MATERION Corp
For the period ended Jun 27, 2025. Filed Jul 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 27, 2025 · Filed Jul 30, 2025
MTRN$186.11+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-28; filed 2025-05-01.
0001104657-25-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-27; filed 2025-07-30.
0001104657-25-000144
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 81 current paragraphs.
21 unchanged; 33 reworded; 23 added; 8 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 8 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
SG&A expense was $35.0 million in the second quarter of 2025, compared to $33.6 million in the second quarter of 2024. The increase in SG&A expense was primarily due to timing of the incentive compensation accruals due to year to date performance. Expressed as a percentage of net sales, SG&A expense was 8% of net sales in both the second quarter of 2025 and 2024. Expressed as a percentage of value-added sales, SG&A expense was 13% and 12% in the second quarter of 2025 and 2024, respectively.
Current report
R&D expense consists primarily of direct personnel costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and applications to deliver new high performing advanced materials to our customers. R&D expense accounted for 1% of net sales in the second quarter of 2025 and 2% of net sales in the second quarter of 2024. R&D expense accounted for 2% of value-added sales in the second quarter of 2025 and 3% of value-added sales in the second quarter of 2024. The decrease was driven by project timing.
Current report
Other-netwas $3.9 million of expense in the second quarter of 2025, or a decrease of $0.5 million from the second quarter of 2024. Refer to Note D to the Consolidated Financial Statements for details of the major components within Other-net.
Current report
Interest expense-net was $8.2 million and $8.8 million in the second quarter of 2025 and 2024, respectively. The decrease in interest expense was primarily due to a decrease in interest rates and decreased borrowings compared to the prior year period.
Current report
Value-added salesof $528.3 million in the first six months of 2025 decreased $9.4 million, or 2%, compared to the first six months of 2024. A volume decrease in the consumer electronics (14%) end market was partially offset by a volume increase in the energy (28%) end market. Additionally, there was a $2.5 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the same period in the prior year.
Current report
Gross marginin the first six months of 2025 was $158.8 million, an increase of 4% compared to the first six months of 2024. Gross margin expressed as a percentage of net sales was 19% in the first six months of 2025 and 2024. Gross margin expressed as a percentage of value-added sales increased to 30% in the first six months of 2025 from 28% in the first six months of 2024. Despite the impact of lower sales volumes in the first six months of 2025, the Company experiences improved manufacturing performance, resulting in favorable margins in 2025. The lower gross margin in the first six months of 2024 was impacted by the significant pre-production costs and manufacturing inefficiencies associated with the ramp of the wide area clad facility.
Current report
Income tax expense for the first half of 2025 was $7.3 million, compared to $6.1 million in the first half of 2024. The Company's effective tax rate for the first six months of 2025 and 2024 was 14.5% and 15.8%, respectively. The effective tax rate for the first six months of 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion and the advanced manufacturing production credit. The effective tax rate for the first six months of 2024 was lower than the statutory tax rate primarily due to the impact of percentage depletion and the foreign derived intangible income deduction. The effective tax rate for the first six months of 2025 includes net discrete income tax expense of $0.6 million, primarily consisting of $0.2 million expense for stock-based compensation awards and $0.4 million expense for unrecognized tax benefits recorded. The effective tax rate for the first six months of 2024 included a net discrete income tax benefit of $0.2 million, which primarily consisted of $1.0 million of excess tax benefits from stock-based compensation awards offset by a $1.1 million valuation allowance recorded against deferred tax assets that were not likely to be realized for one of the Company’s foreign subsidiaries. See Note F to the Consolidated Financial Statements for additional discussion.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S. The OBBBA includes a broad range of tax provisions affecting businesses including extending permanently, with modification, certain business and international tax provisions enacted as part of the Tax Cuts and Jobs Act of 2017 and expanding certain Inflation Reduction Act tax incentives while accelerating the phase-out of others. Key provisions of the OBBBA relevant to our operations include the phase-out of the advanced manufacturing production credit beginning in 2031, the immediate expensing of certain capital expenditures and domestic research and development expenses beginning in 2025, adjustments to interest expense limitations, and changes to various U.S international tax provisions. The Company is still evaluating the impact of the OBBBA on our consolidated financial statements. We expect to reflect the effects of the OBBBA in our financial statements for the quarter ending September 26, 2025, in accordance with the ASC 740.
Current report
Net sales from the Performance Materials segment of $182.8 million in the second quarter of 2025 decreased 3% compared to net sales of $187.5 million in the second quarter of 2024. The decrease in net sales was due to lower sales volumes in the consumer electronics (11%) end market and a $3.8 million year over year decrease in the volume of raw material beryllium hydroxide sales compared to the second quarter of 2024, partially offset by increased volumes in the energy (38%) and aerospace and defense (3%) end markets.
Current report
Net sales from the Performance Materials segment of $356.8 million in the first six months of 2025 were relatively flat year over year. The decrease in sales volumes in the consumer electronics (14%) end market was partially offset by increased volumes in the energy (67%) end market when compared to the first six months of 2024. Additionally, there was a $2.5 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the first six months of 2024.
