Materion (MTRN) - 2024 Q4 - Annual Results

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].