EAF

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.

This article first appeared on GuruFocus. Production Volume: 29,000 metric tons, with a capacity utilization rate of 65% for Q1 2026. Sales Volume: 28,000 metric tons, a 14% increase compared to the prior year. Average Selling Price: Approximately $3,900 per metric ton, a 5% decline year-over-year. Cash Costs: $3,848 per metric ton, a 4% sequential decline from Q4 2025. Net Loss: $43 million, or $1.66 per share for Q1 2026. Adjusted EBITDA: Negative $14 million, compared to negative $4 million in the prior year. Cash Used in Operating Activities: $15 million for Q1 2026. Adjusted Free Cash Flow: Negative $27 million, compared to negative $40 million in Q1 2025. Capital Expenditures: Projected to be approximately $35 million for the full year. Total Liquidity: $329 million, including $120 million in cash. Warning! GuruFocus has detected 4 Warning Signs with EAF. Is EAF fairly valued? Test your thesis with our free DCF calculator. Release Date: May 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GrafTech International Ltd (NYSE:EAF) announced a price increase for graphite electrodes by $600 to $1,200 per metric ton, which is expected to positively impact pricing momentum. The company has secured more than 85% of its anticipated 2026 volume in its order book, providing good visibility and stability. GrafTech is well-positioned to capitalize on the recovery in the graphite electrode industry, with a strong focus on disciplined commercial execution and cost structure improvement. The company benefits from vertical integration with Seadrift, ensuring a secure supply of needle coke, a critical raw material. GrafTech is actively engaged in advocating for fair trade practices, with supportive trade rulings expected to enhance market conditions in the US and other regions. GrafTech reported a net loss of $43 million for the first quarter, primarily due to a decline in average pricing. The average selling price for the first quarter was approximately $3,900 per metric ton, representing a 5% decline compared to the prior year. Cash costs per metric ton were $3,848, which, while improved sequentially, remain above the level reported in the first quarter of 2025. The company faces geopolitical uncertainties and energy market volatility, which could impact input costs and supply chain security. GrafTech's liquidity position is limited, with borrowing availability under its revolving credit facility constrained by recent financial performance. Q: Can you confirm if all your EU energy needs are covered for this year, and what inflation are you seeing from decant oil? Has this started to affect needle coke prices? A: Yes, we have fixed price contracts for EU energy through the end of the year. Decant oil accounts for about 25% of our production costs. While its pricing isn't directly tied to the Brent curve, we've factored in futures markets and analyst consensus into our cost forecast. We expect needle coke prices to rise in the second half of the year due to higher oil prices and supply disruptions. Q: With the recent price hikes, do you think Q1 could be the lowest point for pricing this year? When might we see prices increase in your results? A: We are pleased with the adoption of our price increase, but most of the volume impacted by this will be delivered in the second half of the year. Therefore, significant changes in average selling price are expected to materialize in the third and fourth quarters. Q: Could the Middle East conflict lead to a permanent reduction in electrode production capacity, and how might this affect long-term supply and demand balance? A: It's uncertain how the conflict will impact long-term supply and demand. However, disruptions in oil inventories and supply chains could affect pricing and supply in the second half of the year. Our vertical integration with Seadrift positions us well to manage these disruptions. Q: Regarding the trade action in front of the ITC, what is the potential timing, and will it impact 2027 price negotiations? A: The countervailing duties ruling could be applied by the end of July, and the anti-dumping ruling by mid-September. Both are expected before the bulk of 2027 negotiations, potentially impacting those discussions. Q: How do you view the trade case's impact on market share and pricing, and are there opportunities in other markets like Brazil or Mexico? A: In the US, the trade case presents both volume and price opportunities. We are advocating for fair trade in other regions, including Brazil, and supporting efforts in Europe to protect the domestic graphite industry. Broader critical minerals policies could also influence pricing and market dynamics. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Management identifies a significant disconnect between steel industry value creation and graphite electrode pricing, noting that finished steel prices rose 25-50% while electrode pricing remained depressed. The company is shifting its commercial strategy to prioritize value over volume, explicitly walking away from business that does not meet internal margin requirements. Vertical integration through Seadrift is cited as a critical competitive advantage, providing surety of needle coke supply while competitors face disruptions in Middle Eastern oil sourcing. Operational efficiencies and disciplined production management are expected to drive a modest year-over-year reduction in cash costs despite inflationary pressures. Management observes a shift in customer behavior toward regional sourcing and supply chain security due to transit disruptions and rising geopolitical risks. The company is actively leveraging trade policy as a strategic lever, supporting U.S. anti-dumping and countervailing duty cases to address unfair pricing from China and India. Full-year 2026 sales volume is projected to increase 5% to 10% year-over-year, driven by market share gains and recovering EAF steelmaking activity. The $600 to $1,200 per metric ton price increase is expected to impact approximately 20% of 2026 volumes, primarily manifesting in the third and fourth quarters. Management anticipates that higher input costs and supply disruptions for global needle coke producers will serve as a catalyst for higher merchant needle coke pricing in the second half of the year. Long-term cash cost targets are maintained at $3,600 to $3,700 per metric ton, assuming successful execution of procurement and production efficiencies. The company expects to draw the remaining $100 million of its delayed draw term loan by the end of the second quarter of 2026 to bolster liquidity. Sustained increases in oil and energy costs due to Middle East conflicts represent a primary risk that may necessitate further electrode price adjustments. A planned major maintenance turnaround at the Seadrift facility required front-loading decant oil purchases in the first quarter. Borrowing availability under the revolving credit facility is currently limited to approximately $115 million due to a springing financial covenant linked to recent performance. New EU trade protections and the Carbon Border Adjustment Mechanism (CBAM) are expected to boost domestic European steel production, with CBAM implemented in early 2026 and additional trade measures effective starting in July 2026. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management expects a marked increase in merchant needle coke prices in the second half of the year as global producers face higher costs and Middle Eastern supply disruptions. GrafTech's vertical integration provides a hedge, though decant oil represents approximately 25% of total production costs. Countervailing duty rulings are expected by late July, with larger anti-dumping determinations following in mid-September. These rulings are timed to provide a tailwind for the 2027 price negotiations occurring in the back half of 2026. Approximately 90% of the volume impacted by the recent price hike will be delivered in the second half of the year, meaning Q2 ASP will remain relatively stable. Management confirmed they have won more tenders than they have lost since the announcement, validating customer acceptance of higher price levels. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

