gti-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from______ to ______

Commission file number: 1-13888

GRAFTECH INTERNATIONAL LTD.

(Exact name of registrant as specified in its charter)


Delaware			27-2496053
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)


982 Keynote Circle		44131
Brooklyn Heights,	OH	(Zip code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (216) 676-2000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	EAF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☒

Emerging Growth Company

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 18, 2025, 258,112,957 shares of common stock were outstanding.

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TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements

Condensed Consolidated Balance Sheets (unaudited)			5

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)			6

Condensed Consolidated Statements of Cash Flows (unaudited)			7

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity (unaudited)			8

Notes to the Condensed Consolidated Financial Statements (unaudited)			9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			35

Item 4. Controls and Procedures			36

PART II. OTHER INFORMATION:

Item 1. Legal Proceedings			37

Item 1A. Risk Factors			38

Item 5. Other Information			38

Item 6. Exhibits			39
SIGNATURE			40

Presentation of Financial, Market and Industry Data

We present our financial information on a consolidated basis. Unless otherwise noted, when we refer to dollars, we mean U.S. dollars.

Certain market and industry data included in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 (the “Report”) has been obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications and third-party forecasts in conjunction with our assumptions about our markets. We cannot guarantee the accuracy or completeness of this market and market share data and have not independently verified it. None of the sources has consented to the disclosure or use of data in this Report. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward-Looking Statements” in this Report and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (“Annual Report on Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 14, 2025.

Cautionary Note Regarding Forward-Looking Statements

This Report 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 Report 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

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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 (“EAF”) steel industry in particular;

•the cyclical nature of our business and the selling prices of our products, which may decline in the future, and may lead to prolonged periods of reduced profitability and net losses or adversely impact liquidity;

•the sensitivity of our business and operating results to economic conditions, including any recession, and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all;

•the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively implement price increases;

•the possibility that global graphite electrode overcapacity may adversely affect graphite electrode prices;

•the competitiveness of the graphite electrode industry;

•our dependence on the supply of raw materials, including decant oil and petroleum needle coke, and disruptions in supply chains for these materials;

•our primary reliance on one facility in Monterrey, Mexico for the manufacturing of connecting pins;

•the cost of electric power and natural gas, particularly in Europe;

•our manufacturing operations are subject to hazards;

•the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries;

•the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results;

•the possibility that our results of operations could further deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, such as a global pandemic, political crises or other catastrophic events;

•the risks and uncertainties associated with litigation, arbitration, and like disputes, including disputes related to contractual commitments;

•our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services;

•the possibility that we are subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, including with respect to our third-party suppliers and business partners;

•the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions;

•the sensitivity of long-lived assets on our balance sheet to changes in the market;

•our dependence on protecting our intellectual property and the possibility that third parties may claim that our products or processes infringe their intellectual property rights;

•the impact of inflation and our ability to mitigate the effect on our costs;

•the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events;

•the possibility that the imposition of new or increases of existing custom duties and other tariffs in the countries in which we, our customers and our suppliers operate could adversely affect our operations and results of operations;

•the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness;

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•past increases in benchmark interest rates and the fact that any current or future borrowings may subject us to interest rate risk;

•risks and uncertainties associated with our ability to access the capital and credit markets could adversely affect our results of operations, cash flows and financial condition;

•the possibility that disruptions in the capital and credit markets could adversely affect our customers and suppliers;

•the possibility that restrictive covenants in our financing agreements could restrict or limit our operations;

•changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities; and

•our ability to continue to meet the New York Stock Exchange (“NYSE”) listing standards.

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 Report 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 Report 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.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

(Unaudited)


	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	214,283	$	256,248
Accounts and notes receivable, net of allowance for doubtful accounts of $6,571 as of March 31, 2025 and $7,114 as of December 31, 2024	89,596		93,576
Inventories	254,267		231,241
Prepaid expenses and other current assets	60,397		55,732
Total current assets	618,543		636,797
Property, plant and equipment	928,407		910,247
Less: accumulated depreciation	446,987		427,548
Net property, plant and equipment	481,420		482,699
Deferred income taxes	60,309		53,139
Other assets	47,481		51,639
Total assets	$	1,207,753	$	1,224,274
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	70,555	$	72,833
Accrued income and other taxes	9,203		9,642
Other accrued liabilities	49,818		53,362
Interest payable	19,004		2,070
Tax Receivable Agreement	—		2,022
Total current liabilities	148,580		139,929
Long-term debt	1,088,863		1,086,915
Other long-term obligations	47,712		48,559
Deferred income taxes	24,136		23,971
Tax Receivable Agreement long-term	3,802		3,802
Commitments and contingencies - Note 8
Stockholders’ deficit:
Preferred stock, par value $0.01, 300,000,000 shares authorized, none issued	—		—
Common stock, par value $0.01, 3,000,000,000 shares authorized, 258,112,957 and 257,263,710 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	2,581		2,572
Additional paid-in capital	755,344		755,338
Accumulated other comprehensive loss	(30,813)		(43,359)
Accumulated deficit	(832,452)		(793,453)
Total stockholders’ deficit	(105,340)		(78,902)
Total liabilities and stockholders’ deficit	$	1,207,753	$	1,224,274

