GrafTech Reports Third Quarter 2009 Results

PARMA, Ohio, Oct 29, 2009 (BUSINESS WIRE) -- GrafTech International Ltd.

(NYSE:GTI) today announced financial results for the third quarter ended September 30, 2009.

2009 Third Quarter Highlights (Q3 2009 as compared to Q2 2009) -- Net sales increased five percent to $165 million over the second quarter of 2009.

-- Gross profit was $47 million, an increase of $1 million versus the second quarter of 2009.

-- Operating income increased 29 percent to $25 million. Operating income margin expanded nearly three percentage points to 15.2 percent.

-- Net income was $7 million, or $0.06 per diluted share, versus net loss of $37 million, or $0.31 per diluted share, in the second quarter of 2009.

-- On an operating basis, net income before special items* was $18 million, or $0.15 per diluted share, as compared to $15 million, or $0.12 per diluted share, in the second quarter of 2009.

-- Net cash provided by operating activities was $61 million, a $15 million improvement over operating cash flow generated in the second quarter of 2009.

This solid cash flow performance allowed us to complete the early redemption of all remaining 10-year Senior Notes, originally issued in 2002, and reduce our net debt* to $4 million.

-- As a result of stronger than expected third quarter results and anticipation of a solid fourth quarter, we are increasing 2009 annual operating income guidance by more than 25 percent.

2009 Third Quarter Highlights (Q3 2009 as compared to Q3 2008) -- Net sales were $165 million, versus $316 million in the third quarter of 2008, primarily the result of lower volumes associated with significantly reduced demand driven by the global economic recession.

-- Gross profit declined to $47 million or 28.3 percent of sales, as compared to $114 million or 36.1 percent of sales in the third quarter of 2008. The reduction in gross profit percentage was largely the result of unfavorable fixed cost absorption associated with lower sales volumes and the flow-through of higher cost raw materials.

-- Operating income was $25 million, versus $87 million in the third quarter of 2008. Operating income margin decreased to 15.2 percent of sales, from 27.5 percent in the same period in 2008.

-- Net income was $7 million, or $0.06 per diluted share, versus net income of $83 million, or $0.70 per diluted share, in the third quarter of 2008.

-- On an operating basis, net income before special items* was $18 million, or $0.15 per diluted share, as compared to $66 million, or $0.55 per diluted share, in the third quarter of 2008.

-- Net cash provided by operating activities was $61 million, versus $67 million in the third quarter of 2008.

-- Net debt* was $4 million, a reduction of $127 million year-over-year.

Craig Shular, Chief Executive Officer of GrafTech, commented, "Our team continues to execute on productivity initiatives and remains focused on maximizing flow-through of sales dollars to bottom line results. On the cash flow front, this discipline has allowed us to remain cash flow positive in a very difficult operating environment. As a result, we exited the quarter virtually debt free. On the operating income front, we expect second half 2009 results to be approximately double the first half 2009 as a result of increased sales and continued tight cost control." Industrial Materials Segment The Industrial Materials segment's net sales were $137 million in the 2009 third quarter, as compared to $266 million in the 2008 third quarter. Net sales in the quarter increased $7 million from $130 million in the 2009 second quarter, as a result of slightly higher graphite electrode sales volume and prices.

Operating income for the Industrial Materials segment was $24 million, versus $74 million in the third quarter 2008. The decline was primarily due to lower sales volume for graphite electrodes related to the sharp reduction in global steel operating rates and the flow-through of higher cost raw materials.

Engineered Solutions Segment Net sales for the Engineered Solutions segment were $28 million in the 2009 third quarter, as compared to $50 million in the 2008 third quarter. Net sales for the quarter were flat as compared to the second quarter 2009.

Operating income for the Engineered Solutions segment was $1 million, as compared to $13 million in the 2008 third quarter. The decrease was largely the result of lower sales volume across multiple product lines and an unfavorable product mix.

Corporate Selling and administrative and research and development expenses declined $6 million to $21 million in the 2009 third quarter versus the same period last year. The reduction was largely due to approximately $3 million lower variable compensation expense in the third quarter 2009. The balance of the reduction is primarily related to successful execution of previously announced cost savings initiatives and effective resolution to various contingent liabilities.

