MATERION CORP, 10-Q filed on 4/28/2022
Quarterly Report
v3.22.1
Cover Page
 3 Months Ended
Apr. 01, 2022
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Apr. 01, 2022
Document Transition Report false
Entity File Number 001-15885
Entity Registrant Name MATERION CORPORATION
Entity Incorporation, State or Country Code OH
Entity Tax Identification Number 34-1919973
Entity Address, Address Line One 6070 Parkland Blvd
Entity Address, City or Town Mayfield Heights
Entity Address, State or Province OH
Entity Address, Postal Zip Code 44124
City Area Code 216
Local Phone Number 486-4200
Title of 12(b) Security Common Stock, no par value
Trading Symbol MTRN
Security Exchange Name NYSE
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Small Business false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding 20,511,415
Entity Central Index Key 0001104657
Document Fiscal Year Focus 2022
Document Fiscal Period Focus Q1
Amendment Flag false
Current Fiscal Year End Date --12-31
v3.22.1
Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Income Statement [Abstract]    
Net sales $ 449,045 $ 354,386
Cost of sales 373,754 287,590
Gross margin 75,291 66,796
Selling, general, and administrative expense 41,662 36,776
Research and development expense 7,074 6,206
Restructuring expense (income) 1,076 (378)
Other—net 5,873 4,474
Operating profit 19,606 19,718
Other non-operating income—net (1,169) (1,276)
Interest expense—net 3,735 761
Income before income taxes 17,040 20,233
Income tax expense 3,021 3,466
Net income $ 14,019 $ 16,767
Basic earnings per share:    
Net income (loss) per share of common stock (in dollars per share) $ 0.69 $ 0.82
Diluted earnings per share:    
Net income (loss) per share of common stock (in dollars per share) $ 0.68 $ 0.81
Weighted-average number of shares of common stock outstanding:    
Basic (in shares) 20,464 20,374
Diluted (in shares) 20,724 20,628
v3.22.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Statement of Comprehensive Income [Abstract]    
Net income $ 14,019 $ 16,767
Other comprehensive (loss) income:    
Foreign currency translation adjustment (2,047) (8,857)
Derivative and hedging activity, net of tax 2,270 1,245
Pension and post-employment benefit adjustment, net of tax (240) 164
Other comprehensive loss (17) (7,448)
Comprehensive income $ 14,002 $ 9,319
v3.22.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Current assets    
Cash and cash equivalents $ 20,237 $ 14,462
Accounts receivable, net 237,712 223,553
Inventories, net 386,992 361,115
Prepaid and other current assets 27,971 28,122
Total current assets 672,912 627,252
Deferred income taxes 5,323 5,431
Property, plant, and equipment 1,149,458 1,132,223
Less allowances for depreciation, depletion, and amortization (732,529) (723,248)
Property, plant, and equipment, net 416,929 408,975
Operating lease, right-of-use assets 70,862 63,096
Intangible assets, net 152,922 156,736
Other assets 30,063 27,369
Goodwill 317,897 318,620
Total Assets 1,666,908 1,607,479
Current liabilities    
Short-term debt 15,351 15,359
Accounts payable 103,438 86,243
Salaries and wages 21,848 37,544
Other liabilities and accrued items 47,793 53,388
Income taxes 5,624 4,205
Unearned revenue 7,407 7,770
Total current liabilities 201,461 204,509
Other long-term liabilities 16,457 14,954
Operating lease liabilities 64,569 57,099
Finance lease liabilities 15,192 16,327
Retirement and post-employment benefits 32,704 33,394
Unearned income 96,971 97,962
Long-term income taxes 1,205 1,190
Deferred income taxes 27,564 27,216
Long-term debt 479,821 434,388
Shareholders’ equity    
Serial preferred stock (no par value; 5,000 authorized shares, none issued) 0 0
Common stock (no par value; 60,000 authorized shares, issued shares of 27,148 at April 1 and December 31) 278,589 271,978
Retained earnings 705,255 693,756
Common stock in treasury (217,549) (209,920)
Accumulated other comprehensive loss (40,186) (40,169)
Other equity 4,855 4,795
Total shareholders' equity 730,964 720,440
Total Liabilities and Shareholders’ Equity $ 1,666,908 $ 1,607,479
v3.22.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Apr. 01, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Serial preferred stock, par value (in dollars per share) $ 0 $ 0
Serial preferred stock, shares authorized (in shares) 5,000,000 5,000,000
Serial preferred stock, shares issued (in shares) 0 0
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 60,000,000 60,000,000
Common stock, shares, issued (in shares) 27,148,000 27,148,000
v3.22.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Cash flows from operating activities:    
Net income $ 14,019 $ 16,767
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, depletion, and amortization 13,179 8,599
Amortization of deferred financing costs in interest expense 511 182
Stock-based compensation expense (non-cash) 1,699 1,473
Deferred income tax (benefit) expense 401 382
Changes in assets and liabilities:    
Accounts receivable (15,045) (15,697)
Inventory (28,129) (23,219)
Prepaid and other current assets (5) (2,107)
Accounts payable and accrued expenses (4,177) 19,224
Unearned revenue (343) 932
Interest and taxes payable 1,874 3,164
Unearned income due to customer prepayments 0 5,890
Other-net 1,712 (140)
Net cash (used in) provided by operating activities (14,304) 15,450
Cash flows from investing activities:    
Payments for purchase of property, plant, and equipment (18,977) (31,250)
Proceeds from sale of property, plant, and equipment 11 575
Net cash used in investing activities (18,966) (30,675)
Cash flows from financing activities:    
Proceeds from borrowings under revolving credit agreement, net 49,067 14,955
Repayment of long-term debt (3,839) (377)
Principal payments under finance lease obligations (686) (675)
Cash dividends paid (2,520) (2,338)
Payments of withholding taxes for stock-based compensation awards (2,717) (2,838)
Net cash provided by financing activities 39,305 8,727
Effects of exchange rate changes (260) (446)
Net change in cash and cash equivalents 5,775 (6,944)
Cash and cash equivalents at beginning of period 14,462 25,878
Cash and cash equivalents at end of period $ 20,237 $ 18,934
v3.22.1
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Shares
Common Shares Held in Treasury
Common Stock
Retained Earnings
Common Stock in Treasury
Accumulated Other Comprehensive Loss
Other Equity
Beginning balance (in shares) at Dec. 31, 2020   20,328            
Beginning balance (in shares) at Dec. 31, 2020     (6,820)          
Beginning balance at Dec. 31, 2020 $ 655,630     $ 258,642 $ 631,058 $ (199,187) $ (38,639) $ 3,756
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 16,767       16,767      
Other comprehensive loss (7,448)           (7,448)  
Cash dividends declared (2,338)       (2,338)      
Stock-based compensation activity (in shares)   127 127          
Stock-based compensation activity 1,473     6,259 (19) (4,767)    
Payments of withholding taxes for stock-based compensation awards (in shares)   (43) (43)          
Payments of withholding taxes for stock-based compensation awards (2,838)         (2,838)    
Directors' deferred compensation (in shares)   2 2          
Directors’ deferred compensation 90     39   (53)   104
Ending balance (in shares) at Apr. 02, 2021   20,414            
Ending balance (in shares) at Apr. 02, 2021     (6,734)          
Ending balance at Apr. 02, 2021 661,336     264,940 645,468 (206,845) (46,087) 3,860
Beginning balance (in shares) at Dec. 31, 2021   20,448            
Beginning balance (in shares) at Dec. 31, 2021     (6,700)          
Beginning balance at Dec. 31, 2021 720,440     271,978 693,756 (209,920) (40,169) 4,795
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 14,019       14,019      
Other comprehensive loss (17)           (17)  
Cash dividends declared (2,520)       (2,520)      
Stock-based compensation activity (in shares)   95 95          
Stock-based compensation activity 1,699     6,572 0 (4,873)    
Payments of withholding taxes for stock-based compensation awards (in shares)   (33) (33)          
Payments of withholding taxes for stock-based compensation awards (2,717)         (2,717)    
Directors' deferred compensation (in shares)   1 1          
Directors’ deferred compensation 60     39   (39)   60
Ending balance (in shares) at Apr. 01, 2022   20,511            
Ending balance (in shares) at Apr. 01, 2022     (6,637)          
Ending balance at Apr. 01, 2022 $ 730,964     $ 278,589 $ 705,255 $ (217,549) $ (40,186) $ 4,855
v3.22.1
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Statement of Stockholders' Equity [Abstract]    
Cash dividends declared (in usd per share) $ 0.120 $ 0.115
v3.22.1
Accounting Policies
 3 Months Ended
Apr. 01, 2022
Accounting Policies [Abstract]  
Accounting Policies Accounting Policies
Basis of Presentation:
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.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2021 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year.

Business Combinations:
The Company records assets acquired and liabilities assumed at the date of acquisition at their respective fair values. Any intangible assets acquired in a business combination are recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

The amounts reflected in Note B of the consolidated financial statements are the results of a preliminary purchase price allocation and will be updated upon completion of the final valuation. The Company is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined.

New Pronouncements Adopted:
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company has applied this guidance in accounting for the interest rate swap discussed in Note N. Any additional reference rate reform impacts will be accounted for in accordance with ASU 2020-04.