Current report
Value-added sales of $328.6 million in the first six months of 2025 were were relatively flat year over year. The change in value-added sales was due to the same factors driving the change in net sales.
Current report
EBITDA for the Performance Materials segment was $81.8 million in the first six months of 2025 compared to $71.1 million in the first six months of 2024. EBITDA was favorably impacted by production efficiencies in the first six months of 2025. Additionally, there were higher costs associated with the production ramp of the precision clad strip facility in the first six months of 2024 that did not recur in 2025.
Current report
Value-added sales of $76.0 million in the second quarter of 2025 decreased 6% compared to value-added sales of $81.1 million in the second quarter of 2024. The decrease in value-added sales was due a decrease in sales volumes in the energy (32%) and semiconductor (5%) end markets.
Current report
EBITDA for the Electronic Materials segment was $17.6 million in the second quarter of 2025 compared to $13.5 million in the second quarter of 2024. Despite lower sales, EBITDA was favorably impacted by production efficiencies in the second quarter of 2025 and a $0.9 million reduction in restructuring expense when compared to the second quarter of 2024.
Current report
Net sales from the Electronic Materials segment of $449.2 million in the first six months of 2025 increased by 11% compared to net sales of $404.7 million in the first six months of 2024. The increase in net sales was due to higher pass-through metal pricing, accounting for an increase of $78.5 million compared to the first six months of 2024, partially offset by a lower volume of precious metal sales.
Current report
Value-added sales of $153.9 million in the first half of 2025 decreased 3% compared to value-added sales of $158.8 million in the first half of 2024. The decrease in value-added sales was due a decrease in sales volumes in the energy (27%) end market.
Current report
Value-added sales of $24.4 million in the second quarter of 2025 decreased 5% compared to value-added sales of $25.6 million in the second quarter of 2024. The decrease in value-added sales was due to the same factors driving the decrease in net sales.
Current report
EBITDA for the Precision Optics segment was $2.1 million in the second quarter of 2025 compared to $1.6 million in the second quarter of 2024. Despite lower sales volumes, various cost control initiatives implemented in 2024 and throughout 2025 drove the increase in EBITDA when comparing the second quarter of 2025 to the second quarter of 2024.
Current report
Net sales from the Precision Optics segment of $46.0 million in the first half of 2025 decreased 9% compared to net sales of $50.3 million in the first half of 2024. The decrease was primarily due to lower sales volumes in the life sciences end market (31%).
Current report
Value-added sales of $45.9 million in the first half of 2025 decreased 9% compared to value-added sales of $50.3 million in the first half of 2024. The decrease in value-added sales was due to the same factors driving the decrease in net sales.
Current report
Net cash provided by operating activities totaled $65.4 million in the first six months of 2025 versus $6.5 million in the prior-year period. In addition to the $9.7 million increase in operating income, the increase in cash provided by operating activities was favorably impacted by the Company’s continued working capital initiatives, specifically efforts focused around inventory management. In the prior year the Company saw inventory levels rise through the first half of 2024 to support organic growth. Throughout 2025, the Company has focused on maintaining reduced inventory levels consistent with the levels achieved at December 31, 2024. This resulted in incremental cash flow of approximately $24.4 million. Additionally, there was a net cash inflow of $4.2 million in the first six months of 2025 compared to a usage of $20.9 million in the first six months of 2024 for payables and accruals due to continued focus on working capital and timing of quarter-end payments. Lastly, there was a decrease in prepaid assets in the first six months of 2025 compared to an increase in the first six months of 2024, resulting in an increase in operating cash flow of $12.7 million, when comparing the first six months of 2025 to the first six months of 2024. The change is primarily due to timing of of payments on annual renewals.
Current report
Other sources of liquidity include uncommitted short-term lines of credit for certain of the Company's foreign subsidiaries, which currently provide for borrowings of up to $22.8 million. At June 27, 2025, the Company had borrowings outstanding of $2.0 million, which reduced the aggregate availability under these facilities to $20.8 million.
Current report
In June 2025, the Company entered into a Fifth Amended and Restated Credit Agreement (Credit Agreement). The Credit Agreement refinances the revolving credit facility and term loan facility provided under Materion's previous Fourth Amended and Restated Credit Agreement, dated October 27, 2021 (as amended). Among other things, the Credit Agreement provides for a $450 million senior secured revolving credit facility (the "Revolving Credit Facility") and a $225 million senior secured term loan facility (the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Credit Facilities"). The Term Loan Facility was fully drawn on June 26, 2025. The Credit Facilities mature on June 26, 2030.
Removed paragraphs (8)
Previous report
NM = Not Meaningful
Previous report
The primary measurement used by management to measure the financial performance of each segment is EBITDA. Refer to Note B to the Consolidated Financial Statements for the reconciliation of EBITDA by segment to consolidated net income.
