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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Materion Corporation | NYSE:MTRN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.73 | 0.68% | 107.96 | 108.84 | 106.74 | 108.43 | 170,715 | 23:57:34 |
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ohio
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34-1919973
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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6070 Parkland Blvd.,
Mayfield Heights, Ohio
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44124
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, no par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging Growth Company
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¨
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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▪
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Actual net sales, operating rates, and margins for
2018
;
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▪
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The global economy;
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▪
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The impact of any U.S. Federal Government shutdowns and sequestrations;
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▪
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The condition of the markets which we serve, whether defined geographically or by segment, with the major market segments being: consumer electronics, industrial components, medical, automotive electronics, defense, telecommunications infrastructure, energy, commercial aerospace, and science;
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▪
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Changes in product mix and the financial condition of customers;
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▪
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Our success in developing and introducing new products and new product ramp-up rates;
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▪
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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;
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▪
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Our success in identifying acquisition candidates and in acquiring and integrating such businesses, including our ability to effectively integrate the acquisition of the high-performance target materials business of the Heraeus Group;
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▪
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The impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions;
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▪
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Our success in implementing our strategic plans and the timely and successful completion and start-up of any capital projects;
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▪
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Other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal financing 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;
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▪
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The uncertainties related to the impact of war, terrorist activities, and acts of God;
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▪
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Changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations;
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▪
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The conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; and
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•
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The risk factors set forth elsewhere in Item 1A of this Form 10-K.
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Item 1.
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BUSINESS
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•
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Bulk products
are the largest of the product families and are made with copper and nickel (with or without beryllium) in plate, rod, bar, tube, and wire product forms and other customized shapes. Depending upon the application, they may provide superior strength, corrosion/wear resistance, thermal conductivity, or lubricity. While the majority of bulk products contain beryllium, a growing portion of net sales is from non-beryllium-containing alloys as a result of product diversification efforts. Applications for bulk products include oil & gas drilling and production components, bearings, bushings, welding rods, plastic mold tooling, and undersea telecommunications housing equipment. Major end markets for bulk products include industrial components, commercial aerospace, energy, and telecommunications infrastructure. Bulk products compete with companies around the world that produce alloys with similar properties. Key competitors include NGK Insulators, IBC Advanced Alloys Corp., Ningxia Orient Tantalum Industry Co., Ltd., Ulba Metallurgical, Le Bronze Industriel, KME AG & Co. KG, Aurubis AG, MKM Mansfelder Kupfer und Messing GmbH, AMPCO Metal, and Chuetsu Metal Works Ltd.
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•
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Strip products
include various thicknesses of precision strip. These beryllium and non-beryllium containing alloy products are made with copper and nickel to provide unique combinations of high conductivity, high reliability, and formability for use as connectors, contacts, springs, switches, relays, shielding, and bearings. Major end markets for strip products include consumer electronics, telecommunications infrastructure, automotive electronics, aerospace, industrial components, appliance, and medical. Strip products compete with strip from many companies around the world that produce alloys with similar properties as beryllium and non-beryllium containing alloys. Key competitors include NGK Insulators, Global Brass and Copper, Inc., Wieland Electric, Inc., Aurubis Stolberg GmbH, Diehl Metall Stiftung & Co. KG, Nippon Mining, and PMX Industries, Inc.
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•
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Beryllium hydroxide
is produced at our milling operations in Utah from our bertrandite ore mine and purchased beryl ore. The hydroxide is used primarily as a raw material input for strip and bulk products and, to a lesser extent, beryllium products. Net sales of beryllium hydroxide to third parties from our Utah operations were less than 5% of Performance Metals’ total net sales in each of the last three years.
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•
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burdens to comply with multiple and potentially conflicting foreign laws and regulations, including export requirements, tariffs and other barriers, environmental health and safety requirements, and unexpected changes in any of these factors;
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•
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disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (FCPA);
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Item 1B.
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UNRESOLVED STAFF COMMENTS
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Item 2.
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PROPERTIES
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Location
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Owned or Leased
|
Approximate
Number of
Square Feet
|
|
Corporate and Administrative Offices
|
|
|
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Mayfield Heights, Ohio
(1)(2)
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Leased
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79,130
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Manufacturing Facilities
|
|
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Albuquerque, New Mexico
(2)
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Owned/Leased
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13,000/63,223
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Alzenau, Germany
(2)
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Leased
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235,550
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Bloomfield, Connecticut
(3)
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Leased
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44,800
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Brewster, New York
(2)
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Leased
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75,000
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Buffalo, New York
(2)
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Owned
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97,000
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Delta, Utah
(1)
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Owned
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100,836
|
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Elmore, Ohio
(1)
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Owned/Leased
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681,000/191,000
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Farnborough, England
(1)
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Leased
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10,000
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Fremont, California
(1)
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Leased
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40,000
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Hanau, Germany
(2)
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Leased
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120,000
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Limerick, Ireland
(2)
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Leased
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23,000
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Lincoln, Rhode Island
(1)
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Owned/Leased
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130,000/26,451
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Lorain, Ohio
(1)
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Owned/Leased
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55,000/10,000
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Milwaukee, Wisconsin
(2)
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Owned
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98,750
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Reading, Pennsylvania
(1)
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Owned
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128,863
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Santa Clara, California
(2)
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Leased
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5,800
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Shanghai, China
(3)
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Leased
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101,400
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Singapore
(2)
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Leased
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24,500
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Subic Bay, Philippines
(2)
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Leased
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5,000
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Suzhou, China
(2)
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Leased
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21,743
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Taoyuan City, Taiwan
(2)
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Leased
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32,523
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Tucson, Arizona
(1)
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Owned
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53,000
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Tyngsboro, Massachusetts
(3)
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Leased
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38,000
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Westford, Massachusetts
(3)
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Leased
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53,000
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Wheatfield, New York
(2)
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Owned
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35,000
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Windsor, Connecticut
(3)
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Leased
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34,700
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Service, Sales, and Distribution Centers
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Elmhurst, Illinois
(1)
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Leased
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28,500
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Maastricht, The Netherlands
(2)
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Leased
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450
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Seoul, Korea
(2)
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Leased
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13,654
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Singapore
(1)
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Leased
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2,500
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Stuttgart, Germany
(1)
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Leased
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24,800
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Tokyo, Japan
(1)
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Leased
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7,200
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Warren, Michigan
