Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MATERION Corp | |
Entity Central Index Key | 1,104,657 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MTRN | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 19,937,862 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 249,619 | $ 244,354 | $ 734,906 | $ 811,233 |
Cost of sales | 198,864 | 200,351 | 595,488 | 663,548 |
Gross margin | 50,755 | 44,003 | 139,418 | 147,685 |
Selling, general, and administrative expense | 34,177 | 29,051 | 97,101 | 101,578 |
Research and development expense | 3,237 | 2,501 | 9,860 | 9,435 |
Other net | 3,190 | 1,590 | 8,997 | (532) |
Operating profit | 10,151 | 10,861 | 23,460 | 37,204 |
Interest expense—net | 490 | 586 | 1,417 | 1,893 |
Income before income taxes | 9,661 | 10,275 | 22,043 | 35,311 |
Income tax expense | 1,616 | 2,883 | 3,081 | 9,868 |
Net income | $ 8,045 | $ 7,392 | $ 18,962 | $ 25,443 |
Basic earnings per share: | ||||
Net income per share of common stock (in dollars per share) | $ 0.40 | $ 0.37 | $ 0.95 | $ 1.26 |
Diluted earnings per share: | ||||
Net income per share of common stock (in dollars per share) | 0.40 | 0.36 | 0.94 | 1.24 |
Cash dividends per share (in dollars per share) | $ 0.095 | $ 0.090 | $ 0.280 | $ 0.265 |
Weighted-average number of shares of common stock outstanding: | ||||
Basic (in shares) | 19,957 | 20,087 | 19,996 | 20,128 |
Diluted (in shares) | 20,192 | 20,383 | 20,209 | 20,458 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 8,045 | $ 7,392 | $ 18,962 | $ 25,443 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 467 | 359 | 2,918 | (895) |
Derivative and hedging activity, net of tax | 132 | (1,177) | (489) | (1,778) |
Pension and post-employment benefit adjustment, net of tax | 673 | 901 | 2,923 | 2,705 |
Net change in other comprehensive income | 1,272 | 83 | 5,352 | 32 |
Comprehensive income | $ 9,317 | $ 7,475 | $ 24,314 | $ 25,475 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 15,806 | $ 24,236 |
Accounts receivable | 118,826 | 97,236 |
Inventories | 210,213 | 211,820 |
Prepaid expenses | 13,871 | 12,799 |
Total current assets | 358,716 | 346,091 |
Long-term deferred income taxes | 26,655 | 25,743 |
Property, plant, and equipment | 862,474 | 833,834 |
Less allowances for depreciation, depletion, and amortization | (602,084) | (570,205) |
Property, plant, and equipment—net | 260,390 | 263,629 |
Intangible assets | 10,706 | 13,389 |
Other assets | 4,925 | 6,716 |
Goodwill | 86,725 | 86,725 |
Total Assets | 748,117 | 742,293 |
Current liabilities | ||
Short-term debt | 12,803 | 8,990 |
Accounts payable | 32,941 | 31,888 |
Salaries and wages | 23,637 | 27,494 |
Other liabilities and accrued items | 24,275 | 22,035 |
Income taxes | 3,851 | 2,373 |
Unearned revenue | 1,152 | 3,695 |
Total current liabilities | 98,659 | 96,475 |
Other long-term liabilities | 17,893 | 18,435 |
Retirement and post-employment benefits | 84,003 | 92,794 |
Unearned income | 42,515 | 45,953 |
Long-term income taxes | 1,179 | 1,293 |
Deferred income taxes | 142 | 110 |
Long-term debt | 3,776 | 4,276 |
Serial preferred stock | 0 | 0 |
Common stock | 212,168 | 208,967 |
Retained earnings | 513,020 | 499,659 |
Common stock in treasury | (153,899) | (148,559) |
Accumulated other comprehensive loss | (75,353) | (80,705) |
Other equity transactions | 4,014 | 3,595 |
Total shareholders' equity | 499,950 | 482,957 |
Total Liabilities and Shareholders’ Equity | $ 748,117 | $ 742,293 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Oct. 02, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 18,962 | $ 25,443 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation, depletion, and amortization | 34,379 | 28,462 |
Amortization of deferred financing costs in interest expense | 417 | 497 |
Stock-based compensation expense | 2,880 | 4,518 |
(Gain) loss on sale of property, plant, and equipment | (601) | 310 |
Deferred income tax (benefit) expense | (676) | 3,841 |
Changes in assets and liabilities net of acquired assets and liabilities: | ||
Decrease (increase) in accounts receivable | (19,781) | (1,583) |
Decrease (increase) in inventory | 3,294 | 9,928 |
Decrease (increase) in prepaid and other current assets | (956) | (1,965) |
Increase (decrease) in accounts payable and accrued expenses | (2,207) | (19,299) |
Increase (decrease) in unearned revenue | (2,546) | (773) |
Increase (decrease) in interest and taxes payable | 898 | 896 |
Increase (decrease) in long-term liabilities | (9,320) | (5,175) |
Other-net | 1,611 | (256) |
Net cash provided by operating activities | 26,354 | 44,844 |
Cash flows from investing activities: | ||
Payments for purchase of property, plant, and equipment | (20,052) | (24,085) |
Payments for mine development | (8,934) | (16,972) |
Proceeds from sale of property, plant, and equipment | 1,366 | 43 |
Net cash used in investing activities | (27,620) | (41,014) |
Cash flows from financing activities: | ||
Proceeds from issuance of short-term debt, net | 3,777 | 14,152 |
Proceeds from issuance of long-term debt | 10,000 | 53,990 |
Repayment of long-term debt | (10,517) | (46,275) |
Principal payments under capital lease obligations | (549) | (582) |
Cash dividends paid | (5,601) | (5,331) |
Deferred financing costs | (1,000) | 0 |
Repurchase of common stock | (3,798) | (7,129) |
Net cash (used in) provided by financing activities | (7,688) | 8,825 |
Effects of exchange rate changes | 524 | (979) |
Net change in cash and cash equivalents | (8,430) | 11,676 |
Cash and cash equivalents at beginning of period | 24,236 | 13,150 |
Cash and cash equivalents at end of period | $ 15,806 | $ 24,826 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies (Dollars in thousands) Basis of Presentation: In management’s opinion, the accompanying consolidated financial statements of Materion Corporation and its subsidiaries (the Company) contain all of the adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported. All adjustments were of a normal and recurring nature. Certain amounts in prior years have been reclassified to conform to the 2016 consolidated financial statement presentation. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2015 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. New Pronouncements Adopted: In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires companies to present debt issuance costs associated with a debt liability as a deduction from the carrying amount of that debt liability on the balance sheet rather than being capitalized as an asset. The Company adopted this ASU effective January 1, 2016, and applied the new guidance on a retrospective basis, which resulted in a decrease to Intangible assets, Short-term debt, and Long-term debt, at December 31, 2015, of $347 , $8 , and $339 , respectively. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . Inventory within the scope of this update is required to be measured at the lower of its cost or net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective prospectively for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We early adopted this ASU effective January 1, 2016. The adoption did not have a material effect on the consolidated financial statements. New Pronouncements Issued: In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , which impacts several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement, and the tax effects of exercised or vested awards will be treated as discrete items in the reporting period in which they occur. An entity will also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the reporting period. Excess tax benefits will be classified, along with other income tax cash flows, as an operating activity. In regard to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases , which eliminates the off-balance-sheet accounting for leases. The new guidance will require lessees to report their operating leases as both an asset and liability on the balance sheet and disclose key information about leasing arrangements. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount, and timing of revenue and cash flows arising from contracts. This ASU is effective beginning in fiscal year 2018 with a provision for early adoption in 2017. The standard can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Other (Thousands) Performance Alloys and Composites Advanced Materials Other (1) Corporate (2) Subtotal Total Third Quarter 2016 Net sales $ 103,699 $ 107,250 $ 38,670 $ — $ 38,670 $ 249,619 Intersegment sales (3) 47 21,505 — — — 21,552 Value-added sales 87,247 45,960 25,803 (2,009 ) 23,794 157,001 Operating profit (loss) 4,357 8,245 3,432 (5,883 ) (2,451 ) 10,151 Third Quarter 2015 Net sales $ 93,566 $ 113,635 $ 37,142 $ 11 $ 37,153 $ 244,354 Intersegment sales (3) 191 15,316 — — — 15,507 Value-added sales 79,596 44,520 25,671 (948 ) 24,723 148,839 Operating profit (loss) 4,547 6,950 2,273 (2,909 ) (636 ) 10,861 First Nine Months 2016 Net sales $ 292,024 $ 328,927 $ 113,955 $ — $ 113,955 $ 734,906 Intersegment sales (3) 226 54,110 — — — 54,336 Value-added sales 248,799 135,019 75,548 (4,573 ) 70,975 454,793 Operating profit (loss) 6,103 20,748 9,803 (13,194 ) (3,391 ) 23,460 First Nine Months 2015 Net sales $ 304,507 $ 394,922 $ 112,024 $ (220 ) $ 111,804 $ 811,233 Intersegment sales (3) 733 48,830 — — — 49,563 Value-added sales 256,697 142,952 75,438 (1,258 ) 74,180 473,829 Operating profit (loss) 20,677 23,289 4,512 (11,274 ) (6,762 ) 37,204 (1) Other represents the Precision Coatings group, which is a business included in the Other reportable segment. (2) Costs associated with the Company's unallocated corporate functions have been shown separately to better illustrate the financial information for the businesses within the Other reportable segment. (3) Intersegment sales are eliminated in consolidation. |
Other-net
Other-net | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Other-net | Other-net Other-net (income) expense for the third quarter and first nine months of 2016 and 2015 is summarized as follows: Third Quarter Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Foreign currency exchange/translation loss (gain) $ 336 $ (1,256 ) $ 977 $ (4,569 ) Amortization of intangible assets 1,148 1,256 3,444 3,769 Metal consignment fees 1,665 1,686 4,851 5,554 Net loss (gain) on disposal of fixed assets 94 2 (601 ) 310 Recovery from insurance — — — (3,800 ) Legal recoveries — (500 ) — (1,825 ) Other items (53 ) 402 326 29 Total $ 3,190 $ 1,590 $ 8,997 $ (532 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax expense of $1.6 million in the third quarter of 2016 , an effective tax rate of 16.7% against income before income taxes, and income tax expense of $2.9 million in the third quarter of 2015 , with an effective tax rate of 28.1% against income before income taxes. In the first nine months of 2016 , income tax expense of $3.1 million was calculated using an effective tax rate of 14.0% , while income tax expense of $9.9 million in the first nine months of 2015 was calculated using an effective tax rate of 27.9% . The Company recorded discrete items in the first nine months of 2016, resulting in a net tax benefit of $1.0 million , primarily due to international tax planning initiatives. The difference between the statutory and effective rates in the third quarter and first nine months of both years was primarily due to these discrete items, the impact of percentage depletion, the foreign rate differential, and other items. The research and development credit also had a favorable effect on the Company's 2016 effective tax rate. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted EPS: Third Quarter Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands, except per share amounts) 2016 2015 2016 2015 Numerator for basic and diluted EPS: Net income $ 8,045 $ 7,392 $ 18,962 $ 25,443 Denominator: Denominator for basic EPS: Weighted-average shares outstanding 19,957 20,087 19,996 20,128 Effect of dilutive securities: Stock appreciation rights 70 123 66 174 Restricted stock units 82 113 86 103 Performance-based restricted stock units 83 60 61 53 Diluted potential common shares 235 296 213 330 Denominator for diluted EPS: Adjusted weighted-average shares outstanding 20,192 20,383 20,209 20,458 Basic EPS $ 0.40 $ 0.37 $ 0.95 $ 1.26 Diluted EPS $ 0.40 $ 0.36 $ 0.94 $ 1.24 Stock appreciation rights (SARs) totaling 982,588 and 487,248 for the quarters ended September 30, 2016 and October 2, 2015 , respectively, and 993,418 and 379,676 for the nine months ended September 30, 2016 and October 2, 2015 , respectively, were excluded from the dilution calculation as their effect would have been anti-dilutive. |
Depreciation and Amortization
Depreciation and Amortization | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Depreciation and Amortization | The Company received an aggregate of $63.5 million from the U.S. Department of Defense (DoD) in previous periods for reimbursement of the DoD's share of the cost of the equipment in property, plant, and equipment, and the reimbursements are reported as unearned income, a liability on the Consolidated Balance Sheets. The equipment was placed in service during 2012, and its full cost is being depreciated in accordance with Company policy. The unearned income liability is being reduced ratably with the depreciation expense recorded over the life of the equipment. In the first nine months of 2016 and 2015, the depreciation expense reimbursed for this equipment was $3.4 million and $4.7 million , respectively. Accordingly, in the first nine months of 2016 and 2015, unearned income was reduced by $3.4 million and $4.7 million , respectively, with the offset recorded as a credit to cost of sales. Depreciation, depletion, and amortization expense on the Consolidated Statements of Cash Flows is shown net of the reduction in unearned income. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories on the Consolidated Balance Sheets are summarized as follows: Sept. 30, Dec. 31, (Thousands) 2016 2015 Raw materials and supplies $ 35,792 $ 37,463 Work in process 176,763 180,458 Finished goods 41,896 38,135 Subtotal $ 254,451 $ 256,056 Less: LIFO reserve balance 44,238 44,236 Inventories $ 210,213 $ 211,820 The liquidation of last in, first out (LIFO) inventory layers did not impact cost of sales in the third quarter of 2016 and reduced cost of sales by $0.5 million in the third quarter of 2015. In the first nine months of 2016 and 2015, cost of sales was reduced by $3.2 million and $2.4 million , respectively. |
