MATERION CORP, 10-K filed on 2/18/2021
Annual Report
v3.20.4
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2020
Jan. 29, 2021
Jun. 26, 2020
Document and Entity Information [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2020    
Document Transition Report false    
Entity File Number 1-15885    
Entity Registrant Name MATERION CORPORATION    
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    
Entity Address, Postal Zip Code 44124    
City Area Code 216    
Local Phone Number 486-4200    
Title of 12(b) Security Common Stock, no par value    
Trading Symbol MTRN    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Emerging Growth Company false    
Entity Small Business false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 1,175,158,375
Entity Common Stock, Shares Outstanding   20,330,126  
Entity Central Index Key 0001104657    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Amendment Flag false    
Documents Incorporated by Reference Portions of the Proxy Statement for the 2021 Annual Meeting of Shareholders are incorporated by reference into Part III.    
v3.20.4
Consolidated Statements of Income - USD ($)
shares in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Income Statement [Abstract]      
Net sales $ 1,176,274,000 $ 1,185,424,000 $ 1,207,815,000
Cost of sales 983,641,000 922,734,000 956,454,000
Gross margin 192,633,000 262,690,000 251,361,000
Selling, general, and administrative expense 133,963,000 147,164,000 153,489,000
Research and development expense 20,283,000 18,271,000 15,187,000
Goodwill impairment charges 9,053,000 11,560,000 0
Asset impairment charges 1,419,000 2,581,000 0
Restructuring expense 11,237,000 785,000 5,599,000
Other - net 8,463,000 11,783,000 15,334,000
Operating profit 8,215,000 70,546,000 61,752,000
Other non-operating (income) expense-net (3,939,000) 3,431,000 42,683,000
Interest expense - net 3,879,000 1,579,000 2,471,000
Income before income taxes 8,275,000 65,536,000 16,598,000
Income tax (benefit) expense (7,187,000) 12,142,000 (4,446,000)
Net income $ 15,462,000 $ 53,394,000 $ 21,044,000
Basic earnings per share:      
Net income per share of common stock (in usd per share) $ 0.76 $ 2.62 $ 1.04
Diluted earnings per share:      
Net income per share of common stock (in usd per share) $ 0.75 $ 2.59 $ 1.02
Weighted-average number of shares of common stock outstanding:      
Basic 20,338 20,365 20,212
Diluted 20,603 20,655 20,613
v3.20.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Statement of Comprehensive Income [Abstract]      
Net income $ 15,462 $ 53,394 $ 21,044
Other comprehensive income:      
Foreign currency translation adjustment 9,030 (421) (484)
Derivative and hedging activity, net of tax (expense) benefit of $28, $5, and $672 (80) (4) 138
Pension and post-employment benefit adjustment, net of tax benefit (expense) of $651, ($4,741), and ($13,300) (2,127) 13,197 45,049
Other comprehensive income 6,823 12,772 44,703
Comprehensive income $ 22,285 $ 66,166 $ 65,747
v3.20.4
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Statement of Comprehensive Income [Abstract]      
Derivative and hedging activity, tax benefit $ 28 $ 5 $ 672
Pension and post employment benefit adjustment, tax benefit (expense) $ 651 $ (4,741) $ (13,300)
v3.20.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Cash flows from operating activities:      
Net income $ 15,462 $ 53,394 $ 21,044
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation, depletion, and amortization 42,384 41,116 35,524
Amortization of deferred financing costs in interest expense 790 962 1,009
Stock-based compensation expense (non-cash) 5,528 7,170 5,313
Amortization of pension and post-retirement costs (151) 386 5,551
Loss on sale of property, plant, and equipment 466 344 518
Deferred income tax (benefit) expense (9,850) 3,945 (1,912)
Impairment charges 10,472 14,141 0
Net pension curtailments and settlements 94 3,328 41,406
Changes in assets and liabilities net of acquired assets and liabilities:      
Decrease (increase) in accounts receivable (707) (23,933) (7,219)
Decrease (increase) in inventory (1,288) 20,485 3,978
Decrease (increase) in prepaid and other current assets 2,475 869 1,814
Increase (decrease) in accounts payable and accrued expenses (21,877) (18,575) 8,820
Increase (decrease) in unearned revenue 2,935 (2,538) 477
Increase (decrease) in interest and taxes payable (157) (805) 435
Increase (decrease) in unearned income due to customer prepayments 54,103 4,733 0
Domestic pension plan contributions 0 (4,500) (42,000)
Other — net 378 (1,300) 1,616
Net cash provided by operating activities 101,057 99,222 76,374
Cash flows from investing activities:      
Payments for acquisition, net of cash acquired (130,715) 0 0
Payments for purchase of property, plant, and equipment (67,274) (24,251) (27,702)
Payments for mine development 0 (2,277) (6,558)
Proceeds from settlement of currency exchange contract 3,249 0 0
Proceeds from sale of property, plant, and equipment 33 44 432
Net cash used in investing activities (194,707) (26,484) (33,828)
Cash flows from financing activities:      
Proceeds from short-term debt under revolving credit agreement, net 34,000 0 0
Repayment of long-term debt (20,634) (823) (777)
Principal payments under finance lease obligations (2,213) (1,200) (861)
Cash dividends paid (9,257) (8,856) (8,389)
Deferred financing costs 0 (2,130) 0
Repurchase of common stock (6,766) (199) (422)
Payments of withholding taxes for stock-based compensation awards (2,221) (4,846) (3,156)
Net cash used in financing activities (7,091) (18,054) (13,605)
Effects of exchange rate changes 1,612 (322) (140)
Net change in cash and cash equivalents (99,129) 54,362 28,801
Cash and cash equivalents at beginning of period 125,007 70,645 41,844
Cash and cash equivalents at end of period $ 25,878 $ 125,007 $ 70,645
v3.20.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 25,878 $ 125,007
