Form 8-K - Current report

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
	-2.09	-2.04%	100.25	101.58	99.00	101.14	83,071	22:21:29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 30, 2024

MATERION CORPORATION

(Exact name of registrant as specified in its charter)

Ohio 001-15885 34-1919973


(State or other jurisdiction of incorporation or organization)			(Commission File Number)			(I.R.S. Employer Identification No.)

6070 Parkland Blvd., Mayfield Hts., Ohio 44124


(Address of principal executive offices)						(Zip Code)

Registrant's telephone number, including area code (216) 486-4200

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class			Trading Symbol(s)			Name of each exchange on which registered

Common Stock, no par value MTRN New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§204.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Item 2.02 Results of Operations and Financial Condition.

On October 30, 2024, Materion Corporation issued a press release announcing its results for the third quarter of 2024. The press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibits.


Exhibit Number						Description of Exhibit
99.1						Materion Corporation press release, dated October 30, 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		Materion Corporation

October 30, 2024	By:	/s/ Shelly M. Chadwick
		Shelly M. Chadwick
		Vice President, Finance and Chief Financial Officer

Materion Corporation Reports Third Quarter 2024 Financial Results

MAYFIELD HEIGHTS, Ohio – October 30, 2024 - Materion Corporation (NYSE: MTRN) today reported third quarter 2024 financial results.

Financial Summary

•Net sales were $436.7 million; value-added sales1 were $263.8 million

•Net income was $22.3 million, or $1.07 per share, diluted; adjusted earnings of $1.41 per share

•Operating profit of $31.3 million; record third quarter adjusted EBITDA2 of $56.7 million versus $55.4 million in the prior year quarter

Business Highlights

•Delivered record quarterly adjusted EBITDA margin of 21.5%

•Strategic actions implemented to reduce cost and deliver strong performance despite soft environment

•Announcing sale of non-core large area targets business for architectural glass in Albuquerque, New Mexico4

•Appointed new Precision Optics President to lead business transformation

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

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

THIRD QUARTER 2024 RESULTS

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

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

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

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

OUTLOOK

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

ADJUSTED EARNINGS GUIDANCE

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

CONFERENCE CALL

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

FOOTNOTES

1 Value-added sales deducts the impact of pass-through metals from net sales

2 EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization

3 Details of the special items can be found in Attachments 4 through 8

4 Date of transaction occurred on October 25, 2024

ABOUT MATERION

Materion Corporation is a global leader in advanced materials solutions for high-performance industries including semiconductor, industrial, aerospace & defense, energy and automotive. With nearly 100 years of expertise in specialty engineered alloy systems, inorganic chemicals and powders, precious and non-precious metals, beryllium and beryllium composites, and

precision filters and optical coatings, Materion partners with customers to enable breakthrough solutions that move the world forward. Headquartered in Mayfield Heights, Ohio, the company employs more than 3,500 talented people worldwide, serving customers in more than 60 countries.

FORWARD-LOOKING STATEMENTS

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

Investor Contact:

Kyle Kelleher

(216) 383-4931

kyle.kelleher@materion.com

Media Contact:

Jason Saragian

(216) 383-6893

jason.saragian@materion.com

https://materion.com

Attachment 1

Materion Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)


	Third Quarter Ended				Nine Months Ended
(In thousands except per share amounts)	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Net sales	$	436,715	$	403,067	$	1,247,868	$	1,244,144
Cost of sales	355,777		314,131		1,014,859		974,817
Gross margin	80,938		88,936		233,009		269,327
Selling, general, and administrative expense	35,009		38,806		104,454		118,053
Research and development expense	7,868		6,322		22,712		21,098
Restructuring expense (income)	1,493		1,077		6,161		3,194
Other — net	5,309		6,211		14,112		18,178
Operating profit	31,259		36,520		85,570		108,804
Other non-operating income—net	(642)		(685)		(1,925)		(2,141)
Interest expense — net	8,839		7,678		25,920		22,820
Income before income taxes	23,062		29,527		61,575		88,125
Income tax expense	768		2,963		6,836		11,891
Net income	$	22,294	$	26,564	$	54,739	$	76,234
Basic earnings per share:
Net income per share of common stock	$	1.07	$	1.29	$	2.64	$	3.70
Diluted earnings per share:
Net income per share of common stock	$	1.07	$	1.27	$	2.61	$	3.65
Weighted-average number of shares of common stock outstanding:
Basic	20,749		20,640		20,723		20,611
Diluted	20,920		20,905		20,935		20,891

