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What changed in MATERION Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MATERION Corp's 2024 and 2025 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 2025 report.

+186 added−194 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-19)

Top changes in MATERION Corp's 2025 10-K

186 paragraphs added · 194 removed · 152 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe ERGs serve as platforms for employees to network, learn, develop, and grow in a supportive environment that emphasizes our commitment to diversity and inclusion. As of December 31, 2024, we had four ERGs: ELEVATE (Women); V.E.T. (veterans and allies of the military); LGBTQ+; and United Voices of Materion (all ethnic backgrounds).
Biggest changeAs of December 31, 2025, we had four ERGs: ELEVATE (Women); V.E.T. (veterans and allies of the military); LGBTQ+; and United Voices of Materion (all ethnic backgrounds). In 2026, we will introduce a Young Professionals Employee Resource Group to support early-career employees. Talent Development We continue to provide professional development and training for all global employees.
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.
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 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 (Exchange Act).
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. 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.
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. 5 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.
Diversity and Inclusion 5 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.
We strongly encourage employees to build development plans in partnership with their managers and supervisors, providing both ongoing and specific opportunities for two-way communication and corresponding action. We offer formalized mentoring, development plans, and stretch assignments for employees who are engaged in career development programs.
We strongly encourage employees to build development plans in partnership with their managers and supervisors, providing ongoing opportunities for two-way communication and corresponding action. We offer formalized mentoring and stretch assignments for employees who are engaged in career development programs.
Our SupremEX TM products offer the industry’s highest quality aluminum silicon carbide metal matrix composite formulation, well suited for a wide range of applications from high performance engine components and aerospace structural components to high-stiffness consumer electronic components. Direct competitors include IBC Advanced Alloys, NGK Metals, ATI Specialty Metals, CBL Ceramics Limited, and CoorsTek, Inc.
Our SupremEX TM products offer the industry a high quality aluminum silicon carbide metal matrix composite formulation, well suited for a wide range of applications from high performance engine components and aerospace structural components to high-stiffness consumer electronic components. Direct competitors include IBC Advanced Alloys, NGK Metals, ATI Specialty Metals, CBL Ceramics Limited, and CoorsTek, Inc.
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 2024. 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 $1.8 billion in net sales in 2025. The Company was incorporated in Ohio in 1931.
Backlog The backlog of unshipped orders as of December 31, 2024, 2023, and 2022 was $537.6 million, $573.4 million, and $576.2 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, 2024 will be filled over the next 18 months.
Backlog The backlog of unshipped orders as of December 31, 2025, 2024, and 2023 was $579.0 million, $537.6 million, and $573.4 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, 2025 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 3,037 people globally as of December 31, 2024.
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 2,880 people globally as of December 31, 2025.
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.
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.
Apprenticeship programs have been implemented in some of our largest plant sites, and we continue to develop a path for apprenticeship program expansion throughout the Company. Likewise, we have implemented career development programs and tools in other key professional functional areas. We are committed to identifying and developing the talents of our next generation of leaders.
Apprenticeship programs have been implemented in some of our largest plant sites, and we continue to evaluate opportunities to expand the apprenticeship program throughout the Company. Likewise, we have implemented career pathways in other key professional functional areas. We are committed to identifying and developing the talents of our next generation of leaders.
Health and Safety The environment, health, safety, and well-being of our employees is our highest priority and is a Materion core value. We have a strong and mature Environmental, Health, and Safety (EHS) program based on the 45001 standard.
Health and Safety The environment, health, safety, and well-being of our employees is our highest priority and is a Materion core value. Our Environmental, Health, and Safety (EHS) systems are mature and largely based on the ISO 45001 standard.
Approximately 341 were in the Asia–Pacific region, 444 were in the Europe, the Middle East, and Africa (EMEA) region, and 2,252 were in the North America region. Among our total global employee population, approximately 2,005 were employed in manufacturing.
Approximately 317 were in the Asia–Pacific region, 436 were in the Europe, the Middle East, and Africa (EMEA) region, and 2,127 were in the North America region. Among our total global employee population, approximately 1,847 were employed in manufacturing.
Talent Development We continue to provide professional development and training for all global employees. By providing employees with wide-ranging development opportunities and paths to success, we empower them to realize their full potential. Our development activities support our goal to develop and retain employees while building a strong foundation on their critical capabilities.
By providing employees with wide-ranging development opportunities and paths to success, we empower them to realize their full potential. Our development activities support our goal to develop and retain employees while building their critical capabilities on an ongoing basis.
Approximately 800 customers purchase our products throughout the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and life sciences end markets. In fiscal year 2024 and 2023, one customer in our Performance Materials segment 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.
Approximately 800 customers purchase our products throughout the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and life sciences end markets. In fiscal year 2025, there were no customers that accounted for greater than ten percent of our net sales.
Availability of Raw Materials The principal raw materials we use are beryllium, tantalum, aluminum, cobalt, copper, gold, nickel, palladium, platinum, ruthenium, silver, and tin.
In 2024 and 2023, one customer in our Performance Materials segment 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. Availability of Raw Materials The principal raw materials we use are beryllium, tantalum, aluminum, cobalt, copper, gold, nickel, palladium, platinum, ruthenium, silver, and tin.
The inhalation of airborne beryllium particulate may present a health hazard to certain individuals. 4 In 2018, the U.S.
The inhalation of airborne beryllium 4 particulate may present a health hazard to certain individuals, and the U.S. Occupational Safety and Health Administration (OSHA) has established standards for workplace exposure to beryllium, which fundamentally represent our current health and safety operating practices.
Our robust and fully integrated talent and succession-planning process supports the development of our talent pipeline for critical roles in operations management, commercial excellence, and engineering. We have maintained our campus recruitment initiatives to ensure a strong pipeline of talent into the organization. Additionally, Company development programs have been designed to target and accelerate key leadership and functional skill sets.
Our robust and fully integrated talent and succession-planning process supports the development of our talent pipeline for critical roles in operations management, commercial excellence, and engineering. These activities include identifying successors for key roles and initiating individual development plans designed to build, retain, and expand key skills within the company.
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.
Other government and standard-setting organizations, however, may also review beryllium-related worker safety rules and standards, and may 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.
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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-keeping.
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At Materion we take a holistic approach to employee engagement and inclusion. Our ERGs are open to participation by any employee, regardless of background. The ERGs serve as platforms for employees to network, learn, develop, and grow in a supportive environment that emphasizes our commitment to diversity and inclusion.
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All factory leadership received detailed training on the model as well as the operations staff receiving basic training on the concepts last year. In 2024, we experienced a 20 percent improvement in our injury frequency rate and lowered our severity rate to one of the lowest in the primary nonferrous industry.
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We have also maintained our campus recruitment initiatives to ensure a strong pipeline of talent into the organization and have a record of converting student interns into full-time hires. Additionally, Company development programs have been designed to target and accelerate key leadership skills. We regularly evaluate and implement new development approaches, including classroom and online training opportunities.
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A new interactive learning management system increasing operator hazard recognition skills was deployed as well. Performance improvement was also due in part to a large increase in safety conversations between operators and supervision as well as a campaign to dramatically increase near miss reporting.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to retain our management team and professional personnel, our customer relationships and level of technical expertise could be negatively affected, which may materially and adversely affect our business. Any interruption of our workforce, including interruptions due to our restructuring initiatives, unionization efforts, changes in labor relations or shortages of appropriately skilled individuals could affect our business.
Biggest changeIn addition, our restructuring activities and strategies for growth have placed, and are expected to continue to place, increased demands on our management’s skills and resources. If we are unable to retain our management team and professional personnel, our customer relationships and level of technical expertise could be negatively affected, which may materially and adversely affect our business.
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, tariffs, 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.
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, tariffs, 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, government spending on defense, and government shutdowns.
Compliance with these climate change initiatives may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced 12 emission allowances or additional restrictions on production or operations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.
Compliance with these climate change initiatives may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced emission allowances or additional restrictions on production or operations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.
