Materion Corporation

Good morning, ladies and gentlemen, and thank you for your patience. Your conference will begin shortly. Once again, thank you for your patience. Your conference will begin shortly. Thank you. Thank you. Thank you. Please note this conference is being recorded. I will now turn the conference over to your host, Kyle Kelleher, Director, Investor Relations, and Corporate FP&A. You may begin.

Good morning, and thank you for joining us on our first quarter 2026 earnings conference call. This is Kyle Kelleher, Director, Investor Relations, and Corporate FP&A. 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 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 Vijay Varghia, President and Chief Executive Officer, and Shelley 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. Following Jugal, Shelley will review the detailed financial results in addition to discussing expectations for the remainder of 2026. We will then open up the call for questions. Let me remind investors that any forward-looking statements made in the presentation, including those in the outlook section and during the question and answer portion, are based on current expectations. The company's actual 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, taxes, depreciation, depletion, and amortization, net income, and earnings per share reflect the adjusted gap numbers shown on attachments 4 through 8 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 discrete income tax adjustments. And now, I'll turn over to Carl DeFugel for his comments.

Thanks, Kyle, and good morning, everyone. I'm pleased to be with you today to discuss our first quarter performance and share what we're seeing for the remainder of the year. VA sales were up 10% year-over-year, excluding Precision Cloud Strip, reflecting strong demand across most of our end markets. Electronic materials sales increased 18% versus last year, driven by AI-led demand for high-performance memory and data storage applications, along with strengthening demand in power applications and communication devices. Precision Optics delivered 43% year-over-year top-line increase, with new business coming online across multiple end markets and applications. While performance material sales were roughly flat, excluding precision clad, this was primarily due to shipment timing. The order book continues to build, driven by strong demand in aerospace and defense, energy, and telecom and data center. We expect a meaningful step-up in sales in Q2 and throughout the rest of the year. As for precision clad strip, the production ramp up is progressing well and remains on schedule. We are now producing at the same rate as before the quality issue. We also delivered strong earnings in Q1, with EBITDA margins exceeding 20%, a record for our first quarter given our typical seasonality. Electronic Materials continues to be an outstanding performer, achieving record profitability on very strong sales. Precision Optics continued to exceed expectations, delivering its fifth consecutive quarter of profitability improvement through strong execution on its expanding top line. Turning to our end markets, it's encouraging to see most markets in the high single digit to low double digit growth range. Even more importantly, our order book continues to strengthen. We exited the first quarter with the highest backlog in our company's history. Order backlog is up more than 20% year-over-year and 15% since the start of the year. Defense orders remain strong, with $60 million received in the first quarter, and we have more than $300 million in open RFQs. Over the last 12 months, aerospace and defense order rates are up 50%, energy is up 20%, and semiconductor is up 10%. We are seeing clear acceleration across many of our end markets, and our teams are prepared to meet these higher levels of demand. Going a layer deeper, I want to step back and frame a broader trend that is having a significant impact on Materion, the rapid proliferation of AI. When people think about our role in AI, they often focus on our semiconductor deposition materials, and with good reason. We are a leading supplier of advanced electronic materials that enable advanced node chips and data storage devices. We're in the midst of an AI-driven semiconductor growth cycle, and that strength is evident in our electronic materials performance. But our impact on AI extends far beyond the chip itself. Materion has become a critical enabler of the AI ecosystem, not at the edges, but at the core. AI acceleration depends on advances in semiconductor performance, high speed connectivity, next generation optics, and high reliability energy and space systems. Each of our three businesses provides foundational materials for these applications. Our performance materials business plays a strategic role across the infrastructure powering AI. From advanced data centers to global connectivity networks and next generation energy systems, Our engineered alloys and beryllium-based materials enable performance, reliability, and safety at scale. We supply beryllium nickel materials for fire protection systems and data center buildouts, and specialty alloys for connector technologies and high-speed semiconductor fab equipment. Our materials support the wireless backbone that carries AI-driven data, including towers, undersea cables, and base stations. In energy, our beryllium alloys enable breakthrough nuclear reactor technologies needed to deliver the continuous power AI will require and are widely used in oil and gas drilling and processing equipment. In space, our materials are integral to propulsion systems, spacecraft structures, and launch components supporting global connectivity and observation networks. Our precision optics business provides advanced optical coatings and engineered components essential for data center expansion. immersive AR-VR technologies, and advanced semiconductor manufacturing. Our solutions support connectivity and semiconductor equipment applications, and we supply optical filters and systems for satellite technologies that enhance communication and Earth observation capabilities. As semiconductor devices become smaller and more complex, advanced optics have become increasingly important for lithography, inspection, and metrology. improving accuracy, boosting yield, and enabling scaling for next-generation chips. Our electronic materials business sits at the center of semiconductor innovation, supplying the advanced deposition materials and engineered targets required to manufacture chips at the most sophisticated nodes. These materials power both high-performance computing and data storage devices used in data centers, as well as the semiconductor components that enable global connectivity. Beyond deposition, we provide a range of high value niche materials supporting AI, including alloys for next generation nuclear reactor technologies, specialty metals for base space station applications, and chemicals used in satellite heat shield tiles. While smaller in scale, these applications highlight the depth of our capabilities and our ability to solve complex materials challenges in high reliability environments. As AI workloads scale, Demand for the engineered materials we produce is rising rapidly, and we are already seeing that momentum reflected in customer demand, order rates, and new business wins. Looking ahead to the remainder of 2026, we are energized by the growth our businesses are experiencing and the opportunities emerging across our markets. We're seeing momentum build across the company in our end markets, our incoming order rates, and the new business opportunities our teams are securing. Our results reflect their hard work and commitment. We now see a path to delivering low double digit top line growth for the year while continuing to seed opportunities for the future. This gives us even greater confidence in delivering results toward the high end of our earnings guidance provided in February. I want to express my gratitude to our global teams for their dedication and unwavering commitment to excellence. Their work, driving innovation, Ensuring quality and supporting our customers is the foundation of Materion's success. And finally, I'd like to thank our customers and shareholders for their continued trust and partnership. With that, I'll turn the call over to Shelly to review the financial details.