GrafTech International Ltd. (NYSE:GTI) today announced that its
EBITDA* and operating cash flow for the first half of 2015 is now
expected to be at the low end of the previous guided targeted
ranges of $30 million to $40 million each, and could fall slightly
below the targeted ranges.
The Company reported that market conditions remain challenging
in both the Industrial Materials segment and Engineered Solutions
segment. While pricing in the Industrial Materials segment is
generally consistent with expectations, volumes remain under
pressure due to weak electric arc furnace steel production in its
key North American and European markets driven by high steel import
levels. In the Engineered Solution segment, sales are also lower
than expected as industrial and oil and gas sector demand continues
to be weak. Additionally, lower volumes and pricing pressure have
affected product sales into the advanced consumer electronics
market. In light of these market conditions, the Company will
reduce production rates further to align with current market
demand.
Update on Convertible Preferred Investment and
Tender Offer
As previously announced, GrafTech has agreed to issue $150
million of convertible preferred stock to an affiliate of
Brookfield Asset Management (Brookfield) pursuant to an investment
agreement. This transaction will close upon receipt of the required
regulatory approvals, which are expected to be received in July or
early August.
Also, as previously announced, Brookfield has launched a tender
offer to acquire up to all of the outstanding shares of GrafTech
common stock at a purchase price of $5.05 per share. The tender
offer will expire at 12:00 midnight, New York City time, on July 7,
2015, unless extended in accordance with the terms of the merger
agreement and the applicable rules and regulations of the
Securities and Exchange Commission. Closing of the tender offer is
subject to receipt of required regulatory approvals.
About GrafTech
GrafTech International is a global company that has been
redefining limits for more than 125 years. We offer innovative
graphite material solutions for our customers in a wide range of
industries and end markets, including steel manufacturing, advanced
energy applications and latest generation electronics. GrafTech
operates 18 principal manufacturing facilities on four continents
and sells products in over 70 countries. Headquartered in
Independence, Ohio, GrafTech employs approximately 2,400 people.
For more information, call 216-676-2000 or visit
www.GrafTech.com.
Forward-Looking Statements
This news release and related discussions may contain
forward-looking statements about such matters as: the proposed
tender offer and merger, the conditions to consummation thereof,
the terms thereof and related matters; the proposed issuance of
convertible preferred stock, the conditions to consummation
thereof, the terms of such issuance and preferred stock, the use of
proceeds and related matters; the effects of such proposed
issuance, tender offer and merger under our equity award and
benefit plans and agreements or our credit agreement, senior notes
or senior subordinated notes; our outlook for 2015; forecasts;
future or targeted operational and financial performance; growth
prospects and rates; the markets we serve; future or targeted
profitability, cash flow, liquidity, sales, costs and expenses, tax
rates, working capital, inventory levels, debt levels, capital
expenditures, EBITDA, cost savings and business opportunities and
positioning; strategic plans; cost, inventory and supply-chain
management; rationalization and related activities; the impact of
rationalization, product line changes, cost competitiveness and
liquidity initiatives; expected or targeted changes in production
capacity or levels, operating rates or efficiency in our operations
or our competitors' or customers' operations; future prices and
demand for our products; product quality; diversification, new
products and product improvements and their impact on our business;
the integration or impact of acquired businesses; investments,
acquisitions, asset sales or divestitures that we may make in the
future; possible financing or refinancing (including factoring and
supply-chain financing) activities; our customers' operations,
order patterns and demand for their products; the impact of
customer bankruptcies; our position in markets we serve; regional
and global economic and industry market conditions, including our
expectations concerning their impact on us and our customers and
suppliers; conditions and changes in the global financial and
credit markets; legal proceedings and antitrust investigations; our
liquidity and capital resources, including our obligations under
our senior subordinated notes that mature in November 2015; tax
rates and the effects of jurisdictional mix; the impact of
accounting changes; and currency exchange and interest rates and
changes therein.