Pensions and Other Post-employm
Pensions and Other Post-employment Benefits | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pensions and Other Post-employment Benefits | Pensions and Other Post-employment Benefits The following is a summary of the net periodic benefit cost for the third quarter and first nine months of 2016 and 2015 for the domestic pension plans (which include the defined benefit pension plan and the supplemental retirement plans) and the domestic retiree medical plan. Pension Benefits Other Benefits Third Quarter Ended Third Quarter Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 1,946 $ 2,231 $ 26 $ 29 Interest cost 2,595 2,500 140 139 Expected return on plan assets (3,488 ) (3,354 ) — — Amortization of prior service benefit (115 ) (113 ) (374 ) (374 ) Amortization of net loss 1,431 1,820 — — Net periodic benefit cost (benefit) $ 2,369 $ 3,084 $ (208 ) $ (206 ) Pension Benefits Other Benefits Nine Months Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 5,838 $ 6,692 $ 77 $ 87 Interest cost 7,785 7,500 422 415 Expected return on plan assets (10,464 ) (10,062 ) — — Amortization of prior service benefit (345 ) (337 ) (1,122 ) (1,122 ) Amortization of net loss 4,292 5,459 — — Net periodic benefit cost (benefit) $ 7,106 $ 9,252 $ (623 ) $ (620 ) The Company made contributions to the domestic defined benefit pension plan of $12.0 million and $8.0 million in the first nine months of 2016 and 2015 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the third quarter and first nine months of 2016 and 2015 are as follows: (Thousands) Gains and Losses on Cash Flow Hedges Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at July 1, 2016 $ 958 $ (74,546 ) $ (3,037 ) $ (76,625 ) Other comprehensive income (loss) before reclassifications (126 ) — 467 341 Amounts reclassified from accumulated other comprehensive income 336 1,015 — 1,351 Net current period other comprehensive income before tax 210 1,015 467 1,692 Deferred taxes on current period activity 78 342 — 420 Net current period other comprehensive income after tax 132 673 467 1,272 Balance at September 30, 2016 $ 1,090 $ (73,873 ) $ (2,570 ) $ (75,353 ) Balance at July 3, 2015 $ 2,977 $ (79,858 ) $ (5,407 ) $ (82,288 ) Other comprehensive income (loss) before reclassifications (447 ) — 359 (88 ) Amounts reclassified from accumulated other comprehensive income (1,423 ) 1,396 — (27 ) Net current period other comprehensive income (loss) before tax (1,870 ) 1,396 359 (115 ) Deferred taxes on current period activity (693 ) 495 — (198 ) Net current period other comprehensive income (loss) after tax (1,177 ) 901 359 83 Balance at October 2, 2015 $ 1,800 $ (78,957 ) $ (5,048 ) $ (82,205 ) Balance at December 31, 2015 $ 1,579 $ (76,796 ) $ (5,488 ) $ (80,705 ) Other comprehensive income (loss) before reclassifications (1,571 ) — 2,918 1,347 Amounts reclassified from accumulated other comprehensive income 793 3,045 — 3,838 Net current period other comprehensive income (loss) before tax (778 ) 3,045 2,918 5,185 Deferred taxes on current period activity (289 ) 122 — (167 ) Net current period other comprehensive income (loss) after tax (489 ) 2,923 2,918 5,352 Balance at September 30, 2016 $ 1,090 $ (73,873 ) $ (2,570 ) $ (75,353 ) Balance at December 31, 2014 $ 3,578 $ (81,662 ) $ (4,153 ) $ (82,237 ) Other comprehensive income (loss) before reclassifications 2,198 14 (895 ) 1,317 Amounts reclassified from accumulated other comprehensive income (5,021 ) 4,186 — (835 ) Net current period other comprehensive income (loss) before tax (2,823 ) 4,200 (895 ) 482 Deferred taxes on current period activity (1,045 ) 1,495 — 450 Net current period other comprehensive income (loss) after tax (1,778 ) 2,705 (895 ) 32 Balance at October 2, 2015 $ 1,800 $ (78,957 ) $ (5,048 ) $ (82,205 ) Reclassifications from accumulated other comprehensive income of gains and losses on foreign currency cash flow hedges are recorded in Other-net in the Consolidated Statements of Income. Refer to Note L for additional details on cash flow hedges. Reclassifications from accumulated other comprehensive income for pension and post-employment benefits are included in the computation of the net periodic pension and post-employment benefit expense. Refer to Note H for additional details on pension and post-employment expenses. |
Stock-based Compensation Expens
Stock-based Compensation Expense | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense Stock-based compensation expense, which includes awards settled in shares and in cash, was $2.1 million and $4.4 million in the third quarter and first nine months of 2016 , respectively, compared to $0.5 million and $5.9 million in the same periods of 2015 . The Company granted 221,065 SARs to certain employees during the first nine months of 2016 . The weighted-average exercise price per share and weighted-average fair value per share of the SARs granted during the nine months ended September 30, 2016 were $25.19 and $8.07 , respectively. The Company estimated the fair value of the SARs using the following assumptions in the Black-Scholes model: Risk-free interest rate 1.25 % Dividend yield 1.4 % Volatility 38.0 % Expected term (in years) 5.7 The Company granted 69,212 stock-settled restricted stock units (RSUs) and 28,180 cash-settled RSUs to certain employees and non-employee directors during the first nine months of 2016 . 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 $25.96 for stock-settled RSUs granted during the nine months ended September 30, 2016 . Cash-settled RSUs are accounted for as liability-based compensation awards and adjusted based on the closing price of Materion’s common stock over the vesting period of three years . The Company granted stock-settled and cash-settled performance-based restricted stock units (PRSUs) to certain employees in the first nine months of 2016 . The weighted-average fair value of the stock-settled PRSUs was $22.77 per share and will be expensed over the vesting period of three years . The liability for cash-settled PRSUs is re-measured at fair value each reporting period, and the expense is recorded accordingly. The final payout to the employees for all PRSUs will be based upon the Company’s return on invested capital and the total return to shareholders over the vesting period relative to a peer group’s performance over the same period. At September 30, 2016 , unearned compensation cost related to the unvested portion of all stock-based awards was approximately $5.9 million , and is expected to be recognized over the remaining vesting period of the respective grants. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures and records financial instruments at fair value. A fair value hierarchy is used for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 — Quoted market prices in active markets for identical assets and liabilities; Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 — Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use. The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 : (Thousands) Total Carrying Value in the Consolidated Balance Sheets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 2016 2015 2016 2015 2016 2015 2016 2015 Financial Assets Deferred compensation investments $ 1,699 $ 2,524 $ 1,699 $ 2,503 $ — $ 21 $ — $ — Foreign currency forward contracts 64 462 — — 64 462 — — Total $ 1,763 $ 2,986 $ 1,699 $ 2,503 $ 64 $ 483 $ — $ — Financial Liabilities Deferred compensation liability $ 1,699 $ 2,524 $ 1,699 $ 2,503 $ — $ 21 $ — $ — Foreign currency forward contracts 560 180 — — 560 180 — — Total $ 2,259 $ 2,704 $ 1,699 $ 2,503 $ 560 $ 201 $ — $ — The Company uses a market approach to value the assets and liabilities for financial instruments in the table above. Outstanding contracts are valued through models that utilize market observable inputs, including both spot and forward prices, for the same underlying currencies and metals. The carrying values of the other working capital items and debt in the Consolidated Balance Sheet approximate fair values as of September 30, 2016 and December 31, 2015. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activity | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activity | Derivative Instruments and Hedging Activity The Company uses derivative contracts to hedge portions of its foreign currency exposures and may also use derivatives to hedge a portion of its precious metal exposures. The objectives and strategies for using derivatives in these areas are as follows: Foreign Currency. The Company sells a portion of its products to overseas customers in their local currencies, primarily the euro and yen. The Company secures foreign currency derivatives, mainly forward contracts and options, to hedge these anticipated sales transactions. The purpose of the hedge program is to protect against the reduction in the dollar value of foreign currency sales from adverse exchange rate movements. Should the dollar strengthen significantly, the decrease in the translated value of the foreign currency sales should be partially offset by gains on the hedge contracts. Depending upon the methods used, hedge contracts may limit the benefits from a weakening U.S. dollar. The use of forward contracts locks in a firm rate and eliminates any downside risk from an adverse rate movement as well as any benefit from a favorable rate movement. The Company may from time to time choose to hedge with options or a tandem of options, known as a collar. These hedging techniques can limit or eliminate the downside risk but can allow for some or all of the benefit from a favorable rate movement to be realized. Unlike a forward contract, a premium is paid for an option; collars, which are a combination of a put and call option, may have a net premium but can be structured to be cash neutral. The Company will primarily hedge with forward contracts due to the relationship between the cash outlay and the level of risk. The use of foreign currency derivative contracts is governed by policies approved by the Audit Committee of the Board of Directors. A team consisting of senior financial managers reviews the estimated exposure levels, as defined by budgets, forecasts, and other internal data, and determines the timing, amounts, and instruments to use to hedge that exposure within the confines of the policy. Management analyzes the effective hedged rates and the actual and projected gains and losses on the hedging transactions against the program objectives, targeted rates, and levels of risk assumed. Hedge contracts are typically layered in at different times for a specified exposure period in order to minimize the impact of rate movements. Precious Metals. The Company maintains the majority of its precious metal production requirements on consignment in order to reduce its working capital investment and the exposure to metal price movements. When a precious metal product is fabricated and ready for shipment to the customer, the metal is purchased out of consignment at the current market price. The price paid by the Company forms the basis for the price charged to the customer. 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 financial institutions that charge the Company a financing fee based upon the current value of the metal on hand. In certain instances, a customer may want to establish the price for the precious metal at the time the sales order is placed rather than at the time of shipment. Setting the sales price at a different date than when the material would be purchased potentially creates an exposure to movements in the market price of the metal. Therefore, in these limited situations, the Company may elect to enter into a forward contract to purchase precious metal. The forward contract allows the Company to purchase metal at a fixed price on a specific future date. The price in the forward contract serves as the basis for the price to be charged to the customer. By doing so, the selling price and purchase price are matched, and the Company's price exposure is reduced. The Company refines precious metal-containing materials for its customers and typically will purchase the refined metal from the customer at current market prices. In limited circumstances, the customer may want to fix the price to be paid at the time of the order as opposed to when the material is refined. The customer may also want to fix the price for a set period of time. The Company may then elect to enter into a hedge contract, either a forward contract or a swap, to fix the price for the estimated quantity of metal to be purchased, thereby reducing the exposure to adverse movements in the price of the metal. 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 typically held for a short duration. A forward contract will be secured at the time of the purchase to fix the price to be used when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned. The Company will only enter into a derivative contract if there is an underlying identified exposure. Contracts are typically held until maturity. The Company does not engage in derivative trading activities and does not use derivatives for speculative purposes. The Company only uses currency hedge contracts that are denominated in the same currency as the underlying exposure and precious metal hedge contracts denominated in the same metal as the underlying exposure. All derivatives are recorded on the balance sheet at fair value. If the derivative is designated and effective as a cash flow hedge, changes in the fair value of the derivative are recognized in other comprehensive income (OCI) until the hedged item is recognized in earnings. The ineffective portion of a derivative’s fair value, if any, is recognized in earnings immediately. If a derivative is not a hedge, changes in the fair value are adjusted through income. The fair values of the outstanding derivatives are recorded on the balance sheet as assets (if the derivatives are in a gain position) or liabilities (if the derivatives are in a loss position). The fair values will also be classified as short-term or long-term depending upon their maturity dates. The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives and balance sheet