New Accounting Guidance Issued and Not Yet Adopted:
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832). ASU 2021-10 is intended to increase transparency related to governmental assistance by requiring entities to disclose the types of government assistance, the entity's accounting for government assistance, and the effect of government assistance on an entity's financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is in the process of evaluating the impact of the guidance on its annual disclosures.
No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.
v3.22.1
Acquisition
 3 Months Ended
Apr. 01, 2022
Business Combinations [Abstract]  
Acquisition Acquisition
On November 1, 2021, the Company acquired the industry-leading electronic materials business of H.C. Starck Group GmbH (HCS-Electronic Materials) for a cash purchase price of approximately $395.9 million, on a cash-free, debt-free basis, subject to a customary purchase price adjustment mechanism. During the first quarter of 2022, acquisition-related inventory step-up expense was $7.5 million and classified in Cost of Sales and transaction and integration costs were $2.1 million and classified in Selling, General and Administrative expenses in the accompanying consolidated statements of income. The Company financed the purchase price for the HCS-Electronic Materials acquisition with a new $300 million five-year term loan pursuant to a delayed draw term loan facility executed in October 2021 and $103 million of borrowings under its amended revolving credit facility. The maturity date on the revolving credit facility was also extended to October 2026. The interest rate for the term loan is based on LIBOR plus a tiered credit spread that is indexed to the Company's quarterly leverage ratio. This acquired business operates within the Performance Materials and Electronic Materials segments, and the results of operations are included as of the date of acquisition. The combination of Materion and HCS-Electronic Materials enhances the Company's position as the leading supplier to the high growth semiconductor industry.

No adjustments to the preliminary purchase price allocation were made during the first quarter of 2022. The preliminary purchase price allocation for the acquisition is as follows:

(Thousands)November 1, 2021
Assets:
Cash and cash equivalents$3,685 
Accounts receivable28,352 
Inventories70,681 
Prepaid and other current assets660 
Property, plant, and equipment 44,681 
Operating lease, right-of-use assets6,120 
Intangible assets107,800 
Other long-term assets4,528 
Goodwill178,181 
Total assets acquired$444,688 
Liabilities:
Accounts payable$12,139 
Salaries and wages2,516 
Other liabilities and accrued items28 
Income taxes2,183 
Other long-term liabilities5,543 
Operating lease liabilities6,042 
Deferred income taxes20,300 
Total liabilities assumed$48,751 
Net assets acquired$395,937 

Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The Company engaged specialists to assist in the valuation of inventories, property, plant, and equipment, and intangible assets. The estimates in the purchase price allocation are based on available information and will be revised during the measurement period, not to exceed 12 months, as additional information becomes available on tax-related items, and as additional analyses are performed. During the measurement period for the acquisition, we will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date.
In determining the fair value of the amounts above, inventory is fair valued based on the comparative sales method for work in process and finished goods at the selling price less cost to dispose and remaining manufacturing effort. The remaining working capital accounts' carrying values approximate fair value. For property, plant and equipment and intangible asset values, the Company utilized various forms of the income, cost and market approaches depending on the asset being valued. The Company used a relief from royalty method under the income approach to value its trade names and the developed technology and the multi-period excess earnings method under the income approach to value customer relationships. The significant assumptions used to estimate the fair value of these intangible assets included the discount rate and certain assumptions that form the basis of forecasted future cash flows (including revenue growth rates, royalty rates for trade names and developed technology, and attrition rates for customer relationships). Inputs were generally determined by taking into account independent appraisals and historical data, supplemented by current and anticipated market conditions and are considered Level 3 assets as the assumptions are unobservable inputs developed by the Company.

As part of the acquisition, the Company recorded approximately $178.2 million of goodwill allocated between its Electronic Materials and Performance Materials segments based on the relative fair values. Goodwill was calculated as the excess of the purchase price over the estimated fair values of the tangible net assets and intangible assets acquired and primarily attributable to the synergies expected to arise after the acquisition dates. The goodwill is not expected to be deductible for U.S. tax purposes.

The following table reports the intangible assets by asset category as of the closing date:
(Thousands)Value at AcquisitionUseful Life
Customer relationships$50,200 13 years
Technology35,300 13 years
Trade name22,300 15 years
Total$107,800 

The amounts of revenue and income (loss) before taxes of HCS-Electronic Materials in the first quarter of 2022 consolidated statements are $43.1 million and ($1.6) million, respectively, and include three months of the purchase accounting inventory step-up expense. Had the HCS-Electronic Materials acquisition occurred as of the beginning of fiscal 2020, the Company's sales and income (loss) before taxes would have been as follows:
(Unaudited)
Three months ended
April 2, 2021
Net Sales$385,384 
Profit income (loss) before taxes$18,997 

The unaudited pro forma financial information has been calculated after applying our accounting policies and adjusting the historical results with pro forma adjustments that assume the acquisition occurred on January 1, 2020. These unaudited pro forma results do not represent financial results realized, nor are they intended to be a projection of future results. The transaction accounting adjustments and other adjustments are based on available information and assumptions that the Company’s management believes are reasonable. Such adjustments are estimates and actual experience may differ from expectations. The pro forma income (loss) before taxes includes approximately $2.9 million of additional interest expense related to committed financing to fund the acquisition and acquisition-related intangible asset amortization expense of $2.0 million as if the transaction occurred on January 1, 2020.
v3.22.1
Segment Reporting
 3 Months Ended
Apr. 01, 2022
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company changed two segment names during the first quarter of 2022: Performance Alloys and Composites became Performance Materials, and Advanced Materials became Electronic Materials. The Company believes these names better represent the markets served and the advanced next - generation product solutions provided to our customers. Other than the name changes, there were no changes in the composition or structure of the Company's reportable segments in the first quarter of 2022.

The Company has the following reportable segments: Performance Materials, Electronic Materials, Precision Optics, 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 Materials provides advanced engineered solutions comprised of beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes.

Electronic Materials produces advanced chemicals, microelectric packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal preforms, high temperature braze materials, and ultra-fine wire.

Precision Optics produces thin film coatings, optical filter materials, sputter-coated, and precision-converted thin film materials.

The Other reportable segment includes unallocated corporate costs and assets.

Beginning with the first quarter of 2022, the Company began using earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) as the main operating income metric used by management to measure the financial performance of the Company and each segment. The Company made this change because recent acquisitions have resulted in increased purchase accounting amortization expense, which in turn has affected the comparability of results across periods and when compared to other companies. Management believes EBITDA is useful to investors as it better represents the Company's performance excluding the effect of the recent acquisition of significant intangible assets that are now being amortized. EBITDA is not a measurement of financial performance under U.S. GAAP. Although the Company uses EBITDA to assess the performance of its business and for various other purposes, the use of this non-GAAP financial measure as an analytical tool has limitations, and it should not be considered in isolation or as a substitute for analysis of the Company’s results of operations as reported in accordance with U.S. GAAP.
The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the first quarter of 2022 and 2021:
(Thousands)Three months ended April 1, 2022Three months ended April 2, 2021
Net sales:
Performance Materials (1)
149,630 114,143 
Electronic Materials(1)
270,836 204,644 
Precision Optics28,579 35,599 
Other— — 
Net sales$449,045 $354,386 
Segment EBITDA:
Performance Materials24,792 16,792 
Electronic Materials12,148 10,930 
Precision Optics2,191 7,471 
Other(5,177)(5,600)
Total Segment EBITDA33,954 29,593 
Income tax expense3,021 3,466 
Interest expense - net3,735 761 
Depreciation, depletion and amortization13,179 8,599 
Net income14,019 16,767 
(1) Excludes inter-segment sales of $5.5 million for the first quarter of 2022 and $2.7 million for the first quarter of 2021 for Electronic Materials and $0.3 million for the first quarter of 2022 for Performance Materials. Inter-segment sales are eliminated in consolidation.
The following table disaggregates revenue for each segment by end market for the first quarter of 2022 and 2021:
 (Thousands)Performance MaterialsElectronic MaterialsPrecision OpticsOtherTotal
First Quarter 2022
End Market
Semiconductor$1,800 $214,922 $1,327 $— $218,049 
Industrial40,819 15,866 8,434 — 65,119 
Aerospace and defense23,684 2,614 5,145 — 31,443 
Consumer electronics13,002 325 5,312 — 18,639 
Automotive22,235 1,657 2,464 — 26,356 
Energy10,099 29,119 — — 39,218 
Telecom and data center16,081 45 — — 16,126 
Other21,910 6,288 5,897 — 34,095 
Total$149,630 $270,836 $28,579 $— $449,045 
First Quarter 2021
End Market
Semiconductor$997 $155,061 $471 $— $156,529 
Industrial24,030 12,590 7,375 — 43,995 
Aerospace and defense21,842 1,398 6,576 — 29,816 
Consumer electronics10,044 165 9,460 — 19,669 
Automotive23,507 1,669 2,193 — 27,369 
Energy4,137 27,190 — — 31,327 
Telecom and data center11,343 70 — — 11,413 
Other18,243 6,501 9,524 — 34,268 
Total$114,143 $204,644 $35,599 $— $354,386 
v3.22.1
Revenue Recognition
 3 Months Ended
Apr. 01, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition 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 a product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product.

Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at April 1, 2022. Remaining performance obligations include non-cancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

After considering the practical expedient at April 1, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $76.5 million.
Contract Balances: The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:
(Thousands)April 1, 2022December 31, 2021$ change% change
Accounts receivable, trade
$230,805 $213,584 $17,221 8 %
Unbilled receivables
6,445 7,961 (1,516)(19)%
Unearned revenue
7,407 7,770 (363)(5)%
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 related to our receivables were immaterial during the first quarter of 2022.