Previous report
Net sales from the Performance Materials segment of $174.0 million in the first quarter of 2025 increased 3% compared to net sales of $168.6 million in the first quarter of 2024. The increase in sales was due to a $6.2 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the first quarter of 2024 as well as a volume increase in the energy end market (97%), partially offset by a sales volume decrease in the consumer electronics end market (17%).
Previous report
Value-added sales of $77.8 million in the first quarter of 2025 were relatively flat compared to value-added sales of $77.6 million in the first quarter of 2024. The increase in semiconductor sales noted above was partially offset by the decrease in the energy end market.
Previous report
Value-added sales of $21.5 million in the first quarter of 2025 decreased 13% compared to value-added sales of $24.6 million in the first quarter of 2024. The decrease in value-added sales was due to the same factors driving the decrease in net sales.
Previous report
Net cash provided by operating activities totaled $15.5 million in the first three months of 2025 compared to net cash used in operating activities of $13.8 million in the prior-year period. The favorable change in cash provided by operating activities was primarily driven by continued focus on working capital, specifically efforts focused around inventory management, which resulted in a net cash benefit of $0.4 million in the first quarter of 2025 compared to a usage of $26.5 million in the first quarter of 2024 when inventory levels increased. The increase in Account Receivable and Account Payable during the first quarter of 2025 was primarily due to the significant increase in precious metal pricing from year end, compared to decreases in the same period in the prior year.
Previous report
In January 2023, we amended the agreement governing our $375.0 million revolving credit facility and term loan (Credit Agreement). Pursuant to the amendment, we transitioned U.S. dollar denominated borrowings from LIBOR to SOFR for both the revolving credit facility and the term loan and increased the cap on precious metals consignment line from $550 million to $615 million.
Previous report
In November 2021, we completed the acquisition of HCS-Electronic Materials. The Company financed the purchase price for the HCS-Electronic Materials acquisition with a new $300 million five-year term loan pursuant to its delayed draw term loan facility under the Credit Agreement and $103 million of borrowings under its amended revolving credit facility. The interest rate for the term loan is based on SOFR, following the January 2023 amendment, plus a tiered rate determined by the Company's quarterly leverage ratio.
Reworded paragraphs (33)
Previous wording
We are an integrated producer of high-performance advanced engineered materials used in a variety of electrical, electronic, thermal, and structural applications. Our products are sold into numerous end markets, including semiconductor, industrial, aerospace and defense, automotive, consumer electronics, energy, and telecom and data center.
Current wording
We are an integrated producer of high-performance advanced engineered materials used in a variety of electronic, thermal, and structural applications. Our products are sold into numerous end markets, including semiconductor, industrial, aerospace and defense, automotive, consumer electronics, energy, and telecom and data center.
Previous wording
Net sales of $420.3 million in the first quarter of 2025 increased $35.0 million from $385.3 million in the first quarter of 2024. An increase in net sales in the Electronic Materials and Performance Materials segments were partially offset by decreased net sales in the Precision Optics segment. The increase in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $40.5 million when compared to the prior year period. At the Company level, volume increases in the energy (45%) and semiconductor (7%) end markets were partially offset by a volume decrease in the consumer electronics (14%) end market. Additionally, there was a $6.2 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the first quarter of 2024. See Note B to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.
Current wording
Net sales of $431.7 million in the second quarter of 2025 increased $5.8 million from $425.9 million in the second quarter of 2024. The increase in net sales was primarily attributable to the Electronic Materials segment. The increase in net sales in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $38.0 million when compared to the prior year period. At the Company level, volume decreases in the consumer electronics (11%) and semiconductor (4%) end markets were partially offset by volume increases in the aerospace and defense (6%) and energy (4%) end markets. Additionally, there was a $3.8 million year over year decrease in the volume of raw material beryllium hydroxide sales compared to the second quarter of 2024. See Note B to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.
Previous wording
Value-added salesis a non-GAAP financial measure that removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in metal prices and changes in mix due to customer-supplied material. Internally, we manage our business on this basis, and a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales is included herein. Value-added sales of $259.3 million in the first quarter of 2025 increased $1.5 million, or 1%, compared to the first quarter of 2024. The increase was driven by volume increase in the energy (47%) and semiconductor (7%) end markets partially offset by a sales volume decrease in the consumer electronics (17%) end market. Additionally, there was a $6.2 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the first quarter of 2024.
Current wording
Value-added salesis a non-GAAP financial measure that removes the impact of pass-through precious metal market costs and allows for analysis without the distortion of the movement or volatility in precious metal market prices and changes in mix due to customer-supplied material. Internally, we manage our business on this basis, and a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales is included herein. Value-added sales of $269.0 million in the second quarter of 2025 decreased $10.9 million, or 4%, compared to the second quarter of 2024. Volume decreases in the consumer electronics (12%) and semiconductor (4%) end markets were partially offset by increases in the aerospace and defense (5%) and energy (9%) end markets. Additionally, there was a $3.8 million year over year decrease in the volume of raw material beryllium hydroxide sales compared to the second quarter of 2024.
