Materion Corporation Reports Strong Fourth Quarter and Record Full-Year 2023 Financial Results and Provides 2024 Outlook
Fourth Quarter 2023 Financial Summary
-
Net sales were
$421.0 million ; value-added sales1 were$289.7 million -
Net income was
$19.5 million , or$0.93 per share, diluted, and adjusted earnings of$1.41 per share
Full-Year 2023 Highlights
-
Net sales were
$1.67 billion ; value-added sales were$1.13 billion , a record for the company, up 1% from prior year despite significant semiconductor market weakness -
Net income of
$95.7 million , versus$86.0 million in the prior year -
Earnings per share of
$4.58 , diluted, versus$4.14 in the prior year, and record adjusted earnings of$5.64 per share, versus$5.27 in the prior year, an increase of 7% -
Adjusted EBITDA2 of
$217.7 million , or 19.3% of value-added sales, both records for the company, versus$196.0 million , or 17.6% in the prior year, with 170 bps of margin expansion year on year
Newly Announced Customer Partnerships
-
Announced three new advancements as we continue to strengthen our organic pipeline
-
Secured a fourth order valued at
$36 million to supply critical materials for space propulsion systems -
Awarded
$4 million from a government agency for the development of additive manufacturing processes for advanced materials to serve the Aerospace, Defense and Energy markets -
Secured another customer contract to supply optical components for LIDAR technologies within NextGen autonomous vehicle applications in
Europe
-
Secured a fourth order valued at
“I am proud of our global team for delivering another record year, despite the significant headwinds facing our largest end market,”
“We have made remarkable progress expanding our margins, despite market softness,” Vijayvargiya said. “These efforts, combined with the continued strength of our organic pipeline, leave us well-positioned to take advantage of the market recoveries as they develop.”
FOURTH QUARTER 2023 RESULTS
Net sales for the quarter were
Operating profit for the quarter was
Excluding special items3 primarily related to targeted cost improvement initiatives and precision clad strip start-up costs, adjusted EBITDA was
Adjusted net income was
FULL-YEAR 2023 RESULTS
Net sales for the year were
Operating profit for the year was
Excluding special items, adjusted EBITDA for the year was
Adjusted net income was
OUTLOOK
While we expect some of our key end markets to remain challenged in the near term due to macroeconomic conditions, we expect another year of record results driven by our organic pipeline and close customer partnerships. We believe these growth drivers, along with continued operational excellence and targeted cost improvement initiatives, will help drive earnings growth. With this, we are guiding to the range of
ADJUSTED EARNINGS GUIDANCE
It is not possible for the Company to identify the amount or significance of future adjustments associated with potential insurance and litigation claims, legacy environmental costs, acquisition and integration costs, certain income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance for the full year to a comparable GAAP range. However, items excluded from the Company's adjusted earnings guidance include the historical adjustments noted in Attachments 4 through 8 to this press release.
