What changed in this filing

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Item 1. Financial Statements

2026-08-05 compared with 2026-04-29 · 271 added, 128 removed, 525 unchanged (43% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

First Quarter Ended

(Thousands, except per share amounts) April 3, 2026 March 28, 2025

Second Quarter Ended Six Months Ended

(Thousands, except per share amounts) July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025

Net sales $ 613,906 $ 431,658 $ 1,163,730 $ 851,988

21 unchanged sentences

Consolidated Statements of Comprehensive Income

First Quarter Ended

April 3, March 28,

Second Quarter Ended Six Months Ended

July 3, June 27, July 3, June 27,

(Thousands) 2026 2025 2026 2025

9 unchanged sentences

Consolidated Balance Sheets

April 3, Dec.

(Thousands) 2026 2025

35 unchanged sentences

Common stock (no par value;

60,000 authorized shares, issued shares of 27,148 at April 3 and December 31)

60,000 authorized shares, issued shares of 27,148 at both July 3rd and December 31 st )

380,134 351,901

8 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

April 3, March 28,

Six Months Ended

July 3, June 27,

(Thousands) 2026 2025

5 unchanged sentences

Stock-based compensation expense (non-cash) 8,635 5,437

Deferred income tax (benefit) expense ( 3 ) 22

Deferred income tax (benefit) ( 1,618 ) ( 25 )

Changes in assets and liabilities:

8 unchanged sentences

Other-net 2,304 ( 8,821 )

Net cash provided by (used in) operating activities ( 4,307 ) 15,502

Net cash provided by operating activities 70,506 65,442

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Proceeds from (repayments of) borrowings under credit facilities, net 32,783 16,190

Repayments of borrowings under credit facilities, net ( 14,962 ) ( 2,219 )

Repayment of debt ( 3,033 ) ( 15,111 )

1 unchanged sentence

Cash dividends paid ( 5,926 ) ( 5,705 )

Deferred financing costs — ( 2,856 )

Repurchase of common stock — ( 7,843 )

Payments of withholding taxes for stock-based compensation awards ( 7,888 ) ( 2,337 )

Net cash provided by financing activities 22,381 3,478

Net cash used in financing activities ( 32,115 ) ( 36,377 )

Effects of exchange rate changes ( 606 ) 1,725

11 unchanged sentences

Comprehensive

Balance at April 3, 2026 20,801 6,347 $ 368,264 $ 928,796 $ ( 295,362 ) $ ( 51,870 ) $ 7,135 $ 956,963

Net income — — — 38,758 — — — 38,758

Other comprehensive income — — — — — ( 978 ) — ( 978 )

Cash dividends declared ($ 0.145 per share)

— — — ( 3,021 ) — — — ( 3,021 )

Stock-based compensation activity 42 ( 42 ) 11,830 ( 64 ) ( 6,549 ) — — 5,217

Payments of withholding taxes for stock-based compensation awards ( 10 ) 10 — — ( 2,116 ) — — ( 2,116 )

Directors’ deferred compensation 1 ( 1 ) 40 — 1,651 — ( 1,647 ) 44

Balance at July 3, 2026 20,834 6,314 $ 380,134 $ 964,469 $ ( 302,376 ) $ ( 52,848 ) $ 5,488 $ 994,867

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

Net income — — — 25,140 — — — 25,140

Other comprehensive income — — — — — 5,939 — 5,939

Cash dividends declared ($ 0.140 per share)

— — — ( 2,902 ) — — — ( 2,902 )

Stock-based compensation activity 14 ( 14 ) 2,887 7 ( 443 ) — — 2,451

Repurchase of common stock ( 100 ) 100 — — ( 7,843 ) — — ( 7,843 )

Payments of withholding taxes for stock-based compensation awards ( 2 ) 2 — — ( 113 ) — — ( 113 )

Directors’ deferred compensation 1 ( 1 ) 20 — ( 292 ) — 316 44

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

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, 2025 20,735 6,413 $ 351,901 $ 912,361 $ ( 277,473 ) $ ( 50,581 ) $ 7,069 $ 943,277

