MATERION CORP, 10-Q filed on 7/26/2018
Quarterly Report
v3.10.0.1
Document and Entity Information
6 Months Ended
Jun. 29, 2018
shares
Document and Entity Information [Abstract]  
Entity Registrant Name MATERION Corp
Entity Central Index Key 0001104657
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Document Type 10-Q
Document Period End Date Jun. 29, 2018
Document Fiscal Year Focus 2018
Document Fiscal Period Focus Q2
Trading Symbol MTRN
Amendment Flag false
Entity Common Stock, Shares Outstanding 20,235,856
v3.10.0.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Income Statement [Abstract]        
Net sales $ 309,085 $ 295,842 $ 612,552 $ 536,511
Cost of sales 247,247 241,064 492,434 438,577
Gross margin 61,838 54,778 120,118 97,934
Selling, general, and administrative expense 38,473 37,928 76,935 71,449
Research and development expense 3,860 3,544 7,503 6,674
Other net 4,313 3,204 7,237 6,022
Operating profit 15,192 10,102 28,443 13,789
Interest expense—net 667 695 1,397 1,188
Other non-operating expense - net 437 368 879 635
Income before income taxes 14,088 9,039 26,167 11,966
Income tax expense 2,944 1,726 4,459 1,603
Net income $ 11,144 $ 7,313 $ 21,708 $ 10,363
Basic earnings per share:        
Net income per share of common stock (in dollars per share) $ 0.55 $ 0.37 $ 1.08 $ 0.52
Diluted earnings per share:        
Net income per share of common stock (in dollars per share) 0.54 0.36 1.05 0.51
Cash dividends per share (in dollars per share) $ 0.105 $ 0.1 $ 0.205 $ 0.195
Weighted-average number of shares of common stock outstanding:        
Basic (in shares) 20,221 20,012 20,178 19,991
Diluted (in shares) 20,593 20,347 20,583 20,348
v3.10.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Statement of Comprehensive Income [Abstract]        
Net income $ 11,144 $ 7,313 $ 21,708 $ 10,363
Other comprehensive income (loss):        
Foreign currency translation adjustment (944) 275 169 1,378
Derivative and hedging activity, net of tax 1,763 (174) 1,088 (635)
Pension and post-employment benefit adjustment, net of tax 1,296 759 2,574 1,516
Net current period other comprehensive income (loss) after tax 2,115 860 3,831 2,259
Comprehensive income $ 13,259 $ 8,173 $ 25,539 $ 12,622
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 29, 2018
Dec. 31, 2017
Current assets    
Cash and cash equivalents $ 42,895 $ 41,844
Accounts receivable 135,699 124,014
Inventories 209,204 220,352
Prepaid and other current assets 19,617 24,733
Total current assets 407,415 410,943
Long-term deferred income taxes 16,588 17,047
Property, plant, and equipment 894,306 891,789
Less allowances for depreciation, depletion, and amortization (637,730) (636,211)
Property, plant, and equipment—net 256,576 255,578
Intangible assets—net 7,899 9,847
Other assets 6,991 6,992
Goodwill 90,697 90,677
Total Assets 786,166 791,084
Current liabilities    
Short-term debt 798 777
Accounts payable 46,240 49,059
Salaries and wages 32,299 42,694
Other liabilities and accrued items 27,182 28,044
Income taxes 2,994 1,084
Unearned revenue 7,576 5,451
Total current liabilities 117,089 127,109
Other long-term liabilities 14,203 14,895
Capital lease obligations 15,896 16,072
Retirement and post-employment benefits 80,944 93,225
Unearned income 34,734 36,905
Long-term income taxes 4,896 4,857
Long-term deferred income taxes 210 213
Long-term debt 2,453 2,827
Serial preferred stock 0 0
Common stock 230,763 223,484
Retained earnings 553,523 536,116
Common stock in treasury (173,825) (166,128)
Accumulated other comprehensive loss (99,106) (102,937)
Other equity transactions 4,386 4,446
Total shareholders' equity 515,741 494,981
Total Liabilities and Shareholders’ Equity $ 786,166 $ 791,084
v3.10.0.1
Consolidated Balance Sheets Consolidated Balance Sheets (Parenthetical) - $ / shares
$ / shares in Thousands
Jun. 29, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Serial preferred stock, par value (in dollars per share) $ 0 $ 0
Serial preferred stock, shares authorized 5,000,000 5,000,000
Serial preferred stock, shares issued 0 0
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized 60,000,000 60,000,000
Common stock, shares, issued 27,148,000 27,148,000
Treasury stock, shares 6,912,000 7,042,000
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net income $ 21,708 $ 10,363
Adjustments to reconcile net income to net cash provided from (used in) operating activities:    
Depreciation, depletion, and amortization 18,349 20,725
Amortization of deferred financing costs in interest expense 514 440
Non-cash compensation expense 5,412 5,816
Deferred income tax expense 429 658
Changes in assets and liabilities net of acquired assets and liabilities:    
Decrease (increase) in accounts receivable (12,060) (30,882)
Decrease (increase) in inventories 10,428 (6,498)
Decrease (increase) in prepaid and other current assets 4,928 (9,267)
Increase (decrease) in accounts payable and accrued expenses (14,189) 15,519
Increase (Decrease) in Unearned Revenue 2,132 1,685
Increase (decrease) in interest and taxes payable 2,084 (1,115)
Domestic pension plan contributions (13,000) (4,000)
Other-net 2,569 (3,141)
Net cash used in operating activities 29,304 303
Cash flows from investing activities:    
Payments for purchase of property, plant, and equipment (17,153) (11,252)
Payments for mine development (3,425) (509)
Payments for acquisition 0 (16,504)
Proceeds from sale of property, plant, and equipment 27 27
Net cash used in investing activities (20,551) (28,238)
Cash flows from financing activities:    
Proceeds from issuance of short-term debt 0 2,387
Proceeds from issuance of long-term debt 0 45,000
Repayment of long-term debt (383) (25,362)
Principal payments under capital lease obligations (425) (383)
Cash dividends paid (4,137) (3,899)
Deferred financing costs 0 (300)
Repurchase of common stock 0 (1,086)
Payments of withholding taxes for stock-based compensation awards (2,765) (2,302)
Net cash (used in) provided by financing activities (7,710) 14,055
Effects of exchange rate changes 8 913
Net change in cash and cash equivalents 1,051 (12,967)
Cash and cash equivalents at beginning of period 41,844 31,464
Cash and cash equivalents at end of period $ 42,895 $ 18,497
v3.10.0.1
Accounting Policies
6 Months Ended
Jun. 29, 2018
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 2018 consolidated financial statement presentation.

These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2017 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 March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires an employer to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by pertinent employees during the period. This ASU requires non-service cost components of net benefit cost to be presented in a caption below the Company's Operating profit and allows only the service cost component to be eligible for capitalization. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted. The amendments were applied retrospectively for the presentation of service cost and other components of net benefit cost on the income statement and prospectively for the capitalization of service cost and net periodic postretirement benefits in assets. The application of ASU 2017-07 resulted in an increase to Operating profit of $0.4 million and $0.6 million for the second quarter and first six months of 2017, respectively, which was offset by a corresponding increase in Other non-operating expense, net. The adoption of this ASU did not have a material effect on the Company's financial condition or liquidity. The Company utilized this ASU's practical expedient, which permits the Company to use the amounts disclosed in its Pensions and Other Post-employment Benefits note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), which supersedes previous revenue recognition guidance. The Company adopted the new standard using the modified retrospective method as of January 1, 2018. Prior periods were not retrospectively adjusted. This approach was applied to all contracts not completed as of January 1, 2018. The new standard primarily impacted the Company's timing of revenue recognition for certain contracts and subcontracts with the United States (U.S.) government that contain termination for convenience clauses, and due to the cumulative impact of adopting ASC 606, the Company recorded a reduction to beginning retained earnings of $0.4 million, net of tax as summarized below:
(Thousands)
 
December 31, 2017
 
Adjustments due to ASC 606
 
January 1, 2018
Assets
 


 
 
 


Unbilled receivables
 
$

 
$
2,658

 
$
2,658

Inventories
 
220,352

 
(2,059
)
 
218,293

 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
Other liabilities and accrued items
 
$
28,044

 
61

 
28,105

Deferred income taxes
 
213

 
113

 
326

Retained earnings
 
536,116

 
425

 
536,541



The adoption of the standard did not have a material impact to the Company's consolidated financial statements. Refer to Note B for additional disclosures relating to ASC 606.
New Pronouncements Issued: 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. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases, which eliminates the off-balance-sheet accounting for leases. The new guidance will require 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 will adopt this ASU on January 1, 2019. In preparation for the adoption, the Company, along with an outside consultant, has executed on its project plan to identify a complete lease population, analyze lease agreements, and evaluate technology solutions. Currently, this ASU is required to be applied on a modified retrospective basis. The FASB has proposed another transition method in addition to the existing requirements to transition to the new lease standard by recognizing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has not decided on its transition method to adopt this new guidance.
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.
v3.10.0.1
Revenue Recognition
6 Months Ended
Jun. 29, 2018
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.

