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Image source: The Motley Fool. Friday, Oct. 23, 2026 - Vice President of Investor Relations and treasurer - Michael Dillon - Chief Executive Officer - Timothy K. Flanagan - Chief Financial Officer - Rory F. O'Donnell Jr. Operator: Hello, everyone. Thank you for joining us and welcome to GrafTech's Third Quarter 26 Earnings Conference Call and Webcast. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press 1. To raise your hand. To withdraw your question, press 1. Again. I will now hand the conference over to Mike Dillon, Vice President of Investor Relations and treasurer. Please go ahead. Michael Dillon: Good morning, and welcome to GrafTech International's Third Quarter 26 Earnings Call. Thank you for joining us. Joining me on the call are Timothy K. Flanagan, Chief Executive Officer Roy O'Donnell, Chief Financial Officer; Timothy will begin with opening comments on our key strategic initiatives, Rory will then provide a color on our quarterly results, outlook and other financial matters. After closing comments by Timothy, we will then open the call to questions. Turning to our next slide, as a reminder, our comments today may include forward-looking statements regarding among other things, performance, trends and strategies. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by forward-looking statements are shown here. We will also discuss certain non GAAP financial measures, these slides include the relevant non GAAP reconciliations. You can find these slides in the Investor Relations section of our website at www.graftech.com replay of the call will also be available on our website. I will now turn the call over to Timothy. Timothy K. Flanagan: Good morning, everyone, and thank you for joining us today. The third quarter marked another important period for GrafTech as we continued to advance the commercial, operational, and strategic initiatives designed to improve our long term profitability and strengthen our competitive position. We are particularly encouraged by the progress we are making on the pricing front. As higher price customer commitments reinforce our confidence, that we have reached an inflection point in our realized pricing. During the quarter, we also announced a significant step in our strategy to improve the efficiency and competitiveness of our manufacturing footprint. Through the planned closure of our Monterrey, Mexico, facility. These actions, together with our ongoing efforts to improve our cost structure, advocate for fair trade, capitalize on emerging market opportunities, reflect our commitment to taking decisive steps to strengthen GrafTech's financial performance. We also remain confident in the longer term fundamentals of our end markets. Supported by improving steel industry conditions across many of our key regions, the continued transition towards electric arc furnace steelmaking, and the growing strategic importance of synthetic graphite. This morning, I would like to begin with an update on our strategic priorities, followed by our perspectives on the steel market and broader industry environment. I will then discuss safety before turning the call over to Rory for a review of our financial results. On the commercial front, our disciplined commercial approach is beginning to produce tangible results. During the third quarter and early in the fourth quarter, we continued to secure customer commitments at higher-priced levels than those secured earlier in this period this year. Reinforcing our expectation for meaningful improvement in realized pricing in 2027. Restoring graphite electrode pricing to more sustainable levels remains essential to supporting continued investment in high quality manufacturing capacity, ensuring reliable supply for our customers. As we have seen in prior industry cycles, changes in the balance between supply and demand can result in relatively rapid and significant movements in graphite electrode pricing. While the timing and magnitude of any recovery will depend on market conditions, we believe the combination of improving commercial momentum, and actions to better address industry overcapacity create the potential for meaningful price recovery. To put our recent pricing progress in perspective, market pricing continued to decline early in 2026 before beginning to recover during the second quarter. On the heels of the price increase we announced in March. Since then, we have seen sustained improvement in prices reflected in new customer commitments. However, because of our realized pricing, reported to date in 2026 reflects commitments that were primarily entered into in prior periods, those improvements have not yet translated into our quarterly results. Our weighted average realized pricing was approximately $3.9 thousand per metric ton in the third quarter. Essentially flat with the second quarter. However, based on our current order book, and the timing of shipments against these higher priced commitments, we expect a mid single digit percentage increase in realized pricing in the fourth quarter. Looking ahead to 2027, we are seeing positive results in securing customer commitments at significantly higher prices than those reflected in our 2026 business. While a substantial portion of our anticipated 2027 volume remains to be committed, is typical for this point in the year, these initial results reinforce our confidence in the pricing momentum we are building. Importantly, our objective is not simply to achieve near term improvement in pricing, but to establish a more sustainable pricing environment. We believe our efforts to better align production capacity with underlying demand together with the value customers place on reliable, high quality supply, provide important support for that objective. We remain focused on securing commitments that appropriately reflect the value of our differentiated products technical capabilities, and reliable supply. Maintaining discipline in how we allocate our available production capacity. We look forward to providing a more comprehensive update on our 2027 commercial position when we report our fourth quarter results early next year. Beyond our own commercial progress, we are also seeing positive industry developments. In China, graphite electrode prices have increased throughout the year. Supported in part by higher raw material costs. At the same time, Chinese graphite electrode exports have declined approximately 10% year over year. Taken together, we view these developments as further indications that the prolonged period of low industry pricing is beginning to change. We are also seeing strengthening conditions in the petroleum needle coke market. Needle coke prices have steadily increased throughout the year, reflecting a combination of high raw material costs evolving supply and demand conditions. At the same time, interest in our own needle coke production capabilities is growing amongst potential customers serving various end markets. Historically needle coke and graphite electrode pricing have been closely correlated with an average spread between the 2 of approximately $4 thousand per metric ton. Over the past 20 years on an inflation adjusted basis. Therefore, we believe the strengthening needle coke market provides another catalyst for higher electrode pricing while vertical integration positions GrafTech favorably as these market dynamics evolve. Second, with respect to our manufacturing footprint, In the third quarter, we announced the planned closure of our graphite electrode manufacturing facility in Monterrey, Mexico. This represents an important step in our efforts to optimize our manufacturing network, improve operational efficiency, and better align production capacity with market demand. Over the past several years, the graphite electrode industry has faced persistent structural overcapacity, reflecting significant capacity additions in certain markets that have outpaced underlying demand growth. These conditions have contributed to a prolonged period of depressed pricing, and have made it increasingly difficult to justify maintaining excess manufacturing capacity. We have taken meaningful actions over the past several years to improve our cost structure and operational efficiency. However, given the continued imbalance between industry supply and demand, we determined that further action was necessary. Following the phased wind-down of Monterrey, customer requirements currently served by that facility will transition to our manufacturing operations in Calais, France and Pamplona, Spain. The transition of connecting pin production capacity to Pamplona is also in process and on track. Transition to our manufacturing operations in Calais, France and Pamplona, Spain. The transition of connecting pin production capacity to Pamplona is also in process and on track. Upon the completion of this transition early in the second quarter of 27, our annual graphite electrode production capacity is expected to be 127 thousand metric tons. Importantly, we are confident this consolidation will enable us to serve our customers more efficiently through a more competitive manufacturing footprint. While preserving the differentiated product capabilities and technical expertise that are central to GrafTech's value proposition. We expect the initiative to strengthen our cost structure, improve operating efficiency, and reduce future capital requirements. We are managing the transition carefully with a focus on safety, maintaining supply continuity, and meeting our customer commitments. I also want to reiterate our support for the employees impacted by this decision. The Monterey team has made important contributions to GrafTech over many years, and we are committed to treating our colleagues with respect, supporting them throughout the transition. Taken together, our ongoing manufacturing productivity, and cost reduction initiatives, this action represents another meaningful step towards establishing a more sustainable foundation for long term profitability. Following the wind down of operations, a permanent removal of graphite electrode production capabilities at Monterey, we intend to pursue the sale of the property and have already begun preliminary activities in preparation for a potential transaction. Any proceeds from a future sale would provide additional opportunity to support our liquidity position and reduce our outstanding debt, consistent with the requirements of our loan to us. Third, with respect to trade policy. We continue to advocate for fair trade and more balanced competitive commit conditions across the graphite electrode industry, including through our supportive of trade proceedings in key commercial jurisdictions. As we discussed last quarter, the U. S. Department of Commerce has been investigating imports of large diameter graphite electrodes from China and India. Since our last call, Commerce has issued its preliminary anti-dumping determination While we were disappointed with the preliminary outcome as it related to India, it is important to emphasize that the investigation is not yet complete. Information submitted by the Indian respondents remains subject to verification by commerce and the final determination is expected during the first quarter of 27. We will remain actively engaged throughout the remainder of this process and continue to support efforts to address unfair trade practices that undermine the competitiveness of domestic graphite electrode manufacturing. More broadly, we believe appropriate trade enforcement is an important component of establishing a healthier and more sustainable competitive environment. Particularly as governments increasingly recognize the strategic importance of maintaining domestic and regional industrial capabilities. Finally, with respect to emerging opportunities. We continue to believe that the growing strategic importance of synthetic graphite presents attractive, longer term, opportunities for GrafTech. As we have discussed previously, graphite electrodes are essential to electric arc furnace steelmaking, which we expect to benefit from the continued transition towards more sustainable methods steel production. At the same time, demand for high quality synthetic graphite petroleum needle coke is expanding into applications beyond traditional steel making. Including battery materials, energy storage, certain defense and industrial applications. These trends are reinforcing the importance of reliable, high quality supply chains particularly in North America and Europe. GrafTech's vertical integration into petroleum needle coke extensive manufacturing capabilities, and expertise in graphite and carbon science provide a differentiated foundation from which to pursue these opportunities. An example of our progress in this area, which we are quite excited about, is a collaboration with Antora Energy that we announced in September. Antora develops thermal batteries designed to provide reliable energy supply for industrial applications such as AI data centers. And our collaboration is focused on leveraging our manufacturing capabilities at our St. Marys, Pennsylvania, facility to support this technology. Although still in its early stages, this represents tangible progress in our efforts to leverage existing assets and technical capabilities to develop new revenue opportunities. We continue to engage with prospective customers and strategic partners and policymakers to evaluate opportunities that leverage our existing capabilities and infrastructure. These opportunities remain at various stages of development, and we believe they offer an attractive potential to diversify our business over time and create additional value from our assets. In summary, we are making progress on several important fronts. Pricing momentum is building, and we are taking decisive steps to improve our manufacturing footprint and cost structure. And we continue to position GrafTech to benefit from longer term growth opportunities. We believe these actions will strengthen our competitive position enhance our ability to generate improved earnings and cash flow as industry conditions recover. With that, let me turn to the broader steel market environment. Turning to slide 5. Let me spend a few minutes discussing the broader steel market, as steel industry fundamentals remain the primary driver of long term graphite electric demand. Overall, we continue to see improving trends across several of our key regions, supporting our expectation for modest growth in graphite electrode demand during 2026. Through the first 2 months of the third quarter, global steel production, excluding