Our inability to accurately predict the timing and magnitude of sales of our products, especially newly introduced products, could affect our ability to meet our customers’ product delivery requirements or cause our results of operations to suffer if we incur expenses in a particular period that do not translate into sales during that period, or at all.
Our inability to accurately predict the timing and magnitude of sales of our products, especially newly 7 introduced products, could affect our ability to meet our customers’ product delivery requirements or cause our results of operations to suffer if we incur expenses in a particular period that do not translate into sales during that period, or at all.
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. 9 A cybersecurity 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.
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 cybersecurity 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.
Additionally, while we maintain insurance to cover the theft of our inventory, such coverage may not sufficiently cover any loss. Access to consigned metals may restrict our operations We use gold and other precious metals in the production of some of our products. We obtain most precious metals from consignors under consignment agreements.
Additionally, while we maintain insurance to cover the theft of our inventory, such coverage may not sufficiently cover any loss. 8 Access to consigned metals may restrict our operations We use gold and other precious metals in the production of some of our products. We obtain most precious metals from consignors under consignment agreements.
Although we maintain a cyber insurance policy, there is no guarantee that such coverage will be sufficient to address costs, liabilities and damages we may incur in connection with a cybersecurity incident or that such coverage will continue to be available on commercially reasonable terms or at all.
Although we maintain a cyber insurance policy, 9 there is no guarantee that such coverage will be sufficient to address costs, liabilities and damages we may incur in connection with a cybersecurity incident or that such coverage will continue to be available on commercially reasonable terms or at all.
As a result, our business, financial condition and results of operations could be materially adversely affected. Risks Related to Legal, Compliance and Regulatory Matters 11 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.
As a result, our business, financial condition and results of operations could be materially adversely affected. 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.
If our customers use substitutes for beryllium-containing materials in their products, the demand for beryllium-containing products may decrease, which could reduce our sales. 7 Our long and variable sales and development cycle makes it difficult for us to predict if and when a new product will be sold to customers.
If our customers use substitutes for beryllium-containing materials in their products, the demand for beryllium-containing products may decrease, which could reduce our sales. Our long and variable sales and development cycle makes it difficult for us to predict if and when a new product will be sold to customers.
Bertrandite ore 13 mining is also subject to extensive governmental regulation on matters such as permitting and licensing requirements, plant and wildlife protection, reclamation and restoration of mining properties, the discharge of materials into the environment, and the effects that mining has on groundwater quality and availability.
Bertrandite ore mining is also subject to extensive governmental regulation on matters such as permitting and licensing requirements, plant and wildlife protection, reclamation and restoration of mining properties, the discharge of materials into the environment, and the effects that mining has on groundwater quality and availability.
Other effects of these changes, including impacts on the price of raw materials, responsive actions from governments and the opportunity for competitors to establish a presence in markets where we participate, could also have significant impacts on our financial results.
The effects of these changes, including impacts on the price of raw materials, responsive actions from governments and the opportunity for competitors to establish a presence in markets where we participate, could also have significant impacts on our financial results.
While policies mandate compliance with these anti-bribery laws, we operate in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.
While policies mandate compliance with these 11 anti-bribery laws, we operate in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.
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 10 defined benefit pension plans in other non-U.S. locations.
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.
Concerns over CBD and other potential adverse health effects relating to beryllium, as well as concerns regarding potential liability from the use of beryllium, may discourage our customers’ use of our beryllium-containing products and significantly reduce demand for our products.
Concerns over CBD and other potential adverse health effects relating to beryllium, as well as concerns regarding potential liability from the use of beryllium, may discourage our customers’ use of our beryllium-containing products and significantly reduce demand for 12 our products.
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.
Additionally, restrictive covenants contained in our indebtedness may restrict our operations, including our ability to pursue our growth and acquisition strategies. 13 The terms of our credit facilities require us to comply with various covenants, including financial covenants.
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 57% in 2024 and 51% in 2023 and 2022, respectively 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 64% in 2025, 57% in 2024 and 51% in 2023, respectively of Net sales. We anticipate that international shipments will account for a significant portion of our sales for the foreseeable future.
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. These contracts may be suspended, canceled, or delayed, which could have an adverse impact on our revenues. In 2024, 19% of our value-added sales were to customers in the aerospace and defense end market.
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. These contracts may be suspended, canceled, or delayed, which could have an adverse impact on our revenues. In 2025, 20% of our value-added sales were to customers in the aerospace and defense end market.
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. In 2018, OHSA issued a final standard for workplace exposure to beryllium.
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.
In fiscal year 2024 and 2023, one Performance Material customer accounted for approximately ten percent of our net sales. Our business may be impacted by external factors that we may not be able to control.
In fiscal year 2025, no customers accounted for more than ten percent of our sales. In fiscal years 2024 and 2023, one Performance Material customer accounted for approximately ten percent of our net sales. Our business may be impacted by external factors that we may not be able to control.
These covenants could adversely affect our business by limiting our ability to plan for or react to market conditions or to meet our capital needs, as well as adversely affect our ability to pursue our growth and acquisition strategies, and other strategic initiatives.
These covenants could adversely affect our business by limiting our ability to plan for or react to market conditions or to meet our capital needs, as well as adversely affect our ability to pursue our growth and acquisition strategies, and other strategic initiatives. Adverse business conditions could impact our ability to generate cash and service our indebtedness.
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 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.
Because we manufacture products that contain precious metals, we maintain a significant amount of precious metals at certain of our manufacturing facilities. Accordingly, we are subject to the risk of precious metal shortages resulting from employee error or theft.
Because we manufacture products that contain precious metals, we maintain a significant amount of precious metals at certain of our manufacturing facilities. Accordingly, we are subject to the risk of precious metal shortages resulting from employee error or theft. In the past, we have had precious metal shortages resulting from theft and employee error, which could reoccur in the future.
Further, we maintain some precious metals and copper on a consigned inventory basis. The owners of the precious metals and copper charge a fee that fluctuates based on the market price of those metals and other factors.
Further, we maintain some precious metals and copper on a consigned inventory basis. The owners of the precious metals and copper charge a fee that fluctuates based on the market price of those metals and other factors. A significant increase in the market price or the consignment fee of precious metals and/or copper would increase our costs.
In the past, we have had precious metal shortages resulting from theft and employee error, which could reoccur in the future. 8 While we maintain controls to prevent theft, including physical security measures, if our controls do not operate effectively or are designed ineffectively, our profitability could be adversely affected, including any charges that we might incur as a result of the shortage of our inventory and by costs associated with increased security, preventative measures, and insurance.
While we maintain controls to prevent theft, including physical security measures, if our controls do not operate effectively or are designed ineffectively, our profitability could be adversely affected, including any charges that we might incur as a result of the shortage of our inventory and by costs associated with increased security, preventative measures, and insurance.
In addition to the risk of unanticipated warranty or recall expenses, our customer contracts may contain provisions that could cause us to incur penalties, be liable for damages, including liquidated damages, or incur other expenses, if we experience difficulties with respect to the functionality, deployment, operation, and availability of our products and services.
Any of these occurrences could also result in the loss of, or delay in, market acceptance of our products, and could damage our reputation, which could reduce our sales. 14 In addition to the risk of unanticipated warranty or recall expenses, our customer contracts may contain provisions that could cause us to incur penalties, be liable for damages, including liquidated damages, or incur other expenses, if we experience difficulties with respect to the functionality, deployment, operation, and availability of our products and services.
Adverse business conditions could impact our ability to generate cash and service our indebtedness. 14 Our ability to pay interest on our debt and to satisfy our other debt obligations depends in part upon our future financial and operating performance and that of our subsidiaries, and upon our ability to renew or refinance borrowings.
Our ability to pay interest on our debt and to satisfy our other debt obligations depends in part upon our future financial and operating performance and that of our subsidiaries, and upon our ability to renew or refinance borrowings.
We cannot provide assurance that we will not incur future restructuring charges or impairment charges, or that we will achieve all of the anticipated benefits from the restructuring actions we have taken or plan to take in the future.
We cannot provide assurance that we will not incur future restructuring charges or impairment charges, or that we will achieve all of the anticipated benefits from the restructuring actions we have taken or plan to take in the future. If we are unable to retain our qualified management and employees, our business may be negatively affected.
