Materion Corporation

Greetings and welcome to the Materion Corporation second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Vento, Manager, Corporate Development and Investor Relations. Thank you, sir. You may begin.

Good morning and thank you everyone for joining us on our second quarter 2021 earnings conference call. This is Andrew Vento, Manager, Investor Relations and Corporate Development for Materion Corporation. Before we begin our remarks this morning, I would like to point out that we have posted materials on the company's website that we will reference as a part of today's review of the quarterly results. You can also access the materials through the download feature on the earnings call webcast link. With me today is Jugal Vijayvargiya, President and Chief Executive Officer, and Shelly Chadwick, Vice President and Chief Financial Officer. Our format for today's conference call is as follows. Jugal will provide opening comments on the quarter and an update on key initiatives. Following Jugal, Shelly will review the detailed financial results for the quarter and then we will open the call for questions. Let me remind investors that any forward-looking statements made in this presentation 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 regarding earnings before interest and taxes, net income, and earnings per share reflect the adjusted gap numbers shown in attachment number five in this morning's press release. The adjustments are made in the prior year period for comparative purposes and remove special items, non-cash charges, and certain income tax adjustments. And now, I'll turn the call over to Jugal for his comments.

Thanks, Andrew, and welcome, everyone. I'm pleased to report that we delivered very strong results in the second quarter. We achieved record quarterly value-added sales, exceeding our prior record set in the first quarter, and recorded our fifth quarter of sequential top-line growth. We're seeing strength across key end markets, and more importantly, we continue to outpace that growth by delivering on our organic growth initiatives. Our advanced materials business delivered another quarterly record for value added sales, recognizing substantial results from our commercial initiatives and strong market demand. I'm very proud of our team's continued dedication to serving our customers in this accelerating demand environment. Our businesses are effectively managing supply chain and staffing needs and mitigating the effects of inflationary pressures with a well-designed pricing model and good cost control efforts. Along with our strong financial and operational performance, we continue to execute well on our key strategic growth initiatives. Let me talk through a few highlights. Our customer-funded engineered precision-clad strip project is ramping up. We are nearing completion on the construction of our new leading-edge manufacturing facility and commencing startup activities. Our Optics Boulders integration is complete. Our global teams are collaborating on various customer opportunities, and we have several synergistic initiatives underway. Our organic growth pipeline remains strong across all three segments. We continue to make R&D and commercial investments and work collaboratively with customers to deliver new, high performing products to our customers, which will allow the company to continue at above market organic growth rate. And finally, we have been steadily increasing our investments in our facilities and capabilities to support our growth objectives. With accelerating demand and a strong organic pipeline, we are focusing on projects that will deliver new capacity, We remain confident that these important strategic initiatives, along with many others, are positioning us as a high-performing advanced materials company that enables next-generation applications. The space sector has been in the news quite a lot recently, and Materion is proud to serve this exciting industry across all three of our businesses. and we look forward to advancing the future of the space market with our innovative solutions. On slide seven of our materials, we are highlighting some exciting recent wins and advancements that are helping to enable the growing space sector in a variety of different ways. First, we have announced a partnership in our PAC business to develop nuclear thermal propulsion systems for future NASA space missions. Nuclear propulsion provides greater propellant efficiency as compared with conventional chemical rockets and can enable faster travel and longer mission durations. Our products are being explored for use in critical components of the nuclear thermal engine that will propel new missions and exciting discoveries. Materion will be collaborating on this inspiring project with UltraSafe Nuclear Corporation, Blue Origin, General Electric's Hitachi Nuclear Energy, General Electric Research, Framatome, and others. In addition to our continued relationship and growth with NASA, we are supporting the emerging commercial space market in a variety of ways. Let me give you a few examples of our products involved in recent commercial missions. Our advanced materials business supplies a gold alloy preform product used to braze the thrusters on many commercial spacecrafts. This product is an excellent solution for joining highly critical components in applications subject to adverse operating conditions due to its high tensile strength, resistance to corrosion and oxidation, and superior thermal and electrical conductivity. Our PAC business has also taken flight in the commercial space arena. Currently, our ToughMet 3 alloy is used in fluid control systems on commercial space launch rockets. The tough matte alloy is used because it's extremely strong, is non-flammable when exposed to pure oxygen, and is very easy to machine into complex components. Finally, Maternion provides critical optical components enabling space observation and surveillance. Our precision optics business has decades of experience in the design and manufacture of filter arrays that provide high-end spectral performance in extreme environments. These optical filters enable leading-edge space imaging, making them ideal for a wide range of applications, including space-based instrumentation, surveillance, and targeting systems for missile defense and commercial satellites. We recently announced a partnership with the Vera C. Rubin Observatory on a first-of-its-kind custom optical filter set to be used on the Legacy Survey of Space and Time Telescope, or LSST, currently under construction in Chile. In our PAC business, beryllium is a preferred material for space-related reflective optical systems and sensors. Beryllium's high stiffness-to-weight ratio, excellent thermal properties, and dimensional stability provide unmatched performance when used as a reflective optic and structures material in space-based optical systems. Materion is proud to have beryllium mirrors that are set to launch into orbit on the James Webb Space Telescope later this year. The space sector represents a great opportunity for market growth and Maturion-specific outgrowth based on our broad portfolio of high-performing advanced technologies, which continue to drive further space observation, exploration, and commercial and non-commercial aerospace missions well into the future. Now, let me share some comments on the second half of 2021. We've had tremendous success in executing our growth initiatives, delivering two consecutive record-setting quarters for value-added sales. We are confident that we will be able to sustain this momentum into the second half as our strong-end markets coupled with accelerating organic initiatives have positioned the company on a path of continued above-market growth. As a result, we are raising our full-year guidance to $3.25 to $3.45. I cannot stress how proud I am of our global team's dedication to meeting our customers' needs. I would like to thank them for their hard work and dedication as we move through this outstanding year. Now, let me turn the call over to Shelly to cover the financial details.