Materion Corporation Reports Fourth Quarter and Full-Year 2025 Results; Provides Strong 2026 Outlook
MWN-AI** Summary
Materion Corporation (NYSE: MTRN) disclosed its financial results for the fourth quarter and full-year 2025, revealing a robust performance in its core business units despite previous challenges. For Q4 2025, the company reported net sales of $489.7 million, a notable increase from $436.9 million in Q4 2024. The net income was $6.6 million, equating to $0.31 per diluted share, a stark turnaround from a loss of $48.8 million or $2.33 per diluted share in the prior year. Adjusted earnings stood at $1.53 per share, slightly down from $1.55.
The full-year results mirrored this positive trend, with net sales reaching $1.79 billion compared to $1.68 billion in 2024. Net income surged to $74.8 million, or $3.58 per diluted share, compared to $5.9 million or $0.28 per diluted share the previous year. Significant operational improvements were noted, with a full-year adjusted EBITDA margin expanding to 20.7%, up from 20.2%. Materion's Electronic Materials segment exhibited a strong performance, posting 8% organic growth in value-added sales.
Looking ahead, Materion provided an optimistic outlook for 2026, projecting adjusted earnings per share in the range of $6.00 to $6.50, reflecting a 15% increase at the midpoint compared to 2025. The company also announced a $65 million investment from a major defense contractor to enhance its beryllium production capacity, supporting U.S. defense initiatives. CEO Jugal Vijayvargiya emphasized the company's focus on operational excellence and margin expansion, aiming for a mid-term target of 23%. Materion's solid results and forward-looking guidance position it well for sustained growth in 2026 and beyond.
MWN-AI** Analysis
Materion Corporation (NYSE: MTRN) has showcased a robust fourth quarter and full-year 2025 performance, marked by significant resilience and strategic initiatives. The company reported a commendable 7% increase in net sales to $489.7 million for Q4, lifting the full-year sales to $1.79 billion. The net income also rebounded impressively to $6.6 million, contrasting sharply with a hefty loss of $48.8 million in the prior year. This resurgence in profitability demonstrates effective management strategies, particularly amid challenges such as a quality issue impacting one of their significant customers.
The outlook for 2026 appears promising, with Materion anticipating continued growth across its business segments and guiding for adjusted earnings per share (EPS) in the range of $6.00 to $6.50—indicating a potential 15% increase from 2025. Their focus on capturing new business, along with the anticipated benefits from the recently announced $65 million customer investment to enhance beryllium capacity for U.S. defense initiatives, further underscores their growth trajectory.
Investors should take note of the ongoing margin expansion, which has been a highlight for Materion. The adjusted EBITDA margin of 20.7% reflects steady improvement, even amid lower volume pressures. This trend is supported by successful cost structure improvements and strategic acquisitions, notably in the semiconductor sector.
From a valuation perspective, the upward earnings guidance combined with operational improvements could provide a buying opportunity, especially as the market may underappreciate Materion's potential growth. However, investors should remain cautious of risks associated with raw material prices and global economic uncertainties. Overall, maintaining a position in Materion could prove rewarding as the company navigates an optimistic 2026 landscape.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Announces $65 Million Customer Investment to Support US Defense Initiatives
Materion Corporation (NYSE: MTRN) today reported fourth quarter and full-year 2025 financial results, provided strong 2026 earnings guidance and announced a $65 million customer investment to support US defense initiatives.
Fourth Quarter 2025 Highlights
- Net sales were $489.7 million; value-added sales 1 were $253.9 million
- Net income of $6.6 million, or $0.31 per share, diluted, versus net loss of $48.8 million, or $2.33 loss per share, in the prior year quarter; adjusted earnings of $1.53 per share versus $1.55 in the prior year quarter
- Operating profit of $10.8 million versus operating loss of $38.3 million in the prior year quarter; adjusted EBITDA 2 of $57.0 million versus $61.5 million in the prior year quarter
- Secured $65 million investment from major defense prime to expand beryllium capacity in support of US initiatives to replenish inventory and increase capabilities
Full-Year 2025 Highlights
- Net sales were $1.79 billion; value-added sales were $1.05 billion
- Net income was $74.8 million, or $3.58 per share, diluted, versus net income of $5.9 million, or $0.28 per share, in the prior year; adjusted earnings of $5.44 per share versus $5.34 in the prior year
- Delivered full year adjusted EBITDA margin of 20.7% versus 20.2% in the prior year, marking the fifth consecutive year of margin expansion
- Electronic Materials delivered 8% organic 3 year over year value-added sales growth with ~300 basis points of margin expansion
- Completed semiconductor acquisition to expand footprint and capabilities in Asia
- Transformation of Precision Optics delivered 7% year over year value-added sales growth with ~800 basis points of margin expansion
“I am very proud of our team for delivering strong results in the fourth quarter despite the intense focus placed on addressing a previously announced quality event that impacted our large precision clad strip customer. While working diligently to resolve the issue, the rest of our business performed very well, with Electronic Materials and Precision Optics driving double digit top and bottom-line growth, fueled by market outgrowth and strong operational execution,” said Jugal Vijayvargiya, President & CEO of Materion.
