What changed in MATERION Corp's 2023 10-K compared to 2022?

Across the narrative sections we track, MATERION Corp (MTRN) added 177 paragraphs, removed 205, and edited 140 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+76/−91), Item 1A. Risk Factors (+57/−62), Item 1. Business (+22/−21).

Did MATERION Corp add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 57 new/edited paragraphs and 62 removed paragraphs versus the 2022 10-K.

What changed in MATERION Corp's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 76 new/edited paragraphs and 91 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did MATERION Corp's Legal Proceedings (Item 3) change in 2023?

Item 3 shows 2 added/edited paragraphs and 10 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this MTRN 10-K diff come from?

The source filings are MATERION Corp's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in MATERION Corp's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of MATERION Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+177 added−205 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-16)

Top changes in MATERION Corp's 2023 10-K

177 paragraphs added · 205 removed · 140 edited across 8 sections

Item 7. Management's Discussion & Analysis+76 / −91 · 58 edited
Item 1A. Risk Factors+57 / −62 · 42 edited
Item 1. Business+22 / −21 · 18 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+12 / −13 · 12 edited
Item 3. Legal Proceedings+2 / −10 · 2 edited

Item 1. Business

Business — how the company describes what it does

18 edited+4 added−3 removed51 unchanged

2022 filing

2023 filing

Biggest changeTo attract a global workforce, we strive to create and embed a culture where employees can bring their whole selves to work. Our employee resource groups (ERGs) are Company-sponsored groups of global employees that support and promote the specific mutual objectives of both the employees and the Company, with emphasis on the inclusion, diversity, and professional development of employees.

Biggest changeOur employee resource groups (ERGs) are Company-sponsored groups of global employees that support and promote the specific mutual objectives of both the employees and the Company, with emphasis on the inclusion, diversity, and professional 5 development of employees. The ERGs provide opportunities for employees to connect, develop, and grow together in a supportive environment.

On an annual basis, we conduct organizational reviews with our Chief Executive Officer and all business unit and function senior leaders to identify and evaluate our high potential, diverse talent and succession plans for our most critical roles. Available Information We are subject to the informational requirements of the Securities Exchange Act of 1934.

On an annual basis, we conduct organizational reviews with our Chief Executive Officer and all business unit and function senior leaders to identify and evaluate our high potential, diverse talent and create succession plans for our most critical roles. Available Information We are subject to the informational requirements of the Securities Exchange Act of 1934.

Occupational Safety and Health Administration (OSHA) published a new standard for workplace exposure to beryllium that, among other things, lowered the permissible exposure by a factor of ten and established new requirements for respiratory protection, personal protective clothing and equipment, medical surveillance, hazard communication, and record-keeping.

Occupational Safety and Health Administration (OSHA) published a final standard for workplace exposure to beryllium that, among other things, lowered the permissible exposure by a factor of ten and established new requirements for respiratory protection, personal protective clothing and equipment, medical surveillance, hazard communication, and record- 4 keeping.

Item 1. BUSINESS THE COMPANY Materion Corporation (referred to herein as the Company, our, we, or us), through its wholly owned subsidiaries, is an integrated producer of high-performance advanced engineered materials used in a variety of electrical, electronic, thermal, and structural applications with $1.8 billion in net sales in 2022. The Company was incorporated in Ohio in 1931.

Item 1. BUSINESS THE COMPANY Materion Corporation (referred to herein as the Company, our, we, or us), through its wholly owned subsidiaries, is an integrated producer of high-performance advanced engineered materials used in a variety of electrical, electronic, thermal, and structural applications with $1.7 billion in net sales in 2023. The Company was incorporated in Ohio in 1931.

This data-driven approach helps ensure that we stay aligned to our goal of creating a positive and dynamic global work environment where all employees can flourish. A truly innovative workforce needs to be diverse and leverage the skills and perspectives of a broad range of backgrounds and experiences.

This data-driven approach helps ensure that we stay aligned to our goal of creating a positive and dynamic global work environment where all employees can both contribute and thrive. A truly innovative workforce needs to be diverse and leverage the skills and perspectives of a broad range of backgrounds and experiences.

Backlog The backlog of unshipped orders as of December 31, 2022, 2021, and 2020 was $576.2 million, $541.1 million, and $279.2 million, respectively. Backlog is generally represented by purchase orders that may be terminated under certain conditions. We expect that substantially all of our backlog of orders at December 31, 2022 will be filled over the next 18 months.

Backlog The backlog of unshipped orders as of December 31, 2023, 2022, and 2021 was $573.4 million, $576.2 million, and $541.1 million, respectively. Backlog is generally represented by purchase orders that may be terminated under certain conditions. We expect that substantially all of our backlog of orders at December 31, 2023 will be filled over the next 18 months.

Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully. We employed approximately 3,723 people globally as of December 31, 2022.

If the standards are made more stringent and/or our customers or other downstream users decide to reduce their use of beryllium-containing products, our results of operations, liquidity, and financial condition could be materially adversely affected.

The development, proposal, or adoption of more stringent standards may affect the buying decisions of the users of beryllium-containing products. If the standards are made more stringent and/or our customers or other downstream users decide to reduce their use of beryllium-containing products, our results of operations, liquidity, and financial condition could be materially adversely affected.

Approximately 574 were in the Asia–Pacific region, 488 were in the Europe, the Middle East, and Africa (EMEA) region, and 2,661 were in the North America region. Among our total global employee population, approximately 2,336 were employed in manufacturing.

Approximately 473 were in the Asia–Pacific region, 454 were in the Europe, the Middle East, and Africa (EMEA) region, and 2,477 were in the North America region. Among our total global employee population, approximately 2,224 were employed in manufacturing.

Approximately 800 customers purchase our products throughout the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center end markets. No single customer accounted for more than 10% of our total net sales for 2022.

Approximately 800 customers purchase our products throughout the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center end markets. In fiscal year 2023, one customer accounted for approximately ten percent of our net sales. Prior to this, no single customer accounted for ten percent or more of our net sales.

We continue to invest in safety improvements such as capital improvements, new safety technology, safety controls, and engineering ergonomic solutions. On an annual basis, our corporate long-range strategies are reviewed and updated, improvement plans are developed for each global location, progress is tracked, and daily critical safety statistics and metrics are published internally.

On an annual basis, our corporate long-range strategies are critically analyzed, reviewed and updated, improvement plans are developed for each global location, progress is tracked, and daily critical safety statistics and metrics are published internally.

The ERGs provide opportunities for employees to connect, develop, and grow together in a supportive environment. As of December 31, 2022, we had four ERGs: ELEVATE (Women); V.E.T. (veterans and allies of the military); LGBTQ+; and United Voices of Materion (all ethnic backgrounds).

As of December 31, 2023, we had four ERGs: ELEVATE (Women); V.E.T. (veterans and allies of the military); LGBTQ+; and United Voices of Materion (all ethnic backgrounds).

We also have onsite medical teams at two key manufacturing sites to provide medical testing for employees to determine any potential exposure to beryllium, of which Materion is a leading global supplier. 5 Diversity and Inclusion As part of our human capital management initiatives to attract, develop, and retain diverse global talent, we track and report internally on key talent metrics including workforce demographics, critical role pipeline data, and diversity hiring analytics.

Diversity and Inclusion As part of our human capital management initiatives to attract, develop, and retain diverse global talent, we track and report internally on key talent metrics including workforce demographics, critical role pipeline data, and diversity hiring analytics.

This business includes a portion of HCS-Electronic Materials. See Note B to the Consolidated Financial Statements for additional discussion regarding our acquisition of HCS-Electronic Materials. Electronic Materials products are sold directly from its facilities throughout the United States, Asia, and Europe, as well as through direct sales offices and independent sales representatives throughout the world.

Electronic Materials products are sold directly from its facilities throughout the United States, Asia, and Europe, as well as through direct sales offices and independent sales representatives throughout the world.

Refer to Note B to the Consolidated Financial Statements for additional detail on the acquisition of HCS-Electronic Materials. Regulatory Matters 4 We are subject to a variety of laws that regulate the manufacturing, processing, use, handling, storage, transport, treatment, emission, release, and disposal of substances and wastes used or generated in manufacturing.

Regulatory Matters We are subject to a variety of laws that regulate the manufacturing, processing, use, handling, storage, transport, treatment, emission, release, and disposal of substances and wastes used or generated in manufacturing. For decades, we have operated our facilities under applicable standards of inplant and outplant emissions and releases.

Materion was a participant in the development of the new standards, which fundamentally represent our current health and safety operating practices.

Materion was a participant in the development of the new standards, which fundamentally represents our current health and safety operating practices. Other government and standard-setting organizations are also reviewing beryllium-related worker safety rules and standards, and may make them more stringent.

Health and Safety The health, safety, and well-being of our employees is our highest priority and is a Materion core value. We have a strong Environmental, Health, and Safety (EHS) program that focuses on implementing policies and training programs, as well as performing self-audits to ensure our colleagues leave their workplace safely, every day.

For decades, we have operated our facilities under applicable standards of inplant and outplant emissions and releases. The inhalation of airborne beryllium particulate may present a health hazard to certain individuals. On January 9, 2017, the U.S.

The inhalation of airborne beryllium particulate may present a health hazard to certain individuals. In 2018, the U.S.

Removed

Acquisitions On November 1, 2021, the Company acquired HCS-Electronic Materials for a purchase price of approximately $395.9 million in cash, on a cash-free, debt-free basis, subject to a customary purchase price adjustment mechanism. This business operates within the Performance Materials and Electronic Materials segments, and the results of operations are included as of the date of acquisition.

Added

Our future focus is the integration of human operating performance concepts into our EHS process which is proven to further reduce the risk of serious injuries. We will be significantly enhancing our training programs through the implementation of a new learning management system emphasizing increased hazard recognition skills and typical regulatory compliance requirements.

Removed

On July 6, 2018, OSHA issued a Direct Final Rule that amended the text of the new standard to clarify OSHA’s intent with respect to certain terms and provisions of the standard, and on December 11, 2018, OSHA issued a Notice of Proposed Rulemaking concerning additional modifications to the standard “to clarify certain provisions and to simplify or improve compliance.” OSHA issued the final beryllium standard incorporating these additional modifications on July 14, 2020.

Added

We perform self-audits to ensure sustainability of our processes and systems to create an environment where our colleagues leave their workplace safely, every day. We continue to invest in safety improvements such as capital improvements, new safety technology, safety controls, and engineering ergonomic solutions.

Removed

Other government and standard-setting organizations are also reviewing beryllium-related worker safety rules and standards, and will likely make them more stringent. The development, proposal, or adoption of more stringent standards may affect the buying decisions of the users of beryllium-containing products.

Added

To attract a global workforce, we strive to create and embed a culture where employees can bring their authentic selves to work and feel a genuine sense of belonging.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+15 added−20 removed84 unchanged

2022 filing

2023 filing

Biggest changeMaterion has not experienced a known information security breach to our systems, however intrusions could pose a risk of undetected data loss or theft that could later be used to harm the Company. There have been no financial penalties or settlements associated with an information security breach within the last three years.

