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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 | |
---|---|---|---|---|---|---|---|---|
3.58 | 3.10% | 118.94 | 119.70 | 116.32 | 116.86 | 177,627 | 22:26:22 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
|
|
34-1919973
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
6070 Parkland Blvd., Mayfield Heights, Ohio
|
|
44124
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
þ
|
|
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
||
|
|
|
Emerging growth company
¨
|
|
|
Second Quarter Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
|
$
|
309,085
|
|
|
$
|
295,842
|
|
|
$
|
612,552
|
|
|
$
|
536,511
|
|
Cost of sales
|
|
247,247
|
|
|
241,064
|
|
|
492,434
|
|
|
438,577
|
|
||||
Gross margin
|
|
61,838
|
|
|
54,778
|
|
|
120,118
|
|
|
97,934
|
|
||||
Selling, general, and administrative expense
|
|
38,473
|
|
|
37,928
|
|
|
76,935
|
|
|
71,449
|
|
||||
Research and development expense
|
|
3,860
|
|
|
3,544
|
|
|
7,503
|
|
|
6,674
|
|
||||
Other—net
|
|
4,313
|
|
|
3,204
|
|
|
7,237
|
|
|
6,022
|
|
||||
Operating profit
|
|
15,192
|
|
|
10,102
|
|
|
28,443
|
|
|
13,789
|
|
||||
Interest expense—net
|
|
667
|
|
|
695
|
|
|
1,397
|
|
|
1,188
|
|
||||
Other non-operating expense—net
|
|
437
|
|
|
368
|
|
|
879
|
|
|
635
|
|
||||
Income before income taxes
|
|
14,088
|
|
|
9,039
|
|
|
26,167
|
|
|
11,966
|
|
||||
Income tax expense
|
|
2,944
|
|
|
1,726
|
|
|
4,459
|
|
|
1,603
|
|
||||
Net income
|
|
$
|
11,144
|
|
|
$
|
7,313
|
|
|
$
|
21,708
|
|
|
$
|
10,363
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income per share of common stock
|
|
$
|
0.55
|
|
|
$
|
0.37
|
|
|
$
|
1.08
|
|
|
$
|
0.52
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income per share of common stock
|
|
$
|
0.54
|
|
|
$
|
0.36
|
|
|
$
|
1.05
|
|
|
$
|
0.51
|
|
Cash dividends per share
|
|
$
|
0.105
|
|
|
$
|
0.100
|
|
|
$
|
0.205
|
|
|
$
|
0.195
|
|
Weighted-average number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
20,221
|
|
|
20,012
|
|
|
20,178
|
|
|
19,991
|
|
||||
Diluted
|
|
20,593
|
|
|
20,347
|
|
|
20,583
|
|
|
20,348
|
|
|
|
Second Quarter Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
|
$
|
11,144
|
|
|
$
|
7,313
|
|
|
$
|
21,708
|
|
|
$
|
10,363
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(944
|
)
|
|
275
|
|
|
169
|
|
|
1,378
|
|
||||
Derivative and hedging activity, net of tax
|
|
1,763
|
|
|
(174
|
)
|
|
1,088
|
|
|
(635
|
)
|
||||
Pension and post-employment benefit adjustment, net of tax
|
|
1,296
|
|
|
759
|
|
|
2,574
|
|
|
1,516
|
|
||||
Other comprehensive income
|
|
2,115
|
|
|
860
|
|
|
3,831
|
|
|
2,259
|
|
||||
Comprehensive income
|
|
$
|
13,259
|
|
|
$
|
8,173
|
|
|
$
|
25,539
|
|
|
$
|
12,622
|
|
|
|
(Unaudited)
|
|
|
||||
|
|
June 29,
|
|
Dec. 31,
|
||||
(Thousands)
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
42,895
|
|
|
$
|
41,844
|
|
Accounts receivable
|
|
135,699
|
|
|
124,014
|
|
||
Inventories
|
|
209,204
|
|
|
220,352
|
|
||
Prepaid and other current assets
|
|
19,617
|
|
|
24,733
|
|
||
Total current assets
|
|
407,415
|
|
|
410,943
|
|
||
Long-term deferred income taxes
|
|
16,588
|
|
|
17,047
|
|
||
Property, plant, and equipment
|
|
894,306
|
|
|
891,789
|
|
||
Less allowances for depreciation, depletion, and amortization
|
|
(637,730
|
)
|
|
(636,211
|
)
|
||
Property, plant, and equipment—net
|
|
256,576
|
|
|
255,578
|
|
||
Intangible assets—net
|
|
7,899
|
|
|
9,847
|
|
||
Other assets
|
|
6,991
|
|
|
6,992
|
|
||
Goodwill
|
|
90,697
|
|
|
90,677
|
|
||
Total Assets
|
|
$
|
786,166
|
|
|
$
|
791,084
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Short-term debt
|
|
$
|
798
|
|
|
$
|
777
|
|
Accounts payable
|
|
46,240
|
|
|
49,059
|
|
||
Salaries and wages
|
|
32,299
|
|
|
42,694
|
|
||
Other liabilities and accrued items
|
|
27,182
|
|
|
28,044
|
|
||
Income taxes
|
|
2,994
|
|
|
1,084
|
|
||
Unearned revenue
|
|
7,576
|
|
|
5,451
|
|
||
Total current liabilities
|
|
117,089
|
|
|
127,109
|
|
||
Other long-term liabilities
|
|
14,203
|
|
|
14,895
|
|
||
Capital lease obligations
