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Materion Corporation Reports Third Quarter 2024 Financial Results

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Materion (NYSE: MTRN) reported Q3 2024 financial results with net sales of $436.7 million and value-added sales of $263.8 million. Net income was $22.3 million, or $1.07 per share, with adjusted earnings of $1.41 per share. The company achieved record Q3 adjusted EBITDA of $56.7 million and a record quarterly adjusted EBITDA margin of 21.5%. Despite weak market conditions, Materion announced the sale of its non-core large area targets business and expects full-year 2024 adjusted earnings between $5.20 to $5.40 per share.

Materion (NYSE: MTRN) ha riportato i risultati finanziari del terzo trimestre 2024, con vendite nette di $436,7 milioni e vendite a valore aggiunto di $263,8 milioni. L'utile netto è stato di $22,3 milioni, ovvero $1,07 per azione, con utili rettificati di $1,41 per azione. L'azienda ha raggiunto un EBITDA rettificato record per il terzo trimestre di $56,7 milioni e un margine EBITDA rettificato trimestrale record del 21,5%. Nonostante le condizioni di mercato deboli, Materion ha annunciato la vendita della sua attività non core relativa a obiettivi di grande area e prevede utili rettificati per l'intero anno 2024 compresi tra $5,20 e $5,40 per azione.

Materion (NYSE: MTRN) reportó los resultados financieros del tercer trimestre de 2024, con ventas netas de $436.7 millones y ventas de valor agregado de $263.8 millones. El ingreso neto fue de $22.3 millones, o $1.07 por acción, con ganancias ajustadas de $1.41 por acción. La compañía logró un EBITDA ajustado récord para el tercer trimestre de $56.7 millones y un margen EBITDA ajustado trimestral récord del 21.5%. A pesar de las débiles condiciones del mercado, Materion anunció la venta de su negocio de objetivos de gran área no esencial y espera que las ganancias ajustadas para el año completo 2024 se sitúen entre $5.20 y $5.40 por acción.

Materion (NYSE: MTRN)은 2024년 3분기 재무 실적을 발표했으며, 순매출은 4억 3,670만 달러, 부가 가치 매출은 2억 6,380만 달러였습니다. 순이익은 2,230만 달러, 주당 $1.07로, 조정 후 주당 수익은 $1.41입니다. 이 회사는 3분기 조정 EBITDA가 5,670만 달러로 기록을 세웠고, 조정 EBITDA 마진은 21.5%로 사상 최고치를 기록했습니다. 시장 환경이 좋지 않은 상황에도 불구하고, Materion은 비핵심 대형 목표 사업 매각을 발표했으며, 2024년 전체 연도 조정 수익을 주당 $5.20에서 $5.40 사이로 예상하고 있습니다.

Materion (NYSE: MTRN) a publié ses résultats financiers du troisième trimestre 2024, avec des ventes nettes de 436,7 millions de dollars et des ventes à valeur ajoutée de 263,8 millions de dollars. Le revenu net s'élevait à 22,3 millions de dollars, soit 1,07 dollar par action, avec des bénéfices ajustés de 1,41 dollar par action. L'entreprise a atteint un EBITDA ajusté record pour le troisième trimestre de 56,7 millions de dollars et une marge EBITDA ajustée trimestrielle record de 21,5%. Malgré des conditions de marché difficiles, Materion a annoncé la vente de son activité non essentielle liée aux cibles de grande surface et prévoit des bénéfices ajustés pour l'ensemble de l'année 2024 compris entre 5,20 et 5,40 dollars par action.

Materion (NYSE: MTRN) hat die finanziellen Ergebnisse für das dritte Quartal 2024 veröffentlicht, mit Nettoumsätzen von 436,7 Millionen Dollar und wertschöpfenden Verkäufen von 263,8 Millionen Dollar. Der Nettogewinn betrug 22,3 Millionen Dollar, oder 1,07 Dollar pro Aktie, mit bereinigten Erträgen von 1,41 Dollar pro Aktie. Das Unternehmen erzielte ein Rekord-EBITDA von 56,7 Millionen Dollar für das dritte Quartal und eine Rekord-EBITDA-Marge von 21,5%. Trotz schwacher Marktbedingungen kündigte Materion den Verkauf seines nicht zum Kerngeschäft gehörenden Geschäfts mit großen Zielbereichen an und erwartet für das gesamte Jahr 2024 bereinigte Erträge zwischen 5,20 und 5,40 Dollar pro Aktie.

Positive
  • Record Q3 adjusted EBITDA of $56.7 million, up from $55.4 million year-over-year
  • Achieved record quarterly adjusted EBITDA margin of 21.5%
  • Net sales increased to $436.7 million from $403.1 million in prior year
  • Strong performance in space, defense, and semiconductor segments
Negative
  • Value-added sales decreased 2% year-over-year
  • Net income declined to $22.3 million from $26.6 million in prior year
  • Adjusted earnings per share decreased to $1.41 from $1.51 year-over-year
  • Weak end market conditions affecting overall performance

Insights

The Q3 results show mixed performance with notable strengths and challenges. $436.7M in net sales represents a 8.3% YoY increase, though value-added sales declined 2%. The company achieved record Q3 adjusted EBITDA of $56.7M with impressive margins of 21.5%, demonstrating strong operational efficiency despite market headwinds.