China, totaled approximately 142 million metric tons, an increase of approximately 2% compared to the corresponding period last year. In The United States, steel production continues to benefit from favorable trade policies and resilient domestic demand, with steel capacity utilization reaching 80% for the second consecutive quarter. While the pace of improvement varies by region, we are also encouraged by recent policy developments in Europe that we believe will support a more favorable environment for regional steel producers over time. Taken together, these trends reinforce our view that steel industry fundamentals outside of China are gradually improving providing constructive foundation for graphite electrode demand. Turning to slide 6. Beyond the improving conditions we are seeing today, several potential catalysts could support additional growth in steel demand over the coming years. These include infrastructure investment, higher defense spending, investments associated with the energy transition, and growing demand related to artificial intelligence and data center infrastructure. We also see opportunities for additional demand growth as construction activity recovers, investment in steel intensive manufacturing increases, and geopolitical tensions ease. While the timing and magnitude of these individual catalysts will vary, we believe their combined impact provides a favorable backdrop for steel demand growth over the medium term. Importantly, this perspective is supported by the World Steel latest short range outlook published earlier this month. The World Steel Association is projecting finished steel demand growth outside of China of approximately 1.5% in 2020 accelerating to 4% in 2027. We view this anticipated acceleration as encouraging indicator of improving industry fundamentals with positive implications for graphite electrode demand. Specifically in Europe, which remains 1 of our most important commercial regions, we see important developments aimed at strengthening the competitiveness regional steel production. As we discussed last quarter, the implementation of the European Union's carbon border adjustment mechanism together with increased trade protections for steel, has potential to improve the competitive position of European steelmakers. More broadly, we believe these catalysts will drive increased regional steel production over time and support our view that graphite electrode demand outside of China will increase at a compound annual growth rate of approximately 3% in the coming years. While the pace of improvement will depend on broader economic and market conditions, we believe that these demand drivers, combined with other strategic actions, we are taking to improve our commercial performance, and cost structure, position GrafTech to benefit as the industry conditions strengthen. Before turning the call over to worry, I would like to briefly discuss an area that will always remain our highest priority which is safety. I have always believed that no business objective is ever more important than ensuring our people return home safely at the end of every shift. And I am proud of the continued focus our employees have demonstrated across our global operations. Through the first 9 months of 2026, our total recordable incident rate was point 7. While this is above our full year 2025 performance, it remains substantially below the levels we experienced several years ago reflecting the meaningful progress we have made in strengthening our safety culture. We recognize that maintaining a strong safety performance requires constant attention and a commitment to continuous improvement. Safety must remain embedded in every aspect of how we operate, rather simply than a metric being reported each quarter. On behalf of our leadership team, I would like to thank all of our employees for their dedication to operating safely while delivering for our customers every day. Their commitment is the foundation of everything we accomplish as a team. Rory F. O'Donnell Jr.: With that, I will turn the call over to Rory to review our third quarter results, our outlook in greater detail. Thank you, Timothy, and good morning, everyone. I will begin with our third quarter operating and financial performance before discussing our liquidity position and financial outlook. Our third quarter results reflected continued execution against operating priorities, including disciplined production management, and ongoing cost improvements. While financial performance continued to reflect lower realized graphite electrode pricing associated with customer commitments established before our recent pricing action. Starting with our operations. Production volume was approximately 27 thousand metric tons during the quarter, an increase of 2% compared to the prior year quarter, but a sequential decline of 19% from the second quarter of 26. The sequential decline in production primarily reflected planned summer maintenance shutdowns at our European manufacturing facilities. Capacity utilization rate for the quarter was 64%, compared to 63% in the third quarter of last year, and 74% in the second quarter of 26. Through the first 9 months of 26, production volume exceeded sales volume by approximately 2,000 metric tons. We continue to expect production and sales volumes to be balanced on a full year basis, consistent with our previous outlook. Turning to sales. We delivered approximately 29 thousand metric tons during the quarter, essentially flat compared to the prior year period, and in line with our expectations. Importantly, year to date sales volume increased approximately 7% compared to the first 9 months of 2025. Keeping us on track to achieve our full year expectation for sales volume growth between 5% to 10%. Net sales for the quarter were $140 million, a decline of approximately 3% compared to the third quarter of last year, primarily reflecting lower weighted average realized graphite electrode pricing. Our weighted average realized price was approximately $3.9 thousand per metric ton, down approximately 7% compared to the prior year quarter, and has been essentially flat through the first 3 quarters of 26. As Tim discussed, our reported pricing continues to reflect customer commitments established before the more recent improvements in market price. We expect the benefit of these higher price commitments to begin flowing through our reported results the fourth quarter. With a significant increase in realized pricings anticipated in 2027 compared to 2026. To put the financial opportunity into perspective, each $100 improvement in our weighted average realized price would equate to approximately $12 million of incremental annual cash flow, thereby further supporting our liquidity position. Combined with these actions, are taking to optimize our manufacturing footprint and improve our cost structure, we believe this pricing momentum positions us to deliver stronger financial performance going forward. Turning to slide 9. We continue to make progress on our cost improvement initiatives, while managing the impact of ongoing inflationary pressures across several key input categories. During the third quarter, Cash costs of goods sold per metric ton declined approximately 4% compared to the prior year quarter. While this metric can fluctuate from quarter to quarter, due to production schedules, inventory timing, and the recognition of manufacturing costs, our underlying cost structure remains materially improved from the levels we experienced several years ago. Our teams remain focused on identifying and executing to improve manufacturing productivity enhance operating discipline, optimize procurement effectiveness, and improve energy efficiency. To highlight 2 key areas of focus, first, with respect to decant oil, a key raw material in our needle cook operations, We continue to manage cost pressures through supplier diversification, and enhancements in our blending capabilities. In addition, sales of oil related byproducts from our needle coke manufacturing process provide a natural hedge that partially offsets increases in decan oil costs. Further, domestic feedstock sourcing and established supplier relationships provide an advantage in managing raw material availability. Particularly given the ongoing supply chain disruptions and uncertainty affecting producers in Asia. Second, in Europe, fixed price energy contracts covering a significant portion of our 2026 requirements have helped insulate us from recent market volatility. We look to 2027, we anticipate higher energy costs as portions of that contractual coverage reset. And we are incorporating those expectations into our operating plans while continuing to pursue energy efficiency improvements. Despite these external headwinds, we continue to expect a low single digit percentage decline in cash cost of goods sold per metric ton for the full year of 2026 compared to 2025. Looking beyond 2026, the planned consolidation of our manufacturing footprint through the closure of our highest cost facility, Monterrey, is expected to provide meaningful financial benefit As previously announced, we anticipate annual cash cost savings of approximately $20 million to $25 million with the full benefit expected in 2028. As well as a reduction in annual capital expenditure requirements of approximately $5 million beginning in 2027. We also expect a onetime release approximately $20 million to $25 million of working capital. With the majority anticipated to occur in 2028. These benefits will be partially offset by approximately $20 million to $25 million of onetime cash costs associated with the closure. The majority of which is expected to be incurred by the end of 27. As we have emphasized previously, our objective is not simply to reduce costs in the near term, but to establish a more efficient and competitive manufacturing network that can deliver greater operating leverage as market conditions improve. Importantly, we remain committed to achieving these improvements while maintaining the product quality, reliability, and safety standards that our customers and employees expect. With that, let me turn to our third quarter earnings and cash flow performance. Turning to slide 10. We reported a net loss of $47 million or $1.76 per share compared to a net loss of $28 million, $1.10 per share in the prior year Included in our third quarter results were approximately $14 million of restructuring and other exit charges associated with the planned closure of our Monterey manufacturing facility. The majority of which were noncash. Adjusted EBITDA was $9 million during the quarter, compared to $13 million in the prior year period. With the decline primarily reflecting lower weighted average realized graphite electrode pricing partially offset by lower cash cost of goods sold per metric ton. Turning to cash flow. Net cash used in operating activities was $8 million during the third quarter while adjusted free cash flow was negative $16 million This represented a significant improvement from the second quarter when net cash used in operating activities was $69 million and adjusted free cash flow was negative $75 million Our third quarter cash flow reflected an increase in inventory levels that was consistent with our expectation. We continue to anticipate a reduction in working capital including inventory, during the fourth quarter. As we have discussed previously, our cash requirements are influenced by the seasonal nature of our working capital needs. As well as the timing of our semiannual interest payments on our second lien notes. Which occurs in the second and fourth quarters. We continue to expect the second quarter to represent our highest quarterly cash requirement for 2026. With cash usage during the second half of the year significantly lower than during the first half. For the full year, we continue to expect a modest increase in working capital and we are maintaining our expectation for approximately $35 million of capital expenditures. Turning to the next slide. Let me review our liquidity position and debt maturity profile. We remain focused on preserving liquidity and managing our balance sheet prudently. As we execute on our strategic initiatives. We ended the third quarter with approximately $242 million of total liquidity, consisting of $134 million of cash, and approximately $108 million of available borrowing capacity under our revolving credit facility. Importantly, we have substantially no debt maturities until December 2029. Providing us with the time to execute our operational and commercial initiatives and benefit from improving market conditions. Taken together, our liquidity position and debt maturity profile provide financial flexibility as we manage through the current industry environment and implement the actions necessary to strengthen our long term profitability. As we look ahead, we remain focused on preserving liquidity, managing capital expenditures, and working capital carefully, and pursuing opportunities to strengthen our balance sheet over time. In my closing remarks, I would like to thank our employees around the world for their continued dedication and hard work. Their commitment is essential as we execute our strategic priorities and position GrafTech for improved financial performance. With that, I will turn the call back to Timothy for his closing remarks. Timothy K. Flanagan: Thank you, Rory. Before we open the call for questions, I would like to close with a few thoughts on why we remain confident in GrafTech's future. First, we are making meaningful progress on the priorities within our control. Our commercial initiatives are gaining traction, We are securing customer commitments at significantly higher prices, and we are taking decisive actions to improve our manufacturing footprint and cost structure. While we recognize that our financial performance has not yet reflected the full benefit of these actions, we believe the progress we are making today is establishing a stronger foundation for improved profitability and cash flow. Second, we remain encouraged by the longer term fundamentals of our industry. Continued transition toward electric arc furnace steelmaking, together with improving steel industry conditions outside of China supports our expectation for growth in graphite electrode demand over time. Third, GrafTech possesses a set of differentiated capabilities that we believe will be increasingly valuable as market conditions evolve. These include our global manufacturing network, substantial vertical integration into petroleum needle coke, advanced manufacturing technology, and our ability to provide high