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

			
FORM 8-K

CURRENT REPORT	

			

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934	
					
Date of Report (Date of earliest event reported) August 3, 2022

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

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

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

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

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

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

	

Item 2.02 Results of Operations and Financial Condition.

On August 3, 2022, Materion Corporation issued a press release announcing its results for the second quarter of 2022. The press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibits.
									
Exhibit Number		Description of Exhibit	
99.1		Materion Corporation press release, dated August 3, 2022	
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
									
		Materion Corporation	
			
August 3, 2022	By:	/s/ John M. Zaranec	
		John M. Zaranec	
		Chief Accounting Officer	

Materion Corporation Reports Record Second Quarter Results and

Affirms Full Year 2022 Outlook

MAYFIELD HEIGHTS, Ohio - August 3, 2022 - Materion Corporation (NYSE: MTRN), a world leader in high performance advanced materials, today reported record second quarter financial results, affirmed 2022 earnings guidance and shared an update on key strategic initiatives.

Second Quarter 2022 Highlights
•Net sales were $445.3 million; value-added sales increased 33% year over year to a record $277.2 million
•Operating profit was $31.9 million; adjusted earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) was a record $47.0 million, an increase of 44% and a 120-basis point margin expansion year over year
•Net income of $1.12 per share, diluted; adjusted earnings per share (EPS) of $1.28, an all-time record, up 41% year over year
Recent Organic Growth Developments
•Established a new advanced chemicals facility to accelerate growth in semiconductor and electric vehicle applications
•Leading EV battery customer is funding $6M to establish a prototype line to produce advanced chemicals for their next-generation battery solutions
•Materion and Kairos jointly commissioned a Molten Salt Purification Plant for use in clean energy production

“Our global team delivered an exceptional first half of the year with another record quarter of value-added sales and earnings,” Jugal Vijayvargiya, Materion President & Chief Executive Officer said. “Our organic outgrowth initiatives and strategic acquisitions combined with strong end market demand are accelerating the transformation of our company into a leading provider of advanced materials solutions.”
“Our relentless focus on commercial excellence, strong customer partnerships and investments in R&D are coming together as planned resulting in a fantastic pipeline of opportunities that will continue to deliver above market growth,” Vijayvargiya continued. “Our substantial organic initiatives, coupled with the HCS-Electronic Materials acquisition, which continues to exceed expectations, strengthened our performance during the quarter and enhances our ability to deliver on several exciting opportunities ahead of us.”