“Our full year results reflect the substantial progress we’ve made, including the meaningful cost structure improvements made in Precision Optics and Electronic Materials that drove strong margin expansion, and the new business initiatives across the company that have strengthened our order book, positioning us well for growth in 2026.”
“We expect to continue the momentum by delivering on our organic initiatives, capturing new business and driving operational excellence, resulting in strong top and bottom-line growth while advancing towards our mid-term margin target of 23%.”
FOURTH QUARTER 2025 RESULTS
Net sales for the quarter were $489.7 million, compared to $436.9 million in the prior year period. Value-added sales were $253.9 million for the quarter, up 7% organic 3 excluding precision clad strip from the prior year quarter due to strength in semiconductor, energy and data center growth.
Operating profit for the quarter was $10.8 million and net income was $6.6 million, or $0.31 per diluted share, compared to operating loss of $38.3 million and net loss of $48.8 million, or $2.33 loss per share, in the prior year period.
Adjusted EBITDA was $57.0 million, or 22.5% of value-added sales, compared to $61.5 million or 20.8% of value-added sales in the prior year period. This decrease was driven primarily by lower volume, partially offset by strong price/mix and operational performance in Electronic Materials and Precision Optics.
Adjusted net income was $32.0 million excluding acquisition amortization, or $1.53 per diluted share, compared to $1.55 per share in the prior year period.
FULL-YEAR 2025 RESULTS
Net sales for the year were $1.79 billion, compared to $1.68 billion in the prior year. Value-added sales were $1.05 billion for the year, up 4% organic 3 excluding precision clad strip from the prior year due to strength in semiconductor, energy and data center growth.
Operating profit for the year was $109.8 million and net income was $74.8 million, or $3.58 per diluted share, compared to operating profit of $47.2 million and net income of $5.9 million, or $0.28 per diluted share, in the prior year.
Adjusted EBITDA was $217.0 million, or 20.7% of value-added sales, compared to $221.2 million or 20.2% of value-added sales in the prior year period. This decrease was driven primarily by lower volume, partially offset by strong price/mix and operational performance in Electronic Materials and Precision Optics.
Adjusted net income was $113.6 million excluding acquisition amortization, or $5.44 per diluted share, compared to $5.34 per diluted share in the prior year.
OUTLOOK
Moving into 2026, we expect to capture strong sales growth across each of our three businesses from new business wins and strong market conditions while driving performance improvements. With mid-single digit top line growth and continued margin expansion, we are guiding to the range of $6.00 to $6.50 for full year 2026 adjusted earnings per share, an increase of 15% from prior year at the midpoint. We remain focused on driving towards our mid-term adjusted EBITDA margin target of 23%.
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
Materion Corporation will host an investor conference call with analysts at 9:00 a.m. Eastern Time, February 12, 2026. The conference call will be available via webcast through the Company’s website at www.materion.com . By phone, please dial (888) 506-0062. Calls outside the U.S. can dial (973) 528-0011; please reference participant access code of 365914. A replay of the call will be available until February 26, 2026 by dialing (877) 481-4010 or (919) 882-2331 if international; please reference replay ID number 53270. The call will also be archived on the Company’s website.
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; adjusted EBITDA represents EBITDA excluding special items, the details of which can be found in Attachments 4 through 8
3 Excludes value-added sales from the divested Albuquerque, New Mexico large area targets business sold in 2024
ABOUT MATERION
Materion Corporation is a global leader in advanced materials solutions for high-performance industries including semiconductor, industrial, aerospace & defense, energy and automotive. With nearly 100 years of expertise in specialty engineered alloy systems, inorganic chemicals and powders, precious and non-precious metals, beryllium and beryllium composites, and precision filters and optical coatings, Materion partners with customers to enable breakthrough solutions that move the world forward. Headquartered in Mayfield Heights, Ohio, the Company employs more than 3,000 talented people worldwide, serving customers in more than 60 countries.
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 U.S. Federal Government shutdowns or sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; 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 identifying acquisition candidates and in acquiring and integrating such businesses; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions; our success in implementing our strategic plans and the timely and successful start-up and completion of any capital projects; other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal consignment fees, tax rates, exchange rates, interest rates, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, credit availability, 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 disruptions in operations from, and other effects of, catastrophic and other extraordinary events including outbreaks from infectious diseases and the conflict between Russia and Ukraine and other hostilities; realization of expected financial benefits expected from the Inflation Reduction Act of 2022; and the risk factors set forth in Part 1, Item 1A of the Company's 2024 Annual Report on Form 10-K and in other reports that we file with the SEC.
