Financial Performance and Operations - The backlog of unshipped orders as of December 31, 2024, was $537.6 million, down from $573.4 million in 2023 and $576.2 million in 2022, with expectations to fill substantially all orders over the next 18 months [29]. - Materion employed approximately 3,037 people globally as of December 31, 2024, with 2,005 in manufacturing roles, indicating a strong employee base to support operations [33]. - The company has implemented restructuring efforts aimed at reducing costs and improving operational efficiency, but future economic disruptions may impact these initiatives [100]. - Restructuring initiatives and labor relations changes could lead to workforce interruptions, negatively affecting business operations [103]. Safety and Compliance - In 2024, Materion achieved a 20% improvement in its injury frequency rate, reflecting enhanced safety measures and training initiatives [35]. - The company is subject to various laws and regulations that may increase costs and impact operations, including trade regulations and data protection laws, necessitating material investments in compliance [32]. - Materion's compliance programs may involve significant investments in processes, training, and technology to meet increasingly complex regulations [32]. Risk Management - Materion's credit facilities are secured by substantially all assets, and a significant portion of its bank debt consists of variable-rate obligations, exposing the company to interest rate fluctuations [91]. - The company is actively pursuing acquisitions to drive growth, but there are risks associated with successfully integrating acquired businesses and achieving expected synergies [96]. - Materion's products are complex and may contain undetected defects, which could lead to installation delays and damage to reputation, impacting sales [98]. - Customer contracts may expose the company to penalties and liabilities due to issues with product functionality and delivery, potentially affecting financial results [99]. Workforce and Culture - The company has a strong focus on diversity and inclusion, with four employee resource groups established to support various demographics [38]. - Retaining qualified management and skilled employees is critical for maintaining product quality and customer relationships, with intense competition for such personnel [102]. Research and Development - Continuous investment in R&D is emphasized to maintain a competitive edge through the development of advanced coatings and optical solutions [30].

Materion Corporation 4Q 2024 Earnings Presentation February 19, 2025 © 2025 Materion Corporation | Agenda | | | --- | --- | | Introduction | Kyle Kelleher – Director, Investor Relations and Corporate FP&A | | Opening Remarks & Business Update | Jugal Vijayvargiya – President and Chief Executive Officer | | Financial Review | Shelly Chadwick – Vice President and Chief Financial Officer | | Q&A | Question and Answer Session | 2 © 2025 Materion Corporation Forward-looking Statements and Non-GAAP Financial Info ...

