What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-07-30 · 169 added, 144 removed, 608 unchanged (34% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

Second Quarter Ended Six Months Ended

(Thousands, except per share amounts) June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Third Quarter Ended Nine Months Ended

(Thousands, except per share amounts) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024

Net sales $ 444,808 $ 436,715 $ 1,296,796 $ 1,247,868

21 unchanged sentences

Consolidated Statements of Comprehensive Income

Second Quarter Ended Six Months Ended

June 27, June 28, June 27, June 28,

Third Quarter Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(Thousands) 2025 2024 2025 2024

4 unchanged sentences

Pension and post-employment benefit adjustment, net of tax ( 161 ) ( 62 ) 893 ( 298 )

Other comprehensive income (loss) 5,939 ( 1,566 ) 9,286 ( 3,939 )

Other comprehensive loss ( 1,499 ) 3,065 7,787 ( 874 )

Comprehensive income $ 23,913 $ 25,359 $ 76,037 $ 53,865

2 unchanged sentences

Consolidated Balance Sheets

June 27, Dec.

September 26, December 31,

(Thousands) 2025 2024

35 unchanged sentences

Common stock (no par value;

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

60,000 authorized shares, issued shares of 27,148 at both September 26 th and December 31 st )

349,247 336,136

8 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

June 27, June 28,

Nine Months Ended

September 26, September 27,

(Thousands) 2025 2024

21 unchanged sentences

Proceeds from sale of property, plant, and equipment 932 561

Payments for acquisition, net of cash acquired ( 19,500 ) —

Net cash used in investing activities ( 77,261 ) ( 60,545 )

7 unchanged sentences

Payments of withholding taxes for stock-based compensation awards ( 2,540 ) ( 6,575 )

Net cash provided by/(used in) financing activities ( 36,377 ) 46,200

Net cash provided by financing activities ( 8,417 ) 52,926

Effects of exchange rate changes 1,652 635

11 unchanged sentences

Comprehensive

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

Balance at June 27, 2025 20,727 6,421 $ 345,666 $ 886,247 $ ( 276,447 ) $ ( 51,760 ) $ 6,939 $ 910,645

Net income — — — 25,412 — — — 25,412

6 unchanged sentences

Directors’ deferred compensation — — 24 — ( 44 ) — 64 44

Balance at September 26, 2025 20,733 6,415 $ 349,247 $ 908,691 $ ( 277,103 ) $ ( 53,259 ) $ 7,003 $ 934,579

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

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

Net income — — — 22,294 — — — 22,294

5 unchanged sentences

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

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

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

Common Shares Shareholders' Equity

13 unchanged sentences

Directors’ deferred compensation 1 ( 1 ) 70 — ( 381 ) — 443 132

Balance at June 27, 2025 20,727 6,421 $ 345,666 $ 886,247 $ ( 276,447 ) $ ( 51,760 ) $ 6,939 $ 910,645

Balance at September 26, 2025 20,733 6,415 $ 349,247 $ 908,691 $ ( 277,103 ) $ ( 53,259 ) $ 7,003 $ 934,579

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 1 ( 1 ) 96 — ( 541 ) — 577 132

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

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

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 adjustments were of a normal and recurring nature.

All material 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.

11 unchanged sentences

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

Note B — Segment Reporting

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-internal-use software (Subtopic 350-40):

Targeted Improvements to the Accounting for internal-use software .

The amendments in this update make targeted improvements to Subtopic 350-40, Intangibles-Goodwill and Other-internal-use software to increase the operability of the recognition guidance considering different methods of software development.

The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this ASU will have on its condensed consolidated financial statements and related disclosures.

Note B — Acquisition

On July 9, 2025, the Company completed the acquisition of certain manufacturing assets for tantalum solutions in Dangjin City, South Korea, from Konasol Co., Ltd., a Korean manufacturer serving the semiconductor and adjacent markets.

This strategic investment expands the Company’s global footprint with a facility in Asia to better serve semiconductor customers in that region.

The total purchase price was approximately $ 19.5 million, which was paid in cash on the date of acquisition.

