What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-01 compared with 2024-10-30 · 184 added, 257 removed, 425 unchanged (51% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

Third Quarter Ended Nine Months Ended

(Thousands, except per share amounts) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

First Quarter Ended

(Thousands, except per share amounts) March 28, 2025 March 29, 2024

Net sales $ 420,330 $ 385,287

3 unchanged sentences

Research and development expense 6,505 7,142

Restructuring expense (income) 1,493 1,077 6,161 3,194

Restructuring expense 2,038 1,620

Other—net 4,996 4,357

15 unchanged sentences

Consolidated Statements of Comprehensive Income

Third Quarter Ended Nine Months Ended

September 27, September 29, September 27, September 29,

First Quarter Ended

March 28, March 29,

(Thousands) 2025 2024

4 unchanged sentences

Pension and post-employment benefit adjustment, net of tax 1,075 ( 173 )

Other comprehensive loss 3,065 ( 1,385 ) ( 874 ) 1,081

Other comprehensive income (loss) 3,347 ( 2,373 )

Comprehensive income $ 21,045 $ 11,036

2 unchanged sentences

Consolidated Balance Sheets

September 27, December 31,

March 28, Dec.

(Thousands) 2025 2024

35 unchanged sentences

Common stock (no par value;

60,000 authorized shares, issued shares of 27,148 at both September 27 th and December 31 st )

60,000 authorized shares, issued shares of 27,148 at March 28 and December 31)

342,759 336,136

8 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

September 27, September 29,

Three Months Ended

March 28, March 29,

(Thousands) 2025 2024

5 unchanged sentences

Stock-based compensation expense (non-cash) 2,986 2,495

Deferred income tax expense (benefit) ( 9 ) ( 149 )

Deferred income tax (benefit) expense 22 ( 253 )

Changes in assets and liabilities:

7 unchanged sentences

( 404 ) ( 3,294 )

Unearned income due to customer prepayments — 16,676

Other-net ( 1,444 ) 2,362

Net cash provided by operating activities 11,564 84,505

Net cash provided by (used in) operating activities 15,502 ( 13,805 )

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Proceeds from borrowings under credit facilities, net 91,057 39,649

Repayment of long-term debt ( 22,694 ) ( 11,579 )

Proceeds from (repayments of) borrowings under credit facilities, net 16,190 56,779

Repayment of debt ( 7,522 ) ( 7,586 )

Principal payments under finance lease obligations ( 163 ) ( 191 )

15 unchanged sentences

Comprehensive

Balance at June 28, 2024 20,747 6,401 $ 328,836 $ 881,284 $ ( 258,583 ) $ ( 50,887 ) $ 6,435 $ 907,085

Net income — — — 22,294 — — — 22,294

Other comprehensive income — — — — — 3,065 — 3,065

Cash dividends declared ($ 0.135 per share)

— — — ( 2,802 ) — — — ( 2,802 )

Stock-based compensation activity 5 ( 5 ) 2,774 ( 12 ) ( 381 ) — — 2,381

Payments of withholding taxes for stock-based compensation awards ( 1 ) 1 — — ( 173 ) — — ( 173 )

Directors’ deferred compensation — — 36 — ( 54 ) — 63 45

Balance at September 27, 2024 20,751 6,397 $ 331,646 $ 900,764 $ ( 259,191 ) $ ( 47,822 ) $ 6,498 $ 931,895

Balance at June 30, 2023 20,637 6,511 $ 303,390 $ 813,793 $ ( 236,423 ) $ ( 39,443 ) $ 5,806 $ 847,123

Net income — — — 26,564 — — — 26,564

Other comprehensive income — — — — — ( 1,385 ) — ( 1,385 )

Cash dividends declared ($ 0.130 per share)

— — — ( 2,683 ) — — — ( 2,683 )

Stock-based compensation activity 8 ( 8 ) 3,174 ( 76 ) ( 562 ) — — 2,536

Payments of withholding taxes for stock-based compensation awards ( 3 ) 3 — — ( 229 ) — — ( 229 )

Directors’ deferred compensation — — 29 — ( 45 ) — 58 42

Balance at September 29, 2023 20,642 6,506 $ 306,593 $ 837,598 $ ( 237,259 ) $ ( 40,828 ) $ 5,864 $ 871,968

Common Shares Shareholders' Equity

(Thousands, except per share amounts) Common Shares Common Shares Held in Treasury Common

Stock Retained

Earnings Common

Treasury Accumulated Other

Comprehensive

Balance at December 31, 2024 20,764 6,384 $ 336,136 $ 849,111 $ ( 261,880 ) $ ( 61,046 ) $ 6,560 $ 868,881

6 unchanged sentences

Directors’ deferred compensation — — 26 — ( 45 ) — 63 44

Balance at September 27, 2024 20,751 6,397 $ 331,646 $ 900,764 $ ( 259,191 ) $ ( 47,822 ) $ 6,498 $ 931,895

Balance at March 28, 2025 20,814 6,334 $ 342,759 $ 864,002 $ ( 267,756 ) $ ( 57,699 ) $ 6,623 $ 887,929

Balance at December 31, 2023 20,646 6,502 $ 309,492 $ 854,334 $ ( 237,746 ) $ ( 46,948 ) $ 5,921 $ 885,053

6 unchanged sentences

Directors’ deferred compensation — — 31 — ( 48 ) — 61 44

Balance at September 29, 2023 20,642 6,506 $ 306,593 $ 837,598 $ ( 237,259 ) $ ( 40,828 ) $ 5,864 $ 871,968

Balance at March 29, 2024 20,731 6,417 $ 324,492 $ 865,038 $ ( 256,268 ) $ ( 49,321 ) $ 5,982 $ 889,923

See notes to these consolidated financial statements.

