8-K
MATERION Corp (MTRN)
| UNITED STATES |
|---|
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, D.C. 20549 |
FORM 8-K
| CURRENT REPORT | | --- || Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | --- |
Date of Report (Date of earliest event reported) April 21, 2022
MATERION CORPORATION
| (Exact name of registrant as specified in its charter) | |||||||
|---|---|---|---|---|---|---|---|
| Ohio | 001-15885 | 34-1919973 | |||||
| --- | --- | --- | |||||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | 6070 Parkland Blvd., | Mayfield Hts., | Ohio | 44124 | |
| --- | --- | --- | --- | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code (216) 486-4200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|
Common Stock, no par value MTRN New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§204.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 2.02 Results of Operations and Financial Condition.
Beginning with the first quarter of 2022, Materion Corporation (the “Company”) began using earnings before interest, taxes, depreciation and amortization ("EBITDA") as the main operating income metric used by management to measure financial performance of the Company and each segment. The Company made this change because recent acquisitions have resulted in an increased amount of purchase accounting amortization expense, which in turn has affected the comparability of results across periods and versus other companies. Management believes EBITDA is a non-GAAP measure that is useful to investors as it is representative of the Company's performance and that it is appropriate to compare GAAP net income to consolidated EBITDA. The primary operating income metric used by management to measure financial performance of the Company and each segment prior to the first quarter of 2022 was earnings before interest and taxes. A copy of the EBITDA results for the Company for certain periods is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. Exhibit 99.1 contains EBITDA results for each quarter of 2021, 2020 and 2019, and the years ended December 31, 2021, 2020, 2019 and 2018, respectively.
This information shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
Exhibits.
| Exhibit Number | Description of Exhibit |
|---|---|
| 99.1 | EBITDAResults foreach quarter of 2021, 2020 and 2019, and the years endedDecember 31, 2021, 2020, 2019and2018 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Materion Corporation | ||
|---|---|---|
| April 21, 2022 | By: | /s/ John M. Zaranec |
| John M. Zaranec | ||
| Vice President, Corporate Controller and Investor Relations |
Document
Summary of Net Income, EBITDA, and Adjusted EBITDA
(Unaudited)
Beginning with the first quarter of 2022, Materion Corporation (the “Company”) began using earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA") as the main operating income metric used by management to measure financial performance of the Company and each segment. The Company made this change because recent acquisitions have resulted in an increased amount of purchase accounting amortization expense, which in turn has affected the comparability of results across periods and versus other companies. Management believes EBITDA is useful to investors as it better represents the Company's performance due to recent acquisitions in which significant intangible assets were acquired that are now being amortized. Management also utilizes adjusted EBITDA to measure financial performance of the Company and each segment. Adjusted EBITDA represents EBITDA excluding certain special items such as non-cash impairment charges, mine development costs, forfeiture of certain non-cash stock-based compensation, non-cash inventory adjustments, cost reduction initiatives (i.e., severance), COVID-19 related costs, merger and acquisition costs, foreign currency hedge gains, legacy legal and environmental costs, and certain discrete income tax items from the applicable GAAP financial measure. Internally, management reviews the results of operations without the impact of these costs in order to assess the profitability from ongoing activities and is used in making decisions concerning the allocation of resources and assessment of performance. We are providing adjusted EBITDA because we believe it will assist investors in analyzing our financial results and, when viewed in conjunction with the GAAP results, provide a more comprehensive understanding of the factors and trends affecting our operations, as it is representative of the Company's core operations.
Reconciliations of EBITDA and adjusted EBITDA to the most directly comparable GAAP financial measures can be found on pages 4 to 11.
