MATERION Corp (MTRN)
SIC breadcrumb: Manufacturing > SIC Major Group 34 > SIC 3460 Metal Forgings & Stampings
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1104657. Latest filing source: 0001104657-26-000011.
Informational only. Descriptive public-record data — not a rating, forecast, or investment advice. See Disclaimer.
At a glance
- Revenue
- 1,786,550,000 USD verified
- Net income
- 74,823,000 USD verified
- Assets
- 1,802,801,000 USD verified
- Net margin
- 4.19% computed
- Operating margin
- 6.15% computed
- Revenue YoY
- +6.04% computed
- ROE
- 7.93% computed
Peer & cluster context
Peer percentile fingerprint
Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 34 SIC Major Group 34, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,786,550,000 | USD | 2025 | 2026-02-12 |
| Net income | 74,823,000 | USD | 2025 | 2026-02-12 |
| Assets | 1,802,801,000 | USD | 2025 | 2026-02-12 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001104657.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 969,236,000 | 1,139,447,000 | 1,207,815,000 | 1,185,424,000 | 1,176,274,000 | 1,510,644,000 | 1,757,109,000 | 1,665,187,000 | 1,684,739,000 | 1,786,550,000 | |
| Net income | 25,740,000 | 11,451,000 | 21,044,000 | 53,394,000 | 15,462,000 | 72,474,000 | 85,990,000 | 95,702,000 | 5,888,000 | 74,823,000 | |
| Operating income | 28,880,000 | 40,031,000 | 61,752,000 | 70,546,000 | 8,215,000 | 77,111,000 | 119,755,000 | 136,444,000 | 47,223,000 | 109,796,000 | |
| Gross profit | 184,528,000 | 212,829,000 | 251,361,000 | 262,690,000 | 192,633,000 | 283,762,000 | 343,880,000 | 349,042,000 | 325,985,000 | 308,626,000 | |
| Diluted EPS | 1.27 | 0.56 | 1.02 | 2.59 | 0.75 | 3.50 | 4.14 | 4.58 | 0.28 | 3.58 | |
| Operating cash flow | 68,180,000 | 67,795,000 | 76,374,000 | 99,222,000 | 101,057,000 | 90,241,000 | 115,958,000 | 144,414,000 | 87,817,000 | 103,243,000 | |
| Capital expenditures | 29,505,000 | 27,177,000 | 27,516,000 | 27,702,000 | 24,251,000 | 67,274,000 | 102,910,000 | 77,608,000 | 110,550,000 | 68,649,000 | |
| Dividends paid | 7,496,000 | 7,913,000 | 8,389,000 | 8,856,000 | 9,257,000 | 9,697,000 | 10,160,000 | 10,621,000 | 11,087,000 | 11,510,000 | |
| Share buybacks | 3,798,000 | 1,086,000 | 422,000 | 199,000 | 6,766,000 | 0.00 | 0.00 | 0.00 | 0.00 | 7,843,000 | |
| Assets | 741,298,000 | 791,084,000 | 843,310,000 | 898,430,000 | 1,057,860,000 | 1,607,479,000 | 1,691,979,000 | 1,762,726,000 | 1,697,632,000 | 1,802,801,000 | |
| Stockholders' equity | 494,089,000 | 527,115,000 | 586,238,000 | 645,743,000 | 655,630,000 | 720,440,000 | 799,990,000 | 885,053,000 | 868,881,000 | 943,277,000 | |
| Cash and cash equivalents | 31,464,000 | 41,844,000 | 70,645,000 | 125,007,000 | 25,878,000 | 14,462,000 | 13,101,000 | 13,294,000 | 16,713,000 | 13,681,000 | |
| Free cash flow | 41,003,000 | 40,279,000 | 48,672,000 | 74,971,000 | 33,783,000 | -12,669,000 | 38,350,000 | 33,864,000 | 19,168,000 |
Ratios
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 2.66% | 1.00% | 1.74% | 4.50% | 1.31% | 4.80% | 4.89% | 5.75% | 0.35% | 4.19% | |
| Operating margin | 2.98% | 3.51% | 5.11% | 5.95% | 0.70% | 5.10% | 6.82% | 8.19% | 2.80% | 6.15% | |
| Return on equity | 5.21% | 2.17% | 3.59% | 8.27% | 2.36% | 10.06% | 10.75% | 10.81% | 0.68% | 7.93% | |
| Return on assets | 3.47% | 1.45% | 2.50% | 5.94% | 1.46% | 4.51% | 5.08% | 5.43% | 0.35% | 4.15% | |
| Liabilities / equity | 0.50 | 0.50 | 0.44 | 0.39 | 0.61 | 1.23 | 1.12 | 0.99 | 0.95 | 0.91 | |
| Current ratio | 3.82 | 3.23 | 3.14 | 4.39 | 3.66 | 3.07 | 2.89 | 2.78 | 3.19 | 3.11 |
Industry Peer Context
Net margin peer context
Operating margin peer context
ROE peer context
ROA peer context
Financial Bridges
Income statement bridge from reported figures
Figure provenance: SEC companyfacts FY 2025. Revenue: accession 0001104657-26-000011; concept RevenueFromContractWithCustomerExcludingAssessedTax; source concepts us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | Gross profit: accession 0001104657-26-000011; concept GrossProfit; source concepts us-gaap:GrossProfit | Operating income: accession 0001104657-26-000011; concept OperatingIncomeLoss; source concepts us-gaap:OperatingIncomeLoss | Net income: accession 0001104657-26-000011; concept NetIncomeLoss; source concepts us-gaap:NetIncomeLoss