Interest expense in the quarter was $1 million, versus $3 million in the third quarter 2008. The reduction was driven primarily by the Company's successful deleveraging initiatives.

Mr. Shular commented, "In the third quarter, we completed the early redemption of the Senior Notes, which originally totaled $550 million and represented our most expensive debt. For the full year 2009, we expect to generate approximately $150 million of operating net cash. The improvement to our balance sheet was recognized by Standard & Poor's, which has placed the Company's corporate credit ratings on positive watch." Other expense, net, was $11 million in the 2009 third quarter, as compared to other income, net, of $17 million in the third quarter 2008. The change in the quarter is largely due to the foreign currency remeasurement of intercompany loans which generated a non-cash loss of approximately $10 million in the current quarter.

The effective income tax rate in the third quarter 2009, excluding special charges, was 24 percent, as compared to 21 percent in the 2008 third quarter.

For the full year 2009, we continue to expect the effective tax rate to be in the range of 22 percent to 25 percent.

Outlook Based on International Monetary Fund (IMF) projections and other economic forecasts, the global recession has begun to ease, driven by strength in Asian economies and unprecedented global government intervention. While stabilization has begun, steel end market demand remains far below pre-crisis levels and the pace of recovery is anticipated to be slow. As a result, steel producers continue to operate at low rates in order to match current market demand.

Third quarter results came in better than expected due to stronger than anticipated European steel operating rates as well as continued increases in steel operating rates in several geographies. As a result, we believe customers in various geographies have completed their graphite electrode destocking activities earlier than initially expected and began reordering in the third quarter. Accordingly, we are increasing our 2009 full year operating income guidance to reflect the improved third quarter performance and anticipation of a solid fourth quarter.

While the global economy remains fragile, we continue to expect an improvement in fourth quarter results as customers will have largely completed inventory destocking initiatives and continue restocking.

Given global economic conditions, which have been and may continue to be volatile and uncertain, GrafTech expects the following full year 2009 results: -- Operating income targeted to be in the range of $80 million to $85 million (previous guidance was $60 million to $70 million); -- The effective tax rate to be in the range of 22 percent to 25 percent; -- Capital expenditures to be approximately $50 million to $55 million; -- Depreciation expense to be in the range of $32 million to $34 million (previous guidance was approximately $35 million); -- Cash flow from operations targeted to be approximately $150 million.

In conjunction with this earnings release, you are invited to listen to our earnings call being held today at 11:00 a.m. Eastern Time. The call will be webcast and available at www.graftech.com, in the investor relations section. A conference call will also be available. The dial-in number is 800-894-3831 for domestic and 763-416-5291 for international. The rebroadcast webcast will be available following the call, and for 30 days thereafter, at www.graftech.com, in the investor relations section. GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission available at www.graftech.com. This includes its quarterly report on Form 10-Q for the period reported. Upon request, GrafTech will provide its stockholders with a hard copy of its complete financial statements free of charge.

GrafTech International Ltd. is one of the world's largest manufacturers and providers of high quality synthetic and natural graphite and carbon based products and technical and research and development services, with customers in 70 countries engaged in the manufacture of steel, automotive products and electronics. We manufacture graphite electrodes, products essential to the production of electric arc furnace steel. We also manufacture thermal management, fuel cell and other specialty graphite and carbon products for, and provide services to, the electronics, power generation, solar, oil and gas, transportation, petrochemical and other metals markets. We operate 11 manufacturing facilities strategically located on four continents. For additional information on GrafTech International Ltd., call 216-676-2000, or visit our website at www.graftech.com.

