MTRN - Earnings call 3 2023 | Materion Corporation

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Operator

Greetings, and welcome to the Materion Third Quarter 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Kyle Kelleher, Manager, Investor Relations. Sir, you may begin.

Kyle Kelleher

Good morning, and thank you for joining us on our Third Quarter 2023 Earnings Conference Call. Manager, Kelleher, Kyle is Investor Relations. This

part begin to point we the website, reference our quarterly of posted remarks like would company's as will we I morning, that today's out results. on review the this materials Before of that have we

call President Vice also earnings and Officer. Officer; Shelly the Chadwick, Chief and on access today Chief me can through the Executive link. With You feature is President Financial download materials the webcast Jugal Vijayvargiya, and

is key as on call Jugal format will well comments conference Our for opening follows: the as provide today's an strategic as quarter, update on initiatives.

Shelly discussing financial results our Jugal, XXXX. for to the review for addition of remainder in Following the expectations will the detailed quarter,

We open will call for then the up questions.

made the are actual those forward-looking presentation, Let variety factors morning. me are a that in we The listed current differ release, remind the factors. from result outlook Those of question-and-answer this by portion, and contemplated the investors in press during based the earnings on may materially in company's expectations. the statements including performance that of as section forward-looking issued statements a any

to reflect Additionally, in adjusted The comments before depreciation, share, taxes, and certain over GAAP net morning's the regarding income adjustments income X call per earnings tax numbers interest, amortization, shown in period through made attachments removed and now for for release. and turn X year depletion this earnings noncash the press prior the charges discrete are special adjustments. in comparative his purposes items, and I'll comments. And Jugal

Jugal Vijayvargiya

everyone. It's great Thanks, be to you welcome, Kyle, today. with and

and talent strength of is quarter of of third our testament our our the the effectiveness in to performance record Our people. company, the the strategy a

leveraging unique organic to diverse our on technical We new capabilities and successfully are growth opportunities. capitalize portfolio

for Delivering the and are our improved in and while softer outgrowth enabling Materion operational impact improvements addition, demand global our deliver conditions bar These targeted and end executing semiconductor environment. raise trends our in challenging offsetting pursuing to plants. driving markets performance team continues for across initiatives, on customers the excellence. our cost a the In to and of industrial

third second EBITDA earnings growth, The the outperforming $X.XX of represented achieving our consecutive also per quarter record target of It quarter consecutive share. of was XX%. adjusted XXth quarter earnings margin year-over-year our

from Excluding the market, were drove the and the the continued X%, the in of portfolio data the pipeline. Strength Strip, value-added differentiator and speaks semiconductor contributions emerging the meaningful sales substantial defense, market, softness to contributions Clad up organic space telecom our Aerospace, center Precision from our performance. including of in significance our which diversity and

from content We improved and more continue to benefit importantly, Aerospace plane. increasing build rates, per are

emerging In market. gaining significant the content we're addition, space in

the and Telecom adoption For cable Center, market. growth our undersea XG is fueling Data increasing in

our third as to of a industry, remain order recovery rates. software quarter some semi we've signs broader As some communication modest in recovery the devices. We pushing recovery by beyond demand seen continue for the inventory semiconductor as the has quarter, was out low third encouraged expectations, for in well positive persisted correction we our believe point and the memory, in see as the market, into softness previous logic and

that is we in expectation a next year. recovery with to in improvement see fourth the Our demand quarter will start broader gradual

the semiconductor are said opportunities content As we have our excited extremely before, about expanding chip. we in including per market,

opportunities well One mega to trend can significant is aligned it continues team cycles trends. for diverse portfolio, returns. recognize positioned driving with upturns as volume our support to market, new semi organic Leveraging lead remain that the also We emerging space such strong is global that growth that to and unlock us. we new opportunities, our

the have market tripled than more last growing years. in this X into sales Our

$XX materials for million. highlight we That secured to year. valued at recently a start, a the to for total supply propulsion of third past To order the opportunities. $XX me few brings amount critical awarded Let systems, exciting million the space