Free cash flow = operating cash flow - capital expenditures
Figure provenance: SEC companyfacts FY 2024. Operating cash flow: accession 0001104657-26-000011; concept NetCashProvidedByUsedInOperatingActivities; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities | Capital expenditures: accession 0001104657-25-000024; concept PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | Free cash flow: accession 0001104657-26-000011; concept NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment
Financial Charts
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: RevenueFromContractWithCustomerExcludingAssessedTax. Source concepts: us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: OperatingIncomeLoss. Source concepts: us-gaap:OperatingIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: GrossProfit. Source concepts: us-gaap:GrossProfit.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: NetCashProvidedByUsedInOperatingActivities. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities.
Figure provenance: SEC companyfacts. Latest point: FY 2024 ended 2024-12-31; accession 0001104657-25-000024; filed 2025-02-19. Concept: PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: PaymentsOfDividendsCommonStock. Source concepts: us-gaap:PaymentsOfDividendsCommonStock.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: PaymentsForRepurchaseOfCommonStock. Source concepts: us-gaap:PaymentsForRepurchaseOfCommonStock.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: Assets. Source concepts: us-gaap:Assets.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: StockholdersEquity. Source concepts: us-gaap:StockholdersEquity.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: CashAndCashEquivalentsAtCarryingValue. Source concepts: us-gaap:CashAndCashEquivalentsAtCarryingValue.
Figure provenance: SEC companyfacts. Latest point: FY 2024 ended 2024-12-31; accession 0001104657-26-000011; filed 2026-02-12. Concept: NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.
As-reported value updates
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001104657.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-09-30 | 0.96 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 1.23 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 1.15 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-29 | 403,067,000 | 26,564,000 | 1.27 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 421,043,000 | 19,468,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-29 | 385,287,000 | 13,409,000 | 0.64 | reported discrete quarter |
| 2024-Q2 | 2024-06-28 | 425,866,000 | 19,036,000 | 0.91 | reported discrete quarter |
| 2024-Q3 | 2024-09-27 | 436,715,000 | 22,294,000 | 1.07 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 436,871,000 | -48,851,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-28 | 420,330,000 | 17,698,000 | 0.85 | reported discrete quarter |
| 2025-Q2 | 2025-06-27 | 431,658,000 | 25,140,000 | 1.21 | reported discrete quarter |
| 2025-Q3 | 2025-09-26 | 444,808,000 | 25,412,000 | 1.22 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 489,754,000 | 6,573,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-04-03 | 549,824,000 | 19,373,000 | 0.92 | reported discrete quarter |
| 2026-Q2 | 2026-07-03 | 613,906,000 | 38,758,000 | 1.84 | reported discrete quarter |
Quarterly Charts
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-07-03; accession 0001104657-26-000044; filed 2026-08-05. Concept: RevenueFromContractWithCustomerExcludingAssessedTax. Source concepts: us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-07-03; accession 0001104657-26-000044; filed 2026-08-05. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-07-03; accession 0001104657-26-000044; filed 2026-08-05. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Business
Read MTRN's verbatim Item 1 Business section from its latest 10-K: Business.