The acquisition and related fees and expenses were funded through available cash and borrowings under the Company's revolving credit facility.

Acquisition-related transaction and integration costs totaled $ 1.7 million in 2025.

These costs are included in selling, general, and administrative expenses in the Consolidated Statements of Income.

The Company accounted for the transaction as a business combination using the acquisition method of accounting and a third-party valuation appraisal, and included the results of operations of the acquisition in its consolidated financial statements from the effective date of the acquisition.

The operating results are included within Materion’s Electronic Materials segment.

Pro forma financial information has not been presented, as revenue and expenses related to the acquisition do not have a material impact on the Company’s consolidated financial statements.

The total purchase price was allocated to identifiable assets and liabilities based upon the preliminary estimates of fair value at the date of the acquisition, which primarily included PP&E and a developed technology intangible asset of $ 2.1 million.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired, such excess was allocated to goodwill and approximated $ 14.9 million.

The goodwill is deductible for Korean tax purposes.

The fair values of the acquired intangible asset is determined based on an income approach, using estimates and assumptions that are deemed reasonable by the Company.

These assumptions are subject to revision as additional information is obtained about the facts and circumstances that existed as of the acquisition date, primarily related to intangible assets, which may result in adjustments to the preliminary values discussed above as valuations are finalized.

We expect to finalize these amounts as soon as possible, but no later than the end of the third quarter of 2026.

Note C — Segment Reporting

The Company has the following reportable segments:

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 chief operating decision maker, 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 CODM, 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.

Electronic Materials produces advanced chemicals, microelectric packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal preforms, high temperature and braze materials.

Precision Optics produces thin film coatings, optical filter materials, sputter-coated, and precision-converted thin film materials.

1 unchanged sentence

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

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 second quarter and first six months of 2025 and 2024:

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 2025 and 2024:

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Second quarter ended June 27, 2025

Third quarter ended September 26, 2025

Performance Materials Electronic Materials Precision Optics Other Consolidated

11 unchanged sentences

Net Income $ 25,412

Second quarter ended June 28, 2024

Third quarter ended September 27, 2024

Performance Materials Electronic Materials Precision Optics Other Consolidated

13 unchanged sentences

Notes to Consolidated Financial Statements

First six months ended June 27, 2025

First nine months ended September 26, 2025

Performance Materials Electronic Materials Precision Optics Other Consolidated

11 unchanged sentences

Net Income $ 68,250

First six months ended June 28, 2024

First nine months ended September 27, 2024

Performance Materials Electronic Materials Precision Optics Other Consolidated

13 unchanged sentences

Notes to Consolidated Financial Statements

(1) Excludes inter-segment sales of $ 2.0 million and $ 1.7 million for the second quarter of 2025 and 2024, respectively, and $ 4.6 million and $ 3.2 million for the first six months of 2025 and 2024, respectively, for Electronic Materials.

(1) Excludes inter-segment sales of $ 1.0 million and $ 1.6 million for the third quarter of 2025 and 2024, respectively, and $ 5.6 million and $ 4.8 million for the first nine months of 2025 and 2024, respectively, for Electronic Materials.

There were no material inter-segment sales for Performance Materials or Precision Optics in 2025 or 2024.

3 unchanged sentences

• Restructuring expense

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

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

• Non-operating expenses primarily related to pension costs

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

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

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

Second Quarter 2025

Third Quarter 2025

Semiconductor $ 2,005 $ 205,821 $ 1,120 $ — $ 208,946

7 unchanged sentences

Total $ 170,787 $ 246,837 $ 27,184 $ — $ 444,808

Second Quarter 2024

Third Quarter 2024

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

10 unchanged sentences

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

First Six Months 2025

First Nine Months 2025

Semiconductor $ 7,390 $ 579,064 $ 2,690 $ — $ 589,144

7 unchanged sentences

Total $ 527,552 $ 696,059 $ 73,185 $ — $ 1,296,796

First Six Months 2024

First Nine Months 2024

Semiconductor $ 6,059 $ 533,312 $ 1,877 $ — $ 541,248

7 unchanged sentences

Total $ 533,534 $ 641,564 $ 72,770 $ — $ 1,247,868

Note C — Revenue Recognition

Note D — Revenue Recognition

Net sales consist primarily of revenue from the sale of precious and non-precious specialty metals, beryllium and copper-based alloys, beryllium composites, and other products into numerous end markets.