Shipping and Handling Costs: The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, customer payments of 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 June 29, 2018. 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 29, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $36.0 million, of which $7.5 million will be recognized in 2018.
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)
 
June 29, 2018
 
January 1, 2018
 
$ change
 
% change
Accounts receivable, trade
 
$
128,450

 
$
122,393

 
$
6,057

 
5
%
Unbilled receivables
 
6,341

 
2,658

 
3,683

 
139
%
Unearned revenue
 
7,576

 
5,451

 
2,125

 
39
%


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 2018.

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.

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.
v3.10.0.1
Acquisitions
6 Months Ended
Jun. 29, 2018
Business Combinations [Abstract]  
Acquisition Disclosure
Acquisitions

On February 28, 2017, the Company acquired the target materials business of the Heraeus Group (HTB), of Hanau, Germany, for $16.5 million. This business manufactures precious and non-precious metal target materials for the architectural and automotive glass, electronic display, photovoltaic, and semiconductor markets at facilities in Germany, Taiwan, and the United States. This business operates within the Advanced Materials segment, and the results of operations are included as of the date of acquisition.
The final purchase price allocation for the acquisition is as follows:
(Thousands)
Amount
Assets:
 
Inventories
$
7,221

Prepaid and other current assets
2,270

Long-term deferred income taxes
14

Property, plant, and equipment
6,501

Intangible assets
3,649

Goodwill
3,574

Total assets acquired
$
23,229

 
 
Liabilities:
 
Other liabilities and accrued items
$
984

Other long-term liabilities
449

Retirement and post-employment benefits
5,292

Total liabilities assumed
$
6,725

 
 
Total purchase price
$
16,504



No material measurement period adjustments were recorded upon finalizing the purchase price allocation in the first quarter of 2018.
v3.10.0.1
Segment Reporting
6 Months Ended
Jun. 29, 2018
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 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

Intersegment sales 
 
3

 
11,400

 

 

 
11,403

Value-added sales
 
110,150

 
57,267

 
23,393

 
(908
)
 
189,902

Operating profit (loss)
 
12,309

 
5,572

 
2,233

 
(4,922
)
 
15,192

Second Quarter 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
108,541

 
$
157,044

 
$
30,257

 
$

 
$
295,842

Intersegment sales
 
4

 
13,247

 

 

 
13,251

Value-added sales
 
92,686

 
62,041

 
22,613

 
(1,241
)
 
176,099

Operating profit (loss)
 
5,548

 
8,670

 
2,314

 
(6,430
)
 
10,102

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552

Intersegment sales 
 
31

 
23,052

 

 

 
23,083

Value-added sales
 
210,449

 
115,550

 
47,034

 
(1,818
)
 
371,215

Operating profit (loss)
 
22,170

 
11,470

 
5,608

 
(10,805
)
 
28,443

First Six Months 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
201,094

 
$
271,780

 
$
63,637

 
$

 
$
536,511

Intersegment sales
 
59

 
29,694

 

 

 
29,753

Value-added sales
 
171,897

 
109,329

 
45,914

 
(2,060
)
 
325,080

Operating profit (loss)
 
5,737

 
15,117

 
4,532

 
(11,597
)
 
13,789



The following table disaggregates revenue for each segment by end market for the second quarter and first six months of 2018:

 (Thousands)
 
Performance Alloys and Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Consumer Electronics
 
$
26,469

 
$
88,230

 
$
5,035

 
$

 
$
119,734

Industrial Components
 
25,025

 
11,501

 
2,900

 

 
39,426

Energy
 
10,202

 
16,311

 
8

 

 
26,521

Automotive Electronics
 
19,879

 

 
469

 

 
20,348

Defense
 
14,932

 
3,353

 
4,887

 

 
23,172

Medical
 
1,816

 
4,712

 
14,455

 

 
20,983

Telecom Infrastructure
 
10,890

 
7,968

 

 

 
18,858

Other
 
20,552

 
18,249

 
1,242

 

 
40,043

    Total
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Consumer Electronics
 
$
51,827

 
$
170,280

 
$
9,314

 
$

 
$
231,421

Industrial Components
 
53,546

 
24,800

 
5,392

 

 
83,738

Energy
 
18,006

 
39,747

 
8

 

 
57,761

Automotive Electronics
 
38,849

 

 
691

 

 
39,540

Defense
 
21,554

 
7,838

 
9,202

 

 
38,594

Medical
 
3,559

 
9,121

 
33,525

 

 
46,205

Telecom Infrastructure
 
18,984

 
15,325

 
59

 

 
34,368

Other
 
41,676

 
36,758

 
2,491

 

 
80,925

    Total
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552


Intersegment sales are eliminated in consolidation.
v3.10.0.1
Other-net
6 Months Ended
Jun. 29, 2018
Other Income and Expenses [Abstract]  
Other-net
Other-net
Other-net expense for the second quarter and first six months of 2018 and 2017 is summarized as follows: 
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands)
 
2018
 
2017
 
2018
 
2017
Metal consignment fees
 
$
2,588

 
$
2,062

 
$
5,017

 
$
3,747

Amortization of intangible assets
 
561

 
1,232

 
1,334

 
2,277

Foreign currency exchange/translation (gain)
 
1,230

 
(336
)
 
1,219

 
(593
)
Net (gain) loss on disposal of fixed assets
 
(3
)
 
119

 
23

 
147

Other items
 
(63
)
 
127

 
(356
)
 
444

Total
 
$
4,313

 
$
3,204

 
$
7,237

 
$
6,022

v3.10.0.1
Income Taxes
6 Months Ended
Jun. 29, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. The TCJA includes a number of provisions, including: (1) the lowering of the U.S. corporate tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) the creation of the base erosion anti-abuse tax (BEAT, a new minimum tax); (4) a general elimination of the U.S. federal income taxes on dividends from foreign subsidiaries; (5) a new provision designed to tax global intangible low-taxed income (GILTI), which allows for the possibility of using foreign tax credits (FTCs) and a deduction of up to 50% to offset the income tax liability (subject to some limitations); (6) a new limitation on deductible interest expense; (7) the repeal of the domestic production activity deduction; and (8) limitations on the deductibility of certain executive compensation.

The Company recorded income tax expense of $2.9 million in the second quarter of 2018, an effective tax rate of 20.9% against income before income taxes, and income tax expense of $1.7 million in the second quarter of 2017, an effective tax rate of 19.1% against income before income taxes.

In the first six months of 2018, income tax expense of $4.5 million was calculated using an effective tax rate of 17.0%, while income tax expense of $1.6 million in the first six months of 2017 was calculated using an effective tax rate of 13.4%.

In the second quarter and first six months of 2018, income tax expense differed from the U.S. Federal statutory income tax rate of 21% primarily due to the impact of foreign losses in jurisdictions that will not result in tax benefits, percentage depletion, U.S. research and development credit, the new GILTI income inclusion, the new executive compensation limitations, and a discrete tax adjustment of $0.1 million. The Company does not expect to incur a new BEAT minimum tax or an interest expense limitation.

In the second quarter and first six months of 2017, income tax expense differed from the U.S Federal statutory income tax rate of 35% primarily due to the impact of percentage depletion, foreign rate differential, U.S. research and development credit, and a discrete tax benefit of $0.7 million related to officer compensation and the adoption of ASU 2016-09, Improvements to Employee Share-based Payment Accounting.

As disclosed in Note G (Income Taxes) in the Company's 2017 Annual Report on Form 10-K, the Company was able to reasonably estimate certain TCJA effects and, therefore, recorded provisional adjustments associated with the deemed repatriation transition tax and remeasurement of certain deferred tax asset and liabilities. As of the second quarter of 2018, the Company's accounting for the TCJA is incomplete and the previously disclosed provisional amounts (transition tax and remeasurement of deferred taxes) continue to be provisional.

The Company has not made any additional measurement-period adjustments related to the transition tax during 2018 because the calculation of the total post-1986 earnings and profits (E&P) for these foreign subsidiaries has not yet been completed. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets. The Company is continuing to gather additional information to complete its accounting for these items and expects to complete its accounting within the prescribed measurement period. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

The Company was able to reasonably estimate the remeasurement of certain deferred tax asset and liabilities at an initial provisional amount to be $5.0 million of additional income tax expense for the year ended December 31, 2017. The total adjustment to tax expense related to the remeasurement of certain deferred tax asset and liabilities that has been recorded to date is $4.4 million. However, the Company is continuing to gather additional information to more precisely compute the amount of the tax expense related to remeasurement. The accounting for this item is not yet complete because judgment is required with respect to the timing and deductibility of certain expenses in the Company’s income tax return.

