MATERION CORP, 10-Q filed on 7/25/2019
Quarterly Report
v3.19.2
Document and Entity Information
6 Months Ended
Jun. 28, 2019
shares
Document and Entity Information [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Jun. 28, 2019
Document Transition Report false
Entity File Number 001-15885
Entity Registrant Name MATERION CORPORATION
Local Phone Number 486-4200
Title of 12(b) Security Common Stock, no par value
Entity Incorporation, State or Country Code OH
Entity Tax Identification Number 34-1919973
Entity Address, Address Line One 6070 Parkland Blvd
Entity Address, City or Town Mayfield Heights
Entity Address, State or Province OH
City Area Code 216
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Address, Postal Zip Code 44124
Entity Central Index Key 0001104657
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Document Fiscal Year Focus 2019
Document Fiscal Period Focus Q2
Trading Symbol MTRN
Amendment Flag false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Small Business false
Entity Common Stock, Shares Outstanding 20,399,425
Security Exchange Name NYSE
v3.19.2
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Income Statement [Abstract]        
Net sales $ 297,843 $ 309,085 $ 599,284 $ 612,552
Cost of sales 228,249 247,247 460,378 492,434
Gross margin 69,594 61,838 138,906 120,118
Selling, general, and administrative expense 39,891 38,473 79,955 76,935
Research and development expense 4,062 3,860 7,802 7,503
Other net 2,891 4,313 7,012 7,237
Operating profit 22,750 15,192 44,137 28,443
Interest expense—net 500 667 966 1,397
Other non-operating expense - net 3,112 437 3,357 879
Income before income taxes 19,138 14,088 39,814 26,167
Income tax expense 3,598 2,944 7,368 4,459
Net income $ 15,540 $ 11,144 $ 32,446 $ 21,708
Basic earnings per share:        
Net income per share of common stock (in dollars per share) $ 0.76 $ 0.55 $ 1.60 $ 1.08
Diluted earnings per share:        
Net income per share of common stock (in dollars per share) $ 0.75 $ 0.54 $ 1.57 $ 1.05
Weighted-average number of shares of common stock outstanding:        
Basic (in shares) 20,383 20,221 20,326 20,178
Diluted (in shares) 20,666 20,593 20,635 20,583
v3.19.2
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Statement of Comprehensive Income [Abstract]        
Net income $ 15,540 $ 11,144 $ 32,446 $ 21,708
Other comprehensive income (loss):        
Foreign currency translation adjustment 339 (944) (164) 169
Derivative and hedging activity, net of tax (1,000) 1,763 (73) 1,088
Pension and post-employment benefit adjustment, net of tax 13,953 1,296 14,493 2,574
Net current period other comprehensive income (loss) after tax 13,292 2,115 14,256 3,831
Comprehensive income $ 28,832 $ 13,259 $ 46,702 $ 25,539
v3.19.2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 74,856 $ 70,645
Accounts receivable 142,327 130,538
Inventories, net 213,329 214,871
Prepaid and other current assets 23,904 23,299
Total current assets 454,416 439,353
Deferred income taxes 1,052 5,616
Property, Plant and Equipment 913,325 898,251
Less allowances for depreciation, depletion, and amortization (669,861) (647,233)
Property, plant, and equipment—net 243,464 251,018
Operating lease, right-of-use asset 26,788 0
Intangible assets 5,213 6,461
Other assets 15,280 7,236
Goodwill 90,633 90,657
Total Assets 836,846 800,341
Current liabilities    
Short-term debt 847 823
Accounts payable 41,658 49,622
Salaries and wages 36,250 47,501
Other liabilities and accrued items 38,482 33,301
Income taxes 1,971 2,615
Unearned revenue 5,829 5,918
Total current liabilities 125,037 139,780
Other long-term liabilities 11,419 14,764
Operating lease liabilities 21,118 0
Finance lease liabilities 18,325 15,221
Retirement and post-employment benefits 30,663 38,853
Unearned income 30,354 32,563
Long-term income taxes 3,093 2,993
Deferred income taxes 383 195
Long-term debt 1,669 2,066
Serial preferred stock (no par value; 5,000 authorized shares, none issued) 0 0
Common stock (no par value; 60,000 authorized shares, issued shares of 27,148 at June 28 and December 31) 245,785 234,704
Retained earnings 576,211 548,374
Common stock in treasury (187,224) (175,426)
Accumulated other comprehensive loss (43,978) (58,234)
Other equity 3,991 4,488
Total shareholders' equity 594,785 553,906
Total Liabilities and Shareholders’ Equity $ 836,846 $ 800,341
v3.19.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
shares in Thousands, $ / shares in Thousands
Jun. 28, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Serial preferred stock, par value (in dollars per share) $ 0 $ 0
Serial preferred stock, shares authorized 5,000 5,000
Serial preferred stock, shares issued 0 0
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized 60,000 60,000
Common stock, shares, issued 27,148 27,148
v3.19.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Cash flows from operating activities:    
Net income $ 32,446 $ 21,708
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation, depletion, and amortization 22,607 18,349
Amortization of deferred financing costs in interest expense 472 514
Stock-based compensation expense (non-cash) 3,541 2,164
Deferred income tax expense (benefit) 4,578 429
Pension curtailment 3,296 0
Changes in assets and liabilities:    
Decrease (increase) in accounts receivable (11,778) (12,060)
Decrease (increase) in inventory 1,306 10,428
Decrease (increase) in prepaid and other current assets (588) 4,928
Increase (decrease) in accounts payable and accrued expenses (18,813) (14,189)
Increase (Decrease) in Unearned Revenue (88) 2,132
Increase (decrease) in interest and taxes payable (1,130) 2,084
Domestic pension plan contributions (3,000) (13,000)
Other-net (2,803) 5,817
Net cash used in operating activities 30,046 29,304
Cash flows from investing activities:    
Payments for purchase of property, plant, and equipment (13,833) (17,153)
Payments for mine development (1,591) (3,425)
Proceeds from sale of property, plant, and equipment 15 27
Net cash used in investing activities (15,409) (20,551)
Cash flows from financing activities:    
Repayment of long-term debt (397) (383)
Principal payments under finance lease obligations 599 425
Cash dividends paid (4,368) (4,137)
Repurchase of common stock (199) 0
Payments of withholding taxes for stock-based compensation awards (4,763) (2,765)
Net cash used in financing activities (10,326) (7,710)
Effects of exchange rate changes (100) 8
Net change in cash and cash equivalents 4,211 1,051
Cash and cash equivalents at beginning of period 70,645 41,844
Cash and cash equivalents at end of period $ 74,856 $ 42,895
v3.19.2
Consolidated Statements of Shareholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Shares
Common Shares Held In Treasury
Common Stock
Retained Earnings
Common Stock In Treasury
Accumulated Other Comprehensive Income (Loss)
Other Equity
Beginning balance (in shares) at Dec. 31, 2017   20,107            
Beginning balances (in Treasury shares) at Dec. 31, 2017     (7,042)          
Beginning balances at Dec. 31, 2017 $ 494,981     $ 223,484 $ 536,116 $ (166,128) $ (102,937) $ 4,446
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 21,708     0 21,708 0 0 0
Other comprehensive income (loss) 3,256     0 0 0 3,256 0
Pension curtailment 0              
Tax Cuts and Jobs Act of 2017 Reclassification From Aoci to Retained Earnings 0     0 (575) 0 575 0
Cumulative effect of accounting change 425     0 425 0 0 0
Cash dividends declared (4,137)     0 (4,137) 0 0 0
Stock-based compensation activity (in shares)   181 181          
Stock-based compensation activity 2,164     7,220 (14) (5,042) 0 0
Payments of withholding taxes for stock-based compensation awards (in shares)   (53) (53)          
Payments of withholding taxes for stock-based compensation awards (2,765)     0 0 (2,765) 0 0
Directors' deferred compensation 109 $ 1 $ 2 59 0 110 0 (60)
Ending balance (in shares) at Jun. 29, 2018   20,236            
Ending balances (in Treasury shares) at Jun. 29, 2018     (6,912)          
Ending balances at Jun. 29, 2018 515,741     230,763 553,523 (173,825) (99,106) 4,386
Beginning balance (in shares) at Mar. 30, 2018   20,191            
Beginning balances (in Treasury shares) at Mar. 30, 2018     (6,958)          
Beginning balances at Mar. 30, 2018 504,329     227,694 545,093 (171,574) (101,221) 4,337
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 11,144     0 11,144 0 0 0
Other comprehensive income (loss) 1,540     0 0 0 1,540 0
Tax Cuts and Jobs Act of 2017 Reclassification From Aoci to Retained Earnings 0     0 (575) 0 575 0
Cumulative effect of accounting change 0     0 0 0 0 0
Cash dividends declared (2,125)     0 (2,125) 0 0 0
Stock-based compensation activity (in shares)   55 55          
Stock-based compensation activity 1,393     3,020 (14) (1,613) 0 0
Payments of withholding taxes for stock-based compensation awards (in shares)   (11) (11)          
Payments of withholding taxes for stock-based compensation awards (632)     0 0 (632) 0 0
Directors' deferred compensation 92 $ 1 $ 2 49 0 (6) 0 49
Ending balance (in shares) at Jun. 29, 2018   20,236            
Ending balances (in Treasury shares) at Jun. 29, 2018     (6,912)          
Ending balances at Jun. 29, 2018 515,741     230,763 553,523 (173,825) (99,106) 4,386
Beginning balance (in shares) at Dec. 31, 2018   20,242            
Beginning balances (in Treasury shares) at Dec. 31, 2018     (6,906)          
Beginning balances at Dec. 31, 2018 553,906     234,704 548,374 (175,426) (58,234) 4,488
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 32,446     0 32,446 0 0 0
Other comprehensive income (loss) 10,960     0 0 0 10,960 0
Pension curtailment 3,296     0 0 0 3,296 0
Cumulative effect of accounting change (179)     0 (179) 0 0 0
Cash dividends declared (4,368)     0 (4,368) 0 0 0
Stock-based compensation activity (in shares)   247 247          
Stock-based compensation activity 3,541     11,046 (62) (7,443) 0 0
Payments of withholding taxes for stock-based compensation awards (in shares)   (87) (87)          
Payments of withholding taxes for stock-based compensation awards (4,763)     0 0 (4,763) 0 0
Repurchase of shares (in shares)   (5) (5)          
Repurchase of shares (199)     0 0 (199) 0 0
Directors' deferred compensation 145 $ 2 $ 2 35 0 607 0 (497)
Ending balance (in shares) at Jun. 28, 2019   20,399            
Ending balances (in Treasury shares) at Jun. 28, 2019     (6,749)          
Ending balances at Jun. 28, 2019 594,785     245,785 576,211 (187,224) (43,978) 3,991
Beginning balance (in shares) at Mar. 29, 2019   20,354            
Beginning balances (in Treasury shares) at Mar. 29, 2019     (6,794)          
Beginning balances at Mar. 29, 2019 566,877     241,480 562,941 (184,812) (57,270) 4,538
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 15,540     0 15,540 0 0 0
Other comprehensive income (loss) 9,996     0 0 0 9,996 0
Pension curtailment 3,296     0 0 0 3,296 0
Cash dividends declared (2,243)     0 (2,243) 0 0 0
Stock-based compensation activity (in shares)   55 55          
Stock-based compensation activity 1,994     4,287 (27) (2,266) 0 0
Payments of withholding taxes for stock-based compensation awards (in shares)   (12) (12)          
Payments of withholding taxes for stock-based compensation awards (785)     0 0 (785) 0 0
Repurchase of shares (in shares)   0 0          
Repurchase of shares 0     0 0 0 0 0
Directors' deferred compensation 110 $ 2 $ 2 18 0 639 0 (547)
Ending balance (in shares) at Jun. 28, 2019   20,399            
Ending balances (in Treasury shares) at Jun. 28, 2019     (6,749)          
Ending balances at Jun. 28, 2019 $ 594,785     $ 245,785 $ 576,211 $ (187,224) $ (43,978) $ 3,991
v3.19.2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Statement of Stockholders' Equity [Abstract]        
Cash dividends declared (per share) $ 0.110 $ 0.105 $ 0.215 $ 0.205
v3.19.2
Accounting Policies
6 Months Ended
Jun. 28, 2019
Accounting Policies [Abstract]  
Accounting Policies Accounting Policies

