GrafTech International Ltd. (NYSE:GTI) today announced financial results for the fourth quarter and year ended December 31, 2011.
2011 Full Year Review
- Net sales increased 31 percent to $1,320 million versus 2010 net sales of $1,007 million.
- 2011 EBITDA * was $247 million, up 23 percent year-over-year. This includes a $22 million non-cash pension related charge; 2010 included a similar charge for $7 million. Excluding this charge for both years, EBITDA * was $269 million in 2011, up 30 percent from 2010.
- Operating income was $166 million versus $158 million for 2010. Excluding the pension related charges for both years, operating income was $188 million in 2011 versus $165 million in 2010*.
- Net income was $153 million, or $1.05 earnings per diluted share. This includes a $26 million income tax benefit from the release of a valuation allowance in the fourth quarter. 2010 also included a similar tax benefit of $33 million. Excluding the tax benefit and the pension related charges, 2011 net income was $141 million, or $0.96 earnings per diluted share, versus $148 million in 2010 *.
- Net cash provided by operating activities was $77 million versus $145 million in 2010.
- GrafTech successfully completed the refinancing of its principal revolving credit facility. The new five-year $570 million revolver represents a $310 million increase over the prior facility and extends the maturity date to October 2016.
- Net debt * at year end 2011 was $419 million compared to $288 million in 2010. This increase is primarily attributed to an increase in capital expenditures, working capital needs to support the 31 percent increase in sales, the fourth quarter repurchase of two million shares of GrafTech’s common stock which concluded a previously announced program, and acquisitions.
- In December 2011, the Board of Directors approved a new GrafTech share repurchase program for up to ten million shares of its common stock.
- Moody’s upgraded GrafTech’s corporate rating to Ba1 and rated the $570 million senior secured revolving credit facility investment grade, Baa3.
- GrafTech successfully completed the acquisitions of Micron Research and Fiber Materials, Inc. (FMI). These acquisitions strengthen the Engineered Solutions business segment positioning GrafTech for further penetration into the markets requiring super-fine grain graphite and highly engineered advanced carbon composites.
2011 Fourth Quarter Highlights
- Net sales increased 24 percent to $348 million compared to net sales of $281 million in the fourth quarter of 2010.
- EBITDA * improved to $52 million, up 20 percent versus same quarter last year. This includes a $22 million non-cash pension related charge; 2010 included a similar charge for $7 million. Excluding this charge for the fourth quarter of both years, EBITDA * was $75 million for the fourth quarter in 2011, up 47 percent versus the same time period in 2010.
- Operating income was $31 million for the fourth quarter versus $30 million for the same period in 2010. Excluding the pension related charges for the fourth quarter of both years, operating income was $54 million in 2011 versus $38 million in 2010*.
- Net income was $57 million, or $0.39 earnings per diluted share. This includes a $26 million income tax benefit from the release of a valuation allowance. 2010 also included a similar income tax benefit of $33 million. Excluding this item and the pension related charges, fourth quarter 2011 net income was $45 million, or $0.31 per diluted share compared to fourth quarter 2010 net income of $46 million, or $0.36 per diluted share *.
Acquisition UpdatesOver the past two years, GrafTech has closed on four acquisitions that enhance both our Industrial Materials and Engineered Solutions business segments furthering our strategic goals of continued and sustainable growth. Both Seadrift and St. Marys integrations are complete with both businesses contributing approximately $91 million of EBITDA in 2011. The integration of our latest two acquisitions, Micron Research and FMI, are on track to be completed in 2012. Industrial Materials Segment The Industrial Materials segment’s net sales for the fourth quarter of 2011 were $297 million, as compared to $234 million in the fourth quarter of 2010. Net sales in the quarter increased primarily as a result of higher graphite electrode and needle coke sales volume.