Due to the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the TCJA and the application of the Accounting Standards Codification 740, Income Taxes. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the period cost method) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the deferred method). The Company's selection of an accounting policy related to the new GILTI tax rules will depend on a number of different aspects of the estimated long-term effects of this provision under the TCJA. Therefore, the Company has not recorded any potential deferred tax effects related to the GILTI in the financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI or use the period cost method. However, the Company has included an estimate of the 2018 current GILTI impact in the annual effective tax rate for 2018.
v3.10.0.1
Earnings Per Share
6 Months Ended
Jun. 29, 2018
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 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands, except per share amounts)
 
2018
 
2017
 
2018
 
2017
Numerator for basic and diluted EPS:
 
 
 
 
 
 
 
 
Net income
 
$
11,144

 
$
7,313

 
$
21,708

 
$
10,363

Denominator:
 
 
 
 
 
 
 
 
Denominator for basic EPS:
 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
20,221

 
20,012

 
20,178

 
19,991

Effect of dilutive securities:
 
 
 
 
 
 
 
 
Stock appreciation rights
 
166

 
125

 
185

 
152

Restricted stock units
 
75

 
102

 
85

 
102

Performance-based restricted stock units
 
131

 
108

 
135

 
103

Diluted potential common shares
 
372

 
335

 
405

 
357

Denominator for diluted EPS:
 

 

 
 
 
 
Adjusted weighted-average shares outstanding
 
20,593

 
20,347

 
20,583

 
20,348

Basic EPS
 
$
0.55

 
$
0.37

 
$
1.08

 
$
0.52

Diluted EPS
 
$
0.54

 
$
0.36

 
$
1.05

 
$
0.51



Securities totaling 65,112 and 349,068 for the quarters ended June 29, 2018 and June 30, 2017, respectively, and 65,112 and 382,426 for the six months ended June 29, 2018 and June 30, 2017, respectively, were excluded from the dilution calculation as their effect would have been anti-dilutive.
v3.10.0.1
Inventories
6 Months Ended
Jun. 29, 2018
Inventory Disclosure [Abstract]  
Inventories
Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
 
 
June 29,
 
December 31,
(Thousands)
 
2018
 
2017
Raw materials and supplies
 
$
40,550

 
$
42,958

Work in process
 
176,216

 
187,719

Finished goods
 
41,017

 
34,418

Subtotal
 
$
257,783

 
$
265,095

Less: LIFO reserve balance
 
48,579

 
44,743

Inventories
 
$
209,204

 
$
220,352


The liquidation of last in, first out (LIFO) inventory layers increased cost of sales by $0.1 million in both the second quarter and first six months of 2018. In both the second quarter and first six months of 2017, cost of sales was increased by $0.2 million.
v3.10.0.1
Pensions and Other Post-employment Benefits
6 Months Ended
Jun. 29, 2018
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 and first six months of 2018 and 2017 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 29,

June 30,

June 29,

June 30,
(Thousands)

2018

2017

2018

2017
Components of net periodic benefit cost (benefit)








Service cost

$
1,674


$
1,777


$
28


$
23

Interest cost

2,397


2,370


99


99

Expected return on plan assets

(3,697
)

(3,378
)




Amortization of prior service benefit

(30
)

(73
)

(374
)

(374
)
Amortization of net loss

1,959


1,611





Net periodic benefit cost (benefit)

$
2,303


$
2,307


$
(247
)

$
(252
)

 
 
Pension Benefits
 
Other Benefits
 
 
Six Months Ended
 
Six Months Ended
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands)
 
2018
 
2017
 
2018
 
2017
Components of net periodic benefit cost (benefit)
 
 
 
 
 
 
 
 
Service cost
 
$
3,348

 
$
3,496

 
$
56

 
$
46

Interest cost
 
4,794

 
4,726

 
198

 
198

Expected return on plan assets
 
(7,394
)
 
(6,743
)
 

 

Amortization of prior service benefit
 
(61
)
 
(194
)
 
(749
)
 
(748
)
Amortization of net loss
 
3,919

 
3,198

 

 

Net periodic benefit cost (benefit)
 
$
4,606

 
$
4,483

 
$
(495
)
 
$
(504
)


The Company made contributions to the domestic defined benefit pension plan of $13.0 million and $4.0 million in the first six months of 2018 and 2017, respectively.
Beginning in 2018, 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. Additionally, Pension Benefit Guaranty Corporation premiums are reported within expected return on plan assets.
v3.10.0.1
Accumulated Other Comprehensive Income
6 Months Ended
Jun. 29, 2018
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 and first six months of 2018 and 2017 are as follows:
 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2017
 
$
1,476

 
$
(100
)
 
$
1,376

 
$
(81,601
)
 
$
(4,557
)
 
$
(84,782
)
Other comprehensive income (loss) before reclassifications
 
(629
)
 
393

 
(236
)
 

 
275

 
39

Amounts reclassified from accumulated other comprehensive income
 
47

 
(88
)
 
(41
)
 
1,156

 

 
1,115

Net current period other comprehensive income (loss) before tax
 
(582
)
 
305

 
(277
)
 
1,156

 
275

 
1,154

Deferred taxes
 
(215
)
 
112

 
(103
)
 
397

 

 
294

Net current period other comprehensive income (loss) after tax
 
(367
)
 
193

 
(174
)
 
759

 
275

 
860

Balance at June 30, 2017
 
$
1,109

 
$
93

 
$
1,202

 
$
(80,842
)
 
$
(4,282
)
 
$
(83,922
)


 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
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 before tax
 
92

 
603

 
695

 
3,248

 
169

 
4,112

Deferred taxes
 
(531
)
 
138

 
(393
)
 
674

 

 
281

Net current period other comprehensive income 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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
$
1,837

 
$

 
$
1,837

 
$
(82,358
)
 
$
(5,660
)
 
$
(86,181
)
Other comprehensive income (loss) before reclassifications
 
(881
)
 
235

 
(646
)
 

 
1,378

 
732

Amounts reclassified from accumulated other comprehensive income
 
(214
)
 
(88
)
 
(302
)
 
2,309

 

 
2,007

Net current period other comprehensive income (loss) before tax
 
(1,095
)
 
147

 
(948
)
 
2,309

 
1,378

 
2,739

Deferred taxes
 
(367
)
 
54

 
(313
)
 
793

 

 
480

Net current period other comprehensive income (loss) after tax
 
(728
)
 
93

 
(635
)
 
1,516

 
1,378

 
2,259

Balance at June 30, 2017
 
$
1,109

 
$
93

 
$
1,202

 
$
(80,842
)
 
$
(4,282
)
 
$
(83,922
)


Reclassifications from accumulated other comprehensive income of gains and losses on foreign currency cash flow hedges are recorded in Other-net 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.
v3.10.0.1
Stock-based Compensation Expense
6 Months Ended
Jun. 29, 2018
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 $2.7 million and $5.2 million in the second quarter and first six months of 2018, respectively, compared to $2.4 million and $4.7 million in the same periods of 2017.
The Company granted 65,112 stock appreciation rights (SARs) to certain employees during the first six months of 2018. The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the six months ended June 29, 2018 were $50.35 and $15.73, 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
 
2.58
%
Dividend yield
 
0.8
%
Volatility
 
31.9
%
Expected term (in years)
 
5.5


The Company granted 59,222 stock-settled restricted stock units (RSUs) to certain employees and 14,728 stock-settled RSUs to non-employee directors during the first six months of 2018. 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 $50.35 and $51.60 for stock-settled RSUs granted to employees and non-employee directors, respectively, during the six months ended June 29, 2018. 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 2018. The weighted-average fair value of the stock-settled PRSUs was $50.35 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 29, 2018, unearned compensation cost related to the unvested portion of all stock-based awards was approximately $9.7 million, and is expected to be recognized over the remaining vesting period of the respective grants.
v3.10.0.1
Fair Value of Financial Instruments
6 Months Ended
Jun. 29, 2018
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 29, 2018 and December 31, 2017: 
 
 
 
 
 
 
 
 
 
(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)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation investments
 
$
2,420

 
$
2,310

 
$
2,420

 
$
2,310

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
817

 
254

 

 

 
817

 
254

 

 

Precious metal swaps
 
347

 
14

 

 

 
347

 
14

 

 

Total
 
$
3,584

 
$
2,578

 
$
2,420

 
$
2,310

 
$
1,164

 
$
268


$


$

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liability
 
$
2,420

 
$
2,310

 
$
2,420

 
$
2,310

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
23

 
201

 

 

 
23

 
201

 

 

Precious metal swaps
 

 
269

 

 

 

 
269

 

 