In recent years, a tremendous effort has been put into developing disruptive thermal spreading materials which requires newer technology that replaces the traditional approach of building package.
For example, for many years thermal and mechanical performance have been at the forefront of device packaging for wireless communications infrastructure devices. In recent years, a tremendous effort has been put into developing disruptive thermal spreading materials which requires newer technology that replaces the traditional approach of building package.
Therefore, an investment in us involves some risks, including the risks described below. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Therefore, an investment in us involves some risks, including the risks described below. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. The risks discussed below are not the only risks that we may experience.
If, in the future, we are unable to obtain sufficient amounts of metals on a timely basis, we may not be able to obtain metals from alternate sources at competitive prices.
We are not dependent on any one supplier for our primary raw materials, but the business could be impacted by supply constraints. If, in the future, we are unable to obtain sufficient amounts of metals on a timely basis, we may not be able to obtain metals from alternate sources at competitive prices.
The markets for our products are experiencing rapid changes in technology. We operate in markets driven by rapidly changing technology and evolving customer specifications and industry standards. Next-generation solutions may quickly render an existing product obsolete and unmarketable. For example, for many years thermal and mechanical performance have been at the forefront of device packaging for wireless communications infrastructure devices.
Our business could also be adversely affected by prolonged government shutdowns. The markets for our products are experiencing rapid changes in technology. We operate in markets driven by rapidly changing technology and evolving customer specifications and industry standards. Next-generation solutions may quickly render an existing product obsolete and unmarketable.
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. 6 A substantial number of our customers are in the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and life sciences end markets.
If we are unable to retain our qualified management and employees, our business may be negatively affected. 15 Our ability to provide high quality products and services depends in part on our ability to retain our skilled personnel in the areas of management, product engineering, servicing and sales.
Our ability to provide high quality products and services depends in part on our ability to retain our skilled personnel in the areas of management, product engineering, servicing and sales. Competition for such personnel is intense, and our competitors can be expected to attempt to hire our management and skilled employees from time to time.
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.
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. 10 Our success is dependent upon our relationships with certain key customers.
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The risks discussed below are not the only risks that we may experience.
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If any of the following risks occur, our business, results of operations, or financial condition could be negatively impacted.
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A substantial number of our customers are in the semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and life sciences end markets.
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Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax laws.
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A significant increase in the market price or the consignment fee of precious metals and/or copper would increase our costs, negatively impacting our operating profit. We are not dependent on any one supplier for our primary raw materials, but the business could be impacted by supply constraints.
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For example, the Trump administration has imposed and could further impose broad-based global tariffs that could adversely impact trade relations and result in higher costs.
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Specifically, the Inflation Reduction Act of 2022 may be subject to change by future presidential administrations, including the Trump administration. It is not possible at this time to determine whether such actions will be taken and the impact they may have on the Company. Our success is dependent upon our relationships with certain key customers.
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Any interruption of our workforce, including interruptions due to our restructuring initiatives, unionization efforts, changes in labor relations or shortages of appropriately skilled individuals could affect our business. Item 1B. UNRESOLVED STAFF COMMENTS None.
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For example, the Trump administration has proposed to significantly increase tariffs on foreign imports into the United States, particularly from Canada, China and Mexico.
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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.
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Any of these occurrences could also result in the loss of, or delay in, market acceptance of our products, and could damage our reputation, which could reduce our sales.
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Competition for such personnel is intense, and our competitors can be expected to attempt to hire our management and skilled employees from time to time. In addition, our restructuring activities and strategies for growth have placed, and are expected to continue to place, increased demands on our management’s skills and resources.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, at least annually, the full Board attends a cybersecurity training from external experts and reviews and discusses our technology strategy with the Chief Information Officer and approves our technology strategic plan. 16 Our senior leadership is responsible for identifying, assessing and managing our exposure to risk, including cybersecurity risks.
Biggest changeThe full Board attends two of the Audit and Risk Committee meetings at which information technology and cyber risk are discussed. Additionally, at least annually, the full Board attends a cybersecurity training from external experts and reviews and discusses our technology strategy with the Chief Information Officer and approves our technology strategic plan.
See “Risks Relating to Our Business and Operations – A cybersecurity 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. ” in “Risk Factors” on page 10 of this Form 10-K.
See “Risks Relating to Our Business and Operations – A cybersecurity incident impacting customer, 15 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. ” in “Risk Factors” on page 9 of this Form 10-K.
As of the date of the filing of this Form 10-K, we are not aware of and do not believe that any such attempts that have occurred since the beginning of 2024 that have had a material effect, or are reasonably likely to have a material effect, on our business, operations, or financial condition.
As of the date of the filing of this Form 10-K, we are not aware of and do not believe that any such attempts that have occurred since the beginning of 2025 that have had a material effect, or are reasonably likely to have a material effect, on our business, operations, or financial condition.
For all matters that have been escalated, the responsible team executes specified procedures to contain the incident, implement incident response procedures and implement and document remediation measures. Steve Holt is our Chief Information Officer, a role he has had since he joined Materion in November 2017. Mr. Holt has 40 years of experience in the information technology industry.
For all matters that have been escalated, the responsible team executes specified procedures to contain the incident, implement incident response procedures and implement and document remediation measures. Pankaj Lahoti is our Chief Information Officer, a role he has had since he joined Materion in April 2025. Mr. Lahoti has over 30 years of experience in the information technology industry.
Our cybersecurity program is led by our Chief Information Officer, who is responsible for assessing and managing material risks from cybersecurity threats, including monitoring the prevention, detection, mitigation and remediation of cybersecurity threats. Our Chief Information Officer reports directly to our Chief Executive Officer.
Our senior leadership is responsible for identifying, assessing and managing our exposure to risk, including cybersecurity risks. Our cybersecurity program is led by our Chief Information Officer, who is responsible for assessing and managing material risks from cybersecurity threats, including monitoring the prevention, detection, mitigation and remediation of cybersecurity threats.
Removed
The full Board attends two of the Audit and Risk Committee meetings at which information technology and cyber risk are discussed.
Added
Our Chief Information Officer reports directly to our Chief Executive Officer.
Removed
Prior to joining Materion, Mr. Holt served as Chief Information Officer at Chart Industries as well as other IT-focused positions at TechnOptics, Accuride Corporation and Navistar. 17
Added
Prior to joining Materion, Mr. Lahoti served as Vice President of IT at Amphenol CIT and as Senior Director of Information Technology at Johnson Controls. 16

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeInformation as of December 31, 2024, 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 13,000/23,460 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 125,000/110,800 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 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 18 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, 2025, 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) Leased 23,460 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 Dangjin, Korea (2) Leased 31,538 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 125,000/110,800 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 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 17 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 2024, 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 2025, 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 2024, 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 2025, 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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Biggest changeThe 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, 2024 there were no pending beryllium cases.
Biggest changeThe 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, 2025 there were no pending beryllium cases.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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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. 19 PART II
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

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (1) September 28 through November 1, 2024 — $ — — $ 8,316,239 November 2 through November 29, 2024 — $ — — 8,316,239 November 30 through December 31, 2024 — $ — — 8,316,239 Total — $ — — $ 8,316,239 (1) On January 14, 2014, we announced that our Board of Directors authorized the repurchase of up to $50.0 million of our common stock; this Board authorization does not have an expiration date.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (1) September 27 through October 31, 2025 — $ — — $ 50,000,000 November 1 through November 28, 2025 — $ — — 50,000,000 November 29 through December 31, 2025 — $ — — 50,000,000 Total — $ — — $ 50,000,000 (1) On January 14, 2014, the Company announced that its Board of Directors authorized the repurchase of up to $50.0 million of its common stock.
Share Repurchases The following table presents information with respect to repurchases of common stock made by us during the three months ended December 31, 2024.
Share Repurchases The following table presents information with respect to repurchases of common stock made by us during the three months ended December 31, 2025.
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, 2025, there were 592 shareholders of record.
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, 2026, there were 559 shareholders of record.