Biggest changeThe Company has taken steps to protect our computer systems; however, there is always a risk of successful intrusions or attacks, and any intrusions or attacks could pose a risk of undetected data loss or theft that could later be used to harm the Company.

Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us or our industry could harm us. We may not be able to recover the cost of compliance with new or more stringent laws and regulations, which could adversely affect our results of operations, financial position or cash flows.

Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us 11 or our industry could harm us. We may not be able to recover the cost of compliance with new or more stringent laws and regulations, which could adversely affect our results of operations, financial position or cash flows.

For retiree health accounting purposes, we have used a graded assumption schedule to assume the rate at which health care costs will increase. We cannot predict whether changing 10 market or economic conditions, regulatory changes, or other factors will further increase our retiree health care expenses or obligations, diverting funds we would otherwise apply elsewhere.

For retiree health accounting purposes, we have used a graded assumption schedule to assume the rate at which health care costs will increase. We cannot predict whether changing market or economic conditions, regulatory changes, or other factors will further increase our retiree health care expenses or obligations, diverting funds we would otherwise apply elsewhere.

We cannot assure that rights to indemnification by the sellers of these assets or companies to us, even if obtained, or applicable representation and warranty insurance, will be enforceable, collectible, or sufficient in amount, scope, or duration to fully offset the possible liabilities 14 associated with the business or property acquired.

In the event we were to incur contractual penalties, such as liquidated damages or other related costs that exceed our expectations, our business, financial condition, and operating results could be materially and adversely affected. Item 1B. UNRESOLVED STAFF COMMENTS None. 15

Future requirements could impose on us significant additional costs or obligations with respect to our extraction, milling, and processing of ore. If we fail to comply with present and future environmental laws and regulations, we could be subject to liabilities or our operations could be interrupted.

Future requirements could impose on us significant additional 12 costs or obligations with respect to our extraction, milling, and processing of ore. If we fail to comply with present and future environmental laws and regulations, we could be subject to liabilities or our operations could be interrupted.

Prices for precious metal and certain non-precious metals including tantalum, nickel, iridium, rhodium, niobium, hafnium and tungsten have fluctuated significantly in recent years. Additionally, geopolitical instability and the inflationary environment 8 have added to the volatility.

Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other factors, many of which are beyond our control, affect our ability to make these payments.

Prevailing economic 13 conditions and financial, business, competitive, legislative, regulatory and other factors, many of which are beyond our control, affect our ability to make these payments.

Tax increases and changes in tax rules may adversely affect our financial results As a company conducting business on a global basis with material operations throughout the United States, we are exposed, both directly and indirectly, to the effects of changes in U.S., state, local, and foreign tax rules.

Tax increases and changes in tax laws may adversely affect our financial results As a company conducting business on a global basis with material operations throughout the United States, we are exposed, both directly and indirectly, to the effects of changes in U.S., state, local, and foreign tax laws.

Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules. Such changes may put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers.

Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax laws. Such changes may put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers.

These contracts may be suspended, canceled, or delayed, which could have an adverse impact on our revenues. In 2022, 16% of our value-added sales were to customers in the aerospace and defense end market. A portion of these customers operate under contracts with the U.S. Government, which are vulnerable to termination at any time, for convenience or default.

These contracts may be suspended, canceled, or delayed, which could have an adverse impact on our revenues. In 2023, 14% of our value-added sales were to customers in the aerospace and defense end market. A portion of these customers operate under contracts with the U.S. Government, which are vulnerable to termination at any time, for convenience or default.

The destruction or closure of our mine, any of our manufacturing facilities, or to critical pieces of equipment within these facilities for a significant period of time as a result of harsh weather (including that caused by climate change), fire, explosion, act of war or terrorism, or other natural disaster or unexpected event may interrupt our manufacturing 9 capabilities, increase our capital expenditures and our costs of doing business, and impair our ability to deliver our products on a timely basis.

The destruction or closure of our mine, any of our manufacturing facilities, or to critical pieces of equipment within these facilities for a significant period of time as a result of harsh weather (including that caused by climate change), fire, explosion, act of war or terrorism, or other natural disaster or unexpected event, including a security incident such as a ransomware attack, may interrupt our manufacturing capabilities, increase our capital expenditures and our costs of doing business, and impair our ability to deliver our products on a timely basis.

Our property damage and business interruption insurance may not cover all of our potential losses and may not continue to be available to us on acceptable terms, if at all. A security breach of customer, employee, supplier, or Company information may have a material adverse effect on our business, financial condition, and results of operations.

Our property damage and business interruption insurance may not cover all of our potential losses and may not continue to be available to us on acceptable terms, if at all. A security incident impacting customer, employee, supplier, or Company information, or Company systems or infrastructure, may have a material adverse effect on our business, financial condition, and results of operations.

We cannot predict whether we will be successful in pursuing any acquisition opportunities or whether we will be able to achieve the strategic and other objectives related to any acquisitions, including our recent acquisition of HCS-Electronic Materials, including the achievement of any expected synergies. Future acquisitions may involve the expenditure of significant funds and management time.

We cannot predict whether we will be successful in pursuing any acquisition opportunities or whether we will be able to achieve the strategic and other objectives related to any acquisitions, including the achievement of any expected synergies. Future acquisitions may involve the expenditure of significant funds and management time.

Government; • political and economic instability and disruptions, including terrorist attacks; • disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (FCPA); • potentially adverse tax consequences due to overlapping or differing tax structures; • fluctuations in currency exchange rates; and 11 • disruptions in our business or the businesses of our suppliers or customers due to cyber security incidents, public health concerns (including viral outbreaks, such as COVID-19), the ongoing conflict between Russia and Ukraine or natural disasters.

Government; • political and economic instability and disruptions, including terrorist attacks; • disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (FCPA); • potentially adverse tax consequences due to overlapping or differing tax structures; • fluctuations in currency exchange rates; and • disruptions in our business or the businesses of our suppliers or customers due to cyber security incidents, public health concerns (including viral outbreaks, such as COVID-19), war or other hostilities, or natural disasters.

For example, we have experienced customers building inventory in anticipation of increased demand, whereas in other periods, demand decreased because our customers had excess inventory. 7 A portion of our revenue is derived from the sale of defense-related products through various contracts and subcontracts.

For example, we have experienced customers building inventory in anticipation of increased demand, whereas in other periods, we experienced decreased demand because our customers had excess inventory. Risks Relating to Our Business and Operations A portion of our revenue is derived from the sale of defense-related products through various contracts and subcontracts.

In addition, adverse media coverage relating to our beryllium-containing products could damage our reputation or cause a decrease in demand for beryllium-containing products, which could adversely affect our profitability. Additionally we, as well as our customers, are subject to laws regulating worker exposure to beryllium.

For instance, our manufacturing facility in Elmore, Ohio relies on our mining operation for its supply of beryllium hydroxide used in production of most of its beryllium-containing materials.

Some of our facilities are interdependent. For instance, our manufacturing facility in Elmore, Ohio relies on our mining operation for its supply of beryllium hydroxide used in production of most of its beryllium-containing materials.

The Company froze the pay and service amounts used to calculate the pension benefits for active participants as of January 1, 2020. The Company has defined benefit pension plans in other non-U.S. locations.

In 2019, the Company's Board of Directors approved changes to the U.S. defined benefit pension plan. The Company froze the pay and service amounts used to calculate the pension benefits for active participants as of January 1, 2020. The Company has defined benefit pension plans in other non-U.S. locations.

The development, proposal, or adoption of more stringent standards may affect buying decisions by the users of beryllium-containing products. If the standards are made more stringent and/or our customers or other downstream users decide to reduce their use of beryllium-containing products, our results of operations, liquidity, and financial condition could be materially adversely affected.

Any such threat could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen. A security breach of our computer systems could interrupt or damage our operations or harm our reputation, resulting in a loss of sales, operating profits, and assets.

Any such threat could compromise our networks and those of third parties and the information stored there could be accessed, publicly disclosed, lost, or stolen. Attacks impacting our systems or data could interrupt or damage our operations or harm our reputation, resulting in a loss of sales, operating profits, and assets.

If exposed to respirable beryllium fumes, dusts, or powder, some individuals may demonstrate an allergic reaction and may later develop a chronic lung disease known as chronic beryllium disease (CBD).

Each of these end markets is cyclical in nature, influenced by a combination of factors which could have a negative impact on our business, including, among other things, periods of economic growth or recession, inflation, rising interest rates and the strength or weakness of the U.S. dollar, the strength of the semiconductor, automotive electronics, and oil and gas industries, the rate of construction of telecommunications infrastructure equipment, and government spending on defense.

Our credit facilities are secured by substantially all of our assets (other than non-mining real property and certain other assets). Our working capital line of credit includes variable-rate obligations, which expose us to interest rate risks.

Risks Related to Our Debt A major portion of our bank debt consists of variable-rate obligations, which subjects us to interest rate fluctuations. Our credit facilities are secured by substantially all of our assets (other than non-mining real property and certain other assets). Our working capital line of credit includes variable-rate obligations, which expose us to interest rate risks.

Revenue from international operations (principally Europe and Asia) accounted for approximately 51% in 2022, 47% in 2021, and 45% in 2020 of Net sales. We anticipate that international shipments will account for a significant portion of our sales for the foreseeable future.

We sell to customers outside of the United States from our domestic and international operations. Revenue from international operations (principally Europe and Asia) accounted for approximately 51% in 2023, 51% in 2022, and 47% in 2021 of Net sales. We anticipate that international shipments will account for a significant portion of our sales for the foreseeable future.

Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price. 13 Risks Related to Our Debt A major portion of our bank debt consists of variable-rate obligations, which subjects us to interest rate fluctuations.

Materion was a participant in the development of the new standards, which fundamentally represent our current health and safety operating practices. Other government and standard-setting organizations are also reviewing beryllium-related worker safety rules and standards, and will likely make them more stringent.

Materion was a participant in the development of the standards, which fundamentally represent our current health and safety operating practices. Other government and standard-setting organizations are also reviewing beryllium-related worker safety rules and standards, and will likely make them more stringent. The development, proposal, or adoption of more stringent standards may affect buying decisions by the users of beryllium-containing products.

If any of the following risks occur, our business, results of operations, or financial condition could be negatively impacted. 6 Risks Relating to Economic Conditions The businesses of many of our customers are subject to significant fluctuations as a result of the cyclical nature of their industries and their sensitivity to general economic conditions, which could adversely affect their demand for our products and reduce our sales and profitability.

Risks Relating to Economic Conditions The businesses of many of our customers are subject to significant fluctuations as a result of the cyclical nature of their industries and their sensitivity to general economic conditions, which could adversely affect their demand for our products and reduce our sales and profitability.

The terms and amount of our indebtedness may restrict our operations, including our ability to pursue our growth and acquisition strategies. The terms of our credit facilities contain a number of restrictive covenants, including restrictions in our ability to, among other things, borrow and make investments, acquire other businesses, and consign additional precious metals.

Additionally, the terms of the agreements governing our indebtedness contain a number of restrictive covenants, including restrictions in our ability to, among other things, borrow and make investments, acquire other businesses, and consign additional precious metals.