NOTE ON FORWARD-LOOKING STATEMENTS: This news release and related discussions may contain forward-looking statements about such matters as: our preliminary unaudited results for the third quarter ended September 30, 2009 and outlook for the 2009 fourth quarter and for 2009 as a whole; regional and global economic and industry market conditions, including our expectations concerning their impact on the markets we serve and, our profitability, operating income, cash flow, and liquidity; conditions and changes in the global financial and credit markets and their impact on us and our customers and suppliers; the impact of actions being taken to improve our cost competitiveness and liquidity; estimated future capital expenditures and their impact on product quality and efficiencies; changes in production capacity, inventories, or operating rates in our operations and our customers' operations or possible suspensions thereof; growth rates for, future prices and sales of, and demand for our products and our customers products; costs of materials and production, including anticipated changes therein; our position in markets we serve; investments and acquisitions that we have made or may make in the future; tax rates and the effects of jurisdictional mix and nonrecurring and other items; future operational and financial performance; strategic and growth plans; currency exchange and interest rates; financing activities including those with respect to our credit facilities which expire in July 2010, factoring and supply chain financing; stock repurchase plans; raw material and supply chain management; future sales, costs, working capital, revenues, business opportunities; operational and financial performance; and debt levels. We have no duty to update these statements. Our 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, from those set forth in these statements due to various factors, including: the extent of any adjustments to our preliminary 2009 third quarter results; the actual timing of the filing of our Form 10-Q with the SEC and potential effects of delays in such filing; the adoption of government fiscal and monetary stimulus and stabilization plans that could significantly impact us and our industry; further downturns, production suspensions, or changes in steel and other markets we serve or that our customers serve that could result in additional loss of revenue, profitability, and cash flow; a protracted regional or global financial or economic crisis that could cause us not to achieve our growth and diversification plans or meet market expectations, or to lose market share; challenging economic conditions may lead to more intensified price competition and price or margin decreases; reductions in capacity or production by us and our customers; delays in customer destocking activities or failure of demand to increase thereafter; graphite electrode manufacturing capacity increases; differences between actual graphite electrode prices and spot or announced prices; changes in inventory management and utilization or in supply chain management; consolidation of steel producers; limitations on the amounts of or delays in the timing of our capital expenditures; absence of successful development and commercialization of new or improved products or subsequent displacement thereof by other products or technologies; failure to expand manufacturing capacity or inadequacy in production lead times to meet growth in demand, if any; investments and acquisitions that we make or may make in the future, failure to successfully integrate into our business or the failure of such investments and acquisitions to provide the performance or returns expected; inability to protect our intellectual property rights or infringement of intellectual property rights of others; unanticipated developments in legal proceedings or litigation; non-realization of anticipated benefits from organizational changes and restructurings; significant changes in our provision for income taxes and effective income tax rate; unanticipated developments relating to health, safety or environmental compliance or remediation obligations or liabilities to third parties, changes in labor relations; significant changes in the availability or cost of key and other raw materials, including petroleum based coke, or energy; changes in market prices of our securities, or other events that affect our financing and capital structure plans or limit our ability to obtain financing for working capital, growth, or other initiatives on acceptable terms; changes in interest or currency exchange rates or competitive conditions, including growth by producers in developing countries and the mix, distribution, and pricing of their products; inflation or deflation; changes in appropriation of or failure to satisfy conditions to government grants; failure to achieve earnings or other estimates; business interruptions adversely affecting our ability to supply our products; 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.

