Materion Corporation (NYSE:MTRN) Q2 2023 Earnings Conference Call August 2, 2023 9:00 AM ET Company Participants John Zaranec - Chief Accounting Officer Jugal Vijayvargiya - President and Chief Executive Officer Shelly Chadwick - Vice President and Chief Financial Officer Conference Call Participants Philip Gibbs - KeyBanc Capital Markets Michael Harrison - Seaport Research Partners Daniel Moore - CJS Securities David Silver - CL King David Storms - Stonegate Capital Markets Operator Greetings. Welcome to t ...

Financial Data and Key Metrics Changes - Materion Corporation reported record first-quarter performance with value-added sales growth of 15%, EBITDA growth of 20%, and EPS growth of 12% [6][7][14] - Adjusted earnings per share were $1.34, up 12% year-over-year, despite approximately $0.15 of interest expense headwinds [14][38] - Adjusted EBITDA was $53.4 million, representing 17.9% of value-added sales, with a margin expansion of 70 basis points [14][38] Business Line Data and Key Metrics Changes - Performance Materials business achieved record value-added sales of $168 million, up 30% year-over-year, with an EBITDA margin of 25.5%, up 420 basis points [26] - Electronic Materials reported value-added sales of $103.9 million, up 2% year-over-year, but EBITDA decreased by 24% due to cost headwinds and unfavorable mix impacts [34] - Precision Optics segment saw value-added sales decline by 7% to $26.7 million, although EBITDA margin improved by 240 basis points [36] Market Data and Key Metrics Changes - Strong demand was noted across aerospace, automotive, and energy markets, contributing to above-market growth [25][19] - The company experienced a more than 70% content increase in automotive applications, over 25% in aerospace, and over 20% in oil and gas since 2019 [8] Company Strategy and Development Direction - Materion is focused on operational excellence and targeted cost management while advancing growth initiatives [11][18] - The company is expanding its Milwaukee facility to support production of sophisticated semiconductor chips and materials for next-generation batteries [9] - Materion raised its full-year guidance for 2023, expecting continued growth despite market softness in certain areas [23][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong results in 2023, even amid challenges in semiconductor and consumer electronics markets [22][38] - The company is optimistic about the impact of the Inflation Reduction Act, estimating an $8 million benefit for the year [30][33] - Management noted that while there is cautiousness in the semiconductor market, they expect to outperform overall market growth [46][70] Other Important Information - Materion ended the quarter with a net debt position of approximately $418 million and $187 million of available capacity on its credit facility [37] - The company expects to spend approximately $95 million in capital expenditures in 2023 to fund growth opportunities [38] Q&A Session Summary Question: Benefits from the Inflation Reduction Act - Management indicated an estimated benefit of roughly $8 million for the year from the Inflation Reduction Act, which was larger than initially anticipated [30][33] Question: Electronic Materials performance - The decline in Electronic Materials EBITDA was attributed to Tantalum cost headwinds and unfavorable mix impacts from softening precious metal sales [34][65] Question: Future growth in Precision Optics - Management expects sequential improvement in Precision Optics supported by new business wins in defense and space [48] Question: Working capital release - Management is focused on improving working capital and expects a positive release this year compared to previous years [95] Question: M&A market conditions - Management noted that M&A pricing remains elevated, and they continue to evaluate potential acquisitions carefully [85]

| --- | --- | --- | --- | --- | |-------|---------|----------------------------------|-------|----------------------------------------------| | 28.6 | % of VA | Other \n(Millions) \nEBITDA | ર | Three Months Ended \nMarch 31, 2023 \n (6.7) | | 0.1 | | Restructuring and cost reduction | | - | | 28.5 | | Merger and acquisition costs | | - | | | | Adjusted EBITDA | | (6.7) | | 2.2 | 7.7 % | | | | | 0.2 | 0.7 % | | | | | 2.4 | 8.4 % | | | | 22 We have adjusted the results for certain special ferns such as restr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to MATERION CORPORATION (Exact name of Registrant as specified in charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Ide ...

Financial Performance and Outlook - The backlog of unshipped orders as of December 31, 2022, was $576.2 million, an increase from $541.1 million in 2021 and $279.2 million in 2020, with expectations to fill substantially all orders over the next 18 months [28]. - The company’s ability to comply with financial covenants is critical, as a global economic downturn could adversely affect earnings and cash flow, limiting borrowing capacity [96]. Acquisitions and Growth Strategy - The company acquired HCS-Electronic Materials on November 1, 2021, for approximately $395.9 million in cash, enhancing its Performance Materials and Electronic Materials segments [29]. - The company is actively pursuing acquisitions to drive growth, but there are risks associated with successfully integrating acquired businesses and achieving expected synergies [99]. Workforce and Talent Development - As of December 31, 2022, the company employed approximately 3,723 people globally, with 2,661 in manufacturing, indicating a strong workforce to support operations [34]. - The company has implemented talent development programs, including apprenticeship initiatives, to enhance employee skills and support succession planning [39]. - The company tracks key talent metrics to promote diversity and inclusion, with four employee resource groups established as of December 31, 2022 [38]. Regulatory and Operational Risks - The company is subject to various regulatory matters, including new OSHA standards for beryllium exposure, which could impact operational costs and customer demand for beryllium-containing products [32]. - The company’s credit facilities are secured by substantially all assets, and a significant portion of its bank debt consists of variable-rate obligations, exposing it to interest rate fluctuations [95]. Health and Safety Initiatives - The company continues to invest in health and safety improvements, emphasizing the well-being of employees and compliance with environmental standards [36].

