Confirms Full-Year Guidance of $1.75 to $1.95 Per Share
MAYFIELD HEIGHTS, Ohio--(BUSINESS WIRE)--
Materion Corporation (NYSE:MTRN) today reported first quarter financial
results.
-
First quarter 2014 GAAP earnings were $0.35 per share. Excluding costs
associated with the previously announced facility closing and a
benefit from the sale of related assets, first quarter adjusted
earnings were $0.29 per share, exceeding the previously provided
guidance of $0.20 to $0.25 per share
-
Net sales were $258.9 million, which compares to sales of $299.2
million in the first quarter of 2013. Value-added sales for the first
quarter of 2014 were $144.9 million, compared to value-added sales of
$151.3 million for the first quarter of the prior year. The decline in
value-added sales is due to destocking in the automotive electronics
market, continued defense sequestration and weather-related and other
factors
-
Early in the second quarter, the Company reached a settlement with its
insurance carrier related to its claim for the silver theft at its
Albuquerque, New Mexico facility. A cash settlement of $6.8 million
will favorably affect second quarter earnings
-
Excluding the benefit of the aforementioned sale of assets and
insurance recovery, the Company, at this time, is confirming its
previously announced earnings range for the full-year 2014 of $1.75 to
$1.95 per share
FIRST QUARTER 2014 RESULTS
Sales for the first quarter were $258.9 million, compared to sales of
$299.2 million for the first quarter of 2013. Value-added sales (sales
less pass-through metals as defined in Attachment 4) for the first
quarter were $144.9 million, compared to value-added sales of $151.3
million for the first quarter of 2013. A portion of the decline in the
first quarter sales is due to the timing of hydroxide shipments and
weather-related facility shutdowns. Also contributing to the sales
decline was destocking in the automotive electronics market. Value-added
sales were lower in the industrial components, medical,
telecommunications infrastructure and defense markets and higher in the
consumer electronics and energy markets.
Net income for the first quarter was $7.3 million, or $0.35 per share,
diluted. This compares to net income of $6.8 million, or $0.33 per
share, diluted, for the first quarter of the prior year. Excluding the
net benefit of the aforementioned facility closing costs and related
asset sale, first quarter adjusted earnings were $0.29 per share.
BUSINESS SEGMENT REPORTING
Advanced Material Technologies
Advanced Material Technologies' sales for the first quarter of 2014 were
$163.2 million, which compares to sales of $193.9 million in the first
quarter of 2013. Value-added sales, which removes the impact of changes
in the market prices of pass-through metals as defined in Attachment 4,
were $65.6 million in the first quarter 2014, compared to $68.7 million
in the first quarter of 2013. Compared to the first quarter of the prior
year, value-added sales were up in consumer electronics. The higher
shipment levels were offset by lower business levels in medical, defense
and automotive electronics.
The operating profit for the first quarter of 2014 was $7.6 million,
compared to an operating profit of $3.4 million for the first quarter of
2013. The improvement in operating profit on the lower value-added sales
level is due to the aforementioned sale of assets and the favorable
affect of the previously announced facility closure and product line
rationalization initiatives undertaken in the prior year.
Performance Alloys
Performance Alloys' sales for the first quarter of 2014 were $66.7
million which compares to the first quarter of 2013 sales of $74.5
million. Value-added sales for the first quarter of 2014 were $54.6
million compared to $59.2 million for the first quarter of 2013. First
quarter 2014 value-added sales for the consumer electronics market grew
by approximately 25% from prior-year levels. The year-over-year growth
was offset by the timing of hydroxide shipments as well as weaker demand
levels in the industrial components and telecommunications
infrastructure markets. Automotive destocking and weather-related
factors also negatively affected value-added shipments in this segment.
Operating profit for the first quarter of 2014 was $3.5 million,
compared to an operating profit of $7.2 million in the first quarter of
2013. When comparing to the prior year first quarter, operating profit
was negatively impacted by the lower value-added sales volume identified
above and weaker manufacturing yields.
Beryllium and Composites
Beryllium and Composites' sales for the first quarter of 2014 were $15.5
million, up 18% compared to sales of $12.3 million in the first quarter
2013. 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.
The increase in sales is due primarily to an earlier than anticipated
shipment of Defense Logistic Agency (DLA) stockpile materials offset, in
part, by a delayed shipment of a nuclear medicine product application.
The DLA is in the process of qualifying material for its stockpile and
future shipments to the DLA will be a function of budgetary timing and
decisions.