Our this into orders strengthening, the in year. $XX will for double next and space is market, also the the sales additional we coming our potential to see important projecting customer that approximately product partnership ToughMet million with year. We're

this new We have is both benefiting proven the and important business, markets. material, the which this conditions. Growth approximately space be require new million have for as customer space secured strength to in properties exceptionally applications. harsh Which has Optics Precision our and contracts commitments in corrosion-resistant across also $X for high in ideal defense performance next-generation market robust

various as Our across technologies serve components implementation imaging and applications. optical key enabling space-based essential for

performance, announce of our additive manufacturing have development of that to the XD beryllium as $X pleased in thermal investment our from received of the aluminum manufacturing and capabilities year execute very Laboratory, recently and that to printing, and into to I of new us I'm operationalize notified a supplier phase these another known to guidance development million proud production be used unique $XX accelerate manufacturing demanding continue also significant us optic our will in our million new program. I'm Force a and expertise We enable will we specialized Research propel systems enable to alloys. advantages of for important ability that applications, supply Air a and U.S. remain ability structures, to materials our for in space-related accelerate the investment results. techniques. technically critical of record management will critical bringing programs, defense deliver defense and We've an of and materials. Defense award will performance Additive also team's the beryllium Aerospace confident capabilities, markets. This

we our portfolio, to focus and build achieved earnings through on capabilities excellence, we've are are the uniquely With on of power the Materion. operational unrelenting continuing teams relevant technical diverse our wins

the the to call over to cover let me turn on details Now more Shelly financials.

Shelly Chadwick

good Thanks, morning, Jugal, and everyone.

on I Slide on website comments, slides reference my During morning, our this will posted XX. the starting

for record the the sequentially. year million we $XXX.X quarter, Value-added quarter. impact third prior Jugal of up which costs, X% the earnings outlined, metal precious from down As in were sales, pass-through delivered but excluded

Data business market softness, the the from in markets, demand Precision Telecom year. Center contribution and end quarter, X% company of semiconductor was driven This strong Excluding year-on-year. prior up delivered Defense approximately remainder along and the the was Aerospace in growth by and for business. We the the $X.XX of adjusted earnings and record compared per share XX%, up a to meaningful Strip the quarterly third with as Clad the

basis strong performance, Moving prior partially in in Adjusted pricing XX.X% of up This the or XX% margin EBITDA offset value-added expansion to year as as favorable increase by the from was and Slide XX. was sales, operational $XX.X million driven XXX quarter volume. by significant well the decrease of points. with slight mix,

to midterm EBITDA in earnings, up also XX% straight our target for of initiatives second outperforming improvement cost the targeted contributed quarter. step margin Our the

XX. Moving to Slide

to benefits outgrowth and compared our of me $XX.X third of or a Consumer and due from margin $XX strong by million, combined XXX Center XX.X% Performance when business, Let with from primarily XXXX, and sales in of electronics, review initiatives, were growth drove the in items, segment. $XXX.X up EBITDA, million, Precision Data Starting excluding year. with sales, quarter Materials this million Business to initiatives. expansion. This favorable was volume performance value-added XX%, pricing XX% impressive third operational our higher with excellence the basis value-added Clad increase. our mix, Telecom an points results compared Strip, Aerospace, to up the quarter was Strong prior special

the to outlook. Moving

led Data fourth with Telecom strong quarter We Precision contributions Clad by continued Center Aerospace, from expect Defense and and Strip. a

in customers mix their of basis compared semiconductor of to or this by initiatives, targeted continue Slide plus Electronic prior were turning value-added the benefit XX.X% market, XX% in Value-added to the points our do some margin from cost prior our year-over-year special decline, Materials on sales million, $XX.X favorable inventory reduction was resulting quarter. year. we saw improvement XX. year, where a sales Despite of which the include million a compared Next, short-term the down was slowdown to excluding driven actions. items, This correction. EBITDA, the XXX $XX

As the in we've the as we as expect forward from semiconductor improvement the quarter, well benefit look improvement fourth cost implemented. continued sales, initiatives to we incremental

to million, slightly the down market, special demand, by of on offset we basis in sales. The was prior was XX% by X% and added EBITDA, Defense. compared decline year-over-year the this general margin mix decrease by of million of sales This turning electronics growth, points driver year. Precision initiatives. application Finally, with XX. discontinued meaningful $X.X Value-added standpoint, Slide in benefit mainly XXX segment filter improvement to value PCR along excluding offset reduced strength were targeted Optics and or expansion. a a product cost in the items, the saw the consumer the EBITDA $XX.X softening driven sequential our volume positive was of decrease From