3 unchanged sentences

Transaction Price Allocated to Future Performance Obligations:

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 June 27, 2025.

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 26, 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 June 27, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 27.9 million.

After considering the practical expedient at September 26, 2025 and September 27, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 21.5 million and $ 39.9 million, respectively.

Materion Corporation and Subsidiaries

2 unchanged sentences

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

(Thousands) June 27, 2025

(Thousands) September 26, 2025

December 31, 2024

8 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 second quarter and first six months of 2025.

Impairment losses (bad debt) incurred related to our receivables were immaterial during the third quarter and first nine 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 $ 22.9 million of receivables in the second quarter of 2025 and a total of $ 38.9 million of receivables in the first six months of 2025.

The Company recorded a loss on sale of $ 0.2 million and $ 0.4 million for the second quarter and first sixth months of 2025, respectively.

The Company sold $ 20.5 million of receivables in the third quarter of 2025 and a total of $ 59.4 million of receivables in the first nine months of 2025.

The Company recorded a loss on sale of $ 0.2 million and $ 0.6 million for the third quarter and first nine months of 2025, respectively.

The Company sold $ 48.9 million of receivables in the fourth quarter of 2024 and recorded a loss on sale of $ 0.7 million.

4 unchanged sentences

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

The Company recognized approximately $ 0.7 million and $ 9.9 million of the December 31, 2024 unearned amounts as revenue during the second quarter and first six months of 2025, respectively.

The Company recognized approximately $ 10.1 million of the December 31, 2024 short-term unearned amounts as revenue during the first nine 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.

Note D — Other-net

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

Second Quarter Ended Six Months Ended

June 27, June 28, June 27, June 28,

(Thousands) 2025 2024 2025 2024

Amortization of intangible assets $ 2,806 $ 3,163 $ 5,695 $ 6,010

Metal consignment fees 2,460 1,895 4,675 3,918

Foreign currency (gain) loss ( 800 ) 101 ( 952 ) 534

Other items ( 558 ) ( 713 ) ( 514 ) ( 1,659 )

Total $ 3,908 $ 4,446 $ 8,904 $ 8,803

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note E — Restructuring

In fiscal year 2024, 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.

In fiscal year 2024, the Company announced restructuring plans that were both designed to reduce costs and expenses in response to macroeconomic conditions and operating performance at the time the actions were announced.

These actions impacted 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 $ 0.5 million and $ 2.5 million in the three and six months ended June 27, 2025, respectively, and $ 3.0 million and $ 4.7 million in the three and six months ended June 28, 2024, respectively, all of which were associated with workforce reduction, including severance and other personnel-related costs.

In connection with these actions, we recorded restructuring expenses of $ 0.2 million and $ 2.7 million in the three and nine months ended September 26, 2025, respectively, and $ 1.5 million and $ 6.2 million in the three and nine months ended September 27, 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 fiscal year 2025.

The activity in the accrued balances incurred in relation to restructuring during the six months ended June 27, 2025, and June 28, 2024, were as follows:

The activity in the accrued balances incurred in relation to restructuring during the nine months ended September 26, 2025, and September 27, 2024, were as follows:

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Reduction in Force

4 unchanged sentences

Cash Payments ( 537 ) ( 1,067 ) ( 1,457 ) ( 325 ) ( 3,386 )

Balance at June 27, 2025

Balance at September 26, 2025

$ — $ 15 $ 31 $ 114 $ 160

4 unchanged sentences

Cash Payments ( 1,270 ) ( 2,019 ) ( 755 ) ( 1,154 ) ( 5,198 )

Balance at June 28, 2024

Balance at September 27, 2024

$ 173 $ 173 $ 443 $ 564 $ 1,353

Note F — Income Taxes

The Company's effective tax rate for the second quarter of 2025 and 2024 was 13.8 % and 20.4 %, respectively, and 14.5 % and 15.8 % for the first six months of 2025 and 2024, respectively.