Operating profit for the first quarter of 2014 was $1.1 million, which
compares to an operating loss of $1.3 million in the first quarter of
2013. The improvement in operating profit is a result of the increased
sales volume as well as improved output from the beryllium pebble plant.
Technical Materials
Technical Materials' sales for the first quarter of 2014 were $13.6
million, compared to $18.5 million for the same period of last year.
Value-added sales were $9.2 million in the first quarter 2014, compared
to $11.1 million for the first quarter of 2013. The decline in
value-added sales was due to lower demand from the consumer electronics
and automotive electronics markets. The lower demand in consumer
electronics was primarily due to a program that reached end of life in
mid-2013 and the decline in automotive electronics was due to
destocking. Helping to partially offset these factors were higher
value-added sales into energy applications.
Operating profit for the first quarter of 2014 was $0.2 million,
compared to an operating profit of $1.4 million for the same period of
last year. The decline in operating profit is due to the lower sales
volume.
INSURANCE RECOVERY
Subsequent to quarter end, the Company entered into an agreement with
its insurer regarding the settlement of its claim related to the silver
theft at its Albuquerque, New Mexico facility that occurred in 2012. A
$6.8 million cash settlement was received in April 2014 and the
financial benefit of the settlement will be recorded in the Company's
second quarter financial results.
OUTLOOK
In recent weeks, we have seen an improvement in order entry rates when
comparing to the same period of the prior year. The improvement is
general in nature and is visible as well in the automotive electronics
and telecommunications infrastructure markets which were both weaker
earlier in the year. All in all, three of our key markets were stronger
in the first quarter when comparing to the prior year. At this time we
expect the majority of our key markets to be sequentially stronger in
the second quarter, with defense remaining weaker. In addition, the
facility closing and product line rationalization initiatives
implemented in 2013 are on schedule to deliver approximately $0.30 per
share benefit in 2014. The beryllium pebble plant, which negatively
impacted earnings in 2013, is operating at planned production levels.
At this time, results on a GAAP basis, including the benefits from the
first quarter asset sale and the second quarter insurance claim
settlement, are expected to be in the range of $2.02 to $2.22 per share.
Excluding these factors, earnings for the full year are expected to be
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, "We are off to a
good start in 2014. The benefits from the actions and initiatives
undertaken during 2013 are materializing and providing increased
confidence in our outlook for the balance of the year. We anticipate a
significant earnings lift in 2014 from the facility and product
rationalizations, the beryllium pebble plant operational improvements
and new product developments."
CONFERENCE CALL
Materion Corporation will host a conference call with analysts at 9:00
a.m. Eastern Time, April 24, 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 May 9,
2014 by dialing (877) 660-6853 or (201) 612-7415; please reference
Conference ID Number 13579692. 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 2014;
-
Our ability to strengthen our internal control over financial
reporting and disclosure controls and procedures;
-
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; 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, 2013.
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