| First Quarter Ended | Second Quarter Ended | Third Quarter Ended | Fourth Quarter Ended | Year Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | July 2, 2021 | October 1, 2021 | December 31, 2021 | December 31, 2021 | |||||
| Net (loss) income | $ | 16.8 | $ | 17.9 | $ | 18.1 | $ | 19.7 | $ | 72.5 |
| Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) | ||||||||||
| Performance Alloys and Composites | $ | 16.8 | $ | 22.3 | $ | 28.9 | $ | 21.0 | $ | 89.0 |
| Advanced Materials | 10.9 | 10.4 | 11.3 | 12.2 | 44.8 | |||||
| Precision Optics | 7.5 | 5.5 | 6.2 | 6.6 | 25.8 | |||||
| Other | (5.6) | (5.7) | (10.6) | (11.3) | (33.2) | |||||
| Total EBITDA | $ | 29.6 | $ | 32.5 | $ | 35.8 | $ | 28.5 | $ | 126.4 |
| Adjusted EBITDA | ||||||||||
| Performance Alloys and Composites | $ | 16.8 | $ | 22.3 | $ | 28.9 | $ | 22.6 | $ | 90.6 |
| Advanced Materials | 10.9 | 10.4 | 11.3 | 15.9 | 48.5 | |||||
| Precision Optics | 7.8 | 5.6 | 6.2 | 6.6 | 26.2 | |||||
| Other | (5.5) | (5.7) | (5.2) | (5.3) | (21.7) | |||||
| Total Adjusted EBITDA | $ | 30.0 | $ | 32.6 | $ | 41.2 | $ | 39.8 | $ | 143.6 |
| First Quarter Ended | Second Quarter Ended | Third Quarter Ended | Fourth Quarter Ended | Year Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in millions) | March 27, 2020 | June 26, 2020 | September 25, 2020 | December 31, 2020 | December 31, 2020 | |||||
| Net (loss) income | $ | (3.9) | $ | 5.8 | $ | 5.5 | $ | 8.0 | $ | 15.4 |
| Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) | ||||||||||
| Performance Alloys and Composites | $ | 14.0 | $ | 12.8 | $ | 3.3 | $ | 8.5 | $ | 38.6 |
| Advanced Materials | 7.2 | 6.6 | 7.7 | 8.6 | 30.1 | |||||
| Precision Optics | (8.6) | 2.7 | 3.7 | 4.7 | 2.5 | |||||
| Other | (2.9) | (4.5) | (5.7) | (3.6) | (16.7) | |||||
| Total EBITDA | $ | 9.7 | $ | 17.6 | $ | 9.0 | $ | 18.2 | $ | 54.5 |
| Adjusted EBITDA | ||||||||||
| Performance Alloys and Composites | $ | 17.7 | $ | 17.0 | $ | 13.2 | $ | 16.7 | $ | 64.6 |
| Advanced Materials | 7.2 | 7.2 | 7.8 | 9.2 | 31.4 | |||||
| Precision Optics | 2.1 | 3.0 | 5.6 | 7.2 | 17.9 | |||||
| Other | (2.8) | (5.3) | (4.0) | (4.0) | (16.1) | |||||
| Total Adjusted EBITDA | $ | 24.2 | $ | 21.9 | $ | 22.6 | $ | 29.1 | $ | 97.8 |
| First Quarter Ended | Second Quarter Ended | Third Quarter Ended | Fourth Quarter Ended | Year Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in millions) | March 29, 2019 | June 28, 2019 | September 27, 2019 | December 31, 2019 | December 31, 2019 | |||||
| Net income | $ | 17.2 | $ | 17.4 | $ | 4.5 | $ | 14.3 | $ | 53.4 |
| Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) | ||||||||||
| Performance Alloys and Composites | $ | 24.5 | $ | 30.0 | $ | 25.0 | $ | 18.1 | $ | 97.6 |
| Advanced Materials | 8.8 | 9.1 | 8.6 | 7.5 | 34.0 | |||||
| Precision Optics | 3.6 | 5.4 | (9.7) | 2.8 | 2.1 | |||||
| Other | (6.2) | (9.0) | (7.0) | (3.3) | (25.5) | |||||
| Total EBITDA(1) | $ | 30.7 | $ | 35.5 | $ | 16.9 | $ | 25.1 | $ | 108.2 |
| Adjusted EBITDA | ||||||||||
| Performance Alloys and Composites | $ | 24.5 | $ | 30.0 | $ | 25.0 | $ | 18.1 | $ | 97.6 |
| Advanced Materials | 8.8 | 9.1 | 8.6 | 7.5 | 34.0 | |||||
| Precision Optics | 3.6 | 5.4 | 4.7 | 2.8 | 16.5 | |||||
| Other | (6.2) | (5.7) | (6.5) | (2.8) | (21.2) | |||||
| Total Adjusted EBITDA | $ | 30.7 | $ | 38.8 | $ | 31.8 | $ | 25.6 | $ | 126.9 |
| Year Ended | ||||||||||
| --- | --- | --- | ||||||||
| (Dollars in millions) | December 31, 2018 | |||||||||
| Net income | $ | 21.0 | ||||||||
| EBITDA | ||||||||||
| Performance Alloys and Composites | $ | 77.1 | ||||||||
| Advanced Materials | 25.3 | |||||||||
| Precision Optics | 17.8 | |||||||||
| Other | (65.7) | |||||||||
| Total EBITDA | $ | 54.5 | ||||||||
| Adjusted EBITDA | ||||||||||
| Performance Alloys and Composites | $ | 77.1 | ||||||||
| Advanced Materials | 30.9 | |||||||||
| Precision Optics | 17.8 | |||||||||
| Other | (24.3) | |||||||||
| Total Adjusted EBITDA | $ | 101.5 |
Reconciliation of Net sales to Value-Added sales, EBITDA and Adjusted EBITDA to GAAP Net Income, and EBITDA Margin and Adjusted EBITDA Margin, to Net Income as a Percentage of Sales:
(Unaudited)
The following are reconciliations of the value-added sales, EBITDA and adjusted EBITDA to the most directly comparable GAAP financial measures.
