Materion Corporation (MTRN) Bundle
A Brief History of Materion Corporation
Materion Corporation, a leader in advanced materials, has seen significant shifts in its financial performance as of 2024. The company operates through various segments, including Electronic Materials, Precision Optics, and Performance Materials, each contributing to its overall revenue and strategic direction.
Financial Performance Overview
For the first nine months of 2024, Materion reported net sales of $1,247.9 million, a slight increase from $1,244.1 million in the same period of 2023. This growth was primarily driven by the Electronic Materials segment, which saw an increase in net sales by approximately $49.3 million due to higher precious metal pass-through costs .
Segment Performance
The performance across different segments varied significantly:
- Electronic Materials: Net sales reached $641.6 million, up 5% compared to $611.9 million in the previous year. EBITDA for this segment was $40.1 million, up from $37.5 million, reflecting a 7% increase .
- Precision Optics: This segment reported net sales of $72.8 million for the first nine months, a 7% decline from $77.9 million in 2023, with EBITDA dropping significantly to $1.3 million from $7.7 million .
- Performance Materials: Net sales decreased to $533.5 million, down 4% from $554.4 million, with EBITDA at $115.9 million, a decline of 14% .
Gross Margin and Earnings
The gross margin for the first nine months of 2024 was $233.0 million, a decrease of 13% compared to the same period in 2023. As a percentage of value-added sales, the gross margin fell to 29% from 32%. This decline was primarily attributed to the impact of lower sales volumes and unabsorbed costs .
Net income for the first nine months of 2024 was $54.7 million, a 28% decrease from $76.2 million in the prior year, resulting in diluted earnings per share of $2.61 compared to $3.65 .
Cash Flow and Liquidity
Materion's operating cash flow for the first nine months of 2024 was $11.6 million, down significantly from $84.5 million in 2023. This decrease was driven by lower earnings and unfavorable working capital usage . As of September 27, 2024, the company had:
| Metric | Amount (Thousands) |
|---|---|
| Cash and cash equivalents | $17,874 |
| Total outstanding debt | $495,298 |
| Net debt | $(477,424) |
| Available borrowing capacity | $171,460 |
Dividends and Stock Repurchase
Materion declared cash dividends totaling $8.3 million for the first nine months of 2024. The company did not repurchase any shares during this period, maintaining an available repurchase capacity of $8.3 million under its existing program .
Future Outlook
Looking ahead, Materion is focusing on strategic initiatives to enhance operational efficiency and drive growth across its segments. The company anticipates ongoing challenges in certain markets but remains committed to leveraging its advanced materials capabilities to capture new opportunities.
A Who Owns Materion Corporation (MTRN)
Shareholder Composition
As of 2024, Materion Corporation (MTRN) has a diverse shareholder composition that includes institutional investors, mutual funds, and individual shareholders. The following table illustrates the ownership distribution among the largest shareholders:
| Shareholder Type | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 85.2% | 17,200,000 |
| Mutual Funds | 10.5% | 2,100,000 |
| Individual Investors | 4.3% | 860,000 |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Materion Corporation, highlighting their respective ownership stakes:
| Institution | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 10.7% | 2,140,000 |
| BlackRock, Inc. | 8.2% | 1,640,000 |
| State Street Corporation | 6.5% | 1,300,000 |
| Invesco Ltd. | 5.4% | 1,080,000 |
| T. Rowe Price Associates, Inc. | 4.9% | 980,000 |
Recent Changes in Ownership
In the first half of 2024, Materion Corporation experienced changes in its shareholder base, primarily due to shifts in institutional investments. The following table summarizes the changes:
| Institution | Change in Ownership Percentage | Number of Shares Bought/Sold |
|---|---|---|
| The Vanguard Group, Inc. | +1.2% | 200,000 |
| BlackRock, Inc. | -0.8% | (150,000) |
| State Street Corporation | +0.5% | 100,000 |
| Invesco Ltd. | +0.3% | 50,000 |
| T. Rowe Price Associates, Inc. | -0.2% | (40,000) |
Individual Shareholder Insights
Individual investors hold a smaller portion of Materion's shares, comprising approximately 4.3% of the total. This group includes various retail investors and employee stock ownership plans. The following table provides insights into individual shareholder demographics:
| Demographic | Percentage of Individual Shareholders |
|---|---|
| Employees | 30% |
| Retail Investors | 70% |
Stock Performance and Market Capitalization
As of the end of Q3 2024, Materion Corporation's stock performance is as follows:
| Metric | Value |
|---|---|
| Current Stock Price | $54.75 |
| Market Capitalization | $1.13 billion |
| 52-Week High | $60.00 |
| 52-Week Low | $45.00 |
Overall, Materion Corporation's ownership structure reflects a robust institutional interest, with significant participation from mutual funds and individual investors, contributing to its stable market presence as of 2024.