The increased levels of scrutiny by federal, state, foreign, and international regulatory authorities could lead to regulatory decisions relating to the approval or prohibition of the use of beryllium-containing materials for various uses.

The health risks associated with beryllium have resulted in product liability claims, employee, and third-party lawsuits. The increased levels of scrutiny by federal, state, foreign, and international regulatory authorities could lead to regulatory decisions relating to the approval or prohibition of the use of beryllium-containing materials for various uses.

Risks Related to Legal, Compliance and Regulatory Matters We conduct our sales and distribution operations on a worldwide basis and are subject to the risks associated with doing business outside the United States. We sell to customers outside of the United States from our domestic and international operations.

As a result, our business, financial condition and results of operations could be materially adversely affected. Risks Related to Legal, Compliance and Regulatory Matters 10 We conduct our sales and distribution operations on a worldwide basis and are subject to the risks associated with doing business outside the United States.

We have a limited number of manufacturing facilities, and damage to those facilities, or to critical pieces of equipment in these facilities, could interrupt our operations, increase our costs of doing business, and impair our ability to deliver our products on a timely basis. Some of our facilities are interdependent.

Because we do not control the consigned inventory, we may not be able to access the inventory to meet our forecasted needs, which could adversely impact our results of operations. 8 We have a limited number of manufacturing facilities, and damage to those facilities, or to critical pieces of equipment in these facilities, could interrupt our operations, increase our costs of doing business, and impair our ability to deliver our products on a timely basis.

The terms of our credit facilities require us to comply with various covenants, including financial covenants. A global economic downturn could have a material adverse impact on our earnings and cash flow, which could adversely affect our ability to comply with our financial covenants and could limit our borrowing capacity.

A global economic downturn could have a material adverse impact on our earnings and cash flow, which could adversely affect our ability to comply with our financial covenants and could limit our borrowing capacity. Our ability to comply with these covenants depends, in part, on factors over which we may have no control.

In the conduct of our business, we collect, use, transmit, store, and report data on information systems and interact with customers, vendors, and employees. Increased global information technology (IT) security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability, and integrity of our data.

Increased global information technology (IT) security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks, as well as those of third parties who we rely on, and risk the confidentiality, availability, and integrity of our data.

We manufacture advanced engineered materials using various precious and non-precious metals, including beryllium, tantalum, aluminum, cobalt, copper, gold, nickel, palladium, platinum, ruthenium, silver, tin, iridium, rhodium, niobium, hafnium, and tungsten.

The availability and prices of some raw materials we use in our manufacturing operations fluctuate, and increases in raw material costs can adversely affect our operating results and our financial condition. 7 We manufacture advanced engineered materials using various precious and non-precious metals, including beryllium, tantalum, aluminum, cobalt, copper, gold, nickel, palladium, platinum, ruthenium, silver, tin, iridium, rhodium, niobium, hafnium, and tungsten.

We protect our sensitive information and confidential personal data, our facilities, and information technology systems, but we may be vulnerable to future security breaches. Despite our security measures, our IT systems and infrastructure may be vulnerable to customer viruses, cyber-attacks, security breaches caused by employee error or malfeasance, or other disruptions.

Despite our security measures, the IT systems and infrastructure of the Company and third parties who host or secure our data may be vulnerable to customer viruses, cyber-attacks, security breaches caused by employee error or malfeasance, and exploitable third-party software vulnerabilities or other disruptions.

In addition, these failures would make it difficult to plan future capital expenditure needs and could cause us to fail to meet our cash flow requirements. The availability and prices of some raw materials we use in our manufacturing operations fluctuate, and increases in raw material costs can adversely affect our operating results and our financial condition.

In addition, these failures would make it difficult to plan future capital expenditure needs and could cause us to fail to meet our cash flow requirements.

Severe cases of CBD can cause disability or death. 12 Further, some scientists claim there is evidence of an association between beryllium exposure and lung cancer, and certain standard-setting organizations have classified beryllium and beryllium compounds as human carcinogens.

Further, some scientists claim there is evidence of an association between beryllium exposure and lung cancer, and certain standard-setting organizations have classified beryllium and beryllium compounds as human carcinogens. The health risks relating to exposure to beryllium have been, and will continue to be, a significant issue confronting the beryllium-containing products industry.

Similar security threats exist with respect to the IT systems of our lenders, suppliers, consultants, advisers, and other third parties with whom we conduct business. A security breach of those computer systems could result in the loss, theft, or disclosure of confidential information and could also interrupt or damage our operations, harm our reputation, and subject us to legal claims.

Cyber attacks, vulnerabilities, and disruptions impacting those systems could result in the loss, theft, or disclosure of confidential, proprietary, or personal information and could also interrupt or damage our operations, harm our reputation, and subject us to legal claims.

The consignors retain ownership of the precious metals and charge us fees based on the amounts we consign and the period of consignment. Because we do not control the consigned inventory, we may not be able to access the inventory to meet our forecasted needs, which could adversely impact our results of operations.

The consignors retain ownership of the precious metals and charge us fees based on the amounts we consign and the period of consignment.

Data privacy breaches and the evolving global governmental regulation relating to data privacy could adversely affect our results of operations and profitability. We collect, store, access and otherwise process certain confidential or sensitive data, including proprietary customer and business information, personal data or other information that is subject to privacy and security laws, regulations and customer-imposed requirements.

Data privacy breaches and the evolving global governmental regulation relating to data privacy could adversely affect our results of operations and profitability.

The risks discussed below are not the only risks that we may experience.

The risks discussed below are not the only risks that we may experience. If any of the following risks occur, our business, results of operations, or financial condition could be negatively impacted.

Removed

Also, in times when growth rates in our markets are lower, or negative, there may be temporary inventory adjustments by our customers that may negatively affect our business . Risks Relating to the COVID-19 Pandemic The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business.

Added

In the conduct of our business, we collect, use, transmit, store, and report data on information systems owned by the Company or hosted by third parties, and interact with customers, vendors, and employees.

Removed

The worldwide spread of the COVID-19 virus resulted in a global slowdown of economic activity which could continue to impact demand for a broad variety of goods and services, including from the Company’s customers, while also continuing to disrupt sales channels and marketing activities for an unknown period of time.

Added

We protect our sensitive, confidential, or proprietary information as well as personal data, our facilities, and information technology systems, but we and third parties upon whom we rely to host or protect our data, facilities, and IT systems may be vulnerable to future security incidents.

Removed

New and potentially more contagious variants of the virus have emerged over the course of the pandemic, along with a surge in cases in several regions across the globe, including Europe and Asia, resulting in renewed shutdown, mandatory quarantines and shelter in place orders in certain regions.

Added

These security threats exist with respect to the IT systems of our lenders, suppliers, consultants, advisers, and other third parties with whom we conduct business.

Removed

These events have led, at times, to slowdowns in our operations, including the temporary shutdown of the Company's Shanghai facility in the first half of 2022 . Through continued economic challenges, there continue to be periodic shipping and logistics challenges and continued supply chain constraints, shortages and delays, along with inflationary pricing pressures.

Added

The Company is subject to increasingly complex and changing laws and regulations enacted to protect business and personal information in the United States and other jurisdictions regarding privacy, data protection and data security, including those related to the collection, storage, use, transmission and protection of personal information and other customer, vendor or employee data.

Removed

As normal business operations resume, we continue to practice enhanced sanitation procedures, health checks and social distancing protocols, however, none of these measures can completely eliminate the risk of exposure or spread of COVID-19. There could be additional waves or spikes in infection, again causing widespread social, economic and operational impacts.

Added

Laws and regulations addressing personal information, including with respect to the European Union’s General Data Protection Regulation (GDPR), and the California Consumer Privacy Act of 2018 (CCPA) as amended by the California Privacy Rights Act (CPRA), and other similar United States state privacy laws, and the interpretation and enforcement of these and similar laws and regulations, are continuously evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may develop and the costs and complexity of future compliance.

Removed

Further, the lingering impacts of the COVID-19 pandemic may continue to adversely affect the economies and financial markets in many countries. Any prolonged disruption of manufacturing or shipment of our products caused by the COVID-19 pandemic or any future pandemics could materially and adversely affect our results of operations and financial conditions.

Added

The interpretation and application of data protection laws may be interpreted and applied in a manner that is inconsistent with our data practices.

Removed

Surges in infection rate, new shutdowns or quarantines, emergence of new and potentially more contagious variants of the virus and staffing and labor supply challenges may impact our suppliers and our ability to source materials in a timely manner. Further, ongoing supply chain constraints and inflationary pressure could have a negative impact on our results.

Added

In addition, as a result of existing or new data protection requirements, we incur and expect to continue to incur significant ongoing costs as part of our efforts to protect our business data and personal information and comply with applicable law.

Removed

Risks Relating to Our Business and Operations Because we experience seasonal fluctuations in certain end-market sales, our quarterly results will fluctuate, and our annual performance will be affected by the fluctuations. We expect seasonal patterns to continue, which may cause our quarterly results to fluctuate.

Added

Any failure, or perceived failure, to comply with our data protection or privacy-related legal obligations may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial condition. 9 Our defined benefit pension plans and other post-employment benefit plans are subject to financial market risks that could adversely impact our financial performance.

Removed

If our revenue during any quarter were to fall below the expectations of investors or securities analysts, our share price could decline, perhaps significantly. Unfavorable economic conditions, lower than normal levels of demand, and other occurrences in any quarter could also harm our results of operations.

Added

Our success is dependent upon our relationships with certain key customers. Although the Company serves a diverse customer base, a portion of our sales is concentrated amongst a limited number of customers.

Removed

The Company has taken steps to protect our computer systems however there is always a risk of undetected successful intrusions. The Company requires employees to complete information security training programs multiple times a year to reinforce the importance of protecting company information and assets.

Added

If we lost one or more of these major customers, or if one or more major customers significantly decreased its orders for our products, our business, results of operations and financial condition could be materially and adversely impacted. In fiscal year 2023, one customer accounted for approximately ten percent of our net sales.

Removed

The data privacy laws of the specific jurisdictions in which we operate may vary and potentially conflict. As such, we cannot predict the cost of compliance with future data privacy laws, regulations and standards, future interpretations of current laws, regulations and standards, or the potential effects on our business.

Added

Our business may be impacted by external factors that we may not be able to control.

Removed

Government enforcement actions can be costly and interrupt the regular operation of our business, and a violation of data privacy laws or a security breach involving personal data can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our results of operations and profitability.

Added

War, civil conflict, terrorism, other geopolitical and diplomatic tensions, natural disasters, climate change and public health issues including domestic or international pandemics, other outbreaks of contagious diseases (such as the COVID-19 pandemic) and other adverse public health developments have caused or could cause damage or disruption to domestic or international commerce by creating economic or political uncertainties.

Removed

Our defined benefit pension plans and other post-employment benefit plans are subject to financial market risks that could adversely impact our financial performance. In 2019, the Company's Board of Directors approved changes to the U.S. defined benefit pension plan.

