UNITED STATES	
SECURITIES AND EXCHANGE COMMISSION	
Washington, D.C. 20549	

			
FORM 8-K

CURRENT REPORT	

			

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934	
					
Date of Report (Date of earliest event reported) October 22, 2020

MATERION CORPORATION
															
(Exact name of registrant as specified in its charter)	

			
Ohio 001-15885 34-1919973
									
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)	
6070 Parkland Blvd., Mayfield Hts., Ohio 44124
									
(Address of principal executive offices)		(Zip Code)	
Registrant's telephone number, including area code (216) 486-4200

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
									
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Common Stock, no par value MTRN New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§204.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

	

Item 2.02 Results of Operations and Financial Condition.

On October 22, 2020, Materion Corporation issued a press release announcing its results for the third quarter of 2020. The press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

Exhibits.
									
Exhibit Number		Description of Exhibit	
99.1		Materion Corporation press release, dated October 22, 2020	
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
									
		Materion Corporation	
			
October 22, 2020	By:	/s/ Stephen Shamrock	
		Stephen Shamrock	
		Interim Chief Financial Officer	

			
NEWS RELEASE	

MAYFIELD HEIGHTS, Ohio – October 22, 2020 - Materion Corporation (NYSE: MTRN) today reported third quarter 2020 financial results and provided an update on key strategic initiatives.

•Net sales were $287.2 million compared to $271.5 million in the second quarter; value-added sales increased 4% sequentially to $167.5 million

•Net income of $0.32 per share, diluted, consistent with the second quarter; adjusted earnings of $0.55 per share, up 12% vs. the second quarter

•Transformative acquisition of Optics Balzers completed to create a global industry leader in optical thin film coating solutions; integration activities progressing as planned

•Significant new customer opportunity for precision clad engineered strip product remains on schedule
“The health and safety of our people remains top priority during these challenging times, and we continue to follow all recommended guidelines and take the precautions necessary to protect our people,” stated Jugal Vijayvargiya, President and Chief Executive Officer.

Mr. Vijayvargiya continued, “Despite the ongoing challenges amid the COVID-19 pandemic, we delivered sequential earnings growth and continued to execute on our significant growth opportunities. We completed the acquisition of Optics Balzers and integration is proceeding as planned. The significant precision clad engineered strip product opportunity which we previously announced continues to progress and will be a meaningful driver of organic growth. To date, we have received $45.1 million of prepayments from the customer, and we remain on the schedule previously communicated.”

THIRD QUARTER 2020 RESULTS

Net sales for the third quarter of 2020 were $287.2 million, compared to $306.0 million in the prior year third quarter. Third quarter value-added sales of $167.5 million were up 4% from the second quarter of 2020 and down 11% versus the prior year third quarter. On a sequential basis, sales from Optics Balzers and stronger performance in the semiconductor end market were partially offset by end markets significantly impacted by the COVID-19 pandemic, including aerospace and industrial, and lower raw material hydroxide sales.

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Operating profit for the third quarter was $0.7 million, and net income was $6.5 million, or $0.32 per diluted share, compared to operating profit of $8.7 million and net income of $6.7 million, or $0.32 per share, in the second quarter. Adjusted earnings before interest and tax expense were $15.4 million in the third quarter, an increase of $1.5 million versus the second quarter. Adjusted net income was $11.3 million, or $0.55 per diluted share, an increase of 12% compared to $0.49 per share in the second quarter.

Adjusted earnings in the third quarter excluded special items for mine development ($7.3 million), merger and acquisition costs ($5.5 million), and other items ($0.8 million). We expanded an existing pit in production for the first time, and as such, mine development costs were treated as period costs in the third quarter despite the fact that the costs will benefit future periods when the related ore is extracted and sold. Adjusted net income in the third quarter also included tax special items of $5.8 million of expense, primarily related to the acquisition of Optics Balzers and tax law changes.