See accompanying Notes to the Condensed Consolidated Financial Statements

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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
		2025		2024
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales		$	111,839	$	136,584
Cost of goods sold		110,765		135,204
Lower of cost or market inventory valuation adjustment		2,783		2,692
Gross loss		(1,709)		(1,312)
Research and development		1,879		1,627
Selling and administrative expenses		14,622		15,277
Rationalization expenses		—		3,145
Operating loss		(18,210)		(21,361)

Other expense (income), net		447		(393)
Interest expense		29,841		15,626
Interest income		(1,935)		(1,524)
Loss before income taxes		(46,563)		(35,070)
Income tax benefit		(7,212)		(4,201)
Net loss		$	(39,351)	$	(30,869)

Basic loss per common share:
Net loss per share		$	(0.15)	$	(0.12)

Weighted average common shares outstanding		258,369,101		257,399,365
Diluted loss per common share:
Net loss per share		$	(0.15)	$	(0.12)

Weighted average common shares outstanding		258,369,101		257,399,365

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss		$	(39,351)	$	(30,869)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $0 and $45, respectively		12,596		(6,472)
Commodities, interest rate and foreign currency derivatives, net of tax benefit of $7 and $1,152, respectively		(50)		(4,253)
Other comprehensive income (loss), net of tax		12,546		(10,725)
Comprehensive loss		$	(26,805)	$	(41,594)

See accompanying Notes to the Condensed Consolidated Financial Statements

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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flow from operating activities:
Net loss	$	(39,351)	$	(30,869)
Adjustments to reconcile net loss to cash used in operations:
Depreciation and amortization	13,783		13,883


Deferred income tax benefit	(7,310)		(4,581)

Non-cash stock-based compensation expense	580		1,047

Non-cash interest expense	1,948		(1,469)
Lower of cost or market inventory valuation adjustment	2,783		2,692
Other adjustments	3,066		1,122
Net change in working capital*	(5,663)		23,062
Change in Tax Receivable Agreement	(2,022)		(5,417)

Net cash used in operating activities	(32,186)		(530)
Cash flow from investing activities:
Capital expenditures	(10,281)		(10,511)
Proceeds from the sale of fixed assets	29		3


Net cash used in investing activities	(10,252)		(10,508)
Cash flow from financing activities:




Payments for taxes related to net share settlement of equity awards	(213)		(82)


Principal payments under finance lease obligations	(24)		(16)
Net cash used in financing activities	(237)		(98)
Net change in cash and cash equivalents	(42,675)		(11,136)
Effect of exchange rate changes on cash and cash equivalents	710		(552)
Cash and cash equivalents at beginning of period	256,248		176,878
Cash and cash equivalents at end of period	$	214,283	$	165,190

* Net change in working capital due to changes in the following components:
Accounts and notes receivable, net	$	5,396	$	8,575
Inventories	(23,371)		25,328
Prepaid expenses and other current assets	(3,860)		4,313
Income taxes payable	(866)		(2,433)
Accounts payable and accruals	103		(29,598)
Interest payable	16,935		16,877
Net change in working capital	$	(5,663)	$	23,062

Net cash paid during the periods for:
Interest	$	5,593	$	216
Income taxes	$	1,683	$	2,569
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	(5,303)	$	(6,936)

See accompanying Notes to the Condensed Consolidated Financial Statements


GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY (Dollars in thousands, except per share data) (Unaudited)
	Issued Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ (Deficit) Equity
Balance as of December 31, 2024	257,263,710	$	2,572	$	755,338	$	(43,359)	$	(793,453)	$	(78,902)
Net loss	—	—		—		—		(39,351)		(39,351)
Other comprehensive income:
Foreign currency derivatives loss, net of tax of $0	—	—		—		—		—		—
Foreign currency derivatives reclassification adjustments, net of tax of $7	—	—		—		(50)		—		(50)
Foreign currency translation adjustments, net of tax of $0	—	—		—		12,596		—		12,596
Total other comprehensive income	—	—		—		12,546		—		12,546
Stock-based compensation	1,048,789	9		571		—		—		580
Payments for taxes related to net share settlement of equity awards	(199,542)	—		(565)		—		352		(213)
Balance as of March 31, 2025	258,112,957	$	2,581	$	755,344	$	(30,813)	$	(832,452)	$	(105,340)
