|
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
March 28,
|
|
|
March 29,
|
(In thousands except per share amounts)
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
258,929
|
|
|
$
|
299,169
|
Cost of sales
|
|
|
|
213,467
|
|
|
|
250,830
|
Gross margin
|
|
|
|
45,462
|
|
|
|
48,339
|
Selling, general and administrative expense
|
|
|
|
31,259
|
|
|
|
32,780
|
Research and development expense
|
|
|
|
2,787
|
|
|
|
3,557
|
Other - net
|
|
|
|
363
|
|
|
|
2,480
|
Operating profit
|
|
|
|
11,053
|
|
|
|
9,522
|
Interest expense - net
|
|
|
|
695
|
|
|
|
828
|
Income before income taxes
|
|
|
|
10,358
|
|
|
|
8,694
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
|
3,027
|
|
|
|
1,909
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
7,331
|
|
|
$
|
6,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
Net income per share of common stock
|
|
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
Net income per share of common stock
|
|
|
$
|
0.35
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share
|
|
|
$
|
0.080
|
|
|
$
|
0.075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock outstanding
|
Basic
|
|
|
|
20,604
|
|
|
|
20,481
|
Diluted
|
|
|
|
20,962
|
|
|
|
20,824
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 28,
|
|
|
Dec. 31,
|
(In thousands)
|
|
|
2014
|
|
|
2013
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
19,313
|
|
|
|
$
|
22,774
|
|
Accounts receivable
|
|
|
|
121,527
|
|
|
|
|
113,012
|
|
Inventories
|
|
|
|
226,961
|
|
|
|
|
213,392
|
|
Prepaid expenses
|
|
|
|
38,037
|
|
|
|
|
35,761
|
|
Deferred income taxes
|
|
|
|
9,948
|
|
|
|
|
9,566
|
|
Total current assets
|
|
|
|
415,786
|
|
|
|
|
394,505
|
|
|
|
|
|
|
|
|
Long-term deferred income taxes
|
|
|
|
4,285
|
|
|
|
|
4,672
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
784,513
|
|
|
|
|
782,879
|
|
Less allowances for depreciation, depletion and amortization
|
|
|
|
(529,546
|
)
|
|
|
|
(520,986
|
)
|
Property, plant, and equipment - net
|
|
|
|
254,967
|
|
|
|
|
261,893
|
|
Intangible assets
|
|
|
|
22,751
|
|
|
|
|
24,248
|
|
Other assets
|
|
|
|
4,799
|
|
|
|
|
3,874
|
|
Goodwill
|
|
|
|
88,753
|
|
|
|
|
88,753
|
|
Total Assets
|
|
|
$
|
791,341
|
|
|
|
$
|
777,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Short-term debt
|
|
|
$
|
41,832
|
|
|
|
$
|
35,566
|
|
Accounts payable
|
|
|
|
27,404
|
|
|
|
|
36,556
|
|
Other liabilities and accrued items
|
|
|
|
46,456
|
|
|
|
|
54,851
|
|
Income taxes
|
|
|
|
4,755
|
|
|
|
|
1,564
|
|
Unearned revenue
|
|
|
|
1,941
|
|
|
|
|
479
|
|
Total current liabilities
|
|
|
|
122,388
|
|
|
|
|
129,016
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
|
16,046
|
|
|
|
|
16,531
|
|
Retirement and post-employment benefits
|
|
|
|
59,970
|
|
|
|
|
80,275
|
|
Unearned income
|
|
|
|
55,317
|
|
|
|
|
56,490
|
|
Long-term income taxes
|
|
|
|
1,576
|
|
|
|
|
1,576
|
|
Deferred income taxes
|
|
|
|
6,063
|
|
|
|
|
1,469
|
|
Long-term debt
|
|
|
|
51,107
|
|
|
|
|
29,267
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
478,874
|
|
|
|
|
463,321
|
|
Total Liabilities and Shareholders' Equity
|
|
|
$
|
791,341
|
|
|
|
$
|
777,945
|
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
March 28,
|
|
|
March 29,
|
(In thousands)
|
|
|
2014
|
|
|
2013
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
7,331
|
|
|
|
$
|
6,785
|
|
Adjustments to reconcile net income to net cash provided from
operating activities:
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
12,131
|
|
|
|
|
8,572
|
|
Amortization of deferred financing costs in interest expense
|
|
|
|
178
|
|
|
|
|
162
|
|
Stock-based compensation expense
|
|
|
|
1,412
|
|
|
|
|
1,199
|
|
Changes in assets and liabilities net of acquired assets and
liabilities:
