Confirms Outlook for 2015
MAYFIELD HEIGHTS, Ohio--(BUSINESS WIRE)--
Materion Corporation (NYSE:MTRN) today reported first quarter 2015
financial results.
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First quarter 2015 GAAP earnings were $0.47 per share, diluted. This
compares to $0.35 per share, diluted, earned in the first quarter of
2014.
-
Adjusted first quarter earnings were $0.41 per share, diluted, up 41%,
compared to $0.29 per share, diluted, in the first quarter of 2014.
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Net sales for the first quarter of 2015 were $290.0 million.
Value-added sales were $162.6 million, up 12% compared to the prior
year period.
-
Adjusted operating profit margin, as a percent of value-added sales,
expanded year over year to 7.4%, a 110 basis point improvement.
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All three business groups delivered top line growth and expanded
profit margins in the first quarter of 2015 compared to the first
quarter of 2014.
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The Company confirms its previously announced 2015 adjusted earnings
forecast range of $1.80 to $2.00 per share, diluted.
FIRST QUARTER 2015 RESULTS
Net sales for the first quarter were $290.0 million, compared to net
sales of $258.9 million for the first quarter of 2014. Value-added sales
grew 12% to $162.6 million compared to value-added sales of $144.9
million for the first quarter of 2014. The growth in value-added sales
in the first quarter of 2015 compared to the same period of last year
was due primarily to stronger demand from customers in the industrial
components, medical, consumer electronics, automotive electronics and
defense markets.
Adjusted operating profit for the first quarter of 2015, which excludes
the net benefit of an insurance settlement related to the pebble plant,
reached $12.1 million, a 33% increase over the prior-year first quarter
adjusted operating profit. Adjusted operating profit margin, expressed
as a percent of value-added sales, expanded by 110 basis points to 7.4%
from the 2014 first quarter level. The margin improvement is a result of
the higher sales volume and an improved product mix.
Net income for the first quarter of 2015 was $9.6 million, or $0.47 per
share, diluted. This compares to net income of $7.3 million, or $0.35
per share, diluted, for the first quarter of the prior year. Adjusted
earnings, which excludes the net insurance settlement benefit, for the
first quarter of 2015 were $0.41 per share, diluted, up 41% compared to
the first quarter of 2014 adjusted earnings of $0.29 per share, diluted.
CHAIRMAN'S COMMENTS
Richard J. Hipple, Chairman, President and Chief Executive Officer,
stated, "We are off to a great start for 2015. This marks the fourth
consecutive quarter of meaningful year-over-year earnings and
value-added sales growth. The strength across the majority of our key
end markets, combined with our ability to penetrate new markets and
applications with our differentiated products, more than offset the
significant decline in oil and gas and adverse impacts of the weakening
euro. I am encouraged with the value-added sales growth and expanded
profit margin each of our three business groups recorded in the quarter,
along with our new product sales comprising 11% of our net sales. We
remain committed to strategies that achieve strong organic value-added
sales growth and margin expansion."
ANALYST MEETING
On Wednesday, May 13, 2015, the Company is hosting an Investor Day for
investment professionals at the Plaza Hotel in New York City, New York,
from 9:00 a.m. to 12:00 p.m. During the event, Chairman, President and
Chief Executive Officer, Richard Hipple, Vice President, Finance and
Chief Financial Officer, Joseph Kelley, and each of the Company's
business unit Presidents will present an overview of the Company's
growth opportunities and long-range 2017 financial targets. Those
interested in attending should contact Lynn Benz at (216) 383-6812.
BUSINESS SEGMENT REPORTING
Advanced Materials
Advanced Materials' net sales for the first quarter of 2015 were $149.9
million, which compares to first quarter of 2014 net sales of $129.3
million. Value-added sales for the first quarter of 2015 were $51.7
million, up 24% compared to the first quarter 2014 value-added sales of
$41.7 million. The improvement in the first quarter value-added sales
compared to the same period last year was driven primarily by strength
from customers in the consumer electronics, industrial components and
the broader semiconductor market.