OUTLOOK

We continue to experience significant levels of uncertainty regarding future demand in our end markets due to the COVID-19 pandemic. Based on current demand levels and assuming our factories remain operational, we expect adjusted earnings per diluted share in the fourth quarter to be slightly better than the third quarter.

ADJUSTED EARNINGS GUIDANCE

It is not possible for the Company to identify the amount or significance of future adjustments associated with potential insurance and litigation claims, legacy environmental costs, acquisition and integration costs, certain income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance for the full year to a comparable GAAP range. However, items excluded from the Company's adjusted earnings guidance include the historical adjustments noted in Attachments 4 and 5 to this press release.

DIVIDEND ANNOUNCEMENT

Today the Company announced the declaration of its fourth quarter dividend of $0.115 per share payable on November 30, 2020 to shareholders of record on November 5, 2020.

CONFERENCE CALL

Materion Corporation will host an investor conference call with analysts at 9:00 a.m. Eastern Time, October 22, 2020. The conference call will be available via webcast through the Company’s website at www.materion.com or through www.InvestorCalendar.com. By phone, please dial (877) 407-0778. Callers outside the U.S. can dial (201) 689-8565. A replay of the call will be available until November 5, 2020 by dialing (877) 481-4010 or (919) 882-2331; please reference replay ID number 57377. The call will also be archived on the Company’s website.

2

FORWARD-LOOKING STATEMENTS

Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition, and liquidity; the global economy, including the impact of tariffs and trade agreements; the impact of any U.S. Federal Government shutdowns and sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success in identifying acquisition candidates and in acquiring and integrating such businesses, including the integration of Optics Balzers; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions, including, without limitation, the acquisition of Optics Balzers being accretive in the expected timeframe or at all; our success in implementing our strategic plans and the timely and successful completion and start-up of any capital projects; other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal financing fees, tax rates, exchange rates, interest rates, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, credit availability, and the impact of the Company’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; our ability to successfully complete the disposition of our LAC business; the disruptions on operations from, and other effects of, catastrophic and other extraordinary events including the COVID-19 pandemic; and the risk factors set forth in Part 1, Item 1A of our 2019 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the second quarter 2020.

Materion Corporation is headquartered in Mayfield Heights, Ohio. The Company, through its wholly owned subsidiaries, supplies highly engineered advanced enabling materials to global markets. Products include precious and non-precious specialty metals, inorganic chemicals and powders, specialty coatings, specialty engineered beryllium alloys, beryllium and beryllium composites, and engineered clad and plated metal systems.

Investor Contact: Media Contact:
Stephen F. Shamrock John G. McCloskey
(216) 383-4010 (216) 383-6835
stephen.shamrock@materion.com john.mccloskey@materion.com
https://materion.com
Mayfield Hts-g
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Attachment 1
Materion Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)

	Third Quarter Ended		Nine Months Ended	
(In thousands except per share amounts)	September 25, 2020		September 27, 2019		September 25, 2020		September 27, 2019	
Net sales	$	287,171 			$	305,979 			$	836,585 			$	905,263 		
Cost of sales	240,531 			240,748 			696,280 			701,126 		
Gross margin	46,640 			65,231 			140,305 			204,137 		
Selling, general, and administrative expense	35,696 			35,812 			99,292 			115,767 		
Research and development expense	5,417 			5,262 			14,104 			13,064 		
Goodwill impairment charges	— 			11,560 			9,053 			11,560 		
Asset impairment charges	— 			2,581 			1,713 			2,581 		
Restructuring expense	2,593 			785 			7,144 			785 		
Other — net	2,221 			2,942 			4,143 			9,954 		
Operating profit	713 			6,289 			4,856 			50,426 		
Other non-operating (income) expense—net	(1,076)			127 			(2,871)			3,484 		
Interest expense — net	1,334 			436 			2,839 			1,402 		
Income before income taxes	455 			5,726 			4,888 			45,540 		
Income tax (benefit) expense	(6,041)			2,263 			(5,183)			9,631 		
Net income	$	6,496 			$	3,463 			$	10,071 			$	35,909 		
Basic earnings per share:								
Net income per share of common stock	$	0.32 			$	0.17 			$	0.50 			$	1.76 		
Diluted earnings per share:								
Net income per share of common stock	$	0.32 			$	0.17 			$	0.49 			$	1.74 		
Weighted-average number of shares of common stock outstanding:								
Basic	20,325 			20,401 			20,342 			20,351 		
Diluted	20,592 			20,677 			20,595 			20,645 		

