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CORRESP

 MATERION CORPORATION

6070 Parkland Boulevard, Mayfield Heights, OH 44124

216.486.4200 f 216.383.4005 www.materion.com

December 23, 2024

 CORRESPONDENCE FILING VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Technology

100 F Street, N.E.

Washington, D.C. 20549

Attention:
 Stephany Yang

 
 Andrew Blume

Re:
 Materion Corporation

 
 Form 10-K for the Fiscal Year Ended December 31, 2023

 
 Filed February 15, 2024

 
 Form 8-K Furnished October 30, 2024

 
 File No. 001-15885

Ladies and Gentlemen:

 Materion Corporation, an
Ohio corporation (the “Company,” “we” or “our”), is submitting this letter in response to the comment letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”),
dated December 2, 2024, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed February 15, 2024 (“Form 10-K”), and Current Report Form 8-K, furnished October 30, 2024.

Below are the Company’s responses. For the convenience of the Staff, the Company has repeated the Staff’s comment before the
corresponding response.

 Form 10-K for the Fiscal Year Ended December 31,
2023

 Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21

1.
 We note that you present and discuss gross margin as a percentage of
non-GAAP value-added sales within the table on page 21 and the related narrative on page 22. Please present and discuss gross margin on a GAAP basis using consolidated net sales and ensure you present the
comparable GAAP measure with equal or greater prominence as required by Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the Non-GAAP Financial Measures
Compliance and Disclosure

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

  Page -
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Interpretations (“Non-GAAP C&DIs”). Please also apply the nature of this comment to your press releases furnished under Item 2.02 of Form 8-K, such as for the consolidated and segment measures presented within Attachments 5 and 7 of the Form 8-K furnished October 30, 2024.

Response:

 The Company uses the value-added sales, a Non-GAAP financial measure that removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in precious metal market prices and changes in mix due to
customer-supplied material. Internally, we manage our business on this basis, and we provide a reconciliation of net sales, the most directly comparable GAAP financial measure, to value-added sales when we disclose value-added sales. Gross margin as
a percentage of net sales could vary significantly from period to period due to volatility in the precious metal markets, even though there would be little to no impact on the overall profitability of the business as our pricing policy is to
directly pass the costs of the metals on to the customer in order to mitigate the impact of metal price volatility on our results of operations.

 Although
we believe gross margin as a percent of value-added sales is more reflective of our current period performance, the Company acknowledges the Staff’s comment and going forward, in future period reports filed with the Commission and future
earnings releases furnished to the Commission, we will present and discuss gross margin as a percent of net sales prior to providing gross margin as a percentage of value added sales, similar to the following examples from the 10-K and press release, presented for illustrative purposes:

 RESULTS OF OPERATIONS

 (Thousands except per share data)

2023

2022

2021

  Net sales

 $
 1,665,187    

 $
1,757,109   

 $
 1,510,644   

  Value-added sales

1,127,071    

 1,114,411   

829,572   

  Gross margin

349,042    

343,880   

283,762   

  Gross margin as a % of Net sales

21 %

20 %

19 %

  Gross margin as a % of Value-added sales

31 %

31 %

34 %

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

  Page -
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 Attachment 5

Materion Corporation and Subsidiaries

Reconciliation of Net Sales to Value-added Sales, Net Income to EBITDA and Adjusted EBITDA

(Unaudited)

Third Quarter Ended

Nine Months Ended

(Millions)