Attachment 1 | |||||||||||||||
Materion Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) | |||||||||||||||
Fourth Quarter Ended | Year Ended | ||||||||||||||
(In thousands except per share amounts) | December 31, | December 31, | December 31, | December 31, | |||||||||||
Net sales | $ | 489,754 | $ | 436,871 | $ | 1,786,550 | $ | 1,684,739 | |||||||
Cost of sales | 426,088 | 343,895 | 1,477,924 | 1,358,754 | |||||||||||
Gross margin | 63,666 | 92,976 | 308,626 | 325,985 | |||||||||||
Selling, general, and administrative expense | 34,317 | 41,134 | 143,057 | 145,588 | |||||||||||
Research and development expense | 6,475 | 6,316 | 25,941 | 29,028 | |||||||||||
Goodwill impairment | — | 56,067 | — | 56,067 | |||||||||||
Long-lived asset impairment | — | 17,134 | — | 17,134 | |||||||||||
Loss on asset disposal | — | 6,412 | — | 6,412 | |||||||||||
Restructuring expense | 426 | 687 | 3,155 | 6,848 | |||||||||||
Other — net | 11,609 | 3,573 | 26,677 | 17,685 | |||||||||||
Operating profit (loss) | 10,839 | (38,347 | ) | 109,796 | 47,223 | ||||||||||
Other non-operating (income) expense—net | (493 | ) | (518 | ) | (2,437 | ) | (2,443 | ) | |||||||
Interest expense — net | 8,001 | 8,844 | 30,692 | 34,764 | |||||||||||
Income (loss) before income taxes | 3,331 | (46,673 | ) | 81,541 | 14,902 | ||||||||||
Income tax (benefit) expense | (3,242 | ) | 2,177 | 6,718 | 9,014 | ||||||||||
Net income (loss) | $ | 6,573 | $ | (48,850 | ) | $ | 74,823 | $ | 5,888 | ||||||
Basic earnings per share: | |||||||||||||||
Net income (loss) per share of common stock | $ | 0.32 | $ | (2.35 | ) | $ | 3.61 | $ | 0.28 | ||||||
Diluted earnings per share: | |||||||||||||||
Net income (loss) per share of common stock | $ | 0.31 | $ | (2.33 | ) | $ | 3.58 | $ | 0.28 | ||||||
Weighted-average number of shares of common stock outstanding: | |||||||||||||||
Basic | 20,734 | 20,758 | 20,755 | 20,732 | |||||||||||
Diluted | 20,953 | 20,923 | 20,912 | 20,928 |
Attachment 2 | ||||||||
Materion Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) | ||||||||
(Thousands) | December 31, 2025 | December 31, 2024 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 13,681 | $ | 16,713 | ||||
Accounts receivable, net | 222,916 | 193,793 | ||||||
Inventories, net | 461,231 | 441,299 | ||||||
Prepaid and other current assets | 91,692 | 72,419 | ||||||
Total current assets | 789,520 | 724,224 | ||||||
Deferred income taxes | 7,727 | 2,964 | ||||||
Property, plant, and equipment | 1,376,703 | 1,315,586 | ||||||
Less allowances for depreciation, depletion, and amortization | (841,245 | ) | (804,781 | ) | ||||
Property, plant, and equipment—net | 535,458 | 510,805 | ||||||
Operating lease, right-of-use assets | 62,036 | 64,449 | ||||||
Intangible assets, net | 105,874 | 109,312 | ||||||
Other assets | 21,529 | 22,140 | ||||||
Goodwill | 280,657 | 263,738 | ||||||
Total Assets | $ | 1,802,801 | $ | 1,697,632 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Short-term debt | $ | 22,445 | $ | 34,274 | ||||
Accounts payable | 148,642 | 105,901 | ||||||
Salaries and wages | 19,312 | 20,939 | ||||||
Other liabilities and accrued items | 45,445 | 47,523 | ||||||
Income taxes | 5,054 | 4,906 | ||||||
Unearned revenue | 12,685 | 13,191 | ||||||
Total current liabilities | 253,583 | 226,734 | ||||||
Other long-term liabilities | 12,556 | 12,013 | ||||||
Operating lease liabilities | 60,568 | 62,626 | ||||||
Finance lease liabilities | 13,384 | 12,404 | ||||||
Retirement and post-employment benefits | 23,931 | 26,411 | ||||||
Unearned income | 55,862 | 75,769 | ||||||
Long-term income taxes | 532 | 1,818 | ||||||