4

Attachment 2
Materion Corporation and Subsidiaries
Consolidated Balance Sheets
															
		(Unaudited)			
(Thousands)		September 25, 2020		December 31, 2019	
Assets					
Current assets					
Cash and cash equivalents		$	117,754 			$	125,007 		
Accounts receivable, net		150,454 			154,751 		
Inventories, net		211,700 			190,390 		
Prepaid and other current assets		24,515 			21,839 		
Total current assets		504,423 			491,987 		
Deferred income taxes		5,156 			1,666 		
Property, plant, and equipment		987,902 			916,965 		
Less allowances for depreciation, depletion, and amortization		(693,223)			(684,689)		
Property, plant, and equipment—net		294,679 			232,276 		
Operating lease, right-of-use assets		62,235 			23,413 		
Intangible assets		54,449 			6,380 		
Other assets		20,754 			17,937 		
Goodwill		143,118 			79,011 		
Total Assets		$	1,084,814 			$	852,670 		
Liabilities and Shareholders’ Equity					
Current liabilities					
Short-term debt		$	122,216 			$	868 		
Accounts payable		56,524 			43,206 		
Salaries and wages		24,853 			41,167 		
Other liabilities and accrued items		42,238 			32,477 		
Income taxes		1,435 			1,342 		
Unearned revenue		4,360 			3,380 		
Total current liabilities		251,626 			122,440 		
Other long-term liabilities		10,057 			11,560 		
Operating lease liabilities		56,891 			18,091 		
Finance lease liabilities		20,540 			17,424 		
Retirement and post-employment benefits		40,208 			32,466 		
Unearned income		72,632 			32,891 		
Long-term income taxes		3,365 			3,451 		
Deferred income taxes		11,340 			2,410 		
Long-term debt		6,374 			1,260 		
Shareholders’ equity		611,781 			610,677 		
Total Liabilities and Shareholders’ Equity		$	1,084,814 			$	852,670 		

5

Attachment 3
Materion Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
															
		Nine Months Ended	
(Thousands)		September 25, 2020		September 27, 2019	
Cash flows from operating activities:					
Net income		$	10,071 			$	35,909 		
Adjustments to reconcile net income to net cash provided by (used in) operating activities:					
Depreciation, depletion, and amortization		32,042 			31,955 		
Amortization of deferred financing costs in interest expense		547 			720 		
Stock-based compensation expense (non-cash)		3,989 			5,230 		
Deferred income tax (benefit) expense		(5,187)			5,725 		
Net pension curtailments and settlements		94 			3,296 		
Impairment charges		10,766 			14,141 		
Changes in assets and liabilities, net of acquired assets and liabilities:					
Decrease (increase) in accounts receivable		13,899 			(36,146)		
Decrease (increase) in inventory		(9,883)			22,089 		
Decrease (increase) in prepaid and other current assets		(686)			(416)		
Increase (decrease) in accounts payable and accrued expenses		(9,759)			(14,114)		
Increase (decrease) in unearned revenue		(298)			(728)		
Increase (decrease) in interest and taxes payable		143 			(1,499)		
Increase (decrease) in unearned income due to customer prepayments		40,385 			— 		
Domestic pension plan contributions		— 			(4,500)		
Other-net		(6,679)			(2,126)		
Net cash provided by operating activities		79,444 			59,536 		
Cash flows from investing activities:					
Payments for acquisition, net of cash acquired		(130,715)			— 		
Payments for purchase of property, plant, and equipment		(46,285)			(18,193)		
Payments for mine development		— 			(1,903)		
Proceeds from settlement of currency exchange contract		3,249 			— 		
Proceeds from sale of property, plant, and equipment		35 			17 		
Net cash used in investing activities		(173,716)			(20,079)		
Cash flows from financing activities:					
Short-term debt under revolving credit agreement, net		120,000 			— 		
Repayment of long-term debt		(16,357)			(599)		
Principal payments under finance lease obligations		(1,440)			(894)		
Cash dividends paid		(6,920)			(6,612)		
Repurchase of common stock		(6,766)			(199)		
Payments of withholding taxes for stock-based compensation awards		(2,212)			(4,832)		
Deferred financing costs		— 			(2,018)		
Net cash provided by (used in) financing activities		86,305 			(15,154)		
Effects of exchange rate changes		714 			(422)		
Net change in cash and cash equivalents		(7,253)			23,881 		
Cash and cash equivalents at beginning of period		125,007 			70,645 		
Cash and cash equivalents at end of period		$	117,754 			$	94,526 		
    