classification as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (Thousands) Notional Amount Fair Value Notional Amount Fair Value Prepaid expenses Foreign currency forward contracts - yen $ — $ — $ 5,138 $ 60 Foreign currency forward contracts - euro 8,549 64 18,181 402 8,549 64 23,319 462 Other liabilities and accrued items Foreign currency forward contracts - yen 4,320 (461 ) 5,102 (94 ) Foreign currency forward contracts - euro 4,443 (99 ) 10,514 (86 ) 8,763 (560 ) 15,616 (180 ) Total $ 17,312 $ (496 ) $ 38,935 $ 282 All of these contracts were designated and effective as cash flow hedges. No ineffectiveness expense was recorded in the third quarter or first nine months of 2016 or 2015. Changes in the fair value of outstanding cash flow hedges recorded in OCI for the first nine months of 2016 and 2015 totaled a decrease of $1.6 million and an increase of $2.2 million , respectively. The Company expects to relieve substantially the entire balance in OCI as of September 30, 2016 to the Consolidated Statements of Income during the twelve-month period beginning October 1, 2016. Refer to Note I for additional OCI details. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies Materion Brush Inc., one of the Company's wholly-owned subsidiaries, is a defendant from time to time in proceedings where the plaintiffs allege they have contracted chronic beryllium disease (CBD) or related ailments as a result of exposure to beryllium. The Company will record a reserve for CBD or other litigation when a loss from either settlement or verdict is probable and estimable. Claims filed by third-party plaintiffs may be covered by insurance subject to deductibles which vary based on when the exposure occurred. Reserves are recorded for asserted claims only, and defense costs are expensed as incurred. One CBD case that was outstanding at the end of the second quarter of 2016 was settled during the third quarter of 2016. The settlement of this case has been fully reflected in the Company's financial statements and is not material to the Company's consolidated financial statements. One CBD case that had been on appeal was remanded to the trial court and was outstanding as of the end of the third quarter of 2016 . The Company does not expect the resolution of this matter to have a material impact on the consolidated financial statements. The Company has an active environmental compliance program and records reserves for the probable cost of identified environmental remediation projects. The reserves are established based upon analyses conducted by the Company’s engineers and outside consultants and are adjusted from time to time based upon ongoing studies, the difference between actual and estimated costs, and other factors. The reserves may also be affected by rulings and negotiations with regulatory agencies. The undiscounted reserve balance was $6.0 million at September 30, 2016 and $5.7 million at December 31, 2015 . Environmental projects tend to be long term, and the final actual remediation costs may differ from the amounts currently recorded. |
Accounting Policies Basis of Ac
Accounting Policies Basis of Accounting (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation: In management’s opinion, the accompanying consolidated financial statements of Materion Corporation and its subsidiaries (the Company) contain all of the adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported. All adjustments were of a normal and recurring nature. Certain amounts in prior years have been reclassified to conform to the 2016 consolidated financial statement presentation. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2015 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. |
Accounting Policies New Pronoun
Accounting Policies New Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Pronouncements Adopted: In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires companies to present debt issuance costs associated with a debt liability as a deduction from the carrying amount of that debt liability on the balance sheet rather than being capitalized as an asset. The Company adopted this ASU effective January 1, 2016, and applied the new guidance on a retrospective basis, which resulted in a decrease to Intangible assets, Short-term debt, and Long-term debt, at December 31, 2015, of $347 , $8 , and $339 , respectively. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . Inventory within the scope of this update is required to be measured at the lower of its cost or net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective prospectively for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We early adopted this ASU effective January 1, 2016. The adoption did not have a material effect on the consolidated financial statements. New Pronouncements Issued: In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , which impacts several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement, and the tax effects of exercised or vested awards will be treated as discrete items in the reporting period in which they occur. An entity will also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the reporting period. Excess tax benefits will be classified, along with other income tax cash flows, as an operating activity. In regard to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases , which eliminates the off-balance-sheet accounting for leases. The new guidance will require lessees to report their operating leases as both an asset and liability on the balance sheet and disclose key information about leasing arrangements. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount, and timing of revenue and cash flows arising from contracts. This ASU is effective beginning in fiscal year 2018 with a provision for early adoption in 2017. The standard can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Other (Thousands) Performance Alloys and Composites Advanced Materials Other (1) Corporate (2) Subtotal Total Third Quarter 2016 Net sales $ 103,699 $ 107,250 $ 38,670 $ — $ 38,670 $ 249,619 Intersegment sales (3) 47 21,505 — — — 21,552 Value-added sales 87,247 45,960 25,803 (2,009 ) 23,794 157,001 Operating profit (loss) 4,357 8,245 3,432 (5,883 ) (2,451 ) 10,151 Third Quarter 2015 Net sales $ 93,566 $ 113,635 $ 37,142 $ 11 $ 37,153 $ 244,354 Intersegment sales (3) 191 15,316 — — — 15,507 Value-added sales 79,596 44,520 25,671 (948 ) 24,723 148,839 Operating profit (loss) 4,547 6,950 2,273 (2,909 ) (636 ) 10,861 First Nine Months 2016 Net sales $ 292,024 $ 328,927 $ 113,955 $ — $ 113,955 $ 734,906 Intersegment sales (3) 226 54,110 — — — 54,336 Value-added sales 248,799 135,019 75,548 (4,573 ) 70,975 454,793 Operating profit (loss) 6,103 20,748 9,803 (13,194 ) (3,391 ) 23,460 First Nine Months 2015 Net sales $ 304,507 $ 394,922 $ 112,024 $ (220 ) $ 111,804 $ 811,233 Intersegment sales (3) 733 48,830 — — — 49,563 Value-added sales 256,697 142,952 75,438 (1,258 ) 74,180 473,829 Operating profit (loss) 20,677 23,289 4,512 (11,274 ) (6,762 ) 37,204 |
Other-net (Tables)