The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. Internally, management also reviews net sales on a value-added basis. Value-added sales is a non-GAAP financial measure that deducts the value of the pass-through metals sold from net sales. Value-added sales allows management to assess the impact of differences in net sales between periods or segments and analyze the resulting margins and profitability without the distortion of the movements in pass-through metal prices. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. The Company sells other metals and materials that are not considered direct pass throughs, and these costs are not deducted from net sales to calculate value-added sales.
The Company’s pricing policy is to pass the cost of these metals on to customers in order to mitigate the impact of price volatility on the Company’s results from operations. Value-added information is being presented since changes in metal prices may not directly impact profitability. It is the Company’s intent to allow users of the financial statements to review sales with and without the impact of the pass-through metals.
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | % of VA | July 2, 2021 | % of VA | October 1, 2021 | % of VA | December 31, 2021 | % of VA | December 31, 2021 | % of VA | ||||||||||
| Net sales | $ | 354.4 | $ | 371.0 | $ | 388.0 | $ | 397.2 | $ | 1,510.6 | ||||||||||
| Pass-through metal cost | 155.8 | 163.1 | 172.2 | 159.8 | 650.9 | |||||||||||||||
| Value-added sales | $ | 198.6 | $ | 207.9 | $ | 215.8 | $ | 237.4 | $ | 859.7 | ||||||||||
| Net (loss) income | $ | 16.8 | 8.5 | % | $ | 17.9 | 8.6 | % | $ | 18.1 | 8.4 | % | $ | 19.7 | 8.3 | % | $ | 72.5 | 8.4 | % |
| Income tax (benefit) expense | 3.5 | 1.8 | % | 3.3 | 1.6 | % | 3.4 | 1.6 | % | (5.3) | (2.2) | % | 4.9 | 0.6 | % | |||||
| Interest expense - net | 0.8 | 0.4 | % | 0.8 | 0.4 | % | 0.9 | 0.4 | % | 2.4 | 1.0 | % | 4.9 | 0.6 | % | |||||
| Depreciation, depletion, and amortization | 8.5 | 4.3 | % | 10.5 | 5.1 | % | 13.4 | 6.2 | % | 11.7 | 4.9 | % | 44.1 | 5.1 | % | |||||
| Consolidated EBITDA | $ | 29.6 | 14.9 | % | $ | 32.5 | 15.6 | % | $ | 35.8 | 16.6 | % | $ | 28.5 | 12.0 | % | $ | 126.4 | 14.7 | % |
| Special items | ||||||||||||||||||||
| Cost reduction initiatives | 0.3 | 0.2 | % | 0.1 | — | % | — | — | % | — | — | % | 0.4 | — | % | |||||
| Merger and acquisition costs | 0.1 | 0.1 | % | — | — | % | 5.4 | 2.5 | % | 11.3 | 4.8 | % | 16.8 | 2.0 | % | |||||
| Total special items | $ | 0.4 | 0.2 | % | $ | 0.1 | — | % | $ | 5.4 | 2.5 | % | $ | 11.3 | 4.8 | % | $ | 17.2 | 2.0 | % |
| Adjusted EBITDA | $ | 30.0 | 15.1 | % | $ | 32.6 | 15.7 | % | $ | 41.2 | 19.1 | % | $ | 39.8 | 16.8 | % | $ | 143.6 | 16.7 | % |
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in millions) | March 27, 2020 | % of VA | June 26, 2020 | % of VA | September 25, 2020 | % of VA | December 31, 2020 | % of VA | December 31, 2020 | % of VA | ||||||||||
| Net sales | $ | 278.0 | $ | 271.5 | $ | 287.1 | $ | 339.7 | $ | 1,176.3 | ||||||||||
| Pass-through metal cost | 124.0 | 112.4 | 122.2 | 152.5 | 511.1 | |||||||||||||||
| Value-added sales | $ | 154.0 | $ | 159.1 | $ | 164.9 | $ | 187.2 | $ | 665.2 | ||||||||||
| Net (loss) income | $ | (3.9) | (2.5) | % | $ | 5.8 | 3.6 | % | $ | 5.5 | 3.3 | % | $ | 8.0 | 4.3 | % | $ | 15.4 | 2.3 | % |
| Income tax (benefit) expense | (1.0) | (0.6) | % | 1.4 | 0.9 | % | (6.4) | (3.9) | % | (1.2) | (0.6) | % | (7.2) | (1.1) | % | |||||
| Interest expense - net | 0.3 | 0.2 | % | 1.2 | 0.8 | % | 1.4 | 0.8 | % | 1.0 | 0.5 | % | 3.9 | 0.6 | % | |||||