quality products and technical solutions to our customers around the world. We are also leveraging these capabilities to pursue opportunities in adjacent markets providing additional avenues for long term growth. Finally, we recognize the importance of strengthening our financial position. We remain committed to disciplined capital allocation, preserving liquidity, and ultimately reducing leverage as our operating performance improves. We recognize that there is more work ahead, but we believe the combination of the pricing improvements we are securing, a more efficient cost structure, and our differentiated competitive position creates a compelling opportunity for GrafTech. Our focus remains on executing our strategy, delivering sustainable value for our shareholders. With that, we would be happy to take your questions. Operator: We will now begin the question and answer session. If you would like to ask a question, please press star-1 to raise your hand. To withdraw your question, press star-1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Bennett Moore with JPMorgan. Your line is open. Please go ahead. And just a reminder that if you are asking a question, to unmute your device. Thank you. Timothy K. Flanagan: Yeah. Operator: Maybe we go to the next 1. Bennett Moore: Good morning. And then-- good morning. To you. Timothy K. Flanagan: There you go. Hey, Bennett. Bennett Moore: Can you guys hear me? Timothy K. Flanagan: We can hear you now. Bennett Moore: Okay. Sorry about that. Thanks for taking my questions. I guess it is. First, it is really encouraging to hear strong price momentum headed into 2027. So first, could you just talk about how the dialogue has been with customers on that front? And then second, is it your expectation that these increases will be margin accretive given the cost inflation, I guess, on the EU energy side and maybe lagged decan oil costs? Timothy K. Flanagan: Yeah, absolutely. Thanks for the question. So maybe let's talk a little bit about kind of the evolution over the course of this year from a pricing perspective. You know, as we entered 2026 we saw declining spot prices that were contracting in the first quarter. Which led to the initial price increase that we announced at the end of the first quarter And we gave some guidance or at least some directional indications in the quarterly call that if you extrapolated what we are seeing in the marketplace as a result of that over the full volume, it would be roughly a 15% uplift. And that is what is starting to take hold and will drive the mid single digit increase that we mentioned heading into the fourth quarter. And then early September, announced another price increase of 30%. And that really is where the negotiations start with every customer. And each customer is a bespoke or unique negotiation. But that is the starting point in you know, at this point right now, we are really pleased with, the progress we are making in those discussions. You know, we still have quite a bit of volume yet to book, but I think we are right on track where we have been in prior years at this point in time. You know, now, you know, 4 to 6 weeks into the heart of, the negotiation season. You know, I would expect as we work through the end of the year, you know, we would end the year and get into the first quarterly call in February for the fourth quarter was roughly 60 to 65% of our order book confirmed. So, making good progress. You know, I think if I add some color to the customer conversations, I think they understand and appreciate that. Electrode pricing has been, on a downward slope for quite some time, and that, you know, necessarily is not sustainable, in the long run. I think there is absolutely a recognition of the importance of the electrode industry to the health of the steel industry. And I think when you start to talk about utilization rates at 80% plus in The United States, there certainly is a need to, to have a stable supply base. So I think a lot of the conversation is oriented around that. But I think there is also a recognition too that to your quest-- to your second part of your question that there are rising costs, and there are some headwinds globally on the needle coke front, in particular, raw material input that we use, decan oil, as well as energy pricing. I am confident in saying at this point in time that the price increase and the momentum we are building and where we land in next year will be margin accretive. We will more than offset any sort of price increases or. Sorry. Cost increases that we will experience, as I think, you know, we have done a pretty good job over the last couple of years and reducing our costs, and I think we can do quite a bit to combat the inflationary pressures we are seeing So, no. Bennett Moore: that is great color. I appreciate it. My second question, I want to ask about the rationale behind why Monterey was specifically chosen. I think the location makes it appear as if it is counterintuitive, but presumably, there were some aspects related to efficiencies and prior investment at other facilities. So maybe if you could just help unpack that. Yeah. Timothy K. Flanagan: No, it is a good question. So I think, you know, if you take a step back, you know, our first and foremost, and I think we would alluded to this in a number of calls previously, you know, with the market the oversupplied market conditions, you know, we felt that you know, we needed to evaluate what our portfolio looked like. Know, I think everyone on the call can appreciate that running industrial assets at 60% utilization is not a recipe for long term success. So really, our first objective was to bring that supply and demand oversupply back into balance to the extent that we could. We looked at all of our facilities and really went through an evaluation process of saying, how do we continue to serve our customers? By serving our customers, maintaining the product mix that we have today, our capabilities around supersized electrodes to standard sizes, as well as some of the more unique products that we offer to the market that differentiate us. ALX, extra long lengths, the low oxidation items like that. Secondarily, we wanted obviously to improve our cost profile, which Rory spoke to in terms of bringing down our fixed costs. We were able to reduce the overall cost profile, on a variable cost basis for a number of reasons, Monterrey is the highest cost facility that we had in our portfolio. Partially driven by the fact it is also the smallest set of assets in our portfolio. And then lastly, it is how we manage the risk of transition. right? And how we can ensure that we can do this seamlessly and not disrupt ultimately our customers' business. And I think 1 thing that is important you know, you raised the point of the proximity to The US market and that we only serve The US market, partially out of Monterey. We have historically brought in quite a bit of material from our European facilities. So from our perspective, this is not really a change in the way we. We have otherwise had to operate. You know, St. Mary's gives us a lot of flexibility to you know, stockpile inventory, allow us to manage deliveries and shipments to customers, and so it is been a pretty efficient supply chain for us time. Rory F. O'Donnell Jr.: So end of the day, we view it as it is the same needle coke going through the same production process under the same quality standards, with the same expectations of, product performance. So does not really affect how we think we will, deliver to our customers at the end of the day. Hey, Bennett. Just 1 more couple more things to add on the cost front. Do not overlook the efforts that we have made in the past few years around investment in equipment and process innovation around our needle coke production facility. I think we have got a proven track record that we are able to battle changes in underlying crude indices and other commodity costs with our capabilities around blending. I mentioned it in my prepared remarks. With those with those investments we have been making, it is possible for us to continue to improve our premium needle coke quality with a diversified set of oils. We have got many refineries that supply us, not all the same quality. But we have got the science behind the blending and the ability to push in some of the blow of some of the volatile markets. So please keep that in mind. On the on the energy front, remember, we have an. We have a pretty robust hedging strategy in Europe. Some hedging contracts are up to 2 years. So we. We are going to enjoy some against some of the volatility going into 2027 in some of our operations in Europe. But we are it is it is kudos to the team, the management team, around identifying these risks and properly mitigating whether it is through process innovation, supplier relations, equipment investment, or contractual commitments. So just wanna add that to Timothy's cost comments. Bennett Moore: Oh, that is a great color and much appreciated. Maybe just sticking with that thread, if I can squeeze in 1 last 1 is with the Antora deal, I mean, there any opportunity here to help absorb stranded fixed cost at Saint Mary's? Rory F. O'Donnell Jr.: Of course. that is 1 of the benefits that we see. We are not gonna guide to individual asset costs or any of the terms of the agreement. We are still working through it with our partner. But pleased where it is going. And that, of course, is what Timothy was mentioning around prudent use of our idle assets. that is exactly 1 of the objectives. Bennett Moore: So I think I will leave it at that, but you can. Rory F. O'Donnell Jr.: I am gonna assume what I said. Bennett Moore: Yep. Alright. Thank you very much. Timothy K. Flanagan: Thanks, Bennett. Operator: Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Arun, your line is open. Please go ahead. Arun Viswanathan: Great. Good morning. Thanks for taking my questions. Yes, I think you mentioned kind of turning the corner on pricing initiatives. So maybe you can just elaborate on what you are seeing there. And maybe if you could link that to your outlook on needle coke as well. It sounds like you know, you have done some work there, but, yeah, is there is there more of a an outlook on what you see there, especially given the recent oil price inflation? Thanks. Timothy K. Flanagan: Yes, Arun, thanks. On the price front, again, I think good progress is being made by the team across the board. You know, I think we will start to see the realization of the initial price increase that we announced back in March in Q4. And that will have a higher ASP reported out in the fourth quarter. And then you will see a step change that will be meaningfully higher as we head into 2027 as we continue to work through the negotiations. But very pleased with. Thus far with the team's effort and all the work that is been done throughout the year to get us here. So yeah, I do not I do not know if there is much more I can say at this point on the price front. With respect to needle coke, you know, I think needle coke has been similar to electrode prices. Pretty stagnant for a number of years. And we probably entered the year somewhere in $1 thousand to $1.2 thousand range depending on grade. And we have seen that steadily increase over the course of the year. And really, that is a factor of 2 things. 1, obviously higher oil prices are gonna drive the byproducts for oil and that. So that is certainly a driving up the price of needle coke to some extent, but also supply and demand. I think we are seeing greater demand in the market across a couple end markets and end users. Which certainly helps drive up the price of needle coke. So if I if I had to say where I think the market is today, we are probably in that $1.7 thousand to $2,000 a ton range. Again, which I think provides support, for higher, electric price going into 2027. And I probably would expect that number to continue to creep up as we head into Q1 and Q2 of next year. And again, it is it is been a little while since we have had this conversation, but again, when you start to see needle prices in that range, Seadrift really becomes, a cost benefit to us and a and a strategic asset beyond the benefits we get from having surety of supply and the ability to control the quality of the product we put into our electrodes. Arun Viswanathan: But we are really pleased with how that market's evolving as well. Thanks for that. And I guess wanted to get your thoughts on supply demand for electrodes globally Congrats on your own decisive actions here to close Monterrey. But would you. You know, you noted the percent utilization. I imagine the industry is also not running full, you know, maybe in the. Maybe above that 60%. But yeah, where do you think industry utilization rates are? And where do you think and do you expect other actions? I know, you know, you yourself may not be able to take anything else, but I guess maybe just get your thoughts on that and then as a related question, you know, now that you have exited some extra-- or you will be exiting some electrode finishing capacity, conversion capacity, will you still be able to, potentially use some of your needle coke and divert it to the EV side, the battery materials market, or is that unlikely? Maybe you can offer your thoughts on both industry supply demand and then you know, potential forays into the EV industry. Thanks. Timothy K. Flanagan: Thanks, Arun, and try to capture both of those. So just to clarify, on a year to date basis, we are at about 68% utilization. So a little better than the 60 that I threw out there before. But just as an example, I think if you look across the industry right now, if I had to you know, take an estimate of where I think you know, it is at collectively. We are probably sitting at about 65% globally outside of China. If you take the 51 thousand tons of capacity reduction, that would put you probably closer to 70 or just over 70% So certainly a meaningful move in terms of balancing out supply and demand, but I think there is still opportunity for that, to tighten up and some of it will happen organically as electrode demand continues to grow. at, you know, call it, 3% a year over the next, you know, 5 years or so or as we project out. But, also, I think there is still opportunity for some supply reduction in the market You know, which plants and which competitors, you know, I think we have done our part. I will not speculate as to what it is, but, I mean, I think at the end of the day, you know, this is a cost game and fixed cost leverage game in many respects. So I think the bigger the plant, the more cost competitive they