Risk Factors
Read MTRN's verbatim Item 1A Risk Factors from its latest 10-K: Risk Factors.
Latest quarter (10-Q)
Latest 10-Q source: 0001104657-26-000044.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
We are an integrated producer of high-performance advanced engineered materials used in a variety of electronic, thermal, and structural applications. Our products are sold into numerous end markets, including semiconductor, industrial, aerospace and defense, automotive, consumer electronics, energy, and telecom and data center.
27
RESULTS OF OPERATIONS
Second Quarter
| Second Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 3, | June 27, | $ | % | ||||||||||||
| (Thousands, except per share data) | 2026 | 2025 | Change | Change | |||||||||||
| Net sales | $ | 613,906 | $ | 431,658 | $ | 182,248 | 42 | % | |||||||
| Value-added sales | 308,188 | 268,970 | 39,218 | 15 | % | ||||||||||
| Gross margin | 104,342 | 82,658 | 21,684 | 26 | % | ||||||||||
| Gross margin as a % of net sales | 17 | % | 19 | % | |||||||||||
| Gross margin as a % of value-added sales | 34 | % | 31 | % | |||||||||||
| Selling, general, and administrative (SG&A) expense | 42,321 | 35,039 | 7,282 | 21 | % | ||||||||||
| SG&A expense as a % of net sales | 7 | % | 8 | % | |||||||||||
| SG&A expense as a % of value-added sales | 14 | % | 13 | % | |||||||||||
| Research and development (R&D) expense | 6,562 | 6,413 | 149 | 2 | % | ||||||||||
| R&D expense as a % of net sales | 1 | % | 1 | % | |||||||||||
| R&D expense as a % of value-added sales | 2 | % | 2 | % | |||||||||||
| Restructuring expense | 324 | 479 | (155) | (32) | % | ||||||||||
| Other—net | 3,424 | 3,908 | (484) | (12) | % | ||||||||||
| Operating profit | 51,711 | 36,819 | 14,892 | 40 | % | ||||||||||
| Other non-operating (income)—net | (317) | (567) | 250 | (44) | % | ||||||||||
| Interest expense—net | 7,526 | 8,230 | (704) | (9) | % | ||||||||||
| Income before income taxes | 44,502 | 29,156 | 15,346 | 53 | % | ||||||||||
| Income tax expense | 5,744 | 4,016 | 1,728 | 43 | % | ||||||||||
| Net income | $ | 38,758 | $ | 25,140 | $ | 13,618 | 54 | % | |||||||
| Diluted earnings per share | $ | 1.84 | $ | 1.21 | $ | 0.63 | 52 | % |
Net sales of $613.9 million in the second quarter of 2026 increased $182.2 million from $431.7 million in the second quarter of 2025. The increase in net sales was primarily attributable to the Electronic Materials segment. The increase in net sales in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $94.6 million when compared to the prior year period. At the Company level, this was driven by volume increases in the energy (106%), semiconductor (59%), and aerospace and defense (40%) end markets. Additionally, there was a $5.9 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the second quarter of 2025. See Note C to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.
Value-added sales is a non-GAAP financial measure that removes the impact of pass-through precious metal market costs and allows for analysis without the distortion of the movement or volatility in precious metal market prices and changes in mix due to customer-supplied material. Internally, we manage our business on this basis, and a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales is included herein. Value-added sales of $308.2 million in the second quarter of 2026 increased $39.2 million, or 15%, compared to the second quarter of 2025. Volume increases in the aerospace and defense (39%) and semiconductor (23%) end markets were partially offset by decreases in the consumer electronics (17%) end market. Additionally, there was a $5.9 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the second quarter of 2025.