SECOND QUARTER 2022 RESULTS
Net sales for the second quarter of 2022 were $445.3 million, compared to $371.0 million in the prior year period. Value-added sales of $277.2 million were a quarterly record, up 33% from the prior year. In addition to the benefit of the HCS-Electronic Materials acquisition, value-added sales were up 12% organically, driven by strong performance across several major end markets including semiconductor, industrial, aerospace and energy.
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Operating profit for the second quarter was $31.9 million and net income was $23.3 million, or $1.12 per diluted share, compared to operating profit of $20.7 million and net income of $17.9 million, or $0.87 per diluted share in the prior year period. Excluding acquisition and restructuring related costs as detailed in the attached tables, adjusted EBITDA was $47.0 million in the second quarter, another quarterly record and an increase of 44% versus the prior year period.
Adjusted net income was $26.4 million excluding acquisition amortization, or $1.28 per diluted share, an increase of 41% compared to $0.91 per share in the prior year period.
OUTLOOK
While we continue to monitor various macroeconomic factors that could intensify headwinds, we remain confident in our full year outlook with the strength of our order book, organic outgrowth resulting from our customer initiatives, and the full year impact of the HCS-Electronic Materials acquisition. As a result, we are affirming the 2022 adjusted earnings per share guidance in the range of $5.50 to $5.90.
ADJUSTED EARNINGS GUIDANCE
It is not possible for the Company to identify the amount or significance of future adjustments associated with potential insurance and litigation claims, legacy environmental costs, acquisition and integration costs, certain income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance for the full year to a comparable GAAP range. However, items excluded from the Company's adjusted earnings guidance include the historical adjustments noted in Attachments 4 through 7 to this press release.
CONFERENCE CALL
Materion Corporation will host an investor conference call with analysts at 9:00 a.m. Eastern Time, August 3, 2022. The conference call will be available via webcast through the Company’s website at www.materion.com. By phone, please dial (888) 506-0062. Calls outside the U.S. can dial (973) 528-0011; please reference participant access code of 380484. A replay of the call will be available until August 17, 2022 by dialing (877) 481-4010 or (919) 882-2331 if international; please reference replay ID number 44231. The call will also be archived on the Company’s website.
FORWARD-LOOKING STATEMENTS
Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: our ability to achieve the strategic and other objectives related to the acquisition of HCS-Electronic Materials, including any expected synergies; our ability to successfully integrate the HCS-Electronic Materials business and other such acquisitions and achieve the expected results of the acquisition, the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition, and liquidity; the global economy, including inflationary pressures, potential future recessionary conditions, and the impact of tariffs and trade agreements; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success implementing our strategic plans and the timely and successful completion and start-up of any capital projects; other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal consignment fees, tax rates, exchange rates, interest rates, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, credit availability, and the impact of the Materion’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; the disruptions on operations from, and
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other effects of, catastrophic and other extraordinary events; and the risk factors set forth in Part 1, Item 1A of our 2021 Annual Report on Form 10-K.
Materion Corporation is headquartered in Mayfield Heights, Ohio. The Company, through its wholly owned subsidiaries, supplies highly engineered advanced enabling materials to global markets. Products include precious and non-precious specialty metals, inorganic chemicals and powders, specialty coatings, specialty engineered beryllium alloys, beryllium and beryllium composites, and engineered clad and plated metal systems.

Investor Contact:
Kyle Kelleher
(216) 383-4931
kyle.kelleher@materion.com

Media Contact:
Shannon Bennett
(216) 383-4094
shannon.bennett@materion.com

https://materion.com
Mayfield Hts-g
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Attachment 1
Materion Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)

	Second Quarter Ended		Six Months Ended	
(In thousands except per share amounts)	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021	
Net sales	$	445,295 			$	370,999 			$	894,340 			$	725,385 		
Cost of sales	357,868 			301,418 			731,622 			589,008 		
Gross margin	87,427 			69,581 			162,718 			136,377 		
Selling, general, and administrative expense	42,047 			38,060 			83,708 			74,836 		
Research and development expense	7,592 			6,604 			14,666 			12,810 		
Restructuring expense (income)	— 			— 			1,076 			(378)		
Other — net	5,928 			4,194 			11,801 			8,668 		
Operating profit	31,860 			20,723 			51,467 			40,441 		
Other non-operating income—net	(1,168)			(1,277)			(2,337)			(2,553)		
Interest expense — net	4,701 			858 			8,437 			1,619 		
Income before income taxes	28,327 			21,142 			45,367 			41,375 		
Income tax expense	5,072 			3,274 			8,093 			6,740 		
Net income	$	23,255 			$	17,868 			$	37,274 			$	34,635 		
Basic earnings per share:								
Net income per share of common stock	$	1.13 			$	0.87 			$	1.82 			$	1.70 		
Diluted earnings per share:								
Net income per share of common stock	$	1.12 			$	0.87 			$	1.80 			$	1.68 		
Weighted-average number of shares of common stock outstanding:								
Basic	20,517 			20,429 			20,491 			20,402 		
Diluted	20,723 			20,651 			20,743 			20,647 		

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Attachment 2
Materion Corporation and Subsidiaries
Consolidated Balance Sheets