tend to be. With respect to Seadrift and how we view Seadrift as an asset, certainly by reducing our electrode capacity that gives us a little bit more capacity or excess capacity out of Seadrift and certainly allows us to you know, continue to explore how we partner and supply needle coke into I will say broadly, other synthetic graphite applications, whether that is for EVs, energy storage, industrial defense applications, whatever. So you know, we continue to work in the background as we have been saying for the last couple years, Antora is the first example of kind of all of this work by our development and technical teams, to come to market and allow us to use some stranded assets. We have a number of other initiatives and activities going on that will allow us to use the needle coke Seadrift, and pretty excited about where that will land longer term. Arun Viswanathan: Thanks. Timothy K. Flanagan: Thanks, Arun. Operator: Your next question comes from the line of Abe Landa with Bank of America. Abe, your line is open. Please go ahead. Abraham Landa: Good morning. Thank you for taking my questions. Maybe just some housekeeping items. The cost to achieve the Monterrey closure, the $20 million to $25 million to $25 million, what is cash versus non-cash, and how do you split that up between COGS and SG&A? Rory F. O'Donnell Jr.: That is that is a cash cost. $20 million to $25 million. So I would. I guess I would split it predominantly as cost of goods sold. The primary categories of that cost are general closure cost is about half and people cost is the other half. So you could probably think about that mostly as a. As COGS. But we will be isolating that to report it separately for you to go forward. Abraham Landa: I-- sorry. Maybe the $20 million to $25 million cost saves. I guess, how-- how would you split the cost saves between COGS and actually Oh, I bet you-- I misread my question. Rory F. O'Donnell Jr.: No. No. I think I think I misspoke. I misspoke over here. So That cost savings will be primarily cost of goods sold. Abraham Landa: Okay. Rory F. O'Donnell Jr.: We are lowering our overall Go ahead. Abraham Landa: And there is no long-term liability, cleanup costs that are associated with closing the Monterey? So that is included in the first 20 as well. Rory F. O'Donnell Jr.: that is included-- yeah. there is a lot of 20 to 25 millions floating around. So that first $20 million to $25 million was the cash cost expected from the closure. Which would incorporate all the site closure costs and other-- and their decision based costs And the $20 million to $25 million of cost savings going forward would be COGS savings. Abraham Landa: Okay. Okay, that clarifies it. Yes, it does. You kind of mentioned that you thought realized prices would be up mid single digits. Quarter on quarter in the fourth quarter. I guess if we were to just to look at those open contracts, where you are able to actually enable cost increases or price increases What was the percent change on those volumes on a on a quarter? Timothy K. Flanagan: For the first quarter. Basis or expected change. Yeah. So I will I will go back to kind of the analysis or the indicators that we shared previously. You know, because when the first price increase we announced was a range of $600 to $1.2 thousand so it was not ratable across each region. And again, negotiated on a customer by customer basis. But if you take what we achieved in those on a regional basis and apply our existing mix, it was about 15% you know, for the new contracts that we had. Again, just to remind you or the new commitments that we could made during 2026 after the price increase announcement. But just to, again, to remind you that when we made the price increase announcement, about 80% of our volume was already committed. So it is a relatively small subset of customer commitments that were at that higher price point. Abraham Landa: Okay. And that is essentially what you are saying is that is flowing through into the fourth quarter that is why we are getting to, like, the mid single digits. Yeah. Timothy K. Flanagan: So if you think about if you think about the way. You know, so Q1 would have been all negotiated in 25. Q2 would have been almost entirely negotiated in 2025, maybe a some small volumes in 2026, but probably before the price increase. Q3 and Q4, that percentage of when it was contracted pre or post price increase tends to go up, the fourth quarter is going to have the biggest portion. And that is why we are seeing the price increase now trickle through our results. Abraham Landa: And then given your recent price increase, I think it was 30%, In September ish time frame, that is going to then flow through Q1 combined with the commitments you typically get from the North American markets that will all essentially kind of flow through to the better, higher price increases and start in 2027. Am I kinda thinking about various parts correctly? Timothy K. Flanagan: Yeah. So that will be a step change as we get into 2027. So all of the 2027 volume is being negotiated post this new price increase announcement. You will see a step change as we get into Q1 deliveries. And again, typically, it is it is more of that 60 to 65% that we have committed in, you know, the start of the new year is gonna be heavier weighted towards North American or US customers just the way those markets tend to contract. Abraham Landa: Versus, the rest. But there is a lot of European and other region commitment in there as well. Maybe just touching on in the US, the anti-dumping and countervailing duties that were at least the preliminary was provided since your last call. It seems like especially in India, it was kinda lower versus your expectations. Maybe if those are reaffirmed, do you expect US graphite electrode import volumes to be impacted and maybe the impact on pricing? Timothy K. Flanagan: Within The US? So a little disappointed in the outcome, but, again, I do not think the previously communicated numbers are our expectations. that is what the filed cases were and the preliminary assessment coming out of the ITC. But, again, I think as we made in our prepared remarks, you know, the investigation is not complete. You know, the information will be subject to verification as it always is as commerce works through its process. And, you know, I think we are confident that the Commerce will do an investigation, you know, before they announce their final ruling in Q1 of next year. You know, in terms of market, you know, I think certainly, we saw, you know, the Indian competitors have you know, call it 10 to 15% of The US market. Few years ago. And with all of the turmoil and trade talk over the last year or year and a half, you know, I think that maybe has pulled back some. But I. You know, how that plays out going forward, I mean, prices are still going up absent the, announced increase or tariff, levels as high as what, the preliminary rulings would have otherwise suggested. So yeah, I think we like our position, both in The US and Europe globally. And our market position. Again, I think it all comes down to value proposition, you know, for those customers, that value something other than just the absolute lowest price. Abraham Landa: And then my last question, You said earlier that pet needle coke prices are being driven by graphite electrode demand, but then also other markets. Can you just describe what is going on? In those other markets and maybe kind of any other asset supply and demand perspective on pet needle coke? Timothy K. Flanagan: Yeah. So, I mean, I think there is a few things. Right? Obviously, needle coke demand, I think all of the disruption in the oil markets to date you know, in terms of, you know, oil coming out of The Middle East and getting to needle coke producers globally, certainly will have an impact. As well as I think you. As you start to think about the demand and the impact that the diesel markets are having, As the refineries produce more diesel, they are producing less decan oil as decan oil means less needle coke in the market. So all of those things can weigh on know, kind of the supply and demand balance, from a price pushing up, but also graphite electrode demand pulling needle coke prices up as well. So it. it is kind of a push and pull on that front. Abraham Landa: Okay. Makes sense. that is all for me. Thank you. Operator: Thanks. There are no further questions at this time. I will now turn the call back to Timothy K. Flanagan, CEO and president for closing remarks. Timothy K. Flanagan: Thank you. And I would like to thank everyone on this call for joining us this morning. We look forward to speaking with you again next quarter. Have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in GrafTech International, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GrafTech International wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. GrafTech (EAF) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Advancing strategic initiatives to improve long-term profitability Expecting higher realized pricing in the fourth quarter and in 2027 Reaffirming full-year 2026 volume and cost expectations BROOKLYN HEIGHTS, Ohio, October 23, 2026--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE: EAF) today announced its unaudited financial results for the quarter and nine months ended September 30, 2026. Third Quarter 2026 Summary - Sales volume of 28.8 thousand metric tons ("MT"), flat year-over-year - Net sales of $140 million, a decrease of 3% year-over-year - Net loss of $47 million, or $1.76 per share(1) - Adjusted EBITDA(2) of $9 million - Net cash used in operating activities of $8 million - Adjusted free cash flow(2) of negative $16 million - Total liquidity of $242 million as of September 30, 2026, including $134 million of cash and cash equivalents - Announced planned closure of Monterrey, Mexico manufacturing facility, expected to generate $20 to $25 million in annual cash cost savings while better aligning production capacity with market demand CEO Comments "Our third quarter results reflect continued progress in executing our operational and commercial priorities," said Timothy Flanagan, Chief Executive Officer and President. "Pricing momentum across our key commercial regions reinforces our confidence that our realized pricing has reached an inflection point, positioning us for meaningfully higher realized pricing in 2027." "During the quarter we announced the planned closure of our Monterrey, Mexico manufacturing facility, a significant step toward improving GrafTech's long-term competitiveness and financial performance," continued Mr. Flanagan. "The closure will better align our production capacity with market demand, lower costs and improve operating efficiency. Combined with our ongoing commercial and operational initiatives, this action will strengthen our foundation for sustainable, long-term profitability." Third Quarter 2026 Financial Performance (dollars in thousands, except per share amounts) | | | Nine Months Ended | | September 30, Q3 2026 | Q2 2026 | Q3 2025 | | 2026 | 2025 Net sales | $ | 140,163 | | $ | 127,362 | | $ | 143,998 | | | $ | 392,626 | | $ | 387,677 | Net loss | $ | (46,768 | ) | $ | (40,471 | ) | $ | (28,482 | ) | | $ | (130,516 | ) | $ | (154,719 | ) Loss per share(1) | $ | (1.76 | ) | $ | (1.54 | ) | $ | (1.10 | ) | | $ | (4.96 | ) | $ | (5.97 | ) Net cash (used in) provided by operating activities | $ | (8,445 | ) | $ | (68,612 | ) | $ | 24,700 | | | $ | (91,991 | ) | $ | (60,722 | ) | | | | | | Adjusted net loss(2) | $ | (32,109 | ) | $ | (38,582 | ) | $ | (26,788 | ) | | $ | (124,218 | ) | $ | (103,190 | ) Adjusted loss per share(1)(2) | $ | (1.21 | ) | $ | (1.47 | ) | $ | (1.03 | ) | | $ | (4.73 | ) | $ | (3.98 | ) Adjusted EBITDA(2) | $ | 8,626 | | $ | 1,898 | | $ | 13,013 | | | $ | (3,026 | ) | $ | 12,812 | Adjusted free cash flow(2) | $ | (16,104 | ) | $ | (75,476 | ) | $ | 18,376 | | | $ | (118,659 | ) | $ | (75,235 | ) Net sales for the third quarter of 2026 were $140 million, a decrease of 3% compared to $144 million for the third quarter of 2025, primarily driven by lower weighted-average realized pricing. Net loss for the third quarter of 2026 was $47 million, or $1.76 per share, compared to $28 million, or $1.10 per share, for the third quarter of 2025. The current year period included $14 million of restructuring and other exit charges, the majority of which are non-cash, associated with the planned closure of our Monterrey facility. Adjusted EBITDA(2) was $9 million for the third quarter of 2026, compared to $13 million for the third quarter of 2025, with the year-over-year decline primarily reflecting lower weighted-average realized price, partially offset by lower cash cost of goods sold per MT. For the third quarter of 2026, net cash used in operating activities was $8 million and adjusted free cash flow(2) was negative $16 million, compared to net cash provided by operating activities of $25 million and adjusted free cash flow(2) of $18 million for the third quarter of 2025. Operating cash flow in the quarter reflected an increase in inventory levels that was consistent with our expectations. We continue to anticipate a reduction in working capital, including inventory, during the fourth quarter. Operational and Commercial Update Key Operating Metrics | | | | | Nine Months Ended | | | | | September 30, (in thousands, except percentages) | Q3 2026 | Q2 2026 | Q3 2025 | | 2026 | 2025 Sales volume (MT) | 28.8 | | 30.8 | | 28.8 | | | 87.7 | | 82.1 | Production volume (MT) | 27.0 | | 33.4 | | 26.6 | | | 89.8 | | 84.5 | Production capacity (MT)(3)(4) | 42.0 | | 45.0 | | 42.0 | | | 132.0 | | 132.0 | Capacity utilization(5) | 64 | % | 74 | % | 63 | % | | 68 | % | 64 | % Sales volume for the third quarter of 2026 was 28.8 thousand MT, flat compared to the third quarter of 2025. For the first nine months of 2026, sales volume increased 7% year-over-year, consistent with our full-year growth expectations. For the third quarter of 2026, our weighted-average realized price was approximately $3,900 per MT, a 7% decrease compared to the third quarter of 2025 and flat compared to the second quarter of 2026. Production volume was 27.0 thousand MT for the third quarter of 2026, resulting in a capacity utilization rate of 64%. While production volume has exceeded sales volume for the first nine months of 2026, we continue to expect production and sales volume levels to be balanced on a full-year basis. In September 2026, we announced the planned closure of our graphite electrode manufacturing facility in Monterrey, Mexico, as part of our ongoing efforts to optimize our manufacturing footprint