Deferred income taxes | 2,760 | 3,242 | ||||||
Long-term debt | 436,348 | 407,734 | ||||||
Shareholders’ equity | 943,277 | 868,881 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 1,802,801 | $ | 1,697,632 |
Attachment 3 | ||||||||
Materion Corporation and Subsidiaries Consolidated Statements of Cash Flows | ||||||||
(Thousands) | December 31, | December 31, | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 74,823 | $ | 5,888 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, depletion, and amortization | 69,074 | 68,676 | ||||||
Amortization of deferred financing costs in interest expense | 1,887 | 1,714 | ||||||
Stock-based compensation expense (non-cash) | 10,925 | 10,560 | ||||||
Amortization of pension and post-retirement costs | (154 | ) | (307 | ) | ||||
Loss on sale of property, plant, and equipment | 282 | 1,201 | ||||||
Deferred income tax expense (benefit) | (5,103 | ) | (16,598 | ) | ||||
Impairment charges | — | 73,201 | ||||||
Loss on asset disposal | — | 6,412 | ||||||
Net pension curtailments and settlements | 230 | — | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (25,790 | ) | (3,723 | ) | ||||
Inventory | (13,303 | ) | (468 | ) | ||||
Prepaid and other current assets | (15,101 | ) | (11,345 | ) | ||||
Accounts payable and accrued expenses | 33,517 | (15,757 | ) | |||||
Unearned revenue | (15,204 | ) | (24,692 | ) | ||||
Interest and taxes payable | 663 | (2,619 | ) | |||||
Other-net | (13,503 | ) | (4,326 | ) | ||||
Net cash provided by operating activities | 103,243 | 87,817 | ||||||
Cash flows from investing activities: | ||||||||
Payments for purchase of property, plant, and equipment | (53,279 | ) | (68,649 | ) | ||||
Payments for mine development | (26,288 | ) | (12,159 | ) | ||||
Proceeds from sale of property, plant, and equipment | 932 | 1,203 | ||||||
Payments for acquisition, net of cash acquired | (19,500 | ) | — | |||||
Net cash used in investing activities | (98,135 | ) | (79,605 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from borrowings under credit facilities, net | 33,890 | 45,692 | ||||||
Repayment of long-term debt | (18,177 | ) | (30,342 | ) | ||||
Principal payments under finance lease obligations | (604 | ) | (683 | ) | ||||
Cash dividends paid | (11,510 | ) | (11,087 | ) | ||||
Deferred financing costs | (2,935 | ) | (156 | ) | ||||
Repurchase of common stock | (7,843 | ) | — | |||||
Payments of withholding taxes for stock-based compensation awards | (2,642 | ) | (7,610 | ) | ||||
Net cash provided by financing activities | (9,821 | ) | (4,186 | ) | ||||
Effects of exchange rate changes | 1,681 | (607 | ) | |||||
Net change in cash and cash equivalents | (3,032 | ) | 3,419 | |||||
Cash and cash equivalents at beginning of period | 16,713 | 13,294 | ||||||
Cash and cash equivalents at end of period | $ | 13,681 | $ | 16,713 |
Attachment 4 | |||||||||||
Materion Corporation and Subsidiaries Reconciliation of Non-GAAP Measure - Value-added Sales, Operating Profit, and EBITDA (Unaudited) | |||||||||||
Fourth Quarter Ended | Year Ended | ||||||||||
(Millions) | December 31, | December 31, | December 31, | December 31, | |||||||
Net Sales | |||||||||||
Performance Materials | $ | 148.3 | $ | 211.0 | $ | 675.9 | $ | 744.5 | |||
Electronic Materials | 313.9 | 204.2 | 1,010.0 | 845.7 | |||||||
Precision Optics | 27.5 | 21.7 | 100.7 | 94.5 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 489.7 | $ | 436.9 | $ | 1,786.6 | $ | 1,684.7 | |||
Less: Pass-through Metal Cost | |||||||||||
Performance Materials | $ | 15.9 | $ | 15.2 | $ | 57.8 | $ | 56.5 | |||
Electronic Materials | 219.8 | 125.6 | 682.4 | 530.4 | |||||||
