MAYFIELD HEIGHTS, Ohio--(BUSINESS WIRE)--
Materion Corporation (NYSE:MTRN) today reported fourth quarter and
full-year 2013 results.
-
The Company today filed a current report on Form 8-K identifying a
procedural error in the recording of the results of the Company's
second and third quarter 2013 physical inventory counts. Results for
the quarterly and year-to-date periods ending June 28, 2013 and
September 27, 2013 will be restated
-
Fourth quarter 2013 GAAP earnings were $0.18 per share, stronger than
the Company's previously provided guidance of $0.05 to $0.10 per share
-
Excluding the previously announced costs related to facility and
product line rationalizations, fourth quarter adjusted earnings were
$0.34 per share, also stronger than the Company's previously provided
guidance of $0.20 to $0.25 per share and sequentially stronger than
third quarter 2013 earnings by $0.10 per share
-
Earnings for the full-year 2014 are expected to be well above those
for the full-year 2013 and in the range of $1.75 to $1.95 per share,
consistent with previous guidance
CURRENT REPORT ON FORM 8-K
During the year-end review and evaluation of the Company's regular
fourth quarter physical inventory results, a procedural error was
identified related to the utilization of a new report from the Company's
enterprise-wide software system. This error first occurred in the
recording of the results of the Company's second quarter 2013 physical
inventory count and had gone undetected by the Company's review
processes since then. As a result, operating results of the Company's
Buffalo, New York-based precious metal facility appeared to be within
normal tolerance ranges and expectations while they were not.
At this time, the Company believes that the error understated the
Company's book-to-physical adjustment and therefore understated cost of
sales for the three months ended June 28, 2013 and for the three months
ended September 27, 2013. As a result, second quarter net income was
overstated by approximately $4.8 million, or $0.23 per share. Third
quarter net income was overstated by approximately $0.1 million, which
did not affect reported EPS. A table attached to this press release
summarizes the restated quarterly and year-to-date financial
information, which is subject to change pending the finalization of the
audit.
Over the past several years, the Company has been engaged in several
initiatives to improve its internal practices. One such initiative has
been the installation of enterprise-wide software systems to upgrade and
monitor processes, provide better management information, lower
operating costs and improve controls. The implementation of these
systems is complete at the majority of facilities and leads to a more
robust control environment.
STOCK REPURCHASES
On January 14, 2014, the Company announced an authorization to
repurchase up to $50.0 million of the Company's common stock. The
Company has initiated repurchases under this authorization and, at this
time, intends to continue repurchasing shares utilizing various methods,
including open market repurchases, subject to market and other
conditions.
FOURTH QUARTER 2013 RESULTS
Sales for the fourth quarter were $286.1 million compared to sales of
$303.8 million for the fourth quarter of 2012. Value-added sales (sales
less pass-through metals as defined in attachment 4) for the fourth
quarter were $157.2 million, up approximately 4% compared to value-added
sales of $151.3 million for the fourth quarter of 2012. Sequentially,
value-added sales were up approximately 6% compared to third quarter
2013 value-added sales of $148.1 million.
The increase in value-added sales when comparing to the prior-year
fourth quarter is primarily due to stronger business levels in the
medical, consumer electronics and energy markets. When comparing
sequentially to the third quarter, the increase is a result of improving
conditions in the Company's defense and science, consumer electronics,
industrial components and commercial aerospace, telecommunications
infrastructure and energy markets.
Net income for the fourth quarter was $3.8 million, or $0.18 per share,
diluted. This compares to net income of $2.5 million, or $0.12 per
share, diluted, for the fourth quarter of the prior year. Excluding the
previously announced costs related to facility and product line
rationalizations, fourth quarter adjusted earnings were $0.34 per share,
also stronger than the Company's previously provided guidance of $0.20
to $0.25 per share and sequentially stronger than third quarter 2013
earnings by $0.10 per share.
