Greetings and welcome to the Materion Corporation Third Quarter 2014 Earnings Report. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Mike Hasychak. Thank you, sir. You may begin.

Good morning. This is Mike Hasychak, Vice President, Treasurer and Secretary. With me today is Dick Hipple, President, Chairman and CEO; John Grampa, Senior Vice President, Finance and Chief Financial Officer; Joe Kelley, Vice President of Finance; and Steve Shamrock, Vice President and Controller. Our format for today's conference call is as follows. Joe Kelley will review the financial results for the quarter, and then John Grampa will review the outlook for the remainder of 2014 and comments on capital allocation. Following John's comments, Dick Hipple will review the current state of our key markets. Following Dick, we will open up the call for your questions. A recorded playback of this call will be available until November 7, by dialing area code 877, the number is 660-6853 or area code 201, the number is 612-7415, conference ID number 13592214. The call also be archived on the company's website, www.materion.com. To access the replay, just click on Events and Presentations on the Investor Relations page. 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 issued this morning. I'll now turn the call over to Joe Kelley.

Thank you, Mike. And good morning to everyone joining us on a call today. During my comments, I'll cover our third quarter 2014 financial highlights, review profitability by segments and make the brief comment on the balance sheet cash flow and modeling assumptions. Let me start with the highlight. I am very pleased to report our third quarter 2014 financial results as our team deliver strong, top line value added sales growth across all four our segments. Profit margin extension and meaningful earnings growth. In the third quarter of 2014, sales grew 6% over the prior year third quarter to $291.6 million. Earnings per share grew from $0.24 in the third quarter of 2013 to $0.60 in the third quarter of 2014. On an adjusted basis third quarter of 2014 earnings grew 113% over the prior year period to $0.51 per share. This adjusted earnings level is in line with our annual guidance and 42% sequential improvement over second quarter of 2014 earnings. Value added sales which exclude the impact of pass through metal costs grew 12% over the prior year of third quarter value added sales and 4% sequentially over the second quarter of 2014 to $165.6 million in the current year of third quarter. This marks the second consecutive quarter of establishing a new record level of value added sales as we continue to gain traction in most of our key end markets. Value added sales into our three largest end markets; consumer electronics, industrial component and medical led the growth, improving double digit year-over-year. And more than offsetting the single digit decline in automotive electronics and defense from the comparable prior year period. It is a very encouraging to see two consecutive quarters of record level value added sales, since began reporting this metric in 2012. Our…

Thank you, Joe. And good morning, everybody. I thought it would be worthwhile to comment on our capital allocation practices. As in these calls as well as in our visits with shareholders, we often get questions about this. The question usually centered on our acquisition and share repurchase plan. I think it's important to reinforce what we have disclosed in the past especially given the fact that we have been more aggressive recently with share repurchases and have not closed on any acquisitions. During the third quarter, we repurchased approximately 400,000 shares of the company's stock. This was under the $50 million share repurchase authorization approved by our Board of Directors and previously announced. To date, in 2014 we have repurchased approximately 2.5% or 500,000 shares under that authorization at a total cost of about [$16 million]. And at this time, we do expect to continue to repurchase shares opportunistically and at a governed pace. Over the past two three years, the company has been focused on resolving specific internal and market related issues that were affecting operating performance. In addition, we've worked at and have been successful in developing an array of new organic growth opportunity. Today, we have a very strong set of new product opportunities. Strongest than we have had in several years. And we are focused on supporting these. Acquisitions have been a low priority through this timeframe. In fact, none of have been consummated in approximately three years. While we've not closed on a transaction during this period, those we did close on in the past have proven to be quite successful. Much of our growth are free cash flow and our new future organic growth product opportunities have been created by those businesses we acquired a five to six years period prior to 2012.…