Added

Additionally, the volatility in the financial markets could negatively impact our business.

Removed

The Biden administration has announced in 2021 and 2022, and in certain cases has enacted, a number of tax proposals to fund new government investments in infrastructure, healthcare, and education, among other things.

Added

These events could result in a decrease in demand for our products, affect the availability of credit facilities to us, our customers or other members of the supply chain necessary to transact business, make it difficult or impossible to deliver orders to customers or receive materials from suppliers, affect the availability or pricing of energy sources or result in other severe consequences that may or may not be predictable.

Removed

Certain of these proposals involve an increase in the domestic corporate tax rate, which if implemented could have a material impact on our future results of operations and cash flows.

Added

Additionally, restrictive covenants contained in our indebtedness may restrict our operations, including our ability to pursue our growth and acquisition strategies. The terms of our credit facilities require us to comply with various covenants, including financial covenants.

Removed

Economic and geopolitical instability including as a result of military conflict could have a material adverse effect on our operating results, financial condition, and cash flows Geopolitical conflict may have a global impact on our operations, customers, or suppliers. Conflicts may result in various sanctions, including asset freezes and prohibitions on transactions.

Removed

These sanctions could have a larger impact that expands into other geographies where we do business, including our supply chain, business partners, and customers in those markets, which could result in lost sales, supply shortages, commodity price fluctuations, increased manufacturing costs, transportation logistics challenges, customer credit and liquidity issues, and lost efficiencies.

Removed

The health risks relating to exposure to beryllium have been, and will continue to be, a significant issue confronting the beryllium-containing products industry. The health risks associated with beryllium have resulted in product liability claims, employee, and third-party lawsuits. As of December 31, 2022, we had one CBD case outstanding.

Removed

OSHA has published a new standard for workplace exposure to beryllium that, among other things, lowered the permissible exposure by a factor of ten and established new requirements for respiratory protection, personal protective clothing and equipment, medical surveillance, hazard communication, and recordkeeping.

Removed

Our ability to comply with these covenants depends, in part, on factors over which we may have no control.

Item 2. Properties

Properties — owned and leased real estate

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2022 filing

2023 filing

Biggest changeInformation as of December 31, 2022, with respect to our facilities that are owned or leased, and the respective segments in which they are included, is set forth below: Location Owned or Leased Approximate Number of Square Feet Corporate and Administrative Offices Mayfield Heights, Ohio (1)(2) Leased 79,100 Manufacturing Facilities Albuquerque, New Mexico (2) Owned/Leased 13,000/63,200 Alzenau, Germany (2) Leased 136,400 Balzers, Lichtenstein (3) Leased 83,400 Brewster, New York (2) Leased 75,000 Buffalo, New York (2) Owned 110,000 Delta, Utah (1) Owned 100,800 Elmore, Ohio (1) Owned/Leased 681,000/191,000 Farnborough, England (1) Leased 10,000 Jena, Germany (3) Owned 25,800 Limerick, Ireland (2) Leased 23,000 Lincoln, Rhode Island (1) Owned/Leased 166,500/27,100 Lorain, Ohio (1) Owned 55,000 Milwaukee, Wisconsin (2) Owned/Leased 106,000/150,000 Newton, MA (1,2) Owned/Leased 125,000/69,900 Penang, Malaysia (3) Leased 68,000 Reading, Pennsylvania (1) Owned/Leased 128,800/287,000 Santa Clara, California (2) Leased 5,800 Shanghai, China (3) Leased 101,400 Singapore (1)(2) Leased 24,500 Subic Bay, Philippines (2) Leased 5,000 Suzhou, China (2) Leased 21,700 Taoyuan City, Taiwan (2) Leased 32,500 Tucson, Arizona (1) Owned 53,000 Tyngsboro, Massachusetts (3) Leased 38,000 Westford, Massachusetts (3) Leased 78,000 Wheatfield, New York (2) Owned 35,000 Service, Sales, and Distribution Centers Elmhurst, Illinois (1) Leased 28,000 Eschborn, Germany (3) Leased 500 Seoul, Korea (2) Leased 2,200 Shanghai, China (1) Leased 5,000 Stuttgart, Germany (1) Leased 49,000 Tokyo, Japan (1) Leased 5,400 Tyngsboro, Massachusetts (3) Leased 4,200 (1) Performance Materials (2) Electronic Materials (3) Precision Optics 16 Mine Property The Company holds certain mineral rights on 7,443.5 acres at the Spor Mountain Mining Properties in Juab County, Utah, from which the beryllium-bearing ore, bertrandite, is mined by the open pit method.

Biggest changeInformation as of December 31, 2023, with respect to our facilities that are owned or leased, and the respective segments in which they are included, is set forth below: Location Owned or Leased Approximate Number of Square Feet Corporate and Administrative Offices Mayfield Heights, Ohio (1)(2) Leased 79,100 Manufacturing Facilities Albuquerque, New Mexico (2) Owned/Leased 13,000/63,200 Alzenau, Germany (2) Leased 136,400 Balzers, Lichtenstein (3) Leased 83,400 Brewster, New York (2) Leased 75,000 Buffalo, New York (2) Owned 110,000 Delta, Utah (1) Owned 100,800 Elmore, Ohio (1) Owned/Leased 681,000/191,000 Farnborough, England (1) Leased 10,000 Jena, Germany (3) Owned 102,700 Limerick, Ireland (2) Leased 23,000 Lincoln, Rhode Island (1) Owned/Leased 166,500/27,100 Lorain, Ohio (1) Owned 55,000 Milwaukee, Wisconsin (2) Owned/Leased 106,000/150,000 Newton, MA (1,2) Owned/Leased 125,000/69,900 Penang, Malaysia (3) Leased 68,000 Reading, Pennsylvania (1) Owned/Leased 128,800/287,000 Santa Clara, California (2) Leased 5,800 Shanghai, China (3) Leased 101,400 Singapore (1)(2) Leased 24,500 Subic Bay, Philippines (2) Leased 5,000 Taoyuan City, Taiwan (2) Leased 32,500 Tucson, Arizona (1) Owned 53,000 Tyngsboro, Massachusetts (3) Leased 38,000 Westford, Massachusetts (3) Leased 78,000 Wheatfield, New York (2) Owned 35,000 Service, Sales, and Distribution Centers Suzhou, China (2) Leased 400 Elmhurst, Illinois (1) Leased 28,000 Eschborn, Germany (3) Leased 500 Seoul, Korea (2) Leased 2,200 Shanghai, China (1) Leased 5,000 Stuttgart, Germany (1) Leased 49,000 Tokyo, Japan (1) Leased 5,400 (1) Performance Materials (2) Electronic Materials (3) Precision Optics 16 Mine Property The Company holds certain mineral rights on 7,443.5 acres at the Spor Mountain Mining Properties in Juab County, Utah, from which the beryllium-bearing ore, bertrandite, is mined by the open pit method.

Because there have been no material changes to the Company’s reserves or resources in 2022, it is not filing a TRS as an exhibit to this Form 10-K. Mine Exploration Status The Spor Mountain Mine has been in production since 1968. Over the years, seven different mining areas have been identified.

Because there have been no material changes to the Company’s reserves or resources in 2023, it is not filing a TRS as an exhibit to this Form 10-K. Mine Exploration Status The Spor Mountain Mine has been in production since 1968. Over the years, seven different mining areas have been identified.

Item 2. PROPERTIES We operate manufacturing plants, service and distribution centers, and other facilities throughout the world. During 2022, we made effective use of our productive capacities at our principal facilities. We believe that the quality and production capacity of our facilities is sufficient to maintain our competitive position for the foreseeable future.

Item 2. PROPERTIES We operate manufacturing plants, service and distribution centers, and other facilities throughout the world. During 2023, we made effective use of our productive capacities at our principal facilities. We believe that the quality and production capacity of our facilities is sufficient to maintain our competitive position for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2022 filing

2023 filing

Biggest changeDuring 2022, one beryllium case was resolved. No beryllium cases were filed in 2022. 17 The Company has insurance coverage, which may respond, subject to an annual deductible. Other Claims On October 14, 2020, Garett Lucyk, et al. v.

Biggest changeThe Company has insurance coverage, which may respond, subject to an annual deductible.

The plaintiffs in beryllium cases seek recovery under negligence and various other legal theories and demand compensatory and often punitive damages, in many cases of an unspecified sum. Spouses of some plaintiffs claim loss of consortium. Beryllium Claims As of December 31, 2022, our subsidiary, Materion Brush Inc., was a defendant in one beryllium case. In Richard Miller v.

Removed

Dolphin, Inc. et al. , case number CV2020-005163, filed in the Superior Court of Arizona, Maricopa County, the Company is one of six named defendants in addition to 100 John/Jane Doe defendants.

Removed

The plaintiff alleges that he contracted beryllium disease from exposures to beryllium-containing products supplied to his employer, Karsten Manufacturing Corporation, where he was a production worker, and asserts claims for negligence, strict liability – failure to warn, strict liability – design defect, and fraudulent concealment.

Removed

The plaintiff seeks general damages, medical expenses, loss of earnings, consequential damages, and punitive damages, and his wife claims loss of consortium. A co-defendant, Dolphin, Inc., filed a cross-claim against the Company for indemnification. On August 12, 2020, the Company moved to dismiss the cross-claim for failure to state a claim upon which relief can be granted.

Removed

The court denied the motion on October 23, 2020. On December 7, 2020, the Company filed a Petition for Special Action in the Court of Appeals seeking to appeal the motion to dismiss the cross-claim. The Court of Appeals declined to accept jurisdiction on December 30, 2020.

Removed

The court entered a scheduling order on September 14, 2021 that did not set a date for trial. Amended scheduling orders were entered on April 8, 2022, August 4, 2022, and November 1, 2022, that likewise did not set a trial date. The Company believes that it has substantive defenses and intends to vigorously defend itself against this suit.

Removed

Materion Brush Inc., et. al. , case number 20CV0234, a wage and hour purported collective and class action lawsuit, was filed in the Northern District of Ohio against the Company and its subsidiary, Materion Brush Inc. (collectively, the Company).

Removed

Plaintiff, a former hourly production employee at the Company's Elmore, Ohio facility, alleges that he and other similarly situated employees 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.

