thank you for standing by my name is jael and i will be your conference operator today at this time i would like to welcome everyone to the graph tech's first quarter 2026 earnings conference call and webcast all lives have been placed on mute to prevent any background noise after the speaker's remarks there will be a question and answer session if you would like to ask a question during this time simply press star followed by the number one on your telephone keypad if you would like to withdraw your question simply press star one again but now I'd like to turn the conference over to Mike Billen, Vice President, Investor Relations and Treasurer. You may begin.

Good morning, and welcome to Graphic International's first quarter 2026 earnings call. Thank you for joining us. Joining me on the call are Tim Flanagan, Chief Executive Officer, and Rory O'Donnell, Chief Financial Officer. Tim will begin with opening comments on our first quarter performance and key strategic initiatives. Rory will provide more details on our quarterly results and other financial matters. After re-closing comments by Tim, we will then open a call to questions. Turning to our next slide, as a reminder, our comments today may include forward-looking statements regarding, among other things, performance, trends, and strategies. These statements are based on current expectations that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by forward-looking statements are shown here. We will also discuss certain non-GAAP financial measures, and these slides include the relevant non-cap reconciliations. You can find these slides in the Investor Relations section of our website at www.graftech.com. A replay of the call will also be available on our website. I'll now turn the call over to Tim.