Materion Corporation (NYSE:MTRN) Q4 2022 Earnings Conference Call February 16, 2023 9:00 AM ET Company Participants John Zaranec - Chief Accounting Officer Jugal Vijayvargiya - President and Chief Executive Officer Shelly Chadwick - Vice President and Chief Financial Officer Conference Call Participants Daniel Moore - CJS Securities Phil Gibbs - KeyBanc Capital Markets Dave Storms - Stonegate Capital Markets David Silver - CL King Operator Good morning, everybody, and welcome to the Materion's Fourth Quarte ...

Low Single-Digit (0-3%) Looking Ahead to 2023 | --- | --- | --- | |-----------------------------------------------------------------------------|-------|----------| | | | | | | | | | | | | | | | | | Financial Review Shelly Chadwick Vice President and Chief Financial Officer | | | | | | | | | | MATERION | " 18% margin nearing mid-term target . HCS acquisition accretive despite interest headwinds . Growth driven by strong volume, meaningful price/mix and favorable impact of HCS Electronic Materials acquisitio ...

Baird Industrial Conference - 2022 November 9, 2022 MATERION © 2022 Materion Corporation Materion Snapshot | --- | --- | |-----------------------------|---------------| | Headquarters | Cleveland, OH | | TTM Revenue1 | $1.7B | | TTM Value-Added Sales1, 2 | $1.1B | | TTM Adj. EBITDA Margin1, 2 | 16.8% | | Market Cap3 | $1.7B | | Countries of Operation | 13 | | Manufacturing Facilities 28 | | | Global Employees | ~3,600 | § Global leader in high-performing advanced materials § Strong positions in growing mark ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-15885 MATERION CORPORATION 6070 Parkland Blvd., Mayfield Heights, Ohio 44124 (Address of principal executive offices) (Zip C ...

Financial Data and Key Metrics Changes - Materion achieved record value-added sales of $290.4 million in Q3 2022, up 35% year-over-year [21] - Adjusted earnings per share (EPS) increased by 14% to $1.31, despite a $0.20 rise in interest expense [23] - Adjusted EBITDA for the quarter was $48.8 million, an 18% increase from the previous year [24] Business Line Data and Key Metrics Changes - Performance Materials segment reported value-added sales of $148.8 million, a 29% increase driven by strong industrial, energy, and aerospace markets [28] - Electronic Materials segment saw value-added sales of $113.9 million, up 63% year-over-year, with a 10% organic growth [31] - Precision Optics segment experienced a decline in value-added sales to $28 million, down 10% year-over-year, impacted by foreign currency headwinds and discontinued applications [34] Market Data and Key Metrics Changes - Organic growth initiatives contributed to a robust 15% organic growth in Q3, with strong demand in semiconductor, industrial, aerospace, and energy markets [8][22] - The order book increased by approximately 13% from the end of the previous year, indicating strong demand across various sectors [56] Company Strategy and Development Direction - Materion's strategy focuses on organic outgrowth initiatives, which have accelerated top and bottom-line growth [14] - The company is ramping up its Precision Class 3 facility and expanding its HCS-Electronic Materials capabilities to support growth objectives [15][16] - Materion aims to address short-term headwinds and improve operational excellence to sustain growth [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to outperform despite economic uncertainties, citing a robust pipeline of projects and customer partnerships [14] - The company expects stronger performance in Q4 2022, adjusting its EPS guidance to a range of $5.15 to $5.25, representing a 30% increase year-over-year [37] - Management anticipates that challenges related to raw material costs, particularly tantalum, will be mitigated in the upcoming year [46] Other Important Information - The company ended the quarter with a net debt position of approximately $473 million and expects strong free cash flow in Q4 [36] - Materion is working to restructure legacy contracts to better align with current pricing dynamics [45] Q&A Session Summary Question: Update on semiconductor customers' expansion plans related to the Inflation Reduction Act - Some customers may back off on CapEx investments for 2023 and 2024, but no major announcements have been made [41][42] Question: Tantalum cost and timing of normalization - Tantalum prices increased due to labor shortages but are expected to normalize by Q1 of the new year [44][46] Question: Impact of misalignment in contracts on quarterly results - The misalignment had a sizable impact of approximately $4 million due to a 50% increase in tantalum pricing [48][49] Question: Overall order book texture and market outlook - The order book remains strong, with continued organic growth expected across various sectors, despite some challenges in the semiconductor and automotive markets [55][56]