PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and comprehensive notes on accounting policies, segment reporting, debt, and other financial details [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section details the unaudited condensed consolidated financial statements and related notes, covering financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific reporting dates | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $158,543 | $256,248 | | Total current assets | $566,451 | $636,797 | | Total assets | $1,112,026 | $1,224,274 | | LIABILITIES AND STOCKHOLDERS' DEFICIT (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | Total current liabilities | $114,426 | $139,929 | | Long-term debt | $1,090,811 | $1,086,915 | | Total stockholders' deficit | $(168,435) | $(78,902) | | Total liabilities and stockholders' deficit | $1,112,026 | $1,224,274 | - Total assets decreased by **$112.2 million (9.2%)** from **$1,224.3 million** at December 31, 2024, to **$1,112.0 million** at June 30, 2025. Cash and cash equivalents saw a significant decrease of **$97.7 million (38.1%)**[17](index=17&type=chunk) - Total stockholders' deficit increased by **$89.5 million (113.5%)** from **$(78.9) million** at December 31, 2024, to **$(168.4) million** at June 30, 2025, primarily due to net losses[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(unaudited)) This section details the company's financial performance, including net sales, gross profit, operating loss, net loss, and comprehensive loss over specified periods | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $131,840 | $137,327 | $243,679 | $273,911 | | Gross profit (loss) | $62 | $3,976 | $(1,647) | $2,664 | | Operating loss | $(14,553) | $(2,679) | $(32,763) | $(24,040) | | Net loss | $(86,886) | $(14,752) | $(126,237) | $(45,621) | | Basic loss per share | $(0.34) | $(0.06) | $(0.49) | $(0.18) | | Comprehensive loss | $(64,937) | $(22,940) | $(91,742) | $(64,534) | - Net sales decreased by **4%** for Q2 2025 and **11%** for 6M 2025 compared to the respective prior-year periods[20](index=20&type=chunk) - Net loss significantly widened, increasing by **489%** to **$(86.9) million** for Q2 2025 and by **177%** to **$(126.2) million** for 6M 2025, primarily driven by higher interest expense and income tax expense[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the reported periods | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(85,422) | $(37,385) | | Net cash used in investing activities | $(14,157) | $(17,410) | | Net cash used in financing activities | $(264) | $(117) | | Net change in cash and cash equivalents | $(99,843) | $(54,912) | | Cash and cash equivalents at end of period | $158,543 | $120,726 | - Net cash used in operating activities increased by **$48.0 million** in the first six months of 2025 compared to the same period in 2024, primarily due to a **$32.0 million** increase in cash used for working capital, particularly inventories[185](index=185&type=chunk) - Capital expenditures decreased to **$14.2 million** for the first six months of 2025 from **$17.5 million** in the prior year period[23](index=23&type=chunk)[186](index=186&type=chunk) [Condensed Consolidated Statements of Stockholders' (Deficit) Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20Equity%20(unaudited)) This section details changes in stockholders' (deficit) equity, including net loss, foreign currency adjustments, and stock-based compensation impacts | Equity Component (in thousands) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :------------------------------ | :---------------- | :------------- | :------------ | | Total Stockholders' (Deficit) Equity | $(78,902) | $(105,340) | $(168,435) |\n| Net loss (Q1 2025) | | $(39,351) | | | Net loss (Q2 2025) | | | $(86,886) | | Foreign currency translation adjustments | | $12,596 | $21,981 | | Stock-based compensation | | $580 | $1,842 | - The total stockholders' deficit significantly increased from **$(78.9) million** at December 31, 2024, to **$(168.4) million** at June 30, 2025, primarily due to net losses incurred during the period[26](index=26&type=chunk) - Accumulated other comprehensive loss improved from **$(43.4) million** at December 31, 2024, to **$(8.9) million** at June 30, 2025, largely driven by positive foreign currency translation adjustments[26](index=26&type=chunk)[80](index=80&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial items [(1) Organization and Summary of Significant Accounting Policies](index=10&type=section&id=(1)%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section describes the company's business, its reportable segment, and the impact of recently adopted and pending accounting pronouncements - GrafTech International Ltd. is a leading manufacturer of **high-quality graphite electrode products**, essential for **electric arc furnace (EAF) steel production**, and is substantially vertically integrated into **petroleum needle coke**[29](index=29&type=chunk) - The company's only reportable segment is **Industrial Materials**, comprising graphite electrodes and petroleum needle coke products[29](index=29&type=chunk) - The adoption of **ASU 2023-07 (Segment Reporting)** did not materially impact consolidated financial statements. **ASU 2023-09 (Income Taxes)** will result in additional disclosures for FY2025 but no impact on financial position, results, or cash flows. **ASU 2024-03 (Expense Disaggregation)** is being assessed for impact[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [(2) Revenue from Contracts with Customers](index=11&type=section&id=(2)%20Revenue%20from%20Contracts%20with%20Customers) This section disaggregates revenue by product type and notes changes in revenue presentation, reflecting the company's sales performance | Product Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Graphite Electrodes | $119,440 | $124,807 | $220,702 | $248,794 | | By-products and other | $12,400 | $12,520 | $22,977 | $25,117 | | Total Revenues | $131,840 | $137,327 | $243,679 | $273,911 | - Graphite electrode revenue decreased by **4.3%** for Q2 2025 and **11.3%** for 6M 2025 compared to the prior year periods[37](index=37&type=chunk) - The company updated its disaggregated revenue presentation, no longer showing **long-term agreement (LTA) revenues** separately due to their immaterial amount[37](index=37&type=chunk) [(3) Segment Reporting](index=12&type=section&id=(3)%20Segment%20Reporting) This section confirms the company operates as a single Industrial Materials segment, with graphite electrodes as the primary revenue source, and outlines performance evaluation criteria - GrafTech operates as a single reportable segment, **Industrial Materials**, which manufactures **graphite electrodes** and utilizes internally produced **petroleum needle coke**[41](index=41&type=chunk) - Over **90%** of external revenues are derived from **graphite electrode sales**[41](index=41&type=chunk) - The chief operating decision maker evaluates segment performance based on **net income or losses**[42](index=42&type=chunk) [(4) Intangible Assets](index=13&type=section&id=(4)%20Intangible%20Assets) This section details the company's finite-lived intangible assets, including trade names, technology, and customer relationships, and their associated amortization expense | Intangible Asset Category (in thousands) | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :--------------------------------------- | :-------------------------------- | :------------------------------------ | | Trade names | $3,872 | $4,274 | | Technology | $5,414 | $6,687 | | Customer relationships | $21,316 | $23,437 | | Total finite-lived intangible assets | $30,602 | $34,398 | - Total finite-lived intangible assets decreased by **$3.8 million** from December 31, 2024, to June 30, 2025[44](index=44&type=chunk) - Amortization expense for intangible