Previous wording
Gross marginin the first quarter of 2025 was $76.2 million, an increase of 7% compared to the first quarter of 2024. Gross margin expressed as a percentage of net sales was 18% in both the first quarter of 2025 and 2024. Gross margin expressed as a percentage of value-added sales increased to 29% in the first quarter of 2025 from 28% in the first quarter of 2024. In the first quarter of the prior year, the Company incurred significant pre-production costs and manufacturing inefficiencies associated with the ramp of the wide area clad facility and overall lower sales volumes, resulting in lower margins. In addition to improved manufacturing performance in 2025, the increase in hydroxide sales favorably impacted margins in the first quarter of 2025 compared to the same period in 2024.
Current wording
Gross marginin the second quarter of 2025 was $82.7 million, an increase of 2% compared to the second quarter of 2024. Gross margin expressed as a percentage of net sales was 19% in both the second quarter of 2025 and 2024. Gross margin expressed as a percentage of value-added sales was 31% in second quarter of 2025, compared to 29% in the second quarter of 2024. The increase in gross margins is primarily due to improved manufacturing performance in 2025. Additionally in the second quarter of the prior year, the Company incurred significant pre-production costs and manufacturing inefficiencies associated with the ramp of the wide area clad facility, resulting in lower margins.
Previous wording
Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure. In the first quarter of 2025, we recorded a combined total of $2.0 million of restructuring charges in our Precision Optics, Electronic Materials and Performance Materials segments, compared to $1.6 million of restructuring charges across all segments in the first quarter of 2024.
Current wording
Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure. In the second quarter of 2025, we recorded a combined total of $0.5 million of restructuring charges in our Performance Materials, Electronic Materials and Precision Optics segments. In the second quarter of 2024, we incurred restructuring costs across all segments due to the Company's efforts to realign its cost structure. Refer to Note E to the Consolidated Financial Statements for details.
Previous wording
Other non-operating (income) expense-netincludes components of pension and post-retirement expense other than service costs. Refer to Note J to the Consolidated Financial Statements for details of the components.
Current wording
Other non-operating (income)-netincludes components of pension and post-retirement expense other than service costs. Refer to Note J to the Consolidated Financial Statements for details of the components.
Previous wording
Income tax expense for the first quarter of 2025 was expense of $3.2 million, compared to $1.2 million in the first quarter of 2024. The effective tax rate for the first quarter of 2025 and 2024 was 15.5% and 8.2%, respectively. The effective tax rate for the first quarter of 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion, foreign derived intangible income deduction and production credit. The effective tax rate for the first quarter of 2024 was lower than the statutory tax rate primarily due to the impact of percentage depletion, the foreign derived intangible income deduction, and excess tax benefits from stock-based compensation awards. The effective tax rate for the first three months of 2025 and 2024 included a net discrete income tax effect from stock-based compensation awards of $0.1 million expense and $1.2 million benefit, respectively. See Note F to the Consolidated Financial Statements for additional discussion.
Current wording
Income tax expense for the second quarter of 2025 was $4.0 million, compared to $4.9 million in the second quarter of 2024. The Company's effective tax rate for the second quarter of 2025 and 2024 was 13.8% and 20.4%, respectively. The effective tax rate for the second quarter of 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion and the advanced manufacturing production credit. The effective tax rate for the second quarter of 2024 was lower than the statutory tax rate primarily due to the impact of percentage depletion and the foreign derived intangible income deduction. See Note F to the Consolidated Financial Statements for additional discussion.
Previous wording
SG&A expense was $35.4 million in the first quarter of 2025, compared to $35.8 million in the first quarter of 2024. SG&A expense remained relatively flat from the prior year period due to continue cost control initiatives. Expressed as a percentage of net sales, SG&A expense decreased from 9% in the first quarter of 2024 to 8% in the first quarter of 2025, primarily due to the impact of precious metal pricing on net sales. Expressed as a percentage of value-added sales, SG&A expense was 14% in both the first quarter of 2025 and 2024.
Current wording
SG&A expense was $70.5 million in the first six months of 2025, compared to $69.4 million in the first six months of 2024. The increase in SG&A expense was primarily due to timing of incentive compensation accruals due to year to date performance. Expressed as a percentage of net sales, SG&A expense was 8% and 9% in the first six months of 2025 and 2024, respectively. Expressed as a percentage of value-added sales, SG&A expense was 13% in the first six months of 2025 and 2024.
Previous wording
R&D expense consists primarily of direct personnel costs for pre-production evaluation and testing of new products, prototypes, and applications. R&D spend was 2% of net sales in both the first quarter of 2025 and 2024 and 3% of value-added sales in the first quarter of 2025 and 2024.