The strategic sale of the non-core large area targets business and cost optimization initiatives signal management's focus on portfolio refinement and margin improvement. The adjusted EPS guidance of $5.20 to $5.40 for FY2024 suggests stable performance despite market softness.

The semiconductor segment shows signs of recovery, while space and defense remain strong growth drivers. However, general market weakness and lower precision clad strip sales indicate ongoing challenges in certain segments.

The strategic positioning in high-growth sectors like semiconductors, aerospace & defense shows promise for long-term value creation. The company's focus on technical solutions and engagement with customer challenges demonstrates strong market adaptation.

Key performance indicators reveal operational resilience:

  • Record EBITDA margin at 21.5% despite volume challenges
  • Adjusted EPS of $1.41 maintaining profitability
  • Strategic cost management offsetting market weakness
The divestment of the Albuquerque facility aligns with the strategy to optimize the business portfolio and focus on higher-margin opportunities.

MAYFIELD HEIGHTS, Ohio--(BUSINESS WIRE)-- Materion Corporation (NYSE: MTRN) today reported third quarter 2024 financial results.

Financial Summary

  • Net sales were $436.7 million; value-added sales1 were $263.8 million
  • Net income was $22.3 million, or $1.07 per share, diluted; adjusted earnings of $1.41 per share
  • Operating profit of $31.3 million; record third quarter adjusted EBITDA2 of $56.7 million versus $55.4 million in the prior year quarter

Business Highlights

  • Delivered record quarterly adjusted EBITDA margin of 21.5%
  • Strategic actions implemented to reduce cost and deliver strong performance despite soft environment
  • Announcing sale of non-core large area targets business for architectural glass in Albuquerque, New Mexico4
  • Appointed new Precision Optics President to lead business transformation

“I am proud of the outstanding performance our team delivered, despite weak end market conditions,” Jugal Vijayvargiya, Materion President & CEO said. “While navigating this challenging environment, we are strengthening the company by shedding low margin business, optimizing our operational footprint and improving the cost structure to position us for strong performance as markets recover.”

“We continue to win new business by working with our customers to develop solutions to their most challenging technical problems, while remaining laser focused on delivering on our organic growth initiatives and driving efficiencies across all areas of our business,” Vijayvargiya added. “Through the combination of these efforts, we’ve set a solid foundation that will enable us to drive sustainable long-term growth as global megatrends continue to open up new opportunities for our products and solutions.”

THIRD QUARTER 2024 RESULTS

Net sales for the quarter were $436.7 million, compared to $403.1 million in the prior year period. Value-added sales were $263.8 million for the quarter, down 2% from the prior year period primarily driven by general market softness combined with lower precision clad strip sales. This decrease was partially offset by strength in space and defense and improvement in semiconductor.

Operating profit for the quarter was $31.3 million and net income was $22.3 million, or $1.07 per diluted share, compared to operating profit of $36.5 million and net income of $26.6 million, or $1.27 per share, in the prior year period.

Excluding special items3, EBITDA was $56.7 million in the quarter or 21.5% of value-added sales, a quarterly margin record, compared to $55.4 million or 20.5% of value-added sales in the prior year period. Despite lower volume, this record margin was driven by strong cost management and operational performance.

Adjusted net income was $29.6 million excluding acquisition amortization, or $1.41 per diluted share, compared to $1.51 per share in the prior year period.

OUTLOOK

While conditions in many of our end markets remain weak, we expect to deliver a solid fourth quarter with a stronger top line combined with the continued benefit of our cost and footprint initiatives. With that, we expect to deliver full year 2024 adjusted earnings in the range of $5.20 to $5.40 per share.

ADJUSTED EARNINGS GUIDANCE

It is not possible for the Company to identify the amount or significance of future adjustments associated with potential insurance and litigation claims, legacy environmental costs, acquisition and integration costs, certain income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance for the full year to a comparable GAAP range. However, items excluded from the Company's adjusted earnings guidance include the historical adjustments noted in Attachments 4 through 8 to this press release.

CONFERENCE CALL

Materion Corporation will host an investor conference call with analysts at 10:00 a.m. Eastern Time, October 30, 2024. The conference call will be available via webcast through the Company’s website at www.materion.com. By phone, please dial (888) 506-0062. Calls outside the U.S. can dial (973) 528-0011; please reference participant access code of 445452. A replay of the call will be available until November 13, 2024 by dialing (877) 481-4010 or (919) 882-2331 if international; please reference replay ID number 49167. The call will also be archived on the Company’s website.