Attachment 2

Materion Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)


(Thousands)	September 27, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	17,874	$	13,294
Accounts receivable, net	214,576		192,747
Inventories, net	476,596		441,597
Prepaid and other current assets	86,314		61,744
Total current assets	795,360		709,382
Deferred income taxes	4,914		4,908
Property, plant, and equipment	1,328,355		1,281,622
Less allowances for depreciation, depletion, and amortization	(802,294)		(766,939)
Property, plant, and equipment—net	526,061		514,683
Operating lease, right-of-use assets	58,871		57,645
Intangible assets, net	124,281		133,571
Other assets	26,384		21,664
Goodwill	321,147		320,873
Total Assets	$	1,857,018	$	1,762,726
Liabilities and Shareholders’ Equity
Current liabilities
Short-term debt	$	37,542	$	38,597
Accounts payable	130,310		125,663
Salaries and wages	19,463		25,912
Other liabilities and accrued items	48,850		45,773
Income taxes	1,166		5,207
Unearned revenue	15,497		13,843
Total current liabilities	252,828		254,995
Other long-term liabilities	12,513		13,300
Operating lease liabilities	56,698		53,817
Finance lease liabilities	13,438		13,744
Retirement and post-employment benefits	26,178		26,334
Unearned income	81,553		103,983
Long-term income taxes	4,551		3,815
Deferred income taxes	19,608		20,109
Long-term debt	457,756		387,576
Shareholders’ equity	931,895		885,053
Total Liabilities and Shareholders’ Equity	$	1,857,018	$	1,762,726

Attachment 3

Materion Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
(Thousands)	September 27, 2024		September 29, 2023
Cash flows from operating activities:
Net income	$	54,739	$	76,234
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization	51,291		46,524
Amortization of deferred financing costs in interest expense	1,286		1,284
Stock-based compensation expense (non-cash)	7,715		7,578
Deferred income tax expense (benefit)	(9)		(149)
Changes in assets and liabilities:
Accounts receivable	(21,921)		27,832
Inventory	(34,215)		(30,868)
Prepaid and other current assets	(24,646)		(16,175)
Accounts payable and accrued expenses	3,704		(25,533)
Unearned revenue	(17,568)		(12,398)
Interest and taxes payable	(3,233)		(1,730)
Unearned income due to customer prepayments	—		16,676
Other-net	(5,579)		(4,770)
Net cash provided by operating activities	11,564		84,505
Cash flows from investing activities:
Payments for purchase of property, plant, and equipment	(50,730)		(85,251)
Payments for mine development	(10,376)		(9,326)
Proceeds from sale of property, plant, and equipment	561		417

Net cash used in investing activities	(60,545)		(94,160)
Cash flows from financing activities:
Proceeds from borrowings under credit facilities, net	91,057		39,649

Repayment of long-term debt	(22,694)		(11,579)
Principal payments under finance lease obligations	(567)		(1,297)
Cash dividends paid	(8,295)		(7,937)
Payments of withholding taxes for stock-based compensation awards	(6,575)		(5,101)
Net cash provided by financing activities	52,926		13,735
Effects of exchange rate changes	635		(780)
Net change in cash and cash equivalents	4,580		3,300
Cash and cash equivalents at beginning of period	13,294		13,101
Cash and cash equivalents at end of period	$	17,874	$	16,401

Attachment 4

Materion Corporation and Subsidiaries

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

(Unaudited)