(1)
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Leased
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34,500
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(1)
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Performance Alloys and Composites
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(2)
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Advanced Materials
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(3)
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Precision Coatings
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Item 3.
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LEGAL PROCEEDINGS
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Item 4.
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MINE SAFETY DISCLOSURES
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Item 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Period
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Total Number of Shares Purchased (1)
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Average Price Paid per Share (1)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
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Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (2)
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||||||
September 30 through November 3, 2017
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39,767
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$
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50.52
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|
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—
|
|
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$
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15,703,744
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November 4 through December 1, 2017
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1,936
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50.37
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|
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—
|
|
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15,703,744
|
|
||
December 2 through December 31, 2017
|
|
58
|
|
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47.67
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|
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—
|
|
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15,703,744
|
|
||
Total
|
|
41,761
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|
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$
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50.51
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|
|
—
|
|
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$
|
15,703,744
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(1)
|
Represents shares surrendered to the Company by employees to satisfy tax withholding obligations on stock appreciation rights issued under the Company's stock incentive plan.
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(2)
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On January 14, 2014, we announced that our Board of Directors authorized the repurchase of up to $50.0 million of our common stock; this Board authorization does not have an expiration date. We did not repurchase any shares of the Company's common stock under this authorization during the fourth quarter of 2017.
|
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2013
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2014
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2015
|
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2016
|
|
2017
|
||||||||||
Materion Corporation
|
|
$
|
121
|
|
|
$
|
140
|
|
|
$
|
112
|
|
|
$
|
161
|
|
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$
|
199
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|
Russell 2000
|
|
139
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|
|
146
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|
|
139
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|
|
169
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|
|
193
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|||||
S&P SmallCap 600
|
|
141
|
|
|
149
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|
|
146
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|
|
185
|
|
|
209
|
|
|||||
S&P SmallCap 600 - Materials
|
|
136
|
|
|
136
|
|
|
101
|
|
|
157
|
|
|
172
|
|
Item 6.
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SELECTED FINANCIAL DATA
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(Thousands except per share data)
|
|
2017
|
|
2016
|
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2015
|
|
2014
|
|
2013
|
||||||||||
For the year
|
|
|
|
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|
|
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|
||||||||||
Net sales
|
|
$
|
1,139,447
|
|
|
$
|
969,236
|
|
|
$
|
1,025,272
|
|
|
$
|
1,126,890
|
|
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$
|
1,166,882
|
|
Cost of sales
|
|
927,953
|
|
|
785,773
|
|
|
834,492
|
|
|
920,987
|
|
|
978,904
|
|
|||||
Gross margin
|
|
211,494
|
|
|
183,463
|
|
|
190,780
|
|
|
205,903
|
|
|
187,978
|
|
|||||
Operating profit
|
|
38,579
|
|
|
27,104
|
|
|
45,268
|
|
|
57,588
|
|
|
27,608
|
|
|||||
Interest expense - net
|
|
2,183
|
|
|
1,789
|
|
|
2,450
|
|
|
2,787
|
|
|
3,036
|
|
|||||
Income before income taxes
|
|
36,396
|
|
|
25,315
|
|
|
42,818
|
|
|
54,801
|
|
|
24,572
|
|
|||||
Income tax expense (benefit)
|
|
24,945
|
|
|
(425
|
)
|
|
10,660
|
|
|
12,670
|
|
|
4,360
|
|
|||||
Net income
|
|
11,451
|
|
|
25,740
|
|
|
32,158
|
|
|
42,131
|
|
|
20,212
|
|
|||||
Earnings per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
(1)
|
|
0.57
|
|
|
1.29
|
|
|
1.60
|
|
|
2.06
|
|
|
0.98
|
|
|||||
Diluted
(1)
|
|
0.56
|
|
|
1.27
|
|
|
1.58
|
|
|
2.02
|
|
|
0.97
|
|
|||||
Dividends per share of common stock
|
|
0.395
|
|
|
0.375
|
|
|
0.355
|
|
|
0.335
|
|
|
0.315
|
|
|||||
Depreciation, depletion, and amortization
|
|
42,751
|
|
|
45,651
|
|
|
37,817
|
|
|
42,721
|
|
|
41,649
|
|
|||||
Capital expenditures
|
|
27,516
|
|
|
27,177
|
|
|
29,505
|
|
|
29,312
|
|
|
27,848
|
|
|||||
Mine development expenditures
|
|
1,560
|
|
|
9,861
|
|
|
22,585
|
|
|
1,247
|
|
|
4,776
|
|
|||||
Year-end position
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net current assets
|
|
$
|
283,834
|
|
|
$
|
254,907
|
|
|
$
|
249,616
|
|
|
$
|
282,628
|
|
|
$
|
266,248
|
|
Ratio of current assets to current liabilities
|
|
3.2 to 1
|
|
|
3.8 to 1
|
|
|
3.6 to 1
|
|
|
3.7 to 1
|
|
|
3.1 to 1
|
|
|||||
Property, plant, and equipment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At cost
|
|
891,789
|
|
|
861,267
|
|
|
833,834
|
|
|
800,671
|
|
|
782,879
|
|
|||||
Cost less depreciation, depletion, and amortization
|
|
255,578
|
|
|
252,631
|
|
|
263,629
|
|
|
247,588
|
|
|
261,893
|
|
|||||
Total assets
|
|
791,084
|
|
|
741,298
|
|
|
742,293
|
|
|
761,921
|
|
|
777,458
|
|
|||||
Long-term liabilities
(2)
|
|
161,097
|
|
|
150,853
|
|
|
157,182
|
|
|
173,890
|
|
|
153,296
|
|
|||||
Long-term debt
|
|
2,827
|
|
|
3,605
|
|
|
4,276
|
|
|
23,196
|
|
|
28,780
|
|
|||||
Shareholders’ equity
|
|
494,981
|
|
|
494,089
|
|
|
482,957
|
|
|
459,019
|
|
|
464,428
|
|
|||||
Weighted-average number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
20,027
|
|
|
19,983
|
|
|
20,097
|
|
|
20,461
|
|
|
20,571
|
|
|||||
Diluted
|
|
20,415
|
|
|
20,213
|
|
|
20,402
|
|
|
20,852
|
|
|
20,943
|
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
(Thousands except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
1,139,447
|
|
|
$
|
969,236
|
|
|
$
|
1,025,272
|
|
Value-added sales
|
|
677,697
|
|
|
599,910
|
|
|
617,247
|
|
|||
Gross margin
|
|
211,494
|
|
|
183,463
|
|
|
190,780
|
|
|||
Gross margin as a % of Value-added sales
|
|
31
|
%
|
|
31
|
%
|
|
31
|
%
|
|||
Selling, general, and administrative (SG&A) expense
|
|
146,170
|
|
|
129,683
|
|
|
129,941
|
|
|||
SG&A expense as a % of Value-added sales
|
|
22
|
%
|
|
22
|
%
|
|
21
|
%
|
|||
Research and development (R&D) expense
|
|
13,981
|
|
|
12,802
|
|
|
12,796
|
|
|||
R&D expense as a % of Value-added sales
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|||
Other — net
|
|
12,764
|
|
|
13,874
|
|
|
2,775
|
|
|||
Operating profit
|
|
38,579
|
|
|
27,104
|
|
|
45,268
|
|
|||
Interest expense — net
|
|
2,183
|
|
|
1,789
|
|
|
2,450
|
|
|||
Effective tax rate
|
|
68.5
|
%
|
|
(1.7
|
)%
|
|
24.9
|
%
|
|||
Net income
|
|
11,451
|
|
|
25,740
|
|
|
32,158
|
|
|||
Diluted earnings per share
|
|
0.56
|
|
|
1.27
|
|
|
1.58
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
429,442
|
|
|
$
|
387,539
|
|
|
$
|
394,760
|
|
Value-added sales
|
|
363,465
|
|
|
332,012
|
|
|
335,136
|
|
|||
Operating profit
|
|
21,978
|
|
|
6,601
|
|
|
23,560
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
590,789
|
|
|
$
|
437,249
|
|
|
$
|
482,288
|
|
Value-added sales
|
|
228,062
|
|
|
176,332
|
|
|
182,794
|
|
|||
Operating profit
|
|
32,763
|
|
|
26,282
|
|
|
27,805
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
119,216
|
|
|
$
|
144,448
|
|
|
$
|
148,444
|
|
Value-added sales
|
|
90,678
|
|
|
97,700
|
|
|
101,761
|
|
|||
Operating profit
|
|
8,445
|
|
|
11,635
|
|
|
7,483
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(220
|
)
|
Value-added sales
|
|
(4,508
|
)
|
|
(6,134
|
)
|
|
(2,444
|
)
|
|||
Operating loss
|
|
(24,607
|
)
|
|
(17,414
|
)
|
|
(13,580
|
)
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Asia
|
|
$
|
265,991
|
|
|
$
|
193,739
|
|
|
$
|
247,174
|
|
Europe
|
|
205,118
|
|
|
121,648
|
|
|
122,554
|
|
|||
Rest of world
|
|
17,663
|
|
|
14,174
|
|
|
16,108
|
|
|||
Total
|
|
$
|
488,772
|
|
|
$
|
329,561
|
|
|
$
|
385,836
|
|
Percent of total net sales
|
|
43
|
%
|
|
34
|
%
|
|
38
|
%
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
|
|
|
|
|
||||||
Performance Alloys and Composites
|
|
$
|
429,442
|
|
|
$
|
387,539
|
|
|
$
|
394,760
|
|
Advanced Materials
|
|
590,789
|
|
|
437,249
|
|
|
482,288
|
|
|||
Precision Coatings
|
|
119,216
|
|
|
144,448
|
|
|
148,444
|
|
|||
Other
|
|
—
|
|
|
—
|
|
|
(220
|
)
|
|||
Total
|
|
$
|
1,139,447
|
|
|
$
|
969,236
|
|
|
$
|
1,025,272
|
|
|
|
|
|
|
|
|
||||||
Less: pass-through metal costs
|
|
|
|
|
|
|
||||||
Performance Alloys and Composites
|
|
$
|
65,977
|
|
|
$
|
55,527
|
|
|
$
|
59,624
|
|
Advanced Materials
|
|
362,727
|
|
|
260,917
|
|
|
299,494
|
|
|||
Precision Coatings
|
|
28,538
|
|
|
46,748
|
|
|
46,683
|
|
|||
Other
|
|
4,508
|
|
|
6,134
|
|
|
2,224
|
|
|||
Total
|
|
$
|
461,750
|
|
|
$
|
369,326
|
|
|
$
|
408,025
|
|
|
|
|
|
|
|
|
||||||
Value-added sales
|
|
|
|
|
|
|
||||||
Performance Alloys and Composites
|
|
$
|
363,465
|
|
|
$
|
332,012
|
|
|
$
|
335,136
|
|
Advanced Materials
|
|
228,062
|
|
|
176,332
|
|
|
182,794
|
|
|||
Precision Coatings
|
|
90,678
|
|
|
97,700
|
|
|
101,761
|
|
|||
Other
|
|
(4,508
|
)
|
|
(6,134
|
)
|
|
(2,444
|
)
|
|||
Total
|
|
$
|
677,697
|
|
|
$
|
599,910
|
|
|
$
|
617,247
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided from operating activities
|
|
$
|
67,795
|
|
|
$
|
68,180
|
|
|
$
|
91,010
|
|
Net cash (used in) investing activities
|
|
(43,358
|
)
|
|
(37,355
|
)
|
|
(52,032
|
)
|
|||
Net cash (used in) financing activities
|
|
(15,445
|
)
|
|
(23,118
|
)
|
|
(26,877
|
)
|
|||
Effects of exchange rate changes
|
|
1,388
|
|
|
(479
|
)
|
|
(1,015
|
)
|
|||
Net change in cash and cash equivalents
|
|
$
|
10,380
|
|
|
$
|
7,228
|
|
|
$
|
11,086
|
|
|
|
December 31,
|
||||||
(Thousands)
|
|
2017
|
|
2016
|
||||
Total outstanding debt
|
|
$
|
3,818
|
|
|
$
|
4,615
|
|
Cash
|
|
41,844
|
|
|
31,464
|
|
||
Net (cash) debt
|
|
(38,026
|
)
|
|
(26,849
|
)
|
||
Available borrowing capacity
|
|
$
|
254,777
|
|
|
$
|
238,886
|
|
Debt-to-debt-plus-equity ratio
|
|
1
|
%
|
|
1
|
%
|
(Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
There-
after
|
|
Total
|
||||||||||||||
Total debt
(1)
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
0.9
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Capital lease payments
(2)
|
|
2.2
|
|
|
2.2
|
|
|
2.2
|
|
|
2.2
|
|
|
2.1
|
|
|
22.6
|
|
|
33.5
|
|
|||||||
Interest payments on total debt
(3)
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||||
Non-cancelable lease payments
(4)
|
|
8.1
|
|
|
6.3
|
|
|
5.5
|
|
|
4.6
|
|
|
5.6
|
|
|
3.3
|
|
|
33.4
|
|
|||||||
Pension plan contribution
(5)
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|||||||
Other benefit payments
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|||||||
Other long-term liabilities
(6)
|
|
1.0
|
|
|
0.9
|
|
|
2.8
|
|
|
0.7
|
|
|
0.6
|
|
|
0.5
|
|
|
6.5
|
|
|||||||
Tax Cuts and Jobs Act transition
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|
0.9
|
|
|
2.0
|
|
|||||||
Purchase obligations
|
|
9.7
|
|
|
0.9
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
1.7
|
|
|
13.2
|
|
|||||||
Total
|
|
$
|
45.5
|
|
|
$
|
11.5
|
|
|
$
|
12.0
|
|
|
$
|
9.3
|
|
|
$
|
8.9
|
|
|
$
|
29.0
|
|
|
$
|
116.2
|
|
(5)
|
Our domestic defined benefit pension plan is underfunded as of
December 31, 2017
. Contributions in future periods will be dependent upon regulatory requirements, the plan funded ratio, plan investment performance, discount rates, actuarial assumptions, plan amendments, our contribution objectives, and other factors. Federal legislation enacted during 2012 resulted in a reduction in mandatory contributions in the short term from levels under the previous regulations, but we may elect to contribute funds in excess of the mandatory levels in a given year depending upon our cash flow from operations and other considerations. In 2018, we anticipate contributing approximately $21.0 million to our domestic defined benefit plan. This estimate is in excess of the mandatory contributions. This higher contribution level is designed to minimize our PBGC premium payments, as well as to maintain the plan funded ratio in line with our long-term objectives. We also
|
(6)
|
Other long-term liabilities include environmental remediation costs. We have an active environmental compliance program. We estimate the probable cost of identified environmental remediation projects and establish reserves accordingly. The environmental remediation reserve balance was $6.5 million at December 31, 2017 and $6.0 million at December 31, 2016. Environmental projects tend to be long term, and the associated payments are typically made over a number of years. Refer to Note R of the Consolidated Financial Statements for further discussion.