Sales for the full-year 2013 were $1.2 billion compared to sales of $1.3
billion for 2012. Value-added sales for 2013 were $609.1 million
compared to $615.6 million for 2012, a decrease of 1%. Net income for
the full year was $19.7 million or $0.94 per share, diluted, compared to
net income of $24.7 million or $1.19 per share for 2012. Excluding the
aforementioned fourth quarter facility and product line rationalization
costs, net income for the full year was $23.1 million, or $1.10 per
share.
BUSINESS SEGMENT REPORTING
Advanced Material Technologies
Advanced Material Technologies' sales for the fourth quarter of 2013
were $178.1 million, which compares to sales of $193.6 million in the
fourth quarter of 2012. Value-added sales were $68.4 million in the
fourth quarter 2013, up 10% compared to $62.1 million in the fourth
quarter of 2012. The increase was attributable to stronger demand from
the medical and consumer electronics markets and phosphors and other
non-precious metal alloys used in LED applications. This strength was,
in part, offset by weaker demand from defense and telecommunications
infrastructure product applications.
The operating loss for the fourth quarter of 2013 was $0.5 million,
compared to an operating loss of $5.3 million for the fourth quarter of
2012. The aforementioned facility and product line rationalization costs
negatively impacted the quarter by $4.5 million. The operating profit,
excluding these costs, was $4.0 million for the fourth quarter of 2013.
Performance Alloys
Performance Alloys' sales for the fourth quarter of 2013 were $73.8
million compared to the fourth quarter of 2012 sales of $76.0 million.
Value-added sales for the fourth quarter of 2013 were $59.8 million
compared to $61.3 million for the fourth quarter of 2012. The slight
decrease in value-added sales is a result of weaker demand in automotive
electronics and telecom infrastructure. Growth from the consumer
electronics, industrial components and commercial aerospace and energy
markets helped offset the decline. Sequentially, value-added sales were
up 4% when comparing to the third quarter of 2013.
Operating profit for the fourth quarter of 2013 was $4.7 million,
compared to an operating profit of $5.7 million in the fourth quarter of
2012. Sequentially, operating profit was 5% above the third quarter of
2013 operating profit of $4.5 million. Operating profit in the fourth
quarter was negatively impacted by manufacturing yields and performance.
Manufacturing performance did improve by the end of the fourth quarter
and it is anticipated that the yields will return to historical levels
in the second quarter of 2014.
Beryllium and Composites
Beryllium and Composites' sales for the fourth quarter of 2013 were
$19.1 million, up 13% compared to sales of $16.9 million in the four
quarter 2012. Beryllium and Composites does not directly pass through
changes in the costs of its materials sold, and, therefore, value-added
sales for this segment are the same as sales. Sequentially, sales were
approximately 40% above the third quarter 2013 levels as the backlog was
shipped.
The operating profit for the fourth quarter of 2013 was $0.2 million,
compared to an operating loss of $0.1 million for the fourth quarter of
2012. At quarter end, the pebble plant was operating at targeted ramp-up
production levels. Sequentially, operating profit improved $3.5 million
when compared to the third quarter of 2013.
Technical Materials
Technical Materials' sales for the fourth quarter of 2013 were $15.2
million, compared to $17.3 million for the same period of last year.
Value-added sales were $10.0 million in the fourth quarter 2013,
compared to $11.0 million for the fourth quarter of 2012. Sequentially,
value-added sales were up 7% from the third quarter value-added sales of
$9.3 million.
Operating profit for the fourth quarter of 2013 was $1.7 million,
compared to an operating profit of $1.6 million for the same period of
last year. Most of the improvement in operating profit is due to
improved manufacturing efficiencies and a favorable product mix offset,
in part, by the impact of the lower sales volume. Operating profit
margins as a percentage of value-added sales improved to 17% from 15% in
the prior year.
OUTLOOK
Entering 2014, business levels are up by approximately 10% compared to
the beginning of 2013. While order entry is stronger coming into the
year, earnings for the first quarter of 2014 will be negatively impacted
by approximately $0.10 per share due to weather-related facility
shutdowns and production curtailments.