Basis of Presentation: In management’s opinion, the accompanying consolidated financial statements of Materion Corporation and its subsidiaries (referred to herein as the Company, our, we, or us) contain all of the adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported. All adjustments were of a normal and recurring nature. Certain amounts in prior periods have been reclassified to conform to the 2019 consolidated financial statement presentation.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2018 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year.
New Pronouncements Adopted: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 (Topic 842), Leases, which eliminates the off-balance-sheet accounting for leases. This guidance requires lessees to report their operating leases as both an asset and liability on the balance sheet and disclose key information about leasing arrangements. The Company adopted this guidance as of January 1, 2019 using the modified retrospective method and applied it retrospectively through a cumulative-effect adjustment to retained earnings. The Company applied the transitional package of practical expedients allowed by the standard to not reassess the identification, classification, and initial direct costs of leases commencing before this ASU's effective date; however, the Company did not elect the hindsight transitional practical expedient. The Company also applied the practical expedient to not separate lease and non-lease components to new leases as well as existing leases through transition. The Company made an accounting policy election not to apply recognition requirements of the guidance to short-term leases.

Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with legacy generally accepted accounting principles.

The Company recorded a net reduction to opening retained earnings of $0.2 million as of January 1, 2019 due to the cumulative impact of adopting Topic 842, with the impact primarily related to derecognition of a built-to-suit lease. Refer to Note H for additional disclosures relating to the Company's leasing arrangements.
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies existing guidance to allow companies to more accurately present the economic effects of risk management activities in the financial statements. The Company adopted this guidance as of January 1, 2019, and the adoption did not have a material effect on the Company’s consolidated financial statements.

New Pronouncements Issued: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. This ASU requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” to a “current expected credit loss” model. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years. Early adoption is permitted. The Company is currently assessing the effect that this ASU will have on its financial position, results of operations, and disclosures.
No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.
v3.19.2
Segment Reporting
6 Months Ended
Jun. 28, 2019
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
 
The Company has the following reportable segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, the Company's Chief Operating Decision Maker, in determining how to allocate the Company’s resources and evaluate performance.
Performance Alloys and Composites produces strip and bulk form alloy products, strip metal products with clad inlay and overlay metals, beryllium-based metals, beryllium, and aluminum metal matrix composites, in rod, sheet, foil, and a variety of customized forms, beryllia ceramics, and bulk metallic glass materials.
Advanced Materials produces advanced chemicals, microelectric packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal preforms, high temperature braze materials, and ultra-fine wire.
Precision Coatings produces thin film coatings, optical filter materials, sputter-coated, and precision-converted thin film materials.
The Other reportable segment includes unallocated corporate costs and assets.

(Thousands)
 
Performance
Alloys and
Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
Second Quarter 2019
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
135,231

 
$
133,238

 
$
29,374

 
$

 
$
297,843

Intersegment sales 
 
6

 
19,260

 

 

 
19,266

Operating profit (loss)
 
19,328

 
6,139

 
3,937

 
(6,654
)
 
22,750

Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

Intersegment sales
 
3

 
11,400

 

 

 
11,403

Operating profit (loss)
 
12,309

 
5,572

 
2,233

 
(4,922
)
 
15,192

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2019
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
262,344

 
$
277,263

 
$
59,677

 
$

 
$
599,284

Intersegment sales
 
15

 
36,473

 

 

 
36,488

Operating profit (loss)
 
38,286

 
13,219

 
6,014

 
(13,382
)
 
44,137

First Six Months 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552

Intersegment sales
 
31

 
23,052

 

 

 
23,083

Operating profit (loss)
 
22,170

 
11,470

 
5,608

 
(10,805
)
 
28,443



In the second quarter of 2019, the Company recategorized its end markets based on the ongoing refinement of its go-to-market strategy. The changes reflect new processes designed to enable the Company to better serve global customers and growth markets.

The following table disaggregates revenue for each segment by end market for the second quarter and first six months of 2019 and 2018, respectively:
 (Thousands)

Performance Alloys and Composites

Advanced Materials

Precision Coatings

Other

Total
Second Quarter 2019










End Market










Semiconductor

$
1,303


$
100,758


$
93


$


$
102,154

Industrial

28,585


7,704


3,842




40,131

Aerospace and Defense

26,046


1,125


4,750




31,921

Consumer Electronics

22,663


500


4,430




27,593

Automotive

16,564


1,669


365




18,598

Energy

11,303


16,027






27,330

Telecom and Data Center

18,244


713






18,957

Other

10,523


4,742


15,894




31,159

    Total

$
135,231


$
133,238


$
29,374


$


$
297,843












Second Quarter 2018










End Market










Semiconductor

$
1,299


$
118,525


$
428


$


$
120,252

Industrial

28,974


7,951


3,171




40,096

Aerospace and Defense

25,964


1,010


4,960




31,934

Consumer Electronics

16,150


174


5,021




21,345

Automotive

23,236


1,804


469




25,509

Energy

9,825


12,069






21,894

Telecom and Data Center

17,784


566






18,350

Other

6,533


8,225


14,947




29,705

    Total

$
129,765


$
150,324


$
28,996


$


$
309,085




 (Thousands)
 
Performance Alloys and Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
First Six Months 2019
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Semiconductor
 
$
3,268

 
$
205,125

 
$
205

 
$

 
$
208,598

Industrial
 
55,015

 
15,635

 
7,992

 

 
78,642

Aerospace and Defense
 
53,120

 
2,618

 
9,622

 

 
65,360

Consumer Electronics
 
36,218

 
705

 
7,916

 

 
44,839

Automotive
 
37,277

 
3,023

 
587

 

 
40,887

Energy
 
22,397

 
38,190

 

 

 
60,587

Telecom and Data Center
 
35,836

 
914

 

 

 
36,750

Other
 
19,213

 
11,053

 
33,355

 

 
63,621

    Total
 
$
262,344

 
$
277,263

 
$
59,677

 
$

 
$
599,284


 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Semiconductor
 
$
2,387

 
$
226,842

 
$
971

 
$

 
$
230,200

Industrial
 
58,577

 
15,416

 
5,899

 

 
79,892

Aerospace and Defense
 
44,246

 
2,020

 
9,644

 

 
55,910

Consumer Electronics
 
31,455

 
626

 
9,291

 

 
41,372

Automotive
 
46,773

 
4,184

 
691

 

 
51,648

Energy
 
17,612

 
33,480

 

 

 
51,092

Telecom and Data Center
 
32,647

 
1,031

 

 

 
33,678

Other
 
14,304

 
20,270

 
34,186

 

 
68,760

    Total
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552



Intersegment sales are eliminated in consolidation.
v3.19.2
Revenue Recognition
6 Months Ended
Jun. 28, 2019
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block] Revenue Recognition

Net sales consist primarily of revenue from the sale of precious and non-precious specialty metals, beryllium and copper-based alloys, beryllium composites, and other products into numerous end markets. The Company requires an agreement with a customer that creates enforceable rights and performance obligations. The Company generally recognizes revenue, in an amount that reflects the consideration to which it expects to be entitled, upon satisfaction of a performance obligation, by transferring control over a product to the customer. Control over the product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product.

Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at June 28, 2019. Remaining performance obligations include noncancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

After considering the practical expedient at June 28, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $19.6 million.

Contract Balances: The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:

(Thousands)
 
June 28, 2019
 
December 31, 2018
 
$ change
 
% change
Accounts receivable, trade
 
$
132,493

 
$
124,498

 
$
7,995

 
6
 %
Unbilled receivables
 
9,430

 
4,619

 
4,811

 
104
 %
Unearned revenue
 
5,829

 
5,918

 
(89
)
 
(2
)%


Accounts receivable, trade represents payments due from customers relating to the transfer of the Company’s products and services. The Company believes that its receivables are collectible and appropriate allowances for doubtful accounts have been recorded. Impairment losses (bad debt) incurred relating to our receivables were immaterial during the second quarter and first six months of 2019.

Unbilled receivables represent expenditures on contracts, plus applicable profit margin, not yet billed. Unbilled receivables are normally billed and collected within one year. Billings made on contracts are recorded as a reduction of unbilled receivables.

Unearned revenue is recorded for consideration received from customers in advance of satisfaction of the related performance obligations. The Company recognized approximately $5.0 million of the unearned amounts as revenue during the first six months of 2019.

As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component because the period between the transfer of a product or service to a customer and when the customer pays for that product or service will be one year or less. The Company does not include extended payment terms in its contracts with customers.
v3.19.2
Other-net
6 Months Ended
Jun. 28, 2019
Other Income and Expenses [Abstract]  
Other-net Other-net
Other-net expense for the second quarter and first six months of of 2019 and 2018 is summarized as follows: 
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands)
 
2019
 
2018
 
2019
 
2018
Metal consignment fees
 
$
2,225

 
$
2,588

 
$
5,316

 
$
5,017

Amortization of intangible assets
 
368

 
561

 
758

 
1,334

Foreign currency loss
 
307

 
1,230

 
384

 
1,219

Net loss (gain) on disposal of fixed assets
 
118

 
(3
)
 
142

 
23

Rental income
 
(29
)
 
(134
)
 
(58
)
 
(260
)
Other items
 
(98
)
 
71

 
470

 
(96
)
Total
 
$
2,891

 
$
4,313

 
$
7,012

 
$
7,237


v3.19.2
Income Taxes
6 Months Ended
Jun. 28, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

The Company's effective tax rate for the second quarter of 2019 and 2018 was 18.8% and 20.9%, respectively, and 18.5% and 17.0% for the first six months of 2019 and 2018, respectively. The effective tax rate for each period is lower than the statutory tax rate primarily due to the impact of percentage depletion and the research and development credit. Additionally, the effective tax rate for the first six months of 2019 included a net discrete income tax benefit of $0.5 million, primarily related to excess tax benefits from stock-based compensation. The effective tax rate for the first six months of 2018 included a net discrete income tax benefit of $1.0 million, primarily related to Staff Accounting Bulletin (SAB) No. 118 adjustments.
v3.19.2
Earnings Per Share
6 Months Ended
Jun. 28, 2019
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share (EPS)
The following table sets forth the computation of basic and diluted EPS:
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands, except per share amounts)
 
2019
 
2018
 
2019
 
2018
Numerator for basic and diluted EPS:
 
 
 
 
 
 
 
 
Net income
 
$
15,540

 
$
11,144

 
$
32,446

 
$
21,708

Denominator:
 
 
 
 
 
 
 
 
Denominator for basic EPS:
 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
20,383

 
20,221

 
20,326

 
20,178

Effect of dilutive securities:
 
 
 
 
 
 
 
 
Stock appreciation rights
 
76

 
166

 
92

 
185

Restricted stock units
 
76

 
75

 
77

 
85

Performance-based restricted stock units
 
131

 
131

 
140

 
135

Diluted potential common shares
 
283

 
372

 
309

 
405

Denominator for diluted EPS:
 