|
|
|
Proven
|
|
Probable
|
|
Total
|
|||
As of December 31, 2017
|
|
|
|
|
|
|
|||
Tonnage (in thousands)
|
|
8,119
|
|
|
945
|
|
|
9,064
|
|
Grade (% beryllium)
|
|
0.248
|
%
|
|
0.257
|
%
|
|
0.249
|
%
|
Beryllium pounds (in millions)
|
|
40.34
|
|
|
4.85
|
|
|
45.19
|
|
|
|
|
|
|
|
|
|||
As of December 31, 2016
|
|
|
|
|
|
|
|||
Tonnage (in thousands)
|
|
7,991
|
|
|
739
|
|
|
8,730
|
|
Grade (% beryllium)
|
|
0.249
|
%
|
|
0.269
|
%
|
|
0.251
|
%
|
Beryllium pounds (in millions)
|
|
39.85
|
|
|
3.98
|
|
|
43.83
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
Financial Statements
|
Page
|
Management’s Report on Internal Control over Financial Reporting
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Income for the Years Ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016, and 2015
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2017, 2016, and 2015
|
|
Notes to Consolidated Financial Statements
|
|
Schedule II - Valuation and Qualifying Accounts
|
81
|
(Thousands except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
$
|
1,139,447
|
|
|
$
|
969,236
|
|
|
$
|
1,025,272
|
|
Cost of sales
|
927,953
|
|
|
785,773
|
|
|
834,492
|
|
|||
Gross margin
|
211,494
|
|
|
183,463
|
|
|
190,780
|
|
|||
Selling, general, and administrative expense
|
146,170
|
|
|
129,683
|
|
|
129,941
|
|
|||
Research and development expense
|
13,981
|
|
|
12,802
|
|
|
12,796
|
|
|||
Other — net
(Note D)
|
12,764
|
|
|
13,874
|
|
|
2,775
|
|
|||
Operating profit
|
38,579
|
|
|
27,104
|
|
|
45,268
|
|
|||
Interest expense — net
(Note F)
|
2,183
|
|
|
1,789
|
|
|
2,450
|
|
|||
Income before income taxes
|
36,396
|
|
|
25,315
|
|
|
42,818
|
|
|||
Income tax expense (benefit)
(Note G)
|
24,945
|
|
|
(425
|
)
|
|
10,660
|
|
|||
Net income
|
$
|
11,451
|
|
|
$
|
25,740
|
|
|
$
|
32,158
|
|
Basic earnings per share:
|
|
|
|
|
|
||||||
Net income per share of common stock
|
$
|
0.57
|
|
|
$
|
1.29
|
|
|
$
|
1.60
|
|
Diluted earnings per share:
|
|
|
|
|
|
||||||
Net income per share of common stock
|
$
|
0.56
|
|
|
$
|
1.27
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
||||||
Cash dividends per share
|
$
|
0.395
|
|
|
$
|
0.375
|
|
|
$
|
0.355
|
|
|
|
|
|
|
|
||||||
Weighted-average number of shares of common stock outstanding:
|
|
|
|
|
|
||||||
Basic
|
20,027
|
|
|
19,983
|
|
|
20,097
|
|
|||
Diluted
|
20,415
|
|
|
20,213
|
|
|
20,402
|
|
(Thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
11,451
|
|
|
$
|
25,740
|
|
|
$
|
32,158
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
1,552
|
|
|
(172
|
)
|
|
(1,335
|
)
|
|||
Derivative and hedging activity, net of tax (expense) benefit of ($271), ($149), and $1,175
|
(1,074
|
)
|
|
258
|
|
|
(1,999
|
)
|
|||
Pension and post-employment benefit adjustment, net of tax (expense) benefit of ($13,820), $4,555, and ($2,963)
|
(17,234
|
)
|
|
(5,562
|
)
|
|
4,866
|
|
|||
Other comprehensive (loss) income
|
(16,756
|
)
|
|
(5,476
|
)
|
|
1,532
|
|
|||
Comprehensive income
|
$
|
(5,305
|
)
|
|
$
|
20,264
|
|
|
$
|
33,690
|
|
(Thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
11,451
|
|
|
$
|
25,740
|
|
|
$
|
32,158
|
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion, and amortization
|
42,751
|
|
|
45,651
|
|
|
37,817
|
|
|||
Amortization of deferred financing costs in interest expense
|
919
|
|
|
666
|
|
|
654
|
|
|||
Stock-based compensation expense (non-cash)
|
4,957
|
|
|
3,174
|
|
|
5,491
|
|
|||
(Gain) loss on sale of property, plant, and equipment
|
(1,150
|
)
|
|
(648
|
)
|
|
768
|
|
|||
Deferred tax expense (benefit)
|
20,256
|
|
|
(9,010
|
)
|
|
4,368
|
|
|||
Changes in assets and liabilities net of acquired assets and liabilities:
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
(18,484
|
)
|
|
(4,096
|
)
|
|
14,777
|
|
|||
Decrease (increase) in inventory
|
(9,462
|
)
|
|
10,791
|
|
|
19,372
|
|
|||
Decrease (increase) in prepaid and other current assets
|
(11,606
|
)
|
|
658
|
|
|
2,139
|
|
|||
Increase (decrease) in accounts payable and accrued expenses
|
34,433
|
|
|
2,758
|
|
|
(17,989
|
)
|
|||
Increase (decrease) in unearned revenue
|
4,336
|
|
|
(2,590
|
)
|
|
(1,184
|
)
|
|||
Increase (decrease) in interest and taxes payable
|
(514
|
)
|
|
2,511
|
|
|
(910
|
)
|
|||
Increase (decrease) in long-term liabilities
|
(4,264
|
)
|
|
(684
|
)
|
|
(8,923
|
)
|
|||
Other — net
|
(5,828
|
)
|
|
(6,741
|
)
|
|
2,472
|
|
|||
Net cash provided from operating activities
|
67,795
|
|
|
68,180
|
|
|
91,010
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Payments for purchase of property, plant, and equipment
|
(27,516
|
)
|
|
(27,177
|
)
|
|
(29,505
|
)
|
|||
Payments for mine development
|
(1,560
|
)
|
|
(9,861
|
)
|
|
(22,585
|
)
|
|||
Payments for acquisition
|
(16,504
|
)
|
|
(1,750
|
)
|
|
—
|
|
|||
Proceeds from sale of property, plant, and equipment
|
2,222
|
|
|
1,433
|
|
|
58
|
|
|||
Net cash (used in) investing activities
|
(43,358
|
)
|
|
(37,355
|
)
|
|
(52,032
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repayment of short-term debt
|
—
|
|
|
(8,305
|
)
|
|
(653
|
)
|
|||
Proceeds from issuance of long-term debt
|
55,000
|
|
|
10,000
|
|
|
78,000
|
|
|||
Repayment of long-term debt
|
(55,797
|
)
|
|
(10,694
|
)
|
|
(88,000
|
)
|
|||
Principal payments under capital lease obligations
|
(843
|
)
|
|
(736
|
)
|
|
(759
|
)
|
|||
Cash dividends paid
|
(7,913
|
)
|
|
(7,496
|
)
|
|
(7,132
|
)
|
|||
Deferred financing costs
|
(300
|
)
|
|
(1,000
|
)
|
|
(838
|
)
|
|||
Repurchase of common stock
|
(1,086
|
)
|
|
(3,798
|
)
|
|
(7,129
|
)
|
|||
Payments of withholding taxes for stock-based compensation awards
|
(4,506
|
)
|
|
(1,089
|
)
|
|
(366
|
)
|
|||
Net cash (used in) financing activities
|
(15,445
|
)
|
|
(23,118
|
)
|
|
(26,877
|
)
|
|||
Effects of exchange rate changes
|
1,388
|
|
|
(479
|
)
|
|
(1,015
|
)
|
|||
Net change in cash and cash equivalents
|
10,380
|
|
|
7,228
|
|
|
11,086
|
|
|||
Cash and cash equivalents at beginning of period
|
31,464
|
|
|
24,236
|
|
|
13,150
|
|
|||
Cash and cash equivalents at end of period
|
$
|
41,844
|
|
|
$
|
31,464
|
|
|
$
|
24,236
|
|
(Thousands)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
(Note A)
|
$
|
41,844
|
|
|
$
|
31,464
|
|
Accounts receivable
(Note A)
|
124,014
|
|
|
100,817
|
|
||
Inventories
(Notes A and I)
|
220,352
|
|
|
200,865
|
|
||
Prepaid and other current assets
|
24,733
|
|
|
12,138
|
|
||
Total current assets
|
410,943
|
|
|
345,284
|
|
||
Long-term deferred income taxes
(Notes A and G)
|
17,047
|
|
|
39,409
|
|
||
Property, plant, and equipment
(Notes A and J)
|
891,789
|
|
|
861,267
|
|
||
Less allowances for depreciation, depletion, and amortization
|
(636,211
|
)
|
|
(608,636
|
)
|
||
Property, plant, and equipment — net
|
255,578
|
|
|
252,631
|
|
||
Intangible assets
(Notes A and K)
|
9,847
|
|
|
11,074
|
|
||
Other assets
|
6,992
|
|
|
5,950
|
|
||
Goodwill
(Notes A and K)
|
90,677
|
|
|
86,950
|
|
||
Total Assets
|
$
|
791,084
|
|
|
$
|
741,298
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term debt
(Note L)
|
$
|
777
|
|
|
$
|
733
|
|
Accounts payable
|
49,059
|
|
|
32,533
|
|
||
Salaries and wages
|
42,694
|
|
|
29,885
|
|
||
Taxes other than income taxes
|
2,492
|
|
|
1,395
|
|
||
Other liabilities and accrued items
|
25,552
|
|
|
19,945
|
|
||
Income taxes
(Notes A and G)
|
1,084
|
|
|
4,781
|
|
||
Unearned revenue
|
5,451
|
|
|
1,105
|
|
||
Total current liabilities
|
127,109
|
|
|
90,377
|
|
||
Other long-term liabilities
|
30,967
|
|
|
17,979
|
|
||
Retirement and post-employment benefits
(Note N)
|
93,225
|
|
|
91,505
|
|
||
Unearned income
(Note A)
|
36,905
|
|
|
41,369
|
|
||
Long-term income taxes
(Notes A and G)
|
4,857
|
|
|
2,100
|
|
||
Deferred income taxes
(Notes A and G)
|
213
|
|
|
274
|
|
||
Long-term debt
(Note L)
|
2,827
|
|
|
3,605
|
|
||
Shareholders’ equity
|
|
|
|
||||
Serial preferred stock (no par value; 5,000 authorized shares, none issued)
|
—
|
|
|
—
|
|
||
Common stock (no par value; 60,000 authorized shares, issued shares of 27,148 for both 2017 and 2016)
|
223,484
|
|
|
212,702
|
|
||
Retained earnings
|
536,116
|
|
|
517,903
|
|
||
Common stock in treasury (7,042 shares for 2017 and 7,200 shares for 2016)
|
(166,128
|
)
|
|
(154,399
|
)
|
||
Accumulated other comprehensive loss
(Note O)
|
(102,937
|
)
|
|
(86,181
|
)
|
||
Other equity transactions
|
4,446
|
|
|
4,064
|
|
||
Total shareholders’ equity
|
494,981
|
|
|
494,089
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
791,084
|
|
|
$
|
741,298
|
|
(Thousands)
|
Common
Stock
|
|
Retained
Earnings
|
|
Common
Stock In
Treasury
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Other
Equity
Transactions
|
|
Total
|
||||||||||||
Balance at January 1, 2015
|
$
|
204,634
|
|
|
$
|
474,633
|
|
|
$
|
(140,938
|
)
|
|
$
|
(82,237
|
)
|
|
$
|
2,927
|
|
|
$
|
459,019
|
|
Net income
|
—
|
|
|
32,158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,158
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,532
|
|
|
—
|
|
|
1,532
|
|
||||||
Cash dividends declared
|
—
|
|
|
(7,132
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,132
|
)
|
||||||
Stock-based compensation activity
|
4,260