The effective tax rate for 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion and the advanced manufacturing production credit.

The effective tax rate for the 2024 periods was lower than the statutory tax rate primarily due to the impact of percentage depletion and the foreign derived intangible income deduction.

The effective tax rate for the first six months of 2025 includes net discrete income tax expense of $ 0.6 million, primarily consisting of $ 0.2 million expense for stock-based compensation awards and $ 0.4 million expense for unrecognized tax benefits recorded.

The effective tax rate for the first six months of 2024 included a net discrete income tax benefit of $ 0.2 million, which primarily consisted of $ 1.0 million of excess tax benefits from stock-based compensation awards offset by a $ 1.1 million valuation allowance recorded against deferred tax assets that were not likely to be realized for one of the Company’s foreign subsidiaries.

Note F — Other-net

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

Third Quarter Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(Thousands) 2025 2024 2025 2024

Amortization of intangible assets $ 2,699 $ 3,217 $ 8,394 $ 9,227

Metal consignment fees 3,186 1,978 7,860 5,896

Foreign currency (gain) loss 492 717 ( 459 ) 1,251

Other items ( 213 ) ( 603 ) ( 727 ) ( 2,262 )

Total $ 6,164 $ 5,309 $ 15,068 $ 14,112

Note G — Income Taxes

The Company's effective tax rate for the third quarter of 2025 and 2024 was 9.6 % and 3.3 %, respectively, and 12.7 % and 11.1 % for the first nine months of 2025 and 2024, respectively.

The effective tax rate for 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion, the advanced manufacturing production credit, and the foreign derived intangible income deduction.

The effective tax rate for 2024 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 2025 includes a net discrete income tax benefit of $ 0.7 million, primarily consisting of prior year return-to-provision adjustments recorded.

The effective tax rate for the first nine months of 2024 included 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.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S.

The OBBBA includes a broad range of tax provisions affecting businesses including extending permanently, with modification, certain business and international tax provisions enacted as part of the Tax Cuts and Jobs Act of 2017 and accelerating the phase-out of certain Inflation Reduction Act tax incentives.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in future years.

The Company recognized the income tax effects of the OBBBA in its third quarter of 2025, the impact of which was not material.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Government Tax Credits

4 unchanged sentences

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

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

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 credit 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.

3 unchanged sentences

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

Note G — Earnings Per Share (EPS)

Note H — Earnings Per Share (EPS)

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

Second Quarter Ended Six Months Ended

June 27, June 28, June 27, June 28,

Third Quarter Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(Thousands, except per share amounts) 2025 2024 2025 2024

12 unchanged sentences

Diluted EPS $ 1.22 $ 1.07 $ 3.27 $ 2.61

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 320,477 and 137,252 for the quarters ended June 27, 2025 and June 28, 2024, respectively, and securities totaling 146,804 and 95,392 for the six months ended June 27, 2025 and June 28, 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 stock and were excluded from the dilution calculation as the effect would have been anti-dilutive.

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 158,282 and 148,038 for the quarters ended September 26, 2025 and September 27, 2024, respectively, and 149,694 and 110,555 for the nine months ended September 26, 2025 and September 27, 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

Note I — Inventories

Inventories on the Consolidated Balance Sheets are summarized as follows:

June 27, December 31,

September 26, December 31,

(Thousands) 2025 2024

4 unchanged sentences

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 $ 379.3 million and $ 381.6 million as of June 27, 2025 and December 31, 2024, respectively.

Note I — Customer Prepayments

The notional value of off-balance sheet precious metals and copper was $ 493.8 million and $ 381.6 million as of September 26, 2025 and December 31, 2024, respectively.

Note J — Customer Prepayments

In 2020, the Company entered into an investment agreement and a master supply agreement with a customer to procure equipment to manufacture product for the customer.

4 unchanged sentences

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

As of June 27, 2025 and December 31, 2024, $ 49.8 million and $ 60.9 million, respectively, of prepayments are classified as Unearned income on the Consolidated Balance Sheets.