4 unchanged sentences

The accompanying consolidated financial statements of Materion Corporation and its subsidiaries (referred to herein as the Company, our, we, or us) contain all of the adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported.

All material adjustments were of a normal and recurring nature.

All adjustments were of a normal and recurring nature.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2024 Annual Report on Form 10-K.

The interim period results are not necessarily indicative of the results to be expected for the full year.

Certain prior year amounts have been reclassified to conform with the current year presentation.

These reclassifications had no effect on the reported results of operations, cash flows or financial position.

Specifically, the net sales related to the previously disclosed precision clad strip project have been reclassified from the other end market to the consumer electronics end market within Note B.

New Pronouncements Adopted:

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-07 “Improvements to Reportable Segment Disclosures (Topic 280)”.

This ASU updates current reportable segment disclosure requirements to require disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

This ASU will be effective for the annual period ending December 31, 2024.

Adoption of this ASU will result in additional disclosure, but it will not impact the Company’s consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU No.

New Accounting Guidance Issued and Not Yet Adopted:

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740) .

2 unchanged sentences

Adoption of this ASU will result in additional disclosure, but it will not impact the Company’s consolidated financial position, results of operations or cash flows.

No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.

In November 2024, the FASB issued amended guidance related to disclosure of disaggregated expenses (“ASU 2024-03”).

This amendment requires public business entities to provide detailed disclosures in the notes to financial statements disaggregating specific expense categories, including employee compensation, depreciation, and intangible asset amortization, as well as certain other disclosures to provide enhanced transparency into the nature and function of expenses.

This new guidance is effective for annual periods beginning in the Company’s fiscal year 2027 and interim periods following annual adoption, with early adoption permitted.

This guidance will be applied on a prospective basis with retrospective application permitted.

Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

Note B — Segment Reporting

1 unchanged sentence

Performance Materials, Electronic Materials, Precision Optics, and Other.

The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, the Company's CODM, in determining how to allocate the Company’s resources and evaluate performance.

The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, the Company's chief operating decision maker, in determining how to allocate the Company’s resources and evaluate performance.

Performance Materials provides advanced engineered solutions comprised of beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes.

3 unchanged sentences

The primary measurement used by management to measure the financial performance of each segment is earnings before interest, taxes, depreciation and amortization (EBITDA).

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the third quarter and first nine months of 2024 and 2023:

(Thousands) Third Quarter 2024 Third Quarter 2023 First Nine Months 2024 First Nine Months 2023

Performance Materials (1)

The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the first quarter of 2025 and 2024:

First quarter ended March 28, 2025

Performance Materials Electronic Materials Precision Optics Other Consolidated

Net sales (1)

$ 173,987 $ 224,795 $ 21,548 $ — $ 420,330

Electronic Materials (1)

Cost of sales 125,756 201,057 17,324 14 344,151

Selling, general and administrative expense 13,981 10,619 4,386 6,459 35,445

Other segment items (2)

3,007 6,308 3,675 ( 117 ) 12,873

Precision Optics 22,433 26,120 72,770 77,862

Other — — — —

Segment depreciation, depletion and amortization 9,430 4,267 2,355 486 16,538

Segment EBITDA $ 40,673 $ 11,078 $ ( 1,482 ) $ ( 5,870 ) $ 44,399

Income tax expense 3,246

Interest expense - net 6,917

Depreciation, depletion and amortization 16,538

Net Income $ 17,698

First quarter ended March 29, 2024

Performance Materials Electronic Materials Precision Optics Other Consolidated

Net sales (1)

$ 168,646 $ 191,971 $ 24,670 $ — $ 385,287

Cost of sales 128,565 166,915 18,584 11 314,075

Selling, general and administrative expense 14,155 10,131 5,614 5,944 35,844

Other segment items (2)

3,439 5,140 3,628 269 12,476

Segment depreciation, depletion and amortization 8,189 4,567 2,904 525 16,185

Segment EBITDA $ 30,676 $ 14,352 $ ( 252 ) $ ( 5,699 ) $ 39,077

Performance Materials $ 44,802 $ 46,366 $ 115,893 $ 134,061

Electronic Materials 12,309 10,155 40,118 37,504

Precision Optics ( 39 ) 3,261 1,297 7,654

Other ( 6,578 ) ( 7,497 ) ( 18,522 ) ( 21,750 )

Total Segment EBITDA 50,494 52,285 138,786 157,469

Income tax expense 1,204

2 unchanged sentences

Net Income $ 13,409

(1) Excludes inter-segment sales of $ 1.6 million for the third quarter of 2024 and $ 4.8 million for the first nine months of 2024 for Electronic Materials.

Excludes inter-segment sales of $ 3.2 million for the third quarter of 2023 and $ 7.3 million for the first nine months of 2023 for Electronic Materials.

There were no material inter-segment sales for Performance Materials in 2024 or 2023.

(1) Excludes inter-segment sales of $ 2.6 million for the first quarter of 2025 and $ 1.5 million for the first quarter of 2024 for Electronic Materials.

Inter-segment sales are eliminated in consolidation.