During the three months ended December 31, 2024, we did not repurchase any shares under this program. 20 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. 2020 2021 2022 2023 2024 Materion Corporation $ 108 $ 156 $ 150 $ 222 $ 170 Russell 2000 118 135 106 121 134 S&P SmallCap 600 110 137 113 129 138 S&P SmallCap 600 - Materials 121 142 132 157 157 The above graph assumes that the value of our common shares and each index was $100 on December 31, 2019 and that all applicable dividends were reinvested. 21
During the three months ended December 31, 2025, the Company did not repurchase any shares under this authorization. 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. 2021 2022 2023 2024 2025 Materion Corporation $ 156 $ 150 $ 222 $ 170 $ 199 Russell 2000 135 106 121 134 126 S&P SmallCap 600 137 113 129 138 131 S&P SmallCap 600 - Materials 142 132 157 157 146 The above graph assumes that the value of our common shares and each index was $100 on December 31, 2020 and that all applicable dividends were reinvested. 20
Added
On October 29, 2025, the Company announced its Board of Directors had authorized the repurchase of up to $50.0 million of its common stock, which authorization replaced the existing 2014 authorization.

Item 7. Management's Discussion & Analysis

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

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Biggest changeRESULTS OF OPERATIONS (Thousands except per share data) 2024 2023 2022 Net sales $ 1,684,739 $ 1,665,187 $ 1,757,109 Value-added sales 1,097,577 1,127,071 1,114,411 Gross margin 325,985 349,042 343,880 Gross margin as a % of Net sales 19 % 21 % 20 % Gross margin as a % of Value-added sales 30 % 31 % 31 % Selling, general, and administrative (SG&A) expense 145,588 157,911 169,338 SG&A expense as a % of Net sales 9 % 9 % 10 % SG&A expense as a % of Value-added sales 13 % 14 % 15 % Research and development (R&D) expense 29,028 27,540 28,977 R&D expense as a % of Net sales 2 % 2 % 2 % R&D expense as a % of Value-added sales 3 % 2 % 3 % Restructuring expense 6,848 3,824 1,573 Goodwill impairment 56,067 — — Long-lived asset impairment 17,134 — — Loss on asset disposal 6,412 — — Other — net 17,685 23,323 24,237 Operating profit 47,223 136,444 119,755 Other non-operating (income) expense — net (2,443) (2,710) (5,250) Interest expense — net 34,764 31,323 21,905 Income before income taxes 14,902 107,831 103,100 Income tax expense (benefit) 9,014 12,129 17,110 Net income 5,888 95,702 85,990 Diluted earnings per share 0.28 4.58 4.14 2024 Compared to 2023 Net sales of $1,684.7 million in 2024 increased $19.5 million from $1,665.2 million in 2023.
Biggest changeRESULTS OF OPERATIONS (Thousands except per share data) 2025 2024 2023 Net sales $ 1,786,550 $ 1,684,739 $ 1,665,187 Value-added sales 1,046,194 1,097,577 1,127,071 Gross margin 308,626 325,985 349,042 Gross margin as a % of Net sales 17 % 19 % 21 % Gross margin as a % of Value-added sales 29 % 30 % 31 % Selling, general, and administrative (SG&A) expense 143,057 145,588 157,911 SG&A expense as a % of Net sales 8 % 9 % 9 % SG&A expense as a % of Value-added sales 14 % 13 % 14 % Research and development (R&D) expense 25,941 29,028 27,540 R&D expense as a % of Net sales 1 % 2 % 2 % R&D expense as a % of Value-added sales 2 % 3 % 2 % Restructuring expense 3,155 6,848 3,824 Goodwill impairment — 56,067 — Long-lived asset impairment — 17,134 — Loss on asset disposal — 6,412 — Other — net 26,677 17,685 23,323 Operating profit 109,796 47,223 136,444 Other non-operating income — net (2,437) (2,443) (2,710) Interest expense — net 30,692 34,764 31,323 Income before income taxes 81,541 14,902 107,831 Income tax expense 6,718 9,014 12,129 Net income 74,823 5,888 95,702 Diluted earnings per share $ 3.58 $ 0.28 $ 4.58 2025 Compared to 2024 Net sales of $1,786.6 million in 2025 increased $101.9 million from $1,684.7 million in 2024.
The premium resets quarterly according to the terms and conditions stipulated in the agreement. The Credit Agreement includes restrictive covenants relating to restrictions on additional indebtedness, acquisitions, dividends, and stock repurchases. In addition, the Credit Agreement includes covenants that limit the Company to a maximum leverage ratio and a minimum interest coverage ratio.
The premium resets quarterly according to the terms and conditions stipulated in the credit agreement. The Credit Agreement includes restrictive covenants relating to restrictions on additional indebtedness, acquisitions, dividends, and stock repurchases. In addition, the Credit Agreement includes covenants that limit the Company to a maximum leverage ratio and a minimum interest coverage ratio.
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 32 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.
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.
All samples are tested with a berylometer. b. The berylometer calibration procedures are verified through comparison with the beryllium production from the mill for the same ores. c. The lab and field berylometers are calibrated on site each shift. 31 d. Materion follows industry standard procedures for calibrating its field and laboratory berylometers each shift that they are utilized. e.
All samples are tested with a berylometer. b. The berylometer calibration procedures are verified through comparison with the beryllium production from the mill for the same ores. c. The lab and field berylometers are calibrated on site each shift. d. Materion follows industry standard procedures for calibrating its field and laboratory berylometers each shift that they are utilized. e.
Precious Metal Physical Inventory Counts We take and record the results of a physical inventory count of our precious metals on a periodic 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.
Precious Metal Physical Inventory Counts We take and record the results of a physical inventory count of our precious metals on a periodic basis. Our precious metal operations include a refinery that processes precious metal-containing scrap and other materials from our customers, as well as 32 our own internally generated scrap.
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. 30 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 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 “indicated resources” means resources for which quantity and grade or quality can be estimated on the basis of adequate geological evidence and sampling.
The Company’s reporting units each provide their forecast of results for the next five years. These forecasts form the basis for 34 the information used in the discounted cash flow model.
The Company’s reporting units each provide their forecast of results for the next five years. These forecasts form the basis for the information used in the discounted cash flow model.
Our pricing policy is to directly pass the cost of these metals on to the customer in order to mitigate the impact of metal price volatility on our results from operations.
Our pricing policy is to directly pass the market cost of these metals on to the customer in order to mitigate the impact of metal price volatility on our results from operations.
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.
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, 2025, and is incorporated by reference herein.
The following represents our indicated and inferred ore mineral resources, exclusive of mineral reserves, as of December 31, 2024 and December 31, 2023: Indicated Inferred As of December 31, 2024 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, 2023 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, 2025 and December 31, 2024: 29 Indicated Inferred As of December 31, 2025 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, 2024 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 available borrowing capacity in the table above represents the additional amounts that could be borrowed under our revolving credit facility and other secured lines existing as of the end of each year depicted.
The available borrowing capacity in the table above represents the additional amounts that could be borrowed under our revolving credit facility and other secured lines existing as of the end of each period depicted.
We also compared our market capitalization as of October 1, 2024 to the carrying value of our equity and considering an implied control premium, we noted no other impairment indicators or triggering events.
We also compared our market capitalization as of October 1, 2025 to the carrying value of our equity and considering an implied control premium, we noted no other impairment indicators or triggering events.
The Credit Agreement provides the Company and its subsidiaries with additional capacity to enter into facilities for the consignment of precious metals and copper, and provides enhanced flexibility to finance acquisitions and other strategic initiatives.
The Credit Agreement provides the Company and its subsidiaries with additional capacity to enter into facilities for the consignment of precious metals, copper, nickel and tantalum, and provides enhanced flexibility to finance acquisitions and other strategic initiatives.
The determination of the weight of the precious metal content within the refine streams as part of a physical inventory count requires the use of estimates and calculations based upon assays, assumed recovery percentages developed from actual historical data and other analyses, the total estimated volumes of solutions and other materials within the refinery, data from our refine vendors, and other factors.