6

Attachment 4
Materion Corporation and Subsidiaries
Reconciliation of Non-GAAP Measure - Value-added Sales, Operating Profit, and EBIT
(Unaudited)
																														
	Third Quarter Ended		Second Quarter Ended		Nine Months Ended	
(Millions)	September 25, 2020		September 27, 2019		June 26, 2020		September 25, 2020		September 27, 2019	
Net Sales										
Performance Alloys and Composites	$	91.2 			$	130.7 			$	101.6 			$	291.9 			$	393.1 		
Advanced Materials	165.6 			147.7 			150.1 			475.9 			424.9 		
Precision Coatings	30.4 			27.6 			19.8 			68.8 			87.3 		
Other	— 			— 			— 			— 			— 		
 Total	$	287.2 			$	306.0 			$	271.5 			$	836.6 			$	905.3 		
										
 Less: Pass-through Metal Cost										
Performance Alloys and Composites	$	9.3 			$	18.7 			$	11.8 			$	36.5 			$	56.3 		
Advanced Materials	108.0 			92.1 			95.4 			304.4 			253.5 		
Precision Coatings	2.1 			5.2 			2.0 			5.7 			19.2 		
Other	0.3 			1.4 			0.7 			2.2 			5.1 		
 Total	$	119.7 			$	117.4 			$	109.9 			$	348.8 			$	334.1 		
										
 Value-added Sales (non-GAAP)										
Performance Alloys and Composites	$	81.9 			$	112.0 			$	89.8 			$	255.4 			$	336.8 		
Advanced Materials	57.6 			55.6 			54.7 			171.5 			171.4 		
Precision Coatings	28.3 			22.4 			17.8 			63.1 			68.1 		
Other	(0.3)			(1.4)			(0.7)			(2.2)			(5.1)		
 Total	$	167.5 			$	188.6 			$	161.6 			$	487.8 			$	571.2 		
										
Gross Margin										
Performance Alloys and Composites	$	17.5 			$	38.2 			$	25.4 			$	64.9 			$	119.0 		
Advanced Materials	18.8 			18.7 			16.1 			52.5 			60.9 		
Precision Coatings	10.2 			9.4 			7.1 			23.3 			29.0 		
Other	0.1 			(1.1)			(0.5)			(0.4)			(4.8)		
 Total	$	46.6 			$	65.2 			$	48.1 			$	140.3 			$	204.1 		
										