Other-net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Summary of Other-Net Expense | Other-net (income) expense for the third quarter and first nine months of 2016 and 2015 is summarized as follows: Third Quarter Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Foreign currency exchange/translation loss (gain) $ 336 $ (1,256 ) $ 977 $ (4,569 ) Amortization of intangible assets 1,148 1,256 3,444 3,769 Metal consignment fees 1,665 1,686 4,851 5,554 Net loss (gain) on disposal of fixed assets 94 2 (601 ) 310 Recovery from insurance — — — (3,800 ) Legal recoveries — (500 ) — (1,825 ) Other items (53 ) 402 326 29 Total $ 3,190 $ 1,590 $ 8,997 $ (532 ) |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted EPS: Third Quarter Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands, except per share amounts) 2016 2015 2016 2015 Numerator for basic and diluted EPS: Net income $ 8,045 $ 7,392 $ 18,962 $ 25,443 Denominator: Denominator for basic EPS: Weighted-average shares outstanding 19,957 20,087 19,996 20,128 Effect of dilutive securities: Stock appreciation rights 70 123 66 174 Restricted stock units 82 113 86 103 Performance-based restricted stock units 83 60 61 53 Diluted potential common shares 235 296 213 330 Denominator for diluted EPS: Adjusted weighted-average shares outstanding 20,192 20,383 20,209 20,458 Basic EPS $ 0.40 $ 0.37 $ 0.95 $ 1.26 Diluted EPS $ 0.40 $ 0.36 $ 0.94 $ 1.24 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories on the Consolidated Balance Sheets are summarized as follows: Sept. 30, Dec. 31, (Thousands) 2016 2015 Raw materials and supplies $ 35,792 $ 37,463 Work in process 176,763 180,458 Finished goods 41,896 38,135 Subtotal $ 254,451 $ 256,056 Less: LIFO reserve balance 44,238 44,236 Inventories $ 210,213 $ 211,820 |
Pensions and Other Post-emplo25
Pensions and Other Post-employment Benefits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | The following is a summary of the net periodic benefit cost for the third quarter and first nine months of 2016 and 2015 for the domestic pension plans (which include the defined benefit pension plan and the supplemental retirement plans) and the domestic retiree medical plan. Pension Benefits Other Benefits Third Quarter Ended Third Quarter Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 1,946 $ 2,231 $ 26 $ 29 Interest cost 2,595 2,500 140 139 Expected return on plan assets (3,488 ) (3,354 ) — — Amortization of prior service benefit (115 ) (113 ) (374 ) (374 ) Amortization of net loss 1,431 1,820 — — Net periodic benefit cost (benefit) $ 2,369 $ 3,084 $ (208 ) $ (206 ) Pension Benefits Other Benefits Nine Months Ended Nine Months Ended Sept. 30, Oct. 2, Sept. 30, Oct. 2, (Thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 5,838 $ 6,692 $ 77 $ 87 Interest cost 7,785 7,500 422 415 Expected return on plan assets (10,464 ) (10,062 ) — — Amortization of prior service benefit (345 ) (337 ) (1,122 ) (1,122 ) Amortization of net loss 4,292 5,459 — — Net periodic benefit cost (benefit) $ 7,106 $ 9,252 $ (623 ) $ (620 ) |
Accumulated Other Comprehensi26
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in the components of accumulated other comprehensive income, including the amounts reclassified, for the third quarter and first nine months of 2016 and 2015 are as follows: (Thousands) Gains and Losses on Cash Flow Hedges Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at July 1, 2016 $ 958 $ (74,546 ) $ (3,037 ) $ (76,625 ) Other comprehensive income (loss) before reclassifications (126 ) — 467 341 Amounts reclassified from accumulated other comprehensive income 336 1,015 — 1,351 Net current period other comprehensive income before tax 210 1,015 467 1,692 Deferred taxes on current period activity 78 342 — 420 Net current period other comprehensive income after tax 132 673 467 1,272 Balance at September 30, 2016 $ 1,090 $ (73,873 ) $ (2,570 ) $ (75,353 ) Balance at July 3, 2015 $ 2,977 $ (79,858 ) $ (5,407 ) $ (82,288 ) Other comprehensive income (loss) before reclassifications (447 ) — 359 (88 ) Amounts reclassified from accumulated other comprehensive income (1,423 ) 1,396 — (27 ) Net current period other comprehensive income (loss) before tax (1,870 ) 1,396 359 (115 ) Deferred taxes on current period activity (693 ) 495 — (198 ) Net current period other comprehensive income (loss) after tax (1,177 ) 901 359 83 Balance at October 2, 2015 $ 1,800 $ (78,957 ) $ (5,048 ) $ (82,205 ) Balance at December 31, 2015 $ 1,579 $ (76,796 ) $ (5,488 ) $ (80,705 ) Other comprehensive income (loss) before reclassifications (1,571 ) — 2,918 1,347 Amounts reclassified from accumulated other comprehensive income 793 3,045 — 3,838 Net current period other comprehensive income (loss) before tax (778 ) 3,045 2,918 5,185 Deferred taxes on current period activity (289 ) 122 — (167 ) Net current period other comprehensive income (loss) after tax (489 ) 2,923 2,918 5,352 Balance at September 30, 2016 $ 1,090 $ (73,873 ) $ (2,570 ) $ (75,353 ) Balance at December 31, 2014 $ 3,578 $ (81,662 ) $ (4,153 ) $ (82,237 ) Other comprehensive income (loss) before reclassifications 2,198 14 (895 ) 1,317 Amounts reclassified from accumulated other comprehensive income (5,021 ) 4,186 — (835 ) Net current period other comprehensive income (loss) before tax (2,823 ) 4,200 (895 ) 482 Deferred taxes on current period activity (1,045 ) 1,495 — 450 Net current period other comprehensive income (loss) after tax (1,778 ) 2,705 (895 ) 32 Balance at October 2, 2015 $ 1,800 $ (78,957 ) $ (5,048 ) $ (82,205 ) |
Stock-based Compensation Expe27
Stock-based Compensation Expense Stock-based Compensation Expense Tables (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclsure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Of Share Based Payment Award SARs Valuation Assumptions [Table Text Block] | The Company estimated the fair value of the SARs using the following assumptions in the Black-Scholes model: Risk-free interest rate 1.25 % Dividend yield 1.4 % Volatility 38.0 % Expected term (in years) 5.7 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Information and Derivative Financial Instruments | The following table summarizes the financial instruments measured at fair value in the Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 : (Thousands) Total Carrying Value in the Consolidated Balance Sheets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 2016 2015 2016 2015 2016 2015 2016 2015 Financial Assets Deferred compensation investments $ 1,699 $ 2,524 $ 1,699 $ 2,503 $ — $ 21 $ — $ — Foreign currency forward contracts 64 462 — — 64 462 — — Total $ 1,763 $ 2,986 $ 1,699 $ 2,503 $ 64 $ 483 $ — $ — Financial Liabilities Deferred compensation liability $ 1,699 $ 2,524 $ 1,699 $ 2,503 $ — $ 21 $ — $ — Foreign currency forward contracts 560 180 — — 560 180 — — Total $ 2,259 $ 2,704 $ 1,699 $ 2,503 $ 560 $ 201 $ — $ — |
Derivative Instruments and He29
Derivative Instruments and Hedging Activity Derivative Instruments and Hedging Activity Tables (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives and balance sheet classification as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (Thousands) Notional Amount Fair Value Notional Amount Fair Value Prepaid expenses Foreign currency forward contracts - yen $ — $ — $ 5,138 $ 60 Foreign currency forward contracts - euro 8,549 64 18,181 402 8,549 64 23,319 462 Other liabilities and accrued items Foreign currency forward contracts - yen 4,320 (461 ) 5,102 (94 ) Foreign currency forward contracts - euro 4,443 (99 ) 10,514 (86 ) 8,763 (560 ) 15,616 (180 ) Total $ 17,312 $ (496 ) $ 38,935 $ 282 |