Removed

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. In November 2022, the parties reached a settlement for an immaterial amount. The settlement is pending court approval.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged

2022 filing

2023 filing

Biggest changeItem 4. MINE SAFETY DISCLOSURES Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Form 10-K. 18 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed1 unchanged

2022 filing

2023 filing

Biggest changeDuring the three months ended December 31, 2022, we did not repurchase any shares under this program. 19 Performance Graph The following graph sets forth the cumulative shareholder return on our common shares as compared to the cumulative total return of the Russell 2000 Index, the S&P SmallCap 600 Index, and the S&P SmallCap 600 Materials Index, as Materion Corporation is a component of these indices. 2018 2019 2020 2021 2022 Materion Corporation $ 93 $ 124 $ 134 $ 193 $ 185 Russell 2000 86 108 127 145 114 S&P SmallCap 600 90 109 120 150 124 S&P SmallCap 600 - Materials 77 91 110 130 119 The above graph assumes that the value of our common shares and each index was $100 on December 31, 2017 and that all applicable dividends were reinvested. 20

Biggest changeDuring the three months ended December 31, 2022, we did not repurchase any shares under this program. 18 Performance Graph The following graph sets forth the cumulative shareholder return on our common shares as compared to the cumulative total return of the Russell 2000 Index, the S&P SmallCap 600 Index, and the S&P SmallCap 600 Materials Index, as Materion Corporation is a component of these indices. 2019 2020 2021 2022 2023 Materion Corporation $ 133 $ 144 $ 207 $ 199 $ 295 Russell 2000 125 148 168 132 152 S&P SmallCap 600 121 132 166 137 156 S&P SmallCap 600 - Materials 119 144 169 155 186 The above graph assumes that the value of our common shares and each index was $100 on December 31, 2018 and that all applicable dividends were reinvested. 19

Share Repurchases The following table presents information with respect to repurchases of common stock made by us during the three months ended December 31, 2022.

Share Repurchases The following table presents information with respect to repurchases of common stock made by us during the three months ended December 31, 2023.

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company's common shares are listed on the New York Stock Exchange under the symbol “MTRN”. As of January 31, 2023, there were 652 shareholders of record.

Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (2) October 1 through November 4, 2022 5,021 $ 84.64 — $ 8,316,239 November 5 through December 2, 2022 1,403 $ 80.17 — 8,316,239 December 3 through December 31, 2022 — — — 8,316,239 Total 6,424 $ — — $ 8,316,239 (1) Represents shares surrendered to the Company by employees to satisfy tax withholding obligations on stock appreciation rights issued under the Company's stock incentive plan.

Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (2) September 30 through November 3, 2023 — $ — — $ 8,316,239 November 4 through December 1, 2023 1,181 $ 113.11 — 8,316,239 December 2 through December 31, 2023 2 $ 114.93 — 8,316,239 Total 1,183 $ 113.11 — $ 8,316,239 (1) Represents shares surrendered to the Company by employees to satisfy tax withholding obligations on stock appreciation rights issued under the Company's stock incentive plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+18 added−33 removed78 unchanged

2022 filing

2023 filing

Biggest changeThe decrease in corporate costs in 2022 compared to 2021 was primarily due to a $7.3 million decrease in general and administrative expense, primarily related to a decrease in merger and acquisition costs, primarily related to the HCS-Electronic Materials acquisition in 2021. 25 Value-Added Sales - Reconciliation of Non-GAAP Financial Measure A reconciliation of net sales to value-added sales, a non-GAAP financial measure, for each reportable segment and for the Company in total for 2022, 2021, and 2020 is as follows: (Thousands) 2022 2021 2020 Net sales Performance Materials $ 671,525 $ 511,874 $ 394,195 Electronic Materials $ 971,902 866,816 $ 670,867 Precision Optics 113,682 131,954 $ 111,212 Other — — — Total $ 1,757,109 $ 1,510,644 $ 1,176,274 Less: pass-through metal costs Performance Materials $ 81,938 $ 71,442 $ 48,860 Electronic Materials 529,947 577,697 450,351 Precision Optics 102 139 9,334 Other 1,483 1,666 2,604 Total $ 613,470 $ 650,944 $ 511,149 Value-added sales Performance Materials 589,587 440,432 345,335 Electronic Materials 441,955 289,119 220,516 Precision Optics 113,580 131,815 101,878 Other (1,483) (1,666) (2,604) Total $ 1,143,639 $ 859,700 $ 665,125 The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium can be quite volatile.

Biggest changeValue-Added Sales - Reconciliation of Non-GAAP Financial Measure 24 A reconciliation of net sales to value-added sales, a non-GAAP financial measure, for each reportable segment and for the Company in total for 2023, 2022, and 2021 is as follows: (Thousands) 2023 2022 2021 Net sales Performance Materials $ 755,547 $ 671,525 $ 511,874 Electronic Materials 805,751 971,902 866,816 Precision Optics 103,889 113,682 131,954 Other — — — Total $ 1,665,187 $ 1,757,109 $ 1,510,644 Less: pass-through metal costs Performance Materials $ 66,994 $ 81,994 $ 71,442 Electronic Materials 471,021 559,119 607,825 Precision Optics 101 102 139 Other — 1,483 1,666 Total $ 538,116 $ 642,698 $ 681,072 Value-added sales Performance Materials $ 688,553 $ 589,531 $ 440,432 Electronic Materials 334,730 412,783 258,991 Precision Optics 103,788 113,580 131,815 Other — (1,483) (1,666) Total $ 1,127,071 $ 1,114,411 $ 829,572 The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium can be quite volatile.

As a result, management utilizes judgment to determine the appropriate accounting, including whether multiple promised products or services in a 31 contract should be accounted for separately or as a group, how the consideration should be allocated among the performance obligations, and when to recognize revenue upon satisfaction of the performance obligations. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer.

As a result, management utilizes judgment to determine the appropriate accounting, including whether multiple promised products or services in a contract should be accounted for separately or as a group, how the consideration should be allocated among the performance obligations, and when to recognize revenue upon satisfaction of the performance obligations. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer.

We were in compliance with all of our debt covenants as of December 31, 2022 and December 31, 2021. Cash on hand up to $25 million can benefit the covenants and may benefit the borrowing capacity under the Credit Agreement. In November 2021, we completed the acquisition of HCS-Electronic Materials.

We were in compliance with all of our debt covenants as of December 31, 2023 and December 31, 2022. Cash on hand up to $25 million can benefit the covenants and may benefit the borrowing capacity under the Credit Agreement. In November 2021, we completed the acquisition of HCS-Electronic Materials.

The Company used a discount rate in the mid-teens and a terminal growth rate of low single digits. The market approach requires several assumptions including sales and EBITDA multiples for comparable companies that operate in the same markets as the reporting unit.

The Company used a 32 discount rate in the mid-teens and a terminal growth rate of low single digits. The market approach requires several assumptions including sales and EBITDA multiples for comparable companies that operate in the same markets as the reporting unit.

Goodwill and Other Intangible Assets 33 We use the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed are recognized as goodwill.

Goodwill and Other Intangible Assets We use the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed are recognized as goodwill.

The assumptions used for the reporting units 34 and indefinite-lived intangibles with fair values exceeding carrying values of less than 10% are more sensitive to future performance and will be monitored accordingly.

The assumptions used for the reporting units and indefinite-lived intangibles with fair values exceeding carrying values of less than 10% are more sensitive to future performance and will be monitored accordingly.

The following represents our indicated and inferred ore mineral resources, exclusive of mineral reserves, as of December 31, 2022 and December 31, 2021: Indicated Inferred As of December 31, 2022 Tonnage (in thousands) 1,504 2,630 Grade (% beryllium) 0.128 % 0.345 % Beryllium pounds (in millions) 38.38 18.12 As of December 31, 2021 Tonnage (in thousands) 1,504 2,630 Grade (% beryllium) 0.128 % 0.345 % Beryllium pounds (in millions) 38.38 18.12 Mineral Reserves A mineral reserve is an estimate of tonnage and grade, or quality, of indicated and measured mineral resources that, in the opinion of a qualified person, can be the basis of an economically viable project.

The following represents our indicated and inferred ore mineral resources, exclusive of mineral reserves, as of December 31, 2023 and December 31, 2022: Indicated Inferred As of December 31, 2023 Tonnage (in thousands) 1,504 2,630 Grade (% beryllium) 0.128 % 0.345 % Beryllium pounds (in millions) 38.38 18.12 As of December 31, 2022 Tonnage (in thousands) 1,504 2,630 Grade (% beryllium) 0.128 % 0.345 % Beryllium pounds (in millions) 38.38 18.12 Mineral Reserves A mineral reserve is an estimate of tonnage and grade, or quality, of indicated and measured mineral resources that, in the opinion of a qualified person, can be the basis of an economically viable project.

Since the approval of the repurchase plan, we have purchased 1,254,264 shares at a total cost of $41.7 million, or an average of $33.23 per share. Material Future Cash Obligations The following table summarizes our material future obligations with respect to debt and associated interest as of December 31, 2022.

Management believes the future sales growth and EBITDA margins in the long range plan, terminal growth rate and the discount rate used in the valuations requires significant use of judgment.

Management believes the future sales growth and EBITDA margins in the long range plan and the discount rate used in the valuations requires significant use of judgment.

See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of our results for 2021 compared to 2020. Segment Disclosures The Company has four reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Other reportable segment includes unallocated corporate costs.

See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our results for 2022 compared to 2021. Segment Disclosures The Company has four reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Other reportable segment includes unallocated corporate costs.

Based on the quantitative assessment performed for the Precision Optics reporting unit, the fair value exceeded the carrying value by less than 10%, but by a sufficient amount to support no indicators of impairment as of October 1, 2022.

There is no minimum number of common shares required to be repurchased in a given year, and the repurchases may be discontinued at any time. We did not repurchase any shares in 2021 or 2022.

There is no minimum number of common shares required to be repurchased in a given year, and the repurchases may be discontinued at any time. We did not repurchase any shares in 2022 or 2023.

We also compared our market capitalization as of October 1, 2022 to the carrying value of our equity and considering an implied control premium, we noted no impairment indicators or triggering events.

We also compared our market capitalization as of October 1, 2023 to the carrying value of our equity and considering an implied control premium, we noted no impairment indicators or triggering events.

The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts 27 borrowing capacity to a multiple of the twelve-month trailing earnings before interest, income taxes, depreciation and amortization, and other adjustments. In January 2023, we amended the agreement governing our $375.0 million revolving credit facility (Credit Agreement).

The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts borrowing capacity to a multiple of the twelve-month trailing earnings before interest, income taxes, depreciation and amortization, and other adjustments. 26 In January 2023, we amended the agreement governing our $375.0 million revolving credit facility and term loan facility (Credit Agreement).

If management forms a judgment that a particular customer’s financial condition has deteriorated but decides to deliver products or services to the customer, we will defer recognizing revenue relating to products sold to that customer until it is probable that we will collect substantially all of the consideration to which we are entitled, which typically coincides with the collection of cash. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the product is separately identifiable from other promises in the contract.

During the fourth quarter of 2022, the Company considered sales multiples in the low single digits and EBITDA multiples in the range high single digits to low double digits.

During the fourth quarter of 2023, the Company considered sales multiples in the low single digits and EBITDA multiples in the range high single digits to low double digits.

Other non-operating (income) expense-net includes components of pension and post-retirement income other than service costs. Refer to Note O of the Consolidated Financial Statements for details of the components of net periodic benefit costs. Interest expense - net was $21.9 million in 2022 and $4.9 million in 2021.

Refer to Item 7A “Quantitative and Qualitative Disclosures about Market Risk.” The notional value of off-balance sheet precious metals and copper was $373.1 million as of December 31, 2022 versus $480.2 million as of December 31, 2021. We were in compliance with all of the covenants contained in the consignment agreements as of December 31, 2022 and December 31, 2021.

