MATERION Corp Q4 FY2024 Earnings Call

Greetings, and welcome to the Materion Corporation Fourth Quarter and Full Year 2024 earnings conference call. At this time, all participants are on a listen-only mode, and a question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Kyle Kelleher, Director, Investor Relations and Corporate FP&A. Sir, you may begin. Good morning, and thank you for joining us on our fourth quarter 2024 earnings conference call. This is Kyle Kelleher, Director, Investor Relations and Corporate FP&A. Before we begin our remarks this morning, I would like to point out that we post materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access the materials via the download feature on the earnings call webcast link. With me today is Jugal Vijayvargiya, President and Chief Executive Officer, and Shelly Chadwick, Vice President and Chief Financial Officer. Our format for today's conference call is as follows: Jugal will provide opening comments on the quarter. Following Jugal, Shelly will review detailed financial results for the quarter and full year in addition to discussing expectations for 2025. We will then open up the call for questions. Let me remind investors that any forward-looking statements made in the presentation, including those in the outlook section and during the question and answer portion, are based on current expectations. The company's actual performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. Those factors are listed in the earnings press release we issued this morning. Additionally, comments regarding earnings before interest, taxes, depreciation, depletion, and amortization, net income, and earnings per share reflect the adjusted GAAP numbers shown in attachments four through eight in this morning's press release. The adjustments are made in the prior year period for comparative purposes and remove special items, non-cash charges, and certain discrete income tax adjustments. And now, I'll turn the call over to Jugal for his comments.