assets was **$1.9 million** for Q2 2025 and **$3.8 million** for 6M 2025[44](index=44&type=chunk) [(5) Debt and Liquidity](index=13&type=section&id=(5)%20Debt%20and%20Liquidity) This section outlines the company's long-term debt structure and available liquidity, including credit facilities, as of the reporting period | Long-Term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Initial First Lien Term Loans due 2029 | $175,000 | $175,000 | | New 4.625% Second Lien Notes due 2029 | $498,245 | $498,245 | | New 9.875% Second Lien Notes due 2029 | $446,167 | $446,167 | | Total long-term debt | $1,090,811 | $1,086,915 | - Total long-term debt remained relatively stable at approximately **$1.09 billion** as of June 30, 2025[45](index=45&type=chunk) - The company had **$100 million** available under its Delayed Draw First Lien Term Loan Facility and **$108 million** availability under its 2018 Revolving Credit Facility as of June 30, 2025[46](index=46&type=chunk)[47](index=47&type=chunk) [(6) Inventories](index=14&type=section&id=(6)%20Inventories) This section provides a breakdown of inventories by component, highlights changes, and discusses lower of cost or market valuation adjustments | Inventory Component (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Raw materials and supplies | $89,721 | $78,386 | | Work in process | $136,039 | $122,590 | | Finished goods | $30,166 | $30,265 | | Total Inventories | $255,926 | $231,241 | - Total inventories increased by **$24.7 million (10.7%)** from December 31, 2024, to June 30, 2025, driven by increases in raw materials and work in process[50](index=50&type=chunk) - The company recorded **lower of cost or market (LCM)** inventory valuation adjustments of **$1.9 million** for Q2 2025 and **$4.7 million** for 6M 2025[50](index=50&type=chunk) [(7) Interest Expense](index=14&type=section&id=(7)%20Interest%20Expense) This section details the components of interest expense, including debt interest and modification costs, and explains the period-over-period changes | Interest Expense Component (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest incurred on debt | $22,539 | $17,110 | $45,071 | $34,205 | | Debt modification costs | $931 | $0 | $6,292 | $0 | | Total interest expense | $25,418 | $15,609 | $55,259 | $31,235 | - Total interest expense increased significantly by **63%** for Q2 2025 and **77%** for 6M 2025, primarily due to interest on the Initial First Lien Term Loan Facility and debt modification costs[51](index=51&type=chunk)[52](index=52&type=chunk) - Debt modification costs of **$0.9 million** for Q2 2025 and **$6.3 million** for 6M 2025 were expensed as incurred[52](index=52&type=chunk) [(8) Commitments and Contingencies](index=14&type=section&id=(8)%20Commitments%20and%20Contingencies) This section addresses ongoing legal proceedings, the write-off of the Tax Receivable Agreement liability, and a significant Brazilian income tax assessment - The company is involved in ongoing legal proceedings, including **Brazil Clause IV litigation** and **securities and derivative class action lawsuits**, but does not believe their ultimate disposition will have a material adverse effect on financial position, results of operations, or cash flows at this stage[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The **Tax Receivable Agreement liability** of **$3.8 million** was written off in Q2 2025 due to the recording of a full valuation allowance against U.S. deferred tax assets, as related foreign tax credits are unlikely to be utilized[59](index=59&type=chunk)[60](index=60&type=chunk) - GrafTech Brasil Participações Ltda. received a **$32.6 million** income tax assessment notice from the Brazilian IRS for 2019-2020, which the company intends to vigorously defend[61](index=61&type=chunk) [(9) Income Taxes](index=16&type=section&id=(9)%20Income%20Taxes) This section details income tax expense, effective tax rates, the impact of valuation allowances on deferred tax assets, and the evaluation of new tax legislation | Income Tax Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense (benefit) | $51,207 | $(592) | $43,995 | $(4,793) | | Loss before income taxes | $(35,679) | $(15,344) | $(82,242) | $(50,414) | | Effective tax rate | (143.5)% | 3.9% | (53.5)% | 9.5% | - The effective tax rate for Q2 2025 and 6M 2025 was significantly impacted by the recording of a full valuation allowance of **$34.2 million** against U.S. deferred tax assets and **$8.4 million** against Switzerland deferred tax assets[63](index=63&type=chunk)[66](index=66&type=chunk) - The company is evaluating the potential future impact of the recently enacted **One Big Beautiful Bill Act (OBBBA)** on its consolidated financial statements[67](index=67&type=chunk) [(10) Fair Value Measurements and Derivative Instruments](index=17&type=section&id=(10)%20Fair%20Value%20Measurements%20and%20Derivative%20Instruments) This section describes the company's use of foreign currency, commodity, and interest rate derivatives to manage market risks, including notional amounts and sensitivity analysis - GrafTech uses **foreign currency derivatives**, **commodity derivative contracts**, and **interest rate swaps** to manage exposure to fluctuations in currency exchange rates, commodity prices, and interest rates[68](index=68&type=chunk) | Derivative Type (in thousands) | Notional Amount June 30, 2025 | Notional Amount December 31, 2024 | | :----------------------------- | :---------------------------- | :-------------------------------- | | Designated as hedges: Foreign currency derivatives | $5,740 | $0 | | Not designated as hedges: Foreign currency derivatives | $24,059 | $11,918 | - A **10%** appreciation or depreciation in the U.S. dollar against foreign currencies would result in a **$1.2 million** decrease or increase, respectively, in the fair value of the foreign currency hedge portfolio as of June 30, 2025[223](index=223&type=chunk) [(11) Accumulated Other Comprehensive Loss](index=19&type=section&id=(11)%20Accumulated%20Other%20Comprehensive%20Loss) This section details the components of accumulated other comprehensive loss, primarily foreign currency translation adjustments, and their impact on the overall balance | Component (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Foreign currency translation adjustments, net of tax | $(8,996) | $(43,573) | | Foreign currency derivatives, net of tax | $132 | $214 | | Total accumulated other comprehensive loss | $(8,864) | $(43,359) | - Total accumulated other comprehensive loss improved from **$(43.4) million** at December 31, 2024, to **$(8.9) million** at June 30, 2025, primarily due to positive foreign currency translation adjustments[80](index=80&type=chunk) [(12) Loss per Share](index=20&type=section&id=(12)%20Loss%20per%20Share) This section presents basic and diluted loss per share, explaining the impact of net losses and the exclusion of anti-dilutive securities from calculations | Loss per Share Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (in thousands) | $(86,886) | $(14,752) | $(126,237) | $(45,621) | | Basic loss per share | $(0.34) | $(0.06) | $(0.49) | $(0.18) | | Diluted loss per share | $(0.34) | $(0.06) | $(0.49) | $(0.18) | - Basic and diluted loss per share increased significantly to **$(0.34)** for Q2 2025 and **$(0.49)** for 6M 2025, compared to **$(0.06)** and **$(0.18)** respectively in the prior year periods[81](index=81&type=chunk) - Potentially dilutive securities were excluded from diluted loss per share calculations due to the company's net loss, making their inclusion **anti-dilutive**[82](index=82&type=chunk)[83](index=83&type=chunk) [(13) Stock-Based Compensation](index=20&type=section&id=(13)%20Stock-Based%20Compensation) This section details equity awards granted, the recognition of stock-based compensation expense, and the remaining unrecognized compensation cost for