Operating Profit (Loss)										
Performance Alloys and Composites	$	0.7 			$	18.8 			$	8.2 			$	13.8 			$	57.1 		
Advanced Materials	5.9 			6.2 			4.4 			15.1 			19.4 		
Precision Coatings	1.4 			(11.2)			2.1 			(6.1)			(5.2)		
Other	(7.3)			(7.5)			(6.0)			(17.9)			(20.9)		
 Total	$	0.7 			$	6.3 			$	8.7 			$	4.9 			$	50.4 		
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	Third Quarter Ended		Second Quarter Ended		Nine Months Ended	
(Millions)	September 25, 2020		September 27, 2019		June 26, 2020		September 25, 2020		September 27, 2019	
Special Items										
Performance Alloys and Composites	$	9.9 			$	— 			$	4.2 			$	17.7 			$	— 		
Advanced Materials	0.1 			— 			0.6 			0.8 			— 		
Precision Coatings	1.9 			14.5 			0.3 			13.0 			14.5 		
Other	1.7 			0.4 			(0.8)			1.0 			0.4 		
 Total	$	13.6 			$	14.9 			$	4.3 			$	32.5 			$	14.9 		
										
Operating Profit (Loss) Excluding Special Items										
Performance Alloys and Composites	$	10.6 			$	18.8 			$	12.4 			$	31.5 			$	57.1 		
Advanced Materials	6.0 			6.2 			5.0 			15.9 			19.4 		
Precision Coatings	3.3 			3.3 			2.4 			6.9 			9.3 		
Other	(5.6)			(7.1)			(6.8)			(16.9)			(20.5)		
 Total	$	14.3 			$	21.2 			$	13.0 			$	37.4 			$	65.3 		
										
Non-Operating (Income) Expense										
Performance Alloys and Composites	$	0.2 			$	0.2 			$	0.1 			$	0.5 			$	0.5 		
Advanced Materials	— 			— 			— 			— 			— 		
Precision Coatings	(0.2)			— 			— 			(0.2)			— 		
Other	(1.1)			(0.1)			(1.0)			(3.2)			3.0 		
 Total	$	(1.1)			$	0.1 			$	(0.9)			$	(2.9)			$	3.5 		
										
Non-Operating (Income) Expense Special Items									
Other	$	— 			$	— 			$	— 			$	— 			$	3.3 		
Total	$	— 			$	— 			$	— 			$	— 			$	3.3 		
										
EBIT Excluding Special Items										
Performance Alloys and Composites	$	10.4 			$	18.6 			$	12.3 			$	31.0 			$	56.6 		
Advanced Materials	6.0 			6.2 			5.0 			15.9 			19.4 		
Precision Coatings	3.5 			3.3 			2.4 			7.1 			9.3 		
Other	(4.5)			(7.0)			(5.8)			(13.7)			(20.2)		
 Total	$	15.4 			$	21.1 			$	13.9 			$	40.3 			$	65.1 		
The cost of gold, silver, platinum, palladium, and copper is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. Internally, management also reviews net sales on a value-added basis. Value-added sales is a non-GAAP financial measure that deducts the value of the pass-through metals sold from net sales. Value-added sales allows management to assess the impact of differences in net sales between periods or segments and analyze the resulting margins and profitability without the distortion of the movements in pass-through metal prices. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. The Company sells other metals and materials that are not considered direct pass throughs, and these costs are not deducted from net sales to calculate value-added sales.

The Company’s pricing policy is to pass the cost of these metals on to customers in order to mitigate the impact of price volatility on the Company’s results from operations. Value-added information is being presented since changes in metal prices may not directly impact profitability. It is the Company’s intent to allow users of the financial statements to review sales with and without the impact of the pass-through metals.
8

Attachment 5
Materion Corporation and Subsidiaries
Reconciliation of Non-GAAP Measures - Profitability
(Unaudited)
																														
