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. For the year ended December 31, 2025, one customer accounted for approximately 11% of the Company’s consolidated net sales. No single customer accounted for 10% or more of the Company's net sales in 2024 or 2023.
The accounting policies of our Industrial Materials segment are the same as those described in Note 1, “Business and Summary of Significant Accounting Policies.” 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 loss, which is also reported on the Consolidated Statements of Operations and Comprehensive Loss as consolidated net loss. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.
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 years ended December 31, 2025, 2024 and 2023:
| | | | | | | | | | | |
| (in thousands) | 2025 | 2024 | 2023 |
| Net sales | $ | 504,134 | | $ | 538,782 | | $ | 620,500 | |
Cash cost of goods sold(1) | 415,760 | | 442,699 | | 507,233 | |
| Other segment expenses | 85,736 | | 91,058 | | 64,624 | |
| Lower of cost or market inventory valuation adjustment | 18,315 | | 24,878 | | 12,431 | |
| Research and development | 6,475 | | 5,706 | | 5,520 | |
| Selling and administrative expenses | 54,914 | | 46,510 | | 74,012 | |
| Rationalization expenses | — | | 3,156 | | — | |
| Goodwill impairment charges | — | | — | | 171,117 | |
| Other (income) expense, net | (4,049) | | (1,569) | | 4,679 | |
| Interest expense | 104,057 | | 85,313 | | 58,087 | |
| Interest income | (6,632) | | (5,701) | | (3,439) | |
| Income tax expense (benefit) | 49,393 | | (22,103) | | (18,514) | |
| Net loss | $ | (219,835) | | $ | (131,165) | | $ | (255,250) | |
(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.
The following tables summarize information as to the Company's operations in different geographic areas:
| | | | | | | | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Net sales: | | | | | |
| United States | $ | 206,190 | | | $ | 171,192 | | | $ | 206,263 | |
| Americas (excluding the United States) | 67,138 | | | 95,513 | | | 100,364 | |
| Asia Pacific | 31,923 | | | 57,581 | | | 66,214 | |
| Europe, Middle East, Africa | 198,883 | | | 214,496 | | | 247,659 | |
| Total | $ | 504,134 | | | $ | 538,782 | | | $ | 620,500 | |
| | | | | | | | | | | |
| | December 31, |
| (in thousands) | 2025 | | 2024 |
| Long-lived assets (a): | | | |
| United States | $ | 167,371 | | | $ | 182,087 | |
| Mexico | 104,215 | | | 109,020 | |
| Brazil | 3,737 | | | 3,451 | |
| France | 94,393 | | | 84,059 | |
| Spain | 119,918 | | | 103,734 | |
| Other countries | 296 | | | 348 | |
| Total | $ | 489,930 | | | $ | 482,699 | |
(a)Long-lived assets represent fixed assets, net of accumulated depreciation.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.