Core Insights - Materion (MTRN) reported revenue of $436.87 million for the quarter ended December 2024, marking a year-over-year increase of 3.8% and exceeding the Zacks Consensus Estimate of $430.95 million by 1.37% [1] - The company's EPS for the same period was $1.55, up from $1.41 a year ago, and also surpassed the consensus EPS estimate of $1.43 by 8.39% [1] Financial Performance - Value-added Sales (non-GAAP) for Performance Materials reached $195.80 million, exceeding the average estimate of $165.90 million from two analysts [4] - Value-added Sales (non-GAAP) for Precision Optics were reported at $21.70 million, which was below the average estimate of $23.35 million from two analysts [4] - Value-added Sales (non-GAAP) for Electronic Materials amounted to $78.60 million, surpassing the average estimate of $73.40 million from two analysts [4] Stock Performance - Materion's shares have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's +4.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Materion (MTRN) reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.43 per share, and up from $1.41 per share a year ago, representing an earnings surprise of 8.39% [1] - The company posted revenues of $436.87 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.37% and increasing from $421.04 million year-over-year [2] - Over the last four quarters, Materion has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Outlook - Materion shares have declined approximately 1.9% since the beginning of the year, while the S&P 500 has gained 4% [3] - The current consensus EPS estimate for the upcoming quarter is $1.25 on revenues of $426.8 million, and for the current fiscal year, it is $5.96 on revenues of $1.8 billion [7] - The estimate revisions trend for Materion is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - Materion operates within the Zacks Mining - Miscellaneous industry, which is currently ranked in the bottom 34% of over 250 Zacks industries [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Performance - Fourth quarter net sales were $436.9 million, an increase from $421.0 million in the prior year period, while full-year net sales reached $1.68 billion, slightly up from $1.67 billion[4][9]. - The company reported a net loss of $48.8 million, or $2.33 loss per diluted share, compared to a net income of $19.5 million, or $0.93 per share, in the prior year quarter[7][10]. - Value-added sales for the full year were $1.10 billion, down 3% from the prior year due to weakness in key markets, partially offset by strength in space & defense[9][10]. - For the fourth quarter ended December 31, 2024, net sales increased to $436.9 million, up from $421.0 million in the same quarter of 2023, representing a growth of 1.4%[33]. - The company's net income for the fourth quarter was a loss of $48.8 million, compared to a profit of $19.5 million in Q4 2023, indicating a significant decline[34]. - Value-added sales for the fourth quarter were $296.1 million, slightly up from $289.7 million year-over-year, reflecting a growth of 0.5%[33]. EBITDA and Margins - Adjusted EBITDA for the fourth quarter was a record $61.5 million, representing 20.8% of value-added sales, compared to $53.3 million or 18.4% in the prior year[8]. - For the full year, adjusted EBITDA was $221.2 million, up from $217.7 million in the prior year, achieving a mid-term target of 20% adjusted EBITDA margin for the first time in company history[10][5]. - The company established a new mid-term adjusted EBITDA margin target of 23%, indicating an expected improvement of 300 basis points over the next several years[5]. - Adjusted EBITDA for Performance Materials was $53.6 million in Q4 2024, compared to $46.0 million in Q4 2023, with an adjusted EBITDA margin of 25.4% of net sales[36]. - Adjusted EBITDA for Electronic Materials increased to $14.7 million in Q4 2024 from $11.0 million in Q4 2023, representing an adjusted EBITDA margin of 7.2% of net sales[36]. - The company reported a total adjusted EBITDA of $178.8 million for the twelve months ended December 31, 2024, compared to $181.2 million in 2023, reflecting a slight decline year-over-year[36]. Market Outlook - Materion expects mid-single digit top-line growth in 2025, excluding precision clad strip, with earnings guidance of $5.30 to $5.70 per share, reflecting a 3% increase from the prior year at the midpoint[12][13]. - The company remains cautiously optimistic about market dynamics entering 2025, anticipating earnings growth from operational excellence and market outperformance[12][13]. Asset and Cash Flow Management - Total assets decreased from $1,762,726,000 in December 31, 2023 to $1,697,632,000 in December 31, 2024, a decline of approximately 3.7%[23]. - Total net cash provided by operating activities decreased to $87,817,000 in 2024 from $144,414,000 in 2023, representing a decline of 39.1%[27]. - Cash and cash equivalents increased to $16,713,000 at the end of 2024 from $13,294,000 at the end of 2023, an increase of 25.5%[27]. - Long-term debt rose to $407,734,000 in 2024 from $387,576,000 in 2023, an increase of 5.4%[23]. - Operating lease liabilities increased to $62,626,000 in 2024 from $53,817,000 in 2023, reflecting a rise of 16.5%[23]. Segment Performance - The company's operating profit for the Performance Materials segment was $43.4 million in Q4 2024, up from $33.0 million in Q4 2023, showing a growth of 31.1%[30]. - Precision Optics segment reported an operating loss of $77.0 million in Q4 2024, compared to a loss of $0.4 million in Q4 2023, highlighting a substantial deterioration[30]. - Performance Materials segment net sales for Q4 2024 were $211.0 million, up from $201.1 million in Q4 2023, while total net sales for the twelve months ended December 31, 2024, were $744.5 million, down from $755.5 million in 2023[36]. - Electronic Materials segment net sales increased to $204.2 million in Q4 2024 from $193.9 million in Q4 2023, with total net sales for the twelve months reaching $845.7 million, compared to $805.8 million in 2023[36]. - Precision Optics segment reported a decline in Q4 2024 net sales to $21.7 million from $26.0 million in Q4 2023, with total net sales for the twelve months at $94.5 million, down from $103.9 million in 2023[36]. Special Items and Charges - The total special items for the fourth quarter amounted to $82.0 million, significantly higher than $10.0 million in Q4 2023, indicating increased costs related to restructuring and impairments[33]. - The company reported an impairment charge of $73,201,000 in 2024, indicating significant asset write-downs[27]. - The company incurred restructuring and cost reduction expenses of $0.1 million in Q4 2024 for the Performance Materials segment, while total restructuring costs for the twelve months were $2.9 million[36].

Core Viewpoint - Wall Street analysts predict Materion (MTRN) will report quarterly earnings of $1.43 per share, reflecting a year-over-year increase of 1.4%, with revenues expected to reach $430.95 million, a 2.4% increase compared to the previous year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate for the quarter has been revised downward by 8.1%, indicating a collective reassessment by analysts of their initial forecasts [2]. - Changes in earnings estimates are crucial for predicting potential investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock price performance [3]. Key Metrics Forecast - Analysts forecast 'Value-added Sales (non-GAAP) - Performance Materials' to be $165.90 million, down from $186 million reported in the same quarter last year [5]. - The average estimate for 'Value-added Sales (non-GAAP) - Precision Optics' is $23.35 million, compared to $26 million reported in the same quarter last year [5]. - 'Value-added Sales (non-GAAP) - Electronic Materials' is expected to be $73.40 million, down from $77.70 million reported in the same quarter last year [6]. Market Performance - Materion shares have decreased by 4% over the past month, contrasting with the Zacks S&P 500 composite's increase of 4.7%, and the company holds a Zacks Rank 4 (Sell), indicating expected underperformance in the near term [6].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Materion (MTRN) due to higher revenues, with a focus on how actual results will compare to estimates [1][2] Earnings Expectations - Materion is expected to report quarterly earnings of $1.43 per share, reflecting a +1.4% change year-over-year, with revenues projected at $430.95 million, up 2.4% from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 8.09% over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Materion is higher than the consensus estimate, resulting in an Earnings ESP of +0.35% [10][11] Historical Performance - In the last reported quarter, Materion met the expected earnings of $1.41 per share, with a history of beating consensus EPS estimates two out of the last four quarters [12][13] Investment Considerations - Despite a positive Earnings ESP, Materion's Zacks Rank is 4, making it challenging to predict an earnings beat conclusively [11][16]