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

Unearned revenue is recorded for consideration received from customers in advance of satisfaction of the related performance obligations. The Company recognized approximately $4.5 million of the December 31, 2021 unearned amounts as revenue during the first three months of 2022.

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.
v3.22.1
Other-net
 3 Months Ended
Apr. 01, 2022
Other Income and Expenses [Abstract]  
Other-net Other-net
Other-net for the first quarter of 2022 and 2021 is summarized as follows: 
 First Quarter Ended
 April 1,April 2,
(Thousands)20222021
Amortization of intangible assets$3,131 $1,173 
Metal consignment fees3,011 $2,150 
Foreign currency (gain) loss(333)1,249 
Net (gain) loss on disposal of fixed assets(11)(388)
Other items75 290 
Total$5,873 $4,474 
v3.22.1
Income Taxes
 3 Months Ended
Apr. 01, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesThe Company's effective tax rate for the first quarter of 2022 and 2021 was 17.7% and 17.1%, respectively. The effective tax rate for the first quarter of 2022 was lower than the statutory tax rate primarily due to the impact of percentage depletion and research and development credits. The effective tax rate for the first three months of 2022 included a net discrete income tax benefit of $0.1 million, primarily related to excess tax benefits from stock-based compensation awards. The effective tax rate for the first quarter of 2021 included a net discrete income tax benefit of $0.3 million, primarily related to excess tax benefits from stock-based compensation awards.
v3.22.1
Earnings Per Share
 3 Months Ended
Apr. 01, 2022
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share (EPS)
The following table sets forth the computation of basic and diluted EPS:
First Quarter Ended
April 1,April 2,
(Thousands, except per share amounts)20222021
Numerator for basic and diluted EPS:
Net income (loss)$14,019 $16,767 
Denominator:
Denominator for basic EPS:
Weighted-average shares outstanding20,464 20,374 
Effect of dilutive securities:
Stock appreciation rights97 72 
Restricted stock units106 108 
Performance-based restricted stock units57 74 
Diluted potential common shares260 254 
Denominator for diluted EPS:
Adjusted weighted-average shares outstanding20,724 20,628 
Basic EPS$0.69 $0.82 
Diluted EPS$0.68 $0.81 
Adjusted weighted-average shares outstanding - diluted exclude securities totaling 117,390 and 63,627 for the quarters ended April 1, 2022 and April 2, 2021, respectively. These securities are primarily related to restricted stock units and stock appreciation rights with fair market values and exercise prices greater than the average market price of the Company's common shares and were excluded from the dilution calculation as the effect would have been anti-dilutive.
v3.22.1
Inventories
 3 Months Ended
Apr. 01, 2022
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
April 1,December 31,
(Thousands)20222021
Raw materials and supplies$106,625 $93,518 
Work in process228,194 221,638 
Finished goods52,173 45,959 
Inventories, net$386,992 $361,115 
The Company maintains the majority of the precious metals and copper used in production on a consignment basis in order to reduce its exposure to metal price movements and to reduce its working capital investment. The notional value of off-balance sheet precious metals and copper was $485.5 million and $480.2 million as of April 1, 2022 and December 31, 2021, respectively.
v3.22.1
Customer Prepayments
 1 Months Ended
Apr. 28, 2022
Customer Prepayments [Abstract]  
Customer Prepayments Customer Prepayments
The Company had previously entered into an investment agreement and a master supply agreement with a customer to procure equipment to manufacture product for the customer. The customer provided prepayments to the Company to fund the necessary infrastructure and procure the equipment necessary to supply the customer with the desired product. The Company will own, operate and maintain the equipment in order to produce and provide product to the customer.

Revenue will be recognized when the Company receives and fulfills purchase orders, including shipment of the commercial product to the customer as the product delivery is considered the fulfillment of the performance obligation. To date there have been no purchase orders received from the customer for the commercial product out of these assets. Accordingly, as of April 1, 2022 and December 31, 2021, $72.6 million of prepayments are classified as Unearned income in the Consolidated Balance Sheet.

During the second quarter of 2022, the Company entered into an investment agreement amendment with the customer to procure additional equipment to manufacture product for the customer. No prepayments under this amendment were received as of April 1, 2022. As of April 28, 2022 the Company has received approximately $4 million in prepayments.
v3.22.1
Pensions and Other Post-employment Benefits
 3 Months Ended
Apr. 01, 2022
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 first quarter of 2022 and 2021 for the pension plans as shown below. The Pension Benefits column aggregates defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S. supplemental retirement plans. The Other Benefits column includes the domestic retiree medical and life insurance plan.
 Pension BenefitsOther Benefits
 First Quarter EndedFirst Quarter Ended
April 1,April 2,April 1,April 2,
(Thousands)2022202120222021
Components of net periodic benefit (income) cost
Service cost$318 $438 $22 $20 
Interest cost1,223 1,048 39 29 
Expected return on plan assets(2,400)(2,474)— — 
Amortization of prior service cost (benefit)(20)(21)(374)(374)
Amortization of net loss (gain)430 577 (68)(69)
Total net benefit (income) cost$(449)$(432)$(381)$(394)
The Company did not make any contributions to its defined benefit plan in the first quarter of 2022 or 2021.
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 (income) expense.
v3.22.1
Accumulated Other Comprehensive Income (Loss)
 3 Months Ended
Apr. 01, 2022
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)
Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the first quarter of 2022 and 2021 are as follows:
Gains and Losses on Cash Flow Hedges
(Thousands)Foreign CurrencyInterest RatePrecious MetalsCopperTotalPension and Post-Employment BenefitsForeign Currency TranslationTotal
Balance at December 31, 2021$2,348 $— $72 $— $2,420 $(39,702)$(2,887)$(40,169)
Other comprehensive income (loss) before reclassifications153 3,112 (520)— 2,745 — (2,047)698 
Amounts reclassified from accumulated other comprehensive income (loss)(19)115 107 — 203 (1,000)— (797)
Net current period other comprehensive (loss) income before tax134 3,227 (413)— 2,948 (1,000)(2,047)(99)
Deferred taxes31 742 (95)— 678 (760)— (82)
Net current period other comprehensive (loss) income after tax103 2,485 (318)— 2,270 (240)(2,047)(17)
Balance at April 1, 2022$2,451 $2,485 $(246)$— $4,690 $(39,942)$(4,934)$(40,186)
Balance at December 31, 2020$519 $— $(170)$468 $817 $(43,473)$4,017 $(38,639)
Other comprehensive (loss) income before reclassifications1,085 — 741 1,291 3,117 — (8,857)(5,740)
Amounts reclassified from accumulated other comprehensive income (loss)140 — (104)(1,534)(1,498)157 — (1,341)
Net current period other comprehensive (loss) income before tax1,225 637 (243)1,619 157 (8,857)(7,081)
Deferred taxes282 147 (55)374 (7)— 367 
Net current period other comprehensive (loss) income after tax943 490 (188)1,245 164 (8,857)(7,448)
Balance at April 2, 2021$1,462 $320 $280 $2,062 $(43,309)$(4,840)$(46,087)

Reclassifications from accumulated other comprehensive income (loss) of gains and losses on foreign currency cash flow hedges are recorded in Net sales in the Consolidated Statements of Income (Loss). Reclassifications from accumulated other comprehensive income (loss) of gains and losses on precious metal and copper cash flow hedges are recorded in Cost of sales in the Consolidated Statements of Income. Reclassifications from accumulated other comprehensive income (loss) of gains and losses on the interest rate cash flow hedge is recorded in Interest expense in the Consolidated Statements of Income. Refer to Note N for additional details on cash flow hedges.
Reclassifications from accumulated other comprehensive income (loss) for pension and post-employment benefits are included in the computation of the net periodic pension and post-employment benefit expense. Refer to Note J for additional details on pension and post-employment expenses.
v3.22.1
Stock-based Compensation Expense
 3 Months Ended
Apr. 01, 2022
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation Expense Stock-based Compensation Expense
Stock-based compensation expense, which includes awards settled in shares and in cash, was $1.8 million and $1.6 million in the first quarter of 2022 and 2021, respectively.
The Company granted 45,016 stock appreciation rights (SARs) to certain employees during the first quarter of 2022. The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the three months ended April 1, 2022 were $80.85 and $25.87, respectively. The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model:
Risk-free interest rate1.56 %
Dividend yield0.59 %
Volatility38.5 %
Expected term (in years)4.4
The Company granted 54,293 stock-settled restricted stock units (RSUs) to certain employees during the first quarter of 2022. 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 $80.95 for stock-settled RSUs granted to employees during the three months ended April 1, 2022. RSUs are generally expensed over the vesting period of three years for employees.
The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first quarter of 2022. The weighted-average fair value of the stock-settled PRSUs was $97.79 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 its total return to shareholders over the vesting period relative to a peer group’s performance over the same period.
At April 1, 2022, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $16.1 million, and is expected to be recognized over the remaining vesting period of the respective grants.
v3.22.1
Fair Value of Financial Instruments
 3 Months Ended
Apr. 01, 2022
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 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 April 1, 2022 and December 31, 2021: 
  