 

 
 
 
 
Adjusted weighted-average shares outstanding
 
20,666

 
20,593

 
20,635

 
20,583

Basic EPS
 
$
0.76

 
$
0.55

 
$
1.60

 
$
1.08

Diluted EPS
 
$
0.75

 
$
0.54

 
$
1.57

 
$
1.05



Securities totaling 84,509 and 65,112 for the quarters ended June 28, 2019 and June 29, 2018, respectively, and 144,154 and 65,112 for the six months ended June 28, 2019 and June 29, 2018, respectively, were excluded from the dilution calculation as their effect would have been anti-dilutive.
v3.19.2
Inventories
6 Months Ended
Jun. 28, 2019
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
 
 
June 28,
 
December 31,
(Thousands)
 
2019
 
2018
Raw materials and supplies
 
$
38,425

 
$
33,182

Work in process
 
190,428

 
195,879

Finished goods
 
32,062

 
30,643

Subtotal
 
$
260,915

 
$
259,704

Less: LIFO reserve balance
 
47,586

 
44,833

Inventories
 
$
213,329

 
$
214,871


The liquidation of last in, first out (LIFO) inventory layers increased cost of sales by $0.1 million in the second quarter and first six months of both 2019 and 2018.
The Company maintains the majority of the precious metals and copper used in production on a consignment basis in order to reduce our exposure to metal price movements and to reduce our working capital investment. The notional value of off-balance sheet precious metals and copper was $295.7 million as of June 28, 2019 versus $316.1 million as of December 31, 2018.
v3.19.2
Leases
6 Months Ended
Jun. 28, 2019
Leases [Abstract]  
Leases of Lessee Disclosure [Text Block] Leases
The Company leases warehouse and manufacturing real estate, and manufacturing and computer equipment under operating leases with lease terms ranging up to 25 years. Several operating lease agreements contain options to extend the lease term and/or options for early termination. The lease term consists of the non-cancelable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The weighted average remaining lease term for the Company's operating and finance leases as of June 28, 2019 was 5.09 years and 19.87 years, respectively.

The discount rate implicit within the leases is generally not determinable, and, therefore, the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for leases is determined based on the lease term in which lease payments are made, adjusted for impacts of collateral. The weighted average discount rate used to measure the Company's operating and finance lease liabilities as of June 28, 2019 was 5.55% and 5.31%, respectively.

The components of operating and finance lease cost for the second quarter and first six months of 2019 were as follows:
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 28,
(Thousands)
 
2019
 
2019
Components of lease expense
 
 
 
 
Operating lease cost
 
$
2,291

 
$
5,003

 
 
 
 
 
Finance lease cost
 
 
 
 
Amortization of right-of-use assets
 
354

 
710

Interest on lease liabilities
 
259

 
522

Total lease cost
 
$
2,904

 
$
6,235



Operating lease expense amounted to $2.3 million and $3.0 million during the second quarter of 2019 and 2018, respectively, and $5.0 million and $6.1 million during the first six months of 2019 and 2018, respectively. The Company straight-lines its expense of fixed payments for operating leases over the lease term and expenses the variable lease payments in the period incurred. These variable lease payments are not included in the calculation of right-of-use assets or lease liabilities.
Supplemental balance sheet information related to the Company's operating and finance leases as of June 28, 2019 was as follows:
 
 
June 28,
(Thousands)
 
2019
Supplemental balance sheet information
 
 
 
 
 
Operating Leases
 
 
Operating lease right-of-use assets
 
$
26,788

Other liabilities and accrued items
 
6,927

Operating lease liabilities
 
21,118

 
 
 
Finance Leases
 
 
Property, plant, and equipment
 
$
26,330

Allowances for depreciation, depletion, and amortization
 
(3,140
)
Finance lease assets, net
 
$
23,190

Other liabilities and accrued items
 
$
1,238

Finance lease liabilities
 
18,325

Total principal payable on finance leases
 
$
19,563



Future maturities of the Company's lease liabilities as of June 28, 2019 are as follows:
 
 
Finance
 
Operating
(Thousands)
 
Leases
 
Leases
2019
 
$
1,122

 
$
4,201

2020
 
2,244

 
7,618

2021
 
2,244

 
6,619

2022
 
2,244

 
4,727

2023
 
1,534

 
3,818

2024 and thereafter
 
22,414

 
5,148

Total lease payments
 
31,802

 
32,131

Less amount of lease payment representing interest
 
12,239

 
4,086

Total present value of lease payments

 
$
19,563

 
$
28,045



Supplemental cash flow information related to leases for the first six months of 2019 was as follows:
 
 
Six Months Ended
 
 
June 28,
(Thousands)
 
2019
Supplemental cash flow information
 
 
Cash paid for amounts included in the measurement of lease liabilities:
 
 
Operating cash flows from operating leases
 
$
7,710

Operating cash flows from finance leases
 
522

Financing cash flows from finance leases
 
599


v3.19.2
Pensions and Other Post-employment Benefits
6 Months Ended
Jun. 28, 2019
Retirement Benefits [Abstract]  
Pensions and Other Post-employment Benefits Pensions and Other Post-employment Benefits
The following is a summary of the net periodic benefit cost for the second quarter of 2019 and 2018 for the domestic pension plans (which include the defined benefit pension plan and the supplemental retirement plans) and the domestic retiree medical plan.
 

Pension Benefits

Other Benefits
 

Second Quarter Ended

Second Quarter Ended


June 28,

June 29,

June 28,

June 29,
(Thousands)

2019

2018

2019

2018
Components of net periodic benefit cost (benefit)








Service cost

$
1,418


$
1,674


$
18


$
28

Interest cost

1,347


2,397


99


99

Expected return on plan assets

(2,167
)

(3,697
)




Amortization of prior service benefit

122


(30
)

(375
)

(374
)
Amortization of net loss (gain)

627


1,959


(23
)


Pension curtailment charge
 
3,296

 

 

 

Net periodic benefit cost (benefit)

$
4,643


$
2,303


$
(281
)

$
(247
)

 
 
Pension Benefits
 
Other Benefits
 
 
Six Months Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands)
 
2019
 
2018
 
2019
 
2018
Components of net periodic benefit cost (benefit)
 
 
 
 
 
 
 
 
Service cost
 
$
2,758

 
$
3,348

 
$
35

 
$
56

Interest cost
 
2,904

 
4,794

 
199

 
198

Expected return on plan assets
 
(4,290
)
 
(7,394
)
 

 

Amortization of prior service benefit
 
242

 
(61
)
 
(749
)
 
(749
)
Amortization of net loss (gain)
 
1,431

 
3,919

 
(46
)
 

Pension curtailment charge
 
3,296

 

 

 

Net periodic benefit cost (benefit)
 
$
6,341

 
$
4,606

 
$
(561
)
 
$
(495
)
The Company made contributions to the domestic defined benefit pension plan of $3.0 million and $13.0 million in the six months of 2019 and 2018, respectively.
The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs in operating expenses and the non-service cost components of net periodic benefit cost in Other non-operating expenses.
In May 2019, the Company's Board of Directors approved changes to the U.S. defined benefit pension plan. The Company will freeze the pay and service amounts used to calculate pension benefits for active participants in the pension plan as of January 1, 2020. The Company recognized a non-cash pre-tax pension curtailment charge of $3.3 million associated with the plan amendment during the second quarter of 2019.
v3.19.2
Accumulated Other Comprehensive Income
6 Months Ended
Jun. 28, 2019
Equity [Abstract]  
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Loss)
Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the second quarter of 2019 and 2018 and first six months of 2019 and 2018 are as follows:
 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Copper
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
Balance at March 29, 2019

$
1,663


$
(24
)

$
189

 
$
1,828


$
(54,003
)

$
(5,095
)

$
(57,270
)
Other comprehensive income before reclassifications

(269
)

(563
)

(580
)
 
(1,412
)

14,224


339


13,151

Amounts reclassified from accumulated other comprehensive income

(46
)

(1
)

163

 
116


3,781




3,897

Net current period other comprehensive income (loss) before tax

(315
)

(564
)

(417
)
 
(1,296
)

18,005


339


17,048

Deferred taxes

(72
)

(130
)

(94
)
 
(296
)

4,052




3,756

Net current period other comprehensive income (loss) after tax

(243
)

(434
)

(323
)
 
(1,000
)

13,953


339


13,292

Balance at June 28, 2019

$
1,420


$
(458
)

$
(134
)
 
$
828


$
(40,050
)

$
(4,756
)

$
(43,978
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 30, 2018
 
$
326

 
$
(238
)
 
$

 
$
88

 
$
(98,314
)
 
$
(2,995
)
 
$
(101,221
)
Other comprehensive income (loss) before reclassifications
 
871

 
635

 

 
1,506

 

 
(944
)
 
562

Amounts reclassified from accumulated other comprehensive income
 
42

 
23

 

 
65

 
1,622

 

 
1,687

Net current period other comprehensive income (loss) before tax
 
913

 
658

 

 
1,571

 
1,622

 
(944
)
 
2,249

Deferred taxes
 
(343
)
 
151

 

 
(192
)
 
326

 

 
134

Net current period other comprehensive income (loss) after tax
 
1,256

 
507

 

 
1,763

 
1,296

 
(944
)
 
2,115

Balance at June 29, 2018
 
$
1,582

 
$
269

 
$

 
$
1,851

 
$
(97,018
)
 
$
(3,939
)
 
$
(99,106
)





 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Copper
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
Balance at December 31, 2018
 
$
1,263

 
$
79

 
$
(441
)
 
$
901

 
$
(54,543
)
 
$
(4,592
)
 
$
(58,234
)
Other comprehensive income before reclassifications
 
248

 
(636
)
 
304

 
(84
)
 
14,224

 
(164
)
 
13,976

Amounts reclassified from accumulated other comprehensive income
 
(44
)
 
(62
)
 
92

 
(14
)
 
4,441

 

 
4,427

Net current period other comprehensive income (loss) before tax
 
204

 
(698
)
 
396

 
(98
)
 
18,665

 
(164
)
 
18,403

Deferred taxes
 
47

 
(161
)
 
89

 
(25
)
 
4,172

 

 
4,147

Net current period other comprehensive income (loss) after tax
 
157

 
(537
)
 
307

 
(73
)
 
14,493

 
(164
)
 
14,256

Balance at June 28, 2019
 
$
1,420

 
$
(458
)
 
$
(134
)
 
$
828

 
$
(40,050
)
 
$
(4,756
)
 
$
(43,978
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
$
959

 
$
(196
)
 
$

 
$
763

 
$
(99,592
)
 
$
(4,108
)
 
$
(102,937
)
Other comprehensive income (loss) before reclassifications
 
(327
)
 
444

 

 
117

 

 
169

 
286

Amounts reclassified from accumulated other comprehensive income
 
419

 
159

 

 
578

 
3,248

 

 
3,826

Net current period other comprehensive income (loss) before tax
 
92

 
603

 

 
695

 
3,248

 
169

 
4,112

Deferred taxes
 
(531
)
 
138

 

 
(393
)
 
674

 

 
281

Net current period other comprehensive income (loss) after tax
 
623

 
465

 

 
1,088

 
2,574

 
169

 
3,831

Balance at June 29, 2018
 
$
1,582

 
$
269

 
$

 
$
1,851

 
$
(97,018
)
 
$
(3,939
)
 
$
(99,106
)