Operating profit for the first quarter of 2015 was $8.9 million, up $3.4
million, or 62%, compared to an adjusted operating profit of $5.5
million in the first quarter of 2014. Operating profit as a percent of
value-added sales for the first quarter of 2015 was 17.2% compared to
adjusted operating profit of 13.2% for the first quarter of 2014. The
significant improvement in profit margins is a result of leveraging a
double-digit volume growth and favorable product mix.
Performance Alloys and Composites
Net sales for Performance Alloys and Composites in the first quarter of
2015 were $103.3 million, a 6% increase over net sales of $97.2 million
in the first quarter of 2014. Value-added sales were $85.6 million in
the first quarter of 2015, up $5.6 million, or 7%, compared to $80.0
million in the first quarter of 2014. A strong 8% volume increase,
primarily in the industrial components end market, offset the headwinds
from a weakening euro and declines in the energy market and, more
specifically, with oil and gas customers.
Operating profit for the first quarter of 2015 was $6.8 million, or 7.9%
of value-added sales, which compares to $6.2 million, or 7.8% of
value-added sales, for the first quarter of 2014. The operating profit
margin expansion resulted primarily from leveraging the volume growth.
Other
The Other segment includes the operating results of the Precision
Coatings group and unallocated corporate costs.
Within the Other segment, Precision Coatings' net sales for the first
quarter of 2015 were $36.6 million, which compare to net sales of $33.9
million for the first quarter of 2014. Value-added sales for the first
quarter of 2015 were $24.6 million, up $0.7 million, or 3%, compared to
value-added sales of $23.9 million for the same period of 2014. The
increase in value-added sales is due to stronger demand from customers
in the medical, automotive electronics and defense markets, offset in
part by weaker demand in consumer electronics.
Precision Coatings' operating profit for the first quarter of 2015 was
$1.7 million, or 6.9% of value-added sales, which compares to an
adjusted operating profit of $1.5 million, or 6.3% of value-added sales,
for the first quarter of 2014.
OUTLOOK
The success of our new product development efforts has broadened the
Company's market breadth and enhanced growth opportunities across the
Company's key markets. Despite the headwinds from the oil and gas market
and the weakening euro, we continue to have momentum overall and are
committed to growing both value-added sales and earnings in 2015. The
Company is therefore confirming its previously announced 2015 adjusted
earnings forecast range of $1.80 to $2.00 per share, diluted, 10-20%
above 2014 adjusted earnings of $1.65 per share, diluted.
CONFERENCE CALL
Materion Corporation will host a conference call with analysts at 9:00
a.m. Eastern Time, April 30, 2015. 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 15,
2015 by dialing (877) 660-6853 or (201) 612-7415; please reference
Conference ID Number 13606106. 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:
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Actual net sales, operating rates and margins for 2015;
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The global economy;
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The impact of any U.S. Federal Government shutdowns and sequestrations;
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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, energy, telecommunications infrastructure, defense,
commercial aerospace, and science;
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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 implementing our strategic plans and the timely and
successful completion and start-up of any capital projects, including
the beryllium pebble facility in Elmore, Ohio;
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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 success of the realignment of our businesses; and
-
The risk factors as set forth in Item 1A of our Form 10-K for the year
ended December 31, 2014.