(Thousands)Total Carrying Value in the Consolidated Balance SheetsQuoted Prices
in  Active
Markets  for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
20222021202220212022202120222021
Financial Assets
Deferred compensation investments$3,675 $4,426 $3,675 $4,426 $— $— $— $— 
Foreign currency forward contracts2,885 3,368 — — 2,885 3,368 — — 
Interest rate swap3,227 — — — 3,227 — — — 
Precious metal swaps— 116 — — — 116 — — 
Total$9,787 $7,910 $3,675 $4,426 $6,112 $3,484 $— $— 
Financial Liabilities
Deferred compensation liability$3,675 $4,426 $3,675 $4,426 $— $— $— $— 
Foreign currency forward contracts480 136 — — 480 136 — — 
Precious metal swaps321 24 — — 321 24 — — 
Total$4,476 $4,586 $3,675 $4,426 $801 $160 $— $— 
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, metals, and interest rates. The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of April 1, 2022 and December 31, 2021. The Company's deferred compensation investments and liabilities are based on the fair value of the investments corresponding to the employees’ investment selections, primarily in mutual funds, based on quoted prices in active markets for identical assets. Deferred compensation investments are primarily presented in Other assets. Deferred compensation liabilities are primarily presented in Other long-term liabilities.
v3.22.1
Derivative Instruments and Hedging Activity
 3 Months Ended
Apr. 01, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activity Derivative Instruments and Hedging Activity
The Company uses derivative contracts to hedge exposure to movements in interest rates associated with borrowings, foreign currency exposures, and precious metal and copper exposures. The objectives and strategies for using derivatives in these areas are as follows:
Interest Rate. On March 4, 2022, the Company entered into a $100.0 million interest rate swap to hedge the interest rate risk on the Credit Agreement described in Note P. The swap hedges the change in 1-month LIBOR from March 4, 2022 to November 2, 2026. The purpose of this hedge is to manage the risk of changes in the monthly interest payments attributable to changes in the benchmark interest rate.
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, the 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 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 nature of instruments to use to hedge exposures. 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. Foreign currency contracts are typically layered in at different times for a specified exposure period in order to minimize the impact of market 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 product containing precious metal is fabricated and delivered to the customer, the metal content is purchased out of consignment based on the current market price. The price paid by the Company for the precious metal forms the basis for the price charged to the customer for the metal content in the product. 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 consignment fees based upon the value of the metal as it fluctuates while on consignment. Each financial institution retains title to its consigned precious metal until it is purchased by the Company, and it is the Company’s typical practice to purchase metal out of consignment only after a product containing that metal has been purchased by one of our customers.
In certain instances, a customer may want to fix 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 out of consignment 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 refined and purchased, thereby reducing the exposure to adverse movements in the price of the metal. The Company may also enter into hedges to mitigate the risk relating to the prices of the metals that we process or refine.
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 in these instances.
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 infrequent and, when made 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 paid when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned by the Company.
The Company will only enter into a derivative contract if there is an underlying identified exposure. Contracts are typically held to maturity. The Company does not engage in derivative trading activities and does not use derivatives for speculative
purposes. The Company only uses hedge contracts that are denominated in the same currency or metal as the underlying exposure.
All derivatives are recorded on the balance sheet at fair value. If a 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) and reclassified into income in the same period or periods during which the hedged transaction affects 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 derivative assets and liabilities are classified as short-term or long-term depending upon the contract maturity date.
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and the balance sheet classification as of April 1, 2022 and December 31, 2021:
 
April 1, 2022
December 31, 2021
(Thousands)Notional
Amount		Fair
Value		Notional
Amount		Fair
Value
Foreign currency forward contracts
Prepaid and other current assets$91,615 $1,350 $55,063 $2,132 
Other liabilities and accrued items18,474 307 9,425 128 
These outstanding foreign currency derivatives were related to balance sheet hedges and intercompany loans. Other-net included $0.7 million and $1.6 million of foreign currency gains related to derivatives in the first quarter of 2022 and 2021, respectively.
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and the balance sheet classification as of April 1, 2022 and December 31, 2021:
 
April 1, 2022
Fair Value
(Thousands)Notional
Amount		Prepaid and other current assetsOther assetsOther liabilities and accrued itemsOther long-term liabilities
Foreign currency forward contracts - yen$4,303 $275 $22 $6 $— 
Foreign currency forward contracts - euro31,199 1,238 — 81 86 
Precious metal swaps6,869 — — 298 23 
Interest rate swap100,000 120 3,107 — — 
Total142,371 1,633 3,129 385 109 
December 31, 2021
Fair Value
Notional
Amount		Prepaid and other current assetsOther assetsOther liabilities and accrued itemsOther long-term liabilities
Foreign currency forward contracts - yen3,907 131 2 — — 
Foreign currency forward contracts - euro28,412 1,102 — — 8 
Precious metal swaps6,256 116 — 24 — 
Total38,575 1,349 2 24 8 
All of the contracts summarized above were designated and effective as cash flow hedges. We expect to reclassify $1.2 million of gains into earnings in the next 12 months contemporaneously with the earnings effects of the related
forecasted transactions. At April 1, 2022, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years. Refer to Note K for additional OCI details.
The following table summarizes the amounts reclassified from accumulated other comprehensive income related to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the first quarter of 2022 and 2021: 
 First Quarter Ended
(Thousands)
April 1, 2022
April 2, 2021
Hedging relationshipLine item
Foreign currency forward contractsNet sales$(19)$140 
Precious metal swapsCost of sales107 (104)
Interest rate swapInterest expense - net115 — 
Copper swapsCost of sales— (1,534)
Total$203 $(1,498)
v3.22.1
Contingencies
 3 Months Ended
Apr. 01, 2022
Loss Contingency [Abstract]  
Contingencies Contingencies
Legal Proceedings. For general information regarding legal proceedings relating to Chronic Beryllium Disease Claims, refer to Note T "Contingencies and Commitments" in the Company's 2021 Annual Report on Form 10-K.
Two beryllium cases were outstanding as of April 1, 2022; however, a settlement agreement has been reached in one of those cases, and the Company is awaiting the filing of the dismissal. The Company does not expect the resolution of these matters to have a material impact on the consolidated financial statements.
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.
On October 14, 2020, Garett Lucyk, et al. v. Materion Brush Inc., et. al., case number 20CV0234, a wage and hour purported collective and class action, was filed in the Northern District of Ohio against the Company and its subsidiary, Materion Brush Inc. (collectively, the Company). Plaintiff, a former hourly production employee at the Company's Elmore, Ohio facility, alleges, amoung other things, that he and other similarly situated employees nationwide are not paid for all time they spend donning and doffing personal protective equipment in violation of the Fair Labor Standards Act and Ohio law. The case remains in the preliminary stages while the parties have explored a negotiated resolution. The Company believes that it has substantive defenses and intends to vigorously defend this suit, absent a negotiated resolution.
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 $4.4 million and $4.8 million at April 1, 2022 and December 31, 2021, respectively, and is included in Other liabilities and accrued items and Other long-term liabilities on the Consolidated Balance Sheet. Environmental projects tend to be long-term, and the final actual remediation costs may differ from the amounts currently recorded.
v3.22.1
Debt
 3 Months Ended
Apr. 01, 2022
Debt Disclosure [Abstract]  
Debt Debt
(Thousands)April 1, 2022December 31, 2021
Borrowings under Credit Agreement $201,363 $152,296 
Borrowings under the Term Loan Facility296,250 300,000 
Foreign debt2,112 2,252 
Total debt outstanding499,725 454,548 
Current portion of long-term debt(15,351)(15,359)
Gross long-term debt484,374 439,189 
Unamortized deferred financing fees(4,553)(4,801)
Long-term debt$479,821 $434,388 

As of April 1, 2022 and December 31, 2021, the Company had $201.4 million outstanding at an average interest rate of 2.55% and $152.3 million outstanding at an average interest rate of 2.12%, respectively, under its revolving credit facility. The available borrowing capacity under the revolving credit facility as of April 1, 2022 was $127.4 million. The Company has the option to repay or borrow additional funds under the revolving credit facility until the maturity date in 2026. The amended and restated credit agreement governing the revolving credit facility (Credit Agreement) includes covenants subject to a maximum leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all of our debt covenants as of April 1, 2022.

The balance outstanding on the term loan facility as of April 1, 2022 and December 31, 2021 was $296.3 million and $300.0 million, respectively.

At both April 1, 2022 and December 31, 2021, there was $46.3 million outstanding against the letters of credit sub-facility.
v3.22.1
Accounting Policies (Policies)
 3 Months Ended
Apr. 01, 2022
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation:
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.
These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2021 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year.
Business Combinations
Business Combinations:
The Company records assets acquired and liabilities assumed at the date of acquisition at their respective fair values. Any intangible assets acquired in a business combination are recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

The amounts reflected in Note B of the consolidated financial statements are the results of a preliminary purchase price allocation and will be updated upon completion of the final valuation. The Company is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined.
New Accounting Guidance Issued and Not Yet Adopted
New Pronouncements Adopted:
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company has applied this guidance in accounting for the interest rate swap discussed in Note N. Any additional reference rate reform impacts will be accounted for in accordance with ASU 2020-04.