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited) At December 31, At September 30, 2008 2009 ASSETS (as adjusted) Current Assets: Cash and cash equivalents $ 11,664 $ 8,665 Accounts and notes receivable, net of allowance for doubtful 146,986 104,450 accounts of $4,110 at December 31, 2008 and $5,061 at September 30, 2009 Inventories 290,397 251,802 Loan to non-consolidated affiliate - 6,000 Prepaid expenses and other current assets 14,376 19,044 Total current assets 463,423 389,961 Property, plant and equipment 873,932 957,015 Less: accumulated depreciation 536,562 591,672 Net property, plant and equipment 337,370 365,343 Deferred income taxes 1,907 6,516 Goodwill 7,166 8,784 Other assets 12,887 12,089 Investment in non-consolidated affiliate 118,925 64,460 Restricted cash 1,451 2,450 Total assets $ 943,129 $ 849,603 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 55,132 $ 41,248 Interest payable 953 7 Short-term debt 9,347 10,256 Accrued income and other taxes 34,861 33,134 Other accrued liabilities 140,330 64,814 Total current liabilities 240,623 149,459 Long-term debt: Principal 50,328 2,145 Fair value adjustments for hedge instruments 191 - Unamoritized premium (discount) 38 (651 ) Total long-term debt 50,557 1,494 Other long-term obligations 118,272 121,723 Deferred income taxes 29,087 30,012 Stockholders' equity: Preferred stock, par value $.01, 10,000,000 shares authorized, none - - issued Common stock, par value $.01, 150,000,000 shares authorized at 1,226 1,239 December 31, 2008 and 225,000,000 authorized at September 30, 2009, 122,634,854 shares issued at December 31, 2008 and 123,945,414 shares issued at September 30, 2009 Additional paid-in capital 1,290,381 1,298,108 Accumulated other comprehensive loss (355,960 ) (299,557 ) Accumulated deficit (317,752 ) (339,510 ) Less: cost of common stock held in treasury, 3,974,345 shares at (112,511 ) (112,511 ) December 31, 2008 and September 30, 2009 Less: common stock held in employee benefit and compensation trusts, (794 ) (854 ) 55,728 shares at December 31, 2008 and 69,661 shares at September 30, 2009 Total stockholders' equity 504,590 546,915 Total liabilities and stockholders' equity $ 943,129 $ 849,603 GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in thousands, except share and per share data) (Unaudited) For the For the Three Months Ended Nine Months Ended September 30, September 30, 2008 2009 2008 2009 (as adjusted) (as adjusted) Net sales $ 315,748 $ 164,879 $ 925,288 $ 456,679 Cost of sales 201,795 118,226 588,884 332,244 Gross profit 113,953 46,653 336,404 124,435 Research and development 2,479 2,871 6,579 8,048 Selling and administrative expenses 24,754 18,589 71,033 63,319 Restructuring charges, net 7 120 349 88 Operating income 86,713 25,073 258,443 52,980 Equity in losses and write-down of investment in non-consolidated - 953 - 54,343 affiliate Other (income) expense, net (16,919 ) 10,710 7,035 8,446 Interest expense 3,427 1,168 16,859 4,236 Interest income (204 ) (251 ) (782 ) (552 ) Income (loss) before provision for income taxes 100,409 12,493 235,331 (13,493 ) Provision for (benefit from) income taxes 17,009 5,629 69,392 8,265 Net income (loss) $ 83,400 $ 6,864 $ 165,939 $ (21,758 ) Basic income (loss) per common share: Net income (loss) per share $ 0.70 $ 0.06 $ 1.52 $ (0.18 ) Weighted average common shares outstanding 118,764 119,928 109,063 119,596 Diluted earnings (loss) per common share: Net income (loss) per share $ 0.70 $ 0.06 $ 1.45 $ (0.18 ) Weighted average common shares outstanding 119,965 120,716 118,920 119,596 GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) For the For the Three Months Ended Nine Months Ended September 30, September 30, 2008 2009 2008 2009 (as adjusted) (as adjusted) Cash flow from operating activities: Net income (loss) $ 83,400 $ 6,864 $ 165,939 $ (21,758 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 9,332 7,703 26,748 23,905 Deferred income taxes (880 ) (11,677 ) 10,212 (10,829 ) Equity in losses and write-down of investment in non-consolidated - 953 - 54,343 affiliate Gain on redemption of debentures - - (4,060 ) - Currency (gains) losses (22,065 ) 8,817 (7,752 ) 5,135 Post retirement and pension plan changes 5,098 1,290 6,679 6,688 Stock based compensation, including incentive compensation paid in 1,488 999 3,861 5,957 company stock Interest expense 519 380 7,488 1,040 Other (credits) charges, net (9,915 ) 2,067 (7,298 ) 14,666 Dividends from non-consolidated affiliate - - - 122 (Increase) decrease in working capital(1) 5,442 44,290 (29,560 ) 47,693 Long-term assets and liabilities (5,501 ) (414 ) (2,978 ) (5,259 ) Net cash provided by operating activities 66,918 61,272 169,279 121,703 Cash flow from investing activities: Capital expenditures (20,056 ) (10,580 ) (47,610 ) (40,544 ) Proceeds from derivative instruments 87 170 311 433 Investment in and loan to non-consolidated affiliate (1,779 ) (6,000 ) (136,390 ) (6,000 ) Proceeds from sale of assets 301 43 319 112 Change in restricted cash 257 (980 ) 91 (999 ) Net cash used in investing activities (21,190 ) (17,347 ) (183,279 ) (46,998 ) Cash flow from financing activities: Short-term debt borrowings, net (3,368 ) (1,756 ) 11,625 773 Revolving Facility borrowings 25,036 10,000 180,661 124,715 Revolving Facility reductions (67 ) (43,231 ) (70,877 ) (155,231 ) Long-term debt additions - 1,837 - 1,837 Long-term debt reductions (54,910 ) (19,906 ) (179,418 ) (20,035 ) Excess tax benefit from stock-based compensation 2,137 - 14,273 10 Supply chain financing - - - (30,115 ) Long-term financing obligations (296 ) (279 ) (296 ) (815 ) Purchase of treasury shares (15,927 ) - (21,250 ) - Proceeds from exercise of stock options 595 32 36,910 89 Net cash provided by (used in) financing activities (46,800 ) (53,303 ) (28,372 ) (78,772 ) Net increase (decrease) in cash and cash equivalents (1,072 ) (9,378 ) (42,372 ) (4,067 ) Effect of exchange rate changes on cash and cash equivalents (1,359 ) 414 (1,237 ) 1,068 Cash and cash equivalents at beginning of period 13,563 17,629 54,741 11,664 Cash and cash equivalents at end of period $ 11,132 $ 8,665 $ 11,132 $ 8,665 (1)Net change in working capital due to the following components: (Increase) decrease in current assets: Accounts and notes receivable $ (12,410 ) $ (9,506 ) $ (60,596 ) $ 64,187 Effect of factoring on accounts receivable 323 (175 ) 24,096 (15,993 ) Inventories (5,450 ) 32,352 (11,009 ) 62,819 Prepaid expenses and other current assets 241 245 (735 ) (596 ) Restructuring payments (57 ) (1 ) (873 ) (12 ) Increase (decrease) in accounts payable and accruals 20,202 9,258 10,540 (62,672 ) Increase in accrued income taxes 4,899 13,077 17,837 906 (Decrease) in interest payable (2,306 ) (960 ) (8,820 ) (946 ) (Increase) decrease in working capital $ 5,442 $ 44,290 $ (29,560 ) $ 47,693 GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES SEGMENT DATA SUMMARY (Dollars in thousands) (Unaudited) For the For the Three Months Ended Nine Months Ended September 30, September 30, 2008 2009 2008 2009 Net sales: Industrial Materials $ 266,046 $ 136,721 $ 789,456 $ 371,076 Engineered Solutions 49,702 28,158 135,832 85,603 Net sales $ 315,748 $ 164,879 $ 925,288 $ 456,679 Operating income: Industrial Materials $ 74,180 $ 23,828 $ 228,491 $ 46,986 Engineered Solutions 12,533 1,245 29,952 5,994 Operating income $ 86,713 $ 25,073 $ 258,443 $ 52,980 Operating income margin: Industrial Materials 27.9 % 17.4 % 28.9 % 12.7 % Engineered Solutions 25.2 % 4.4 % 22.1 % 7.0 % Operating income margin 27.5 % 15.2 % 27.9 % 11.6 % GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES SELECTED SECOND QUARTER 2009 DATA (Dollars in thousands) (Unaudited) For the Three Months Ended June 30, 2009 Net Sales $ 157,774 Industrial Materials Net Sales $ 129,834 Engineered Solutions Net Sales $ 27,940 Gross Profit $ 45,688 Operating Income $ 19,484 Net Income $ (37,091 ) Net Income Before Special Items* $ 14,778 Net Cash Provided by Operating Activities $ 46,107 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands, except per share data) (Unaudited) Net Income and Earnings per Share Reconciliation For the For the Three Months Ended Three Months Ended September September 30, 2008 30, 2009 Income EPS Impact Income EPS Impact Net Income $ 83,400 $ 0.70 $ 6,864 $ 0.06 Adjustments, net of tax, per diluted share - Equity in losses of and write down of investment in - - 766 0.01 non-consolidated affiliate - Non-recurring tax adjustments 274 - (1,253 ) (0.02 ) - Restructuring and Other (income) expense, net (17,636 ) (0.15 ) 12,085 0.10 Net Income before special items $ 66,038 $ 0.55 $ 18,462 $ 0.15 For the For the Nine Months Ended Nine Months Ended September 30, September 30, 2008 2009 Income EPS Impact Income EPS Impact Net Income $ 165,939 $ 1.45 $ (21,758 ) $ (0.18 ) Adjustments, net of tax, per diluted share - Equity in losses of and write down of investment in - - 46,953 0.39 non-consolidated affiliate - Non-recurring tax adjustments 902 0.01 2,662 0.02 - Accounting standards codification ACS 470-2 5,841 0.05 - - - Restructuring and Other (income) expense, net 10,928 0.09 10,208 0.09 Net Income before special items $ 183,610 $ 1.60 $ 38,065 $ 0.32 For 2008, the non-GAAP earnings per diluted share includes 13.6 million shares underlying our previously outstanding contingently convertible debentures and excludes approximately $3 million (before and after tax) in the second quarter of 2008 and $6 million (before and after tax) through June 19, 2008 of contingently convertible debenture interest expense.