Gross margin in the second quarter of 2026 was $104.3 million, an increase of 26% compared to the second quarter of 2025. Gross margin expressed as a percentage of net sales was 17% in the second quarter of 2026 and 19% in the second quarter of 2025. Gross margin expressed as a percentage of value-added sales was 34% in second quarter of 2026, compared to 31% in the second quarter of 2025. Gross margin as a percentage of value-added sales increased due to product mix, manufacturing efficiencies and the increase in hydroxide sales, which favorably impacted margins in the second quarter of 2026 compared to the same period in 2025.
28
SG&A expense was $42.3 million in the second quarter of 2026, compared to $35.0 million in the second quarter of 2025. The increase in SG&A expense was primarily due to timing of the incentive compensation accruals due to year to date performance. Expressed as a percentage of net sales, SG&A expense was 7% of net sales in the second quarter of 2026 and 8% in the second quarter of 2025. Expressed as a percentage of value-added sales, SG&A expense was 14% and 13% in the second quarter of 2026 and 2025, respectively.
R&D expense consists primarily of direct personnel costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and applications to deliver new high performing advanced materials to our customers. R&D expense accounted for 1% of net sales in both the second quarter of 2026 and 2025. R&D expense accounted for 2% of value-added sales in both the second quarter of 2026 and 2025.
Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure. We recorded a combined total of $0.3 million and $0.5 million of restructuring charges across all segments in the second quarter of 2026 and 2025, respectively. Refer to Note F to the Consolidated Financial Statements for details.
Other-net was $3.4 million of expense in the second quarter of 2026, or a decrease of $0.5 million from the second quarter of 2025. Refer to Note E to the Consolidated Financial Statements for details of the major components within Other-net.
Other non-operating (income)-net includes components of pension and post-retirement expense other than service costs. Refer to Note K to the Consolidated Financial Statements for details of the components.
Interest expense-net was $7.5 million and $8.2 million in the second quarter of 2026 and 2025, respectively. The decrease in interest expense was primarily due to a decrease in interest rates compared to the prior year period.
Income tax expense for the second quarter of 2026 was $5.7 million, compared to $4.0 million in the second quarter of 2025. The Company's effective tax rate for the second quarter of 2026 and 2025 was 12.9% and 13.8%, respectively. The effective tax rate for the second quarter of 2026 is lower than the statutory tax rate primarily due to the impact of the foreign-derived deduction eligible income, and excess tax benefits from stock-based compensation awards. The effective tax rate for the second quarter of 2025 is lower than the statutory tax rate primarily due to the impact of percentage depletion and the advanced manufacturing production credit. See Note G to the Consolidated Financial Statements for additional discussion.
29
Six Months
| Six Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 3, | June 27, | $ | % | ||||||||||||
| (Thousands, except per share data) | 2026 | 2025 | Change | Change | |||||||||||
| Net sales | $ | 1,163,730 | $ | 851,988 | $ | 311,742 | 37 | % | |||||||
| Value-added sales | 569,978 | 528,316 | 41,662 | 8 | % | ||||||||||
| Gross margin | 186,177 | 158,837 | 27,340 | 17 | % | ||||||||||
| Gross margin as a % of net sales | 16 | % | 19 | % | |||||||||||
| Gross margin as a % of value-added sales | 33 | % | 30 | % | |||||||||||
| SG&A expense | 78,521 | 70,484 | 8,037 | 11 | % | ||||||||||
| SG&A expense as a % of net sales | 7 | % | 8 | % | |||||||||||
| SG&A expense as a % of value-added sales | 14 | % | 13 | % | |||||||||||
| R&D expense | 12,719 | 12,918 | (199) | (2) | % | ||||||||||
| R&D expense as a % of net sales | 1 | % | 2 | % | |||||||||||
| R&D expense as a % of value-added sales | 2 | % | 2 | % | |||||||||||
| Restructuring expense | 2,619 | 2,517 | 102 | 4 | % | ||||||||||
| Other—net | 12,432 | 8,904 | 3,528 | 40 | % | ||||||||||
| Operating profit | 79,886 | 64,014 | 15,872 | 25 | % | ||||||||||
| Other non-operating (income)—net | (627) | (1,233) | 606 | (49) | % | ||||||||||
| Interest expense—net | 15,104 | 15,147 | (43) | — | % | ||||||||||
| Income before income taxes | 65,409 | 50,100 | 15,309 | 31 | % | ||||||||||
| Income tax expense | 7,277 | 7,262 | 15 | — | % | ||||||||||
| Net income | $ | 58,132 | $ | 42,838 | $ | 15,294 | 36 | % | |||||||
| Diluted earnings per share | $ | 2.76 | $ | 2.05 | $ | 0.71 | 35 | % |
Net sales of $1,163.7 million in the first six months of 2026 increased $311.7 million from $852.0 million in the first six months of 2025. The increase in net sales was primarily attributable to the Electronic Materials segment. The increase in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $227.3 million when compared to the prior year period. At the Company level, a volume increase in the semiconductor (64%), energy (60%) and aerospace and defense (29%) end markets were partially offset by a volume decrease in the consumer electronics (17%) end market. Additionally, there was a $8.8 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the same period in the prior year. See Note C to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.