|
|
15,896
|
|
|
16,072
|
|
||
Retirement and post-employment benefits
|
|
80,944
|
|
|
93,225
|
|
||
Unearned income
|
|
34,734
|
|
|
36,905
|
|
||
Long-term income taxes
|
|
4,896
|
|
|
4,857
|
|
||
Long-term deferred income taxes
|
|
210
|
|
|
213
|
|
||
Long-term debt
|
|
2,453
|
|
|
2,827
|
|
||
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 at June 29 and December 31)
|
|
230,763
|
|
|
223,484
|
|
||
Retained earnings
|
|
553,523
|
|
|
536,116
|
|
||
Common stock in treasury (6,912 shares at June 29 and 7,042 shares at December 31)
|
|
(173,825
|
)
|
|
(166,128
|
)
|
||
Accumulated other comprehensive loss
|
|
(99,106
|
)
|
|
(102,937
|
)
|
||
Other equity transactions
|
|
4,386
|
|
|
4,446
|
|
||
Total shareholders' equity
|
|
515,741
|
|
|
494,981
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
786,166
|
|
|
$
|
791,084
|
|
|
|
Six Months Ended
|
||||||
|
|
June 29,
|
|
June 30,
|
||||
(Thousands)
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
21,708
|
|
|
$
|
10,363
|
|
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
|
|
|
|
|
||||
Depreciation, depletion, and amortization
|
|
18,349
|
|
|
20,725
|
|
||
Amortization of deferred financing costs in interest expense
|
|
514
|
|
|
440
|
|
||
Non-cash compensation expense
|
|
5,412
|
|
|
5,816
|
|
||
Deferred income tax expense
|
|
429
|
|
|
658
|
|
||
Changes in assets and liabilities net of acquired assets and liabilities:
|
|
|
|
|
||||
Decrease (increase) in accounts receivable
|
|
(12,060
|
)
|
|
(30,882
|
)
|
||
Decrease (increase) in inventories
|
|
10,428
|
|
|
(6,498
|
)
|
||
Decrease (increase) in prepaid and other current assets
|
|
4,928
|
|
|
(9,267
|
)
|
||
Increase (decrease) in accounts payable and accrued expenses
|
|
(14,189
|
)
|
|
15,519
|
|
||
Increase (decrease) in unearned revenue
|
|
2,132
|
|
|
1,685
|
|
||
Increase (decrease) in interest and taxes payable
|
|
2,084
|
|
|
(1,115
|
)
|
||
Domestic pension plan contributions
|
|
(13,000
|
)
|
|
(4,000
|
)
|
||
Other-net
|
|
2,569
|
|
|
(3,141
|
)
|
||
Net cash provided by operating activities
|
|
29,304
|
|
|
303
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Payments for purchase of property, plant, and equipment
|
|
(17,153
|
)
|
|
(11,252
|
)
|
||
Payments for mine development
|
|
(3,425
|
)
|
|
(509
|
)
|
||
Payments for acquisition
|
|
—
|
|
|
(16,504
|
)
|
||
Proceeds from sale of property, plant, and equipment
|
|
27
|
|
|
27
|
|
||
Net cash used in investing activities
|
|
(20,551
|
)
|
|
(28,238
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of short-term debt
|
|
—
|
|
|
2,387
|
|
||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
45,000
|
|
||
Repayment of long-term debt
|
|
(383
|
)
|
|
(25,362
|
)
|
||
Principal payments under capital lease obligations
|
|
(425
|
)
|
|
(383
|
)
|
||
Cash dividends paid
|
|
(4,137
|
)
|
|
(3,899
|
)
|
||
Deferred financing costs
|
|
—
|
|
|
(300
|
)
|
||
Repurchase of common stock
|
|
—
|
|
|
(1,086
|
)
|
||
Payments of withholding taxes for stock-based compensation awards
|
|
(2,765
|
)
|
|
(2,302
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(7,710
|
)
|
|
14,055
|
|
||
Effects of exchange rate changes
|
|
8
|
|
|
913
|
|
||
Net change in cash and cash equivalents
|
|
1,051
|
|
|
(12,967
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
41,844
|
|
|
31,464
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
42,895
|
|
|
$
|
18,497
|
|
(Thousands)
|
|
December 31, 2017
|
|
Adjustments due to ASC 606
|
|
January 1, 2018
|
||||||
Assets
|
|
|
|
|
|
|
|
|
||||
Unbilled receivables
|
|
$
|
—
|
|
|
$
|
2,658
|
|
|
$
|
2,658
|
|
Inventories
|
|
220,352
|
|
|
(2,059
|
)
|
|
218,293
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
||||||
Other liabilities and accrued items
|
|
$
|
28,044
|
|
|
61
|
|
|
28,105
|
|
||
Deferred income taxes
|
|
213
|
|
|
113
|
|
|
326
|
|
|||
Retained earnings
|
|
536,116
|
|
|
425
|
|
|
536,541
|
|
(Thousands)
|
|
June 29, 2018
|
|
January 1, 2018
|
|
$ change
|
|
% change
|
|||||||
Accounts receivable, trade
|
|
$
|
128,450
|
|
|
$
|
122,393
|
|