Total
 
$
2,443

 
$
2,780

 
$
2,420

 
$
2,310

 
$
23

 
$
470

 
$

 
$


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 29, 2018 and December 31, 2017.
v3.10.0.1
Derivative Instruments and Hedging Activity
6 Months Ended
Jun. 29, 2018
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 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.
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. The ineffective portion of a derivative’s fair value, if any, is recognized in earnings immediately. 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 and balance sheet classification as of June 29, 2018 and December 31, 2017:
 
 
June 29, 2018
 
December 31, 2017
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Foreign currency forward contracts - euro
 
 
 
 
 
 
 
 
Prepaid expenses
 
$
25,377

 
$
559

 
$
13,981

 
$
127

Other liabilities and accrued items
 

 

 

 

Total
 
$
25,377

 
$
559

 
$
13,981

 
$
127


These outstanding foreign currency derivatives were related to intercompany loans. Other-net included foreign currency gains relating to these derivatives of $1.6 million and $1.1 million during the second quarter and first six months of 2018, respectively, compared to foreign currency losses of $0.5 million and $0.6 million during the same periods in 2017, respectively.
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges and balance sheet classification as of June 29, 2018 and December 31, 2017:
 
 
June 29, 2018
 
December 31, 2017
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Prepaid expenses
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
$
847

 
$
29

 
$
5,673

 
$
91

Foreign currency forward contracts - euro
 
9,387

 
229

 
5,026

 
36

Precious metal swaps
 
8,548

 
322

 

 

Total
 
18,782

 
580

 
10,699

 
127

 
 
 
 
 
 
 
 
 
Other assets
 
 
 
 
 
 
 
 
Precious metal swaps
 
540

 
25

 
880

 
14

Total
 
540

 
25

 
880

 
14

 
 
 
 
 
 
 
 
 
Other liabilities and accrued items
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
2,158

 
(19
)
 

 

Foreign currency forward contracts - euro
 
819

 
(4
)
 
13,583

 
(201
)
Precious metal swaps
 
188

 

 
10,067

 
(255
)
Total
 
3,165

 
(23
)
 
23,650

 
(456
)
 
 
 
 
 
 
 
 
 
Other long-term liabilities
 
 
 
 
 
 
 
 
Precious metal swaps
 

 

 
789

 
(14
)
Total
 
$
22,487

 
$
582

 
$
36,018

 
$
(329
)

All of these contracts were designated and effective as cash flow hedges. No ineffectiveness expense was recorded in the second quarter and first six months of 2018 or 2017.
Changes in the fair value of outstanding cash flow hedges recorded in OCI for the first six months of 2018 and 2017 totaled an increase of $0.1 million and a decrease of $0.6 million, respectively. The Company expects to relieve substantially the entire balance in OCI as of June 29, 2018 to the Consolidated Statements of Income within the next 18-month period. Refer to Note J for additional OCI details.
v3.10.0.1
Contingencies
6 Months Ended
Jun. 29, 2018
Loss Contingency [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Contingencies
Legal Proceedings. For information regarding legal proceedings relating to Chronic Beryllium Disease Claims, refer to Note R ("Contingencies and Commitments") in the Company's 2017 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 $6.4 million at June 29, 2018 and $6.5 million at December 31, 2017. Environmental projects tend to be long-term, and the final actual remediation costs may differ from the amounts currently recorded.
v3.10.0.1
Basis of Accounting (Policies)
6 Months Ended
Jun. 29, 2018
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 2018 consolidated financial statement presentation.

These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2017 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year.
v3.10.0.1
New Pronouncements (Policies)
6 Months Ended
Jun. 29, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
New Accounting Pronouncements
New Pronouncements Adopted: In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires an employer to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by pertinent employees during the period. This ASU requires non-service cost components of net benefit cost to be presented in a caption below the Company's Operating profit and allows only the service cost component to be eligible for capitalization. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted. The amendments were applied retrospectively for the presentation of service cost and other components of net benefit cost on the income statement and prospectively for the capitalization of service cost and net periodic postretirement benefits in assets. The application of ASU 2017-07 resulted in an increase to Operating profit of $0.4 million and $0.6 million for the second quarter and first six months of 2017, respectively, which was offset by a corresponding increase in Other non-operating expense, net. The adoption of this ASU did not have a material effect on the Company's financial condition or liquidity. The Company utilized this ASU's practical expedient, which permits the Company to use the amounts disclosed in its Pensions and Other Post-employment Benefits note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), which supersedes previous revenue recognition guidance. The Company adopted the new standard using the modified retrospective method as of January 1, 2018. Prior periods were not retrospectively adjusted. This approach was applied to all contracts not completed as of January 1, 2018. The new standard primarily impacted the Company's timing of revenue recognition for certain contracts and subcontracts with the United States (U.S.) government that contain termination for convenience clauses, and due to the cumulative impact of adopting ASC 606, the Company recorded a reduction to beginning retained earnings of $0.4 million, net of tax as summarized below:
(Thousands)
 
December 31, 2017
 
Adjustments due to ASC 606
 
January 1, 2018
Assets
 


 
 
 


Unbilled receivables
 
$

 
$
2,658

 
$
2,658

Inventories
 
220,352

 
(2,059
)
 
218,293

 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
Other liabilities and accrued items
 
$
28,044

 
61

 
28,105

Deferred income taxes
 
213

 
113

 
326

Retained earnings
 
536,116

 
425

 
536,541



The adoption of the standard did not have a material impact to the Company's consolidated financial statements. Refer to Note B for additional disclosures relating to ASC 606.
New Pronouncements Issued: 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. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases, which eliminates the off-balance-sheet accounting for leases. The new guidance will require 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 will adopt this ASU on January 1, 2019. In preparation for the adoption, the Company, along with an outside consultant, has executed on its project plan to identify a complete lease population, analyze lease agreements, and evaluate technology solutions. Currently, this ASU is required to be applied on a modified retrospective basis. The FASB has proposed another transition method in addition to the existing requirements to transition to the new lease standard by recognizing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has not decided on its transition method to adopt this new guidance.
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.
v3.10.0.1
Revenue Recognition Accounting Policy (Policies)
6 Months Ended
Jun. 29, 2018
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.

Shipping and Handling Costs: The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, customer payments of 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 June 29, 2018. 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 29, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $36.0 million, of which $7.5 million will be recognized in 2018.
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.
v3.10.0.1
Accounting Policies (Tables)
3 Months Ended
Jun. 29, 2018
Accounting Policies [Abstract]  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]
The new standard primarily impacted the Company's timing of revenue recognition for certain contracts and subcontracts with the United States (U.S.) government that contain termination for convenience clauses, and due to the cumulative impact of adopting ASC 606, the Company recorded a reduction to beginning retained earnings of $0.4 million, net of tax as summarized below:
(Thousands)
 
December 31, 2017
 
Adjustments due to ASC 606
 
January 1, 2018
Assets
 


 
 
 


Unbilled receivables
 
$

 
$
2,658

 
$
2,658

Inventories
 
220,352

 
(2,059
)
 
218,293

 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
Other liabilities and accrued items
 
$
28,044

 
61

 
28,105

Deferred income taxes
 
213

 
113

 
326

Retained earnings
 
536,116

 
425

 
536,541

v3.10.0.1
Revenue Recognition (Tables)
6 Months Ended
Jun. 29, 2018
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 29, 2018
 
January 1, 2018
 
$ change
 
% change
Accounts receivable, trade
 
$
128,450

 
$
122,393

 
$
6,057

 
5
%
Unbilled receivables
 
6,341

 
2,658

 
3,683

 
139
%
Unearned revenue
 
7,576

 
5,451

 
2,125

 
39
%
v3.10.0.1
Acquisitions (Tables)
6 Months Ended
Jun. 29, 2018
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
The final purchase price allocation for the acquisition is as follows:
(Thousands)
Amount
Assets:
 
Inventories
$
7,221

Prepaid and other current assets
2,270

Long-term deferred income taxes
14

Property, plant, and equipment
6,501

Intangible assets
3,649

Goodwill
3,574

Total assets acquired
$
23,229

 
 
Liabilities:
 
Other liabilities and accrued items
$
984

Other long-term liabilities
449

Retirement and post-employment benefits
5,292

Total liabilities assumed
$
6,725

 
 
Total purchase price
$
16,504

v3.10.0.1
Segment Reporting (Tables)
6 Months Ended
Jun. 29, 2018
Segment Reporting [Abstract]  
Segment Reporting

(Thousands)
 
Performance
Alloys and
Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

Intersegment sales 
 
3

 
11,400

 

 

 
11,403

Value-added sales
 
110,150

 
57,267

 
23,393

 
(908
)
 
189,902

Operating profit (loss)
 
12,309

 
5,572

 
2,233

 
(4,922
)
 
15,192

Second Quarter 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
108,541

 
$
157,044

 
$
30,257

 
$

 
$
295,842

Intersegment sales
 
4

 
13,247

 

 

 
13,251

Value-added sales
 
92,686

 
62,041

 
22,613

 
(1,241
)
 