Value-added sales of $570.0 million in the first six months of 2026 increased $41.7 million, or 8%, compared to the first six months of 2025. Volume increases in the aerospace and defense (26%) and semiconductor (20%) end markets were partially offset by a volume decreases in the consumer electronics (29%) end market. Additionally, there was a $8.8 million year over year increase in the volume of raw material beryllium hydroxide sales compared to the same period in the prior year.
Gross margin in the first six months of 2026 was $186.2 million, an increase of 17% compared to the first six months of 2025. Gross margin expressed as a percentage of net sales was 16% in the first six months of 2026 and 19% in the first six months of 2025. Gross margin expressed as a percentage of value-added sales increased to 33% in the first six months of 2026 from 30% in the first six months of 2025. Gross margin as a percentage of value-added sales increased due to product mix, manufacturing efficiencies and the increase in hydroxide sales, which favorably impacted margins in the first six months of 2026 compared to the same period in 2025.
SG&A expense was $78.5 million in the first six months of 2026, compared to $70.5 million in the first six months of 2025. The increase in SG&A expense was primarily due to timing of incentive compensation accruals due to year to date performance. Expressed as a percentage of net sales, SG&A expense was 7% and 8% in the first six months of 2026 and 2025, respectively. Expressed as a percentage of value-added sales, SG&A expense was 14% in the first six months of 2026 and 13% in the first six months of 2025.
30
R&D expense consists primarily of direct personnel costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and ap
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A (excerpt)
Latest 10-K Item 7 source: 0001104657-26-000011. The complete FY 2025 MD&A is published at /company/MTRN/mda/fy2025/.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We are an integrated producer of high-performance advanced engineered materials used in a variety of electrical, electronic, thermal, and structural applications. Our products are sold into numerous end markets, including semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and life sciences.
RESULTS OF OPERATIONS
| (Thousands except per share data) | 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 1,786,550 | $ | 1,684,739 | $ | 1,665,187 | |||||
| Value-added sales | 1,046,194 | 1,097,577 | 1,127,071 | ||||||||
| Gross margin | 308,626 | 325,985 | 349,042 | ||||||||
| Gross margin as a % of Net sales | 17 | % | 19 | % | 21 | % | |||||
| Gross margin as a % of Value-added sales | 29 | % | 30 | % | 31 | % | |||||
| Selling, general, and administrative (SG&A) expense | 143,057 | 145,588 | 157,911 | ||||||||
| SG&A expense as a % of Net sales | 8 | % | 9 | % | 9 | % | |||||
| SG&A expense as a % of Value-added sales | 14 | % | 13 | % | 14 | % | |||||
| Research and development (R&D) expense | 25,941 | 29,028 | 27,540 | ||||||||
| R&D expense as a % of Net sales | 1 | % | 2 | % | 2 | % | |||||
| R&D expense as a % of Value-added sales | 2 | % | 3 | % | 2 | % | |||||
| Restructuring expense | 3,155 | 6,848 | 3,824 | ||||||||
| Goodwill impairment | — | 56,067 | — | ||||||||
| Long-lived asset impairment | — | 17,134 | — | ||||||||
| Loss on asset disposal | — | 6,412 | — | ||||||||
| Other — net | 26,677 | 17,685 | 23,323 | ||||||||
| Operating profit | 109,796 | 47,223 | 136,444 | ||||||||
| Other non-operating income — net | (2,437) | (2,443) | (2,710) | ||||||||
| Interest expense — net | 30,692 | 34,764 | 31,323 | ||||||||
| Income before income taxes | 81,541 | 14,902 | 107,831 | ||||||||
| Income tax expense | 6,718 | 9,014 | 12,129 | ||||||||
| Net income | 74,823 | 5,888 | 95,702 | ||||||||
| Diluted earnings per share | $ | 3.58 | $ | 0.28 | $ | 4.58 |
2025 Compared to 2024
