Materion Corporation MTRN said business conditions and margins in the fourth quarter were better than
initially anticipated and, as a result, fourth quarter earnings are now
expected to be significantly higher, subject to the discussion below regarding
a possible charge.
Raises Q4 EPS outlook from $0.33-0.38 to $0.37-0.40 vs $0.26 estimate. Expecting FY12 EPS of $1.30-1.35 vs 1.31 estimate. Sees FY13 EPS $1.75-2 vs $1.85 estimate.
In January 2013, as the year-end physical inventory was being taken, the
Company became aware of a potential theft of precious metal from its
Albuquerque, New Mexico refinery. An internal investigation ensued, an arrest
was made and a minor amount of stolen material was recovered.
The Company began further investigations, including an investigation of the
physical inventory results and engaged an outside team of forensic experts and
criminal investigators. While the results of these investigations are not yet
complete, preliminary indications are that some, or all, of a year-end
inventory short may be due to theft. The initial results of the physical
inventory suggest that the impact on the fourth quarter of 2012 may be a
charge of up to $0.25 per share. Recent inventories taken at other Company
facilities were all within the normal, tight tolerances. The results of the
physical inventory and the potential theft remain under investigation.
The Company has a specific theft insurance policy that covers theft of the
suspected nature. The policy provides up to $10.0 million of coverage with a
$100,000 deductible. The underwriters of the policy have been notified. The
amount of insurance recovery is uncertain at this time, therefore, the
recovery of any insurance proceeds cannot be recorded in the fourth quarter of
2012, but instead would be recorded in a future period.
Throughout the Company's long history, a material theft has not been
discovered at this location or any of the Company's other locations and the
Company has never made a material claim under its theft insurance.
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