GrafTech announced a $600–$1,200 per metric ton price increase (region-dependent), is pushing a "value over volume" strategy, and expects roughly 90% of the pricing benefit to materialize in the second half of 2026. The company supports U.S. trade cases after the USITC’s preliminary finding of injury from Chinese and Indian imports, with potential countervailing duties by end of July and an anti‑dumping decision by mid‑September, while EU carbon and trade measures are also expected to bolster pricing. Operationally, sales volume rose 14% YoY to 28,000 mt (production 29,000 mt) and full‑year volume growth is guided to 5%–10%, but Q1 showed a $43 million net loss and adjusted EBITDA of negative $14 million, with $329 million of total liquidity and about $12 million of incremental EBITDA per $100/mt ASP improvement. Interested in GrafTech International Ltd.? Here are five stocks we like better. GrafTech International (NYSE:EAF) executives said the graphite electrode market is showing early signs of improvement after a prolonged downturn, as the company pushes through price increases, pursues trade enforcement efforts, and manages input-cost volatility tied to geopolitical disruptions. On the company’s first-quarter 2026 earnings call, CEO Timothy Flanagan said the industry remains in a “period of transition,” but added that GrafTech is “starting to see signs of improvement” and believes it is positioned to benefit from a recovery. CFO Rory O’Donnell outlined first-quarter operating and financial results, including higher sales volumes, lower sequential costs, and continued pressure from pricing. → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Flanagan reiterated management’s view that graphite electrode pricing has not reflected the importance of electrodes to electric arc furnace (EAF) steelmaking or the investment required to maintain reliable supply. He highlighted that steelmakers in the U.S. and Europe have announced cumulative finished steel price increases over the past five quarters of about 50% and 25%, respectively, which he said “reinforc[es] the disconnect” between steel pricing and graphite electrode pricing. GrafTech announced on March 26 that it is increasing graphite electrode prices by a minimum of $600 to $1,200 per metric ton, depending on region. Flanagan characterized the change as roughly a $1 to $2 per ton-of-steel impact, or “less than one half of 1% of the cost to produce a ton of steel,” applying only to volume not yet committed at the time of the announcement. → Meta Posted Its Best Sales Growth Since 2021—So Why Did Shares Fall? O’Donnell said the company’s average selling price in the first quarter was about $3,900 per metric ton, down 5% year-over-year and down 2% sequentially. While near-term reported results have not yet reflected the new pricing, Flanagan told analysts that most of the benefit will land later in the year. “Probably 90% of the volume that will be impacted by the price increase will happen in the second half of the year,” he said, adding that GrafTech would not expect “a big change in ASP in the second quarter,” with increases materializing in the third and fourth quarters. Management also emphasized that the price move was an initial step. Flanagan said the company remains focused on “value over volume” and will continue to walk away from business that does not meet margin requirements. As of the call, GrafTech had more than 85% of anticipated 2026 volume committed in its order book, mostly at pricing reflecting market levels at the end of the fourth quarter of 2025, according to Flanagan. O’Donnell said this commitment level was tracking ahead of the same point last year. → Is Oracle Undervalued as Cloud Growth Accelerates? GrafTech also discussed policy and trade initiatives it says could support pricing and market stability. Flanagan said the company supports U.S. trade cases filed earlier this year concerning imports of large-diameter graphite electrodes sold at unfair prices. In April, the U.S. International Trade Commission issued a preliminary determination finding a reasonable indication that the domestic industry is being materially injured by imports from China and India alleged to be sold “at far less than fair value” and subsidized, respectively. The determination allows the U.S. Department of Commerce investigation to continue. On timing, Flanagan said the countervailing duties ruling “could be applied no later than the end of July,” while the anti-dumping decision “would come in mid-September.” He said both would occur ahead of the bulk of 2027 negotiations, which are expected in the back half of 2026. Flanagan also referenced European policy developments he expects to support higher steel production. He cited the EU’s Carbon Border Adjustment Mechanism implemented in early 2026, and noted the EU approved additional steel trade protections in April that are expected to take effect at the beginning of July, including reduced tariff-free quotas, higher above-quota duties, and new disclosure rules to prevent circumvention. Flanagan said global steel production outside China totaled 212 million tons in the first quarter, up about 1% year-over-year, with utilization around 67%. He highlighted stronger trends in North America, where production rose 2% year-over-year, driven by 6% growth in the U.S. He pointed to American Iron and Steel Institute data showing weekly U.S. capacity utilization reached 80% during the second quarter for only the second time in two years, calling it a signal that EAF activity and electrode demand are gaining momentum. In Europe, Flanagan said first-quarter steel output fell 3% year-over-year, though he added that indicators of a rebound are emerging. He cited World Steel Association projections that steel demand outside China will grow 1.9% in 2026, with 1.7% growth expected in the U.S. and 1.3% in Europe. Based on these trends, Flanagan said GrafTech continues to project that graphite electrode demand outside China will increase in 2026, with all major regions contributing, and said the company is positioned to capture market share growth. Executives spent significant time discussing geopolitical impacts on oil-based raw materials, energy, and logistics. Flanagan said disruptions in the production and transportation of oil from the Middle East have raised decant oil prices, a key raw material for petroleum needle coke, and management expects higher input costs and potential availability disruptions to act as a catalyst for needle coke pricing. On the Q&A, O’Donnell said decant oil represents about 25% of GrafTech’s total production cost and cautioned against directly correlating the company’s decant oil costs to Brent crude because GrafTech’s pricing is tied to other indices and includes quality-related adjustments. He said the company had incorporated futures-market and analyst-consensus assumptions into its cost outlook and maintained its guidance for a low single-digit cost improvement versus 2025. Flanagan added that while GrafTech has not yet seen major moves broadly, the company has seen a roughly $175 to $200 increase in needle coke prices in China and said he would expect “a marked increase in needle coke prices on the merchant side” in the second half of the year. O’Donnell also told analysts that fixed-price energy contracts cover European electricity costs through year-end and that electricity and natural gas together represent about 10% to 15% of total costs. Beyond decant oil and energy, he said GrafTech uses operational strategies and production scheduling to manage consumption and costs. GrafTech’s vertical integration with its Seadrift needle coke operation was a recurring theme. Flanagan said Seadrift sources decant oil from domestic producers and provides “surety of supply.” O’Donnell noted that the company is in the middle of planned major maintenance at Seadrift and brought forward oil purchases in the first quarter to support operations through the turnaround. Operationally, O’Donnell said first-quarter production volume was 29,000 metric tons, implying 65% capacity utilization, while sales volume was 28,000 metric tons, up 14% year-over-year. He said U.S. sales volume rose 37% year-over-year as the company expanded in higher-value regions. GrafTech reiterated