unvested awards - The company granted **3,680,476 RSUs** and **1,702,363 performance-based restricted stock units (PSUs)** to employees, and **297,901 deferred share units (DSUs)** and **953,332 deferred RSUs (DRSUs)** to non-employee directors in the first six months of 2025[84](index=84&type=chunk) - Stock-based compensation expense was **$1.8 million** for Q2 2025 and **$2.4 million** for 6M 2025, with the majority recorded in selling and administrative expense[87](index=87&type=chunk)[88](index=88&type=chunk) - Unrecognized compensation cost related to unvested awards was approximately **$10.8 million** as of June 30, 2025[89](index=89&type=chunk) [(14) Supplementary Balance Sheet Detail](index=21&type=section&id=(14)%20Supplementary%20Balance%20Sheet%20Detail) This section provides additional balance sheet details, specifically regarding obligations under the Supplier Finance Program - GrafTech Mexico participates in a **Supplier Finance Program (SFP)**, with **$4.8 million** in SFP obligations included in accounts payable as of June 30, 2025[90](index=90&type=chunk)[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and operational results, covering key performance indicators, market outlook, capital structure, liquidity, and non-GAAP financial measures [Company Overview and Operational Update](index=22&type=section&id=Company%20Overview%20and%20Operational%20Update) This section provides an overview of the company's business as a graphite electrode manufacturer and details key operational metrics like sales volume and realized prices - GrafTech is a leading manufacturer of **high-quality graphite electrodes** for **EAF steel production**, vertically integrated into **petroleum needle coke**[93](index=93&type=chunk) | Metric | Q2 2025 | Q2 2024 | Change YoY | | :----- | :------ | :------ | :--------- | | Sales volume (MT) | 28.6k | 25.5k | +12% | | Production volume (MT) | 29.4k | 26.8k | +10% | | Weighted-average realized price (per MT) | ~$4,200 | ~$4,773 | -12% | - The weighted-average realized price decreased by **12% YoY** in Q2 2025 but increased **2%** sequentially from Q1 2025, with efforts to shift sales to the U.S. to mitigate competitive pressures[96](index=96&type=chunk) [Outlook](index=22&type=section&id=Outlook) This section outlines the company's expectations for graphite electrode demand, sales volume, cost of goods sold, and long-term market trends - The company expects demand for **graphite electrodes** to remain relatively flat in most regions, with modest growth in the U.S. steel production driven by **EAF**[98](index=98&type=chunk) - GrafTech anticipates an approximate **10% year-over-year increase in sales volume** for 2025, aiming to regain market share[99](index=99&type=chunk) - The company expects a **7-9% year-over-year decline in cash cost of goods sold per MT** for 2025, exceeding previous guidance, and anticipates second-half 2025 **adjusted EBITDA to be near breakeven**[101](index=101&type=chunk) - Longer term, the company is confident in increased **EAF steelmaking adoption** due to decarbonization efforts and accelerating demand for **petroleum needle coke for lithium-ion batteries**[104](index=104&type=chunk) [Capital Structure and Liquidity](index=23&type=section&id=Capital%20Structure%20and%20Liquidity) This section details the company's capital structure, including total debt, and its liquidity position, comprising cash and available credit facilities | Metric (in thousands) | June 30, 2025 | | :-------------------- | :------------ | | Cash and cash equivalents | $158,543 | | 2018 Revolving Credit Facility availability | $108,000 | | Initial First Lien Term Loan Facility availability | $100,000 | | Total liquidity | $366,543 | | Total debt | ~$1,100,000 | - The company had **$366.5 million** in liquidity as of June 30, 2025, consisting of cash and available credit facilities[105](index=105&type=chunk) [Key Financial Measures](index=23&type=section&id=Key%20Financial%20Measures) This section presents key financial performance indicators, including net sales, net loss, loss per share, and adjusted EBITDA for the reported periods | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $131,840 | $137,327 | $243,679 | $273,911 | | Net loss | $(86,886) | $(14,752) | $(126,237) | $(45,621) | | Loss per share | $(0.34) | $(0.06) | $(0.49) | $(0.18) | | Adjusted EBITDA | $3,471 | $14,493 | $(201) | $14,687 | - Adjusted EBITDA decreased significantly to **$3.5 million** for Q2 2025 (from **$14.5 million** in Q2 2024) and turned negative to **$(0.2) million** for 6M 2025 (from **$14.7 million** in 6M 2024)[108](index=108&type=chunk) [Key Operating Measures](index=23&type=section&id=Key%20Operating%20Measures) This section highlights key operational metrics, including sales volume, production volume, production capacity, and capacity utilization rates | Metric (in thousands, except utilization) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales volume (MT) | 28.6 | 25.5 | 53.3 | 49.6 | | Production volume (MT) | 29.4 | 26.8 | 57.9 | 52.8 | | Production capacity (MT) | 45.0 | 45.0 | 90.0 | 90.0 | | Capacity utilization | 65% | 60% | 64% | 59% | - Sales volume increased by **12%** for Q2 2025 and **7.5%** for 6M 2025 compared to the prior year periods[114](index=114&type=chunk) - Capacity utilization improved to **65%** for Q2 2025 (from **60%**) and **64%** for 6M 2025 (from **59%**)[114](index=114&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=24&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) This section provides a detailed comparative analysis of the company's financial performance for the three months ended June 30, 2025, versus the prior year | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :----------- | :--------- | | Net sales | $131,840 | $137,327 | $(5,487) | (4)% | | Gross profit | $62 | $3,976 | $(3,914) | (98)% | | Operating loss | $(14,553) | $(2,679) | $(11,874) | 443% | | Selling and administrative expenses | $13,267 | $5,098 | $8,169 | 160% | | Interest expense | $25,418 | $15,609 | $9,809 | 63% | | Net loss | $(86,886) | $(14,752) | $(72,134) | 489% | - Net sales decreased by **$5.5 million (4%)** due to lower weighted-average realized prices, partially offset by increased sales volume[116](index=116&type=chunk) - Selling and administrative expenses increased by **$8.2 million (160%)**, primarily due to a **$9.2 million** legal fee reimbursement in Q2 2024, making the underlying expenses lower in Q2 2025[119](index=119&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=26&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) This section provides a detailed comparative analysis of the company's financial performance for the six months ended June 30, 2025, versus the prior year | Metric (in thousands) | 6M 2025 | 6M 2024 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :----------- | :--------- | | Net sales | $243,679 | $273,911 | $(30,232) | (11)% | | Gross (loss) profit | $(1,647) | $2,664 | $(4,311) | (162)% | | Operating loss | $(32,763) | $(24,040) | $(8,723) | 36% | | Selling and administrative expenses | $27,889 | $20,375 | $7,514 | 37% | | Interest expense | $55,259 | $31,235 | $24,024 | 77% | | Net loss | $(126,237) | $(45,621) | $(80,616) | 177% | - Net sales decreased by **$30.2 million (11%)** primarily due to a decrease in weighted-average realized price, partially offset by increased sales volume[126](index=126&type=chunk) - Cost of goods sold decreased by **$26.5 million (10%)**, benefiting from cost reduction initiatives and a **$5.5 million** favorable impact from prior period LCM inventory write-downs[127](index=127&type=chunk) [Effects of Changes in Currency Exchange Rates](index=27&type=section&id=Effects%20of%20Changes%20in%20Currency%20Exchange%20Rates) This section analyzes the impact of fluctuations in currency exchange rates on the company's net sales and cost