Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2022 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2022 |
Document Transition Report | false |
Entity File Number | 001-15885 |
Entity Registrant Name | MATERION CORPORATION |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-1919973 |
Entity Address, Address Line One | 6070 Parkland Blvd |
Entity Address, City or Town | Mayfield Heights |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44124 |
City Area Code | 216 |
Local Phone Number | 486-4200 |
Title of 12(b) Security | Common Stock, no par value |
Trading Symbol | MTRN |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 20,528,138 |
Entity Central Index Key | 0001104657 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 428,191 | $ 388,028 | $ 1,322,531 | $ 1,113,413 |
Cost of sales | 345,448 | 313,715 | 1,077,070 | 902,723 |
Gross margin | 82,743 | 74,313 | 245,461 | 210,690 |
Selling, general, and administrative expense | 38,958 | 43,195 | 122,666 | 118,031 |
Research and development expense | 7,430 | 6,354 | 22,096 | 19,164 |
Restructuring expense (income) | 484 | 0 | 1,560 | (378) |
Other—net | 6,774 | 3,604 | 18,575 | 12,272 |
Operating profit | 29,097 | 21,160 | 80,564 | 61,601 |
Other non-operating (income)—net | (1,175) | (1,279) | (3,512) | (3,832) |
Interest expense—net | 5,888 | 861 | 14,325 | 2,480 |
Income before income taxes | 24,384 | 21,578 | 69,751 | 62,953 |
Income tax expense | 4,432 | 3,422 | 12,525 | 10,162 |
Net income | $ 19,952 | $ 18,156 | $ 57,226 | $ 52,791 |
Basic earnings per share: | ||||
Net income per share of common stock (in dollars per share) | $ 0.97 | $ 0.89 | $ 2.79 | $ 2.59 |
Diluted earnings per share: | ||||
Net income per share of common stock (in dollars per share) | $ 0.96 | $ 0.88 | $ 2.76 | $ 2.56 |
Weighted-average number of shares of common stock outstanding: | ||||
Basic (in shares) | 20,526 | 20,439 | 20,502 | 20,414 |
Diluted (in shares) | 20,780 | 20,657 | 20,756 | 20,659 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 19,952 | $ 18,156 | $ 57,226 | $ 52,791 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (6,094) | (2,029) | (14,484) | (7,693) |
Derivative and hedging activity, net of tax | 4,125 | 439 | 8,289 | 1,411 |
Pension and post-employment benefit adjustment, net of tax | 8 | 121 | (216) | 368 |
Other comprehensive loss | (1,961) | (1,469) | (6,411) | (5,914) |
Comprehensive income | $ 17,991 | $ 16,687 | $ 50,815 | $ 46,877 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 20,682 | $ 14,462 |
Accounts receivable, net | 238,975 | 223,553 |
Inventories, net | 420,299 | 361,115 |
Prepaid and other current assets | 29,708 | 28,122 |
Total current assets | 709,664 | 627,252 |
Deferred income taxes | 4,701 | 5,431 |
Property, plant, and equipment | 1,173,073 | 1,132,223 |
Less allowances for depreciation, depletion, and amortization | (746,966) | (723,248) |
Property, plant, and equipment, net | 426,107 | 408,975 |
Operating lease, right-of-use assets | 65,716 | 63,096 |
Intangible assets, net | 145,089 | 156,736 |
Other assets | 32,475 | 27,369 |
Goodwill | 318,571 | 318,620 |
Total Assets | 1,702,323 | 1,607,479 |
Current liabilities | ||
Short-term debt | 19,747 | 15,359 |
Accounts payable | 96,482 | 86,243 |
Salaries and wages | 29,974 | 37,544 |
Other liabilities and accrued items | 47,949 | 53,388 |
Income taxes | 1,542 | 4,205 |
Unearned revenue | 6,596 | 7,770 |
Total current liabilities | 202,290 | 204,509 |
Other long-term liabilities | 13,991 | 14,954 |
Operating lease liabilities | 60,248 | 57,099 |
Finance lease liabilities | 13,009 | 16,327 |
Retirement and post-employment benefits | 29,421 | 33,394 |
Unearned income | 110,723 | 97,962 |
Long-term income taxes | 1,257 | 1,190 |
Deferred income taxes | 30,427 | 27,216 |
Long-term debt | 474,280 | 434,388 |
Shareholders’ equity | ||
Serial preferred stock (no par value; 5,000 authorized shares, none issued) | 0 | 0 |
Common stock (no par value; 60,000 authorized shares, issued shares of 27,148 at both September 30th and December 31st) | 284,024 | 271,978 |
Retained earnings | 743,283 | 693,756 |
Common stock in treasury | (219,219) | (209,920) |
Accumulated other comprehensive loss | (46,580) | (40,169) |
Other equity | 5,169 | 4,795 |
Total shareholders' equity | 766,677 | 720,440 |
Total Liabilities and Shareholders’ Equity | $ 1,702,323 | $ 1,607,479 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Serial preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Serial preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares, issued (in shares) | 27,148,000 | 27,148,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 57,226 | $ 52,791 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, and amortization | 39,223 | 32,478 |
Amortization of deferred financing costs in interest expense | 1,310 | 546 |
Stock-based compensation expense (non-cash) | 5,997 | 4,924 |
Deferred income tax expense (benefit) | 1,825 | (263) |
Changes in assets and liabilities: | ||
Accounts receivable | (20,964) | (26,041) |
Inventory | (64,832) | (62,353) |
Prepaid and other current assets | (3,019) | (7,020) |
Accounts payable and accrued expenses | (1,785) | 35,314 |
Unearned revenue | (2,191) | 650 |
Interest and taxes payable | (1,741) | (1,504) |
Unearned income due to customer prepayments | 17,501 | 9,022 |
Other-net | 5,654 | 1,974 |
Net cash provided by operating activities | 34,204 | 40,518 |
Cash flows from investing activities: | ||
Payments for purchase of property, plant, and equipment | (54,236) | (77,640) |
Proceeds from sale of property, plant, and equipment | 827 | 686 |
Payments for acquisition | (2,971) | 0 |
Net cash used in investing activities | (56,380) | (76,954) |
Cash flows from financing activities: | ||
Proceeds from borrowings under revolving credit agreement, net | 49,092 | 43,010 |
Proceeds from issuance of debt | 6,643 | 0 |
Repayment of long-term debt | (11,761) | (1,803) |
Principal payments under finance lease obligations | (1,985) | (2,152) |
Cash dividends paid | (7,584) | (7,243) |
Payments of withholding taxes for stock-based compensation awards | (3,056) | (3,033) |
Net cash provided by financing activities | 31,349 | 28,779 |
Effects of exchange rate changes | (2,953) | (212) |
Net change in cash and cash equivalents | 6,220 | (7,869) |
Cash and cash equivalents at beginning of period | 14,462 | 25,878 |
Cash and cash equivalents at end of period | $ 20,682 | $ 18,009 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares | Common Shares Held in Treasury | Retained Earnings | Accumulated Other Comprehensive Loss | Other Equity |
Common stock, beginning balance (in shares) at Dec. 31, 2020 | 20,328 | |||||
Treasury stock, beginning balance (in shares) at Dec. 31, 2020 | (6,820) | |||||
Beginning balances at Dec. 31, 2020 | $ 655,630 | $ 258,642 | $ (199,187) | $ 631,058 | $ (38,639) | $ 3,756 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 52,791 | 52,791 | ||||
Net current period other comprehensive (loss) income after tax | (5,914) | (5,914) | ||||
Cash dividends declared | (7,243) | (7,243) | ||||
Stock-based compensation activity (in shares) | 152 | 152 | ||||
Stock-based compensation activity | 4,924 | $ 10,932 | $ (5,929) | (79) | ||
Payments of withholding taxes for stock-based compensation awards (in shares) | (45) | (45) | ||||
Payments of withholding taxes for stock-based compensation awards | (3,033) | $ (3,033) | ||||
Directors' deferred compensation (in shares) | 4 | 4 | ||||
Directors’ deferred compensation | 273 | $ 142 | $ (803) | 934 | ||
Common stock, ending balance (in shares) at Oct. 01, 2021 | 20,439 | |||||
Treasury stock, ending balance (in shares) at Oct. 01, 2021 | (6,709) | |||||
Ending balances at Oct. 01, 2021 | $ 697,428 | $ 269,716 | $ (208,952) | 676,527 | (44,553) | 4,690 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared (in dollars per share) | $ 0.355 | |||||
Common stock, beginning balance (in shares) at Jul. 02, 2021 | 20,438 | |||||
Treasury stock, beginning balance (in shares) at Jul. 02, 2021 | (6,710) | |||||
Beginning balances at Jul. 02, 2021 | $ 681,701 | $ 268,205 | $ (208,854) | 660,851 | (43,084) | 4,583 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 18,156 | 18,156 | ||||
Net current period other comprehensive (loss) income after tax | (1,469) | (1,469) | ||||
Cash dividends declared | (2,452) | (2,452) | ||||
Stock-based compensation activity (in shares) | 0 | 0 | ||||
Stock-based compensation activity | 1,412 | $ 1,458 | $ (18) | (28) | ||
Payments of withholding taxes for stock-based compensation awards (in shares) | 0 | 0 | ||||
Payments of withholding taxes for stock-based compensation awards | (12) | $ (12) | ||||
Directors' deferred compensation (in shares) | 1 | 1 | ||||
Directors’ deferred compensation | 92 | $ 53 | $ (68) | 107 | ||
Common stock, ending balance (in shares) at Oct. 01, 2021 | 20,439 | |||||
Treasury stock, ending balance (in shares) at Oct. 01, 2021 | (6,709) | |||||
Ending balances at Oct. 01, 2021 | $ 697,428 | $ 269,716 | $ (208,952) | 676,527 | (44,553) | 4,690 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared (in dollars per share) | $ 0.120 | |||||
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 20,448 | |||||
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | (6,700) | |||||
Beginning balances at Dec. 31, 2021 | $ 720,440 | $ 271,978 | $ (209,920) | 693,756 | (40,169) | 4,795 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 57,226 | 57,226 | ||||
Net current period other comprehensive (loss) income after tax | (6,411) | (6,411) | ||||
Cash dividends declared | (7,584) | (7,584) | ||||
Stock-based compensation activity (in shares) | 115 | 115 | ||||
Stock-based compensation activity | 5,882 | $ 11,938 | $ (5,941) | (115) | ||
Payments of withholding taxes for stock-based compensation awards (in shares) | (37) | (37) | ||||
Payments of withholding taxes for stock-based compensation awards | (3,056) | $ (3,056) | ||||
Directors' deferred compensation (in shares) | 2 | 2 | ||||
Directors’ deferred compensation | 180 | $ 108 | $ (302) | 374 | ||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 20,528 | |||||
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | (6,620) | |||||
Ending balances at Sep. 30, 2022 | $ 766,677 | $ 284,024 | $ (219,219) | 743,283 | (46,580) | 5,169 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared (in dollars per share) | $ 0.370 | |||||
Common stock, beginning balance (in shares) at Jul. 01, 2022 | 20,523 | |||||
Treasury stock, beginning balance (in shares) at Jul. 01, 2022 | (6,625) | |||||
Beginning balances at Jul. 01, 2022 | $ 749,154 | $ 281,296 | $ (218,356) | 725,918 | (44,619) | 4,915 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 19,952 | 19,952 | ||||
Net current period other comprehensive (loss) income after tax | (1,961) | (1,961) | ||||
Cash dividends declared | (2,557) | (2,557) | ||||
Stock-based compensation activity (in shares) | 6 | 6 | ||||
Stock-based compensation activity | 2,273 | $ 2,695 | $ (392) | (30) | ||
Payments of withholding taxes for stock-based compensation awards (in shares) | (2) | (2) | ||||
Payments of withholding taxes for stock-based compensation awards | (244) | $ (244) | ||||
Directors’ deferred compensation | 60 | $ 33 | $ (227) | 254 | ||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 20,528 | |||||
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | (6,620) | |||||