full-year guidance for total sales volume growth of 5% to 10% year-over-year. First-quarter cash costs were $3,848 per metric ton, which O’Donnell said was higher than the prior year but down 4% sequentially. Management said it remains focused on reaching a longer-term cash cost target of about $3,600 to $3,700 per metric ton. Financially, GrafTech reported a first-quarter net loss of $43 million, or $1.66 per share. Adjusted EBITDA was negative $14 million, compared with negative $4 million in the prior-year quarter, which O’Donnell attributed primarily to lower average pricing. Cash used in operating activities was $15 million. Adjusted free cash flow was negative $27 million, an improvement from negative $40 million a year earlier, which O’Donnell said reflected a planned inventory build in the prior-year quarter compared with a more neutral working capital impact in the current quarter. Capital expenditures are expected to total about $35 million for the full year, according to O’Donnell. GrafTech ended the quarter with total liquidity of $329 million, consisting of $120 million in cash, $108 million of revolver availability, and $100 million of availability under a delayed draw term loan. O’Donnell said the company still expects to draw the remaining delayed draw term loan amount, “most likely by the end of the second quarter,” and noted there were no revolver borrowings at quarter-end. He also said revolver availability is limited by a springing covenant to about $115 million, less letters of credit of about $7 million at quarter-end. As a pricing sensitivity, O’Donnell said that, at current utilization levels, each $100 per metric ton improvement in average selling price equates to about $12 million of incremental EBITDA and liquidity, based on expected volume levels. Flanagan closed by saying improving demand, the company’s pricing actions, and trade and policy developments are “reinforcing the pricing recovery thesis,” while longer-term drivers such as decarbonization and the shift toward EAF steelmaking remain intact. 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. The article "GrafTech International Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Friday, May 1, 2026 at 10 a.m. ET Chief Executive Officer — Timothy Flanagan Chief Financial Officer — Rory O'Donnell Timothy Flanagan: Good morning, and thank you for joining GrafTech's first quarter earnings call. While the graphite electrode industry continues to navigate a period of transition, we are starting to see signs of improvement, and GrafTech is well-positioned to capitalize on the recovery ahead. At the same time, geopolitical conflicts are generating macro uncertainty and energy market volatility. Against this backdrop, our priorities remain clear: drive disciplined commercial execution, continue improving our cost structure, maintain strong liquidity, operate safely and position GrafTech for long-term value creation. In all of these areas, we'll continue to take decisive actions to support the long-term viability of our business. To that end, let me provide an update on several of our key strategic initiatives that leverage the commercial, operational and financial progress that we've made over the past couple of years. Starting on the commercial front. For some time, we've been clear that pricing levels have not reflected the indispensable nature of a graphite electrode nor the level of investment required to maintain a stable, reliable supply for the steel industry. That's happened even as steelmakers in the U.S. and Europe have announced cumulative price increases over the past 5 quarters for finished steel products of approximately 50% and 25%, respectively, reinforcing the disconnect between value creation in the steel industry and the pricing environment for graphite electrodes, a mission-critical consumable. In response, we are actively pursuing both market-based and policy-driven solutions as part of our disciplined approach to addressing this condition. On March 26, we announced that we're increasing our graphite electrode prices by a minimum of $600 to $1,200 per metric ton, depending on the region. From a customer's perspective, this represents a $1 to $2 increase or less than 0.5% of the cost to produce a ton of steel. This increase will only apply to volume that was not yet committed as of that date. This price increase represents only a first step to restoring pricing to levels that safeguard regional graphite electrode production and continuity of supply for our customers. And as we remain focused on value over volume, we'll continue to walk away from volume opportunities that do not meet our margin requirements. So still early on, we've been encouraged by our customers' reaction to the price announcement and the reflection of the price increase in recent tenders. As of today, more than 85% of our anticipated volume is committed in our order book, mostly at price points that reflect market pricing at the end of the fourth quarter of 2025. However, we're pleased to see the positive pricing momentum, which will lay a critical foundation as we begin the 2027 price negotiations later this year. To further support these efforts, we are actively engaged in advocating for GrafTech in our key commercial jurisdictions as part of our commitment to fair trade and market stability. In the U.S., this includes our support of trade cases filed earlier this year related to the imports of large diameter graphite electrodes at unfair prices. In April, the International Trade Commission announced the preliminary determination that there is a reasonable indication that the domestic industry is being materially injured by imports from China and India that are being sold in the U.S. at far less than fair value and subsidized by those governments, respectively. As a result of this determination, the U.S. Department of Commerce will continue its investigation. We're very encouraged by these developments and remain confident that the Commerce and that the ITC will complete a thorough investigation and take the necessary actions to address these unfair trade practices. As we assess progress towards constructive pricing and supportive trade actions, we continue to evaluate the level of production capacity we need to maintain and the level of volume we will deliver to the market, reflecting our commitment to take decisive actions and support the long-term viability of our business. We also continue to assess the industry-wide impact of recent geopolitical developments, particularly the effect on key graphite electrode inputs, including oil-based raw materials, energy and logistics. Disruptions in the production and transportation of oil out of the Middle East are having a significant impact on the global oil market. This in turn has translated into higher decant oil prices, the key raw material for petroleum needle coke. While the needle coke market has been relatively flat for the past 2 years, we anticipate that higher input costs and potential disruptions in decant oil availability for certain needle coke producers will provide a catalyst for needle coke pricing. In addition, shipping disruption and rising geopolitical risk continue to reinforce the need for supply chain security. We are beginning to see a shift in sourcing behavior for certain steel producers with an increased focus on regional production and surety of supply to safeguard continuity of their operations. In this regard, we're well-positioned to meet the needs of our customers. Our strategically positioned global manufacturing footprint provides a competitive advantage given its proximity to large EAF steelmaking regions. Further, we have surety of needle coke supply through our vertical integration with Seadrift, which sources all of its decant oil needs from domestic producers. Lastly, regarding the impact of the conflict on GrafTech's cost structure, our efforts over the past several years have created a more agile, more efficient manufacturing footprint that positions us well to control production costs while navigating a dynamic macro environment. We expect incremental improvement through operational efficiencies and disciplined production management. As a result, our current expectation is that we'll achieve a modest year-over-year