We have no duty to update these statements. Our forecasts,
expectations and targets are not predictions of actual performance
and historically our performance has deviated, often significantly,
from our expectations and targets. Actual future events,
circumstances, performance and trends could differ materially,
positively or negatively, due to various factors, including:
failure to satisfy the conditions contained in the definitive
agreements relating to the proposed issuance, tender offer and
merger to consummation thereof, including due to material adverse
changes affecting the Company or its prospects or failure to obtain
regulatory approvals; litigation in relation to such transactions;
events of default occurring or repurchase obligations arising under
our credit agreement, senior notes or senior subordinated notes
related to the proposed tender offer and merger, or otherwise
(including by reason of cross default provisions thereunder);
downgrades in the ratings of our senior notes and the requirement
to repurchase the senior notes that could arise as a result
thereof; restrictions on the conduct of our business in the
ordinary course due to provisions under such definitive agreements;
failure to achieve cost savings, EBITDA, cash flow or other
forecasts, expectations or targets; actual outcome of uncertainties
associated with assumptions and estimates used to prepare
forecasts, expectations or targets or when applying critical
accounting policies and preparing financial statements; failure to
successfully develop and commercialize new or improved products;
adverse changes in cost, inventory or supply-chain management;
limitations or delays on capital expenditures; business
interruptions, including those caused by weather, natural disaster
or other causes; delays or changes in, or non-consummation of,
proposed or planned asset sales, divestitures, investments or
acquisitions; failure to successfully integrate or achieve expected
synergies, performance or returns expected from any completed
investments or acquisitions; inability to protect our intellectual
property rights or infringement of intellectual property rights of
others; changes in market prices of our securities; changes in our
ability to obtain new or refinance existing financing on acceptable
terms, or at all; adverse changes in labor relations; adverse
developments in legal proceedings or antitrust or other
investigations; non-realization of anticipated benefits from, or
variances in the cost or timing of, organizational changes,
rationalizations and restructurings; loss of market share or sales
due to rationalization, product-line changes or pricing activities;
negative developments relating to health, safety or environmental
compliance, remediation or liabilities; downturns, production
reductions or suspensions or other changes in steel, electronics
and other markets we or our customers serve; customer or supplier
bankruptcy or insolvency events; terrorism or political unrest
which adversely impacts us or our customers' businesses; declines
in demand; intensified competition and price or margin decreases;
graphite-electrode and needle-coke manufacturing capacity
increases; fluctuating market prices for our products, including
adverse differences between actual graphite-electrode prices and
spot or announced prices; consolidation of steel producers;
mismatches between manufacturing capacity and demand; significant
changes in our provision for income taxes and effective income-tax
rate; changes in the availability or cost of key inputs, including
petroleum-based coke or energy; changes in interest or
currency-exchange rates; inflation or deflation; failure to satisfy
conditions to government grants; continuing uncertainty over fiscal
or monetary policies or conditions in the U.S., Europe, China or
elsewhere; changes in fiscal and monetary policy; a protracted
regional or global financial or economic crisis; and other risks
and uncertainties, including those detailed in our SEC filings, as
well as future decisions by us. This news release does not
constitute an offer or solicitation as to any securities.
References to street or analyst earnings estimates mean those
published by First Call.
*Non-GAAP Reconciliation: Using the mid-point of the guidance
range, EBITDA excludes depreciation and amortization of $39
million, rationalization-related depreciation of $1 million,
rationalization and related charges of $12 million, impairment
charges of $35 million, proxy contest expenses of $2 million, other
expense, net, of $1 million, interest expense of $18 million and
income tax expense of $2 million to arrive at a targeted net loss
of $75 million.
GTI-G
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version on businesswire.com: http://www.businesswire.com/news/home/20150629006343/en/
GrafTech International Ltd.Kelly Taylor, 216-676-2000Director,
Investor Relations
Graftech (NYSE:GTI)
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