Materion Corporation
Reconciliation of Non-GAAP Measure - Segment Reporting Information
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions except per share amounts) | | | | | | | | | | | | |
| | | Quarter Ended | | Quarter Ended | | Quarter Ended |
| | | Mar. 30, 2012 | Jun. 29, 2012 | Sep. 28, 2012 | Dec. 31, 2012 | | Mar. 29, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Dec. 31, 2013 | | Mar. 28, 2014 | Jun. 27, 2014 | Sep. 26, 2014 |
| External Sales | | | | | | | | | | | | | |
| | PAC | $ | 112.1 |
| $ | 103.2 |
| $ | 100.4 |
| $ | 108.7 |
| | $ | 106.4 |
| $ | 109.5 |
| $ | 98.7 |
| $ | 108.4 |
| | $ | 97.2 |
| $ | 109.6 |
| $ | 114.2 |
|
| | AM | 205.0 |
| 183.7 |
| 151.8 |
| 154.3 |
| | 156.4 |
| 160.4 |
| 134.5 |
| 140.7 |
| | 129.3 |
| 145.0 |
| 137.6 |
|
| | PC | 36.8 |
| 38.3 |
| 38.7 |
| 39.2 |
| | 37.5 |
| 35.6 |
| 41.8 |
| 37.4 |
| | 33.9 |
| 34.1 |
| 39.9 |
|
| | Corporate | (0.3 | ) | (0.1 | ) | (0.3 | ) | 1.6 |
| | (1.1 | ) | 0.6 |
| 0.4 |
| (0.4 | ) | | (1.5 | ) | (0.7 | ) | (0.1 | ) |
| | Other | 36.5 |
| 38.2 |
| 38.4 |
| 40.8 |
| | 36.4 |
| 36.2 |
| 42.2 |
| 37.0 |
| | 32.4 |
| 33.4 |
| 39.8 |
|
| | Total | $ | 353.6 |
| $ | 325.1 |
| $ | 290.6 |
| $ | 303.8 |
| | $ | 299.2 |
| $ | 306.1 |
| $ | 275.4 |
| $ | 286.1 |
| | $ | 258.9 |
| $ | 288.0 |
| $ | 291.6 |
|
| | | | | | | | | | | | | | | |
| Pass-Through Metal Cost | | | | | | | | | | | | |
| | PAC | $ | 24.3 |
| $ | 22.2 |
| $ | 21.4 |
| $ | 19.5 |
| | $ | 22.6 |
| $ | 22.7 |
| $ | 18.8 |
| $ | 19.0 |
| | $ | 17.2 |
| $ | 19.7 |
| $ | 19.5 |
|
| | AM | 162.0 |
| 138.0 |
| 105.2 |
| 117.5 |
| | 113.3 |
| 119.6 |
| 92.9 |
| 97.7 |
| | 87.6 |
| 100.0 |
| 91.5 |
|
| | PC | 10.3 |
| 10.5 |
| 12.0 |
| 13.8 |
| | 11.3 |
| 10.5 |
| 14.7 |
| 11.5 |
| | 10.0 |
| 9.2 |
| 12.9 |
|
| | Corporate | (0.4 | ) | (0.1 | ) | (0.3 | ) | 1.6 |
| | 0.7 |
| 0.8 |
| 0.9 |
| 0.7 |
| | (0.8 | ) | (0.5 | ) | 2.1 |
|
| | Other | 9.9 |
| 10.4 |
| 11.7 |
| 15.4 |
| | 12.0 |
| 11.3 |
| 15.6 |
| 12.2 |
| | 9.2 |
| 8.7 |
| 15.0 |
|
| | Total | $ | 196.2 |
| $ | 170.6 |
| $ | 138.3 |
| $ | 152.4 |
| | $ | 147.9 |
| $ | 153.6 |
| $ | 127.3 |
| $ | 128.9 |
| | $ | 114.0 |
| $ | 128.4 |
| $ | 126.0 |
|
| | | | | | | | | | | | | | | |
| Valued-Added Sales | | | | | | | | | | | | | |
| | PAC | $ | 87.8 |
| $ | 81.0 |
| $ | 79.0 |
| $ | 89.2 |
| | $ | 83.8 |
| $ | 86.8 |
| $ | 79.9 |
| $ | 89.4 |
| | $ | 80.0 |
| $ | 89.9 |
| $ | 94.7 |
|
| | AM | 43.0 |
| 45.7 |
| 46.6 |
| 36.8 |
| | 43.1 |
| 40.8 |
| 41.6 |
| 43.0 |
| | 41.7 |
| 45.0 |
| 46.1 |
|
| | PC | 26.5 |
| 27.8 |
| 26.7 |
| 25.4 |
| | 26.2 |
| 25.1 |
| 27.1 |
| 25.9 |
| | 23.9 |
| 24.9 |
| 27.0 |
|
| | Corporate | 0.1 |
| — |
| — |
| — |