Thank you, John and Joe. Obviously, I am very pleased with our third quarter performance. The strong 12% growth and value added sales and operating profit margins, expanding 9% demonstrates the earnings power that we have indicated. Our commercial execution is driving sales growth greater than our end market growth, and our value added sales at each of our three largest end markets, consumer electronics, industrial components and medical grew year-over-year approximately 15%. So differentiated product portfolio gives us the ability to grow sales by penetrating new customers and new applications. All four of our business segments are contributing to the year-over-year and sequential growth. Gross margins are expanding to 33% to value added sales clearly demonstrates that the top line growth we are delivering this profitable growth and we are improving the quality of our earnings of our company. Last quarter, we indicated that our sales into the automotive electronics and telecom infrastructure end markets fell, while down year-over-year in the first half, were forecasted to sequentially improve. And that is in fact what happened in the third quarter. Our sales into the automotive electronics were up quarter-to-quarter by 3% and our sales into telecom infrastructure market were up 12% quarter-to-quarter driven by shipments for undersea cable line in our telecom packaging business which is benefiting from the rollout of 4G LTE in China. The other end market which remained down year-to-date but is showing sequential improvement as we forecasted is defense. Our defense sales increased sequentially 12% over the second quarter of 2014. Of note in defense was a major order we received for our ToughMet alloy for the Bradley heavy training vehicle. We see this as a first good penetration into the defense market for ToughMet which will open many other doors as we prove our distinct…

(Operator Instructions). Our first question comes from the line of Avinash Kant with D.A. Davidson and Company. Please proceed with your question. Avinash Kant – D.A. Davidson & Co.: Good morning, Dick, John, Joe and Steve. I have a few questions. The first one, I just wanted to clarify, I think John was talking about -- when you talked about Q4, you said you expected a seasonal decline sequentially but you did expect this to be significantly better than Q4 last year?

That's correct. Avinash Kant – D.A. Davidson & Co: Okay. And second question was that you earlier had talked about roughly $0.25 to $0.30 improvement in calendar year 2014 just based on the cost cutting efforts that you have done. Now if I just look at the operating EPS is the low end of the guidance kind of is $0.20 above the last year EPS roughly $0.21. So is it because the value added sales a bit down a little bit or what's --

Avinash, the low end of our guidance for 2014 is a $1.55. If you look at 2013 on an adjusted EPS base it was $1.10. So that is more than $0.20 improvement there. Avinash Kant – D.A. Davidson & Co: Now moving forward, could you talk a little about the pebble plant utilization rate right now? And how is that going to be impacting your margins, operating margin performance in the Beryllium and Composites segment?

Well, as you can see our improvement in the Beryllium and Composites segment is very solid. So we continue to progress with the pebble's plant. And we did better in the third quarter and second quarter, better than the first quarter and we are up substantially over next year. So we are on track with the performance there and the division the segment, they are continuous to dramatically improve as you recall we had forecasted to have lift of about $6 million of OP from the both improvement sales and operations from that division, and we are bringing that home. Avinash Kant – D.A. Davidson & Co: So could you comment on utilization rate, Dick? What's the utilization rate there?

We are probably in the range of 75% -80% Avinash Kant – D.A. Davidson & Co: And at what level do you expect it to get or do you expect it to draw at these levels at this point going forward?

Well, we are going to be at the -- it is basically our targeted production rate is --we actually have more capacity at that facility. So when I am talking about those rates it's the rate that we are ultimately targeting but we actually have more upside capacity at that plant should volumes ever required. Avinash Kant – D.A. Davidson & Co: So this is 75% to 80% of total capacity or 75% to 80% of what you have released thus far?

What was the question again? Avinash Kant – D.A. Davidson & Co: 75% to 80% utilization rate is of the total capacity.

No, no. That's just what we need.

Thank you. Our next question comes from Edward Marshall with Sidoti & Company. You may proceed with your question. Edward Marshall – Sidoti & Company: Hey, guys. How are you guys? So I wanted to talk about the guidance if I could. I mean it's pretty wide range when you have one quarter left and I am wondering what are maybe the levers that kind of push you to maybe the high end and the low end of that range? What are the positives and negatives take surrounding that considering such a wide range?