reduction in cash costs, consistent with our guidance at the beginning of the year. However, the extended duration of the conflict in the Middle East and the resulting longer-term impact on the oil and energy markets remains uncertain. Ultimately, sustained increases in our key input costs will require us to take further action on electrode pricing. Stepping back as it relates to the graphite electrode and needle coke industries, we are seeing an inflection point take shape. The near-term pricing environment is improving and the long-term fundamentals remain firmly intact. Electric arc furnace steelmaking continues to gain share globally, driven by decarbonization trends and structural shifts in steel production. This transition supports long-term demand for graphite electrodes and in turn, petroleum needle coke. We expect further synthetic graphite and petroleum needle coke demand to result from the building of Western supply chains for battery needs, whether for electric vehicles or energy storage applications. We applaud the efforts of policymakers, both in the U.S. and the EU as we begin to develop a joint Critical Minerals Action Plan. This action plan establishes a framework for the 2 trading partners to coordinate policies to ensure supply chain resiliency for critical minerals such as synthetic graphite as they explore potential trade mechanisms, including order-adjusted price floors. Furthermore, there is overwhelming evidence in trade cases across multiple jurisdictions that whether it's to support the establishment of a supply chain that doesn't exist outside of China today or to protect those industries that do, pricing support for materials that are critical for national and economic security are an absolute must. Against this backdrop, GrafTech continues to take proactive measures that seek to capitalize on these emerging opportunities. These include ongoing engagement with the U.S. administration at various levels to help inform and shape critical mineral policies as it relates to graphite electrodes as well as battery materials, within the EU, supporting the ongoing efforts of the European Carbon and Graphite Association as they advocate for stronger European steel and graphite electrode industries and demonstrating our technical capabilities through partnership and engagement with various agencies, research institutions and companies. Let me pivot to our current thoughts on the steel industry trends as context for the rest of our discussion and our performance and outlook. Global steel production outside of China was 212 million tons in the first quarter, up approximately 1% compared to the prior year with a global utilization rate of approximately 67% for the quarter. Looking at some of our key commercial regions using data recently published in the World Steel Association. For North America, steel production was up 2% in the first quarter compared to the prior year, driven by 6% year-over-year growth in the United States. And we're seeing this trend continue into Q2 with the AISI reporting that weekly U.S. capacity utilization rate at 80% for just the second time in the past 2 years. This is a clear signal that EAF steelmaking activity and therefore, demand for our electrodes is gaining momentum in an important commercial region. Conversely, in the EU, steel output for the first quarter remained depressed, declining 3% compared to the prior year. However, as we've noted previously, indicators of a rebound in the steel market have started to appear both in the EU and globally. Turning to the next slide and expanding on this point. In April, World Steel published their latest short-range outlook for steel demand. Globally, outside of China, World Steel is projecting 2026 steel demand to grow 1.9% year-over-year. For the U.S., World Steel is projecting 1.7% steel demand growth in 2026. Along with this demand growth, favorable trade policies are expected to further support U.S. steel production. For Europe, World Steel is projecting a return of steel demand growth in the near-term, forecasting demand growth of 1.3% for 2026. This reflects some of the demand drivers we've discussed in the past earnings calls, including initiatives to increase infrastructure investment, defense spending, representing key steel-intensive industries. In addition, key policy initiatives in the EU are expected to support higher levels of steel production in this important commercial region for GrafTech. Specifically, provisions within the Carbon Border Adjustment Mechanism, or CBAM, implemented in early 2026 will make certain steel imports into the EU less competitive. Further in April, the EU approved the proposal initially made by the European Commission in 2025 to significantly increase trade protections on steel. These new measures, which will be effective at the beginning of July, will cut tariff-free steel import quotas nearly in half, double the above quota duties to 50% and introduce melt and pour disclosure rules to prevent circumvention. All this is expected to boost domestic steel production with some analysts projecting capacity utilization rates in the EU could increase from current levels around 60% to potentially 80% over time. Overall, we continue to project that globally outside of China, demand for graphite electrodes will increase in 2026 with all major regions expected to contribute. GrafTech is uniquely positioned to capture a disproportionate share of that growth. Before I hand the call over to Rory, I want to circle back on one of the key priorities I mentioned in my opening comments, operating safely. Our team continues to do just that, and I want to thank them for their efforts. For the first quarter, our total Recordable Incident Rate was 0.35, a further improvement over the full year rate for 2025. Sustaining this momentum will remain a critical focus as we work relentlessly towards our goal of 0 injuries. But with that, I'm going to turn it over to Rory, who will provide more color on our commercial and financial performance for the quarter. Rory? Rory O'Donnell: Thank you, Tim, and good morning, everyone. Starting with our operations. Our production volume for the first quarter was 29,000 metric tons, resulting in a capacity utilization rate of 65% for the quarter. On the commercial front, our sales volume in the first quarter was 28,000 metric tons, an increase of 14% compared to the prior year. As we remain focused on value over volume, we continue to prioritize business that meets our margin expectations while expanding our presence in higher-value regions, particularly the United States. To that end, we delivered 37% sales volume growth year-over-year in the U.S. for the first quarter. For the full year, we remain on track to achieve our original guidance of a 5% to 10% year-over-year increase in total sales volume, reflecting further market share gains. Of our anticipated 2026 volume, we have more than 85% committed in our order book to-date, which provides good visibility as this is tracking ahead of where we were at this point last year. Turning to price. Our average selling price for the first quarter was approximately $3,900 per metric ton, which represented a 5% decline compared to the prior year and sequentially a 2% decline compared to the fourth quarter. As we take stock of our pricing action, we are encouraged to see that the trajectory of our pricing is beginning to turn. While we continue to operate with disciplined commercial standards, we are encouraged by the positive pricing momentum, which, in addition to our pricing actions, also reflects the improving backdrop in EAF steelmaking, all of which is positioning GrafTech to capture significant long-term value as fundamentals continue to improve. Turning to the next slide and expanding on costs. For the first quarter, our cash costs on a per metric ton basis were $3,848. While above the level reported in the first quarter of 2025, this represented a 4% sequential decline from the fourth quarter. As we have noted in prior calls, we will have periodic quarter-to-quarter fluctuations in our cash cost recognition as a result of timing impacts. However, our underlying cost structure remains significantly improved compared to the prior periods. And we will remain focused on further