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,260
|
|
||||||
Repurchase of 212 shares
|
—
|
|
|
—
|
|
|
(7,129
|
)
|
|
—
|
|
|
—
|
|
|
(7,129
|
)
|
||||||
Directors' deferred compensation
|
73
|
|
|
—
|
|
|
(492
|
)
|
|
—
|
|
|
668
|
|
|
249
|
|
||||||
Balance at December 31, 2015
|
$
|
208,967
|
|
|
$
|
499,659
|
|
|
$
|
(148,559
|
)
|
|
$
|
(80,705
|
)
|
|
$
|
3,595
|
|
|
$
|
482,957
|
|
Net income
|
—
|
|
|
25,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,740
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,476
|
)
|
|
—
|
|
|
(5,476
|
)
|
||||||
Cash dividends declared
|
—
|
|
|
(7,496
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,496
|
)
|
||||||
Stock-based compensation activity
|
3,764
|
|
|
—
|
|
|
(1,762
|
)
|
|
—
|
|
|
—
|
|
|
2,002
|
|
||||||
Repurchase of 147 shares
|
—
|
|
|
—
|
|
|
(3,798
|
)
|
|
—
|
|
|
—
|
|
|
(3,798
|
)
|
||||||
Directors’ deferred compensation
|
(29
|
)
|
|
—
|
|
|
(280
|
)
|
|
—
|
|
|
469
|
|
|
160
|
|
||||||
Balance at December 31, 2016
|
$
|
212,702
|
|
|
$
|
517,903
|
|
|
$
|
(154,399
|
)
|
|
$
|
(86,181
|
)
|
|
$
|
4,064
|
|
|
$
|
494,089
|
|
Net income
|
—
|
|
|
11,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,451
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,081
|
)
|
|
—
|
|
|
(2,081
|
)
|
||||||
Tax Cuts and Jobs Act Reclassification
|
—
|
|
|
14,675
|
|
|
—
|
|
|
(14,675
|
)
|
|
—
|
|
|
—
|
|
||||||
Cash dividends declared
|
—
|
|
|
(7,913
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,913
|
)
|
||||||
Stock-based compensation activity
|
10,750
|
|
|
—
|
|
|
(10,300
|
)
|
|
—
|
|
|
—
|
|
|
450
|
|
||||||
Repurchase of 32 shares
|
—
|
|
|
—
|
|
|
(1,086
|
)
|
|
—
|
|
|
—
|
|
|
(1,086
|
)
|
||||||
Directors’ deferred compensation
|
32
|
|
|
—
|
|
|
(343
|
)
|
|
—
|
|
|
382
|
|
|
71
|
|
||||||
Balance at December 31, 2017
|
$
|
223,484
|
|
|
$
|
536,116
|
|
|
$
|
(166,128
|
)
|
|
$
|
(102,937
|
)
|
|
$
|
4,446
|
|
|
$
|
494,981
|
|
|
Years
|
Land improvements
|
10 to 20
|
Buildings
|
20 to 40
|
Leasehold improvements
|
Life of lease
|
Machinery and equipment
|
3 to 15
|
Furniture and fixtures
|
4 to 10
|
Automobiles and trucks
|
3 to 8
|
Research equipment
|
3 to 10
|
Computer hardware
|
3 to 10
|
Computer software
|
3 to 10
|
(Thousands)
|
Amount
|
||
Assets:
|
|
||
Inventories
|
$
|
7,221
|
|
Prepaid and other current assets
|
2,270
|
|
|
Long-term deferred income taxes
|
14
|
|
|
Property, plant, and equipment
|
6,501
|
|
|
Intangible assets
|
3,649
|
|
|
Goodwill
|
3,574
|
|
|
Total assets acquired
|
$
|
23,229
|
|
|
|
||
Liabilities:
|
|
||
Other liabilities and accrued items
|
$
|
984
|
|
Other long-term liabilities
|
449
|
|
|
Retirement and post-employment benefits
|
5,292
|
|
|
Total liabilities assumed
|
$
|
6,725
|
|
|
|
||
Total purchase price
|
$
|
16,504
|
|
(Thousands)
|
|
Value at Acquisition
|
|
Useful Life
|
||
Customer relationships
|
|
$
|
2,274
|
|
|
15 years
|
Technology
|
|
1,375
|
|
|
3 years
|
|
Total
|
|
$
|
3,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Thousands)
|
|
Performance
Alloys and
Composites
|
|
Advanced Materials
|
|
Precision Coatings
|
|
Other
|
|
Total
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
429,442
|
|
|
$
|
590,789
|
|
|
$
|
119,216
|
|
|
$
|
—
|
|
|
$
|
1,139,447
|
|
Intersegment sales
|
|
114
|
|
|
58,056
|
|
|
—
|
|
|
—
|
|
|
58,170
|
|
|||||
Value-added sales
|
|
363,465
|
|
|
228,062
|
|
|
90,678
|
|
|
(4,508
|
)
|
|
677,697
|
|
|||||
Operating profit (loss)
|
|
21,978
|
|
|
32,763
|
|
|
8,445
|
|
|
(24,607
|
)
|
|
38,579
|
|
|||||
Depreciation, depletion, and amortization
|
|
23,209
|
|
|
7,354
|
|
|
9,721
|
|
|
2,467
|
|
|
42,751
|
|
|||||
Expenditures for long-lived assets
|
|
10,427
|
|
|
13,318
|
|
|
3,048
|
|
|
2,283
|
|
|
29,076
|
|
|||||
Assets
|
|
418,798
|
|
|
202,389
|
|
|
97,504
|
|
|
72,393
|
|
|
791,084
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
387,539
|
|
|
$
|
437,249
|
|
|
$
|
144,448
|
|
|
$
|
—
|
|
|
$
|
969,236
|
|
Intersegment sales
|
|
240
|
|
|
70,457
|
|
|
—
|
|
|
—
|
|
|
70,697
|
|
|||||
Value-added sales
|
|
332,012
|
|
|
176,332
|
|
|
97,700
|
|
|
(6,134
|
)
|
|
599,910
|
|
|||||
Operating profit (loss)
|
|
6,601
|
|
|
26,282
|
|
|
11,635
|
|
|
(17,414
|
)
|
|
27,104
|
|
|||||
Depreciation, depletion, and amortization
|
|
27,059
|
|
|
6,644
|
|
|
9,945
|
|
|
2,003
|
|
|
45,651
|
|
|||||
Expenditures for long-lived assets
|
|
26,604
|
|
|
4,931
|
|
|
3,176
|
|
|
2,327
|
|
|
37,038
|
|
|||||
Assets
|
|
422,787
|
|
|
133,682
|
|
|
108,788
|
|
|
76,041
|
|
|
741,298
|
|
|||||
2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
394,760
|
|
|
$
|
482,288
|
|
|
$
|
148,444
|
|
|
$
|
(220
|
)
|
|
$
|
1,025,272
|
|
Intersegment sales
|
|
768
|
|
|
63,669
|
|
|
—
|
|
|
—
|
|
|
64,437
|
|
|||||
Value-added sales
|
|
335,136
|
|
|
182,794
|
|
|
101,761
|
|
|
(2,444
|
)
|
|
617,247
|
|
|||||
Operating profit (loss)
|
|
23,560
|
|
|
27,805
|
|
|
7,483
|
|
|
(13,580
|
)
|
|
45,268
|
|
|||||
Depreciation, depletion, and amortization
|
|
19,748
|
|
|
6,995
|
|
|
9,951
|
|
|
1,777
|
|
|
38,471
|
|
|||||
Expenditures for long-lived assets
|
|
38,562
|
|
|
5,286
|
|
|
6,399
|
|
|
1,843
|
|
|
52,090
|
|
|||||
Assets
|
|
425,759
|
|
|
131,104
|
|
|
118,953
|
|
|
66,477
|
|
|
742,293
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
650,675
|
|
|
$
|
639,675
|
|
|
$
|
639,436
|
|
Asia
|
|
265,991
|
|
|
193,739
|
|
|
247,174
|
|
|||
Europe
|
|
205,118
|
|
|
121,648
|
|
|
122,554
|
|
|||
All other
|
|
17,663
|
|
|
14,174
|
|
|
16,108
|
|
|||
Total
|
|
$
|
1,139,447
|
|
|
$
|
969,236
|
|
|
$
|
1,025,272
|
|
Long-lived assets by country deployed
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
227,412
|
|
|
$
|
240,309
|
|
|
$
|
249,976
|
|
All other
|
|
28,166
|
|
|
12,322
|
|
|
13,653
|
|
|||
Total
|
|
$
|
255,578
|
|
|
$
|
252,631
|
|
|
$
|
263,629
|
|
|
|
(Income) Expense
|
||||||||||
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Metal consignment fees
|
|
$
|
8,782
|
|
|
$
|
6,409
|
|
|
$
|
7,074
|
|
Amortization of intangible assets
|
|
4,629
|
|
|
4,498
|
|
|
5,112
|
|
|||
Foreign currency exchange/translation (gain) loss
|
|
(722
|
)
|
|
1,525
|
|
|
(5,461
|
)
|
|||
Impairment and other cost reduction initiatives
|
|
255
|
|
|
2,586
|
|
|
—
|
|
|||
Net (gain) loss on disposal of fixed assets
|
|
(1,150
|
)
|
|
(648
|
)
|
|
768
|
|
|||
Recovery from insurance
|
|
—
|
|
|
—
|
|
|
(3,800
|
)
|
|||
Legal settlement
|
|
—
|
|
|
—
|
|
|
(1,825
|
)
|
|||
Other items
|
|
970
|
|
|
(496
|
)
|
|
907
|
|
|||
Total
|
|
$
|
12,764
|
|
|
$
|
13,874
|
|
|
$
|
2,775
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of sales
|
|
$
|
463
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Selling, general, and administrative (SG&A) expense
|
|
1,310
|
|
|
—
|
|
|
—
|
|
|||
Other-net
|
|
255
|
|
|
2,586
|
|
|
—
|
|
|||
Total
|
|
$
|
2,028
|
|
|
$
|
2,586
|
|
|
$
|
—
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest incurred
|
|
$
|
2,608
|
|
|
$
|
2,219
|
|
|
$
|
2,685
|
|
Less: Capitalized interest
|
|
425
|
|
|
430
|
|
|
235
|
|
|||
Total net expense
|
|
$
|
2,183
|
|
|
$
|
1,789
|
|
|
$
|
2,450
|
|
Interest paid
|
|
$
|
1,646
|
|
|
$
|
1,611
|
|
|
$
|
2,042
|
|
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
28,327
|
|
|
$
|
13,934
|
|
|
$
|
31,748
|
|
Foreign
|
|
8,069
|
|
|
11,381
|
|
|
11,070
|
|
|||
Total income before income taxes
|
|
$
|
36,396
|
|
|
$
|
25,315
|
|
|
$
|
42,818
|
|
Income tax expense:
|
|
|
|
|
|
|
||||||
Current income tax expense:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
1,912
|
|
|
$
|
6,505
|
|
|
$
|
3,556
|
|
Foreign
|
|
2,777
|
|
|
2,080
|
|
|
2,736
|
|
|||
Total current
|
|
$
|
4,689
|
|
|
$
|
8,585
|
|
|
$
|
6,292
|
|
Deferred income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
19,935
|
|
|
$
|
(8,842
|
)
|
|
$
|
4,565
|
|
Foreign
|
|
321
|
|
|
(168
|
)
|
|
(197
|
)
|
|||
Total deferred
|
|
$
|
20,256
|
|
|
$
|
(9,010
|
)
|
|
$
|
4,368
|
|
Total income tax expense (benefit)
|
|
$
|
24,945
|
|
|
$
|
(425
|
)
|
|
$
|
10,660
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
U.S. federal statutory rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal tax effect
|
|
2.3
|
|
|
(0.4
|
)
|
|
1.7
|
|
Effect of excess of percentage depletion over cost depletion
|
|
(10.0
|
)
|
|
(10.6
|
)
|
|
(7.1
|
)
|
Manufacturing production deduction
|
|
(0.8
|
)
|
|
(3.3
|
)
|
|
(0.9
|
)
|
Foreign rate differential
|
|
(3.4
|
)
|
|
(5.9
|
)
|
|
(4.2
|
)
|
Tax Cuts and Jobs Act impact
|
|
47.1
|
|
|
—
|
|
|
—
|
|
Research and development tax credit
|
|
(2.6
|
)
|
|
(6.6
|
)
|
|
(1.6
|
)
|
Foreign tax credit
|
|
(1.1
|
)
|
|
(28.1
|
)
|
|
(4.8
|
)
|
Foreign repatriation
|
|
1.3
|
|
|
13.7
|
|
|
5.9
|
|
Incremental fixed asset basis
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
Adjustment to unrecognized tax benefits
|
|
2.8
|
|
|
3.2
|
|
|
(1.1
|
)
|
Stock compensation - excess tax benefits
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
Valuation allowance
|
|
2.4
|
|
|
0.1
|
|
|
(0.9
|
)
|
Other items
|
|
0.8
|
|
|
1.2
|
|
|
2.9
|
|
Effective tax rate
|
|
68.5
|
%
|
|
(1.7
|
)%
|
|
24.9
|
%
|
|
|
December 31,
|
||||||
(Thousands)
|
|
2017
|
|
2016
|
||||