Current wording
R&D expense consists primarily of direct personnel costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and applications to deliver new high performing advanced materials to our customers. R&D expense accounted for 2% of net sales in the first six months of 2025 and 2024. R&D expense accounted for 2% of value-added sales in the first six months of 2025 and 3% of value-added sales in the first six months of 2024. The decrease was driven by project timing.
Previous wording
Other-netwas $5.0 million of expense in the first quarter of 2025, or a $0.6 million increase from the first quarter of 2024, impacted by a $0.2 million increase in metal consignment fees. Refer to Note E to the Consolidated Financial Statements for details of the major components within Other-net.
Current wording
Other-netwas $8.9 million of expense in the first six months of 2025, or a $0.1 million increase from the first six months of 2024. Refer to Note D to the Consolidated Financial Statements for details of the major components within Other-net.
Previous wording
Interest expense-net was $6.9 million and $8.3 million in the first quarter of 2025 and 2024, respectively. The decrease in interest expense is primarily due to an decrease in interest rates and borrowings compared to the prior year period.
Current wording
Interest expense-net was $15.1 million and $17.1 million in the first six months of 2025 and 2024, respectively. The decrease in interest expense is primarily due to an decrease in interest rates and borrowings compared to the prior year period.
Previous wording
A reconciliation of net sales to value-added sales, a non-GAAP financial measure, for each reportable segment and for the total Company for the first quarter of 2025 and 2024 is as follows:
Current wording
A reconciliation of net sales to value-added sales, a non-GAAP financial measure, for each reportable segment and for the total Company for the second quarter and first six months of 2025 and 2024 is as follows:
Previous wording
Internally, management 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 metal costs from net sales. Value-added sales allow management to assess the impact of differences in net sales between periods, segments, or markets, and analyze the resulting margins and profitability without the distortion of movements in pass-through metal costs. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. We sell other metals and materials that are not considered direct pass-throughs, and these costs are not deducted from net sales when calculating value-added sales. Non-GAAP financial measures, such as value-added sales, have inherent limitations and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
Current wording
Internally, management 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 precious metal market costs from net sales. Value-added sales allow management to assess the impact of differences in net sales between periods, segments, or markets, and analyze the resulting margins and profitability without the distortion of movements in pass-through market metal costs. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. We sell other metals and materials that are not considered direct pass-throughs, and these costs are not deducted from net sales when calculating value-added sales. Non-GAAP financial measures, such as value-added sales, have inherent limitations and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
Previous wording
The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium can be quite volatile. Our pricing policy is to directly pass the cost of these metals on to the customer in order to mitigate the impact of metal price volatility on our results from operations. Trends and comparisons of net sales are affected by movements in the market prices of these metals, but changes in net sales due to metal price movements may not have a proportionate impact on our profitability.
Current wording
The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium can be quite volatile. Our pricing policy is to directly pass the market cost of these metals on to the customer in order to mitigate the impact of metal price volatility on our results from operations. Trends and comparisons of net sales are affected by movements in the market prices of these metals, but changes in net sales due to metal price movements may not have a proportionate impact on our profitability.
Previous wording
Value-added sales of $160.0 million in the first quarter of 2025 were 3% higher than value-added sales of $155.6 million in the first quarter of 2024. The increase in value-added sales was due to the same factors driving the increase in net sales.
Current wording
Value-added sales of $168.5 million in the second quarter of 2025 were 3% lower than value-added sales of $173.1 million in the second quarter of 2024. The decrease in value-added sales was due to the same factors driving the decrease in net sales.
Previous wording
EBITDA for the Performance Materials segment was $40.7 million in the first quarter of 2025 compared to $30.7 million in the first quarter of 2024. The increase in EBITDA was primarily due to pre-production costs associated with the production ramp of the new wide area clad facility in the first quarter of 2024 that did not recur in the first quarter of 2025 as well as the favorable impact of other manufacturing efficiencies in the first quarter of 2025. In addition, the increase in hydroxide sales favorably impacted margins.
Current wording
EBITDA for the Performance Materials segment was $41.1 million in the second quarter of 2025 compared to $40.4 million in the second quarter of 2024. Despite lower sales volumes, EBITDA was favorably impacted by production efficiencies in the second quarter of 2025. Additionally, there were higher costs associated with the production ramp of the precision clad strip facility in the second quarter of 2024 that did not recur in 2025.
Previous wording
Net sales from the Electronic Materials segment of $224.8 million in the first quarter of 2025 increased 17% from net sales of $192.0 million in the first quarter of 2024. The increase in net sales was due to higher pass-through metal pricing, accounting for an increase of $40.5 million compared to the first quarter of 2024, and an increase in sales volumes in the semiconductor end market (5%). These increases were partially offset by lower volume of precious metal sales and a decrease in sales volumes in the energy end market (19%).
Current wording
Net sales from the Electronic Materials segment of $224.4 million in the second quarter of 2025 increased by 6% compared to net sales of $212.7 million in the second quarter of 2024. The increase in net sales was due to higher pass-through metal pricing, accounting for an increase of $38.0 million compared to the second quarter of 2024. This increase was partially offset by lower volume of precious metal sales and a decrease in sales volumes in the energy (16%) and semiconductor (5%) end markets.