|
$
|
6,057
|
|
|
5
|
%
|
Unbilled receivables
|
|
6,341
|
|
|
2,658
|
|
|
3,683
|
|
|
139
|
%
|
|||
Unearned revenue
|
|
7,576
|
|
|
5,451
|
|
|
2,125
|
|
|
39
|
%
|
(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)
|
|
Performance
Alloys and
Composites
|
|
Advanced Materials
|
|
Precision Coatings
|
|
Other
|
|
Total
|
||||||||||
Second Quarter 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
129,765
|
|
|
$
|
150,324
|
|
|
$
|
28,996
|
|
|
$
|
—
|
|
|
$
|
309,085
|
|
Intersegment sales
|
|
3
|
|
|
11,400
|
|
|
—
|
|
|
—
|
|
|
11,403
|
|
|||||
Value-added sales
|
|
110,150
|
|
|
57,267
|
|
|
23,393
|
|
|
(908
|
)
|
|
189,902
|
|
|||||
Operating profit (loss)
|
|
12,309
|
|
|
5,572
|
|
|
2,233
|
|
|
(4,922
|
)
|
|
15,192
|
|
|||||
Second Quarter 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
108,541
|
|
|
$
|
157,044
|
|
|
$
|
30,257
|
|
|
$
|
—
|
|
|
$
|
295,842
|
|
Intersegment sales
|
|
4
|
|
|
13,247
|
|
|
—
|
|
|
—
|
|
|
13,251
|
|
|||||
Value-added sales
|
|
92,686
|
|
|
62,041
|
|
|
22,613
|
|
|
(1,241
|
)
|
|
176,099
|
|
|||||
Operating profit (loss)
|
|
5,548
|
|
|
8,670
|
|
|
2,314
|
|
|
(6,430
|
)
|
|
10,102
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First Six Months 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
248,001
|
|
|
$
|
303,869
|
|
|
$
|
60,682
|
|
|
$
|
—
|
|
|
$
|
612,552
|
|
Intersegment sales
|
|
31
|
|
|
23,052
|
|
|
—
|
|
|
—
|
|
|
23,083
|
|
|||||
Value-added sales
|
|
210,449
|
|
|
115,550
|
|
|
47,034
|
|
|
(1,818
|
)
|
|
371,215
|
|
|||||
Operating profit (loss)
|
|
22,170
|
|
|
11,470
|
|
|
5,608
|
|
|
(10,805
|
)
|
|
28,443
|
|
|||||
First Six Months 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
201,094
|
|
|
$
|
271,780
|
|
|
$
|
63,637
|
|
|
$
|
—
|
|
|
$
|
536,511
|
|
Intersegment sales
|
|
59
|
|
|
29,694
|
|
|
—
|
|
|
—
|
|
|
29,753
|
|
|||||
Value-added sales
|
|
171,897
|
|
|
109,329
|
|
|
45,914
|
|
|
(2,060
|
)
|
|
325,080
|
|
|||||
Operating profit (loss)
|
|
5,737
|
|
|
15,117
|
|
|
4,532
|
|
|
(11,597
|
)
|
|
13,789
|
|
(Thousands)
|
|
Performance Alloys and Composites
|
|
Advanced Materials
|
|
Precision Coatings
|
|
Other
|
|
Total
|
||||||||||
Second Quarter 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
End Market
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer Electronics
|
|
$
|
26,469
|
|
|
$
|
88,230
|
|
|
$
|
5,035
|
|
|
$
|
—
|
|
|
$
|
119,734
|
|
Industrial Components
|
|
25,025
|
|
|
11,501
|
|
|
2,900
|
|
|
—
|
|
|
39,426
|
|
|||||
Energy
|
|
10,202
|
|
|
16,311
|
|
|
8
|
|
|
—
|
|
|
26,521
|
|
|||||
Automotive Electronics
|
|
19,879
|
|
|
—
|
|
|
469
|
|
|
—
|
|
|
20,348
|
|
|||||
Defense
|
|
14,932
|
|
|
3,353
|
|
|
4,887
|
|
|
—
|
|
|
23,172
|
|
|||||
Medical
|
|
1,816
|
|
|
4,712
|
|
|
14,455
|
|
|
—
|
|
|
20,983
|
|
|||||
Telecom Infrastructure
|
|
10,890
|
|
|
7,968
|
|
|
—
|
|
|
—
|
|
|
18,858
|
|
|||||
Other
|
|
20,552
|
|
|
18,249
|
|
|
1,242
|
|
|
—
|
|
|
40,043
|
|
|||||
Total
|
|
$
|
129,765
|
|
|
$
|
150,324
|
|
|
$
|
28,996
|
|
|
$
|
—
|
|
|
$
|
309,085
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First Six Months 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
End Market
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer Electronics
|
|
$
|
51,827
|
|
|
$
|
170,280
|
|
|
$
|
9,314
|
|
|
$
|
—
|
|
|
$
|
231,421
|
|
Industrial Components
|
|
53,546
|
|
|
24,800
|
|
|
5,392
|
|
|
—
|
|
|
83,738
|
|
|||||
Energy
|
|
18,006
|
|
|
39,747
|
|
|
8
|
|
|
—
|
|
|
57,761
|
|
|||||
Automotive Electronics
|
|
38,849
|
|
|
—
|
|
|
691
|
|
|
—
|
|
|
39,540
|
|
|||||
Defense
|
|
21,554
|
|
|
7,838
|
|
|
9,202
|
|
|
—
|
|
|
38,594
|
|
|||||
Medical
|
|
3,559
|
|
|
9,121
|
|
|
33,525
|
|
|
—
|
|
|
46,205
|
|
|||||
Telecom Infrastructure
|
|
18,984
|
|
|
15,325
|
|
|
59
|
|
|
—
|
|
|
34,368
|
|
|||||
Other
|
|
41,676
|
|
|
36,758
|
|
|
2,491
|
|
|
—
|
|
|
80,925
|
|
|||||
Total
|
|
$
|
248,001
|
|
|
$
|
303,869
|
|
|
$
|
60,682
|
|
|
$
|
—
|
|
|
$
|
612,552
|
|
|
|
Second Quarter Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Metal consignment fees
|
|
$
|
2,588
|
|
|
$
|
2,062