| | (1.8 | ) | (0.2 | ) | (0.5 | ) | (1.1 | ) | | (0.7 | ) | (0.2 | ) | (2.2 | ) |
| | Other | 26.6 |
| 27.8 |
| 26.7 |
| 25.4 |
| | 24.4 |
| 24.9 |
| 26.6 |
| 24.8 |
| | 23.2 |
| 24.7 |
| 24.8 |
|
| | Total | $ | 157.4 |
| $ | 154.5 |
| $ | 152.3 |
| $ | 151.4 |
| | $ | 151.3 |
| $ | 152.5 |
| $ | 148.1 |
| $ | 157.2 |
| | $ | 144.9 |
| $ | 159.6 |
| $ | 165.6 |
|
| | | | | | | | | | | | | | | |
| Gross Margin % of Value-Added | | | | | | | | | | | | |
| | PAC | 27 | % | 30 | % | 29 | % | 28 | % | | 28 | % | 31 | % | 25 | % | 27 | % | | 28 | % | 27 | % | 28 | % |
| | AM | 43 | % | 45 | % | 44 | % | 32 | % | | 37 | % | 28 | % | 37 | % | 40 | % | | 39 | % | 39 | % | 42 | % |
| | PC | 28 | % | 33 | % | 35 | % | 26 | % | | 34 | % | 31 | % | 35 | % | 29 | % | | 30 | % | 31 | % | 33 | % |
| | Corporate | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
|
| | Other | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
|
| | Total | 31 | % | 35 | % | 34 | % | 29 | % | | 32 | % | 30 | % | 30 | % | 31 | % | | 31 | % | 31 | % | 33 | % |
| | | | | | | | | | | | | | | |
| Operating Profit | | | | | | | | | | | | | |
| | PAC | $ | 7.2 |
| $ | 7.3 |
| $ | 6.7 |
| $ | 8.1 |
| | $ | 8.4 |
| $ | 11.0 |
| $ | 3.3 |
| $ | 8.1 |
| | $ | 6.2 |
| $ | 6.3 |
| $ | 10.8 |
|
| | AM | 6.5 |
| 7.3 |
| 8.8 |
| (0.8 | ) | | 3.6 |
| (1 | ) | 3.5 |
| 2.3 |
| | 5.1 |
| 12.5 |
| 7.8 |
|
| | PC | 0.1 |
| 1.9 |
| 2.1 |
| (2.3 | ) | | 1.5 |
| 0.7 |
| 2.4 |
| (0.4 | ) | | 4.1 |
| 0.5 |
| 2.1 |
|
| | Corporate | (3.9 | ) | (4.1 | ) | (4.2 | ) | (3.9 | ) | | (4 | ) | (4.1 | ) | (3.9 | ) | (4.6 | ) | | (4.3 | ) | (4.8 | ) | (3.3 | ) |
| | Other | (3.8 | ) | (2.2 | ) | (2.1 | ) | (6.2 | ) | | (2.5 | ) | (3.4 | ) | (1.5 | ) | (5 | ) | | (0.2 | ) | (4.3 | ) | (1.2 | ) |
| | Total | $ | 9.9 |
| $ | 12.4 |
| $ | 13.4 |
| $ | 1.1 |
| | $ | 9.5 |
| $ | 6.6 |
| $ | 5.3 |
| $ | 5.4 |
| | $ | 11.1 |
| $ | 14.5 |
| $ | 17.4 |
|
| | | | | | | | | | | | | | | |
| Special Items | | | | | | | | | | | | | |
| | PAC | $ | — |
| $ | — |
| $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | — |
|
| | AM | — |
| — |
| — |
| $ | 7.4 |
| | — |
| — |
| — |
| $ | 2.8 |
| | $ | 0.4 |
| $ | (5.4 | ) | — |
|
| | PC | — |
| — |
| — |
| — |
| | — |
| — |
| — |
| 1.6 |
| | (2.6 | ) | 0.1 |
| — |
|
| | Corporate | — |
| — |
| — |
| — |
| | — |
| — |
| — |
| 0.5 |
| | 0.2 |
| 1.5 |
| (2.7 | ) |
| | Other | — |
| — |
| — |
| — |
| | — |
| — |
| — |
| 2.1 |
| | (2.4 | ) | 1.6 |
| (2.7 | ) |
| | Total | $ | — |
| $ | — |
| $ | — |
| $ | 7.4 |
| | $ | — |
| $ | — |
| $ | — |
| $ | 4.9 |
| | $ | (2 | ) | $ | (3.8 | ) | $ | (2.7 | ) |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Profit Ex Spec Items | | | | | | | | | | | | |
| | PAC | 7.2 |