Precision Optics | 0.1 | — | 0.2 | 0.2 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 235.8 | $ | 140.8 | $ | 740.4 | $ | 587.1 | |||
Value-added Sales (non-GAAP) | |||||||||||
Performance Materials | $ | 132.4 | $ | 195.8 | $ | 618.1 | $ | 688.0 | |||
Electronic Materials | 94.1 | 78.6 | 327.6 | 315.3 | |||||||
Precision Optics | 27.4 | 21.7 | 100.5 | 94.3 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 253.9 | $ | 296.1 | $ | 1,046.2 | $ | 1,097.6 | |||
Gross Margin | |||||||||||
Performance Materials (1) | $ | 16.9 | $ | 62.6 | $ | 158.7 | $ | 203.2 | |||
Electronic Materials (1) | 37.2 | 26.0 | 121.3 | 99.5 | |||||||
Precision Optics (1) | 9.6 | 4.4 | 28.6 | 23.3 | |||||||
Other | — | — | — | — | |||||||
Total (1) | $ | 63.7 | $ | 93.0 | $ | 308.6 | $ | 326.0 | |||
(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) | December 31, | December 31, | December 31, | December 31, | |||||||||||
Operating Profit (Loss) | |||||||||||||||
Performance Materials | $ | (1.6 | ) | $ | 43.4 | $ | 87.5 | $ | 132.1 | ||||||
Electronic Materials | 17.0 | 2.9 | 53.4 | 29.4 | |||||||||||
Precision Optics | 1.7 | (77.0 | ) | (2.3 | ) | (84.7 | ) | ||||||||
Other | (6.3 | ) | (7.6 | ) | (28.8 | ) | (29.6 | ) | |||||||
Total | $ | 10.8 | $ | (38.3 | ) | $ | 109.8 | $ | 47.2 | ||||||
Non-Operating (Income)/Expense | |||||||||||||||
Performance Materials | $ | 0.1 | $ | 0.1 | $ | 0.4 | $ | 0.5 | |||||||
Electronic Materials | — | — | (0.1 | ) | — | ||||||||||
Precision Optics | — | — | (0.6 | ) | (0.4 | ) | |||||||||
Other | (0.7 | ) | (0.6 | ) | (2.1 | ) | (2.5 | ) | |||||||
Total | $ | (0.6 | ) | $ | (0.5 | ) | $ | (2.4 | ) | $ | (2.4 | ) | |||
Depreciation, Depletion, and Amortization | |||||||||||||||
Performance Materials | $ | 10.2 | $ | 10.1 | $ | 40.1 | $ | 37.7 | |||||||
Electronic Materials | 4.6 | 4.4 | 17.6 | 18.0 | |||||||||||
Precision Optics | 2.2 | 2.4 | 9.4 | 11.0 | |||||||||||
Other | 0.5 | 0.4 | 2.0 | 2.0 | |||||||||||
Total | $ | 17.5 | $ | 17.3 | $ | 69.1 | $ | 68.7 | |||||||
Segment EBITDA | |||||||||||||||
Performance Materials | $ | 8.5 | $ | 53.4 | $ | 127.2 | $ | 169.3 | |||||||
Electronic Materials | 21.6 | 7.3 | 71.1 | 47.4 | |||||||||||
Precision Optics | 3.9 | (74.6 | ) | 7.7 | (73.3 | ) | |||||||||
Other | (5.1 | ) | (6.6 | ) | (24.7 | ) | (25.1 | ) | |||||||
Total | $ | 28.9 | $ | (20.5 | ) | $ | 181.3 | $ | 118.3 | ||||||
Special Items (2) | |||||||||||||||
Performance Materials | $ | 27.3 | $ | 0.2 | $ | 29.0 | $ | 9.5 | |||||||
Electronic Materials | 0.4 | 7.4 | 3.6 | 14.6 | |||||||||||
Precision Optics | 0.4 | 73.5 | 1.9 | 75.2 | |||||||||||
Other | — | 0.9 | 1.2 | 3.6 | |||||||||||
Total | $ | 28.1 | $ | 82.0 | $ | 35.7 | $ | 102.9 | |||||||
Adjusted EBITDA Excluding Special Items | |||||||||||||||
Performance Materials | $ | 35.8 | $ | 53.6 | $ | 156.2 | $ | 178.8 | |||||||
Electronic Materials | 22.0 | 14.7 | 74.7 | 62.0 | |||||||||||
Precision Optics | 4.3 | (1.1 | ) | 9.6 | 1.9 | ||||||||||
Other | (5.1 | ) | (5.7 | ) | (23.5 | ) | (21.5 | ) | |||||||
Total | $ | 57.0 | $ | 61.5 | $ | 217.0 | $ | 221.2 | |||||||
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 | |||||||||||||||
Materion Corporation and Subsidiaries Reconciliation of Net Sales to Value-added Sales, Net Income to EBITDA and Adjusted EBITDA (Unaudited) | |||||||||||||||
Fourth Quarter Ended | Twelve Months Ended | ||||||||||||||
(Millions) | December 31, | December 31, | December 31, | December 31, | |||||||||||
Net sales | $ | 489.7 | $ | 436.9 | $ | 1,786.6 | $ | 1,684.7 | |||||||
Pass-through metal cost | 235.8 | 140.8 | 740.4 | 587.1 | |||||||||||