|
|
|
$
|
5,017
|
|
|
$
|
3,747
|
|
Amortization of intangible assets
|
|
561
|
|
|
1,232
|
|
|
1,334
|
|
|
2,277
|
|
||||
Foreign currency exchange/translation (gain)
|
|
1,230
|
|
|
(336
|
)
|
|
1,219
|
|
|
(593
|
)
|
||||
Net (gain) loss on disposal of fixed assets
|
|
(3
|
)
|
|
119
|
|
|
23
|
|
|
147
|
|
||||
Other items
|
|
(63
|
)
|
|
127
|
|
|
(356
|
)
|
|
444
|
|
||||
Total
|
|
$
|
4,313
|
|
|
$
|
3,204
|
|
|
$
|
7,237
|
|
|
$
|
6,022
|
|
|
|
Second Quarter Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator for basic and diluted EPS:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
11,144
|
|
|
$
|
7,313
|
|
|
$
|
21,708
|
|
|
$
|
10,363
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic EPS:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
|
20,221
|
|
|
20,012
|
|
|
20,178
|
|
|
19,991
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock appreciation rights
|
|
166
|
|
|
125
|
|
|
185
|
|
|
152
|
|
||||
Restricted stock units
|
|
75
|
|
|
102
|
|
|
85
|
|
|
102
|
|
||||
Performance-based restricted stock units
|
|
131
|
|
|
108
|
|
|
135
|
|
|
103
|
|
||||
Diluted potential common shares
|
|
372
|
|
|
335
|
|
|
405
|
|
|
357
|
|
||||
Denominator for diluted EPS:
|
|
|
|
|
|
|
|
|
||||||||
Adjusted weighted-average shares outstanding
|
|
20,593
|
|
|
20,347
|
|
|
20,583
|
|
|
20,348
|
|
||||
Basic EPS
|
|
$
|
0.55
|
|
|
$
|
0.37
|
|
|
$
|
1.08
|
|
|
$
|
0.52
|
|
Diluted EPS
|
|
$
|
0.54
|
|
|
$
|
0.36
|
|
|
$
|
1.05
|
|
|
$
|
0.51
|
|
|
|
June 29,
|
|
December 31,
|
||||
(Thousands)
|
|
2018
|
|
2017
|
||||
Raw materials and supplies
|
|
$
|
40,550
|
|
|
$
|
42,958
|
|
Work in process
|
|
176,216
|
|
|
187,719
|
|
||
Finished goods
|
|
41,017
|
|
|
34,418
|
|
||
Subtotal
|
|
$
|
257,783
|
|
|
$
|
265,095
|
|
Less: LIFO reserve balance
|
|
48,579
|
|
|
44,743
|
|
||
Inventories
|
|
$
|
209,204
|
|
|
$
|
220,352
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
Second Quarter Ended
|
|
Second Quarter Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Components of net periodic benefit cost (benefit)
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1,674
|
|
|
$
|
1,777
|
|
|
$
|
28
|
|
|
$
|
23
|
|
Interest cost
|
|
2,397
|
|
|
2,370
|
|
|
99
|
|
|
99
|
|
||||
Expected return on plan assets
|
|
(3,697
|
)
|
|
(3,378
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
|
(30
|
)
|
|
(73
|
)
|
|
(374
|
)
|
|
(374
|
)
|
||||
Amortization of net loss
|
|
1,959
|
|
|
1,611
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (benefit)
|
|
$
|
2,303
|
|
|
$
|
2,307
|
|
|
$
|
(247
|
)
|
|
$
|
(252
|
)
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Components of net periodic benefit cost (benefit)
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
3,348
|
|
|
$
|
3,496
|
|
|
$
|
56
|
|
|
$
|
46
|
|
Interest cost
|
|
4,794
|
|
|
4,726
|
|
|
198
|
|
|
198
|
|
||||
Expected return on plan assets
|
|
(7,394
|
)
|
|
(6,743
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
|
(61
|
)
|
|
(194
|
)
|
|
(749
|
)
|
|
(748
|
)
|
||||
Amortization of net loss
|
|
3,919
|
|
|
3,198
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (benefit)
|
|
$
|
4,606
|
|
|
$
|
4,483
|
|
|
$
|
(495
|
)
|
|
$
|
(504
|
)
|
|
|
Gains and Losses on Cash Flow Hedges
|
|
|
|
|
|
|
||||||||||||||||
(Thousands)
|
|
Foreign Currency
|
|
Precious Metals
|
|
Total
|
|
Pension and Post-Employment Benefits
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||||
Balance at March 30, 2018
|
|
$
|
326
|
|
|
$
|
(238
|
)
|
|
$
|
88
|
|
|
$
|
(98,314
|
)
|
|
$
|
(2,995
|
)
|
|
$
|
(101,221
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
871
|
|
|
635
|
|
|
1,506
|
|
|
—
|
|
|
(944
|
)
|
|
562
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
42
|
|
|
23
|
|
|
65
|
|
|
1,622
|
|
|
—
|
|
|
1,687
|
|
||||||
Net current period other comprehensive income (loss) before tax
|
|
913
|
|
|
658
|
|
|
1,571
|
|
|
1,622
|
|
|
(944
|
)
|
|
2,249
|
|
||||||
Deferred taxes
|
|
(343
|
)
|
|
151
|
|
|
(192
|
)
|
|
326
|
|
|
—
|
|
|
134
|
|
||||||
Net current period other comprehensive income (loss) after tax
|
|