176,099

Operating profit (loss)
 
5,548

 
8,670

 
2,314

 
(6,430
)
 
10,102

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552

Intersegment sales 
 
31

 
23,052

 

 

 
23,083

Value-added sales
 
210,449

 
115,550

 
47,034

 
(1,818
)
 
371,215

Operating profit (loss)
 
22,170

 
11,470

 
5,608

 
(10,805
)
 
28,443

First Six Months 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
201,094

 
$
271,780

 
$
63,637

 
$

 
$
536,511

Intersegment sales
 
59

 
29,694

 

 

 
29,753

Value-added sales
 
171,897

 
109,329

 
45,914

 
(2,060
)
 
325,080

Operating profit (loss)
 
5,737

 
15,117

 
4,532

 
(11,597
)
 
13,789



Disaggregation of Revenue
The following table disaggregates revenue for each segment by end market for the second quarter and first six months of 2018:

 (Thousands)
 
Performance Alloys and Composites
 
Advanced Materials
 
Precision Coatings
 
Other
 
Total
Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Consumer Electronics
 
$
26,469

 
$
88,230

 
$
5,035

 
$

 
$
119,734

Industrial Components
 
25,025

 
11,501

 
2,900

 

 
39,426

Energy
 
10,202

 
16,311

 
8

 

 
26,521

Automotive Electronics
 
19,879

 

 
469

 

 
20,348

Defense
 
14,932

 
3,353

 
4,887

 

 
23,172

Medical
 
1,816

 
4,712

 
14,455

 

 
20,983

Telecom Infrastructure
 
10,890

 
7,968

 

 

 
18,858

Other
 
20,552

 
18,249

 
1,242

 

 
40,043

    Total
 
$
129,765

 
$
150,324

 
$
28,996

 
$

 
$
309,085

 
 
 
 
 
 
 
 
 
 
 
First Six Months 2018
 
 
 
 
 
 
 
 
 
 
End Market
 
 
 
 
 
 
 
 
 
 
Consumer Electronics
 
$
51,827

 
$
170,280

 
$
9,314

 
$

 
$
231,421

Industrial Components
 
53,546

 
24,800

 
5,392

 

 
83,738

Energy
 
18,006

 
39,747

 
8

 

 
57,761

Automotive Electronics
 
38,849

 

 
691

 

 
39,540

Defense
 
21,554

 
7,838

 
9,202

 

 
38,594

Medical
 
3,559

 
9,121

 
33,525

 

 
46,205

Telecom Infrastructure
 
18,984

 
15,325

 
59

 

 
34,368

Other
 
41,676

 
36,758

 
2,491

 

 
80,925

    Total
 
$
248,001

 
$
303,869

 
$
60,682

 
$

 
$
612,552

v3.10.0.1
Other-net (Tables)
6 Months Ended
Jun. 29, 2018
Other Income and Expenses [Abstract]  
Summary of Other-Net Expense
Other-net expense for the second quarter and first six months of 2018 and 2017 is summarized as follows: 
 
 
Second Quarter Ended
 
Six Months Ended
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands)
 
2018
 
2017
 
2018
 
2017
Metal consignment fees
 
$
2,588

 
$
2,062

 
$
5,017

 
$
3,747

Amortization of intangible assets
 
561

 
1,232

 
1,334

 
2,277

Foreign currency exchange/translation (gain)
 
1,230

 
(336
)
 
1,219

 
(593
)
Net (gain) loss on disposal of fixed assets
 
(3
)
 
119

 
23

 
147

Other items
 
(63
)
 
127

 
(356
)
 
444

Total
 
$
4,313

 
$
3,204

 
$
7,237

 
$
6,022

v3.10.0.1
Earnings Per Share (Tables)
6 Months Ended
Jun. 29, 2018
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 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands, except per share amounts)
 
2018
 
2017
 
2018
 
2017
Numerator for basic and diluted EPS:
 
 
 
 
 
 
 
 
Net income
 
$
11,144

 
$
7,313

 
$
21,708

 
$
10,363

Denominator:
 
 
 
 
 
 
 
 
Denominator for basic EPS:
 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
20,221

 
20,012

 
20,178

 
19,991

Effect of dilutive securities:
 
 
 
 
 
 
 
 
Stock appreciation rights
 
166

 
125

 
185

 
152

Restricted stock units
 
75

 
102

 
85

 
102

Performance-based restricted stock units
 
131

 
108

 
135

 
103

Diluted potential common shares
 
372

 
335

 
405

 
357

Denominator for diluted EPS:
 

 

 
 
 
 
Adjusted weighted-average shares outstanding
 
20,593

 
20,347

 
20,583

 
20,348

Basic EPS
 
$
0.55

 
$
0.37

 
$
1.08

 
$
0.52

Diluted EPS
 
$
0.54

 
$
0.36

 
$
1.05

 
$
0.51

v3.10.0.1
Inventories (Tables)
6 Months Ended
Jun. 29, 2018
Inventory Disclosure [Abstract]  
Summary of Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
 
 
June 29,
 
December 31,
(Thousands)
 
2018
 
2017
Raw materials and supplies
 
$
40,550

 
$
42,958

Work in process
 
176,216

 
187,719

Finished goods
 
41,017

 
34,418

Subtotal
 
$
257,783

 
$
265,095

Less: LIFO reserve balance
 
48,579

 
44,743

Inventories
 
$
209,204

 
$
220,352

v3.10.0.1
Pensions and Other Post-employment Benefits (Tables)
6 Months Ended
Jun. 29, 2018
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost
The following is a summary of the net periodic benefit cost for the second quarter and first six months of 2018 and 2017 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 29,

June 30,

June 29,

June 30,
(Thousands)

2018

2017

2018

2017
Components of net periodic benefit cost (benefit)








Service cost

$
1,674


$
1,777


$
28


$
23

Interest cost

2,397


2,370


99


99

Expected return on plan assets

(3,697
)

(3,378
)




Amortization of prior service benefit

(30
)

(73
)

(374
)

(374
)
Amortization of net loss

1,959


1,611





Net periodic benefit cost (benefit)

$
2,303


$
2,307


$
(247
)

$
(252
)

 
 
Pension Benefits
 
Other Benefits
 
 
Six Months Ended
 
Six Months Ended
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
(Thousands)
 
2018
 
2017
 
2018
 
2017
Components of net periodic benefit cost (benefit)
 
 
 
 
 
 
 
 
Service cost
 
$
3,348

 
$
3,496

 
$
56

 
$
46

Interest cost
 
4,794

 
4,726

 
198

 
198

Expected return on plan assets
 
(7,394
)
 
(6,743
)
 

 

Amortization of prior service benefit
 
(61
)
 
(194
)
 
(749
)
 
(748
)
Amortization of net loss
 
3,919

 
3,198

 

 

Net periodic benefit cost (benefit)
 
$
4,606

 
$
4,483

 
$
(495
)
 
$
(504
)
v3.10.0.1
Accumulated Other Comprehensive Income (Tables)
6 Months Ended
Jun. 29, 2018
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 and first six months of 2018 and 2017 are as follows:
 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2017
 
$
1,476

 
$
(100
)
 
$
1,376

 
$
(81,601
)
 
$
(4,557
)
 
$
(84,782
)
Other comprehensive income (loss) before reclassifications
 
(629
)
 
393

 
(236
)
 

 
275

 
39

Amounts reclassified from accumulated other comprehensive income
 
47

 
(88
)
 
(41
)
 
1,156

 

 
1,115

Net current period other comprehensive income (loss) before tax
 
(582
)
 
305

 
(277
)
 
1,156

 
275

 
1,154

Deferred taxes
 
(215
)
 
112

 
(103
)
 
397

 

 
294

Net current period other comprehensive income (loss) after tax
 
(367
)
 
193

 
(174
)
 
759

 
275

 
860

Balance at June 30, 2017
 
$
1,109

 
$
93

 
$
1,202

 
$
(80,842
)
 
$
(4,282
)
 
$
(83,922
)


 
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
 
 
(Thousands)
 
Foreign Currency
 
Precious Metals
 
Total
 
Pension and Post-Employment Benefits
 
Foreign Currency Translation
 
Total
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 before tax
 
92

 
603

 
695

 
3,248

 
169

 
4,112

Deferred taxes
 
(531
)
 
138

 
(393
)
 
674

 

 
281

Net current period other comprehensive income 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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
$
1,837

 
$

 
$
1,837

 
$
(82,358
)
 
$
(5,660
)
 
$
(86,181
)
Other comprehensive income (loss) before reclassifications
 
(881
)
 
235

 
(646
)
 

 
1,378

 
732

Amounts reclassified from accumulated other comprehensive income
 
(214
)
 
(88
)
 
(302
)
 
2,309

 

 
2,007

Net current period other comprehensive income (loss) before tax
 
(1,095
)
 