Defense, across to quarter, line expect Automotive out Looking growth. top opportunities the fourth contribute we to Space to and new

million million facility. ended We XX. of Slide on a of liquidity on and debt $XXX company's quarter debt the cash, $XXX net available approximately credit existing position to now capacity Moving the with and

remains midpoint at Xx Our slightly the targeted range. leverage of below our

the another $X.XX This look value Lastly, results let XXXX. We XXXX our long-term year. affirming on ability stakeholders. full for of sustainable out benefit in transition outlook. to cost year contributions strong midpoint are actions, an address high record our to pipeline, forward Slide me note, we and execute to remain per from year increase the our our record to organic of prior continued XX performance at guidance remarks. delivering accelerating prepared confident With of from of our we operational a XX% that, concludes and another closing With and the our share, creation finish reduction our

questions. open now will We the line for

Operator

Instructions] first question [Operator Moore Dan CJS from coming is Securities. with Our

Unknown Analyst

Dan. for It's Pete Lucas

relative First expected in Phase any one II? performing And in for to timing has me. Strip expectations? How been Clad project ramp your the is there regarded change

Jugal Vijayvargiya

Yes.

the Let first second part with me here. start

-- low time timing with before, in starting the of full is ramp at expect our we have have volume volume which that is the production ramp 'XX communicated end 'XX, what a in to and So line then frame. we

installation or as on, over go the equipment that and getting will Our so, qualified. through go year we next validation

our -- going our of well. would really I current terms In say program, it's

at facility. We our and the are delivering, produced facility well, to new it's legacy our as producing at We expectations.

line our as we that's results. planned, line had So and and the reflected with the in bottom top contributing, are

Unknown Analyst

you do X full to And in spread likely of it helpful. then over looking 'XX? revenue the you for think next layering And amounts was the begin each do to the of years? X fiscal noted, in Very When the record awards those to Or awards? are expect I program expect presentation. you X listed these Slide at on various

Jugal Vijayvargiya

it's Well, team I say, want first just growth organic to all, think to our just testament opportunities. another Yes. fantastic I of delivering

over just As done continues several last to know, and we've in that new bring years, the that opportunities. our you team

those are on that highlight few Let on me a of page. this

We announced Space to all, million, speak. another order critical being customer One earlier. expect 'XX to for So materials X was as we $XX a million we the was And supply million, frame. X actually $XX to that those the first in $XX that. of Systems, the are the of Phase time be Phase delivered and Propulsion one

this $XX is So to order million total with of $XX this another million customer. a coming

more So expect for for new this frame. opportunity us, and 'XX great orders really and would a in I perhaps time the becoming opportunity is 'XX year

So Optics as very the the frame. contracts, I in Defense, million the see $X 'XX 'XX, forward would those Precision at looking time much to and that. When look multiyear contracts Space I for

very The those. for So looking to space ToughMet forward much materials applications.

very, very important ToughMet us. material know, you is a for As

applications, in Commercial, space a just material & qualities for into that And et on of offers. been Gas, the adopted now Oil applications this cetera, have based number has material. the that We it Aerospace,

supplying year. We that this have been material

can roughly $X 'XX. and about into the this we million to chart, worth of year, you see sales those double As that's from expect

of, of into frame. of XXXX year $X So next time for we expect this then million into materials and the applications, year. million the the the speak notification Defense-related The $XX we an incremental partly critical that that

last were very and the is on -- this this U.S. this award Space receiving we're Defense. a The $X for investment done ourselves forward materials that This our our development, expertise provide for X-year X had is the award of will quite bit ourselves initiatives we beryllium a investment, And capabilities neat and accelerate be to just looking will beryllium-based of of builds that number materials And Force Manufacturing. award invested to from on facility. So X this space-related taken over thing period. We've million then Air about a for is an much over money regarding We've just a we Defense Additive different our that the applications. Additive that. That in aluminum an years. additive we've manufacturing. time Manufacturing for to application

years. X over the next So, we're very looking that much over to

company. our organic So to to great growth opportunities drive continue for

Unknown Analyst

And EPS helpful. good here. to out And it what's is What look one assumed as 'XX? rate fiscal finish just your guidance? Extremely implied tax with we a rate for housekeeping QX question