Value-added sales | $ | 253.9 | $ | 296.1 | $ | 1,046.2 | $ | 1,097.6 | |||||||
Net income (loss) | $ | 6.6 | $ | (48.8 | ) | $ | 74.8 | $ | 5.9 | ||||||
Income tax (benefit) expense | (3.2 | ) | 2.2 | 6.7 | 9.0 | ||||||||||
Interest expense - net | 8.0 | 8.8 | 30.7 | 34.7 | |||||||||||
Depreciation, depletion and amortization | 17.5 | 17.3 | 69.1 | 68.7 | |||||||||||
Consolidated EBITDA | $ | 28.9 | $ | (20.5 | ) | $ | 181.3 | $ | 118.3 | ||||||
Net Income as a % of Net sales | 1.3 | % | (11.2 | )% | 4.2 | % | 0.4 | % | |||||||
Net Income as a % of Value-added sales | 2.6 | % | (16.5 | )% | 7.1 | % | 0.5 | % | |||||||
EBITDA as a % of Net sales | 5.9 | % | (4.7 | )% | 10.1 | % | 7.0 | % | |||||||
EBITDA as a % of Value-added sales | 11.4 | % | (6.9 | )% | 17.3 | % | 10.8 | % | |||||||
Special items | |||||||||||||||
Restructuring and cost reduction | $ | 0.4 | $ | 0.7 | $ | 3.2 | $ | 11.4 | |||||||
Electronic Materials inventory adjustment | — | — | — | 2.8 | |||||||||||
Environmental remediation | — | — | 0.6 | — | |||||||||||
Business transformation costs | — | 0.7 | 0.8 | 1.3 | |||||||||||
Pension settlement | 0.3 | — | 0.3 | — | |||||||||||
Product quality issue | 27.3 | — | 27.3 | — | |||||||||||
Additional start up resources and scrap | — | — | — | 6.1 | |||||||||||
Merger, acquisition and divestiture related costs | 0.1 | 7.4 | 3.5 | 8.1 | |||||||||||
Precision Optics impairments | — | 73.2 | — | 73.2 | |||||||||||
Total special items | 28.1 | 82.0 | 35.7 | 102.9 | |||||||||||
Adjusted EBITDA | $ | 57.0 | $ | 61.5 | $ | 217.0 | $ | 221.2 | |||||||
Adjusted EBITDA as a % of Net sales | 11.6 | % | 14.1 | % | 12.1 | % | 13.1 | % | |||||||
Adjusted EBITDA as a % of Value-added sales | 22.5 | % | 20.8 | % | 20.7 | % | 20.2 | % | |||||||
In addition to presenting financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release contains financial measures, including operating profit, segment operating profit, earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), net income, and earnings per share, on a non-GAAP basis. As detailed in the above reconciliation and Attachment 6, we have adjusted the results for certain special items, including the following:
| |||||||||||||||
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. |
Attachment 6 | ||||||||||||||||||||||||||||
Materion Corporation and Subsidiaries 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 | Diluted | December | Diluted | December | Diluted | December | Diluted | ||||||||||||||||||||
Net income (loss) and EPS | $ | 6.6 | $ | 0.31 | $ | (48.8 | ) | $ | (2.33 | ) | $ | 74.8 | $ | 3.58 | $ | 5.9 | $ | 0.28 | ||||||||||
Special items | ||||||||||||||||||||||||||||
Restructuring and cost reduction | 0.4 | 0.7 | 3.2 | 11.4 | ||||||||||||||||||||||||
Electronic Materials inventory adjustment | — | — | — | 2.8 | ||||||||||||||||||||||||
Environmental remediation | — | — | 0.6 | — | ||||||||||||||||||||||||
Business transformation costs | — | 0.7 | 0.8 | 1.3 | ||||||||||||||||||||||||
Debt extinguishment costs (1) | — | — | 0.5 | — | ||||||||||||||||||||||||
Pension settlement | 0.3 | — | 0.3 | — | ||||||||||||||||||||||||
Product quality issue (2) | 28.6 | — | 28.6 | — | ||||||||||||||||||||||||
Additional start up resources and scrap | — | — | — | 6.1 | ||||||||||||||||||||||||
Merger, acquisition and divestiture related costs | 0.1 | 7.4 | 3.5 | 8.1 | ||||||||||||||||||||||||
Precision Optics impairments | — | 73.2 | — | 73.2 | ||||||||||||||||||||||||
Provision for income taxes (3) | (6.0 | ) | (3.0 | ) | (7.2 | ) | (6.6 | ) | ||||||||||||||||||||
Total special items | 23.4 | 1.12 | 79.0 | 3.77 | 30.3 | 1.45 | 96.3 | 4.60 | ||||||||||||||||||||