Reclassifications from accumulated other comprehensive income of gains and losses on foreign currency cash flow hedges are recorded in Net sales in the Consolidated Statements of Income. Reclassifications from accumulated other comprehensive income of gains and losses on precious metal cash flow hedges are recorded in Cost of sales in the Consolidated Statements of Income. Refer to Note M for additional details on cash flow hedges.
Reclassifications from accumulated other comprehensive income for pension and post-employment benefits are included in the computation of the net periodic pension and post-employment benefit expense. Refer to Note I for additional details on pension and post-employment expenses.
v3.19.2
Stock-based Compensation Expense
6 Months Ended
Jun. 28, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based Compensation Expense Stock-based Compensation Expense
Stock-based compensation expense, which includes awards settled in shares and in cash, was $3.5 million and $6.2 million in the second quarter and first six months of 2019, respectively, compared to $2.7 million and $5.2 million in same periods of 2018.
The Company granted 73,461 stock appreciation rights (SARs) to certain employees during the first six months of 2019. The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the six months ended June 28, 2019 were $58.30 and $17.76, respectively. The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model:
Risk-free interest rate
 
2.47
%
Dividend yield
 
0.7
%
Volatility
 
31.7
%
Expected term (in years)
 
5.2


The Company granted 63,665 stock-settled restricted stock units (RSUs) to certain employees and 11,048 stock-settled RSUs to non-employee directors during the first six months of 2019. The Company measures the fair value of stock-settled RSUs based on the closing market price of a share of Materion common stock on the date of the grant. The weighted-average fair value per share was $58.30 and $68.79 for stock-settled RSUs granted to employees and non-employee directors, respectively, during the six months ended June 28, 2019. RSUs are expensed over the vesting period of three years for employees and one year for non-employee directors.
The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first six months of 2019. The weighted-average fair value of the stock-settled PRSUs was $69.84 per share and will be expensed over the vesting period of three years. The final payout to the employees for all PRSUs will be based upon the Company’s return on invested capital and the total return to shareholders over the vesting period relative to a peer group’s performance over the same period.
At June 28, 2019, unamortized compensation cost related to the unvested portion of all stock-based awards was approximately $13.6 million, and is expected to be recognized over the remaining vesting period of the respective grants.
v3.19.2
Fair Value of Financial Instruments
6 Months Ended
Jun. 28, 2019
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The Company measures and records financial instruments at fair value. A fair value hierarchy is used for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:
Level 1 — Quoted market prices in active markets for identical assets and liabilities;
Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable; and
Level 3 — Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use.
The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of June 28, 2019 and December 31, 2018: 
 
 
 
 
 
 
 
 
 
(Thousands)
 
Total Carrying Value in the Consolidated Balance Sheets
 
Quoted Prices
in  Active
Markets  for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation investments
 
$
3,121

 
$
2,156

 
$
3,121

 
$
2,156

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
119

 
246

 

 

 
119

 
246

 

 

Precious metal swaps
 

 
237

 

 

 

 
237

 

 

Copper swaps
 
9

 

 

 

 
9

 

 

 

Total
 
$
3,249

 
$
2,639

 
$
3,121

 
$
2,156

 
$
128

 
$
483


$


$

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liability
 
$
3,121

 
$
2,156

 
$
3,121

 
$
2,156

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
121

 
432

 

 

 
121

 
432

 

 

Precious metal swaps
 
596

 
135

 

 

 
596

 
135

 

 

Copper swaps
 
182

 
569

 

 

 
182

 
569

 

 

Total
 
$
4,020

 
$
3,292

 
$
3,121

 
$
2,156

 
$
899

 
$
1,136

 
$

 
$


The Company uses a market approach to value the assets and liabilities for financial instruments in the table above. Outstanding contracts are valued through models that utilize market observable inputs, including both spot and forward prices, for the same underlying currencies and metals. The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of June 28, 2019 and December 31, 2018.
v3.19.2
Derivative Instruments and Hedging Activity
6 Months Ended
Jun. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activity Derivative Instruments and Hedging Activity
The Company uses derivative contracts to hedge portions of its foreign currency exposures and uses derivatives to hedge a portion of its precious metal and copper exposures. The objectives and strategies for using derivatives in these areas are as follows:
Foreign Currency.    The Company sells a portion of its products to overseas customers in their local currencies, primarily the euro and yen. The Company secures foreign currency derivatives, mainly forward contracts and options, to hedge these anticipated sales transactions. The purpose of the hedge program is to protect against the reduction in the dollar value of foreign currency sales from adverse exchange rate movements. Should the dollar strengthen significantly, the decrease in the translated value of the foreign currency sales should be partially offset by gains on the hedge contracts. Depending upon the methods used, hedge contracts may limit the benefits from a weakening U.S. dollar.
The use of forward contracts locks in a firm rate and eliminates any downside risk from an adverse rate movement as well as any benefit from a favorable rate movement. The Company may from time to time choose to hedge with options or a tandem of options, known as a collar. These hedging techniques can limit or eliminate the downside risk but can allow for some or all of the benefit from a favorable rate movement to be realized. Unlike a forward contract, a premium is paid for an option; collars, which are a combination of a put and call option, may have a net premium but can be structured to be cash neutral. The Company will primarily hedge with forward contracts due to the relationship between the cash outlay and the level of risk.
The use of foreign currency derivative contracts is governed by policies approved by the Audit Committee of the Board of Directors. A team consisting of senior financial managers reviews the estimated exposure levels, as defined by budgets,
forecasts, and other internal data, and determines the timing, amounts, and instruments to use to hedge that exposure within the confines of the policy. Management analyzes the effective hedged rates and the actual and projected gains and losses on the hedging transactions against the program objectives, targeted rates, and levels of risk assumed. Hedge contracts are typically layered in at different times for a specified exposure period in order to minimize the impact of rate movements.
Precious Metals.    The Company maintains the majority of its precious metal production requirements on consignment in order to reduce its working capital investment and the exposure to metal price movements. When a precious metal product is fabricated and ready for shipment to the customer, the metal is purchased out of consignment at the current market price. The price paid by the Company forms the basis for the price charged to the customer. This methodology allows for changes in either direction in the market prices of the precious metals used by the Company to be passed through to the customer, and reduces the impact changes in prices could have on the Company's margins and operating profit. The consigned metal is owned by financial institutions that charge the Company a financing fee based upon the current value of the metal on hand.
In certain instances, a customer may want to establish the price for the precious metal at the time the sales order is placed rather than at the time of shipment. Setting the sales price at a different date than when the material would be purchased potentially creates an exposure to movements in the market price of the metal. Therefore, in these limited situations, the Company may elect to enter into a forward contract to purchase precious metal. The forward contract allows the Company to purchase metal at a fixed price on a specific future date. The price in the forward contract serves as the basis for the price to be charged to the customer. By doing so, the selling price and purchase price are matched, and the Company's price exposure is reduced.
The Company refines precious metal-containing materials for its customers and typically will purchase the refined metal from the customer at current market prices. In limited circumstances, the customer may want to fix the price to be paid at the time of the order as opposed to when the material is refined. The customer may also want to fix the price for a set period of time. The Company may then elect to enter into a hedge contract, either a forward contract or a swap, to fix the price for the estimated quantity of metal to be purchased, thereby reducing the exposure to adverse movements in the price of the metal.
In certain circumstances, the Company also refines metal from the customer and may retain a portion of the refined metal as payment. The Company may elect to enter into a forward contract to sell precious metal to reduce the Company's price exposure.
The Company may from time to time elect to purchase precious metal and hold in inventory rather than on consignment due to potential credit line limitations or other factors. These purchases are typically held for a short duration. A forward contract will be secured at the time of the purchase to fix the price to be used when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned.
Copper. We also use copper in our production processes. When possible, fluctuations in the purchase price of copper are passed on to customers in the form of price adders or reductions. While over time our price exposure to copper is generally in balance, there can be a lag between the change in our cost and the pass-through to our customers, resulting in higher or lower margins in a given period. To mitigate this impact, we hedge a portion of this pricing risk.
The Company will only enter into a derivative contract if there is an underlying identified exposure. Contracts are typically held until maturity. The Company does not engage in derivative trading activities and does not use derivatives for speculative purposes. The Company only uses currency hedge contracts that are denominated in the same currency as the underlying exposure and precious metal hedge contracts denominated in the same metal as the underlying exposure.
All derivatives are recorded on the balance sheet at fair value. If the derivative is designated and effective as a cash flow hedge, changes in the fair value of the derivative are recognized in other comprehensive income (OCI) until the hedged item is recognized in earnings. If a derivative is not a hedge, changes in the fair value are adjusted through income. The fair values of the outstanding derivatives are recorded on the balance sheet as assets (if the derivatives are in a gain position) or liabilities (if the derivatives are in a loss position). The fair values will also be classified as short-term or long-term depending upon their maturity dates.

The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and balance sheet classification as of June 28, 2019 and December 31, 2018:
 
 
June 28, 2019
 
December 31, 2018
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Foreign currency forward contracts - euro
 
 
 
 
 
 
 
 
Prepaid expenses
 
$
2,421

 
$
27

 
$
8,767

 
$
244

Other liabilities and accrued items
 
3,836

 
52

 
8,771

 
249


These outstanding foreign currency derivatives were related to intercompany loans. Other-net included no foreign currency impact relating to these derivatives during both the second quarter and the first six months of 2019 and included $1.6 million and $1.1 million of foreign currency gains during the second quarter and first six months of 2018, respectively.
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and balance sheet classification as of June 28, 2019 and December 31, 2018:
 
 
June 28, 2019
 
December 31, 2018
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Prepaid expenses
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
$
1,465

 
$
9

 
$

 
$

Foreign currency forward contracts - euro
 
7,475

 
83

 
725

 
2

Precious metal swaps
 

 

 
4,533

 
237

Copper swaps
 
977

 
9

 

 

Total
 
9,917

 
101

 
5,258

 
239

 
 
 
 
 
 
 
 
 
Other liabilities and accrued items
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
2,065

 
35

 
1,264

 
17

Foreign currency forward contracts - euro
 
7,459

 
34

 
19,158

 
166

Precious metal swaps
 
6,828

 
573

 
2,864

 
135

Copper swaps
 
4,359

 
182

 
11,170

 
569

Total
 
20,711

 
824

 
34,456

 
887

 
 
 
 
 
 
 
 
 
Other long-term liabilities
 
 
 
 
 
 
 
 
Precious metal swaps
 
697

 
23

 

 

Total
 
$
31,325

 
$
746

 
$
39,714

 
$
648


All of these contracts were designated and effective as cash flow hedges. The Company expects to relieve substantially the entire balance in OCI as of June 28, 2019 to the Consolidated Statements of Income within the next 15-month period. Refer to Note J for additional OCI details.
The following table summarizes the amounts reclassified from accumulated other comprehensive income relating to the hedging relationship of the Company’s outstanding derivatives designated as cash flow hedges and income statement classification as of the second quarter and first six months of of 2019
 
 
 
 
Second Quarter Ended
 
Six Months ended
(Thousands)
 
 
 
June 28, 2019
 
June 28, 2019
Hedging relationship
 
Line item
 
 
 
 
Foreign currency forward contracts
 
Net sales
 
(46
)
 
(44
)
Precious metal swaps
 
Cost of sales
 
(1
)
 
(62
)
Copper swaps
 
Cost of sales
 
163

 
92

Total
 
 
 