147

 
(948
)
 
2,309

 
1,378

 
2,739

Deferred taxes
 
(367
)
 
54

 
(313
)
 
793

 

 
480

Net current period other comprehensive income (loss) after tax
 
(728
)
 
93

 
(635
)
 
1,516

 
1,378

 
2,259

Balance at June 30, 2017
 
$
1,109

 
$
93

 
$
1,202

 
$
(80,842
)
 
$
(4,282
)
 
$
(83,922
)
v3.10.0.1
Stock-based Compensation Expense Tables (Tables)
6 Months Ended
Jun. 29, 2018
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
 
2.58
%
Dividend yield
 
0.8
%
Volatility
 
31.9
%
Expected term (in years)
 
5.5

v3.10.0.1
Fair Value of Financial Instruments (Tables)
6 Months Ended
Jun. 29, 2018
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 29, 2018 and December 31, 2017: 
 
 
 
 
 
 
 
 
 
(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)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation investments
 
$
2,420

 
$
2,310

 
$
2,420

 
$
2,310

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
817

 
254

 

 

 
817

 
254

 

 

Precious metal swaps
 
347

 
14

 

 

 
347

 
14

 

 

Total
 
$
3,584

 
$
2,578

 
$
2,420

 
$
2,310

 
$
1,164

 
$
268


$


$

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liability
 
$
2,420

 
$
2,310

 
$
2,420

 
$
2,310

 
$

 
$

 
$

 
$

Foreign currency forward contracts
 
23

 
201

 

 

 
23

 
201

 

 

Precious metal swaps
 

 
269

 

 

 

 
269

 

 

Total
 
$
2,443

 
$
2,780

 
$
2,420

 
$
2,310

 
$
23

 
$
470

 
$

 
$

v3.10.0.1
Derivative Instruments and Hedging Activity Tables (Tables)
6 Months Ended
Jun. 29, 2018
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 and balance sheet classification as of June 29, 2018 and December 31, 2017:
 
 
June 29, 2018
 
December 31, 2017
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Foreign currency forward contracts - euro
 
 
 
 
 
 
 
 
Prepaid expenses
 
$
25,377

 
$
559

 
$
13,981

 
$
127

Other liabilities and accrued items
 

 

 

 

Total
 
$
25,377

 
$
559

 
$
13,981

 
$
127

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges and balance sheet classification as of June 29, 2018 and December 31, 2017:
 
 
June 29, 2018
 
December 31, 2017
(Thousands)
 
Notional
Amount
 
Fair
Value
 
Notional
Amount
 
Fair
Value
Prepaid expenses
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
$
847

 
$
29

 
$
5,673

 
$
91

Foreign currency forward contracts - euro
 
9,387

 
229

 
5,026

 
36

Precious metal swaps
 
8,548

 
322

 

 

Total
 
18,782

 
580

 
10,699

 
127

 
 
 
 
 
 
 
 
 
Other assets
 
 
 
 
 
 
 
 
Precious metal swaps
 
540

 
25

 
880

 
14

Total
 
540

 
25

 
880

 
14

 
 
 
 
 
 
 
 
 
Other liabilities and accrued items
 
 
 
 
 
 
 
 
Foreign currency forward contracts - yen
 
2,158

 
(19
)
 

 

Foreign currency forward contracts - euro
 
819

 
(4
)
 
13,583

 
(201
)
Precious metal swaps
 
188

 

 
10,067

 
(255
)
Total
 
3,165

 
(23
)
 
23,650

 
(456
)
 
 
 
 
 
 
 
 
 
Other long-term liabilities
 
 
 
 
 
 
 
 
Precious metal swaps
 

 