Balance as of December 31, 2023	256,831,870	$	2,568	$	749,527	$	(11,458)	$	(662,390)	$	78,247
Net loss	—	—		—		—		(30,869)		(30,869)
Other comprehensive loss:
Commodity, interest rate and foreign currency derivatives loss, net of tax of $17	—	—		—		(121)		—		(121)
Commodity, interest rate and foreign currency derivatives reclassification adjustments, net of tax of $1,135	—	—		—		(4,132)		—		(4,132)
Foreign currency translation adjustments, net of tax of $45	—	—		—		(6,472)		—		(6,472)
Total other comprehensive loss	—	—		—		(10,725)		—		(10,725)
Stock-based compensation	390,490	4		1,043		—		—		1,047
Payments for taxes related to net share settlement of equity awards	(61,185)	—		(173)		—		91		(82)
Balance as of March 31, 2024	257,161,175	$	2,572	$	750,397	$	(22,183)	$	(693,168)	$	37,618

See accompanying Notes to the Condensed Consolidated Financial Statements

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)Organization and Summary of Significant Accounting Policies

A. Organization

GrafTech International Ltd. (the “Company” or “GrafTech”) is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace (“EAF”) steel and other ferrous and non-ferrous metals. References herein to “GTI,” “we,” “our,” or “us” refer collectively to the Company and its subsidiaries. The Company’s common stock is listed on the NYSE under the symbol “EAF.”

The Company’s only reportable segment, Industrial Materials, is comprised of its two major product categories: graphite electrodes and petroleum needle coke products. Petroleum needle coke is our key raw material used in the production of graphite electrodes. The Company’s vision is to provide highly engineered graphite electrode products, services and solutions to EAF operators.

B. Basis of Presentation

The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, they have been prepared in accordance with Rule 10-01 of Regulation S-X and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The December 31, 2024 Consolidated Balance Sheet data included herein was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K, but does not include all disclosures required by GAAP in audited financial statements. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the accompanying notes, contained in the Company’s Annual Report on Form 10-K.

The unaudited condensed consolidated financial statements reflect all adjustments (all of which are of a normal, recurring nature) which management considers necessary for a fair presentation of our financial statements for the interim periods presented. The results for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

Items previously reported in "other adjustments” and “change in long-term assets and liabilities” have been condensed into the “other adjustments” line item within the Condensed Consolidated Statements of Cash Flows to conform to the current presentation.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

C. New Accounting Standards

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024. Adoption of this ASU will result in additional disclosure in our Annual Report on Form 10-K for the year ended December 31, 2025 but will not impact our consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Under this ASU, a public entity would be required to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. This ASU allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently assessing the impact of this ASU on its financial statements and disclosures, but does not expect it to be material.

(2) Revenue from Contracts with Customers

Disaggregation of Revenue

The following table provides information about disaggregated revenue by type of product:


	Three Months Ended March 31,
		2025		2024
		(Dollars in thousands)
Graphite Electrodes		$	101,262	$	123,987
By-products and other		10,577		12,597
Total Revenues		$	111,839	$	136,584

In the first quarter of 2025, the Company updated its presentation of disaggregated revenue to align with how management evaluates its top-line commercial and financial performance. Due to the immaterial amount of remaining take or pay contracts with initial terms of three to five years (“LTAs”), we no longer show these revenues as a separate line item.

Contract Balances

Substantially all of the Company’s receivables relate to contracts with customers. Accounts receivables are recorded when the right to consideration becomes unconditional. Payment terms on invoices range from 20 to 120 days depending on the customary business practices of the jurisdictions in which we do business.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We did not have any contract asset balances as of March 31, 2025 or December 31, 2024.

Deferred revenue is recorded for consideration received from customers in advance of satisfaction of the related performance obligations.

Deferred revenue is included in “Other accrued liabilities” on the Condensed Consolidated Balance Sheets. The timing of revenue recognition, billings, and cash collections resulted in a deferred revenue balance of $11.2 million as of March 31, 2025 and December 31, 2024.

(3) Segment Reporting

Our Industrial Materials segment, our only operating and reportable segment, manufactures high-quality graphite electrodes essential to the production of EAF steel and other ferrous and non-ferrous metals. Petroleum needle coke, a crystalline form of carbon derived from decant oil, is a key raw material used in the production of graphite electrodes. We utilize the majority of the needle coke that we produce internally to manufacture our graphite electrodes and as a result approximately 91% of our revenues from external customers are derived from the sale of graphite electrodes.

Our chief operating decision maker is our chief executive officer. The chief operating decision maker assesses performance for our Industrial Materials segment and decides how to allocate resources based on net income or losses, which are reported on the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The chief operating decision maker uses net loss to evaluate growth trends, establish budgets, assess operational efficiencies and evaluate our overall financial performance.

