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• Value-Added Sales: $263.8 million, down 2% from prior year.

• Adjusted Earnings Per Share (EPS): $1.41, down 7% from prior year.

• Adjusted EBITDA: $56.7 million, representing 21.5% of value-added sales, up 2% with 100 basis points of margin expansion from prior year.

• Performance Materials Value-Added Sales: $163.6 million, down 3% from prior year.

• Performance Materials EBITDA: $46.5 million, 28.4% of value-added sales, with 90 basis points of year-over-year margin expansion.

• Electronic Materials Value-Added Sales: $77.8 million, up 3% year-on-year.

• Electronic Materials EBITDA: $15.6 million, 20.1% of value-added sales, up 290 basis points versus prior year.

• Precision Optics Value-Added Sales: $22.4 million, down 14% compared to prior year.

• Precision Optics EBITDA: $0.5 million, 2.2% of value-added sales.

• Net Debt Position: Approximately $477 million.

• Available Credit Facility Capacity: Approximately $127 million.

• Leverage Ratio: 2.2x, expected to be approximately 2x by year-end.

• Full-Year 2024 Adjusted EPS Outlook: $5.20 to $5.40 per share.

• Warning! GuruFocus has detected 5 Warning Signs with MTRN.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Materion Corp (NYSE:MTRN) achieved record EBITDA margins of 21.5% for the quarter, marking the fourth time in six quarters that margins exceeded 20%.

• The company has entered into an agreement to serve as a technology partner for a major global supplier of semiconductor processing equipment, which is expected to drive future growth.

• Materion Corp (NYSE:MTRN) reported continued strength in the space and defense markets, with new business wins such as the selection of their Supremex material for a US Army prototype.

• The company is actively optimizing its footprint by selling non-core businesses and consolidating facilities, which has improved the performance of its Electronic Materials business.

• Materion Corp (NYSE:MTRN) is investing heavily in R&D, reaching an all-time high in spending to support next-generation products and solutions.

Negative Points

• Sales for the quarter were down slightly due to expected inventory corrections in clad strip and general market softness across several end markets.

• The semiconductor recovery is progressing slower than anticipated, impacting overall sales growth.

• Precision Optics segment experienced a 14% decrease in value-added sales year-over-year, driven by defense order timing and market weakness.

• The company is facing challenges in the consumer electronics market, with continued choppiness and no significant turnaround outside of precision clad.

• Materion Corp (NYSE:MTRN) anticipates continued inventory corrections in the Precision Clad Strip business, which may extend into the new year.