Materion Corporation Updates Third Quarter Expectations

  Materion Corporation Updates Third Quarter Expectations

   Also Comments on Its Outlook and Initiatives to Reduce Costs and Improve

Business Wire

MAYFIELD HEIGHTS, Ohio -- October 7, 2013

Materion Corporation (NYSE:MTRN) today provided an update on expected third
quarter 2013 results and also commented on its outlook and initiatives to
reduce costs and improve margins.

  *Third quarter markets weaker and high-margin shipments delayed
  *Fourth quarter expected to be the strongest of the year
  *Cost reduction actions taken in the fourth quarter driving significant
    operating performance improvement beginning in 2014


The previously announced weaker business conditions being experienced at the
beginning of the third quarter of 2013 did not improve during the third
quarter to the level that the Company originally anticipated. Order entry has
been highly variable, and business levels have been increasing at a slower
than expected rate. In addition, shipments of certain high-margin
beryllium-based defense and nuclear science as well as defense optics orders
have been delayed. Profits were also adversely affected by lower manufacturing
yields and efficiencies in the quarter. The impact of these factors has been
offset, in part, by continued strong business levels in the medical,
commercial aerospace, automotive electronics and commercial optics markets.

As a result of these factors, earnings for the third quarter are expected to
be approximately $0.20 per share.


The aforementioned delayed orders are expected to ship in the fourth quarter.
In addition, production levels at the Company’s new beryllium pebble plant
continued to increase throughout the third quarter and were at record levels
in the month of September, well ahead of the fourth quarter target. As a
result of these and other factors, the Company expects results for the fourth
quarter to be well ahead of the third quarter and the strongest of the year,
exceeding the $0.43 per share reported in the second quarter, absent the
impact of the actions discussed below.


The Company is planning to take additional facility and product line
rationalization actions during the fourth quarter which will further reduce
costs and significantly improve margins beginning in 2014. These actions will
result in a charge of up to $0.15 per share in the fourth quarter,
approximately 25% of which is non-cash. These are expected to favorably impact
2014 performance by up to $0.30 per share.


Richard J. Hipple, Chairman, President and Chief Executive Officer, stated,
“In spite of the unexpected weakness visible in the order book and the noted
unexpected delay of specific high-margin shipments that occurred in the third
quarter, I am encouraged by the progress in the new beryllium pebble plant and
our new product initiatives. These, along with improving overall market
conditions and the lower cost structure, should result in significantly
improved earnings in 2014.”


Portions of the narrative set forth in this document that are not statements
of historical or current facts are forward-looking statements, in particular
the outlook provided above. Our actual future performance may materially
differ from that contemplated by the forward-looking statements as a result of
a variety of factors. These factors include, in addition to those mentioned
elsewhere herein:

  *Actual sales, operating rates and margins for 2013 and 2014;
  *Uncertainties relating to the fourth quarter 2012 physical inventory and
    possible theft at our Albuquerque facility, including (i) the costs and
    outcome of our investigations and (ii) the timing and amount, if any, of
    any insurance proceeds that we might receive;
  *The global economy;
  *The impact of the Federal Government shutdown;
  *The condition of the markets which we serve, whether defined
    geographically or by segment, with the major market segments being:
    consumer electronics, industrial components and commercial aerospace,
    defense and science, automotive electronics, medical, energy and
    telecommunications infrastructure;
  *Changes in product mix and the financial condition of customers;
  *Our success in developing and introducing new products and new product
    ramp-up rates;
  *Our success in passing through the costs of raw materials to customers or
    otherwise mitigating fluctuating prices for those materials, including the
    impact of fluctuating prices on inventory values;
  *Our success in integrating acquired businesses, including EIS Optics
    Limited and Aerospace Metal Composites Limited;
  *Our success in moving the microelectronics packaging operations to
  *Our success in completing the announced facility consolidations and the
    product line rationalizations and achieving the expected benefits;
  *Our success in implementing our strategic plans and the timely and
    successful completion and start-up of any capital projects, including the
    new primary beryllium facility in Elmore, Ohio;
  *The availability of adequate lines of credit and the associated interest
  *The impact of the results of acquisitions on our ability to achieve fully
    the strategic and financial objectives related to these acquisitions;
  *Other financial factors, including the cost and availability of raw
    materials (both base and precious metals), physical inventory valuations,
    metal financing fees, tax rates, exchange rates, pension costs and
    required cash contributions and other employee benefit costs, energy
    costs, regulatory compliance costs, the cost and availability of
    insurance, and the impact of the Company’s stock price on the cost of
    incentive compensation plans;
  *The uncertainties related to the impact of war, terrorist activities and
    acts of God;
  *Changes in government regulatory requirements and the enactment of new
    legislation that impacts our obligations and operations;
  *The conclusion of pending litigation matters in accordance with our
    expectation that there will be no material adverse effects;
  *The timing and ability to achieve further efficiencies and synergies
    resulting from our name change and product line alignment under the
    Materion name and Materion brand; and
  *The risk factors set forth in Part 1, Item 1A of our Annual Report on Form
    10-K for the year ended December 31, 2012.

Materion Corporation is headquartered in Mayfield Heights, Ohio. The Company,
through its wholly owned subsidiaries, supplies highly engineered advanced
enabling materials to global markets. Products include precious and
non-precious specialty metals, inorganic chemicals and powders, specialty
coatings, specialty engineered beryllium alloys, beryllium and beryllium
composites, and engineered clad and plated metal systems.


Materion Corporation
Investor Contact:
Michael C. Hasychak, 216-383-6823
Media Contact:
Patrick S. Carpenter, 216-383-6835
Mayfield Hts-g
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