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
	(Dollars in thousands)
Net sales	$	111,839	$	136,584
Cash cost of goods sold(1)	90,206		110,742
Other segment expenses	20,559		24,462
Lower of cost or market inventory valuation adjustment	2,783		2,692
Research and development	1,879		1,627
Selling and administrative expenses	14,622		15,277
Rationalization expenses	—		3,145
Other expense (income), net	447		(393)
Interest expense	29,841		15,626
Interest income	(1,935)		(1,524)
Income tax benefit	(7,212)		(4,201)
Net loss	$	(39,351)	$	(30,869)

(1) Cash cost of goods sold is defined as cost of goods sold less depreciation and amortization and less cost of goods sold associated with the portion of our sales that consist of deliveries of by-products of the manufacturing processes, and is the significant expense the chief operating decision maker uses to evaluate segment expenses.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4) Intangible Assets

The following table summarizes intangible assets with determinable useful lives by major category, which are included in “Other assets” on our Condensed Consolidated Balance Sheets:



	March 31, 2025						December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(Dollars in thousands)
Trade names	$	22,500	$	(18,427)	$	4,073	$	22,500	$	(18,226)	$	4,274
Technology and know-how	55,300		(49,249)		6,051		55,300		(48,613)		6,687
Customer-related intangibles	64,500		(42,123)		22,377		64,500		(41,063)		23,437
Total finite-lived intangible assets	$	142,300	$	(109,799)	$	32,501	$	142,300	$	(107,902)	$	34,398

Amortization expense for intangible assets was $1.9 million and $2.1 million in the three months ended March 31, 2025 and 2024, respectively. Amortization expense is expected to be approximately $5.4 million for the remainder of 2025, $6.7 million in 2026, $6.1 million in 2027, $5.5 million in 2028, $4.9 million in 2029 and $2.9 million in 2030.

(5) Debt and Liquidity

The following table presents our long-term debt:


	March 31, 2025		December 31, 2024
	(Dollars in thousands)
Initial First Lien Term Loans due 2029	175,000		175,000
Existing 4.625% Senior Notes due 2028	1,755		1,755
New 4.625% Second Lien Notes due 2029	498,245		498,245
Existing 9.875% Senior Notes due 2028	3,833		3,833
New 9.875% Second Lien Notes due 2029	446,167		446,167
Unamortized debt discount and issuance costs	(36,137)		(38,085)
Total long-term debt	$	1,088,863	$	1,086,915

The fair value of our debt was approximately $875.9 million and $905.8 million as of March 31, 2025 and December 31, 2024, respectively. The fair values were determined using Level 1 quoted market prices for the same or similar debt instruments.

Initial First Lien Term Loan Facility; Delayed Draw First Lien Term Loan Facility

As of March 31, 2025 and December 31, 2024, we did not have any borrowings under our Delayed Draw First Lien Term Loan Facility, with $100 million available as of the end of each period.

2018 Term Loan and 2018 Revolving Credit Facility

As of March 31, 2025 and December 31, 2024, the availability under our 2018 Revolving Credit Facility was $106.6 million and $108.0 million, respectively. As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder, our operating performance as of March 31, 2025 and December 31, 2024 resulted in our inability to access the full amount of commitments under the facility. As of March 31, 2025 and December 31, 2024, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $8.8 million and $7.4 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.

As of March 31, 2025 and December 31, 2024, there were no outstanding term loans under the 2018 Term Loan Facility.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We were in compliance with all of our debt covenants as of March 31, 2025 and December 31, 2024.

(6) Inventories

Inventories are comprised of the following:


	March 31, 2025		December 31, 2024
	(Dollars in thousands)
Inventories:
Raw materials and supplies	$	87,205	$	78,386
Work in process	133,933		122,590
Finished goods	33,129		30,265


Total	$	254,267	$	231,241

In the first quarter of 2025, we recorded a lower of cost or market (“LCM”) inventory valuation adjustment of $2.8 million in order to state our inventories at the lower of cost or market.

(7) Interest Expense

The following table presents the components of interest expense:


	Three Months Ended March 31,
		2025		2024
		(Dollars in thousands)
Interest incurred on debt		$	22,532	$	17,095
Accretion of original issue discount		1,267		520
Amortization of debt issuance costs		681		748
Debt modification costs		5,361		—
Amortization of interest rate swap deferred gains		—		(2,737)
Total interest expense		$	29,841	$	15,626

The financing transactions entered into in 2024 (described in further detail in Note 5, “Debt and Liquidity”) were accounted for as a modification of the existing debt under ASC 470-50, Debt—Modifications and Extinguishments.

The Company incurred $5.4 million of fees and expenses related to post-closure costs attributable to the modification, which were expensed as incurred in the first quarter of 2025 and are included in Interest expense on the Condensed Consolidated Statements of Operations.