| 7.3 |
| 6.7 |
| 8.1 |
| | 8.4 |
| 11.0 |
| 3.3 |
| 8.1 |
| | 6.2 |
| 6.3 |
| 10.8 |
|
| | AM | 6.5 |
| 7.3 |
| 8.8 |
| 6.6 |
| | 3.6 |
| (1 | ) | 3.5 |
| 5.1 |
| | 5.5 |
| 7.1 |
| 7.8 |
|
| | PC | 0.1 |
| 1.9 |
| 2.1 |
| (2.3 | ) | | 1.5 |
| 0.7 |
| 2.4 |
| 1.2 |
| | 1.5 |
| 0.6 |
| 2.1 |
|
| | Corporate | (3.9 | ) | (4.1 | ) | (4.2 | ) | (3.9 | ) | | (4 | ) | (4.1 | ) | (3.9 | ) | (4.1 | ) | | (4.1 | ) | (3.3 | ) | (6 | ) |
| | Other | (3.8 | ) | (2.2 | ) | (2.1 | ) | (6.2 | ) | | (2.5 | ) | (3.4 | ) | (1.5 | ) | (2.9 | ) | | (2.6 | ) | (2.7 | ) | (3.9 | ) |
| | Total | $ | 9.9 |
| $ | 12.4 |
| $ | 13.4 |
| $ | 8.5 |
| | $ | 9.5 |
| $ | 6.6 |
| $ | 5.3 |
| $ | 10.3 |
| | $ | 9.1 |
| $ | 10.7 |
| $ | 14.7 |
|
| | | | | | | | | | | | | | | |
| Operating Profit Ex Spec Items % of Value-Added | | | | | | | | | | | |
| | PAC | 8.2 | % | 9 | % | 8.5 | % | 9.1 | % | | 10 | % | 12.7 | % | 4.1 | % | 9.1 | % | | 7.8 | % | 7 | % | 11.4 | % |
| | AM | 15.1 | % | 16 | % | 18.9 | % | 17.9 | % | | 8.4 | % | (2.5 | )% | 8.4 | % | 11.9 | % | | 13.2 | % | 15.8 | % | 16.9 | % |
| | PC | 0.4 | % | 6.8 | % | 7.9 | % | (9.1 | )% | | 5.7 | % | 2.8 | % | 8.9 | % | 4.6 | % | | 6.3 | % | 2.4 | % | 7.8 | % |
| | Corporate | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
|
| | Other | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
| N/M |
| | N/M |
| N/M |
| N/M |
|
| | Total | 6.3 | % | 8 | % | 8.8 | % | 5.6 | % | | 6.3 | % | 4.3 | % | 3.6 | % | 6.6 | % | | 6.3 | % | 6.7 | % | 8.9 | % |
| | | | | | | | | | | | | | | |
| EPS Diluted (GAAP) | $ | 0.30 |
| $ | 0.38 |
| $ | 0.39 |
| $ | 0.12 |
| | $ | 0.33 |
| $ | 0.20 |
| $ | 0.24 |
| $ | 0.18 |
| | $ | 0.35 |
| $ | 0.47 |
| $ | 0.60 |
|
| EPS Ex Spec Items Diluted | $ | 0.30 |
| $ | 0.38 |
| $ | 0.39 |
| $ | 0.35 |
| | $ | 0.33 |
| $ | 0.20 |
| $ | 0.24 |
| $ | 0.34 |
| | $ | 0.29 |
| $ | 0.36 |
| $ | 0.51 |
|
The cost of gold, silver, platinum, palladium and copper is passed through to customers and therefore the trends and comparisons of sales are affected by movements in the market price of these metals. Internally, management reviews sales and value-added sales. Value-added sales is a non-GAAP measure that deducts the value of the pass-through metals sold from sales. Value-added sales allows management to assess the impact of differences in sales between periods or segments and analyze the resulting margins and profitability without the distortion of the movements in pass-through metal prices. The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. The Company sells other metals and materials that are not considered direct pass throughs and their costs are not deducted from sales to calculate value-added sales.