FOOTNOTES

1 Value-added sales deducts the impact of pass-through metals from net sales
2 EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization
3 Details of the special items can be found in Attachments 4 through 8
4 Date of transaction occurred on October 25, 2024

ABOUT MATERION

Materion Corporation is a global leader in advanced materials solutions for high-performance industries including semiconductor, industrial, aerospace & defense, energy and automotive. With nearly 100 years of expertise in specialty engineered alloy systems, inorganic chemicals and powders, precious and non-precious metals, beryllium and beryllium composites, and precision filters and optical coatings, Materion partners with customers to enable breakthrough solutions that move the world forward. Headquartered in Mayfield Heights, Ohio, the company employs more than 3,500 talented people worldwide, serving customers in more than 60 countries.

FORWARD-LOOKING STATEMENTS

Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: the global economy, including inflationary pressures, potential future recessionary conditions and the impact of tariffs and trade agreements; the impact of any U.S. Federal Government shutdowns or sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success in identifying acquisition candidates and in acquiring and integrating such businesses; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions; our success in implementing our strategic plans and the timely and successful start-up and completion of any capital projects; other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal consignment fees, tax rates, exchange rates, interest rates, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, credit availability, and the impact of the Company’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; the disruptions in operations from, and other effects of, catastrophic and other extraordinary events including outbreaks from infectious diseases and the conflict between Russia and Ukraine and other hostilities; realization of expected financial benefits expected from the Inflation Reduction Act of 2022; and the risk factors set forth in Part 1, Item 1A of the Company's 2023 Annual Report on Form 10-K and in other reports that we file with the SEC.

Attachment 1

Materion Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

 

 

 

Third Quarter Ended

 

Nine Months Ended

(In thousands except per share amounts)

 

September 29,
2023

 

September 29,
2023

 

September 27,
2024

 

September 29,
2023

Net sales

 

$

436,715

 

 

$

403,067

 

 

$

1,247,868

 

 

$

1,244,144

 

Cost of sales

 

 

355,777

 

 

 

314,131

 

 

 

1,014,859

 

 

 

974,817

 

Gross margin

 

 

80,938

 

 

 

88,936

 

 

 

233,009

 

 

 

269,327

 

Selling, general, and administrative expense

 

 

35,009

 

 

 

38,806

 

 

 

104,454

 

 

 

118,053

 

Research and development expense

 

 

7,868

 

 

 

6,322

 

 

 

22,712

 

 

 

21,098

 

Restructuring expense (income)

 

 

1,493

 

 

 

1,077

 

 

 

6,161

 

 

 

3,194

 

Other — net

 

 

5,309

 

 

 

6,211

 

 

 

14,112

 

 

 

18,178

 

Operating profit

 

 

31,259

 

 

 

36,520

 

 

 

85,570

 

 

 

108,804

 

Other non-operating income—net

 

 

(642

)

 

 

(685

)

 

 

(1,925

)

 

 

(2,141

)

Interest expense — net

 

 

8,839

 

 

 

7,678

 

 

 

25,920

 

 

 

22,820

 

Income before income taxes

 

 

23,062

 

 

 

29,527

 

 

 

61,575

 

 

 

88,125

 

Income tax expense

 

 

768

 

 

 

2,963

 

 

 

6,836

 

 

 

11,891

 

Net income

 

$

22,294

 

 

$

26,564

 

 

$

54,739

 

 

$

76,234

 

Basic earnings per share:

 

 

 

 

 

 

 

 

Net income per share of common stock

 

$

1.07

 

 

$

1.29

 

 

$

2.64

 

 

$

3.70

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

Net income per share of common stock

 

$

1.07

 

 

$

1.27

 

 

$

2.61

 

 

$

3.65

 

Weighted-average number of shares of common stock outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

20,749

 

 

 

20,640

 

 

 

20,723

 

 

 

20,611

 

Diluted

 

 

20,920

 

 

 

20,905

 

 

 

20,935

 

 

 

20,891

 

Attachment 2

Materion Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

(Thousands)

 

September 27, 2024

 

December 31, 2023

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

17,874

 

 

$

13,294

 

Accounts receivable, net

 

 

214,576

 

 

 

192,747

 

Inventories, net

 

 

476,596

 

 

 

441,597

 

Prepaid and other current assets

 

 

86,314

 

 

 

61,744

 

Total current assets

 

 

795,360

 

 

 

709,382

 

Deferred income taxes

 

 

4,914

 

 

 

4,908

 

Property, plant, and equipment

 

 

1,328,355

 

 

 

1,281,622

 

Less allowances for depreciation, depletion, and amortization

 

 

(802,294

)

 

 

(766,939

)

Property, plant, and equipment—net

 

 

526,061

 

 

 

514,683

 

Operating lease, right-of-use assets

 

 

58,871

 

 

 

57,645

 

Intangible assets, net

 

 

124,281

 

 

 

133,571

 

Other assets

 

 

26,384

 

 

 

21,664

 

Goodwill

 

 

321,147

 

 

 

320,873

 

Total Assets

 

$

1,857,018

 

 

$

1,762,726

 

Liabilities and Shareholders’ Equity

 

 

 

 

Current liabilities

 

 

 

 

Short-term debt

 

$

37,542

 

 

$

38,597

 