Net sales of $1,786.6 million in 2025 increased $101.9 million from $1,684.7 million in 2024. An increase in net sales in the Electronic Materials and Precision Optics segments was partially offset by decreased net sales in the Performance Materials segment. The increase in the Electronic Materials segment was primarily due to higher precious metal pass-through costs, increasing net sales by approximately $208.2 million when compared to the prior year, partially offset by a decrease in precious metal sales of $35.3 million. The decrease in precious metal sales was primarily due to the impact of the divestiture of the target business in Albuquerque, New Mexico that occurred in the fourth quarter of 2024, which resulted in $23.1 million of lower sales in 2025 compared to 2024.
At the Company level, volume increased in the semiconductor (21%), telecom and data center (24%) and energy (12%) end markets. Additionally, sales of raw material beryllium hydroxide increased by $6.3 million compared to the prior year. The increase was partially offset by a volume decrease in the consumer electronics (30%) end market due to a quality issue with a large precision clad strip customer within Performance Materials segment, causing the Company to temporarily idle production facilities, which limited sales in the fourth quarter. The Company closely collaborated with our customer, implementing targeted modifications to our processes and procedures and enhancing quality control measures designed to reduce the risk of future occurrences. We resumed shipping product from our facilities in December 2025 and continue to ramp production.
22
Value-added sales is a non-GAAP financial measure that removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in metal prices and changes in mix due to customer-supplied material. Internally, we manage our business on this basis, and a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales is included herein. Value-added sales of $1,046.2 million in 2025 decreased $51.4 million compared to $1,097.6 million in 2024. At the Company level, volume increases in the semiconductor (7%), telecom and data center (14%) and energy (19%) end markets was partially offset by a volume decrease in the consumer electronics (33%) end market. Additionally, the decrease in value-added sales was impacted by a $7.0 million decrease in sales in 2025 compared to 2024 due to the divestiture of the target business in Albuquerque, New Mexico in the fourth quarter of 2024.
Gross margin was $308.6 million in 2025, representing a 5% decrease from $326.0 million in 2024. Gross margin expressed as a percentage of net sales was 17% in 2025 and 19% in 2024. Gross margin expressed as a percentage of value-added sales was 29% in 2025 and 30% in 2024. Gross margin decreased from the prior year primarily related to lower sales volumes and $25.7 million of charges in the Performance Materials segment related to the quality issue described above. Gross margin in 2024 was unfavorably impacted by higher costs associated with the production ramp of the precision clad strip facility.
SG&A expense totaled $143.1 million in 2025 as compared to $145.6 million in 2024. The decrease in SG&A expense was primarily due to lower incentive compensation accruals as a result of year-to-date performance. Expressed as a percentage of net sales, SG&A expense was 8% and 9% in 2025 and 2024, respectively. Expressed as a percentage of value-added sales, SG&A expense was 14% and 13% in 2025 and 2024, respectively.
R&D expense consists primarily of direct personnel and material costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and applications to deliver new high performing advanced materials to our customers. R&D expense accounted for 1% and 2% of net sales in 2025 and 2024, respectively. R&D expense accounted for 2% and 3% of value-added sales in 2025 and 2024, respectively.
Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure. In 2025, we recorded a combined total of $3.2 million of restructuring charges in our Electronic Materials, Precision Optics, Performance Materials and Other segments. In 2024, we recorded a combined total of $6.8 million of restructuring charges primarily in our Precision Optics, Electronic Materials, Performance Materials and Other segments. Refer to Note E to the Consolidated Financial Statements for details.