of goods sold - Changes in currency exchange rates resulted in increases of **$2.2 million** in net sales for Q2 2025 and **$1.3 million** for 6M 2025[133](index=133&type=chunk) - The impact on cost of goods sold was an increase of **$3.0 million** for Q2 2025 and **$0.6 million** for 6M 2025[133](index=133&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, total debt, capital allocation strategies, and capital expenditure plans - As of June 30, 2025, liquidity was **$366.5 million**, comprising **$158.5 million** in cash and cash equivalents, **$108.0 million** from the 2018 Revolving Credit Facility, and **$100.0 million** from the Initial First Lien Term Loan Facility (Delayed Draw Commitments)[136](index=136&type=chunk) - The company's total debt was approximately **$1.1 billion** as of June 30, 2025[138](index=138&type=chunk) - The Board of Directors suspended the quarterly cash dividend of **$0.01 per share** on August 2, 2023, and no shares were repurchased in Q2 or 6M 2025, with **$99.0 million** remaining under the stock repurchase authorization[177](index=177&type=chunk)[178](index=178&type=chunk) - Capital expenditures totaled **$14.2 million** in the first six months of 2025, with a full-year expectation of approximately **$40.0 million**[181](index=181&type=chunk) [Cash Flow](index=33&type=section&id=Cash%20Flow) This section analyzes the company's cash flows from operating, investing, and financing activities, highlighting changes in operating cash usage | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(85,422) | $(37,385) | | Net cash used in investing activities | $(14,157) | $(17,410) | | Net cash used in financing activities | $(264) | $(117) | | Net change in cash and cash equivalents | $(99,843) | $(54,912) | - Net cash used in operating activities increased by **$48.0 million** in the first six months of 2025, primarily due to a **$32.0 million** increase in cash used for working capital, driven by higher inventories[185](index=185&type=chunk) [Non-GAAP financial measures](index=33&type=section&id=Non-GAAP%20financial%20measures) This section defines and reconciles non-GAAP financial measures, including adjusted EBITDA, adjusted net loss, free cash flow, and cash cost of goods sold per MT - The company uses non-GAAP financial measures such as **EBITDA**, **adjusted EBITDA**, **adjusted net loss**, **adjusted loss per share**, **free cash flow**, **adjusted free cash flow**, and **cash cost of goods sold per MT** to evaluate performance and facilitate period-to-period comparisons[188](index=188&type=chunk)[189](index=189&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) | Non-GAAP Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted net loss | $(42,247) | $(13,564) | $(76,402) | $(38,725) | | Adjusted loss per share | $(0.16) | $(0.05) | $(0.30) | $(0.15) | | Adjusted EBITDA | $3,471 | $14,493 | $(201) | $14,687 | | Free cash flow | $(57,145) | $(43,834) | $(99,612) | $(54,875) | | Adjusted free cash flow | $(53,337) | $(43,834) | $(93,611) | $(54,875) | | Cash cost of goods sold per MT | $3,754 | $4,315 | $3,707 | $4,451 | - Cash cost of goods sold per MT decreased by **13%** for Q2 2025 and **16.8%** for 6M 2025, reflecting ongoing cost structure enhancement initiatives[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, primarily from changes in interest rates, currency exchange rates, and energy commodity prices, and describes the use of derivative financial instruments to manage these risks. It also includes a sensitivity analysis for potential impacts of market rate changes - GrafTech is exposed to market risks from fluctuations in **interest rates**, **currency exchange rates**, **energy commodity prices**, and **commercial energy rates**[217](index=217&type=chunk)[219](index=219&type=chunk) - The company uses **foreign currency derivatives** (forward exchange contracts and purchased currency options) to manage currency exchange rate exposures[220](index=220&type=chunk) - A hypothetical **10%** appreciation or depreciation in the U.S. dollar against foreign currencies would result in a **$1.2 million** decrease or increase, respectively, in the fair value of the foreign currency hedge portfolio as of June 30, 2025[223](index=223&type=chunk) - A hypothetical **100 basis point increase** in interest rates would have increased interest expense by **$0.4 million** in Q2 2025[223](index=223&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective. It also states that there were no material changes in internal control over financial reporting during the quarter - Management concluded that the company's **disclosure controls and procedures** were effective as of June 30, 2025[227](index=227&type=chunk) - There were no changes in **internal control over financial reporting** during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[228](index=228&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, updated risk factors, other information, a list of exhibits, and the official signature for the report [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section details the company's involvement in various legal proceedings, including ongoing litigation in Brazil related to wage increase provisions and securities and derivative class action lawsuits in the U.S. District Court for the Northern District of Ohio. The company asserts that the ultimate disposition of these matters is not expected to have a material adverse effect on its financial condition - The company is involved in ongoing **Brazil Clause IV litigation** regarding wage increase provisions from 1989-1990, with the Brazilian Supreme Court ruling in favor of the employees' union in 2019. GrafTech Brazil has successfully appealed related state court rulings, and intends to vigorously defend its position[232](index=232&type=chunk) - A **securities class action complaint** was filed on January 25, 2024, alleging material misrepresentations related to the temporary suspension of the Monterrey, Mexico facility. **Derivative actions** were also filed on June 9, 2025, alleging breaches of fiduciary duty based on similar facts[233](index=233&type=chunk)[234](index=234&type=chunk) - At this stage, the company cannot determine if these legal matters would reasonably be expected to have a **material adverse effect** on its financial condition[235](index=235&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section updates and refers to the risk factors disclosed in the Annual Report on Form 10-K, specifically highlighting the risk associated with the company's non-compliance with NYSE continued listing requirements regarding minimum share price. It discusses the proposed reverse stock split as a measure to address this and the potential impacts of delisting - The company's common stock does not currently comply with the **NYSE's minimum share price standard** for continued listing[240](index=240&type=chunk) - GrafTech is seeking stockholder approval for a **reverse stock split** to address the **NYSE $1.00 minimum bid price requirement**, with a Special Meeting of Stockholders expected on August 14, 2025[241](index=241&type=chunk) - A **delisting from the NYSE**, for this or any other reason, could materially affect the company's ability to raise capital, its business, and the price of its common stock[241](index=241&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section states that no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated **Rule 10b5-1** or **non-Rule 10b5-1 trading arrangements** during the fiscal quarter ended June 30, 2025[243](index=243&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Certificate of Incorporation, By-Laws, certifications from the CEO and CFO (pursuant to Rule 13a-14(a) and Section 906 of Sarbanes-Oxley Act), and the Inline XBRL financial information - The exhibits include corporate governance documents (**Certificate