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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Attachment 1
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Consolidated Statements of Income
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(Unaudited)
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First Quarter Ended
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April 3,
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March 28,
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(In thousands except per share amounts)
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2015
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2014
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Net sales
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$
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290,024
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$
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258,929
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Cost of sales
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237,669
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213,467
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Gross margin
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52,355
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45,462
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Selling, general and administrative expense
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36,941
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31,259
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Research and development expense
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3,348
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2,787
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Other - net
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(2,158
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)
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363
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Operating profit
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14,224
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11,053
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Interest expense - net
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657
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695
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Income before income taxes
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13,567
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10,358
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Income tax expense
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3,938
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3,027
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Net income
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$
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9,629
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$
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7,331
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Basic earnings per share:
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Net income per share of common stock
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$
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0.48
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$
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0.36
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Diluted earnings per share:
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Net income per share of common stock
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$
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0.47
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$
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0.35
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Cash dividends per share
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$
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0.085
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$
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0.080
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Weighted average number of shares of common stock outstanding
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Basic
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20,144
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20,604
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Diluted
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20,447
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20,962
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Materion Corporation
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Attachment 2
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Consolidated Balance Sheets
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(Unaudited)
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April 3,
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Dec. 31,
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(In thousands)
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2015
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2014
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Assets
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Current assets
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Cash and cash equivalents
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$
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21,938
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$
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13,150
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Accounts receivable
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117,126
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112,780
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Inventories
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237,028
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232,409
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Prepaid expenses
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17,161
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14,953
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Deferred income taxes
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13,347
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13,402
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Total current assets
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406,600
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386,694
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Long-term deferred income taxes
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17,494
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17,722
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Property, plant and equipment
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813,806
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800,671
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Less allowances for depreciation,
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depletion and amortization
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(565,456
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)
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(553,083
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)
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Property, plant, and equipment - net
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248,350
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247,588
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Intangible assets
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17,109
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18,559
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Other assets
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4,868
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4,781
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Goodwill
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86,725
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86,725
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Total Assets
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$
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781,146