The facility and product rationalization initiatives taken during 2013
are expected to provide up to a $0.30 per share benefit in 2014. The
full impact on earnings from these initiatives is expected to be visible
by the second quarter. The new beryllium pebble plant, which endured
significant start-up and ramp-up issues throughout the prior year,
continues to ramp-up at a sufficient pace to support anticipated
increased business levels in 2014. These factors, plus the benefits from
our new product pipeline, should result in a sequentially stronger
second quarter in 2014 when compared to the first quarter and a stronger
second half. Therefore, earnings for the full-year 2014 are expected to
be well above 2013 and in the range of $1.75 to $1.95 per share,
consistent with previous guidance.
CHAIRMAN'S COMMENTS
Richard J. Hipple, Chairman, President and CEO, stated, "2013 presented
us with several challenges including the production ramp-up and
operation of the beryllium pebble plant, facility and product
rationalization actions and an inventory adjustment and related
restatement of earnings. A significant effort was undertaken to resolve
the above issues, and I am confident that we are well positioned for a
substantial improvement in earnings for 2014. We are well positioned in
our markets and remain committed to the long-term growth of this Company
and enhancing shareholder value."
CONFERENCE CALL
Materion Corporation will host a conference call with analysts at 9:00
a.m. Eastern Time, February 27, 2014. The conference call will be
available via webcast through the Company's website at www.materion.com
or through www.InvestorCalendar.com.
By phone, please dial (877) 407-0778, callers outside the U.S. can
dial (201) 689-8565. A replay of the call will be available until March
14, 2014 by dialing (877) 660-6853 or (201) 612-7415; please reference
Conference ID Number 13575400. The call will also be archived on the
Company's website.
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 2013 and 2014;
-
Our ability to strengthen our internal control over financial
reporting and disclosure controls and procedures, particularly in
light of the matters disclosed in this earnings release as well as in
the Form 8-K that was filed on February 26, 2014;
-
The finalization of our review of the procedural error in our physical
inventory count in 2013, including the determination of the impact on
affected periods;
-
Uncertainties relating to the fourth quarter 2012 physical inventory
and possible theft at our Albuquerque, New Mexico facility, including
(i) the costs and outcome of our investigations and (ii) the timing
and amount, if any, of any insurance proceeds that we might receive;
-
The global economy;
-
The impact of the 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 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;
-
The impact of the results of acquisitions on our ability to achieve
fully the strategic and financial objectives related to these
acquisitions;
-
Our success in completing the announced facility consolidations and
the product line rationalizations and achieving the expected benefits;
-
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;
-
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, 2012.
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.
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Materion Corporation
|
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Consolidated Statements of Income
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(Unaudited)
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|
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|
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|
|
|
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|
|
Fourth Quarter Ended
|
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Twelve Months Ended
|
|
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Dec. 31,
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Dec. 31,
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Dec. 31,
|
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Dec. 31,
|
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(In thousands except per share amounts)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
286,138
|
|
$
|
303,759
|
|
|
$
|
1,166,882
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|
$
|
1,273,078
|
|
Cost of sales
|
|
|
236,974
|
|
|
259,787
|
|
|
|
978,904
|
|
|
1,074,295
|
|
Gross margin
|
|
|
49,164
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|
|
43,972
|
|
|
|
187,978
|
|
|
198,783
|
|
Selling, general and administrative expense
|
|
|
35,343
|
|
|
34,955
|
|
|
|
133,253
|
|
|
133,893
|
|
Research and development expense
|
|
|
3,531
|
|
|
3,196
|
|
|
|
13,432
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|