New Accounting Guidance Issued and Not Yet Adopted:
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832). ASU 2021-10 is intended to increase transparency related to governmental assistance by requiring entities to disclose the types of government assistance, the entity's accounting for government assistance, and the effect of government assistance on an entity's financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is in the process of evaluating the impact of the guidance on its annual disclosures.
No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.
Revenue 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 a product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product. Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at April 1, 2022. Remaining performance obligations include non-cancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
v3.22.1
Acquisitions (Tables)
 3 Months Ended
Apr. 01, 2022
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition The preliminary purchase price allocation for the acquisition is as follows:
(Thousands)November 1, 2021
Assets:
Cash and cash equivalents$3,685 
Accounts receivable28,352 
Inventories70,681 
Prepaid and other current assets660 
Property, plant, and equipment 44,681 
Operating lease, right-of-use assets6,120 
Intangible assets107,800 
Other long-term assets4,528 
Goodwill178,181 
Total assets acquired$444,688 
Liabilities:
Accounts payable$12,139 
Salaries and wages2,516 
Other liabilities and accrued items28 
Income taxes2,183 
Other long-term liabilities5,543 
Operating lease liabilities6,042 
Deferred income taxes20,300 
Total liabilities assumed$48,751 
Net assets acquired$395,937 
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination
The following table reports the intangible assets by asset category as of the closing date:
(Thousands)Value at AcquisitionUseful Life
Customer relationships$50,200 13 years
Technology35,300 13 years
Trade name22,300 15 years
Total$107,800 
Business Acquisition, Pro Forma Information Had the HCS-Electronic Materials acquisition occurred as of the beginning of fiscal 2020, the Company's sales and income (loss) before taxes would have been as follows:
(Unaudited)
Three months ended
April 2, 2021
Net Sales$385,384 
Profit income (loss) before taxes$18,997 
v3.22.1
Segment Reporting (Tables)
 3 Months Ended
Apr. 01, 2022
Segment Reporting [Abstract]  
Segment Reporting
The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the first quarter of 2022 and 2021:
(Thousands)Three months ended April 1, 2022Three months ended April 2, 2021
Net sales:
Performance Materials (1)
149,630 114,143 
Electronic Materials(1)
270,836 204,644 
Precision Optics28,579 35,599 
Other— — 
Net sales$449,045 $354,386 
Segment EBITDA:
Performance Materials24,792 16,792 
Electronic Materials12,148 10,930 
Precision Optics2,191 7,471 
Other(5,177)(5,600)
Total Segment EBITDA33,954 29,593 
Income tax expense3,021 3,466 
Interest expense - net3,735 761 
Depreciation, depletion and amortization13,179 8,599 
Net income14,019 16,767 
(1) Excludes inter-segment sales of $5.5 million for the first quarter of 2022 and $2.7 million for the first quarter of 2021 for Electronic Materials and $0.3 million for the first quarter of 2022 for Performance Materials. Inter-segment sales are eliminated in consolidation.
Disaggregation of Revenue
The following table disaggregates revenue for each segment by end market for the first quarter of 2022 and 2021:
 (Thousands)Performance MaterialsElectronic MaterialsPrecision OpticsOtherTotal
First Quarter 2022
End Market
Semiconductor$1,800 $214,922 $1,327 $— $218,049 
Industrial40,819 15,866 8,434 — 65,119 
Aerospace and defense23,684 2,614 5,145 — 31,443 
Consumer electronics13,002 325 5,312 — 18,639 
Automotive22,235 1,657 2,464 — 26,356 
Energy10,099 29,119 — — 39,218 
Telecom and data center16,081 45 — — 16,126 
Other21,910 6,288 5,897 — 34,095 
Total$149,630 $270,836 $28,579 $— $449,045 
First Quarter 2021
End Market
Semiconductor$997 $155,061 $471 $— $156,529 
Industrial24,030 12,590 7,375 — 43,995 
Aerospace and defense21,842 1,398 6,576 — 29,816 
Consumer electronics10,044 165 9,460 — 19,669 
Automotive23,507 1,669 2,193 — 27,369 
Energy4,137 27,190 — — 31,327 
Telecom and data center11,343 70 — — 11,413 
Other18,243 6,501 9,524 — 34,268 
Total$114,143 $204,644 $35,599 $— $354,386 
v3.22.1
Revenue Recognition (Tables)
 3 Months Ended
Apr. 01, 2022
Revenue from Contract with Customer [Abstract]  
Contract with Customer, Asset and Liability
Contract Balances: The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:
(Thousands)April 1, 2022December 31, 2021$ change% change
Accounts receivable, trade
$230,805 $213,584 $17,221 8 %
Unbilled receivables
6,445 7,961 (1,516)(19)%
Unearned revenue
7,407 7,770 (363)(5)%
v3.22.1
Other-net (Tables)
 3 Months Ended
Apr. 01, 2022
Other Income and Expenses [Abstract]  
Summary of Other-Net Expense
Other-net for the first quarter of 2022 and 2021 is summarized as follows: 
 First Quarter Ended
 April 1,April 2,
(Thousands)20222021
Amortization of intangible assets$3,131 $1,173 
Metal consignment fees3,011 $2,150 
Foreign currency (gain) loss(333)1,249 
Net (gain) loss on disposal of fixed assets(11)(388)
Other items75 290 
Total$5,873 $4,474 
v3.22.1
Earnings Per Share (Tables)
 3 Months Ended
Apr. 01, 2022
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the computation of basic and diluted EPS:
First Quarter Ended
April 1,April 2,
(Thousands, except per share amounts)20222021
Numerator for basic and diluted EPS:
Net income (loss)$14,019 $16,767 
Denominator:
Denominator for basic EPS:
Weighted-average shares outstanding20,464 20,374 
Effect of dilutive securities:
Stock appreciation rights97 72 
Restricted stock units106 108 
Performance-based restricted stock units57 74 
Diluted potential common shares260 254 
Denominator for diluted EPS:
Adjusted weighted-average shares outstanding20,724 20,628 
Basic EPS$0.69 $0.82 
Diluted EPS$0.68 $0.81 
v3.22.1
Inventories (Tables)
 3 Months Ended
Apr. 01, 2022
Inventory Disclosure [Abstract]  
Summary of Inventories
Inventories on the Consolidated Balance Sheets are summarized as follows:
April 1,December 31,
(Thousands)20222021
Raw materials and supplies$106,625 $93,518 
Work in process228,194 221,638 
Finished goods52,173 45,959 
Inventories, net$386,992 $361,115 
v3.22.1
Pensions and Other Post-employment Benefits (Tables)
 3 Months Ended
Apr. 01, 2022
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost
The following is a summary of the net periodic benefit cost for the first quarter of 2022 and 2021 for the pension plans as shown below. The Pension Benefits column aggregates defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S. supplemental retirement plans. The Other Benefits column includes the domestic retiree medical and life insurance plan.
 Pension BenefitsOther Benefits
 First Quarter EndedFirst Quarter Ended
April 1,April 2,April 1,April 2,
(Thousands)2022202120222021
Components of net periodic benefit (income) cost
Service cost$318 $438 $22 $20 
Interest cost1,223 1,048 39 29 
Expected return on plan assets(2,400)(2,474)— — 
Amortization of prior service cost (benefit)(20)(21)(374)(374)
Amortization of net loss (gain)430 577 (68)(69)
Total net benefit (income) cost$(449)$(432)$(381)$(394)
v3.22.1
Accumulated Other Comprehensive Income (Loss) (Tables)
 3 Months Ended
Apr. 01, 2022
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the first quarter of 2022 and 2021 are as follows:
Gains and Losses on Cash Flow Hedges
(Thousands)Foreign CurrencyInterest RatePrecious MetalsCopperTotalPension and Post-Employment BenefitsForeign Currency TranslationTotal
Balance at December 31, 2021$2,348 $— $72 $— $2,420 $(39,702)$(2,887)$(40,169)
Other comprehensive income (loss) before reclassifications153 3,112 (520)— 2,745 — (2,047)698 
Amounts reclassified from accumulated other comprehensive income (loss)(19)115 107 — 203 (1,000)— (797)
Net current period other comprehensive (loss) income before tax134 3,227 (413)— 2,948 (1,000)(2,047)(99)
Deferred taxes31 742 (95)— 678 (760)— (82)
Net current period other comprehensive (loss) income after tax103 2,485 (318)— 2,270 (240)(2,047)(17)
Balance at April 1, 2022$2,451 $2,485 $(246)$— $4,690 $(39,942)$(4,934)$(40,186)
Balance at December 31, 2020$519 $— $(170)$468 $817 $(43,473)$4,017 $(38,639)
Other comprehensive (loss) income before reclassifications1,085 — 741 1,291 3,117 — (8,857)(5,740)
Amounts reclassified from accumulated other comprehensive income (loss)140 — (104)(1,534)(1,498)157 — (1,341)
Net current period other comprehensive (loss) income before tax1,225 637 (243)1,619 157 (8,857)(7,081)
Deferred taxes282 147 (55)374 (7)— 367 
Net current period other comprehensive (loss) income after tax943 490 (188)1,245 164 (8,857)(7,448)
Balance at April 2, 2021$1,462 $320 $280 $2,062 $(43,309)$(4,840)$(46,087)
v3.22.1
Stock-based Compensation Expense (Tables)
 3 Months Ended
Apr. 01, 2022
Share-based Payment Arrangement [Abstract]  
Schedule Of Share Based Payment Award SARs Valuation Assumptions The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model:
Risk-free interest rate1.56 %
Dividend yield0.59 %
Volatility38.5 %
Expected term (in years)4.4
v3.22.1
Fair Value of Financial Instruments (Tables)
 3 Months Ended
Apr. 01, 2022
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 April 1, 2022 and December 31, 2021: 
  