Accounts receivable 166,447 154,751
Inventories 250,778 236,253
Prepaid and other current assets 20,896 21,736
Total current assets 463,999 537,747
Deferred income taxes 3,134 1,666
Property, plant, and equipment 998,312 916,965
Less allowances for depreciation, depletion, and amortization (688,626) (684,689)
Property, plant, and equipment — net 309,686 232,276
Operating lease, right-of-use assets 62,089 23,413
Intangible assets 54,672 6,380
Other assets 19,364 17,937
Goodwill 144,916 79,011
Total Assets 1,057,860 898,430
Current liabilities    
Short-term debt 1,937 868
Accounts payable 55,640 43,206
Salaries and wages 18,809 41,167
Other liabilities and accrued items 40,887 32,477
Income taxes 1,898 1,342
Unearned revenue 7,713 3,380
Total current liabilities 126,884 122,440
Other long-term liabilities 14,313 11,560
Operating lease liabilities 56,761 18,091
Finance lease liabilities 20,539 17,424
Retirement and post-employment benefits 41,877 32,466
Unearned income 86,761 32,891
Long-term income taxes 2,689 3,451
Deferred income taxes 15,864 13,104
Long-term debt 36,542 1,260
Shareholders’ equity    
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 for both 2020 and 2019) 258,642 249,674
Retained earnings 631,058 624,954
Common stock in treasury (6,820 shares for 2020 and 6,744 shares for 2019) (199,187) (186,845)
Accumulated other comprehensive loss (38,639) (45,462)
Other equity 3,756 3,422
Total shareholders’ equity 655,630 645,743
Total Liabilities and Shareholders’ Equity $ 1,057,860 $ 898,430
v3.20.4
Consolidated Balance Sheets (Parenthetical) - $ / shares
shares in Thousands, $ / shares in Thousands
Dec. 31, 2020
Dec. 31, 2019
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
Treasury stock, shares 6,820 6,744
v3.20.4
Consolidated Statements of Shareholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Previously Reported
Revision of Prior Period, Adjustment
Common Shares
Common Shares
Previously Reported
Common Shares Held In Treasury
Common Shares Held In Treasury
Previously Reported
Common Stock
Common Stock
Previously Reported
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Previously Reported
Retained Earnings
Revision of Prior Period, Adjustment
Common Stock In Treasury
Common Stock In Treasury
Previously Reported
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Previously Reported
Other Equity Transactions
Other Equity Transactions
Previously Reported
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Common shares       20,107 20,107                            
Common shares held in Treasury           7,042 7,042                        
Retained earnings | Accounting Standards Update 2014-09 $ 425                   $ 425                
Beginning balances at Dec. 31, 2017 527,115 $ 494,981 $ 32,134         $ 223,484 $ 223,484 $ 568,250   $ 536,116 $ 32,134 $ (166,128) $ (166,128) $ (102,937) $ (102,937) $ 4,446 $ 4,446
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Net income 21,044 20,846           0   21,044       0   0   0  
Other comprehensive income 2,722             0   0       0   2,722   0  
Net pension curtailments and settlements 41,406             0   0       0   41,406   0  
Tax Cuts and Jobs Act Reclassification $ 0             0   (575)       0   575   0  
Accounting Standards Update [Extensible List] | Accounting Standards Update 2014-09 us-gaap:AccountingStandardsUpdate201409Member                                    
Cash dividends declared $ (8,389)             0   (8,389)       0   0   0  
Stock-based compensation activity, in shares       202   (203)                          
Stock-based compensation activity 5,314             11,131   (49)       (5,768)   0   0  
Payments for withholding taxes for stock-based compensation awards, in shares       (60)   60                          
Payments for withholding taxes for stock-based compensation awards (3,156)             0   0       (3,156)   0   0  
Repurchase of shares       (10)   10                          
Repurchase of 10, 5, and 158 shares for the years ended 2018, 2019, and 2020, respectively (422)             0   0       (422)   0   0  
Directors' deferred compensation, in shares       3   (3)                          
Directors' deferred compensation 179             89   0       48   0   42  
Ending balances at Dec. 31, 2018 586,238             234,704   580,706       (175,426)   (58,234)   4,488  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Common shares       20,242                              
Common shares held in Treasury           6,906                          
Retained earnings | Accounting Standards Update 2016-02 (179)                   $ (179)                
Net income 53,394 50,660           0   53,394       0   0   0  
Other comprehensive income 9,444             0   0       0   9,444   0  
Net pension curtailments and settlements $ 3,328             0   0       0   3,328   0  
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-02 us-gaap:AccountingStandardsUpdate201602Member                                    
Cash dividends declared $ (8,856)             0   (8,856)       0   0   0  
Stock-based compensation activity, in shares       252   (252)                          
Stock-based compensation activity 7,170             14,876   (111)       (7,595)   0   0  
Payments for withholding taxes for stock-based compensation awards, in shares       (89)   89                          
Payments for withholding taxes for stock-based compensation awards (4,846)             0   0       (4,846)   0   0  
Repurchase of shares       (5)   5                          
Repurchase of 10, 5, and 158 shares for the years ended 2018, 2019, and 2020, respectively (199)             0   0       (199)   0   0  
Directors' deferred compensation, in shares       4   (4)                          
Directors' deferred compensation 249             94   0       1,221   0   (1,066)  