And thank you for joining GrafTech's friend. While the graphing electrode industry continues to navigate a period of transition, you're starting to see signs of improvement, and GrafTech is well-positioned to capitalize on the recovery ahead. At the same time, geopolitical conflicts are generating macro uncertainty and energy market volatility. Against this backdrop, drive disciplined commercial execution, continue improving our cost structure, maintain strong liquidity, operate safely, and position GrafTech for long-term value creation. In all of these areas, we'll continue to take decisive actions to support the long-term viability of our business. To that end, let me provide an update on several of our key strategic initiatives that leverage the commercial, operational, and financial progress that we've made over the past couple Starting on the commercial front, for some time we've been clear that pricing levels have not reflected the indispensable nature of a graphite electrode, nor the level of investment required to maintain a stable, reliable supply for the steel industry. That's happened even as steel makers in the U.S. and Europe have announced cumulative price increases over the past five quarters for finished steel products of approximately 50% and 25% respectively, reinforcing the disconnect between value creation in the steel industry and the pricing environment for graphite electrodes, a mission-critical consumer. In response, we are actively pursuing both market-based and policy-driven solutions as part of our disciplined approach to addressing this condition. On March 26th, we announced that we're increasing our graphite electrode prices by a minimum of $600 to $1,200 per metric time. From a consumer's perspective, this represents a $1 to $2 increase, or less than one-half of 1% of the cost. This increase will only apply to volume that was not yet committed as of that date. It's only a first step to restoring pricing to levels that safeguard regional graphite electrode production and continuity of supply for our customers. And as we remain focused on value over volume, we'll continue to walk away from volume opportunities that do not meet our margin requirements. So, still early on, we've been encouraged by our customers' reaction to the price announcement and the reflection of the price increase in recent tenders. As of today, more than 85% of our anticipated volume is committed in our order book, mostly at price points that reflect market pricing at the end of the fourth quarter of 2025. However, we're pleased to see the positive pricing momentum, which will lay a critical foundation as we begin the 2027 price negotiations later this year. To support these efforts, we are actively engaged in advocating for GrafTech in our key commercial jurisdictions as part of our commitment to fair trade and market. In the U.S., this includes our support of large diameter graphite electrodes at on-drag prices. The International Trade Commission announced the preliminary determination that there is a reasonable indication that the domestic industry is being materially injured by imports from China and India that are being sold in the U.S. excised by those governments. As a result of this determination, the U.S. Department of Commerce will continue its investigation. We are very encouraged by these developments and remain confident that the Commerce and that the ITC will complete a thorough investigation and take the necessary actions to address these unfair trade practices. We continue to evaluate the level of production capacity we need to maintain and the level of volume, we were reflecting our commitment to take decisive actions and support the long-term viability of our business. We also continue to assess the industry-wide impact of recent geopolitical developments, particularly the effect on key graphite electrode inputs, including oil-based raw materials, and disruptions in the production and transportation of oil out of the Middle East are having a significant impact on the global oil market. This, in turn, has translated into higher decan oil prices, the key raw material for petroleum needle coke. While the needle coke market has been relatively flat for the past few years, we anticipate that higher input costs and potential disruptions in decan oil availability for certain needle coke producers, in addition, shipping disruption and rising geopolitical risk continue to reinforce the need for supply chain security. We are beginning to see a shift in sourcing behavior for certain steel producers, with with an increased focus on regional production and surety of supply to safeguard continuity of their operations. In this regard, our strategically positioned global manufacturing footprint provides a competitive advantage of furthering the surety of needle poke supply through our vertical integration with Seedript, which sources all of its decan oil needs from domestic producers. Lastly, regarding the impact of the conflict on Graf-Tex cost structure, the past several years, more efficient manufacturing put-over-year reduction in cash costs, consistent with our guidance at the beginning. The extent and duration of the conflict in the Middle East and the resulting longer-term impacts on the oil and energy markets remains uncertain. Ultimately, sustained increases in our key input costs will require us to take further action on electric pricing. As it relates to the graphite electric, we are seeing an inflection point take shape. The near-term pricing environment is improving, and the long-term fundamentals remain firmly intact. Electric arc furnace steelmaking continues to gain share globally, driven by decarbonization trends. This transition supports long-term demand for graphite electrodes and, in turn, petroleum needle coke. We expect further synthetic graphite and petroleum needle coke demand to result from the building of western supply chains for battery needs, whether for electric vehicles or energy storage applications. We applaud the efforts of policymakers both in the U.S. and the EU has begun to develop a joint critical minerals action plan. This action plan establishes a framework for the two trading partners to coordinate policies to ensure supply chain resiliency for critical minerals, such as synthetic graphite, as they explore potential trade mechanisms, including furthermore, there's overwhelming evidence in trade cases across multiple jurisdictions that whether it's to support the establishment of a supply chain that doesn't exist outside of China today, or to protect those industries that do, pricing support for materials that are critical for national and economic security are an absolute must. Against this backdrop, Graphite continues to take proactive measures that seek to capitalize on these emerging opportunities. Engagement with the U.S. administration at various levels to help inform and shape critical mineral policies as it relates to graphite electrodes as well as battery materials, as they advocate for stronger European steel and graphite electrode industries, and demonstrating our technical capabilities through partnership and engagement with various agencies, research institutions, and companies. Let me pivot to our current thoughts on the steel industry trends. Global steel production outside of China was 212 million tons in the first quarter, of approximately 1% compared to the prior year, with a global utilization rate of approximately 1%. Looking at some of our key commercial regions using data recently published in the World Steel Association, for North America, steel production was up 2%, driven by 6% year-over-year growth in the United States. And we're seeing this trend continue into Q2, that weekly U.S. capacity utilization rate is gaining momentum in an important number. Conversely, the U.S. is declining 3% compared to the prior year. As we've noted previously, indicators of a rebound in the steel market have started to appear, both in the EU and globally. Turning to the next slide and expanding on this point, World Steel published the report globally outside of China, World Steel is projecting 2026 steel demand to grow 1.9% year-over-year. For the U.S., World Steel is projecting 1.7%. Along with its demand growth, favorable trade policies are expected to further support U.S. steel for Europe. World Steel is projecting a return of steel demand growth in the near term, forecasting demand growth of 1.3%, reflects some of the demand drivers we've discussed in the past during this fall, including initiatives to do in for GrafTech. Specifically, provisions within the Carbon Border Adjustment Mechanism, or CMOM, implemented in early 2026 will make certain steel imports into the EU less competitive. The European Commission in 2025 to significantly increase trade protections on steel. At the beginning of July, we'll introduce melt and portus freeze from current levels around 60% to potentially 80% over time. Overall, we continue to project that demand for graphite electors will increase, and Graptex is uniquely positioned to capture a disproportionate share of that growth. Before I hand the call over Rory, I want to circle back on one of the key priorities I mentioned in my opening comments. Our team continues to do just that, and I want to thank them for their efforts. For the first quarter, our total reportable insert rate was .35. Sustaining this momentum will remain a critical focus as we work relentlessly towards our goal of zero injuries. With that, I'm going to turn it over to Rory who will provide more color on our commercial and financial.