The following table disaggregates revenue for each segment by end market for the third quarter and first nine months of 2024 and 2023:

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

Third Quarter 2024

Semiconductor $ 2,097 $ 198,790 $ 798 $ — $ 201,685

Industrial 33,494 7,352 6,254 — 47,100

Aerospace and defense 44,940 975 5,126 — 51,041

Consumer electronics 49,131 172 4,006 — 53,309

Automotive 18,123 1,724 1,780 — 21,627

Energy 12,819 20,810 — — 33,629

Telecom and data center 7,929 75 — — 8,004

Other 8,843 7,008 4,469 — 20,320

Total $ 177,376 $ 236,906 $ 22,433 $ — $ 436,715

Third Quarter 2023

Semiconductor $ 2,712 $ 151,388 $ 624 $ — $ 154,724

Industrial 32,046 7,958 6,954 — 46,958

Aerospace and defense 30,938 1,102 7,124 — 39,164

Consumer electronics 59,486 144 4,254 — 63,884

Automotive 19,447 1,747 2,606 — 23,800

Energy 13,013 25,179 — — 38,192

Telecom and data center 15,685 10 — — 15,695

Other 11,315 4,777 4,558 — 20,650

Total $ 184,642 $ 192,305 $ 26,120 $ — $ 403,067

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(2) Other segment items for each reportable segment include:

• Research and development expense

• Restructuring expense

• Other operating expense - primarily comprised of metal consignment fees, intangible amortization and foreign currency (gains)/losses as further detailed in Note E

• Non-operating expenses primarily related to pension costs

The following table disaggregates revenue for each segment by end market for the first quarter of 2025 and 2024:

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

First Nine Months 2024

First Quarter 2025

Semiconductor $ 3,628 $ 183,749 $ 775 $ — $ 188,152

4 unchanged sentences

Energy 16,420 20,230 — — 36,650

Telecom and data center 28,913 131 — — 29,044

Life sciences 2,575 5,874 3,692 — 12,141

Other 16,760 1,651 139 — 18,550

Total $ 173,987 $ 224,795 $ 21,548 $ — $ 420,330

First Nine Months 2023

First Quarter 2024

Semiconductor $ 2,662 $ 156,424 $ 325 $ — $ 159,411

4 unchanged sentences

Energy 8,317 16,945 — — 25,262

Telecom and data center 49,223 68 — — 49,291

Life sciences 3,001 3,714 6,302 — 13,017

Other 13,772 2,440 40 — 16,252

Total $ 168,646 $ 191,971 $ 24,670 $ — $ 385,287

The CODM does not regularly review segment assets to make decisions regarding the allocation of resources, and as such the Company has not included assets for each reportable segment.

Note C — Revenue Recognition

2 unchanged sentences

The Company generally recognizes revenue in an amount that reflects the consideration to which it expects to be entitled upon satisfaction of a performance obligation by transferring control over a product to the customer.

Control over a product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product.

Control over a product is generally transferred to the customer when the

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product.

Transaction Price Allocated to Future Performance Obligations:

Accounting Standards Codification (ASC) 606, "Revenue from Contracts with Customers" , requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at September 27, 2024.

Accounting Standards Codification 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at March 28, 2025.

Remaining performance obligations include non-cancelable purchase orders and customer contracts.

1 unchanged sentence

As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

After considering the practical expedient at September 27, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 39.9 million.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

After considering the practical expedient at March 28, 2025 and December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 33.8 million and $ 39.3 million, respectively.

Contract Balances :

The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities:

(Thousands) September 27, 2024

December 31, 2023

$ change % change

(Thousands) March 28, 2025 December 31, 2024 $ change % change

Accounts receivable, trade

6 unchanged sentences

The Company believes that its receivables are collectible and appropriate allowances for doubtful accounts have been recorded.

Impairment losses (bad debt) incurred related to our receivables were immaterial during the third quarter of 2024.

Impairment losses (bad debt) incurred related to our receivables were immaterial during the first three months of 2025 and 2024.

In the fourth quarter of 2024, the Company entered into a factoring agreement to sell certain receivables to a third-party financial institution.

The transfer of the receivables constitute purchases and sales of receivables resulting in a reduction of trade receivables on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows.

The Company sold $ 16.0 million of receivables in the first quarter of 2025 and recorded a loss on sale of $ 0.2 million.

The Company sold $ 48.9 million of receivables in the fourth quarter of 2024.

Unbilled receivables represent expenditures on contracts, plus applicable profit margin, not yet billed.

1 unchanged sentence

Billings made on contracts are recorded as a reduction of unbilled receivables.

Unbilled receivables are included within the prepaid and other current assets line item on the Consolidated Balance Sheet.

Unearned revenue is recorded for consideration received from customers in advance of satisfaction of the related performance obligations.

The Company recognized approximately $ 13.5 million of the December 31, 2023 short-term unearned amounts as revenue during the first nine months of 2024.

The Company recognized approximately $ 9.2 million of the December 31, 2024 unearned amounts as revenue during the first three months of 2025.

As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component because the period between the transfer of a product or service to a customer and when the customer pays for that product or service will be one year or less.

The Company does not include extended payment terms in its contracts with customers.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note D — Restructuring

The Company implemented various restructuring initiatives across the Performance Materials, Electronic Materials, Precision Optics and Other segments to improve operational efficiency during the three and nine months ended September 27, 2024 and the three and nine months ended September 29, 2023.

This resulted in severance and related costs of approximately $ 1.5 million and $ 6.2 million during the three months and nine months ended September 27, 2024, respectively, and $ 1.1 million and $ 3.2 million during the three months and nine months ended September 29, 2023, respectively.

Of the $ 6.2 million incurred in 2024, approximately $ 4.8 million of those severance costs were paid as of September 27, 2024.

In fiscal years 2024 and 2023, we announced restructuring plans that were both designed to reduce costs and expenses in response to macroeconomic conditions and current operating performance.