Shelly Chadwick

reduction a saw down the year-to-date and Yes, already with. really our question. were which we of by tax great Thanks benefit asking top saw pleased We it. combination of a that's the things. effective in of a we strong results, tax for rate, our rate come operating On

The our strong of due has increase mix. pure first being lot estimate credit. a slightly, the credit We The the been increased the has production to we have that selling. a about production products credit in related beryllium gone, production the talked

Some tax beryllium and free. then drive pure related the is our credit that's of from Those that products. production

to that of income, all So we're able tax free. take

tax foreign credits on In of seeing the based addition, mix we're global earnings. higher

in call mid-sixteens what rate we'll have how see down tax and So to once assumed and I've a shakes XX.X%, we is in out actuals. XX% our we the QX, sense, from, roughly took it, year

Operator

is question next Seaport from with Research coming Partners. Harrison Our Mike

Michael Harrison

I I just PM and the has you increased, in then puts flows should But through at the and Shelly, of look believe can thinking bit Materials EBITDA that was maybe, that the margin the as get the takes strong. just be segment mix that your we wondering we we that level QX, detail for more some XXXX. credit that in little into particularly a which line. mentioned segment as talk in about, on a talk here was you if I Performance little know comments, production we mentioned of about And strength. margin sources

Jugal Vijayvargiya

Yes. Mike, Shelly credit it things. start especially comes let to can in, when the and that, on then and jump production me

I several over well. think that the quarters, to know, business, as you last perform has continued

for we sure -- on pricing, certainly, providing say that initiative a part business be price we're things that I we're factor very been And the important as company-wide, do important to very our an the customers. the making to right mix but to getting for that value focused are that is that. of continue One It's for business, then of continue that would particularly we value-based well. has

to value drive more don't. products products on focus for frankly, continue We than generate that more us, that

we're also making Shelly. the sure excellence. that that's assets best possible. we're on drive to of our go us, so ahead operational But utilizing mix helped And course, And

Shelly Chadwick

Yes.

running really Just have well. of a couple other plants things. the been

margin a then as and mix that the and see quarter. And is we've well, better last And definitely and mix we'll operating fourth we talked said this up the that the about, & our in as production credit, for about plants so Jugal running $X well. when highlighted million are we talked year. Space for us, previously roughly mix the and get performance, just Defense helped that's through and the quarter, we

Now we're looking $XX roughly year. for at the million

the about of each think of two the million you So year. $X in last quarters

for that really So benefit a nice business.

Michael Harrison

in than little business, All it of Electronic right. your get rates, us bit color here start Materials the and a of recovery about little slower, more production is hoped. on into from as Can hearing in memory logic a you both their And we the seems of might side year-end customers and we pace the you're kind what give then terms like have XXXX?

Jugal Vijayvargiya

Yes.

inventory all can unfortunately, customers know, you of than into estimated. slowdown so inventory course, rates has that bit waiting orders start Mike, we've the our As But they longer the build translates for and That back -- the been all pick rates correction of for I up. or to to down slow start correction taken this to correction, that, little us. think a slower had inventory

we little to towards a see maybe bit end that of recovery. was start expectation would of QX, the Our

starting our to we're the QX. also calls, as customers some we're to of that starting from small We're positive to things see, some expectation highlighting. some think has our from listening customers, benefits they're shifted I hear earnings now incremental that directly. to

for Some of uptick an semiconductor bit order the depending orders, a to of so starting on little see maybe our are types, rates QX.

I are be semi well. QX for goes and what incremental like the would with think So QX as it a seems companies saying uptick small us. say I line the in point, And is low would that

So us. kind prepared X/X to this very extremely of It's good you the we uptick. our our it. that's of -- materials, extremely, just and roughly company, looking workforce our This the uptick is how our is for everything much We've as uptick. made we're the ready We're an and know, see as is forward that address to starts. sure inventory, to go business

looking that. very to forward much we're So,

Michael Harrison

benefits. comes you've sooner this or think or maybe showing Last think of portion year, of portion about later. And complete are back I additional most temporary is us you should structural what I maybe is question some in cost that I'm guess can That of help more actions that discretionary come have Well, taking these what some reduction if QX cost a hopefully, spend. year? quantify, is just and takeout better your is been could than we curious, next regarding