and improve long-term profitability. Following the phased wind-down of operations, customer requirements currently served by Monterrey will transition to our facilities in Calais, France and Pamplona, Spain, with connecting pin production capacity transferred to Pamplona. Upon completion, our annual graphite electrode production capacity is expected to be approximately 127 thousand MT. We expect this initiative to generate $20 to $25 million in annual cash cost savings, excluding one-time costs, with the full annual benefit expected to be realized in 2028. In addition to strengthening our cost structure, this action will improve operating efficiency and better align our production capacity with market demand. Capital Structure and Liquidity As of September 30, 2026, we had total liquidity of $242 million, consisting of cash and cash equivalents of $134 million and $108 million of availability under our revolving credit facility, supporting our ability to execute our operational and strategic initiatives. As of September 30, 2026, we had gross debt(6) of $1,225 million, with substantially no maturities until December 2029, and net debt(7) of approximately $1,091 million. Outlook Global steel demand, outside of China, is projected to grow modestly in 2026, with anticipated growth in many of our key commercial regions. In the United States, modest demand growth, coupled with favorable trade policies, has driven a 6% increase in steel production year-to-date through August. In Europe, while steel production is flat over this period, the steel market outlook is improving, reflecting recently approved increases in trade protections. Based on current steel market conditions, we continue to expect modest growth in graphite electrode demand for the full year of 2026. For GrafTech, we are maintaining our expectation for a 5–10% year-over-year increase in graphite electrode sales volume as we continue to gain market share. We are encouraged by improving pricing trends across our key commercial regions and believe we have reached an inflection point in our realized pricing. During the third quarter and early in the fourth quarter, we have secured customer commitments at higher price levels than comparable commitments secured in earlier periods. We expect these higher-priced commitments to contribute to improved realized graphite electrode pricing as they begin to flow through our results. For the fourth quarter, we anticipate a mid-single-digit percentage increase in our weighted-average realized pricing compared to the third quarter. We believe this momentum, together with our disciplined commercial approach and ongoing efforts to optimize our product and customer mix, positions us for meaningfully higher realized pricing in 2027. We remain focused on supporting sustainable pricing improvement through our previously announced price increases, trade enforcement efforts in key jurisdictions and strategic actions to better align industry supply with market demand, including our recently announced plan to close our Monterrey, Mexico manufacturing facility. Despite continued cost pressures from oil-based raw materials, energy and logistics, our ongoing cost reduction and operational efficiency initiatives are expected to offset these headwinds. Accordingly, we continue to expect a low-single-digit percentage decline in our cash cost of goods sold per MT for 2026 compared to 2025. We remain focused on disciplined capital spending and working capital management. For 2026, we continue to expect a modest increase in working capital to support higher sales volume. We also continue to anticipate full-year capital expenditures of approximately $35 million. Longer term, we remain confident in the structural drivers of demand growth for graphite electrodes, including the ongoing transition toward electric arc furnace steelmaking, as well as opportunities for petroleum needle coke in battery applications. We believe our strategic initiatives to improve our cost structure, optimize our manufacturing footprint and strengthen our commercial position, combined with our vertical integration and differentiated capabilities, position GrafTech to deliver stronger financial performance as market conditions improve. Conference Call Information In connection with this earnings release, you are invited to listen to our earnings call being held on October 23, 2026 at 10:00 a.m. (EDT). The webcast and accompanying slide presentation will be available on our investor relations website at: http://ir.graftech.com. The earnings call dial-in number is +1 (833) 461-5787 toll-free or +1 (626) 884-3620, conference ID: 988749212. Archived replays of the conference call and webcast will be made available on our investor relations website at: http://ir.graftech.com. GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission ("SEC") and other information available at: www.GrafTech.com. 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 global manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. With 140 years of experience in carbon science and manufacturing, GrafTech operates a competitive portfolio of large-scale, low-cost, ultra-high power graphite electrode facilities and is the only major graphite electrode producer vertically integrated into petroleum needle coke, its key raw material. This unique position provides important advantages in product quality, supply reliability, and cost competitiveness. Building on its core graphite electrode and needle coke capabilities, GrafTech also has deep experience in research and development, engineering and processing of specialized carbon and graphite materials supporting selected applications in industrial manufacturing, energy storage, anode materials, defense, and other emerging technologies. ____________________ (1) | Loss per share represents diluted loss per share. Adjusted loss per share represents diluted adjusted loss per share. (2) | A non-GAAP financial measure, see below for more information and reconciliations to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). (3) | Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. (4) | Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; and Pamplona, Spain. (5) | Capacity utilization reflects production volume as a percentage of production capacity. (6) | Gross debt reflects the notional value of our outstanding debt and excludes unamortized debt discount and issuance costs. (7) | A non-GAAP financial measure, net debt is calculated as gross debt minus cash and cash equivalents (September 30, 2026 gross debt of $1,225 million less September 30, 2026 cash and cash equivalents of $134 million). 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 "will," "may," "plan," "estimate," "project," "believe," "anticipate," "expect," "foresee," "intend," "should," "would," "could," "target," "goal," "continue to," "positioned to," "are confident," 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 remain at depressed levels or further decline in the future, and may continue to experience 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 that 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 increase or maintain existing prices 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 cost and availability of manufacturing inputs, including raw materials, such as decant oil, petroleum needle coke, energy and freight, and disruptions in availability for such inputs; our ability to execute the closure of the Monterrey, Mexico facility (the "Mexico Facility Closure") as planned; our ability to produce connecting pins at our facility located in Pamplona, Spain and our primary reliance on one facility for the manufacturing of connecting pins after the Mexico Facility Closure; 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; uncertain shifts in domestic and foreign trade policies and the possibility that the imposition of current, new or increased custom duties and tariffs and trade barriers in the countries in which we, our customers and our suppliers operate could adversely affect our ability to compete, operations, results of operations and financial condition; risks associated with strategic transactions, including acquisitions, divestitures, joint ventures, equity investments, and debt issuances, that could adversely affect our business, operating results and financial condition; 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; 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; our ability to obtain the estimated cost savings, capital expenditure reductions, working-capital release, and other benefits from the Mexico Facility Closure on the expected timing, or at all; the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; and changes in health, safety and environmental regulations applicable to our manufacturing operations and facilities. 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 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, 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, gains on asset sales, restructuring and other exit charges and Tax Receivable Agreement adjustments. Adjusted EBITDA is the primary metric used by our management and the Company's Board of Directors (the "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. 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' 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 restructuring and 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 and less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes, 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 the 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. GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) (Unaudited) | | | | September 30,2026 | | December 31,2025 ASSETS | | | Current assets: | | | Cash and cash equivalents | $ | 134,312 | | | $ | 138,427 | Accounts receivable, net of allowance for doubtful accounts of $3,203 as of September 30, 2026 and $3,271 as of December 31, 2025 | | 77,819 | | | | 73,235 | Inventories | | 247,597 | | | | 224,692 | Prepaid and other current assets | | 59,490 | | | | 48,180 | Total current assets | | 519,218 | | | | 484,534 | Property, plant and equipment | | 982,320 | | | | 986,946 | Less: accumulated depreciation | | 529,504 | | | | 497,016 | Net property, plant and equipment | | 452,816 | | | | 489,930 | Deferred income taxes | | 9,232 | | | | 9,318 | Other assets | | 41,154 | | | | 45,007 | Total assets | $ | 1,022,420 | | | $ | 1,028,789 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | Current liabilities: | | | Accounts payable | $ | 67,734 | | | $ | 67,017 | Accrued income and other taxes | | 9,665 | | | | 8,047 | Other accrued liabilities | | 45,296 | | | | 48,363 | Interest payable | | 23,604 | | | | 4,764 | Total current liabilities | | 146,299 | | | | 128,191 | | | | Long-term debt | | 1,200,550 | | | | 1,094,706 | Other long-term obligations | | 38,538 | | | | 40,388 | Deferred income taxes | | 25,204 | | | | 25,132 | Stockholders' deficit: | | | Preferred stock, par value $0.01, 30,000,000 shares authorized, none issued | | — | | | | — | Common stock, par value $0.01, 300,000,000 shares authorized, 26,897,473 and 25,820,110 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | | 2,596 | | | | 2,582 | Additional paid-in capital | | 768,475 | | | | 759,710 | Accumulated other comprehensive loss | | (15,571 | ) | | | (8,972 | ) Accumulated deficit | | (1,143,671 | ) | | | (1,012,948 | ) Total stockholders' deficit | | (388,171 | ) | | | (259,628 | ) Total liabilities and stockholders' deficit | $ | 1,022,420 | | | $ | 1,028,789 | GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) | | | | Three Months EndedSeptember 30, | | Nine Months EndedSeptember 30, | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | Net sales | $ | 140,163 | | | $ | 143,998 | | | $ | 392,626 | | | $ | 387,677 | Cost of goods sold | | 132,526 | | | | 132,041 | | | | 392,622 | | | | 372,691 | Lower of cost or market inventory valuation adjustment | | 2,013 | | | | 1,650 | | | | 9,792 | | | | 6,326 | Gross profit (loss) | | 5,624 | | | | 10,307 | | | | (9,788 | ) | | | 8,660 | Research and development | | 1,458 | | | | 1,639 | | | | 4,440 | | | | 4,866 | Selling and administrative expenses | | 12,964 | | | | 13,784 | | | | 39,808 | | | | 41,673 | Restructuring and other exit charges | | 13,874 | | | | — | | | | 13,874 | | | | — | Operating loss | | (22,672 | ) | | | (5,116 | ) | | | (67,910 | ) | | | (37,879 | ) | | | | | | | Other (income) expense, net | | (774 | ) | | | 142 | | | | (12,288 | ) | | | (1,837 | ) Interest expense | | 25,916 | | | | 24,517 | | | | 74,482 | | | | 79,776 | Interest income | | (1,151 | ) | | | (1,383 | ) | | | (2,705 | ) | | | (5,184 | ) Loss before income taxes | | (46,663 | ) | | | (28,392 | ) | | | (127,399 | ) | | | (110,634 | ) Income tax expense | | 105 | | | | 90 | | | | 3,117 | | | | 44,085 | Net loss | $ | (46,768 | ) | | $ | (28,482 | ) | | $ | (130,516 | ) | | $ | (154,719 | ) | | | | | | | Basic loss per common share: | | | | | | | Net loss per share | $ | (1.76 | ) | | $ | (1.10 | ) | | $ | (4.96 | ) | | $ | (5.97 | ) Weighted average common shares outstanding | | 26,514,073 | | | | 25,933,254 | | | | 26,287,719 | | | | 25,896,520 | Diluted loss per common share: | | | | | | | Net loss per share | $ | (1.76 | ) | | $ | (1.10 | ) | | $ | (4.96 | ) | | $ | (5.97 | ) Weighted average common shares outstanding | | 26,514,073 | | | | 25,933,254 | | | | 26,287,719 | | | | 25,896,520 | GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) | | | | Three Months EndedSeptember 30, | | Nine Months EndedSeptember 30, | 2026 | | 2025 | | 2026 | | 2025 Cash flow from operating activities: | | | | | | | Net loss | $ | (46,768 | ) | | $ | (28,482 | ) | | $ | (130,516 | ) | | $ | (154,719 | ) Adjustments to reconcile net loss to cash used in operations: | | | | | | | Depreciation and amortization | | 15,277 | | | | 16,499 | | | | 45,238 | | | | 45,844 | Deferred income tax expense | | (298 | ) | | | (1,355 | ) | | | 62 | | | | 40,782 | Non-cash stock-based compensation expense | | 1,229 | | | | 1,012 | | | | 4,146 | | | | 3,434 | Non-cash interest expense | | 1,947 | | | | 1,948 | | | | 5,843 | | | | 5,844 | Lower of cost or market inventory valuation adjustment | | 2,013 | | | | 1,650 | | | | 9,792 | | | | 6,326 | Non-cash restructuring and other exit costs | | 12,317 | | | | — | | | | 12,317 | | | | — | Gain on sale of assets | | (500 | ) | | | — | | | | (12,777 | ) | | | — | Changes in assets and liabilities: | | | | | | | Accounts receivable, net | | (1,787 | ) | | | 2,551 | | | | (4,877 | ) | | | 9,142 | Inventories | | (11,111 | ) | | | 10,620 | | | | (31,294 | ) | | | (15,034 | ) Prepaid and other current assets | | (1,039 | ) | | | (1,995 | ) | | | (9,301 | ) | | | (6,263 | ) Income taxes payable | | (627 | ) | | | (448 | ) | | | (1,526 | ) | | | (691 | ) Accounts payable and other accruals | | 3,450 | | | | 4,055 | | | | 8,855 | | | | (17,762 | ) Interest payable | | 18,715 | | | | 16,813 | | | | 18,840 | | | | 16,816 | Change in Tax Receivable Agreement | | — | | | | — | | | | — | | | | (5,824 | ) Other | | (1,263 | ) | | | 1,832 | | | | (6,793 | ) | | | 11,383 | Net cash (used in) provided by operating activities | | (8,445 | ) | | | 24,700 | | | | (91,991 | ) | | | (60,722 | ) Cash flow from investing activities: | | | | | | | Capital expenditures | | (7,847 | ) | | | (6,324 | ) | | | (26,856 | ) | | | (20,514 | ) Proceeds from the sale of fixed assets | | 624 | | | | 265 | | | | 9,882 | | | | 298 | Net cash used in investing activities | | (7,223 | ) | | | (6,059 | ) | | | (16,974 | ) | | | (20,216 | ) Cash flow from financing activities: | | | | | | | Proceeds from Delayed Draw First Lien Term Loan due 2029 | | — | | | | — | | | | 100,000 | | | | — | Proceeds from issuance of common stock, net of issuance costs | | 4,725 | | | | — | | | | 5,073 | | | | — | Payments for taxes related to net share settlement of equity awards | | (11 | ) | | | (17 | ) | | | (350 | ) | | | (230 | ) Principal payments under finance lease obligations | | (36 | ) | | | (29 | ) | | | (106 | ) | | | (80 | ) Net cash provided by (used in) financing activities | | 4,678 | | | | (46 | ) | | | 104,617 | | | | (310 | ) Net change in cash and cash equivalents | | (10,990 | ) | | | 18,595 | | | | (4,348 | ) | | | (81,248 | ) Effect of exchange rate changes on cash and cash equivalents | | (58 | ) | | | 497 | | | | 233 | | | | 2,635 | Cash and cash equivalents at beginning of period | | 145,360 | | | | 158,543 | | | | 138,427 | | | | 256,248 | Cash and cash equivalents at end of period | $ | 134,312 | | | $ | 177,635 | | | $ | 134,312 | | | $ | 177,635 | NON-GAAP RECONCILIATIONS (Dollars in thousands, except per share and per MT data) (Unaudited) The following tables reconcile our non-GAAP financial measures to the most directly comparable GAAP measures: | Reconciliation of Net Loss to Adjusted Net Loss | | | | | Nine Months EndedSeptember 30, | Q3 2026 | Q2 2026 | Q3 2025 | 2026 | 2025 | | | | | Net loss | $ | (46,768 | ) | $ | (40,471 | ) | $ | (28,482 | ) | $ | (130,516 | ) | $ | (154,719 | ) | | | | | Diluted loss per common share: | | | | | Net loss per share | $ | (1.76 | ) | $ | (1.54 | ) | $ | (1.10 | ) | $ | (4.96 | ) | $ | (5.97 | ) Weighted average shares outstanding | | 26,514,073 | | | 26,254,657 | | | 25,933,254 | | | 26,287,719 | | | 25,896,520 | | | | | | Adjustments, pre-tax: | | | | | Pension and OPEB plan expenses(1) | | 531 | | | 532 | | | 719 | | | 1,594 | | | 1,980 | Foreign currency remeasurement(2) | | 113 | | | 484 | | | 41 | | | 521 | | | 1,387 | Stock-based compensation expense | | 1,229 | | | 1,078 | | | 1,012 | | | 4,146 | | | 3,434 | (Gain) loss on sale of assets(3) | | (500 | ) | | 2 | | | — | | | (12,777 | ) | | — | Restructuring and other exit charges(4) | | 13,874 | | | — | | | — | | | 13,874 | | | — | Tax Receivable Agreement adjustment(5) | | — | | | — | | | — | | | — | | | (3,791 | ) Debt modification costs(6) | | — | | | — | | | — | | | — | | | 6,293 | Total non-GAAP adjustments pre-tax | | 15,247 | | | 2,096 | | | 1,772 | | | 7,358 | | | 9,303 | Valuation allowance adjustments(7) | | — | | | — | | | — | | | — | | | (42,624 | ) Income tax impact on non-GAAP adjustments | | 588 | | | 207 | | | 78 | | | 1,060 | | | 398 | Adjusted net loss | $ | (32,109 | ) | $ | (38,582 | ) | $ | (26,788 | ) | $ | (124,218 | ) | $ | (103,190 | ) Reconciliation of Loss Per Share to Adjusted Loss Per Share | | | | | Nine Months EndedSeptember 30, | Q3 2026 | Q2 2026 | Q3 2025 | 2026 | 2025 | | | | | Loss per share | $ | (1.76 | ) | $ | (1.54 | ) | $ | (1.10 | ) | $ | (4.96 | ) | $ | (5.97 | ) Adjustments per share: | | | | | Pension and OPEB plan expenses(1) | | 0.02 | | | 0.02 | | | 0.03 | | | 0.06 | | | 0.08 | Foreign currency remeasurement(2) | | — | | | 0.02 | | | — | | | 0.02 | | | 0.05 | Stock-based compensation expense | | 0.05 | | | 0.04 | | | 0.04 | | | 0.16 | | | 0.13 | (Gain) loss on sale of assets(3) | | (0.02 | ) | | — | | | — | | | (0.49 | ) | | — | Restructuring and other exit charges(4) | | 0.52 | | | — | | | — | | | 0.53 | | | — | Tax Receivable Agreement adjustment(5) | | — | | | — | | | — | | | — | | | (0.14 | ) Debt modification costs(6) | | — | | | — | | | — | | | — | | | 0.24 | Total non-GAAP adjustments pre-tax per share | | 0.57 | | | 0.08 | | | 0.07 | | | 0.28 | | | 0.36 | Valuation allowance adjustments(7) | | — | | | — | | | — | | | — | | | (1.65 | ) Income tax impact on non-GAAP adjustments per share | | 0.02 | | | 0.01 | | | — | | | 0.05 | | | 0.02 | Adjusted loss per share | $ | (1.21 | ) | $ | (1.47 | ) | $ | (1.03 | ) | $ | (4.73 | ) | $ | (3.98 | ) Reconciliation of Net Loss to Adjusted EBITDA | | | | Nine Months Ended September 30, | Q3 2026 | Q2 2026 | Q3 2025 | 2026 | 2025 | | | | | Net loss | $ | (46,768 | ) | $ | (40,471 | ) | $ | (28,482 | ) | $ | (130,516 | ) | $ | (154,719 | ) Add: | | | | | Depreciation and amortization | | 15,277 | | | 14,913 | | | 16,499 | | | 45,238 | | | 45,844 | Interest expense | | 25,916 | | | 24,370 | | | 24,517 | | | 74,482 | | | 79,776 | Interest income | | (1,151 | ) | | (713 | ) | | (1,383 | ) | | (2,705 | ) | | (5,184 | ) Income taxes | | 105 | | | 1,703 | | | 90 | | | 3,117 | | | 44,085 | EBITDA | | (6,621 | ) | | (198 | ) | | 11,241 | | | (10,384 | ) | | 9,802 | Adjustments: | | | | | Pension and OPEB plan expenses(1) | | 531 | | | 532 | | | 719 | | | 1,594 | | | 1,980 | Foreign currency remeasurement(2) | | 113 | | | 484 | | | 41 | | | 521 | | | 1,387 | Stock-based compensation expense | | 1,229 | | | 1,078 | | | 1,012 | | | 4,146 | | | 3,434 | (Gain) loss on sale of assets(3) | | (500 | ) | | 2 | | | — | | | (12,777 | ) | | — | Restructuring and other exit charges(4) | | 13,874 | | | — | | | — | | | 13,874 | | | — | Tax Receivable Agreement adjustment(5) | | — | | | — | | | — | | | — | | | (3,791 | ) Adjusted EBITDA | $ | 8,626 | | $ | 1,898 | | $ | 13,013 | | $ | (3,026 | ) | $ | 12,812 | Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow | | | | Nine Months Ended September 30, | Q3 2026 | Q2 2026 | Q3 2025 | 2026 | 2025 | | | | | Net cash (used in) provided by operating activities | $ | (8,445 | ) | $ | (68,612 | ) | $ | 24,700 | | $ | (91,991 | ) | $ | (60,722 | ) Capital expenditures | | (7,847 | ) | | (6,864 | ) | | (6,324 | ) | | (26,856 | ) | | (20,514 | ) Free cash flow | | (16,292 | ) | | (75,476 | ) | | 18,376 | | | (118,847 | ) | | (81,236 | ) | | | | | Restructuring and other exit charges(8) | | 188 | | | — | | | — | | | 188 | | | — | Debt modification costs(9) | | — | | | — | | | — | | | — | | | 6,001 | Adjusted free cash flow | $ | (16,104 | ) | $ | (75,476 | ) | $ | 18,376 | | $ | (118,659 | ) | $ | (75,235 | ) Reconciliation of Cost of Goods Sold to Cash Cost of Goods Sold per MT | | Nine Months Ended September 30, | Q3 2026 | Q2 2026 | Q3 2025 | 2026 | 2025 | | | | | Cost of goods sold | $ | 132,526 | $ | 125,263 | $ | 132,041 | $ | 392,622 | $ | 372,691 Less: | | | | | Depreciation and amortization(10) | | 13,739 | | 13,356 | | 14,905 | | 40,572 | | 40,995 Cost of goods sold - by-products and other(11) | | 13,567 | | 3,585 | | 7,840 | | 30,390 | | 24,840 Cash cost of goods sold | | 105,220 | | 108,322 | | 109,296 | | 321,660 | | 306,856 Sales volume (in thousands of MT) | | 28.8 | | 30.8 | | 28.8 | | 87.7 | | 82.1 Cash cost of goods sold per MT | $ | 3,653 | $ | 3,517 | $ | 3,795 | $ | 3,668 | $ | 3,738 (1) | Net periodic benefit cost for our pension and OPEB plans. (2) | Non-cash losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (3) | (Gain) loss recognized related to the sale of assets associated with previously divested operations. (4) | Severance and other non-cash costs, primarily fixed asset write-offs associated with the planned shutdown of our Monterrey, Mexico facility. (5) | Prior to the second quarter of 2025, when the Company established a full valuation allowance, represents expense adjustment for future payment to our sole pre-Initial Public Offering stockholder for tax assets that have been utilized. (6) | Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations. (7) | Represents non-cash income tax expense recorded in the second quarter of 2025 related to the establishment of a full valuation allowance against the Company's U.S. and Switzerland deferred tax assets. (8) | Severance payments associated with the planned shutdown of our Monterrey, Mexico facility. (9) | Cash payments of debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations and recognized in net cash used in operating activities on the Condensed Consolidated Statements of Cash Flows. (10) | Reflects the portion of depreciation and amortization that is recognized in cost of goods sold. (11) | Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes. View source version on businesswire.com: https://www.businesswire.com/news/home/20261022463591/en/ Contacts Michael Dillon 216-676-2000 [email protected]

- Interested in GrafTech International Ltd.? Here are five stocks we like better. - Pricing recovery is underway: Third-quarter realized graphite electrode pricing fell 7% year over year to about $3,900 per metric ton, but newer customer commitments are at higher prices. GrafTech expects a mid-single-digit pricing increase in Q4 and a more significant improvement in 2027. - Q3 remained financially weak, though cash usage improved: Sales declined 3% to $140 million, adjusted EBITDA fell to $9 million, and the company posted a $47 million net loss. Operating cash use improved to $8 million from $69 million in Q2, while full-year volume growth guidance remains 5%–10%. - Monterrey closure should lower costs: GrafTech plans to complete the facility shutdown by early Q2 2027, expecting annual cash savings of $20 million–$25 million, lower capital expenditures, and a $20 million–$25 million working-capital release, with full savings realized in 2028. GrafTech International (NYSE:EAF) said its third-quarter results continued to reflect lower graphite electrode prices tied to customer commitments made before its recent pricing actions, while the company reported progress in securing higher-priced business for late 2026 and 2027. Chief Executive Officer Tim Flanagan said customer commitments secured during the third quarter and early fourth quarter were at higher price levels than earlier agreements. The company expects those agreements to lift weighted average realized pricing by a mid-single-digit percentage in the fourth quarter, followed by a more significant increase in 2027. → The AI Buildout Is Only 15% Complete—Here Is Where the Next Dollar Actually Goes GrafTech reported weighted average realized graphite electrode pricing of about $3,900 per metric ton in the third quarter, essentially unchanged from the second quarter and down about 7% from a year earlier. Flanagan said the company's reported pricing has lagged market improvements because much of its 2026 volume had been contracted before its pricing actions. Net sales totaled $140 million in the third quarter, down approximately 3% from the same quarter a year earlier, primarily because of lower realized graphite electrode prices. Sales volume was approximately 29,000 metric tons, essentially flat year over year, while year-to-date sales volume rose about 7% from the first nine months of 2025. → GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? The company maintained its expectation for full-year sales volume growth of 5% to 10% in 2026. Production volume was approximately 27,000 metric tons, up 2% from a year earlier but down 19% sequentially due mainly to planned summer maintenance shutdowns at its European facilities. Capacity utilization was 64%, compared with 63% a year earlier and 74% in the second quarter. GrafTech recorded a net loss of $47 million, or $1.76 per share, compared with a $28 million loss, or $1.10 per share, in the prior-year quarter. Results included approximately $14 million in restructuring and other exit charges related to the planned closure of its Monterrey, Mexico, manufacturing facility, most of which were non-cash. → Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Adjusted EBITDA was $9 million, compared with $13 million in the prior-year period. Chief Financial Officer Rory O'Donnell said the decline primarily reflected lower realized pricing, partly offset by lower cash cost of goods sold per metric ton. Net cash used in operating activities was $8 million during the quarter, while adjusted free cash flow was negative $16 million. Both figures improved from the second quarter, when operating cash usage was $69 million and adjusted free cash flow was negative $75 million. The company expects working capital, including inventory, to decline in the fourth quarter, though it continues to anticipate a modest full-year increase in working capital and about $35 million in capital expenditures. Flanagan said GrafTech announced an initial price increase late in the first quarter, followed by another 30% increase in early September. The company had previously indicated that customer commitments made after the first increase represented roughly a 15% uplift when applied across its sales mix, though about 80% of its volume had already been committed when that increase was announced. In response to analyst questions, Flanagan said the company expects the pricing gains being negotiated for 2027 to be margin accretive and to more than offset anticipated cost inflation. O'Donnell said each $100-per-metric-ton increase in weighted average realized pricing would represent about $12 million of incremental annual cash flow. Needle coke pricing has also risen during 2026, according to Flanagan. He said the market entered the year in an approximate range of $1,000 to $1,200 per ton depending on grade, and had risen to roughly $1,700 to $2,000 per ton. He cited higher oil-related input costs as well as supply-and-demand conditions, including reduced decant-oil availability as refineries produce more diesel. O'Donnell said GrafTech's blending capabilities, supplier diversification and sales of oil-related byproducts help manage decant-oil cost pressures. The company also has fixed-price energy contracts covering a significant portion of its 2026 European requirements, though it expects energy costs to rise as some contractual coverage resets in 2027. GrafTech expects cash cost of goods sold per metric ton