CONFERENCE CALL
FOOTNOTES
1 Value-added sales deducts the impact of pass-through metals from net sales
2 EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization
3 Details of the special items can be found in Attachments 4 through 8
ABOUT
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. 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: the global economy, including inflationary pressures, potential future recessionary conditions and the impact of tariffs and trade agreements; the impact of any
Attachment 1 |
|||||||||||||||
|
|||||||||||||||
|
|||||||||||||||
Consolidated Statements of Income |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|||||||||||||||
|
Fourth Quarter Ended |
|
Year Ended |
||||||||||||
(In thousands except per share amounts) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales |
$ |
421,043 |
|
|
$ |
434,578 |
|
|
$ |
1,665,187 |
|
|
$ |
1,757,109 |
|
Cost of sales |
|
341,328 |
|
|
|
336,159 |
|
|
|
1,316,145 |
|
|
|
1,413,229 |
|
Gross margin |
|
79,715 |
|
|
|
98,419 |
|
|
|
349,042 |
|
|
|
343,880 |
|
Selling, general, and administrative expense |
|
39,858 |
|
|
|
46,672 |
|
|
|
157,911 |
|
|
|
169,338 |
|
Research and development expense |
|
6,442 |
|
|
|
6,881 |
|
|
|
27,540 |
|
|
|
28,977 |
|
Restructuring expense (income) |
|
630 |
|
|
|
13 |
|
|
|
3,824 |
|
|
|
1,573 |
|
Other — net |
|
5,145 |
|
|
|
5,662 |
|
|
|
23,323 |
|
|
|
24,237 |
|
Operating profit |
|
27,640 |
|
|
|
39,191 |
|
|
|
136,444 |
|
|
|
119,755 |
|
Other non-operating (income) expense—net |
|
(569 |
) |
|
|
(1,738 |
) |
|
|
(2,710 |
) |
|
|
(5,250 |
) |
Interest expense — net |
|
8,503 |
|
|
|
7,580 |
|
|
|
31,323 |
|
|
|
21,905 |
|
Income before income taxes |
|
19,706 |
|
|
|
33,349 |
|
|
|
107,831 |
|
|
|
103,100 |
|
Income tax (benefit) expense |
|
238 |
|
|
|
4,585 |
|
|
|
12,129 |
|
|
|
17,110 |
|
Net income |
$ |
19,468 |
|
|
$ |
28,764 |
|
|
$ |
95,702 |
|
|
$ |
85,990 |
|
Basic earnings per share: |
|
|
|
|
|
|
|
||||||||
Net income per share of common stock |
$ |
0.94 |
|
|
$ |
1.40 |
|
|
$ |
4.64 |
|
|
$ |
4.19 |
|
Diluted earnings per share: |
|
|
|
|
|
|
|
||||||||
Net income per share of common stock |
$ |
0.93 |
|
|
$ |
1.38 |
|
|
$ |
4.58 |
|
|
$ |
4.14 |
|
Weighted-average number of shares of common stock outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
20,644 |
|
|
|
20,537 |
|
|
|
20,619 |
|
|
|
20,511 |
|
Diluted |
|
20,936 |
|
|
|
20,790 |
|
|
|
20,911 |
|
|
|
20,760 |
|
Attachment 2 |
||||||||
|
||||||||
|
||||||||
Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
||||
(Thousands) |
|
2023 |
|
2022 |
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
13,294 |
|
|
$ |
13,101 |
|
Accounts receivable, net |
|
|
192,747 |
|
|
|
215,211 |
|
Inventories, net |
|
|
441,597 |
|
|
|
423,080 |
|
Prepaid and other current assets |
|
|
61,744 |
|
|
|
39,056 |
|
Total current assets |
|
|
709,382 |
|
|
|
690,448 |
|
Deferred income taxes |
|
|
4,908 |
|
|
|
3,265 |
|
Property, plant, and equipment |
|
|
1,281,622 |
|
|
|
1,209,205 |
|
Less allowances for depreciation, depletion, and amortization |