The determination of the weight of the precious metal content within the refine streams as part of a physical inventory count requires the use of estimates and calculations based upon assumed recovery percentages developed from actual historical data and other analyses, the total estimated volumes of solutions and other materials within the refinery, and other factors.
Billings in advance of 33 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 C of the Consolidated Financial Statements for additional details on our contract balances.
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.
Liquidity We believe that cash flow from operations plus available borrowing capacity and our current cash balance are adequate to support operating requirements, capital expenditures, projected pension plan contributions, the current dividend and share repurchase programs, environmental remediation projects, and strategic acquisitions for at least the next 12 months and the foreseeable future thereafter.
Liquidity We believe that cash flow from operations plus available borrowing capacity and our current cash balance are adequate to support operating requirements, capital expenditures, projected pension plan contributions, the current dividend and selective share repurchases, environmental remediation projects, and strategic acquisitions for at least the next 12 months and the foreseeable future thereafter.
In May 2024, the Board of Directors declared an increase in our quarterly dividend from $0.13 to $0.135 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.
In May 2025, the Board of Directors declared an increase in our quarterly dividend from $0.135 to $0.14 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.
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.
When contracts with customers contain multiple performance obligations, 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. 31 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.
See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our results for 2023 compared to 2022. 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 Rep ort on Form 10-K for the year ended December 31, 2024 for a discussion of our results for 2024 compared to 2023. Segment Disclosures The Company has four reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Other reportable segment includes unallocated corporate costs.
Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company and its direct subsidiaries, with the exception of non-mining real property, precious metal, copper and certain other assets. The Credit Agreement allows the Company to borrow money at a premium over SOFR, following the January 2023 amendment, or prime rate and at varying maturities.
Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company and its direct subsidiaries, with the exception of non-mining real property, precious metal and certain other assets. The Credit Agreement allows the Company to borrow money at a premium over SOFR or prime rate and at varying maturities.
In addition to the amounts below, the Company anticipates incurring costs related to its finance lease obligations and non-cancelable lease payments for operating leases with an initial lease term in excess of one year. These obligations are further detailed in Note L.
In addition to the amounts below, the Company anticipates incurring costs related to its finance lease obligations and non-cancelable lease payments for operating leases with an initial lease term in excess of one year. These obligations are further detailed in Note M to the Consolidated Financial Statements.
The available and unused capacity under the metal consignment agreements expiring in August 2025 totaled approximately $233.4 million as of December 31, 2024, compared to $263.5 million as of December 31, 2023. The availability is determined by Board approved levels and actual capacity.
The available and unused capacity under the metal consignment agreements expiring in August 2028 totaled approximately $88.4 million as of December 31, 2025, compared to $233.4 million as of December 31, 2024. The availability is determined by Board approved levels and actual capacity.
At December 31, 2024, cash and cash equivalents held by our foreign operations totaled $15.7 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, 2025, cash and cash equivalents held by our foreign operations totaled $13.0 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.
(Thousands of Pounds of Beryllium) 2024 2023 2022 Domestic ore 507 405 382 Non-domestic ore — — — Unyielded total 507 405 382 Annual yield 82 % 89 % 90 % Beryllium produced 418 362 344 % of mill capacity 65 % 56 % 53 % 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) 2025 2024 2023 Domestic ore 506 507 405 Non-domestic ore — — — Unyielded total 506 507 405 Annual yield 77 % 82 % 89 % Beryllium produced 391 418 362 % of mill capacity 61 % 65 % 56 % 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.
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. 27 FINANCIAL POSITION Cash Flow A summary of cash flows provided by (used in) operating, investing, and financing activities is as follows: (Thousands) 2024 2023 2022 Net cash provided by operating activities $ 87,817 $ 144,414 $ 115,958 Net cash (used in) investing activities (79,605) (119,222) (79,729) Net cash provided by (used in) financing activities (4,186) (24,850) (35,558) Effects of exchange rate changes (607) (149) (2,032) Net change in cash and cash equivalents $ 3,419 $ 193 $ (1,361) Net cash provided by operating activities totaled $87.8 million in 2024 versus $144.4 million in 2023.
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) 2025 2024 2023 Net cash provided by operating activities $ 103,243 $ 87,817 $ 144,414 Net cash (used in) investing activities (98,135) (79,605) (119,222) Net cash (used in) financing activities (9,821) (4,186) (24,850) Effects of exchange rate changes 1,681 (607) (149) Net change in cash and cash equivalents $ (3,032) $ 3,419 $ 193 Net cash provided by operating activities totaled $103.2 million in 2025 versus $87.8 million in 2024.
The following represents our ore mineral reserves: Proven Probable Total As of December 31, 2024 Tonnage (in thousands) 7,475 962 8,437 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 36.58 4.97 41.55 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 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, 2025 Tonnage (in thousands) 7,338 962 8,300 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 35.91 4.97 40.88 As of December 31, 2024 Tonnage (in thousands) 7,475 962 8,437 Grade (% beryllium) 0.245 % 0.258 % 0.246 % Beryllium pounds (in millions) 36.58 4.97 41.55 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.
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 October 2025, we announced that our Board of Directors had approved a new plan to repurchase up to $50.0 million of our common stock, replacing the plan approved in 2014. 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 dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. We sell other metals and materials that are not considered direct pass-throughs, and these costs are not deducted from net sales when calculating value-added sales. 26 Our net sales are also affected by changes in the use of customer-supplied metal.
The dollar amount of gross margin and operating profit is not affected by the value-added sales calculation. We sell other metals and materials that are not considered direct pass-throughs, and these costs are not deducted from net sales when calculating value-added sales.
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. It is considered that Materion has adequate data to support its milling practices.
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.
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 $1,097.6 million in 2024 decreased $29.5 23 million compared to $1,127.1 million in 2023.
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 $1,046.2 million in 2025 decreased $51.4 million compared to $1,097.6 million in 2024.
Moreover, the Credit Agreement also provides for an uncommitted incremental facility whereby, under certain conditions, the Company may be able to borrow additional term loans in an aggregate amount not to exceed $150.0 million.
The Credit Agreement also provides for an uncommitted incremental facility whereby, subject to the satisfaction of certain conditions, the Company may be able to borrow additional term loans in an aggregate amount not to exceed $250 million.
Corporate costs were 2 and 3% of total Company value-added sales in 2024 and 2023, respectively.
Corporate costs were 2% of total Company value-added sales in 2025 and 2024.
Trends and comparisons of net sales are affected by movements in the market prices of these metals, but changes in net sales due to metal price movements may not have a proportionate impact on our profitability. Internally, management reviews net sales on a value-added basis.
Trends and comparisons of net sales are affected by movements in the market prices of these metals, but changes in net sales due to metal price movements may not have a proportionate impact on our profitability. Our net sales are also affected by changes in the use of customer-supplied metal.
Value-added sales is a non-GAAP financial measure that removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in metal prices and changes in mix due to customer-supplied material.
We resumed shipping product from our facilities in December 2025 and continue to ramp production. 22 Value-added sales is a non-GAAP financial measure that removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in metal prices and changes in mix due to customer-supplied material.
A summary of key data relative to our liquidity, including the outstanding debt, cash balances, and available borrowing capacity, as of December 31, 2024 and December 31, 2023 is as follows: December 31, (Thousands) 2024 2023 Cash and cash equivalents $ 16,713 $ 13,294 Total outstanding debt 442,008 426,173 Net (debt) cash (425,295) (412,879) Available borrowing capacity $ 168,997 $ 178,734 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, 2025 and December 31, 2024 is as follows: December 31, (Thousands) 2025 2024 Cash and cash equivalents $ 13,681 $ 16,713 Total outstanding debt 458,793 442,008 Net (debt) cash (445,112) (425,295) Available borrowing capacity $ 223,675 $ 168,997 Net debt is a non-GAAP financial measure.
The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts 28 borrowing capacity to a multiple of the twelve-month trailing adjusted earnings before interest, income taxes, depreciation and amortization, and other adjustments.