to decline by a low-single-digit percentage for full-year 2026 versus 2025. GrafTech announced during the quarter that it plans to close its Monterrey graphite electrode manufacturing facility. The phased wind-down is expected to be completed early in the second quarter of 2027, after customer requirements are transferred to plants in Calais, France, and Pamplona, Spain. Connecting-pin production also is being moved to Pamplona. After the transition, GrafTech expects annual graphite electrode production capacity of about 127,000 metric tons. Flanagan said Monterrey was the company's highest-cost facility and its smallest set of assets, and the closure is intended to improve fixed-cost leverage while preserving product capabilities and customer service. - Annual cash cost savings are expected to total approximately $20 million to $25 million, with the full benefit anticipated in 2028. - Annual capital expenditure requirements are expected to decline by approximately $5 million beginning in 2027. - The company expects to release approximately $20 million to $25 million of working capital, mostly in 2028. - One-time cash costs associated with the closure are expected to total approximately $20 million to $25 million, with most incurred by the end of 2027. Flanagan said the company intends to pursue a sale of the Monterrey property following the shutdown and permanent removal of production capabilities. Any proceeds could support liquidity and debt reduction, subject to the company's loan documents. Management said steel market conditions outside China are gradually improving. Global steel production excluding China increased about 2% year over year through the first two months of the third quarter, reaching approximately 142 million metric tons. U.S. steel capacity utilization reached 80% for the second consecutive quarter, according to the company. GrafTech cited the World Steel Association's forecast for finished steel demand outside China to grow approximately 1.5% in 2026 and 4% in 2027. The company continues to expect graphite electrode demand outside China to grow at an approximately 3% compound annual rate in coming years, supported by electric arc furnace steelmaking, infrastructure investment, defense spending, energy-transition projects and data-center development. The company ended the quarter with approximately $242 million of total liquidity, including $134 million of cash and roughly $108 million available under its revolving credit facility. O'Donnell said GrafTech has substantially no debt maturities until December 2029. GrafTech also said it continues to pursue synthetic graphite opportunities beyond steelmaking. In September, the company announced a collaboration with Antora Energy involving manufacturing capabilities at its St. Marys, Pennsylvania, facility for Antora's thermal-battery technology. Management said the initiative remains in its early stages but could help utilize idled assets and support new revenue opportunities. GrafTech International Ltd. (NYSE:EAF) manufactures graphite electrodes and related carbon-based products used primarily in electric arc furnace steelmaking. Its graphite electrodes conduct electricity at extremely high temperatures, enabling steel producers to melt scrap steel and other metallic inputs. The company also produces petroleum needle coke, a specialty carbon material used in the manufacture of graphite electrodes. GrafTech serves steel producers and industrial customers worldwide, supplying products through manufacturing and distribution operations in North America, Europe and other international markets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What GrafTech International (EAF) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

The market expects GrafTech International (EAF) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on October 23, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This maker of graphite products is expected to post quarterly loss of $1.46 per share in its upcoming report, which represents a year-over-year change of -41.8%. Revenues are expected to be $126.59 million, down 12.1% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 2.01% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For GrafTech, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.72%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that GrafTech will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that GrafTech would post a loss of$1.49 per share when it actually produced a loss of -$1.47, delivering a surprise of +1.34%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. GrafTech doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GrafTech International Ltd. (EAF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Delivering Strong Sales Volume Growth Reaffirming Full-Year Volume and Cost Expectations Executing Pricing Actions and Other Strategic Initiatives to Improve Profitability BROOKLYN HEIGHTS, Ohio, July 24, 2026--(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, 2026. Second Quarter 2026 Summary Sales volume of 30.8 thousand metric tons ("MT"), an increase of 8% year-over-year and a 10% sequential increase compared to the first quarter of 2026 Net sales of $127 million, a decrease of 3% year-over-year and a 2% sequential increase compared to the first quarter of 2026 Net loss of $40 million, or $1.54 per share(1) Adjusted EBITDA(2) of $2 million Net cash used in operating activities of $69 million Adjusted free cash flow(2) of negative $75 million, reflecting the timing of semi-annual interest payments and a planned inventory build in the second quarter of 2026 Total liquidity of $253 million as of June 30, 2026 CEO Comments "Our second quarter results demonstrate continued strong operational execution in a dynamic market," said Timothy Flanagan, Chief Executive Officer and President. "Sales volume increased 8% from a year ago and 10% sequentially, reflecting solid customer demand and disciplined commercial execution, and we continue to expect our full-year sales volume will increase 5% to 10%. In addition, we are seeing broad acceptance of our previously announced price increase on uncommitted volume. Combined with ongoing improvements in production efficiency and our cost structure, these results reflect the progress we are making in executing our strategic priorities." "At the same time, we are taking decisive action to improve our long-term graphite electrode pricing," continued Mr. Flanagan. "Our approach combines disciplined pricing, support for trade policy reform in key markets and focusing our commercial mix toward higher-value opportunities. Together, these actions are intended to strengthen our realized pricing while reinforcing our position with customers who value reliable supply, product quality and industry-leading technical support. We remain committed to making disciplined commercial and operational decisions that support these objectives, while maintaining the flexibility to adapt our operating plans as market conditions evolve." Second Quarter 2026 Financial Performance Net sales for the second quarter of 2026 were $127 million, a decrease of 3% compared to $132 million for the second quarter of 2025, as higher sales volume was more than offset by lower weighted-average realized pricing. Net loss for the second quarter of 2026 was $40 million, or $1.54 per share, compared to a net loss of $87 million, or $3.35 per share, for the second quarter of 2025. 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’s United States and Switzerland deferred tax assets. Adjusted EBITDA(2) was $2 million for the second quarter of 2026, compared to adjusted EBITDA(2) of $3 million for the second quarter of 2025, with the year-over-year change primarily reflecting the decline in the weighted-average realized price, partially offset by lower cash cost of goods sold per MT. For the second quarter of 2026, net cash used in operating activities was $69 million and adjusted free cash flow(2) was negative $75 million, compared to net cash used in operating activities of $53 million and adjusted free cash flow(2) of negative $53 million for the second quarter of 2025. The year-over-year change primarily reflected working capital timing impacts, including a planned inventory build in the second quarter of 2026. Consistent with the seasonality of our working capital requirements and the timing of semi-annual interest payments, we expect second-quarter cash usage to represent the peak quarterly cash requirement for 2026. Accordingly, we expect cash requirements during the second half of the year to be significantly lower than in the first half of 2026. Operational and Commercial Update Sales volume for the second quarter of 2026 was 30.8 thousand MT, an increase of 8% compared to the second quarter of 2025 and a 10% sequential increase compared to the first quarter of 2026. For the second quarter of 2026, our weighted-average realized price was approximately $3,900 per MT, a 7% decrease compared to the second quarter of 2025 and flat compared to the first quarter of 2026. The year-over-year pricing decline reflected persistent competitive pressures across most of our principal commercial regions, partially mitigated by favorable mix as we achieved 29% sales volume growth in the United States, which remains the strongest region for graphite electrode pricing. Production volume was 33.4 thousand MT for the second quarter of 2026, resulting in a capacity utilization rate of 74%, up from 65% for both the second quarter of 2025 and the first quarter of 2026. While production volume has exceeded sales volume for the first six months of 2026, our expectation remains to balance our production and sales volume levels on a full-year basis. Capital Structure and Liquidity During June 2026, we drew the remaining $100 million that was available under our delayed draw first lien term loan facility that closed in December 2024, prior to the expiration of the delayed draw commitments on July 23, 2026. As of June 30, 2026, we had total liquidity of $253 million, consisting of cash and cash equivalents of $145 million and $108 million of availability under our revolving credit facility, providing financial flexibility to manage through current industry conditions. As of June 30, 2026, we had gross debt(6) of $1,225 million, with substantially no maturities until December 2029, and net debt(7) of approximately $1,080 million. Outlook Global steel demand, outside of China, is projected to grow modestly in 2026, with anticipated growth in most of our key commercial regions. In the United States, modest demand growth, coupled with favorable trade policies, has driven a 6% increase in steel production year-to-date. In Europe, while steel production is flat year-to-date, the steel market outlook is improving, reflecting recently approved increases in trade protections. Supported by these favorable steel production trends, demand for graphite electrodes is expected to improve modestly in 2026. For GrafTech, with more than 90% of our anticipated volume already committed in our order book, we continue to expect a 5–10% year-over-year increase in graphite electrode sales volume for 2026 as we continue to gain market share. While demand trends are improving, current industry-wide pricing levels do not reflect the indispensable nature of graphite electrodes for electric arc furnace steelmaking. As a result, we are taking deliberate actions to restore more sustainable pricing and improve our profitability. These include the previously announced price increases of $600 to $1,200 per MT on uncommitted volume, actively supporting graphite electrode trade cases in key jurisdictions, including the United States and Brazil, and continuing to optimize our order book by prioritizing higher-value regions while foregoing volume opportunities where margins are unacceptably low. Since announcing our price increases near the end of the first quarter of 2026, we have secured customer commitments at weighted-average prices that are more than 15% above those for comparable commitments entered into during the first quarter of 2026. On costs, geopolitical developments continue to impact key input costs, including oil-based raw materials, energy and logistics. However, reflecting our ongoing cost improvement initiatives, we expect to offset these headwinds. Accordingly, we continue to expect a low single-digit percentage-point decline in our cash cost of goods sold per MT for 2026 compared to 2025. We are also maintaining disciplined capital and working capital management. For 2026, we continue to expect a modest increase in working capital for the full year to support higher volume. We continue to anticipate our full-year capital expenditures will be approximately $35 million, consistent with maintaining our assets at current utilization levels. Longer term, we remain confident in the structural drivers of demand growth for graphite electrodes. The ongoing shift toward electric arc furnace steelmaking and growing demand for petroleum needle coke in battery applications are expected to support sustained industry growth. We believe the actions we are taking, combined with our vertical integration and industry-leading capabilities, position GrafTech to generate stronger financial performance as market conditions normalize. Conference Call Information In connection with this earnings release, you are invited to listen to our earnings call being held on July 24, 2026 at 10:00 a.m. (EDT). The webcast and accompanying slide presentation will be available on our investor relations website at: http://ir.graftech.com. The earnings call dial-in number is +1 (833) 461-5787 toll-free or +1 (626) 884-3620, conference ID: 924538458. Archived replays of the conference call and webcast will be made available on our investor relations website at: http://ir.graftech.com. GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission ("SEC") and other information available at: www.GrafTech.com. 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. We believe 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 a number of competitive advantages. ________________________ 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 "will," "may," "plan," "estimate," "project," "believe," "anticipate," "expect," "foresee," "intend," "should," "would," "could," "target," "goal," "continue to," "positioned to," "are confident," 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 remain at depressed levels or further decline in the future, and may continue to experience 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 increase or maintain existing prices 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 cost and availability of manufacturing inputs, including raw materials, such as decant oil, petroleum needle coke, energy and freight, and disruptions in availability for such inputs; 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; uncertain shifts in domestic and foreign trade policies and the possibility that the imposition of current, new or increased custom duties and tariffs and trade barriers in the countries in which we, our customers and our suppliers operate could adversely affect our ability to compete, operations, results of operations and financial condition; risks associated with strategic transactions, including acquisitions, divestitures, joint ventures, equity investments, and debt issuances, that could adversely affect our business, operating results and financial condition; 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; 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; and changes in health, safety and environmental regulations applicable to our manufacturing operations and facilities. 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 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, 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, gains on asset sales 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. 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’ 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 and less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes, 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260723664701/en/ Contacts Michael [email protected]