Shelly Chadwick

That's great to it talking to that Yes. things the buckets. what the the that that And we actions. reductions the that are meaning, at permanent And Mike. we're two are our about address too, into are really improve way way question, look you're a breaks what down long business temporary making current it, term,

market tightening until we head of related But a is the bit the it on belt side. temporary that controlling of is see and count Some up. some little just pick too the costs

quarters, terms tightening, say to people-related temporary sense. I makes So the the call belt I know, the it, permanent probably don't versus it's actions, would that X in X of if roughly, and XX-XX temporary in quarter

Michael Harrison

greater than being That's QX guess QX? the my just I And for helpful. about benefits and Sure. question

Shelly Chadwick

Yes.

saw in be to that do been reductions improve. QX. most we're we see impact of largely, to we QX. There'll done, have would a I into say, the the can So bit organization comes that always little what and at looking

So meaningful I QX. wouldn't see a in change step

Operator

coming next Phil Our is Gibbs question KeyBanc. from with

Philip Gibbs

commissioning when trials? Regarding plant do Clad start for actually initial II, Phase the you

Jugal Vijayvargiya

Yes, start with I to our customer, we as to our that, of the saleable then to production production, said start in equipment QX, own material QX, we that, low the do share get trials start out. that expect can And that tested end to produce that just and go would to as Phil, start would we've some probably like then some they and continue production in evaluate QX, that that and low-volume to towards just well would QX, ahead we volume do have would do. do

Philip Gibbs

And into going this existing Phase on? that is facility the I is

Jugal Vijayvargiya

Yes. exactly. This it yes, in building, program now last the working same that years. is of we're expertise This been is is same the The basically leverage the able great thing to folks that, for of our facility. couple this have about

those Of years. will resources the for plant be will supply resources of general overall going that course, engineering be to the needed, mostly but couple workforce the be last have with been management, that new, is development, many our chain, of

Philip Gibbs

phase Okay, just a in defense you bucket, have your XXXX, you relative awards, great, to color presentation. awards. which the sales that saying these is you on XXXX and then going of But value-added commentary space nicely some well to that be and that lot in had you and was highlighted to and higher are in as of clear,

Jugal Vijayvargiya

one last calls which so Well, it I year would the tripled fantastic. will an continue our couple be years, think order, And this to well. I going in And our we've ago, about see 'XX sales think, which expectation, to frame. has we the additional incremental the million step important the expect time Yes. would customer, us. example, important benefits X, Space 'XX this we in as $XX well. market, I over I or of for a say, as with that orders. then secure for We it's is work market very our as Space highlighted customer, into been I into highlighted I

this to to materials that that security work get market. are that. to other try we're into those to course, with but to And have our we Of make we do customer not going then continue continue we'll can add, sure

trend is one us kind I and this a three on. can of high very mega really focused our type tell much growth, for of all very, we're almost across market like businesses, a So, you a that of

Philip Gibbs

quarter? terms And in then just what for anticipating you are working the fourth of lastly, net capital,

Shelly Chadwick

that, I'll Yes, take Phil.

WIP upturn. that starting mentioned So of one that raw taken from jugal bit, so is was ready we've our that get might not material we're some for you we're up when that results orders, see customer material And raw and a to be things to the that base. semi in we inventory push ready little the through

little we'll year. built expect inventory end we and that bit a of hold So the through I the there, of

And bit I cash was the and a of been of the as be AP quarter, a we will well. some in expect I has a spot, in that finish that so a get we'll as bright AR out expect back inflow, year negative for QX. QX

should So end a down slight year. be it the positive, the meaningfully but inventory bringing not of before

Operator

from is next David question Silver CL Our coming with King.

David Silver

Yes.

wins, ago, attribute firstly, question it. new say, again, the a have how contract is But year And it to, these this. wins. A there's beginning accelerating Performance year or now, questions traditional couple not naive my or contract I it warning. greater your But of several know, business you wording a but The of probably I or maybe Aerospace and going that's I looking not but sound little on of don't Performance What backlog however guess, And Materials? results successful to the Materials. figure first in you seemingly like seems do book in are this track going particularly, hopelessly let's angles year, advance. a maybe like snide to for been was success of good you I'm an typically and or, compared then, just intention. apologize naive whatever, alternatively Defense. a would So these mean

in a this had always position, let's in You've beryllium say, commanding area.

