GrafTech Cuts FY14 EBITDA Outlook

(RTTNews) - GrafTech International Ltd. (GTI) on Tuesday lowered its 2014 EBITDA guidance to a range of $105 million to $115 million from its prior range of $135 million to $150 million, citing continued pressure on products for the consumer electronics end market and a weakening in graphite electrode demand outside of the United States, causing delays in customer shipments in its Industrial Materials segment.

The company also cut its capital expenditures target in 2014 to $80 million to $90 million from its previous target of $85 million to $95 million.

Joel Hawthorne, Chief Executive Officer of GrafTech, commented, "We continue to face a challenging and volatile operating environment in both our Engineered Solutions and Industrial Materials segments. As a result of the uncertainly that exists in our end markets today, we will be re-evaluating our guidance practice going forward."

GrafTech also said that it has concluded another phase of its on-going company-wide cost savings assessment. As a result, the company has identified about $30 million in cost-savings actions, in addition to the more than $90 million in annual cost savings identified over the past year.

The actions include changes to the company's operating and management structure in order to streamline, simplify and decentralize the organization. Actions include a combination of reduced contractor costs, attrition, early retirements and layoffs.

GrafTech also will redesign its research and development function and downsize its corporate functions. The company said it will downsize its corporate functions by about 25% and relocate to a smaller, more cost effective, corporate headquarters within Northeast Ohio. The transition is expected to begin in the fourth quarter of 2014 and be completed by the first quarter of 2015.

The company expects to record a charge of about $20 million related to these actions in the third and fourth quarters of 2014.

In addition, GrafTech announced several executive management changes that are part of its ongoing initiative to create a more simplified and efficient organizational structure and foster innovation.