MAYFIELD HEIGHTS, Ohio--(BUSINESS WIRE)--
Materion Corporation (NYSE:MTRN) today provided an update to expected
fourth quarter 2012 results and announced preliminary guidance for the
full-year 2013. In addition, the Company announced that a charge to
fourth quarter 2012 earnings is possible pending the outcome of
investigations of year-end physical inventory results and a potential
related theft at the Company's Albuquerque, New Mexico facility.
FOURTH QUARTER 2012 STRONGER THAN EXPECTED
Business conditions and margins in the fourth quarter were better than
initially anticipated and, as a result, fourth quarter earnings are now
expected to be significantly higher, subject to the discussion below
regarding a possible charge.
The Company had earlier provided guidance that full-year 2012 earnings
would be in the range of $1.30 to $1.35 per share. This translates to
fourth quarter guidance of $0.23 to $0.28 per share, which included
approximately $0.10 per share of costs related to previously announced
plans to consolidate certain manufacturing operations. Excluding these
costs, results for the quarter were expected to be in the $0.33 to $0.38
per share range.
Results for the quarter are now expected to be in the range of $0.33 to
$0.36 per share, which includes $0.13 per share as opposed to $0.10 per
share for the aforementioned costs to consolidate certain manufacturing
operations, as well as an unrelated tax benefit of $0.09 per share due
to changes in projections. Excluding these costs and the tax benefit,
results for the quarter are now expected to be in the $0.37 to $0.40 per
share range. These results are preliminary and unaudited and are
therefore subject to change.
POSSIBLE FOURTH QUARTER 2012 CHARGE
In January 2013, as the year-end physical inventory was being taken, the
Company became aware of a potential theft of precious metal from its
Albuquerque, New Mexico refinery. An internal investigation ensued, an
arrest was made and a minor amount of stolen material was recovered.
The Company began further investigations, including an investigation of
the physical inventory results and engaged an outside team of forensic
experts and criminal investigators. While the results of these
investigations are not yet complete, preliminary indications are that
some, or all, of a year-end inventory short may be due to theft. The
initial results of the physical inventory suggest that the impact on the
fourth quarter of 2012 may be a charge of up to $0.25 per share. Recent
inventories taken at other Company facilities were all within the
normal, tight tolerances. The results of the physical inventory and the
potential theft remain under investigation.
The Company has a specific theft insurance policy that covers theft of
the suspected nature. The policy provides up to $10.0 million of
coverage with a $100,000 deductible. The underwriters of the policy have
been notified. The amount of insurance recovery is uncertain at this
time, therefore, the recovery of any insurance proceeds cannot be
recorded in the fourth quarter of 2012, but instead would be recorded in
a future period.
Throughout the Company's long history, a material theft has not been
discovered at this location or any of the Company's other locations and
the Company has never made a material claim under its theft insurance.
OUTLOOK FOR 2013 IMPROVING
Overall market conditions and demand for the Company's materials
continued to improve throughout the fourth quarter of 2012. These
improving conditions have continued thus far into 2013. The Company at
this time expects earnings for the full-year 2013 to be in the range of
$1.75 to $2.00 per share.
The Company's guidance for 2013 will be more fully discussed at the
previously announced February 28, 2013 conference call.
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, in particular the outlook provided above. 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:
-
Actual sales, operating rates and margins for 2012 and 2013;
-
Uncertainties relating to the physical inventory and possible theft at
our Albuquerque facility, including (i) the outcome of our
investigations, (ii) the timing and amount, if any, of any insurance
proceeds that we might receive and (iii) the actual amount of any
charge that we ultimately incur;
-
The global economy;
-
The condition of the markets which we serve, whether defined
geographically or by segment, with the major market segments being:
consumer electronics, industrial components and commercial aerospace,
defense and science, automotive electronics, medical, energy and
telecommunications infrastructure;
-
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 integrating acquired businesses, including EIS Optics
Limited and Aerospace Metal Composites Limited;
-
Our success in moving the microelectronics packaging operations to
Singapore;
-
Our success in implementing our strategic plans and the timely and
successful completion and start-up of any capital projects, including
the new primary beryllium facility in Elmore, Ohio;
-
The availability of adequate lines of credit and the associated
interest rates;
-
The impact of the results of acquisitions on our ability to achieve
fully the strategic and financial objectives related to these
acquisitions;
-
Other financial 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, 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 timing and ability to achieve further efficiencies and synergies
resulting from our name change and product line alignment under the
Materion name and Materion brand; and
-
The risk factors set forth in Part 1, Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2011.
Materion Corporation is headquartered in Mayfield Heights, Ohio. The
Company, through its wholly owned subsidiaries, supplies highly
engineered advanced enabling materials to global markets. Products
include precious and non-precious specialty metals, inorganic chemicals
and powders, specialty coatings, specialty engineered beryllium alloys,
beryllium and beryllium composites, and engineered clad and plated metal
systems.
Materion Corporation
Investor Contact:
Michael
C. Hasychak, 216-383-6823
mike.hasychak@materion.com
or
Media
Contact:
Patrick S. Carpenter, 216-383-6835
patrick.carpenter@materion.com
http://www.materion.com
Mayfield
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Source: Materion Corporation
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