These actions impact all three of our business segments as well as Corporate.

When completed, the restructuring programs are expected to result in the reduction in annual cost of sales and operating expenses.

In 2025, the Company continued to implement restructuring actions, primarily in our Precision Optics segment.

In connection with these actions, we recorded restructuring expenses of $ 2.0 million and $ 1.6 million in the three months ended March 28, 2025 and March 29, 2024, respectively, all of which were associated with workforce reduction, including severance and other personnel-related costs.

We expect to substantially complete the remaining restructuring activities by the end of the second quarter of fiscal year 2025.

The activity in the accrued balances incurred in relation to restructuring during the three months ended March 28, 2025, and March 29, 2024, were as follows:

Reduction in Force

(Thousands) Performance Materials Electronic Materials Precision Optics Other Consolidated

Balance at December 31, 2024

$ 56 $ 293 $ 60 $ 408 $ 817

Additional Charges 196 453 1,358 31 2,038

Cash Payments ( 66 ) ( 648 ) ( 1,015 ) ( 129 ) ( 1,858 )

Balance at March 28, 2025 $ 186 $ 98 $ 403 $ 310 $ 997

Reduction in Force

(Thousands) Performance Materials Electronic Materials Precision Optics Other Consolidated

Balance at December 31, 2023 $ 2 $ 388 $ — $ — $ 390

Additional Charges 739 350 324 207 1,620

Cash Payments ( 461 ) ( 689 ) ( 229 ) ( 119 ) ( 1,498 )

Balance at March 29, 2024 $ 280 $ 49 $ 95 $ 88 $ 512

Note E — Other-net

Other-net for the third quarter and first nine months of 2024 and 2023 is summarized as follows:

Third Quarter Ended Nine Months Ended

September 27, September 29, September 27, September 29,

Other-net for the first quarter of 2025 and 2024 is summarized as follows:

First Quarter Ended

March 28, March 29,

(Thousands) 2025 2024

1 unchanged sentence

Metal consignment fees 2,215 2,023

Foreign currency (gain) loss 717 609 1,251 571

Other items ( 603 ) ( 131 ) ( 2,262 ) ( 103 )

Foreign currency loss (gain) ( 153 ) 433

Other items, net 45 ( 946 )

Total $ 4,996 $ 4,357

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note F — Income Taxes

The Company's effective tax rate for the third quarter of 2024 and 2023 was 3.3 % and 10.0 %, respectively, and 11.1 % and 13.5 % in the first nine months of 2024 and 2023, respectively.

The effective tax rate for 2024 is lower than the statutory tax rate primarily due to the impact of percentage depletion, research and development and production tax credits, and the foreign derived intangible income deduction.

The effective tax rate for 2023 was lower than the statutory tax rate primarily due to the impact of percentage depletion, research and development and production tax credits, and the foreign derived intangible income deduction.

The effective tax rate for the first nine months of 2024 includes a nominal amount of discrete income tax expense primarily consisting 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 are not likely to be realized for one of the Company’s foreign subsidiaries.

The effective tax rate for the first nine months of 2023 included a net discrete income tax benefit of $ 3.4 million, primarily related to an optimization of our foreign-derived intangible income deduction benefit, excess tax benefits from stock-based compensation awards, and return to provision adjustments.

Government Tax Credits

Pursuant to The Inflation Reduction Act of 2022 (IRA), the Company is eligible for the Advanced Manufacturing Production Credit (production credit) beginning in 2023.

The production credit provides an annual cash benefit for a portion of the production costs for the sale of certain critical minerals produced in the U.S.

and sold during the year.

On October 24, 2024, the U.S.

Treasury Department published final regulations on the production credit that include clarifying guidance regarding the definition of production costs included in the computation of the production credit.

The company is currently in the process of analyzing the final regulations to determine the amount of the production costs eligible for inclusion in the calculation of the production credit for the tax year ended December 31, 2024.

The amount of the benefit that the Company is entitled to receive in connection with the production credit will ultimately depend on its analysis of the final regulations.

The Company records the production credit as a reduction in cost of goods sold as the applicable items are produced and sold.

GAAP does not address the accounting for government grants received by a business entity that are outside the scope of ASC 740.

Our accounting policy is to analogize to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, under IFRS Accounting Standards.

We recognize the benefit of the production credits by applying IAS 20 in pretax income on a systematic basis in line with its recognition of the expenses that the grant is intended to compensate.

The Organization for Economic Co-operation and Development (OECD) introduced rules to establish a global minimum corporate tax, commonly referred to as Pillar Two.

Numerous foreign countries have enacted legislation to implement the Pillar Two rules, effective beginning in 2024, or are expected to enact similar legislation.

The Company continues to evaluate the Pillar Two rules but does not expect Pillar Two to have a significant impact on its effective tax rate or consolidated results of operations, financial position, and cash flows.

The Company's 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

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

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.

The Organization for Economic Co-operation and Development (OECD) introduced rules to establish a global minimum corporate tax rate, commonly referred to as Pillar Two.

Numerous foreign countries have enacted legislation to implement the Pillar Two rules, or are expected to enact similar legislation.

Pillar Two legislation enacted in jurisdictions the Company operates in is not expected to have a material impact on its effective tax rate or consolidated results of operations, financial position, or cash flows in 2025.

We will continue to evaluate the impact of Pillar Two legislation on the current and future reporting periods.