Thanks, Kyle, and welcome, everyone. It's nice to be with you today to discuss our fourth quarter and 2024 results and provide our initial outlook for 2025. Let's start with the fourth quarter. Sales developed about as we expected in the fourth quarter, with strong shipments in aerospace and defense, and improved contribution from semiconductor and precision clad strip, muted by the continued softness across other end markets like automotive and industrial. We delivered record EBITDA with 240 basis points of margin expansion, thanks to the diligent work our teams have been driving to improve our operations and streamline our back-office functions. These actions will continue to pay dividends as we move through 2025 and beyond. Now for the full year. 2024 was a challenging year with notable achievements. Sluggish markets and inventory corrections may have dampened our organic growth, but this allowed us to demonstrate the strength of our company and the commitment of our team as a result of their hard work. For the year, we delivered our fourth consecutive year of record EBITDA and EBITDA margins. After years of diligent efforts to improve performance and drive profitable growth while streamlining our organization, we delivered on our midterm EBITDA margin target of 20% for the first time for the full year of 2024. We have been taking swift and consistent actions to optimize our footprint and address our cost structure while continuing to invest for growth and strengthen our customer partnerships. Achieving this level of performance in a sluggish environment gives us confidence to look ahead and set new goals for the company. As our end markets strengthen and we deliver on our organic initiatives, we will continue to drive further operational improvements and generate even stronger levels of profitability. With this in mind, we are establishing a new midterm EBITDA margin target of 23%, expecting that our business can deliver an additional 300 basis points of improvement over the next several years. While our underlying markets struggled to find momentum in 2024, we advanced several strategic initiatives during the year. In aerospace and defense, our customers are developing new products and applications that require the highest level of performance reliability in harsh conditions. Earlier this year, a leading aerospace and defense customer agreed to invest approximately $10 million in new capacity and capabilities at one of our existing sites in support of their growing demand. This project is well underway, and we expect to bring our new capabilities online mid-next year. 2024 also saw key new business wins in defense, including the selection of our Supremeax lightweight composite material for use on the prototype for the US Army's future tiltrotor long-range aircraft. As Materion's products are uniquely suited for next-generation applications, the growth of commercial space has driven new opportunities for us as well, as Materion is well-positioned to serve the needs of this expanding market. In the second quarter, we secured a $150 million multiyear agreement to supply critical materials for space propulsion systems after proving ourselves to be a key critical supplier of these products. In addition, Iontex Alloy, one of our newest high-performance products, was selected for a new telescope mirror that will be tested by NASA in its cryogenic test facility. In semiconductor, the expansion of our portfolio to include ALD or atomic layer deposition products is allowing us to support the production of the most sophisticated semiconductor chips. We are pleased to receive an overall excellent supplier award after our team collaborated with a leading ALD customer to innovate multiple new materials, which will seek expansion with the rapid growth of AI and the increasing demand for the most complex chips. We also entered into an agreement to serve as the technology partner for a major global supplier of semiconductor processing equipment. We are supporting this customer in their development of a new deposition material that will pave the way for a wide range of next-generation consumer and automotive electronic devices. Aside from commercial advancements, we took steps to eliminate underperforming non-core businesses and optimize our footprint. In the fourth quarter, we completed the sale of an electronic materials business that produces coatings for architectural glass mainly used in commercial construction. We are also closing a related nearby facility, and we are in the process of rightsizing two facilities in Asia, which should be completed in the first half of this year. As a result of some of the changes already made, our electronic materials business delivered roughly 20% EBITDA margins for the year, representing a 390 basis points improvement year over year. Regarding our cost structure, we took a series of decisive actions to streamline our organization and position us for greater efficiency. Over the last year, we reduced over 150 positions through targeted reductions and optimized back-office operations while controlling discretionary spending. At the same time, we remain focused on investing for growth. Our R&D spend in 2024 was at an all-time high as we focus on partnering with our customers to deliver next-generation products and solutions. Even through periods of market softness, we have remained focused on investing for the future, further aligning the business to high-growth opportunities supported by global megatrends. Across our plants, we are improving yields and profitability through process and technical innovations and continuous improvement initiatives. In precision optics, we took meaningful steps to drive the early stages of transformation, starting with appointing a new president, Jason Moore. Despite the challenges the business has faced, we believe the long-term fundamentals remain strong. Jason is quickly working with his team to adjust the cost structure and optimize the footprint to ensure we are maximizing the value of that critical business and prioritizing the growth opportunities the business is developing. The number of careful and deliberate actions we have undertaken allowed us to deliver record performance in 2024 and have set the stage for even stronger performance in the future. As we look ahead to 2025, we are cautiously optimistic about a stronger macro environment as we move through the year. We expect to continue to see solid growth in aerospace and defense, where healthy end-market demand will be compounded by outgrowth from our organic wins. We are seeing some gradual recovery in semiconductor, and while our customers are providing mixed outlooks for 2025, we expect to see mid-single-digit growth year on year. Industrial, where our largest application is the beryllium nickel spring for commercial construction, should see growth in 2025 as the inventory correction is nearly complete and we are seeing orders returning to near-normal levels. We are planning for other end markets to show low single-digit growth, with the exception of automotive, which is poised to remain weak. With regard to precision clad strip, we are expecting meaningful headwinds in 2025. Our customers indicated that the inventory correction that started in the back half of 2024 will carry through in 2025, resulting in lower volumes year on year. After working diligently to ramp volumes and fill their supply chain over the past couple of years, PMI finds themselves in a position to lean out their inventory levels despite the continued success of their IQOS product rollout. Our phase two capacity is complete and online, ready to serve their increased demand, which is expected in 2026. As we head into 2025, I am confident that we will continue to deliver the strong performance you have come to expect from Materion. I would like to thank our global team for their unwavering commitment to innovating for our customers while managing costs and delivering record performance. Now let me turn the call over to Shelly to cover more details on the financials.