Thank you, Tim, and good morning, everyone. Starting with our operations, 1,000 metric tons, capacity utilization rates of 65% for the quarter. On the commercial front, our sales volume in the first quarter is 15% compared to the while expanding our presence in higher-value regions, particularly the United States. More than 85% committed in our order to represent a 5% decline in the stock of our pricing action. We are encouraged to see that the trajectory of our pricing is beginning. While we continue to operate with disciplined commercial standards, we are encouraged by the positive pricing momentum, which, in addition to our pricing actions, also reflects the improving backdrop in EAS steelmaking, all of which is positioning for effect to capture significant long-term value as fundamentals continue to work. Turning to the next slide and expanding on costs. For the first quarter, our cash costs on a per metric ton basis were $3,848. While above the level reported in the first quarter of 20.5, this represented a 4% sequential decline from the fourth quarter. As we have noted in prior calls, we will have periodic quarters remain significantly improved compared to the prior periods. And we will remain focused on further optimization opportunities, including procurement and production efficiency across the organization, including in response to the geopolitically driven cost pressures that Tim spoke to. All of this while maintaining our dedication to product quality and reliability, as well as upholding our commitment to environmental responsibility and safety. We're in progress towards achieving our long-term expectations, cash costs being approximately $3,600 to $3,700. Turning to the next slide and factoring all of this in, for the first quarter, we had a net loss of $43 million for $1.60. Adjusted EBITDA was negative $14 million compared to negative $4 million in the prior year, primarily due to the decline in our average price. According to cash flow, cash used in operating activities was $15 million. Adjusted free cash flow was negative $27 million compared to negative $40 million in the first quarter of 2025, as the prior year reflected a planned inventory build in the first quarter compared to a more neutral impact of working capital in the current year. On a full-year basis, we continue to project a modest increase in our net working capital levels, reflecting our anticipated volume growth. As we have noted, to the extent that conflict-driven impacts on the oil and energy markets result in sustained increases in the carrying cost of our inventory, this will need to be reflected in our graphite electrode pricing moving forward. Lastly, regarding CapEx, we continue to anticipate a full-year spend will be approximately $35 million. which we believe is an adequate level to maintain our assets at current utilization levels and support targeted investments in terms of the next quarter with total equity of $329 million, consisting of $120 million of cash, $108 million of availability under our revolving credit facility, and $100 million of availability under our delayed draw term loan. The untaxed portion of our delayed draw term loan is available to be drawn until July of 2026. and our expectation remains to draw on this residual portion, most likely by the end of the second quarter. As it relates to our $225 million revolving credit facility, which matures in November of 2028, we had no borrowings outstanding as of the end of the quarter. Based on a springing financial covenant that considers our recent financial performance, borrowing availability under the revolver remains limited to approximately $115 million, dollars less currently outstanding letters of credit which were approximately seven million dollars at the end more broadly as it relates to our liquidity positions our pricing actions announced in the first quarter will set the stage for a more constructive pricing going relates to 2027 negotiations that are set to begin in the back half as a reference point based on current utilization rates each 100 improvement to approximately 12 million dollars of incremental liquidity. In conjunction with the other key initiatives that Tim spoke to, it is expected to result in a marked improvement in our financial performance in 2027 and beyond. As such, we believe our $329 million liquidity position, along with the absence of substantial debt maturities until December of 2029, provides a strong foundation from which to execute our strategy, capitalize on improving marketing conditions, and position draft tech for meaningful long-term value creation. In closing my remarks, I would like to extend my gratitude for the outstanding commitment and hard work demonstrated by our team members worldwide and thank our customers and our investors for their continued partnership. I will now turn the call back to Tim for a few minutes.

This remains a visible sign for GrafTech in our broader industry. Near-term demand fundamentals are beginning to improve. Our price increase actions, favorable trade rulings, supportive policy action, and strong EAS steelmaking trends from key customers are all reinforcing the pricing recovery thesis. Long-term growth drivers, including decarbonization, the continued shift to electric arc furnace steelmaking, and the growing demand for needle coke and synthetic graphite are firmly in Pure play graphite electrode producer outside of India and China, we remain firmly resolved to support the continuation of these dynamics and the condition to add long-term value. all of which will position GraphStack to capitalize on the structural trends that are set to shape the future of our industry and to deliver long-term to that end to our entire team around the world. That concludes our prepared remarks.

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, please press star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from the line of Bennett Moore of J.P. Morgan. Your line is open.

Good morning, Tim and Murray. Thank you for taking my questions. I wanted to start on the cost inflation side. I think all your EU energy needs are covered for this year, but if you could confirm that and then maybe if you could help frame what sort of inflation you're seeing from Deacon Oil And has this started to put upward pressure on Needle Coke? And if not, when do you think we could start to see that flow through?

Thanks, Bennett. So on the EU energy costs, you're right. We are nearly fully hedged on those. We have fixed price contracts going through the end of the year. So that's a good thing for us. We're happy to have that in place. Moving on to the decant oil question, just to dimensionalize, dimensionalized, decanth oil as a percentage of our total production cost is around 25% of it.

The pricing for $200 increase following the 1Q could be over the year.

We won't get it at specific levels, but $1,200 across various regions, and we're seeing success in that delivered in the second quarter, and that's just the main announcement when our negotiations took place. So probably 90% of the volume that will be impacted by the price increase will happen in the second half of the year. So wouldn't expect to have a big change in ASP in the second quarter, but would really see that start to materialize in the third and fourth quarter. But again, pleased with where that's at at this point in time.