The applicable debt covenants have been taken into account when determining the available borrowing capacity, including the covenant that restricts the borrowing capacity to a multiple of the twelve-month trailing earnings before interest, income taxes, depreciation, depletion and amortization, and other adjustments. 27 In June 2025, the Company entered into a Fifth Amended and Restated Credit Agreement (Credit Agreement).
We were in compliance with all of our debt covenants as of December 31, 2024 and December 31, 2023. 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, 2025 and December 31, 2024. Cash on hand up to $35.0 million can benefit the covenants and may benefit the borrowing capacity under the Credit Agreement.
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.
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 increase in net sales was primarily due to higher precious metal pass through costs, increasing net sales by approximately $79.5 million when compared to the prior year. This increase was partially offset by a decrease in sales volumes in the energy end market (24%).
The increase was primarily due to higher precious metal pass-through costs, increasing net sales by approximately $208.2 million compared to the prior year, partially offset by a decrease in precious metal sales volumes of $35.3 million.
Precision Optics (Thousands) 2024 2023 2022 Net sales $ 94,490 $ 103,889 $ 113,682 Value-added sales 94,295 103,788 113,580 EBITDA (73,297) 9,860 13,753 2024 Compared to 2023 Net sales from the Precision Optics segment were $94.5 million in 2024, a decrease of 9% compared to net sales of $103.9 million in 2023.
Precision Optics (Thousands) 2025 2024 2023 Net sales $ 100,714 $ 94,490 $ 103,889 Value-added sales 100,493 94,295 103,788 EBITDA 7,698 (73,297) 9,860 2025 Compared to 2024 Net sales from the Precision Optics segment were $100.7 million in 2025, an increase of 7% compared to net sales of $94.5 million in 2024.
An increase in net sales in the Electronic Materials was partially offset by decreased net sales in the Performance Materials and Precision Optics segments. The increase in the Electronic Materials segment was primarily due to higher precious metal pass through costs, increasing net sales by approximately $79.5 million when compared to the prior year.
The increase in the Electronic Materials segment was primarily due to higher precious metal pass-through costs, increasing net sales by approximately $208.2 million when compared to the prior year, partially offset by a decrease in precious metal sales of $35.3 million.
Electronic Materials (Thousands) 2024 2023 2022 Net sales $ 845,746 $ 805,751 $ 971,902 Value-added sales 315,252 334,730 412,783 EBITDA 47,443 45,747 67,806 2024 Compared to 2023 Net sales from the Electronic Materials segment of $845.7 million in 2024 was 5% higher than net sales of $805.8 million in 2023.
Electronic Materials (Thousands) 2025 2024 2023 Net sales $ 1,009,965 $ 845,746 $ 805,751 Value-added sales 327,627 315,252 334,730 EBITDA 71,137 47,443 45,747 2025 Compared to 2024 Net sales from the Electronic Materials segment of $1,010.0 million in 2025 was 19% higher than net sales of $845.7 million in 2024.
Off-balance Sheet Obligations We maintain the majority of the precious metals and copper we use in production on a consignment basis in order to reduce our exposure to metal price movements and to reduce our working capital investment.
(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. 28 Off-balance Sheet Obligations We maintain the majority of the precious metals and copper we use in production on a consignment basis in order to reduce our exposure to metal price movements and to reduce our working capital investment.
The decrease in value-added sales was driven by the same factors driving the decrease in net sales. EBITDA for the Performance Materials segment was $169.3 million in 2024 compared to $174.5 million in 2023.
Value-added sales of $618.1 million in 2025 decreased 10% compared to $688.0 million in 2024, consistent with the decrease in net sales. The decrease in value-added sales was driven by the same factors driving the decrease in net sales. EBITDA for the Performance Materials segment was $127.2 million in 2025 compared to $169.3 million in 2024.
Performance Materials (Thousands) 2024 2023 2022 Net sales $ 744,503 $ 755,547 $ 671,525 Value-added sales 688,030 688,553 589,531 EBITDA 169,276 174,471 125,227 2024 Compared to 2023 24 Net sales from the Performance Materials segment of $744.5 million in 2024 decreased 1% compared to 2023.
Performance Materials (Thousands) 2025 2024 2023 Net sales $ 675,871 $ 744,503 $ 755,547 Value-added sales 618,074 688,030 688,553 EBITDA 127,163 169,276 174,471 23 2025 Compared to 2024 Net sales from the Performance Materials segment of $675.9 million in 2025 decreased 9% compared to 2024.
Refer to Item 7A “Quantitative and Qualitative Disclosures about Market Risk.” The notional value of off-balance sheet precious metals and copper was $381.6 million as of December 31, 2024 versus $351.5 million as of December 31, 2023. We were in compliance with all of the covenants contained in the consignment agreements as of December 31, 2024 and December 31, 2023.
Refer to Item 7A “Quantitative and Qualitative Disclosures about Market Risk.” The notional value of off-balance sheet precious metals and c opper was $526.2 million as of December 31, 2025 versus $381.6 million as of December 31, 2024.
R&D costs as a percentage of net sales remained flat at 2% in 2024 and 2023 but as a percent of value-added sales increased from 2% in 2023 to 3% in 2024. Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure.
R&D expense accounted for 1% and 2% of net sales in 2025 and 2024, respectively. R&D expense accounted for 2% and 3% of value-added sales in 2025 and 2024, respectively. Restructuring expense consists primarily of cost reduction actions taken in order to reduce our fixed cost structure.
Due to the slower than expected semiconductor market recovery 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, 2024 and a qualitative impairment test for the Performance Materials reporting unit.
Due to historical results combined with the partial impairment charge recognized in 2024 for the Precision Optics reporting unit, the Company elected to perform a quantitative annual impairment assessment for the Precision Optics reporting unit's goodwill as of October 1, 2025 and a qualitative impairment test for the Electronic Materials and Performance Materials reporting units.
Other (Thousands) 2024 2023 2022 Net sales $ — $ — $ — Value-added sales — — (1,483) EBITDA (25,080) (29,280) (28,345) 2024 Compared to 2023 The Other reportable segment in total includes unallocated corporate costs. Corporate costs of $25.1 million in 2024 decreased from $29.3 million in 2023.
Other (Thousands) 2025 2024 2023 Net sales $ — $ — $ — Value-added sales — — EBITDA (24,691) (25,080) (29,280) 2025 Compared to 2024 The Other reportable segment includes unallocated corporate costs. Corporate costs of $24.7 million in 2025 decreased from $25.1 million in 2024 primarily due to lower incentive compensation as a result of year-to-date performance.
There were no indicators during interim periods that required the performance of an interim impairment assessment. The Company conducted its annual impairment assessment as of the first day of the fourth quarter. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment.
There were no indicators during interim periods that required the performance of an interim impairment assessment. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. Goodwill within the Electronic Materials segment totaled $221.4 million as of December 31, 2025. Within the Precision Optics segment, goodwill totaled $33.1 million.
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 2024, 2023, and 2022 is as follows: (Thousands) 2024 2023 2022 Net sales Performance Materials $ 744,503 $ 755,547 $ 671,525 Electronic Materials 845,746 805,751 971,902 Precision Optics 94,490 103,889 113,682 Other — — — Total $ 1,684,739 $ 1,665,187 $ 1,757,109 Less: pass-through metal costs Performance Materials $ 56,473 $ 66,994 $ 81,994 Electronic Materials 530,494 471,021 559,119 Precision Optics 195 101 102 Other — — 1,483 Total $ 587,162 $ 538,116 $ 642,698 Value-added sales Performance Materials $ 688,030 $ 688,553 $ 589,531 Electronic Materials 315,252 334,730 412,783 Precision Optics 94,295 103,788 113,580 Other — — (1,483) Total $ 1,097,577 $ 1,127,071 $ 1,114,411 The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium can be quite volatile.