	Third Quarter Ended		Second Quarter Ended		Nine Months Ended	
(Millions except per share amounts)	September 25, 2020		September 27, 2019		June 26, 2020		September 25, 2020		September 27, 2019	
GAAP as Reported										
Net sales	$	287.2 			$	306.0 			$	271.5 			$	836.6 			$	905.3 		
Operating profit	0.7 			6.3 			8.7 			4.9 			50.4 		
Non-operating (income) expense	(1.1)			0.1 			(0.9)			(2.9)			3.5 		
Net income	6.5 			3.5 			6.7 			10.1 			35.9 		
Shares outstanding - Diluted	20,592 			20,667 			20,554 			20,595 			20,645 		
EPS - Diluted	$	0.32 			$	0.17 			$	0.32 			$	0.49 			$	1.74 		
										
Operating Profit Special Items										
Impairment charges	$	— 			$	14.1 			$	— 			$	10.8 			$	14.1 		
Mine development costs	7.3 			— 			— 			7.3 			— 		
Forfeiture of non-cash stock-based compensation	(1.5)			— 			— 			(1.5)			— 		
Non-cash inventory adjustment	— 			— 			— 			1.3 			— 		
Cost reduction initiatives	2.6 			0.8 			2.4 			7.2 			0.8 		
COVID-19 related costs	0.8 			— 			2.7 			3.7 			— 		
Merger and acquisition costs	5.5 			— 			1.4 			7.0 			— 		
Foreign currency hedge gain	(1.1)			— 			(2.2)			(3.3)			— 		
Total Operating Profit Special Items	$	13.6 			$	14.9 			$	4.3 			$	32.5 			$	14.9 		
Operating Profit Special Items - net of tax	$	10.6 			$	12.3 			$	3.3 			$	25.1 			$	12.3 		
Non-Operating Expense Special Items	$	— 			$	— 			$	— 			$	— 			$	3.3 		
Non-Operating Expense Special Items - net of tax	$	— 			$	— 			$	— 			$	— 			$	2.6 		
Tax Special Items	$	(5.8)			$	1.0 			$	— 			$	(5.1)			$	1.0 		
Special items per diluted share	$	0.23 			$	0.64 			$	0.17 			$	0.97 			$	0.77 		
										
Non-GAAP Measures - Adjusted Profitability										
Value-added (VA) sales	$	167.5 			$	188.6 			$	161.6 			$	487.8 			$	571.2 		
Operating profit	14.3 			21.2 			13.0 			37.4 			65.3 		
Operating profit % of VA	8.5 	%		11.2 	%		8.0 	%		7.7 	%		11.4 	%	
EBIT	15.4 			21.1 			13.9 			40.3 			65.1 		
EBIT % of VA	9.1 	%		11.2 	%		8.6 	%		8.3 	%		11.4 	%	
Net income	11.3 			16.8 			10.0 			30.1 			51.8 		
EPS - Diluted	$	0.55 			$	0.81 			$	0.49 			$	1.46 			$	2.51 		
In addition to presenting financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release contains financial measures, including operating profit, segment operating profit, earnings before interest and taxes (EBIT), net income, and earnings per share, on a non-GAAP basis. As detailed in the above reconciliation and Attachment 4, we have adjusted the results for certain special items such as non-cash impairment charges, mine development costs, forfeiture of certain non-cash stock-based compensation, non-cash inventory adjustments, cost reduction initiatives (i.e., severance), COVID-19 related costs, merger and acquisition costs, foreign currency hedge gains, and certain discrete income tax items from the applicable GAAP financial measure. Internally, management reviews the results of operations without the impact of these costs in order to assess the profitability from ongoing activities. We are providing this information because we believe it will assist investors in analyzing our financial results and, when viewed in conjunction with the GAAP results, provide a more comprehensive understanding of the factors and trends affecting our operations.
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Attachment 6
Materion Corporation and Subsidiaries
Value-added sales by Market
(Unaudited)
																																				