Ending balances at Dec. 31, 2019 $ 645,743             249,674   624,954       (186,845)   (45,462)   3,422  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Common shares       20,404                              
Common shares held in Treasury 6,744         6,744                          
Retained earnings $ 624,954                                    
Net income 15,462 $ 16,942           0   15,462       0   0   0  
Other comprehensive income 6,729             0   0       0   6,729   0  
Net pension curtailments and settlements 94             0   0       0   94   0  
Cash dividends declared (9,257)             0   (9,257)       0   0   0  
Stock-based compensation activity, in shares       117   (117)                          
Stock-based compensation activity 5,619             8,867   (101)       (3,147)   0   0  
Payments for withholding taxes for stock-based compensation awards, in shares       (39)   39                          
Payments for withholding taxes for stock-based compensation awards (2,221)             0   0       (2,221)   0   0  
Repurchase of shares       (158)   158                          
Repurchase of 10, 5, and 158 shares for the years ended 2018, 2019, and 2020, respectively (6,766)             0   0       (6,766)   0   0  
Directors' deferred compensation, in shares       4   (4)                          
Directors' deferred compensation 227             101   0       (208)   0   334  
Ending balances at Dec. 31, 2020 $ 655,630             $ 258,642   $ 631,058       $ (199,187)   $ (38,639)   $ 3,756  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Common shares       20,328                              
Common shares held in Treasury 6,820         6,820                          
Retained earnings $ 631,058                                    
v3.20.4
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Statement of Stockholders' Equity [Abstract]      
Cash dividends per share $ 0.455 $ 0.435 $ 0.415
v3.20.4
Significant Accounting Policies
12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies Significant Accounting Policies
Organization:  Materion Corporation (the Company) is a holding company with subsidiaries that have operations in the United States, Europe, and Asia. These operations manufacture advanced engineered materials used in a variety of end markets, including semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center. The Company has four reportable segments: Performance Alloys and Composites, Advanced Materials, Precision Optics, and Other. Other includes unallocated corporate costs.
Refer to Note C for additional segment details. The Company distributes its products through a combination of company-owned facilities and independent distributors and agents.
Business Combinations: The Company records assets acquired and liabilities assumed at the date of acquisition at their respective fair values. Intangible assets acquired in a business combination are recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
The amounts reflected in Note B to the Consolidated Financial Statements are the results of the preliminary purchase price allocation for the Optics Balzers acquisition and will be updated upon completion of the final valuation. The Company is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined.
Use of Estimates:  The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
Change in Accounting Principle:  During the fourth quarter of 2020, the Company changed its method of accounting for certain domestic inventory from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. All prior periods presented have been retroactively adjusted to apply the new method of accounting.
Consolidation:  The Consolidated Financial Statements include the accounts of Materion Corporation and its subsidiaries. All of the Company’s subsidiaries were wholly owned as of December 31, 2020. Intercompany accounts and transactions are eliminated in consolidation.
Cash Equivalents:  All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.
Accounts Receivable:  An allowance for doubtful accounts is maintained for the expected losses resulting from the inability of customers to pay amounts due. The Company considers the current market conditions and credit losses related to the Company's trade receivables based on the macroeconomic environment, geographic considerations, and other expected market trends. Additionally, the allowance is based upon identified delinquent accounts, customer payment patterns, and other analyses of historical data and trends. Accounts receivable were net of an allowance for credit losses of $0.5 million and $0.4 million at December 31, 2020 and 2019, respectively. The change in the allowance for credit losses includes expense and net write-offs, none of which are material. The Company extends credit to customers based upon their financial condition, and collateral is not generally required.
Property, Plant, and Equipment:  Property, plant, and equipment is stated on the basis of cost. Depreciation is computed principally by the straight-line method, except certain assets for which depreciation may be computed by the units-of-production method. The depreciable lives that are used in computing the annual provision for depreciation by class of asset are primarily as follows:
 Years
Land improvements10 to 20
Buildings20 to 40
Leasehold improvementsLife of lease
Machinery and equipment3 to 15
Furniture and fixtures4 to 10
Automobiles and trucks3 to 8
Research equipment3 to 10
Computer hardware3 to 10
Computer software3 to 10
An asset acquired under a finance lease will be recorded at the lesser of the present value of the projected lease payments or the fair value of the asset and will be depreciated in accordance with the above schedule. Leasehold improvements will be depreciated over the life of the improvement if it is shorter than the life of the lease. Repair and maintenance costs are expensed as incurred.
