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GrafTech Reports Fourth Quarter And Year Ended 2012 Results

Stocks in this article: GTI

GrafTech International Ltd. (NYSE:GTI) today announced financial results for the fourth quarter and year ended December 31, 2012.

2012 Fourth Quarter Review

  • Net sales increased seven percent to $371 million compared to net sales of $348 million in the fourth quarter of 2011.
  • EBITDA * was $66 million, up 26 percent versus the same quarter last year. This includes a $9 million non-cash pension related charge **; the fourth quarter of 2011 included a similar charge of $22 million. Excluding this charge for the fourth quarter of both years, adjusted EBITDA * was $75 million for the fourth quarter in 2012, or flat versus the same period in 2011.
  • Net income was $29 million, or $0.21 per diluted share, versus $57 million, or $0.39 per diluted share, in the fourth quarter of 2011. The fourth quarter of 2011 included a $26 million non-cash discrete tax benefit. Excluding this tax item and the pension related charges, fourth quarter 2012 adjusted net income * was $34 million, or $0.25 per diluted share, compared to fourth quarter 2011 adjusted net income * of $45 million, or $0.31 per diluted share.

2012 Full Year Financial Review

  • Net sales were $1,248 million, a five percent decline from our all-time record sales of $1,320 million in 2011.
    • Industrial Materials segment revenue was $1,026 million, a decrease of nine percent year-over-year.
    • Engineered Solutions segment revenue was $223 million, representing record revenue for the segment and an increase of 18 percent year-over-year.
  • 2012 EBITDA * was $238 million, a decrease of four percent year-over-year. This includes a $9 million non-cash pension related charge **; 2011 included a similar charge of $22 million. Excluding this charge for both years, adjusted EBITDA * was $247 million in 2012, a decrease of eight percent from 2011.
  • Net income was $118 million, or $0.84 per diluted share. This includes a $10 million non-cash discrete tax benefit in the second quarter of 2012. There was a similar tax benefit of $26 million in 2011. Excluding the tax benefit and the pension related charges, 2012 adjusted net income * was $113 million, or $0.81 per diluted share, versus $141 million in 2011, or $0.96 per diluted share.
  • Net cash provided by operating activities was $101 million in 2012 versus $77 million in 2011 as a result of lower working capital investments.
  • Net debt * at year end 2012 was $554 million compared to $419 million at year end 2011. This increase is primarily attributed to higher borrowings related to a 10 million share repurchase program completed in 2012. Working capital investments and capital expenditures also contributed to the increase.
  • In November 2012, GrafTech executed a successful $300 million eight-year unsecured 6.375% Senior Notes offering, securing a strategic component of its balance sheet and creating strong financial flexibility. Proceeds were used to repay amounts previously outstanding under its revolving credit facility.

2012 Full Year Operational Review

  • GrafTech announced the development of a super premium grade of Seadrift needle coke and successfully commercialized this breakthrough product in the second quarter of 2012. This represents a key development in expanding Seadrift’s ability to service the full range of customer needle coke needs.
    • This important strategic accomplishment marks a milestone in our ability to internally source our needle coke requirements, providing us with greater procurement flexibility and less dependence on external suppliers.
  • In August 2012, GrafTech celebrated the successful landing of NASA’s Mars Science Laboratory Curiosity rover mission. The thermal solutions used in the rover’s heat shield, which protected the Curiosity from the intense heat and friction generated during descent through the Martian atmosphere, were developed and manufactured by a subsidiary in our Engineered Solutions’ segment.

Craig Shular, Chief Executive Officer of GrafTech, commented, “In 2012, GrafTech delivered its second best sales in Company history and record Engineered Solutions revenue despite difficult global economic conditions. Our Seadrift facility has been a very important part of our 2012 results, delivering quality advancements, commercializing super premium needle coke and contributing meaningfully to our Industrial Materials segment.”

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