		(Unaudited)			
(Thousands)		July 1, 2022		December 31, 2021	
Assets					
Current assets					
Cash and cash equivalents		$	32,175 			$	14,462 		
Accounts receivable, net		222,811 			223,553 		
Inventories, net		422,376 			361,115 		
Prepaid and other current assets		29,606 			28,122 		
Total current assets		706,968 			627,252 		
Deferred income taxes		5,018 			5,431 		
Property, plant, and equipment		1,164,273 			1,132,223 		
Less allowances for depreciation, depletion, and amortization		(739,776)			(723,248)		
Property, plant, and equipment—net		424,497 			408,975 		
Operating lease, right-of-use assets		68,045 			63,096 		
Intangible assets, net		148,364 			156,736 		
Other assets		30,228 			27,369 		
Goodwill		319,994 			318,620 		
Total Assets		$	1,703,114 			$	1,607,479 		
Liabilities and Shareholders’ Equity					
Current liabilities					
Short-term debt		$	15,333 			$	15,359 		
Accounts payable		113,708 			86,243 		
Salaries and wages		22,239 			37,544 		
Other liabilities and accrued items		49,148 			53,388 		
Income taxes		1,700 			4,205 		
Unearned revenue		8,097 			7,770 		
Total current liabilities		210,225 			204,509 		
Other long-term liabilities		15,846 			14,954 		
Operating lease liabilities		62,474 			57,099 		
Finance lease liabilities		14,360 			16,327 		
Retirement and post-employment benefits		30,992 			33,394 		
Unearned income		108,126 			97,962 		
Long-term income taxes		1,206 			1,190 		
Deferred income taxes		28,766 			27,216 		
Long-term debt		481,965 			434,388 		
Shareholders’ equity		749,154 			720,440 		
Total Liabilities and Shareholders’ Equity		$	1,703,114 			$	1,607,479 		

5

Attachment 3

Materion Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
															
		Six Months Ended	
(Thousands)		July 1, 2022		July 2, 2021	
Cash flows from operating activities:					
Net income		$	37,274 			$	34,635 		
Adjustments to reconcile net income to net cash provided by operating activities:					
Depreciation, depletion, and amortization		26,070 			19,063 		
Amortization of deferred financing costs in interest expense		780 			364 		
Stock-based compensation expense (non-cash)		3,694 			3,512 		
Deferred income tax expense (benefit)		1,966 			367 		
Changes in assets and liabilities:					
Accounts receivable		(2,566)			(13,941)		
Inventory		(67,304)			(40,651)		
Prepaid and other current assets		(2,462)			(1,718)		
Accounts payable and accrued expenses		8,897 			28,403 		
Unearned revenue		(141)			3,246 		
Interest and taxes payable		(1,765)			2,868 		
Unearned income due to customer prepayments		13,059 			8,043 		
Other-net		3,913 			(126)		
Net cash provided by operating activities		21,415 			44,065 		
Cash flows from investing activities:					
Payments for purchase of property, plant, and equipment		(37,730)			(57,712)		
Proceeds from sale of property, plant, and equipment		105 			603 		
Payments for acquisition, net of cash acquired		(2,971)			— 		
Net cash used in investing activities		(40,596)			(57,109)		
Cash flows from financing activities:					
Proceeds from borrowings under revolving credit agreement, net		52,794 			22,500 		
Proceeds from issuance of long-term debt		2,059 				
Repayment of long-term debt		(7,177)			(1,654)		
Principal payments under finance lease obligations		(1,334)			(1,512)		
Cash dividends paid		(5,112)			(4,791)		
Payments of withholding taxes for stock-based compensation awards		(2,812)			(3,021)		
Net cash provided by financing activities		38,418 			11,522 		
Effects of exchange rate changes		(1,524)			(11)		
Net change in cash and cash equivalents		17,713 			(1,533)		
Cash and cash equivalents at beginning of period		14,462 			25,878 		
Cash and cash equivalents at end of period		$	32,175 			$	24,345 		

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Attachment 4
Materion Corporation and Subsidiaries
Reconciliation of Non-GAAP Measure - Value-added Sales, Operating Profit, and EBITDA
(Unaudited)
																								
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021	
Net Sales								
Performance Materials(1)	$	154.9 			$	125.3 			$	304.5 			$	239.4 		
Electronic Materials(1)	261.0 			213.1 			531.8 			417.8 		
Precision Optics	29.4 			32.6 			58.0 			68.2 		
Other	— 			— 			— 			— 		
 Total	$	445.3 			$	371.0 			$	894.3 			$	725.4 		
								