Mineral Resources and Mine Development: Property acquisition costs are capitalized as mineral resources on the balance sheet and are depleted using the units-of-production method based upon total estimated recoverable proven reserves of the beryllium-bearing bertrandite ore body. The Company uses beryllium pounds as the unit of accounting measure, and depletion expense is recorded on a pro-rata basis based upon the amount of beryllium pounds extracted as a percentage of total estimated beryllium pounds contained in all ore bodies.
Mine development costs at the Company's open pit surface mine include drilling, infrastructure, and other related costs to delineate an ore body, and the removal of overburden to initially expose an ore body. Before mineralization is classified as proven and probable reserves, costs are classified as exploration expense. Capitalization of mine development project costs that meet the definition of an asset begins once mineralization is classified as proven and probable reserves.
Historically, the Company’s mine development costs involved the development of a new source of ore, and, as such, mine development costs incurred were capitalized during the pre-production phase of a mine and amortized into inventory as the ore was extracted. In 2020, the Company expanded a mine to further develop an ore body. Since the pre-production phase ended when ore was first extracted from this mine, the Company recognized approximately $12.9 million of mine development costs in 2020 as a component of cost of sales. This expansion is expected to benefit future periods.
Drilling and related costs are capitalized for an ore body where proven and probable reserves exist, and the activities are directed at obtaining additional information on the ore body. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of costs applicable to sales.
The costs of removing overburden and waste materials to access the ore body at an open-pit mine prior to the production phase are capitalized during the development of an open-pit mine and are capitalized at each pit. These costs are amortized as the ore is extracted using the units-of-production method based upon total estimated recoverable proven reserves for the individual pit. The Company uses beryllium pounds as the unit of accounting measure for recording amortization.
To the extent that the aforementioned costs benefit an entire ore body, the costs are amortized over the estimated useful life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore block area.
Goodwill and Other Intangible Assets:  Goodwill is reviewed annually for impairment or more frequently if impairment indicators arise. The Company conducts its annual goodwill and indefinite-lived intangible asset impairment assessment as of the first day of the fourth quarter, or more frequently under certain circumstances. For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as "step zero") to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment ("step one") where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach). Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. Intangible assets with finite lives are amortized using the straight-line method or effective interest
method, as applicable, over the periods estimated to be benefited, which is generally 20 years or less. Finite-lived intangible assets are also reviewed for impairment if facts and circumstances warrant.
Long-Lived Asset Impairment: Management performs impairment tests of long-lived assets, including property and equipment, whenever an event occurs or circumstances change that indicate that the carrying value may not be recoverable or the useful life of the asset has changed. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future undiscounted cash flows generated by the asset group are less than its carrying value.  If such undiscounted cash flows indicate that the carrying value of the asset group is not recoverable, impairment losses are measured by comparing the estimated fair value of the asset group to its carrying amount.
Derivatives:  The Company recognizes all derivatives 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, a component of shareholders’ equity, until the hedged item is recognized in earnings. If the derivative is designated as a fair value hedge, changes in fair value are offset against the change in the fair value of the hedged asset, liability, or commitment through earnings. The ineffective portion of a derivative’s change in fair value, if any, is recognized in earnings immediately. If a derivative is not a hedge, changes in its fair value are adjusted through the income statement.
Asset Retirement Obligation:  The Company records a liability to recognize the legal obligation to remove an asset at the time the asset is acquired or when the legal liability arises. The liability is recorded for the present value of the ultimate obligation by discounting the estimated future cash flows using a credit-adjusted risk-free interest rate. The liability is accreted over time, with the accretion charged to expense. An asset equal to the fair value of the liability is recorded concurrent with the liability and depreciated over the life of the underlying asset.
Unearned Income:  Expenditures for capital equipment to be reimbursed under government contracts are recorded in property, plant, and equipment, while the reimbursements for those expenditures are recorded in unearned income, a liability on the balance sheet. When the assets subject to reimbursement are placed in service, the total cost is depreciated over the useful lives, and the unearned income liability is reduced and credited to cost of sales on the Consolidated Statements of Income ratably with the annual depreciation expense.
Also included in Unearned Income as of December 31, 2020 are $58.8 million of customer prepayments. See Note L for additional discussion.
Advertising Costs: The Company expenses all advertising costs as incurred. Advertising costs were $0.3 million in 2020, $0.7 million in 2019, and $1.2 million in 2018.
Stock-based Compensation:  The Company recognizes stock-based compensation expense based on the grant date fair value of the award over the period during which an employee is required to provide service in exchange for the award. Stock-based awards include performance-based restricted stock units (PRSUs), restricted stock units (RSUs), and stock appreciation rights (SARs). The fair value of PRSUs and RSUs is primarily based on the closing market price of a share of the Company's common stock on the date of grant, modified as appropriate to take into account the features of such grants. SARs are granted with an exercise price equal to the closing price of the Company's common shares on the date of grant. The fair value of SARs is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. See Note R for additional information about stock-based compensation.