 
789

 
(14
)
Total
 
$
22,487

 
$
582

 
$
36,018

 
$
(329
)
v3.10.0.1
New Prouncements Adopted (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jan. 01, 2018
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Other non-operating expense - net   $ 437 $ 368 $ 879 $ 635
Adjustments for New Accounting Pronouncement [Member]          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Cumulative Effect on Retained Earnings, Net of Tax $ 400        
v3.10.0.1
New Pronouncements Adopted (Details 1) - USD ($)
$ in Thousands
Jun. 29, 2018
Jan. 01, 2018
Dec. 31, 2017
Retained Earnings Adjustments [Line Items]      
Unbilled receivables   $ 2,658 $ 0
Inventories $ 209,204 218,293 220,352
Other liabilities and accrued items 27,182 28,105 28,044
Long-term deferred income taxes 210 326 213
Retained earnings $ 553,523 536,541 $ 536,116
Adjustments for New Accounting Pronouncement [Member]      
Retained Earnings Adjustments [Line Items]      
Unbilled receivables   2,658  
Inventories   (2,059)  
Other liabilities and accrued items   61  
Long-term deferred income taxes   113  
Retained earnings   $ 425  
v3.10.0.1
Revenue Recognition (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jan. 01, 2018
Capitalized Contract Cost [Line Items]      
Increase (Decrease) in Unearned Revenue $ 2,132 $ 1,685  
Trade Accounts Receivable      
Capitalized Contract Cost [Line Items]      
Accounts Receivable, Trade 128,450   $ 122,393
Change in Accounts Receivable, Trade $ 6,057    
Contract Asset Percent Change 5.00%    
Unbilled Receivables      
Capitalized Contract Cost [Line Items]      
Unbilled Contracts Receivable $ 6,341   2,658
Change in Unbilled Receivables $ 3,683    
Contract Asset Percent Change 139.00%    
UnearnedRevenue      
Capitalized Contract Cost [Line Items]      
Deferred Revenue $ 7,576   $ 5,451
Increase (Decrease) in Unearned Revenue $ 2,125    
Contract Liability Percent Change 39.00%    
v3.10.0.1
Revenue Recognition (Details 1)
$ in Millions
Jun. 29, 2018
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining Performance Obligation $ 36.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-06-29  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining Performance Obligation $ 7.5
v3.10.0.1
Acquisitions (Details)
$ in Thousands
Feb. 28, 2017
USD ($)
Business Acquisition [Line Items]  
Inventories $ 7,221
Prepaid and other current assets 2,270
Long-term deferred income taxes 14
Property, plant, and equipment 6,501
Intangible Assets 3,649
Goodwill 3,574
Total assets acquired 23,229
Other liabilities and accrued items 984
Other long-term liabilities 449
Retirement and post-employment benefits 5,292
Total liabilities assumed 6,725
Total purchase price $ 16,504
v3.10.0.1
Acquisitions Textual (Details)
$ in Thousands
Feb. 28, 2017
USD ($)
Business Combinations [Abstract]  
Total purchase price $ 16,504
v3.10.0.1
Segment Reporting (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Segment Reporting Information        
Net sales $ 309,085 $ 295,842 $ 612,552 $ 536,511
Intersegment sales 11,403 13,251 23,083 29,753
Value-added sales 189,902 176,099 371,215 325,080
Operating profit (loss) 15,192 10,102 28,443 13,789
Performance Alloys and Composites        
Segment Reporting Information        
Net sales 129,765 108,541 248,001 201,094
Intersegment sales 3 4 31 59
Value-added sales 110,150 92,686 210,449 171,897
Operating profit (loss) 12,309 5,548 22,170 5,737
Advanced Materials        
Segment Reporting Information        
Net sales 150,324 157,044 303,869 271,780
Intersegment sales 11,400 13,247 23,052 29,694
Value-added sales 57,267 62,041 115,550 109,329
Operating profit (loss) 5,572 8,670 11,470 15,117
Precision Coatings        
Segment Reporting Information        
Net sales 28,996 30,257 60,682 63,637
Intersegment sales 0 0 0 0
Value-added sales 23,393 22,613 47,034 45,914
Operating profit (loss) 2,233 2,314 5,608 4,532
Other        
Segment Reporting Information        
Net sales 0 0 0 0
Intersegment sales 0 0 0 0
Value-added sales (908) (1,241) (1,818) (2,060)
Operating profit (loss) $ (4,922) $ (6,430) $ (10,805) $ (11,597)
v3.10.0.1
Segment Reporting (Details 1) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Disaggregation of Revenue [Line Items]        
Net sales $ 309,085 $ 295,842 $ 612,552 $ 536,511
Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 119,734   231,421  
Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 39,426   83,738  
Energy        
Disaggregation of Revenue [Line Items]        
Net sales 26,521   57,761  
Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 20,348   39,540  
Defense        
Disaggregation of Revenue [Line Items]        
Net sales 23,172   38,594  
Medical        
Disaggregation of Revenue [Line Items]        
Net sales 20,983   46,205  
Telecom Infrastructure        
Disaggregation of Revenue [Line Items]        
Net sales 18,858   34,368  
Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 40,043   80,925  
Performance Alloys and Composites        
Disaggregation of Revenue [Line Items]        
Net sales 129,765 108,541 248,001 201,094
Performance Alloys and Composites | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 26,469   51,827  
Performance Alloys and Composites | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 25,025   53,546  
Performance Alloys and Composites | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 10,202   18,006  
Performance Alloys and Composites | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 19,879   38,849  
Performance Alloys and Composites | Defense        
Disaggregation of Revenue [Line Items]        
Net sales 14,932   21,554  
Performance Alloys and Composites | Medical        
Disaggregation of Revenue [Line Items]        
Net sales 1,816   3,559  
Performance Alloys and Composites | Telecom Infrastructure        
Disaggregation of Revenue [Line Items]        
Net sales 10,890   18,984  
Performance Alloys and Composites | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 20,552   41,676  
Advanced Materials        
Disaggregation of Revenue [Line Items]        
Net sales 150,324 157,044 303,869 271,780
Advanced Materials | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 88,230   170,280  
Advanced Materials | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 11,501   24,800  
Advanced Materials | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 16,311   39,747  
Advanced Materials | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Advanced Materials | Defense        
Disaggregation of Revenue [Line Items]        
Net sales 3,353   7,838  
Advanced Materials | Medical        
Disaggregation of Revenue [Line Items]        
Net sales 4,712   9,121  
Advanced Materials | Telecom Infrastructure        
Disaggregation of Revenue [Line Items]        
Net sales 7,968   15,325  
Advanced Materials | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 18,249   36,758  
Precision Coatings        
Disaggregation of Revenue [Line Items]        
Net sales 28,996 30,257 60,682 63,637
Precision Coatings | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 5,035   9,314  
Precision Coatings | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 2,900   5,392  
Precision Coatings | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 8   8  
Precision Coatings | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 469   691  
Precision Coatings | Defense        
Disaggregation of Revenue [Line Items]        
Net sales 4,887   9,202  
Precision Coatings | Medical        
Disaggregation of Revenue [Line Items]        
Net sales 14,455   33,525  
Precision Coatings | Telecom Infrastructure        
Disaggregation of Revenue [Line Items]        
Net sales 0   59  
Precision Coatings | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales 1,242   2,491  
Other        
Disaggregation of Revenue [Line Items]        
Net sales 0 $ 0 0 $ 0
Other | Consumer Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Industrial Components        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Energy        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Automotive Electronics        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Defense        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Medical        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Telecom Infrastructure        
Disaggregation of Revenue [Line Items]        
Net sales 0   0  
Other | Other End Market        
Disaggregation of Revenue [Line Items]        
Net sales $ 0   $ 0  
v3.10.0.1
Other-net (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Other Income and Expenses [Abstract]        
Metal consignment fees $ 2,588 $ 2,062 $ 5,017 $ 3,747
Amortization of Intangible Assets 561 1,232 1,334 2,277
Foreign currency exchange/translation (gain) 1,230 (336) 1,219 (593)
Net loss (gain) on disposal of fixed assets (3) 119 23 147
Other items (63) 127 (356) 444
Total $ 4,313 $ 3,204 $ 7,237 $ 6,022
v3.10.0.1
Income Taxes Details (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Dec. 31, 2017
Income Tax Disclosure [Abstract]          
U.S. Federal Statutory Rate 21.00% 35.00% 21.00% 35.00% 35.00%
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, GILTI Percentage     50.00%    
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount $ 100,000     $ (700,000)  
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit)     $ 4,400,000   $ 5,000,000
Income tax expense $ 2,944,000 $ 1,726,000 $ 4,459,000 $ 1,603,000  
Effective tax rate 20.90% 19.10% 17.00% 13.40%  
v3.10.0.1
Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Numerator For Basic And Diluted EPS:        
Net income $ 11,144 $ 7,313 $ 21,708 $ 10,363
Denominator for basic EPS:        
Weighted-average shares outstanding 20,221 20,012 20,178 19,991
Effect of dilutive securities:        
Diluted potential common shares (in shares) 372 335 405 357
Denominator for diluted EPS:        
Adjusted weighted-average shares outstanding 20,593 20,347 20,583 20,348
Basic EPS (in usd per share) $ 0.55 $ 0.37 $ 1.08 $ 0.52
Diluted EPS (in usd per share) $ 0.54 $ 0.36 $ 1.05 $ 0.51
Stock Appreciation Rights (SARs)        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 166 125 185 152
Restricted Stock Units (RSUs)        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 75 102 85 102
Performance Shares        
Effect of dilutive securities:        
Dilutive effect of share-based compensation (in shares) 131 108 135 103
v3.10.0.1
Earnings Per Share (Details 1) - shares
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Stock Appreciation Rights (SARs)        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Stock appreciation rights excluded from diluted EPS calculation 65,112 349,068 65,112 382,426
v3.10.0.1
Inventories (Detail) - USD ($)
$ in Thousands
Jun. 29, 2018
Jan. 01, 2018
Dec. 31, 2017
Principally average cost:      
Raw materials and supplies $ 40,550   $ 42,958
Work in process 176,216   187,719
Finished goods 41,017   34,418
Subtotal 257,783   265,095
Less: LIFO reserve balance 48,579   44,743
Inventories $ 209,204 $ 218,293 $ 220,352
v3.10.0.1
Inventories (Details 1) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Inventory Disclosure [Abstract]        
LIFO liquidation effect $ 0.1 $ 0.2 $ 0.1 $ 0.2
v3.10.0.1
Pensions and Other Post-employment Benefits (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Pension Benefits [Member]        
Components of net periodic benefit cost        
Service cost $ 1,674 $ 1,777 $ 3,348 $ 3,496
Interest cost 2,397 2,370 4,794 4,726
Expected return on plan assets (3,697) (3,378) (7,394) (6,743)
Amortization of prior service benefit (30) (73) (61) (194)
Amortization of net loss 1,959 1,611 3,919 3,198
Net periodic benefit cost (benefit) 2,303 2,307 4,606 4,483
Other Benefits [Member]        
Components of net periodic benefit cost        
Service cost 28 23 56 46
Interest cost 99 99 198 198
Expected return on plan assets 0 0 0 0
Amortization of prior service benefit (374) (374) (749) (748)
Amortization of net loss 0 0 0 0
Net periodic benefit cost (benefit) $ (247) $ (252) $ (495) $ (504)
v3.10.0.1
Pensions and Other Post-employment Benefits (Detail 1) - USD ($)
$ in Thousands
