Materion Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales reached $567.3 million, a significant increase from $444.8 million in the prior year period.
• Value-added sales totaled $313.7 million, up 19% year-over-year from $263.9 million.
• Net income was $38.3 million ($1.81 per diluted share), compared to $25.4 million ($1.22 per diluted share) in the prior year.
• Adjusted earnings per share were $1.93, an increase from $1.41 in the prior year.
• Operating profit rose to $50.4 million from $34.9 million in the prior year.
• Adjusted EBITDA reached a record $70.7 million, or 22.5% of value-added sales, up from $55.5 million (21.0% of value-added sales) in the prior year.
• Free cash flow generation was approximately $46 million with a 120% conversion rate relative to net income.
• Cash and cash equivalents increased to $15.4 million as of October 2, 2026, from $13.7 million as of December 31, 2025.
• Long-term debt decreased to $377.4 million from $436.3 million at the end of 2025.

Guidance and Future Outlook:

• Full-year adjusted earnings per share guidance was raised to a range of $7.10 to $7.40, representing a 33% year-over-year increase at the midpoint.
• Management expects a meaningful step up in sales for the fourth quarter supported by record backlog and robust demand across end markets.
• The company is making significant progress toward a mid-term adjusted EBITDA margin target of 23%.

Business Segments and Product Lines:

• All business segments delivered double-digit year-over-year sales and earnings growth.
• Electronic Materials segment net sales were $336.6 million, up from $246.8 million in the prior year.
• Performance Materials segment net sales were $199.0 million, up from $170.8 million in the prior year.
• Precision Optics segment net sales were $31.7 million, up from $27.2 million in the prior year.
• The company recorded its highest quarterly semiconductor sales in company history.
• Significant growth was driven by aerospace & defense and telecom & data center end markets.

Market and Competitive Landscape:

• Incoming orders reached an all-time high, up approximately 25% year-over-year.
• Backlog reached an all-time high, up approximately 35% year-over-year.
• The company reported the fourth consecutive quarter of year-over-year adjusted EBITDA margin expansion.

Risks and Challenges:

• Forward-looking statements note potential risks including global economic conditions, inflationary pressures, recessionary conditions, and impacts from tariffs and trade agreements.
• Risks include potential U.S. Federal Government shutdowns or sequestrations, changes in product mix, and customer financial conditions.
• Challenges involve the success of new product introductions, raw material cost fluctuations (including base and precious metals), and the ability to pass costs to customers.
• Other risks include geopolitical conflicts, regulatory changes, and the realization of benefits from the Inflation Reduction Act of 2022.

Management Commentary and Tone:

• President & CEO Jugal Vijayvargiya stated that results demonstrate the power of the advanced materials portfolio and strong momentum across the company.
• Management highlighted that the team's commitment to delivering for customers across diverse end markets drove double-digit growth in each segment.
• The tone regarding the fourth quarter is described as "very strong," with expectations to deliver the strongest quarter yet and close out a record year.

Other Key Points:

• The company will host an investor conference call on November 4, 2026, at 9:00 a.m. Eastern Time.
• The press release includes detailed reconciliations of non-GAAP measures including value-added sales, adjusted EBITDA, and free cash flow.
• The company employs more than 3,000 people worldwide and serves customers in over 60 countries.
• Adjusted net income for the quarter was $40.8 million ($1.93 per diluted share) excluding acquisition amortization.
• The company paid $8.95 million in cash dividends during the nine months ended October 2, 2026.