Thanks, Jugal, and good morning, everyone. During my comments, I'll reference the slides posted on our website this morning, starting on slide thirteen. In the fourth quarter, value-added sales, which exclude the impact of pass-through purchase metal cost, were $296.1 million, up 2% from the prior year and up 12% sequentially. This year-over-year increase was driven by continued strength in space and defense and gradual improvement in semiconductor, partially offset by market headwinds across automotive, industrial, and energy. When looking at earnings per share, we delivered record quarterly adjusted earnings of $1.55, up 10% from the prior year. Moving to slide fourteen, adjusted EBITDA was a quarterly record of $61.5 million or 20.8% of value-added sales, up 15% with 240 basis points of margin expansion from the prior year. This marks the third consecutive quarter delivering margins above our midterm target of 20%. The increase was driven primarily by strong cost management and operational performance. Moving to slide fifteen, let me now review fourth-quarter performance by business segment. Starting with performance materials, value-added sales were $195.8 million, a quarterly record and up 5% as compared to the prior year. This year-over-year increase was largely driven by continued strength across space and defense and the consumer electronics end market. EBITDA excluding special items was a record $53.6 million or 27.4% of value-added sales, up 17% compared to the prior year period with 270 basis points of year-over-year margin expansion. This increase was driven by higher volume, strong price mix, and operational performance, including higher production credit benefit year on year. Moving now to the 2025 outlook, we expect continued strength across aerospace and defense, with improving market conditions in energy and industrial. We expect the automotive market to remain challenged with market contraction for the second straight year. Precision clad strip sales to Philip Morris will be down year on year, given the continued inventory correction I've mentioned earlier. We expect to deliver another year of strong bottom-line results driven by operational performance and cost management. Next, turning to electronic materials on slide sixteen. Value-added sales were $78.6 million, a 1% increase year on year driven by improving semiconductor sales, specifically across logic and memory and data storage technology. When adjusting for the divested Albuquerque large area target sales, the growth was 4% for the quarter. EBITDA excluding special items was $14.7 million or 18.7% of value-added sales in the quarter, up 460 basis points versus the prior year. This increase was driven by improved mix, strong operational performance, and cost management. As we look out to 2025, we expect the semiconductor market to improve as the year progresses, particularly in logic and memory and data storage devices. This improvement is expected to be greater in the second half. On the flip side, we expect our Power Semi business to remain challenged with high levels of inventories remaining at our customers and weak end-use demand in markets like automotive and industrial. We expect improved bottom-line results driven by the stronger demand, strong cost management, and operational performance. Turning to Precision Optics on slide seventeen, value-added sales were $21.7 million, down 17% compared to the prior year. This decrease was driven by market weakness in several end markets, offset by strength in the space and semiconductor markets. EBITDA, excluding special items, was a loss of $1.1 million or minus 5% of value-added sales. This decrease was largely driven by reduced volume, unfavorable product mix, and some operational challenges. As part of the initiatives underway to transform its business, our new business president continues to review and adjust the portfolio, footprint, and cost structure, setting the stage for dramatically improved results that will start this year. While we are optimistic about the future of precision optics, we did take a non-cash goodwill and intangible impairment charge that impacted our GAAP results in the fourth quarter. This write-down is expected to be a one-time accounting adjustment and does not reflect our commitment to this business as a key part of the Materion portfolio. Moving to slide eighteen, let me comment on the full year. Value-added sales were approximately $1.1 billion, a 3% decrease from the prior year due to market weakness in key end markets, including industrial, energy, and automotive. This decrease was partially offset by strength in space and defense and precision clad strip. Despite the slight decline in VA sales, we delivered our fourth consecutive year of record adjusted EBITDA and EBITDA margins, with adjusted EBITDA of $221.2 million for the year, or 20.2% of value-added sales, up 2% from the prior year with margin expansion of 90 basis points. We are very pleased to have delivered our targeted EBITDA margins of 20% for the year, the first time in our company's history. This significant margin performance was driven by strong price mix and improved operational performance despite the softer top line. Adjusted earnings per share was $5.34 for the year, down 5% as compared to the prior year, with a $0.16 headwind due to higher interest expense. Moving now to cash, debt, and liquidity on Slide nineteen. We ended the quarter with a net debt position of approximately $425 million and approximately $169 million of available capacity on the company's existing credit facility. We generated strong free cash flow of $57 million in the quarter and ended the year with leverage at 1.9 times, down from 2.2 times at the end of Q3. Free cash flow remains an important focus, and we expect to generate stronger cash flows in 2025. Lastly, let me transition to slide twenty and address the full-year outlook for the company. After a challenged macro environment in 2024, we remain cautiously optimistic about the market dynamics as we enter 2025, expecting mid-single-digit top-line growth from our businesses excluding Precision Clad Strip. Clad Strip inventory correction is expected to continue through 2025, returning to growth in 2026. Despite the Clad Strip inventory correction, we expect earnings growth in 2025 from market outperformance, continued operational excellence, cost management, and portfolio optimization actions despite very modest top-line growth. With this, we are guiding to the range of $5.30 to $5.70 for the full year 2025 adjusted earnings per share, an increase of 3% from the prior year at the midpoint. This concludes our prepared remarks. We will now open the line for questions.

Thank you. At this time, we'll be conducting our question and answer session. The confirmation tone will indicate your line is in the question queue. One moment, please. Thank you. Our first question is coming from Mike Harrison with Seaport Research Partners. Your line is live.