1,256
|
|
|
507
|
|
|
1,763
|
|
|
1,296
|
|
|
(944
|
)
|
|
2,115
|
|
||||||
Balance at June 29, 2018
|
|
$
|
1,582
|
|
|
$
|
269
|
|
|
$
|
1,851
|
|
|
$
|
(97,018
|
)
|
|
$
|
(3,939
|
)
|
|
$
|
(99,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at March 31, 2017
|
|
$
|
1,476
|
|
|
$
|
(100
|
)
|
|
$
|
1,376
|
|
|
$
|
(81,601
|
)
|
|
$
|
(4,557
|
)
|
|
$
|
(84,782
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(629
|
)
|
|
393
|
|
|
(236
|
)
|
|
—
|
|
|
275
|
|
|
39
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
47
|
|
|
(88
|
)
|
|
(41
|
)
|
|
1,156
|
|
|
—
|
|
|
1,115
|
|
||||||
Net current period other comprehensive income (loss) before tax
|
|
(582
|
)
|
|
305
|
|
|
(277
|
)
|
|
1,156
|
|
|
275
|
|
|
1,154
|
|
||||||
Deferred taxes
|
|
(215
|
)
|
|
112
|
|
|
(103
|
)
|
|
397
|
|
|
—
|
|
|
294
|
|
||||||
Net current period other comprehensive income (loss) after tax
|
|
(367
|
)
|
|
193
|
|
|
(174
|
)
|
|
759
|
|
|
275
|
|
|
860
|
|
||||||
Balance at June 30, 2017
|
|
$
|
1,109
|
|
|
$
|
93
|
|
|
$
|
1,202
|
|
|
$
|
(80,842
|
)
|
|
$
|
(4,282
|
)
|
|
$
|
(83,922
|
)
|
|
|
Gains and Losses on Cash Flow Hedges
|
|
|
|
|
|
|
||||||||||||||||
(Thousands)
|
|
Foreign Currency
|
|
Precious Metals
|
|
Total
|
|
Pension and Post-Employment Benefits
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||||
Balance at December 31, 2017
|
|
$
|
959
|
|
|
$
|
(196
|
)
|
|
$
|
763
|
|
|
$
|
(99,592
|
)
|
|
$
|
(4,108
|
)
|
|
$
|
(102,937
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(327
|
)
|
|
444
|
|
|
117
|
|
|
—
|
|
|
169
|
|
|
286
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
419
|
|
|
159
|
|
|
578
|
|
|
3,248
|
|
|
—
|
|
|
3,826
|
|
||||||
Net current period other comprehensive income before tax
|
|
92
|
|
|
603
|
|
|
695
|
|
|
3,248
|
|
|
169
|
|
|
4,112
|
|
||||||
Deferred taxes
|
|
(531
|
)
|
|
138
|
|
|
(393
|
)
|
|
674
|
|
|
—
|
|
|
281
|
|
||||||
Net current period other comprehensive income after tax
|
|
623
|
|
|
465
|
|
|
1,088
|
|
|
2,574
|
|
|
169
|
|
|
3,831
|
|
||||||
Balance at June 29, 2018
|
|
$
|
1,582
|
|
|
$
|
269
|
|
|
$
|
1,851
|
|
|
$
|
(97,018
|
)
|
|
$
|
(3,939
|
)
|
|
$
|
(99,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
|
$
|
1,837
|
|
|
$
|
—
|
|
|
$
|
1,837
|
|
|
$
|
(82,358
|
)
|
|
$
|
(5,660
|
)
|
|
$
|
(86,181
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(881
|
)
|
|
235
|
|
|
(646
|
)
|
|
—
|
|
|
1,378
|
|
|
732
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
(214
|
)
|
|
(88
|
)
|
|
(302
|
)
|
|
2,309
|
|
|
—
|
|
|
2,007
|
|
||||||
Net current period other comprehensive income (loss) before tax
|
|
(1,095
|
)
|
|
147
|
|
|
(948
|
)
|
|
2,309
|
|
|
1,378
|
|
|
2,739
|
|
||||||
Deferred taxes
|
|
(367
|
)
|
|
54
|
|
|
(313
|
)
|
|
793
|
|
|
—
|
|
|
480
|
|
||||||
Net current period other comprehensive income (loss) after tax
|
|
(728
|
)
|
|
93
|
|
|
(635
|
)
|
|
1,516
|
|
|
1,378
|
|
|
2,259
|
|
||||||
Balance at June 30, 2017
|
|
$
|
1,109
|
|
|
$
|
93
|
|
|
$
|
1,202
|
|
|
$
|
(80,842
|
)
|
|
$
|
(4,282
|
)
|
|
$
|
(83,922
|
)
|
Risk-free interest rate
|
|
2.58
|
%
|
Dividend yield
|
|
0.8
|
%
|
Volatility
|
|
31.9
|
%
|
Expected term (in years)
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Thousands)
|
|
Total Carrying Value in the Consolidated Balance Sheets
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Deferred compensation investments
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
817
|
|
|
254
|
|
|
—
|
|
|
—
|
|
|
817
|
|
|
254
|
|
|
—
|
|
|
—
|
|
||||||||
Precious metal swaps
|
|
347
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
|
$
|
3,584
|
|
|
$
|
2,578
|
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
1,164
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Deferred compensation liability
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
23
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
201
|
|
|
—
|
|
|
—
|
|
||||||||
Precious metal swaps
|
|
—
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
269
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
|
$
|
2,443
|