|
|
(766,939 |
) |
|
|
(760,440 |
) |
Property, plant, and equipment—net |
|
|
514,683 |
|
|
|
448,765 |
|
Operating lease, right-of-use assets |
|
|
57,645 |
|
|
|
64,249 |
|
Intangible assets |
|
|
133,571 |
|
|
|
143,219 |
|
Other assets |
|
|
21,664 |
|
|
|
22,535 |
|
|
|
|
320,873 |
|
|
|
319,498 |
|
Total Assets |
|
$ |
1,762,726 |
|
|
$ |
1,691,979 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Short-term debt |
|
$ |
38,597 |
|
|
$ |
21,105 |
|
Accounts payable |
|
|
125,663 |
|
|
|
107,899 |
|
Salaries and wages |
|
|
25,912 |
|
|
|
35,543 |
|
Other liabilities and accrued items |
|
|
45,773 |
|
|
|
54,993 |
|
Income taxes |
|
|
5,207 |
|
|
|
3,928 |
|
Unearned revenue |
|
|
13,843 |
|
|
|
15,496 |
|
Total current liabilities |
|
|
254,995 |
|
|
|
238,964 |
|
Other long-term liabilities |
|
|
13,300 |
|
|
|
12,181 |
|
Operating lease liabilities |
|
|
53,817 |
|
|
|
59,055 |
|
Finance lease liabilities |
|
|
13,744 |
|
|
|
13,876 |
|
Retirement and post-employment benefits |
|
|
26,334 |
|
|
|
20,422 |
|
Unearned income |
|
|
103,983 |
|
|
|
107,736 |
|
Long-term income taxes |
|
|
3,815 |
|
|
|
665 |
|
Deferred income taxes |
|
|
20,109 |
|
|
|
28,214 |
|
Long-term debt |
|
|
387,576 |
|
|
|
410,876 |
|
Shareholders’ equity |
|
|
885,053 |
|
|
|
799,990 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
1,762,726 |
|
|
$ |
1,691,979 |
|
Attachment 3 |
|||||||
|
|||||||
|
|||||||
Consolidated Statements of Cash Flows |
|||||||
|
|||||||
(Thousands) |
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
95,702 |
|
|
$ |
85,990 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation, depletion, and amortization |
|
61,644 |
|
|
|
53,436 |
|
Amortization of deferred financing costs in interest expense |
|
1,712 |
|
|
|
1,734 |
|
Stock-based compensation expense (non-cash) |
|
10,092 |
|
|
|
8,813 |
|
Amortization of pension and post-retirement costs |
|
(1,318 |
) |
|
|
(146 |
) |
(Gain) loss on sale of property, plant, and equipment |
|
20 |
|
|
|
14 |
|
Deferred income tax (benefit) expense |
|
(7,005 |
) |
|
|
1,733 |
|
Net pension curtailments and settlements |
|
142 |
|
|
|
(551 |
) |
Changes in assets and liabilities, net of acquired assets and liabilities: |
|
|
|
||||
Decrease (increase) in accounts receivable |
|
23,359 |
|
|
|
(4,377 |
) |
Decrease (increase) in inventory |
|
(18,700 |
) |
|
|
(63,986 |
) |
Decrease (increase) in prepaid and other current assets |
|
(22,663 |
) |
|
|
(1,604 |
) |
Increase (decrease) in accounts payable and accrued expenses |
|
6,631 |
|
|
|
12,860 |
|
Increase (decrease) in unearned revenue |
|
(17,361 |
) |
|
|
207 |
|
Increase (decrease) in interest and taxes payable |
|
3,771 |
|
|
|
154 |
|
Increase (decrease) in unearned income due to customer prepayments |
|
16,676 |
|
|
|
21,942 |
|
Other — net |
|
(8,288 |
) |
|
|
(261 |
) |
Net cash provided by operating activities |
|
144,414 |
|
|
|
115,958 |
|
Cash flows from investing activities: |
|
|
|
||||
Payments for acquisition, net of cash acquired |
|
— |
|
|
|
(2,971 |
) |
Payments for purchase of property, plant, and equipment |
|
(110,550 |
) |
|
|
(77,608 |
) |
Payments for mine development |
|