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable
|
|
|
|
(8,214
|
)
|
|
|
|
(4,255
|
)
|
Decrease (increase) in inventory
|
|
|
|
(13,363
|
)
|
|
|
|
3,770
|
|
Decrease (increase) in prepaid and other current assets
|
|
|
|
153
|
|
|
|
|
2,390
|
|
Decrease (increase) in deferred income taxes
|
|
|
|
17
|
|
|
|
|
1,951
|
|
Increase (decrease) in accounts payable and accrued expenses
|
|
|
|
(16,474
|
)
|
|
|
|
(26,153
|
)
|
Increase (decrease) in unearned revenue
|
|
|
|
1,462
|
|
|
|
|
32
|
|
Increase (decrease) in interest and taxes payable
|
|
|
|
2,648
|
|
|
|
|
473
|
|
Increase (decrease) in long-term liabilities
|
|
|
|
(7,671
|
)
|
|
|
|
(525
|
)
|
Other - net
|
|
|
|
(2,821
|
)
|
|
|
|
833
|
|
Net cash used in operating activities
|
|
|
|
(23,211
|
)
|
|
|
|
(4,766
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Payments for purchase of property, plant and equipment
|
|
|
|
(6,120
|
)
|
|
|
|
(5,781
|
)
|
Payments for mine development
|
|
|
|
(80
|
)
|
|
|
|
(3,874
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
3,009
|
|
|
|
|
-
|
|
Other investments - net
|
|
|
|
-
|
|
|
|
|
8
|
|
Net cash used in investing activities
|
|
|
|
(3,191
|
)
|
|
|
|
(9,647
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from issuance (repayment) of short-term debt
|
|
|
|
4,119
|
|
|
|
|
(678
|
)
|
Proceeds from issuance of long-term debt
|
|
|
|
30,086
|
|
|
|
|
20,097
|
|
Repayment of long-term debt
|
|
|
|
(8,246
|
)
|
|
|
|
(247
|
)
|
Principal payments under capital lease obligations
|
|
|
|
(163
|
)
|
|
|
|
(164
|
)
|
Cash dividends paid
|
|
|
|
(1,648
|
)
|
|
|
|
(1,544
|
)
|
Repurchase of common stock
|
|
|
|
(1,466
|
)
|
|
|
|
-
|
|
Issuance of common stock under stock option plans
|
|
|
|
65
|
|
|
|
|
576
|
|
Tax benefit from stock compensation realization
|
|
|
|
13
|
|
|
|
|
920
|
|
Net cash provided from financing activities
|
|
|
|
22,760
|
|
|
|
|
18,960
|
|
Effects of exchange rate changes
|
|
|
|
181
|
|
|
|
|
(361
|
)
|
Net change in cash and cash equivalents
|
|
|
|
(3,461
|
)
|
|
|
|
4,186
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
22,774
|
|
|
|
|
16,056
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
19,313
|
|
|
|
$
|
20,242
|
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
Reconciliation of Non-GAAP Measure - Value-added sales
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
First
|
|
|
|
First
|
|
|
|
Fourth
|
|
|
|
|
|
|
|
|
|
Quarter 2014
|
|
|
|
Quarter 2013
|
|
|
|
Quarter 2013
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
|
$
|
163,197
|
|
|
|
|
$
|
193,853
|
|
|
|
|
$
|
178,082
|
|
|
|
|
|
Performance Alloys
|
|
|
|
66,685
|
|
|
|
|
|
74,522
|
|
|
|
|
|
73,754
|
|
|
|
|
|
Beryllium and Composites
|
|
|
|
15,497
|
|
|
|
|
|
12,322
|
|
|
|
|
|
19,144
|
|
|
|
|
|
Technical Materials
|
|
|
|
13,550
|
|
|
|
|
|
18,472
|
|
|
|
|
|
15,158
|
|
|
|
|
|
All Other
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
Total
|
|
|
$
|
258,929
|
|
|
|
|
$
|
299,169
|
|
|
|
|
$
|
286,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Pass-through Metal Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
|
$
|
97,624
|
|
|
|
|
$
|
125,180
|
|
|
|
|
$
|
109,717
|
|
|
|
|
|
Performance Alloys
|
|
|
|
12,052
|
|
|
|
|
|
15,300
|
|
|
|
|
|
14,000
|
|
|
|
|
|
Beryllium and Composites
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
Technical Materials
|
|
|
|
4,393
|
|
|
|
|
|
7,400
|
|
|
|
|
|
5,200
|
|
|
|
|
|
All Other
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
Total
|
|
|
$
|
114,069
|
|
|
|
|
$
|
147,880
|
|
|
|
|
$
|
128,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value-added Sales (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
|
$
|
65,573
|
|
|
|
|
$
|
68,673
|
|
|
|
|
$