Yes. Absolutely. Thank you for asking it. It is a wide range as we had indicated and as you noted. And I think I would start by saying as the seasonal factors are wild card, the high end of the range, we believe would result from absolutely no delay of the large high margin Beryllium and Composites orders into 2015 as well as no shipments delays or order fall off due to the macro conditions in Europe and Asia that seemed to be unfolding. And I'll go as far as saying that also no supply chain corrections in automotive or consumer electronics. If those factors occur, if those factors -- if those situations don't occur, we could be -- that would drive the higher end of the range which frankly I don't know that we would say we expect. The low end would result should all of these conditions develop, is the way I would express it to you at this point in time. Edward Marshall – Sidoti and Company: Okay. So you mentioned by the way consumer electronics and automotive electronics, I mean that seems to very similar to what we kind of pointed before with microchip -- is that microchip technology, is that the kind of what you are referring to? Have you seen any kind of delays in the fourth quarter order book or anything along those lines as of yet?

At this point, no. We have seen -- the comments that you made about micro and but we've seen others go the other way. So at this point, I would say nothing significant but that doesn't necessarily mean we will rapidly develop as you point out. Situations here have in the past. Edward Marshall – Sidoti and Company: Okay. And as I look at kind of the Beryllium and Composites segment, I guess I have two questions. One's being could and both kind of similar, I am curious, you said you had a few orders in the quarter that were relatively large. And you also said there were some shipments for 4Q slated for late in the quarter. Could you quantify maybe the size of those particular orders that kind of sure -- 3Q and what do you expect for 4Q?

Let me comment it a bit about it. If I would have to frame what could be the impact, a push out, you could easily see in that segment, you could easily see push out that affect us $0.05 to $0.07 a share in a given quarter. And the supply chain question, let me take it a bit further. If you see significant change in consumer electronics and/ or automotive in that world, you could also see movement apply to $0.10 a share any given quarter as you recall earlier of this year. So that's the order of magnitude. What was pulled into the current quarter, what was pulled into Q3 from Q4, was not business in Beryllium and Composites. We shipped what we got shipped there. We had some customers, also consumer electronics business into the third quarter. Edward Marshall – Sidoti and Company: Okay. Did you say $0.05 to $0.07 for the fourth quarter shipments in Beryllium and Composites? What is that - what is that effectively as far as revenue?

In that business, those large shipments are about $2 million booked on average as you think about those. So for instance the two large ones that I referenced approximately $4 million in terms of revenue. Edward Marshall – Sidoti and Company: So when you look at 4Q, the Beryllium and Composites segment, two large orders relatively $4 million and that's $0.05 to $0.07 impact potentially to fourth quarter? Is that what you are saying?

We are combing the couple of things there, I am sorry. The ones I referenced that above $4 million was in Q3. I did not quantify the Q4 shipment. Edward Marshall – Sidoti and Company: Could you that from a revenue perspective as opposed to the EPS perspective?

Yes. I think, well, I guess what I am calibrating you on is, when we are talking large shipments in the Beryllium business, they are averaging much to say around $2 million per shipments. And those are the ones that are subject to delays that our customers, they caused push up wholly in the sometime as you go into year end. Edward Marshall – Sidoti and Company: Okay. Asked a different way I guess. How many large orders are kind of slated for back half of the fourth quarter?

There is about four to five large orders scheduled for the back half of the fourth quarter. Edward Marshall – Sidoti & Company: Okay. Did you just give a breakeven point and I missed for the Beryllium business?

No. Edward Marshall – Sidoti and Company: Could you provide that kind of what is the breakeven revenue range for --

I guess if you look at our year-to-date results, I mean we are delivering $300,000 of operating profit and $50 million of value added sales. So a lot of the improvement here is driven by the top line growth. Our year-to-date sales are up approximately 19%. And our gross margins are expanding, combination of leveraging the volume growth plus as Dick mentioned some of the improvement in the pebble plant production. Edward Marshall – Sidoti and Company: Is the pebble plant improvements kind of behind you at this point? Is there any more incremental impact aside from say additional revenue take that you kind of see or you kind of add that at that level now?