Great. Thank you for all the color. I'll get back in the queue.

Next question comes from RBC Capital Markets. Your line is open.

Great. Thanks for taking my question. You guys are well. So a few questions. So, first off, I think I heard you say that your cash costs should be in a $3,600 to $3,700 range. And so, if I think about your average price in Q1, which was $3,900, you know, and then maybe I take the midpoint of what you've announced, $900, and so that would get you to $4,800. is that the right way to think about maybe Q3, Q4 potential pricing? And then, you know, given that – and would you be at that cash cost level? So maybe you could see kind of a, you know, $1,000 per EBITDA per ton range, or maybe you can kind of just help us frame, you know, what the path to profitability is or, you know, and what that looks like, and maybe a timeline, maybe Q3 or Q4.

Thanks, Arun, and let me try to add some clarity to that. So, you know, I think it's a fair proxy to take the midpoint of the range, because, again, that range is over all that we sell. But let me remind you, when we made the announcement of the price increase, we were approximately 80% committed, right? So, the 20% of the sales we have to go would be influenced or impacted by that price increase. And, again, we're pleased with where those negotiations are and the uptake we're seeing from customers at those price levels. But you can't just apply to all the tons. You can only apply it to the incremental tons. But what's really important about this is how it sets up the third quarter, the fourth quarter negotiations, and the momentum. I mean, this is the first time we've seen in a number of years, quarters, any sort of positive price momentum on the electrode side. And really, that's a reflection of not only just market conditions, but better demand. We mentioned that you saw utilization rates in the U.S. ticked up over 80 percent last week. You know, I think there's concerns around supply security, just given some of the disruption in the transit markets and just overall geopolitical elements that are going under the cost pressure.

And if I could just ask a follow-up, so obviously there is a lot of electrode production by Japanese producers and Koreans also, Korea is involved, and there's a fair amount of needle cook production in that region. So, however, we know from, you know, following what's going on on the chemical side that there's been massive disruptions, and many of those facilities are down. So, you know, electrodes have suffered from weak pricing for a little while, and our explanation would be oversupply in the electrode market. But, you know, has the conflict potentially – could it result in maybe some permanent structural reduction of capacity, especially in that region? And could that help kind of the long-term supply-demand balance and pricing power that you expect in electrodes going forward? Thanks.

Yeah, I mean, it's hard to say what the conflict is going to do, but I think certainly what it's going to do to long-term supply and demand balance, I mean, I think it all depends on the extent and duration of the war and the impact, but certainly as you look at oil inventories globally coming way down and the continuation of the supply disruption, I would expect that you would certainly see, you know, a mark throughout half of the year in terms of not only pricing but potentially supply for those who are struggling to get needle coke and other raw materials that are important to produce electrodes. So it'll be, you have to be seeing what it looks like globally for the long term, but certainly, you know, I think there'll be some in the back half of the year. And, again, I think that's why we like our position where we've maintained C-Drift as a meaningful part of our portfolio and the vertical integration that it provides our operations and what we can offer customers from a surety of supply.

And then just lastly, maybe you could comment on your expected success on these price increases. Do you feel like competitors are in the same boat and are using this as an opportunity, and are they acting rationally, or, you know, is there oversupply, and would they use this opportunity more as an opportunity to reclaim share? And I know you guys have been on a, you know, multi-year share recovery journey. So where are you on that as well? And do you foresee any headwinds in recovering that share now with increased competitive activity or not?

Yeah. Thanks, Arun.

The question comes from the line of Abe Landa of Bank of America. Your line is open.

Good morning. Maybe just focusing again on this, like, Middle East conflict, potential exposure, et cetera. Just kind of break it out more, the direct and indirect exposure within the cash college. I think you broke out decant 25%. That's helpful. We don't have to score that. But maybe between energy, logistics, maybe some other indirect exposure or direct exposure. And then, I guess, all that potential exposure, what is fixed? Obviously, it sounds like energy is fixed and what is potentially variable.

Yeah, thanks, Abe. So I would say beyond decant oil, of course, energy, electricity, and natural gas are probably the next biggest chunk. I mentioned when Bennett chimed in about the fixed-price contracts we have in place for most of our consumption for the rest of the year in Europe. So not a lot of direct exposure. The gas goes, same thing, but between decant oil and the electricity, that's a big, big chunk of our variable costs. So from a fixed standpoint, there's a small amount of things that are exposed to the dock of some of that pricing, but we're pretty comfortable that we have operational strategies, production scheduling tactics and things like that to take advantage of some of the rates that are available to us in other jurisdictions. you know, time of consumption, extent of consumption, things like that. So I would say that as well as the common risk mitigation are estimates around exposure to the oil.