(9,326 |
) |
|
|
— |
|
Proceeds from sale of property, plant, and equipment |
|
654 |
|
|
|
850 |
|
Net cash used in investing activities |
|
(119,222 |
) |
|
|
(79,729 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from (repayment of) borrowings under credit facilities, net |
|
8,065 |
|
|
|
230 |
|
Repayment of debt |
|
(15,415 |
) |
|
|
(19,299 |
) |
Principal payments under finance lease obligations |
|
(1,645 |
) |
|
|
(2,736 |
) |
Cash dividends paid |
|
(10,621 |
) |
|
|
(10,160 |
) |
Payments of withholding taxes for stock-based compensation awards |
|
(5,234 |
) |
|
|
(3,593 |
) |
Net cash provided by (used in) financing activities |
|
(24,850 |
) |
|
|
(35,558 |
) |
Effects of exchange rate changes |
|
(149 |
) |
|
|
(2,032 |
) |
Net change in cash and cash equivalents |
|
193 |
|
|
|
(1,361 |
) |
Cash and cash equivalents at beginning of period |
|
13,101 |
|
|
|
14,462 |
|
Cash and cash equivalents at end of period |
$ |
13,294 |
|
|
$ |
13,101 |
|
Attachment 4 |
|||||||||||||
|
|||||||||||||
|
|||||||||||||
Reconciliation of Non-GAAP Measure - Value-added Sales, Operating Profit, and EBITDA |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|||||||||||||
|
Fourth Quarter Ended |
|
Year Ended |
||||||||||
(Millions) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||
|
|
|
|
|
|
|
|
||||||
Performance Materials |
$ |
201.1 |
|
$ |
197.6 |
|
|
$ |
755.5 |
|
$ |
671.5 |
|
Electronic Materials |
|
193.9 |
|
|
209.3 |
|
|
|
805.8 |
|
|
971.9 |
|
Precision Optics |
|
26.0 |
|
|
27.7 |
|
|
|
103.9 |
|
|
113.7 |
|
Other |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Total |
$ |
421.0 |
|
$ |
434.6 |
|
|
$ |
1,665.2 |
|
$ |
1,757.1 |
|
|
|
|
|
|
|
|
|
||||||
Less: Pass-through Metal Cost |
|
|
|
|
|
|
|
||||||
Performance Materials |
$ |
15.1 |
|
$ |
20.0 |
|
|
$ |
66.9 |
|
$ |
82.0 |
|
Electronic Materials |
|
116.2 |
|
|
111.5 |
|
|
|
471.1 |
|
|
559.1 |
|
Precision Optics |
|
— |
|
|
— |
|
|
|
0.1 |
|
|
0.1 |
|
Other |
|
— |
|
|
0.1 |
|
|
|
— |
|
|
1.5 |
|
Total |
$ |
131.3 |
|
$ |
131.6 |
|
|
$ |
538.1 |
|
$ |
642.7 |
|
|
|
|
|
|
|
|
|
||||||
Value-added Sales (non-GAAP) |
|
|
|
|
|
|
|
||||||
Performance Materials |
$ |
186.0 |
|
$ |
177.6 |
|
|
$ |
688.6 |
|
$ |
589.5 |
|
Electronic Materials |
|
77.7 |
|
|
97.8 |
|
|
|
334.7 |
|
|
412.8 |
|
Precision Optics |
|
26.0 |
|
|
27.7 |
|
|
|
103.8 |
|
|
113.6 |
|
Other |
|
— |
|
|
(0.1 |
) |
|
|
— |
|
|
(1.5 |
) |
Total |
$ |
289.7 |
|
$ |
303.0 |
|
|
$ |
1,127.1 |
|
$ |
1,114.4 |
|
|
|
|
|
|
|
|
|
||||||
Gross Margin |
|
|
|
|
|
|
|
||||||
Performance Materials(1) |
$ |
50.5 |
|
$ |
57.7 |
|
|
$ |
216.5 |
|
$ |
175.1 |
|
Electronic Materials(1) |
|
21.5 |
|
|
31.5 |
|
|
|
100.4 |
|
|
131.5 |
|
Precision Optics(1) |
|
7.7 |
|
|
9.2 |
|
|
|
32.1 |
|
|
37.3 |
|
Other |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Total(1) |
$ |
79.7 |
|
$ |
98.4 |
|
|
$ |
349.0 |
|
$ |
343.9 |
|
(1) See reconciliation of gross margin to adjusted gross margin in Attachment 8 |
|||||||||||||
Note: Quarterly information presented within this document and previously disclosed quarterly information may not equal the total computed for the year due to rounding |
|
Fourth Quarter Ended |
|
