GrafTech International Ltd. (NYSE:GTI) today announced financial results for the first quarter ended March 31, 2012.
2012 First Quarter Review
- Net sales were $241 million, down 21 percent versus $306 million in the first quarter of 2011, primarily the result of lower volumes associated with the reduction in demand for graphite electrodes.
- EBITDA* was $40 million, down 30 percent versus $57 million in the first quarter of 2011. Current quarter EBITDA was negatively impacted by $4 million in severance charges as a result of previously reported right sizing initiatives in response to weak end market demand. EBITDA in the prior year was unfavorably impacted by $3 million of costs associated with acquisition-related inventory step-up.
- Net income was $18 million, or $0.12 per diluted share, down 36 percent versus $27 million, or $0.19 per diluted share, in the first quarter of 2011.
- Net cash used in operating activities was $15 million versus $1 million used in the first quarter of 2011. The year-over-year reduction in operating net cash was largely driven by lower income in the current quarter.
- Net debt* was $466 million as compared to $419 million at year end 2011. The increase was largely the result of working capital investments and capital expenditures.
Craig Shular, Chief Executive Officer of GrafTech, commented, “As previously guided, graphite electrode sales were lower largely due to customer destocking initiatives, especially in Europe where the steel market has slowed considerably in response to recessionary conditions in the region. We believe the majority of the destocking in electrodes occurred in the first quarter and will be fully complete by mid-year.”
Industrial Materials SegmentThe Industrial Materials segment’s net sales were down 27 percent to $193 million in the first quarter 2012, as compared to $263 million in the first quarter of 2011. Revenue in the quarter decreased primarily as the result of lower sales volume, partially offset by higher average selling prices for both graphite electrodes and needle coke.