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$
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762,069
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Liabilities and Shareholders' Equity
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Current liabilities
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Short-term debt
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$
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667
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$
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653
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Accounts payable
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38,054
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36,239
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Other liabilities and accrued items
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41,171
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59,151
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Income taxes
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4,222
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3,144
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Unearned revenue
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10,389
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4,879
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Total current liabilities
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94,503
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104,066
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Other long-term liabilities
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17,853
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18,203
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Retirement and post-employment benefits
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99,701
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103,891
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Unearned income
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49,469
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51,796
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Long-term income taxes
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1,750
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1,750
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Deferred income taxes
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2,166
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617
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Long-term debt
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50,787
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23,613
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Shareholders' equity
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464,917
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458,133
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Total Liabilities and Shareholders' Equity
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$
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781,146
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$
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762,069
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Materion Corporation
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Attachment 3
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Consolidated Statements of Cash Flows
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(Unaudited)
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Three Months Ended
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April 3,
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March 28,
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(In thousands)
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2015
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2014
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Cash flows from operating activities:
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Net income
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$
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9,629
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$
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7,331
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Adjustments to reconcile net income to net cash used in
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operating activities:
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Depreciation, depletion and amortization
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11,909
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12,131
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Amortization of deferred financing costs in interest expense
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148
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178
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Changes in assets and liabilities net of acquired assets and
liabilities:
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Decrease (increase) in accounts receivable
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(5,467
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)
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(8,214
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)
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Decrease (increase) in inventory
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(5,925
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(13,363
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Decrease (increase) in prepaid and other current assets
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(2,480
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)
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153
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Decrease (increase) in deferred income taxes
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340
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17
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Increase (decrease) in accounts payable and accrued expenses
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(18,494
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(16,474
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Increase (decrease) in unearned revenue
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5,510
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1,462
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Increase (decrease) in interest and taxes payable
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1,314
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2,648
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Increase (decrease) in long-term liabilities
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(1,520
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)
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(7,671
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Other - net
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969
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(1,409
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)
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Net cash used in operating activities
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(4,067
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(23,211
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)
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Cash flows from investing activities:
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Payments for purchase of property, plant and equipment
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(7,196
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(6,120
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)
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Payments for mine development
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(3,748
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)
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(80
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)
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Proceeds from sale of property, plant and equipment
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-
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3,009