6 unchanged sentences

Directors’ deferred compensation 1 ( 1 ) 71 — 1,600 — ( 1,581 ) 90

Balance at April 3, 2026 20,801 6,347 $ 368,264 $ 928,796 $ ( 295,362 ) $ ( 51,870 ) $ 7,135 $ 956,963

Balance at July 3, 2026 20,834 6,314 $ 380,134 $ 964,469 $ ( 302,376 ) $ ( 52,848 ) $ 5,488 $ 994,867

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

4 unchanged sentences

Stock-based compensation activity 89 ( 89 ) 9,484 3 ( 4,050 ) — — 5,437

Repurchase of common stock ( 100 ) 100 — — ( 7,843 ) — — ( 7,843 )

Payments of withholding taxes for stock-based compensation awards ( 27 ) 27 — — ( 2,337 ) — — ( 2,337 )

Directors’ deferred compensation 1 ( 1 ) 46 — ( 337 ) — 379 88

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

See notes to these consolidated financial statements.

8 unchanged sentences

New Accounting Guidance Issued and Not Yet Adopted:

In November 2024, the Financial Accounting Standards Board (FASB) issued a final ASU to require disaggregated disclosure of income statement expenses.

This new standard 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 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.

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses," which is intended to improve disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

Such information should allow investors to better understand an entity's performance, assess future cash flows, and compare performance over time and with other entities.

The amendments will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's selling expenses.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively.

Early adoption is permitted.

While the adoption of ASU 2024-03 will result in enhanced disclosures, the Company does not expect it will have a material impact on its financial condition or results of operations.

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

17 unchanged sentences

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.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

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.

10 unchanged sentences

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.

No material provisional adjustments to the acquisition accounting have been recorded during 2026.

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

8 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).

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 2026 and 2025:

First quarter ended April 3, 2026

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 2026 and 2025:

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Second quarter ended July 3, 2026

Performance Materials Electronic Materials Precision Optics Other Consolidated

11 unchanged sentences

Net Income $ 38,758

First quarter ended March 28, 2025

Second quarter ended June 27, 2025

Performance Materials Electronic Materials Precision Optics Other Consolidated

11 unchanged sentences

Net Income $ 25,140

(1) Excludes inter-segment sales of $ 2.7 million for the first quarter of 2026 and $ 2.6 million for the first quarter of 2025 for Electronic Materials.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

First six months ended July 3, 2026

Performance Materials Electronic Materials Precision Optics Other Consolidated

Net sales (1)

$ 363,614 $ 738,545 $ 61,571 $ — $ 1,163,730

Cost of sales 280,989 657,970 38,588 6 977,553

Selling, general and administrative expense 28,942 20,893 10,197 18,489 78,521

Other segment items (2)

4,468 15,598 5,992 1,085 27,143

Segment depreciation, depletion and amortization 22,888 9,278 4,483 965 37,614

Segment EBITDA $ 72,103 $ 53,362 $ 11,277 $ ( 18,615 ) $ 118,127

Income tax expense 7,277

Interest expense - net 15,104

Depreciation, depletion and amortization 37,614

Net Income $ 58,132

First six months ended June 27, 2025

Performance Materials Electronic Materials Precision Optics Other Consolidated

Net sales (1)

$ 356,765 $ 449,222 $ 46,001 $ — $ 851,988

Cost of sales 259,526 398,223 35,319 83 693,151

Selling, general and administrative expense 28,223 19,744 8,702 13,815 70,484

Other segment items (2)

6,871 11,104 6,278 ( 1,147 ) 23,106

Segment depreciation, depletion and amortization 19,622 8,528 4,915 982 34,047

Segment EBITDA $ 81,767 $ 28,679 $ 617 $ ( 11,769 ) $ 99,294

Income tax expense 7,262

Interest expense - net 15,147

Depreciation, depletion and amortization 34,047

Net Income $ 42,838

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(1) Excludes inter-segment sales of $ 2.1 million and $ 2.0 million for the second quarter of 2026 and 2025, respectively, and $ 4.8 million and $ 4.6 million for the first six months of 2026 and 2025, respectively, for Electronic Materials.