Accounts payable

 

 

130,310

 

 

 

125,663

 

Salaries and wages

 

 

19,463

 

 

 

25,912

 

Other liabilities and accrued items

 

 

48,850

 

 

 

45,773

 

Income taxes

 

 

1,166

 

 

 

5,207

 

Unearned revenue

 

 

15,497

 

 

 

13,843

 

Total current liabilities

 

 

252,828

 

 

 

254,995

 

Other long-term liabilities

 

 

12,513

 

 

 

13,300

 

Operating lease liabilities

 

 

56,698

 

 

 

53,817

 

Finance lease liabilities

 

 

13,438

 

 

 

13,744

 

Retirement and post-employment benefits

 

 

26,178

 

 

 

26,334

 

Unearned income

 

 

81,553

 

 

 

103,983

 

Long-term income taxes

 

 

4,551

 

 

 

3,815

 

Deferred income taxes

 

 

19,608

 

 

 

20,109

 

Long-term debt

 

 

457,756

 

 

 

387,576

 

Shareholders’ equity

 

 

931,895

 

 

 

885,053

 

Total Liabilities and Shareholders’ Equity

 

$

1,857,018

 

 

$

1,762,726

 

Attachment 3

Materion Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended

(Thousands)

 

September 27,
2024

 

September 29,
2023

Cash flows from operating activities:

 

 

 

 

Net income

 

$

54,739

 

 

$

76,234

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion, and amortization

 

 

51,291

 

 

 

46,524

 

Amortization of deferred financing costs in interest expense

 

 

1,286

 

 

 

1,284

 

Stock-based compensation expense (non-cash)

7,715

 

 

7,578

 

Deferred income tax expense (benefit)

 

 

(9

)

 

 

(149

)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(21,921

)

 

 

27,832

 

Inventory

 

 

(34,215

)

 

 

(30,868

)

Prepaid and other current assets

 

 

(24,646

)

 

 

(16,175

)

Accounts payable and accrued expenses

 

 

3,704

 

 

 

(25,533

)

Unearned revenue

 

 

(17,568

)

 

 

(12,398

)

Interest and taxes payable

 

 

(3,233

)

 

 

(1,730

)

Unearned income due to customer prepayments

 

 

 

 

 

16,676

 

Other-net

 

 

(5,579

)

 

 

(4,770

)

Net cash provided by operating activities

 

 

11,564

 

 

 

84,505

 

Cash flows from investing activities:

 

 

 

 

Payments for purchase of property, plant, and equipment

 

 

(50,730

)

 

 

(85,251

)

Payments for mine development

 

 

(10,376

)

 

 

(9,326

)

Proceeds from sale of property, plant, and equipment

 

 

561

 

 

 

417

 

Net cash used in investing activities

 

 

(60,545

)

 

 

(94,160

)

Cash flows from financing activities:

 

 

 

 

Proceeds from borrowings under credit facilities, net

 

 

91,057

 

 

 

39,649

 

Repayment of long-term debt

 

 

(22,694

)

 

 

(11,579

)

Principal payments under finance lease obligations

 

 

(567

)

 

 

(1,297

)

Cash dividends paid

 

 

(8,295

)

 

 

(7,937

)

Payments of withholding taxes for stock-based compensation awards

 

 

(6,575

)

 

 

(5,101

)

Net cash provided by financing activities

 

 

52,926

 

 

 

13,735

 

Effects of exchange rate changes

 

 

635

 

 

 

(780

)

Net change in cash and cash equivalents

 

 

4,580

 

 

 

3,300

 

Cash and cash equivalents at beginning of period

 

 

13,294

 

 

 

13,101

 

Cash and cash equivalents at end of period

 

$

17,874

 

 

$

16,401

 

Attachment 4

Materion Corporation and Subsidiaries

Reconciliation of Non-GAAP Measure - Value-added Sales, Operating Profit, and EBITDA

(Unaudited)

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September 27,
2024

 

September 29,
2023

 

September 27,
2024

 

September 29,
2023

Net Sales

 

 

 

 

 

 

 

 

Performance Materials

 

$

177.4

 

$

184.6

 

$

533.5

 

$

554.4

Electronic Materials

 

 

236.9

 

 

192.3

 

 

641.6

 

 

611.8

Precision Optics

 

 

22.4

 

 

26.2

 

 

72.8

 

 

77.9

Other

 

 

 

 

 

 

 

 

Total

 

$

436.7

 

$

403.1

 

$

1,247.9

 

$

1,244.1

 

 

 

 

 

 

 

 

 

Less: Pass-through Metal Cost

 

 

 

 

 

 

 

 

Performance Materials

 

$

13.8

 

$

15.7

 

$

41.2

 

$

51.9

Electronic Materials

 

 

159.1

 

 

116.8

 

 

405.0

 

 

354.8

Precision Optics

 

 

 

 

0.1

 

 

0.2

 

 

0.1

Other

 

 

 

 

 

 

 

 

Total

 

$

172.9

 

$

132.6

 

$

446.4

 

