Graftech International (EAF) risk factors, FY2024 10-K

Risks related to our business and industry

1. 01We are dependent on the global steel industry generally and the EAF steel industry in particular, which historically have been highly cyclical, and a downturn in these industries may materially adversely affect our business
2. 02Pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future
3. 03Global graphite electrode overcapacity has adversely affected graphite electrode prices in the past, and is currently doing so now, which is negatively impacting our sales, margins and profitability
4. 04The graphite industry is highly competitive. Our market share, net sales or net income could decline due to vigorous price and other competition
5. 05We are dependent on the supply of petroleum needle coke. Our results of operations could deteriorate if disruptions in the supply of petroleum needle coke occur for an extended period
6. 06We rely primarily on one facility in Monterrey, Mexico for the manufacturing of connecting pins, a necessary component of our graphite electrodes. Our results of operations could deteriorate if this facility would become unable to provide us with the required volume of connecting pins
7. 07We are dependent on supplies of raw materials (in addition to petroleum needle coke). Our results of operations could deteriorate if those supplies increase in cost or are substantially disrupted for an extended period
8. 08Our business and our customers are subject to market changes in the cost of electricity and natural gas that could adversely affect our business
9. 09Failure to retain our existing senior management team or the inability to attract and retain qualified personnel could hurt our business and inhibit our ability to operate and grow successfully
10. 10Our operations are subject to hazards which could result in significant liability to us
11. 11We are subject to a variety of legal, economic, social and political risks associated with our substantial operations in multiple countries, which could have a material adverse effect on our financial and business operations
12. 12Our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period for any reason, including equipment failure, legal proceedings, climate change, natural disasters, public health crises, political crises or other catastrophic events
13. 13Plant operational improvements may be delayed or may not achieve the expected benefits
14. 14We depend on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services
15. 15We may be subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, which could compromise our information and expose us to liability
16. 16If we are unable to successfully negotiate with the representatives of our employees, including labor unions, we may experience strikes and work stoppages
17. 17Our ability to grow and compete effectively depends on protecting our intellectual property. Failure to protect our intellectual property could adversely affect our business
18. 18Moreover, patents, even if valid, only provide protection for a specified limited duration. In addition, effective patent, trademark and trade secret protection may be limited or unavailable or we may not apply for it in the United States or in any of the other countries in which we operate
19. 19Third parties may claim that our products or processes infringe their intellectual property rights, which may cause us to pay unexpected litigation costs or damages or prevent us from selling our products or services
20. 20We currently benefit from U.S. and EU anti-dumping duties and tariffs against certain Chinese and Indian imports that if reduced or not extended could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition
21. 21Implementation of tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business

Risks related to our indebtedness

1. 22Our indebtedness could limit our financial and operating activities and adversely affect our ability to incur additional debt to fund future needs and our ability to fulfill our obligations under our existing and future indebtedness
2. 23The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes include covenants that could restrict or limit our financial and business operations

Risks related to tax matters

1. 24We are required to make payments under a Tax Receivable Agreement for certain tax benefits we may claim in the future, and the amounts we may pay could be significant

Risks related to our legal and regulatory environment

1. 25Stringent health, safety and environmental laws and regulations applicable to our manufacturing operations and facilities could result in substantial costs related to compliance, sanctions or material liabilities and may affect the availability of raw materials
2. 26Global data and privacy protection laws applicable to us require substantial costs related to compliance, and any failure to comply could result in significant liability to us, including fines and penalties

Risks related to our common stock

1. 27Certain provisions, including in our Amended Certificate of Incorporation and our Amended By-Laws, could hinder, delay or prevent a change in control, which could adversely affect the price of our common stock
2. 28We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves
3. 29We may not be able to remain in compliance with the continued listing requirements of the NYSE, and if the NYSE delists our common stock, it could have an adverse impact on the trading, liquidity and market price of our common stock