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 2025, 2024, and 2023 is as follows: (Thousands) 2025 2024 2023 Net sales Performance Materials $ 675,871 $ 744,503 $ 755,547 Electronic Materials 1,009,965 845,746 805,751 Precision Optics 100,714 94,490 103,889 Other — — — Total $ 1,786,550 $ 1,684,739 $ 1,665,187 Less: pass-through metal costs Performance Materials $ 57,797 $ 56,473 $ 66,994 Electronic Materials 682,338 530,494 471,021 Precision Optics 221 195 101 Other — — — Total $ 740,356 $ 587,162 $ 538,116 Value-added sales Performance Materials $ 618,074 $ 688,030 $ 688,553 Electronic Materials 327,627 315,252 334,730 Precision Optics 100,493 94,295 103,788 Other — — Total $ 1,046,194 $ 1,097,577 $ 1,127,071 Management reviews net sales on a value-added basis.
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.
Additionally, for the Electronic Materials and Performance Materials reporting units, there were no indicators of impairment based on the qualitative analysis performed. 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.
There were no material asset disposals in 2023. Other-net totaled expense of $17.7 million and $23.3 million in 2024 and 2023, 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.
Other-net totaled expense of $26.7 million and $17.7 million in 2025 and 2024, respectively. The increase in Other-net was primarily driven by an increase in metal consignment fees. Refer to Note F to the Consolidated Financial Statements for the major components within Other-net. Other non-operating income-net includes components of pension and post-retirement income other than service costs.
In August 2022, we entered into a precious metals consignment agreement, maturing on August 31, 2025, which replaced the consignment agreements that would have matured on August 27, 2022.
Expansion of business volumes and/or higher metal prices can put pressure on the consignment line limitations from time to time. In August 2025, we entered into a precious metals consignment agreement, maturing on August 31, 2028, which replaced the consignment agreements that would have matured on August 31, 2025.
The decrease was primarily due to lower sales volumes in the industrial (13%), automotive (27%) and aerospace and defense (10%) end markets. Value-added sales of $94.3 million in 2024 decreased 9% compared to value-added sales of $103.8 million in 2023. The decrease in value-added sales was due to the same factors driving the decrease in net sales.
The increase was primarily due to higher sales volumes in the aerospace and defense (35%) end market. 24 Value-added sales of $100.5 million in 2025 increased 7% compared to value-added sales of $94.3 million in 2024. The increase in value-added sales was due to the same factors driving the increase in net sales.
The interest rate for the term loan is based on SOFR, following the January 2023 amendment, plus a tiered rate determined by the Company's quarterly leverage ratio. Portions of our business utilize off-balance sheet consignment arrangements allowing us to use metal owned by precious metal consignors as we manufacture product for our customers.
Portions of our business utilize off-balance sheet consignment arrangements allowing us to use metal owned by precious metal consignors as we manufacture product for our customers. Metal is purchased from the precious metal consignor and sold to our customer at the time of product shipment.
The decrease in 2024 compared to 2023 is a result of an increase in draws on our credit facilities, offset by increased repayments of our long-term debt in 2024. Dividends per common share increased 4% to $0.535 per share in 2024. Total dividend payments to common shareholders were $11.1 million in 2024 and $10.6 million in 2023.
The increase in 2025 compared to 2024 is a result of a repurchase of common stock and deferred financing costs, offset by lower withholding taxes for stock-based compensation awards. Dividends per common share increased 4% to $0.555 per share in 2025. Total dividend payments to common shareholders were $11.5 million in 2025 and $11.1 million in 2024.
(Millions) 2025 2026 2027 2028 2029 There- after Total Debt (1) $ 34.3 $ 409.2 $ 0.2 $ 0.2 $ 0.1 $ — $ 444.0 Interest payments on debt (2) $ 13.8 $ 9.7 $ — $ — $ — $ — $ 23.5 Total $ 48.1 $ 418.9 $ 0.2 $ 0.2 $ 0.1 $ — $ 467.5 29 (1) Refer to Note N to the Consolidated Financial Statements.
(Millions) 2026 2027 2028 2029 2030 There- after Total Debt (1) $ 22.4 $ 8.7 $ 11.5 $ 11.3 $ 406.8 $ — $ 460.7 Interest payments on debt (2) $ 11.2 $ 10.2 $ 9.8 $ 9.2 $ 4.4 $ — $ 44.8 Total $ 33.6 $ 18.9 $ 21.3 $ 20.5 $ 411.2 $ — $ 505.5 (1) Refer to Note O to the Consolidated Financial Statements.
Refer to Note I for additional information. ORE RESERVES The following information concerning our mining properties has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, which first became applicable to us for the year ended December 31, 2021. These requirements differ significantly from the previously applicable disclosure requirements of SEC Industry Guide 7.
We were in complia nce with all of the covenants contained in the consignment agreements as of December 31, 2025 and December 31, 2024. Refer to Note J for additional information. ORE RESERVES The following information concerning our mining properties has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K.
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 $34.8 million in 2024 and $31.3 million in 2023.
Refer to Note P of the Consolidated Financial Statements for details of the components of net periodic benefit costs. Interest expense - net was $30.7 million in 2025 and $34.8 million in 2024. The decrease in interest expense in 2025 compared to 2024 is primarily due to a decrease in interest rates and borrowings compared to the prior year.
In 2024, we recorded a combined total of $6.8 million of restructuring charges across all segments compared to $3.8 million in 2023. See Note D of the Consolidated Financial Statements for further details of restructuring activities. Goodwill impairment was $56.1 million in 2024. There were no goodwill impairments recorded in 2023.
In 2025, we recorded a combined total of $3.2 million of restructuring charges in our Electronic Materials, Precision Optics, Performance Materials and Other segments. In 2024, we recorded a combined total of $6.8 million of restructuring charges primarily in our Precision Optics, Electronic Materials, Performance Materials and Other segments. Refer to Note E to the Consolidated Financial Statements for details.
R&D expense consists primarily of direct personnel costs for pre-production evaluation and testing of new products, prototypes, and applications. R&D expense was $29.0 million in 2024, an increase of 5% compared to 2023.
Expressed as a percentage of value-added sales, SG&A expense was 14% and 13% in 2025 and 2024, respectively. R&D expense consists primarily of direct personnel and material costs for product innovation including pre-production development, evaluation, and testing of new products, prototypes, and applications to deliver new high performing advanced materials to our customers.
The decrease in EBITDA was primarily driven by the impact unfavorable price/mix as well as the impact of lower volumes and related unabsorbed costs in the first half of 2024. Additionally, EBITDA was unfavorably impacted in 2024 by higher costs associated with the production ramp of the precision clad strip facility.
Gross margin decreased from the prior year primarily related to lower sales volumes and $25.7 million of charges in the Performance Materials segment related to the quality issue described above. Gross margin in 2024 was unfavorably impacted by higher costs associated with the production ramp of the precision clad strip facility.
EBITDA for the Precision Optics segment was a loss of $73.3 million in 2024 compared to income of $9.9 million in 2023.
EBITDA for the Precision Optics segment was $7.7 million in 2025 compared to a loss of $73.3 million in 2024. The increase in EBITDA was primarily driven by impairments recorded in 2024 for the Precision Optics reporting unit in Malaysia of $73.2 million. EBITDA was also favorably impacted by increased sales volumes and overall business performance.
The decrease in sales was due to lower sales volumes in the industrial (13%) and automotive (16%) end markets. These decreases were partially offset by increased volumes in the aerospace and defense (33%) end market. Value-added sales of $688.0 million in 2024 decreased slightly from value-added sales of $688.6 million in 2023, consistent with the decrease in net sales.
The decrease in sales was due to lower sales volumes in th e consumer electronics (34%) and ae rospace and defense (9%) end markets. These decreases were partially offset by increased volumes in the energy (35%) end market, along with a $6.3 million year over year increase in the volume of raw material beryllium hydroxide .
Gross margin expressed as a percentage of value-added sales was 30% in 2024 and 31% in 2023. Gross margin decreased from the prior year primarily due to impact of lower volumes and related unabsorbed costs in the first half of 2024.
Gross margin expressed as a percentage of net sales was 17% in 2025 and 19% in 2024. Gross margin expressed as a percentage of value-added sales was 29% in 2025 and 30% in 2024.
The decrease in cash used in investing activities is due to decreased capital expenditures concurrent with the decrease in cash flow provided by operating activities. Net cash used in financing activities decreased $20.7 million from 2023.