Ending balances at Sep. 30, 2022 | $ 766,677 | $ 284,024 | $ (219,219) | $ 743,283 | $ (46,580) | $ 5,169 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared (in dollars per share) | $ 0.125 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.125 | $ 0.120 | $ 0.370 | $ 0.355 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Basis of Presentation: The accompanying consolidated financial statements of Materion Corporation and its subsidiaries (referred to herein as the Company, our, we, or us) 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. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's 2021 Annual Report on Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Business Combinations: The Company records assets acquired and liabilities assumed at the date of acquisition at their respective fair values. Any intangible assets acquired in a business combination are recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The amounts reflected in Note B of the consolidated financial statements are the results of a preliminary purchase price allocation and will be updated upon completion of the final valuation. The Company is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined. New Pronouncements Adopted: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company has applied this guidance in accounting for the interest rate swap discussed in Note N. Any additional reference rate reform impacts will be accounted for in accordance with ASU 2020-04. New Accounting Guidance Issued and Not Yet Adopted: In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) . ASU 2021-10 is intended to increase transparency related to governmental assistance by requiring entities to disclose the types of government assistance, the entity's accounting for government assistance, and the effect of government assistance on an entity's financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is in the process of evaluating the impact of the guidance on its annual disclosures, but do not expect material impact to our disclosures at this time. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On November 1, 2021, the Company acquired the industry-leading electronic materials business of H.C. Starck Group GmbH (HCS-Electronic Materials) for a cash purchase price of approximately $398.9 million, on a cash-free, debt-free basis, subject to a customary purchase price adjustment mechanism. During the nine months ended September 30, 2022, acquisition-related inventory step-up expense was $7.5 million and classified in Cost of Sales and transaction and integration costs were $3.3 million and classified in Selling, General and Administrative expenses in the accompanying consolidated statements of income. The Company financed the purchase price for the HCS-Electronic Materials acquisition with a new $300 million five-year term loan pursuant to a delayed draw term loan facility executed in October 2021 and $103 million of borrowings under its amended revolving credit facility. The maturity date on the revolving credit facility was also extended to October 2026. The interest rate for the term loan is based on LIBOR plus a tiered credit spread that is indexed to the Company's quarterly leverage ratio. This acquired business operates within the Performance Materials and Electronic Materials segments, and the results of operations are included as of the date of acquisition. The combination of Materion and HCS-Electronic Materials enhances the Company's position as the leading supplier to the high growth semiconductor industry. The fair value estimates of the assets acquired are subject to adjustment during the measurement period (up to one year from the HCS-Electronic Materials acquisition date). The primary areas of accounting for the HCS-Electronic Materials Acquisition that are not yet finalized relate to the fair value of contingencies, income tax accruals, and the impact on residual goodwill. The fair values of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, we will evaluate any additional information prior to finalization of the fair value. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the HCS-Electronic Materials acquisition date that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings. During the period subsequent to the HCS-Electronic Materials acquisition, we made certain measurement period adjustments to the acquired assets and liabilities assumed due to clarification of information utilized to determine fair value during the measurement period. Additionally, we paid a working capital true-up of approximately $3.0 million during the second quarter of 2022, which increased the total purchase price. The preliminary purchase price allocation for the acquisition including these measurement period adjustments is as follows: (Thousands) Initial Allocation of Consideration Measurement Period Adjustments Updated Allocation Assets: Cash and cash equivalents $ 3,685 $ — $ 3,685 Accounts receivable 28,352 (132) 28,220 Inventories 70,681 — 70,681 Prepaid and other current assets 660 (355) 305 Property, plant, and equipment 44,681 355 45,036 Operating lease, right-of-use assets 6,120 — 6,120 Intangible assets 107,800 — 107,800 Other long-term assets 4,528 — 4,528 Goodwill 178,181 4,010 182,191 Total assets acquired $ 444,688 $ 3,878 $ 448,566 Liabilities: Accounts payable $ 12,139 $ — $ 12,139 Salaries and wages 2,516 625 3,141 Other liabilities and accrued items 28 — 28 Income taxes 2,183 79 2,262 Other long-term liabilities 5,543 215 5,758 Operating lease liabilities 6,042 — 6,042 Deferred income taxes 20,300 — 20,300 Total liabilities assumed $ 48,751 $ 919 $ 49,670 Net assets acquired $ 395,937 $ 2,959 $ 398,896 Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The Company engaged specialists to assist in the valuation of inventories, property, plant, and equipment, and intangible assets. In determining the fair value of the amounts above, inventory is fair valued based on the comparative sales method for work in process and finished goods at the selling price less cost to dispose and remaining manufacturing effort. The remaining working capital accounts' carrying values approximate fair value. For property, plant and equipment and intangible asset values, the Company utilized various forms of the income, cost and market approaches depending on the asset being valued. The Company used a relief from royalty method under the income approach to value its trade names and the developed technology and the multi-period excess earnings method under the income approach to value customer relationships. The significant assumptions used to estimate the fair value of these intangible assets included the discount rate and certain assumptions that form the basis of forecasted future cash flows (including revenue growth rates, royalty rates for trade names and developed technology, and attrition rates for customer relationships). Inputs were generally determined by taking into account independent appraisals and historical data, supplemented by current and anticipated market conditions and are considered Level 3 assets as the assumptions are unobservable inputs developed by the Company. As part of the acquisition, the Company recorded approximately $182.2 million of goodwill allocated between its Electronic Materials and Performance Materials segments based on the relative fair values. Goodwill was calculated as the excess of the purchase price over the estimated fair values of the tangible net assets and intangible assets acquired and primarily attributable to the synergies expected to arise after the acquisition date. The goodwill is not expected to be deductible for U.S. tax purposes. The following table reports the intangible assets by asset category as of the closing date: (Thousands) Value at Acquisition Useful Life Customer relationships $ 50,200 13 years Technology 35,300 13 years Trade name 22,300 15 years Total $ 107,800 The amounts of revenue and income (loss) before taxes of HCS-Electronic Materials in the third quarter of 2022 consolidated statements are $49.2 million and $4.4 million, respectively. For the nine months ended September 30, 2022, revenue and income before taxes total $135.7 million and $10.5 million, respectively. Income before taxes includes the purchase accounting inventory step-up expense recorded in the first quarter of 2022. Had the HCS-Electronic Materials acquisition occurred as of the beginning of fiscal 2020, the Company's sales and income (loss) before taxes would have been as follows: (Unaudited) Three months ended Nine months ended October 1, 2021 October 1, 2021 Net Sales $ 428,864 $ 1,223,450 Income before taxes $ 23,022 $ 65,926 The unaudited pro forma financial information has been calculated after applying our accounting policies and adjusting the historical results with pro forma adjustments that assume the acquisition occurred on January 1, 2020. These unaudited pro forma results do not represent financial results realized, nor are they intended to be a projection of future results. The transaction accounting adjustments and other adjustments are based on available information and assumptions that the Company’s management believes are reasonable. Such adjustments are estimates and actual experience may differ from expectations. The pro forma income before taxes for the third quarter ended and nine months ended October 1, 2021 includes approximately $2.5 million and $8.1 million, respectively, of additional interest expense related to committed financing to fund the acquisition and acquisition-related intangible asset amortization expense of $2.0 million and $6.0 million, respectively, as if the acquisition occurred on January 1, 2020. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company changed two segment names during the first quarter of 2022: Performance Alloys and Composites became Performance Materials, and Advanced Materials became Electronic Materials. The Company believes these names better represent the markets served and the advanced next-generation product solutions provided to our customers. Other than the name changes, there were no changes in the composition or structure of the Company's reportable segments in the first half of 2022. The Company has the following reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, the Company's chief operating decision maker, in determining how to allocate the Company’s resources and evaluate performance. Performance Materials provides advanced engineered solutions comprised of beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes. Electronic Materials produces advanced chemicals, microelectric packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal preforms, high temperature braze materials, and ultra-fine wire. Precision Optics produces thin film coatings, optical filter materials, sputter-coated, and precision-converted thin film materials. The Other reportable segment includes unallocated corporate costs and assets. Beginning with the first quarter of 2022, the Company began using earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) as the main operating income metric used by management to measure the financial performance of the Company and each segment. The Company made this change because recent acquisitions have resulted in increased purchase accounting amortization expense, which in turn has affected the comparability of results across periods and when compared to other companies. Management believes EBITDA is useful to investors as it better represents the Company's performance, excluding the effect of the recent acquisition of significant intangible assets that are now being amortized. EBITDA is not a measurement of financial performance under U.S. GAAP. Although the Company uses EBITDA to assess the performance of its business and for various other purposes, the use of this non-GAAP financial measure as an analytical tool has limitations, and it should not be considered in isolation or as a substitute for analysis of the Company’s results of operations as reported in accordance with U.S. GAAP. The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the third quarter of 2022 and 2021: (Thousands) Third Quarter 2022 Third Quarter 2021 First Nine Months 2022 First Nine Months 2021 Net sales: Performance Materials (1) $ 169,357 $ 136,096 $ 473,876 $ 375,533 Electronic Materials (1) 230,841 220,723 762,649 638,481 Precision Optics 27,993 31,209 86,006 99,399 Other — — — — Net sales 428,191 388,028 1,322,531 1,113,413 Segment EBITDA: Performance Materials $ 28,866 $ 28,917 $ 80,886 $ 68,027 Electronic Materials 16,853 11,326 51,338 32,668 Precision Optics 3,546 6,228 9,281 19,246 Other (5,839) (10,617) (18,206) (22,030) Total Segment EBITDA 43,426 35,854 123,299 97,911 Income tax expense 4,432 3,422 12,525 10,162 Interest expense - net 5,888 861 14,325 2,480 Depreciation, depletion and amortization 13,154 $ 13,415 $ 39,223 $ 32,478 Net income $ 19,952 $ 18,156 $ 57,226 $ 52,791 (1) Excludes inter-segment sales of $0.2 million for the third quarter of 2022 and $0.6 million for the first nine months of 2022 for Performance Materials and $3.8 million for the third quarter of 2022 and $12.1 million for the first nine months of 2022 for Electronic Materials. Inter-segment sales are eliminated in consolidation. The following table disaggregates revenue for each segment by end market for the third quarter and first nine months of 2022 and 2021: (Thousands) Performance Materials Electronic Materials Precision Optics Other Total Third Quarter 2022 End Market Semiconductor $ 2,410 $ 185,223 $ 1,151 $ — $ 188,784 Industrial 44,667 9,383 7,564 — 61,614 Aerospace and defense 28,262 1,243 3,532 — 33,037 Consumer electronics 9,607 364 6,799 — 16,770 Automotive 24,802 1,863 2,268 — 28,933 Energy 15,854 25,220 — — 41,074 Telecom and data center 15,412 42 — — 15,454 Other 28,343 7,503 6,679 — 42,525 Total $ 169,357 $ 230,841 $ 27,993 $ — $ 428,191 Third Quarter 2021 End Market Semiconductor $ 3,163 $ 173,689 $ 630 $ — $ 177,482 Industrial 31,521 10,479 8,296 — 50,296 Aerospace and defense 19,129 1,622 5,653 — 26,404 Consumer electronics 9,717 530 7,789 — 18,036 Automotive 28,922 1,719 2,571 — 33,212 Energy 7,524 27,081 — — 34,605 Telecom and data center 14,980 31 — — 15,011 Other 21,140 5,572 6,270 — 32,982 Total $ 136,096 $ 220,723 $ 31,209 $ — $ 388,028 (Thousands) Performance Materials Electronic Materials Precision Optics Other Total First Nine Months 2022 End Market Semiconductor $ 6,657 $ 613,887 $ 4,007 $ — $ 624,551 Industrial 127,187 37,206 23,605 — 187,998 Aerospace and defense 79,561 5,141 12,344 — 97,046 Consumer electronics 38,822 969 17,925 — 57,716 Automotive 71,893 4,985 7,294 — 84,172 Energy 36,632 79,701 — — 116,333 Telecom and data center 47,716 107 — — 47,823 Other 65,408 20,653 20,831 — 106,892 Total $ 473,876 $ 762,649 $ 86,006 $ — $ 1,322,531 First Nine Months 2021 End Market Semiconductor $ 5,966 $ 495,718 $ 1,664 $ — $ 503,348 Industrial 85,815 33,756 23,305 — 142,876 Aerospace and defense 60,221 4,680 17,825 — 82,726 Consumer electronics 30,483 961 24,212 — 55,656 Automotive 78,195 5,145 6,871 — 90,211 Energy 16,541 78,487 — — 95,028 Telecom and data center 39,348 140 — — 39,488 Other 58,964 19,594 25,522 — 104,080 Total $ 375,533 $ 638,481 $ 99,399 $ — $ 1,113,413 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Net sales consist primarily of revenue from the sale of precious and non-precious specialty metals, beryllium and copper-based alloys, beryllium composites, and other products into numerous end markets. The Company requires an agreement with a customer that creates enforceable rights and performance obligations. The Company generally recognizes revenue in an amount that reflects the consideration to which it expects to be entitled upon satisfaction of a performance obligation by transferring control over a product to the customer. Control over a product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product. Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at September 30, 2022. Remaining performance obligations include non-cancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. After considering the practical expedient at September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $69.4 million. Contract Balances : The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities: (Thousands) September 30, 2022 December 31, 2021 $ change % change Accounts receivable, trade $ 229,171 $ 213,584 $ 15,587 7 % Unbilled receivables 9,654 7,961 1,693 21 % Unearned revenue 6,596 7,770 (1,174) (15) % Accounts receivable, trade represents payments due from customers relating to the transfer of the Company’s products and services. The Company believes that its receivables are collectible and appropriate allowances for doubtful accounts have been recorded. Impairment losses (bad debt) incurred related to our receivables were immaterial during the third quarter of 2022. Unbilled receivables represent expenditures on contracts, plus applicable profit margin, not yet billed. Unbilled receivables are generally billed and collected within one year. Billings made on contracts are recorded as a reduction of unbilled receivables. Unearned revenue is recorded for consideration received from customers in advance of satisfaction of the related performance obligations. The Company recognized approximately $7.2 million of the December 31, 2021 unearned amounts as revenue during the first nine months of 2022. As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component because the period between the transfer of a product or service to a customer and when the customer pays for that product or service will be one year or less. The Company does not include extended payment terms in its contracts with customers. |
Other-net
Other-net | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other-net | Other-net Other-net for the third quarter and first nine months of 2022 and 2021 is summarized as follows: Third Quarter Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Amortization of intangible assets $ 3,088 $ 1,283 $ 9,318 $ 3,461 Metal consignment fees 3,111 2,243 8,993 6,857 Foreign currency (gain) loss 235 380 (70) 1,596 Net loss (gain) on disposal of fixed assets (1) 81 17 (283) Other items 341 (383) 317 641 Total $ 6,774 $ 3,604 $ 18,575 $ 12,272 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate for the third quarter of 2022 and 2021 was 18.2% and 15.9%, respectively, and 18.0% and 16.1% in the first nine months of 2022 and 2021, respectively. The effective tax rate for each period in 2022 and 2021 was lower than the statutory tax rate primarily due to the impact of percentage depletion, research and development credits, and the foreign derived intangible income deduction. The effective tax rate for the first nine months of 2022 and 2021 included a net discrete income tax benefit of $0.9 million for each period, primarily related to excess tax benefits from stock-based compensation awards and return to provision adjustments recorded. On August 9, 2022, President Biden signed the CHIPS and Science Act (the CHIPS Act) into law. The CHIPS Act provides incentives, beginning in 2023, for manufacturing semiconductors and certain tooling equipment used in the semiconductor manufacturing process. On August 16, 2022, President Biden also signed the Inflation Reduction Act of 2022 (IRA) into law. The IRA, among other provisions, includes a new corporate alternative minimum tax on certain large corporations, an excise |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share (EPS) The following table sets forth the computation of basic and diluted EPS: Third Quarter Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands, except per share amounts) 2022 2021 2022 2021 Numerator for basic and diluted EPS: Net income $ 19,952 $ 18,156 $ 57,226 $ 52,791 Denominator: Denominator for basic EPS: Weighted-average shares outstanding 20,526 20,439 20,502 20,414 Effect of dilutive securities: Stock appreciation rights 85 72 85 73 Restricted stock units 98 94 113 113 Performance-based restricted stock units 71 52 55 59 Diluted potential common shares 254 218 254 245 Denominator for diluted EPS: Adjusted weighted-average shares outstanding 20,780 20,657 20,756 20,659 Basic EPS $ 0.97 $ 0.89 $ 2.79 $ 2.59 Diluted EPS $ 0.96 $ 0.88 $ 2.76 $ 2.56 Adjusted weighted-average shares outstanding - diluted exclude securities totaling 45,016 and 55,598 for the quarters ended September 30, 2022 and October 1, 2021, respectively, and 54,680 and 56,319 for the nine months ended September 30, 2022 and October 1, 2021, respectively. These securities are primarily related to restricted stock units and stock appreciation rights with fair market values and exercise prices greater than the average market price of the Company's common shares and were excluded from the dilution calculation as the effect would have been anti-dilutive. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories on the Consolidated Balance Sheets are summarized as follows: September 30, December 31, (Thousands) 2022 2021 Raw materials and supplies $ 114,225 $ 93,518 Work in process 252,077 221,638 Finished goods 53,997 45,959 Inventories, net $ 420,299 $ 361,115 |
Customer Prepayments
Customer Prepayments | 9 Months Ended |
Sep. 30, 2022 | |
Customer Prepayments [Abstract] | |
Customer Prepayments | Customer Prepayments In 2020, the Company entered into an investment agreement and a master supply agreement with a customer to procure equipment to manufacture product for the customer. The customer provided prepayments to the Company to fund the necessary infrastructure improvements and procure the equipment necessary to supply the customer with the desired product. The Company owns, operates and maintains the equipment that is being used to manufacture product for the customer. Revenue will be recognized as the Company fulfills purchase orders and ships the commercial product to the customer, as product delivery is considered the satisfaction of the performance obligation. Additionally, during the second quarter of 2022, the Company entered into an amendment to the investment agreement with the same customer to procure additional equipment to manufacture product for the customer. As of September 30, 2022, the Company has received approximately $17.5 million in prepayments under the terms of this amended agreement. As of September 30, 2022 and December 31, 2021, $88.2 million and $72.6 million, respectively, of prepayments are classified as Unearned income on the Consolidated Balance Sheets. The prepayments will remain in Unearned income until commercial purchase orders are received for product serviced out of the equipment, at which time a portion of the purchase order value related to prepayments will be reclassified to Unearned revenue. As of September 30, 2022 $1.0 million of the prepayments are classified as Unearned revenue. |
Pensions and Other Post-employm
Pensions and Other Post-employment Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [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 ended September 30, 2022 and October 1, 2021, respectively, for the pension plans as shown below. The Pension Benefits column aggregates defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S. supplemental retirement plans. The Other Benefits column includes the domestic retiree medical and life insurance plan. Pension Benefits Other Benefits Third Quarter Ended Third Quarter Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Components of net periodic benefit (credit) cost Service cost $ 281 $ 410 $ 21 $ 20 Interest cost 1,203 1,045 39 29 Expected return on plan assets (2,380) (2,459) — — Amortization of prior service (benefit) cost (19) (18) (374) (374) Amortization of net loss (gain) 410 565 (68) (69) Net periodic benefit (credit) cost $ (505) $ (457) $ (382) $ (394) Settlements — — — — Total net benefit (credit) cost $ (505) $ (457) $ (382) $ (394) Pension Benefits Other Benefits Nine Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Components of net periodic benefit (credit) cost Service cost $ 891 $ 1,284 $ 63 $ 60 Interest cost 3,639 3,141 117 87 Expected return on plan assets (7,158) (7,407) — — Amortization of prior service (benefit) cost (57) (60) (1,122) (1,122) Amortization of net loss (gain) 1,260 1,719 (204) (207) Net periodic benefit (credit) cost $ (1,425) $ (1,323) $ (1,146) $ (1,182) Settlements — — — — Total net benefit (credit) cost $ (1,425) $ (1,323) $ (1,146) $ (1,182) The Company did not make any contributions to its domestic defined benefit plan in the third quarter or first nine months of 2022 or 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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 2022 and 2021 are as follows: Gains and Losses on Cash Flow Hedges (Thousands) Foreign Currency Interest Rate Precious Metals Copper Total Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at July 1, 2022 $ 3,226 $ 3,250 $ 108 $ — $ 6,584 $ (39,926) $ (11,277) $ (44,619) Other comprehensive income (loss) before reclassifications 837 4,360 441 — 5,638 — (6,094) (456) Amounts reclassified from accumulated other comprehensive income (loss) (41) (115) (126) — (282) (18) — (300) Net current period other comprehensive (loss) income before tax 796 4,245 315 — 5,356 (18) (6,094) (756) Deferred taxes 183 976 72 — 1,231 (26) — 1,205 Net current period other comprehensive (loss) income after tax 613 3,269 243 — 4,125 8 (6,094) (1,961) Balance at September 30, 2022 $ 3,839 $ 6,519 $ 351 $ — $ 10,709 $ (39,918) $ (17,371) $ (46,580) Balance at July 2, 2021 $ 1,603 $ — $ 186 $ — $ 1,789 $ (43,226) $ (1,647) $ (43,084) Other comprehensive (loss) income before reclassifications 625 — 30 8 663 — (2,029) (1,366) Amounts reclassified from accumulated other comprehensive income (loss) (2) — (83) (8) (93) 114 — 21 Net current period other comprehensive (loss) income before tax 623 — (53) — 570 114 (2,029) (1,345) Deferred taxes 143 (12) — 131 (7) — 124 Net current period other comprehensive (loss) income after tax 480 — (41) — 439 121 (2,029) (1,469) Balance at October 1, 2021 $ 2,083 $ — $ 145 $ — $ 2,228 $ (43,105) $ (3,676) $ (44,553) Gains and Losses on Cash Flow Hedges (Thousands) Foreign Currency Interest Rate Precious Metals Copper Total Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at December 31, 2021 $ 2,348 $ — $ 72 $ — $ 2,420 $ (39,702) $ (2,887) $ (40,169) Other comprehensive income (loss) before reclassifications 2,107 8,228 388 — 10,723 — (14,484) (3,761) Amounts reclassified from accumulated other comprehensive income (loss) (170) 238 (27) — 41 (1,028) — (987) Net current period other comprehensive (loss) income before tax 1,937 8,466 361 — 10,764 (1,028) (14,484) (4,748) Deferred taxes 446 1,947 82 — 2,475 (812) — 1,663 Net current period other comprehensive (loss) income after tax 1,491 6,519 279 — 8,289 (216) (14,484) (6,411) Balance at September 30, 2022 $ 3,839 $ 6,519 $ 351 $ — $ 10,709 $ (39,918) $ (17,371) $ (46,580) Balance at December 31, 2020 $ 519 $ — $ (170) $ 468 $ 817 $ (43,473) $ 4,017 $ (38,639) Other comprehensive (loss) income before reclassifications 1,893 — 532 2,444 4,869 — (7,693) (2,824) Amounts reclassified from accumulated other comprehensive income (loss) 138 — (122) (3,049) (3,033) 348 — (2,685) Net current period other comprehensive (loss) income before tax 2,031 — 410 (605) 1,836 348 (7,693) (5,509) Deferred taxes 467 — 95 (137) 425 (20) — 405 Net current period other comprehensive (loss) income after tax 1,564 — 315 (468) 1,411 368 (7,693) (5,914) Balance at October 1, 2021 $ 2,083 $ — $ 145 $ — $ 2,228 $ (43,105) $ (3,676) $ (44,553) Reclassifications from accumulated other comprehensive income (loss) of gains and losses on foreign currency cash flow hedges are recorded in Net sales in the Consolidated Statements of Income. Reclassifications from accumulated other comprehensive income (loss) of gains and losses on precious metal and copper cash flow hedges are recorded in Cost of sales in the Consolidated Statements of Income. Reclassifications from accumulated other comprehensive income (loss) of gains and losses on the interest rate cash flow hedge is recorded in Interest expense in the Consolidated Statements of Income. Refer to Note N for additional details on cash flow hedges. |