|
12,505
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|
Other - net
|
|
|
4,870
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|
|
4,763
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|
|
|
14,462
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|
|
15,609
|
|
Operating profit
|
|
|
5,420
|
|
|
1,058
|
|
|
|
26,831
|
|
|
36,776
|
|
Interest expense - net
|
|
|
680
|
|
|
837
|
|
|
|
3,036
|
|
|
3,134
|
|
Income before income taxes
|
|
|
4,740
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|
|
221
|
|
|
|
23,795
|
|
|
33,642
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
965
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|
|
(2,282
|
)
|
|
|
4,088
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|
|
8,978
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|
|
|
|
|
|
|
|
|
|
Net income
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|
$
|
3,775
|
|
$
|
2,503
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|
|
$
|
19,707
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|
$
|
24,664
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Basic earnings per share:
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|
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|
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|
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Net income per share of common stock
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|
$
|
0.18
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|
$
|
0.12
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|
|
$
|
0.96
|
|
$
|
1.21
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|
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|
|
|
|
|
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Diluted earnings per share:
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|
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Net income per share of common stock
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|
$
|
0.18
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|
$
|
0.12
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|
|
$
|
0.94
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|
$
|
1.19
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share
|
|
$
|
0.080
|
|
$
|
0.075
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|
|
$
|
0.315
|
|
$
|
0.225
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock outstanding
|
|
|
|
|
|
Basic
|
|
|
20,627
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|
|
20,436
|
|
|
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20,571
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|
|
20,365
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Diluted
|
|
|
20,946
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|
|
20,692
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|
|
|
20,895
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|
|
20,754
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
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Materion Corporation
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Consolidated Balance Sheets
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(Unaudited)
|
|
|
|
|
|
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|
|
Dec. 31,
|
|
|
Dec. 31,
|
|
(In thousands)
|
|
2013
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|
|
2012
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
22,774
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|
|
|
$
|
16,056
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|
|
Accounts receivable
|
|
|
112,767
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|
|
|
|
126,482
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|
|
Other receivables
|
|
|
245
|
|
|
|
|
405
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|
|
Inventories
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|
|
213,392
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|
|
|
|
206,125
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|
|
Prepaid expenses
|
|
|
36,083
|
|
|
|
|
41,685
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|
|
Deferred income taxes
|
|
|
9,566
|
|
|
|
|
10,236
|
|
|
Total current assets
|
|
|
394,827
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|
|
|
|
400,989
|
|
|
|
|
|
|
|
|
Long-term deferred income taxes
|
|
|
4,672
|
|
|
|
|
19,946
|
|
|
|
|
|
|
|
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Property, plant and equipment
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|
|
782,879
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|
|
|
779,785
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Less allowances for depreciation,
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|
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|