Adjusted net income and adjusted EPS | $ | 30.0 | $ | 1.43 | $ | 30.2 | $ | 1.44 | $ | 105.1 | $ | 5.03 | $ | 102.2 | $ | 4.88 | ||||||||||||
Acquisition amortization (net of tax) | 2.0 | 0.10 | 2.2 | 0.11 | 8.5 | 0.41 | 9.6 | 0.46 | ||||||||||||||||||||
Adjusted net income and adjusted EPS excl. amortization | $ | 32.0 | $ | 1.53 | $ | 32.4 | $ | 1.55 | $ | 113.6 | $ | 5.44 | $ | 111.8 | $ | 5.34 | ||||||||||||
(1) Debt extinguishment costs - Represents debt extinguishment costs incurred in connection with the amendment of the Company's Credit Agreement in June 2025. | ||||||||||||||||||||||||||||
(2) Product quality issue includes $1.3 million of depreciation expense | ||||||||||||||||||||||||||||
(3) 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, | December 31, | December 31, | December 31, | |||||||||||
Net sales | $ | 148.3 | $ | 211.0 | $ | 675.9 | $ | 744.5 | |||||||
Pass-through metal cost | 15.9 | 15.2 | 57.8 | 56.5 | |||||||||||
Value-added sales | $ | 132.4 | $ | 195.8 | $ | 618.1 | $ | 688.0 | |||||||
EBITDA | $ | 8.5 | $ | 53.4 | $ | 127.2 | $ | 169.3 | |||||||
Restructuring and cost reduction | — | 0.1 | 0.5 | 2.9 | |||||||||||
Additional start up resources and scrap | — | — | — | 6.1 | |||||||||||
Product quality issue | 27.3 | — | 27.3 | — | |||||||||||
Environmental remediation | — | — | 0.6 | — | |||||||||||
Business transformation costs | — | 0.1 | 0.6 | 0.5 | |||||||||||
Adjusted EBITDA | $ | 35.8 | $ | 53.6 | $ | 156.2 | $ | 178.8 | |||||||
EBITDA as a % of Net sales | 5.7 | % | 25.3 | % | 18.8 | % | 22.7 | % | |||||||
EBITDA as a % of Value-added sales | 6.4 | % | 27.3 | % | 20.6 | % | 24.6 | % | |||||||
Adjusted EBITDA as a % of Net sales | 24.1 | % | 25.4 | % | 23.1 | % | 24.0 | % | |||||||
Adjusted EBITDA as a % of Value-added sales | 27.0 | % | 27.4 | % | 25.3 | % | 26.0 | % | |||||||
Electronic Materials | Fourth Quarter Ended | Twelve Months Ended | |||||||||||||
(Millions) | December 31, | December 31, | December 31, | December 31, | |||||||||||
Net sales | $ | 313.9 | $ | 204.2 | $ | 1,010.0 | $ | 845.7 | |||||||
Pass-through metal cost | 219.8 | 125.6 | 682.4 | 530.4 | |||||||||||
Value-added sales | $ | 94.1 | $ | 78.6 | $ | 327.6 | $ | 315.3 | |||||||
EBITDA | $ | 21.6 | $ | 7.3 | $ | 71.1 | $ | 47.4 | |||||||
Restructuring and cost reduction | 0.3 | 0.2 | 1.1 | 4.5 | |||||||||||
Electronic Materials inventory adjustment | — | — | — | 2.8 | |||||||||||
Business transformation costs | — | 0.2 | — | 0.3 | |||||||||||
Merger, acquisition and divestiture related costs | 0.1 | 7.0 | 2.5 | 7.0 | |||||||||||
Adjusted EBITDA | $ | 22.0 | $ | 14.7 | $ | 74.7 | $ | 62.0 | |||||||
EBITDA as a % of Net sales | 6.9 | % | 3.6 | % | 7.0 | % | 5.6 | % | |||||||
EBITDA as a % of Value-added sales | 23.0 | % | 9.3 | % | 21.7 | % | 15.0 | % | |||||||
Adjusted EBITDA as a % of Net sales | 7.0 | % | 7.2 | % | 7.4 | % | 7.3 | % | |||||||
Adjusted EBITDA as a % of Value-added sales | 23.4 | % | 18.7 | % | 22.8 | % | 19.7 | % | |||||||
Precision Optics | Fourth Quarter Ended | Twelve Months Ended | |||||||||||||
(Millions) | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||||||
Net sales | $ | 27.5 | $ | 21.7 | $ | 100.7 | $ | 94.5 | |||||||
Pass-through metal cost | 0.1 | — | 0.2 | 0.2 | |||||||||||
Value-added sales | $ | 27.4 | $ | 21.7 | $ | 100.5 | $ | 94.3 | |||||||
EBITDA | $ | 3.9 | $ | (74.6 | ) | $ | 7.7 | $ | (73.3 | ) | |||||
Restructuring and cost reduction | 0.1 | 0.3 | 1.6 | 2.0 | |||||||||||
Pension settlement | 0.3 | — | 0.3 | — | |||||||||||
Precision Optics impairments | — | 73.2 | — | 73.2 | |||||||||||