Stock-based Compensation Expens
Stock-based Compensation Expense | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense Stock-based compensation expense, which includes awards settled in shares and in cash, was $2.2 million and $6.0 million in the third quarter and first nine months of 2022, respectively, compared to $1.5 million and $5.3 million, respectively, in the same periods of 2021. The Company granted 45,016 stock appreciation rights (SARs) to certain employees during the first nine months of 2022. 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, 2022 were $80.85 and $25.87, respectively. The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model: Risk-free interest rate 1.56 % Dividend yield 0.59 % Volatility 38.5 % Expected term (in years) 4.4 The Company granted 61,145 stock-settled restricted stock units (RSUs) to certain employees during the first nine months of 2022. 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 $80.88 for stock-settled RSUs granted to employees during the nine months ended September, 2022. RSUs are generally expensed over the vesting period of three years for employees. The Company granted stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first nine months of 2022. The weighted-average fair value of the stock-settled PRSUs was $97.79 per share and will be expensed over the vesting period of three years. The final payout to the employees for all PRSUs will be based upon the Company’s return on invested capital and its total return to shareholders over the vesting period relative to a peer group’s performance over the same period. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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 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, 2022 and December 31, 2021: (Thousands) Total Carrying Value in the Consolidated Balance Sheets Quoted Prices Significant Significant 2022 2021 2022 2021 2022 2021 2022 2021 Financial Assets Deferred compensation investments $ 2,754 $ 4,426 $ 2,754 $ 4,426 $ — $ — $ — $ — Foreign currency forward contracts 3,796 3,368 — — 3,796 3,368 — — Interest rate swap 8,467 — — — 8,467 — — — Precious metal swaps 476 116 — — 476 116 — — Total $ 15,493 $ 7,910 $ 2,754 $ 4,426 $ 12,739 $ 3,484 $ — $ — Financial Liabilities Deferred compensation liability $ 2,754 $ 4,426 $ 2,754 $ 4,426 $ — $ — $ — $ — Foreign currency forward contracts 736 136 — — 736 136 — — Precious metal swaps 23 24 — — 23 24 — — Total $ 3,513 $ 4,586 $ 2,754 $ 4,426 $ 759 $ 160 $ — $ — 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, metals, and interest rates. The carrying values of the other working capital items and debt in the Consolidated Balance Sheets approximate fair values as of September 30, 2022 and December 31, 2021. The Company's deferred compensation investments and liabilities are based on the fair value of the investments corresponding to the employees’ investment selections, primarily in mutual funds, based on quoted prices in active markets for identical assets. Deferred compensation investments are primarily presented in Other assets. Deferred compensation liabilities are primarily presented in Other long-term liabilities. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activity | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activity | Derivative Instruments and Hedging Activity The Company uses derivative contracts to hedge exposure to movements in interest rates associated with borrowings, foreign currency exposures, and precious metal and copper exposures. The objectives and strategies for using derivatives in these areas are as follows: Interest Rate. On March 4, 2022, the Company entered into a $100.0 million interest rate swap to hedge the interest rate risk on the Credit Agreement described in Note P. The swap hedges the change in 1-month LIBOR from March 4, 2022 to November 2, 2026. The purpose of this hedge is to manage the risk of changes in the monthly interest payments attributable to changes in the benchmark interest rate. 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, the 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 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 nature of instruments to use to hedge exposures. 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. Foreign currency contracts are typically layered in at different times for a specified exposure period in order to minimize the impact of market 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 product containing precious metal is fabricated and delivered to the customer, the metal content is purchased out of consignment based on the current market price. The price paid by the Company for the precious metal forms the basis for the price charged to the customer for the metal content in the product. 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 consignment fees based upon the value of the metal as it fluctuates while on consignment. Each financial institution retains title to its consigned precious metal until it is purchased by the Company, and it is the Company’s typical practice to purchase metal out of consignment only after a product containing that metal has been purchased by one of our customers. In certain instances, a customer may want to fix 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 out of consignment 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 refined and purchased, thereby reducing the exposure to adverse movements in the price of the metal. The Company may also enter into hedges to mitigate the risk relating to the prices of the metals that we process or refine. In certain circumstances, the Company also refines metal from the customer and may retain a portion of the refined metal as payment. The Company may elect to enter into a forward contract to sell precious metal to reduce the Company's price exposure in these instances. 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 infrequent and, when made 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 paid when the metal is transferred back to the consignment line, thereby limiting any price exposure during the time when the metal was owned by the Company. The Company will only enter into a derivative contract if there is an underlying identified exposure. Contracts are typically held to maturity. The Company does not engage in derivative trading activities and does not use derivatives for speculative purposes. The Company only uses hedge contracts that are denominated in the same currency or metal as the underlying exposure. All derivatives are recorded on the balance sheet at fair value. If a 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) and reclassified into income in the same period or periods during which the hedged transaction affects 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 derivative assets and liabilities are classified as short-term or long-term depending upon the contract maturity date. The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and the balance sheet classification as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (Thousands) Notional Fair Notional Fair Foreign currency forward contracts Prepaid and other current assets $ 14,216 $ 619 $ 55,063 $ 2,132 Other liabilities and accrued items 16,144 722 9,425 128 These outstanding foreign currency derivatives were related to balance sheet hedges and intercompany loans. Other-net included less than $0.1 million of foreign currency losses in the third quarter of 2022 and $0.7 million of foreign currency gains related to derivatives in the first nine months of 2022, compared to $0.4 million of foreign currency losses and $2.7 million of foreign currency gains in the third quarter and first nine months of 2021, respectively. The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and balance sheet classification as of September 30, 2022 and December 31, 2021: September 30, 2022 Fair Value (Thousands) Notional Prepaid and other current assets Other assets Other liabilities and accrued items Other long-term liabilities Foreign currency forward contracts - yen $ 3,301 $ 460 $ 35 $ 14 $ — Foreign currency forward contracts - euro 27,030 2,494 188 — — Precious metal swaps 5,227 476 — 9 14 Interest rate swap 100,000 2,798 5,669 — — Total $ 135,558 $ 6,228 $ 5,892 $ 23 $ 14 December 31, 2021 Fair Value Notional Prepaid and other current assets Other assets Other liabilities and accrued items Other long-term liabilities Foreign currency forward contracts - yen $ 3,907 $ 131 $ 2 $ — $ — Foreign currency forward contracts - euro 28,412 1,102 — — 8 Precious metal swaps 6,256 116 — 24 — Total $ 38,575 $ 1,349 $ 2 $ 24 $ 8 All of the contracts summarized above were designated and effective as cash flow hedges. We expect to reclassify $6.2 million of net gains into earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. At September 30, 2022, the maximum term of derivative instruments that hedge forecasted transactions was approximately four years. Refer to Note K for further details related to OCI. The following table summarizes the amounts reclassified from accumulated other comprehensive income relating to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the third quarter and first nine months of 2022 and 2021: Third Quarter Ended (Thousands) September 30, 2022 October 1, 2021 Hedging relationship Line item Foreign currency forward contracts Net sales $ (41) $ (2) Precious metal swaps Cost of sales (126) (83) Interest rate swap Interest expense - net (115) — Copper swaps Cost of sales — (8) Total $ (282) $ (93) Nine Months Ended (Thousands) September 30, 2022 October 1, 2021 Hedging relationship Line item Foreign currency forward contracts Net sales $ (171) $ 138 Precious metal swaps Cost of sales (27) (122) Interest rate swap Interest expense - net 238 — Copper swaps Cost of sales — (3,049) Total $ 40 $ (3,033) |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies Legal Proceedings . For general information regarding legal proceedings relating to Chronic Beryllium Disease Claims, refer to Note T "Contingencies and Commitments" in the Company's 2021 Annual Report on Form 10-K. One beryllium case was outstanding as of September 30, 2022. The Company does not expect the resolution of this open matter to have a material impact on the consolidated financial statements. Other Litigation. The Company is party to several pending legal proceedings and claims arising in the normal course of business. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matters. To the extent there is a reasonable possibility that the losses could exceed any amounts accrued, the Company will adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. On October 14, 2020, Garett Lucyk, et al. v. Materion Brush Inc., et. al. , case number 20CV0234, a wage and hour purported collective and class action, was filed in the Northern District of Ohio against the Company and its subsidiary, Materion Brush Inc. (collectively, the Company). Plaintiff, a former hourly production employee at the Company's Elmore, Ohio facility, alleges, among other things, that he and other similarly situated employees nationwide are not paid for all time they spend donning and doffing personal protective equipment in violation of the Fair Labor Standards Act and Ohio law. Plaintiff filed a motion for conditional certification, which the Company opposed. On August 2, 2022, the Court conditionally certified a class of employees at the Company’s Elmore facility only and rejected certification of a class across the Company’s other facilities. The Company believes that it has substantive defenses and intends to vigorously defend this suit, absent a negotiated resolution. Environmental Proceedings. 