Other-net totaled expense of $26.7 million and $17.7 million in 2025 and 2024, respectively. The increase in Other-net was primarily driven by an increase in metal consignment fees. Refer to Note F to the Consolidated Financial Statements for the major components within Other-net.
Other non-operating income-net includes components of pension and post-retirement income other than service costs. Refer to Note P of the Consolidated Financial Statements for details of the components of net periodic benefit costs.
Interest expense - net was $30.7 million in 2025 and $34.8 million in 2024. The decrease in interest expense in 2025 compared to 2024 is primarily due to a decrease in interest rates and borrowings compared to the prior year.
Income tax expense for 2025 was $6.7 million of expense compared to $9.0 million of expense in 2024. The Company's effective tax rate for 2025 and 2024 was 8.2% and 60.5%, respectively. The effective tax rate for 2025 is lower than the statutory tax rate primarily due to percentage depletion, nontaxable credits and the foreign-derived intangible income deduction. The effective tax rate for 2024 was higher than the statutory tax rate primarily due to the impairment of non-deducible goodwill in the Precision Optics reporting unit. See Note H to the Consolidated Financial Statements for additional discussion.
See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our results for 2024 compared to 2023.
Segment Disclosures
The Company has four reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Other reportable segment includes unallocated corporate costs.
Performance Materials
| (Thousands) | 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 675,871 | $ | 744,503 | $ | 755,547 | |||||
| Value-added sales | 618,074 | 688,030 | 688,553 | ||||||||
| EBITDA | 127,163 | 169,276 | 174,471 |
23
2025 Compared to 2024
Net sales from the Performance Materials segment of $675.9 million in 2025 decreased 9% compared to 2024. The decrease in sales was due to lower sales volumes in the consumer electronics (34%) and aerospace and defense (9%) end markets. These decreases were partially offset by increased volumes in the energy (35%) end market, along with a $6.3 million year over year increase in the volume of raw material beryllium hydroxide. The decrease in the consumer electronics end market reflects the impact of a quality issue with a large precision clad strip customer within the Performance Materials segment, causing the Company to temporarily idle production facilities, which limited sales in the fourth quarter. The Company closely collaborated with our customer, implementing targeted modifications to our processes and procedures and enhancing quality control measures designed to reduce the risk of future occurrences. We resumed shipping product from our facilities in December 2025 and continue to ramp production.
Value-added sales of $618.1 million in 2025 decreased 10% compared to $688.0 million in 2024, consistent with the decrease in net sales. The decrease in value-added sales was driven by the same factors driving the decrease in net sales.
EBITDA for the Performance Materials segment was $127.2 million in 2025 compared to $169.3 million in 2024. The unfavorable impacts of lower sales volumes and $27.3 million of additional costs incurred related to the quality issue described above, which consisted of a quality claim, material scrap expenses, and temporary plant idling costs, were partially offset by manufacturing efficiencies and improved margins along with lower incentive compensation expense in 2025 compared to 2024. Additionally, there were higher costs associated with the production ramp of the precision clad strip facility in 2024 that did not recur in 2025, offsetting the decrease in EBITDA.
Electronic Materials
| (Thousands) | 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 1,009,965 | $ | 845,746 | $ | 805,751 | |||||
| Value-added sales | 327,627 | 315,252 | 334,730 | ||||||||
| EBITDA | 71,137 | 47,443 | 45,747 |
2025 Compared to 2024
Net sales from the Electronic Materials segment of $1,010.0 million in 2025 was 19% higher than net sales of $845.7 million in 2024. The increase was primarily due to higher precious metal pass-through costs, increasing net sales by approximately $208.2 million compared to the prior year, partially offset by a decrease in precious metal sales volumes of $35.3 million. The decrease in precious metal sales was primarily due to the impact of the divestiture of the target business in Albuquerque, New Mexico that occurred in the fourth quarter of 2024, which resulted in lower sales of $23.1 million in 2025 compared to 2024. Excluding sales from the Albuquerque target business, net sales would have been 23% higher in 2025 compared to 2024. Additionally,
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MD&A history
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Macro cross-references for MTRN
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- GDPC1 - Real Gross Domestic Product
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- PAYEMS - All Employees, Total Nonfarm