(Thousands)Total Carrying Value in the Consolidated Balance SheetsQuoted Prices
in  Active
Markets  for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
20222021202220212022202120222021
Financial Assets
Deferred compensation investments$3,675 $4,426 $3,675 $4,426 $— $— $— $— 
Foreign currency forward contracts2,885 3,368 — — 2,885 3,368 — — 
Interest rate swap3,227 — — — 3,227 — — — 
Precious metal swaps— 116 — — — 116 — — 
Total$9,787 $7,910 $3,675 $4,426 $6,112 $3,484 $— $— 
Financial Liabilities
Deferred compensation liability$3,675 $4,426 $3,675 $4,426 $— $— $— $— 
Foreign currency forward contracts480 136 — — 480 136 — — 
Precious metal swaps321 24 — — 321 24 — — 
Total$4,476 $4,586 $3,675 $4,426 $801 $160 $— $— 
v3.22.1
Derivative Instruments and Hedging Activity (Tables)
 3 Months Ended
Apr. 01, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Non-Hedging
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and the balance sheet classification as of April 1, 2022 and December 31, 2021:
 
April 1, 2022
December 31, 2021
(Thousands)Notional
Amount		Fair
Value		Notional
Amount		Fair
Value
Foreign currency forward contracts
Prepaid and other current assets$91,615 $1,350 $55,063 $2,132 
Other liabilities and accrued items18,474 307 9,425 128 
Fair Value Measurements, Recurring and Nonrecurring
The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and the balance sheet classification as of April 1, 2022 and December 31, 2021:
 