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Net cash used in investing activities
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(10,944
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)
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(3,191
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)
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Cash flows from financing activities:
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Proceeds from issuance (repayment) of short-term debt
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13
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4,119
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Proceeds from issuance of long-term debt
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41,103
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|
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30,086
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Repayment of long-term debt
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(13,929
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)
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(8,246
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)
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Principal payments under capital lease obligations
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|
(230
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)
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|
|
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(163
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)
|
Cash dividends paid
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|
|
(1,708
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)
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(1,648
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)
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Repurchase of common stock
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(768
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)
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(1,466
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)
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Issuance of common stock under stock option plans
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|
-
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65
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Tax benefit from stock compensation realization
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-
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|
13
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|
Net cash provided from financing activities
|
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|
|
24,481
|
|
|
|
|
22,760
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Effects of exchange rate changes
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|
(682
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)
|
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|
181
|
|
Net change in cash and cash equivalents
|
|
|
|
8,788
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|
|
|
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(3,461
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)
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Cash and cash equivalents at beginning of period
|
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13,150
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|
|
|
|
22,774
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Cash and cash equivalents at end of period
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|
$
|
21,938
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$
|
19,313
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Materion Corporation
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Attachment 4
|
Reconciliation of Non-GAAP Measure Value-added sales
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|
|
First Quarter Ended
|
|
Fourth Quarter
|
|
|
|
|
|
April 3, 2015
|
|
March 28, 2014
|
|
Dec. 31, 2014
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
103.3
|
|
|
|
|
|
|
$
|
97.2
|
|
|
|
|
|
|
$
|
112.3
|
|
|
|
|
|
|
AM
|
|
|
|
|
149.9
|
|
|
|
|
|
|
|
129.3
|
|
|
|
|
|
|
|
135.3
|
|
|
|
|
|
|
Other
|
|
|
|
|
36.8
|
|
|
|
|
|
|
|
32.4
|
|
|
|
|
|
|
|
40.8
|
|
|
|
|
|
|
PC
|
|
|
|
|
|
36.6
|
|
|
|
|
|
|
33.9
|
|
|
|
|
|
|
39.7
|
|
|
|
|
Corp
|
|
|
|
|
0.2
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
1.1
|
|
|
|
|
Total
|
|
|
|
$
|
290.0
|
|
|
|
|
|
|
$
|
258.9
|
|
|
|
|
|
|
$
|
288.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Pass-through Metal Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
17.7
|
|
|
|
|
|
|
$
|
17.2
|
|
|
|
|
|
|
$
|
18.4
|
|
|
|
|
|
|
AM
|
|
|
|
|
98.2
|
|
|
|
|
|
|
|
87.6
|
|
|
|
|
|
|
|
87.0
|
|
|
|
|
|
|
Other
|
|
|
|
|
11.5
|
|
|
|
|
|
|
|
9.2
|
|
|
|
|
|
|
|
16.0
|
|
|
|
|
|
|
PC
|
|
|
|
|
|
12.0
|
|
|
|
|
|
|
10.0
|
|
|
|
|
|
|
13.2
|
|
|
|
|
Corp
|
|
|
|
|
(0.5
|
)
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
2.8
|
|
|
|
|
Total
|
|
|
|
$
|
127.4
|
|
|
|
|
|
|
$
|
114.0
|
|
|
|
|
|
|
$
|
121.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value-added Sales (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
85.6
|
|
|
|
|
|
|
$
|
80.0
|
|
|
|
|
|
|
$
|
93.9
|
|
|
|
|
|
|
AM
|
|
|
|
|
51.7
|
|
|
|
|
|
|
|
41.7
|
|
|
|
|
|
|
|
48.3
|
|
|
|
|
|
|
Other
|
|
|
|
|
25.3
|
|
|
|
|
|
|
|
23.2
|
|
|
|
|
|
|
|
24.8
|
|
|
|
|
|
|
PC
|
|
|
|
|
|
24.6
|
|
|
|
|
|
|
23.9
|
|
|
|
|
|
|
26.5
|
|
|
|
|
Corp
|
|
|
|
|
0.7
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
(1.7
|
)
|
|
|
|
Total
|
|
|
|
$
|
162.6
|
|
|
|
|
|
|
$
|
144.9
|
|
|
|
|
|
|
$
|
167.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
23.1
|
|
|
|
|
27
|
%
|
|
$
|
22.7
|
|
|
|
|
28
|
%
|
|
$
|
26.8
|
|
|
|
|
29
|
%
|
|
AM
|
|
|
|
|
20.7
|
|
|
|
|
40
|
%
|
|
|
16.1
|
|
|
|
|
39
|
%
|
|
|
20.6
|
|
|
|
|
43
|
%
|
|
Other
|
|
|
|
|
8.6
|
|
|
|
|
-
|
|
|
|
6.7
|
|
|
|
|
-
|
|
|
|
8.5
|
|
|
|
|
-
|
|
|
PC
|
|
|
|
|
|
8.3
|
|
|
34
|
%
|
|
|
|
7.1
|
|
|
30
|
%
|
|
|
|
9.6
|
|
|
36
|
%
|
|
Corp
|
|
|
|
|
0.3
|
|
|
-
|
|
|
|
|
(0.4
|
)
|
|
-
|
|
|
|
|
(1.1
|
)
|
|
-
|
|
|
Total
|
|
|
|
$
|
52.4
|
|
|
|
|
32
|
%
|
|
$
|
45.5
|
|
|
|
|
31
|
%
|
|
$
|
55.8
|
|
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
Operating Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
6.8
|
|
|
|
|
8
|
%
|
|
$
|
6.2
|
|
|
|
|
8
|
%
|
|
$
|
9.9
|
|
|
|
|
11
|
%
|
|
AM
|
|
|
|
|
8.9
|
|
|
|
|
17
|
%
|
|
|
5.1
|
|
|
|
|
12
|
%
|
|
|
7.2
|
|
|
|
|
15
|
%
|
|
Other
|
|
|
|
|
(1.5
|
)
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
|
-
|
|
|
|
(3.2
|
)
|
|
|
|
-
|
|
|
PC
|
|
|
|
|
|
1.7
|
|
|
7
|
%
|
|
|
|
4.1
|
|
|
17
|
%
|
|
|
|
2.5
|
|
|
9
|
%
|
|
Corp
|
|
|
|
|
(3.2
|
)
|
|
-
|
|
|
|
|
(4.3
|
)
|
|
-
|
|
|
|
|
(5.7
|
)
|
|
-
|
|
|
Total
|
|
|
|
$
|
14.2
|
|
|
|
|
9
|
%
|
|
$
|
11.1
|
|
|
|
|
8
|
%
|
|
$
|
13.9
|
|
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAC
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
AM
|
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
Other
|
|
|
|
|
(2.1
|
)
|
|
|
|
|
|
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
PC
|
|
|
|
|
|
|
|
|
|
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|
Corp
|
|
|
|
-
|
|
|
(2.1
|
)
|
|
|
|
|
-
|
|
|
0.2
|
|
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
(2.1
|
)
|
|
|
|
|
|
$
|
(2.0
|
)
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit Excluding Special Items
|
|
% of VA
|
|
|
|
|
|
% of VA
|
|
|
|
|
|
% of VA
|
|
PAC
|
|
|
|
$
|
6.8
|
|
|
|
|
7.9
|
%
|
|
$
|
6.2
|
|
|
|
|
7.8
|
%
|
|
$
|
9.9
|
|
|
|
|
10.5
|
%
|
|
AM
|
|
|
|
|
8.9
|
|
|
|
|
17.2
|
%
|
|
|
5.5
|
|
|
|
|
13.2
|
%
|
|
|
7.2
|
|
|
|
|
14.9
|
%
|
|
Other
|
|
|
|
|
(3.6
|
)
|
|
|
|
|
|
|
(2.6
|
)
|
|
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
PC
|
|
|
|
|
|
1.7
|
|
|
6.9
|
%
|
|
|
-
|
|
|
1.5
|
|
|
6.3
|
%
|
|
|
|
2.5
|
|
|
9.4
|
%
|
|
Corp
|
|
|
|
|
(5.3
|
)
|
|
|
|
|
|
(4.1
|
)
|
|
|
|
|
|
(5.7
|
)
|
|
|
|
Total
|
|
|
|
$
|
12.1
|
|
|
|
|
7.4
|
%
|
|
$
|
9.1
|
|
|
|
|
6.3
|
%
|
|
$
|
13.9
|
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The cost of gold, silver, platinum, palladium and copper is passed
through to customers and therefore the trends and comparisons of net
sales are affected by movements in the market price of these metals.