Year Ended |
||||||||||||
(Millions) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Operating Profit (Loss) |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
33.0 |
|
|
$ |
37.6 |
|
|
$ |
143.9 |
|
|
$ |
101.4 |
|
Electronic Materials |
|
3.8 |
|
|
|
12.3 |
|
|
|
28.6 |
|
|
|
51.3 |
|
Precision Optics |
|
(0.4 |
) |
|
|
1.1 |
|
|
|
(2.0 |
) |
|
|
1.9 |
|
Other |
|
(8.8 |
) |
|
|
(11.8 |
) |
|
|
(34.1 |
) |
|
|
(34.8 |
) |
Total |
$ |
27.6 |
|
|
$ |
39.2 |
|
|
$ |
136.4 |
|
|
$ |
119.8 |
|
|
|
|
|
|
|
|
|
||||||||
Non-Operating (Income) Expense |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
0.2 |
|
|
$ |
0.1 |
|
|
$ |
0.6 |
|
|
$ |
0.5 |
|
Electronic Materials |
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
Precision Optics |
|
— |
|
|
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
(1.3 |
) |
Other |
|
(0.7 |
) |
|
|
(1.2 |
) |
|
|
(2.7 |
) |
|
|
(4.4 |
) |
Total |
$ |
(0.6 |
) |
|
$ |
(1.7 |
) |
|
$ |
(2.8 |
) |
|
$ |
(5.2 |
) |
|
|
|
|
|
|
|
|
||||||||
Depreciation, Depletion, and Amortization |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
7.6 |
|
|
$ |
6.8 |
|
|
$ |
31.2 |
|
|
$ |
24.3 |
|
Electronic Materials |
|
4.3 |
|
|
|
4.2 |
|
|
|
17.0 |
|
|
|
16.5 |
|
Precision Optics |
|
2.6 |
|
|
|
2.7 |
|
|
|
11.3 |
|
|
|
10.5 |
|
Other |
|
0.6 |
|
|
|
0.5 |
|
|
|
2.1 |
|
|
|
2.1 |
|
Total |
$ |
15.1 |
|
|
$ |
14.2 |
|
|
$ |
61.6 |
|
|
$ |
53.4 |
|
|
|
|
|
|
|
|
|
||||||||
Segment EBITDA |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
40.4 |
|
|
$ |
44.3 |
|
|
$ |
174.5 |
|
|
$ |
125.2 |
|
Electronic Materials |
|
8.2 |
|
|
|
16.5 |
|
|
|
45.7 |
|
|
|
67.8 |
|
Precision Optics |
|
2.2 |
|
|
|
4.4 |
|
|
|
9.9 |
|
|
|
13.7 |
|
Other |
|
(7.5 |
) |
|
|
(10.1 |
) |
|
|
(29.3 |
) |
|
|
(28.3 |
) |
Total |
$ |
43.3 |
|
|
$ |
55.1 |
|
|
$ |
200.8 |
|
|
$ |
178.4 |
|
|
|
|
|
|
|
|
|
||||||||
Special Items(2) |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
5.6 |
|
|
$ |
— |
|
|
$ |
6.7 |
|
|
$ |
6.8 |
|
Electronic Materials |
|
2.8 |
|
|
|
0.6 |
|
|
|
7.3 |
|
|
|
8.2 |
|
Precision Optics |
|
1.6 |
|
|
|
(0.4 |
) |
|
|
2.8 |
|
|
|
0.3 |
|
Other |
|
— |
|
|
|
0.3 |
|
|
|
0.1 |
|
|
|
2.3 |
|
Total |
$ |
10.0 |
|
|
$ |
0.5 |
|
|
$ |
16.9 |
|
|
$ |
17.6 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA Excluding Special Items |
|
|
|
|
|
|
|
||||||||
Performance Materials |
$ |
46.0 |
|
|
$ |
44.3 |
|
|
$ |
181.2 |
|
|
$ |
132.0 |
|
Electronic Materials |
|
11.0 |
|
|
|
17.1 |
|
|
|
53.0 |
|
|
|
76.0 |
|
Precision Optics |
|
3.8 |
|
|
|
4.0 |
|
|
|
12.7 |
|
|
|
14.0 |
|
Other |
|
(7.5 |
) |
|
|
(9.8 |
) |
|
|
(29.2 |
) |
|
|
(26.0 |
) |
Total |
$ |
53.3 |
|
|
$ |
55.6 |
|
|
$ |
217.7 |
|
|
$ |
196.0 |
|
The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium 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 financial 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 market 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 these 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. |
|||||||||||||||
(2) See additional details of special items in Attachment 5. |
Attachment 5 |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Reconciliation of |
|||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