 Less: Pass-through Metal Cost								
Performance Materials(1)	$	20.9 			$	16.7 			$	41.4 			$	30.0 		
Electronic Materials(1)	$	146.8 			146.2 			$	307.7 			287.9 		
Precision Optics	$	— 			— 			$	0.1 			— 		
Other	$	0.4 			0.2 			$	1.1 			1.0 		
 Total	$	168.1 			$	163.1 			$	350.3 			$	318.9 		
								
 Value-added Sales (non-GAAP)								
Performance Materials(1)	$	134.0 			$	108.6 			$	263.1 			$	209.4 		
Electronic Materials(1)	114.2 			66.9 			224.1 			129.9 		
Precision Optics	29.4 			32.6 			57.9 			68.2 		
Other	(0.4)			(0.2)			(1.1)			(1.0)		
 Total	$	277.2 			$	207.9 			$	544.0 			$	406.5 		
								
Gross Margin								
Performance Materials(1)	$	39.0 			$	33.0 			$	76.3 			$	62.6 		
Electronic Materials(1)	38.6 			25.0 			68.1 			48.8 		
Precision Optics	9.8 			11.8 			18.3 			25.8 		
Other	— 			(0.3)			— 			(0.8)		
 Total	$	87.4 			$	69.5 			$	162.7 			$	136.4 		
(1)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. See further discussion in the Form 10-Q for the period ended April 1, 2022.	

7

																								
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021	
Operating Profit								
Performance Materials	$	21.8 			$	17.3 			$	40.9 			$	30.8 		
Electronic Materials	18.2 			8.3 			26.2 			17.2 		
Precision Optics	0.7 			2.6 			— 			7.2 		
Other	(8.8)			(7.5)			(15.6)			(14.8)		
Total	$	31.9 			$	20.7 			$	51.5 			$	40.4 		
								
Non-Operating (Income)/Expense								
Performance Materials	$	0.1 			$	0.2 			$	0.3 			$	0.3 		
Electronic Materials	— 			— 			— 			— 		
Precision Optics	(0.2)			(0.2)			(0.4)			(0.4)		
Other	(1.1)			(1.3)			(2.2)			(2.5)		
Total	$	(1.2)			$	(1.3)			$	(2.3)			$	(2.6)		
								
Depreciation, Depletion, and Amortization								
Performance Materials	$	5.5 			$	5.2 			$	11.4 			$	8.6 		
Electronic Materials	4.2 			2.1 			8.3 			4.1 		
Precision Optics	2.6 			2.7 			5.3 			5.4 		
Other	0.6 			0.5 			1.1 			1.0 		
Total	$	12.9 			$	10.5 			$	26.1 			$	19.1 		
								
Segment EBITDA								
Performance Materials	27.2 			22.3 			52.0 			39.1 		
Electronic Materials	22.4 			10.4 			34.5 			21.3 		
Precision Optics	3.5 			5.5 			5.7 			13.0 		
Other	(7.1)			(5.7)			(12.3)			(11.3)		
Total	46.0 			32.5 			79.9 			62.1 		
								
Special Items								
Performance Materials	$	— 			$	— 			$	2.7 			$	— 		
Electronic Materials	0.4 			— 			7.2 			— 		
Precision Optics	0.1 			0.1 			0.3 			0.4 		
Other	0.5 			— 			1.5 			0.1 		
 Total	$	1.0 			$	0.1 			$	11.7 			$	0.5 		
								
Adjusted EBITDA Excluding Special Items								
Performance Materials	27.2 			22.3 			54.7 			39.1 		
Electronic Materials	22.8 			10.4 			41.7 			21.3 		
Precision Optics	3.6 			5.6 			6.0 			13.4 		
Other	(6.6)			(5.7)			(10.8)			(11.2)		
Total	47.0 			32.6 			91.6 			62.6 		
The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. Internally, management also reviews net sales on a value-added basis. Value-added sales is a non-GAAP financial measure that deducts the value of the pass-through metals sold from net sales. Value-added sales allows management to assess the impact of differences in net sales between periods or segments and analyze the resulting margins and profitability without the distortion of the movements in pass-through market metal prices. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. The Company sells other metals and materials that are not considered direct pass throughs, and these costs are not deducted from net sales to calculate value-added sales.