factors mix the or say you're has is market? But value the really that's leading the performance, cause, which So record preferred been that's the there go becoming high-value your the symptom a you of way of to in proposition for but is what these supplier opportunities. a to you would shift maybe

question, here the just say? but stop maybe how and of yes, But long-winded factors and the just would factors a are at there. that So mix play mix I'll you -- of

Jugal Vijayvargiya

of only the Materials really well. years segment, year, really, first in I Well, the not indicated, if X well. in I think done just the you achieved line all, like business the look the Yes. business bottom X, last you the done Performance as but our have think has growth performance. The as what and terms line well has growth, of has top of back business quite has done

is parts doing I business, our new think think talk say, you I performance, what's highlighted, the I about, that because about so materials the When that material think, science of the the great materials I job have. team would out, different. of about think, let's our we marketing that just you expertise of the a that getting we really good the have, first

growth so efforts development that these have, I technical for particularly, I we're say, so I example, market, business mean, across think, just highlighting the today. Space markets, our our like, we would sales So Space,

all that. about by this way, -- I'll the course, So of markets. talk applies But the to

has understanding And has of think customers materials and our I And understand think, I out the But tremendously. great our I a value helping at the think, helped team propositions the of the the materials, day. that, that. getting providing job value of wonderful just there, done materials then our end that,

metrics solutions on a leads those right by customers have just to the the needs, our for finding metrics, imagine, at, of the that. Which, from and for focused we your So and needs then It's are understanding can the question kind backlog. done the backlog. been one on and at job the what look directly fantastic many you of way, teams look different they've growth puts always our we backlogs. There's look We but on of do that perspective. as at takes

markets a the which backlog -- key times. market is of Industrial, top. also a like Space lead of backlog component we that's are Some our is down There's has also know,

were the workforce to 'XX of back lead of the 'XX, year kind I you times the as If long time were ramping after frames, for go getting our our XXXX,and COVID extremely up we mean of materials some in.

lead mean, you that has, imagine, actually that mean times as has are sales is negative as I can business impact on our backlog, significantly, up. you've have doesn't which improved seen, but our declining. Our a

that I more we So, I a general, at is look mean, backlog at. superior metrics of mean have our different we new metrics. the driving markets really the teams in in materials. look the opportunities using But one been number of all

David Silver

have you could next would question hoping about My I Okay. the on I Materials. it somewhat Electronic be inventory issues. guess, And was talk on you a lingering, customer broader commented maybe from perspective.

is you So currently, the in Milwaukee think some for in And your build capability discretionary Newton. had out in spending you've capabilities expectations some capital new I been available. to that area and for levels demand that when

current the up. demand, which your right, you if also thought. transition sluggish here, just than new wondering coming maybe you about could have a little persisted bit give these period has initially maybe thinking maybe And us the customer But then I'm longer capabilities

question, the when capabilities turn on? is the So are case, Or new that bit it units might case it to the serve that markets a the projections softness phase a operating maybe under? in business end but how you do market context of current longer-term demand are this overlap or and newer with little of of growth So about really not or the where the of don't be applications the softer is you're the necessarily there generation kind products long-winded now? gap the the maybe is where those a designed think where next services

Jugal Vijayvargiya

Yes.

facilities was was equipment did expectation second where installation additional time going facilities we and Newton, volume we're Milwaukee adding X these going. you place you the that got our and at procured mentioned, to both and look then be the of half production new XXXX. the get So By the in if our the capabilities, and to the in

next of think So year applications, the then we're that actually positioned needing bit half then little the QX, to to well for and particular, greater and back emerging a I is extremely perfect in out Milwaukee deliver happen a customers recovery the be as then just are think the be starts to our much memory 'XX, timing to work going recovery in I ALD products, able into into of 'XX of first in going our facility. here but half out to because the

And out our of then and Newton products facility. the Logic Memory

were slowdown some I the Because And to capacities these us plants, slowdown can was put So the in trying happening at is think additional how our and has basically Milwaukee The 'XX Newton, our were in recovery opportunity can actually, we in of to capacities and to put say, have so in half to ready us figure the running we full. come put resources as given and capacities 'XX is what going helped the in all same the in. is time, you to out them in place. allocate in respects, place in of right that the we back way into the to the 'XX place. 'XX,

up timing impacted David, I in at The to I of all. getting we're has of way, the right the think, think semi don't and in, timing So recovery in the is us respect, helped cycle. sure it slowdown, some actually make lines that, with it's the interesting. Because capacity the