This article first appeared on GuruFocus. Sales Volume Growth: 8% year-over-year increase, with a 29% increase in the United States. Net Sales: $127 million, down 3% compared to the second quarter of last year. Weighted Average Realized Pricing: Approximately $3,900 per metric ton, flat sequentially and down 7% year-over-year. Production Volume: Exceeded 33,000 metric tons, with a capacity utilization of 74%. Adjusted EBITDA: $2 million, compared to $3 million in the prior year period. Net Cash Used in Operating Activities: $69 million for the second quarter. Adjusted Free Cash Flow: Negative $75 million, compared to negative $53 million in the prior year quarter. Total Liquidity: Approximately $253 million, consisting of $145 million in cash and $108 million in available borrowing capacity. Capital Expenditures: Expected to be approximately $35 million for the year. Warning! GuruFocus has detected 4 Warning Signs with EAF. Is EAF fairly valued? Test your thesis with our free DCF calculator. Release Date: July 24, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GrafTech International Ltd (NYSE:EAF) reported an 8% year-over-year sales volume growth in the second quarter, with a notable 29% increase in the United States. The company has successfully implemented price increases on uncommitted volumes, securing customer commitments at prices more than 15% above previous levels. GrafTech achieved its highest quarterly capacity utilization level since 2022, reflecting improved production efficiency and cost structure. The company is well-positioned to benefit from emerging opportunities in the graphite electrode and petroleum needle coke industries, driven by trends in electric arc furnace steelmaking and synthetic graphite demand. GrafTech's vertical integration enhances supply reliability and positions the company to benefit from improving needle coke market fundamentals. Net sales for the quarter were down 3% compared to the second quarter of last year, due to lower weighted average realized pricing. The graphite electrode industry continues to face pricing pressure, with weighted average realized pricing down approximately 7% compared to the prior year. The market remains oversupplied, which could impact pricing recovery and necessitate potential supply rationalization. Inflationary pressures on raw materials, energy, and logistics costs persist, driven by geopolitical disruptions. Cash flow was negatively impacted, with net cash used in operating activities at $69 million and adjusted free cash flow at negative $75 million for the quarter. Q: Shipments came in better than expected, particularly in the US. Was this due to US customers pulling forward orders, and do you expect this trend to continue given the tightness in the US steel market? A: Yes, the US market is performing well with utilization rates over 80%. We observed some pull-forward of volumes into the second quarter, indicating strengthening demand. We also see new orders for additional volumes in the third and fourth quarters, suggesting continued strength in the US market. Q: Are you experiencing similar cost inflation in needle coke as your peers, and how are broader inflationary pressures affecting you? A: We are seeing similar market intelligence regarding needle coke price increases of $200 to $300 per ton. However, our captive supply in Texas shields us from some pricing pressures. We expect continued tightness in supply due to Middle East conflicts, but our vertical integration provides a strategic advantage. Q: Can you comment on the utilization rates and whether industry capacity rationalization is needed? A: Our utilization rate of 74% reflects planned inventory builds for seasonal shutdowns and anticipated improving conditions. The electrode market remains oversupplied, but we are prepared to adjust production if necessary. We have taken steps to improve cost structure and commercial mix, and will continue to act as an industry leader. Q: What is the outlook for pricing given the oversupply situation, and what actions can you take to improve it? A: We believe current pricing does not reflect the value we deliver. Our first-quarter price increase is a step towards achieving appropriate pricing levels. We see momentum in negotiations and expect trade policy and supply reductions to support a more constructive pricing environment. Q: How are you managing cost pressures, particularly in energy, and what is the impact on your pricing strategy? A: We maintain our cost per ton guidance, leveraging fixed price contracts for energy in Europe and effective procurement strategies. We expect to pass through inflationary impacts to customers through pricing. Our vertical integration and cost management efforts provide a competitive edge. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in GrafTech International Ltd.? Here are five stocks we like better. GrafTech’s Q2 sales volumes improved, with graphite electrode sales up 8% year over year and production/utilization reaching the highest quarterly level since 2022. The company said this supports its full-year outlook for 5% to 10% sales-volume growth. Lower realized pricing continued to pressure results, as net sales fell 3% to $127 million and adjusted EBITDA came in at just $2 million. Management said more than 90% of expected volume is already committed, mostly at earlier prices, though newer commitments were reportedly priced more than 15% higher. Cash use remained heavy, but liquidity was solid, with negative adjusted free cash flow of $75 million and total liquidity of about $253 million at quarter-end. GrafTech expects cash flow to improve in the second half as inventory normalizes, and it still has no major debt maturities until December 2029. GrafTech International (NYSE:EAF) reported higher graphite electrode sales volumes and improved manufacturing utilization in the second quarter of 2026, while lower realized pricing continued to weigh on sales and earnings. Chief Executive Officer Tim Flanagan said the company made progress on its commercial, operational and cost initiatives during the period. Sales volume rose 8% from a year earlier, including a 29% increase in the United States, while production exceeded 33,000 metric tons and capacity utilization reached 74%, the company’s highest quarterly utilization rate since 2022. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? “The second quarter marked another period of meaningful progress for GrafTech,” Flanagan said, citing higher volume, increased production and further manufacturing cost improvements. The company reaffirmed its full-year expectations for sales-volume growth and lower cash cost of goods sold per metric ton. Second-quarter sales volume totaled about 31,000 metric tons, up 8% year over year and 10% sequentially. Chief Financial Officer Rory O’Donnell said the company’s volume performance remains consistent with its forecast for full-year sales-volume growth of 5% to 10%. → GE Vernova Just Sent a Mixed AI Signal to Investors Net sales fell 3% from the prior-year period to $127 million. The increase in shipments was offset by lower weighted-average realized pricing, which was about $3,900 per metric ton. That figure was flat sequentially but 7% below the second quarter of 2025. GrafTech said the current average realized price largely reflects customer commitments made before its late-March pricing action. The company said more than 90% of anticipated volume is already committed in its order book, mostly at prices reflecting market conditions at the end of 2025. → D-Wave Quantum or a Quantum ETF: Which Is the Better Bet? However, Flanagan said customer commitments secured following the price-increase announcement were, on average, more than 15% above prices achieved previously. Those commitments are expected to affect reported pricing as associated orders ship in future periods. O’Donnell said each $100-per-metric-ton increase in average selling price, based on current utilization rates, would equate to roughly $12 million in incremental annual cash flow. He said the recent pricing progress provides a stronger starting point for 2027 contract negotiations, though the impact on 2026 reported pricing is expected to be modest. Cash cost of goods sold per metric ton declined about 9% sequentially and 6% from the prior-year quarter, driven by improved production efficiency, higher utilization and cost-reduction efforts. GrafTech maintained its full-year forecast for a low-single-digit percentage reduction in cash costs per metric ton. O’Donnell said production exceeded sales volume by approximately 4,000 metric tons year to date as the company built inventory ahead of seasonal maintenance at its European plants. GrafTech expects production and sales volumes to balance on a full-year basis. Adjusted EBITDA was $2 million, compared with $3 million in the prior-year quarter. Net cash used in operating activities was $69 million, while adjusted free cash flow was negative $75 million, compared with negative $53 million a year earlier. The company attributed the increased cash usage primarily to working-capital timing, including the planned inventory build, as well as its semiannual interest payment on second-lien notes. GrafTech expects the second quarter to represent its highest cash usage of 2026 and expects operating cash flow to improve in the second half as inventory normalizes and working-capital investments moderate. The company maintained its forecast for approximately $35 million in capital expenditures for the year. During June, GrafTech drew the remaining $100 million available under its delayed-draw first-lien term loan. It ended the quarter with approximately $253 million of total liquidity, including $145 million of cash and about $108 million in available revolver capacity. The company said it has substantially no debt maturities until December 2029. The company also filed a shelf registration and established an at-the-market equity program during the quarter. O’Donnell said usage of the program has been modest but provides additional financing flexibility. GrafTech continues to support trade cases targeting imports of large-diameter graphite electrodes from China and India. Flanagan noted that the U.S. International Trade Commission in April made a preliminary finding that domestic producers were materially injured by imports from those countries. The Department of Commerce is expected to announce its preliminary countervailing-duty determination early in the third quarter, followed by a preliminary anti-dumping determination by the end of September, according to the company. The trade petition estimated dumping margins of 147% for Chinese imports and 74% for Indian imports. Management also pointed to tightening petroleum needle coke market conditions, citing higher oil-related feedstock costs and potential disruptions in decant-oil availability amid conflict in the Middle East. In response to an analyst question, O’Donnell said the company has seen needle coke price increases of roughly $200 to $300 per ton on shipments to date and expects similar increases going forward. GrafTech said its vertically integrated needle coke operations in Port Lavaca, Texas, reduce its exposure to third-party needle coke pricing pressures. The company also said it has diversified decant-oil sourcing and relies on American refineries for those supplies. Flanagan said global steel production excluding China increased about 2% year over year in the second quarter, while U.S. steel production was up 6% year to date. U.S. steel capacity utilization reached 80% during the quarter for the first time since the second quarter of 2022, he said. Europe remains more challenging, though GrafTech expects newer European Union trade protections and the Carbon Border Adjustment Mechanism to support regional steel production over time. Flanagan said these measures could encourage steelmakers to rebuild graphite electrode inventories toward more normalized levels. “While the timing of broader pricing recovery remains uncertain, we are not waiting for it,” Flanagan said. “Every decision we’re making today is intended to ensure GrafTech emerges from this cycle as a stronger, more competitive company.” GrafTech International (NYSE: EAF) is a leading global manufacturer of graphite electrodes and other specialty graphite products used primarily in electric arc furnaces (EAFs) for steel production. The company's core offerings include ultrahigh-power, high-power and regular power electrodes, along with related accessories such as graphite shapes and heterogeneous carbon materials. These products play a critical role in steelmaking by conducting the high electrical currents required to melt scrap steel efficiently and with reduced environmental impact compared to traditional blast furnace methods. With a manufacturing footprint spanning North America, Europe and Asia, GrafTech serves steel producers and foundries worldwide. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "GrafTech International Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.