| Depreciation, depletion, and amortization | 14.3 | 9.3 | % | 9.2 | 5.8 | % | 8.5 | 5.2 | % | 10.4 | 5.6 | % | 42.4 | 6.4 | % | |||||
| Consolidated EBITDA | $ | 9.7 | 6.3 | % | $ | 17.6 | 11.1 | % | $ | 9.0 | 5.5 | % | $ | 18.2 | 9.7 | % | $ | 54.5 | 8.2 | % |
| Special items | ||||||||||||||||||||
| Impairment charges | $ | 10.7 | 6.9 | % | $ | — | — | % | $ | — | — | % | $ | (0.2) | (0.1) | % | $ | 10.5 | 1.6 | % |
| Mine development costs | — | — | % | — | — | % | 7.3 | 4.4 | % | 5.6 | 3.0 | % | 12.9 | 1.9 | % | |||||
| Forfeiture of non-cash stock-based compensation | — | — | % | — | — | % | (1.5) | (0.9) | % | (0.6) | (0.3) | % | (2.1) | (0.3) | % | |||||
| Non-cash inventory adjustment | 1.3 | 0.8 | % | — | — | % | — | — | % | — | — | % | 1.3 | 0.2 | % | |||||
| Cost reduction initiatives | 2.2 | 1.4 | % | 2.4 | 1.5 | % | 2.6 | 1.6 | % | 4.5 | 2.4 | % | 11.7 | 1.8 | % | |||||
| COVID-19 related costs | 0.2 | 0.1 | % | 2.7 | 1.7 | % | 0.8 | 0.5 | % | 0.4 | 0.2 | % | 4.1 | 0.6 | % | |||||
| Merger and acquisition costs | 0.1 | 0.1 | % | 1.4 | 0.9 | % | 5.5 | 3.3 | % | 1.0 | 0.5 | % | 8.0 | 1.2 | % | |||||
| Foreign currency hedge gain | — | — | % | (2.2) | (1.4) | % | (1.1) | (0.7) | % | — | — | % | (3.3) | (0.5) | % | |||||
| Legacy legal & environmental costs | — | — | % | — | — | % | — | — | % | 0.2 | 0.1 | % | 0.2 | — | % | |||||
| Total special items | $ | 14.5 | 9.4 | % | $ | 4.3 | 2.7 | % | $ | 13.6 | 8.2 | % | $ | 10.9 | 5.8 | % | $ | 43.3 | 6.5 | % |
| Adjusted EBITDA | $ | 24.2 | 15.7 | % | $ | 21.9 | 13.8 | % | $ | 22.6 | 13.7 | % | $ | 29.1 | 15.5 | % | $ | 97.8 | 14.7 | % |
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in millions) | March 29, 2019 | % of VA | June 28, 2019 | % of VA | September 27, 2019 | % of VA | December 31, 2019 | % of VA | December 31, 2019 | % of VA | ||||||||||
| Net sales | $ | 301.4 | $ | 297.8 | $ | 306.0 | $ | 280.2 | $ | 1,185.4 | ||||||||||
| Pass-through metal cost | 113.7 | 104.7 | 119.2 | 121.0 | 458.6 | |||||||||||||||
| Value-added sales | $ | 187.7 | $ | 193.1 | $ | 186.8 | $ | 159.2 | $ | 726.8 | ||||||||||
| Net income | $ | 17.2 | 9.2 | % | $ | 17.4 | 9.0 | % | $ | 4.5 | 2.4 | % | $ | 14.3 | 9.0 | % | $ | 53.4 | 7.3 | % |
| Income tax expense | 3.8 | 2.0 | % | 4.1 | 2.1 | % | 2.6 | 1.4 | % | 1.6 | 1.0 | % | 12.1 | 1.7 | % | |||||
| Interest expense | 0.5 | 0.3 | % | 0.5 | 0.3 | % | 0.5 | 0.3 | % | 0.1 | 0.1 | % | 1.6 | 0.2 | % | |||||
| Depreciation, depletion, and amortization | 9.2 | 4.9 | % | 13.5 | 7.0 | % | 9.3 | 5.0 | % | 9.1 | 5.7 | % | 41.1 | 5.7 | % | |||||
| Consolidated EBITDA | $ | 30.7 | 16.4 | % | $ | 35.5 | 18.4 | % | $ | 16.9 | 9.0 | % | $ | 25.1 | 15.8 | % | $ | 108.2 | 14.9 | % |
| Special items | ||||||||||||||||||||
| Impairment charges | $ | — | — | % | $ | — | — | % | $ | 14.1 | 7.5 | % | $ | — | — | % | $ | 14.1 | 1.9 | % |
| Cost reduction initiatives | — | — | % | — | — | % | 0.8 | 0.4 | % | — | — | % | 0.8 | 0.1 | % | |||||
| Acquisition costs | — | — | % | — | — | % | — | — | % | 0.4 | 0.3 | % | 0.4 | 0.1 | % | |||||
| Legacy legal & environmental costs | — | — | % | — | — | % | — | — | % | 0.1 | 0.1 | % | 0.1 | — | % | |||||
| Other non-operating expense(1) | — | — | % | 3.3 | 1.7 | % | — | — | % | — | — | % | 3.3 | 0.5 | % | |||||
| Total special items | $ | — | — | % | $ | 3.3 | 1.7 | % | $ | 14.9 | 8.0 | % | $ | 0.5 | 0.3 | % | $ | 18.7 | 2.6 | % |
| Adjusted EBITDA | $ | 30.7 | 16.4 | % | $ | 38.8 | 20.1 | % | $ | 31.8 | 17.0 | % | $ | 25.6 | 16.1 | % | $ | 126.9 | 17.5 | % |
(1)Amount relates to pension curtailment charges. Refer to the Company's annual report on Form 10-K for the year ended December 31, 2019 for further information.