Accounting Policies New Prounce
Accounting Policies New Prouncements Adopted (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Intangible assets | $ 10,706 | $ 13,389 |
Short-term debt | $ 12,803 | 8,990 |
Adjustments for New Accounting Pronouncement [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Intangible assets | 347 | |
Short-term debt | 8 | |
Long-term debt | $ 339 |
Segment Reporting (Detail)
Segment Reporting (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 249,619 | $ 244,354 | $ 734,906 | $ 811,233 |
Intersegment sales | 21,552 | 15,507 | 54,336 | 49,563 |
Value-added sales | 157,001 | 148,839 | 454,793 | 473,829 |
Operating profit (loss) | 10,151 | 10,861 | 23,460 | 37,204 |
Performance Alloys and Composites | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 103,699 | 93,566 | 292,024 | 304,507 |
Intersegment sales | 47 | 191 | 226 | 733 |
Value-added sales | 87,247 | 79,596 | 248,799 | 256,697 |
Operating profit (loss) | 4,357 | 4,547 | 6,103 | 20,677 |
Advanced Materials | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 107,250 | 113,635 | 328,927 | 394,922 |
Intersegment sales | 21,505 | 15,316 | 54,110 | 48,830 |
Value-added sales | 45,960 | 44,520 | 135,019 | 142,952 |
Operating profit (loss) | 8,245 | 6,950 | 20,748 | 23,289 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 38,670 | 37,153 | 113,955 | 111,804 |
Intersegment sales | 0 | 0 | 0 | 0 |
Value-added sales | 23,794 | 24,723 | 70,975 | 74,180 |
Operating profit (loss) | (2,451) | (636) | (3,391) | (6,762) |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 38,670 | 37,142 | 113,955 | 112,024 |
Intersegment sales | 0 | 0 | 0 | 0 |
Value-added sales | 25,803 | 25,671 | 75,548 | 75,438 |
Operating profit (loss) | 3,432 | 2,273 | 9,803 | 4,512 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 11 | 0 | (220) |
Intersegment sales | 0 | 0 | 0 | 0 |
Value-added sales | (2,009) | (948) | (4,573) | (1,258) |
Operating profit (loss) | $ (5,883) | $ (2,909) | $ (13,194) | $ (11,274) |
Other-net Other-net (Detail)
Other-net Other-net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency exchange/translation loss (gain) | $ 336 | $ (1,256) | $ 977 | $ (4,569) |
Amortization of intangible assets | 1,148 | 1,256 | 3,444 | 3,769 |
Other Noninterest Expense | 1,665 | 1,686 | 4,851 | 5,554 |
Net loss (gain) on disposal of fixed assets | 94 | 2 | (601) | 310 |
Recovery from insurance | 0 | 0 | 0 | (3,800) |
Legal recoveries | 0 | (500) | 0 | (1,825) |
Other Net | (53) | 402 | 326 | 29 |
Total | $ 3,190 | $ 1,590 | $ 8,997 | $ (532) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,616 | $ 2,883 | $ 3,081 | $ 9,868 |
Effective tax rate | 16.70% | 28.10% | 14.00% | 27.90% |
Net tax benefit resulting from discrete items | $ 1,000 |
Earnings Per Share Earnings P34
Earnings Per Share Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Numerator For Basic And Diluted EPS: | ||||
Net income | $ 8,045 | $ 7,392 | $ 18,962 | $ 25,443 |
Denominator for basic EPS: | ||||
Weighted-average shares outstanding | 19,957 | 20,087 | 19,996 | 20,128 |
Effect of dilutive securities: | ||||
Diluted potential common shares (in shares) | 235 | 296 | 213 | 330 |
Denominator for diluted EPS: | ||||
Adjusted weighted-average shares outstanding | 20,192 | 20,383 | 20,209 | 20,458 |
Basic (in usd per share) | $ 0.40 | $ 0.37 | $ 0.95 | $ 1.26 |
Diluted EPS (in usd per share) | $ 0.40 | $ 0.36 | $ 0.94 | $ 1.24 |
Performance Shares | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 83 | 60 | 61 | 53 |
Restricted Stock Units (RSUs) | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 82 | 113 | 86 | 103 |
Stock Appreciation Rights (SARs) | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 70 | 123 | 66 | 174 |
Earnings Per Share Earnings P35
Earnings Per Share Earnings Per Share (Details 1) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Stock Appreciation Rights (SARs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock appreciation rights excluded from diluted EPS calculation | 982,588 | 487,248 | 993,418 | 379,676 |
Depreciation and Amortization (
Depreciation and Amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Reduction in Unearned Income | $ 42,515 | $ 45,953 | |
Depreciation Expense Offset By Government Reimbursement | (34,379) | $ (28,462) | |
Depreciation Expense Reimbursement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Reimbursement Revenue | 63,500 | ||
Reduction in Unearned Income | 3,400 | 4,700 | |
Depreciation Expense Offset By Government Reimbursement | $ (3,400) | $ (4,700) |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Principally average cost: | ||
Raw materials and supplies | $ 35,792 | $ 37,463 |
Work in process | 176,763 | 180,458 |
Finished goods | 41,896 | 38,135 |
Inventory, Gross | 254,451 | 256,056 |
Inventory, LIFO Reserve | 44,238 | 44,236 |
Inventories | $ 210,213 | $ 211,820 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Inventory Disclosure [Abstract] | ||||
LIFO liquidation benefit | $ 0 | $ 500,000 | $ 3,200,000 | $ 2,400,000 |
Pensions and Other Post-emplo39
Pensions and Other Post-employment Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Pension Benefits [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | $ 1,946 | $ 2,231 | $ 5,838 | $ 6,692 |
Interest cost | 2,595 | 2,500 | 7,785 | 7,500 |
Expected return on plan assets | (3,488) | (3,354) | (10,464) | (10,062) |
Amortization of prior service benefit | (115) | (113) | (345) | (337) |
Amortization of net loss | 1,431 | 1,820 | 4,292 | 5,459 |
Net periodic benefit cost (benefit) | 2,369 | 3,084 | 7,106 | 9,252 |
Other Benefits [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | 26 | 29 | 77 | 87 |
Interest cost | 140 | 139 | 422 | 415 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service benefit | (374) | (374) | (1,122) | (1,122) |
Amortization of net loss | 0 | 0 | 0 | 0 |
Net periodic benefit cost (benefit) | $ (208) | $ (206) | $ (623) | $ (620) |
Pensions and Other Post-emplo40
Pensions and Other Post-employment Benefits - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Oct. 02, 2015 | |
Other Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Domestic defined benefit pension plan | $ 12,000 | $ 8,000 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income - (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Jul. 01, 2016 | Dec. 31, 2015 | Jul. 03, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Rollward] | ||||||||
Accumulated other comprehensive loss | $ (75,353) | $ (82,205) | $ (75,353) | $ (82,205) | $ (76,625) | $ (80,705) | $ (82,288) | $ (82,237) |
Activity | ||||||||
Other comprehensive income (loss) before reclassifications | 341 | (88) | 1,347 | 1,317 | ||||
Amounts reclassified from accumulated other comprehensive income | 1,351 | (27) | 3,838 | (835) | ||||
Net current period other comprehensive income (loss) before tax | 1,692 | (115) | 5,185 | 482 | ||||