NOTE ON RECONCILIATION OF EARNINGS DATA: Income (loss) excluding the items mentioned above is a non-GAAP financial measure that GrafTech calculates according to the schedule above, using GAAP amounts from the Consolidated Financial Statements. GrafTech believes that the excluded items are not primarily related to core operational activities. GrafTech believes that income (loss) excluding items that are not primarily related to core operational activities is generally viewed as providing useful information regarding a company's operating profitability. Management uses income (loss) excluding these items as well as other financial measures in connection with its decision-making activities. Income (loss) excluding these items should not be considered in isolation or as a substitute for net income (loss), income (loss) from continuing operations or other consolidated income data prepared in accordance with GAAP. GrafTech's method for calculating income (loss) excluding these items may not be comparable to methods used by other companies.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands) (Unaudited) Net Debt Reconciliation At September 30, At December 31, At June 30, At September 30, 2008 2008 2009 2009 Long-term debt $ 130,577 $ 50,557 $ 53,712 $ 1,494 Short-term debt 11,982 9,347 12,019 10,256 Supply chain financing - 30,115 - - Total debt $ 142,559 $ 90,019 $ 65,731 $ 11,750 Less: Fair value adjustments for hedge instruments 204 191 165 - Unamortized premium (discount) 41 38 33 (651 ) Cash and cash equivalents 11,132 11,664 17,629 8,665 Net Debt $ 131,182 $ 78,126 $ 47,904 $ 3,736 NOTE ON NET DEBT RECONCILIATION: Net debt is a non-GAAP financial measure that GrafTech calculates according to the schedule above, using GAAP amounts from the Consolidated Financial Statements. GrafTech excludes the unamortized bond premium from its sale of $150 million aggregate principal amount of additional senior notes in May 2002 at a price of 104.5% of principal amount. The premium received in excess of principal amount is amortized to reduce interest expense over the term of the senior notes. GrafTech also excludes the fair value adjustments for hedge instruments, which includes interest rate swaps that have been marked-to-market and realized gains or (losses) on interest rate swaps.

GrafTech believes that net debt is generally accepted as providing useful information regarding a company's indebtedness and that net debt provides meaningful information to investors to assist them to analyze leverage.

Management uses net debt as well as other financial measures in connection with its decision-making activities. Net debt should not be considered in isolation or as a substitute for total debt or total debt and other long-term obligations calculated in accordance with GAAP. GrafTech's method for calculating net debt may not be comparable to methods used by other companies and is not the same as the method for calculating net debt under its senior secured revolving credit facility. GrafTech does not forecast the fair value adjustment for hedging instruments.

*Non-GAAP financial measures. See attached reconciliations.

GTI-G SOURCE: GrafTech International Ltd.

CONTACT: GrafTech International Ltd. Kelly Taylor, Manager, Investor Relations, 216-676-2000 Copyright Business Wire 2009 -0- KEYWORD: United States

North America

Ohio

Tennessee

West Virginia INDUSTRY KEYWORD: Energy

Alternative Energy

Other Energy

Technology

Consumer Electronics

Hardware

Manufacturing

Chemicals/Plastics

Steel

Other Manufacturing

Natural Resources

Mining/Minerals

Professional Services

Banking

Nuclear SUBJECT CODE: Earnings

Conference Call

Webcast