Good morning. I was just looking for a little bit more clarification on the Precision Clad Strip business and the inventory actions that your customer is taking there. How should we think about the magnitude of that volume decline that you're expecting in 2025? And I guess we should assume that that decline is probably most pronounced in Q1 and Q2 and then maybe levels out in the second half. And then you have that consumer electronics business listed as a market that should grow low single digits in 2025 on the outlook slide. Is that excluding the PCS business, or are there pieces within consumer electronics that should offset the decline that you're expecting in Precision Clad Strip?

Let me address that first. The consumer electronics growth I referenced is excluding our Precision Clad business; that refers to the general consumer electronics market and represents a small turnaround, small growth on a year-over-year basis for the remaining consumer electronics business. Regarding the Precision Clad Strip, as you know, we've supported the customer from day one as a development partner. We have an extremely good relationship with them as they have launched this product and supported them in every country where they have gone. The ramp-up that we had was significantly more as they were filling the channel than the actual rollout. They now have excess inventory and a significant initiative to delever their business, which includes aligning their supply chain to actual sales and demand. As a result, we expect 2025 to be down. We're likely looking at roughly around a 20% year-over-year decline on that business, with a return to growth expected in 2026. At this time, I would say that the year-over-year decline is spread across the full year and not necessarily more heavily weighted in the first half than the second half. Of course, we'll continue to monitor and work with the customer. If they begin to align to their inventory goals faster, we may see higher volumes in the second half, but our plan is not necessarily based on that. We expect the product to continue to be a great contributor for us over the next several years as we remain their development partner.

Alright. Thank you for that. Then on the electronics business, I was hoping you could give a little more color on your expectations for the semiconductor business. It sounds like you're expecting some acceleration in the pace of recovery as we get further into the year. Are you seeing green shoots in mainstream portions of the market, or is this mostly an advanced application-driven recovery that you're baking into your 2025 guidance for now?

The semiconductor market has been challenged over the last six to eight quarters. The expectation for a recovery has been pushed out multiple times. In the back half of 2024, we saw logic and memory starting to recover, primarily driven by advanced nodes such as three-nanometer and five-nanometer nodes used in AI and high-performance computing applications. Associated memory applications, including high-bandwidth memory, have contributed to a turnaround, and we're starting to see some recovery on the data storage side as well given increased data use. At the same time, power semiconductors are extremely challenged, with key players reporting tough quarters and projecting a challenging 2025. We have a fairly balanced portfolio; the challenges in power semiconductors are offset by expected increases in advanced nodes and our ALD efforts supporting high-bandwidth memory applications. We believe that, particularly in the second half of 2025, the market could see mid-single-digit growth year over year. Q1 will be a very challenging quarter for this market and many chip manufacturers are projecting sequential and year-over-year declines. We expect some upticks during the year, with more pronounced improvement in the back half, which is what we've included in our model.

Very helpful. And then last question: on the $73 million impairment in Precision Optics, was that the Balzers Optics business you acquired about four years ago? If so, can you give a sense of why that progressed differently than expected at acquisition? If not, please explain what was written down and how that helps establish better performance going forward.

I'll start on that one. Every year we need to do an assessment of intangibles; it's an accounting exercise. Precision Optics is a whole reporting unit, so it gets measured at the segment level and does have goodwill beyond the Balzers acquisition. The business was a large acquisition in 2020 with strong prospects, but we did see a major setback with the loss of a very large customer, which the business has struggled to fully recover from. The forecast deteriorated to the point where we couldn't support the carrying value on our books. The impairment was model-driven from the accounting side. We took the adjustment; it impacts our GAAP results and is expected to be a one-time item. We remain committed to rebuilding that business.

We're excited about the changes underway. We made a leadership appointment in the back half of last year and brought in Jason Moore, who has been meeting with teams and assessing the footprint. We've driven a significant number of changes in Q4 and expect to continue driving cost optimization, footprint optimization, and top-line growth. Our expectation is to deliver meaningful year-over-year improvement from 2024 to 2025, which is included in our plan. We want precision optics to be an equal contributor toward our 23% midterm EBITDA margin objective, and our goal is to see meaningful improvement from 2024 to 2025 and continuing beyond that.

Our next question is coming from Daniel Moore with CJS Securities. Your line is live.