$
116

 
$
(14
)

v3.19.2
Contingencies - USD ($)
$ in Millions
6 Months Ended
Jun. 28, 2019
Dec. 31, 2018
Loss Contingency [Abstract]    
Undiscounted reserve balance $ 6.2 $ 6.5
Commitments and Contingencies Disclosure [Text Block] Contingencies
Legal Proceedings. For information regarding legal proceedings relating to Chronic Beryllium Disease Claims, refer to Note S ("Contingencies and Commitments") in the Company's 2018 Annual Report on Form 10-K.
Other Litigation. The Company is party to several pending legal proceedings and claims arising in the normal course of business. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matters. To the extent there is a reasonable possibility that the losses could exceed any amounts accrued, the Company will adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.
Environmental Proceedings. The Company has an active environmental compliance program and records reserves for the probable cost of identified environmental remediation projects. The reserves are established based upon analyses conducted by the Company’s engineers and outside consultants and are adjusted from time to time based upon ongoing studies, the difference between actual and estimated costs, and other factors. The reserves may also be affected by rulings and negotiations with regulatory agencies. The undiscounted reserve balance was $6.2 million and $6.5 million at June 28, 2019 and December 31, 2018, respectively. Environmental projects tend to be long-term, and the final actual remediation costs may differ from the amounts currently recorded.
 
v3.19.2
Basis of Accounting (Policies)
6 Months Ended
Jun. 28, 2019
Accounting Policies [Abstract]  
Basis of Accounting

Basis of Presentation: In management’s opinion, the accompanying consolidated financial statements of Materion Corporation and its subsidiaries (referred to herein as the Company, our, we, or us) contain all of the adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported. All adjustments were of a normal and recurring nature. Certain amounts in prior periods have been reclassified to conform to the 2019 consolidated financial statement presentation.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2018 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year.
v3.19.2
New Pronouncements (Policies)
6 Months Ended
Jun. 28, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
New Accounting Pronouncements
New Pronouncements Adopted: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 (Topic 842), Leases, which eliminates the off-balance-sheet accounting for leases. This guidance requires lessees to report their operating leases as both an asset and liability on the balance sheet and disclose key information about leasing arrangements. The Company adopted this guidance as of January 1, 2019 using the modified retrospective method and applied it retrospectively through a cumulative-effect adjustment to retained earnings. The Company applied the transitional package of practical expedients allowed by the standard to not reassess the identification, classification, and initial direct costs of leases commencing before this ASU's effective date; however, the Company did not elect the hindsight transitional practical expedient. The Company also applied the practical expedient to not separate lease and non-lease components to new leases as well as existing leases through transition. The Company made an accounting policy election not to apply recognition requirements of the guidance to short-term leases.

Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with legacy generally accepted accounting principles.

The Company recorded a net reduction to opening retained earnings of $0.2 million as of January 1, 2019 due to the cumulative impact of adopting Topic 842, with the impact primarily related to derecognition of a built-to-suit lease. Refer to Note H for additional disclosures relating to the Company's leasing arrangements.
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies existing guidance to allow companies to more accurately present the economic effects of risk management activities in the financial statements. The Company adopted this guidance as of January 1, 2019, and the adoption did not have a material effect on the Company’s consolidated financial statements.

New Pronouncements Issued: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. This ASU requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” to a “current expected credit loss” model. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years. Early adoption is permitted. The Company is currently assessing the effect that this ASU will have on its financial position, results of operations, and disclosures.
No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.
v3.19.2
Revenue Recognition Accounting Policy (Policies)
6 Months Ended
Jun. 28, 2019
Accounting Policies [Abstract]  
Revenue Recognition, Policy [Policy Text Block]

Net sales consist primarily of revenue from the sale of precious and non-precious specialty metals, beryllium and copper-based alloys, beryllium composites, and other products into numerous end markets. The Company requires an agreement with a customer that creates enforceable rights and performance obligations. The Company generally recognizes revenue, in an amount that reflects the consideration to which it expects to be entitled, upon satisfaction of a performance obligation, by transferring control over a product to the customer. Control over the product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product.

Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at June 28, 2019. Remaining performance obligations include noncancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
v3.19.2
Segment Reporting (Tables)
6 Months Ended
Jun. 28, 2019
Segment Reporting [Abstract]  
Segment Reporting

(Thousands)
 
Performance
Alloys and
Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
Second Quarter 2019
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
135,231

 
$
133,238

 
$
29,374

 
$

 
$
297,843

Intersegment sales 
 
6

 
19,260

 

 

 
19,266

Operating profit (loss)
 
19,328

 
6,139

 
3,937

 
(6,654
)
 
22,750

Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

Intersegment sales
 
3

 
11,400

 

 

 
11,403

Operating profit (loss)
 
12,309

 
5,572

 
2,233

 
(4,922
)
 
15,192

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2019
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
262,344

 
$
277,263

 
$
59,677

 
$

 
$
599,284

Intersegment sales
 
15

 
36,473

 

 

 
36,488

Operating profit (loss)
 
38,286

 
13,219

 
6,014

 
(13,382
)
 
44,137

First Six Months 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552

Intersegment sales
 
31

 
23,052

 

 

 
23,083

Operating profit (loss)
 
22,170

 
11,470

 
5,608

 
(10,805
)
 
28,443



Disaggregation of Revenue
The following table disaggregates revenue for each segment by end market for the second quarter and first six months of 2019 and 2018, respectively:
 (Thousands)

Performance Alloys and Composites

Advanced Materials

Precision Coatings

Other

Total
Second Quarter 2019










End Market










Semiconductor

$
1,303


$
100,758


$
93


$


$
102,154

Industrial

28,585


7,704


3,842




40,131

Aerospace and Defense

26,046


1,125


4,750




31,921

Consumer Electronics

22,663


500


4,430




27,593

Automotive

16,564


1,669


365




18,598

Energy

11,303


16,027






27,330

Telecom and Data Center

18,244


713






18,957

Other

10,523


4,742


15,894




31,159

    Total

$
135,231


$
133,238


$
29,374


$


$
297,843












Second Quarter 2018










End Market










Semiconductor

$
1,299


$
118,525


$
428


$


$
120,252

Industrial

28,974


7,951


3,171




40,096

Aerospace and Defense

25,964


1,010


4,960




31,934

Consumer Electronics

16,150


174


5,021




21,345

Automotive

23,236


1,804


469




25,509

Energy

9,825


12,069






21,894

Telecom and Data Center

17,784


566






18,350

Other

6,533


8,225


14,947




29,705

    Total

$
129,765


$
150,324


$
28,996


$


$
309,085




 (Thousands)
 
Performance Alloys and Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
First Six Months 2019
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Semiconductor
 
$
3,268

 
$
205,125

 
$
205

 
$

 
$
208,598

Industrial
 
55,015

 
15,635

 
7,992

 

 
78,642

Aerospace and Defense
 
53,120

 
2,618

 
9,622

 

 
65,360

Consumer Electronics
 
36,218

 
705

 
7,916

 

 
44,839

Automotive
 
37,277

 
3,023

 
587

 

 
40,887

Energy
 
22,397

 
38,190

 

 

 
60,587

Telecom and Data Center
 
35,836

 
914

 

 

 
36,750

Other
 
19,213

 
11,053

 
33,355

 

 
63,621

    Total
 
$
262,344

 
$
277,263

 
$
59,677

 
$

 
$
599,284


 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Semiconductor
 
$
2,387

 
$
226,842

 
$
971

 
$

 
$
230,200

Industrial
 
58,577

 
15,416

 
5,899

 

 
79,892

Aerospace and Defense
 
44,246

 
2,020

 
9,644

 

 
55,910

Consumer Electronics
 
31,455

 
626

 
9,291

 

 
41,372

Automotive
 
46,773

 
4,184

 
691

 

 
51,648

Energy
 
17,612

 
33,480

 

 

 
51,092

Telecom and Data Center
 
32,647

 
1,031

 

 

 
33,678

Other
 
14,304

 
20,270

 
34,186

 

 
68,760

    Total
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552


v3.19.2
Revenue Recognition (Tables)
6 Months Ended
Jun. 28, 2019
Revenue from Contract with Customer [Abstract]  
Contract with Customer, Asset and Liability
Contract Balances: The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:

(Thousands)
 
June 28, 2019
 
December 31, 2018
 
$ change
 
% change
Accounts receivable, trade
 
$
132,493

 
$
124,498

 
$
7,995

 
6
 %
Unbilled receivables
 
9,430

 
4,619

 
4,811

 
104
 %
Unearned revenue
 
5,829

 
5,918

 
(89
)
 
(2
)%

v3.19.2
Other-net (Tables)
6 Months Ended
Jun. 28, 2019
Other Income and Expenses [Abstract]  
Summary of Other-Net Expense
Other-net expense for the second quarter and first six months of of 2019 and 2018 is summarized as follows: 
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands)
 
2019
 
2018
 
2019
 
2018
Metal consignment fees
 
$
2,225

 
$
2,588

 
$
5,316

 
$
5,017

Amortization of intangible assets
 
368

 
561

 
758

 
1,334

Foreign currency loss
 
307

 
1,230

 
384

 
1,219

Net loss (gain) on disposal of fixed assets
 
118

 
(3
)
 
142

 
23

Rental income
 
(29
)
 
(134
)
 
(58
)
 
(260
)
Other items
 
(98
)
 
71

 
470

 
(96
)
Total
 
$
2,891

 
$
4,313

 
$
7,012

 
$
7,237


v3.19.2
Earnings Per Share (Tables)
6 Months Ended
Jun. 28, 2019
Earnings Per Share [Abstract]  
Computation of basic and diluted earnings per share
The following table sets forth the computation of basic and diluted EPS:
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands, except per share amounts)
 
2019
 
2018
 
2019
 
2018
Numerator for basic and diluted EPS:
 
 
 
 
 
 
 
 
Net income
 
$
15,540

 
$
11,144

 
$
32,446

 
$
21,708

Denominator:
 
 
 
 
 
 
 
 
Denominator for basic EPS:
 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
20,383

 
20,221

 
20,326

 
20,178

Effect of dilutive securities:
 
 
 
 
 
 
 
 
Stock appreciation rights
 
76

 
166

 
92

 
185

Restricted stock units
 
76

 
75

 
77

 
85

Performance-based restricted stock units
 
131

 
131

 
140

 
135

Diluted potential common shares
 
283

 
372

 
309

 
405

Denominator for diluted EPS:
 

 

 
 
 
 
Adjusted weighted-average shares outstanding
 
20,666

 
20,593

 
20,635

 
20,583

Basic EPS
 
$
0.76

 
$
0.55

 
$
1.60

 
$
1.08

Diluted EPS
 
$
0.75

 
$
0.54

 
$
1.57

 
$
1.05


v3.19.2
Inventories (Tables)
6 Months Ended
Jun. 28, 2019
Inventory Disclosure [Abstract]  
Summary of Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
 
 
June 28,
 
December 31,
(Thousands)
 
2019
 
2018
Raw materials and supplies
 
$
38,425

 
$
33,182

Work in process
 
190,428

 
195,879

Finished goods
 
32,062

 
30,643

Subtotal
 
$
260,915

 
$
259,704

Less: LIFO reserve balance
 
47,586

 
44,833

Inventories
 
$
213,329

 
$
214,871


v3.19.2
Leases (Tables)
6 Months Ended
Jun. 28, 2019
Leases [Abstract]  
Lease, Cost [Table Text Block]
The components of operating and finance lease cost for the second quarter and first six months of 2019 were as follows:
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 28,
 
June 28,
(Thousands)
 
2019
 
2019
Components of lease expense
 
 
 
 
Operating lease cost
 
$
2,291

 
$
5,003

 
 
 
 
 
Finance lease cost
 
 
 
 
Amortization of right-of-use assets
 
354

 
710

Interest on lease liabilities
 
259

 
522

Total lease cost
 
$
2,904

 
$
6,235


Schedule Of Future Minimum Lease Payments For Capital Leases And Operating Leases [Table Text Block]
 
 
Finance
 
Operating
(Thousands)
 