optimization opportunities, including procurement and production efficiency and cost management across the organization, including in response to the geopolitically driven cost pressures that Tim spoke to. Importantly, we continue to achieve all of this while maintaining our dedication to product quality and reliability as well as upholding our commitment to environmental responsibility and safety. Overall, cost discipline remains a cornerstone of our strategy, and we are pleased with our ongoing progress towards achieving our long-term expectation of cash costs being approximately $3,600 to $3,700 per metric ton. Turning to the next slide and factoring all of this in. For the first quarter, we had a net loss of $43 million or $1.66 per share. Adjusted EBITDA was negative $14 million compared to negative $4 million in the prior year, primarily due to the decline in our average price. Turning to cash flow. For the first quarter, cash used in operating activities was $15 million. Adjusted free cash flow was negative $27 million compared to negative $40 million in the first quarter of 2025 as the prior year reflected a planned inventory build in the first quarter compared to a more neutral impact of working capital in the current year. On a full year basis, we continue to project a modest increase in our net working capital levels, reflecting our anticipated volume growth. As we have noted, to the extent that conflict-driven impacts on the oil and energy markets result in sustained increases in the carrying cost of our inventory, this will need to be reflected in our graphite electrode pricing moving forward. Lastly, regarding CapEx, we continue to anticipate a full year spend will be approximately $35 million, which we believe is an adequate level to maintain our assets at current utilization levels and support targeted investments in productivity capital. Turning to the next slide. We ended the first quarter with total liquidity of $329 million, consisting of $120 million of cash, $108 million of availability under our revolving credit facility and $100 million of availability under our delayed draw term loan. As a reminder, the untapped portion of our delayed draw term loan is available to be drawn until July of 2026, and our expectation remains to draw on this residual portion, most likely by the end of the second quarter. As it relates to our $225 million revolving credit facility, which matures in November of 2028, we had no borrowings outstanding as of the end of the quarter. However, based on a [ springing ] financial covenant that considers our recent financial performance, borrowing availability under the revolver remains limited to approximately $115 million less currently outstanding letters of credit, which were approximately $7 million at the end of the first quarter. More broadly, as it relates to our liquidity position, our pricing actions announced in the first quarter will set the stage for a more constructive pricing going forward, particularly as it relates to 2027 negotiations that are set to begin in the back half of 2026. As a reference point, based on current utilization rates, each $100 improvement in our average selling price would equate to approximately $12 million of incremental liquidity. In conjunction with the other key initiatives that Tim spoke to, it is expected to result in a marked improvement on our financial performance in 2027 and beyond. As such, we believe our $329 million liquidity position, along with the absence of substantial debt maturities until December of 2029, provides a strong foundation from which to execute our strategy, capitalize on improving market conditions and position GrafTech for meaningful long-term value creation. In closing my remarks, I would like to extend my gratitude for the outstanding commitment and hard work demonstrated by our team members worldwide and thank our customers and our investors for their continued partnership. I will now turn the call back to Tim for a few closing comments. Timothy Flanagan: Thank you, Rory. This remains a pivotal time for GrafTech and our broader industry. Near-term demand fundamentals are beginning to improve. Our price increase actions, favorable trade rulings, supportive policy action and strong EAF steelmaking trends from key customers are all reinforcing the pricing recovery thesis. Further, long-term growth drivers, including decarbonization, the continued shift to electric arc furnace steelmaking and the growing demand for needle coke and synthetic graphite are firmly in place. As the only pure-play graphite electrode producer outside of India and China, we remain firmly resolved to support the continuation of these dynamics. To that end, we will continue to operate with urgency, adaptability and the conviction to act decisively in the pursuit of long-term value, all of which will position GrafTech to capitalize on the structural trends that are set to shape the future of our industry and to deliver long-term shareholder value. To that end, I want to sincerely thank our entire team around the world for their remarkable efforts, resilience and commitment during this difficult time. That concludes our prepared remarks, and we'll now open up the call for questions. Operator: [Operator Instructions] Your first question comes from the line of Bennett Moore of JPMorgan. Bennett Moore: I wanted to start on the cost inflation side. I think all your EU energy needs are covered for this year, but if you could confirm that. And then maybe if you could help frame what sort of inflation you're seeing from decant oil? And has this started to put upward pressure on needle coke? And if not, when do you think we could start to see that flow through? Timothy Flanagan: Yes. Thanks, Bennett. So on the EU energy costs, you're right. We are nearly fully hedged on those. We have fixed price contracts going through the end of the year. So that's a good thing for us. We're happy to have that in place. Moving on to the decant oil question. Just to dimensionalize it, and I think we've talked about this before, decant oil as a percentage of our total production cost is around 25% of it. The pricing that we realize on decant oil is not necessarily directly correlated to just the Brent curve. We price off of other index as well, such as the HSFO and the like. And there's also premiums and discounts applied based on quality and such. So it's dangerous to correlate exactly the forward curve on Brent to our cost of decant oil and needle coke. But I will tell you, I'm very happy to say that we've taken a good look at the futures markets. We've looked at analyst consensus. and we've built that into our cost forecast, which, as you saw in our release this morning, we're maintaining our cost guidance for a low single-digit improvement over 2025. So luckily -- or not luckily, but very prudently, we've managed working capital, which has given us a little bit of a cushion to tolerate some of these headwinds on the decant oil market if those assumptions come true. Again, our supplier diversification and the timing of our purchases is important to managing that cost. So we'll continue to do that. A reminder from our year-end call, we're in the middle of planned major maintenance at our Seadrift facility. So a lot of our oil purchases were brought forward in the first quarter in anticipation of that, so we can exit the turnaround at Seadrift with enough inventory of decant oil to produce. So that's another factor to consider. But we have headwinds as does everyone else. It's dangerous to index right off of the Brent curve if you're looking forward, but we've incorporated all this into our guidance, and we're happy to maintain that previous cost reduction guidance. Rory O'Donnell: And Bennett, maybe I'll chime in on the needle coke market as a whole. I think the oil markets certainly have moved up. And while we source from different things and have a number of constructs that help us keep our pricing in check, I think it is a bit of a proxy for what some of the other decant oil producers globally are experiencing and other needle coke producers are experiencing globally. So I think that combination of higher oil prices at this point in time as well as just the overall supply disruption, right? A number of