Refer to Item 7A “Quantitative and Qualitative Disclosures about Market Risk.” The notional value of off-balance sheet precious metals and copper was $351.5 million as of December 31, 2023 versus $373.1 million as of December 31, 2022. We were in compliance with all of the covenants contained in the consignment agreements as of December 31, 2023 and December 31, 2022.

At December 31, 2022, cash and cash equivalents held by our foreign operations totaled $11.7 million. We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition, or the results of operations for the foreseeable future.

At December 31, 2023, cash and cash equivalents held by our foreign operations totaled $12.6 million. We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition, or the results of operations for the foreseeable future.

The availability is determined by Board approved levels and actual capacity. In January 2014, our Board of Directors approved a plan to repurchase up to $50.0 million of our common stock. The timing of the share repurchases will depend on several factors, including market and business conditions, our cash flow, debt levels, and other investment opportunities.

In January 2014, our Board of Directors approved a plan to repurchase up to $50.0 million of our common stock. The timing of the share repurchases will depend on several factors, including market and business conditions, our cash flow, debt levels, and other investment opportunities.

The following represents our ore mineral reserves: Proven Probable Total As of December 31, 2022 Tonnage (in thousands) 7,678 962 8,640 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 37.57 4.97 42.54 As of December 31, 2021 Tonnage (in thousands) 7,739 962 8,701 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 37.92 4.97 42.89 Internal Controls Disclosure Under subpart 1305 of Regulation S-K, management has included information regarding the internal controls that the Company used in determining the mineral resource and reserve estimation efforts.

The following represents our ore mineral reserves: Proven Probable Total As of December 31, 2023 Tonnage (in thousands) 7,598 962 8,560 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 37.21 4.97 42.18 As of December 31, 2022 Tonnage (in thousands) 7,678 962 8,640 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 37.57 4.97 42.54 Internal Controls Disclosure Under subpart 1305 of Regulation S-K, management has included information regarding the internal controls that the Company used in determining the mineral resource and reserve estimation efforts.

(Thousands of Pounds of Beryllium) 2022 2021 2020 Domestic ore 382 386 367 Purchased ore — — — Unyielded total 382 386 367 Annual yield 90 % 91 % 90 % Beryllium produced 344 353 334 % of mill capacity 53 % 55 % 52 % CRITICAL ACCOUNTING POLICIES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the inherent use of estimates and management’s judgment in establishing those estimates.

(Thousands of Pounds of Beryllium) 2023 2022 2021 Domestic ore 405 382 386 Purchased ore — — — Unyielded total 405 382 386 Annual yield 89 % 90 % 91 % Beryllium produced 362 344 353 % of mill capacity 56 % 53 % 55 % CRITICAL ACCOUNTING POLICIES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the inherent use of estimates and management’s judgment in establishing those estimates.

Goodwill within the Electronic Materials segment totaled $206.7 million as of December 31, 2022. Within the Precision Optics segment, goodwill totaled $86.7 million. The remaining $26.2 million is related to the Performance Materials segment.

Goodwill within the Electronic Materials segment totaled $206.7 million as of December 31, 2023. Within the Precision Optics segment, goodwill totaled $88.0 million. The remaining $26.2 million is related to the Performance Materials segment.

The term “indicated resources” means resources for which quantity and grade or quality can be estimated on the basis of adequate geological evidence and sampling. 29 The term “inferred resources” means resources for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling.

The term “inferred resources” means resources for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling.

By presenting information on net sales and value-added sales, it is our intention to allow users of our financial statements to review our net sales with and without the impact of the pass-through metals. 26 FINANCIAL POSITION Cash Flow A summary of cash flows provided by (used in) operating, investing, and financing activities is as follows: (Thousands) 2022 2021 2020 Net cash provided by operating activities $ 115,958 $ 90,241 $ 101,057 Net cash (used in) investing activities (79,729) (494,269) (194,707) Net cash provided by (used in) financing activities (35,558) 393,006 (7,091) Effects of exchange rate changes (2,032) (394) 1,612 Net change in cash and cash equivalents $ (1,361) $ (11,416) $ (99,129) Net cash provided by operating activities totaled $116.0 million in 2022 versus $90.2 million in 2021.

By presenting information on net sales and value-added sales, it is our intention to allow users of our financial statements to review our net sales with and without the impact of the pass-through metals. 25 FINANCIAL POSITION Cash Flow A summary of cash flows provided by (used in) operating, investing, and financing activities is as follows: (Thousands) 2023 2022 2021 Net cash provided by operating activities $ 144,414 $ 115,958 $ 90,241 Net cash (used in) investing activities (119,222) (79,729) (494,269) Net cash provided by (used in) financing activities (24,850) (35,558) 393,006 Effects of exchange rate changes (149) (2,032) (394) Net change in cash and cash equivalents $ 193 $ (1,361) $ (11,416) Net cash provided by operating activities totaled $144.4 million in 2023 versus $116.0 million in 2022.

The available and unused capacity under the metal consignment agreements expiring in August 2025 totaled approximately $241.9 million as of December 31, 2022, compared to $69.8 million as of December 31, 2021 under the metal consignment agreements that expired on August 27, 2022. The availability is determined by Board approved levels and actual capacity.

The available and unused capacity under the metal consignment agreements expiring in August 2025 totaled approximately $263.5 million as of December 31, 2023, compared to $241.9 million as of December 31, 2022. The availability is determined by Board approved levels and actual capacity. The availability is determined by Board approved levels and actual capacity.

Resource models are reconciled to production data regularly. f. Materion has been producing ore at the Spor Mountain Mine for over 45 years and has mined and processed materials from a range of pits from the property.

Resource models are reconciled to production data regularly. 29 f. Materion has been producing ore at the Spor Mountain Mine for over 45 years and has mined and processed materials from a range of pits from the property. It is considered that Materion has adequate data to support its milling practices.

Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, which is filed as Exhibit 96 to this Form 10-K and is incorporated by reference herein.

Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, which was filed as Exhibit 96 to our Annual Report on Form 10-K for the year-ended December 31, 2021 and is incorporated by reference herein.

The term "measured mineral resource" is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling.

The term "measured mineral resource" is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. 28 The term “indicated resources” means resources for which quantity and grade or quality can be estimated on the basis of adequate geological evidence and sampling.

The decrease in value-added sales was due to the same factors driving the decrease in net sales. EBITDA for the Precision Optics segment was $13.8 million in 2022 compared to $25.9 million in 2021.

Value-added sales of $103.8 million in 2023 decreased 9% compared to value-added sales of $113.6 million in 2022. The decrease in value-added sales was due to the same factors driving the decrease in net sales. EBITDA for the Precision Optics segment was $9.9 million in 2023 compared to $13.8 million in 2022.

Value-added sales of $589.6 million in 2022 were 34% higher than value-added sales of $440.4 million in 2021. The increase in value-added sales was driven by the same factors driving the increase in net sales. EBITDA for the Performance Materials segment was $125.2 million in 2022 compared to $89.0 million in 2021.

Value-added sales of $688.6 million in 2023 were 17% higher than value-added sales of $589.5 million in 2022. The increase in value-added sales was driven by the same factors driving the increase in net sales. EBITDA for the Performance Materials segment was $174.5 million in 2023 compared to $125.2 million in 2022.

A summary of key data relative to our liquidity, including the outstanding debt, cash balances, and available borrowing capacity, as of December 31, 2022 and December 31, 2021 is as follows: December 31, (Thousands) 2022 2021 Cash and cash equivalents $ 13,101 $ 14,462 Total outstanding debt 431,981 449,747 Net (debt) cash (418,880) (435,285) Available borrowing capacity $ 185,294 $ 176,419 Net (debt) cash is a non-GAAP financial measure.

A summary of key data relative to our liquidity, including the outstanding debt, cash balances, and available borrowing capacity, as of December 31, 2023 and December 31, 2022 is as follows: December 31, (Thousands) 2023 2022 Cash and cash equivalents $ 13,294 $ 13,101 Total outstanding debt 426,173 431,981 Net (debt) cash (412,879) (418,880) Available borrowing capacity $ 178,734 $ 185,294 Net (debt) cash is a non-GAAP financial measure.

Internally, we manage our business on this basis, and a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales is included herein. Value-added sales of $1,143.6 million in 2022 were up 33% compared to 2021.

It is considered that Materion has adequate data to support its milling practices. 30 The Qualified Persons have assessed that the Company’s control procedures, including redundant testing at various operational points, the quality control and quality assurance measures, the calibration measures, the extensive cataloging of sample duplicates, and the reconciliation with recovered beryllium, are sufficient.

The Qualified Persons have assessed that the Company’s control procedures, including redundant testing at various operational points, the quality control and quality assurance measures, the calibration measures, the extensive cataloging of sample duplicates, and the reconciliation with recovered beryllium, are sufficient.

Billings in advance of the shipments allow us to collect cash earlier than billing at the time of the shipment and, therefore, the collected cash can be used to reduce our investment in working capital. Refer to Note D of the Consolidated Financial Statements for additional details on our contract balances.

In May 2022, the Board of Directors declared an increase in our quarterly dividend from $0.12 to $0.125 per share. We intend to pay a quarterly dividend on an ongoing basis, subject to a continuing strong capital structure and a determination that the dividend remains in the best interest of our shareholders.

We intend to pay a quarterly dividend on an ongoing basis, subject to a continuing strong capital structure and a determination that the dividend remains in the best interest of our shareholders.

Precision Optics (Thousands) 2022 2021 2020 Net sales $ 113,682 $ 131,954 $ 111,212 Value-added sales 113,580 131,815 101,878 EBITDA 13,753 25,854 2,470 2022 Compared to 2021 Net sales from the Precision Optics segment were $113.7 million in 2022, a decrease of 14% compared to net sales of $132.0 million in 2021.

Precision Optics (Thousands) 2023 2022 2021 Net sales $ 103,889 $ 113,682 $ 131,954 Value-added sales 103,788 113,580 131,815 EBITDA 9,860 13,753 25,854 2023 Compared to 2022 Net sales from the Precision Optics segment were $103.9 million in 2023, a decrease of 9% compared to net sales of $113.7 million in 2022.

(Millions) 2023 2024 2025 2026 2027 There- after Total Debt (1) 21.1 30.3 30.3 353.5 0.2 0.3 435.7 Interest payments on debt (2) 17.3 15.9 14.1 10.3 — — 57.6 Total $ 38.4 $ 46.2 $ 44.4 $ 363.8 $ 0.2 $ 0.3 $ 493.3 (1) Refer to Note O to the Consolidated Financial Statements. 28 (2) These amounts represent future interest payments related to our total debt, excluding any interest payments to be made on borrowings under our Credit Agreement.

(Millions) 2024 2025 2026 2027 2028 There- after Total Debt (1) $ 38.6 $ 30.4 $ 359.6 $ 0.2 $ 0.2 $ 0.1 $ 429.1 Interest payments on debt (2) $ 17.6 $ 14.2 $ 10.6 $ — $ — $ — $ 42.4 Total $ 56.2 $ 44.6 $ 370.2 $ 0.2 $ 0.2 $ 0.1 $ 471.5 (1) Refer to Note N to the Consolidated Financial Statements. 27 (2) These amounts represent future interest payments related to our total debt, excluding any interest payments to be made on borrowings under our Credit Agreement.