6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Other Pension Plan [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Employer Contribution $ 13,000 $ 4,000
v3.10.0.1
Accumulated Other Comprehensive Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Mar. 30, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss $ (99,106) $ (83,922) $ (99,106) $ (83,922) $ (101,221) $ (102,937) $ (84,782) $ (86,181)
Activity                
Other comprehensive income (loss) before reclassifications 562 39 286 732        
Amounts reclassified from accumulated other comprehensive income 1,687 1,115 3,826 2,007        
Net current period other comprehensive income (loss) before tax 2,249 1,154 4,112 2,739        
Deferred taxes on current period activity 134 294 281 480        
Net current period other comprehensive income (loss) after tax 2,115 860 3,831 2,259        
Pension and Post Employment Benefits [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (97,018) (80,842) (97,018) (80,842) (98,314) (99,592) (81,601) (82,358)
Activity                
Other comprehensive income (loss) before reclassifications 0 0 0 0        
Amounts reclassified from accumulated other comprehensive income 1,622 1,156 3,248 2,309        
Net current period other comprehensive income (loss) before tax 1,622 1,156 3,248 2,309        
Deferred taxes on current period activity 326 397 674 793        
Net current period other comprehensive income (loss) after tax 1,296 759 2,574 1,516        
Foreign Currency Translation [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss (3,939) (4,282) (3,939) (4,282) (2,995) (4,108) (4,557) (5,660)
Activity                
Other comprehensive income (loss) before reclassifications (944) 275 169 1,378        
Amounts reclassified from accumulated other comprehensive income 0 0 0 0        
Net current period other comprehensive income (loss) before tax (944) 275 169 1,378        
Deferred taxes on current period activity 0 0 0 0        
Net current period other comprehensive income (loss) after tax (944) 275 169 1,378        
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss 1,851 1,202 1,851 1,202 88 763 1,376 1,837
Activity                
Other comprehensive income (loss) before reclassifications 1,506 (236) 117 (646)        
Amounts reclassified from accumulated other comprehensive income 65 (41) 578 (302)        
Net current period other comprehensive income (loss) before tax 1,571 (277) 695 (948)        
Deferred taxes on current period activity (192) (103) (393) (313)        
Net current period other comprehensive income (loss) after tax 1,763 (174) 1,088 (635)        
Forward Contract | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss 1,582 1,109 1,582 1,109 326 959 1,476 1,837
Activity                
Other comprehensive income (loss) before reclassifications 871 (629) (327) (881)        
Amounts reclassified from accumulated other comprehensive income 42 47 419 (214)        
Net current period other comprehensive income (loss) before tax 913 (582) 92 (1,095)        
Deferred taxes on current period activity (343) (215) (531) (367)        
Net current period other comprehensive income (loss) after tax 1,256 (367) 623 (728)        
Precious Metal Contracts [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]                
Accumulated Other Comprehensive Income (Loss) [Rollward]                
Accumulated other comprehensive loss 269 93 269 93 $ (238) $ (196) $ (100) $ 0
Activity                
Other comprehensive income (loss) before reclassifications 635 393 444 235        
Amounts reclassified from accumulated other comprehensive income 23 (88) 159 (88)        
Net current period other comprehensive income (loss) before tax 658 305 603 147        
Deferred taxes on current period activity 151 112 138 54        
Net current period other comprehensive income (loss) after tax $ 507 $ 193 $ 465 $ 93        
v3.10.0.1
Stock-based Compensation Expense (Detail)
6 Months Ended
Jun. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Risk-free interest rate 2.58%
Dividend yield 0.80%
Volatility 31.90%
Expected term (in years) 5 years 6 months
v3.10.0.1
Stock-based Compensation Expense Textual (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 2.7 $ 2.4 $ 5.2 $ 4.7
Unearned Compensation $ 9.7   $ 9.7  
Stock Appreciation Rights (SARs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares granted in period     65,112  
Weighted average exercise price on SARs granted in period     $ 50.35  
Grant date fair value per unit (in usd per share)     15.73  
Performance Shares        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Grant date fair value per unit (in usd per share)     $ 50.35  
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     59,222  
Grant date fair value per unit (in usd per share)     $ 50.35  
Vesting period     3 years  
Director [Member] | Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares granted in period     14,728  
Grant date fair value per unit (in usd per share)     $ 51.60  
Vesting period     1 year  
v3.10.0.1
Fair Value of Financial Instruments (Detail) - Fair Value, Measurements, Recurring - USD ($)
$ in Thousands
Jun. 29, 2018
Dec. 31, 2017
Financial Assets    
Assets Fair Value Disclosure $ 3,584 $ 2,578
Financial Liabilities    
Liabilities Fair Value Disclosure 2,443 2,780
Deferred Compensation Investments Liabilities    
Financial Liabilities    
Liabilities Fair Value Disclosure 2,420 2,310
Foreign Currency Forward Contract    
Financial Liabilities    
Liabilities Fair Value Disclosure 23 201
Precious Metal Swaps    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 269
Fair Value, Inputs, Level 1    
Financial Assets    
Assets Fair Value Disclosure 2,420 2,310
Financial Liabilities    
Liabilities Fair Value Disclosure 2,420 2,310
Fair Value, Inputs, Level 1 | Deferred Compensation Investments Liabilities    
Financial Liabilities    
Liabilities Fair Value Disclosure 2,420 2,310
Fair Value, Inputs, Level 1 | Foreign Currency Forward Contract    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 1 | Precious Metal Swaps    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 2    
Financial Assets    
Assets Fair Value Disclosure 1,164 268
Financial Liabilities    
Liabilities Fair Value Disclosure 23 470
Fair Value, Inputs, Level 2 | Deferred Compensation Investments Liabilities    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 2 | Foreign Currency Forward Contract    
Financial Liabilities    
Liabilities Fair Value Disclosure 23 201
Fair Value, Inputs, Level 2 | Precious Metal Swaps    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 269
Fair Value, Inputs, Level 3    
Financial Assets    
Assets Fair Value Disclosure 0 0
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 3 | Deferred Compensation Investments Liabilities    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 3 | Foreign Currency Forward Contract    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Fair Value, Inputs, Level 3 | Precious Metal Swaps    
Financial Liabilities    
Liabilities Fair Value Disclosure 0 0
Deferred Compensation Investments Assets    
Financial Assets    
Assets Fair Value Disclosure 2,420 2,310
Deferred Compensation Investments Assets | Fair Value, Inputs, Level 1    
Financial Assets    
Assets Fair Value Disclosure 2,420 2,310
Deferred Compensation Investments Assets | Fair Value, Inputs, Level 2    
Financial Assets    
Assets Fair Value Disclosure 0 0
Deferred Compensation Investments Assets | Fair Value, Inputs, Level 3    
Financial Assets    
Assets Fair Value Disclosure 0 0
Foreign Currency Forward Contract    
Financial Assets    
Assets Fair Value Disclosure 817 254
Foreign Currency Forward Contract | Fair Value, Inputs, Level 1    
Financial Assets    
Assets Fair Value Disclosure 0 0
Foreign Currency Forward Contract | Fair Value, Inputs, Level 2    
Financial Assets    
Assets Fair Value Disclosure 817 254
Foreign Currency Forward Contract | Fair Value, Inputs, Level 3    
Financial Assets    
Assets Fair Value Disclosure 0 0
Precious Metal Swaps    
Financial Assets    
Assets Fair Value Disclosure 347 14
Precious Metal Swaps | Fair Value, Inputs, Level 1    
Financial Assets    
Assets Fair Value Disclosure 0 0
Precious Metal Swaps | Fair Value, Inputs, Level 2    
Financial Assets    
Assets Fair Value Disclosure 347 14
Precious Metal Swaps | Fair Value, Inputs, Level 3    
Financial Assets    
Assets Fair Value Disclosure $ 0 $ 0
v3.10.0.1
Derivative Instruments and Hedging Activity (Details) - Not Designated as Hedging Instrument [Member] - USD ($)
$ in Thousands
Jun. 29, 2018
Dec. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Notional Amount $ 25,377 $ 13,981
Derivative, Fair Value, Net 559 127
Euro Member Countries, Euro | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Forward [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative Asset, Notional Amount 25,377 13,981
Derivative Asset, Fair Value, Gross Asset 559 127
Euro Member Countries, Euro | Other Current Liabilities | Foreign Exchange Forward [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative Liability, Notional Amount 0 0
Derivative Liability, Fair Value, Gross Liability $ 0 $ 0
v3.10.0.1
Derivative Instruments and Hedging Activity (Details 1) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]        
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net $ 1.6 $ (0.5) $ 1.1 $ (0.6)
v3.10.0.1
Derivative Instruments and Hedging Activity (Details 2) - Designated as Hedging Instrument [Member] - USD ($)
$ in Thousands
Jun. 29, 2018
Dec. 31, 2017
Derivative [Line Items]    
Derivative, Notional Amount $ 22,487 $ 36,018
Derivative, Fair Value, Net 582 (329)
Prepaid Expenses and Other Current Assets [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 18,782 10,699
Derivative Asset, Fair Value, Gross Asset 580 127
Prepaid Expenses and Other Current Assets [Member] | Precious Metal Swaps    
Derivative [Line Items]    
Derivative Asset, Notional Amount 8,548 0
Derivative Asset, Fair Value, Gross Asset 322 0
Other Assets [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 540 880
Derivative Asset, Fair Value, Gross Asset 25 14
Other Assets [Member] | Precious Metal Swaps    
Derivative [Line Items]    
Derivative Asset, Notional Amount 540 880
Derivative Asset, Fair Value, Gross Asset 25 14
Other Current Liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 3,165 23,650
Derivative Liability, Fair Value, Gross Liability (23) (456)
Other Current Liabilities | Precious Metal Swaps    
Derivative [Line Items]    
Derivative Liability, Notional Amount 188 10,067
Derivative Liability, Fair Value, Gross Liability 0 (255)
Other Noncurrent Liabilities [Member] | Precious Metal Swaps    
Derivative [Line Items]    
Derivative Liability, Notional Amount 0 789
Derivative Liability, Fair Value, Gross Liability 0 (14)
Japan, Yen | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Forward [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 847 5,673
Derivative Asset, Fair Value, Gross Asset 29 91
Japan, Yen | Other Current Liabilities | Foreign Exchange Forward [Member]    
Derivative [Line Items]    
Derivative Liability, Notional Amount 2,158 0
Derivative Liability, Fair Value, Gross Liability (19) 0
Euro Member Countries, Euro | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Forward [Member]    
Derivative [Line Items]    
Derivative Asset, Notional Amount 9,387 5,026
Derivative Asset, Fair Value, Gross Asset 229 36
Euro Member Countries, Euro | Other Current Liabilities | Foreign Exchange Forward [Member]    
Derivative [Line Items]    
Derivative Liability, Notional Amount 819 13,583
Derivative Liability, Fair Value, Gross Liability $ (4) $ (201)
v3.10.0.1
Derivative Instruments and Hedging Activity (Details 3) - USD ($)
3 Months Ended 6 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]        
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net $ 0 $ 0 $ 0 $ 0
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax     $ 100,000 $ (600,000)
v3.10.0.1
Contingencies (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 29, 2018
Dec. 31, 2017
Loss Contingencies [Line Items]    
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 $ 6.4 $ 6.5