Deferred taxes on current period activity | 420 | (198) | (167) | 450 | ||||
Net change in other comprehensive income | 1,272 | 83 | 5,352 | 32 | ||||
Pension and Post Employment Benefits [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Rollward] | ||||||||
Accumulated other comprehensive loss | (73,873) | (78,957) | (73,873) | (78,957) | (74,546) | (76,796) | (79,858) | (81,662) |
Activity | ||||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 14 | ||||
Amounts reclassified from accumulated other comprehensive income | 1,015 | 1,396 | 3,045 | 4,186 | ||||
Net current period other comprehensive income (loss) before tax | 1,015 | 1,396 | 3,045 | 4,200 | ||||
Deferred taxes on current period activity | 342 | 495 | 122 | 1,495 | ||||
Net change in other comprehensive income | 673 | 901 | 2,923 | 2,705 | ||||
Foreign Currency Translation [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Rollward] | ||||||||
Accumulated other comprehensive loss | (2,570) | (5,048) | (2,570) | (5,048) | (3,037) | (5,488) | (5,407) | (4,153) |
Activity | ||||||||
Other comprehensive income (loss) before reclassifications | 467 | 359 | 2,918 | (895) | ||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 | ||||
Net current period other comprehensive income (loss) before tax | 467 | 359 | 2,918 | (895) | ||||
Deferred taxes on current period activity | 0 | 0 | 0 | 0 | ||||
Net change in other comprehensive income | 467 | 359 | 2,918 | (895) | ||||
Forward Contract | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Rollward] | ||||||||
Accumulated other comprehensive loss | 1,090 | 1,800 | 1,090 | 1,800 | $ 958 | $ 1,579 | $ 2,977 | $ 3,578 |
Activity | ||||||||
Other comprehensive income (loss) before reclassifications | (126) | (447) | (1,571) | 2,198 | ||||
Amounts reclassified from accumulated other comprehensive income | 336 | (1,423) | 793 | (5,021) | ||||
Net current period other comprehensive income (loss) before tax | 210 | (1,870) | (778) | (2,823) | ||||
Deferred taxes on current period activity | 78 | (693) | (289) | (1,045) | ||||
Net change in other comprehensive income | $ 132 | $ (1,177) | $ (489) | $ (1,778) |
Stock-based Compensation Expe42
Stock-based Compensation Expense - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2.1 | $ 0.5 | $ 4.4 | $ 5.9 |
Risk-free interest rate | 1.25% | |||
Dividend yield | 1.40% | |||
Volatility Rate | 38.00% | |||
Expected term (in years) | 5 years 8 months | |||
Unearned Compensation | $ 5.9 | $ 5.9 | ||
Stock Settled Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted in period | 69,212 | |||
Grant date fair value per unit (in usd per share) | $ 25.96 | |||
Cash Settled Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted in period | 28,180 | |||
Stock Appreciation Rights (SARs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted in period | 221,065 | |||
Weighted average exercise price on SARs granted in period | $ 25.19 | |||
Grant date fair value per unit (in usd per share) | 8.07 | |||
Stock Settled Performance Based Restricted Stock Units (PRSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value per unit (in usd per share) | $ 22.77 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years |
Fair Value of Financial Instr43
Fair Value of Financial Instruments - Summary of Fair Value Information and Derivative Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Financial Assets | ||
Deferred Compensation Investment | $ 1,699 | $ 2,524 |
Foreign Currency Contract | 64 | 462 |
Assets Fair Value Disclosure | 1,763 | 2,986 |
Financial Liabilities | ||
Deferred Compensation Liability | 1,699 | 2,524 |
Foreign Currency Contract | 560 | 180 |
Liabilities Fair Value Disclosure | 2,259 | 2,704 |
Fair Value, Inputs, Level 1 [Member] | ||
Financial Assets | ||
Deferred Compensation Investment | 1,699 | 2,503 |
Foreign Currency Contract | 0 | 0 |
Assets Fair Value Disclosure | 1,699 | 2,503 |
Financial Liabilities | ||
Deferred Compensation Liability | 1,699 | 2,503 |
Foreign Currency Contract | 0 | 0 |
Liabilities Fair Value Disclosure | 1,699 | 2,503 |
Fair Value, Inputs, Level 2 [Member] | ||
Financial Assets | ||
Deferred Compensation Investment | 0 | 21 |
Foreign Currency Contract | 64 | 462 |
Assets Fair Value Disclosure | 64 | 483 |
Financial Liabilities | ||
Deferred Compensation Liability | 0 | 21 |
Foreign Currency Contract | 560 | 180 |
Liabilities Fair Value Disclosure | 560 | 201 |
Fair Value, Inputs, Level 3 [Member] | ||
Financial Assets | ||
Deferred Compensation Investment | 0 | 0 |
Foreign Currency Contract | 0 | 0 |
Assets Fair Value Disclosure | 0 | 0 |
Financial Liabilities | ||
Deferred Compensation Liability | 0 | 0 |
Foreign Currency Contract | 0 | 0 |
Liabilities Fair Value Disclosure | $ 0 | $ 0 |
Derivative Instruments and He44
Derivative Instruments and Hedging Activity - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Notional Amount | $ 17,312,000 | $ 38,935,000 | |
Derivative, Fair Value, Net | (496,000) | 282,000 | |
Ineffective expense | 0 | $ 0 | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | (1,600,000) | $ 2,200,000 | |
Prepaid Expenses and Other Current Assets [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Asset, Notional Amount | 8,549,000 | 23,319,000 | |
Derivative Asset, Fair Value, Gross Asset | 64,000 | 462,000 | |
Prepaid Expenses and Other Current Assets [Member] | Japan, Yen | Forward Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Asset, Notional Amount | 0 | 5,138,000 | |
Derivative Asset, Fair Value, Gross Asset | 0 | 60,000 | |
Prepaid Expenses and Other Current Assets [Member] | Euro Member Countries, Euro | Forward Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Asset, Notional Amount | 8,549,000 | 18,181,000 | |
Derivative Asset, Fair Value, Gross Asset | 64,000 | 402,000 | |
Other Current Liabilities [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Liability, Notional Amount | 8,763,000 | 15,616,000 | |
Derivative Liability, Fair Value, Gross Liability | (560,000) | (180,000) | |
Other Current Liabilities [Member] | Japan, Yen | Forward Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Liability, Notional Amount | 4,320,000 | 5,102,000 | |
Derivative Liability, Fair Value, Gross Liability | (461,000) | (94,000) | |
Other Current Liabilities [Member] | Euro Member Countries, Euro | Forward Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Liability, Notional Amount | 4,443,000 | 10,514,000 | |
Derivative Liability, Fair Value, Gross Liability | $ (99,000) | $ (86,000) |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)claim | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | ||
Number of CBD cases outstanding | 1 | |
Accrual for Environmental Loss Contingencies, Significant Assumptions | The reserves are established based upon analyses conducted by the Company’s engineers and outside consultants and are adjusted from time to time based upon ongoing studies, the difference between actual and estimated costs, and other factors. The reserves may also be affected by rulings and negotiations with regulatory agencies. | |
Number of CBD cases on appeal | 1 | |
Undiscounted reserve balance | $ | $ 6 | $ 5.7 |