We also outsource portions of our refining requirements to other vendors, particularly for those materials with longer processing times. The precious metal content within these various refine streams may be in solutions, sludges, and other non-homogeneous forms and can vary over time based upon the input materials, yield rates, and other process parameters.

The precious metal content within these various refine streams may be in solutions, sludges, and other non-homogeneous forms and can vary over time based upon the input materials, yield rates, and other process parameters.

R&D expense was $29.0 million in 2022, an increase of 9% compared to 2021. R&D costs as a percentage of value-added sales remained at 3%. 23 Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure.

R&D expense was $27.5 million in 2023, a decrease of 5% compared to 2022. R&D costs as a percentage of value-added sales decreased from 3% in 2022 to 2% in 2023. 22 Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure.

The increase in SG&A expense for 2022 was primarily due to incremental HCS-Electronic Materials SG&A expense of $4.8 million. Expressed as a percentage of value-added sales, SG&A expense decreased 400 basis points in 2022 to 15% compared to 19% in 2021. R&D expense consists primarily of direct personnel costs for pre-production evaluation and testing of new products, prototypes, and applications.

The decrease in SG&A expense for 2023 was primarily due to various cost savings initiatives in 2023. Expressed as a percentage of value-added sales, SG&A expense decreased from 15% in 2022 to 14% in 2023. R&D expense consists primarily of direct personnel costs for pre-production evaluation and testing of new products, prototypes, and applications.

Performance Materials (Thousands) 2022 2021 2020 Net sales $ 671,525 $ 511,874 $ 394,195 Value-added sales 589,587 440,432 345,335 EBITDA 125,227 89,028 38,745 2022 Compared to 2021 Net sales from the Performance Materials segment of $671.5 in 2022 increased 31% compared to 2021.

Performance Materials (Thousands) 2023 2022 2021 Net sales $ 755,547 $ 671,525 $ 511,874 Value-added sales 688,553 589,531 440,432 EBITDA 174,471 125,227 89,028 2023 Compared to 2022 Net sales from the Performance Materials segment of $755.5 million in 2023 increased 13% compared to 2022.

The Company had previously amended and restated the Credit Agreement in connection with the HCS-Electronic Materials acquisition in November 2021. A $300 million delayed draw term loan facility was added to the Credit Agreement and the maturity date of the Credit Agreement was extended from 2024 to 2026.

A $300 million delayed draw term loan facility was added to the Credit Agreement and the maturity date of the Credit Agreement was extended from 2024 to 2026.

RESULTS OF OPERATIONS (Thousands except per share data) 2022 2021 2020 Net sales $ 1,757,109 $ 1,510,644 $ 1,176,274 Value-added sales 1,143,638 859,700 665,125 Gross margin 343,880 283,762 192,633 Gross margin as a % of Value-added sales 30 % 33 % 29 % Selling, general, and administrative (SG&A) expense 169,338 163,777 133,963 SG&A expense as a % of Value-added sales 15 % 19 % 20 % Research and development (R&D) expense 28,977 26,575 20,283 R&D expense as a % of Value-added sales 3 % 3 % 3 % Goodwill impairment charges — — 9,053 Asset impairment charges — — 1,419 Restructuring expense 1,573 (438) 11,237 Other — net 24,237 16,737 8,463 Operating profit 119,755 77,111 8,215 Other non-operating (income) expense — net (5,250) (5,115) (3,939) Interest expense — net 21,905 4,901 3,879 Income before income taxes 103,100 77,325 8,275 Income tax expense (benefit) 17,110 4,851 (7,187) Net income 85,990 72,474 15,462 Diluted earnings per share 4.14 3.50 0.75 2022 Compared to 2021 Net sales of $1,757.1 million in 2022 increased $246.5 million from $1,510.6 million in 2021.

RESULTS OF OPERATIONS (Thousands except per share data) 2023 2022 2021 Net sales $ 1,665,187 $ 1,757,109 $ 1,510,644 Value-added sales 1,127,071 1,114,411 829,572 Gross margin 349,042 343,880 283,762 Gross margin as a % of Value-added sales 31 % 31 % 34 % Selling, general, and administrative (SG&A) expense 157,911 169,338 163,777 SG&A expense as a % of Value-added sales 14 % 15 % 20 % Research and development (R&D) expense 27,540 28,977 26,575 R&D expense as a % of Value-added sales 2 % 3 % 3 % Restructuring expense 3,824 1,573 (438) Other — net 23,323 24,237 16,737 Operating profit 136,444 119,755 77,111 Other non-operating (income) expense — net (2,710) (5,250) (5,115) Interest expense — net 31,323 21,905 4,901 Income before income taxes 107,831 103,100 77,325 Income tax expense (benefit) 12,129 17,110 4,851 Net income 95,702 85,990 72,474 Diluted earnings per share 4.58 4.14 3.50 2023 Compared to 2022 Net sales of $1,665.2 million in 2023 decreased $91.9 million from $1,757.1 million in 2022.

Pursuant to the amendment, we transition U.S. dollar denominated borrowings from LIBOR to the Secured Overnight Financial Rate (SOFR) for both the revolving credit agreement and the term loan and increased the cap on precious metals facilities from $600 million to $615 million.

Pursuant to the amendment, we transitioned U.S. dollar denominated borrowings from LIBOR to SOFR for both the revolving credit agreement and the term loan and increased the cap on precious metals consignment line from $550 million to $615 million. The Company had previously amended and restated the Credit Agreement in connection with the HCS-Electronic Materials acquisition in November 2021.

Other (Thousands) 2022 2021 2020 Net sales $ — $ — $ — Value-added sales (1,483) (1,666) (2,604) EBITDA (28,345) (33,371) (16,804) 2022 Compared to 2021 The Other reportable segment in total includes unallocated corporate costs. Corporate costs of $28.3 million in 2022 decreased $5.1 million as compared to $33.4 million in 2021.

The decrease in EBITDA was driven by decreased volumes, partially offset by targeted cost control initiatives implemented in 2023. Other (Thousands) 2023 2022 2021 Net sales $ — $ — $ — Value-added sales — (1,483) (1,666) EBITDA (29,280) (28,345) (33,371) 2023 Compared to 2022 The Other reportable segment in total includes unallocated corporate costs.

As of October 1, 2022, based on the quantitative assessments for the other reporting units, the estimated fair value was substantially in excess of the carrying value for the remaining reporting units.

As of October 1, 2023, based on the quantitative assessments for the Electronic Materials reporting unit, the estimated fair value was substantially in excess of the carrying value. Additionally, for the Performance Materials reporting unit, there were no indicators of impairment based on the qualitative analysis performed.

Corporate costs were 2% of total Company value-added sales in 2022 compared to 4% in 2021.

Corporate costs of $29.3 million in 2023 increased $0.9 million as compared to $28.3 million in 2022. Corporate costs were 3% of total Company value-added sales in both 2023 and 2022.

Increased net sales in the Performance Materials and Electronic Materials segments were partially offset by a net sales decrease in the Precision Optics segment. Incremental sales from the full year of HCS-Electronic Materials accounted for $153.3 million of the net sales increase, most of which were sales into the semiconductor end market.

A decrease in net sales in the Electronic Materials and Precision Optics segments was partially offset by increased net sales in the Performance Materials segment.

Precious Metal Physical Inventory Counts We take and record the results of a physical inventory count of our precious metals on a quarterly basis. Our precious metal operations include a refinery that processes precious metal-containing scrap and other materials from our customers, as well as our own internally generated scrap.

Our precious metal operations include a refinery that processes precious metal-containing scrap and other materials from our customers, as well as our own internally generated scrap. We also outsource portions of our refining requirements to other vendors, particularly for those materials with longer processing times.

As a result of the timing of the recent acquisitions over the past few years, the Company elected to bybass the qualitative assessment and perform a quantitative assessment of the Performance Materials, Electronic Materials and Precision Optics reporting units' goodwill balances.

Due to the recent downturn in the semi-conductor market impacting the Electronic Materials reporting unit and recent results for the Precision Optics reporting unit, the Company elected to perform a quantitative annual impairment assessment for the Electronic Materials and Precision Optics reporting units' goodwill as of October 1, 2023 and a qualitative impairment test for the Performance Materials reporting unit.

The change in precious metal and copper prices, which are passed on to the customer as discussed in the value-added sales section below, unfavorably impacted net sales by $9.2 million in 2022 compared to 2021. This impact was partially offset by an increase in the volume of raw material beryllium hydroxide sales in 2022 of $4.0 million.

See Note B to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market. The change in precious metal and copper prices, which are passed on to the customer as discussed in the value-added sales section below, favorably impacted net sales by $6.2 million in 2023 compared to 2022.

The effects of percentage depletion, foreign derived intangible income deduction, and the impacts of research and development credits were the primary factors for the difference between the effective and statutory tax rates in 2022. Refer to Note G to the Consolidated Financial Statements for further details on income taxes.

The decrease in income tax expense in 2023 compared to 2022 was primarily due to the favorable impacts of the foreign derived intangible income deduction and the non-taxable production credit, partially offset by the impact of adjustments to unrecognized tax benefits. Refer to Note G to the Consolidated Financial Statements for further details on income taxes.

The increase in interest expense in 2022 compared to 2021 was primarily due to borrowings under our term loan facility and under our revolving credit facility incurred in the fourth quarter of 2021 used to finance the HCS-Electronic Materials acquisition. Income tax expense (benefit) for 2022 was $17.1 million of expense compared to $4.9 million of benefit in 2021.

The increase in interest expense in 2023 compared to 2022 was primarily due to an increase in interest rates compared to the prior year. Income tax expense (benefit) for 2023 was $12.1 million of expense compared to $17.1 million of expense in 2022.

Net cash used in investing activities was $79.7 million in 2022 compared to $494.3 million in 2021. The decrease was due to a $392.2 million payment, net of cash acquired, for the HCS-Electronic Materials acquisition in 2021.

This was partially offset by cash outflows due to an increase in unbilled receivables of $18.6 million, a decrease in unearned revenue of $17.6 million and a decrease in customer prepayments of $5.3 million. Net cash used in investing activities was $119.2 million in 2023 compared to $79.7 million in 2022.

The increase in Other-net was driven by an increase in acquisition amortization due to a full year of intangible amortization from the HCS-Electronic Materials acquisition and higher metal consignment fees partially offset by foreign exchange gains in 2022 compared to losses in the prior year. Refer to Note E to the Consolidated Financial Statements for the major components within Other-net.

In 2023, we recorded a combined total of $3.8 million of restructuring charges across all segments. Other-net totaled expense of $23.3 million and $24.2 million in 2023 and 2022, respectively. The decrease Other-net was primarily driven by a decrease in metal consignment fees. Refer to Note E to the Consolidated Financial Statements for the major components within Other-net.