Internally, management also reviews net sales on a value-added
basis. Value-added sales is a non-GAAP measure that deducts the
value of the pass-through metals sold from net sales. Value-added
sales allows management to assess the impact of differences in net
sales between periods or segments and analyze the resulting margins
and profitability without the distortion of the movements in
pass-through 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 net sales to calculate value-added sales.
|
|
The Company's pricing policy is to pass the cost of these metals on
to customers in order to mitigate the impact of price volatility on
the Company's results from operations. Value-added information is
being presented since changes in metal prices may not directly
impact profitability. It is the Company's intent to allow users of
the financial statements to review sales with and without the impact
of the pass-through metals.
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
|
|
Attachment 5
|
Reconciliation of Non-GAAP Measure - Profitability
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
Fourth Quarter Ended
|
|
|
(In millions except per share amounts)
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
Dec. 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
290.0
|
|
|
|
$
|
258.9
|
|
|
|
$
|
288.4
|
|
|
|
|
Gross margin
|
|
|
|
52.4
|
|
|
|
|
45.5
|
|
|
|
|
55.8
|
|
|
|
|
Operating profit
|
|
|
|
14.2
|
|
|
|
|
11.1
|
|
|
|
|
13.9
|
|
|
|
|
Net income
|
|
|
|
9.6
|
|
|
|
|
7.3
|
|
|
|
|
12.0
|
|
|
|
|
EPS - Diluted
|
|
|
$
|
0.47
|
|
|
|
$
|
0.35
|
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility closure and reorganization costs (benefits)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
$
|
-
|
|
|
|
$
|
0.2
|
|
|
|
$
|
-
|
|
|
|
|
Selling, general and administrative
|
|
|
|
-
|
|
|
|
|
0.4
|
|
|
|
|
-
|
|
|
|
|
Other-net
|
|
|
|
-
|
|
|
|
|
(2.6
|
)
|
|
|
|
-
|
|
|
Recovery from insurance and other litigation, net of expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
$
|
1.7
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
|
Other-net
|
|
|
|
(3.8
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
Total special items
|
|
|
$
|
(2.1
|
)
|
|
|
$
|
(2.0
|
)
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items - net of tax
|
|
|
$
|
(1.5
|
)
|
|
|
$
|
(1.3
|
)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Special Item
|
|
|
$
|
0.2
|
|
|
|
$
|
-
|
|
|
|
$
|
(1.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures - Adjusted Profitability
|
|
|
|
|
|
|
|
|
|
|
|
|
Value-added (VA) sales
|
|
|
$
|
162.6
|
|
|
|
$
|
144.9
|
|
|
|
$
|
167.0
|
|
|
|
|
Gross margin
|
|
|
|
52.4
|
|
|
|
|
45.7
|
|
|
|
|
55.8
|
|
|
|
|
Gross margin % of VA
|
|
|
|
32.2
|
%
|
|
|
|
31.5
|
%
|
|
|
|
33.4
|
%
|
|
|
|
Operating profit
|
|
|
|
12.1
|
|
|
|
|
9.1
|
|
|
|
|
13.9
|
|
|
|
|
Operating profit % of VA
|
|
|
|
7.4
|
%
|
|
|
|
6.3
|
%
|
|
|
|
8.3
|
%
|
|
|
|
Net income
|
|
|
|
8.3
|
|
|
|
|
6.0
|
|
|
|
|
10.2
|
|
|
|
|
EPS - Diluted
|
|
|
$
|
0.41