||||||||||||||||||||||
(Millions) |
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
||||||||||
Net sales |
$ |
421.0 |
|
|
|
$ |
434.6 |
|
|
|
|
$ |
1,665.2 |
|
|
|
$ |
1,757.1 |
|
|
|
||||
Pass-through metal cost |
|
131.3 |
|
|
|
|
131.6 |
|
|
|
|
|
538.1 |
|
|
|
|
642.7 |
|
|
|
||||
Value-added sales |
$ |
289.7 |
|
|
|
$ |
303.0 |
|
|
|
|
$ |
1,127.1 |
|
|
|
$ |
1,114.4 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
19.5 |
|
6.7 |
% |
|
$ |
28.8 |
|
|
9.5 |
% |
|
$ |
95.7 |
|
8.5 |
% |
|
$ |
86.0 |
|
|
7.7 |
% |
Income tax expense |
|
0.2 |
|
0.1 |
% |
|
|
4.5 |
|
|
1.5 |
% |
|
|
12.2 |
|
1.1 |
% |
|
|
17.1 |
|
|
1.5 |
% |
Interest expense - net |
|
8.5 |
|
2.9 |
% |
|
|
7.6 |
|
|
2.5 |
% |
|
|
31.3 |
|
2.8 |
% |
|
|
21.9 |
|
|
2.0 |
% |
Depreciation, depletion and amortization |
|
15.1 |
|
5.2 |
% |
|
|
14.2 |
|
|
4.7 |
% |
|
|
61.6 |
|
5.5 |
% |
|
|
53.4 |
|
|
4.8 |
% |
Consolidated EBITDA |
$ |
43.3 |
|
14.9 |
% |
|
$ |
55.1 |
|
|
18.2 |
% |
|
$ |
200.8 |
|
17.8 |
% |
|
$ |
178.4 |
|
|
16.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Special items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructuring and cost reduction |
$ |
4.2 |
|
1.4 |
% |
|
$ |
— |
|
|
— |
% |
|
$ |
11.1 |
|
1.0 |
% |
|
$ |
1.5 |
|
|
0.1 |
% |
Pension settlement |
|
0.2 |
|
0.1 |
% |
|
|
(0.5 |
) |
|
(0.2 |
)% |
|
|
0.2 |
|
— |
% |
|
|
(0.5 |
) |
|
— |
% |
Additional start up resources and scrap |
|
5.6 |
|
1.9 |
% |
|
|
— |
|
|
— |
% |
|
|
5.6 |
|
0.5 |
% |
|
|
4.1 |
|
|
0.4 |
% |
Merger and acquisition costs |
|
— |
|
— |
% |
|
|
1.0 |
|
|
0.3 |
% |
|
|
— |
|
— |
% |
|
|
12.5 |
|
|
1.1 |
% |
Total special items |
|
10.0 |
|
3.5 |
% |
|
|
0.5 |
|
|
0.2 |
% |
|
|
16.9 |
|
1.5 |
% |
|
|
17.6 |
|
|
1.6 |
% |
Adjusted EBITDA |
$ |
53.3 |
|
18.4 |
% |
|
$ |
55.6 |
|
|
18.3 |
% |
|
$ |
217.7 |
|
19.3 |
% |
|
$ |
196.0 |
|
|
17.6 |
% |
In addition to presenting financial statements prepared in accordance with |
Attachment 6 |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Reconciliation of Net Income to Adjusted Net Income |
||||||||||||||||||||||||||||
and Diluted Earnings per Share to Adjusted Diluted Earnings per Share (Unaudited) |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
(Millions) |
December 31, 2023 |
|
Diluted EPS |
|
December 31, 2022 |
|
Diluted EPS |
|
December 31, 2023 |
|
Diluted EPS |
|
December 31, 2022 |
|
Diluted EPS |
|||||||||||||
Net income and EPS |
$ |
19.5 |
|
|
$ |
0.93 |
|
$ |
28.8 |
|
|
$ |
1.38 |
|
|
$ |
95.7 |
|
|
$ |
4.58 |
|
$ |
86.0 |
|
|
$ |
4.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Special items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring and cost reduction |
|
4.2 |
|
|
|
|
|
— |
|
|
|
|
|
11.1 |
|
|
|
|
|
1.5 |
|
|
|
|||||
Additional start up resources and scrap |
|
5.6 |
|
|
|
|
|
— |
|
|
|
|
|
5.6 |
|
|
|
|
|
4.1 |
|
|
|
|||||
Merger and acquisition costs |
|
— |
|
|
|
|
|
1.0 |
|
|
|
|
|
— |
|
|
|
|
|
12.5 |
|
|
|
|||||
Pension settlement |
|
0.2 |
|
|
|
|
|
(0.5 |
) |
|
|
|
|
0.2 |
|
|
|
|
|
(0.5 |
) |
|
|
|||||
Provision for income taxes (1) |
|
(2.4 |
) |
|
|
|
|
(0.8 |
) |
|
|
|
|
(4.4 |
) |
|
|
|
|
(3.9 |
) |
|
|
|||||
Total special items |
|
