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GrafTech Reports Fourth Quarter And Year Ended 2010 Results

GrafTech International Ltd. (NYSE:GTI) today announced financial results for the fourth quarter and year ended December 31, 2010.

As noted below, certain of the following financial results are presented on a pro forma basis, excluding all impacts of the acquisitions.

2010 Full Year Review
  • As announced on November 30, 2010, GrafTech successfully completed the acquisitions of Seadrift Coke L.P. (Seadrift), the world’s second-largest producer of petroleum-based needle coke, and C/G Electrodes LLC (St. Marys), a US-based graphite electrode producer. These acquisitions significantly strengthen our business model, position us as the graphite electrode industry’s low-cost producer and allow us to better serve our customers.
  • Net sales increased to $1,007 million, or $988 million excluding the impact of the acquisitions, versus 2009 net sales of $659 million.
  • Operating income improved to $159 million, or $174 million excluding the impact of the acquisitions. This compares to operating income of $99 million in 2009, or $95 million excluding $4 million from a gain associated with the settlement of a contingent liability in 2009.
  • Net income was $175 million (including a $30 million non-cash deferred tax valuation allowance release) or $1.42 per diluted share, versus $13 million or $0.10 per diluted share in 2009. Adversely impacting net income in 2009 was a charge of $53 million related to the non-cash impairment in the value of our investment in Seadrift.
  • On an operating basis, net income excluding the impact of the acquisitions and other special items* was $146 million or $1.20 per diluted share, as compared to $63 million or $0.52 per diluted share in 2009.
  • Net cash provided by operating activities was $145 million, versus $170 million in 2009. The decline year-over-year was primarily driven by a $42 million increase in working capital to support higher sales volumes and $14 million in customary acquisition related expenditures.
  • Net debt* at year end 2010 was $288 million, including $130 million drawn on the revolver and $143 million of non-interest bearing Senior Subordinated Notes used to fund the acquisitions of Seadrift and St. Marys.
  • Also announced earlier this year, GrafTech successfully completed the refinancing of its principal revolving credit facility. The new $260 million revolver represents a $45 million increase over the prior facility and extends the maturity date to April 29, 2013. The facility has an accordion feature that enables it to be increased to up to $390 million to provide additional capacity to fund future growth.

GrafTech Chief Executive Officer Craig Shular commented, “The year 2010 proved to be historic for our Company. We successfully completed the acquisitions of Seadrift and St. Marys, both of which are strategic assets positioned to propel future growth for our Company. These are the first major acquisitions in GrafTech’s history and are important to generating sustainable long-term value for our shareholders and better serving our customers’ needs. Following the completion of the acquisitions, we exited the year with a solid balance sheet well-positioned to capitalize on opportunities for growth as the global economies continue to recover.”

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