As of September 26, 2025 and December 31, 2024, $ 46.4 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 June 27, 2025 and December 31, 2024, $ 4.8 million and $ 4.3 million of the prepayments are classified as Unearned revenue.

As of September 26, 2025 $ 3.0 million 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 second quarter and first six months ended June 27, 2025 and June 28, 2024, respectively, for the pension plans as shown below.

Note K — 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 26, 2025 and September 27, 2024, 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.

2 unchanged sentences

Pension Benefits Other Benefits

Second Quarter Ended Second Quarter Ended

June 27, June 28, June 27, June 28,

Third Quarter Ended Third Quarter Ended

September 26, September 27, September 26, September 27,

(Thousands) 2025 2024 2025 2024

7 unchanged sentences

Pension Benefits Other Benefits

Six Months Ended Six Months Ended

June 27, June 28, June 27, June 28,

Nine Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(Thousands) 2025 2024 2025 2024

6 unchanged sentences

Net periodic benefit (credit) cost $ ( 695 ) $ ( 1,027 ) $ ( 55 ) $ ( 50 )

The Company did no t make any contributions to its domestic defined benefit plan in the second quarter or first six months of 2025 or 2024.

The Company did no t make any contributions to its domestic defined benefit plan in the third quarter or first nine months 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 second quarter and first six months of 2025 and 2024 are as follows:

Note L — 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 2025 and 2024 are as follows:

Materion Corporation and Subsidiaries

2 unchanged sentences

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

Balance at March 28, 2025

Balance at June 27, 2025

$ 1,316 $ 1,888 $ 2 $ 3,206 $ ( 53,648 ) $ ( 1,318 ) $ ( 51,760 )

4 unchanged sentences

Net current period other comprehensive (loss) income after tax 85 ( 520 ) — ( 435 ) ( 161 ) ( 903 ) ( 1,499 )

Balance at September 26, 2025

$ 1,401 $ 1,368 $ 2 $ 2,771 $ ( 53,809 ) $ ( 2,221 ) $ ( 53,259 )

Balance at June 28, 2024

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

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

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

3 unchanged sentences

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

Balance at June 28, 2024

Balance at September 27, 2024

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

10 unchanged sentences

Net current period other comprehensive (loss) income after tax ( 237 ) ( 2,177 ) — ( 2,414 ) 893 9,308 7,787

Balance at June 27, 2025

Balance at September 26, 2025

$ 1,401 $ 1,368 $ 2 $ 2,771 $ ( 53,809 ) $ ( 2,221 ) $ ( 53,259 )

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

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

Other comprehensive (loss) income before reclassifications 872 4,579 ( 560 ) 4,891 — ( 5,549 ) ( 658 )

Other comprehensive income (loss) before reclassifications 177 774 ( 708 ) 243 — 2,030 2,273

Amounts reclassified from accumulated other comprehensive income (loss) ( 335 ) ( 3,856 ) 564 ( 3,627 ) ( 266 ) — ( 3,893 )

2 unchanged sentences

Net current period other comprehensive (loss) income after tax ( 122 ) ( 2,373 ) ( 111 ) ( 2,606 ) ( 298 ) 2,030 ( 874 )

Balance at June 28, 2024

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

Balance at September 27, 2024 $ 1,079 $ 1,783 $ ( 210 ) $ 2,652 $ ( 48,956 ) $ ( 1,518 ) $ ( 47,822 )

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.

1 unchanged sentence

Reclassifications from accumulated other comprehensive income (loss) of gains and losses on the interest rate cash flow hedge is recorded in Interest expense in the Consolidated Statements of Income.

Refer to Note N for additional details on cash flow hedges.

Refer to Note O for additional details on cash flow hedges.

Reclassifications from accumulated other comprehensive income (loss) for pension and post-employment benefits are included in the computation of the net periodic pension and post-employment benefit expense.

Refer to Note J for additional details on pension and post-employment expenses.

Refer to Note K for additional details on pension and post-employment expenses.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note L — Stock-based Compensation Expense

Stock-based compensation expense, which includes awards settled in shares and in cash, was $ 2.6 million and $ 5.6 million in the second quarter and first six months of 2025, respectively, compared to $ 2.7 million and $ 5.3 million, respectively, in the same periods of 2024.

The Company granted 55,546 SARs to certain employees during the first six months of 2025.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the six months ended June 27, 2025 were $ 87.36 and $ 26.33 , respectively.

Note M — Stock-based Compensation Expense

Stock-based compensation expense, which includes awards settled in shares and in cash, was $ 3.2 million and $ 8.8 million in the third quarter and first nine months of 2025, respectively, compared to $ 2.4 million and $ 7.7 million, respectively, in the same periods of 2024.

The Company granted 55,546 SARs to certain employees during the first nine months of 2025.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the nine months ended September 26, 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 104,873 stock-settled RSUs to certain employees during the first six months of 2025.

The Company granted 4,946 and 109,819 stock-settled RSUs to certain employees during the third quarter and first nine months of 2025, respectively.

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 $ 87.74 for stock-settled RSUs granted to employees during the six months ended June 27, 2025.

The weighted-average fair value per share was $ 106.43 and $ 88.79 for stock-settled RSUs granted to employees during the third quarter and nine months ended September 26, 2025, respectively.

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 six months of 2025.

The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first nine months 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 June 27, 2025, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 22.6 million, and is expected to be recognized over the remaining vesting period of the respective grants.

Note M — Fair Value of Financial Instruments

At September 26, 2025, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 19.5 million, and is expected to be recognized over the remaining vesting period of the respective grants.

Note N — Fair Value of Financial Instruments

The Company measures and records financial instruments at fair value.

7 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 June 27, 2025 and December 31, 2024:

The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of September 26, 2025 and December 31, 2024:

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

5 unchanged sentences

Foreign currency forward contracts 412 1,671 — — 412 1,671 — —

Interest rate swaps 2,819 4,603 — — 2,819 4,603 — —

Interest rate swap 2,112 4,603 — — 2,112 4,603 — —

Precious metal swaps — — — — — — — —

3 unchanged sentences

Foreign currency forward contracts 488 1,033 — — 488 1,033 — —

Interest rate swaps 368 — — — 368 — — —

Interest Rate Swap 336 — 336 — —

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 June 27, 2025 and December 31, 2024.

The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of September 26, 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.

1 unchanged sentence

Deferred compensation liabilities are primarily presented in Other long-term liabilities.

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 and copper exposures.

Note O — 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 objectives and strategies for using derivatives in these areas are as follows:

Interest Rate.

On March 4, 2022, the Company entered into a $ 100.0 million interest rate swap to hedge the interest rate risk on the Credit Agreement described in Note P.

On March 4, 2022, the Company entered into a $ 100.0 million interest rate swap to hedge the interest rate risk on the Credit Agreement described in Note Q.

The swap hedges the change in 1-month Secured Overnight Financial Rate (SOFR) from March 4, 2022 to November 2, 2026.

On March 21, 2023, the Company entered into two $ 50.0 million interest rate swaps to hedge the interest rate risk on the Credit Agreement described in Note P.

On March 21, 2023, the Company entered into two $ 50.0 million interest rate swaps to hedge the interest rate risk on the Credit Agreement described in Note Q.

The swaps hedge the change in 1-month USD-SOFR.

54 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 June 27, 2025 and December 31, 2024:

June 27, 2025 December 31, 2024

September 26, 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 $ 1.5 million and $ 2.0 million of foreign currency losses in the second quarter and first six months of 2025, respectively, compared to $ 0.1 million of foreign currency losses and $ 0.4 million of foreign currency gains in the second quarter and first six months of 2024, respectively.

Other-net included $ 0.1 million and $ 2.1 million of foreign currency losses related to derivatives in the third quarter and first nine months of 2025, respectively, compared to $ 0.2 million of foreign currency losses and $ 0.2 million of foreign currency gains in the third quarter and first nine months of 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 June 27, 2025 and December 31, 2024:

June 27, 2025

September 26, 2025

(Thousands) Notional

3 unchanged sentences

Precious metal swaps — — — — —

Interest rate swaps 200,000 2,208 611 114 254

Interest rate swap 200,000 1,873 239 233 103

Total $ 200,229 $ 1,873 $ 239 $ 238 $ 103

4 unchanged sentences

Precious metal swaps — — — — —

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

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

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

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We expect to reclassify $ 1.6 million of net gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

At June 27, 2025, 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 second quarter and first six months of 2025 and 2024:

Second Quarter Ended

(Thousands) June 27, 2025 June 28, 2024

At September 26, 2025, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years .