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 $4.3 million and $4.8 million at September 30, 2022 and December 31, 2021, respectively, and is included in Other liabilities and accrued items and Other long-term liabilities on the Consolidated Balance Sheet. Environmental projects tend to be long-term, and the final actual remediation costs may differ from the amounts currently recorded. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt (Thousands) September 30, 2022 December 31, 2021 Borrowings under Credit Agreement $ 201,388 $ 152,296 Borrowings under the Term Loan Facility 288,750 300,000 Foreign debt 7,947 2,252 Total debt outstanding 498,085 454,548 Current portion of long-term debt (19,747) (15,359) Gross long-term debt 478,338 439,189 Unamortized deferred financing fees (4,058) (4,801) Long-term debt $ 474,280 $ 434,388 As of September 30, 2022 and December 31, 2021, the Company had $201.4 million outstanding at an average interest rate of 4.74% and $152.3 million outstanding at an average interest rate of 2.12%, respectively, under its revolving credit facility. The available borrowing capacity under the revolving credit facility as of September 30, 2022 was $127.2 million. The Company has the option to repay or borrow additional funds under the revolving credit facility until the maturity date in 2026. The amended and restated credit agreement governing the revolving credit facility (Credit Agreement) includes covenants subject to a maximum leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all of our debt covenants as of September 30, 2022. The balance outstanding on the term loan facility as of September 30, 2022 and December 31, 2021 wa s $288.8 million and $300.0 million, respectively. At September 30, 2022 and December 31, 2021, there was $46.4 million and $46.3 million, respectively, outstanding against the letters of credit sub-facility. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying consolidated financial statements of Materion Corporation and its subsidiaries (referred to herein as the Company, our, we, or us) 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. |
Business Combinations | Business Combinations: The Company records assets acquired and liabilities assumed at the date of acquisition at their respective fair values. Any intangible assets acquired in a business combination are recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The amounts reflected in Note B of the consolidated financial statements are the results of a preliminary purchase price allocation and will be updated upon completion of the final valuation. The Company is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined. |
New Pronouncements Adopted and New Accounting Guidance Issued and Not Yet Adopted | New Pronouncements Adopted: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company has applied this guidance in accounting for the interest rate swap discussed in Note N. Any additional reference rate reform impacts will be accounted for in accordance with ASU 2020-04. New Accounting Guidance Issued and Not Yet Adopted: In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) . ASU 2021-10 is intended to increase transparency related to governmental assistance by requiring entities to disclose the types of government assistance, the entity's accounting for government assistance, and the effect of government assistance on an entity's financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is in the process of evaluating the impact of the guidance on its annual disclosures, but do not expect material impact to our disclosures at this time. |
Revenue Recognition | Net sales consist primarily of revenue from the sale of precious and non-precious specialty metals, beryllium and copper-based alloys, beryllium composites, and other products into numerous end markets. The Company requires an agreement with a customer that creates enforceable rights and performance obligations. The Company generally recognizes revenue in an amount that reflects the consideration to which it expects to be entitled upon satisfaction of a performance obligation by transferring control over a product to the customer. Control over a product is generally transferred to the customer when the Company has a present right to payment, the customer has legal title, the customer has physical possession, the customer has the significant risks and rewards of ownership, and/or the customer has accepted the product. Transaction Price Allocated to Future Performance Obligations: Accounting Standards Codification 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at September 30, 2022. Remaining performance obligations include non-cancelable purchase orders and customer contracts. The guidance provides certain practical expedients that limit this requirement. As such, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. After considering the practical expedient at September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $69.4 million. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation for the acquisition including these measurement period adjustments is as follows: (Thousands) Initial Allocation of Consideration Measurement Period Adjustments Updated Allocation Assets: Cash and cash equivalents $ 3,685 $ — $ 3,685 Accounts receivable 28,352 (132) 28,220 Inventories 70,681 — 70,681 Prepaid and other current assets 660 (355) 305 Property, plant, and equipment 44,681 355 45,036 Operating lease, right-of-use assets 6,120 — 6,120 Intangible assets 107,800 — 107,800 Other long-term assets 4,528 — 4,528 Goodwill 178,181 4,010 182,191 Total assets acquired $ 444,688 $ 3,878 $ 448,566 Liabilities: Accounts payable $ 12,139 $ — $ 12,139 Salaries and wages 2,516 625 3,141 Other liabilities and accrued items 28 — 28 Income taxes 2,183 79 2,262 Other long-term liabilities 5,543 215 5,758 Operating lease liabilities 6,042 — 6,042 Deferred income taxes 20,300 — 20,300 Total liabilities assumed $ 48,751 $ 919 $ 49,670 Net assets acquired $ 395,937 $ 2,959 $ 398,896 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table reports the intangible assets by asset category as of the closing date: (Thousands) Value at Acquisition Useful Life Customer relationships $ 50,200 13 years Technology 35,300 13 years Trade name 22,300 15 years Total $ 107,800 |
Business Acquisition, Pro Forma Information | Materials acquisition occurred as of the beginning of fiscal 2020, the Company's sales and income (loss) before taxes would have been as follows: (Unaudited) Three months ended Nine months ended October 1, 2021 October 1, 2021 Net Sales $ 428,864 $ 1,223,450 Income before taxes $ 23,022 $ 65,926 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | The below table presents financial information for each segment and a reconciliation of EBITDA to Net Income (the most directly comparable GAAP financial measure) for the third quarter of 2022 and 2021: (Thousands) Third Quarter 2022 Third Quarter 2021 First Nine Months 2022 First Nine Months 2021 Net sales: Performance Materials (1) $ 169,357 $ 136,096 $ 473,876 $ 375,533 Electronic Materials (1) 230,841 220,723 762,649 638,481 Precision Optics 27,993 31,209 86,006 99,399 Other — — — — Net sales 428,191 388,028 1,322,531 1,113,413 Segment EBITDA: Performance Materials $ 28,866 $ 28,917 $ 80,886 $ 68,027 Electronic Materials 16,853 11,326 51,338 32,668 Precision Optics 3,546 6,228 9,281 19,246 Other (5,839) (10,617) (18,206) (22,030) Total Segment EBITDA 43,426 35,854 123,299 97,911 Income tax expense 4,432 3,422 12,525 10,162 Interest expense - net 5,888 861 14,325 2,480 Depreciation, depletion and amortization 13,154 $ 13,415 $ 39,223 $ 32,478 Net income $ 19,952 $ 18,156 $ 57,226 $ 52,791 (1) Excludes inter-segment sales of $0.2 million for the third quarter of 2022 and $0.6 million for the first nine months of 2022 for Performance Materials and $3.8 million for the third quarter of 2022 and $12.1 million for the first nine months of 2022 for Electronic Materials. Inter-segment sales are eliminated in consolidation. |
Disaggregation of Revenue | The following table disaggregates revenue for each segment by end market for the third quarter and first nine months of 2022 and 2021: (Thousands) Performance Materials Electronic Materials Precision Optics Other Total Third Quarter 2022 End Market Semiconductor $ 2,410 $ 185,223 $ 1,151 $ — $ 188,784 Industrial 44,667 9,383 7,564 — 61,614 Aerospace and defense 28,262 1,243 3,532 — 33,037 Consumer electronics 9,607 364 6,799 — 16,770 Automotive 24,802 1,863 2,268 — 28,933 Energy 15,854 25,220 — — 41,074 Telecom and data center 15,412 42 — — 15,454 Other 28,343 7,503 6,679 — 42,525 Total $ 169,357 $ 230,841 $ 27,993 $ — $ 428,191 Third Quarter 2021 End Market Semiconductor $ 3,163 $ 173,689 $ 630 $ — $ 177,482 Industrial 31,521 10,479 8,296 — 50,296 Aerospace and defense 19,129 1,622 5,653 — 26,404 Consumer electronics 9,717 530 7,789 — 18,036 Automotive 28,922 1,719 2,571 — 33,212 Energy 7,524 27,081 — — 34,605 Telecom and data center 14,980 31 — — 15,011 Other 21,140 5,572 6,270 — 32,982 Total $ 136,096 $ 220,723 $ 31,209 $ — $ 388,028 (Thousands) Performance Materials Electronic Materials Precision Optics Other Total First Nine Months 2022 End Market Semiconductor $ 6,657 $ 613,887 $ 4,007 $ — $ 624,551 Industrial 127,187 37,206 23,605 — 187,998 Aerospace and defense 79,561 5,141 12,344 — 97,046 Consumer electronics 38,822 969 17,925 — 57,716 Automotive 71,893 4,985 7,294 — 84,172 Energy 36,632 79,701 — — 116,333 Telecom and data center 47,716 107 — — 47,823 Other 65,408 20,653 20,831 — 106,892 Total $ 473,876 $ 762,649 $ 86,006 $ — $ 1,322,531 First Nine Months 2021 End Market Semiconductor $ 5,966 $ 495,718 $ 1,664 $ — $ 503,348 Industrial 85,815 33,756 23,305 — 142,876 Aerospace and defense 60,221 4,680 17,825 — 82,726 Consumer electronics 30,483 961 24,212 — 55,656 Automotive 78,195 5,145 6,871 — 90,211 Energy 16,541 78,487 — — 95,028 Telecom and data center 39,348 140 — — 39,488 Other 58,964 19,594 25,522 — 104,080 Total $ 375,533 $ 638,481 $ 99,399 $ — $ 1,113,413 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | Contract Balances : The timing of revenue recognition, billings, and cash collections resulted in the following contract assets and contract liabilities: (Thousands) September 30, 2022 December 31, 2021 $ change % change Accounts receivable, trade $ 229,171 $ 213,584 $ 15,587 7 % Unbilled receivables 9,654 7,961 1,693 21 % Unearned revenue 6,596 7,770 (1,174) (15) % |
Other-net (Tables)
Other-net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Summary of Other-Net Expense | Other-net for the third quarter and first nine months of 2022 and 2021 is summarized as follows: Third Quarter Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Amortization of intangible assets $ 3,088 $ 1,283 $ 9,318 $ 3,461 Metal consignment fees 3,111 2,243 8,993 6,857 Foreign currency (gain) loss 235 380 (70) 1,596 Net loss (gain) on disposal of fixed assets (1) 81 17 (283) Other items 341 (383) 317 641 Total $ 6,774 $ 3,604 $ 18,575 $ 12,272 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted EPS: Third Quarter Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands, except per share amounts) 2022 2021 2022 2021 Numerator for basic and diluted EPS: Net income $ 19,952 $ 18,156 $ 57,226 $ 52,791 Denominator: Denominator for basic EPS: Weighted-average shares outstanding 20,526 20,439 20,502 20,414 Effect of dilutive securities: Stock appreciation rights 85 72 85 73 Restricted stock units 98 94 113 113 Performance-based restricted stock units 71 52 55 59 Diluted potential common shares 254 218 254 245 Denominator for diluted EPS: Adjusted weighted-average shares outstanding 20,780 20,657 20,756 20,659 Basic EPS $ 0.97 $ 0.89 $ 2.79 $ 2.59 Diluted EPS $ 0.96 $ 0.88 $ 2.76 $ 2.56 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories on the Consolidated Balance Sheets are summarized as follows: September 30, December 31, (Thousands) 2022 2021 Raw materials and supplies $ 114,225 $ 93,518 Work in process 252,077 221,638 Finished goods 53,997 45,959 Inventories, net $ 420,299 $ 361,115 |
Pensions and Other Post-emplo_2