Capitalized Interest: Interest expense associated with active capital asset construction and mine development projects is capitalized and amortized over the future useful lives of the related assets.
Income Taxes:  The Company uses the liability method in measuring the provision for income taxes and recognizing deferred tax assets and liabilities on the balance sheet. The Company will record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized, as warranted by current facts and circumstances. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties and will record a liability for those tax benefits that have a less than 50% likelihood of being sustained upon examination by the taxing authorities.
Net Income Per Share:  Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive common stock equivalents as appropriate using the treasury stock method.
New Pronouncements Adopted:  In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 is effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years. The Company adopted this guidance as of January 1, 2020, and the adoption did not have a material effect on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU 2018-14 Defined Benefit Plans (Topic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans, which intends to improve disclosure effectiveness by adding, removing, or clarifying certain disclosure requirements related to defined benefit pension or other postretirement plans. The standard is effective for fiscal years ending after December 15, 2020. The Company adopted this guidance as of December 31, 2020. The effect of the adoption did not materially impact the Company's financial statements or related 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.
Inventories:  Inventories are stated at the lower of cost or net realizable value. In the fourth quarter of 2020, the Company voluntarily changed its method of inventory costing for the majority of its domestic inventories to the FIFO method from the LIFO method. Except for its bertrandite ore mine which values inventory using a weighted average cost method, the Company's remaining inventories are valued using the FIFO method. The Company believes that a current costing method is preferable as it improves comparability with its most similar peers, it more closely resembles the physical flow of its inventory (i.e., it provides better matching of revenues and expenses), and it results in uniformity across a significant majority of the Company’s inventory. Prior to the change in method, inventories valued on the LIFO cost method were approximately 45% of the Company's total inventories as of December 31, 2020.
The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented. As a result of the retrospective application of the change in accounting principle, certain financial statement line items in the Company’s consolidated balance sheets as of December 31, 2019 and the consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years ended December 31, 2019 and 2018 were adjusted as necessary.
As a result of the retrospective application of this change in accounting method, the following financial statement line items within the accompanying financial statements were adjusted, as follows:
Consolidated Statements of Income
(Thousands except per share amounts)
202020192018
Selected ItemsAs Computed Under LIFOAs Reported Under FIFODifferencePreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Cost of sales$981,722 $983,641 $1,919 $926,280 $922,734 $(3,546)$956,710 $956,454 $(256)
Gross margin194,552 192,633 (1,919)259,144 262,690 3,546 251,105 251,361 256 
Operating profit10,134 8,215 (1,919)67,000 70,546 3,546 61,496 61,752 256 
Income before income taxes10,194 8,275 (1,919)61,990 65,536 3,546 16,342 16,598 256 
Income tax (benefit) expense(6,748)(7,187)(439)11,330 12,142 812 (4,504)(4,446)58 
Net income16,942 15,462 (1,480)50,660 53,394 2,734 20,846 21,044 198 
Basic earnings per share:
Net income per share of common stock$0.83 $0.76 $(0.07)$2.49 $2.62 $0.13 $1.03 $1.04 $0.01 
Diluted earnings per share:
Net income per share of common stock$0.82 $0.75 $(0.07)$2.45 $2.59 $0.14 $1.01 $1.02 $0.01 
Consolidated Statements of Comprehensive Income
(Thousands)
202020192018
Selected ItemsAs Computed Under LIFOAs Reported Under FIFODifferencePreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Net income$16,942 $15,462 $(1,480)$50,660 $53,394 $2,734 $20,846 $21,044 $198 
Comprehensive income23,765 22,285 (1,480)63,432 66,166 2,734 65,549 65,747 198 
Consolidated Balance Sheets
(Thousands)
20202019
Selected ItemsAs Computed Under LIFOAs Reported Under FIFODifferencePreviously ReportedAs AdjustedAdjustment
Inventories, net$206,834 $250,778 $43,944 $190,390 $236,253 $45,863 
Prepaid and other current assets23,470 20,896 (2,574)21,839 21,736 (103)
Deferred income taxes (liability)8,081 15,864 7,783 2,410 13,104 10,694 
Retained earnings597,471 631,058 33,587 589,888 624,954 35,066 
Consolidated Statements of Cash Flows
(Thousands)
202020192018
Selected ItemsAs Computed Under LIFOAs Reported Under FIFODifferencePreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Net income$16,942 $15,462 $(1,480)$50,660 $53,394 $2,734 $20,846 $21,044 $198 
Deferred income tax (benefit) expense(6,940)(9,850)(2,910)2,584 3,945 1,361 (1,318)(1,912)(594)
Decrease (increase) in inventory(3,207)(1,288)1,919 24,031 20,485 (3,546)4,234 3,978 (256)
Decrease (increase) in prepaid and other current assets2,475 2,471 1,418 869 (549)1,162 1,814 652 