| Year Ended | ||||
|---|---|---|---|---|
| (Dollars in millions) | December 31, 2018 | % of VA | ||
| Net sales | $ | 1,207.8 | ||
| Pass-through metal cost | 468.8 | |||
| Value-added sales | $ | 739.0 | ||
| Net income | $ | 21.0 | 2.8 | % |
| Income tax (benefit) expense | (4.5) | (0.6) | % | |
| Interest expense - net | 2.5 | 0.3 | % | |
| Depreciation, depletion, and amortization | 35.5 | 4.8 | % | |
| Consolidated EBITDA | $ | 54.5 | 7.4 | % |
| Special items | ||||
| Cost reduction initiatives | $ | 5.6 | 0.8 | % |
| Legacy legal & environmental costs | 0.8 | 0.1 | % | |
| Other non-operating expense(1) | 40.6 | 5.5 | % | |
| Total special items | $ | 47.0 | 6.4 | % |
| Adjusted EBITDA | $ | 101.5 | 13.7 | % |
(1)Amount relates to pension settlement charges. Refer to the Company's annual report on Form 10-K for the year ended December 31, 2018 for further information.
Reconciliation of Net sales to Value-Added sales, adjusted segment EBITDA Margin to segment EBITDA as a Percentage of Sales and adjusted segment EBITDA to segment EBITDA:
(Unaudited)
The following reconciliations are provided as additional relevant information about the Company's segment performance deemed useful to investors. Management believes that the non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin are useful to investors as they are representative of each segment's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.
Performance Alloys and Composites - 2021
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | % of VA | July 2, 2021 | % of VA | October 1, 2021 | % of VA | December 31, 2021 | % of VA | December 31, 2021 | % of VA | ||||||||||
| Net sales | $ | 114.1 | $ | 125.3 | $ | 136.1 | $ | 136.4 | $ | 511.9 | ||||||||||
| Pass-through metal cost | 13.3 | 16.7 | 20.9 | 20.6 | 71.5 | |||||||||||||||
| Value-added sales | $ | 100.8 | $ | 108.6 | $ | 115.2 | $ | 115.8 | $ | 440.4 | ||||||||||
| EBITDA | $ | 16.8 | 16.7 | % | $ | 22.3 | 20.5 | % | $ | 28.9 | 25.1 | % | $ | 21.0 | 18.1 | % | $ | 89.0 | 20.2 | % |
| Merger and acquisition costs | — | — | % | — | — | % | — | — | % | 1.6 | 1.4 | % | 1.6 | 0.4 | % | |||||
| Adjusted EBITDA | $ | 16.8 | 16.7 | % | $ | 22.3 | 20.5 | % | $ | 28.9 | 25.1 | % | $ | 22.6 | 19.5 | % | $ | 90.6 | 20.6 | % |
Advanced Materials - 2021
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | % of VA | July 2, 2021 | % of VA | October 1, 2021 | % of VA | December 31, 2021 | % of VA | December 31, 2021 | % of VA | ||||||||||
| Net sales | $ | 204.7 | $ | 213.1 | $ | 220.7 | $ | 228.3 | $ | 866.8 | ||||||||||
| Pass-through metal cost | 141.7 | 146.2 | 151.0 | 138.8 | 577.7 | |||||||||||||||
| Value-added sales | $ | 63.0 | $ | 66.9 | $ | 69.7 | $ | 89.5 | $ | 289.1 | ||||||||||
| EBITDA | $ | 10.9 | 17.3 | % | $ | 10.4 | 15.5 | % | $ | 11.3 | 16.2 | % | $ | 12.2 | 13.6 | % | $ | 44.8 | 15.5 | % |
| Merger and acquisition costs | — | — | % | — | — | % | — | — | % | 3.7 | 4.1 | % | 3.7 | 1.3 | % | |||||
| Adjusted EBITDA | $ | 10.9 | 17.3 | % | $ | 10.4 | 15.5 | % | $ | 11.3 | 16.2 | % | $ | 15.9 | 17.8 | % | $ | 48.5 | 16.8 | % |
Precision Optics - 2021
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | % of VA | July 2, 2021 | % of VA | October 1, 2021 | % of VA | December 31, 2021 | % of VA | December 31, 2021 | % of VA | ||||||||||
| Net sales | $ | 35.6 | $ | 32.6 | $ | 31.2 | $ | 32.5 | $ | 131.9 | ||||||||||