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depletion and amortization
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|
|
(520,986
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)
|
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|
|
(507,243
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)
|
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Property, plant, and equipment - net
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|
|
261,893
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|
|
|
|
272,542
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|
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Intangible assets
|
|
|
24,248
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|
|
|
|
28,869
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|
|
Other assets
|
|
|
3,874
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|
|
|
|
3,818
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|
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Goodwill
|
|
|
88,753
|
|
|
|
|
88,753
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|
|
Total Assets
|
|
$
|
778,267
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|
|
|
$
|
814,917
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|
|
|
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|
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|
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|
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|
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Liabilities and Shareholders' Equity
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|
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Current liabilities
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|
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|
|
|
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Short-term debt
|
|
$
|
35,566
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|
|
|
$
|
49,432
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|
|
Accounts payable
|
|
|
36,556
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|
|
|
|
42,281
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|
|
Other liabilities and accrued items
|
|
|
56,737
|
|
|
|
|
55,811
|
|
|
Unearned revenue
|
|
|
479
|
|
|
|
|
1,543
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|
|
Total current liabilities
|
|
|
129,338
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|
|
|
|
149,067
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|
|
|
|
|
|
|
|
Other long-term liabilities
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|
|
16,533
|
|
|
|
|
16,173
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|
|
Retirement and post-employment benefits
|
|
|
80,275
|
|
|
|
|
125,978
|
|
|
Unearned income
|
|
|
56,490
|
|
|
|
|
61,184
|
|
|
Long-term income taxes
|
|
|
1,576
|
|
|
|
|
1,510
|
|
|
Deferred income taxes
|
|
|
1,468
|
|
|
|
|
1,130
|
|
|
Long-term debt
|
|
|
29,267
|
|
|
|
|
44,880
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
463,320
|
|
|
|
|
414,995
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|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
778,267
|
|
|
|
$
|
814,917
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|
|
|
|
|
|
|
|
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|
|
|
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|
|
Materion Corporation
|
|
Consolidated Statements of Cash Flows
|
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(Unaudited)
|
|
|
|
Twelve Months Ended
|
|
|
|
Dec. 31,
|
|
|
Dec. 31,
|
|
(In thousands)
|
|
|
2013
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
19,707
|
|
|
|
$
|
24,664
|
|
|
Adjustments to reconcile net income to net cash provided from
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
41,649
|
|
|
|
|
37,046
|
|
|
Amortization of deferred financing costs in interest expense
|
|
|
|
679
|
|
|
|
|
649
|
|
|
Stock-based compensation expense
|
|
|
|
5,741
|
|
|
|
|
5,889
|
|
|
Deferred tax (benefit) expense
|
|
|
|
(2,443
|
)
|
|
|
|
(2,461
|
)
|
|
Changes in assets and liabilities net of acquired assets and
liabilities:
|
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable
|
|
|
|
11,956
|
|
|
|
|
(8,913
|
)
|
|
Decrease (increase) in other receivables
|
|
|
|
160
|
|
|
|
|
4,197
|
|
|
Decrease (increase) in inventory
|
|
|
|
(8,241
|
)
|
|
|
|
(18,880
|
)
|
|
Decrease (increase) in prepaid and other current assets
|
|
|
|
6,647
|
|
|
|
|
483
|
|
|
Increase (decrease) in accounts payable and accrued expenses
|
|
|
|
(7,414
|
)
|
|
|
|
1,472
|
|
|
Increase (decrease) in unearned revenue
|
|
|
|
(1,389
|
)
|
|
|
|
(1,491
|
)
|
|
Increase (decrease) in interest and taxes payable
|
|
|
|
2,391
|
|
|
|
|
(2,324
|
)
|
|