Morning, Jugal and Shelly. Maybe start with the new long-term target of 23% adjusted EBITDA margin. How do you think about a reasonable time frame and, more importantly, what type of organic top-line growth would be needed to achieve it?

It has been a heavy lift, and I'm very proud of what our team has accomplished over the last five years. We've moved from roughly a 15% EBITDA margin in 2020 to delivering a full-year 20% EBITDA margin, ahead of our expectations, and we have more than doubled EBITDA from roughly $100 million to well over $200 million in that timeframe. That gives us confidence we can continue this trajectory toward a 23% midterm EBITDA margin. Achieving this involves organic growth—our objective is to grow ahead of our underlying markets, perhaps a 200 to 300 basis point outperformance versus those markets—potential bolt-on M&A, and continued disciplined execution in commercial excellence, cost management, and operational excellence. Changes executed in 2024, especially amid market softness, will also carry through. Precision clad ramp in 2026 and other initiatives will contribute. We believe combining these elements allows us to march toward the 23% target over the next several years, and we'll share progress as we go.

You teased a new deposition material and a partnership with an equipment supplier. What can you say about that relative to your current PVD and precious metals businesses, the types of applications, and market opportunity?

We're working with a leading equipment manufacturer investigating a next-generation deposition technology. Historically, our deposition technologies have been primarily PVD—physical vapor deposition—with precious metals targets, tantalum targets, and other non-precious metal targets. We have emerging capabilities in ALD, atomic layer deposition, and now a relationship with a leading equipment OEM exploring another next-generation approach. We're supporting them on development of new materials for that platform. If successful over the next couple of years, we expect meaningful growth opportunities tied to that technology as it is adopted for advanced semiconductor and electronic device applications.

Our next question is coming from Phil Gibbs with KeyBanc. Your line is live.

Good morning. As you have thought about the tariff environment, where are some spots that may be of concern or where might there be opportunity across your supply chain and customers?

The tariff environment is evolving. We monitor developments daily. On the buy side, we source from Canada, Mexico, and China; we've evaluated dollar values and supplier sources and identified second-source opportunities to shift buys if needed. We have disciplined processes to handle cost increases, including tariffs, and we work transparently with customers to process those increases. We don't want to be the sponge for cost increases. On the sell side, about a third of our business goes into Europe; sales into China are mid-single digits. If tariffs affect shipments into Europe, we'll work through implications with customers. We also look for opportunities to leverage our U.S. footprint for local manufacturing and to shift production outside China where feasible; we have a meaningful footprint in Asia outside China. Additionally, we're engaging with the right people in Washington to seek exemptions for certain materials that are important to national security. This topic is getting a lot of attention from our side and we'll continue to manage it proactively.

Regarding the 300 basis point margin improvement expectation over the coming years, how much of that is getting Precision Optics back to profitability versus other actions across the portfolio? Moving Precision Optics from negative to positive EBITDA could contribute meaningfully; what are the big moving pieces?

Precision Optics must be an important contributor. Historically, a few years ago, that business delivered 20% plus EBITDA margins. It's a smaller base but an important contributor. Our objective and leadership changes are focused on getting that business back to a stronger position. At the same time, we will continue driving our electronic materials business above 20% EBITDA margins and keep pushing performance in other areas. So Precision Optics will be an important moving piece, but it's combined with ongoing improvement in our other businesses and continued commercial and operational excellence.

You mentioned R&D being strong last year. Is a meaningful portion of that targeted to rejuvenate Precision Optics in particular?

At the company level, R&D spend was nearly $30 million in 2024, up from less than $20 million a few years ago. We've ensured investments are targeted appropriately. For Precision Optics, we've reorganized the R&D organization to create a single global R&D function supporting the business, so the right projects are funded and aligned to the markets we're focused on. We have resources to fund the turnaround and growth initiatives in that business.

Tantalum prices have been moving up with some supply disruption. How much does that impact you and how are you managing potential cost inflation?

We have a diverse supply base for tantalum, so if disruption occurs in one region, we can source elsewhere. Historically, when prices went up, contractual terms required we absorb some costs, but we've worked to restructure contracts to include clauses for price recovery on cost changes. We have a solid cost-price relationship with customers. There could be timing impacts, but overall we believe we can manage supply and pricing through our sourcing and contractual arrangements.