Asset (liability)
|
|
|
|
|
||||
Post-employment benefits other than pensions
|
|
$
|
2,787
|
|
|
$
|
4,808
|
|
Other reserves
|
|
4,223
|
|
|
9,333
|
|
||
Deferred compensation
|
|
5,054
|
|
|
10,243
|
|
||
Environmental reserves
|
|
1,452
|
|
|
2,231
|
|
||
Inventory
|
|
4,636
|
|
|
5,876
|
|
||
Pensions
|
|
14,307
|
|
|
23,540
|
|
||
Alternative minimum tax credit
|
|
—
|
|
|
1,390
|
|
||
Net operating loss and credit carryforwards
|
|
6,374
|
|
|
5,607
|
|
||
Research and development tax credit carryforward
|
|
2,466
|
|
|
627
|
|
||
Foreign tax credit carryforward
|
|
9,481
|
|
|
4,545
|
|
||
Subtotal
|
|
50,780
|
|
|
68,200
|
|
||
Valuation allowance
|
|
(16,246
|
)
|
|
(3,990
|
)
|
||
Total deferred tax assets
|
|
34,534
|
|
|
64,210
|
|
||
Depreciation
|
|
(10,250
|
)
|
|
(13,064
|
)
|
||
Amortization
|
|
(2,900
|
)
|
|
(5,073
|
)
|
||
Capitalized interest expense
|
|
(112
|
)
|
|
(242
|
)
|
||
Mine development
|
|
(3,621
|
)
|
|
(6,683
|
)
|
||
Derivative instruments and hedging activities
|
|
(817
|
)
|
|
(13
|
)
|
||
Total deferred tax liabilities
|
|
(17,700
|
)
|
|
(25,075
|
)
|
||
Net deferred tax asset
|
|
$
|
16,834
|
|
|
$
|
39,135
|
|
(Thousands)
|
|
2017
|
|
2016
|
||||
Balance at January 1
|
|
$
|
2,048
|
|
|
$
|
1,285
|
|
Additions to tax provisions related to the current year
|
|
163
|
|
|
35
|
|
||
Additions to tax positions related to prior years
|
|
1,210
|
|
|
878
|
|
||
Reduction to tax positions related to prior years
|
|
(121
|
)
|
|
—
|
|
||
Lapses on statutes of limitations
|
|
(356
|
)
|
|
(150
|
)
|
||
Balance at December 31
|
|
$
|
2,944
|
|
|
$
|
2,048
|
|
(Thousands except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator for basic and diluted EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
11,451
|
|
|
$
|
25,740
|
|
|
$
|
32,158
|
|
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic EPS:
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding
|
|
20,027
|
|
|
19,983
|
|
|
20,097
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock appreciation rights
|
|
174
|
|
|
74
|
|
|
156
|
|
|||
Restricted stock units
|
|
96
|
|
|
88
|
|
|
91
|
|
|||
Performance-based restricted stock units
|
|
118
|
|
|
68
|
|
|
58
|
|
|||
Diluted potential common shares
|
|
388
|
|
|
230
|
|
|
305
|
|
|||
Denominator for diluted EPS:
|
|
|
|
|
|
|
||||||
Adjusted weighted-average shares outstanding
|
|
20,415
|
|
|
20,213
|
|
|
20,402
|
|
|||
Basic EPS
|
|
$
|
0.57
|
|
|
$
|
1.29
|
|
|
$
|
1.60
|
|
Diluted EPS
|
|
$
|
0.56
|
|
|
$
|
1.27
|
|
|
$
|
1.58
|
|
|
|
December 31,
|
||||||
(Thousands)
|
|
2017
|
|
2016
|
||||
Raw materials and supplies
|
|
$
|
42,958
|
|
|
$
|
36,233
|
|
Work in process
|
|
187,719
|
|
|
169,327
|
|
||
Finished goods
|
|
34,418
|
|
|
38,147
|
|
||
Subtotal
|
|
265,095
|
|
|
243,707
|
|
||
Less: LIFO reserve balance
|
|
44,743
|
|
|
42,842
|
|
||
Inventories
|
|
$
|
220,352
|
|
|
$
|
200,865
|
|
|
|
December 31,
|
||||||
(Thousands)
|
|
2017
|
|
2016
|
||||
Land
|
|
$
|
4,874
|
|
|
$
|
5,548
|
|
Buildings
|
|
137,196
|
|
|
135,729
|
|
||
Machinery and equipment
|
|
626,186
|
|
|
609,894
|
|
||
Software
|
|
40,575
|
|
|
39,550
|
|
||
Construction in progress
|
|
29,963
|
|
|
19,111
|
|
||
Allowances for depreciation
|
|
(615,134
|
)
|
|
(593,531
|
)
|
||
Subtotal
|
|
223,660
|
|
|
216,301
|
|
||
Capital leases
|
|
10,912
|
|
|
10,913
|
|
||
Allowances for depreciation
|
|
(2,741
|
)
|
|
(2,492
|
)
|
||
Subtotal
|
|
8,171
|
|
|
8,421
|
|
||
Mineral resources
|
|
4,979
|
|
|
4,979
|
|
||
Mine development
|
|
37,103
|
|
|
35,543
|
|
||
Allowances for amortization and depletion
|
|
(18,335
|
)
|
|
(12,613
|
)
|
||
Subtotal
|
|
23,747
|
|
|
27,909
|
|
||
Property, plant, and equipment — net
|
|
$
|
255,578
|
|
|
$
|
252,631
|
|
|
|
2017
|
|
2016
|
||||||||||||
(Thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Customer relationships
|
|
$
|
40,751
|
|
|
$
|
(36,949
|
)
|
|
$
|
38,428
|
|
|
$
|
(33,823
|
)
|
Technology
|
|
13,467
|
|
|
(11,495
|
)
|
|
12,092
|
|
|
(10,516
|
)
|
||||
Licenses and other
|
|
4,519
|
|
|
(2,672
|
)
|
|
4,519
|
|
|
(2,441
|
)
|
||||
Total
|
|
$
|
58,737
|
|
|
$
|
(51,116
|
)
|
|
$
|
55,039
|
|
|
$
|
(46,780
|
)
|
|
|
Amortization
|
||
(Thousands)
|
|
Expense
|
||
2017
|
|
$
|
4,629
|
|
2018
|
|
1,932
|
|
|
2019
|
|
1,089
|
|
|
2020
|
|
642
|
|
|
2021
|
|
620
|
|
|
2022
|
|
620
|
|
(Thousands)
|
|
2017
|
|
2016
|
||||
Performance Alloys and Composites
|
|
$
|
1,899
|
|
|
$
|
1,899
|
|
Advanced Materials
|
|
50,296
|
|
|
46,570
|
|
||
Precision Coatings
|
|
38,482
|
|
|
38,481
|
|
||
Total
|
|
$
|
90,677
|
|
|
$
|
86,950
|
|
|
|
December 31,
|
||||||
(Thousands)
|
|
2017
|
|
2016
|
||||
Revolving credit agreement
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed rate industrial development revenue bonds payable in annual installments through 2021
|
|
3,818
|
|
|
4,615
|
|
||
Total debt outstanding
|
|
3,818
|
|
|
4,615
|
|
||
Current portion of long-term debt
|
|
(777
|
)
|
|
(733
|
)
|
||
Gross long-term debt
|
|
3,041
|
|
|
3,882
|
|
||
Unamortized deferred financing fees
|
|
(214
|
)
|
|
(277
|
)
|
||
Long-term debt
|
|
$
|
2,827
|
|
|
$
|
3,605
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(Thousands)
|
|
Total
|
|
Outstanding
|
|
Available
|
|
Total
|
|
Outstanding
|
|
Available
|
||||||||||||
Domestic
|
|
$
|
347,746
|
|
|
$
|
—
|
|
|
$
|
347,746
|
|
|
$
|
346,522
|
|
|
$
|
—
|
|
|
$
|
346,522
|
|
Foreign
|
|
6,182
|
|
|
—
|
|
|
6,182
|
|
|
8,907
|
|
|
—
|
|
|
8,907
|
|
||||||
Total
|
|
$
|
353,928
|
|
|
$
|
—
|
|
|
$
|
353,928
|
|
|
$
|
355,429
|
|
|
$
|
—
|
|
|
$
|
355,429
|
|
|
|
Capital
|
|
Operating
|
||||
(Thousands)
|
|
Leases
|
|
Leases
|
||||
2018
|
|
$
|
2,172
|
|
|
$
|
8,096
|
|
2019
|
|
2,172
|
|
|
6,297
|
|
||
2020
|
|
2,172
|
|
|
5,471
|
|
||
2021
|
|
2,172
|
|
|
4,605
|
|
||
2022
|
|
2,172
|
|
|
5,636
|
|
||
2023 and thereafter
|
|
22,609
|
|
|
3,281
|
|
||
Total minimum lease payments
|
|
33,469
|
|
|
$
|
33,386
|
|
|
Amounts representing interest
|
|
20,661
|
|
|
|
|||
Present value of net minimum lease payments
|
|
$
|
12,808
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(Thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
|
$
|
276,801
|
|
|
$
|
259,957
|
|
|
$
|
14,334
|
|
|
$
|
15,200
|
|
Acquisition
|
|
7,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Service cost
|
|
8,760
|
|
|
8,060
|
|
|
91
|
|
|
105
|
|
||||
Interest cost
|
|
9,949
|
|
|
10,820
|
|
|
398
|
|
|
562
|
|
||||
Plan amendments
|
|
3,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
|
18,549
|
|
|
11,833
|
|
|
444
|
|
|
(191
|
)
|
||||
Benefit payments from fund
|
|
(13,072
|
)
|
|
(10,509
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit payments directly by Company
|
|
(387
|
)
|
|
(1,116
|
)
|
|
(1,107
|
)
|
|
(1,362
|
)
|
||||
Expenses paid from assets
|
|
(1,133
|
)
|
|
(611
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency exchange rate changes
|
|
2,812
|
|
|
(1,633
|
)
|
|
6
|
|
|
20
|
|
||||
Benefit obligation at end of year
|
|
313,728
|
|
|
276,801
|
|
|
14,166
|
|
|
14,334
|
|
||||
Change in plan assets
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
|
199,992
|
|
|
184,750
|
|
|
—
|
|
|
—
|
|
||||
Acquisition
|
|
2,353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
|
29,428
|
|
|
11,575
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
|
16,338
|
|
|
16,136
|
|
|
—
|
|
|
—
|
|
||||
Employee contributions
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefit payments from fund
|
|
(13,072
|
)
|
|
(10,509
|
)
|
|
—
|
|
|
—
|
|
||||
Expenses paid from assets
|
|
(1,133
|
)
|
|
(611
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency exchange rate changes
|
|
908
|
|
|
(1,349
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
|
234,976
|
|
|
199,992
|
|
|
—
|
|
|
—
|
|
||||
Funded status at end of year
|
|
$
|
(78,752
|
)
|
|
$
|
(76,809
|
)
|
|
$
|
(14,166
|
)
|
|
$
|
(14,334
|
)
|
Amounts recognized in the Consolidated
Balance Sheets consist of:
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
$
|
1,797
|
|
|
$
|
1,148
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities and accrued items
|
|
(2,490
|
)
|
|
(2,538
|
)
|
|
(1,412
|
)
|
|
(1,392
|
)
|
||||
Retirement and post-employment benefits
|
|
(78,059
|
)
|
|
(75,419
|
)
|
|
(12,754
|
)
|
|
(12,942
|
)
|
||||
|
|
$
|
(78,752
|
)
|
|
$
|
(76,809
|
)
|
|
$
|
(14,166
|
)
|
|
$
|
(14,334
|
)
|
Amounts recognized in other comprehensive income (before tax) consist of:
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
|
$
|
119,114
|
|
|
$
|
121,719
|
|
|
$
|
24
|
|
|
$
|
(420
|
)
|
Net prior service (credit) cost
|
|
3,688
|
|
|
(390
|
)
|
|
(8,044
|
)
|
|
(9,541
|
)
|
||||
|
|
$
|
122,802
|
|
|
$
|
121,329
|
|
|
$
|
(8,020
|
)
|
|
$
|
(9,961
|
)
|
Amortizations expected to be recognized during next fiscal year (before tax):
|
|
|
|
|
|
|
|
|
||||||||
Amortization of net loss
|
|
$
|
8,077
|
|
|
$
|
6,591
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of prior service credit
|
|
(123
|
)
|
|
(485
|
)
|
|
(1,497
|
)
|
|
(1,497
|
)
|
||||
|
|
$
|
7,954
|
|
|
$
|
6,106
|
|
|
$
|
(1,497
|
)
|
|
$
|
(1,497
|
)
|
Additional information
|