David Silver

from think call in incremental little a and do on budgeting Space there's number And initiatives a Sorry. Defense, a the was was bit when maybe Electronic you've earlier, the I kind course, Optics. new Materials. October perspective, ones, lot of and I today notice project a And of for did budgeting lot more in new One coming great Precision always expansion previous multistep is the outlined mean, the I a or of this companies That color. resources year. of but a of

terms Materials. the was year this R&D for next you So, XXXX. cited betting success would that just let's million and CapEx, as have I I resources, rise you year. CapEx in for, I'm what in of if XXXX about thinking an technical a for say overall your which then selling, of $XX man, And would aspect are beyond of to But resourcing, say, even thinking Performance just

X, as you're the What's things for So planning on I next dollars, now? or out guess, expertise. R&D people, tap year technological

Jugal Vijayvargiya

Yes. the Well, all, timing. of first right you're on

together. XXXX. we'll you that to to in our And for about mid-February, we and plan to to that our out when come as that We with everybody you think guide starting starting talking about and are be know, put and

looking and that it's us, much because to be with going very think exciting to year I'm along 'XX for another So I on. forward so

to So as 'XX is invest that time is 'XX, for continue frame. opportunities in This mean, we to been out we've shy all 'XX, would opportunity play to going these to M&A, expect our that With investments, I a you've come us indicated, our you invest, regard we in way of fantastic the a to never number know. it's to type business. done that whether resources or that and And CapEx last the exactly years, continue we've that, may fits it's business. of our like we're any over in resources, whether R&D up to do

slower, the down continue I look when to that. at, you even at going on we're mean this markets significantly we're example, slowing Even are R&D So though R&D. to year, not look for

investing and side as the well. do in on it's are that we'll and do to continue our We we'll CapEx to expectation that, continue that still R&D,

So I'm put sharing our looking them very plans, we much you forward together. with guys to as

Operator

with from Markets. question Stonegate next coming Capital is Storms Dave Our

David Joseph Storms

So, to us if that going smallest going Telecom a was markets, to probably wondering talk on seems bit end about you I your and keep could be growing. of acquisition any one there's forward? just it of wanted impact just I from what here markets. your know one to just is customer to environment if meaningful end your looks touch little but like

Jugal Vijayvargiya

Well, we're forward much Yes. smaller of growth. has the one to very is continued it markets, in that this a market consecutive And X It of Data quarters is Center, growth but looking you're and area. right. Telecom

you to market then As that's very know, supply us end we where important, is requirements, increase, requirements and to bandwidth increase, requirements continue cloud for to continue continue data center this. material to and services this

X we I our the years. well very So, to think we're increase expect And X materials. to to over these to next positioned with areas continue X

provide volume-based The going I to it's area market materials, think us, market undersea is strong to where for cable a continue for key be and we us. a

David Joseph Storms

is negotiations. you I lot on more helpful. labor the me, What then one for sounds like your any if that it? what confidence front? if UAW your been shops It you about are now. of more you There's could up running door the at to But scale well point, And very could. the you just needed news labor seeing That's labor get the needed in a if are

Jugal Vijayvargiya

I think into job factories. labor fantastic our getting teams did a our

to in they're recovery as good the time going the as semi the job and ramp-up again frame a happens. really do 'XX, On would happened, I that 'XX

needed, in that focused that I making 'XX the can as is as things we of to the sure time labor so in possible, rely stay uptick the of of frame. think workforce and we're retaining 'XX. there folks department did additional we've much if on support one the on And like the course, 'XX our that's just bring they we is in then, will HR

confident support of we're any to So I'm be to type uptick. that very an going able

Operator

Thank you.

the reached have session. our We end of question-and-answer

over closing turn Kyle now back the will I to remarks. So his call Kelleher for

Kyle Kelleher

earnings our number XXXX like of be recorded you. I this will company's thank concludes Materion. questions, your for I'd on any this Thank materion.com. call A playback you follow-up XXX-XXXX. available in for Thank on call be the interest This and to call. third my you is participating website, (XXX) again. available quarter will

Operator

concludes we lines your This Thank you conference, participation. and you. and disconnect for time, this you your may at today's thank

Materion (MTRN) 1 Nov 232023 Q3 Earnings call transcript