As a result of the retrospective application of this change in accounting principle, the following financial statement line items within the unaudited interim 2020 and 2019 quarterly condensed consolidated financial statements were adjusted, as follows:

Quarterly Data (unaudited)
(Thousands except per share amounts)
2020
First QuarterSecond Quarter
Selected ItemsPreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Cost of sales$232,371 $233,376 $1,005 $223,378 $224,513 $1,135 
Gross margin45,575 44,570 (1,005)48,090 46,955 (1,135)
Operating (loss) profit(4,563)(5,568)(1,005)8,706 7,571 (1,135)
(Loss) Income before income taxes(3,865)(4,870)(1,005)8,298 7,163 (1,135)
Income tax (benefit) expense(762)(992)(230)1,620 1,360 (260)
Net (loss) income(3,103)(3,878)(775)6,678 5,803 (875)
Basic earnings per share:
Net (loss) income per share of common stock$(0.15)$(0.19)$(0.04)$0.33 $0.29 $(0.04)
Diluted earnings per share:
Net (loss) income per share of common stock$(0.15)$(0.19)$(0.04)$0.32 $0.28 $(0.04)
(Thousands except per share amounts)
2020
Third QuarterFourth Quarter
Selected ItemsPreviously ReportedAs AdjustedAdjustmentAs Computed Under LIFOAs ReportedDifference
Cost of sales$240,531 $241,860 $1,329 $285,442 $283,892 $(1,550)
Gross margin46,640 45,311 (1,329)54,247 55,797 1,550 
Operating (loss) profit713 (616)(1,329)5,278 6,828 1,550 
(Loss) Income before income taxes455 (874)(1,329)5,306 6,856 1,550 
Income tax (benefit) expense(6,041)(6,345)(304)(1,565)(1,210)355 
Net income6,496 5,471 (1,025)6,871 8,066 1,195 
Basic earnings per share:
Net income per share of common stock$0.32 $0.27 $(0.05)$0.34 $0.40 $0.06 
Diluted earnings per share:
Net income per share of common stock$0.32 $0.27 $(0.05)$0.33 $0.39 $0.06 
(Thousands except per share amounts)
2019
First QuarterSecond Quarter
Selected ItemsPreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Cost of sales$232,129 $231,835 $(294)$228,249 $225,846 $(2,403)
Gross margin69,312 69,606 294 69,594 71,997 2,403 
Operating profit21,387 21,681 294 22,750 25,153 2,403 
Income before income taxes20,676 20,970 294 19,138 21,541 2,403 
Income tax expense3,770 3,837 67 3,598 4,148 550 
Net income16,906 17,133 227 15,540 17,393 1,853 
Basic earnings per share:
Net income per share of common stock$0.83 $0.85 $0.02 $0.76 $0.85 $0.09 
Diluted earnings per share:
Net income per share of common stock$0.82 $0.83 $0.01 $0.75 $0.84 $0.09 

(Thousands except per share amounts)
2019
Third QuarterFourth Quarter
Selected ItemsPreviously ReportedAs AdjustedAdjustmentPreviously ReportedAs AdjustedAdjustment
Cost of sales$240,748 $239,374 $(1,374)$225,154 $225,679 $525 
Gross margin65,231 66,605 1,374 55,007 54,482 (525)
Operating profit6,289 7,663 1,374 16,574 16,049 (525)
Income before income taxes5,726 7,100 1,374 16,450 15,925 (525)
Income tax expense2,263 2,578 315 1,699 1,579 (120)
Net income3,463 4,522 1,059 14,751 14,346 (405)
Basic earnings per share:
Net income per share of common stock$0.17 $0.22 $0.05 $0.72 $0.70 $(0.02)
Diluted earnings per share:
Net income per share of common stock$0.17 $0.22 $0.05 $0.71 $0.69 $(0.02)
v3.20.4
Acquisition
12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Business Combination Acquisition
On July 17, 2020, the Company acquired 100% of the capital stock of Optics Balzers, an industry leader in thin film optical coatings. The purchase price for Optics Balzers was $136.1 million, including the assumption of $22.5 million of debt. The transaction was funded with cash on hand, including a portion of the $150.0 million borrowed under our revolving credit facility during the first half of 2020. This business operates within the Precision Optics segment, and the results of operations are included as of the date of acquisition. The combination of Materion and Optics Balzers creates a premier optical thin film coating solutions provider with a highly complementary geographic, product, and end market portfolio.

The preliminary purchase price allocation for the acquisition is as follows:

(Thousands)July 17, 2020
Assets:
Cash and cash equivalents$5,390 
Accounts receivable8,484 
Inventories10,715 
Prepaid and other current assets937 
Property, plant, and equipment 46,791 
Operating lease, right-of-use assets13,357 
Intangible assets49,300 
Goodwill70,639 
Total assets acquired$205,613 
Liabilities:
Short-term debt$600 
Accounts payable2,851 
Salaries and wages4,392 
Other liabilities and accrued items3,678 
Income taxes61 
Unearned revenue1,259 
Other long-term liabilities207 
Operating lease liabilities12,356 
Finance lease liabilities2,642 
Retirement and post-employment benefits6,586 
Unearned income1,835 
Long-term income taxes181 
Deferred income taxes10,934 
Long-term debt21,926 
Total liabilities assumed$69,508 
Net assets acquired$136,105 

Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The Company engaged specialists to assist in the valuation of property, plant, and equipment, intangible assets, and retirement and post-employment benefits. The estimates in the purchase price allocation are based on available information and will be revised during the measurement period, not to exceed 12 months, as additional information becomes available on tax-related items, and as additional analysis is performed. Such revisions are not expected to have a material impact on the Company's results of operations and financial position. No material measurement period adjustments have been recorded since the acquisition date.