| Pass-through metal cost | — | — | — | 0.1 | 0.1 | |||||||||||||||
| Value-added sales | $ | 35.6 | $ | 32.6 | $ | 31.2 | $ | 32.4 | $ | 131.8 | ||||||||||
| EBITDA | $ | 7.5 | 21.1 | % | $ | 5.5 | 16.9 | % | $ | 6.2 | 19.9 | % | $ | 6.6 | 20.4 | % | $ | 25.8 | 19.6 | % |
| Cost reduction initiatives | 0.3 | 0.8 | % | 0.1 | 0.3 | % | — | — | % | — | — | % | 0.4 | 0.3 | % | |||||
| Adjusted EBITDA | $ | 7.8 | 21.9 | % | $ | 5.6 | 17.2 | % | $ | 6.2 | 19.9 | % | $ | 6.6 | 20.4 | % | $ | 26.2 | 19.9 | % |
Other - 2021
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | April 2, 2021 | July 2, 2021 | October 1, 2021 | December 31, 2021 | December 31, 2021 | |||||
| Net sales | $ | — | $ | — | $ | — | $ | — | $ | — |
| Pass-through metal cost | 0.8 | 0.2 | 0.3 | 0.3 | 1.6 | |||||
| Value-added sales | $ | (0.8) | $ | (0.2) | $ | (0.3) | $ | (0.3) | $ | (1.6) |
| EBITDA | $ | (5.6) | $ | (5.7) | $ | (10.6) | $ | (11.3) | $ | (33.2) |
| Merger and acquisition costs | 0.1 | — | 5.4 | 6.0 | 11.5 | |||||
| Adjusted EBITDA | $ | (5.5) | $ | (5.7) | $ | (5.2) | $ | (5.3) | $ | (21.7) |
Performance Alloys and Composites - 2020
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 27, 2020 | % of VA | June 26, 2020 | % of VA | September 25, 2020 | % of VA | December 31, 2020 | % of VA | December 31, 2020 | % of VA | ||||||||||
| Net sales | $ | 99.1 | $ | 101.6 | $ | 91.2 | $ | 102.3 | $ | 394.2 | ||||||||||
| Pass-through metal cost | 15.4 | 11.8 | 9.3 | 12.4 | 48.9 | |||||||||||||||
| Value-added sales | $ | 83.7 | $ | 89.8 | $ | 81.9 | $ | 89.9 | $ | 345.3 | ||||||||||
| EBITDA | $ | 14.0 | 16.7 | % | $ | 12.8 | 14.3 | % | $ | 3.3 | 4.0 | % | $ | 8.5 | 9.5 | % | $ | 38.6 | 11.2 | % |
| Mine development costs | — | — | % | — | — | % | 7.3 | 8.9 | % | 5.6 | 6.2 | % | 12.9 | 3.7 | % | |||||
| Non-cash inventory adjustment | 1.3 | 1.6 | % | — | — | % | — | — | % | — | — | % | 1.3 | 0.4 | % | |||||
| COVID-19 related costs | 0.2 | 0.2 | % | 1.8 | 2.0 | % | 0.4 | 0.5 | % | 0.4 | 0.4 | % | 2.8 | 0.8 | % | |||||
| Cost reduction initiatives | 2.2 | 2.6 | % | 2.4 | 2.7 | % | 2.2 | 2.7 | % | 2.2 | 2.4 | % | 9.0 | 2.6 | % | |||||
| Adjusted EBITDA | $ | 17.7 | 21.1 | % | $ | 17.0 | 18.9 | % | $ | 13.2 | 16.1 | % | $ | 16.7 | 18.6 | % | $ | 64.6 | 18.7 | % |
Advanced Materials - 2020
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 27, 2020 | % of VA | June 26, 2020 | % of VA | September 25, 2020 | % of VA | December 31, 2020 | % of VA | December 31, 2020 | % of VA | ||||||||||
| Net sales | $ | 160.2 | $ | 150.1 | $ | 165.6 | $ | 195.0 | $ | 670.9 | ||||||||||
| Pass-through metal cost | 105.7 | 97.9 | 110.6 | 136.2 | 450.4 | |||||||||||||||
| Value-added sales | $ | 54.5 | $ | 52.2 | $ | 55.0 | $ | 58.8 | $ | 220.5 | ||||||||||
| EBITDA | $ | 7.2 | 13.2 | % | $ | 6.6 | 12.6 | % | $ | 7.7 | 14.0 | % | $ | 8.6 | 14.6 | % | $ | 30.1 | 13.7 | % |
| COVID-19 related costs | — | — | % | 0.6 | 1.1 | % | 0.1 | 0.2 | % | 0.2 | 0.3 | % | 0.9 | 0.4 | % | |||||
| Merger and acquisition costs | — | — | % | — | — | % | — | — | % | 0.4 | 0.7 | % | 0.4 | 0.2 | % | |||||
| Adjusted EBITDA | $ | 7.2 | 13.2 | % | $ | 7.2 | 13.8 | % | $ | 7.8 | 14.2 | % | $ | 9.2 | 15.6 | % | $ | 31.4 | 14.2 | % |
Precision Optics - 2020
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 27, 2020 | % of VA | June 26, 2020 | % of VA | September 25, 2020 | % of VA | December 31, 2020 | % of VA | December 31, 2020 | % of VA | ||||||||||