	Third Quarter Ended				Nine Months Ended			
(Millions)	September 25, 2020		September 27, 2019		 % Change		September 25, 2020		September 27, 2019		% Change	
Materion Corporation												
Semiconductor	$	41.3 			$	34.3 			20.4 	%		$	118.5 			$	108.4 			9.3 	%	
Industrial	30.3 			34.9 			(13.2)	%		90.2 			104.9 			(14.0)	%	
Aerospace and Defense	20.0 			32.1 			(37.7)	%		61.2 			92.2 			(33.6)	%	
Consumer electronics	15.8 			16.8 			(6.0)	%		39.9 			50.1 			(20.4)	%	
Automotive	13.1 			14.2 			(7.7)	%		41.0 			46.1 			(11.1)	%	
Energy	11.9 			18.4 			(35.3)	%		37.0 			55.9 			(33.8)	%	
Telecom and Data Center	9.0 			13.5 			(33.3)	%		28.7 			44.6 			(35.7)	%	
Other	26.1 			24.4 			7.0 	%		71.3 			69.0 			3.3 	%	
    Total	$	167.5 			$	188.6 			(11.2)	%		$	487.8 			$	571.2 			(14.6)	%	
Performance Alloys and Composites												
Semiconductor	$	0.9 			$	1.2 			(25.0)	%		$	3.1 			$	4.3 			(27.9)	%	
Industrial	20.1 			25.9 			(22.4)	%		64.0 			75.9 			(15.7)	%	
Aerospace and Defense	14.3		26.0		(45.0)	%		44.7		75.3		(40.6)	%	
Consumer electronics	9.2		11.1		(17.1)	%		26.2		36.4		(28.0)	%	
Automotive	10.7		12.1		(11.6)	%		35.6		40.3		(11.7)	%	
Energy	5.5		9.5		(42.1)	%		15.2		29.3		(48.1)	%	
Telecom and Data Center	8.9		13.1		(32.1)	%		28.2		44.1		(36.1)	%	
Other	12.3		13.1		(6.1)	%		38.4		31.2		23.1 	%	
    Total	$	81.9 			$	112.0 			(26.9)	%		$	255.4 			$	336.8 			(24.2)	%	
Advanced Materials												
Semiconductor	$	40.3 			$	33.1 			21.8 	%		$	115.1 			$	103.9 			10.8 	%	
Industrial	5.2 			5.7 			(8.8)	%		15.5 			17.7 			(12.4)	%	
Aerospace and Defense	0.8		0.7		14.3 	%		2.4		1.9		26.3 	%	
Consumer electronics	0.1		0.1		— 	%		0.2		0.3		(33.3)	%	
Automotive	1.4		1.9		(26.3)	%		4.3		4.9		(12.2)	%	
Energy	6.4		9.0		(28.9)	%		21.8		26.5		(17.7)	%	
Telecom and Data Center	0.1		0.3		(66.7)	%		0.5		0.5		— 	%	
Other	3.3		4.8		(31.3)	%		11.7		15.7		(25.5)	%	
    Total	$	57.6 			$	55.6 			3.6 	%		$	171.5 			$	171.4 			0.1 	%	
Precision Coatings												
Semiconductor	$	0.2 			$	— 			— 	%		$	0.4 			$	0.2 			100.0 	%	
Industrial	5.0 			3.4 			47.1 	%		10.6 			11.4 			(7.0)	%	
Aerospace and Defense	4.8 			5.3 			(9.4)	%		14.0 			14.9 			(6.0)	%	
Consumer electronics	6.6 			5.6 			17.9 	%		13.5 			13.5 			— 	%	
Automotive	1.1 			0.3 			266.7 	%		1.1 			0.9 			22.2 	%	
Energy	— 			— 			— 	%		— 			— 			— 	%	
Telecom and Data Center	— 			— 			— 	%		— 			— 			— 	%	
Other	10.6 			7.8 			35.9 	%		23.5 			27.2 			(13.6)	%	
    Total	$	28.3 			$	22.4 			26.3 	%		$	63.1 			$	68.1 			(7.3)	%	
												
Eliminations	$	(0.3)			$	(1.4)					$	(2.2)			$	(5.1)				
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