Previous wording
EBITDA for the Electronic Materials segment was $11.1 million in the first quarter of 2025 compared to $14.4 million in the first quarter of 2024. EBITDA in the first quarter of 2025 was impacted by approximately $1.6 million of incremental one-time costs related to the continued wind-down of the refinery at the Company's Albuquerque, New Mexico facility as well as the impacts of unfavorable price/mix.
Current wording
EBITDA for the Electronic Materials segment was $28.7 million in the first six months of 2025 compared to $27.8 million in the first six months of 2024. Despite decreased sales volumes, EBITDA increased slightly as a result of production efficiencies in the first six months of 2025, partially offset by $1.6 million of incremental costs related to the wind-down of the refinery at the Company's Albuquerque, New Mexico facility.
Previous wording
Net sales from the Precision Optics segment of $21.5 million in the first quarter of 2025 decreased 13% compared to net sales of $24.7 million in the first quarter of 2024. The decrease was primarily due to lower sales volumes in the life sciences end market (41%).
Current wording
Net sales from the Precision Optics segment of $24.5 million in the second quarter of 2025 decreased 5% compared to net sales of $25.7 million in the second quarter of 2024. The decrease was primarily due to lower sales volumes in the life sciences end market (22%).
Previous wording
EBITDA for the Precision Optics segment was a loss of $1.5 million in the first quarter of 2025, compared to a loss of $0.3 million in the first quarter of 2024. The decrease in EBITDA was primarily driven by a $1.0 million increase in restructuring expense in the first quarter of 2025 compared to the first quarter of 2024, as well as the impact of lower sales volumes.
Current wording
EBITDA for the Precision Optics segment was $0.6 million in the first six months of 2025 compared to $1.3 million in the first six months of 2024. The decrease in EBITDA was primarily driven by a $0.7 million increase in restructuring expense in the first six months of 2025 compared to the first six months of 2024.
Previous wording
Corporate costs were $5.9 million in the first quarter of 2025 compared to $5.7 million in the first quarter of 2024. Corporate costs were 1% of Company-wide net sales in the first quarter of 2025 and 2024. Corporate costs were 2% of Company-wide value-added sales in the first quarter of 2025 and 2024. Corporate costs remained relatively consistent with the prior year period due to continued cost control initiatives implemented throughout 2024 and in the first quarter of 2025.
Current wording
Corporate costs were $5.9 million in the second quarter of 2025 compared to $6.2 million in the second quarter of 2024. Corporate costs were 1% of Company-wide net sales in the second quarter of 2025 and 2024. Corporate costs were 2% of Company-wide value-added sales in the second quarter of 2025 and 2024. Corporate costs remained relatively consistent with the prior year period due to continued cost control initiatives implemented throughout 2024 and into 2025.
Previous wording
Net cash used in investing activities was $20.7 million in the first quarter of 2025 compared to $26.3 million in the prior-year period. The decrease in cash used in investing activities is due to lower capital expenditures, partially offset by an increase in mine development in the first quarter of 2025 compared to the first quarter of 2024.
Current wording
Net cash used in investing activities was $34.9 million in the first six months of 2025 compared to $48.3 million in the prior-year period. The decrease in cash used in investing activities is due to a decrease in capital expenditures.
Previous wording
Net cash provided by financing activities totaled $3.5 million in the first three months of 2025 compared to net cash provided by financing activities of $40.3 million in the prior-year period. The decrease in borrowings in 2025 from the same period in the prior year was a result of favorable operating cash flow and lower capital expenditures in 2025.
Current wording
Net cash used in financing activities totaled $36.4 million in the first six months of 2025 and compared to net cash provided by financing activities of $46.2 million in the comparable prior-year period. The net financing cash outflow in the first six months of 2025 was primarily driven by debt repayments, made possible by increased cash levels resulting from the Company's ongoing working capital initiatives and lower capital spend, compared to an inflow in the prior year used to support business growth.
Previous wording
We believe cash flow from operations plus the available borrowing capacity and our current cash balance are adequate to support operating requirements, capital expenditures, projected pension plan contributions, the current dividend program, environmental remediation projects, and strategic acquisitions for at least the next twelve months and for the foreseeable future thereafter. At March 28, 2025, cash and cash equivalents held by our foreign operations totaled $14.6 million. We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition, or results of operations for the foreseeable future.
Current wording
We believe cash flow from operations plus the available borrowing capacity and our current cash balance are adequate to support operating requirements, capital expenditures, projected pension plan contributions, the current dividend program, environmental remediation projects, and strategic acquisitions for at least the next twelve months and for the foreseeable future thereafter. At June 27, 2025, cash and cash equivalents held by our foreign operations totaled $11.6 million. We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition, or results of operations for the foreseeable future.