Leases
 
Leases
2019
 
$
1,122

 
$
4,201

2020
 
2,244

 
7,618

2021
 
2,244

 
6,619

2022
 
2,244

 
4,727

2023
 
1,534

 
3,818

2024 and thereafter
 
22,414

 
5,148

Total lease payments
 
31,802

 
32,131

Less amount of lease payment representing interest
 
12,239

 
4,086

Total present value of lease payments

 
$
19,563

 
$
28,045


ScheduleOfSupplementalCashFlowInformationRelatedToLeasesTableTextBlock [Table Text Block]
Supplemental cash flow information related to leases for the first six months of 2019 was as follows:
 
 
Six Months Ended
 
 
June 28,
(Thousands)
 
2019
Supplemental cash flow information
 
 
Cash paid for amounts included in the measurement of lease liabilities:
 
 
Operating cash flows from operating leases
 
$
7,710

Operating cash flows from finance leases
 
522

Financing cash flows from finance leases
 
599


ScheduleOfSupplementalBalanceSheetInformationRelatedToLeasesTableTextBlock [Table Text Block]
Supplemental balance sheet information related to the Company's operating and finance leases as of June 28, 2019 was as follows:
 
 
June 28,
(Thousands)
 
2019
Supplemental balance sheet information
 
 
 
 
 
Operating Leases
 
 
Operating lease right-of-use assets
 
$
26,788

Other liabilities and accrued items
 
6,927

Operating lease liabilities
 
21,118

 
 
 
Finance Leases
 
 
Property, plant, and equipment
 
$
26,330

Allowances for depreciation, depletion, and amortization
 
(3,140
)
Finance lease assets, net
 
$
23,190

Other liabilities and accrued items
 
$
1,238

Finance lease liabilities
 
18,325

Total principal payable on finance leases
 
$
19,563


v3.19.2
Pensions and Other Post-employment Benefits (Tables)
6 Months Ended
Jun. 28, 2019
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost
The following is a summary of the net periodic benefit cost for the second quarter of 2019 and 2018 for the domestic pension plans (which include the defined benefit pension plan and the supplemental retirement plans) and the domestic retiree medical plan.
 

Pension Benefits

Other Benefits
 

Second Quarter Ended

Second Quarter Ended


June 28,

June 29,

June 28,

June 29,
(Thousands)

2019

2018

2019

2018
Components of net periodic benefit cost (benefit)








Service cost

$
1,418


$
1,674


$
18


$
28

Interest cost

1,347


2,397


99


99

Expected return on plan assets

(2,167
)

(3,697
)




Amortization of prior service benefit

122


(30
)

(375
)

(374
)
Amortization of net loss (gain)

627


1,959


(23
)


Pension curtailment charge
 
3,296

 

 

 

Net periodic benefit cost (benefit)

$
4,643


$
2,303


$
(281
)

$
(247
)

 
 
Pension Benefits
 
Other Benefits
 
 
Six Months Ended
 
Six Months Ended
 
 
June 28,
 
June 29,
 
June 28,
 
June 29,
(Thousands)
 
2019
 
2018
 
2019
 
2018
Components of net periodic benefit cost (benefit)
 
 
 
 
 
 
 
 
Service cost
 
$
2,758

 
$
3,348

 
$
35

 
$
56

Interest cost
 
2,904

 
4,794

 
199

 
198

Expected return on plan assets
 
(4,290
)
 
(7,394
)
 

 

Amortization of prior service benefit
 
242

 
(61
)
 
(749
)
 
(749
)
Amortization of net loss (gain)
 
1,431

 
3,919

 
(46
)
 

Pension curtailment charge
 
3,296

 

 

 

Net periodic benefit cost (benefit)
 
$
6,341

 
$
4,606

 
$
(561
)
 
$
(495
)
v3.19.2
Accumulated Other Comprehensive Income (Tables)
6 Months Ended
Jun. 28, 2019
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the second quarter of 2019 and 2018 and first six months of 2019 and 2018 are as follows:
 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Copper
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
Balance at March 29, 2019

$
1,663


$
(24
)

$
189

 
$
1,828


$
(54,003
)

$
(5,095
)

$
(57,270
)
Other comprehensive income before reclassifications

(269
)

(563
)

(580
)
 
(1,412
)

14,224


339


13,151

Amounts reclassified from accumulated other comprehensive income

(46
)

(1
)

163

 
116


3,781




3,897

Net current period other comprehensive income (loss) before tax

(315
)

(564
)

(417
)
 
(1,296
)

18,005


339


17,048

Deferred taxes

(72
)

(130
)

(94
)
 
(296
)

4,052




3,756

Net current period other comprehensive income (loss) after tax

(243
)

(434
)

(323
)
 
(1,000
)

13,953


339


13,292

Balance at June 28, 2019

$
1,420


$
(458
)

$
(134
)
 
$
828


$
(40,050
)

$
(4,756
)

$
(43,978
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 30, 2018
 
$
326

 
$
(238
)
 
$

 
$
88

 
$
(98,314
)
 
$
(2,995
)
 
$
(101,221
)
Other comprehensive income (loss) before reclassifications
 
871

 
635

 

 
1,506

 

 
(944
)
 
562

Amounts reclassified from accumulated other comprehensive income
 
42

 
23

 

 
65

 
1,622

 

 
1,687

Net current period other comprehensive income (loss) before tax
 
913

 
658

 

 
1,571

 
1,622

 
(944
)
 
2,249

Deferred taxes
 
(343
)
 
151

 

 
(192
)
 
326

 

 
134

Net current period other comprehensive income (loss) after tax
 
1,256

 
507

 

 
1,763

 
1,296

 
(944
)
 
2,115

Balance at June 29, 2018
 
$
1,582

 
$
269

 
$

 
$
1,851

 
$
(97,018
)
 
$
(3,939
)
 
$
(99,106
)





 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Copper
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
Balance at December 31, 2018
 
$
1,263

 
$
79

 
$
(441
)
 
$
901

 
$
(54,543
)
 
$
(4,592
)
 
$
(58,234
)
Other comprehensive income before reclassifications
 
248

 
(636
)
 
304

 
(84
)
 
14,224

 
(164
)
 
13,976

Amounts reclassified from accumulated other comprehensive income
 
(44
)
 
(62
)
 
92

 
(14
)
 
4,441

 

 
4,427

Net current period other comprehensive income (loss) before tax
 
204

 
(698
)
 
396

 
(98
)
 
18,665

 
(164
)
 
18,403

Deferred taxes
 
47

 
(161
)
 
89

 
(25
)
 
4,172

 

 
4,147

Net current period other comprehensive income (loss) after tax
 
157

 
(537
)
 
307

 
(73
)
 
14,493

 
(164
)
 
14,256

Balance at June 28, 2019
 
$
1,420

 
$
(458
)
 
$
(134
)
 
$
828

 
$
(40,050
)
 
$
(4,756
)
 
$
(43,978
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
$
959

 
$
(196
)
 
$

 
$
763

 
$
(99,592
)
 
$
(4,108
)
 
$
(102,937
)
Other comprehensive income (loss) before reclassifications
 
(327
)
 
444

 

 
117

 

 
169

 
286

Amounts reclassified from accumulated other comprehensive income
 
419

 
159

 

 
578

 
3,248

 

 
3,826

Net current period other comprehensive income (loss) before tax
 
92

 
603

 

 
695

 
3,248

 
169

 
4,112

Deferred taxes
 
(531
)
 
138

 

 
(393
)
 
674

 

 
281

Net current period other comprehensive income (loss) after tax
 
623

 
465

 

 
1,088

 
2,574

 
169

 
3,831

Balance at June 29, 2018
 
$
1,582

 
$
269

 
$

 
$
1,851

 
$
(97,018
)
 
$
(3,939
)
 
$
(99,106
)

v3.19.2
Stock-based Compensation Expense Tables (Tables)
6 Months Ended
Jun. 28, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule Of Share Based Payment Award SARs Valuation Assumptions [Table Text Block] The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model:
Risk-free interest rate
 
2.47
%
Dividend yield
 
0.7
%
Volatility
 
31.7
%
Expected term (in years)
 
5.2


v3.19.2
Fair Value of Financial Instruments (Tables)
6 Months Ended
Jun. 28, 2019
Fair Value Disclosures [Abstract]  
Summary of Fair Value Information and Derivative Financial Instruments
The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of June 28, 2019 and December 31, 2018: 
 
 
 
 
 
 
 
 
 
(Thousands)
 
Total Carrying Value in the Consolidated Balance Sheets
 
Quoted Prices
in  Active
Markets  for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation investments
 
$
3,121

 
$
2,156

 
$
3,121

 
$
2,156

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
119

 
246

 

 

 
119

 
246

 

 

Precious metal swaps
 

 
237

 

 

 

 
237

 

 

Copper swaps
 
9

 

 

 

 
9

 

 

 

Total
 
$
3,249

 
$
2,639

 
$
3,121

 
$
2,156

 
$
128

 
$
483


$


$

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liability
 
$
3,121

 
$
2,156

 
$
3,121

 
$
2,156

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
121

 
432

 

 

 
121

 
432

 

 

Precious metal swaps
 
596

 
135

 

 

 
596

 
135

 

 

Copper swaps
 
182

 
569

 

 

 
182

 
569

 

 

Total
 
$
4,020

 
$
3,292

 
$
3,121

 
$
2,156

 
$
899

 
$
1,136

 
$

 
$


v3.19.2
Derivative Instruments and Hedging Activity Tables (Tables)
6 Months Ended
Jun. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DerivativeInstrumentsNonHedging [Table Text Block]
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and balance sheet classification as of June 28, 2019 and December 31, 2018:
 
 
June 28, 2019
 
December 31, 2018
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Foreign currency forward contracts - euro
 
 
 
 
 
 
 
 
Prepaid expenses
 
$
2,421

 
$
27

 
$
8,767

 
$
244

Other liabilities and accrued items
 
3,836

 
52

 
8,771

 
249


Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and balance sheet classification as of June 28, 2019 and December 31, 2018:
 
 
June 28, 2019
 
December 31, 2018
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Prepaid expenses
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
$
1,465

 
$
9

 
$

 
$

Foreign currency forward contracts - euro
 
7,475

 
83

 
725

 
2

Precious metal swaps
 

 

 
4,533

 
237

Copper swaps
 
977

 
9

 

 

Total
 
9,917

 
101

 
5,258

 
239

 
 
 
 
 
 
 
 
 
Other liabilities and accrued items
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
2,065

 
35

 
1,264

 
17

Foreign currency forward contracts - euro
 
7,459

 
34

 
19,158

 
166

Precious metal swaps
 
6,828

 
573

 
2,864

 
135

Copper swaps
 
4,359

 
182

 
11,170

 
569

Total
 
20,711

 
824

 
34,456

 
887

 
 
 
 
 
 
 
 
 
Other long-term liabilities
 
 
 
 
 
 
 
 
Precious metal swaps
 
697

 
23

 

 

Total
 
$
31,325

 
$
746

 
$
39,714

 
$
648


Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block]
The following table summarizes the amounts reclassified from accumulated other comprehensive income relating to the hedging relationship of the Company’s outstanding derivatives designated as cash flow hedges and income statement classification as of the second quarter and first six months of of 2019
 
 
 
 
Second Quarter Ended
 
Six Months ended
(Thousands)
 
 
 
June 28, 2019
 
June 28, 2019
Hedging relationship
 
Line item
 
 
 
 
Foreign currency forward contracts
 
Net sales
 
(46
)
 
(44
)
Precious metal swaps
 
Cost of sales
 
(1
)
 