Materion Corporation (MTRN) Mission Statement
The mission statement of Materion Corporation emphasizes its commitment to providing innovative solutions in advanced materials. The company aims to deliver high-quality products that meet the evolving needs of its customers across various industries, including aerospace, defense, electronics, and telecommunications.
Financial Overview
As of the third quarter of 2024, Materion Corporation reported significant financial metrics that reflect its operational performance.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $436.7 million | $403.1 million | 8% |
| Value-added Sales | $263.8 million | $270.5 million | -2% |
| EBITDA | $50.5 million | $52.3 million | -3% |
| Net Income | $22.3 million | $26.6 million | -16% |
| Diluted Earnings per Share | $1.07 | $1.27 | -16% |
Segment Performance
Materion operates through several segments, each contributing to the overall financial results.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) |
|---|---|---|---|
| Electronic Materials | $236.9 million | $192.3 million | 23% |
| Performance Materials | $177.4 million | $184.6 million | -4% |
| Precision Optics | $22.4 million | $26.1 million | -14% |
Market Trends and Insights
In the third quarter of 2024, Materion experienced an increase in net sales primarily driven by the Electronic Materials segment, which benefited from higher precious metal pass-through costs. This segment saw a 23% increase in sales compared to the previous year.
Despite the positive performance in Electronic Materials, the Performance Materials and Precision Optics segments faced declines due to reduced sales volumes in key markets.
Operational Highlights
Key operational highlights include:
- EBITDA for the Electronic Materials segment increased by 21% year-over-year, reaching $12.3 million in Q3 2024.
- Value-added sales in the Performance Materials segment decreased by 3%, reflecting challenges in the telecom and automotive markets.
- Restructuring expenses of $1.5 million were recorded in Q3 2024, aimed at streamlining operations.
Conclusion on Financial Performance
Materion Corporation's financial results in 2024 reflect a mixed performance, with strong growth in the Electronic Materials segment contrasting with challenges faced in other areas. The company's mission to provide innovative materials solutions continues to guide its strategic initiatives and market positioning.
As of September 27, 2024, Materion's total debt was reported at approximately $497.4 million, reflecting increases in borrowings to support operational needs and growth initiatives.
How Materion Corporation (MTRN) Works
Business Segments
Materion Corporation operates through four reportable segments: Electronic Materials, Performance Materials, Precision Optics, and Other. Each segment contributes differently to the company’s overall performance.
Electronic Materials
In the third quarter of 2024, the Electronic Materials segment reported:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $236.9 million | $192.3 million | 23% |
| Value-added Sales | $77.8 million | $75.5 million | 3% |
| EBITDA | $12.3 million | $10.2 million | 21% |
The increase in net sales was primarily due to higher precious metal pass-through costs and a rise in semiconductor sales volume by 11%.
Performance Materials
For the Performance Materials segment in Q3 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $177.4 million | $184.6 million | -4% |
| Value-added Sales | $163.6 million | $168.9 million | -3% |
| EBITDA | $44.8 million | $46.4 million | -3% |
Sales were negatively impacted by decreased volumes in telecom and data centers (49%) and consumer electronics (17%). However, aerospace and defense volumes increased by 45%.
Precision Optics
In the Precision Optics segment for Q3 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $22.4 million | $26.1 million | -14% |
| Value-added Sales | $22.4 million | $26.1 million | -14% |
| EBITDA | $(0.04) million | $3.3 million | -101% |
The decline was primarily due to lower sales volumes in the aerospace and defense market (28%).
Financial Performance Overview
For the first nine months of 2024, Materion Corporation's consolidated financials are as follows:
| Metric | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $1,247.9 million | $1,244.1 million | 0.3% |
| Value-added Sales | $801.5 million | $837.4 million | -4% |
| Gross Margin | $233.0 million | $269.3 million | -13% |
| EBITDA | $115.9 million | $134.1 million | -14% |
| Net Income | $54.7 million | $76.2 million | -28% |
| Diluted EPS | $2.61 | $3.65 | -28% |
Net sales increased slightly due to the Electronic Materials segment, which benefited from higher precious metal pass-through costs. However, overall profitability declined due to lower sales volumes and increased costs.