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation for all defined benefit pension plans
|
|
$
|
302,942
|
|
|
$
|
265,159
|
|
|
$
|
—
|
|
|
$
|
—
|
|
For defined benefit pension plans with benefit obligations in excess of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Aggregate benefit obligation
|
|
304,814
|
|
|
271,199
|
|
|
—
|
|
|
—
|
|
||||
Aggregate fair value of plan assets
|
|
227,115
|
|
|
193,242
|
|
|
—
|
|
|
—
|
|
||||
For defined benefit pension plans with accumulated benefit obligations in excess of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Aggregate accumulated benefit obligation
|
|
296,878
|
|
|
259,982
|
|
|
—
|
|
|
—
|
|
||||
Aggregate fair value of plan assets
|
|
227,115
|
|
|
193,242
|
|
|
—
|
|
|
—
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
(Thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Net benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
$
|
8,760
|
|
|
$
|
8,060
|
|
|
$
|
9,195
|
|
|
$
|
91
|
|
|
$
|
105
|
|
|
$
|
115
|
|
Interest cost
|
|
9,949
|
|
|
10,820
|
|
|
10,446
|
|
|
398
|
|
|
562
|
|
|
554
|
|
||||||
Expected return on plan assets
|
|
(14,933
|
)
|
|
(14,241
|
)
|
|
(13,611
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (benefit)
|
|
(274
|
)
|
|
(460
|
)
|
|
(450
|
)
|
|
(1,497
|
)
|
|
(1,497
|
)
|
|
(1,497
|
)
|
||||||
Recognized net actuarial loss
|
|
6,636
|
|
|
6,005
|
|
|
7,537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
|
10,138
|
|
|
10,184
|
|
|
13,117
|
|
|
(1,008
|
)
|
|
(830
|
)
|
|
(828
|
)
|
||||||
Settlements
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net benefit cost
|
|
$
|
10,138
|
|
|
$
|
10,304
|
|
|
$
|
13,117
|
|
|
$
|
(1,008
|
)
|
|
$
|
(830
|
)
|
|
$
|
(828
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
(Thousands)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Change in other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OCI at beginning of year
|
$
|
121,329
|
|
|
$
|
112,518
|
|
|
$
|
121,341
|
|
|
$
|
(9,961
|
)
|
|
$
|
(11,267
|
)
|
|
$
|
(12,261
|
)
|
Increase (decrease) in OCI:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized during year — prior service cost (credit)
|
274
|
|
|
460
|
|
|
450
|
|
|
1,497
|
|
|
1,497
|
|
|
1,497
|
|
||||||
Recognized during year — net actuarial (losses) gains
|
(6,636
|
)
|
|
(6,005
|
)
|
|
(7,537
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Occurring during year — prior service cost
|
3,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Occurring during year — net actuarial losses (gains)
|
4,055
|
|
|
14,279
|
|
|
(1,697
|
)
|
|
444
|
|
|
(191
|
)
|
|
(503
|
)
|
||||||
Other adjustments
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency exchange rate changes
|
(24
|
)
|
|
(43
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
OCI at end of year
|
$
|
122,802
|
|
|
$
|
121,329
|
|
|
$
|
112,518
|
|
|
$
|
(8,020
|
)
|
|
$
|
(9,961
|
)
|
|
$
|
(11,267
|
)
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted-average assumptions used to determine benefit obligations at fiscal year end
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
3.53
|
%
|
|
4.02
|
%
|
|
4.27
|
%
|
|
3.43
|
%
|
|
3.68
|
%
|
|
3.88
|
%
|
Rate of compensation increase
|
|
3.93
|
%
|
|
4.04
|
%
|
|
4.05
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Weighted-average assumptions used to determine net cost for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
3.93
|
%
|
|
4.22
|
%
|
|
4.00
|
%
|
|
3.68
|
%
|
|
3.88
|
%
|
|
3.50
|
%
|
Expected long-term return on plan assets
|
|
6.89
|
%
|
|
6.90
|
%
|
|
7.15
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
|
3.91
|
%
|
|
3.93
|
%
|
|
3.95
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Assumed health care trend rates at fiscal year end
|
|
2017
|
|
2016
|
Health care trend rate assumed for next year
|
|
6.75%
|
|
7.00%
|
Rate that the trend rate gradually declines to (ultimate trend rate)
|
|
5.00%
|
|
5.00%
|
Year that the rate reaches the ultimate trend rate
|
|
2025
|
|
2025
|
|
|
1-Percentage-
Point Increase
|
|
1-Percentage-
Point Decrease
|
||||||||||||
(Thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Effect on total of service and interest cost components
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
(8
|
)
|
|
$
|
(12
|
)
|
Effect on post-employment benefit obligation
|
|
212
|
|
|
259
|
|
|
(198
|
)
|
|
(241
|
)
|
|
|
December 31, 2017
|
||||||||||||||
(Thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash
|
|
$
|
10,604
|
|
|
$
|
10,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. (a)
|
|
54,376
|
|
|
53,659
|
|
|
717
|
|
|
—
|
|
||||
International (b)
|
|
39,010
|
|
|
35,016
|
|
|
3,994
|
|
|
—
|
|
||||
Emerging markets (c)
|
|
15,843
|
|
|
15,586
|
|
|
257
|
|
|
—
|
|
||||
Fixed-income securities:
|
|
|
|
|
|
|
|
|
||||||||
Intermediate-term bonds (d)
|
|
34,187
|
|
|
25,653
|
|
|
8,534
|
|
|
—
|
|
||||
Short-term bonds (e)
|
|
612
|
|
|
—
|
|
|
612
|
|
|
—
|
|
||||
Global bonds (f)
|
|
7,492
|
|
|
4,986
|
|
|
2,506
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
|
||||||||
Real estate fund (g)
|
|
6,617
|
|
|
6,284
|
|
|
333
|
|
|
—
|
|
||||
Alternative strategies (h)
|
|
9,948
|
|
|
9,893
|
|
|
55
|
|
|
—
|
|
||||
Accrued interest and dividends
|
|
114
|
|
|
114
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
178,803
|
|
|
161,795
|
|
|
17,008
|
|
|
—
|
|
||||
Investments measured at NAV:
|
|
|
|
|
|
|
|
|
||||||||
Pooled investment fund (i)
|
|
21,378
|
|
|
|
|
|
|
|
|
|
|||||
Multi-strategy hedge funds (j)
|
|
3,970
|
|
|
|
|
|
|
|
|
|
|
||||
Common/Collective trusts (k)
|
|
8,942
|
|
|
|
|
|
|
|
|||||||
Intermediate-term bonds (d)
|
|
21,771
|
|
|
|
|
|
|
|
|||||||
Private equity funds
|
|
112
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets at fair value
|
|
$
|
234,976
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2016
|
||||||||||||||
(Thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash
|
|
$
|
10,124
|
|
|
$
|
10,124
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. (a)
|
|
53,983
|
|
|
53,358
|
|
|
625
|
|
|
—
|
|
||||
International (b)
|
|
30,732
|
|
|
27,304
|
|
|
3,428
|
|
|
—
|
|
||||
Emerging markets (c)
|
|
11,792
|
|
|
11,562
|
|
|
230
|
|
|
—
|
|
||||
Fixed-income securities:
|
|
|
|
|
|
|
|
|
||||||||
Intermediate-term bonds (d)
|
|
48,138
|
|
|
29,429
|
|
|
18,709
|
|
|
—
|
|
||||
Short-term bonds (e)
|
|
3,150
|
|
|
—
|
|
|
3,150
|
|
|
—
|
|
||||
Global bonds (f)
|
|
2,121
|
|
|
—
|
|
|
2,121
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
|
||||||||
Real estate fund (g)
|
|
5,929
|
|
|
5,639
|
|
|
290
|
|
|
—
|
|
||||
Alternative strategies (h)
|
|
9,036
|
|
|
8,981
|
|
|
55
|
|
|
—
|
|
||||
Accrued interest and dividends
|
|
107
|
|
|
107
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
175,112
|
|
|
146,504
|
|
|
28,608
|
|
|
—
|
|
||||
Investments measured at NAV:
|
|
|
|
|
|
|
|
|
||||||||
Pooled investment fund (i)
|
|
20,418
|
|
|
|
|
|
|
|
|
||||||
Multi-strategy hedge funds (j)
|
|
4,320
|
|
|
|
|
|
|
|
|
||||||
Private equity funds
|
|
142
|
|
|
|
|
|
|
|
|
||||||
Total assets at fair value
|
|
$
|
199,992
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Mutual funds that invest in various sectors of the U.S. market.
|
(b)
|
Mutual funds that invest in non-U.S. companies primarily in developed countries that are generally considered to be value stocks.
|
(c)
|
Mutual funds that invest in non-U.S. companies in emerging market countries.
|
(d)
|
Includes a mutual fund that employs a value-oriented approach to fixed income investment management and a mutual fund that invests primarily in investment-grade debt securities.
|
(e)
|
Includes a mutual fund that seeks a market rate of return for a fixed-income portfolio with low relative volatility of returns, investing generally in U.S. and foreign debt securities maturing in
five years or less
.
|
(f)
|
Mutual funds that invest in domestic and foreign sovereign securities, fixed income securities, mortgage-backed and asset-backed bonds, convertible bonds, high-yield bonds, and emerging market bonds.
|
(g)
|
Includes a mutual fund that typically invests at least
80%
of its assets in equity and debt securities of companies in the real estate industry or related industries or in companies which own significant real estate assets at the time of investment.
|
(h)
|
Includes a mutual fund that tactically allocates assets to global equity, fixed income, and alternative strategies.
|
(i)
|
Includes a fund that invests in a broad portfolio of hedge funds.
|
(j)
|
Includes a hedge fund that employs multiple strategies to multiple asset classes with low correlations. Capital may be withdrawn from the multi-strategy hedge fund partnership on a monthly basis with a
ten
-day notice period.
|
(k)
|
Common/collective trust is valued based on the NAV per unit of the funds. The common/collective trust’s investment objective is to invest in fixed income and equity securities to provide income and/or total investment return through investments in U.S. and non-U.S. securities. The common/collective trust requires that the plan provide a 30-day notice to redeem any number of units from the trust.