| Net sales | $ | 18.7 | $ | 19.8 | $ | 30.4 | $ | 42.4 | $ | 111.3 | ||||||||||
| Pass-through metal cost | 1.7 | 2.0 | 2.1 | 3.6 | 9.4 | |||||||||||||||
| Value-added sales | $ | 17.0 | $ | 17.8 | $ | 28.3 | $ | 38.8 | $ | 101.9 | ||||||||||
| EBITDA | $ | (8.6) | (50.6) | % | $ | 2.7 | 15.2 | % | $ | 3.7 | 13.1 | % | $ | 4.7 | 12.1 | % | $ | 2.5 | 2.5 | % |
| Impairment charges | 10.7 | 62.9 | % | — | — | % | — | — | % | (0.2) | (0.5) | % | 10.5 | 10.3 | % | |||||
| COVID-19 related costs | — | — | % | 0.3 | 1.7 | % | — | — | % | — | — | % | 0.3 | 0.3 | % | |||||
| Merger and acquisition costs | — | — | % | — | — | % | 1.5 | 5.3 | % | 0.9 | 2.3 | % | 2.4 | 2.4 | % | |||||
| Cost reduction initiatives | — | — | % | — | — | % | 0.4 | 1.4 | % | 1.8 | 4.6 | % | 2.2 | 2.2 | % | |||||
| Adjusted EBITDA | $ | 2.1 | 12.4 | % | $ | 3.0 | 16.9 | % | $ | 5.6 | 19.8 | % | $ | 7.2 | 18.6 | % | $ | 17.9 | 17.6 | % |
Other - 2020
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 27, 2020 | June 26, 2020 | September 25, 2020 | December 31, 2020 | December 31, 2020 | |||||
| Net sales | $ | — | $ | — | $ | — | $ | — | $ | — |
| Pass-through metal cost | 1.2 | 0.7 | 0.3 | 0.3 | 2.5 | |||||
| Value-added sales | $ | (1.2) | $ | (0.7) | $ | (0.3) | $ | (0.3) | $ | (2.5) |
| EBITDA | $ | (2.9) | $ | (4.5) | $ | (5.7) | $ | (3.6) | $ | (16.7) |
| Forfeiture of non-cash stock-based compensation | — | — | (1.5) | (0.6) | (2.1) | |||||
| Cost reduction initiatives | — | — | — | 0.5 | 0.5 | |||||
| COVID-19 related costs | — | — | 0.3 | (0.2) | 0.1 | |||||
| Merger and acquisition costs | 0.1 | 1.4 | 4.0 | (0.3) | 5.2 | |||||
| Foreign currency hedge gain | — | (2.2) | (1.1) | — | (3.3) | |||||
| Legacy legal and environmental costs | — | — | — | 0.2 | 0.2 | |||||
| Adjusted EBITDA | $ | (2.8) | $ | (5.3) | $ | (4.0) | $ | (4.0) | $ | (16.1) |
Performance Alloys and Composites - 2019
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 29, 2019 | % of VA | June 28, 2019 | % of VA | September 27, 2019 | % of VA | December 31, 2019 | % of VA | December 31, 2019 | % of VA | ||||||||||
| Net sales | $ | 127.1 | $ | 135.2 | $ | 130.7 | $ | 107.2 | $ | 500.2 | ||||||||||
| Pass-through metal cost | 17.5 | 20.0 | 18.7 | 15.9 | 72.1 | |||||||||||||||
| Value-added sales | $ | 109.6 | $ | 115.2 | $ | 112.0 | $ | 91.3 | $ | 428.1 | ||||||||||
| EBITDA(1) | $ | 24.5 | 22.4 | % | $ | 30.0 | 26.0 | % | $ | 25.0 | 22.3 | % | $ | 18.1 | 19.8 | % | $ | 97.6 | 22.8 | % |
(1) There were no adjusting items for the presented period. As such, adjusted EBITDA is not presented
Advanced Materials - 2019
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 29, 2019 | % of VA | June 28, 2019 | % of VA | September 27, 2019 | % of VA | December 31, 2019 | % of VA | December 31, 2019 | % of VA | ||||||||||
| Net sales | $ | 144.0 | $ | 133.2 | $ | 147.7 | $ | 148.9 | $ | 573.8 | ||||||||||
| Pass-through metal cost | 86.5 | 76.7 | 93.9 | 99.3 | 356.4 | |||||||||||||||
| Value-added sales | $ | 57.5 | $ | 56.5 | $ | 53.8 | $ | 49.6 | $ | 217.4 | ||||||||||
| EBITDA(1) | $ | 8.8 | 15.3 | % | $ | 9.1 | 16.1 | % | $ | 8.6 | 16.0 | % | $ | 7.5 | 15.1 | % | $ | 34.0 | 15.6 | % |
(1) There were no adjusting items for the presented period. As such, adjusted EBITDA is not presented
Precision Optics - 2019