$

406.8

 

 

 

 

 

 

 

 

 

Value-added Sales (non-GAAP)

 

 

 

 

 

 

 

 

Performance Materials

 

$

163.6

 

$

168.9

 

$

492.3

 

$

502.5

Electronic Materials

 

 

77.8

 

 

75.5

 

 

236.6

 

 

257.0

Precision Optics

 

 

22.4

 

 

26.1

 

 

72.6

 

 

77.8

Other

 

 

 

 

 

 

 

 

Total

 

$

263.8

 

$

270.5

 

$

801.5

 

$

837.3

 

 

 

 

 

 

 

 

 

Gross Margin

 

 

 

 

 

 

 

 

Performance Materials(1)

 

$

51.8

 

$

57.4

 

$

140.6

 

$

166.1

Electronic Materials(1)

 

 

23.3

 

 

23.1

 

 

73.5

 

 

78.9

Precision Optics(1)

 

 

5.8

 

 

8.4

 

 

18.9

 

 

24.3

Other

 

 

 

 

 

 

 

 

Total(1)

 

$

80.9

 

$

88.9

 

$

233.0

 

$

269.3

(1) See reconciliation of gross margin to adjusted gross margin in Attachment 8

Note: Quarterly information presented within this document and previously disclosed quarterly information may not equal the total computed for the year due to rounding

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September 27,
2024

 

September 29,
2023

 

September 27,
2024

 

September 29,
2023

Operating Profit/(Loss)

 

 

 

 

 

 

 

 

Performance Materials

 

$

34.2

 

 

$

38.9

 

 

$

88.7

 

 

$

110.9

 

Electronic Materials

 

 

7.8

 

 

 

6.0

 

 

 

26.5

 

 

 

24.8

 

Precision Optics

 

 

(3.0

)

 

 

0.3

 

 

 

(7.7

)

 

 

(1.6

)

Other

 

 

(7.7

)

 

 

(8.7

)

 

 

(21.9

)

 

 

(25.3

)

Total

 

$

31.3

 

 

$

36.5

 

 

$

85.6

 

 

$

108.8

 

 

 

 

 

 

 

 

 

 

Non-Operating (Income)/Expense

 

 

 

 

 

 

 

 

Performance Materials

 

$

0.1

 

 

$

0.2

 

 

$

0.4

 

 

$

0.4

 

Electronic Materials

 

 

 

 

 

 

 

 

 

 

 

 

Precision Optics

 

 

(0.1

)

 

 

(0.2

)

 

 

(0.4

)

 

 

(0.6

)

Other

 

 

(0.6

)

 

 

(0.7

)

 

 

(1.9

)

 

 

(2.0

)

Total

 

$

(0.6

)

 

$

(0.7

)

 

$

(1.9

)

 

$

(2.2

)

 

 

 

 

 

 

 

 

 

Depreciation, Depletion, and Amortization

 

 

 

 

 

 

 

 

Performance Materials

 

$

10.7

 

 

$

7.7

 

 

$

27.6

 

 

$

23.6

 

Electronic Materials

 

 

4.5

 

 

 

4.1

 

 

 

13.6

 

 

 

12.7

 

Precision Optics

 

 

2.9

 

 

 

2.8

 

 

 

8.6

 

 

 

8.7

 

Other

 

 

0.5

 

 

 

0.5

 

 

 

1.5

 

 

 

1.5

 

Total

 

$

18.6

 

 

$

15.1

 

 

$

51.3

 

 

$

46.5

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

 

Performance Materials

 

$

44.8

 

 

$

46.4

 

 

$

115.9

 

 

$

134.1

 

Electronic Materials

 

 

12.3

 

 

 

10.1

 

 

 

40.1

 

 

 

37.5

 

Precision Optics

 

 

 

 

 

3.3

 

 

 

1.3

 

 

 

7.7

 

Other

 

 

(6.6

)

 

 

(7.5

)

 

 

(18.5

)

 

 

(21.8

)

Total

 

$

50.5

 

 

$

52.3

 

 

$

138.8

 

 

$

157.5

 

 

 

 

 

 

 

 

 

 

Special Items(2)

 

 

 

 

 

 

 

 

Performance Materials

 

$

1.7

 

 

$

0.1

 

 

$

9.4

 

 

$

1.1

 

Electronic Materials

 

 

3.3

 

 

 

2.9

 

 

 

7.1

 

 

 

4.5

 

Precision Optics

 

 

0.5

 

 

 

0.1

 

 

 

1.7

 

 

 

1.2

 

Other

 

 

0.7

 

 

 

 

 

 

2.7

 

 

 

0.1

 

Total

 

$

6.2

 

 

$

3.1

 

 

$

20.9

 

 

$

6.9

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Excluding Special Items

 

 

 

 

 

 

 

 

Performance Materials

 

$

46.5

 

 

$

46.5

 

 

$

125.3

 

 

$

135.2

 

Electronic Materials

 

 

15.6

 

 

 

13.0

 

 

 

47.2

 

 

 

42.0

 