|
68,365
|
|
|
|
|
|
Performance Alloys
|
|
|
|
54,633
|
|
|
|
|
|
59,222
|
|
|
|
|
|
59,754
|
|
|
|
|
|
Beryllium and Composites
|
|
|
|
15,497
|
|
|
|
|
|
12,322
|
|
|
|
|
|
19,144
|
|
|
|
|
|
Technical Materials
|
|
|
|
9,157
|
|
|
|
|
|
11,072
|
|
|
|
|
|
9,958
|
|
|
|
|
|
All Other
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
Total
|
|
|
$
|
144,860
|
|
|
|
|
$
|
151,289
|
|
|
|
|
$
|
157,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of VA
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
|
$
|
23,206
|
|
|
35
|
%
|
|
$
|
24,927
|
|
|
36
|
%
|
|
$
|
24,530
|
|
|
|
|
36
|
%
|
Performance Alloys
|
|
|
|
15,498
|
|
|
28
|
%
|
|
|
17,345
|
|
|
29
|
%
|
|
|
15,946
|
|
|
|
|
27
|
%
|
Beryllium and Composites
|
|
|
|
4,906
|
|
|
32
|
%
|
|
|
2,720
|
|
|
22
|
%
|
|
|
4,301
|
|
|
|
|
22
|
%
|
Technical Materials
|
|
|
|
2,044
|
|
|
22
|
%
|
|
|
3,578
|
|
|
32
|
%
|
|
|
4,071
|
|
|
|
|
41
|
%
|
All Other
|
|
|
|
(192
|
)
|
|
-
|
|
|
|
(231
|
)
|
|
-
|
|
|
|
316
|
|
|
|
|
-
|
|
Total
|
|
|
$
|
45,462
|
|
|
31
|
%
|
|
$
|
48,339
|
|
|
32
|
%
|
|
$
|
49,164
|
|
|
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of VA
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
Operating Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Material Technologies
|
|
|
$
|
7,604
|
|
|
12
|
%
|
|
$
|
3,351
|
|
|
5
|
%
|
|
$
|
(550
|
)
|
|
|
|
(1
|
%)
|
Performance Alloys
|
|
|
|
3,548
|
|
|
6
|
%
|
|
|
7,236
|
|
|
12
|
%
|
|
|
4,730
|
|
|
|
|
8
|
%
|
Beryllium and Composites
|
|
|
|
1,102
|
|
|
7
|
%
|
|
|
(1,296
|
)
|
|
(11
|
%)
|
|
|
254
|
|
|
|
|
1
|
%
|
Technical Materials
|
|
|
|
182
|
|
|
2
|
%
|
|
|
1,436
|
|
|
13
|
%
|
|
|
1,651
|
|
|
|
|
17
|
%
|
All Other
|
|
|
|
(1,383
|
)
|
|
-
|
|
|
|
(1,205
|
)
|
|
-
|
|
|
|
(665
|
)
|
|
|
|
-
|
|
Total
|
|
|
$
|
11,053
|
|
|
8
|
%
|
|
$
|
9,522
|
|
|
6
|
%
|
|
$
|
5,420
|
|
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
First
|
|
First
|
|
Fourth
|
|
|
|
Quarter 2014
|
|
Quarter 2013
|
|
Quarter 2013
|
GAAP as Reported
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
258,929
|
|
|
$
|
299,169
|
|
|
$
|
286,138
|
|
Gross margin
|
|
|
|
45,462
|
|
|
|
48,339
|
|
|
|
49,164
|
|
Operating profit
|
|
|
|
11,053
|
|
|
|
9,522
|
|
|
|
5,420
|
|
Net income
|
|
|
|
7,331
|
|
|
|
6,785
|
|
|
|
3,775
|
|
EPS - Diluted
|
|
|
$
|
0.35
|
|
|
$
|
0.33
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
Facility closure and product line rationalization costs
(benefits)
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
$
|
196
|
|
|
$
|
-
|
|
|
$
|
1,299
|
|
Selling, general and administrative
|
|
|
|
459
|
|
|
|
-
|
|
|
|
2,260
|
|
Other-net
|
|
|
|
(2,627
|
)
|
|
|
-
|
|
|
|
1,373
|
|
Total special items
|
|
|
$
|
(1,972
|
)
|
|
$
|
-
|
|
|
$
|
4,932
|
|
|
|
|
|
|
|
|
|
Special items - net of tax
|
|
|
$
|
(1,341
|
)
|
|
$
|
-
|
|
|
$
|
3,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures - Adjusted Profitability
|
|
|
|
|
|
|
|
Value-added sales
|
|
|
$
|
144,860
|
|
|
$
|
151,289
|
|
|
$
|
157,221
|
|
Gross margin
|
|
|
|
45,658
|
|
|
|
48,339
|
|
|
|
50,463
|
|
Gross margin % of VA
|
|
|
|
31.5
|
%
|
|
|
32.0
|
%
|
|
|
32.1
|
%
|
Operating profit
|
|
|
|
9,081
|
|
|
|
9,522
|
|
|
|
10,352
|
|
Operating profit % of VA
|
|
|
|
6.3
|
%
|
|
|
6.3
|
%
|
|
|
6.6
|
%
|
Net income
|
|
|
|
5,990
|
|
|
|
6,785
|
|
|
|
7,129
|
|
EPS - Diluted
|
|
|
$
|
0.29
|
|
|
$
|
0.33
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
(benefit) impact of the plant consolidation and product line
rationalization efforts in our Advanced Material Technologies segment
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
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
Hts-g
Source: Materion Corporation
News Provided by Acquire Media