The Existing 9.875% Notes and the New 9.875% Notes carry fixed interest rates of 9.875%. The Existing 4.625% Notes and the New 4.625% Notes carry fixed interest rates of 4.625%. The Initial First Lien Term Loan had an effective interest rate of 10.30% as of March 31, 2025.

See Note 5, “Debt and Liquidity” for details of our debt.

(8) Commitments and Contingencies

Legal Proceedings

We are involved in various investigations, lawsuits, claims, demands, labor disputes and other legal proceedings, including with respect to environmental and human exposure or other personal injury matters, arising out of or incidental to the conduct of our business. While it is not possible to determine the ultimate disposition of each of these matters and proceedings,

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

we do not believe that their ultimate disposition will have a material adverse effect on our financial position, results of operations or cash flows. Additionally, we are involved in the following legal proceedings:

Brazil Clause IV

Pending litigation in Brazil has been brought by employees seeking to recover additional amounts and interest thereon under certain wage increase provisions applicable in 1989 and 1990 under collective bargaining agreements to which employers in the Bahia region of Brazil were a party (including our subsidiary in Brazil). Companies in Brazil have settled claims arising out of these provisions and, in May 2015, the litigation was remanded by the Brazilian Supreme Court in favor of the employees union. After denying an interim appeal by the Bahia region employers on June 26, 2019, the Brazilian Supreme Court finally ruled in favor of the employees union on September 26, 2019. The employers union has determined not to seek annulment of such decision. Separately, on October 1, 2015, a related action was filed by current and former employees against our subsidiary in Brazil to recover amounts under such provisions, plus interest thereon, which amounts together with interest could be material to us. If the Brazilian Supreme Court proceeding above had been determined in favor of the employers union, it would also have resolved this proceeding in our favor. In the first quarter of 2017, the state court initially ruled in favor of the employees. We appealed this state court ruling, and the appellate court issued a decision in our favor on May 19, 2020. The employees have further appealed and, on December 16, 2020, the court upheld the decision in favor of GrafTech Brazil. On February 22, 2021, the employees filed a further appeal and, on April 28, 2021, the court rejected the employees’ appeal in favor of GrafTech Brazil. The employees filed a further appeal and on September 12, 2022, we filed our response in opposition. We intend to vigorously defend our position. As of March 31, 2025, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought.

Stockholder Class Action

On January 25, 2024, a stockholder of the Company filed a class action complaint on behalf of a putative class consisting of purchasers of GrafTech common stock between February 8, 2019 and August 3, 2023 in the United States District Court for the Northern District of Ohio. The complaint names the Company, certain past and present executive officers, and three entities associated with Brookfield Corporation and its affiliates (together, “Brookfield”) as defendants. The complaint alleges that certain public filings and statements made by the Company contained material misrepresentations or omissions relating to the circumstances before and after the prior temporary suspension of the Company’s graphite electrode facility located in Monterrey, Mexico, in September 2022. The complaint seeks unspecified compensatory damages, costs and expenses, and unspecified equitable or injunctive relief. On May 15, 2024, the Court appointed the University of Puerto Rico Retirement System as the lead plaintiff. On October 7, 2024, the plaintiff filed an amended complaint. At this stage of the proceedings, it is too early to determine if the matter would reasonably be expected to have a material adverse effect on our financial condition. On December 6, 2024, the Company filed a motion to dismiss the complaint. The plaintiff filed a memorandum in opposition to the motion to dismiss on February 3, 2025. On March 17, 2025, the Company filed its reply brief. A status conference is scheduled with the court for July 8, 2025.

Tax Receivable Agreement

On April 23, 2018, the Company entered into the tax receivable agreement (“Tax Receivable Agreement”) that provides Brookfield as the sole stockholder prior to the Company’s initial public offering in April 2018 (the “IPO”), the right to receive future payments from us for 85% of the amount of cash savings, if any, in U.S. federal income tax and Swiss tax that we and our subsidiaries realize as a result of the utilization of the pre-IPO tax assets. In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date. On April 10, 2023, the Tax Receivable Agreement was amended and restated to change the applicable interest rate from LIBOR plus 1.00% per year to the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10%. The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments.