Pensions and Other Post-employment Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [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 ended September 30, 2022 and October 1, 2021, respectively, for the pension plans as shown below. The Pension Benefits column aggregates defined benefit pension plans in the U.S., Germany, Liechtenstein, England, and the U.S. supplemental retirement plans. The Other Benefits column includes the domestic retiree medical and life insurance plan. Pension Benefits Other Benefits Third Quarter Ended Third Quarter Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Components of net periodic benefit (credit) cost Service cost $ 281 $ 410 $ 21 $ 20 Interest cost 1,203 1,045 39 29 Expected return on plan assets (2,380) (2,459) — — Amortization of prior service (benefit) cost (19) (18) (374) (374) Amortization of net loss (gain) 410 565 (68) (69) Net periodic benefit (credit) cost $ (505) $ (457) $ (382) $ (394) Settlements — — — — Total net benefit (credit) cost $ (505) $ (457) $ (382) $ (394) Pension Benefits Other Benefits Nine Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Thousands) 2022 2021 2022 2021 Components of net periodic benefit (credit) cost Service cost $ 891 $ 1,284 $ 63 $ 60 Interest cost 3,639 3,141 117 87 Expected return on plan assets (7,158) (7,407) — — Amortization of prior service (benefit) cost (57) (60) (1,122) (1,122) Amortization of net loss (gain) 1,260 1,719 (204) (207) Net periodic benefit (credit) cost $ (1,425) $ (1,323) $ (1,146) $ (1,182) Settlements — — — — Total net benefit (credit) cost $ (1,425) $ (1,323) $ (1,146) $ (1,182) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 and 2021 are as follows: Gains and Losses on Cash Flow Hedges (Thousands) Foreign Currency Interest Rate Precious Metals Copper Total Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at July 1, 2022 $ 3,226 $ 3,250 $ 108 $ — $ 6,584 $ (39,926) $ (11,277) $ (44,619) Other comprehensive income (loss) before reclassifications 837 4,360 441 — 5,638 — (6,094) (456) Amounts reclassified from accumulated other comprehensive income (loss) (41) (115) (126) — (282) (18) — (300) Net current period other comprehensive (loss) income before tax 796 4,245 315 — 5,356 (18) (6,094) (756) Deferred taxes 183 976 72 — 1,231 (26) — 1,205 Net current period other comprehensive (loss) income after tax 613 3,269 243 — 4,125 8 (6,094) (1,961) Balance at September 30, 2022 $ 3,839 $ 6,519 $ 351 $ — $ 10,709 $ (39,918) $ (17,371) $ (46,580) Balance at July 2, 2021 $ 1,603 $ — $ 186 $ — $ 1,789 $ (43,226) $ (1,647) $ (43,084) Other comprehensive (loss) income before reclassifications 625 — 30 8 663 — (2,029) (1,366) Amounts reclassified from accumulated other comprehensive income (loss) (2) — (83) (8) (93) 114 — 21 Net current period other comprehensive (loss) income before tax 623 — (53) — 570 114 (2,029) (1,345) Deferred taxes 143 (12) — 131 (7) — 124 Net current period other comprehensive (loss) income after tax 480 — (41) — 439 121 (2,029) (1,469) Balance at October 1, 2021 $ 2,083 $ — $ 145 $ — $ 2,228 $ (43,105) $ (3,676) $ (44,553) Gains and Losses on Cash Flow Hedges (Thousands) Foreign Currency Interest Rate Precious Metals Copper Total Pension and Post-Employment Benefits Foreign Currency Translation Total Balance at December 31, 2021 $ 2,348 $ — $ 72 $ — $ 2,420 $ (39,702) $ (2,887) $ (40,169) Other comprehensive income (loss) before reclassifications 2,107 8,228 388 — 10,723 — (14,484) (3,761) Amounts reclassified from accumulated other comprehensive income (loss) (170) 238 (27) — 41 (1,028) — (987) Net current period other comprehensive (loss) income before tax 1,937 8,466 361 — 10,764 (1,028) (14,484) (4,748) Deferred taxes 446 1,947 82 — 2,475 (812) — 1,663 Net current period other comprehensive (loss) income after tax 1,491 6,519 279 — 8,289 (216) (14,484) (6,411) Balance at September 30, 2022 $ 3,839 $ 6,519 $ 351 $ — $ 10,709 $ (39,918) $ (17,371) $ (46,580) Balance at December 31, 2020 $ 519 $ — $ (170) $ 468 $ 817 $ (43,473) $ 4,017 $ (38,639) Other comprehensive (loss) income before reclassifications 1,893 — 532 2,444 4,869 — (7,693) (2,824) Amounts reclassified from accumulated other comprehensive income (loss) 138 — (122) (3,049) (3,033) 348 — (2,685) Net current period other comprehensive (loss) income before tax 2,031 — 410 (605) 1,836 348 (7,693) (5,509) Deferred taxes 467 — 95 (137) 425 (20) — 405 Net current period other comprehensive (loss) income after tax 1,564 — 315 (468) 1,411 368 (7,693) (5,914) Balance at October 1, 2021 $ 2,083 $ — $ 145 $ — $ 2,228 $ (43,105) $ (3,676) $ (44,553) |
Stock-based Compensation Expe_2
Stock-based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule Of Share Based Payment Award SARs Valuation Assumptions | The Company estimated the fair value of the SARs using the following weighted-average assumptions in the Black-Scholes model: Risk-free interest rate 1.56 % Dividend yield 0.59 % Volatility 38.5 % Expected term (in years) 4.4 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and December 31, 2021: (Thousands) Total Carrying Value in the Consolidated Balance Sheets Quoted Prices Significant Significant 2022 2021 2022 2021 2022 2021 2022 2021 Financial Assets Deferred compensation investments $ 2,754 $ 4,426 $ 2,754 $ 4,426 $ — $ — $ — $ — Foreign currency forward contracts 3,796 3,368 — — 3,796 3,368 — — Interest rate swap 8,467 — — — 8,467 — — — Precious metal swaps 476 116 — — 476 116 — — Total $ 15,493 $ 7,910 $ 2,754 $ 4,426 $ 12,739 $ 3,484 $ — $ — Financial Liabilities Deferred compensation liability $ 2,754 $ 4,426 $ 2,754 $ 4,426 $ — $ — $ — $ — Foreign currency forward contracts 736 136 — — 736 136 — — Precious metal swaps 23 24 — — 23 24 — — Total $ 3,513 $ 4,586 $ 2,754 $ 4,426 $ 759 $ 160 $ — $ — |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments NonHedging | The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives not designated as hedging instruments (on a gross basis) and the balance sheet classification as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (Thousands) Notional Fair Notional Fair Foreign currency forward contracts Prepaid and other current assets $ 14,216 $ 619 $ 55,063 $ 2,132 Other liabilities and accrued items 16,144 722 9,425 128 |
Fair Value Measurements, Recurring and Nonrecurring | The following table summarizes the notional amount and the fair value of the Company’s outstanding derivatives designated as cash flow hedges (on a gross basis) and balance sheet classification as of September 30, 2022 and December 31, 2021: September 30, 2022 Fair Value (Thousands) Notional Prepaid and other current assets Other assets Other liabilities and accrued items Other long-term liabilities Foreign currency forward contracts - yen $ 3,301 $ 460 $ 35 $ 14 $ — Foreign currency forward contracts - euro 27,030 2,494 188 — — Precious metal swaps 5,227 476 — 9 14 Interest rate swap 100,000 2,798 5,669 — — Total $ 135,558 $ 6,228 $ 5,892 $ 23 $ 14 December 31, 2021 Fair Value Notional Prepaid and other current assets Other assets Other liabilities and accrued items Other long-term liabilities Foreign currency forward contracts - yen $ 3,907 $ 131 $ 2 $ — $ — Foreign currency forward contracts - euro 28,412 1,102 — — 8 Precious metal swaps 6,256 116 — 24 — Total $ 38,575 $ 1,349 $ 2 $ 24 $ 8 |
Derivative Instruments, Gain (Loss) | The following table summarizes the amounts reclassified from accumulated other comprehensive income relating to the Company’s outstanding derivatives designated as cash flow hedges and associated income statement classification as of the third quarter and first nine months of 2022 and 2021: Third Quarter Ended (Thousands) September 30, 2022 October 1, 2021 Hedging relationship Line item Foreign currency forward contracts Net sales $ (41) $ (2) Precious metal swaps Cost of sales (126) (83) Interest rate swap Interest expense - net (115) — Copper swaps Cost of sales — (8) Total $ (282) $ (93) Nine Months Ended (Thousands) September 30, 2022 October 1, 2021 Hedging relationship Line item Foreign currency forward contracts Net sales $ (171) $ 138 Precious metal swaps Cost of sales (27) (122) Interest rate swap Interest expense - net 238 — Copper swaps Cost of sales — (3,049) Total $ 40 $ (3,033) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | (Thousands) September 30, 2022 December 31, 2021 Borrowings under Credit Agreement $ 201,388 $ 152,296 Borrowings under the Term Loan Facility 288,750 300,000 Foreign debt 7,947 2,252 Total debt outstanding 498,085 454,548 Current portion of long-term debt (19,747) (15,359) Gross long-term debt 478,338 439,189 Unamortized deferred financing fees (4,058) (4,801) Long-term debt $ 474,280 $ 434,388 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 8 Months Ended | 9 Months Ended | |||||
Nov. 01, 2021 | Oct. 31, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | Jul. 02, 2021 | Jul. 02, 2021 | Jul. 01, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 318,571 | $ 318,571 | $ 318,620 | |||||||
Amortization of intangible assets | 3,088 | $ 1,283 | 9,318 | $ 3,461 | ||||||
HCS- Electronic Materials | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, consideration transferred | $ 398,900 | |||||||||
Inventory step up | $ 0 | |||||||||
Debt instrument, face amount | $ 300,000 | |||||||||
Debt instrument, term | 5 years | |||||||||
Outstanding amount | 103,000 | 103,000 | ||||||||
Working capital true-up | 3,000 | |||||||||
Goodwill | $ 178,181 | 182,191 | 182,191 | |||||||
Revenue since acquisition date | 49,200 | |||||||||
Income (loss) before taxes since acquisition date | $ 4,400 | |||||||||
Net Sales | $ 428,864 | $ 1,223,450 | 135,700 | |||||||
Income before taxes | $ 23,022 | $ 65,926 | 10,500 | |||||||
HCS- Electronic Materials | Cost of sales | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Inventory step up | 7,500 | |||||||||
HCS- Electronic Materials | Selling, General and Administrative Expenses | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, integration related costs | $ 3,300 | |||||||||
HCS- Electronic Materials | Business Acquisition, Pro Forma Net Income (Loss) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Interest expense | 2,500 | 8,100 | ||||||||
Amortization of intangible assets | $ 2,000 | $ 6,000 |
Acquisition - Schedule of Busin
Acquisition - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) $ in Thousands | 8 Months Ended | |||
Jul. 01, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | |
Assets: | ||||
Operating lease, right-of-use assets | $ 65,716 | $ 63,096 | ||
Goodwill | 318,571 | $ 318,620 | ||
HCS- Electronic Materials | ||||
Assets: | ||||
Cash and cash equivalents | 3,685 | $ 3,685 | ||
Measurement Period Adjustments, Cash and cash equivalents | $ 0 | |||
Accounts receivable | 28,220 | 28,352 | ||
Measurement Period Adjustments, Accounts receivable | (132) | |||
Inventories | 70,681 | 70,681 | ||
Measurement Period Adjustments, Inventories | 0 | |||
Prepaid and other current assets | 305 | 660 | ||
Measurement Period Adjustments, Prepaid and other current assets | (355) | |||
Property, plant, and equipment | 45,036 | 44,681 | ||
Measurement Period Adjustments, , Property, plant, and equipment | 355 | |||
Operating lease, right-of-use assets | 6,120 | 6,120 | ||
Measurement Period Adjustments, Operating lease, right-of-use assets | 0 | |||
Intangible assets | 107,800 | 107,800 | ||
Measurement Period Adjustments, Intangible assets | 0 | |||
Other long-term assets | 4,528 | 4,528 | ||
Measurement Period Adjustments, Other long-term assets | 0 | |||
Goodwill | 182,191 | 178,181 | ||
Measurement Period Adjustments, Goodwill | 4,010 | |||
Total assets acquired | 448,566 | 444,688 | ||
Measurement Period Adjustments, Total assets acquired | 3,878 | |||
Liabilities: | ||||
Accounts payable | 12,139 | 12,139 | ||
Measurement Period Adjustments, Accounts payable | 0 | |||
Salaries and wages | 3,141 | 2,516 | ||
Measurement Period Adjustments, Salaries and wages | 625 | |||
Other liabilities and accrued items | 28 | 28 | ||
Measurement Period Adjustments, Other liabilities and accrued items | 0 | |||
Income taxes | 2,262 | 2,183 | ||
Measurement Period Adjustments, Income taxes | 79 | |||
Other long-term liabilities | 5,758 | 5,543 | ||
Measurement Period Adjustments, Other long-term liabilities | 215 | |||
Operating lease liabilities | 6,042 | 6,042 | ||
Measurement Period Adjustments, Operating lease liabilities | 0 | |||
Deferred income taxes | 20,300 | 20,300 | ||
Measurement Period Adjustments, Deferred income taxes | 0 | |||
Total liabilities assumed | 49,670 | 48,751 | ||
Measurement Period Adjustments, Total liabilities assumed | 919 | |||
Net assets acquired | $ 398,896 | $ 395,937 | ||
Measurement Period Adjustments, Net assets acquired | $ 2,959 |
Acquisition - Finite-Lived and
Acquisition - Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - HCS- Electronic Materials - USD ($) $ in Thousands | Nov. 01, 2021 | Sep. 30, 2022 |
Business Acquisition [Line Items] | ||
Intangible assets | $ 107,800 | $ 107,800 |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 50,200 | |
Useful Life | 13 years | |
Technology | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 35,300 | |