the needle coke producers source their oil out of the Middle East, the Chinese and some of the Japanese producers. And so that disruption is going to have an impact on the market as well. So I would expect as we get into the second half of the year, you'll see a marked increase in needle coke prices on the merchant side, which, again, being vertically integrated for us helps us out and would expect that market to tighten up quite a bit. Thus far, we haven't seen huge moves. I think we've seen about $175 or $200 increase in the Chinese market for needle coke. And I think that's largely a reflection of people fulfilling already committed tons here early on, but we certainly expect that market to move quite a bit in the back half of the year. Bennett Moore: Great. And then coming to pricing, it's great to hear that momentum is moving in the right direction following the recent hikes. I know you don't want to probably get into the detail of quarterly guidance on pricing, but do you think 1Q could be a trough for the year? When might we start to see it inflect at least directionally higher within your results? Rory O'Donnell: Yes. Thanks, Bennett. I'll give you directional commentary. I won't get into specific levels. But I think we're pleased with where the price increase adoption is at this point in time, right? We're now a little bit more than a month out since we made the announcement of $600 to $1,200 across various regions, and we're seeing success in that in all the regions that we sell into. I will tell you that right now that there's limited volumes that will actually be delivered in the second quarter, and that's just the phasing of when we made the announcement, when our negotiations took place. So probably 90% of the volume that will be impacted by the price increase will happen in the second half of the year. So I wouldn't expect to have a big change in ASP in the second quarter, but would really see that start to materialize in the third and fourth quarter. But again, pleased with where that's at, at this point in time. Operator: Next question comes from the line of Arun Viswanathan of RBC Capital Markets. Arun Viswanathan: So a few questions. So first off, I think I heard you say that your cash costs should be in a $3,600 to $3,700 range. And so if I think about your average price in Q1, which was $3,900, and then maybe I take the midpoint of what you've announced, $900. And so that would get you to $4,800. Is that the right way to think about maybe Q3, Q4 potential pricing? And then given that -- and would you be at that cash cost level, so maybe you could see kind of $1,000 EBITDA per ton range or maybe you can kind of just help us frame what the path to profitability is and what that looks like and maybe a time line, maybe Q3 or Q4? Timothy Flanagan: Thanks, Arun, and let me try to add some clarity to that. So I think it's a fair proxy to take the midpoint of the range because, again, that range is over all of the regions and the jurisdictions that we sell. But let me remind you, when we made the announcement of the price increase, we were approximately 80% committed, right? So the 20% of the sales we have to go would be influenced or impacted by that price increase. And again, we're pleased with where those negotiations are and the uptake we're seeing from customers at those price levels. But you can't just apply it to all the tons. You can only apply it to the incremental tons. But what's really important about this is how it sets up the third quarter and the fourth quarter negotiations and the momentum. I mean this is the first time we've seen in a number of years, quarters, any sort of positive price momentum on the electrode side. And really, that's a reflection of not only just market conditions, but better demand. We mentioned that you saw utilization rates in the U.S. ticked up over 80% last week. I think there's concerns around supply security, just given some of the disruption in the transit markets and just overall geopolitical elements that are going on in the world as well as the cost pressures that are front and center for everybody. So this is really about positioning for that next major round of cost or price negotiations for customers as we head into '27. But certainly, anywhere that we can push pricing here in the back half of the year, we will. Arun Viswanathan: Okay. And if I could just ask a follow-up. So Obviously, there is a lot of electrode production by Japanese producers and Koreans, also Korea is involved and there's a fair amount of needle coke production in that region. So however, we know from following what's going on, on the chemical side there's been massive disruptions and many of those facilities are down. So electrodes have suffered from weak pricing for a little while, and our explanation would be oversupply in the electrode market. But has the conflict potentially -- could it result in maybe some permanent structural reduction of capacity, especially in that region? And could that help kind of the long-term supply-demand balance and pricing power that you expect in electrodes going forward? Timothy Flanagan: Yes. I mean it's hard to say what the conflict is going to do. But I think certainly in the -- what it's going to do to long-term supply and demand balance. I mean, I think it all depends on the extent and duration of the war and the impact. But certainly, as you look at oil inventories globally coming way down and the continuation of the supply disruption, I would expect that you would certainly see a marked or meaningful impact in the second half of the year in terms of not only pricing but potentially supply for those who are struggling to get needle coke and other raw materials that are important to produce electrodes. So it will be yet to be seen what it looks like globally for the long term. But certainly, I think there'll be some disruption in the back half of the year. And again, I think that's why we like our position where we've maintained Seadrift as a meaningful part of our portfolio and the vertical integration that it provides our operations and what we can offer customers from a surety of supply perspective. Arun Viswanathan: Okay. And then just lastly, maybe you could comment on the -- your expected success on these price increases, is it -- do you feel like competitors are in the same boat and are using this as an opportunity -- and are they acting rationally or is there oversupply? And would they use this opportunity more as an opportunity to reclaim share? And I know you guys have been on a multiyear share recovery journey. So where are you on that as well? And do you foresee any headwinds in recovering that share now with increased competitive activity or not? Timothy Flanagan: Yes. Thanks, Arun. And I don't think I can comment or will comment on how other companies or competitors are thinking about their pricing strategies. But what I would say is there have been tenders in the market since we've announced the price increase, and we find those tenders in all of the regions. And we have won more of those tenders than we've lost at this point in time, which would suggest that customers are acknowledging either the value proposition that we're delivering or the essential nature of electrodes to their operations and are willing to pay a higher price to ensure that they get that. So if there are people out there looking at this as a volume player or share grab, I think we're still having success on what we're seeing from a tender perspective. And that's what gives us the positive viewpoint and outlook as we head into the back half of the year and start negotiations again, which are a few months out, but that's probably what I'd say there. I think just for reference, right, if we think about history here, if I'm a steel producer, if we looked over the last 20 years, electrodes represent roughly 1.1% of the selling price of finished steel. Today, that sits at 0.74%. And if we took where finished steel is right now, whether it's in the U.S. or the EU, pricing should be somewhere in the neighborhood of $7,000 a ton. So there certainly is a disconnect in the market. And I think the market participants understand that and see that, and that's why we're having some success on the price increase. Operator: Your next question comes from the line of Abe Landa of Bank of America. Abraham Landa: Maybe just focusing again on this like Middle East conflict, potential exposure, et cetera. Just kind of breaking out more the direct and indirect exposure within the cash COGS. I think you broke out decant 25%. That's helpful, so we don't have to explore that. But maybe between energy, logistics, maybe some other indirect exposure or direct exposure. And then I guess, of that potential exposure, what is fixed? Obviously, it sounds like energy is fixed and what is potentially variable? Rory O'Donnell: Yes. Thanks, Abe. So I would say beyond decant oil, of course, energy, electricity and natural gas are probably the next biggest chunk. I mentioned when Bennett chimed in about the fixed price contracts we have in place for most of our consumption for the rest of the year in Europe. So not a lot of direct exposure there. As far as natural gas goes, same thing in Europe, we have the same type of strategy around that. But between decant oil and the electricity, that's a big, big chunk of our variable costs. So from a fixed standpoint, there's a small amount of things that are exposed to the disruption in that market or the market shock of some of that pricing. But we're pretty comfortable that we have operational strategies, production scheduling tactics and things like that to take advantage of some of the rates that are available to us in other jurisdictions as far as time of consumption, extent of consumption, congestion credits, things like that. So I would say that focusing on the energy costs and our strategies around that as well as the comments I made earlier on our risk mitigation and our estimates around exposure to the oil markets, that covers the majority of that direct or indirect exposure to the impacts of the conflict. Abraham Landa: That's very helpful. And then I know decant is 25%. Do you have like a similar number for electricity and nat gas, kind of like those other elements? Rory O'Donnell: Those 2 together are about 10% to 15%. Abraham Landa: Very helpful. And then kind of continuing on this Middle East conflict theme. I guess within the Middle East, like -- I mean, we've seen stories of steelmaking being disrupted in that region. I mean, are you seeing that kind of reduced demand for electrodes in that market? I know it's a pretty popular market for imports of Chinese, Indian graphite electrodes. Are you seeing disruptions within the Middle East market? And then are you seeing any potential spillover to other markets related to the conflict? Timothy Flanagan: Yes. I think certainly, steel production in that region as well as the accessibility of that region, most of the product that we would sell into the Middle East would go via vessels and the availability of vessels and the cost and the access to that is pretty limited right now. So from our perspective, we're not moving a lot of volume into the Middle East right now. It's not a big market for us relative to the U.S., the European market as well as Japan, Korea and Taiwan. But yes, so not a lot of volume going into that region and certainly seeing a disruption and maybe that presents some opportunity when and if the conflict gets resolved and there's some inventory rebuild that needs to take place. In terms of spillover into other regions, no, I think there's probably been some modest opportunities in Europe for volumes that were otherwise coming out of the Asian market that either because of extended transit times or just supply disruptions as a whole, maybe we've been able to pick up some spot volumes in Europe as a result of that. Operator: Your next question comes from the line of Kirk Ludtke of Imperial Capital LLC. Kirk Ludtke: Just a couple of follow-ups. With respect to the -- you provided a rule of thumb pricing to liquidity. I think it was $100 a metric ton to $12 million of liquidity. What would be -- is there a -- can you put that in terms of EBITDA instead of liquidity? Rory O'Donnell: Yes, I consider that EBITDA impact. It would flow through. So if you're talking -- with our volume growth that we've guided to, it puts you kind of in that $115 million, $120 million range for the year. So that's where the $12 million comes from, $100 times $120, it's $12 million of EBITDA. Kirk Ludtke: Okay, great. And then you mentioned some steelmakers are shortening supply lines. Can you maybe elaborate on that? Is that in anticipation of higher pricing due to some of these trade actions or is that actually concerns about the ability to deliver? Timothy Flanagan: Yes. I think there's a few things going on in the market. First and foremost, transit times, again, have extended by a couple of weeks out of Asia into Europe, and that's providing some opportunity. I think the uncertainty of the market, the markets as a whole have maybe started to have some steelmakers thinking more regionally and trying to buy closer and managing less complex or less involved supply chains. I think both of those are having an impact. But I also think we're seeing a little bit of maybe a wait-and-see game from some steel producers trying to defer purchases. So they're consuming down some of their inventory, thinking that they'll have an opportunity to buy in a more favorable market condition later in the year, which, again, I think becomes a bit of a dangerous game just given the lead time that's needed to build electrodes and some of the demand we're seeing in other regions. So overall, I think market conditions, we're seeing some demand pick up and pretty pleased with where we're sitting right now. Kirk Ludtke: Great. And then lastly, the trade action in front of the ITC seems to be moving in the right direction. Can you maybe talk about the potential timing of that and if it will -- do you think it will come in time for the 2027 price negotiations? Timothy Flanagan: Yes. So the -- that large diameter, so again, it covers imports into the U.S. against the Chinese and the Indians and anything greater than 425 millimeters or 16.5 inches. It's through the initial ITC. It's on the Commerce. Commerce will do their investigation. We would expect that the Countervailing duties ruling could be implied or applied no later than the end of July. And then as we look at the antidumping, which is certainly the larger of the 2 would come in mid-September. And both of those would be in advance of kind of the bulk of the negotiations that will take place in the back half of the year and certainly will have an impact on those negotiations. And just for reference, I think the preliminary margin impact or ask on those was 74% against Indian imports and then 147% against Chinese imports. Kirk Ludtke: Got it. And those 2 are, what, 20% of the U.S. market? Timothy Flanagan: Roughly, yes. Operator: Our next question is a follow-up from Bennett Moore of JPMorgan. Bennett Moore: I wanted to stick with the theme of the trade policy here. And I guess I'm wondering kind of the scenarios you think could play out for negotiations later this year, assuming success on the trade case. Do you view this more as like a market share gain opportunity from the India imports or really more of a price action opportunity? And then maybe if you could also just touch on opportunities in other markets. I think you guys have initiated something down in Brazil, but what about Mexico and elsewhere? Timothy Flanagan: Yes. Thanks. And I think let's start in the U.S. Certainly, it's both a volume opportunity because I think it does impact the desire and the willingness to import those tons. But more importantly, it's a price impact for the broader U.S. market, which certainly is supportive and I think it's just another thing that's changing the momentum and the trajectory of the market as we sit here today. And I think we've long advocated whether it's the U.S. or any of the jurisdictions that we have operations in for fair trade and supporting the operations that we have. So I think there's actions going on in Brazil that I think are taking shape that we'll see some output here on later this year. And yes, but continue to advocate for fair trade across the board as well as supporting the ECGA's efforts in terms of the campaign they have going on right now about supporting the domestic