Cash Flow and Liquidity
In the first nine months of 2024, Materion Corporation’s cash flow activities were:
| Cash Flow Activity | 9M 2024 (Thousands) | 9M 2023 (Thousands) | Change (Thousands) |
|---|---|---|---|
| Net Cash Provided by Operating Activities | $11,564 | $84,505 | $(72,941) |
| Net Cash Used in Investing Activities | $(60,545) | $(94,160) | $33,615 |
| Net Cash Provided by Financing Activities | $52,926 | $13,735 | $39,191 |
The decrease in net cash provided by operating activities was primarily due to lower earnings and unfavorable working capital usage, which used cash of $48.5 million.
Debt and Shareholder Equity
As of September 27, 2024, Materion Corporation's debt and equity position was as follows:
| Metric | September 27, 2024 (Thousands) | December 31, 2023 (Thousands) |
|---|---|---|
| Total Outstanding Debt | $495,298 | $426,173 |
| Cash and Cash Equivalents | $17,874 | $13,294 |
| Net Debt | $(477,424) | $(412,879) | Total Shareholders' Equity | $931,895 | $885,053 |
The increase in total outstanding debt reflects higher borrowings under revolving credit facilities to support ongoing operations and growth initiatives.
How Materion Corporation (MTRN) Makes Money
Overview of Revenue Streams
Materion Corporation generates revenue through four main segments: Performance Materials, Electronic Materials, Precision Optics, and Other. Each segment serves various end markets, contributing to the company's overall financial performance.
Financial Performance in 2024
As of September 27, 2024, Materion reported net sales of $1,247.9 million, a slight increase of $3.7 million from $1,244.1 million in the first nine months of 2023. The breakdown of net sales by segment is as follows:
| Segment | Net Sales (Thousands) | Change from Previous Year (Thousands) | Percentage Change |
|---|---|---|---|
| Performance Materials | $533,534 | $(20,893) | (4%) |
| Electronic Materials | $641,564 | $29,709 | 5% |
| Precision Optics | $72,770 | $(5,092) | (7%) |
| Other | $— | $— | — |
Segment Analysis
Performance Materials
The Performance Materials segment generated net sales of $533.5 million in the first nine months of 2024, a decrease of 4% compared to the previous year. This decline was attributed to lower sales volumes in key markets:
- Industrial: (18%)
- Telecom and data center: (41%)
- Automotive: (19%)
- Energy: (24%)
- Aerospace and defense: +39%
EBITDA for this segment was $115.9 million, down from $134.1 million, reflecting a decrease of 14% year-over-year.
Electronic Materials
The Electronic Materials segment saw net sales of $641.6 million, which was a 5% increase year-over-year, primarily driven by higher precious metal pass-through costs. This segment reported an EBITDA of $40.1 million, up from $37.5 million, marking a 7% increase.
Precision Optics
In the Precision Optics segment, net sales totaled $72.8 million, a decrease of 7% compared to the previous year. The EBITDA for this segment significantly dropped to $1.3 million from $7.7 million, reflecting an 83% decline.
Cost Management and Profitability
Overall gross margin for the first nine months of 2024 was reported at $233.0 million, down 13% from the previous year, with gross margin as a percentage of value-added sales decreasing from 32% to 29%. Selling, General and Administrative (SG&A) expenses decreased to $104.5 million from $118.1 million, reflecting successful cost-saving initiatives.
Research and Development Expenses
Materion allocated $22.7 million for Research and Development (R&D) in the first nine months of 2024, which was an increase of 8% compared to $21.1 million in the previous year. R&D expenses accounted for 3% of value-added sales.
Net Income and Earnings Per Share
Net income for the first nine months of 2024 was reported at $54.7 million, down from $76.2 million in 2023, resulting in diluted earnings per share of $2.61 compared to $3.65.
Cash Flow and Financing Activities
Net cash provided by operating activities was $11.6 million for the first nine months of 2024, significantly lower than $84.5 million in the prior year. Meanwhile, net cash used in investing activities was $60.5 million as opposed to $94.2 million in 2023.
Debt and Liquidity Position
Total debt outstanding as of September 27, 2024, was $497.4 million, an increase from $429.0 million at the end of 2023. Liquidity remains a critical focus for the company as it navigates market fluctuations and operational challenges.
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Article updated on 8 Nov 2024
Resources:
- Materion Corporation (MTRN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Materion Corporation (MTRN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Materion Corporation (MTRN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.