7.6 |
|
|
|
0.36 |
|
|
(0.3 |
) |
|
|
(0.01 |
) |
|
|
12.5 |
|
|
|
0.60 |
|
|
13.7 |
|
|
|
0.66 |
Adjusted net income and adjusted EPS |
$ |
27.1 |
|
|
$ |
1.29 |
|
$ |
28.5 |
|
|
$ |
1.37 |
|
|
$ |
108.2 |
|
|
$ |
5.17 |
|
$ |
99.7 |
|
|
$ |
4.80 |
Acquisition amortization (net of tax) |
|
2.5 |
|
|
|
0.12 |
|
|
2.4 |
|
|
|
0.12 |
|
|
|
9.8 |
|
|
|
0.47 |
|
|
9.8 |
|
|
|
0.47 |
Adjusted net income and adjusted EPS excl. amortization |
$ |
29.6 |
|
|
$ |
1.41 |
|
$ |
30.9 |
|
|
$ |
1.49 |
|
|
$ |
118.0 |
|
|
$ |
5.64 |
|
$ |
109.5 |
|
|
$ |
5.27 |
(1) Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of certain discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods. |
Attachment 7 |
||||||||||||||||||||||||||||
Reconciliation of Segment Net sales to Segment Value-added sales and Segment EBITDA to Adjusted Segment EBITDA (Unaudited) |
||||||||||||||||||||||||||||
Performance Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
(Millions) |
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|||||||||||||
Net sales |
$ |
201.1 |
|
|
|
|
$ |
197.6 |
|
|
|
|
$ |
755.5 |
|
|
|
|
$ |
671.5 |
|
|
|
|||||
Pass-through metal cost |
|
15.1 |
|
|
|
|
|
20.0 |
|
|
|
|
|
66.9 |
|
|
|
|
|
82.0 |
|
|
|
|||||
Value-added sales |
$ |
186.0 |
|
|
|
|
$ |
177.6 |
|
|
|
|
$ |
688.6 |
|
|
|
|
$ |
589.5 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA |
$ |
40.4 |
|
|
21.7 |
% |
|
$ |
44.3 |
|
|
24.9 |
% |
|
$ |
174.5 |
|
|
25.3 |
% |
|
$ |
125.2 |
|
|
21.2 |
% |
|
Restructuring and cost reduction |
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
1.1 |
|
|
0.2 |
% |
|
|
— |
|
|
— |
% |
|
Additional start up resources and scrap |
|
5.6 |
|
|
3.0 |
% |
|
|
— |
|
|
— |
% |
|
|
5.6 |
|
|
0.8 |
% |
|
|
4.1 |
|
|
0.7 |
% |
|
Merger and acquisition costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
2.7 |
|
|
0.5 |
% |
|
Adjusted EBITDA |
$ |
46.0 |
|
|
24.7 |
% |
|
$ |
44.3 |
|
|
24.9 |
% |
|
$ |
181.2 |
|
|
26.3 |
% |
|
$ |
132.0 |
|
|
22.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Electronic Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
(Millions) |
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|||||||||||||
Net sales |
$ |
193.9 |
|
|
|
|
$ |
209.3 |
|
|
|
|
$ |
805.8 |
|
|
|
|
$ |
971.9 |
|
|
|
|||||
Pass-through metal cost |
|
116.2 |
|
|
|
|
|
111.5 |
|
|
|
|
|
471.1 |
|
|
|
|
|
559.1 |
|
|
|
|||||
Value-added sales |
$ |
77.7 |
|
|
|
|
$ |
97.8 |
|
|
|
|
$ |
334.7 |
|
|
|
|
$ |
412.8 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA |
$ |
8.2 |
|
|
10.6 |
% |
|
$ |
16.5 |
|
|
16.9 |
% |
|
$ |
45.7 |
|
|
13.7 |
% |
|
$ |
67.8 |
|
|
16.4 |
% |
|
Restructuring and cost reduction |
|
2.8 |
|
|
3.6 |
% |
|
|
— |
|
|
— |
% |
|
|
7.3 |
|
|
2.2 |
% |
|
|
0.8 |
|
|
0.2 |
% |
|
Merger and acquisition costs |
|
— |
|
|
— |
% |
|
|
0.6 |
|
|
0.6 |
% |
|
|
— |
|
|
— |
% |
|
|
7.4 |
|
|
1.8 |
% |
|
Adjusted EBITDA |
$ |
11.0 |
|
|
14.2 |
% |
|
$ |
17.1 |
|
|
17.5 |
% |
|
$ |
53.0 |
|
|
15.8 |
% |
|
$ |
76.0 |
|
|
18.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Precision Optics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
(Millions) |
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|||||||||||||
Net sales |