Inter-segment sales are eliminated in consolidation.

2 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 F

• 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 2026 and 2025:

The following table disaggregates revenue for each segment by end market for the second quarter and first six months of 2026 and 2025:

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

First Quarter 2026

Second Quarter 2026

Semiconductor $ 3,891 $ 298,807 $ 2,430 $ — $ 305,128

7 unchanged sentences

Total $ 207,949 $ 375,181 $ 30,776 $ — $ 613,906

First Quarter 2025

Second Quarter 2025

Semiconductor $ 1,758 $ 189,494 $ 795 $ — $ 192,047

7 unchanged sentences

Total $ 182,778 $ 224,427 $ 24,453 $ — $ 431,658

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Thousands) Performance Materials Electronic Materials Precision Optics Other Total

First Six Months 2026

Semiconductor $ 6,197 $ 613,064 $ 4,228 $ — $ 623,489

Industrial 67,165 25,428 15,544 — 108,137

Aerospace and defense 105,070 8,856 19,755 — 133,681

Consumer electronics 69,707 14,101 7,323 — 91,131

Automotive 35,328 494 3,922 — 39,744

Energy 28,899 70,550 — — 99,449

Life sciences 3,715 ( 2,761 ) 10,739 — 11,693

Other 47,533 8,813 60 — 56,406

Total $ 363,614 $ 738,545 $ 61,571 $ — $ 1,163,730

First Six Months 2025

Semiconductor $ 5,385 $ 373,243 $ 1,570 $ — $ 380,198

Industrial 62,283 18,759 12,022 — 93,064

Aerospace and defense 86,056 3,780 13,514 — 103,350

Consumer electronics 101,707 1,266 6,316 — 109,289

Automotive 33,037 2,542 3,146 — 38,725

Energy 28,940 33,383 — — 62,323

Life sciences 4,858 12,389 8,945 — 26,192

Other 34,499 3,860 488 — 38,847

Total $ 356,765 $ 449,222 $ 46,001 $ — $ 851,988

Note D — Revenue Recognition

3 unchanged sentences

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.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

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 April 3, 2026.

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 April 3, 2026 and December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 14.0 million and $ 21.9 million, respectively.

After considering the practical expedient at July 3, 2026 and December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 116.4 million and $ 21.9 million, respectively.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Contract Balances :

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

(Thousands) April 3, 2026 December 31, 2025 $ change % change

(Thousands) July 3, 2026

December 31, 2025

$ 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 first three months of 2026 and 2025.

Impairment losses (bad debt) incurred related to our receivables were immaterial during the second quarter and first six months of 2026.

During 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 $ 8.1 million of receivables in the first quarter of 2026 and recorded a loss on sale of $ 0.1 million.

The Company did not sell any receivables in the second quarter of 2026.

The company sold a total of $ 8.1 million of receivables resulting in a loss on sale of $ 0.1 million for the first six months of 2026.

The Company sold a total of $ 59.4 million of receivables in 2025.

The Company did not sell any receivables in the fourth quarter of 2025.

3 unchanged sentences

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 $ 5.4 million of the December 31, 2025 unearned amounts as revenue during the first three months of 2026.

The Company recognized approximately $ 6.9 million of the December 31, 2025 unearned amounts as revenue during the first six months of 2026.

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 E — Other-net

Other-net for the second quarter and first six months of 2026 and 2025 is summarized as follows:

Second Quarter Ended Six Months Ended

July 3, June 27, July 3, June 27,

(Thousands) 2026 2025 2026 2025

Amortization of intangible assets $ 2,600 $ 2,806 $ 5,205 $ 5,695

Metal consignment fees 4,350 2,460 10,430 4,675

Foreign currency loss (gain) 232 ( 800 ) 840 ( 952 )

Other items ( 3,758 ) ( 558 ) ( 4,043 ) ( 514 )

Total $ 3,424 $ 3,908 $ 12,432 $ 8,904

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note E — Restructuring

Note F — Restructuring

In fiscal years 2025 and 2024, we announced restructuring plans that were both designed to reduce costs and expenses in response to macroeconomic conditions and current operating performance.