As of March 31, 2025, the total Tax Receivable Agreement liability was $3.8 million, which was classified as a long-term liability in Tax Receivable Agreement long-term on the Condensed Consolidated Balance Sheets. As of December 31, 2024, the total Tax Receivable Agreement liability was $5.8 million, of which $2.0 million was classified as a current liability and $3.8 million was classified as a long-term liability.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Mexico Value-Added Tax (“VAT”)

In July 2019, the Mexican Tax Authority (“MTA”) opened an audit of the VAT filings of GrafTech Comercial de Mexico S. de R.L. de C.V. (“GrafTech Commercial Mexico”) for the period of January 1 to April 30, 2019. In September 2021, the MTA issued a tax assessment, claiming improper use of a certain VAT exemption rule for purchases from a foreign affiliate. The tax assessment for the four month period under audit amounted to approximately $26.1 million, including penalties, inflation and interest. Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time. GrafTech Commercial Mexico filed an administrative appeal against the tax assessment with the MTA’s appeals office. In November 2022, the MTA’s appeals office concluded its review and confirmed the tax assessment. GrafTech Commercial Mexico believes that the purchases from a foreign affiliate are exempt from VAT back-up withholding and in December 2022, GrafTech Commercial Mexico filed a Claim for Nullity with the Chamber Specialized in exclusive resolution of substance of the Federal Court of Administrative Justice. On February 17, 2023, the MTA filed the response to the nullity petition. On May 31, 2023, the court held a hearing to determine the scope of the issues to be decided in the proceedings. At the court’s request, GrafTech Commercial Mexico submitted formal pleadings on August 1, 2023. On January 8, 2024, the court ruled in GrafTech Commercial Mexico’s favor and annulled the tax assessment. On January 31, 2024, the MTA filed an appeal for review. On March 15, 2024, GrafTech Commercial Mexico filed the Tax Adhesive Appeal for Review before the Collegiate Court in Administrative Matters who has authority to hear the MTA’s appeal. On March 12, 2025, the Collegiate Court issued a decision on the MTA’s appeal ruling in favor of GrafTech Commercial Mexico. This decision may not be appealed by the MTA.

Brazil Income Tax Audit

On October 23, 2024, GrafTech Brasil Participações Ltda. received an income tax assessment notice from the Brazilian Internal Revenue Service (“IRS”) totaling approximately $31.0 million including approximately $18.4 million of interest and penalties, resulting from an audit carried out between 2023 and 2024, related to the period from 2019 to 2020. In this assessment, two issues were raised by the tax auditor. The first item disallowed the investment tax incentive (75% reduction of income tax), under the allegation that the Company did not have a negative tax debt certificate. The second disallowed the use of the VAT benefit (called Desenvolve) to increase the investment tax incentive. The Company believes that the IRS assessment is incorrect and does not believe that it is probable that it will incur a loss related to these matters. The Company intends to vigorously defend its position regarding both items.

(9) Income Taxes

We compute and apply to ordinary income or loss an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws. The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts. Ordinary income or loss refers to income or loss before income taxes excluding significant, unusual or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax.

The following table summarizes the income tax benefit:


	Three Months Ended March 31,
		2025			2024
		(Dollars in thousands)
Income tax benefit		$	(7,212)		$	(4,201)
Loss before income taxes		(46,563)			(35,070)
Effective tax rate		15.5		%	12.0		%

The effective tax rate for the first quarter of 2025 and 2024 was different than the U.S. statutory tax rate of 21% primarily due to the mix of U.S. and foreign earnings, tax incentives and provisions of the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”).

We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. All U.S. federal tax years prior to 2021 are generally closed by statute or have been audited and settled with the applicable domestic tax authorities. Other jurisdictions are generally closed for years prior to 2019.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At each reporting period, the Company assesses the need for valuation allowances against deferred tax assets and whether it is more likely than not that deferred tax benefits will be realized in each jurisdiction. Consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence include a strong earnings history, an event or events that would increase the Company's taxable income or reduce expenses, or tax planning strategies that would create the ability to realize deferred tax assets. Examples of negative evidence include cumulative losses in recent years or a history of tax attributes expiring unused. In circumstances where the negative evidence outweighs the positive evidence, the Company has established or maintained valuation allowances on the jurisdiction’s net deferred tax assets. However, the recognition of the valuation allowance does not limit the Company's ability to utilize these tax assets on a tax return in the future should taxable income be realized in sufficient amount to realize the assets.

Our losses in certain tax jurisdictions in recent periods represented sufficient negative evidence to require a full valuation allowance. As of March 31, 2025, we had a valuation allowance of $19.3 million against certain deferred tax assets (“DTAs”). We also have a partial valuation allowance related to certain U.S. state net operating and capital losses where realizability is unlikely due to discontinued operations or the ability of our U.S. subsidiaries to generate capital gains. Until we determine that we will generate sufficient jurisdictional taxable income to realize our net operating losses and DTAs, we will continue to maintain a valuation allowance.

Our losses in the U.S. and Switzerland from recent periods and the potential for respective losses throughout 2025 may lead to a cumulative loss and may represent sufficient negative evidence to require a full valuation allowance on U.S. and Switzerland DTAs, which would materially increase our expenses in the period the allowance is recognized and materially increase our reported net loss. The Company will continue to evaluate additional evidence such as projections for growth and market recovery to determine if adjustments to valuation allowances are required.

