Materion Corporation Reports Mixed Q3 Results, Net Income Down 16% Amid Revenue Growth

Materion Corporation reported its financial results for the third quarter and the first nine months of 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. For the third quarter ended September 27, 2024, the company achieved net income of $22.3 million, a decrease of 16% from $26.6 million in the same quarter of 2023. For the nine months ended September 27, 2024, net income was $54.7 million, down 28% from $76.2 million in the prior year.

Total revenue for the third quarter of 2024 was $436.7 million, reflecting an increase of approximately 8.3% from $403.1 million in Q3 2023. This growth was primarily driven by the Electronic Materials segment, which saw a 23% increase in net sales, reaching $236.9 million, attributed to higher precious metal pass-through costs and increased sales volumes in the semiconductor market. Conversely, the Performance Materials segment experienced a decline in net sales, falling to $177.4 million, a decrease of 4% from the previous year.

For the first nine months of 2024, total net sales were $1.25 billion, a slight increase from $1.24 billion in the same period of 2023. However, value-added sales decreased by 4%, indicating challenges in certain end markets, particularly in telecom and data centers. The gross margin for the first nine months also declined by 13%, reflecting increased costs and lower sales volumes in key segments.

Operating profit for Q3 2024 was reported at $31.3 million, down 14% from $36.5 million in Q3 2023. The company’s effective tax rate improved to 3.3% in Q3 2024 from 10.0% in the prior year, contributing to a lower income tax expense.

Materion's cash and cash equivalents increased to $17.9 million as of September 27, 2024, up from $13.3 million at the end of 2023. The company reported total assets of $1.86 billion, an increase from $1.76 billion at the end of the previous year. Total debt rose to $497.4 million, up from $428.9 million, reflecting increased borrowings under revolving credit facilities.

In terms of strategic developments, Materion announced the sale of its Albuquerque facility, with the transaction expected to close on October 25, 2024. The company anticipates recording a loss in the fourth quarter related to this sale. Additionally, restructuring costs for the first nine months of 2024 totaled $6.2 million, up from $3.2 million in the same period of 2023, indicating ongoing adjustments within the organization.