Precision Optics

 

 

0.5

 

 

 

3.4

 

 

 

3.0

 

 

 

8.9

 

Other

 

 

(5.9

)

 

 

(7.5

)

 

 

(15.8

)

 

 

(21.7

)

Total

 

$

56.7

 

 

$

55.4

 

 

$

159.7

 

 

$

164.4

 

The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. Internally, management also reviews net sales on a value-added basis. Value-added sales is a non-GAAP financial measure that deducts the value of the pass-through metals sold from net sales. Value-added sales allows management to assess the impact of differences in net sales between periods or segments and analyze the resulting margins and profitability without the distortion of the movements in pass-through market metal prices. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. The Company sells other metals and materials that are not considered direct pass throughs, and these costs are not deducted from net sales to calculate value-added sales.

The Company’s pricing policy is to pass the cost of these metals on to customers in order to mitigate the impact of price volatility on the Company’s results from operations. Value-added information is being presented since changes in metal prices may not directly impact profitability. It is the Company’s intent to allow users of the financial statements to review sales with and without the impact of the pass-through metals.

(2) See additional details of special items in Attachment 5.

Attachment 5

Materion Corporation and Subsidiaries

Reconciliation of Net Sales to Value-added Sales, Net Income to EBITDA and Adjusted EBITDA

(Unaudited)

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
27, 2024

 

% of VA

 

September
29, 2023

 

% of VA

 

September
27, 2024

 

% of VA

 

September
29, 2023

 

% of VA

Net sales

 

$

436.7

 

 

 

$

403.1

 

 

 

$

1,247.9

 

 

 

$

1,244.1

 

 

Pass-through metal cost

 

 

172.9

 

 

 

 

132.6

 

 

 

 

446.4

 

 

 

 

406.8

 

 

Value-added sales

 

$

263.8

 

 

 

$

270.5

 

 

 

$

801.5

 

 

 

$

837.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

22.3

 

8.5

%

 

$

26.6

 

9.8

%

 

$

54.7

 

6.8

%

 

$

76.2

 

9.1

%

Income tax expense

 

 

0.8

 

0.3

%

 

 

3.0

 

1.1

%

 

 

6.9

 

0.9

%

 

 

11.9

 

1.4

%

Interest expense - net

 

 

8.8

 

3.3

%

 

 

7.6

 

2.8

%

 

 

25.9

 

3.2

%

 

 

22.9

 

2.7

%

Depreciation, depletion and amortization

 

 

18.6

 

7.1

%

 

 

15.1

 

5.6

%

 

 

51.3

 

6.4

%

 

 

46.5

 

5.6

%

Consolidated EBITDA

 

$

50.5

 

19.1

%

 

$

52.3

 

19.3

%

 

$

138.8

 

17.3

%

 

$

157.5

 

18.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and cost reduction

 

$

1.6

 

0.6

%

 

$

3.1

 

1.2

%

 

$

10.7

 

1.3

%

 

$

6.9

 

0.8

%

Electronic Materials inventory adjustment

 

 

2.8

 

1.1

%

 

 

 

%

 

 

2.8

 

0.3

%

 

 

 

%

Business transformation costs

 

 

0.6

 

0.2

%

 

 

 

%

 

 

0.6

 

0.1

%

 

 

 

%

Additional start up resources and scrap

 

 

1.2

 

0.5

%

 

 

 

%

 

 

6.1

 

0.8

%

 

 

 

%

Merger, acquisition and divestiture-related costs

 

 

 

%

 

 

 

%

 

 

0.7

 

0.1

%

 

 

 

%

Total special items

 

 

6.2

 

2.4

%

 

 

3.1

 

1.2

%

 

 

20.9

 

2.6

%

 

 

6.9

 

0.8

%

Adjusted EBITDA

 

$

56.7

 

21.5

%

 

$

55.4

 

20.5

%

 

$

159.7

 

19.9

%

 

$

164.4

 

19.6

%

In addition to presenting financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release contains financial measures, including operating profit, segment operating profit, earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), net income, and earnings per share, on a non-GAAP basis. As detailed in the above reconciliation and Attachment 6, we have adjusted the results for certain special items, including the following:

(1) Restructuring and cost reduction – Costs include restructuring charges, costs associated with temporarily idled facilities as a result of decreased demand and costs associated with disposal of assets associated with obsolete products.

(2) Electronic Materials inventory adjustment – During the third quarter of 2024, the Company determined that material costs from prior years were understated due to unrecognized metal refine expense and other inventory adjustments.

(3) Business transformation costs – Represents project management and implementation expenses related to the Company's automation and transformation initiatives.

(4) Additional start up resources and scrap – Represents incremental resource, consulting and specialists costs incurred related to the ramp of the precision clad strip facility and scrap related to product qualifications.

(5) Merger, acquisition and divestiture related costs – Includes due diligence costs associated with potential merger, acquisition and divestitures.

Internally, management reviews the results of operations without the impact of these costs in order to assess the profitability from ongoing activities. We are providing this information because we believe it will assist investors in analyzing our financial results and, when viewed in conjunction with the GAAP results, provide a more comprehensive understanding of the factors and trends affecting our operations.