(62
)
Copper swaps
 
Cost of sales
 
163

 
92

Total
 
 
 
$
116

 
$
(14
)

v3.19.2
New Prouncements Adopted (Details)
$ in Millions
Jan. 01, 2019
USD ($)
Adjustments for New Accounting Pronouncement [Member]  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Cumulative Effect on Retained Earnings, Net of Tax $ 0.2
v3.19.2
Segment Reporting (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Segment Reporting Information        
Net sales $ 297,843 $ 309,085 $ 599,284 $ 612,552
Intersegment sales 19,266 11,403 36,488 23,083
Operating profit (loss) 22,750 15,192 44,137 28,443
Performance Alloys and Composites        
Segment Reporting Information        
Net sales 135,231 129,765 262,344 248,001
Intersegment sales 6 3 15 31
Operating profit (loss) 19,328 12,309 38,286 22,170
Advanced Materials        
Segment Reporting Information        
Net sales 133,238 150,324 277,263 303,869
Intersegment sales 19,260 11,400 36,473 23,052
Operating profit (loss) 6,139 5,572 13,219 11,470
Precision Coatings        
Segment Reporting Information        
Net sales 29,374 28,996 59,677 60,682
Intersegment sales 0 0 0 0
Operating profit (loss) 3,937 2,233 6,014 5,608
Other        
Segment Reporting Information        
Net sales 0 0 0 0
Intersegment sales 0 0 0 0
Operating profit (loss) $ (6,654) $ (4,922) $ (13,382) $ (10,805)
v3.19.2
Segment Reporting (Details 1) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Disaggregation of Revenue [Line Items]        
Net sales $ 297,843 $ 309,085 $ 599,284 $ 612,552
Semiconductor        
Disaggregation of Revenue [Line Items]        
Net sales 102,154 120,252 208,598 230,200
Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 27,593 21,345 44,839 41,372
Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 40,131 40,096 78,642 79,892
Aerospace and Defense        
Disaggregation of Revenue [Line Items]        
Net sales 31,921 31,934 65,360 55,910
Energy        
Disaggregation of Revenue [Line Items]        
Net sales 27,330 21,894 60,587 51,092
Telecomm and Data Center        
Disaggregation of Revenue [Line Items]        
Net sales 18,957 18,350 36,750 33,678
Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 18,598 25,509 40,887 51,648
Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 31,159 29,705 63,621 68,760
Performance Alloys and Composites        
Disaggregation of Revenue [Line Items]        
Net sales 135,231 129,765 262,344 248,001
Performance Alloys and Composites | Semiconductor        
Disaggregation of Revenue [Line Items]        
Net sales 1,303 1,299 3,268 2,387
Performance Alloys and Composites | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 22,663 16,150 36,218 31,455
Performance Alloys and Composites | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 28,585 28,974 55,015 58,577
Performance Alloys and Composites | Aerospace and Defense        
Disaggregation of Revenue [Line Items]        
Net sales 26,046 25,964 53,120 44,246
Performance Alloys and Composites | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 11,303 9,825 22,397 17,612
Performance Alloys and Composites | Telecomm and Data Center        
Disaggregation of Revenue [Line Items]        
Net sales 18,244 17,784 35,836 32,647
Performance Alloys and Composites | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 16,564 23,236 37,277 46,773
Performance Alloys and Composites | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 10,523 6,533 19,213 14,304
Advanced Materials        
Disaggregation of Revenue [Line Items]        
Net sales 133,238 150,324 277,263 303,869
Advanced Materials | Semiconductor        
Disaggregation of Revenue [Line Items]        
Net sales 100,758 118,525 205,125 226,842
Advanced Materials | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 500 174 705 626
Advanced Materials | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 7,704 7,951 15,635 15,416
Advanced Materials | Aerospace and Defense        
Disaggregation of Revenue [Line Items]        
Net sales 1,125 1,010 2,618 2,020
Advanced Materials | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 16,027 12,069 38,190 33,480
Advanced Materials | Telecomm and Data Center        
Disaggregation of Revenue [Line Items]        
Net sales 713 566 914 1,031
Advanced Materials | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 1,669 1,804 3,023 4,184
Advanced Materials | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 4,742 8,225 11,053 20,270
Precision Coatings        
Disaggregation of Revenue [Line Items]        
Net sales 29,374 28,996 59,677 60,682
Precision Coatings | Semiconductor        
Disaggregation of Revenue [Line Items]        
Net sales 93 428 205 971
Precision Coatings | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 4,430 5,021 7,916 9,291
Precision Coatings | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 3,842 3,171 7,992 5,899
Precision Coatings | Aerospace and Defense        
Disaggregation of Revenue [Line Items]        
Net sales 4,750 4,960 9,622 9,644
Precision Coatings | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Precision Coatings | Telecomm and Data Center        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Precision Coatings | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 365 469 587 691
Precision Coatings | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 15,894 14,947 33,355 34,186
Other        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Semiconductor        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Aerospace and Defense        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Telecomm and Data Center        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 0 0 0 0
Other | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales $ 0 $ 0 $ 0 $ 0
v3.19.2
Revenue Recognition (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Dec. 31, 2018
Capitalized Contract Cost [Line Items]      
Increase (Decrease) in Unearned Revenue $ (88) $ 2,132  
Trade Accounts Receivable      
Capitalized Contract Cost [Line Items]      
Accounts Receivable, Trade 132,493   $ 124,498
Change in Accounts Receivable, Trade $ 7,995    
Contract Asset Percent Change 6.00%    
Unbilled Receivables      
Capitalized Contract Cost [Line Items]      
Unbilled Contracts Receivable $ 9,430   4,619
Change in Unbilled Receivables $ 4,811    
Contract Asset Percent Change 104.00%    
UnearnedRevenue      
Capitalized Contract Cost [Line Items]      
Deferred Revenue $ 5,829   $ 5,918
Increase (Decrease) in Unearned Revenue $ (89)    
Contract Liability Percent Change (2.00%)    
v3.19.2
Revenue Recognition (Details 1)
$ in Millions
6 Months Ended
Jun. 28, 2019
USD ($)
Revenue from Contract with Customer [Abstract]  
Contract with Customer, Liability, Revenue Recognized $ 5.0
v3.19.2
Revenue Recognition Revenue Recognition (Details 2)
$ in Millions
Jun. 28, 2019
USD ($)
Revenue from Contract with Customer [Abstract]  
Revenue, Remaining Performance Obligation, Amount $ 19.6
v3.19.2
Other-net (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Other Income and Expenses [Abstract]        
Metal consignment fees $ 2,225 $ 2,588 $ 5,316 $ 5,017
Amortization of Intangible Assets 368 561 758 1,334
Foreign currency loss (gain) 307 1,230 384 1,219
Net loss (gain) on disposal of fixed assets 118 (3) 142 23
Rental Income (29) (134) (58) (260)
Other items (98) 71 470 (96)
Total $ 2,891 $ 4,313 $ 7,012 $ 7,237
v3.19.2
Income Taxes Details (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Income Tax Disclosure [Abstract]        
Effective Income Tax Rate Reconciliation, Percent 18.80% 20.90% 18.50% 17.00%
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount     $ 0.5 $ 1.0
v3.19.2
Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Numerator For Basic And Diluted EPS:        
Net income $ 15,540 $ 11,144 $ 32,446 $ 21,708
Denominator for basic EPS:        
Weighted-average shares outstanding 20,383 20,221 20,326 20,178
Effect of dilutive securities:        
Diluted potential common shares (in shares) 283 372 309 405
Denominator for diluted EPS:        
Adjusted weighted-average shares outstanding 20,666 20,593 20,635 20,583
Basic EPS (in usd per share) $ 0.76 $ 0.55 $ 1.60 $ 1.08
Diluted EPS (in usd per share) $ 0.75 $ 0.54 $ 1.57 $ 1.05
Stock Appreciation Rights (SARs)        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 76 166 92 185
Restricted Stock Units (RSUs)        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 76 75 77 85
Performance Shares        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 131 131 140 135
v3.19.2
Earnings Per Share (Details 1) - shares
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Earnings Per Share [Abstract]        
Securities excluded from diluted EPS calculation 84,509 65,112 144,154 65,112
v3.19.2
Inventories (Detail) - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 31, 2018
Principally average cost:    
Raw materials and supplies $ 38,425 $ 33,182
Work in process 190,428 195,879
Finished goods 32,062 30,643
Subtotal 260,915 259,704
Less: LIFO reserve balance 47,586 44,833
Inventories $ 213,329 $ 214,871
v3.19.2
Inventories (Details 1) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Dec. 31, 2018
Inventory Disclosure [Abstract]          
LIFO liquidation effect $ 0.1 $ 0.1 $ 0.1 $ 0.1  
Notional Amount of Nonderivative Instruments     $ 295.7   $ 316.1
v3.19.2
Components of Lease Expense (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 28, 2019
Lease, Cost [Abstract]    
Operating lease cost $ 2,291 $ 5,003
Finance lease cost    
Amortization of right-of-use assets 354 710
Interest on lease liabilities 259 522
Total lease cost $ 2,904 $ 6,235
v3.19.2
Future Estimated Minimum Payments Under Finance Leases and Non-Cancelable Operating Leases (Details)
$ in Thousands
Jun. 28, 2019
USD ($)
Finance Leases  
2019 $ 1,122
2020 2,244
2021 2,244
2022 2,244
2023 1,534
2024 and thereafter 22,414
Total minimum lease payments 31,802
Amounts representing interest 12,239
Present value of net minimum lease payments 19,563
Operating Leases  
2019 4,201
2020 7,618
2021 6,619
2022 4,727
2023 3,818
2024 and thereafter 5,148
Total minimum lease payments 32,131
Amount of lease payment representing interest 4,086
Present value of lease payments $ 28,045
v3.19.2
Leases (Details Textual) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Leases [Abstract]        
Operating Lease Term Maximum 25 years      
Operating lease expense $ 2.3 $ 3.0 $ 5.0 $ 6.1
Weighted Average Remaining Lease Term        
Operating leases 5 years 1 month 2 days   5 years 1 month 2 days  
Finance leases 19 years 10 months 13 days   19 years 10 months 13 days  
Weighted Average Discount Rate        
Operating leases 5.55%   5.55%  
Finance leases 5.31%   5.31%  
v3.19.2
Supplemental Cash Flow Information Related to Leases (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Cash paid for amounts included in the measurement of lease liabilities    
Operating cash flows from operating leases $ 7,710  
Operating cash flows from finance leases 522  
Financing cash flows from finance leases $ 599 $ 425
v3.19.2
Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 31, 2018
Operating Leases    
Operating lease, right-of-use asset $ 26,788 $ 0
Operating Lease, Liability, Current 6,927  
Operating lease liabilities 21,118 0
Finance Leases    
Finance lease liabilities 18,325 15,221
Total principal payable on finance lease 19,563  
Property, Plant and Equipment 913,325 898,251
Allowance for depreciation, depletion and amortization (669,861) (647,233)
Finance lease assets, net 243,464 $ 251,018
Other liabilities and accrued items 1,238  
Property, Plant and Equipment [Member]    
Property, Plant and Equipment 26,330  
Allowance for depreciation, depletion and amortization (3,140)  
Finance lease assets, net $ 23,190  
v3.19.2
Pensions and Other Post-employment Benefits (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Components of net periodic benefit cost        
Pension curtailment $ 3,296   $ 3,296 $ 0
Pension Benefits [Member]        
Components of net periodic benefit cost        
Service cost 1,418 $ 1,674 2,758 3,348
Interest cost 1,347 2,397 2,904 4,794
Expected return on plan assets (2,167) (3,697) (4,290) (7,394)
Amortization of prior service benefit 122 (30) 242 (61)
Amortization of net loss (gain) 627 1,959 1,431 3,919
Pension curtailment 3,296 0 3,296 0
Total net benefit cost 4,643 2,303 6,341 4,606