In 2022, the Company began repaying the incurred debt from 2021 and the net amount due under the revolving credit facility and term loan decreased by $28.3 million. Dividends per common share increased 4% to $0.495 per share in 2022. Total dividend payments to common shareholders were $10.2 million in 2022 and $9.7 million in 2021.

Dividends per common share increased 4% to $0.515 per share in 2023. Total dividend payments to common shareholders were $10.6 million in 2023 and $10.2 million in 2022. In May 2023, the Board of Directors declared an increase in our quarterly dividend from $0.125 to $0.13 per share.

The change was primarily driven by a reduction in sales related to COVID-19 PCR testing programs, the discontinuation of a consumer electronic application and foreign currency headwinds. Value-added sales of $113.6 million in 2022 decreased 14% compared to value-added sales of $131.8 million in 2021.

The decrease was primarily due to lower sales volumes related to COVID-19 PCR testing programs as well as decreased sales in the consumer electronics end market (33%), which was primarily due to the discontinuation of a consumer electronic application. These decreases were partially offset by an increase in sales volumes in the aerospace and defense (47%) end market.

Removed

Additionally, volume and price increases drove organic growth in our industrial (15%), energy (19%) and aerospace and defense (13%) end markets when compared to last year. See Note C to the Consolidated Financial Statements for additional details on the year over year changes in our net sales by segment and market.

Added

Volume decreases in the semiconductor (17%), industrial (14%) and consumer electronics (19%) end markets were partially offset by an increase the aerospace and defense (32%) end market, as well as incremental sales from the clad strip project of $90.7 million.

Removed

Incremental sales from the full year of HCS-Electronic materials accounted for $153.3 million of the value- 22 added sales increase, most of which were sales into the semiconductor end market. Additionally, volume and price increases drove organic growth in our industrial (15%), semi-conductor (11%), energy (43%) and aerospace and defense (8%) end markets.

Added

Volume decreases in the semiconductor (20%) and industrial (9%) end markets were offset by an increase in the aerospace and defense end market (36%) and incremental sales from the clad strip project of $90.7 million. 21 Gross margin was $349.0 million in 2023, a 2% increase from $343.9 million in 2022.

Removed

These increases were partially offset by foreign currency headwinds. Gross margin was $343.9 in 2022, a 21% increase from the $283.8 million gross margin recorded in 2021.

Added

Gross margin expressed as a percentage of value-added sales was 31% in 2023 and 2022, respectively.

Removed

Gross margin expressed as a percentage of value-added sales decreased to 30% in 2022 from 33% in 2021 mainly due to lower gross margin on the HCS-Electronic Materials business and the precision clad strip project. SG&A expense totaled $169.3 million in 2022 as compared to $163.8 million in 2021.

Added

Although gross margin as a percent of value-added sales remained consistent with prior year, 2023 gross margin was favorably impacted by the production credit recorded in 2023, which was partially offset by unfavorable mix as well as the impact of lower volumes, primarily in the Electronic Materials segment.

Removed

In 2022, we recorded a combined total of $1.6 million of restructuring charges in our Precision Optics, Electronic Materials and Other segments. Other-net totaled expense of $24.2 million and $16.7 million in 2022 and 2021, respectively.

Added

The Inflation Reduction Act of 2022 (IRA) was signed into law on August 16, 2022. The IRA, among other provisions, includes a new Advanced Manufacturing Production Credit (“production credit”) effective on January 1, 2023.

Removed

The increase in sales was due to higher organic volume in industrial, aerospace and defense, energy and telecom end markets as well as an increase in the volume of raw material beryllium hydroxide sales in the 2022 of $4 million.

Added

The production credit provides an annual cash benefit for a portion of the production costs for the sale of certain critical minerals produced in the U.S. and sold during the year. On December 15, 2023, the U.S.

Removed

In addition, sales from HCS-Electronic Materials increased sales in this segment by $27.1 million and incremental sales from the clad strip project increased sales by $54.5 million. These impacts were slightly offset by a decrease in automotive market sales as a result of the global chip shortage impacting the timing of demand and foreign currency headwinds.

Added

Treasury Department published proposed regulations on the production credit that include clarifying guidance regarding the definition of production costs in the computation of the production credit.

Removed

The increase in EBITDA was primarily due to the same factors driving the increase in net sales, partially offset by incremental acquisition and integration costs of $1.1 million, primarily related to purchase accounting inventory step up charges, $9.8 million of incremental start up costs and $4.1 million of additional resource costs and scrap for the new wide area precision strip clad facility. 24 Electronic Materials (Thousands) 2022 2021 2020 Net sales $ 971,902 $ 866,816 $ 670,867 Value-added sales 441,955 289,119 220,516 EBITDA 67,806 44,852 30,127 2022 Compared to 2021 Net sales from the Electronic Materials segment of $971.9 million in 2022 were 12% higher than net sales of $866.8 million in 2021.

Added

Although the proposed guidance is not authoritative and is subject to change in the regulatory review process, the guidance indicates that the Treasury Department may implement a narrower definition of eligible production costs in the final regulations. Accordingly, the Company recorded an $8 million benefit to cost of goods sold related to the production credit.

Removed

The increase in net sales was primarily due to $126.2 million in net sales from the HCS-Electronic Materials acquisition. The net sales increase from HCS-Electronic Materials was offset by lower precious metal prices impacting net sales by $9.9 million and foreign currency headwinds.

Added

The ultimate amount of the benefit that the Company is entitled to receive in connection with the production credit will depend on the final regulations issued on the production credit. See Footnote G for further discussion regarding the accounting for the production credit. SG&A expense totaled $157.9 million in 2023 as compared to $169.3 million in 2022.

Removed

In addition, there was an increase in customer-supplied precious metal transactions in 2022, which does not impact value-added sales but would reduce net sales when compared to 2021. Value-added sales of $442.0 million increased 53% compared to value-added sales of $289.1 million in 2021.

Added

The increase in net sales was due to incremental sales from the clad strip project of $90.7 million and increased volumes in the aerospace and defense end market (31%). This increase was offset by decreased volumes in the industrial (11%) and automotive (9%) end markets.

Removed

The increase was primarily driven by $126.2 million in value-added sales from the HCS-Electronic Materials acquisition and an increase in value-added sales in the semiconductor end market. The impact of these items were partially offset by foreign currency headwinds. EBITDA for the Electronic Materials segment was $67.8 million in 2022 compared to $44.9 million in 2021.

Added

The increase in EBITDA was primarily due to the same factors driving the increase in net sales as well as the benefit from the production credit and operational efficiencies.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+0 added−1 removed23 unchanged

2022 filing

2023 filing

Biggest changeWe have a program in place to closely monitor the credit worthiness and financial condition of our key providers of financial services, including our bank group and insurance carriers, as well as the credit worthiness of customers and vendors, and have various contingency plans in place. 34 Our bank lines are established with a number of different banks in order to mitigate our exposure to any one financial institution.

The financial statement impact of the risk from rising metal prices impacting our consignment availability cannot be estimated at the present time. In certain circumstances, we may elect to fix the price of precious metals for a customer for a stated quantity over a specified period of time.

The financial statement impact of the risk from rising metal prices impacting our consignment availability cannot be estimated at the present time. 33 In certain circumstances, we may elect to fix the price of precious metals for a customer for a stated quantity over a specified period of time.

This calculation assumes no changes in the quantity of inventory or the underlying fee and that none of the additional fees are charged to customers. 35 Lower of cost or net realizable value.

This calculation assumes no changes in the quantity of inventory or the underlying fee and that none of the additional fees are charged to customers. Lower of cost or net realizable value.

We did not record any material lower of cost or net realizable value charges in 2022, 2021, or 2020 as a result of market price fluctuations of metals in our inventories. Interest rates. We are exposed to changes in interest rates on our cash balances and borrowings under our Credit Agreement.

We did not record any material lower of cost or net realizable value charges in 2023, 2022, or 2021 as a result of market price fluctuations of metals in our inventories. Interest rates. We are exposed to changes in interest rates on our cash balances and borrowings under our Credit Agreement.

At December 31, 2022, we did not have a material amount of such hedge contracts outstanding. Copper. We also use copper in our production processes. When possible, fluctuations in the purchase price of copper are passed on to customers in the form of price adders or reductions.

At December 31, 2023, we did not have a material amount of such hedge contracts outstanding. Copper. We also use copper in our production processes. When possible, fluctuations in the purchase price of copper are passed on to customers in the form of price adders or reductions.

A decrease in the value of the dollar would result in larger margins but potentially a loss on the contract, depending upon the method used to hedge the exposure. Our current policy limits our hedges to 80% or less of the forecasted exposure. The notional value of outstanding currency contracts was $55.8 million as of December 31, 2022.

Should the market price of precious metals that we have on consignment increase by 20% from the prices on December 31, 2022, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $2.2 million on an annual basis.

Should the market price of precious metals that we have on consignment increase by 20% from the prices on December 31, 2023, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $1.1 million on an annual basis.

Should the market cost of copper increase by 20% from the price as of December 31, 2022, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $0.5 million on an annual basis.

Should the market cost of copper increase by 20% from the price as of December 31, 2023, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $0.4 million on an annual basis.

If the dollar weakened 10% against the currencies we have hedged from the December 31, 2022 exchange rates, the reduced gain and/or increased loss on the outstanding contracts as of December 31, 2022 would reduce 2022 pre-tax profits by approximately $2.6 million.

If the dollar weakened 10% against the currencies we have hedged from the December 31, 2023 exchange rates, the reduced gain and/or increased loss on the outstanding contracts as of December 31, 2023 would reduce 2023 pre-tax profits by approximately $4.7 million.

While over time our price exposure to copper is generally in balance, there can be a lag between the change in our cost and the pass-through to our customers, resulting in higher or lower margins in a given period. To mitigate this impact, we hedge a portion of this pricing risk. We consign the majority of our copper inventory requirements.

While over time our price exposure to copper is generally in balance, there can be a lag between the change in our cost and the pass-through to our customers, resulting in higher or lower margins in a given period. We consign the majority of our copper inventory requirements.

We may manage this interest rate exposure by maintaining a combination of short-term and long-term debt and variable and fixed rate instruments. We may also use interest rate swaps to fix the interest rate on variable rate obligations, as we deem appropriate. As of December 31, 2022 the fair value of our interest rate swap asset was $7.9 million.

We may manage this interest rate exposure by maintaining a combination of short-term and long-term debt and variable and fixed rate instruments. We may also use interest rate swaps to fix the interest rate on variable rate obligations, as we deem appropriate. As of December 31, 2023 the net fair value of our interest rate swaps were $5.4 million.

The financial statement impact from the risk of one or more of the banks in our bank group reducing our lines due to their insolvency or other causes cannot be estimated at the present time. 36

All of the banks in our bank group had credit in good standing as of December 31, 2023. The financial statement impact from the risk of one or more of the banks in our bank group reducing our lines due to their insolvency or other causes cannot be estimated at the present time. 35

Removed

Our bank lines are established with a number of different banks in order to mitigate our exposure to any one financial institution. All of the banks in our bank group had credit in good standing as of December 31, 2022.

Top changes in MATERION Corp's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other MTRN 10-K year-over-year comparisons