|
|
|
Other Benefits
|
||||||||||
(Thousands)
|
|
Pension Benefits
|
|
Gross Benefit
Payment
|
|
Net of
Medicare
Part D
Subsidy
|
||||||
2018
|
|
$
|
13,820
|
|
|
$
|
1,412
|
|
|
$
|
1,390
|
|
2019
|
|
12,827
|
|
|
1,478
|
|
|
1,458
|
|
|||
2020
|
|
13,048
|
|
|
1,507
|
|
|
1,489
|
|
|||
2021
|
|
13,681
|
|
|
1,426
|
|
|
1,410
|
|
|||
2022
|
|
15,156
|
|
|
1,257
|
|
|
1,244
|
|
|||
2023 through 2027
|
|
83,342
|
|
|
4,953
|
|
|
4,909
|
|
|
|
Gains and Losses
On Cash Flow Hedges
|
|
Pension and Post- Employment Benefits
|
|
Foreign Currency Translation
|
|
|
||||||||||||||||
(Thousands)
|
|
Foreign Currency
|
|
Precious Metals
|
|
Total
|
Total
|
|||||||||||||||||
Balance at December 31, 2014
|
|
$
|
3,578
|
|
|
$
|
—
|
|
|
$
|
3,578
|
|
|
$
|
(81,662
|
)
|
|
$
|
(4,153
|
)
|
|
$
|
(82,237
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
2,995
|
|
|
—
|
|
|
2,995
|
|
|
2,249
|
|
|
(1,335
|
)
|
|
3,909
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
(6,169
|
)
|
|
—
|
|
|
(6,169
|
)
|
|
5,580
|
|
|
—
|
|
|
(589
|
)
|
||||||
Other comprehensive income (loss) before tax
|
|
(3,174
|
)
|
|
—
|
|
|
(3,174
|
)
|
|
7,829
|
|
|
(1,335
|
)
|
|
3,320
|
|
||||||
Deferred taxes on current period activity
|
|
(1,175
|
)
|
|
—
|
|
|
(1,175
|
)
|
|
2,963
|
|
|
—
|
|
|
1,788
|
|
||||||
Other comprehensive income (loss) after tax
|
|
(1,999
|
)
|
|
—
|
|
|
(1,999
|
)
|
|
4,866
|
|
|
(1,335
|
)
|
|
1,532
|
|
||||||
Balance at December 31, 2015
|
|
$
|
1,579
|
|
|
$
|
—
|
|
|
$
|
1,579
|
|
|
$
|
(76,796
|
)
|
|
$
|
(5,488
|
)
|
|
$
|
(80,705
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2015
|
|
$
|
1,579
|
|
|
$
|
—
|
|
|
$
|
1,579
|
|
|
$
|
(76,796
|
)
|
|
$
|
(5,488
|
)
|
|
$
|
(80,705
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(377
|
)
|
|
—
|
|
|
(377
|
)
|
|
(14,165
|
)
|
|
(172
|
)
|
|
(14,714
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
784
|
|
|
—
|
|
|
784
|
|
|
4,048
|
|
|
—
|
|
|
4,832
|
|
||||||
Other comprehensive income (loss) before tax
|
|
407
|
|
|
—
|
|
|
407
|
|
|
(10,117
|
)
|
|
(172
|
)
|
|
(9,882
|
)
|
||||||
Deferred taxes on current period activity
|
|
149
|
|
|
—
|
|
|
149
|
|
|
(4,555
|
)
|
|
—
|
|
|
(4,406
|
)
|
||||||
Other comprehensive income (loss) after tax
|
|
258
|
|
|
—
|
|
|
258
|
|
|
(5,562
|
)
|
|
(172
|
)
|
|
(5,476
|
)
|
||||||
Balance at December 31, 2016
|
|
$
|
1,837
|
|
|
$
|
—
|
|
|
$
|
1,837
|
|
|
$
|
(82,358
|
)
|
|
$
|
(5,660
|
)
|
|
$
|
(86,181
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
|
$
|
1,837
|
|
|
$
|
—
|
|
|
$
|
1,837
|
|
|
$
|
(82,358
|
)
|
|
$
|
(5,660
|
)
|
|
$
|
(86,181
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(1,180
|
)
|
|
(463
|
)
|
|
(1,643
|
)
|
|
(8,279
|
)
|
|
1,552
|
|
|
(8,370
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
632
|
|
|
208
|
|
|
840
|
|
|
4,865
|
|
|
—
|
|
|
5,705
|
|
||||||
Other comprehensive income (loss) before tax
|
|
(548
|
)
|
|
(255
|
)
|
|
(803
|
)
|
|
(3,414
|
)
|
|
1,552
|
|
|
(2,665
|
)
|
||||||
Deferred taxes on current period activity
|
|
330
|
|
|
(59
|
)
|
|
271
|
|
|
13,820
|
|
|
—
|
|
|
14,091
|
|
||||||
Other comprehensive income (loss) after tax
|
|
(878
|
)
|
|
(196
|
)
|
|
(1,074
|
)
|
|
(17,234
|
)
|
|
1,552
|
|
|
(16,756
|
)
|
||||||
Balance at December 31, 2017
|
|
$
|
959
|
|
|
$
|
(196
|
)
|
|
$
|
763
|
|
|
$
|
(99,592
|
)
|
|
$
|
(4,108
|
)
|
|
$
|
(102,937
|
)
|
(Shares in thousands)
|
|
Number of
SARs
|
|
Weighted-
average
Exercise
Price Per
Share
|
|
Aggregate
Intrinsic
Value (thousands)
|
|
Weighted-
average
Remaining
Term (Years)
|
|||||
Outstanding at December 31, 2016
|
|
1,142
|
|
|
$
|
29.58
|
|
|
|
|
|
||
Granted
|
|
97
|
|
|
35.26
|
|
|
|
|
|
|||
Exercised
|
|
(560
|
)
|
|
28.19
|
|
|
|
|
|
|||
Cancelled
|
|
(63
|
)
|
|
36.90
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
|
616
|
|
|
30.97
|
|
|
$
|
10,858
|
|
|
4.1
|
|
Vested and expected to vest as of December 31, 2017
|
|
616
|
|
|
30.97
|
|
|
10,858
|
|
|
4.1
|
||
Exercisable at December 31, 2017
|
|
190
|
|
|
30.53
|
|
|
3,441
|
|
|
2.1
|
(Shares in thousands)
|
|
Number of
SARs
|
|
Weighted-
average
Grant
Date
Fair Value
|
|||
Nonvested as of December 31, 2016
|
|
500
|
|
|
$
|
10.82
|
|
Granted
|
|
97
|
|
|
10.89
|
|
|
Vested
|
|
(132
|
)
|
|
12.48
|
|
|
Cancelled
|
|
(39
|
)
|
|
10.35
|
|
|
Nonvested as of December 31, 2017
|
|
426
|
|
|
$
|
10.54
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
|
1.92
|
%
|
|
1.25
|
%
|
|
1.47
|
%
|
Dividend yield
|
|
1.1
|
%
|
|
1.4
|
%
|
|
0.9
|
%
|
Volatility
|
|
34.0
|
%
|
|
38.0
|
%
|
|
42.8
|
%
|
Expected lives (in years)
|
|
5.6
|
|
|
5.7
|
|
|
5.0
|
|
(Shares in thousands)
|
|
Number of
Shares
|
|
Weighted-
average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2016
|
|
141
|
|
|
$
|
30.54
|
|
Granted
|
|
62
|
|
|
34.95
|
|
|
Vested
|
|
(64
|
)
|
|
30.75
|
|
|
Forfeited
|
|
(2
|
)
|
|
30.36
|
|
|
Outstanding at December 31, 2017
|
|
137
|
|
|
$
|
32.45
|
|
(Shares in thousands)
|
|
Number of
Shares |
|
Weighted-
average Grant Date Fair Value |
|||
Outstanding at December 31, 2016
|
|
186
|
|
|
$
|
27.47
|
|
Granted
|
|
65
|
|
|
30.28
|
|
|
Vested
|
|
(25
|
)
|
|
26.02
|
|
|
Forfeited
|
|
(3
|
)
|
|
25.38
|
|
|
Outstanding at December 31, 2017
|
|
223
|
|
|
$
|
28.49
|
|
(Shares in thousands)
|
|
Number of
Shares
|
|
Weighted-
average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2016
|
|
155
|
|
|
$
|
25.52
|
|
Granted
|
|
15
|
|
|
35.34
|
|
|
Distributed
|
|
(6
|
)
|
|
38.94
|
|
|
Outstanding at December 31, 2017
|
|
164
|
|
|
$
|
25.96
|
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
(Thousands)
|
|
Total
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Other
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments
|
|
$
|
2,310
|
|
|
$
|
2,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
254
|
|
|
—
|
|
|
254
|
|
|
—
|
|
||||
Precious metal swaps
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Total
|
|
$
|
2,578
|
|
|
$
|
2,310
|
|
|
$
|
268
|
|
|
$
|
—
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation liability
|
|
$
|
2,310
|
|
|
$
|
2,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
201
|
|
|
—
|
|
|
201
|
|
|
—
|
|
||||
Precious metal swaps
|
|
269
|
|
|
—
|
|
|
269
|
|
|
—
|
|
||||
Total
|
|
$
|
2,780
|
|
|
$
|
2,310
|
|
|
$
|
470
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments
|
|
$
|
1,734
|
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
691
|
|
|
—
|
|
|
691
|
|
|
—
|
|
||||
Precious metal swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
2,425
|
|
|
$
|
1,734
|
|
|
$
|
691
|
|
|
$
|
—
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation liability
|
|
$
|
1,734
|
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Precious metal swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
1,735
|
|
|
$
|
1,734
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(Thousands)
|
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Prepaid expenses
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts - euro
|
|
$
|
13,981
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
13,981
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(Thousands)
|
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Prepaid expenses
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts - yen
|
|
$
|
5,673
|
|
|
$
|
91
|
|
|
$
|
2,418
|
|
|
$
|
239
|
|
Foreign currency forward contracts - euro
|
|
5,026
|
|
|
36
|
|
|
6,493
|
|
|
452
|
|
||||
|
|
10,699
|
|
|
127
|
|
|
8,911
|
|
|
691
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
|
|
|
|
|
|
|
||||||||
Precious metal swaps
|
|
880
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities and accrued items
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts - euro
|
|
13,583
|
|
|
(201
|
)
|
|
537
|
|
|
(1
|
)
|
||||
Precious metal swaps
|
|
10,067
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
23,650
|
|
|
(456
|
)
|
|
537
|
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term liabilities
|
|
|
|
|
|
|
|
|
||||||||
Precious metal swaps
|
|
789
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
36,018
|
|
|
$
|
(329
|
)
|
|
$
|
9,448
|
|
|
$
|
690
|
|
(Thousands)
|
|
2017
|
|
2016
|
||||
Reserve balance at beginning of year
|
|
$
|
6,041
|
|
|
$
|
5,714
|
|
Expensed
|
|
1,006
|
|
|
851
|
|
||
Paid
|
|
(548
|
)
|
|
(524
|
)
|
||
Reserve balance at end of year
|
|
$
|
6,499
|
|
|
$
|
6,041
|
|
Ending balance recorded in:
|
|
|
|
|
||||
Other liabilities and accrued items
|
|
$
|
987
|
|
|
$
|
874
|
|
Other long-term liabilities
|
|
5,512
|
|
|
5,167
|
|
(Thousands)
|
|
2017
|
|
2016
|
||||
Asset retirement obligation at beginning of period
|
|
$
|
1,084
|
|
|
$
|
610
|
|
Accretion expense
|
|
83
|
|
|
49
|
|
||
Change in liability
|
|
—
|
|
|
425
|
|
||
Asset retirement obligation at end of period
|
|
$
|
1,167
|
|
|
$
|
1,084
|
|
|
|
2017
|
||||||||||||||||||
(Thousands except per share amounts)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Net sales
|
|
$
|
240,669
|
|
|
$
|
295,842
|
|
|
$
|
294,268
|
|
|
$
|
308,668
|
|
|
$
|
1,139,447
|
|
Gross margin
|
|
42,996
|
|
|
54,557
|
|
|
55,203
|
|
|
58,738
|
|
|
211,494
|
|
|||||
Percent of net sales
|
|
17.9
|
%
|
|
18.4
|
%
|
|
18.8
|
%
|
|
19.0
|
%
|
|
18.6
|
%
|
|||||
Net income (loss)
|
|
$
|
3,050
|
|
|
$
|
7,313
|
|
|
$
|
9,320
|
|
|
$
|
(8,232
|
)
|
|
$
|
11,451
|
|
Net income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
(1)
|
|
$
|
0.15
|
|
|
$
|
0.37
|
|
|
$
|
0.47
|
|
|
$
|
(0.41
|
)
|
|
$
|
0.57
|
|
Diluted
(1)(2)
|
|
0.15
|
|
|
0.36
|
|
|
0.46
|
|
|
(0.41
|
)
|
|
0.56
|
|
|||||
Cash dividends per share of common stock
|
|
0.095
|
|
|
0.100
|
|
|
0.100
|
|
|
0.100
|
|
|
0.395
|
|
|||||
Stock price range:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
41.10
|
|
|
$
|
38.85
|
|
|
$
|
43.43
|
|
|
$
|
52.10
|
|
|
|
||
Low
|
|
31.05
|
|
|
33.00
|
|
|
36.60
|
|
|
42.10
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2016
|
||||||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Net sales
|
|
$
|
235,511
|
|
|
$
|
249,776
|
|
|
$
|
249,619
|
|
|
$
|
234,330
|
|
|
$
|
969,236
|
|
Gross margin
|
|
43,357
|
|
|
45,306
|
|
|
50,755
|
|
|
44,045
|
|
|
183,463
|
|
|||||
Percent of net sales
|
|
18.4
|
%
|
|
18.1
|
%
|
|
20.3
|
%
|
|
18.8
|
%
|
|
18.9
|
%
|
|||||
Net income
|
|
$
|
5,368
|
|
|
$
|
5,549
|
|
|
$
|
8,045
|
|
|
$
|
6,778
|
|
|
$
|
25,740
|
|
Net income per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.27
|
|
|
$
|
0.28
|
|
|
$
|
0.40
|
|
|
$
|
0.34
|
|
|
$
|
1.29
|
|
Diluted
|
|
0.27
|
|
|
0.27
|
|
|
0.40
|
|
|
0.33
|
|
|
1.27
|
|
|||||
Cash dividends per share of common stock
|
|
0.090
|
|
|
0.095
|
|
|
0.095
|
|
|
0.095
|
|
|
0.375
|
|
|||||
Stock price range:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
28.26
|
|
|
$
|
31.83
|
|
|
$
|
32.28
|
|
|
$
|
41.23
|
|
|
|
||
Low
|
|
20.62
|
|
|
22.36
|
|
|
24.18
|
|
|
28.50
|
|
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
Positions and Offices Held
|
Jugal K. Vijayvargiya
|
|
49
|
|
President and Chief Executive Officer (March 2017-Present); President Delphi Electronics and Safety, a global technology solutions provider to the automotive and transportation sectors (prior to March 2017)
|
Joseph P. Kelley
|
|
45
|
|
Vice President, Finance and Chief Financial Officer (January 2015-Present); Vice President, Finance (October 2013-Present); Vice President, Finance for the Advanced Materials Group (prior to October 2013)
|
Gregory R. Chemnitz
|
|
60
|
|
Vice President, General Counsel and Secretary (January 2017-Present); Vice President, General Counsel (prior to January 2017)
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-average Exercise Price of Outstanding Options, Warrants and Rights
(3)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
(4)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
||||
2006 Stock Incentive Plan
(1)
|
919,798
|
|
|
$
|
30.97
|
|
|
1,438,174
|
|
2006 Non-employee Director Equity Plan
(2)
|
18,656
|
|
|
NA
|
|
|
140,408
|
|
|
Equity compensation plans not approved by security holders:
|
|
|
|
|
|
||||
None
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
938,454
|
|
|
NA
|
|
1,578,582
|
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
1. Financial Statements and Supplemental Information
|
(a)
|
2. Financial Statement Schedules
|
(a)
|
3. Exhibits
|
10.8
|
|
Amendment No. 7 to Third Amended and Restated Precious Metals Agreement dated as of September 30, 2016, among Materion Corporation and other borrowers and The Bank of Nova Scotia
(filed as Exhibit 10.1 to the Company's Form 8-K filed on October 6, 2016), incorporated herein by reference.