Previous wording
The available borrowing capacity in the table above represents the additional amounts that could be borrowed under our revolving credit facility and other secured lines existing as of the end of each period depicted. The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts borrowing capacity to a multiple of the twelve-month trailing earnings before interest, income taxes, depreciation and amortization, and other adjustments.
Current wording
The available borrowing capacity in the table above represents the additional amounts that could be borrowed under our revolving credit facility and other secured lines existing as of the end of each period depicted. The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts the borrowing capacity to a multiple of the twelve-month trailing earnings before interest, income taxes, depreciation, depletion and amortization, and other adjustments.
Previous wording
The Company had previously amended and restated the Credit Agreement in connection with the HCS-Electronic Materials acquisition in November 2021. A $300 million delayed draw term loan facility was added to the Credit Agreement and the maturity date of the Credit Agreement was extended from 2024 to 2026. Moreover, the Credit Agreement also provides for an uncommitted incremental facility whereby, under certain conditions, the Company may be able to borrow additional term loans in an aggregate amount not to exceed $150.0 million. The Credit Agreement provides the Company and its subsidiaries with additional capacity to enter into facilities for the consignment of precious metals and copper, and provides enhanced flexibility to finance acquisitions and other strategic initiatives. Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company and its direct subsidiaries, with the exception of non-mining real property, precious metal, copper and certain other assets.
Current wording
The Credit Agreement also provides for an uncommitted incremental facility whereby, subject to the satisfaction of certain conditions, the Company may be able to borrow additional term loans in an aggregate amount not to exceed $250.0 million. The Credit Agreement provides the Company and its subsidiaries with additional capacity to enter into facilities for the consignment of precious metals, copper, nickel and tantalum, and provides enhanced flexibility to finance acquisitions and other strategic initiatives. Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company and its direct subsidiaries, with the exception of non-mining real property, precious metal and certain other assets.
Previous wording
The Credit Agreement allows the Company to borrow money at a premium over SOFR, following the January 2023 amendment, or prime rate and at varying maturities. The premium resets quarterly according to the terms and conditions stipulated in the agreement. The Credit Agreement includes restrictive covenants relating to restrictions on additional indebtedness, acquisitions, dividends, and stock repurchases. In addition, the Credit Agreement includes covenants that limit the Company to a maximum leverage ratio and a minimum interest coverage ratio. We were in compliance with all of our debt covenants as of March 28, 2025 and December 31, 2024. Cash on hand up to $25 million can benefit the covenants and may benefit the borrowing capacity under the Credit Agreement.
Current wording
The Credit Agreement allows the Company to borrow money at a premium over SOFR, or prime rate and at varying maturities. The Credit Agreement includes restrictive covenants relating to restrictions on additional indebtedness, acquisitions, dividends, and stock repurchases. In addition, the Credit Agreement includes covenants that limit the Company to a maximum leverage ratio and a minimum interest coverage ratio. We were in compliance with all of our debt covenants as of June 27, 2025 and December 31, 2024. Cash on hand up to $35 million can benefit the covenants and may benefit the borrowing capacity under the Credit Agreement.
Previous wording
Portions of our business utilize off-balance sheet consignment arrangements allowing us to use metal owned by precious metal consignors as we manufacture product for our customers. Metal is purchased from the precious metal consignor and sold to our customer at the time of product shipment. Expansion of business volumes and/or higher metal prices can put pressure on the consignment line limitations from time to time. In August 2022, we entered into a precious metals consignment agreement, maturing on August 31, 2025, which replaced the consignment agreements that would have matured on August 27, 2022. The available and unused capacity under the metal consignment agreements expiring in August 2025 totaled approximately $198.2 million as of March 28, 2025, compared to $233.4 million as of December 31, 2024. The availability is determined by Board approved levels and actual capacity.
Current wording
Portions of our business utilize off-balance sheet consignment arrangements allowing us to use metal owned by precious metal consignors as we manufacture product for our customers. Metal is purchased from the precious metal consignor and sold to our customer at the time of product shipment. Expansion of business volumes and/or higher metal prices can put pressure on the consignment line limitations from time to time. In August 2022, we entered into a precious metals consignment agreement, maturing on August 31, 2025, which replaced the consignment agreements that would have matured on August 27, 2022. The available and unused capacity under the metal consignment agreements expiring in August 2025 totaled approximately $235.7 million as of June 27, 2025, compared to $233.4 million as of December 31, 2024. The availability is determined by Board approved levels and actual capacity.
Previous wording
In January 2014, our Board of Directors approved a plan to repurchase up to $50.0 million of our common stock. The timing of the share repurchases will depend on several factors, including market and business conditions, our cash flow, debt levels, and other investment opportunities. There is no minimum quantity requirement to repurchase our common stock for a given year, and the repurchases may be discontinued at any time. We did not repurchase any shares under this program in the first quarter of 2025. Since the approval of the repurchase plan, we have purchased 1,254,264 shares at a total cost of $41.7 million, or an average of $33.23 per share.