The Company’s pricing policy is to pass the cost of these metals on to customers in order to mitigate the impact of price volatility on the Company’s results from operations. Value-added information is being presented since changes in metal prices may not directly impact profitability. It is the Company’s intent to allow users of the financial statements to review sales with and without the impact of the pass-through metals.
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Attachment 5
Materion Corporation and Subsidiaries
Reconciliation of Net Sales to Value-added Sales, Net Income to EBITDA and Adjusted EBITDA
(Unaudited)
																																																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		% of VA		July 2, 2021		% of VA		July 1, 2022		% of VA		July 2, 2021		% of VA	
Net sales	$	445.3 					$	371.0 					$	894.3 					$	725.4 				
Pass-through metal cost	168.1 					$	163.1 					350.3 					318.9 				
Value-added sales	$	277.2 					$	207.9 					$	544.0 					$	406.5 				
																
Net income	$	23.3 			8.4 	%		17.9 			8.6 	%		$	37.3 			6.9 	%		$	34.6 			8.5 	%	
Income tax expense	5.1 			1.8 	%		3.3 			1.6 	%		8.1 			1.5 	%		6.8 			1.7 	%	
Interest expense - net	4.7 			1.7 	%		0.8 			0.4 	%		8.4 			1.5 	%		1.6 			0.4 	%	
Depreciation, depletion and amortization	12.9 			4.7 	%		10.5 			5.1 	%		26.1 			4.8 	%		19.1 			4.7 	%	
Consolidated EBITDA	$	46.0 			16.6 	%		$	32.5 			15.6 	%		$	79.9 			14.7 	%		$	62.1 			15.3 	%	
																
Special items																
Restructuring and cost reduction	$	— 			— 	%		$	0.1 			— 	%		$	1.1 			0.2 	%		0.4 			0.1 	%	
Merger and acquisition costs	1.0 			0.4 	%		— 			— 	%		10.6 			1.9 	%		0.1 			— 	%	
Total special items	1.0 			0.4 	%		0.1 			— 	%		11.7 			2.2 	%		0.5 			0.1 	%	
Adjusted EBITDA	$	47.0 			17.0 	%		$	32.6 			15.7 	%		$	91.6 			16.8 	%		$	62.6 			15.4 	%	
In addition to presenting financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release contains financial measures, including operating profit, segment operating profit, earnings before earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), net income, and earnings per share, on a non-GAAP basis. As detailed in the above reconciliation and Attachment 6, we have adjusted the results for certain special items such as restructuring and cost reductions and merger and acquisition costs. Internally, management reviews the results of operations without the impact of these costs in order to assess the profitability from ongoing activities. We are providing this information because we believe it will assist investors in analyzing our financial results and, when viewed in conjunction with the GAAP results, provide a more comprehensive understanding of the factors and trends affecting our operations.

9

Attachment 6
Materion Corporation and Subsidiaries
Reconciliation of Net Income to Adjusted Net Income
and Diluted Earnings per Share to Adjusted Diluted Earnings per Share (Unaudited)
																																																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		Diluted EPS		July 2, 2021		Diluted EPS		July 1, 2022		Diluted EPS		July 2, 2021		Diluted EPS	
Net income and EPS	$	23.3 			$	1.12 			$	17.9 			$	0.87 			$	37.3 			$	1.80 			$	34.6 			$	1.68 		
																
Special items																
Restructuring and cost reduction	— 					0.1 					1.1 					0.4 				
Merger and acquisition costs	1.0 					— 					10.6 					0.1 				
Provision for income taxes(1)	(0.3)					(0.2)					(2.6)					(0.4)				
Total special items	0.7 			0.04 			(0.1)			(0.01)			9.1 			0.44 			0.1 			— 		
Adjusted net income and adjusted EPS	$	24.0 			$	1.16 			$	17.8 			$	0.86 			$	46.4 			$	2.24 			$	34.7 			$	1.68 		
Acquisition amortization (net of tax)	2.4 			0.12 			1.0 			0.05 			4.9 			0.23 			2.1 			0.10	
Adjusted net income and adjusted EPS excl. amortization	$	26.4 			$	1.28 			$	18.8 			$	0.91 			$	51.3 			$	2.47 			$	36.8 			$	1.78 		
(1) Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of certain discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.