2 unchanged sentences

In 2026, the Company continued to implement restructuring actions across all segments.

In connection with these actions, we recorded restructuring expenses of $ 2.3 million in the three months ended April 3, 2026, compared to $ 2.0 million in the three months ended March 28, 2025.

In connection with these actions, we recorded restructuring expenses of $ 0.3 million and $ 2.6 million in the three and six months ended July 3, 2026, respectively, compared to $ 0.5 million and $ 2.5 million in the three and six months ended June 27, 2025, respectively.

All of these charges 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 2026.

The activity in the accrued balances incurred in relation to restructuring during the three months ended April 3, 2026 and March 28, 2025, were as follows:

As of the July 3, 2026, we have substantially completed the restructuring activities expected for the fiscal year 2026.

The activity in the accrued balances incurred in relation to restructuring during the six months ended July 3, 2026 and June 27, 2025, were as follows:

Reduction in Force

4 unchanged sentences

Cash Payments ( 596 ) ( 463 ) ( 731 ) ( 534 ) ( 2,324 )

Balance at April 3, 2026 $ 250 $ 122 $ 473 $ 104 $ 949

Balance at July 3, 2026

$ 40 $ 35 $ 206 $ 165 $ 446

Reduction in Force

1 unchanged sentence

Balance at December 31, 2024

$ 56 $ 293 $ 60 $ 408 $ 817

Additional Charges 481 577 1,428 31 2,517

Cash Payments ( 433 ) ( 859 ) ( 1,305 ) ( 234 ) ( 2,831 )

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

Note F — Other-net

Other-net for the first quarter of 2026 and 2025 is summarized as follows:

First Quarter Ended

April 3, March 28,

(Thousands) 2026 2025

Metal consignment fees $ 6,080 $ 2,215

Amortization of intangible assets 2,605 2,889

Foreign currency loss (gain) 609 ( 153 )

Other items, net ( 286 ) 45

Total $ 9,008 $ 4,996

Balance at June 27, 2025

$ 104 $ 11 $ 183 $ 205 $ 503

Note G — Income Taxes

The Company's effective tax rate for the first quarter of 2026 and 2025 was 7.3 % and 15.5 %, respectively.

The effective tax rate for the first quarter of 2026 is lower than the statutory tax rate primarily due to the impact of the foreign-derived deduction eligible income, excess tax benefits from stock-based compensation awards and percentage depletion.

The effective tax rate for the first quarter of 2025 was lower than the statutory tax rate primarily due to the impact of percentage

The Company's effective tax rate for the second quarter of 2026 and 2025 was 12.9 % and 13.8 %, respectively, and 11.1 % and 14.5 % for the first six months of 2026 and 2025, respectively.

The effective tax rate for 2026 is lower than the statutory tax rate primarily due to the impact of the foreign-derived deduction eligible income and percentage depletion.

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

The effective tax rate for the first six months of 2026 included a $ 4.6 million net discrete income tax benefit, which primarily consists of $ 2.4 million excess tax benefits from stock-based compensation awards, a $ 1.1 million tax benefit from the release of a valuation allowance previously recorded against the deferred tax assets of one of the Company’s foreign subsidiaries, and a net $ 0.5 million tax benefit from a Liechtenstein tax review settlement as noted below.

The effective tax rate for the first six months of 2025 included a net discrete income tax benefit of $ 0.6 million, which primarily consisted of $ 0.2 million of expense for stock-based compensation awards and $ 0.4 million expense for unrecognized tax benefits.

In the second quarter of 2026, the Company completed a tax review with the Liechtenstein tax authorities for tax years 2020 through 2023, resulting in a settlement related to an intercompany loan impairment that reduced net operating loss carryforwards by $ 2.5 million.