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 29, 2019 | % of VA | June 28, 2019 | % of VA | September 27, 2019 | % of VA | December 31, 2019 | % of VA | December 31, 2019 | % of VA | ||||||||||
| Net sales | $ | 30.2 | $ | 29.4 | $ | 27.6 | $ | 24.2 | $ | 111.4 | ||||||||||
| Pass-through metal cost | 7.6 | 6.3 | 5.2 | 5.0 | 24.1 | |||||||||||||||
| Value-added sales | $ | 22.6 | $ | 23.1 | $ | 22.4 | $ | 19.2 | $ | 87.3 | ||||||||||
| EBITDA | $ | 3.6 | 15.9 | % | $ | 5.4 | 23.4 | % | $ | (9.7) | (43.3) | % | $ | 2.8 | 14.6 | % | $ | 2.1 | 2.4 | % |
| Impairment charges | — | — | % | — | — | % | 14.1 | 62.9 | % | — | — | % | 14.1 | 16.2 | % | |||||
| Cost reduction initiatives | — | — | % | — | — | % | 0.3 | 1.3 | % | — | — | % | 0.3 | 0.3 | % | |||||
| Adjusted EBITDA | $ | 3.6 | 15.9 | % | $ | 5.4 | 23.4 | % | $ | 4.7 | 21.0 | % | $ | 2.8 | 14.6 | % | $ | 16.5 | 18.9 | % |
Other - 2019
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Year Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) | March 29, 2019 | June 28, 2019 | September 27, 2019 | December 31, 2019 | December 31, 2019 | |||||
| Net sales | $ | — | $ | — | $ | — | $ | — | $ | — |
| Pass-through metal cost | 2.0 | 1.7 | 1.4 | 0.7 | 5.8 | |||||
| Value-added sales | $ | (2.0) | $ | (1.7) | $ | (1.4) | $ | (0.7) | $ | (5.8) |
| EBITDA | $ | (6.2) | $ | (9.0) | $ | (7.0) | $ | (3.3) | $ | (25.5) |
| Cost reduction initiatives | — | — | 0.5 | — | 0.5 | |||||
| Acquisition costs | — | — | — | 0.4 | 0.4 | |||||
| Legacy legal & environmental costs | — | — | — | 0.1 | 0.1 | |||||
| Pension curtailment(1) | — | 3.3 | — | — | 3.3 | |||||
| Adjusted EBITDA | $ | (6.2) | $ | (5.7) | $ | (6.5) | $ | (2.8) | $ | (21.2) |
(1)Amount relates to pension curtailment charges. Refer to the Company's annual report on Form 10-K for the year ended December 31, 2019 for further information.
Performance Alloys and Composites - 2018
| Year Ended | ||||
|---|---|---|---|---|
| (Dollars in millions) | December 31, 2018 | % of VA | ||
| Net sales | $ | 500.6 | ||
| Pass-through metal cost | 75.1 | |||
| Value-added sales | $ | 425.5 | ||
| EBITDA(1) | $ | 77.1 | 18.1 | % |
(1) There were no adjusting items for the presented period. As such, adjusted EBITDA not presented
Advanced Materials - 2018
| Year Ended | ||||
|---|---|---|---|---|
| (Dollars in millions) | December 31, 2018 | % of VA | ||
| Net sales | $ | 586.6 | ||
| Pass-through metal cost | 362.9 | |||
| Value-added sales | $ | 223.7 | ||
| EBITDA | $ | 25.3 | 11.3 | % |
| Cost reduction initiatives | 5.6 | 2.5 | % | |
| Adjusted EBITDA | $ | 30.9 | 13.8 | % |
Precision Optics - 2018
| Year Ended | ||||
|---|---|---|---|---|
| (Dollars in millions) | December 31, 2018 | % of VA | ||
| Net sales | $ | 120.6 | ||
| Pass-through metal cost | 26.4 | |||
| Value-added sales | $ | 94.2 | ||
| EBITDA(1) | $ | 17.8 | 18.9 | % |
(1) There were no adjusting items for the presented period. As such, adjusted EBITDA is not presented
Other - 2018
| Year Ended | ||
|---|---|---|
| (Dollars in millions) | December 31, 2018 | |
| Net sales | $ | — |
| Pass-through metal cost | 4.4 | |
| Value-added sales | $ | (4.4) |
| EBITDA | $ | (65.7) |
| Legacy legal & environmental costs | 0.8 | |
| Other non-operating expense(1) | 40.6 | |
| Adjusted EBITDA | $ | (24.3) |
(1)Amount relates to pension settlement charges. Refer to the Company's annual report on Form 10-K for the year ended December 31, 2018 for further information.
11