of Incorporation**, **By-Laws**), certifications from the CEO and CFO (**Rule 13a-14(a)** and **Section 906**), and financial information formatted in **Inline XBRL**[246](index=246&type=chunk)[247](index=247&type=chunk) [SIGNATURE](index=43&type=section&id=SIGNATURE) This section contains the signature of Rory O'Donnell, Chief Financial Officer and Senior Vice President (Principal Financial Officer and Principal Accounting Officer), certifying the filing of the report on behalf of GrafTech International Ltd. on July 25, 2025 - The report was signed by **Rory O'Donnell, Chief Financial Officer and Senior Vice President**, on behalf of GrafTech International Ltd. on July 25, 2025[251](index=251&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net loss of $87 million or $0.34 per share for the second quarter, which included a $43 million non-cash income tax charge [32] - Adjusted EBITDA was $3 million, down from $14 million in the same quarter of the previous year, primarily due to lower average selling prices [33] - Cash costs per metric ton are expected to decline by 7% to 9% year over year, with a revised full-year cash cost guidance of approximately $3,950 per metric ton [34][36] Business Line Data and Key Metrics Changes - Sales volume increased by 12% year over year and reached approximately 29,000 metric tons, marking the highest sales volume performance in 11 quarters [28][30] - The average selling price for the second quarter was approximately $4,200 per metric ton, reflecting a nearly 8% increase compared to the fourth quarter of the previous year [13][30] - The company achieved a capacity utilization rate of 65%, the highest level in nearly three years [8][26] Market Data and Key Metrics Changes - Global steel production outside of China was approximately 210 million tons in the second quarter, down 1% year over year, resulting in a global utilization rate of approximately 67% [24] - In North America, steel production was down 1% year to date, while U.S. production grew by 1% year to date through June [25] - The company increased its sales volume in the U.S. by 38% year over year, contributing significantly to its average selling price [12][30] Company Strategy and Development Direction - The company aims to increase sales volume, regain market share, improve average pricing, reduce costs, and strengthen its financial foundation [6][39] - A strategic focus is placed on shifting sales volume towards regions with higher selling prices, particularly in the U.S. [11][12] - The company is committed to building long-term customer relationships and enhancing its competitive positioning through operational efficiency and cost management [7][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering to normalized levels of profitability, despite current challenges in pricing dynamics and market demand [9][32] - The company anticipates continued growth in the U.S. market due to favorable tariff conditions and an expected increase in steel production [19][40] - Management highlighted the importance of ongoing investments in research and development to maintain a competitive edge in the graphite electrode market [31][47] Other Important Information - The company ended the second quarter with total liquidity of $367 million, consisting of cash and available credit facilities [37] - The impact of U.S. tariffs on cash costs is expected to be less than 1% for 2025, reflecting effective management of global trade uncertainties [18][21] - The company is actively monitoring developments in the needle coke market and anticipates future improvements driven by domestic supply chain initiatives [60][62] Q&A Session Summary Question: Current U.S. market share and potential for further growth - The U.S. and Americas represent over 50% of overall revenue, with a year-over-year share increase of 31% [51] Question: Impact of Chinese anti-dumping duties on local needle coke prices - The recent rulings are expected to support medium to long-term developments in the supply chain, but immediate pricing impacts are not anticipated [52][53] Question: Pricing environment outlook - The pricing environment remains competitive, but there are signs of price stability and potential for recovery in the latter half of the year [56][57] Question: Needle coke supply and demand outlook - The needle coke market remains flat, with no immediate catalysts for change, but future developments in Western supply chains are expected to drive improvements [58][59] Question: Expectations for positive EBITDA trajectory - Positive EBITDA is anticipated to continue, with some fluctuations expected in the second half of the year due to seasonal factors [61][64] Question: State of discussions regarding anode materials - The company is actively exploring partnership opportunities and remains well-positioned to participate in the anode materials market [70][72]

Financial Performance - Q2 2025 sales volume increased by 12% year-over-year and 16% sequentially compared to Q1 2025[15] - Q2 2025 production volume increased by 10% compared to Q2 2024[30] - Q2 2025 net sales decreased by 4% compared to Q2 2024, due to lower weighted-average realized prices[30] - Q2 2025 adjusted EBITDA was $3 million[33] - Q2 2025 adjusted free cash flow was negative $53 million[33] - Q2 2025 cash costs per metric ton declined by 13% year-over-year[33] Steel Industry - Q2 2025 global steel production, excluding China, was 210 million tons, compared to 212 million tons in Q2 2024[27] - Steel capacity utilization rates in Q2 2025 were 67% globally (ex-China) and 77% in the U S[24] Liquidity and Debt - The company's liquidity as of June 30, 2025, was $367 million[36] - The company has substantially no debt maturities until December 2029[36]

分组1 - GrafTech International reported a quarterly loss of $0.16 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.12, and compared to a loss of $0.05 per share a year ago, indicating an earnings surprise of -33.33% [1] - The company posted revenues of $131.84 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.69%, but down from $137.33 million in the same quarter last year [2] - GrafTech shares have declined approximately 22% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] 分组2 - The earnings outlook for GrafTech is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for GrafTech was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.12 on revenues of $148.08 million, and for the current fiscal year, it is -$0.47 on revenues of $533.9 million [7] 分组3 - The Metal Products - Procurement and Fabrication industry, to which GrafTech belongs, is currently in the top 25% of Zacks industries, indicating a favorable outlook that can significantly impact stock performance [8] - Another company in the same industry, Century Aluminum, is expected to report a quarterly earnings of $0.41 per share, reflecting a year-over-year change of +1466.7%, with revenues projected to be $651.2 million, up 16.1% from the previous year [9]