There were no material changes to our valuation allowances in the first three months of 2025.

(10) Fair Value Measurements and Derivative Instruments

In the normal course of business, we are exposed to certain risks related to fluctuations in currency exchange rates, commodity prices and interest rates. We use various derivative financial instruments, primarily foreign currency derivatives, commodity derivative contracts, and interest rate swaps as part of our overall strategy to manage risks from these market fluctuations.

Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not anticipate nonperformance by any of the counterparties to our instruments.

Foreign currency derivatives

We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency instruments, which include, but are not limited to, forward exchange contracts and purchased currency options, are used to hedge global currency exposures such as foreign currency denominated debt, receivables, payables, sales and purchases.

Foreign currency forward and swap contracts are used to mitigate the foreign exchange risk of balance sheet items. These derivatives are fair value hedges. Gains and losses from these derivatives are recorded in cost of goods sold and they are largely offset by the financial impact of translating foreign currency-denominated payables and receivables.

In the second quarter of 2024, we entered into foreign currency derivatives with maturities of one month to 12 months in order to protect against the risk that cash flows associated with certain sales and purchases denominated in a currency other than the U.S. dollar will be adversely affected by future changes in foreign exchange rates. These derivatives are designated as cash flow hedges. The resulting unrealized gains or losses from these derivatives are recorded in AOCL and subsequently, when realized, are reclassified to net sales or cost of goods sold in the Condensed Consolidated Statements of Operations when the hedged exposures affect earnings.

Commodity derivative contracts

From time to time, we enter into commodity derivative contracts for refined oil products. These contracts are entered into to protect against the risk that eventual cash flows related to these products will be adversely affected by future changes in

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

prices. The unrealized gains or losses related to commodity derivative contracts designated as cash flow hedges are recorded in AOCL and subsequently, when realized, are reclassified to the Condensed Consolidated Statement of Operations when the hedged item impacts earnings, which is when the finished product is sold.

Interest rate swap contracts

We have utilized interest rate swaps in the past to limit exposure to market fluctuations on our variable-rate debt. For each derivative agreement that is designated as a cash-flow hedge, the unrealized gain or loss is recorded in AOCL and, when realized, is recorded to interest expense. Upon discontinuance of a designated cash-flow hedging relationship, when interest payments are still probable of occurring, the fair value at the date of discontinuance is deferred into AOCL and amortized into interest expense based upon the term of the cash-flow hedging relationship.

All derivatives are recorded on the balance sheet at fair value. If the derivative is designated and effective as a cash flow hedge, changes in the fair value of the derivative are recognized in AOCL until the hedged item is recognized in earnings. The ineffective portion of a derivative's fair value, if any, is recognized in earnings immediately. If a derivative is not a hedge, changes in the fair value are adjusted through earnings. The fair values of the outstanding derivatives are recorded on the balance sheet as assets (if the derivatives are in a gain position) or liabilities (if the derivatives are in a loss position). The fair values will also be classified as short-term or long-term depending upon their maturity dates. The fair value of all of our derivatives was determined using Level 2 inputs.

The notional amounts of our outstanding derivative instruments as of March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024
	Notional Amount		Notional Amount
	(Dollars in thousands)
Derivative instruments not designated as hedges:
Foreign currency derivatives	$	14,747	$	11,918

As of March 31, 2025, net realized pre-tax gains of $0.2 million related to our foreign currency derivatives were reported in AOCL and will be released to earnings within the next 12 months. No ineffectiveness expense was recorded in the first quarter of 2025 or 2024.

The pre-tax realized (gains) losses on designated cash flow hedges are recognized in the Statements of Operations when the hedged item impacts earnings and were as follows for the periods ended March 31, 2025 and 2024:


		Amount of Gain Recognized
	Location of Realized Gain Recognized in the Condensed Consolidated Statement of Operations	Three Months Ended March 31,
		2025		2024
Derivatives designated as cash flow hedges:		(Dollars in thousands)
Foreign currency derivatives	Cost of goods sold	$	(57)	$	(68)
Commodity derivative contracts	Cost of goods sold	—		(2,462)
Interest rate swap contracts	Interest expense	—		(2,737)

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Pretax gains and losses on non-designated derivatives recognized in earnings were as follows:


		Amount of (Gain)/Loss Recognized
	Location of (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations	Three Months Ended March 31,
		2025		2024
Derivatives not designated as hedges:		(Dollars in thousands)
Foreign currency derivatives	Cost of goods sold, other (income) expense, net	$	(236)	$	127

The following table summarizes the fair value of our outstanding derivatives not designated as hedges (on a gross basis) and balance sheet classification as of March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
	Fair Value		Fair Value
	(Dollars in thousands)
Prepaid and other current assets
Foreign currency derivatives	237		296

Other accrued liabilities
Foreign currency derivatives	(43)		(248)

Net asset	$	194	$	48

(11) Accumulated Other Comprehensive Loss

The balance in our Accumulated other comprehensive loss is set forth in the following table:


	March 31, 2025		December 31, 2024
	(Dollars in thousands)
Foreign currency translation adjustments, net of tax	$	(30,977)	$	(43,573)
Foreign currency derivatives, net of tax	164		214
Total accumulated other comprehensive loss	$	(30,813)	$	(43,359)

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(12) Loss per Share

We did not repurchase any shares of our common stock during the first quarter of 2025 or 2024.