|
|
$
|
2,780
|
|
|
$
|
2,420
|
|
|
$
|
2,310
|
|
|
$
|
23
|
|
|
$
|
470
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
June 29, 2018
|
|
December 31, 2017
|
||||||||||||
(Thousands)
|
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Foreign currency forward contracts - euro
|
|
|
|
|
|
|
|
|
||||||||
Prepaid expenses
|
|
$
|
25,377
|
|
|
$
|
559
|
|
|
$
|
13,981
|
|
|
$
|
127
|
|
Other liabilities and accrued items
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
25,377
|
|
|
$
|
559
|
|
|
$
|
13,981
|
|
|
$
|
127
|
|
|
|
June 29, 2018
|
|
December 31, 2017
|
||||||||||||
(Thousands)
|
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Prepaid expenses
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts - yen
|
|
$
|
847
|
|
|
$
|
29
|
|
|
$
|
5,673
|
|
|
$
|
91
|
|
Foreign currency forward contracts - euro
|
|
9,387
|
|
|
229
|
|
|
5,026
|
|
|
36
|
|
||||
Precious metal swaps
|
|
8,548
|
|
|
322
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
18,782
|
|
|
580
|
|
|
10,699
|
|
|
127
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
|
|
|
|
|
|
|
||||||||
Precious metal swaps
|
|
540
|
|
|
25
|
|
|
880
|
|
|
14
|
|
||||
Total
|
|
540
|
|
|
25
|
|
|
880
|
|
|
14
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities and accrued items
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts - yen
|
|
2,158
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts - euro
|
|
819
|
|
|
(4
|
)
|
|
13,583
|
|
|
(201
|
)
|
||||
Precious metal swaps
|
|
188
|
|
|
—
|
|
|
10,067
|
|
|
(255
|
)
|
||||
Total
|
|
3,165
|
|
|
(23
|
)
|
|
23,650
|
|
|
(456
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term liabilities
|
|
|
|
|
|
|
|
|
||||||||
Precious metal swaps
|
|
—
|
|
|
—
|
|
|
789
|
|
|
(14
|
)
|
||||
Total
|
|
$
|
22,487
|
|
|
$
|
582
|
|
|
$
|
36,018
|
|
|
$
|
(329
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Second Quarter Ended
|
|||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
(Thousands, except per share data)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
309,085
|
|
|
$
|
295,842
|
|
|
$
|
13,243
|
|
|
4
|
%
|
Value-added sales
|
|
189,902
|
|
|
176,099
|
|
|
13,803
|
|
|
8
|
%
|
|||
Gross margin
|
|
61,838
|
|
|
54,778
|
|
|
7,060
|
|
|
13
|
%
|
|||
Gross margin as a % of value-added sales
|
|
33
|
%
|
|
31
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
Selling, general, and administrative (SG&A) expense
|
|
38,473
|
|
|
37,928
|
|
|
545
|
|
|
1
|
%
|
|||
SG&A expense as a % of value-added sales
|
|
20
|
%
|
|
22
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
Research and development (R&D) expense
|
|
3,860
|
|
|
3,544
|
|
|
316
|
|
|
9
|
%
|
|||
R&D expense as a % of value-added sales
|
|
2
|
%
|
|
2
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
Other—net
|
|
4,313
|
|
|
3,204
|
|
|
1,109
|
|
|
35
|
%
|
|||
Operating profit
|
|
15,192
|
|
|
10,102
|
|
|
5,090
|
|
|
50
|
%
|
|||
Interest expense—net
|
|
667
|
|
|
695
|
|
|
(28
|
)
|
|
(4
|
)%
|
|||
Other non-operating expense—net
|
|
437
|
|
|
368
|
|
|
69
|
|
|
19
|
%
|
|||
Income before income taxes
|
|
14,088
|
|
|
9,039
|
|
|
5,049
|
|
|
56
|
%
|
|||
Income tax expense
|
|
2,944
|
|
|
1,726
|
|
|
1,218
|
|
|
N/A
|
|
|||
Net income
|
|
$
|
11,144
|
|
|
$
|
7,313
|
|
|
$
|
3,831
|
|
|
52
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share
|
|
$
|
0.54
|
|
|
$
|
0.36
|
|
|
$
|
0.18
|
|
|
50
|
%
|
|
|
Six Months Ended
|
|||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
(Thousands, except per share data)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
612,552
|
|
|
$
|
536,511
|
|
|
$
|
76,041
|
|
|
14
|
%
|
Value-added sales
|
|
371,215
|
|
|
325,080
|
|
|
46,135
|
|
|
14
|
%
|
|||
Gross margin
|
|
120,118
|
|
|
97,934
|
|
|
22,184
|
|
|
23
|
%
|
|||
Gross margin as a % of value-added sales
|
|
32
|
%
|
|
30
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
SG&A expense
|
|
76,935
|
|
|
71,449
|
|
|
5,486
|
|
|
8
|
%
|
|||
SG&A expense as a % of value-added sales
|
|
21
|
%
|
|
22
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
R&D expense
|
|
7,503