[Report Overview](index=1&type=section&id=Report%20Overview) [Highlights](index=1&type=section&id=Highlights) GrafTech achieved strong Q2 2025 results with 12% YoY sales volume growth, 13% YoY cash cost reduction, positive EBITDA, and robust liquidity Second Quarter 2025 Summary | Metric | Q2 2025 Value | | :------------------------------------ | :------------ | | Sales volume (thousand MT) | 28.6 | | Net sales (in thousands) | $132,000 | | Net loss (in thousands) | $(87,000) | | Loss per share | $0.34 | | Adjusted EBITDA (in thousands) | $3,000 | | Net cash used in operating activities (in thousands) | $(53,000) | | Adjusted free cash flow (in thousands) | $(53,000) | | Total liquidity (in thousands) | $367,000 | - Sales volume grew **12% year-over-year** for Q2 2025, reaching GrafTech's highest sales volume performance since Q3 2022[4](index=4&type=chunk) - Sales volume in the United States grew **38% year-over-year** for Q2 2025, reflecting a strategic shift towards this key region[4](index=4&type=chunk) - Achieved a **13% year-over-year reduction** in cash costs per metric ton (MT) for Q2 2025[4](index=4&type=chunk) - Generated **positive EBITDA** in Q2 2025, indicating continued progress towards normalized profitability[4](index=4&type=chunk) [CEO Comments](index=2&type=section&id=CEO%20Comments) CEO Timothy Flanagan highlighted strong execution, driving volume growth and market share, and expressed confidence in long-term graphite electrode demand from steel decarbonization - The Company continues to deliver on key commercial, operational, and financial objectives, reflecting strong execution of strategic initiatives and focus on managing controllable areas[5](index=5&type=chunk) - Driving strong volume growth and expanding market share in key regions, despite a challenging commercial environment, demonstrates the strength of the customer value proposition[5](index=5&type=chunk) - Longer term, decarbonization efforts will continue to reshape steelmaking, driving long-term demand growth for graphite electrodes due to the shift toward electric arc furnace steelmaking[5](index=5&type=chunk) [Financial and Operational Review](index=3&type=section&id=Financial%20and%20Operational%20Review) [Second Quarter 2025 Financial Performance](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Net sales decreased 4% YoY to $132 million due to lower prices. Net loss widened to $87 million, impacted by a $43 million non-cash tax expense. Adjusted EBITDA declined to $3 million Key Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Net sales | $131,840 | $137,327 | -4.0% | | Net loss | $(86,886) | $(14,752) | -489.0% | | Loss per share | $(0.34) | $(0.06) | -466.7% | | Adjusted EBITDA | $3,471 | $14,493 | -76.0% | | Net cash used in operating activities | $(53,236) | $(36,855) | -44.4% | | Adjusted free cash flow | $(53,337) | $(43,834) | -21.7% | - Net sales decline primarily reflected a year-over-year decrease in weighted-average realized price, partially offset by higher sales volume[6](index=6&type=chunk) - Net loss for Q2 2025 included a **$43 million non-cash income tax expense** related to the establishment of a full valuation allowance against the Company's United States and Switzerland deferred tax assets[7](index=7&type=chunk) - Adjusted EBITDA decline primarily reflected lower weighted-average realized prices, partially offset by a **13% reduction** in cash costs on a per MT basis[8](index=8&type=chunk) [Operational and Commercial Update](index=4&type=section&id=Operational%20and%20Commercial%20Update) Sales volume increased 12% YoY to 28.6 thousand MT, the highest since Q3 2022, driven by a strategic shift towards the US market, with production volume also growing 10% YoY Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------- | :--------------------- | :--------------------- | :----------- | | Sales volume (MT) | 28.6 | 25.5 | +12.2% | | Production volume (MT) | 29.4 | 26.8 | +9.7% | | Production capacity (MT) | 45.0 | 45.0 | 0.0% | | Capacity utilization | 65 % | 60 % | +5 ppts | - Weighted-average realized price was approximately **$4,200 per MT** in Q2 2025, a **12% decrease** compared to Q2 2024 but a sequential increase of **2%** compared to Q1 2025[9](index=9&type=chunk) - The year-over-year decline in realized price was partially mitigated by the initiative to actively shift more sales volume to the United States, which remains the strongest region for graphite electrode pricing[9](index=9&type=chunk) [Capital Structure and Liquidity](index=4&type=section&id=Capital%20Structure%20and%20Liquidity) GrafTech maintained a strong liquidity position of $367 million as of June 30, 2025, with gross debt at $1,125 million and no substantial maturities until December 2029 Liquidity and Debt (as of June 30, 2025) | Metric | Amount ($ millions) | | :------------------------------------------ | :------------------ | | Total liquidity | $367 | | Cash and cash equivalents | $159 | | Availability under revolving credit facility | $108 | | Availability under senior secured first lien delayed draw term loans | $100 | | Gross debt | $1,125 | | Net debt | $966 | - The strong liquidity position continues to support the Company's ability to manage through near-term, industry-wide challenges[11](index=11&type=chunk) - Gross debt was **$1,125 million** with substantially no maturities until December 2029[11](index=11&type=chunk) [Outlook](index=5&type=section&id=Outlook) GrafTech anticipates a 10% YoY sales volume increase for 2025, driven by market share regain and US demand, alongside a 7-9% YoY decline in cash costs per MT, while managing challenging pricing dynamics - Expect an approximate **10% year-over-year increase** in sales volume for 2025 on a full-year basis, continuing to regain market share[13](index=13&type=chunk) - Project a **7-9% year-over-year decline** in cash costs per MT for 2025 on a full-year basis, exceeding previous guidance of a mid-single digit percentage point decline[15](index=15&type=chunk) - Challenging pricing dynamics persist, leading to actions to optimize the order book and actively shift sales volume to regions with higher average selling prices, particularly the United States[14](index=14&type=chunk) - Longer term, decarbonization efforts in the steel industry are expected to increase adoption of electric arc furnace steelmaking, driving long-term demand growth for graphite electrodes[17](index=17&type=chunk) - Anticipate full year 2025 capital expenditures to be approximately **$40 million**[16](index=16&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) [About GrafTech](index=6&type=section&id=About%20GrafTech) GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential for electric arc furnace steel production, uniquely vertically integrated into petroleum needle coke - GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals[20](index=20&type=chunk) - The Company is the only large-scale graphite electrode producer substantially vertically integrated into petroleum needle coke, its key raw material, providing competitive advantages in product quality and cost[20](index=20&type=chunk) [Conference Call Information](index=6&type=section&id=Conference%20Call%20Information) Information for the Q2 2025 earnings call held on July 25, 2025, including webcast and dial-in details, and where to find archived replays and SEC filings - Earnings call held on **July 25, 2025, at 10:00 a.m. (EDT)**[19](index=19&type=chunk) - Webcast and accompanying slide presentation available on the investor relations website: http://ir.graftech.com[19](index=19&type=chunk) - Complete financial reports filed with the SEC and other information available at: www.GrafTech.com[19](index=19&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Definitions and Limitations](index=10&type=section&id=Non-GAAP%20Definitions%20and%20Limitations) This section defines various non-GAAP financial measures used by GrafTech and outlines their limitations as analytical tools, emphasizing they should not be considered in isolation from GAAP results - Non-GAAP financial measures include EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow, net debt, and cash cost of goods sold per MT[30](index=30&type=chunk) - Adjusted EBITDA is the primary metric used by management and the Board of Directors to establish budgets and operational goals for managing the business and evaluating performance[31](index=31&type=chunk) - Non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of results reported under GAAP[33](index=33&type=chunk)[38](index=38&type=chunk) [NON-GAAP RECONCILIATIONS](index=15&type=section&id=NON-GAAP%20RECONCILIATIONS) Provides detailed tables reconciling non-GAAP financial measures to their most directly comparable GAAP measures for Q2 2025, Q1 