|
10.9
|
|
Amendment No. 8 to Third Amended and Restated Precious Metals Agreement dated as of February 28, 2017, among Materion Corporation and other borrowers and The Bank of Nova Scotia
(filed as Exhibit 99.2 to the Company's Form 8-K filed on March 1, 2017), incorporated herein by reference.
|
10.10
|
|
The Bank of Nova Scotia Consignment Agreement with Materion Advanced Materials Germany GMBH
dated as of February 28, 2017 (filed as Exhibit 99.1 to the Company's Form 8-K filed on March 1, 2017), incorporated herein by reference.
|
10.11
|
|
Form of Indemnification Agreement entered into by the Company and its executive officers
(filed as Exhibit 10a to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008), incorporated herein by reference.
|
10.12
|
|
Form of Indemnification Agreement entered into by the Company and its directors
(filed as Exhibit 10b to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008), incorporated herein by reference.
|
10.13*
|
|
Amended and Restated Form of Severance Agreement for Executive Officers
(filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 27, 2008), incorporated herein by reference.
|
10.14*
|
|
Amendment No. 1 to Amended and Restated Severance Agreement, dated May 4, 2011
(filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended July 1, 2011), incorporated herein by reference.
|
10.15*
|
|
Amended and Restated Form of Severance Agreement for Key Employees
(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 27, 2008), incorporated herein by reference.
|
10.16*
|
|
Form of Severance Agreement for Key Employees
(filed as Exhibit 10f to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
|
10.17*
|
|
Severance Agreement for Jugal Vijayvargiya
dated as of March 3, 2017 (filed as Exhibit 10.2 to the Company's Form 8-K filed on March 3, 2017), incorporated herein by reference.
|
10.18*
|
|
CEO Offer Letter for Jugal Vijayvargiya
dated as of March 1, 2017 (filed as Exhibit 10.1 to the Company's Form 8-K filed on March 3, 2017), incorporated herein by reference.
|
10.19*
|
|
Form of Trust Agreement between the Company and Key Trust Company of Ohio, N.A. (formerly Ameritrust Company National Association) on behalf of the Company’s executive officers (filed as Exhibit 10e to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994), incorporated herein by reference.
|
10.20*
|
|
2015 Management Incentive Plan
(filed as Exhibit 10i to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2014), incorporated herein by reference.
|
10.21*
|
|
2016 Management Incentive Plan
(filed as Exhibit 10j to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2015), incorporated herein by reference.
|
10.22*
|
|
Materion Corporation 2006 Stock Incentive Plan
(as Amended and Restated as of May 3, 2017) (filed as Exhibit 4.3 to the Registration Statement on Form S-8 (Registration No. 333-217633), incorporated herein by reference.
|
10.23*
|
|
Form of 2014 Performance-Based Restricted Stock Units (Cash-settled)
(filed as Exhibit 10y to the Company's Annual Report on Form 10-K for the year ended December 31, 2013), incorporated herein by reference.
|
10.24*
|
|
Form of 2014 Performance-Based Restricted Stock Units (Stock-settled)
(filed as Exhibit 10z to the Company's Annual Report on Form 10-K for the year ended December 31, 2013), incorporated herein by reference.
|
10.25*
|
|
Form of 2016 Restricted Stock Units Agreement (Cash-settled)
(filed as Exhibit 10t to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
|
10.26*
|
|
Form of 2016 Restricted Stock Units Agreement (Stock-settled)
(filed as Exhibit 10u to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
.
|
10.27*
|
|
Form of 2016 Performance-Based Restricted Stock Units (Cash-settled)
(filed as Exhibit 10v to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
.
|
10.28*
|
|
Form of 2016 Performance-Based Restricted Stock Units (Stock-settled)
(filed as Exhibit 10w to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
.
|
10.29*
|
|
Form of 2009 Stock Appreciation Rights Agreement
(filed as Exhibit 10ag to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008), incorporated herein by reference.
|
10.30*
|
|
Form of 2010 Stock Appreciation Rights Agreement
(filed as Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009), incorporated herein by reference.
|
10.31*
|
|
Form of 2011 Stock Appreciation Rights Agreement
(filed as Exhibit 10.3 to the Company’s Form 8-K filed on March 3, 2011), incorporated herein by reference.
|
10.32*
|
|
Form of 2016 Stock Appreciation Rights Agreement
(filed as Exhibit 10ad to the Company's Annual Report on Form 10-K for the year ended December 31, 2015), incorporated herein by reference.
.
|
10.33*
|
|
Materion Corporation Supplemental Retirement Benefit Plan
(filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 19, 2011), incorporated herein by reference.
|
10.34*
|
|
Amendment No. 1 to the Supplemental Retirement Benefit Plan
(filed as Exhibit 10al to the Company's Annual Report on Form 10-K for the year ended December 31, 2012), incorporated herein by reference.
|
10.35*
|
|
Amendment No. 2 to the Supplemental Retirement Benefit Plan
(filed as Exhibit 10ah to the Company's Annual Report on Form 10-K for the year ended December 31, 2013), incorporated herein by reference.
|
10.36*
|
|
Materion Corporation 2006 Non-employee Director Equity Plan
(as Amended and Restated as of May 3, 2017) (filed as Exhibit 4.3 to the Registration Statement on Form S-8 (Registration No. 333-217618), incorporated herein by reference.
|
10.37*
|
|
Amended and Restated Executive Deferred Compensation Plan II
(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 28, 2008), incorporated herein by reference.
|
10.38*
|
|
Amendment No. 1 to the Amended and Restated Executive Deferred Compensation Plan II
(filed as Exhibit 10bf to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008), incorporated herein by reference.
|
10.39*
|
|
Amendment No. 2 to the Amended and Restated Executive Deferred Compensation Plan II
(filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended July 3, 2009), incorporated herein by reference.
|
10.40*
|
|
Amendment No. 3 to the Amended and Restated Executive Deferred Compensation Plan II
, dated July 6, 2011 (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended July 1, 2011), incorporated herein by reference.
|
10.41*
|
|
Materion Corporation Restoration & Deferred Compensation Plan, dated March 4, 2015
(filed as Exhibit 10.1 to the Company's Form 8-K filed on March 10, 2015), incorporated herein by reference.
|
10.42*
|
|
Trust Agreement between the Company and Fidelity Investments dated September 26, 2006 for certain deferred compensation plans for Non-employee Directors of the Company
(filed as Exhibit 99.4 to the Current Report on Form 8-K filed by the Company on September 29, 2006), incorporated herein by reference.
|
10.43*
|
|
Trust Agreement between the Company and Fidelity Management Trust Company, dated June 25, 2009 relating to the Executive Deferred Compensation Plan II
(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended July 3, 2009), incorporated herein by reference.
|
(21)#
|
|
|
(23)#
|
|
|
(24)#
|
|
|
(31.1)#
|
|
|
(31.2)#
|
|
|
(32)#
|
|
|
(95)#
|
|
(101.INS)#
|
|
XBRL Instance Document.
|
(101.SCH)#
|
|
XBRL Taxonomy Extension Schema Document.
|
(101.CAL)#
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
(101.DEF)#
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
(101.LAB)#
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
(101.PRE)#
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
|
Denotes a compensatory plan or arrangement.
|
#
|
|
Filed herewith.
|
Item 16.
|
FORM 10-K SUMMARY
|
MATERION CORPORATION
|
|||
|
|
|
|
By:
|
|
/s/ Jugal K. Vijayvargiya
|
|
|
|
Jugal K. Vijayvargiya
|
|
|
|
President and Chief Executive Officer
|
/s/ Jugal K. Vijayvargiya
|
|
President and Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 15, 2018
|
Jugal K. Vijayvargiya
|
|
|
||
|
|
|
|
|
/s/ Joseph P. Kelley
|
|
Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 15, 2018
|
Joseph P. Kelley
|
|
|
||
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Joseph P. Keithley
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Vinod M. Khilnani
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
William B. Lawrence
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
N. Mohan Reddy
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Craig S. Shular
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Darlene J. S. Solomon
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Robert B. Toth
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 15, 2018
|
Geoffrey Wild
|
|
|
|
*
|
Joseph P. Kelley, by signing his name hereto, does sign and execute this report on behalf of each of the above-named officers and directors of Materion Corporation, pursuant to Powers of Attorney executed by each such officer and director filed with the Securities and Exchange Commission.
|
|
|
By:
|
|
/s/ Joseph P. Kelley
|
|
|
|
|
Joseph P. Kelley
|
February 15, 2018
|
|
|
|
Attorney-in-Fact
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
(Thousands)
|
|
Balance at Beginning of Period
|
|
ADDITIONS
|
|
Deduction
|
|
Balance at End
of Period
|
||||||||||||
|
Charged to Costs
and Expenses
|
|
Charged to Other
Accounts
|
|
||||||||||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts receivable
|
|
$
|
857
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
301
|
|
(A)
|
$
|
640
|
|
Inventory reserves and obsolescence
|
|
14,407
|
|
|
3,521
|
|
|
—
|
|
|
4,752
|
|
(B)
|
13,176
|
|
|||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts receivable
|
|
$
|
1,197
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
306
|
|
(A)
|
$
|
857
|
|
Inventory reserves and obsolescence
|
|
7,869
|
|
|
10,564
|
|
|
—
|
|
|
4,026
|
|
(B)
|
14,407
|
|
|||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts receivable
|
|
$
|
1,578
|
|
|
$
|
692
|
|
|
$
|
—
|
|
|
$
|
1,073
|
|
(A)
|
$
|
1,197
|
|
Inventory reserves and obsolescence
|
|
8,193
|
|
|
3,842
|
|
|
—
|
|
|
4,166
|
|
(B)
|
7,869
|
|
1 Year Materion Chart |
1 Month Materion Chart |
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