Financial Data and Key Metrics Changes - Sales for Q3 2024 were $263.8 million, down 2% year-over-year, primarily due to general market softness and lower precision Clad Strip sales [15][6] - Adjusted earnings per share for the quarter were $1.41, a decrease of 7% from the prior year [15] - Adjusted EBITDA was $56.7 million, representing 21.5% of value-added sales, up 2% with a 100 basis points margin expansion from the prior year [15][16] Business Line Data and Key Metrics Changes - Performance Materials segment had value-added sales of $163.6 million, down 3% year-over-year, with EBITDA of $46.5 million or 28.4% of value-added sales, flat compared to the prior year [16] - Electronic Materials segment reported value-added sales of $77.8 million, a 3% increase year-on-year, with EBITDA of $15.6 million or 20.1% of value-added sales, up 290 basis points [18] - Precision Optics segment saw value-added sales of $22.4 million, down 14% year-over-year, with EBITDA of $0.5 million or 2.2% of value-added sales [19] Market Data and Key Metrics Changes - Continued strength in the space and defense markets offset the impact of softness in airplane builds, leading to the 14th consecutive quarter of growth in overall demand for aerospace and defense [9] - The semiconductor recovery is slower than anticipated, but there was year-over-year growth in overall semiconductor sales for the second consecutive quarter [8] Company Strategy and Development Direction - The company is focusing on aligning its portfolio with global mega trends, optimizing its footprint, and improving cost structure [7][12] - Materion announced the sale of a facility in Albuquerque, New Mexico, to eliminate underperforming non-core businesses, which is expected to improve the performance of its electronic materials business [11][24] - The company is investing in R&D at an all-time high to support next-generation products and solutions [12] Management's Comments on Operating Environment and Future Outlook - Management expects sequential improvement in sales and profitability despite soft end-market conditions, aiming for a solid 2024 [14] - The defense business has been growing due to geopolitical issues, with bookings for defense in the first half of the year at levels comparable to the entire previous year [29] - The company anticipates a stronger top and bottom line in Q4, driven by higher volumes and benefits from cost and portfolio actions [21] Other Important Information - The company ended the quarter with a net debt position of approximately $477 million and $127 million of available capacity on its credit facility [20] - Full-year adjusted earnings are expected to be in the range of $5.20 to $5.40 per share [21] Q&A Session Summary Question: Can you discuss the portfolio optimization actions and potential savings? - Management indicated that the divestiture of the Albuquerque facility would eliminate $10 million in annual sales but was not profitable, leading to improved margins in electronic materials [24][25] Question: What is the outlook for the defense business given recent military needs? - The defense market has been stronger this year, with increased bookings and opportunities outside the U.S. contributing to growth [29] Question: What is the current status of the semiconductor market? - The semiconductor market remains challenging, with expectations for flattish growth in Q4 and potential improvement in the back half of 2025 [33] Question: Are there any other non-core businesses being considered for divestiture? - Management expressed satisfaction with the current portfolio but remains open to minor changes if necessary [37] Question: What are the expectations for the beryllium nickel business as destocking subsides? - Initial indications suggest improved sales for beryllium nickel in Q4, with favorable forecasts for 2025 [44] Question: How are expansion projects in electronic materials progressing? - Expansion projects in Milwaukee and Newton are on track, aimed at supporting future growth in the electronic materials market [46] Question: What are the updated margin targets for 2025? - Management aims to maintain adjusted EBITDA margins above 20% consistently, with ongoing efforts to improve performance [47] Question: How is the company broadening its customer base in the space business? - The company is focusing on both government and commercial space markets, with a strong pipeline of new programs [48]

Materion (MTRN) came out with quarterly earnings of $1.41 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $1.39 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this supplier of engineered materials to technology companies would post earnings of $1.41 per share when it actually produced earnings of $1.42, delivering a surprise of 0.71%. Over the last four quarters, the company has surpassed consensus EPS estimate ...

October 30, 2024 Materion Corporation Reports Third Quarter 2024 Financial Results MAYFIELD HEIGHTS, Ohio – October 30, 2024 - Materion Corporation (NYSE: MTRN) today reported third quarter 2024 financial results. Financial Summary • Net sales were $436.7 million; value-added sales were $263.8 million • Net income was $22.3 million, or $1.07 per share, diluted; adjusted earnings of $1.41 per share • Operating profit of $31.3 million; record third quarter adjusted EBITDA of $56.7 million versus $55.4 million ...