2025, Q2 2024, and the six months ended June 30, 2025 and 2024 Reconciliation of Net Loss to Adjusted Net Loss (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :------ | :------ | :------ | :--------------------------- | :--------------------------- | | Net loss | $(86,886) | $(39,351) | $(14,752) | $(126,237) | $(45,621) | | Total non-GAAP adjustments pre-tax | $968 | $6,563 | $1,762 | $7,531 | $9,041 | | Income tax non-GAAP adjustment | $(42,624) | — | — | $(42,624) | — | | Income tax impact on non-GAAP adjustments | $(1,047) | $1,367 | $574 | $320 | $2,145 | | Adjusted net loss | $(42,247) | $(34,155) | $(13,564) | $(76,402) | $(38,725) | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :------ | :------ | :------ | :--------------------------- | :--------------------------- | | Net loss | $(86,886) | $(39,351) | $(14,752) | $(126,237) | $(45,621) | | EBITDA | $3,435 | $(4,874) | $12,731 | $(1,439) | $5,646 | | Adjustments | $37 | $1,202 | $1,762 | $1,238 | $9,041 | | Adjusted EBITDA | $3,471 | $(3,672) | $14,493 | $(201) | $14,687 | Reconciliation of Cash Cost of Goods Sold per MT (in thousands, except per MT data) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :------ | :------ | :------ | :--------------------------- | :--------------------------- | | Cost of goods sold | $129,885 | $110,765 | $131,970 | $240,650 | $267,174 | | Cash cost of goods sold | $107,354 | $90,206 | $110,021 | $197,560 | $220,763 | | Sales volume (in thousands of MT) | 28.6 | 24.7 | 25.5 | 53.3 | 49.6 | | Cash cost of goods sold per MT | $3,754 | $3,652 | $4,315 | $3,707 | $4,451 | [Condensed Consolidated Financial Statements](index=12&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [CONDENSED CONSOLIDATED BALANCE SHEETS](index=12&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased from $1,224.3 million at December 31, 2024, to $1,112.0 million at June 30, 2025, primarily due to reduced cash, while stockholders' deficit significantly increased Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $158,543 | $256,248 | | Total current assets | $566,451 | $636,797 | | Net property, plant and equipment | $488,354 | $482,699 | | Total assets | $1,112,026 | $1,224,274 | | Total current liabilities | $114,426 | $139,929 | | Long-term debt | $1,090,811 | $1,086,915 | | Total stockholders' deficit | $(168,435) | $(78,902) | | Total liabilities and stockholders' deficit | $1,112,026 | $1,224,274 | [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, net sales were $131.8 million, a 4% decrease YoY, with gross profit significantly down to $62 thousand, and net loss widening to $86.9 million, or $0.34 per share Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Net sales | $131,840 | $137,327 | -4.0% | | Cost of goods sold | $129,885 | $131,970 | -1.6% | | Gross profit (loss) | $62 | $3,976 | -98.4% | | Operating loss | $(14,553) | $(2,679) | -443.2% | | Interest expense | $25,418 | $15,609 | +62.8% | | Loss before income taxes | $(35,679) | $(15,344) | -132.5% | | Income tax expense (benefit) | $51,207 | $(592) | N/A | | Net loss | $(86,886) | $(14,752) | -489.0% | | Basic loss per common share | $(0.34) | $(0.06) | -466.7% | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=14&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities increased to $53.2 million in Q2 2025, while net cash used in investing activities decreased to $3.9 million, resulting in a $57.2 million net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Net cash used in operating activities | $(53,236) | $(36,855) | -44.4% | | Net cash used in investing activities | $(3,905) | $(6,902) | +43.4% | | Net cash used in financing activities | $(27) | $(19) | -42.1% | | Net change in cash and cash equivalents | $(57,168) | $(43,776) | -30.6% | | Cash and cash equivalents at end of period | $158,543 | $120,726 | +31.3% | - Capital expenditures for Q2 2025 were **$3.9 million**, a decrease from **$7.0 million** in Q2 2024[45](index=45&type=chunk) - Net change in working capital resulted in a cash outflow of **$39.7 million** in Q2 2025, compared to an outflow of **$36.4 million** in Q2 2024[45](index=45&type=chunk) [Legal Disclosures](index=7&type=section&id=Legal%20Disclosures) [Cautionary Note Regarding Forward-Looking Statements](index=7&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises that the press release contains forward-looking statements subject to risks and uncertainties, cautioning against undue reliance as actual results may differ materially due to various factors - The press release contains forward-looking statements reflecting current views on financial projections, future operations, economic performance, and liquidity[24](index=24&type=chunk) - These statements are subject to various risks and uncertainties, including dependence on the global steel industry, cyclical business nature, economic conditions, and supply chain disruptions[24](index=24&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially from expectations[27](index=27&type=chunk)

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: GrafTech International (EAF) Analysis - GrafTech International (EAF) has shown significant recent price momentum, with a four-week price change of 28.1%, indicating growing investor interest [4] - EAF has gained 107.3% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - The stock has a beta of 1.51, suggesting it moves 51% more than the market in either direction, indicating fast-paced momentum [5] - EAF holds a Momentum Score of A, suggesting it is an opportune time to invest in the stock [6] - The stock has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which attract more investor interest [7] - EAF is trading at a Price-to-Sales ratio of 0.73, indicating it is reasonably valued at 73 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides EAF, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to help investors find winning stock picks [9]

Core Viewpoint - GrafTech International Ltd. is facing a class action lawsuit alleging serious environmental violations and misleading statements regarding its operations in Monterrey, Mexico, which may have significant implications for the company's financial health and reputation [1][2]. Group 1: Allegations and Legal Context - A class action complaint was filed against GrafTech on January 25, 2024, covering a Class Period from February 8, 2019, to August 3, 2023 [1]. - The lawsuit claims that GrafTech's manufacturing operations have chronically contaminated neighboring communities with harmful carcinogenic gases and particulate matter for decades [2]. - GrafTech allegedly failed to honor commitments made to local authorities to improve environmental performance at its Monterrey facility [2]. - The company has been warned over a 30-year period about its disregard for environmental and public health concerns [2]. Group 2: Compliance and Environmental Issues - GrafTech's operations in Monterrey are claimed to be non-compliant with applicable environmental laws and regulations [2]. - The company reportedly did not adequately remediate environmental issues following a 2019 administrative proceeding by the Department of Sustainable Development of the State of Nuevo León [2]. - Local government authorities sought intervention to address the adverse environmental impacts caused by GrafTech's operations [2]. Group 3: Financial and Operational Risks - GrafTech's cost leadership is alleged to have been achieved by neglecting necessary environmental safeguards at its Monterrey facility [2]. - The company's capital expenditures and operational projects were deemed insufficient to address the environmental harm caused by its operations [2]. - As a result of these issues, GrafTech is exposed to undisclosed material risks that could disrupt its manufacturing operations and harm its business, operations, reputation, and financial results [2].