Note G — Earnings Per Share (EPS)

The following table sets forth the computation of basic and diluted EPS:

Third Quarter Ended Nine Months Ended

September 27, September 29, September 27, September 29,

First Quarter Ended

March 28, March 29,

(Thousands, except per share amounts) 2025 2024

12 unchanged sentences

Diluted EPS $ 0.85 $ 0.64

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 148,038 and 47,250 for the quarters ended September 27, 2024 and September 29, 2023, respectively, and 110,555 and 36,927 for the nine months ended September 27, 2024 and September 29, 2023, respectively.

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 141,249 and 71,285 for the quarters ended March 28, 2025 and March 29, 2024, respectively.

These securities are primarily related to restricted stock units (RSUs) and stock appreciation rights (SARs) with fair market values and exercise prices greater than the average market price of the Company's common shares and were excluded from the dilution calculation as the effect would have been anti-dilutive.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note H — Inventories

Inventories on the Consolidated Balance Sheets are summarized as follows:

September 27, December 31,

March 28, December 31,

(Thousands) 2025 2024

3 unchanged sentences

Inventories, net $ 439,763 $ 441,299

The Company maintains the majority of the precious metals and copper used in production on a consignment basis in order to reduce its exposure to metal market price movements and to reduce its working capital investment.

The notional value of off-balance sheet precious metals and copper was $ 385.7 million and $ 351.5 million as of September 27, 2024 and December 31, 2023, respectively.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The Company maintains the majority of the precious metals and copper used in production on a consignment basis in order to reduce its exposure to metal price movements and to reduce its working capital investment.

The notional value of off-balance sheet precious metals and copper was $ 416.8 million and $ 381.6 million as of March 28, 2025 and December 31, 2024, respectively.

Note I — Customer Prepayments

4 unchanged sentences

Additionally, during the second quarter of 2022, the Company entered into an amendment to the investment agreement with the same customer to procure additional equipment to manufacture product for the customer.

In 2023, the Company received the remaining prepayments related to this amendment, the total of which approximated $ 38.6 million.

As of September 27, 2024 and December 31, 2023, $ 65.6 million and $ 84.7 million, respectively, of prepayments are classified as Unearned income on the Consolidated Balance Sheets.

In 2023, the Company received the remaining prepayment related to this amendment, the total of which approximated $ 38.6 million.

As of March 28, 2025 and December 31, 2024, $ 56.2 million and $ 60.9 million, respectively, of prepayments are classified as Unearned income on the Consolidated Balance Sheets.

The prepayments will remain in Unearned income until commercial purchase orders are received for product serviced out of the equipment, at which time a portion of the purchase order value related to prepayments will be reclassified to Unearned revenue.

As of September 27, 2024 $ 7.0 million of the prepayments are classified as Unearned revenue.

As of March 28, 2025 and December 31, 2024, $ 4.4 million and $ 4.3 million, respectively, of the prepayments are classified as Unearned revenue.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note J — Pensions and Other Post-employment Benefits

The following is a summary of the net periodic benefit cost for the third quarter and first nine months ended September 27, 2024 and September 29, 2023, respectively, for the pension plans as shown below.

The Pension Benefits column aggregates defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S.

The following is a summary of the net periodic benefit (income)/cost for the first quarter of 2025 and 2024 for the pension plans as shown below.

The Pension Benefits columns aggregate defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S.

supplemental retirement plans.

The Other Benefits column includes the domestic retiree medical and life insurance plan.

Pension Benefits Other Benefits

Third Quarter Ended Third Quarter Ended

September 27, September 29, September 27, September 29,

(Thousands) 2024 2023 2024 2023

Components of net periodic benefit (credit) cost

Service cost $ 279 $ 209 $ 12 $ 13

Interest cost 1,916 1,966 58 68

Expected return on plan assets ( 2,541 ) ( 2,421 ) — —

Amortization of prior service (benefit) cost ( 22 ) ( 21 ) — ( 139 )

Amortization of net loss (gain) 32 ( 75 ) ( 87 ) ( 95 )

Net periodic benefit (credit) cost $ ( 336 ) $ ( 342 ) $ ( 17 ) $ ( 153 )

The Other Benefits columns include the domestic retiree medical and life insurance plan.

Pension Benefits Other Benefits

Nine Months Ended Nine Months Ended

September 27, September 29, September 27, September 29,

First Quarter Ended First Quarter Ended

March 28, March 29, March 28, March 29,

(Thousands) 2025 2024 2025 2024

Components of net periodic benefit (credit) cost

Components of net periodic benefit (income) cost

Service cost $ 286 $ 268 $ 11 $ 12

1 unchanged sentence

Expected return on plan assets ( 2,504 ) ( 2,530 ) — —

Amortization of prior service (benefit) cost ( 64 ) ( 65 ) — ( 417 )

Amortization of prior service cost (benefit) ( 21 ) ( 21 ) — —

Amortization of net loss (gain) 89 32 ( 87 ) ( 87 )

Net periodic benefit (credit) cost $ ( 1,027 ) $ ( 1,027 ) $ ( 50 ) $ ( 459 )

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The Company did no t make any contributions to its domestic defined benefit plan in the third quarter or first nine months of 2024 or 2023.

Total net benefit (income) cost $ ( 240 ) $ ( 344 ) $ ( 18 ) $ ( 17 )

The Company did not make any contributions to its defined benefit plan in the first quarter of 2025 or 2024.

The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs in operating expenses and the non-service cost components of net periodic benefit cost in Other non-operating (income) expense.