Upon completion of the review, the Company released a $ 3.0 million uncertain tax position, which was partially offset by a related tax assessment and resulted in a $ 0.5 million net discrete tax benefit.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

depletion, the foreign-derived intangible income deduction, and the advanced manufacturing production credit.

The effective tax rate for the first quarter of 2026 and 2025 included a net discrete income tax effect of $ 1.6 million benefit and $ 0.1 million expense, respectively, primarily related to stock-based compensation awards.

Government Tax Credits

13 unchanged sentences

multinational companies from certain Pillar Two provisions, the timing and consistency of implementation across jurisdictions continue to evolve.

The Pillar Two minimum tax is treated as a period cost and is not expected to have a material impact on the Company’s effective tax rate or consolidated results of operations, financial position, or cash flows in 2026.

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

As more countries adopt the “side-by-side” provisions in 2026, the Company’s Pillar Two tax expense will decrease accordingly.

We will continue to evaluate the impact of future Pillar Two legislation on the Company’s effective tax rate.

Note H — Earnings Per Share (EPS)

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

First Quarter Ended

April 3, March 28,

Second Quarter Ended Six Months Ended

July 3, June 27, July 3, June 27,

(Thousands, except per share amounts) 2026 2025 2026 2025

12 unchanged sentences

Diluted EPS $ 1.84 $ 1.21 $ 2.76 $ 2.05

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 66,097 and 320,477 for the quarters ended July 3, 2026 and June 27, 2025, respectively, and securities totaling 44,903 and 146,804 for the six months ended July 3, 2026 and June 27, 2025, 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.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Adjusted weighted-average shares outstanding - diluted exclude securities totaling 77,423 and 141,249 for the quarters ended April 3, 2026 and March 28, 2025, 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.

Note I — Inventories

Inventories on the Consolidated Balance Sheets are summarized as follows:

April 3, December 31,

July 3, December 31,

(Thousands) 2026 2025

4 unchanged sentences

The Company maintains the majority of the precious metals and portions of copper and nickel 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, copper and nickel was $ 579.7 million and $ 526.2 million as of April 3, 2026 and December 31, 2025, respectively.

The notional value of off-balance sheet precious metals, copper and nickel was $ 505.6 million and $ 526.2 million as of July 3, 2026 and December 31, 2025, respectively.

Note J — 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 prepayment related to this amendment, the total of which approximated $ 38.6 million.

As of April 3, 2026 and December 31, 2025, $ 46.6 million and $ 47.5 million, respectively, of prepayments are classified as Unearned income on the Consolidated Balance Sheets.

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

As of July 3, 2026 and December 31, 2025, $ 41.1 million and $ 47.5 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 April 3, 2026 and December 31, 2025, $ 1.7 million and $ 2.4 million, respectively, of the prepayments are classified as Unearned revenue.

As of July 3, 2026 and December 31, 2025, $ 1.8 million and $ 2.4 million of the prepayments are classified as Unearned revenue.

Materion Corporation and Subsidiaries

1 unchanged sentence

Note K — Pensions and Other Post-employment Benefits

The following is a summary of the net periodic benefit (income)/cost for the first quarter of 2026 and 2025 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.

The following is a summary of the net periodic benefit (income)/cost for the second quarter and first six months ended July 3, 2026 and June 27, 2025, 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.

supplemental retirement plans.

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

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

Pension Benefits Other Benefits

First Quarter Ended First Quarter Ended

April 3, March 28, April 3, March 28,

Second Quarter Ended Second Quarter Ended

July 3, June 27, July 3, June 27,

(Thousands) 2026 2025 2026 2025

3 unchanged sentences

Expected return on plan assets ( 2,369 ) ( 2,532 ) — —

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

Amortization of prior service (benefit) cost ( 22 ) ( 23 ) — —

Amortization of net loss (gain) 259 90 ( 104 ) ( 88 )

Total net benefit (income) cost $ ( 5 ) $ ( 240 ) $ ( 73 ) $ ( 18 )

The Company did not make any contributions to its defined benefit plan in the first quarter of 2026 or 2025.