April 1, 2022
Fair Value
(Thousands)Notional
Amount		Prepaid and other current assetsOther assetsOther liabilities and accrued itemsOther long-term liabilities
Foreign currency forward contracts - yen$4,303 $275 $22 $6 $— 
Foreign currency forward contracts - euro31,199 1,238 — 81 86 
Precious metal swaps6,869 — — 298 23 
Interest rate swap100,000 120 3,107 — — 
Total142,371 1,633 3,129 385 109 
December 31, 2021
Fair Value
Notional
Amount		Prepaid and other current assetsOther assetsOther liabilities and accrued itemsOther long-term liabilities
Foreign currency forward contracts - yen3,907 131 2 — — 
Foreign currency forward contracts - euro28,412 1,102 — — 8 
Precious metal swaps6,256 116 — 24 — 
Total38,575 1,349 2 24 8 
Derivative Instruments, Gain (Loss)
The following table summarizes the amounts reclassified from accumulated other comprehensive income related to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the first quarter of 2022 and 2021: 
 First Quarter Ended
(Thousands)
April 1, 2022
April 2, 2021
Hedging relationshipLine item
Foreign currency forward contractsNet sales$(19)$140 
Precious metal swapsCost of sales107 (104)
Interest rate swapInterest expense - net115 — 
Copper swapsCost of sales— (1,534)
Total$203 $(1,498)
v3.22.1
Debt (Tables)
 3 Months Ended
Apr. 01, 2022
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
(Thousands)April 1, 2022December 31, 2021
Borrowings under Credit Agreement $201,363 $152,296 
Borrowings under the Term Loan Facility296,250 300,000 
Foreign debt2,112 2,252 
Total debt outstanding499,725 454,548 
Current portion of long-term debt(15,351)(15,359)
Gross long-term debt484,374 439,189 
Unamortized deferred financing fees(4,553)(4,801)
Long-term debt$479,821 $434,388 
v3.22.1
Acquisition - Additional Information (Details) - USD ($)
$ in Thousands
 1 Months Ended 2 Months Ended 3 Months Ended 5 Months Ended
Nov. 01, 2021
Oct. 31, 2021
Dec. 31, 2021
Apr. 01, 2022
Apr. 02, 2021
Apr. 01, 2022
Business Acquisition [Line Items]            
Goodwill     $ 318,620 $ 317,897   $ 317,897
Amortization of intangible assets       3,131 $ 1,173  
HCS- Electronic Materials            
Business Acquisition [Line Items]            
Business combination, consideration transferred $ 395,900          
Business combination, integration related costs     $ 2,100      
Inventory step up       $ 7,500    
Debt instrument, face amount   $ 300,000        
Debt instrument, term   5 years        
Amount outstanding   $ 103,000        
Goodwill $ 178,181          
Revenue since acquisition date           43,100
Income (loss) before taxes since acquisition date           $ (1,600)
HCS- Electronic Materials | Business Acquisition, Pro Forma Net Income (Loss)            
Business Acquisition [Line Items]            
Interest expense         2,900  
Amortization of intangible assets         $ 2,000  
v3.22.1
Acquisition - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Nov. 01, 2021
Assets:      
Operating lease, right-of-use assets $ 70,862 $ 63,096  
Goodwill $ 317,897 $ 318,620  
HCS- Electronic Materials      
Assets:      
Cash and cash equivalents     $ 3,685
Accounts receivable     28,352
Inventories     70,681
Prepaid and other current assets     660
Property, plant, and equipment     44,681
Operating lease, right-of-use assets     6,120
Intangible assets     107,800
Other long-term assets     4,528
Goodwill     178,181
Total assets acquired     444,688
Liabilities:      
Accounts payable     12,139
Salaries and wages     2,516
Other liabilities and accrued items     28
Income taxes     2,183
Other long-term liabilities     5,543
Operating lease liabilities     6,042
Deferred income taxes     20,300
Total liabilities assumed     48,751
Net assets acquired     $ 395,937
v3.22.1
Acquisition - Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - HCS- Electronic Materials
$ in Thousands
Nov. 01, 2021
USD ($)
Acquired Indefinite-lived Intangible Assets [Line Items]  
Intangible assets $ 107,800
Customer relationships  
Acquired Indefinite-lived Intangible Assets [Line Items]  
Intangible assets $ 50,200
Acquired finite-lived intangible assets, weighted average useful life (in years) 13 years
Technology  
Acquired Indefinite-lived Intangible Assets [Line Items]  
Intangible assets $ 35,300
Acquired finite-lived intangible assets, weighted average useful life (in years) 13 years
Trade name  
Acquired Indefinite-lived Intangible Assets [Line Items]  
Intangible assets $ 22,300
Acquired finite-lived intangible assets, weighted average useful life (in years) 15 years
v3.22.1
Acquisition - Pro Forma Information (Details) - HCS- Electronic Materials
$ in Thousands
 3 Months Ended
Apr. 01, 2022
USD ($)
Business Combination, Separately Recognized Transactions [Line Items]  
Net Sales $ 385,384
Profit income (loss) before taxes $ 18,997
v3.22.1
Segment Reporting - Schedule of Segment Reporting Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Segment Reporting Information    
Net sales $ 449,045 $ 354,386
Total Segment EBITDA 33,954 29,593
Income tax expense 3,021 3,466
Interest expense—net 3,735 761
Depreciation, depletion, and amortization 13,179 8,599
Net income 14,019 16,767
Performance Materials    
Segment Reporting Information    
Net sales 149,630 114,143
Total Segment EBITDA 24,792 16,792
Performance Materials | Intersubsegment Eliminations    
Segment Reporting Information    
Net sales 300  
Electronic Materials    
Segment Reporting Information    
Net sales 270,836 204,644
Total Segment EBITDA 12,148 10,930
Electronic Materials | Intersubsegment Eliminations    
Segment Reporting Information    
Net sales 5,500 2,700
Precision Optics    
Segment Reporting Information    
Net sales 28,579 35,599
Total Segment EBITDA 2,191 7,471
Other    
Segment Reporting Information    
Net sales 0 0
Total Segment EBITDA $ (5,177) $ (5,600)
v3.22.1
Segment Reporting - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Disaggregation of Revenue [Line Items]    
Net sales $ 449,045 $ 354,386
Semiconductor    
Disaggregation of Revenue [Line Items]    
Net sales 218,049 156,529
Industrial    
Disaggregation of Revenue [Line Items]    
Net sales 65,119 43,995
Aerospace and defense    
Disaggregation of Revenue [Line Items]    
Net sales 31,443 29,816
Consumer electronics    
Disaggregation of Revenue [Line Items]    
Net sales 18,639 19,669
Automotive    
Disaggregation of Revenue [Line Items]    
Net sales 26,356 27,369
Energy    
Disaggregation of Revenue [Line Items]    
Net sales 39,218 31,327
Telecom and data center    
Disaggregation of Revenue [Line Items]    
Net sales 16,126 11,413
Other    
Disaggregation of Revenue [Line Items]    
Net sales 34,095 34,268
Performance Materials    
Disaggregation of Revenue [Line Items]    
Net sales 149,630 114,143
Performance Materials | Semiconductor    
Disaggregation of Revenue [Line Items]    
Net sales 1,800 997
Performance Materials | Industrial    
Disaggregation of Revenue [Line Items]    
Net sales 40,819 24,030
Performance Materials | Aerospace and defense    
Disaggregation of Revenue [Line Items]    
Net sales 23,684 21,842
Performance Materials | Consumer electronics    
Disaggregation of Revenue [Line Items]    
Net sales 13,002 10,044
Performance Materials | Automotive    
Disaggregation of Revenue [Line Items]    
Net sales 22,235 23,507
Performance Materials | Energy    
Disaggregation of Revenue [Line Items]    
Net sales 10,099 4,137
Performance Materials | Telecom and data center    
Disaggregation of Revenue [Line Items]    
Net sales 16,081 11,343
Performance Materials | Other    
Disaggregation of Revenue [Line Items]    
Net sales 21,910 18,243
Electronic Materials    
Disaggregation of Revenue [Line Items]    
Net sales 270,836 204,644
Electronic Materials | Semiconductor    
Disaggregation of Revenue [Line Items]    
Net sales 214,922 155,061
Electronic Materials | Industrial    
Disaggregation of Revenue [Line Items]    
Net sales 15,866 12,590
Electronic Materials | Aerospace and defense    
Disaggregation of Revenue [Line Items]    
Net sales 2,614 1,398
Electronic Materials | Consumer electronics    
Disaggregation of Revenue [Line Items]    
Net sales 325 165
Electronic Materials | Automotive    
Disaggregation of Revenue [Line Items]    
Net sales 1,657 1,669
Electronic Materials | Energy    
Disaggregation of Revenue [Line Items]    
Net sales 29,119 27,190
Electronic Materials | Telecom and data center    
Disaggregation of Revenue [Line Items]    
Net sales 45 70
Electronic Materials | Other    
Disaggregation of Revenue [Line Items]    
Net sales 6,288 6,501
Precision Optics    
Disaggregation of Revenue [Line Items]    
Net sales 28,579 35,599
Precision Optics | Semiconductor    
Disaggregation of Revenue [Line Items]    
Net sales 1,327 471
Precision Optics | Industrial    
Disaggregation of Revenue [Line Items]    
Net sales 8,434 7,375
Precision Optics | Aerospace and defense    
Disaggregation of Revenue [Line Items]    
Net sales 5,145 6,576
Precision Optics | Consumer electronics    
Disaggregation of Revenue [Line Items]    
Net sales 5,312 9,460
Precision Optics | Automotive    
Disaggregation of Revenue [Line Items]    
Net sales 2,464 2,193
Precision Optics | Energy    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Precision Optics | Telecom and data center    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Precision Optics | Other    
Disaggregation of Revenue [Line Items]    
Net sales 5,897 9,524
Other    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Semiconductor    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Industrial    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Aerospace and defense    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Consumer electronics    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Automotive    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Energy    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Telecom and data center    
Disaggregation of Revenue [Line Items]    
Net sales 0 0
Other | Other    
Disaggregation of Revenue [Line Items]    
Net sales $ 0 $ 0
v3.22.1
Revenue Recognition - Additional Information (Details)
$ in Millions
 3 Months Ended
Apr. 01, 2022
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 76.5
Contract with customer, liability, revenue recognized $ 4.5
v3.22.1
Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Dec. 31, 2021
Capitalized Contract Cost [Line Items]      
Change in unearned revenue, amount $ (343) $ 932  
Accounts receivable, trade      
Capitalized Contract Cost [Line Items]      
Accounts receivable, trade 230,805   $ 213,584
Change in accounts receivable, trade, amount $ 17,221    
Contract asset percent change 8.00%    
Unbilled receivables      
Capitalized Contract Cost [Line Items]      
Unbilled receivables $ 6,445   7,961
Change in unbilled receivables, amount $ (1,516)    
Contract asset percent change (19.00%)    
Unearned revenue      
Capitalized Contract Cost [Line Items]      
Unearned revenue $ 7,407   $ 7,770
Change in unearned revenue, amount $ (363)    
Contract liability percent change (5.00%)    
v3.22.1
Other-net (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Other Income and Expenses [Abstract]    
Amortization of intangible assets $ 3,131 $ 1,173
Metal consignment fees 3,011 2,150
Foreign currency (gain) loss (333) 1,249
Net (gain) loss on disposal of fixed assets (11) (388)
Other items 75 290
Total $ 5,873 $ 4,474
v3.22.1
Income Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Income Tax Disclosure [Abstract]    
Effective income tax rate, percent 17.70% 17.10%
Effective income tax rate, amount $ 0.1 $ 0.3
v3.22.1
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Numerator for basic and diluted EPS:    
Net income $ 14,019 $ 16,767
Denominator for basic EPS:    
Weighted-average shares outstanding (in shares) 20,464 20,374
Effect of dilutive securities:    
Diluted potential common shares (in shares) 260 254
Denominator for diluted EPS:    
Adjusted weighted-average shares outstanding (in shares) 20,724 20,628
Basic EPS (in usd per share) $ 0.69 $ 0.82
Diluted EPS (in usd per share) $ 0.68 $ 0.81
Stock appreciation rights    
Effect of dilutive securities:    
Dilutive effect of share-based compensation (in shares) 97 72
Restricted stock units    
Effect of dilutive securities:    
Dilutive effect of share-based compensation (in shares) 106 108
Performance-based restricted stock units    
Effect of dilutive securities:    
Dilutive effect of share-based compensation (in shares) 57 74
v3.22.1
Earnings Per Share - Additional Information (Details) - shares
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Out-of-The-Money    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from diluted EPS calculation (in shares) 117,390 63,627
v3.22.1
Inventories - Summary of Inventories (Detail) - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Raw materials and supplies $ 106,625 $ 93,518
Work in process 228,194 221,638
Finished goods 52,173 45,959
Inventories, net $ 386,992 $ 361,115
v3.22.1
Inventories - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Apr. 01, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Notional amount of nonderivative instruments $ 485.5 $ 480.2
v3.22.1
Customer Prepayments (Details) - USD ($)
 1 Months Ended 3 Months Ended
Apr. 28, 2022
Apr. 01, 2022
Dec. 31, 2021
Deferred Revenue Arrangement [Line Items]      
Deferred income   $ 72,600,000 $ 72,600,000
Prepayments from customers   $ 0  
Subsequent Event      
Deferred Revenue Arrangement [Line Items]      
Prepayments from customers $ 4,000,000    
v3.22.1
Pensions and Other Post-employment Benefits (Detail) - USD ($)
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Pension Benefits    