Note K — Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the third quarter and first nine months of 2024 and 2023 are as follows:

Gains and Losses on Cash Flow Hedges

(Thousands) Foreign Currency Interest Rate Precious Metals Total Pension and Post-Employment Benefits Foreign Currency Translation Total

Balance at June 28, 2024

$ 1,718 $ 5,709 $ ( 323 ) $ 7,104 $ ( 48,894 ) $ ( 9,097 ) $ ( 50,887 )

Other comprehensive income (loss) before reclassifications ( 695 ) ( 3,805 ) ( 148 ) ( 4,648 ) — 7,579 2,931

Amounts reclassified from accumulated other comprehensive income (loss) ( 135 ) ( 1,294 ) 295 ( 1,134 ) ( 77 ) — ( 1,211 )

Net current period other comprehensive (loss) income before tax ( 830 ) ( 5,099 ) 147 ( 5,782 ) ( 77 ) 7,579 1,720

Deferred taxes ( 191 ) ( 1,173 ) 34 ( 1,330 ) ( 15 ) — ( 1,345 )

Net current period other comprehensive (loss) income after tax ( 639 ) ( 3,926 ) 113 ( 4,452 ) ( 62 ) 7,579 3,065

Balance at September 27, 2024

$ 1,079 $ 1,783 $ ( 210 ) $ 2,652 $ ( 48,956 ) $ ( 1,518 ) $ ( 47,822 )

Balance at June 30, 2023

$ 1,290 $ 7,069 $ ( 443 ) $ 7,916 $ ( 40,549 ) $ ( 6,810 ) $ ( 39,443 )

Other comprehensive (loss) income before reclassifications 766 2,398 515 3,679 — ( 3,259 ) 420

Amounts reclassified from accumulated other comprehensive income (loss) — ( 1,140 ) 83 ( 1,057 ) ( 299 ) — ( 1,356 )

Net current period other comprehensive (loss) income before tax 766 1,258 598 2,622 ( 299 ) ( 3,259 ) ( 936 )

Deferred taxes 176 289 138 603 ( 154 ) — 449

Net current period other comprehensive (loss) income after tax 590 969 460 2,019 ( 145 ) ( 3,259 ) ( 1,385 )

Balance at September 29, 2023

$ 1,880 $ 8,038 $ 17 $ 9,935 $ ( 40,694 ) $ ( 10,069 ) $ ( 40,828 )

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note K — Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the first quarter of 2025 and 2024 are as follows:

Gains and Losses on Cash Flow Hedges

1 unchanged sentence

Balance at December 31, 2024 $ 1,638 $ 3,545 $ 2 $ 5,185 $ ( 54,702 ) $ ( 11,529 ) $ ( 61,046 )

$ 1,201 $ 4,156 $ ( 99 ) $ 5,258 $ ( 48,658 ) $ ( 3,548 ) $ ( 46,948 )

Other comprehensive income (loss) before reclassifications ( 279 ) ( 686 ) — ( 965 ) 1,553 3,628 4,216

3 unchanged sentences

Net current period other comprehensive (loss) income after tax ( 241 ) ( 1,115 ) — ( 1,356 ) 1,075 3,628 3,347

Balance at September 27, 2024

$ 1,079 $ 1,783 $ ( 210 ) $ 2,652 $ ( 48,956 ) $ ( 1,518 ) $ ( 47,822 )

Balance at March 28, 2025 $ 1,397 $ 2,430 $ 2 $ 3,829 $ ( 53,627 ) $ ( 7,901 ) $ ( 57,699 )

Balance at December 31, 2023 $ 1,201 $ 4,156 $ ( 99 ) $ 5,258 $ ( 48,658 ) $ ( 3,548 ) $ ( 46,948 )

$ 1,243 $ 6,055 $ ( 223 ) $ 7,075 $ ( 40,228 ) $ ( 8,756 ) $ ( 41,909 )

Other comprehensive income (loss) before reclassifications 862 5,525 119 6,506 — ( 1,313 ) 5,193

Other comprehensive (loss) income before reclassifications 665 3,840 ( 333 ) 4,172 — ( 4,460 ) ( 288 )

Amounts reclassified from accumulated other comprehensive income (loss) — ( 1,262 ) 26 ( 1,236 ) ( 111 ) — ( 1,347 )

2 unchanged sentences

Net current period other comprehensive (loss) income after tax 512 1,985 ( 237 ) 2,260 ( 173 ) ( 4,460 ) ( 2,373 )

Balance at September 29, 2023

$ 1,880 $ 8,038 $ 17 $ 9,935 $ ( 40,694 ) $ ( 10,069 ) $ ( 40,828 )

Reclassifications from accumulated other comprehensive income (loss) of gains and losses on foreign currency cash flow hedges are recorded in Net sales in the Consolidated Statements of Income.

Balance at March 29, 2024 $ 1,713 $ 6,141 $ ( 336 ) $ 7,518 $ ( 48,831 ) $ ( 8,008 ) $ ( 49,321 )

Reclassifications from accumulated other comprehensive income (loss) of gains and losses on foreign currency cash flow hedges are recorded in Net sales in the Consolidated Statements of Income (Loss).

Reclassifications from accumulated other comprehensive income (loss) of gains and losses on precious metal and copper cash flow hedges are recorded in Cost of sales in the Consolidated Statements of Income.

6 unchanged sentences

Note L — Stock-based Compensation Expense

Stock-based compensation expense, which includes awards settled in shares and in cash, was $ 2.4 million and $ 7.7 million in the third quarter and first nine months of 2024, respectively, compared to $ 2.6 million and $ 7.8 million, respectively, in the same periods of 2023.

The Company granted 36,919 SARs to certain employees during the first nine months of 2024.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the nine months ended September 27, 2024 were $ 135.58 and $ 50.46 , respectively.