	Third Quarter Ended				Nine Months Ended
(Millions)	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Net Sales
Performance Materials	$	177.4	$	184.6	$	533.5	$	554.4
Electronic Materials	236.9		192.3		641.6		611.8
Precision Optics	22.4		26.2		72.8		77.9
Other	—		—		—		—
Total	$	436.7	$	403.1	$	1,247.9	$	1,244.1

Less: Pass-through Metal Cost
Performance Materials	$	13.8	$	15.7	$	41.2	$	51.9
Electronic Materials	159.1		116.8		405.0		354.8
Precision Optics	—		0.1		0.2		0.1
Other	—		—		—		—
Total	$	172.9	$	132.6	$	446.4	$	406.8

Value-added Sales (non-GAAP)
Performance Materials	$	163.6	$	168.9	$	492.3	$	502.5
Electronic Materials	77.8		75.5		236.6		257.0
Precision Optics	22.4		26.1		72.6		77.8
Other	—		—		—		—
Total	$	263.8	$	270.5	$	801.5	$	837.3

Gross Margin
Performance Materials(1)	$	51.8	$	57.4	$	140.6	$	166.1
Electronic Materials(1)	23.3		23.1		73.5		78.9
Precision Optics(1)	5.8		8.4		18.9		24.3
Other	—		—		—		—
Total(1)	$	80.9	$	88.9	$	233.0	$	269.3
(1) See reconciliation of gross margin to adjusted gross margin in Attachment 8
Note: Quarterly information presented within this document and previously disclosed quarterly information may not equal the total computed for the year due to rounding


	Third Quarter Ended				Nine Months Ended
(Millions)	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Operating Profit/(Loss)
Performance Materials	$	34.2	$	38.9	$	88.7	$	110.9
Electronic Materials	7.8		6.0		26.5		24.8
Precision Optics	(3.0)		0.3		(7.7)		(1.6)
Other	(7.7)		(8.7)		(21.9)		(25.3)
Total	$	31.3	$	36.5	$	85.6	$	108.8

Non-Operating (Income)/Expense
Performance Materials	$	0.1	$	0.2	$	0.4	$	0.4
Electronic Materials	—		—		—		—
Precision Optics	(0.1)		(0.2)		(0.4)		(0.6)
Other	(0.6)		(0.7)		(1.9)		(2.0)
Total	$	(0.6)	$	(0.7)	$	(1.9)	$	(2.2)

Depreciation, Depletion, and Amortization
Performance Materials	$	10.7	$	7.7	$	27.6	$	23.6
Electronic Materials	4.5		4.1		13.6		12.7
Precision Optics	2.9		2.8		8.6		8.7
Other	0.5		0.5		1.5		1.5
Total	$	18.6	$	15.1	$	51.3	$	46.5

Segment EBITDA
Performance Materials	$	44.8	$	46.4	$	115.9	$	134.1
Electronic Materials	12.3		10.1		40.1		37.5
Precision Optics	—		3.3		1.3		7.7
Other	(6.6)		(7.5)		(18.5)		(21.8)
Total	$	50.5	$	52.3	$	138.8	$	157.5

Special Items(2)
Performance Materials	$	1.7	$	0.1	$	9.4	$	1.1
Electronic Materials	3.3		2.9		7.1		4.5
Precision Optics	0.5		0.1		1.7		1.2
Other	0.7		—		2.7		0.1
Total	$	6.2	$	3.1	$	20.9	$	6.9

Adjusted EBITDA Excluding Special Items
Performance Materials	$	46.5	$	46.5	$	125.3	$	135.2
Electronic Materials	15.6		13.0		47.2		42.0
Precision Optics	0.5		3.4		3.0		8.9
Other	(5.9)		(7.5)		(15.8)		(21.7)
Total	$	56.7	$	55.4	$	159.7	$	164.4

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

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

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

Attachment 5

Materion Corporation and Subsidiaries

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

(Unaudited)


	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		% of VA		September 29, 2023		% of VA		September 27, 2024		% of VA		September 29, 2023		% of VA
Net sales	$	436.7			$	403.1			$	1,247.9			$	1,244.1
Pass-through metal cost	172.9				132.6				446.4				406.8
Value-added sales	$	263.8			$	270.5			$	801.5			$	837.3