Useful Life | 13 years | |
Trade name | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 22,300 | |
Useful Life | 15 years |
Acquisition - Pro Forma Informa
Acquisition - Pro Forma Information (Details) - HCS- Electronic Materials - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Jul. 02, 2021 | Jul. 02, 2021 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||
Net Sales | $ 428,864 | $ 1,223,450 | $ 135,700 |
Income before taxes | $ 23,022 | $ 65,926 | $ 10,500 |
Segment Reporting - Segment Rep
Segment Reporting - Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 428,191 | $ 388,028 | $ 1,322,531 | $ 1,113,413 |
Total Segment EBITDA | 43,426 | 35,854 | 123,299 | 97,911 |
Income tax expense | 4,432 | 3,422 | 12,525 | 10,162 |
Interest expense—net | 5,888 | 861 | 14,325 | 2,480 |
Depreciation, depletion, and amortization | 13,154 | 13,415 | 39,223 | 32,478 |
Net income | 19,952 | 18,156 | 57,226 | 52,791 |
Performance Materials | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 169,357 | 136,096 | 473,876 | 375,533 |
Total Segment EBITDA | 28,866 | 28,917 | 80,886 | 68,027 |
Performance Materials | Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 200 | 600 | ||
Electronic Materials | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 230,841 | 220,723 | 762,649 | 638,481 |
Total Segment EBITDA | 16,853 | 11,326 | 51,338 | 32,668 |
Electronic Materials | Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,800 | 12,100 | ||
Precision Optics | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 27,993 | 31,209 | 86,006 | 99,399 |
Total Segment EBITDA | 3,546 | 6,228 | 9,281 | 19,246 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Total Segment EBITDA | $ (5,839) | $ (10,617) | $ (18,206) | $ (22,030) |
Segment Reporting - Disaggregat
Segment Reporting - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 428,191 | $ 388,028 | $ 1,322,531 | $ 1,113,413 |
Semiconductor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 188,784 | 177,482 | 624,551 | 503,348 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 61,614 | 50,296 | 187,998 | 142,876 |
Aerospace and defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 33,037 | 26,404 | 97,046 | 82,726 |
Consumer electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 16,770 | 18,036 | 57,716 | 55,656 |
Automotive | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28,933 | 33,212 | 84,172 | 90,211 |
Energy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 41,074 | 34,605 | 116,333 | 95,028 |
Telecom and data center | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15,454 | 15,011 | 47,823 | 39,488 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 42,525 | 32,982 | 106,892 | 104,080 |
Performance Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 169,357 | 136,096 | 473,876 | 375,533 |
Performance Materials | Semiconductor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,410 | 3,163 | 6,657 | 5,966 |
Performance Materials | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 44,667 | 31,521 | 127,187 | 85,815 |
Performance Materials | Aerospace and defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28,262 | 19,129 | 79,561 | 60,221 |
Performance Materials | Consumer electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,607 | 9,717 | 38,822 | 30,483 |
Performance Materials | Automotive | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 24,802 | 28,922 | 71,893 | 78,195 |
Performance Materials | Energy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15,854 | 7,524 | 36,632 | 16,541 |
Performance Materials | Telecom and data center | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15,412 | 14,980 | 47,716 | 39,348 |
Performance Materials | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28,343 | 21,140 | 65,408 | 58,964 |
Electronic Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 230,841 | 220,723 | 762,649 | 638,481 |
Electronic Materials | Semiconductor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 185,223 | 173,689 | 613,887 | 495,718 |
Electronic Materials | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,383 | 10,479 | 37,206 | 33,756 |
Electronic Materials | Aerospace and defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,243 | 1,622 | 5,141 | 4,680 |
Electronic Materials | Consumer electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 364 | 530 | 969 | 961 |
Electronic Materials | Automotive | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,863 | 1,719 | 4,985 | 5,145 |
Electronic Materials | Energy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 25,220 | 27,081 | 79,701 | 78,487 |
Electronic Materials | Telecom and data center | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 42 | 31 | 107 | 140 |
Electronic Materials | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,503 | 5,572 | 20,653 | 19,594 |
Precision Optics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 27,993 | 31,209 | 86,006 | 99,399 |
Precision Optics | Semiconductor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,151 | 630 | 4,007 | 1,664 |
Precision Optics | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,564 | 8,296 | 23,605 | 23,305 |
Precision Optics | Aerospace and defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,532 | 5,653 | 12,344 | 17,825 |
Precision Optics | Consumer electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,799 | 7,789 | 17,925 | 24,212 |
Precision Optics | Automotive | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,268 | 2,571 | 7,294 | 6,871 |
Precision Optics | Energy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Precision Optics | Telecom and data center | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Precision Optics | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,679 | 6,270 | 20,831 | 25,522 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Semiconductor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Aerospace and defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Consumer electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Automotive | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Energy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Telecom and data center | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 69.4 |
Contract with customer, liability, revenue recognized | $ 7.2 |
Revenue Recognition - (Details)
Revenue Recognition - (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | |||
Unearned revenue | $ 1,000 | ||
Change in unearned revenue | (2,191) | $ 650 | |
Accounts receivable, trade | |||
Capitalized Contract Cost [Line Items] | |||
Accounts receivable, trade | 229,171 | $ 213,584 | |
Change in accounts receivable, trade | $ 15,587 | ||
Contract asset percent change | 7% | ||
Unbilled receivables | |||
Capitalized Contract Cost [Line Items] | |||
Unbilled receivables | $ 9,654 | 7,961 | |
Change in unbilled receivables | $ 1,693 | ||
Contract asset percent change | 21% | ||
Unearned revenue | |||
Capitalized Contract Cost [Line Items] | |||
Unearned revenue | $ 6,596 | $ 7,770 | |
Change in unearned revenue | $ (1,174) | ||
Contract liability percent change | (15.00%) |
Other-net (Detail)
Other-net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Other Income and Expenses [Abstract] | ||||
Amortization of intangible assets | $ 3,088 | $ 1,283 | $ 9,318 | $ 3,461 |
Metal consignment fees | 3,111 | 2,243 | 8,993 | 6,857 |
Foreign currency (gain) loss | 235 | 380 | (70) | 1,596 |
Net loss (gain) on disposal of fixed assets | (1) | 81 | 17 | (283) |
Other items | 341 | (383) | 317 | 641 |
Total | $ 6,774 | $ 3,604 | $ 18,575 | $ 12,272 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate, percent | 18.20% | 15.90% | 18% | 16.10% |
Effective income tax rate, amount | $ 0.9 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Numerator for basic and diluted EPS: | ||||
Net income | $ 19,952 | $ 18,156 | $ 57,226 | $ 52,791 |
Denominator for basic EPS: | ||||
Weighted-average shares outstanding (in shares) | 20,526 | 20,439 | 20,502 | 20,414 |
Effect of dilutive securities: | ||||
Diluted potential common shares (in shares) | 254 | 218 | 254 | 245 |
Denominator for diluted EPS: | ||||
Adjusted weighted-average shares outstanding (in shares) | 20,780 | 20,657 | 20,756 | 20,659 |
Basic EPS (in USD per share) | $ 0.97 | $ 0.89 | $ 2.79 | $ 2.59 |
Diluted EPS (in USD per share) | $ 0.96 | $ 0.88 | $ 2.76 | $ 2.56 |
Stock appreciation rights | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 85 | 72 | 85 | 73 |
Restricted stock units | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 98 | 94 | 113 | 113 |
Performance-based restricted stock units | ||||
Effect of dilutive securities: | ||||
Dilutive effect of share-based compensation (in shares) | 71 | 52 | 55 | 59 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Out-of-The-Money | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from diluted EPS calculation (in shares) | 45,016 | 55,598 | 54,680 | 56,319 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 114,225 | $ 93,518 |
Work in process | 252,077 | 221,638 |
Finished goods | 53,997 | 45,959 |
Inventories, net | $ 420,299 | $ 361,115 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
Notional amount of nonderivative instruments | $ 354.2 | $ 480.2 |
Customer Prepayments (Details)
Customer Prepayments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Customer Prepayments [Abstract] | ||
Prepayments from customers | $ 17.5 | |
Deferred income | 88.2 | $ 72.6 |
Unearned revenue | $ 1 |
Pensions and Other Post-emplo_3
Pensions and Other Post-employment Benefits (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Components of net periodic benefit (credit) cost | ||||
Contributions by employer | $ 0 | $ 0 | $ 0 | $ 0 |
Pension Benefits | ||||
Components of net periodic benefit (credit) cost | ||||
Service cost | 281,000 | 410,000 | 891,000 | 1,284,000 |
Interest cost | 1,203,000 | 1,045,000 | 3,639,000 | 3,141,000 |
Expected return on plan assets | (2,380,000) | (2,459,000) | (7,158,000) | (7,407,000) |
Amortization of prior service (benefit) cost | (19,000) | (18,000) | (57,000) | (60,000) |
Amortization of net loss (gain) | 410,000 | 565,000 | 1,260,000 | 1,719,000 |
Net periodic benefit (credit) cost | (505,000) | (457,000) | (1,425,000) | (1,323,000) |
Settlements | 0 | 0 | 0 | 0 |
Total net benefit (credit) cost | (505,000) | (457,000) | (1,425,000) | (1,323,000) |
Other Benefits | ||||
Components of net periodic benefit (credit) cost | ||||
Service cost | 21,000 | 20,000 | 63,000 | 60,000 |
Interest cost | 39,000 | 29,000 | 117,000 | 87,000 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service (benefit) cost | (374,000) | (374,000) | (1,122,000) | (1,122,000) |
Amortization of net loss (gain) | (68,000) | (69,000) | (204,000) | (207,000) |
Net periodic benefit (credit) cost | (382,000) | (394,000) | (1,146,000) | (1,182,000) |
Settlements | 0 | 0 | 0 | 0 |
Total net benefit (credit) cost | $ (382,000) | $ (394,000) | $ (1,146,000) | $ (1,182,000) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | $ 749,154 | $ 681,701 | $ 720,440 | $ 655,630 |
Other comprehensive income (loss) before reclassifications | (456) | (1,366) | (3,761) | (2,824) |
Amounts reclassified from accumulated other comprehensive income (loss) | (300) | 21 | (987) | (2,685) |
Net current period other comprehensive (loss) income before tax | (756) | (1,345) | (4,748) | (5,509) |
Deferred taxes | 1,205 | 124 | 1,663 | 405 |
Net current period other comprehensive (loss) income after tax | (1,961) | (1,469) | (6,411) | (5,914) |
Ending balances | 766,677 | 697,428 | 766,677 | 697,428 |
Gains and Losses on Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 6,584 | 1,789 | 2,420 | 817 |
Other comprehensive income (loss) before reclassifications | 5,638 | 663 | 10,723 | 4,869 |
Amounts reclassified from accumulated other comprehensive income (loss) | (282) | (93) | 41 | (3,033) |
Net current period other comprehensive (loss) income before tax | 5,356 | 570 | 10,764 | 1,836 |
Deferred taxes | 1,231 | 131 | 2,475 | 425 |
Net current period other comprehensive (loss) income after tax | 4,125 | 439 | 8,289 | 1,411 |
Ending balances | 10,709 | 2,228 | 10,709 | 2,228 |
Pension and Post-Employment Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (39,926) | (43,226) | (39,702) | (43,473) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (18) | 114 | (1,028) | 348 |
Net current period other comprehensive (loss) income before tax | (18) | 114 | (1,028) | 348 |
Deferred taxes | (26) | (7) | (812) | (20) |
Net current period other comprehensive (loss) income after tax | 8 | 121 | (216) | 368 |
Ending balances | (39,918) | (43,105) | (39,918) | (43,105) |
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (11,277) | (1,647) | (2,887) | 4,017 |