Financial Performance - Net sales decreased by $24.7 million, or 18%, to $111.8 million for the first quarter of 2025 compared to the same period in 2024[113] - Operating loss improved by $3.2 million, or 15%, to $18.2 million in the first quarter of 2025 compared to the first quarter of 2024[113] - Net loss increased by $8.5 million, or 27%, to $39.4 million for the first quarter of 2025 compared to the same period in 2024[113] - Adjusted EBITDA for Q1 2025 was $(3,672) thousand, a decrease from $194 thousand in Q1 2024[191] - Net loss for the three months ended March 31, 2025, was $(39,351) thousand, compared to $(30,869) thousand in Q1 2024[191] - Free cash flow for the three months ended March 31, 2025, was $(42,467) thousand, compared to $(11,041) thousand in Q1 2024[195] Cost of Goods Sold - Cost of goods sold also decreased by $24.4 million, or 18%, to $110.8 million, with a favorable impact of $7.2 million from prior inventory write-downs[114] - Cost of goods sold decreased from $135,204 thousand in Q1 2024 to $110,765 thousand in Q1 2025, representing a reduction of approximately 18.1%[196] - Cash cost of goods sold per metric ton (MT) improved from $4,595 in Q1 2024 to $3,652 in Q1 2025, a decrease of about 20.6%[196] - Cash cost of goods sold totaled $90,206 thousand in Q1 2025, down from $110,742 thousand in Q1 2024, indicating a reduction in production costs[196] Debt and Liquidity - As of March 31, 2025, the company had liquidity of $420.9 million, consisting of cash and cash equivalents of $214.3 million[126] - Long-term debt remained stable at $1.1 billion as of March 31, 2025, consistent with the previous quarter[126] - The company was in compliance with all debt covenants as of March 31, 2025, and December 31, 2024[143][148] - The 2018 Revolving Credit Facility has a financial covenant requiring a Senior Secured First Lien Net Leverage Ratio of no more than 4.00 to 1.00[162] - The company may incur additional debt or issue equity securities to provide liquidity, but there is no guarantee of access to credit or capital markets on satisfactory terms[168] Capital Expenditures - Capital expenditures totaled $10.3 million for the three months ended March 31, 2025, with an expectation of approximately $40.0 million for the full year 2025[167] - Capital expenditures for Q1 2025 were $10,281 thousand, slightly down from $10,511 thousand in Q1 2024, showing a stable investment approach[195] Interest and Tax Expenses - Interest expense surged by $14.2 million, or 91%, to $29.8 million due to new debt facilities and associated costs[117] - The effective tax rate for the first quarter of 2025 was 15.5%, compared to 12.0% in the first quarter of 2024[118] Stock and Dividends - The company suspended its quarterly cash dividend of $0.01 per share, with no assurance of future resumption[164] - The company has $99 million remaining under its stock repurchase authorization as of March 31, 2025, with no shares repurchased in Q1 2025[163] Strategic Outlook - The company expects to evaluate strategic transactions, including acquisitions and joint ventures, to enhance growth opportunities[123] - The company believes it has adequate liquidity to meet its needs for at least the next twelve months[126] - The cash flow is expected to fluctuate significantly between quarters due to various factors, including customer order patterns and working capital requirements[128]

Q1 2025 Results April 25, 2025 NYSE: EAF www.graftech.com Forward-Looking Statements If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this presentation and in our A ...

Financial Data and Key Metrics Changes - The company reported a net loss of $39 million or $0.15 per share for Q1 2025, with adjusted EBITDA at negative $4 million compared to flat adjusted EBITDA in Q1 2024 [32] - Cash COGS per metric ton was approximately $3,650 for Q1 2025, reflecting a 21% year-over-year reduction [34] - Total liquidity at the end of Q1 2025 was $421 million, consisting of $214 million in cash and $207 million in available credit [36] Business Line Data and Key Metrics Changes - Sales volume increased by 2% year-over-year in Q1 2025, with a notable 25% increase in the U.S. market [7][10] - Average selling price for Q1 2025 was $4,100 per metric ton, representing a 20% year-over-year decline [28] - Production volume for Q1 was 28,000 tons, with a capacity utilization rate of 63%, a more than 500 basis point increase from the prior year [25][26] Market Data and Key Metrics Changes - Global steel production outside of China was approximately 209 million tons in Q1 2025, slightly below the previous year [24] - U.S. steel production saw a 1% reduction in Q1 2025, while the EU experienced a 3% decrease year-to-date [24][25] - The company increased sales volume in Western Europe by more than 40% year-over-year in Q1 2025 [30] Company Strategy and Development Direction - The company is focused on increasing sales volume, regaining market share, and improving financial performance through strategic initiatives [6][9] - A key goal is to grow volume and market share in the U.S., which is the highest-priced region in the industry [9][10] - The company plans to increase prices by 15% on uncommitted volumes for 2025 to restore pricing and profitability levels [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging near-term market conditions but expressed optimism about future opportunities [6][7] - The company is well-positioned to capitalize on potential recovery in the EU market due to supportive policy changes and infrastructure investments [39][40] - Management emphasized the importance of a healthy graphite electrode industry for the steel industry and the need for improved pricing dynamics [8][10] Other Important Information - The company has made significant strides in reducing costs, achieving a 23% year-over-year reduction in cash COGS per metric ton in 2024 [13] - The company is actively managing its production and inventory levels to align with sales expectations [26][35] - Ongoing assessments of global trade policies and tariffs are being conducted to mitigate potential impacts on the business [14][18] Q&A Session Summary Question: Has the introduction of tariffs on Indian material changed the pace of pricing declines in the U.S. market? - Management indicated that tariffs on Indian imports could significantly impact the availability of competitors in the U.S. market, potentially benefiting the company [46][47] Question: What percentage of sales are now coming from the U.S. and Western Europe? - Management confirmed that over 50% of sales are now derived from the U.S. and Western Europe combined [54] Question: How much of the graphite electrodes sold in the U.S. are sourced from outside the U.S.? - Management estimated that roughly half of the production coming into the U.S. is from the Monterrey facility, with the balance from European facilities [81] Question: What is the outlook for pricing of graphite electrodes and needle coke? - Management expressed optimism for future pricing stability, citing potential support from tariffs and ongoing negotiations with customers [72][75]