Current wording
In January 2014, our Board of Directors approved a plan to repurchase up to $50.0 million of our common stock. The timing of the share repurchases will depend on several factors, including market and business conditions, our cash flow, debt levels, and other investment opportunities. There is no minimum quantity requirement to repurchase our common stock for a given year, and the repurchases may be discontinued at any time. We repurchased 100,000 shares under this program in the second quarter of 2025, for a total cost of $7.8 million. Since the approval of the repurchase plan, we have purchased 1,354,264 shares at a total cost of $49.5 million.
Previous wording
We paid cash dividends of $2.8 million on our common stock in the first quarter of 2025. We intend to pay a quarterly dividend on an ongoing basis, subject to a determination that the dividend remains in the best interest of our shareholders.
Current wording
We paid cash dividends of $2.9 million and $5.7 million on our common stock in the second quarter and first six months of 2025, respectively. We intend to pay a quarterly dividend on an ongoing basis, subject to a determination that the dividend remains in the best interest of our shareholders.
Previous wording
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
Current wording
OFF-BALANCE SHEET ARRANGEMENTS AND CASH OBLIGATIONS
Previous wording
We maintain the majority of the precious metals and portions of the copper we use in production on a consignment basis in order to reduce our exposure to metal price movements and to reduce our working capital investment. The notional value of off-balance sheet precious metals and copper was $416.8 million and $381.6 million as of March 28, 2025 and December 31, 2024, respectively. We were in compliance with all of the covenants contained in the consignment agreements as of March 28, 2025. For additional information on our contractual and other obligations, refer to our 2024 Annual Report on Form 10-K.
Current wording
We maintain the majority of the precious metals and portions of the copper we use in production on a consignment basis in order to reduce our exposure to metal price movements and to reduce our working capital investment. The notional value of off-balance sheet precious metals and copper was $379.3 million and $381.6 million as of June 27, 2025 and December 31, 2024, respectively. We were in compliance with all of the covenants contained in the consignment agreements as of June 27, 2025. For additional information on our material cash obligations, refer to our 2024 Annual Report on Form 10-K.
Previous wording
Forward-looking Statements: Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: the global economy, including inflationary pressures, potential future recessionary conditions and the impact of tariffs and trade agreements; the impact of any U.S. Federal Government shutdowns or sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success in identifying acquisition candidates and in acquiring and integrating such businesses; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions; our success in implementing our strategic plans and the timely and successful start-up and completion 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 Company’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; the disruptions in operations from, and other effects of, catastrophic and other extraordinary events including the conflict between Russia and Ukraine; realization of financial benefits expected from the Inflation Reduction Act of 2022; and the risk factors set forth in Part 1, Item 1A of the Company's 2024 Annual Report on Form 10-K.
Current wording
Forward-looking Statements: Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: the global economy, including inflationary pressures, potential future recessionary conditions and the impact of tariffs and trade agreements; the impact of any U.S. Federal Government shutdowns or sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success in identifying acquisition candidates and in acquiring and integrating such businesses; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions; our success in implementing our strategic plans and the timely and successful start-up and completion 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 Company’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations, including changes in tax regulations or guidance promulgated pursuant to the new legislation implemented in the One Big Beautiful Bill Act; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; the disruptions in operations from, and other effects of, catastrophic and other extraordinary events including outbreaks of infectious diseases and the conflict between Russia and Ukraine; realization of expected financial benefits expected from the Inflation Reduction Act of 2022; and the risk factors set forth in Part 1, Item 1A of the Company's 2024 Annual Report on Form 10-K.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Net sales of $852.0 million in the first six months of 2025 increased $40.8 million from $811.2 million in the first six months of 2024. The increase in net sales was primarily attributable to the Electronic Materials segment. The increase in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $78.5 million when compared to the prior year period. At the Company level, a volume decrease in the consumer electronics (13%) end market was partially offset by a volume increase in the energy (25%) end market. Additionally, there was a $2.5 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the same period in the prior year. See Note B to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.
Current report — wording carried from elsewhere
Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure. In the first six months of 2025, we recorded a combined total of $2.5 million of restructuring charges in our Performance Materials, Electronic Materials and Precision Optics segments. In the first six months of 2024, we recorded a combined total of $4.7 million of restructuring charges in our Performance Materials, Electronic Materials, Precision Optics and Other segments. Refer to Note E to the Consolidated Financial Statements for details.
Current report — wording carried from elsewhere
Other non-operating (income)-netincludes components of pension and post-retirement expense other than service costs. Refer to Note J to the Consolidated Financial Statements for details of the components.
Current report — wording carried from elsewhere
Corporate costs were $11.8 million in the first half of 2025 compared to $11.9 million in the first half of 2024. Corporate costs were 1% of Company-wide net sales in the first six months of 2025 and 2024. Corporate costs were 2% of Company-wide value-added sales in the first six months of 2025 and 2024. Corporate costs remained relatively consistent with the prior year period due to continued cost control initiatives implemented throughout 2024 and into 2025.