Materion Corporation (NYSE:MTRN) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 09:00 am ET


Materion Corporation (NYSE:MTRN) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Greetings and welcome to the Materion Corporation's First Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Mr. Steve Shamrock, you may begin.

Steve Shamrock

Good morning. This is Steve Shamrock, Vice President, Corporate Controller and Investor Relations. With me today is Jugal Vijayvargiya, President and Chief Executive Officer and Joe Kelley, Vice President of Finance and Chief Financial Officer.

Our format for today's conference call is as follows. Jugal Vijayvargiya will provide opening comments on the quarter and an update on key initiatives. Following Jugal, Joe Kelley will review detailed financial results for the quarter and then we will open up the call for questions.

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

Additionally, comments with regard to operating profit, net income and earnings per share reflect the adjusted GAAP numbers shown in attachment number 5 in this morning's press release. The adjustments are made in both the current year and prior year periods for comparative purposes and removed certain non-recurring legacy, legal and environmental matters, certain income tax adjustments, CEO transition costs, cost reduction actions and merger and acquisition costs.

And now, I will turn it over to Jugal for his comments.

Jugal Vijayvargiya

Thank you, Steve and a good day to everyone. I am pleased to report that we are off to a great start in 2018 as we build on a successful 2017. Today, we reported value-added sales for the quarter at $181.3 million, an all-time high and a 22% year-over-year increase. Adjusted earnings are up 76% from prior year at $0.51 per share. This is the fifth consecutive quarter of year-over-year growth in both value-added sales and earnings.

Our Commercial Excellence strategy is working as we delivered 14% growth in value-added sales excluding the Heraeus target materials business acquisition. We reached double-digit growth rates across the majority of our end-markets, with industrial components and the commercial aerospace markets leading the way with 36% and 52% growth respectively. New product sales reached $31 million, accounting for 17% of value-added sales. Our robust pipeline of new differentiated products continues to enable market share gains and new application wins.

ToughMet Bushings for aircrafts and copper beryllium rod and wire are two of the products contributing to the strong sales growth. Consumer electronics, our largest end-market grew 16% overall and 6% organically as we continue to have meaningful success establishing Materion as a key business partner. Our focus on the customer has led to two prestigious awards. First, we were recognized by Texas Instruments for Supplier Excellence and second, we received Skyworks, Supplier of the Year