That's very helpful. And then I know decan is 25%. Do you have like a similar number for electricity and gas? It's kind of like those other elements. Those two together are about 15, 10 to 15%. Very helpful. And then kind of continue on this Middle East complex theme. I guess within the Middle East, like, I mean, we've seen stories of, you know, steelmaking being disrupted in that region. I mean, are you seeing that kind of reduced demand for electrodes in that market? I know it's a pretty popular market for imports of Chinese, Indian graphite electrodes. Are you seeing disruptions within the Middle East market? And then are you seeing any potential spillover to other markets? relate to the conflict.

Yeah, I think certainly steel production in that region as well as the accessibility of that region. Most of the product that we would sell into the Middle East would go via vessels and the availability of vessels and the cost. And from our perspective, we're not moving a lot of volume into the Middle East right now. It's not a big market for us relative to the U.S., the European market, as well as – and there's some – From the line of Kirk Lidke of Imperial Capital, LLC.

Your line is open. Hello, Tim. Rory, Mike. Thanks for the call. Just a couple of follow-ups. With respect to the – you provided a rule of thumb pricing to liquidity. I think it was $100 a metric ton to $12 million of liquidity. is what would be – is there a – can you put that in terms of EBITDA instead of liquidity?

Yeah, I consider that EBITDA impact. It would float through. So if you're talking – with our volume growth that we've guided to, we could put you kind of in that 115, 120 range for the year. So that's where the $12 million comes from. $100 times 120 is $12 million of EBITDA.

Okay, great. And then you mentioned some steel makers are shortening supply lines. Can you maybe elaborate on that? You know, is that in anticipation of higher pricing to do some of these trade actions, or is that actually concerns about the ability to deliver?

Yeah, I think there's a few things going on in the market. You know, first and foremost, transit times, again, have extended by a couple weeks. out of Asia into Europe, and that's providing some opportunity. I think the uncertainty of the market, the markets as a whole have maybe started to have some steel makers thinking more regionally and trying to buy closer and managing less complex or less involved supply chains. You know, I think both of those are having an impact. But I also think we're seeing a little bit of maybe a wait-and-see game from some steel producers trying to defer purchases. So they're consuming down some of their inventory, thinking that, you know, they'll have an opportunity to buy in a more favorable market condition later in the year, which, again, I think becomes a bit of a dangerous game just given the lead time that's needed to build electrodes and some of the demand we're seeing in other regions. So, you know, overall, I think market conditions, we're seeing some demand pickup and pretty pleased with where it was. Great. Thank you.

And then lastly, the trade action in front of the ITC seems to be moving in the right direction. Can you maybe talk about the potential timing of that and if you think it will come in time for the 2027 price negotiations?

Yeah, so that large diameter, so again, it covers imports into the U.S. against the Chinese and the Indians of anything greater than 425 millimeters or 16 and a half inches. It's through the initial IPC, it's on the commerce, commerce will do their investigation. We would expect that the countervailing duties ruling could be implied or applied no later than the end of July. And then as we look at the anti-dumping, which is certainly the larger of the two, would come in mid-September. And both of those would be, you know, in advance of kind of that will take place at the back half of the year.

20% of the U.S. market?

No. J.P. Morgan, your line is open.

Thanks for taking my follow-up. I wanted to stick with the theme of the trade policy here. And I guess I'm wondering kind of the scenarios you think could play out for negotiations later this year, assuming success on the trade case. do you view this more as like a market share gain opportunity from the India imports or really more of a price action opportunity? And then maybe if you could also just touch on opportunities in other markets. I think you guys have initiated something down in Brazil, but what about Mexico and elsewhere?

Yeah, but thanks. And I think let's start the U.S. You know, certainly it's both a volume opportunity, you know, because I think it does impact the desire and the willingness to import those tons, but more importantly, it's a price impact for the broader U.S. market, which, you know, certainly is supportive and I think is just another thing that's changing the momentum and the trajectory of the market as we sit here today. You know, and I think we've long advocated whether it's for any of the jurisdictions that we have operations in for fair trade in supporting, you know, the operations that we have. So, you know, I think there's actions going on in Brazil that, you know, I think are taking shape that we'll see some output here.

That concludes our Q&A session. I will now turn the conference back over to Tim Flanagan, CEO, for closing remarks.

Thank you, JL. I'd like to thank everyone on this call for your interest in GravTech. We look forward to seeing you.

That concludes today's conference call. You may now disconnect.