Adjusted EBITDA | $ | 4.3 | $ | (1.1 | ) | $ | 9.6 | $ | 1.9 | ||||||
EBITDA as a % of Net sales | 14.2 | % | (343.8 | )% | 7.6 | % | (77.6 | )% | |||||||
EBITDA as a % of Value-added sales | 14.2 | % | (343.8 | )% | 7.7 | % | (77.7 | )% | |||||||
Adjusted EBITDA as a % of Net sales | 15.6 | % | (5.1 | )% | 9.5 | % | 2.0 | % | |||||||
Adjusted EBITDA as a % of Value-added sales | 15.7 | % | (5.1 | )% | 9.6 | % | 2.0 | % | |||||||
Other | Fourth Quarter Ended | Twelve Months Ended | |||||||||||||
(Millions) | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||||||
EBITDA | $ | (5.1 | ) | $ | (6.6 | ) | $ | (24.7 | ) | $ | (25.1 | ) | |||
Restructuring and cost reduction | — | 0.1 | — | 2.0 | |||||||||||
Business transformation costs | — | 0.4 | 0.2 | 0.5 | |||||||||||
Merger, acquisition and divestiture related costs | — | 0.4 | 1.0 | 1.1 | |||||||||||
Adjusted EBITDA | $ | (5.1 | ) | $ | (5.7 | ) | $ | (23.5 | ) | $ | (21.5 | ) |
Attachment 8 | |||||||||||
Materion Corporation and Subsidiaries Reconciliation of Non-GAAP Measure - Gross Margin to Adjusted Gross Margin (Unaudited) | |||||||||||
Fourth Quarter Ended | Twelve Months Ended | ||||||||||
(Millions) | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||
Gross Margin | |||||||||||
Performance Materials | $ | 16.9 | $ | 62.6 | $ | 158.7 | $ | 203.2 | |||
Electronic Materials | 37.2 | 26.0 | 121.3 | 99.5 | |||||||
Precision Optics | 9.6 | 4.4 | 28.6 | 23.3 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 63.7 | $ | 93.0 | $ | 308.6 | $ | 326.0 | |||
Special Items (1) | |||||||||||
Performance Materials | $ | 25.7 | $ | — | $ | 26.4 | $ | 7.5 | |||
Electronic Materials | — | — | — | 4.7 | |||||||
Precision Optics | — | — | — | 0.2 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 25.7 | $ | — | $ | 26.4 | $ | 12.4 | |||
Adjusted Gross Margin | |||||||||||
Performance Materials | 42.6 | 62.6 | $ | 185.1 | $ | 210.7 | |||||
Electronic Materials | 37.2 | 26.0 | 121.3 | 104.2 | |||||||
Precision Optics | 9.6 | 4.4 | 28.6 | 23.5 | |||||||
Other | — | — | — | — | |||||||
Total | $ | 89.4 | $ | 93.0 | $ | 335.0 | $ | 338.4 | |||
(1) Special items impacting gross margin represent the product quality issue and environmental remediation in 2025 and restructuring and cost reduction, the Electronic Materials inventory adjustment, and additional start up resources and scrap in 2024. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260211945299/en/
Investor Contact:
Kyle Kelleher
(216) 383-4931
kyle.kelleher@materion.com
Media Contact:
Jason Saragian
(216) 383-6893
jason.saragian@materion.com
https://materion.com
Mayfield Hts-g
FAQ**
How has the $65 million customer investment announced by Materion Corporation MTRN impacted the projected growth for the US defense initiatives in 2026, considering their strong fourth-quarter and full-year 2025 financial results?
What specific operational improvements contributed to the operating profit be coming from a loss in the previous year for Materion Corporation MTRN, leading to a net income of $6.6 million in Q4 2025?
With the focus on driving towards a mid-term adjusted EBITDA margin target of 23%, how does Materion Corporation MTRN plan to achieve sustained top-line growth while navigating potential economic challenges?
Despite previous quality events impacting customers, what steps is Materion Corporation MTRN taking to ensure confidence among investors and stakeholders as they pursue their growth objectives in 2026?
**MWN-AI FAQ is based on asking OpenAI questions about Materion Corporation (NYSE: MTRN).
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