Net income	$	22.3	8.5	%	$	26.6	9.8	%	$	54.7	6.8	%	$	76.2	9.1	%
Income tax expense	0.8		0.3	%	3.0		1.1	%	6.9		0.9	%	11.9		1.4	%
Interest expense - net	8.8		3.3	%	7.6		2.8	%	25.9		3.2	%	22.9		2.7	%
Depreciation, depletion and amortization	18.6		7.1	%	15.1		5.6	%	51.3		6.4	%	46.5		5.6	%
Consolidated EBITDA	$	50.5	19.1	%	$	52.3	19.3	%	$	138.8	17.3	%	$	157.5	18.8	%

Special items
Restructuring and cost reduction	$	1.6	0.6	%	$	3.1	1.2	%	$	10.7	1.3	%	$	6.9	0.8	%
Electronic Materials inventory adjustment	2.8		1.1	%	—		—	%	2.8		0.3	%	—		—	%
Business transformation costs	0.6		0.2	%	—		—	%	0.6		0.1	%	—		—	%
Additional start up resources and scrap	1.2		0.5	%	—		—	%	6.1		0.8	%	—		—	%
Merger, acquisition and divestiture related costs	—		—	%	—		—	%	0.7		0.1	%	—		—	%
Total special items	6.2		2.4	%	3.1		1.2	%	20.9		2.6	%	6.9		0.8	%
Adjusted EBITDA	$	56.7	21.5	%	$	55.4	20.5	%	$	159.7	19.9	%	$	164.4	19.6	%

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

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

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

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

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

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

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

Attachment 6

Materion Corporation and Subsidiaries

Reconciliation of Net Income to Adjusted Net Income

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


	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		Diluted EPS		September 29, 2023		Diluted EPS		September 27, 2024		Diluted EPS		September 29, 2023		Diluted EPS
Net income and EPS	$	22.3	$	1.07	$	26.6	$	1.27	$	54.7	$	2.61	$	76.2	$	3.65

Special items
Restructuring and cost reduction	1.6				3.1				10.7				6.9
Electronic Materials inventory adjustment	2.8				—				2.8				—
Business transformation costs	0.6				—				0.6				—
Additional start up resources and scrap	1.2				—				6.1				—
Merger, acquisition and divestiture related costs	—				—				0.7				—
Provision for income taxes(1)	(1.4)				(0.6)				(3.6)				(2.1)
Total special items	4.8		0.22		2.5		0.12		17.3		0.83		4.8		0.23
Adjusted net income and adjusted EPS	$	27.1	$	1.29	$	29.1	$	1.39	$	72.0	$	3.44	$	81.0	$	3.88
Acquisition amortization (net of tax)	2.5		0.12		2.5		0.12		7.4		0.35		7.4		0.35
Adjusted net income and adjusted EPS excl. amortization	$	29.6	$	1.41	$	31.6	$	1.51	$	79.4	$	3.79	$	88.4	$	4.23

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

Attachment 7


Reconciliation of Segment Net sales to Segment Value-added sales and Segment EBITDA to Adjusted Segment EBITDA (Unaudited)
Performance Materials
	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		% of VA		September 29, 2023		% of VA		September 27, 2024		% of VA		September 29, 2023		% of VA
Net sales	$	177.4			$	184.6			$	533.5			$	554.4
Pass-through metal cost	13.8				15.7				41.2				51.9
Value-added sales	$	163.6			$	168.9			$	492.3			$	502.5

EBITDA	$	44.8	27.4	%	$	46.4	27.5	%	$	115.9	23.5	%	$	134.1	26.7	%
Restructuring and cost reduction	0.1		0.1	%	0.1		—	%	2.9		0.6	%	1.1		0.2	%
Additional start up resources and scrap	1.2		0.7	%	—		—	%	6.1		1.2	%	—		—	%
Business transformation costs	0.4		0.2	%	—		—	%	0.4		0.1	%	—		—	%