Net periodic benefit (income) cost $ ( 6 ) $ ( 230 ) $ ( 73 ) $ ( 19 )

Pension Benefits Other Benefits

Six Months Ended Six Months Ended

July 3, June 27, July 3, June 27,

(Thousands) 2026 2025 2026 2025

Components of net periodic benefit (income) cost

Service cost $ 580 $ 594 $ — $ 22

Interest cost 3,679 3,837 62 116

Expected return on plan assets ( 4,743 ) ( 5,036 ) — —

Amortization of prior service (benefit) cost ( 44 ) ( 44 ) — —

Amortization of net loss (gain) 517 179 ( 208 ) ( 175 )

Net periodic benefit (income) cost $ ( 11 ) $ ( 470 ) $ ( 146 ) $ ( 37 )

The Company did no t make any contributions to its domestic defined benefit plan in the second quarter or first six months of 2026 or 2025.

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 L — 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 2026 and 2025 are as follows:

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note L — Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the first quarter of 2026 and 2025 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 April 3, 2026

$ 1,413 $ 814 $ 2 $ 2,229 $ ( 52,287 ) $ ( 1,812 ) $ ( 51,870 )

Other comprehensive income (loss) before reclassifications ( 208 ) 406 — 198 — ( 1,017 ) ( 819 )

Amounts reclassified from accumulated other comprehensive income (loss) 206 ( 448 ) — ( 242 ) 114 — ( 128 )

Net current period other comprehensive (loss) income before tax ( 2 ) ( 42 ) — ( 44 ) 114 ( 1,017 ) ( 947 )

Deferred taxes — ( 10 ) — ( 10 ) 41 — 31

Net current period other comprehensive (loss) income after tax ( 2 ) ( 32 ) — ( 34 ) 73 ( 1,017 ) ( 978 )

Balance at July 3, 2026

$ 1,411 $ 782 $ 2 $ 2,195 $ ( 52,214 ) $ ( 2,829 ) $ ( 52,848 )

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

Other comprehensive (loss) income before reclassifications ( 45 ) 91 — 46 — 6,583 6,629

Amounts reclassified from accumulated other comprehensive income (loss) ( 60 ) ( 794 ) — ( 854 ) ( 23 ) — ( 877 )

Net current period other comprehensive (loss) income before tax ( 105 ) ( 703 ) — ( 808 ) ( 23 ) 6,583 5,752

Deferred taxes ( 24 ) ( 161 ) — ( 185 ) ( 2 ) — ( 187 )

Net current period other comprehensive (loss) income after tax ( 81 ) ( 542 ) — ( 623 ) ( 21 ) 6,583 5,939

Balance at June 27, 2025

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

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

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 December 31, 2025

$ 1,406 $ 899 $ 2 $ 2,307 $ ( 52,441 ) $ ( 447 ) $ ( 50,581 )

Other comprehensive income (loss) before reclassifications ( 201 ) 780 — 579 — ( 2,382 ) ( 1,803 )

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Net current period other comprehensive (loss) income after tax 5 ( 117 ) — ( 112 ) 227 ( 2,382 ) ( 2,267 )

Balance at April 3, 2026 $ 1,413 $ 814 $ 2 $ 2,229 $ ( 52,287 ) $ ( 1,812 ) $ ( 51,870 )

Balance at July 3, 2026

$ 1,411 $ 782 $ 2 $ 2,195 $ ( 52,214 ) $ ( 2,829 ) $ ( 52,848 )

Balance at December 31, 2024

$ 1,638 $ 3,545 $ 2 $ 5,185 $ ( 54,702 ) $ ( 11,529 ) $ ( 61,046 )

Other comprehensive (loss) income before reclassifications ( 324 ) ( 595 ) — ( 919 ) 1,553 10,211 10,845

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Net current period other comprehensive (loss) income after tax ( 322 ) ( 1,657 ) — ( 1,979 ) 1,054 10,211 9,286

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

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 commodity and cash flow hedges are recorded in Cost of sales in the Consolidated Statements of Income.