10

Attachment 7

Reconciliation of Segment Net sales to Segment Value-added sales and Segment EBITDA to Adjusted Segment EBITDA (Unaudited)	
Performance Materials																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		% of VA		July 2, 2021		% of VA		July 1, 2022		% of VA		July 2, 2021		% of VA	
Net sales	$	154.9 					$	125.3 					$	304.5 					$	239.4 				
Pass-through metal cost	20.9 					16.7 					41.4 					30.0 				
Value-added sales	$	134.0 					$	108.6 					$	263.1 					$	209.4 				
																
EBITDA	$	27.2 			20.3 	%		$	22.3 			20.5 	%		$	52.0 			19.8 	%		$	39.1 			18.7 	%	
Merger and acquisition costs	— 			— 	%		— 			— 	%		2.7 			1.0 	%		— 			— 	%	
Adjusted EBITDA	$	27.2 			20.3 	%		$	22.3 			20.5 	%		$	54.7 			20.8 	%		$	39.1 			18.7 	%	
																
Electronic Materials																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		% of VA		July 2, 2021		% of VA		July 1, 2022		% of VA		July 2, 2021		% of VA	
Net sales	$	261.0 					$	213.1 					$	531.8 					$	417.8 				
Pass-through metal cost	146.8 					146.2 					307.7 					287.9 				
Value-added sales	$	114.2 					$	66.9 					$	224.1 					$	129.9 				
																
EBITDA	$	22.4 			19.6 	%		$	10.4 			15.5 	%		$	34.5 			15.4 	%		$	21.3 			16.4 	%	
Restructuring and cost reduction	— 			— 	%		— 			— 	%		0.8 			0.4 	%		— 			— 	%	
Merger and acquisition costs	0.4 			0.4 	%		— 			— 	%		6.4 			2.9 	%		— 			— 	%	
Adjusted EBITDA	$	22.8 			20.0 	%		$	10.4 			15.5 	%		$	41.7 			18.6 	%		$	21.3 			16.4 	%	
																
Precision Optics																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		% of VA		July 2, 2021		% of VA		July 1, 2022		% of VA		July 2, 2021		% of VA	
Net sales	$	29.4 					$	32.6 					$	58.0 					$	68.2 				
Pass-through metal cost	— 					— 					0.1 					— 				
Value-added sales	$	29.4 					$	32.6 					$	57.9 					$	68.2 				
																
EBITDA	$	3.5 			11.9 	%		$	5.5 			16.9 	%		$	5.7 			9.8 	%		$	13.0 			19.1 	%	
Restructuring and cost reduction	— 			— 	%		0.1 			0.3 	%		0.2 			0.3 	%		0.4 			0.6 	%	
Merger and acquisition costs	0.1 			0.3 	%		— 			— 	%		0.1 			0.2 	%		— 			— 	%	
Adjusted EBITDA	$	3.6 			12.2 	%		$	5.6 			17.2 	%		$	6.0 			10.4 	%		$	13.4 			19.6 	%	
																
Other																
	Second Quarter Ended		Six Months Ended	
(Millions)	July 1, 2022		% of VA		July 2, 2021		% of VA		July 1, 2022		% of VA		July 2, 2021		% of VA	
EBITDA	$	(7.1)					$	(5.7)					$	(12.3)					$	(11.3)				
Restructuring and cost reduction	— 					— 					0.1 					— 				
   Merger and acquisition costs	0.5 					— 					1.4 					0.1 				
Adjusted EBITDA	$	(6.6)					$	(5.7)					$	(10.8)					$	(11.2)				
11