Sep 27,
2024

% of
Net
Sales

% of
VA

Sep 29,
2023

% of
Net
Sales

% of
VA

Sep 27,
2024

% of
Net
Sales

% of
VA

Sep 29,
2023

% of
Net
Sales

% of
VA

 Net sales

 $
  436.7
 

 $
  403.1
 

 $
  1,247.9
 

 $
  1,244.1
 

 Pass-through metal cost

172.9

132.6

446.4

406.8

 Value-added sales

 $
263.8

 $
270.5

 $
801.5

 $
837.3

 Net income

 $
22.3

5.1 %

8.5 %

 $
26.6

6.6 %

9.8 %

 $
54.7

4.4 %

6.8 %

 $
76.2

6.1 %

9.1 %

 Income tax expense

0.8

0.2 %

0.3 %

3.0

0.7 %

1.1 %

6.9

0.6 %

0.9 %

11.9

1.0 %

1.4 %

 Interest expense - net

8.8

2.0 %

3.3 %

7.6

1.9 %

2.8 %

25.9

2.1 %

3.2 %

22.9

1.8 %

2.7 %

 Depreciation, depletion and amortization

18.6

4.3 %

7.1 %

15.1

3.7 %

5.6 %

51.3

4.1 %

6.4 %

46.5

 3.7 %

5.6 %

 Consolidated EBITDA

 $
50.5

11.6 %

19.1 %

 $
52.3

13.0 %

19.3 %

 $
138.8

11.1 %

17.3 %

 $
157.5

12.7 %

18.8 %

 Special items

 Restructuring and cost reduction

 $
1.6

0.4 %

0.6 %

 $
3.1

0.8 %

1.2 %

 $
10.7

0.9 %

1.3 %

 $
6.9

0.6 %

0.8 %

 Electronic Materials inventory adjustment

2.8

0.6 %

1.1 %

—

— %

— %

2.8

0.2 %

0.3 %

—

— %

— %

 Business transformation costs

0.6

0.1 %

0.2 %

—

— %

— %

0.6

— %

0.1 %

—

— %

— %

 Additional start up resources and scrap

 1.2

0.3 %

0.5 %

—

— %

— %

6.1

0.5 %

0.8 %

—

— %

— %

 Merger, acquisition and divestiture related costs

—

— %

— %

—

— %

— %

0.7

0.1 %

0.1 %

—

— %

— %

Total special items

6.2

1.4 %

2.4 %

3.1

0.8 %

1.2 %

20.9

1.7 %

2.6 %

6.9

0.6 %

0.8 %

Adjusted EBITDA

 $
56.7

13.0 %

21.5 %

 $
55.4

13.7 %

20.5 %

 $
159.7

12.8 %

19.9 %

 $
164.4

13.2 %

19.6 %

 Financial Position, page 26

2.
 Please provide a more informative discussion and analysis of cash flows from operating activities, including
changes in working capital components, for the periods presented. In doing so, explain the underlying reasons and implications of material changes between periods to provide investors with an understanding of trends and variability in cash flows.
Also ensure that your disclosures are not merely a recitation of changes evident from the financial statements. Refer to Item 303(a) of Regulation S-K and SEC Release No. 33-8350.

 Response:

In future periodic reports, we will provide a more informative discussion and analysis of cash flows from operating activities, including changes in working
capital components, for the periods presented, explaining the underlying reasons and implications of material changes between periods. By way of example, included below is the revised wording for the period ended December 31, 2023.

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

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 Net cash provided by operations increased by $28.5 million from 2022 to 2023. In addition to the
$16.7 million increase in operating income, the increase in cash provided by operating activities was favorably impacted by the Company’s working capital initiatives implemented through 2023. Specifically, the Company continued to focus on
streamlining customer payment terms, resulting in a $28 million favorable impact to operating cash flow when compared to the prior year. Although inventory increased during 2023 to support organic growth initiatives, the increase in inventory
was less than the increase experienced in 2022, favorably impacting operating cash flow by approximately $45 million. These items were offset by lower unearned income for customer prepayments related to the agreements with a customer as
discussed in Note K. The net activity of the prepayments and servicing the agreements by providing product and therefore reducing the unearned revenue was a net outflow of $0.1 million in 2023 compared to a net cash inflow of $17.8 million
in 2022. Additionally, there was a $19 million increase in unbilled receivables in 2023 due to an increase in projects in the fourth quarter of 2023, which qualified for over time revenue recognition based on the contract terms. Lastly, the
Company paid $9.4 million more in interest expense in 2023 when compared to 2022.

 Note B - Segment Reporting and Geographic
Information, page 50

3.
 Please address the following comments related to your segment disclosures:

•

 As required by ASC 280-10-50-20, provide segment disclosures for each period for which an income statement is presented, unless explicitly exempted.

Response:

 The Company acknowledges the
Staff’s comment. In future periodic reports, the Company will provide the segment disclosures for each period in which a consolidated statement of income is included as required by ASC 280-10-50-20.

•

 Pursuant to ASC 280-10-50-22 and 280-10-50-30(c), present total assets for each reportable
segment and a reconciliation of such totals to consolidated assets or explain to us why the requirement is not applicable.

Response:

 Segment assets are not regularly reviewed by
the Company’s chief operating decision maker to make decisions regarding the allocation of resources to our reportable segments and assess their performance. Accordingly, the Company did not disclose total assets by reportable segment in the
Form 10-K. The Company plans to include this reasoning as to our exclusion of reportable segment asset information in the Annual Report on Form 10-K for the year ending
December 31, 2024 in accordance with ASC 280-10-50-26.