Increase (decrease) in long-term liabilities
|
|
|
|
6,879
|
|
|
|
|
(5,053
|
)
|
|
Other - net
|
|
|
|
(400
|
)
|
|
|
|
3,342
|
|
|
Net cash provided from operating activities
|
|
|
|
75,922
|
|
|
|
|
38,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Payments for purchase of property, plant and equipment
|
|
|
|
(27,848
|
)
|
|
|
|
(34,088
|
)
|
|
Payments for mine development
|
|
|
|
(4,776
|
)
|
|
|
|
(10,573
|
)
|
|
Reimbursement for capital spending under government contract
|
|
|
|
-
|
|
|
|
|
991
|
|
|
Payments for purchase of business net of cash received
|
|
|
|
-
|
|
|
|
|
(3,894
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
|
|
22
|
|
|
|
|
-
|
|
|
Other investments - net
|
|
|
|
15
|
|
|
|
|
4,201
|
|
|
Net cash (used in) investing activities
|
|
|
|
(32,587
|
)
|
|
|
|
(43,363
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance (repayment) of short-term debt
|
|
|
|
(13,692
|
)
|
|
|
|
8,594
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
70,423
|
|
|
|
|
32,403
|
|
|
Repayment of long-term debt
|
|
|
|
(86,036
|
)
|
|
|
|
(27,986
|
)
|
|
Principal payments under capital lease obligations
|
|
|
|
(657
|
)
|
|
|
|
(749
|
)
|
|
Cash dividends paid
|
|
|
|
(6,497
|
)
|
|
|
|
(4,615
|
)
|
|
Deferred financing costs
|
|
|
|
(1,587
|
)
|
|
|
|
-
|
|
|
Repurchase of common stock
|
|
|
|
-
|
|
|
|
|
(119
|
)
|
|
Issuance of common stock under stock option plans
|
|
|
|
1,163
|
|
|
|
|
158
|
|
|
Tax benefit from stock compensation realization
|
|
|
|
711
|
|
|
|
|
817
|
|
|
Net cash (used in) provided from financing activities
|
|
|
|
(36,172
|
)
|
|
|
|
8,503
|
|
|
Effects of exchange rate changes
|
|
|
|
(445
|
)
|
|
|
|
41
|
|
|
Net change in cash and cash equivalents
|
|
|
|
6,718
|
|
|
|
|
3,801
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
16,056
|
|
|
|
|
12,255
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
22,774
|
|
|
|
$
|
16,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
|
Reconciliation of Non-GAAP Measure - Value-added Sales
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Fourth
|
|
Fourth
|
|
Third
|
|
|
|
|
|
|
|
|
|
Quarter 2013
|
|
Quarter 2012
|
|
Quarter 2013
|
|
2013
|
|
2012
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
$
|
178,082
|
|
$
|
193,590
|
|
$
|
176,294
|
|
$
|
744,240
|
|
$
|
847,835
|
|
Performance Alloys
|
|
|
73,754
|
|
|
76,014
|
|
|
69,578
|
|
|
292,189
|
|
|
292,448
|
|
Beryllium and Composites
|
|
|
19,144
|
|
|
16,881
|
|
|
13,685
|
|
|
61,338
|
|
|
59,983
|
|
Technical Materials
|
|
|
15,158
|
|
|
17,274
|
|
|
15,877
|
|
|
69,115
|
|
|
72,733
|
|
All Other
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
79
|
|
Total
|
|
|
|
$
|
286,138
|
|
$
|
303,759
|
|
$
|
275,434
|
|
$
|
1,166,882
|
|
$
|
1,273,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Pass-through Metal Cost
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
$
|
109,717
|
|
$
|
131,463
|
|
$
|
108,554
|
|
$
|
474,280
|
|
$
|
569,327
|
|
Performance Alloys
|
|
|
14,000
|
|
|
14,760
|
|
|
12,211
|
|
|
57,011
|
|
|
60,810
|
|
Beryllium and Composites
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Technical Materials
|
|
|
5,200
|
|
|
6,232
|
|
|
6,600
|
|
|
26,500
|
|
|
27,380
|
|
All Other
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
$
|
128,917
|
|
$
|
152,455
|
|
$
|
127,365
|
|
$
|
557,791
|
|
$
|
657,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value-added Sales (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
$
|
68,365
|
|
$
|
62,128
|
|
$
|
67,740
|
|
$
|
269,960
|
|
$
|
278,508
|
|
Performance Alloys
|
|
|
59,754
|
|
|
61,257
|
|
|
57,367
|
|
|
235,178
|
|
|
231,638
|
|
Beryllium and Composites
|
|
|
19,144
|
|
|
16,881
|
|
|
13,685
|
|
|
61,338
|
|
|
59,983
|
|
Technical Materials
|
|
|
9,958
|
|
|
11,038
|
|
|
9,277
|
|
|
42,615
|
|
|
45,353
|
|
All Other
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
79
|
|
Total
|
|
|
|
$
|
157,221
|
|
$
|
151,304
|
|
$
|
148,069
|
|
$
|
609,091
|
|
$
|
615,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The cost of gold, silver, platinum, palladium and copper is passed
through to customers and therefore the trends and comparisons of
sales are affected by movements in the market price of these
metals. Internally, management reviews sales on value-added basis.
Value-added sales is a non-GAAP measure that deducts the value of
the pass-through metals sold from sales. Value-added sales allows
management to assess the impact of differences in sales between
periods or segments and analyze the resulting margins and
profitability without the distortion of the movements in
pass-through 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 their costs are not
deducted from 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 and
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.