The following table presents a reconciliation of the numerator and denominator of basic and diluted loss per share for the three and nine months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
		2025		2024
		(Dollars in thousands, except per share amounts)
Numerator for basic and diluted loss per share:
Net loss		$	(39,351)	$	(30,869)
Denominator:
Weighted average common shares outstanding for basic calculation		258,369,101		257,399,365

Weighted average common shares outstanding for diluted calculation		258,369,101		257,399,365
Basic loss per share		$	(0.15)	$	(0.12)
Diluted loss per share		$	(0.15)	$	(0.12)

Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding. Diluted loss per share is calculated by dividing net loss by the sum of the weighted average number of common shares outstanding plus the additional common shares that would have been outstanding if potentially dilutive securities had been issued.

The weighted average common shares outstanding for the diluted loss per share calculation for the three months ended March 31, 2025 excludes the dilutive effect of approximately 311,067 shares primarily related to restricted stock units (“RSUs”), as their inclusion would have been anti-dilutive due to the Company’s net loss. For the three months ended March 31, 2024, no shares were excluded because no shares were anti-dilutive solely due to the Company’s net loss.

Additionally, the weighted average common shares outstanding for the diluted loss per share calculation excludes consideration of 4,650,280 and 3,478,359 equivalent shares for the three months ended March 31, 2025 and 2024, respectively, as their effect would have been anti-dilutive.

(13) Stock-Based Compensation

The Human Resources and Compensation Committee of our Board of Directors granted 3,680,476 RSUs and 1,702,363 performance-based restricted stock units (“PSUs”) to our employees during the first quarter of 2025 under our Omnibus Equity Incentive Plan. Our electing non-employee directors received 148,835 deferred share units (“DSUs”) during the three months ended March 31, 2025 under our Omnibus Equity Incentive Plan.

We measure the fair value of grants of RSUs and DSUs based on the closing market price of a share of our common stock on the date of the grant (or if the market is not open for trading on such date, the immediately preceding day on which the market is open for trading). The weighted average fair value per share was $1.19 for RSUs granted to employees and $0.87 for DSUs granted to non-employee directors during the three months ended March 31, 2025.

We measure the fair value of grants of PSUs using a Monte Carlo valuation. The weighted average fair value of the PSUs granted in the first quarter of 2025 was $0.61 per share and will be expensed over a vesting period of three years. The final payout to holders of PSUs will be based upon the Company’s total shareholder return relative to a peer group’s performance measured at the end of each performance period. The final payout for PSUs granted in 2025 is subject to a 3.5x value cap.

In the three months ended March 31, 2025 and 2024, we recognized $0.6 million and $1.0 million, respectively, of stock-based compensation expense. The majority of the expense, $0.3 million and $0.9 million, respectively, was recorded in selling and administrative expense in the Condensed Consolidated Statements of Operations, with the remaining expense recorded in cost of goods sold.

PART I (CONT'D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of March 31, 2025, the unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $12.1 million and is expected to be recognized over the remaining vesting period of the respective grants.

(14) Supplementary Balance Sheet Detail

Supplier Finance Program (“SFP”) Obligations

GrafTech Mexico S.A. de C.V. (“GrafTech Mexico”) participates in an electronic vendor voucher payment program supported by the Mexican Government through one of its national banks, whereby suppliers can factor their invoices through a financial intermediary. This program gives GrafTech Mexico’s suppliers the option to settle trade receivables by obtaining payment from the financial intermediary prior to the invoice due date for a discounted amount. GrafTech Mexico’s responsibility is limited to making payment on the terms originally negotiated with its supplier, regardless of whether the supplier elects to receive early payment. The range of payment terms GrafTech Mexico negotiates with its suppliers is consistent, irrespective of whether a supplier participates in the program.

As of March 31, 2025 and December 31, 2024, $7.1 million and $5.6 million, respectively, of SFP obligations were included in accounts payable on the Condensed Consolidated Balance Sheets and upon settlement, are reflected as cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows.

PART I (CONT’D)

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

SEC Form 10-Q filed by GrafTech International Ltd.