Other Benefits [Member]        
Components of net periodic benefit cost        
Service cost 18 28 35 56
Interest cost 99 99 199 198
Expected return on plan assets 0 0 0 0
Amortization of prior service benefit (375) (374) (749) (749)
Amortization of net loss (gain) (23) 0 (46) 0
Pension curtailment 0 0 0 0
Total net benefit cost $ (281) $ (247) $ (561) $ (495)
v3.19.2
Pensions and Other Post-employment Benefits (Detail 1) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Defined Benefit Plan Disclosure [Line Items]        
Pension curtailment $ 3,296   $ 3,296 $ 0
Pension Benefits [Member]        
Defined Benefit Plan Disclosure [Line Items]        
Contributions by Employer     3,000 13,000
Pension curtailment $ 3,296 $ 0 $ 3,296 $ 0
v3.19.2
Accumulated Other Comprehensive Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Mar. 29, 2019
Dec. 31, 2018
Mar. 30, 2018
Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss $ (43,978) $ (99,106) $ (43,978) $ (99,106) $ (57,270) $ (58,234) $ (101,221) $ (102,937)
Activity                
Other comprehensive income (loss) before reclassifications 13,151 562 13,976 286        
Amounts reclassified from accumulated other comprehensive income 3,897 1,687 4,427 3,826        
Net current period other comprehensive income (loss) before tax 17,048 2,249 18,403 4,112        
Deferred taxes on current period activity 3,756 134 4,147 281        
Net current period other comprehensive income (loss) after tax 13,292 2,115 14,256 3,831        
Pension and Post Employment Benefits [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (40,050) (97,018) (40,050) (97,018) (54,003) (54,543) (98,314) (99,592)
Activity                
Other comprehensive income (loss) before reclassifications 14,224 0 14,224 0        
Amounts reclassified from accumulated other comprehensive income 3,781 1,622 4,441 3,248        
Net current period other comprehensive income (loss) before tax 18,005 1,622 18,665 3,248        
Deferred taxes on current period activity 4,052 326 4,172 674        
Net current period other comprehensive income (loss) after tax 13,953 1,296 14,493 2,574        
Foreign Currency Translation [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (4,756) (3,939) (4,756) (3,939) (5,095) (4,592) (2,995) (4,108)
Activity                
Other comprehensive income (loss) before reclassifications 339 (944) (164) 169        
Amounts reclassified from accumulated other comprehensive income 0 0 0 0        
Net current period other comprehensive income (loss) before tax 339 (944) (164) 169        
Deferred taxes on current period activity 0 0 0 0        
Net current period other comprehensive income (loss) after tax 339 (944) (164) 169        
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss 828 1,851 828 1,851 1,828 901 88 763
Activity                
Other comprehensive income (loss) before reclassifications (1,412) 1,506 (84) 117        
Amounts reclassified from accumulated other comprehensive income 116 65 (14) 578        
Net current period other comprehensive income (loss) before tax (1,296) 1,571 (98) 695        
Deferred taxes on current period activity (296) (192) (25) (393)        
Net current period other comprehensive income (loss) after tax (1,000) 1,763 (73) 1,088        
Foreign Currency Forward Contract | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss 1,420 1,582 1,420 1,582 1,663 1,263 326 959
Activity                
Other comprehensive income (loss) before reclassifications (269) 871 248 (327)        
Amounts reclassified from accumulated other comprehensive income (46) 42 (44) 419        
Net current period other comprehensive income (loss) before tax (315) 913 204 92        
Deferred taxes on current period activity (72) (343) 47 (531)        
Net current period other comprehensive income (loss) after tax (243) 1,256 157 623        
Precious Metal Contracts [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (458) 269 (458) 269 (24) 79 (238) (196)
Activity                
Other comprehensive income (loss) before reclassifications (563) 635 (636) 444        
Amounts reclassified from accumulated other comprehensive income (1) 23 (62) 159        
Net current period other comprehensive income (loss) before tax (564) 658 (698) 603        
Deferred taxes on current period activity (130) 151 (161) 138        
Net current period other comprehensive income (loss) after tax (434) 507 (537) 465        
Copper Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (134) 0 (134) 0 $ 189 $ (441) $ 0 $ 0
Activity                
Other comprehensive income (loss) before reclassifications (580) 0 304 0        
Amounts reclassified from accumulated other comprehensive income 163 0 92 0        
Net current period other comprehensive income (loss) before tax (417) 0 396 0        
Deferred taxes on current period activity (94) 0 89 0        
Net current period other comprehensive income (loss) after tax $ (323) $ 0 $ 307 $ 0        
v3.19.2
Stock-based Compensation Expense (Detail)
6 Months Ended
Jun. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Risk-free interest rate 2.47%
Dividend yield 0.70%
Volatility 31.70%
Expected term (in years) 5 years 2 months 12 days
v3.19.2
Stock-based Compensation Expense Textual (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 3.5 $ 2.7 $ 6.2 $ 5.2
Document Period End Date     Jun. 28, 2019  
Unearned Compensation $ 13.6   $ 13.6  
Stock Appreciation Rights (SARs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares granted in period     73,461  
Weighted average exercise price on SARs granted in period     $ 58.30  
Grant date fair value per unit (in usd per share)     17.76  
Performance Shares        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Grant date fair value per unit (in usd per share)     $ 69.84  
Vesting period     3 years  
Stock Compensation Plan [Member] | Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares granted in period     63,665  
Grant date fair value per unit (in usd per share)     $ 58.30  
Vesting period     3 years  
Director Equity Plan [Domain] | Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares granted in period     11,048  
Grant date fair value per unit (in usd per share)     $ 68.79  
Vesting period     1 year  
v3.19.2
Fair Value of Financial Instruments (Detail) - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred Compensation Investment Assets $ 3,121 $ 2,156
Foreign Currency Forward Contract 119 246
Precious Metal Swaps 0 237
Copper Swaps 9 0
Total Financial Assets 3,249 2,639
Deferred Compensation Investment Related Liability 3,121 2,156
Foreign Currency Forward Contract 121 432
Precious Metal Swaps 596 135
Copper Swaps 182 569
Total Financial Liabilities 4,020 3,292
Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred Compensation Investment Assets 3,121 2,156
Foreign Currency Forward Contract 0 0
Precious Metal Swaps 0 0
Copper Swaps 0 0
Total Financial Assets 3,121 2,156
Deferred Compensation Investment Related Liability 3,121 2,156
Foreign Currency Forward Contract 0 0
Precious Metal Swaps 0 0
Copper Swaps 0 0
Total Financial Liabilities 3,121 2,156
Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred Compensation Investment Assets 0 0
Foreign Currency Forward Contract 119 246
Precious Metal Swaps 0 237
Copper Swaps 9 0
Total Financial Assets 128 483
Deferred Compensation Investment Related Liability 0 0
Foreign Currency Forward Contract 121 432
Precious Metal Swaps 596 135
Copper Swaps 182 569
Total Financial Liabilities 899 1,136
Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred Compensation Investment Assets 0 0
Foreign Currency Forward Contract 0 0
Precious Metal Swaps 0 0
Copper Swaps 0 0
Total Financial Assets 0 0
Deferred Compensation Investment Related Liability 0 0
Foreign Currency Forward Contract 0 0
Precious Metal Swaps 0 0
Copper Swaps 0 0
Total Financial Liabilities $ 0 $ 0
v3.19.2
Derivative Instruments and Hedging Activity (Details - Not designated as hedges) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Dec. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]          
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net $ 0 $ 1,600 $ 0 $ 1,100  
Euro Member Countries, Euro | Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign Currency Forward Contract          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative Asset, Notional Amount 2,421   2,421   $ 8,767
Derivative Asset, Fair Value, Gross Asset 27   27   244
Euro Member Countries, Euro | Not Designated as Hedging Instrument [Member] | Other Current Liabilities | Foreign Currency Forward Contract          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative Liability, Notional Amount 3,836   3,836   8,771
Derivative Liability, Fair Value, Gross Liability $ 52   $ 52   $ 249
v3.19.2
Derivative Instruments and Hedging Activity (Details - Designated as hedges) - Designated as Hedging Instrument [Member] - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 31, 2018
Derivative [Line Items]    
Derivative, Notional Amount $ 31,325 $ 39,714
Derivative, Fair Value, Net 746 648
Prepaid Expenses and Other Current Assets [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 9,917 5,258
Derivative Asset, Fair Value, Gross Asset 101 239
Prepaid Expenses and Other Current Assets [Member] | Precious Metal Swaps [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 0 4,533
Derivative Asset, Fair Value, Gross Asset 0 237
Prepaid Expenses and Other Current Assets [Member] | Copper Swap [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 977 0
Derivative Asset, Fair Value, Gross Asset 9 0
Other Current Liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 20,711 34,456
Derivative Liability, Fair Value, Gross Liability 824 887
Other Current Liabilities | Precious Metal Swaps [Member]    
Derivative [Line Items]    
Derivative Liability, Notional Amount 6,828 2,864
Derivative Liability, Fair Value, Gross Liability 573 135
Other Current Liabilities | Copper Swap [Member]    
Derivative [Line Items]    
Derivative Liability, Notional Amount 4,359 11,170
Derivative Liability, Fair Value, Gross Liability 182 569
Other Noncurrent Liabilities [Member] | Precious Metal Swaps [Member]    
Derivative [Line Items]    
Derivative Liability, Notional Amount 697 0
Derivative Liability, Fair Value, Gross Liability 23 0
Japan, Yen | Prepaid Expenses and Other Current Assets [Member] | Foreign Currency Forward Contract    
Derivative [Line Items]    
Derivative Asset, Notional Amount 1,465 0
Derivative Asset, Fair Value, Gross Asset 9 0
Japan, Yen | Other Current Liabilities | Foreign Currency Forward Contract    
Derivative [Line Items]    
Derivative Liability, Notional Amount 2,065 1,264
Derivative Liability, Fair Value, Gross Liability 35 17
Euro Member Countries, Euro | Prepaid Expenses and Other Current Assets [Member] | Foreign Currency Forward Contract    
Derivative [Line Items]    
Derivative Asset, Notional Amount 7,475 725
Derivative Asset, Fair Value, Gross Asset 83 2
Euro Member Countries, Euro | Other Current Liabilities | Foreign Currency Forward Contract    
Derivative [Line Items]    
Derivative Liability, Notional Amount 7,459 19,158
Derivative Liability, Fair Value, Gross Liability $ 34 $ 166
v3.19.2
Derivative Instruments and Hedging Activity (Details - Reclassificatoins from AOCI) - Designated as Hedging Instrument [Member] - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 28, 2019
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net $ 116 $ (14)
Sales Revenue, Net [Member] | Euro Member Countries, Euro | Foreign Exchange Forward [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net (46) (44)
Cost of Sales [Member] | Precious Metal Swaps [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net (1) (62)
Cost of Sales [Member] | Copper Swap [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net $ 163 $ 92
v3.19.2
Contingencies (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 28, 2019
Dec. 31, 2018
Loss Contingency [Abstract]    
Accrual for Environmental Loss Contingencies, Significant Assumptions The reserves are established based upon analyses conducted by the Company’s engineers and outside consultants and are adjusted from time to time based upon ongoing studies, the difference between actual and estimated costs, and other factors. The reserves may also be affected by rulings and negotiations with regulatory agencies.  
Undiscounted reserve balance $ 6.2 $ 6.5