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to presenting financial statements prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this earnings release contains financial 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 net recovery from
insurance and other litigation claims and certain income tax items
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
|
|
|
Attachment 6
|
Value-added sales by Market
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
|
|
|
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materion Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Electronics
|
|
|
$
|
44.4
|
|
|
$
|
41.9
|
|
|
6
|
%
|
|
Industrial Components
|
|
|
|
25.2
|
|
|
|
19.3
|
|
|
31
|
%
|
|
Medical
|
|
|
|
|
|
17.6
|
|
|
|
14.2
|
|
|
24
|
%
|
|
Automotive Electronics |
|
|
|
15.0
|
|
|
|
13.6
|
|
|
10
|
%
|
|
Energy
|
|
|
|
|
|
12.4
|
|
|
|
12.2
|
|
|
2
|
%
|
|
Defense
|
|
|
|
|
|
9.6
|
|
|
|
8.4
|
|
|
14
|
%
|
|
Telecom Infrastructure
|
|
|
|
9.2
|
|
|
|
8.2
|
|
|
12
|
%
|
|
Other
|
|
|
|
|
|
29.2
|
|
|
|
27.1
|
|
|
8
|
%
|
|
|
Total
|
|
|
|
$
|
162.6
|
|
|
$
|
144.9
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Alloy & Composites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Electronics
|
|
|
$
|
15.9
|
|
|
$
|
15.0
|
|
|
6
|
%
|
|
Industrial Components
|
|
|
|
18.1
|
|
|
|
13.9
|
|
|
30
|
%
|
|
Medical
|
|
|
|
|
|
1.8
|
|
|
|
1.8
|
|
|
0
|
%
|
|
Automotive Electronics |
|
|
|
13.9
|
|
|
|
13.3
|
|
|
5
|
%
|
|
Energy
|
|
|
|
|
|
8.3
|
|
|
|
9.1
|
|
|
-9
|
%
|
|
Defense
|
|
|
|
|
|
4.9
|
|
|
|
5.0
|
|
|
-2
|
%
|
|
Telecom Infrastructure
|
|
|
|
6.6
|
|
|
|
5.9
|
|
|
12
|
%
|
|
Other
|
|
|
|
|
|
16.1
|
|
|
|
16.0
|
|
|
1
|
%
|
|
|
Total
|
|
|
|
$
|
85.6
|
|
|
$
|
80.0
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Electronics
|
|
|
$
|
23.4
|
|
|
$
|
20.1
|
|
|
16
|
%
|
|
Industrial Components
|
|
|
|
6.4
|
|
|
|
4.4
|
|
|
45
|
%
|
|
Medical
|
|
|
|
|
|
2.6
|
|
|
|
1.8
|
|
|
44
|
%
|
|
Automotive Electronics |
|
|
|
-
|
|
|
|
-
|
|
|
0
|
%
|
|
Energy
|
|
|
|
|
|
4.1
|
|
|
|
3.1
|
|
|
32
|
%
|
|
Defense
|
|
|
|
|
|
2.0
|
|
|
|
1.3
|
|
|
54
|
%
|
|
Telecom Infrastructure
|
|
|
|
2.7
|
|
|
|
2.3
|
|
|
17
|
%
|
|
Other
|
|
|
|
|
|
10.5
|
|
|
|
8.7
|
|
|
21
|
%
|
|
|
Total
|
|
|
|
$
|
51.7
|
|
|
$
|
41.7
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other/Precision Coatings Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Electronics
|
|
|
$
|
5.1
|
|
|
$
|
6.8
|
|
|
-25
|
%
|
|
Industrial Components
|
|
|
|
0.7
|
|
|
|
1.0
|
|
|
-30
|
%
|
|
Medical
|
|
|
|
|
|
13.2
|
|
|
|
10.6
|
|
|
25
|
%
|
|
Automotive Electronics |
|
|
|
1.1
|
|
|
|
0.3
|
|
|
267
|
%
|
|
Energy
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Defense
|
|
|
|
|
|
2.7
|
|
|
|
2.1
|
|
|
29
|
%
|
|
Telecom Infrastructure
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Other
|
|
|
|
|
|
2.5
|
|
|
|
2.4
|
|
|
4
|
%
|
|
|
Total
|
|
|
|
$
|
25.3
|
|
|
$
|
23.2
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|

Materion Corporation
Investors:
Michael
C. Hasychak, 216-383-6823
mike.hasychak@materion.com
or
Media:
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