Stock-based compensation expense, which includes awards settled in shares was $ 3.0 million and $ 2.6 million in the first quarter of 2025 and 2024, respectively.

The Company granted 54,302 SARs to certain employees during the first quarter of 2025.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the three months ended March 28, 2025 were $ 87.36 and $ 26.33 , respectively.

The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model:

3 unchanged sentences

Expected term (in years) 4.7

The Company granted 50,873 stock-settled RSUs to certain employees during the first nine months of 2024.

The Company granted 102,678 stock-settled RSUs to certain employees during the first quarter of 2025.

The Company measures the fair value of stock-settled RSUs based on the closing market price of a share of Materion common stock on the date of the grant.

The weighted-average fair value per share was $ 130.31 for stock-settled RSUs granted to employees during the nine months ended September 27, 2024.

The weighted-average fair value per share was $ 87.79 for stock-settled RSUs granted to employees during the three months ended March 28, 2025.

RSUs are generally expensed over the vesting period of three years for employees.

The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first nine months of 2024.

The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first quarter of 2025.

The weighted-average fair value of the stock-settled PRSUs was $ 106.34 per share and will be expensed over the vesting period of three years .

The final payout to the employees for all PRSUs will be based upon the Company’s return on invested capital and its total return to shareholders over the vesting period relative to a peer group’s performance over the same period.

At September 27, 2024, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 19.3 million, and is expected to be recognized over the remaining vesting period of the respective grants.

At March 28, 2025, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 26.9 million, and is expected to be recognized over the remaining vesting period of the respective grants.

Note M — Fair Value of Financial Instruments

8 unchanged sentences

Notes to Consolidated Financial Statements

The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of September 27, 2024 and December 31, 2023:

The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of March 28, 2025 and December 31, 2024:

(Thousands) Total Carrying Value in the Consolidated Balance Sheets Quoted Prices

5 unchanged sentences

Foreign currency forward contracts 434 1,671 — — 434 1,671 — —

Interest rate swap 3,601 6,492 — — 3,601 6,492 — —

Interest rate swaps 3,441 4,603 — — 3,441 4,603 — —

Precious metal swaps — — — — — — — —

3 unchanged sentences

Foreign currency forward contracts 1,397 1,033 — — 1,397 1,033 — —

Interest Rate Swap 1,287 1,096 1,287 1,096 —

Interest rate swaps 287 — — — 287 — —

Precious metal swaps — — — — — — — —

2 unchanged sentences

Outstanding contracts are valued through models that utilize market observable inputs, including both spot and forward prices, for the same underlying currencies, metals, and interest rates.

The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of September 27, 2024 and December 31, 2023.

The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of March 28, 2025 and December 31, 2024.

The Company's deferred compensation investments and liabilities are based on the fair value of the investments corresponding to the employees’ investment selections, primarily in mutual funds, based on quoted prices in active markets for identical assets.

2 unchanged sentences

Note N — Derivative Instruments and Hedging Activity

The Company uses derivative contracts to hedge exposure to movements in interest rates associated with borrowings, foreign currency exposures, and precious metal exposures.

The Company uses derivative contracts to hedge exposure to movements in interest rates associated with borrowings, foreign currency exposures, and precious metal and copper exposures.

The objectives and strategies for using derivatives in these areas are as follows:

28 unchanged sentences

The price paid by the Company for the precious metal forms the basis for the price charged to the customer for the metal content in the product.

This methodology allows for changes in either direction in the market prices of the precious metals used by the Company to be passed through to the customer and reduces the impact changes in prices could have on the Company's margins and operating profit.

This methodology allows for changes in either direction in the market prices of the precious metals used by the Company to be passed through to the customer and reduces the impact that changes in prices could have on the Company's margins and operating profit.

The consigned metal is owned by precious metal consignors that charge the Company consignment fees based upon the value of the metal as it fluctuates while on consignment.

13 unchanged sentences

The Company may elect to enter into a forward contract to sell precious metal to reduce the Company's price exposure in these instances.

The Company may, from time to time, elect to purchase precious metal and hold in inventory rather than on consignment due to potential credit line limitations or other factors.

The Company may, from time to time, elect to purchase precious metal and hold in inventory rather than on consignment due to potential consignment line limitations or other factors.

These purchases are infrequent and, when made are typically held for a short duration.

A forward contract will be secured at the time of the purchase to fix the price to be paid when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned by the Company.

A forward contract will be secured at the time of the purchase to fix the

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

price to be paid when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned by the Company.

The Company will only enter into a derivative contract if there is an underlying identified exposure.

8 unchanged sentences

The derivative assets and liabilities are classified as short-term or long-term depending upon the contract maturity date.

The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and the balance sheet classification as of September 27, 2024 and December 31, 2023:

September 27, 2024 December 31, 2023

March 28, 2025

December 31, 2024

(Thousands) Notional

4 unchanged sentences

These outstanding foreign currency derivatives were related to balance sheet hedges and intercompany loans.

Other-net included $ 0.2 million of foreign currency losses and $ 0.2 million of foreign currency gains related to derivatives in the third quarter and first nine months of 2024, respectively, compared to less than $ 0.1 million of foreign currency losses in the third quarter and $ 0.4 million of foreign currency losses in the first nine months of 2023.