Other comprehensive income (loss) before reclassifications | (6,094) | (2,029) | (14,484) | (7,693) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Net current period other comprehensive (loss) income before tax | (6,094) | (2,029) | (14,484) | (7,693) |
Deferred taxes | 0 | 0 | 0 | 0 |
Net current period other comprehensive (loss) income after tax | (6,094) | (2,029) | (14,484) | (7,693) |
Ending balances | (17,371) | (3,676) | (17,371) | (3,676) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (44,619) | (43,084) | (40,169) | (38,639) |
Net current period other comprehensive (loss) income after tax | (1,961) | (1,469) | (6,411) | (5,914) |
Ending balances | (46,580) | (44,553) | (46,580) | (44,553) |
Foreign Currency | Gains and Losses on Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 3,226 | 1,603 | 2,348 | 519 |
Other comprehensive income (loss) before reclassifications | 837 | 625 | 2,107 | 1,893 |
Amounts reclassified from accumulated other comprehensive income (loss) | (41) | (2) | (170) | 138 |
Net current period other comprehensive (loss) income before tax | 796 | 623 | 1,937 | 2,031 |
Deferred taxes | 183 | 143 | 446 | 467 |
Net current period other comprehensive (loss) income after tax | 613 | 480 | 1,491 | 1,564 |
Ending balances | 3,839 | 2,083 | 3,839 | 2,083 |
Interest rate swap | Gains and Losses on Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 3,250 | 0 | 0 | 0 |
Other comprehensive income (loss) before reclassifications | 4,360 | 0 | 8,228 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (115) | 0 | 238 | 0 |
Net current period other comprehensive (loss) income before tax | 4,245 | 0 | 8,466 | 0 |
Deferred taxes | 976 | 1,947 | 0 | |
Net current period other comprehensive (loss) income after tax | 3,269 | 0 | 6,519 | 0 |
Ending balances | 6,519 | 0 | 6,519 | 0 |
Precious Metals | Gains and Losses on Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 108 | 186 | 72 | (170) |
Other comprehensive income (loss) before reclassifications | 441 | 30 | 388 | 532 |
Amounts reclassified from accumulated other comprehensive income (loss) | (126) | (83) | (27) | (122) |
Net current period other comprehensive (loss) income before tax | 315 | (53) | 361 | 410 |
Deferred taxes | 72 | (12) | 82 | 95 |
Net current period other comprehensive (loss) income after tax | 243 | (41) | 279 | 315 |
Ending balances | 351 | 145 | 351 | 145 |
Copper swaps | Gains and Losses on Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 0 | 0 | 0 | 468 |
Other comprehensive income (loss) before reclassifications | 0 | 8 | 0 | 2,444 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (8) | 0 | (3,049) |
Net current period other comprehensive (loss) income before tax | 0 | 0 | 0 | (605) |
Deferred taxes | 0 | 0 | 0 | (137) |
Net current period other comprehensive (loss) income after tax | 0 | 0 | 0 | (468) |
Ending balances | $ 0 | $ 0 | $ 0 | $ 0 |
Stock-based Compensation Expe_3
Stock-based Compensation Expense - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2.2 | $ 1.5 | $ 6 | $ 5.3 |
Unamortized compensation cost | $ 13 | $ 13 | ||
Stock appreciation rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted in period (in shares) | 45,016 | |||
Weighted average exercise price on SARs granted in period (in usd per share) | $ 80.85 | |||
Grant date fair value per unit (in usd per share) | $ 25.87 | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted in period (in shares) | 61,145 | |||
Grant date fair value per unit (in usd per share) | $ 80.88 | |||
Vesting period | 3 years | |||
Performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value per unit (in usd per share) | $ 97.79 | |||
Vesting period | 3 years |
Stock-based Compensation Expe_4
Stock-based Compensation Expense - Schedule Of Share Based Payment Award SARs Valuation Assumptions (Detail) - Stock appreciation rights | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.56% |
Dividend yield | 0.59% |
Volatility | 38.50% |
Expected term (in years) | 4 years 4 months 24 days |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial Assets | ||
Deferred compensation investments | $ 2,754 | $ 4,426 |
Foreign currency forward contracts | 3,796 | 3,368 |
Interest rate swap | 8,467 | 0 |
Precious metal swaps | 476 | 116 |
Total | 15,493 | 7,910 |
Financial Liabilities | ||
Deferred compensation liability | 2,754 | 4,426 |
Foreign currency forward contracts | 736 | 136 |
Precious metal swaps | 23 | 24 |
Total | 3,513 | 4,586 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial Assets | ||
Deferred compensation investments | 2,754 | 4,426 |
Foreign currency forward contracts | 0 | 0 |
Interest rate swap | 0 | 0 |
Precious metal swaps | 0 | 0 |
Total | 2,754 | 4,426 |
Financial Liabilities | ||
Deferred compensation liability | 2,754 | 4,426 |
Foreign currency forward contracts | 0 | 0 |
Precious metal swaps | 0 | 0 |
Total | 2,754 | 4,426 |
Significant Other Observable Inputs (Level 2) | ||
Financial Assets | ||
Deferred compensation investments | 0 | 0 |
Foreign currency forward contracts | 3,796 | 3,368 |
Interest rate swap | 8,467 | 0 |
Precious metal swaps | 476 | 116 |
Total | 12,739 | 3,484 |
Financial Liabilities | ||
Deferred compensation liability | 0 | 0 |
Foreign currency forward contracts | 736 | 136 |
Precious metal swaps | 23 | 24 |
Total | 759 | 160 |
Significant Unobservable Inputs (Level 3) | ||
Financial Assets | ||
Deferred compensation investments | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Interest rate swap | 0 | 0 |
Precious metal swaps | 0 | 0 |
Total | 0 | 0 |
Financial Liabilities | ||
Deferred compensation liability | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Precious metal swaps | 0 | 0 |
Total | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | Mar. 04, 2022 | |
Derivatives, Fair Value [Line Items] | |||||
Foreign currency gain (loss) related to derivatives | $ (0.1) | $ (0.4) | $ 0.7 | $ 2.7 | |
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 6.2 | ||||
Derivative, term (maximum) | 4 years | ||||
Letter of Credit | Interest rate swap | Designated as hedging instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount total | $ 100 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activity - Derivative Instruments NonHedging (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount, asset | $ 135,558 | $ 38,575 |
Foreign currency forward contracts | Designated as hedging instrument | Yen | ||
Derivative [Line Items] | ||
Notional amount, asset | 3,301 | 3,907 |
Foreign currency forward contracts | Designated as hedging instrument | Euro | ||
Derivative [Line Items] | ||
Notional amount, asset | 27,030 | 28,412 |
Prepaid and other current assets | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Fair value, asset | 6,228 | 1,349 |
Prepaid and other current assets | Foreign currency forward contracts | Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount, asset | 14,216 | 55,063 |
Fair value, asset | 619 | 2,132 |
Prepaid and other current assets | Foreign currency forward contracts | Designated as hedging instrument | Yen | ||
Derivative [Line Items] | ||
Fair value, asset | 460 | 131 |
Prepaid and other current assets | Foreign currency forward contracts | Designated as hedging instrument | Euro | ||
Derivative [Line Items] | ||
Fair value, asset | 2,494 | 1,102 |
Other liabilities and accrued items | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Fair value, liability | 23 | 24 |
Other liabilities and accrued items | Foreign currency forward contracts | Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount, liability | 16,144 | 9,425 |
Fair value, liability | 722 | 128 |
Other liabilities and accrued items | Foreign currency forward contracts | Designated as hedging instrument | Yen | ||
Derivative [Line Items] | ||
Fair value, liability | 14 | 0 |
Other liabilities and accrued items | Foreign currency forward contracts | Designated as hedging instrument | Euro | ||
Derivative [Line Items] | ||
Fair value, liability | $ 0 | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activity - Fair Value Measurements, Recurring and Nonrecurring (Details) - Designated as hedging instrument - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount, asset | $ 135,558 | $ 38,575 |
Precious metal swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount, asset | 5,227 | 6,256 |
Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount, asset | 100,000 | |
Prepaid and other current assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 6,228 | 1,349 |
Prepaid and other current assets | Precious metal swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 476 | 116 |
Prepaid and other current assets | Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 2,798 | |
Other assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 5,892 | 2 |
Other assets | Precious metal swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 0 | 0 |
Other assets | Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 5,669 | |
Other liabilities and accrued items | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 23 | 24 |
Other liabilities and accrued items | Precious metal swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 9 | 24 |
Other liabilities and accrued items | Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 0 | |
Other long-term liabilities | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 14 | 8 |
Other long-term liabilities | Precious metal swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 14 | 0 |
Other long-term liabilities | Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 0 | |
Yen | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount, asset | 3,301 | 3,907 |
Yen | Prepaid and other current assets | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 460 | 131 |
Yen | Other assets | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 35 | 2 |
Yen | Other liabilities and accrued items | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 14 | 0 |
Yen | Other long-term liabilities | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 0 | 0 |
Euro | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount, asset | 27,030 | 28,412 |
Euro | Prepaid and other current assets | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 2,494 | 1,102 |
Euro | Other assets | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, asset | 188 | 0 |
Euro | Other liabilities and accrued items | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | 0 | 0 |
Euro | Other long-term liabilities | Foreign Currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value, liability | $ 0 | $ 8 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activity - Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax |
Precious metal swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of sales | Cost of sales | Cost of sales | Cost of sales |
Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense—net | Interest expense—net | Interest expense—net | Interest expense—net |
Copper swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of sales | Cost of sales | Cost of sales | Cost of sales |
Designated as hedging instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net | $ (282) | $ (93) | $ 40 | $ (3,033) |
Designated as hedging instrument | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net | (41) | (2) | (171) | 138 |
Designated as hedging instrument | Precious metal swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net | (126) | (83) | (27) | (122) |
Designated as hedging instrument | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net | (115) | 0 | 238 | 0 |
Designated as hedging instrument | Copper swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net | $ 0 | $ (8) | $ 0 | $ (3,049) |
Contingencies (Detail)
Contingencies (Detail) $ in Millions | Sep. 30, 2022 USD ($) claim | Dec. 31, 2021 USD ($) |
Loss Contingency [Abstract] | ||
Loss contingency, pending claims | claim | 1 | |
Undiscounted reserve balance | $ | $ 4.3 | $ 4.8 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Borrowings under Credit Agreement | $ 201,388 | $ 152,296 |
Borrowings under the Term Loan Facility | 288,750 | 300,000 |
Foreign debt | 7,947 | 2,252 |
Total debt outstanding | 498,085 | 454,548 |
Current portion of long-term debt | (19,747) | (15,359) |
Gross long-term debt | 478,338 | 439,189 |
Unamortized deferred financing fees | (4,058) | (4,801) |
Long-term debt | $ 474,280 | $ 434,388 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Borrowings under Credit Agreement | $ 201,388 | $ 152,296 |
Line of credit facility, interest rate at period end | 4.74% | 2.12% |
Line of credit facility, remaining borrowing capacity | $ 127,200 | |
Long-term line of credit, noncurrent | 288,800 | $ 300,000 |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | $ 46,400 | $ 46,300 |