Refer to Note L 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 2025 and 2024:

Third Quarter Ended

(Thousands) September 26, 2025 September 27, 2024

Hedging relationship Line item

5 unchanged sentences

Notes to Consolidated Financial Statements

Six Months Ended

(Thousands) June 27, 2025 June 28, 2024

Nine Months Ended

(Thousands) September 26, 2025 September 27, 2024

Hedging relationship Line item

3 unchanged sentences

Total $ ( 2,457 ) $ ( 3,627 )

Note O — Contingencies

Note P — Contingencies

Legal Proceedings .

7 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 June 27, 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.

The undiscounted reserve balance was $ 3.5 million and $ 4.6 million at September 26, 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) June 27, 2025 December 31, 2024

Note Q — Debt

(Thousands) September 26, 2025 December 31, 2024

Borrowings under Credit Agreement $ 230,125 $ 198,875

8 unchanged sentences

In June 2025, the Company entered into a Fifth Amended and Restated Credit Agreement (Credit Agreement).

The Credit Agreement refinances the revolving credit facility and term loan facility provided under Materion's previous Fourth Amended and Restated Credit Agreement, dated October 27, 2021 (as amended).

Among other things, the Credit Agreement provides for a $ 450 million senior secured revolving credit facility (the "Revolving Credit Facility") and a $ 225 million senior secured term loan facility (the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Credit Facilities").

The Credit Agreement refinanced the revolving credit facility and term loan facility provided under Materion's previous Fourth Amended and Restated Credit Agreement, dated October 27, 2021 (as amended).

Among other things, the Credit Agreement provides for a $ 450 million senior secured revolving credit facility (Revolving Credit Facility) and a $ 225 million senior secured term loan facility (Term Loan Facility and, together with the Revolving Credit Facility, Credit Facilities).

The Term Loan Facility was fully drawn on June 26, 2025.

The Credit Facilities mature on June 26, 2030.

As of June 27, 2025 and December 31, 2024, the Company had $ 187.6 million outstanding at an average interest rate of 5.82 % and $ 198.9 million outstanding at an average interest rate of 6.27 %, respectively, under its revolving credit facility.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

The available borrowing capacity under the revolving credit facility as of June 27, 2025 was $ 256.7 million.

As of September 26, 2025 and December 31, 2024, the Company had $ 230.1 million outstanding at an average interest rate of 5.70 % 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 September 26, 2025 was approximately $ 214.2 million.

The Company has the option to repay or borrow additional funds under the Revolving Credit Facility until the maturity date in 2030.

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 June 27, 2025, there was $ 11.9 million outstanding on the overdraft sweep facility.

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

We were in compliance with all of our debt covenants as of June 27, 2025.

The balance outstanding on the term loan facility as of June 27, 2025 and December 31, 2024 wa s $ 225 million and $ 240 million, respectively.

At June 27, 2025 and December 31, 2024, there was $ 5.7 million and $ 7.1 million, respectively, outstanding against the letters of credit sub-facility.

Note Q — Subsequent Events

On July 9, 2025 the Company completed the acquisition of certain manufacturing assets for tantalum solutions in Dangjin City, South Korea, from Konasol, a Korean manufacturer serving the semiconductor and adjacent markets.

The total purchase price was approximately $ 19 million.

The acquisition and related fees and expenses were funded through available cash and drawings on the Company's revolving credit facility.

As of September 26, 2025, the overdraft sweep facility had a balance of $ 2.9 million.

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

The 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 26, 2025.

The balance outstanding on the term loan facility as of September 26, 2025 and December 31, 2024 was $ 223.6 million and $ 240.0 million, respectively.

At September 26, 2025 and December 31, 2024, there was $ 5.7 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