Balance at June 27, 2025

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

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.

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.

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.

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Note M — Stock-based Compensation Expense

Stock-based compensation expense, which includes awards settled in shares was $ 3.4 million and $ 3.0 million in the first quarter of 2026 and 2025, respectively.

The Company granted 47,436 SARs to certain employees during the first quarter of 2026.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the three months ended April 3, 2026 were $ 166.59 and $ 56.70 , respectively.

Stock-based compensation expense, which includes awards settled in shares was $ 5.2 million and $ 8.6 million in the second quarter and first six months of 2026, respectively, compared to $ 2.6 million and $ 5.6 million, respectively, in the same periods of 2025.

The Company granted 47,436 SARs to certain employees during the first six months of 2026.

The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the six months ended July 3, 2026 were $ 166.59 and $ 56.70 , respectively.

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

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Expected term (in years) 4.8

The Company granted 75,870 stock-settled RSUs to certain employees during the first quarter of 2026.

The Company granted 93,035 stock-settled RSUs to certain employees during the first six months of 2026.

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 $ 156.21 for stock-settled RSUs granted to employees during the three months ended April 3, 2026.

The weighted-average fair value per share was $ 161.67 for stock-settled RSUs granted to employees during the six months ended July 3, 2026.

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 quarter of 2026.

The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first six months of 2026.

The weighted-average fair value of the stock-settled PRSUs was $ 206.28 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 April 3, 2026, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 33.6 million, and is expected to be recognized over the remaining vesting period of the respective grants.

At July 3, 2026, unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $ 32.8 million, and is expected to be recognized over the remaining vesting period of the respective grants.

Note N — Fair Value of Financial Instruments

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Notes to Consolidated Financial Statements

The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of April 3, 2026 and December 31, 2025:

The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of July 3, 2026 and December 31, 2025:

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

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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 April 3, 2026 and December 31, 2025.

The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of July 3, 2026 and December 31, 2025.

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.

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Note O — Derivative Instruments and Hedging Activity

The Company may use derivative contracts to hedge exposure to movements in interest rates associated with borrowings, foreign currency exposures, and 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:

3 unchanged sentences

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.

Additionally, on April 2, 2026, the Company entered into a forward starting interest rate swap of $ 25.0 million to hedge the interest rate risk on the Credit Agreement.

The swap will hedge the change in 1-month SOFR from November 2, 2026 to June 25, 2030.

Additionally, on April 2, 2026 and June 11, 2026, the Company entered into forward starting interest rate swaps of $ 25.0 million and $ 15.0 million, respectively, to hedge the interest rate risk on the Credit Agreement.

These swaps will hedge the change in 1-month SOFR from November 2, 2026 to June 25, 2030.

The purpose of these hedges is to manage the risk of changes in the monthly interest payments attributable to changes in the benchmark interest rate.

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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 that 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 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.

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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 consignment 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 credit 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

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

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.

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.

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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 April 3, 2026 and December 31, 2025:

April 3, 2026

December 31, 2025

July 3, 2026 December 31, 2025

(Thousands) Notional

4 unchanged sentences

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

Other-net included $ 0.8 million of foreign currency gains and $ 0.5 million of foreign currency losses related to derivatives in the first quarter of 2026 and 2025, respectively.

Other-net included $ 0.6 million and $ 1.4 million of foreign currency gains in the second quarter and first six months of 2026, respectively, compared to $ 1.5 million and $ 2.0 million of foreign currency losses in the second quarter and first six months of 2025, 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 the balance sheet classification as of April 3, 2026 and December 31, 2025:

April 3, 2026

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 July 3, 2026 and December 31, 2025:

(Thousands) Notional

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

We expect to reclassify $ 1.1 million of gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

At April 3, 2026, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years .