Other-net included $ 0.5 million of foreign currency losses and $ 0.4 million of foreign currency gains related to derivatives in the first quarter of 2025 and 2024, respectively.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and balance sheet classification as of September 27, 2024 and December 31, 2023:

September 27, 2024

The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and the balance sheet classification as of March 28, 2025 and December 31, 2024:

March 28, 2025

(Thousands) Notional

3 unchanged sentences

Precious metal swaps — — — — —

Interest rate swap 200,000 2,271 1,330 322 965

Interest rate swaps 200,000 2,293 1,148 53 234

Total $ 203,178 $ 2,317 $ 1,148 $ 86 $ 234

4 unchanged sentences

Precious metal swaps — — — — —

Interest rate swap 200,000 3,658 2,834 — 1,096

Interest rate swaps 200,000 2,701 1,902 — —

Total $ 207,382 $ 3,007 $ 1,902 $ 2 $ —

All of the contracts summarized above were designated and effective as cash flow hedges.

We expect to reclassify $ 1.3 million of net gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

At September 27, 2024, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years .

Refer to Note K for further details related to OCI.

The following table summarizes the amounts reclassified from accumulated other comprehensive income relating to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the third quarter and first nine months of 2024 and 2023:

Third Quarter Ended

(Thousands) September 27, 2024 September 29, 2023

Hedging relationship Line item

Foreign currency forward contracts Net sales $ ( 135 ) $ —

Precious metal swaps Cost of sales 295 83

Interest rate swap Interest expense - net ( 1,294 ) ( 1,140 )

Total $ ( 1,134 ) $ ( 1,057 )

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Nine Months Ended

(Thousands) September 27, 2024 September 29, 2023

We expect to reclassify $ 2.2 million of gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

At March 28, 2025, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years .

Refer to Note K for additional OCI details.

The following table summarizes the amounts reclassified from accumulated other comprehensive income related to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the first quarter of 2025 and 2024:

First Quarter Ended

(Thousands) March 28, 2025

March 29, 2024

Hedging relationship Line item

8 unchanged sentences

In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matters.

To the extent there is a reasonable possibility that the losses could exceed any amounts accrued, the Company will adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.

Environmental Proceedings.

2 unchanged sentences

The reserves may also be affected by rulings and negotiations with regulatory agencies.

The undiscounted reserve balance was $ 4.4 million and $ 4.6 million at September 27, 2024 and December 31, 2023, respectively, and is included in Other liabilities and accrued items and Other long-term liabilities on the Consolidated Balance Sheet.

The undiscounted reserve balance was $ 4.5 million and $ 4.6 million at March 28, 2025 and December 31, 2024, respectively, and is included in Other liabilities and accrued items and Other long-term liabilities on the Consolidated Balance Sheet.

Environmental projects tend to be long-term, and the final actual remediation costs may differ from the amounts currently recorded.

Note P — Debt

(Thousands) September 27, 2024 December 31, 2023

(Thousands) March 28, 2025

December 31, 2024

Borrowings under Credit Agreement $ 197,125 $ 198,875

7 unchanged sentences

Long-term debt $ 398,744 $ 407,734

As of September 27, 2024 and December 31, 2023, the Company had $ 241.4 million outstanding at an average interest rate of 6.90 % and $ 149.3 million outstanding at an average interest rate of 6.96 %, respectively, under its revolving credit facility.

The available borrowing capacity under the revolving credit facility as of September 27, 2024 was $ 127.0 million.

As of March 28, 2025 and December 31, 2024, the Company had $ 197.1 million outstanding at an average interest rate of 5.92 % and $ 198.9 million outstanding at an average interest rate of 6.27 %, respectively, under its revolving credit facility.

The available borrowing capacity under the revolving credit facility as of March 28, 2025 was $ 172.2 million.

The Company has the option to repay or borrow additional funds under the revolving credit facility until the maturity date in 2026.

In connection with the revolving credit facility, the administrative agent provides the Company with an overdraft sweep facility that the Company uses on a daily basis for short-term cash needs.

As of March 28, 2025 the overdraft sweep facility had a balance of $ 13.7 million.

The facility allows for an additional $ 30.0 million of liquidity.

The amended and restated credit agreement governing the revolving credit facility (Credit Agreement) includes covenants subject to a maximum leverage ratio and a minimum fixed charge coverage ratio.

We were in compliance with all of our debt covenants as of September 27, 2024.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The balance outstanding on the term loan facility as of September 27, 2024 and December 31, 2023 was $ 247.5 million and $ 270.0 million, respectively.

At September 27, 2024 and December 31, 2023, there was $ 6.7 million and $ 47.0 million, respectively, outstanding against the letters of credit sub-facility.

Note Q — Subsequent Events

On October 20, 2024, the Company entered into an agreement to sell the assets of the target manufacturing operations at the Company’s Albuquerque facility (“Target assets”).

The transaction subsequently closed on October 25, 2024.

Based on the facts and circumstances as of September 27, 2024, the Company determined that not all criteria were met to classify the Target assets as held for sale as of September 27, 2024.

Approximately $ 5 million of net assets were included in the transaction.

Based on the final purchase price, the Company estimates that a loss will be recorded in the fourth quarter of 2024.

We were in compliance with all of our debt covenants as of March 28, 2025.

Other sources of liquidity include uncommitted short-term lines of credit for certain of the Company's foreign subsidiaries, which currently provide for borrowings up to $ 20.9 million.

At March 28, 2025 the Company had borrowings outstanding of $ 8.5 million which reduced under these facilities to $ 12.4 million.

The balance outstanding on the term loan facility as of March 28, 2025 and December 31, 2024 was $ 232.5 million and $ 240.0 million, respectively.

At both March 28, 2025 and December 31, 2024, there was $ 5.6 million and $ 7.1 million, respectively, outstanding against the letters of credit sub-facility .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements