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GrafTech Reports Second Quarter 2025 Results

Continuing to Deliver on Key Commercial, Operational and Financial Objectives

BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)-- GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced its unaudited financial results for the quarter and six months ended June 30, 2025.

Highlights

• Grew sales volume 12% year-over-year for the second quarter of 2025, resulting in GrafTech's highest sales volume performance since the third quarter of 2022.
• Continue to expect an approximate 10% year-over-year increase in sales volume for 2025 on a full-year basis, which would result in cumulative sales volume growth of approximately 25% since the end of 2023.
• Grew sales volume in the United States 38% year-over-year for the second quarter of 2025 and 32% for the first six months of 2025, reflecting our strategy to actively shift the geographic mix of our sales volume towards this key region.
• Achieved a 13% year-over-year reduction in cash costs per metric ton ("MT") for the second quarter of 2025.
• We now project a 7-9% year-over-year decline in our cash costs per MT for 2025 on a full-year basis, exceeding our previous guidance range of a mid-single digit percentage point decline.
• Generated positive EBITDA in the second quarter of 2025, reflecting continued progress on our path to normalized levels of profitability.
• Ended the second quarter of 2025 with total liquidity of $367 million; this strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges.

Second Quarter 2025 Summary

• Sales volume of 28.6 thousand MT
• Net sales of $132 million
• Net loss of $87 million, or $0.34 per share⁽¹⁾, including a $43 million non-cash income tax expense related to a valuation allowance against certain deferred tax assets
• Adjusted EBITDA⁽²⁾ of $3 million
• Net cash used in operating activities of $53 million
• Adjusted free cash flow⁽²⁾ of negative $53 million

CEO Comments

"We continue to deliver on our key commercial, operational and financial objectives and targets, reflecting strong execution of our strategic initiatives and our absolute focus on managing all areas within our control," said Timothy Flanagan, Chief Executive Officer and President. 鈥淥ur ability to drive strong volume growth and expand our market share in key regions, despite a challenging commercial environment, demonstrates the strength of our customer value proposition and our focus on meeting customer needs. At the same time, our team is executing cost savings initiatives that will accelerate our return to normalized profitability as the market recovers."

"Longer term, decarbonization efforts will continue to reshape steelmaking in the years ahead," continued Mr. Flanagan. "Specifically, we remain confident that the steel industry鈥檚 ongoing shift toward electric arc furnace steelmaking will continue, driving long-term demand growth for graphite electrodes. The successful execution of our initiatives to manage the current market dynamics is serving to preserve our ability to remain the electric arc furnace industry鈥檚 preeminent supplier of high-quality graphite electrode products and technical services. As a result, GrafTech is in a strong position to benefit from long-term favorable trends that will shape the future of our industry and deliver significant growth."

Net sales for the second quarter of 2025 were $132 million, a decrease of 4% compared to $137 million for the second quarter of 2024. The decline primarily reflected a year-over-year decrease in our weighted-average realized price, partially offset by higher sales volume.

Net loss for the second quarter of 2025 was $87 million, or $0.34 per share, compared to a net loss of $15 million, or $0.06 per share, for the second quarter of 2024. Net loss for the second quarter of 2025 included a $43 million non-cash income tax expense related to the establishment of a full valuation allowance against the Company鈥檚 United States and Switzerland deferred tax assets.

Adjusted EBITDA⁽²⁾ was $3 million for the second quarter of 2025, compared to $14 million for the second quarter of 2024. The decline primarily reflected lower weighted-average realized prices, partially offset by a 13% reduction in cash costs on a per MT basis for the second quarter of 2025, compared to the same period in 2024, which reflects our ongoing initiatives to reduce our cost structure as well as the year-over-year improvement in our sales and production volume levels. Adjusted EBITDA⁽²⁾ for the second quarter of 2024 included a $9 million benefit related to the reimbursement of legal fees and other related expenses in connection with the favorable outcome of an arbitration, which was recorded as a reduction in selling and administrative expenses.

For the second quarter of 2025, net cash used in operating activities was $53 million and adjusted free cash flow⁽²⁾ was negative $53 million, compared to net cash used in operating activities of $37 million and adjusted free cash flow⁽²⁾ of negative $44 million for the second quarter of 2024. For the second quarter of 2025, cash paid for interest was $39 million, including $34 million of semi-annual interest payments on the Company's notes.

Sales volume for the second quarter of 2025 was 28.6 thousand MT, an increase of 12% compared to the second quarter of 2024. For the second quarter of 2025, our weighted-average realized price was approximately $4,200 per MT. This represented a 12% decrease compared to the second quarter of 2024 but a sequential increase of 2% compared to the first quarter of 2025. The year-over-year decline reflected the substantial completion in 2024 of long-term sales agreements entered into in prior years, as well as persistent competitive pressures across all of our principal commercial regions. These impacts were partially mitigated by our initiative to actively shift more sales volume to the United States, which remains the strongest region for graphite electrode pricing.

Production volume was 29.4 thousand MT for the second quarter of 2025, an increase of 10% compared to the second quarter of 2024. On a full-year basis, our expectation remains to balance our production and sales volume levels.

Capital Structure and Liquidity

As of June 30, 2025, we had total liquidity of $367 million, consisting of cash and cash equivalents of $159 million, $108 million of availability under our revolving credit facility and $100 million of availability under our senior secured first lien delayed draw term loans. Our strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges. As of June 30, 2025, we had gross debt⁽⁶⁾ of $1,125 million, with substantially no maturities until December 2029, and net debt⁽⁷⁾ of approximately $966 million.

Outlook

Geopolitical uncertainty, particularly as it relates to global trade and tariffs, continues to have a significant impact on broader steel industry trends. As we closely monitor developments and assess their potential impact on the commercial environment for graphite electrodes, we continue to expect demand for graphite electrodes in the near term will remain relatively flat in most of the regions in which we operate. In the United States, steel production is expected to increase modestly in 2025 on a full-year basis, with growth expected to be driven by the electric arc furnace method of steelmaking, resulting in higher graphite electrode demand in this key region.

For GrafTech, our expectation remains achieving an approximate 10% year-over-year increase in our sales volume for 2025 on a full-year basis, as we continue to regain market share. This reflects our compelling customer value proposition and our ongoing focus on delivering on the needs of our customers.

As it relates to price, challenging pricing dynamics have persisted in most regions and the pricing environment remains unsustainably low. As a result, we continue to execute actions to accelerate our path to normalized levels of profitability and support our ability to invest in our business. These include initiatives to optimize our order book and actively shift the geographic mix of our sales volume to regions where there is an opportunity to capture higher average selling prices, particularly in the United States. In addition, as previously announced, we informed our customers in early 2025 of our intention to increase prices by 15% on 2025 volume that was not yet committed as of the date of the announced price increase.

As it relates to costs, we now expect a 7-9% year-over-year decline in our cash cost of goods sold per MT for 2025 on a full-year basis, exceeding our previous guidance of a mid-single digit percentage point decline compared to 2024. This change reflects ongoing strong execution of our initiatives to enhance our cost structure. Regarding the impact of tariffs, we believe we are well-positioned to minimize the potential impacts imposed by current trade policies, reflecting our integrated and global production network that provides us manufacturing flexibility along with proactive measures we have taken across our supply chain.

In addition, we will continue to closely manage our working capital levels and capital expenditures. For 2025, we continue to expect the net impact of working capital will be favorable to our full year cash flow performance. We also continue to anticipate our full year 2025 capital expenditures will be approximately $40 million.

Longer term, we remain confident that the steel industry鈥檚 efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes. We also anticipate the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, to accelerate driven by its utilization in producing synthetic graphite for use in lithium-ion batteries for the growing electric vehicle market. We believe that the near-term actions we are taking, supported by an industry-leading position and our sustainable competitive advantages, including our substantial vertical integration into petroleum needle coke via our Seadrift facility, will optimally position GrafTech to benefit from that long-term growth.

Conference Call Information

In connection with this earnings release, you are invited to listen to our earnings call being held on July 25, 2025 at 10:00 a.m. (EDT). The webcast and accompanying slide presentation will be available on our investor relations website at: . The earnings call dial-in number is +1 (800) 717-1738 toll-free in North America or +1 (289) 514-5100 for overseas calls, conference ID: 18337. Archived replays of the conference call and webcast will be made available on our investor relations website at: . GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission ("SEC") and other information available at: . The information on our website is not part of this release or any report we file with or furnish to the SEC.

About GrafTech

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. The Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with competitive advantages in product quality and cost.