|
|
|
6,674
|
|
|
829
|
|
|
12
|
%
|
|||
R&D expense as a % of value-added sales
|
|
2
|
%
|
|
2
|
%
|
|
N/A
|
|
|
N/A
|
|
|||
Other—net
|
|
7,237
|
|
|
6,022
|
|
|
1,215
|
|
|
20
|
%
|
|||
Operating profit
|
|
28,443
|
|
|
13,789
|
|
|
14,654
|
|
|
106
|
%
|
|||
Interest expense—net
|
|
1,397
|
|
|
1,188
|
|
|
209
|
|
|
18
|
%
|
|||
Other non-operating expense—net
|
|
879
|
|
|
635
|
|
|
244
|
|
|
38
|
%
|
|||
Income before income taxes
|
|
26,167
|
|
|
11,966
|
|
|
14,201
|
|
|
119
|
%
|
|||
Income tax expense
|
|
4,459
|
|
|
1,603
|
|
|
2,856
|
|
|
178
|
%
|
|||
Net income
|
|
$
|
21,708
|
|
|
$
|
10,363
|
|
|
$
|
11,345
|
|
|
109
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share
|
|
$
|
1.05
|
|
|
$
|
0.51
|
|
|
$
|
0.54
|
|
|
106
|
%
|
|
|
Second Quarter Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
June 29,
|
|
June 30,
|
||||||||
(Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Performance Alloys and Composites
|
|
$
|
129,765
|
|
|
$
|
108,541
|
|
|
$
|
248,001
|
|
|
$
|
201,094
|
|
Advanced Materials
|
|
150,324
|
|
|
157,044
|
|
|
303,869
|
|
|
271,780
|
|
||||
Precision Coatings
|
|
28,996
|
|
|
30,257
|
|
|
60,682
|
|
|
63,637
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
309,085
|
|
|
$
|
295,842
|
|
|
$
|
612,552
|
|
|
$
|
536,511
|
|
|
|
|
|
|
|
|
|
|
||||||||
Less: pass-through metal costs
|
|
|
|
|
|
|
|
|
||||||||
Performance Alloys and Composites
|
|
$
|
19,615
|
|
|
$
|
15,855
|
|
|
$
|
37,552
|
|
|
29,197
|
|
|
Advanced Materials
|
|
93,057
|
|
|
95,003
|
|
|
188,319
|
|
|
162,451
|
|
||||
Precision Coatings
|
|
5,603
|
|
|
7,644
|
|
|
13,648
|
|
|
17,723
|
|
||||
Other
|
|
908
|
|
|
1,241
|
|
|
1,818
|
|
|
2,060
|
|
||||
Total
|
|
$
|
119,183
|
|
|
$
|
119,743
|
|
|
$
|
241,337
|
|
|
$
|
211,431
|
|
|
|
|
|
|
|
|
|
|
||||||||
Value-added sales
|
|
|
|
|
|
|
|
|
||||||||
Performance Alloys and Composites
|
|
$
|
110,150
|
|
|
$
|
92,686
|
|
|
$
|
210,449
|
|
|
$
|
171,897
|
|
Advanced Materials
|
|
57,267
|
|
|
62,041
|
|
|
115,550
|
|
|
109,329
|
|
||||
Precision Coatings
|
|
23,393
|
|
|
22,613
|
|
|
47,034
|
|
|
45,914
|
|
||||
Other
|
|
(908
|
)
|
|
(1,241
|
)
|
|
(1,818
|
)
|
|
(2,060
|
)
|
||||
Total
|
|
$
|
189,902
|
|
|
$
|
176,099
|
|
|
$
|
371,215
|
|
|
$
|
325,080
|
|
|
|
Second Quarter Ended
|
|||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
(Thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
129,765
|
|
|
$
|
108,541
|
|
|
$
|
21,224
|
|
|
20
|
%
|
Value-added sales
|
|
110,150
|
|
|
92,686
|
|
|
17,464
|
|
|
19
|
%
|
|||
Operating profit
|
|
12,309
|
|
|
5,548
|
|
|
6,761
|
|
|
122
|
%
|
|
|
Six Months Ended
|
|||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
(Thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
248,001
|
|
|
$
|
201,094
|
|
|
$
|
46,907
|
|
|
23
|
%
|
Value-added sales
|
|
210,449
|
|
|
171,897
|
|
|
38,552
|
|
|
22
|
%
|
|||
Operating profit
|
|
22,170
|
|
|
5,737
|
|
|
16,433
|
|
|
286
|
%
|
|
|
Second Quarter Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
||||||
(Thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
||||||
Net sales
|
|
$
|
150,324
|
|
|
$
|
157,044
|
|
|
(6,720
|
)
|
|
(4
|
)%
|
Value-added sales
|
|
57,267
|
|
|
62,041
|
|
|
(4,774
|
)
|
|
(8
|
)%
|
||
Operating profit
|
|
5,572
|
|
|
8,670
|
|
|
(3,098
|
)
|
|
(36
|
)%
|
|
|
Six Months Ended
|
||||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
||||||
(Thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
||||||
Net sales
|
|
$
|
303,869
|
|
|
$
|
271,780
|
|
|
32,089
|
|
|
12
|
%
|
Value-added sales
|
|
115,550
|
|
|
109,329
|
|
|
6,221
|
|
|
6
|
%
|
||
Operating profit
|
|
11,470
|
|
|
15,117
|
|
|
(3,647
|
)
|
|
(24
|
)%
|
(Thousands)
|
|
Second Quarter Ended
|
||||||||||||
June 29,
|
|
June 30,
|
|
$
|
|
%
|
||||||||
2018
|
|
2017
|
|
Change
|
|
Change
|
||||||||
Net sales
|
|
$
|
28,996
|
|
|
$
|
30,257
|
|
|
(1,261
|
)
|
|
(4
|
)%
|
Value-added sales
|
|
23,393
|
|
|
22,613
|
|
|
780
|
|
|
3
|
%
|
||
Operating profit
|
|
2,233
|
|
|
2,314
|
|
|
(81
|
)
|
|
(4
|
)%
|
(Thousands)
|
|
Six Months Ended
|
||||||||||||
June 29,
|
|
June 30,
|
|
$
|
|
%
|
||||||||
2018
|
|
2017
|
|
Change
|
|
Change
|
||||||||
Net sales
|
|
$
|
60,682
|
|
|
$
|
63,637
|
|
|
(2,955
|
)
|
|
(5
|
)%
|
Value-added sales
|
|
47,034
|
|
|
45,914
|
|
|
1,120
|
|
|
2
|
%
|
||
Operating profit
|
|
5,608
|
|
|
4,532
|
|
|
1,076
|
|
|
24
|
%
|
(Thousands)
|
|
Second Quarter Ended
|
||||||||||||
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
Value-added sales
|
|
(908
|
)
|
|
(1,241
|
)
|
|
333
|
|
|
(27
|
)%
|
||
Operating loss
|
|
(4,922
|
)
|
|
(6,430
|
)
|
|
1,508
|
|
|
(23
|
)%
|
(Thousands)
|
|
Six Months Ended
|
||||||||||||
|
June 29,
|
|
June 30,
|
|
$
|
|
%
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
Value-added sales
|
|
(1,818
|
)
|
|
(2,060
|
)
|
|
242
|
|
|
(12
|
)%
|
||
Operating loss
|
|
(10,805
|
)
|
|
(11,597
|
)
|
|
792
|
|
|
(7
|
)%
|
|
|
Six Months Ended
|
||||||||||
|
|
June 29,
|
|
June 30,
|
|
$
|
||||||
(Thousands)
|
|
2018
|
|
2017
|
|
Change
|
||||||
Net cash provided by operating activities
|
|
$
|
29,304
|
|
|
$
|
303
|
|
|
$
|
29,001
|
|
Net cash used in investing activities
|
|
(20,551
|
)
|
|
(28,238
|
)
|
|
7,687
|
|
|||
Net cash (used in) provided by financing activities
|
|
(7,710
|
)
|
|
14,055
|
|
|
(21,765
|
)
|
|||
Effects of exchange rate changes
|
|
8
|
|
|
913
|
|
|
(905
|
)
|
|||
Net change in cash and cash equivalents
|
|
$
|
1,051
|
|
|
$
|
(12,967
|
)
|
|
$
|
14,018
|
|
|
|
June 29,
|
|
December 31,
|
||||
(Thousands)
|
|
2018
|
|
2017
|
||||
Total outstanding debt
|
|
$
|
3,434
|
|
|
$
|
3,818
|
|
Cash
|
|
42,895
|
|
|
41,844
|
|
||
Net debt (cash)
|
|
(39,461
|
)
|
|
(38,026
|
)
|
||
Available borrowing capacity
|
|
$
|
279,054
|
|
|
$
|
254,777
|
|
▪
|
Actual net sales, operating rates, and margins for 2018;
|
▪
|
The global economy, including the impact of tariffs, as well as other government actions;
|
▪
|
The impact of any U.S. Federal Government shutdowns and sequestrations;
|
▪
|
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;
|
▪
|
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, including our ability to effectively integrate the acquisition of the high-performance target materials business of the Heraeus Group;
|
▪
|
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 completion and start-up 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 financing fees, tax rates, exchange 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; and
|
•
|
The risk factors set forth in Part 1, Item 1A of our 2017 Annual Report on Form 10-K.
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share (1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
|
||||||
March 31 through April 4, 2018
|
|
8,889
|
|
|
$
|
53.83
|
|
|
—
|
|
|
$
|
15,703,744
|
|
April 5 through May 1, 2018
|
|
2,743
|
|
|
54.64
|
|
|
—
|
|
|
15,703,744
|
|
||
May 2 through June 29, 2018
|
|
65
|
|
|
55.77
|
|
|
—
|
|
|
15,703,744
|
|
||
Total
|
|
11,697
|
|
|
$
|
54.03
|
|
|
—
|
|
|
$
|
15,703,744
|
|
(1)
|
Includes 8,889, 2,743, and 65 shares surrendered to the Company in April, May, and June, respectively, by employees to satisfy tax withholding obligations on equity awards issued under the Company's stock incentive plan.
|
|
|
|
|
(2)
|
On January 14, 2014, we announced that our Board of Directors had authorized the repurchase of up to $50.0 million of our common stock. We did not repurchase any shares under this program during the second quarter of 2018. As of June 29, 2018, $15.7 million may still be purchased under the program.
|
Item 4.
|
Mine Safety Disclosures
|
Item 6.
|
Exhibits
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32
|
|
|
95
|
|
|
101.INS
|
|
XBRL Instance Document*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document*
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document*
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
|
|
|
|
|
|
|
|
|
MATERION CORPORATION
|
|
|
|
||
Dated: July 26, 2018
|
|
|
|
|
|
|
|
|
/s/
Joseph P. Kelley
|
|
|
|
|
Joseph P. Kelley
|
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
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