graphite industry in Europe as well as supporting the broader steel initiatives in Europe. One thing that's probably worth spending a second on is what's going on in the broader critical minerals front. So we're taking action on the trade front in the U.S. because that's closest to where we're at right now. But certainly, as the U.S. continues to develop and partners with the EU and the other trading block countries around critical minerals and thinking about how they kind of decouple or break the ties to China in particular, I think that can have a significant impact on the way people think about graphite electrode pricing and anode material pricing, again, both of which are supportive to our business, both as we think about the electrodes as well as the value of the needle coke operation we have now in Seadrift. So that's an area that we're spending a lot of time as well on ensuring that people understand the essential nature of electrodes and the role that electrodes play in the steel production process and how that translates into economic security and National Security. but the same on the anode side, right? And the only way you can start a new supply chain in this environment is to have some sort of price support. So I think as we look out, it seems to make a lot of sense from an overall governmental policy perspective to have a broader trade protection beyond even what's going on with the ITC. Operator: That concludes our Q&A session. I will now turn the conference back over to Tim Flanagan, CEO, for closing remarks. Timothy Flanagan: Thank you, JL. I'd like to thank everyone on this call for your interest in GrafTech, and we look forward to speaking with you next quarter. Have a great day. Operator: That concludes today's conference call. 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) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Delivering Strong Sales Volume Growth Reaffirming Full-Year Volume and Cost Expectations Executing Pricing Actions and Other Strategic Initiatives to Support Long-term Value BROOKLYN HEIGHTS, Ohio, May 01, 2026--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced its unaudited financial results for the quarter ended March 31, 2026. First Quarter 2026 Summary Sales volume of 28.1 thousand MT, an increase of 14% year-over-year Net sales of $125 million, an increase of 12% year-over-year Net loss of $43 million, or $1.66 per share(1) Adjusted EBITDA(2) of negative $14 million Net cash used in operating activities of $15 million Adjusted free cash flow(2) of negative $27 million Total liquidity of $329 million as of March 31, 2026 CEO Comments "We delivered 14% year-over-year sales volume growth in the first quarter and remain on track to meet our full-year volume expectation," said Timothy Flanagan, Chief Executive Officer and President. "However, supply-side imbalance, driven by overcapacity that has been built in both China and India, translates into a current pricing environment that remains unsustainably weak. Our focus on commercial execution and disciplined cost management, combined with our $329 million liquidity position, allows us to maintain stability while we take actions to address these conditions." "We are taking decisive steps to restore more sustainable market dynamics and support the long-term viability of our business and our industry," continued Mr. Flanagan. "These include implementing price increases on uncommitted volume and actively supporting trade cases in key jurisdictions. We believe these actions are necessary to correct market imbalances. We remain committed to providing reliable supply to our customers while improving our financial performance and delivering long-term shareholder value." First Quarter 2026 Financial Performance Net sales for the first quarter of 2026 were $125 million, an increase of 12% compared to $112 million for the first quarter of 2025, reflecting higher sales volume partially offset by a year-over-year decrease in our weighted-average realized price. Net loss for the first quarter of 2026 was $43 million, or $1.66 per share, compared to a net loss of $39 million, or $1.52 per share, for the first quarter of 2025. Adjusted EBITDA(2) was negative $14 million for the first quarter of 2026, compared to adjusted EBITDA(2) of negative $4 million for the first quarter of 2025, with the year-over-year change primarily reflecting the decline in the weighted-average realized price. For the first quarter of 2026, net cash used in operating activities was $15 million and adjusted free cash flow(2) was negative $27 million, compared to net cash used in operating activities of $32 million and adjusted free cash flow(2) of negative $40 million for the first quarter of 2025. The year-over-year improvement primarily reflected changes in working capital, including a planned inventory build in the first quarter of 2025. Operational and Commercial Update Sales volume for the first quarter of 2026 was 28.1 thousand MT, an increase of 14% compared to the first quarter of 2025. For the first quarter of 2026, our weighted-average realized price was approximately $3,900 per MT, representing a 5% decrease compared to the first quarter of 2025. 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 37% sales volume growth in the United States, which remains the strongest region for graphite electrode pricing. Production volume was 29.4 thousand MT for the first quarter of 2026, resulting in a capacity utilization rate of 65% for the quarter. Capital Structure and Liquidity As of March 31, 2026, we had total liquidity of $328.7 million, consisting of cash and cash equivalents of $120.2 million, $108.5 million of availability under our revolving credit facility and $100.0 million of availability under our senior secured first lien delayed draw term loans, which continues to support our ability to manage through the near-term, industry-wide challenges. As of March 31, 2026, we had gross debt(6) of $1,125 million, with substantially no maturities until December 2029, and net debt(7) of approximately $1,005 million. Outlook Demand for graphite electrodes is expected to improve modestly in 2026, supported by stable-to-improving steel production trends outside of China. While steel market conditions remain mixed, in the United States, demand has been relatively stable and is expected to increase modestly, with steel production further supported by favorable trade policies. In Europe, steel industry conditions have been more challenged, though there are early signs of recovery, including expected demand growth and recently approved increases in trade protections. For GrafTech, we continue to expect a 5–10% year-over-year increase in graphite electrode sales volume for 2026, with more than 85% of our anticipated volume already committed in our order book. While volume trends are stable, current industry-wide pricing levels do not reflect the indispensable nature of graphite electrodes for electric arc furcnace steelmaking. As a result, we are taking deliberate actions to restore more sustainable pricing and improve our profitability. These include implementing price increases of $600 to $1,200 per metric ton on uncommitted volume, actively supporting graphite electrode trade cases in key jurisdictions, including the United States and Brazil, continuing to optimize our order book by prioritizing higher-value regions and foregoing volume opportunities where margins are unacceptably low. On costs, geopolitical developments continue to impact key input costs, including oil-based raw materials, energy and logistics. In response, we are expanding initiatives to improve our cost structure, including enhancing production efficiency and optimizing production schedules. Factoring all of this in, 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 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 a leading competitive position, will enable GrafTech to benefit 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 May 1, 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 (800) 715-9871 toll-free in the United States or +1 (646) 307-1963 for international calls, conference ID: 2242863. 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/20260430670249/en/ Contacts Michael Dillon 216-676-2000 [email protected]