Components of net periodic benefit (income) cost    
Service cost $ 318,000 $ 438,000
Interest cost 1,223,000 1,048,000
Expected return on plan assets (2,400,000) (2,474,000)
Amortization of prior service cost (benefit) (20,000) (21,000)
Amortization of net loss (gain) 430,000 577,000
Total net benefit (income) cost (449,000) (432,000)
Contributions by employer 0 0
Other Benefits    
Components of net periodic benefit (income) cost    
Service cost 22,000 20,000
Interest cost 39,000 29,000
Expected return on plan assets 0 0
Amortization of prior service cost (benefit) (374,000) (374,000)
Amortization of net loss (gain) (68,000) (69,000)
Total net benefit (income) cost $ (381,000) $ (394,000)
v3.22.1
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance $ (40,169) $ (38,639)
Other comprehensive income (loss) before reclassifications 698 (5,740)
Amounts reclassified from accumulated other comprehensive income (loss) (797) (1,341)
Net current period other comprehensive (loss) income before tax (99) (7,081)
Deferred taxes (82) 367
Other comprehensive loss (17) (7,448)
Accumulated other comprehensive income (loss), ending balance (40,186) (46,087)
Gains and Losses on Cash Flow Hedges    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance 2,420 817
Other comprehensive income (loss) before reclassifications 2,745 3,117
Amounts reclassified from accumulated other comprehensive income (loss) 203 (1,498)
Net current period other comprehensive (loss) income before tax 2,948 1,619
Deferred taxes 678 374
Other comprehensive loss 2,270 1,245
Accumulated other comprehensive income (loss), ending balance 4,690 2,062
Pension and Post-Employment Benefits    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance (39,702) (43,473)
Other comprehensive income (loss) before reclassifications 0 0
Amounts reclassified from accumulated other comprehensive income (loss) (1,000) 157
Net current period other comprehensive (loss) income before tax (1,000) 157
Deferred taxes (760) (7)
Other comprehensive loss (240) 164
Accumulated other comprehensive income (loss), ending balance (39,942) (43,309)
Foreign Currency Translation    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance (2,887) 4,017
Other comprehensive income (loss) before reclassifications (2,047) (8,857)
Amounts reclassified from accumulated other comprehensive income (loss) 0 0
Net current period other comprehensive (loss) income before tax (2,047) (8,857)
Deferred taxes 0 0
Other comprehensive loss (2,047) (8,857)
Accumulated other comprehensive income (loss), ending balance (4,934) (4,840)
Foreign Currency | Gains and Losses on Cash Flow Hedges    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance 2,348 519
Other comprehensive income (loss) before reclassifications 153 1,085
Amounts reclassified from accumulated other comprehensive income (loss) (19) 140
Net current period other comprehensive (loss) income before tax 134 1,225
Deferred taxes 31 282
Other comprehensive loss 103 943
Accumulated other comprehensive income (loss), ending balance 2,451 1,462
Interest rate swap | Gains and Losses on Cash Flow Hedges    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance 0 0
Other comprehensive income (loss) before reclassifications 3,112 0
Amounts reclassified from accumulated other comprehensive income (loss) 115 0
Net current period other comprehensive (loss) income before tax 3,227
Deferred taxes 742
Other comprehensive loss 2,485
Accumulated other comprehensive income (loss), ending balance 2,485
Precious Metals | Gains and Losses on Cash Flow Hedges    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance 72 (170)
Other comprehensive income (loss) before reclassifications (520) 741
Amounts reclassified from accumulated other comprehensive income (loss) 107 (104)
Net current period other comprehensive (loss) income before tax (413) 637
Deferred taxes (95) 147
Other comprehensive loss (318) 490
Accumulated other comprehensive income (loss), ending balance (246) 320
Copper swaps | Gains and Losses on Cash Flow Hedges    
Accumulated Other Comprehensive Income (Loss) [Rollward]    
Accumulated other comprehensive income (loss), beginning balance 0 468
Other comprehensive income (loss) before reclassifications 0 1,291
Amounts reclassified from accumulated other comprehensive income (loss) 0 (1,534)
Net current period other comprehensive (loss) income before tax 0 (243)
Deferred taxes 0 (55)
Other comprehensive loss 0 (188)
Accumulated other comprehensive income (loss), ending balance $ 0 $ 280
v3.22.1
Stock-based Compensation Expense - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense $ 1.8 $ 1.6
Unamortized compensation cost $ 16.1  
Stock appreciation rights    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of shares granted in period (in shares) 45,016  
Weighted average exercise price on SARs granted in period (in usd per share) $ 80.85  
Grant date fair value per unit (in usd per share) $ 25.87  
Restricted stock units    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of shares granted in period (in shares) 54,293  
Grant date fair value per unit (in usd per share) $ 80.95  
Vesting period 3 years  
Performance-based restricted stock units    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Grant date fair value per unit (in usd per share) $ 97.79  
Vesting period 3 years  
v3.22.1
Stock-based Compensation Expense - Schedule Of Share Based Payment Award SARs Valuation Assumptions (Detail) - Stock appreciation rights
 3 Months Ended
Apr. 01, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Risk-free interest rate 1.56%
Dividend yield 0.59%
Volatility 38.50%
Expected term (in years) 4 years 4 months 24 days
v3.22.1
Fair Value of Financial Instruments (Detail) - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Financial Assets    
Deferred compensation investments $ 3,675 $ 4,426
Foreign currency forward contracts 2,885 3,368
Total 9,787 7,910
Financial Liabilities    
Deferred compensation liability 3,675 4,426
Foreign currency forward contracts 480 136
Total 4,476 4,586
Interest rate swap    
Financial Assets    
Derivative asset 3,227 0
Precious metal swaps    
Financial Assets    
Derivative asset 0 116
Financial Liabilities    
Precious metal swaps 321 24
Quoted Prices in  Active Markets  for Identical Assets (Level 1)    
Financial Assets    
Deferred compensation investments 3,675 4,426
Foreign currency forward contracts 0 0
Total 3,675 4,426
Financial Liabilities    
Deferred compensation liability 3,675 4,426
Foreign currency forward contracts 0 0
Total 3,675 4,426
Quoted Prices in  Active Markets  for Identical Assets (Level 1) | Interest rate swap    
Financial Assets    
Derivative asset 0 0
Quoted Prices in  Active Markets  for Identical Assets (Level 1) | Precious metal swaps    
Financial Assets    
Derivative asset 0 0
Financial Liabilities    
Precious metal swaps 0 0
Significant Other Observable Inputs (Level 2)    
Financial Assets    
Deferred compensation investments 0 0
Foreign currency forward contracts 2,885 3,368
Total 6,112 3,484
Financial Liabilities    
Deferred compensation liability 0 0
Foreign currency forward contracts 480 136
Total 801 160
Significant Other Observable Inputs (Level 2) | Interest rate swap    
Financial Assets    
Derivative asset 3,227 0
Significant Other Observable Inputs (Level 2) | Precious metal swaps    
Financial Assets    
Derivative asset 0 116
Financial Liabilities    
Precious metal swaps 321 24
Significant Unobservable Inputs (Level 3)    
Financial Assets    
Deferred compensation investments 0 0
Foreign currency forward contracts 0 0
Total 0 0
Financial Liabilities    
Deferred compensation liability 0 0
Foreign currency forward contracts 0 0
Total 0 0
Significant Unobservable Inputs (Level 3) | Interest rate swap    
Financial Assets    
Derivative asset 0 0
Significant Unobservable Inputs (Level 3) | Precious metal swaps    
Financial Assets    
Derivative asset 0 0
Financial Liabilities    
Precious metal swaps $ 0 $ 0
v3.22.1
Derivative Instruments and Hedging Activity - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Mar. 04, 2022
Derivatives, Fair Value [Line Items]      
Foreign currency gain (loss) related to derivatives $ 0.7 $ 1.6  
Cash flow hedge gain (loss) to be reclassified within twelve months $ 1.2    
Interest rate swap | Letter of Credit | Designated as hedging instrument      
Derivatives, Fair Value [Line Items]      
Notional amount, total     $ 100.0
v3.22.1
Derivative Instruments and Hedging Activity - Derivative Instruments Non-Hedging (Details) - Not designated as hedging instrument - Foreign Currency - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Prepaid and other current assets    
Derivative Instruments, Gain (Loss)    
Notional amount, asset $ 91,615 $ 55,063
Fair value, asset 1,350 2,132
Other liabilities and accrued items    
Derivative Instruments, Gain (Loss)    
Notional amount, liability 18,474 9,425
Fair value, liability $ 307 $ 128
v3.22.1
Derivative Instruments and Hedging Activity - Fair Value Measurements, Recurring and Nonrecurring (Details) - Designated as hedging instrument - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Derivative [Line Items]    
Notional amount, asset $ 142,371 $ 38,575
Foreign Currency | Yen    
Derivative [Line Items]    
Notional amount, asset 4,303 3,907
Foreign Currency | Euro    
Derivative [Line Items]    
Notional amount, asset 31,199 28,412
Precious metal swaps    
Derivative [Line Items]    
Notional amount, asset 6,869 6,256
Interest rate swap    
Derivative [Line Items]    
Notional amount, asset 100,000  
Prepaid and other current assets    
Derivative [Line Items]    
Fair value, asset 1,633 1,349
Prepaid and other current assets | Foreign Currency | Yen    
Derivative [Line Items]    
Fair value, asset 275 131
Prepaid and other current assets | Foreign Currency | Euro    
Derivative [Line Items]    
Fair value, asset 1,238 1,102
Prepaid and other current assets | Precious metal swaps    
Derivative [Line Items]    
Fair value, asset 0 116
Prepaid and other current assets | Interest rate swap    
Derivative [Line Items]    
Fair value, asset 120  
Other assets    
Derivative [Line Items]    
Fair value, asset 3,129 2
Other assets | Foreign Currency | Yen    
Derivative [Line Items]    
Fair value, asset 22 2
Other assets | Foreign Currency | Euro    
Derivative [Line Items]    
Fair value, asset 0 0
Other assets | Precious metal swaps    
Derivative [Line Items]    
Fair value, asset 0 0
Other assets | Interest rate swap    
Derivative [Line Items]    
Fair value, asset 3,107  
Other liabilities and accrued items    
Derivative [Line Items]    
Fair value, liability 385 24
Other liabilities and accrued items | Foreign Currency | Yen    
Derivative [Line Items]    
Fair value, liability 6 0
Other liabilities and accrued items | Foreign Currency | Euro    
Derivative [Line Items]    
Fair value, liability 81 0
Other liabilities and accrued items | Precious metal swaps    
Derivative [Line Items]    
Fair value, liability 298 24
Other liabilities and accrued items | Interest rate swap    
Derivative [Line Items]    
Fair value, liability 0  
Other long-term liabilities    
Derivative [Line Items]    
Fair value, liability 109 8
Other long-term liabilities | Foreign Currency | Yen    
Derivative [Line Items]    
Fair value, liability 0 0
Other long-term liabilities | Foreign Currency | Euro    
Derivative [Line Items]    
Fair value, liability 86 8
Other long-term liabilities | Precious metal swaps    
Derivative [Line Items]    
Fair value, liability 23 $ 0
Other long-term liabilities | Interest rate swap    
Derivative [Line Items]    
Fair value, liability $ 0  
v3.22.1
Derivative Instruments and Hedging Activity - Derivative Instruments, Gain (Loss) (Details) - Designated as hedging instrument - USD ($)
$ in Thousands
 3 Months Ended
Apr. 01, 2022
Apr. 02, 2021
Derivative Instruments, Gain (Loss)    
Derivative, gain (loss) on derivative, net $ 203 $ (1,498)
Net sales | Foreign currency forward contracts    
Derivative Instruments, Gain (Loss)    
Derivative, gain (loss) on derivative, net (19) 140
Cost of sales | Precious metal swaps    
Derivative Instruments, Gain (Loss)    
Derivative, gain (loss) on derivative, net 107 (104)
Cost of sales | Copper swaps    
Derivative Instruments, Gain (Loss)    
Derivative, gain (loss) on derivative, net 0 (1,534)
Interest expense - net | Interest rate swap    
Derivative Instruments, Gain (Loss)    
Derivative, gain (loss) on derivative, net $ 115 $ 0
v3.22.1
Contingencies (Detail)
$ in Millions
Apr. 01, 2022
USD ($)
claim
Dec. 31, 2021
USD ($)
Loss Contingency [Abstract]    
Loss contingency, pending claims | claim 2  
Undiscounted reserve balance | $ $ 4.4 $ 4.8
v3.22.1
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Debt Disclosure [Abstract]    
Borrowings under Credit Agreement $ 201,363 $ 152,296
Borrowings under the Term Loan Facility 296,250 300,000
Foreign debt 2,112 2,252
Total debt outstanding 499,725 454,548
Current portion of long-term debt (15,351) (15,359)
Gross long-term debt 484,374 439,189
Unamortized deferred financing fees (4,553) (4,801)
Long-term debt $ 479,821 $ 434,388
v3.22.1
Debt - Additional Information (Details) - USD ($)
$ in Thousands
Apr. 01, 2022
Dec. 31, 2021
Line of Credit Facility [Line Items]    
Borrowings under Credit Agreement $ 201,363 $ 152,296
Line of credit facility, interest rate at period end 2.55% 2.12%
Line of credit facility, remaining borrowing capacity $ 127,400  
Long-term line of credit, noncurrent 296,300 $ 300,000
Letter of Credit    
Line of Credit Facility [Line Items]    
Letters of credit outstanding, amount $ 46,300 $ 46,300