Attachment 6

Materion Corporation and Subsidiaries

Reconciliation of Net Income to Adjusted Net Income

and Diluted Earnings per Share to Adjusted Diluted Earnings per Share (Unaudited)

   

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
27, 2024

 

Diluted
EPS

 

September
29, 2023

 

Diluted
EPS

 

September
27, 2024

 

Diluted
EPS

 

September
29, 2023

 

Diluted
EPS

Net income and EPS

 

$

22.3

 

 

$

1.07

 

$

26.6

 

 

$

1.27

 

$

54.7

 

 

$

2.61

 

$

76.2

 

 

$

3.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and cost reduction

 

 

1.6

 

 

 

 

 

3.1

 

 

 

 

 

10.7

 

 

 

 

 

6.9

 

 

 

Electronic Materials inventory adjustment

 

 

2.8

 

 

 

 

 

 

 

 

 

 

2.8

 

 

 

 

 

 

 

 

Business transformation costs

 

 

0.6

 

 

 

 

 

 

 

 

 

 

0.6

 

 

 

 

 

 

 

 

Additional start up resources and scrap

 

 

1.2

 

 

 

 

 

 

 

 

 

 

6.1

 

 

 

 

 

 

 

 

Merger, acquisition and divestiture-related costs

 

 

 

 

 

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

 

Provision for income taxes(1)

 

 

(1.4

)

 

 

 

 

(0.6

)

 

 

 

 

(3.6

)

 

 

 

 

(2.1

)

 

 

Total special items

 

 

4.8

 

 

 

0.22

 

 

2.5

 

 

 

0.12

 

 

17.3

 

 

 

0.83

 

 

4.8

 

 

 

0.23

Adjusted net income and adjusted EPS

 

$

27.1

 

 

$

1.29

 

$

29.1

 

 

$

1.39

 

$

72.0

 

 

$

3.44

 

$

81.0

 

 

$

3.88

Acquisition amortization (net of tax)

 

 

2.5

 

 

 

0.12

 

 

2.5

 

 

 

0.12

 

 

7.4

 

 

 

0.35

 

 

7.4

 

 

 

0.35

Adjusted net income and adjusted EPS excl. amortization

 

$

29.6

 

 

$

1.41

 

$

31.6

 

 

$

1.51

 

$

79.4

 

 

$

3.79

 

$

88.4

 

 

$

4.23

(1) Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of certain discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.

Attachment 7

Reconciliation of Segment Net sales to Segment Value-added sales and Segment EBITDA to Adjusted Segment EBITDA (Unaudited)

Performance Materials

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

Net sales

 

$

177.4

 

 

 

 

$

184.6

 

 

 

 

$

533.5

 

 

 

 

$

554.4

 

 

 

Pass-through metal cost

 

 

13.8

 

 

 

 

 

15.7

 

 

 

 

 

41.2

 

 

 

 

 

51.9

 

 

 

Value-added sales

 

$

163.6

 

 

 

 

$

168.9

 

 

 

 

$

492.3

 

 

 

 

$

502.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

44.8

 

 

27.4

%

 

$

46.4

 

 

27.5

%

 

$

115.9

 

 

23.5

%

 

$

134.1

 

 

26.7

%

Restructuring and cost reduction

 

 

0.1

 

 

0.1

%

 

 

0.1

 

 

%

 

 

2.9

 

 

0.6

%

 

 

1.1

 

 

0.2

%

Additional start up resources and scrap

 

 

1.2

 

 

0.7

%

 

 

 

 

%

 

 

6.1

 

 

1.2

%

 

 

 

 

%

Business transformation costs

 

 

0.4

 

 

0.2

%

 

 

 

 

%

 

 

0.4

 

 

0.1

%

 

 

 

 

%

Adjusted EBITDA

 

$

46.5

 

 

28.4

%

 

$

46.5

 

 

27.5

%

 

$

125.3

 

 

25.4

%

 

$

135.2

 

 

26.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Materials

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

Net sales

 

$

236.9

 

 

 

 

$

192.3

 

 

 

 

$

641.6

 

 

 

 

$

611.8

 

 

 

Pass-through metal cost

 

 

159.1

 

 

 

 

 

116.8

 

 

 

 

 

405.0

 

 

 

 

 

354.8

 

 

 

Value-added sales

 

$

77.8

 

 

 

 

$

75.5

 

 

 

 

$

236.6

 

 

 

 

$

257.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

12.3

 

 

15.8

%

 

$

10.1

 

 

13.4

%

 

$

40.1

 

 

16.9

%

 

$

37.5

 

 

14.6

%

Restructuring and cost reduction

 

 

0.5

 

 

0.7

%

 

 

2.9

 

 

3.8

%

 

 

4.3

 

 

1.8

%

 

 

4.5

 

 

1.8

%

Electronic Materials inventory adjustment

 

 

2.8

 

 

3.6

%

 

 

 

 