Net cash used in investing activities was $98.1 million in 2025 compared to $79.6 million in 2024. The increase in cash used in investing activities is due to the business acquisition and mine development costs, offset by decreased capital expenditures. Net cash used in financing activities increased $5.6 million from 2024.
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 2023 or 2024.
There is no minimum quantity requirement to repurchase our common stock for a given year, and the repurchases may be discontinued at any time. Material Future Cash Obligations The following table summarizes our material future obligations with respect to debt and associated interest as of December 31, 2025.
Goodwill within the Electronic Materials segment totaled $206.3 million as of December 31, 2024. Within the Precision Optics segment, goodwill totaled $31.3 million. The remaining $26.2 million is related to the Performance Materials segment.
The remaining $26.2 million is related to the Performance Materials segment. The Company conducted its annual impairment assessment as of the first day of the fourth quarter.
During the fourth quarter of 2024, the Company considered sales multiples in the low single digits and EBITDA multiples in the range high single digits to mid double digits.
During the fourth quarter of 2025, the Company considered sales multiples in the low single digits and EBITDA multiples in the range high-single digits to mid-double digits. 33 As of October 1, 2025, based on the quantitative assessments for the Precision Optics reporting unit, the estimated fair value exceeded the carrying value by greater than 10%, which managements believes is a sufficient amount to support no indicators of impairment.
The impairment charges were recorded in the Precision Optics reporting unit in the fourth quarter of 2024 as a result of the Company's annual goodwill impairment testing. Refer to Note A to the Consolidated Financial Statements for additional discussion. Long-lived asset impairment was $17.1 million in 2024 related to the Company’s Malaysia facility in the Precision Optics segment.
The effective tax rate for 2024 was higher than the statutory tax rate primarily due to the impairment of non-deducible goodwill in the Precision Optics reporting unit. See Note H to the Consolidated Financial Statements for additional discussion.
Removed
Additionally, volume decreases in the energy (21%), industrial (11%) and automotive (16%) end markets were partially offset by a volume increase in the aerospace and defense (25%) end market.
Added
An increase in net sales in the Electronic Materials and Precision Optics segments was partially offset by decreased net sales in the Performance Materials segment.
Removed
Volume decreases in the industrial (16%), energy (23%) and automotive (19%) end markets were partially offset by an increase in the aerospace and defense (28%) end market. Gross margin was $326.0 million in 2024, a 7% decrease from $349.0 million in 2023. Gross margin expressed as a percentage of net sales was 19% in 2024 and 21% in 2023.
Added
The decrease in precious metal sales was primarily due to the impact of the divestiture of the target business in Albuquerque, New Mexico that occurred in the fourth quarter of 2024, which resulted in $23.1 million of lower sales in 2025 compared to 2024.
Removed
Additionally, gross margin was unfavorably impacted by higher costs associated with the production ramp of the precision clad strip facility. SG&A expense totaled $145.6 million in 2024 as compared to $157.9 million in 2023. The decrease in SG&A expense for 2024 was primarily due to various cost savings initiatives throughout 2024.
Added
At the Company level, volume increased in the semiconductor (21%), telecom and data center (24%) and energy (12%) end markets. Additionally, sales of raw material beryllium hydroxide increased by $6.3 million compared to the prior year.
Removed
There were no long-lived asset impairments recorded in 2023. Refer to Note A to the Consolidated Financial Statements for additional discussion. Loss on asset disposal was $6.4 million in 2024 due to the sale of the Company's Large Area Target business at its Albuquerque, New Mexico facility and wind-down of the related refinery in the fourth quarter of 2024.
Added
The increase was partially offset by a volume decrease in the consumer electronics (30%) end market due to a quality issue with a large precision clad strip customer within Performance Materials segment, causing the Company to temporarily idle production facilities, which limited sales in the fourth quarter.
Removed
The increase in interest expense in 2024 compared to 2023 was primarily due to an increase in borrowings compared to the prior year. Income tax expense (benefit) for 2024 was $9.0 million of expense compared to $12.1 million of expense in 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+2 added−1 removed21 unchanged
Biggest changeIn February 2023 we amended the terms of the interest rate swap to hedge the change in 1-month USD-SOFR. See Note R for further discussion. Excess cash is typically invested in high quality instruments that mature in 90 days or less. Investments are made in compliance with policies approved by the Board of Directors. Foreign currencies.
Biggest changeExcess cash is typically invested in high quality instruments that mature in 90 days or less. Investments are made in compliance with policies approved by the Board of Directors. Foreign currencies. Portions of our international operations sell products priced in foreign currencies, mainly the euro and yen, while the majority of these products’ costs are incurred in U.S. dollars.
We attempt to minimize these fluctuations and the exposure to higher costs by utilizing fixed price agreements of set durations, when deemed appropriate, obtaining competitive bidding between regional energy suppliers, and other methods. 36 Economy. We are exposed to changes in global economic conditions and the potential impact those changes may have on various facets of our business.
We attempt to minimize these fluctuations and the exposure to higher costs by utilizing fixed price agreements of set durations, when deemed appropriate, obtaining competitive bidding between regional energy suppliers, and other methods. Economy. We are exposed to changes in global economic conditions and the potential impact those changes may have on various facets of our business.
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.
While over time our price exposure to copper is generally in 34 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.
If the dollar weakened 10% against the currencies we have hedged from the December 31, 2024 exchange rates, the reduced gain and/or increased loss on the outstanding contracts as of December 31, 2024 would reduce 2025 pre-tax profits by approximately $3.3 million.
If the dollar weakened 10% against the currencies we have hedged from the December 31, 2025 exchange rates, the reduced gain and/or increased loss on the outstanding contracts as of December 31, 2025 would reduce 2025 pre-tax profits by approximately $3.3 million.
If 35 we were in a significant precious metal ownership position, we might elect to use derivative financial instruments to hedge the potential price exposure. The cost to finance and potentially hedge the purchased inventory may also be higher than the consignment fee.
If we were in a significant precious metal ownership position, we might elect to use derivative financial instruments to hedge the potential price exposure. The cost to finance and potentially hedge the purchased inventory may also be higher than the consignment fee.
We did not record any material lower of cost or net realizable value charges in 2024, 2023, or 2022 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 2025, 2024, or 2023 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, 2024, 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, 2025, 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.
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, 2024.
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, 2025.
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. 37
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
Should the market cost of copper increase by 20% from the price as of December 31, 2024, 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.
Should the market cost of copper increase by 20% from the price as of December 31, 2025, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $0.8 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, 2024, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $0.8 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, 2025, the additional pre-tax cost to us as a result of an increase in the consignment fee would be approximately $4.5 million on an annual basis.
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, 2024 the net fair value of our interest rate swaps were $4.6 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.
To minimize this exposure, we may purchase foreign currency forward contracts, options, and collars in compliance with approved policies. If the dollar strengthened, the decline in the translated value of our margins would be at least partially offset by a gain on the hedge contract.
We are exposed to currency movements in that if the U.S. dollar strengthens, the translated value of the foreign currency sale and the resulting margin on that sale will be reduced. To minimize this exposure, we may purchase foreign currency forward contracts, options, and collars in compliance with approved policies.
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 $77.6 million as of December 31, 2024.
Our current policy limits our hedges to 80% or less of the forecasted exposure. The notional value of outstanding currency contracts was $61.0 million as of December 31, 2025.
Removed
Portions of our international operations sell products priced in foreign currencies, mainly the euro and yen, while the majority of these products’ costs are incurred in U.S. dollars. We are exposed to currency movements in that if the U.S. dollar strengthens, the translated value of the foreign currency sale and the resulting margin on that sale will be reduced.
Added
As of December 31, 2025 and December 31, 2024, the net fair value of our interest rate swaps were $1.2 million and $4.6 million, respectively. In February 2023, we amended the terms of the interest rate swap to hedge the change in 1-month USD-SOFR. See Note S to the Consolidated Financial Statements for further discussion.
Added
If the dollar strengthened, the decline in the translated value of our margins would be at least partially offset by a gain on the hedge contract. 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.

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