$ |
26.0 |
|
|
|
|
$ |
27.7 |
|
|
|
|
$ |
103.9 |
|
|
|
|
$ |
113.7 |
|
|
|
|||||
Pass-through metal cost |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
0.1 |
|
|
|
|
|
0.1 |
|
|
|
|||||
Value-added sales |
$ |
26.0 |
|
|
|
|
$ |
27.7 |
|
|
|
|
$ |
103.8 |
|
|
|
|
$ |
113.6 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA |
$ |
2.2 |
|
|
8.5 |
% |
|
$ |
4.4 |
|
|
15.9 |
% |
|
$ |
9.9 |
|
|
9.5 |
% |
|
$ |
13.7 |
|
|
12.1 |
% |
|
Restructuring and cost reduction |
|
1.4 |
|
|
5.4 |
% |
|
|
— |
|
|
— |
% |
|
|
2.6 |
|
|
2.5 |
% |
|
|
0.6 |
|
|
0.5 |
% |
|
Pension settlement |
|
0.2 |
|
|
0.8 |
% |
|
|
(0.5 |
) |
|
(1.8 |
)% |
|
|
0.2 |
|
|
0.2 |
% |
|
|
(0.5 |
) |
|
(0.4 |
)% |
|
Merger and acquisition costs |
|
— |
|
|
— |
% |
|
|
0.1 |
|
|
0.4 |
% |
|
|
— |
|
|
— |
% |
|
|
0.2 |
|
|
0.2 |
% |
|
Adjusted EBITDA |
$ |
3.8 |
|
|
14.7 |
% |
|
$ |
4.0 |
|
|
14.4 |
% |
|
$ |
12.7 |
|
|
12.2 |
% |
|
$ |
14.0 |
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
(Millions) |
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|
December 31, 2023 |
|
% of |
|
December 31, 2022 |
|
% of |
|||||||||||||
EBITDA |
$ |
(7.5 |
) |
|
|
|
$ |
(10.1 |
) |
|
|
|
$ |
(29.3 |
) |
|
|
|
$ |
(28.3 |
) |
|
|
|||||
Restructuring and cost reduction |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
0.1 |
|
|
|
|
|
0.1 |
|
|
|
|||||
Merger and acquisition costs |
|
— |
|
|
|
|
|
0.3 |
|
|
|
|
|
— |
|
|
|
|
|
2.2 |
|
|
|
|||||
Adjusted EBITDA |
$ |
(7.5 |
) |
|
|
|
$ |
(9.8 |
) |
|
|
|
$ |
(29.2 |
) |
|
|
|
$ |
(26.0 |
) |
|
|
Attachment 8 |
|||||||||||
|
|||||||||||
|
|||||||||||
Reconciliation of Non-GAAP Measure - Gross Margin to Adjusted Gross Margin |
|||||||||||
(Unaudited) |
|||||||||||
|
|||||||||||
|
Fourth Quarter Ended |
|
Twelve Months Ended |
||||||||
(Millions) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Gross Margin |
|
|
|
|
|
|
|
||||
Performance Materials |
$ |
50.5 |
|
$ |
57.7 |
|
$ |
216.5 |
|
$ |
175.1 |
Electronic Materials |
|
21.5 |
|
|
31.5 |
|
|
100.4 |
|
|
131.5 |
Precision Optics |
|
7.7 |
|
|
9.2 |
|
|
32.1 |
|
|
37.3 |
Other |
|
— |
|
|
— |
|
|
— |
|
|
— |
Total |
$ |
79.7 |
|
$ |
98.4 |
|
$ |
349.0 |
|
$ |
343.9 |
|
|
|
|
|
|
|
|
||||
Special Items (1) |
|
|
|
|
|
|
|
||||
Performance Materials |
$ |
5.6 |
|
$ |
— |
|
$ |
6.4 |
|
$ |
6.7 |
Electronic Materials |
|
1.5 |
|
|
— |
|
|
3.9 |
|
|
5.0 |
Precision Optics |
|
1.0 |
|
|
— |
|
|
1.3 |
|
|
— |
Other |
|
— |
|
|
— |
|
|
— |
|
|
— |
Total |
$ |
8.1 |
|
$ |
— |
|
$ |
11.6 |
|
$ |
11.7 |
|
|
|
|
|
|
|
|
||||
Adjusted Gross Margin |
|
|
|
|
|
|
|
||||
Performance Materials |
$ |
56.1 |
|
$ |
57.7 |
|
$ |
222.9 |
|
$ |
181.8 |
Electronic Materials |
|
23.0 |
|
|
31.5 |
|
|
104.3 |
|
|
136.5 |
Precision Optics |
|
8.7 |
|
|
9.2 |
|
|
33.4 |
|
|
37.3 |
Other |
|
— |
|
|
— |
|
|
— |
|
|
— |
Total |
$ |
87.8 |
|
$ |
98.4 |
|
$ |
360.6 |
|
$ |
355.6 |
(1) Special items impacting gross margin represent restructuring and cost reduction and additional start up resources and scrap in 2023 and merger and acquisition costs in 2022. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240214669030/en/
Investor Contact:
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