Refer to Note L 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 2026 and 2025:

First Quarter Ended

(Thousands) April 3, 2026

March 28, 2025

We expect to reclassify $ 0.8 million of net gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

At July 3, 2026, 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 second quarter and first six months of 2026 and 2025:

Second Quarter Ended

(Thousands) July 3, 2026 June 27, 2025

Hedging relationship Line item

3 unchanged sentences

Total $ ( 242 ) $ ( 854 )

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Six Months Ended

(Thousands) July 3, 2026 June 27, 2025

Hedging relationship Line item

Foreign currency forward contracts Net sales $ 208 $ ( 94 )

Precious metal swaps Cost of sales — —

Interest rate swap Interest expense - net ( 932 ) ( 1,557 )

Total $ ( 724 ) $ ( 1,651 )

Note P — Contingencies

3 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.

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.

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.

On May 13, 2026, the Company received an adverse ruling from the Frankfurt am Main Regional Court in a matter involving Heraeus Metals Germany GmbH & Co.

KG (“Heraeus”) related to the theft of 50 kilograms of gold granulate during transport in Germany in 2022.

The Company has appealed the ruling.

At the time of the incident, the gold was valued at approximately $ 2.5 million and is valued at approximately $ 6.7 million as of July 3, 2026, which will fluctuate in future periods as the potential exposure is dependent on future gold prices.

The Company expects that approximately $ 2.5 million of any potential loss will be recoverable under its insurance coverage.

Based on management’s review of the ruling and underlying facts, consultation with legal counsel, and the Company’s appeal, management continues to believe that a loss is not probable at this time.

Accordingly, no accrual was recorded at the time of the incident or as of the date of our financial statements.

The Company will continue to monitor the appeal process and any changes in facts or circumstances that may affect its assessment.

Environmental Proceedings.

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

The undiscounted reserve balance was $ 2.4 million and $ 2.5 million at April 3, 2026 and December 31, 2025, 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 $ 2.4 million and $ 2.5 million at July 3, 2026 and December 31, 2025, 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.

Materion Corporation and Subsidiaries

Notes to Consolidated Financial Statements

Note Q — Debt

(Thousands) April 3, 2026

December 31, 2025

(Thousands) July 3, 2026 December 31, 2025

Borrowings under Credit Agreement $ 212,125 $ 221,125

7 unchanged sentences

Long-term debt $ 423,210 $ 436,348

As of April 3, 2026 and December 31, 2025, the Company had $ 253.1 million outstanding at an average interest rate of 5.17 % and $ 221.1 million outstanding at an average interest rate of 5.26 % respectively, under its revolving credit facility.

The available borrowing capacity under the revolving credit facility as of April 3, 2026 was $ 191.7 million.

As of July 3, 2026 and December 31, 2025, the Company had $ 212.1 million outstanding at an average interest rate of 5.28 % and $ 221.1 million outstanding at an average interest rate of 5.26 %, respectively, under its revolving credit facility.

The available borrowing capacity under the revolving credit facility as of July 3, 2026 was $ 232.7 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 April 3, 2026, the overdraft sweep facility had a balance of $ 8.8 million.

The overdraft sweep 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 April 3, 2026.

As of July 3, 2026, there was $ 0.1 million outstanding on the overdraft sweep facility.

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

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 July 3, 2026.

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 $ 22.4 million.

At April 3, 2026 the Company had borrowings outstanding of $ 8.3 million, which reduced the aggregate availability under these facilities to $ 14.3 million.

The balance outstanding on the term loan facility as of April 3, 2026 and December 31, 2025 was $ 220.8 million and $ 222.2 million, respectively.

At April 3, 2026 and December 31, 2025, there was $ 5.2 million outstanding against the letters of credit sub-facility .

At July 3, 2026 the Company had borrowings outstanding of $ 10.1 million which reduced the aggregate availability under these facilities to $ 12.3 million.

The balance outstanding on the term loan facility as of July 3, 2026 and December 31, 2025 wa s $ 219.4 million and $ 222.2 million, respectively.

At July 3, 2026 and December 31, 2025, there was $ 5.2 million 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