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

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4.
 We note your disclosure that one customer accounted for approximately 10% of your net sales for fiscal year
2023. Please revise future filings to disclose the identity of the segment(s) reporting the revenues from such customer pursuant to ASC
280-10-50- 42.

Response:

 In future
periodic reports, when disclosing that one customer accounted for 10% or more of our net sales, we will disclose the identity of the segment reporting the revenue from such customer (the customer is in the Performance Materials segment).

Form 8-K Furnished October 30, 2024

Exhibit 99.1, page 9

5.
 We note that your non-GAAP measures include adjustments for
“restructuring and cost reduction,” “Electronic Materials inventory adjustment,” “business transformation costs,” and “additional start up resources and scrap.” Please explain to us in sufficient detail the
nature of all items included in each adjustment. Explain how you concluded each cost is not a normal, recurring, cash operating expense of your business and why eliminating it within your non-GAAP financial
measures is meaningful and appropriate. Refer to Question 100.01 of the Non-GAAP C&DIs.

Response:

From time to time, the Company incurs expenses that are non-recurring or associated
with non-operating or abnormal expenses that are not indicative of the performance of our on-going operations. These
non-recurring/abnormal costs are excluded from our non-GAAP measures. These adjustments are consistent with those that are permitted to be excluded from financial
covenants within the Company’s Credit Agreement. The Company intends to provide additional disclosure regarding the treatment of these adjustments for purposes of our debt covenants in the Liquidity section of our interim and annual reports in
the future and will clearly label and describe such adjustment. The following provide more detail on the specific Staff inquiries:

Restructuring and cost reduction

During the nine months ended September 27, 2024, we recorded $10.7 million of restructuring and costs reduction
charges. Of these charges, $6.2 million relate to one-time employee termination benefits incurred as a part of the Company’s restructuring initiatives. The restructuring initiatives were implemented
throughout 2024 across all business segments to optimize our cost structure. These amounts have been recorded in accordance with ASC 420. The costs

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

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related to one-time employee termination benefits are not used for an assessment of the long-term performance of the business or the sustainability of its
results. As these are incremental one-time costs, they do not result in a reduction of ongoing operating expenses necessary to conduct the business.

In addition to these restructuring costs, the Company temporarily idled a limited number of its facilities within its
Electronic Materials and Precision Optics business segments. The facility idling was due to market downturns within the semiconductor and optics market, as a result of a temporary reduction in demand. The semiconductor industry has recently
experienced a significant downturn, primarily driven by a market industry correction and the overall economic outlook. As the market is expected to return to pre-downturn levels, the Company chose to idle the
plants and retain the impacted staff instead of laying-off or restructuring its workers. The Company determined the associated cost incurred at the idled plants during this period were not representative of
normal operating costs due to the unique nature of these temporary shutdowns.

 Lastly, we incurred $1.7 million of
inventory mark-downs associated with the aforementioned restructuring activities and the exit of certain products lines as well as $0.5 million of fixed asset write offs related to the exit of our PC RAM business. As a general matter, we do not
include adjustments for routine inventory write-off charges in our non-GAAP financial measures, nor do we plan to do so in the future. Fixed asset write-offs are
uncommon and relate specifically to the exit of the PC RAM business. The Company believes these non-cash adjustments to be separate and distinct from the costs it normally recognizes as a part of its routine
inventory balance review and believe the adjustments improved the comparability for our investors in evaluating the performance of the core operations consistent with the guidance in Question 100.01 of the Compliance and Disclosure Interpretations
for Non-GAAP Financial Measures.

 Electronic Materials inventory adjustment

During the third quarter of 2024, the Company identified an adjustment primarily related to accounting for third-party
precious metal refinery activity at one of our manufacturing facilities in 2021 through 2023, resulting in a unique, one-time catch-up adjustment of $2.8 million
recorded in the third quarter of 2024. For the impacted years, the losses were approximately $0.8 million to $1.0 million annually and would have only reduced gross margin as a percent of net sales and value-added sales by 0.1% in each
year. Accordingly, the Company determined that excluding this one-time adjustment was necessary to ensure comparability for our investors in evaluating the current year performance of the core operations. As
noted above, as a general matter, we do not include adjustments

 U.S. Securities and Exchange Commission

Division of Corporation Finance

 Office of Manufacturing

December 23, 2024

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for routine inventory write-off charges in our non-GAAP financial measures, nor do we plan to do so in the future.

 Business transformation costs

Business transformation costs relate to a Company-wide initiative, beginning in 2024, to transform our systems, processes
and data across the broader organization. These discrete, non-recurring strategic projects relate to standardization of our S&OP process and SAP enhancement project