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
|
Reconciliation of Non-GAAP Measure - Profitability
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands except per share amounts)
|
|
Fourth
|
|
Fourth
|
|
Full Year
|
|
Full Year
|
|
|
|
Quarter 2013
|
|
Quarter 2012
|
|
2013
|
|
2012
|
|
GAAP as Reported
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
286,138
|
|
$
|
303,759
|
|
$
|
1,166,882
|
|
$
|
1,273,078
|
|
Gross Margin
|
|
|
49,164
|
|
|
43,972
|
|
|
187,978
|
|
|
198,783
|
|
Operating Profit
|
|
|
5,420
|
|
|
1,058
|
|
|
26,831
|
|
|
36,776
|
|
Net Income
|
|
|
3,775
|
|
|
2,503
|
|
|
19,707
|
|
|
24,664
|
|
EPS - Diluted
|
|
$
|
0.18
|
|
$
|
0.12
|
|
$
|
0.94
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
Facility closure and product line rationalization costs
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
$
|
1,299
|
|
$
|
-
|
|
$
|
1,299
|
|
$
|
-
|
|
Selling General and Administrative
|
|
|
2,260
|
|
|
-
|
|
|
2,260
|
|
|
-
|
|
Other-net
|
|
|
1,373
|
|
|
-
|
|
|
1,373
|
|
|
-
|
|
Total Special Items
|
|
$
|
4,932
|
|
$
|
-
|
|
$
|
4,932
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Special Items -net of tax
|
|
$
|
3,354
|
|
$
|
-
|
|
$
|
3,354
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures - Adjusted Profitability
|
|
|
|
|
|
|
|
|
|
Value-added Sales
|
|
|
157,221
|
|
|
151,304
|
|
|
609,091
|
|
|
615,561
|
|
Gross Margin
|
|
|
50,463
|
|
|
43,972
|
|
|
189,277
|
|
|
198,783
|
|
Operating Profit
|
|
|
10,352
|
|
|
1,058
|
|
|
31,763
|
|
|
36,776
|
|
Net Income
|
|
|
7,129
|
|
|
2,503
|
|
|
23,061
|
|
|
24,664
|
|
EPS - Diluted
|
|
$
|
0.34
|
|
$
|
0.12
|
|
$
|
1.10
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to presenting financial statements prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this earnings release contains financials measures,
including gross margin, operating profit, net income and earnings
per share, on a non-GAAP basis. As detailed in the above
reconciliation, we have adjusted out the cost impact of the plant
consolidation and product line rationalization efforts in the
fourth quarter 2013 from the applicable GAAP measure. 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.
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
|
Quarterly Restatement of Earnings - Second and Third Quarters
of 2013
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
|
Second Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Third Quarter
|
|
|
|
|
2013
|
|
2013 YTD
|
|
2013
|
|
2013 YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
306,141
|
|
|
$
|
605,310
|
|
$
|
275,434
|
|
$
|
880,744
|
|
Gross margin
|
|
|
52,821
|
|
|
|
101,160
|
|
|
45,137
|
|
|
146,297
|
|
Operating profit
|
|
|
13,390
|
|
|
|
22,912
|
|
|
5,982
|
|
|
28,894
|
|
Net income
|
|
|
8,909
|
|
|
|
15,694
|
|
|
5,123
|
|
|
20,817
|
|
EPS - Diluted
|
|
$
|
0.43
|
|
|
$
|
0.75
|
|
$
|
0.24
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
196,011
|
|
|
$
|
389,864
|
|
$
|
176,294
|
|
$
|
566,158
|
|
Operating profit
|
|
|
4,543
|
|
|
|
7,894
|
|
|
4,800
|
|
|
12,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated
|
|
|
Second Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Third Quarter
|
|
|
|
|
2013
|
|
2013 YTD
|
|
2013
|
|
2013 YTD
|
|
Materion Corporation Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
306,141
|
|
|
$
|
605,310
|
|
$
|
275,434
|
|
$
|
880,744
|
|
Gross margin
|
|
|
45,992
|
|
|
|
94,331
|
|
|
44,483
|
|
|
138,814
|
|
Operating profit
|
|
|
6,561
|
|
|
|
16,083
|
|
|
5,328
|
|
|
21,411
|
|
Net income
|
|
|
4,155
|
|
|
|
10,940
|
|
|
4,992
|
|
|
15,932
|
|
EPS - Diluted
|
|
$
|
0.20
|
|
|
$
|
0.52
|
|
$
|
0.24
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
196,011
|
|
|
$
|
389,864
|
|
$
|
176,294
|
|
$
|
566,158
|
|
Operating profit (loss)
|
|
|
(2,286
|
)
|
|
|
1,065
|
|
|
4,146
|
|
|
5,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Because the Company is still in the process of reviewing the
impact of this error, these amounts are estimates and are subject
to potential revision as the Company continues its review.
|
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
or
http://www.materion.com
Mayfield
Hts-g
Source: Materion Corporation
News Provided by Acquire Media