The Company's pricing policy is to pass the cost of these metals on to customers in order to mitigate the impact of price volatility on the Company's results from operations. Value-added information is being presented since changes in metal prices may not directly impact profitability. It is the Company's intent to allow users of the financial statements to review sales with and without the impact of the pass-through metals.
Materion Corporation
Reconciliation of Non-GAAP Measure - Profitability
(Unaudited)
|
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | Quarter Ended | | |
| | (In millions except per share amounts) | | Dec. 31, 2012 | Dec. 31, 2013 | March 28, 2014 | June 27, 2014 | Sept. 26, 2014 |
| | | | | | | | | |
| GAAP as Reported | | | | | | |
| | | Sales | | $ | 303.8 |
| $ | 286.1 |
| $ | 258.9 |
| $ | 288.0 |
| $ | 291.6 |
|
| | | Gross margin | | 44.0 |
| 49.2 |
| 45.5 |
| 49.8 |
| 54.8 |
|
| | | Operating profit | | 1.1 |
| 5.4 |
| 11.1 |
| 14.5 |
| 17.4 |
|
| | | Net income | | 2.5 |
| 3.8 |
| 7.3 |
| 10.0 |
| 12.4 |
|
| | | EPS - Diluted | | $ | 0.12 |
| $ | 0.18 |
| $ | 0.35 |
| $ | 0.47 |
| $ | 0.60 |
|
| | | | | | | | | |
| Theft, Facility closure and reorganization costs (benefits) | | | | | | |
| | | Cost of goods sold | | $ | 7.4 |
| $ | 1.3 |
| $ | 0.2 |
| $ | — |
| $ | — |
|
| | | Selling, general and administrative | | — |
| 2.3 |
| 0.5 |
| — |
| 0.3 |
|
| | | Other-net | | — |
| 1.4 |
| (2.6 | ) | — |
| — |
|
| Recovery from insurance and other litigation, net of expenses | | | | | | |
| | | Selling, general and administrative | | — |
| — |
| — |
| 2.9 |
| 1.0 |
|
| | | Other-net | | — |
| — |
| — |
| (6.8 | ) | (4 | ) |
| | Total Special items | | $ | 7.4 |
| $ | 4.9 |
| $ | (2 | ) | $ | (3.8 | ) | $ | (2.7 | ) |
| | | | | | | | | |
| | Special items - net of tax | | $ | 4.8 |
| $ | 3.4 |
| $ | (1.3 | ) | $ | (2.5 | ) | $ | (1.8 | ) |
| | | | | | | | | |
| | | | | | | | | |
| Non-GAAP Measures - Adjusted Profitability | | | | | | |
| | | Value-added (VA) sales | | $ | 151.4 |
| $ | 157.2 |
| $ | 144.9 |
| $ | 159.6 |
| $ | 165.6 |
|
| | | Gross margin | | 51.4 |
| 50.5 |
| 45.7 |
| 49.8 |
| 54.8 |
|
| | | Gross margin % of VA | | 33.9 | % | 32.1 | % | 31.5 | % | 31.2 | % | 33.1 | % |
| | | Operating profit | | 8.5 |
| 10.3 |
| 9.1 |
| 10.7 |
| 14.7 |
|
| | | Operating profit % of VA | | 5.6 | % | 6.6 | % | 6.3 | % | 6.7 | % | 8.9 | % |
| | | Net income | | 7.3 |
| 7.1 |
| 6.0 |
| 7.5 |
| 10.7 |
|
| | | EPS - Diluted | | $ | 0.35 |
| $ | 0.34 |
| $ | 0.29 |
| $ | 0.36 |
| $ | 0.51 |
|
In addition to presenting financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release contains financial measures, including gross margin, operating profit, net income and earnings per share, on a non-GAAP basis. As detailed in the above reconciliation, we have adjusted out the cost (benefit) impact of the plant consolidation and product line rationalization efforts and the net recovery from insurance and other litigation claims in our Other segment from the applicable GAAP measure. Internally, management reviews the results of operations without the impact of these items in order to assess the profitability from ongoing activities. We are providing this information because we believe it will assist investors in analyzing our financial results and, when viewed in conjunction with the GAAP results, provide a more comprehensive understanding of the factors and trends affecting our operations.