On working capital, you did well in Q4 on inventory reduction. How should we think about working capital management in 2025 in terms of use or source, and any internal efficiency metrics over the next three to five years?

Working capital is an important initiative. We've had success bringing inventory down in some places while adding inventory for new space business and Precision Clad, so the base has been moving in different directions. We're working to bring inventory to levels more appropriate for current needs and you saw improvement in Q4. Typically, Q1 is not our strongest quarter for working capital, so I don't expect sequential improvement right away, but I do expect a very strong year for cash flow in 2025. We still have organic spend and a relatively high level of capex, but with controlled working capital and good cash earnings, we expect strong cash performance in 2025.

Our next question is coming from David Silver with CL King. Your line is live.

Hi, good morning. I have a couple of smaller questions and one bigger topic. First, on slide twenty you called out $25 million of CapEx for HCS. Is that outlay required to complete the previously announced capacity expansion or is there something newer going on?

That spend supports investments in the HCS business following that acquisition. We've invested in the business to capture growth not only in semiconductor but also industrial and aerospace and defense. Historically, that business was roughly 70% to 75% semiconductor; we've made strides expanding into industrial and aerospace and defense. The majority of the spend is related to investments we've announced: additional capacity and more cost-effective capacity. The spend will continue into 2025 as we finish those projects, and we expect to continue funding opportunities to capture growth in aero defense, industrial, and semi.

Thanks. Next, regarding nonrecurring items this period: you had a $7.4 million charge listed as M&A related. Were those costs capitalized from the Balzers transaction, or related to an M&A project that was dropped? Can you comment on that charge?

That M&A line also includes divestiture-related costs. Much of the $7.4 million was related to finalizing the divestiture of the Albuquerque large area target business we discussed, and related facility closure costs. So it was divestiture-related rather than an M&A acquisition expense.

Okay. My broader question relates to Performance Materials and how you think about strategy there similar to electronic materials where you work with each top chipmaker. In aerospace and defense, is your approach to be a go-to supplier across many customers including emerging players, or to lock up larger share with a few leading companies? How are you exploiting your strong positioning in A&D over the multiyear horizon?

Good question. I break aerospace and defense into three subsegments. On commercial aerospace, there are two major OEMs and an emerging player in China. We have very strong positions with both North American and European customers and have established solid relationships in China as they build narrow- and wide-body planes. On commercial space, there's one very large customer and a number of smaller private and government entities; we are well-positioned across these customers. We work with U.S. government agencies, the European Space Agency, the Indian Space Agency, and others. In defense, our materials—including beryllium-based and non-beryllium materials—are extensively used; we have strong relationships with the top defense contractors and have focused on expanding defense opportunities globally with appropriate approvals. We've targeted the last two to three years to capture growth across commercial aerospace, space, and defense. We expect commercial aerospace to turn around in 2025, and we've built that into our plan. Our approach is to be diversified and engaged with the major players while also supporting emerging players where appropriate, leveraging our development expertise and global footprint.

Our next question is coming from David Storms with Stonage. Your line is live.

Good morning. Any estimates on the remaining beryllium nickel inventory correction timeline? How are you thinking about industrial post-correction—would growth be back-half weighted this year?

On the beryllium nickel side, the inventory correction is nearly complete. Feedback from key customers indicates they began placing orders in the back half of 2024 and we expect more orders into the first half of 2025. We would expect normalcy by midyear. Regarding industrial, the PMI index was below fifty for several quarters but recently hit fifty, which is a positive sign. I expect slow growth throughout the year, with more growth in the back half than the front half as inventories normalize.

On the divestiture-related costs and the rightsizing in Asia, should we expect similar per-facility charges to the New Mexico charge or are there differences we should be aware of?

Nothing to the magnitude of the $7 million related to Albuquerque and the related facility closure. You'll see some costs tied to facility changes, but not of that magnitude for the Asia rightsizing.

We have reached the end of our question and answer session. I will turn the call back over to Mr. Kelleher for closing remarks.

Thank you. This concludes our fourth quarter 2024 earnings call. Recorded playback of this call will be available on the company's website materion.com. I'd like to thank you for participating on this call and your interest in Materion. I'll be available for any follow-up questions. My number is 216-383-4931. Thank you again.

This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.