%

 

 

2.8

 

 

1.2

%

 

 

 

 

%

Adjusted EBITDA

 

$

15.6

 

 

20.1

%

 

$

13.0

 

 

17.2

%

 

$

47.2

 

 

19.9

%

 

$

42.0

 

 

16.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Precision Optics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

Net sales

 

$

22.4

 

 

 

 

$

26.2

 

 

 

 

$

72.8

 

 

 

 

$

77.9

 

 

 

Pass-through metal cost

 

 

 

 

 

 

 

0.1

 

 

 

 

 

0.2

 

 

 

 

 

0.1

 

 

 

Value-added sales

 

$

22.4

 

 

 

 

$

26.1

 

 

 

 

$

72.6

 

 

 

 

$

77.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

 

 

%

 

$

3.3

 

 

12.6

%

 

$

1.3

 

 

1.8

%

 

$

7.7

 

 

9.9

%

Restructuring and cost reduction

 

 

0.5

 

 

2.2

%

 

 

0.1

 

 

0.4

%

 

 

1.7

 

 

2.3

%

 

 

1.2

 

 

1.5

%

Adjusted EBITDA

 

$

0.5

 

 

2.2

%

 

$

3.4

 

 

13.0

%

 

$

3.0

 

 

4.1

%

 

$

8.9

 

 

11.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

 

September
29, 2024

 

% of VA

 

September
29, 2023

 

% of VA

EBITDA

 

$

(6.6

)

 

 

 

$

(7.5

)

 

 

 

$

(18.5

)

 

 

 

$

(21.8

)

 

 

Restructuring and cost reduction

 

 

0.5

 

 

 

 

 

 

 

 

 

 

1.8

 

 

 

 

 

0.1

 

 

 

Business transformation costs

 

 

0.2

 

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

 

 

Merger, acquisition and divestiture-related costs

 

 

 

 

 

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

(5.9

)

 

 

 

$

(7.5

)

 

 

 

$

(15.8

)

 

 

 

$

(21.7

)

 

 

Attachment 8

Materion Corporation and Subsidiaries

Reconciliation of Non-GAAP Measure - Gross Margin to Adjusted Gross Margin

(Unaudited)

   

 

 

Third Quarter Ended

 

Nine Months Ended

(Millions)

 

September 27, 2024

 

September 29, 2023

 

September 27, 2024

 

September 29, 2023

Gross Margin

 

 

 

 

 

 

 

 

Performance Materials

 

$

51.8

 

$

57.4

 

$

140.6

 

$

166.1

Electronic Materials

 

 

23.3

 

 

23.1

 

 

73.5

 

 

78.9

Precision Optics

 

 

5.8

 

 

8.4

 

 

18.9

 

 

24.3

Other

 

 

 

 

 

 

 

 

Total

 

$

80.9

 

$

88.9

 

$

233.0

 

$

269.3

 

 

 

 

 

 

 

 

 

Special Items (1)

 

 

 

 

 

 

 

 

Performance Materials

 

$

1.3

 

$

 

$

7.5

 

$

0.7

Electronic Materials

 

 

2.6

 

 

1.8

 

 

4.6

 

 

2.4

Precision Optics

 

 

 

 

0.1

 

 

0.2

 

 

0.4

Other

 

 

 

 

 

 

 

 

Total

 

$

3.9

 

$

1.9

 

$

12.3

 

$

3.5

 

 

 

 

 

 

 

 

 

Adjusted Gross Margin

 

 

 

 

 

 

 

 

Performance Materials

 

$

53.1

 

$

57.4

 

$

148.1

 

$

166.8

Electronic Materials

 

 

25.9

 

 

24.9

 

 

78.1

 

 

81.3

Precision Optics

 

 

5.8

 

 

8.5

 

 

19.1

 

 

24.7

Other

 

 

 

 

 

 

 

 

Total

 

$

84.8

 

$

90.8

 

$

245.3

 

$

272.8

(1) Special items impacting gross margin represent restructuring and cost reduction, the Electronic Materials inventory adjustment, and additional start up resources and scrap in 2024, and restructuring and cost reduction in 2023.

Investor Contact:

Kyle Kelleher

(216) 383-4931

kyle.kelleher@materion.com

Media Contact:

Jason Saragian

(216) 383-6893

jason.saragian@materion.com

https://materion.com

Source: Materion Corporation

FAQ

What was Materion's (MTRN) Q3 2024 revenue?

Materion reported net sales of $436.7 million and value-added sales of $263.8 million in Q3 2024.

What is Materion's (MTRN) earnings guidance for full-year 2024?

Materion expects to deliver full-year 2024 adjusted earnings in the range of $5.20 to $5.40 per share.

What was Materion's (MTRN) Q3 2024 EBITDA margin?

Materion achieved a record quarterly adjusted EBITDA margin of 21.5% in Q3 2024.

What strategic actions did Materion (MTRN) announce in Q3 2024?

Materion announced the sale of its non-core large area targets business for architectural glass in Albuquerque, New Mexico.

Materion Corporation

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