Cautionary Note Regarding Forward-Looking Statements

This press release and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, future economic performance and short-term and long-term liquidity. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, and anticipated levels of capital expenditures and cost of goods sold. You can identify these forward-looking statements by the use of forward-looking words such as 鈥渨ill,鈥� 鈥渕ay,鈥� 鈥減lan,鈥� 鈥渆stimate,鈥� 鈥減roject,鈥� 鈥渂elieve,鈥� 鈥渁nticipate,鈥� 鈥渆xpect,鈥� 鈥渇oresee,鈥� 鈥渋ntend,鈥� 鈥渟hould,鈥� 鈥渨ould,鈥� 鈥渃ould,鈥� 鈥渢arget,鈥� 鈥済oal,鈥� 鈥渃ontinue to,鈥� 鈥減ositioned to,鈥� 鈥渁re confident,鈥� or the negative versions of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to: our dependence on the global steel industry generally and the electric arc furnace steel industry in particular; the cyclical nature of our business and the selling prices of our products, which may decline in the future, and may lead to prolonged periods of reduced profitability and net losses or adversely impact liquidity; the sensitivity of our business and operating results to economic conditions, including any recession, and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all; the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively implement price increases and shift sales to regions with higher average selling prices; continued overcapacity of the global graphite electrode industry, which may further adversely affect graphite electrode prices; the competitiveness of the graphite electrode industry; our dependence on the supply of raw materials, including decant oil and petroleum needle coke, and disruptions in supply chains for these materials; our primary reliance on one facility in Monterrey, Mexico for the manufacturing of connecting pins; the cost of electric power and natural gas, particularly in Europe; our manufacturing operations are subject to hazards; the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries; the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results; the possibility that our results of operations could further deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, such as a global pandemic, political crises or other catastrophic events; the risks and uncertainties associated with litigation, arbitration, and like disputes, including disputes related to contractual commitments; our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services; the possibility that we are subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, including with respect to our third-party suppliers and business partners; the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions; the sensitivity of long-lived assets on our balance sheet to changes in the market; our dependence on protecting our intellectual property and the possibility that third parties may claim that our products or processes infringe their intellectual property rights; the impact of inflation and our ability to mitigate the effect on our costs; the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events; the possibility that the imposition of current, new or increases of existing custom duties and other tariffs in the countries in which we, our customers and our suppliers operate could adversely affect our operations and results of operations; the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness; past increases in benchmark interest rates and the fact that any current or future borrowings may subject us to interest rate risk; risks and uncertainties associated with our ability to access the capital and credit markets could adversely affect our results of operations, cash flows and financial condition; the possibility that disruptions in the capital and credit markets could adversely affect our customers and suppliers; the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities; our ability to continue to meet the New York Stock Exchange listing standards; and our ability to obtain stockholder approval for a reverse stock split with respect to our common stock (the 鈥淩everse Stock Split鈥�), the implementation of the Reverse Stock Split pending such approval, and the potential effects of the Reverse Stock Split, including, among others, effects on our compliance with NYSE listing requirements, our market capitalization, the trading price, marketability and liquidity of our common stock and certain accounting matters.

These factors should not be construed as exhaustive and should be read in conjunction with the Risk Factors and other cautionary statements that are included in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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 press release and in our Annual Report on Form 10-K that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

Non-GAAP Financial Measures

In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. 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 are non-GAAP financial measures.

We define EBITDA, a non-GAAP financial measure, as net loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization. We define adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted by any pension and other post-employment benefit ("OPEB") expenses, rationalization and rationalization-related expenses, non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, proxy contest expenses and Tax Receivable Agreement adjustments. Adjusted EBITDA is the primary metric used by our management and our Board of Directors to establish budgets and operational goals for managing our business and evaluating our performance.

We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it is useful to present to investors, because we believe that it facilitates evaluation of our period-to-period operating performance by eliminating items that are not operational in nature, allowing comparison of our recurring core business operating results over multiple periods unaffected by differences in capital structure, capital investment cycles and fixed asset base. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.

Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments, including any capital expenditure requirements to augment or replace our capital assets;
• adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
• adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
• adjusted EBITDA does not reflect expenses relating to our pension and OPEB plans;
• adjusted EBITDA does not reflect rationalization or rationalization-related expenses;
• adjusted EBITDA does not reflect the non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar;
• adjusted EBITDA does not reflect stock-based compensation expense;
• adjusted EBITDA does not reflect proxy contest expenses;
• adjusted EBITDA does not reflect Tax Receivable Agreement adjustments; and
• other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

We define adjusted net loss, a non-GAAP financial measure, as net loss, excluding the items used to calculate adjusted EBITDA and further excluding debt modification costs, less the tax effect of those adjustments and non-cash income tax expense related to the establishment of a deferred tax valuation allowance. We define adjusted loss per share, a non-GAAP financial measure, as adjusted net loss divided by the weighted average diluted common shares outstanding during the period. We believe adjusted net loss and adjusted loss per share are useful to present to investors because we believe that they assist investors鈥� understanding of the underlying operational profitability of the Company.

We define free cash flow, a non-GAAP financial measure, as net cash provided by or used in operating activities less capital expenditures. We define adjusted free cash flow, a non-GAAP financial measure, as free cash flow adjusted by payments made for debt modification costs. We use free cash flow and adjusted free cash flow as critical measures in the evaluation of liquidity in conjunction with related GAAP amounts. We also use these measures when considering available cash, including for decision-making purposes related to dividends and discretionary investments. Further, these measures help management, the Board of Directors, and investors evaluate the Company's ability to generate liquidity from operating activities.

We define net debt, a non-GAAP financial measure, as gross debt minus cash and cash equivalents. We believe this is an important measure as it is more representative of our financial position.

We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization, less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes and less rationalization-related expenses, with this total divided by our sales volume measured in MT. We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis.

In evaluating these non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to the adjustments in the reconciliations presented below. Our presentations of these non-GAAP financial measures should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider these non-GAAP financial measures alongside other measures of financial performance and liquidity, including our net loss, loss per share, cash flow from operating activities, cost of goods sold and other GAAP measures.

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Michael Dillon

216-676-2000

[email protected]

Source: GrafTech International Ltd.