The Company's consolidated financial statements include the results of operations of Optics Balzers from the acquisition date through December 31, 2020. The amount of Net sales and operating results attributable to the acquisition during this period were not material.
Acquisition-related transaction and integration costs totaled $6.5 million in 2020. These costs are included in selling, general, and administrative expense in the Consolidated Statements of Income.

As part of the acquisition, the Company recorded approximately $70.6 million of goodwill in its Precision Optics segment. Goodwill was calculated as the excess of the purchase price over the estimated fair values of the tangible net assets and intangible assets acquired and primarily attributable to the synergies expected to arise after the acquisition dates. The goodwill is not expected to be deductible for U.S. tax purposes.

The following table reports the intangible assets by asset category as of the closing date:
(Thousands)Value at AcquisitionWeighted Average Life
Customer relationships$40,141 18 years
Technology4,059 5 years
Licenses and other5,100 5 years
Total$49,300 
v3.20.4
Segment Reporting and Geographic Information
12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting and Geographic Information Segment Reporting and Geographic Information
Certain amounts below have been adjusted to reflect the retrospective application of the Company's change in inventory accounting method, as described in Note A.
The Company has the following operating segments: Performance Alloys and Composites, Advanced Materials, Precision Optics, and Other. The Company’s operating 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. The segments are determined based on several factors, including the availability of discrete financial information and the Company’s organizational and management structure.
Performance Alloys and Composites provides advanced engineered solutions comprised of beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes.
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 Optics 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.
Financial information for reportable segments was as follows:
(Thousands)Performance
Alloys and
Composites
Advanced MaterialsPrecision OpticsOtherTotal
2020
Net sales$394,195 $670,867 $111,212 $ $1,176,274 
Intersegment sales6 35,912   35,918 
Operating profit (loss)13,597 22,120 (4,382)(23,120)8,215 
Depreciation, depletion, and amortization25,782 8,061 6,564 1,977 42,384 
Expenditures for long-lived assets53,841 9,003 908 3,522 67,274 
Total Assets477,892 251,637 268,004 60,327 1,057,860 
2019
Net sales$500,201 $573,763 $111,460 $— $1,185,424 
Intersegment sales38 70,047 — — 70,085 
Operating profit (loss)73,815 25,124 (3,550)(24,843)70,546 
Depreciation, depletion, and amortization24,437 8,955 5,695 2,029 41,116 
Expenditures for long-lived assets15,520 7,572 1,045 2,391 26,528 
Total Assets442,885 214,961 78,981 161,603 898,430 
2018
Net sales$500,590 $586,643 $120,582 $— $1,207,815 
Intersegment sales37 50,460 — — 50,497 
Operating profit (loss)60,008 16,732 10,707 (25,695)61,752 
Depreciation, depletion, and amortization17,434 8,575 7,066 2,449 35,524 
Expenditures for long-lived assets15,396 15,523 1,983 1,358 34,260 
Total Assets453,345 206,393 90,537 93,035 843,310 
Intersegment sales are eliminated in consolidation.
The primary measure of evaluating segment performance is operating profit. From an assets perspective, segments are evaluated based upon a return on invested capital metric, which includes inventory, accounts receivable, and property, plant, and equipment.
A reconciliation of total segment operating profit to total consolidated income before income taxes is as follows:
(Thousands)202020192018
Total operating profit for reportable segments8,215 70,546 61,752 
Other non-operating (income) expense - net(3,939)3,431 42,683 
Interest expense - net3,879 1,579 2,471 
Income before income taxes$8,275 $65,536 $16,598 
Other geographic information includes the following:
(Thousands)202020192018
Net sales
United States$641,727 $743,345 $726,881 
Asia329,968 256,114 270,672 
Europe189,281 169,132 186,081 
All other15,298 16,833 24,181 
Total$1,176,274 $1,185,424 $1,207,815 
Property, plant, and equipment, net by country deployed
United States$223,340 $194,596 $215,395 
All other86,346 37,680 35,623 
Total$309,686 $232,276 $251,018 
International sales include sales from international operations and direct exports from our U.S. operations. No individual country, other than the United States, or customer accounted for 10% or more of the Company’s net sales for the years presented.
The following table disaggregates revenue for each segment by end market for 2020 and 2019:
 (Thousands)Performance Alloys and CompositesAdvanced MaterialsPrecision OpticsOtherTotal
2020
End Market
Semiconductor$4,626 $526,553 $456 $— $531,635 
Industrial90,884 38,052 18,096 — 147,032 
Aerospace and Defense67,173 6,241 19,539 — 92,953 
Consumer Electronics47,983 479 21,566 — 70,028 
Automotive66,489 6,262 3,532 — 76,283 
Energy20,587 75,768 — — 96,355 
Telecom and Data Center44,313 2,183 — — 46,496 
Other52,140 15,329 48,023 — 115,492 
    Total$394,195 $670,867 $111,212 $— $1,176,274 
2019
End Market
Semiconductor$5,353 $432,658 $711 $— $438,722 
Industrial106,334 29,917 14,253 — 150,504 
Aerospace and Defense109,717 5,647 20,731 — 136,095 
Consumer Electronics72,360 1,254 18,201 — 91,815 
Automotive69,057 8,179 969 — 78,205 
Energy41,101 74,613 — — 115,714 
Telecom and Data Center61,344 2,981 — — 64,325 
Other34,935 18,514 56,595 — 110,044 
    Total$500,201 $573,763 $111,460 $— $1,185,424 
v3.20.4
Revenue Recognition
12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer Revenue RecognitionNet 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.