Adjusted EBITDA	$	46.5	28.4	%	$	46.5	27.5	%	$	125.3	25.4	%	$	135.2	26.9	%

Electronic Materials
	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		% of VA		September 29, 2023		% of VA		September 27, 2024		% of VA		September 29, 2023		% of VA
Net sales	$	236.9			$	192.3			$	641.6			$	611.8
Pass-through metal cost	159.1				116.8				405.0				354.8
Value-added sales	$	77.8			$	75.5			$	236.6			$	257.0

EBITDA	$	12.3	15.8	%	$	10.1	13.4	%	$	40.1	16.9	%	$	37.5	14.6	%
Restructuring and cost reduction	0.5		0.7	%	2.9		3.8	%	4.3		1.8	%	4.5		1.8	%


Electronic Materials inventory adjustment	2.8		3.6	%	—		—	%	2.8		1.2	%	—		—	%

Adjusted EBITDA	$	15.6	20.1	%	$	13.0	17.2	%	$	47.2	19.9	%	$	42.0	16.3	%

Precision Optics
	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		% of VA		September 29, 2023		% of VA		September 27, 2024		% of VA		September 29, 2023		% of VA
Net sales	$	22.4			$	26.2			$	72.8			$	77.9
Pass-through metal cost	—				0.1				0.2				0.1
Value-added sales	$	22.4			$	26.1			$	72.6			$	77.8

EBITDA	$	—	—	%	$	3.3	12.6	%	$	1.3	1.8	%	$	7.7	9.9	%
Restructuring and cost reduction	0.5		2.2	%	0.1		0.4	%	1.7		2.3	%	1.2		1.5	%




Adjusted EBITDA	$	0.5	2.2	%	$	3.4	13.0	%	$	3.0	4.1	%	$	8.9	11.4	%

Other
	Third Quarter Ended								Nine Months Ended
(Millions)	September 27, 2024		% of VA		September 29, 2023		% of VA		September 27, 2024		% of VA		September 29, 2023		% of VA
EBITDA	$	(6.6)			$	(7.5)			$	(18.5)			$	(21.8)
Restructuring and cost reduction	0.5				—				1.8				0.1

Business transformation costs	0.2				—				0.2				—

Merger, acquisition and divestiture related costs	—				—				0.7				—
Adjusted EBITDA	$	(5.9)			$	(7.5)			$	(15.8)			$	(21.7)

Attachment 8

Materion Corporation and Subsidiaries

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

(Unaudited)


	Third Quarter Ended				Nine Months Ended
(Millions)	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Gross Margin
Performance Materials	$	51.8	$	57.4	$	140.6	$	166.1
Electronic Materials	23.3		23.1		73.5		78.9
Precision Optics	5.8		8.4		18.9		24.3
Other	—		—		—		—
Total	$	80.9	$	88.9	$	233.0	$	269.3

Special Items (1)
Performance Materials	$	1.3	$	—	$	7.5	$	0.7
Electronic Materials	2.6		1.8		4.6		2.4
Precision Optics	—		0.1		0.2		0.4
Other	—		—		—		—
Total	$	3.9	$	1.9	$	12.3	$	3.5

Adjusted Gross Margin
Performance Materials	$	53.1	$	57.4	$	148.1	$	166.8
Electronic Materials	25.9		24.9		78.1		81.3
Precision Optics	5.8		8.5		19.1		24.7
Other	—		—		—		—
Total	$	84.8	$	90.8	$	245.3	$	272.8

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

DEI Document	Oct. 30, 2024
Document Information [Abstract]
Entity Central Index Key	0001104657
Document Type	8-K
Document Period End Date	Oct. 30, 2024
Entity Registrant Name	MATERION CORPORATION
Entity Incorporation, State or Country Code	OH
Amendment Flag	false
Entity Emerging Growth Company	false
Entity File Number	001-15885
Entity Tax Identification Number	34-1919973
Entity Address, Address Line One	6070 Parkland Blvd.
Entity Address, City or Town	Mayfield Hts.
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44124
City Area Code	216
Local Phone Number	486-4200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	MTRN
Security Exchange Name	NYSE

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MTRN Materion Corporation