Shipping and Handling Costs: The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill its promise to transfer the associated products. Accordingly, customer payments for shipping and handling costs are recorded as a component of net sales, and related costs are recorded as a component of cost of sales.
Taxes Collected from Customers and Remitted to Governmental Authorities: Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority.
Product Warranty: Substantially all of the Company’s customer contracts contain a warranty that provides assurance that the purchased product will function as expected and in accordance with certain specifications. The warranty is intended to safeguard the customer against existing defects and does not provide any incremental service to the customer.
Transaction Price Allocated to Future Performance Obligations: ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at December 31, 2020. Remaining performance obligations include non-cancelable 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 December 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $10.2 million.
Contract Costs: The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs primarily relate to sales commissions, which are included in selling, general, and administrative expenses.
Contract Balances: The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:
(Thousands)December 31, 2020December 31, 2019$ change% change
Accounts receivable, trade
$156,821 $141,168 $15,653 11 %
Unbilled receivables
8,832 13,583 (4,751)(35)%
Unearned revenue
7,713 3,380 4,333 128 %
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 2020.
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 $3.2 million of the December 31, 2019 unearned amounts as revenue during 2020.
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.
v3.20.4
Restructuring
12 Months Ended
Dec. 31, 2020
Restructuring and Related Activities [Abstract]  
Restructuring RestructuringDuring 2020, the Company committed to a plan to sell its Large Area Coatings (LAC) business (a reporting unit within the Precision Optics segment) and determined that it met the criteria to be classified as held for sale. The Company recorded a goodwill impairment charge of $9.1 million in the first quarter of 2020 to write-off the remaining balance of goodwill for the LAC reporting unit. In addition, the Company estimated the fair value of the disposal group as a whole, less costs to sell, and compared the fair value to the remaining carrying value. Based on this review, the Company recorded an additional $1.4 million asset impairment loss. During the third quarter of 2020, the Company concluded that it intended to close its LAC business and, as a result, only a portion of the fixed assets of the LAC business are classified as held for sale. At December 31, 2020, fixed assets totaling $0.2 million were classified as held for sale and reflected within Prepaid and other current assets in the Consolidated Balance Sheet.
Costs associated with the closure of the LAC business totaled $1.7 million in 2020 and included $0.7 million of severance associated with approximately 20 employees and $1.0 million of facility and other related costs.
Remaining severance payments of $0.6 million and facility costs of $1.0 million related to these initiatives are reflected within Salaries and wages and Other liabilities and accrued items, respectively, in the Consolidated Balance Sheet. The Company expects to incur additional costs related to these initiatives of approximately $0.2 million in the first quarter of 2021.
In addition, in 2020, the Company completed additional cost reduction actions in order to align costs with commensurate business levels in its Precision Optics segment. These actions were accomplished through elimination of vacant positions, consolidation of roles, and staff reductions. Costs associated with these actions totaled $0.4 million and included severance associated with approximately 28 employees and other related costs, all of which was paid during 2020.
Also, in 2020, the Company initiated a restructuring plan in its PAC segment to close its Warren, Michigan and Fremont, California locations. Costs associated with the plan totaled $8.8 million in 2020 and included $2.1 million of severance associated with approximately 63 employees, and $5.3 million of facility and other related costs.
Remaining severance payments of $0.5 million and facility costs of $0.5 million related to these initiatives are reflected within Salaries and wages and Other liabilities and accrued items in the Consolidated Balance Sheet as of December 31, 2020. The Company does not expect to incur any additional costs associated with these initiatives.
In 2019, the Company initiated a restructuring plan in its LAC business to reduce headcount, idle certain machinery and equipment, and exit a facility in Windsor, Connecticut. Costs associated with this plan also included severance and related costs for 19 employees, all of which was paid out by the end of 2020.
In addition, in 2019, the Company completed cost reduction actions in order to align costs with commensurate business levels. These actions were accomplished through elimination of vacant positions, consolidation of roles, and staff reduction. Costs associated with these actions were in the Other segment and included severance associated with seven employees and other related costs. All severance payments were paid by the end of 2020.
Costs associated with cost reduction actions in 2018 were in the Advanced Materials segment and included severance associated with approximately forty employees and other related costs. Remaining severance payments amount to approximately $0.3 million as of December 31, 2020.
These costs are presented in the Company's segment results as follows:
(Thousands)202020192018
Performance Alloys and Composites$8,763 $— $— 
Advanced Materials — 5,599 
Precision Optics2,052 328 — 
Other422 457 — 
Total$11,237 $785 $5,599