Yes. I would think that the improvements, I mean our run rate in 2014 are reflective, well; there will be smaller incremental improvement as volumes perhaps increase in the pebble plant. But we are pretty much have that run rate here as we look at Q3 performance in the pebble plant. Edward Marshall – Sidoti and Company: Okay. And the last question. I am curious on that the discreet tax items that you kind of broke up for Q3, Q4 -- Q2, Q3 and then I guess are no longer going to be a concern going forward but were they broken on the press releases as --?

Were they broken -- Edward Marshall – Sidoti and Company: Yes. Discreet items or one time in nature or -- does that mean that--

No. The discreet items I mean it brought our effective tax rate, I referenced those going from 29 as they go for down to 27, so those were core of doubt in the press release. Edward Marshall – Sidoti and Company: And why was the tax rate 23 in the quarter, is that what you are referring too? I mean on adjusted basis?

Yes. So our tax rate in the quarter from our statutory rate is mainly affecting that is the depletion credit and then also if you look at the prior year period, we had a large R&D credit, as that law was passed and then we had some discreet items as several FIN 48 reserve expired.

Thank you. Our next question comes from Luke Folta with Jefferies. You may proceed with your question. Luke Folta – Jefferies: Good morning, guys. Just a couple. You talked about some of the strength factors in the guidance. You didn't really say much about the energy market in terms of the outlook there. Real pull back a lot here. Can you just give us an update on what you are hearing from your customers in terms of what their thoughts are with spending and sort of gelling levels going forward? Any color you can provide that will be very helpful?

Yes, thank you. That obviously that scenario that with the rapid movement is a tough one to call. And I would say, I would think that if we keep the oil price, if it remains above 80 bucks I think we should be steady as you go. But I think obviously if the oil would drop down below that point, I would think that we would start to see some adjustment in that order book. So perhaps to watch it very carefully going forward and I review some other quickly some other, actually latest earnings releases by companies like Schlumberger, and if you kind of dig through those, you will find they are bit kind of out of the same place there, that they are saying it's going to be steady as you go but every big caveat obviously we see something that really drops substantially below that 80 bucks, it's going be -- 50 going to be, we are looking at hands here on the drilling activities. Luke Folta – Jefferies: Okay. And then your sales to oil and gas I think were up pretty substantially, we are seeing really across the metal space, everyone is telling that market has seen very nice growth this year. I mean do you have a sense where inventory levels are in the channel? I mean I got to imagine that there had to have been some restock in oil and gas just after the weakness in second half 2012 -2013, so far this year, do you that something had an impact on your business?

Yes, of course. And it's always a tough one to read of how much is the end full and how much is the inventory built, and that's why we do see swings from time to time. You have inventory adjustments but the market may continue to be growing. So it's one that we hopeful see that in oil and gas, we will see that in the consumer electronics area. We will see that in telecom infrastructure. We will see in all these markets. And you have to be very careful when you have very, very strong shipments in the market over six to nine month period of time. You can see some softness over four months, say five months period of time after that because of those kind of adjustments. So it's an area that we are certainly watching very carefully. Luke Folta – Jefferies: Okay. And then in terms of the share buyback plan, Hey, John, went through a fair amount of detail on your capital allocation, stock prices and all that. But could you accept you continue to buyback shares, any sense of what sort of magnitude you might be thinking in the next year?

I am sorry. Is it over the next year? Luke Folta – Jefferies: Yes. I mean just taking through the next 12 months. What's the -- what do you think of the goal post in terms of how many-- what the share buyback could be? Just for the month.

Yes. I don't want to really project numbers at this point. I think it's important to recall that we believe that an approach that it is any different than a balanced approach to use of our capital would be very limiting to our flexibility. We want the company to always be in a position to support the organic growth opportunities we have which I mentioned earlier, greater than they had been in quite some time. We wouldn't want to compromise that especially if any of these should launch faster than we expect. And then we also want to be in a position to be able to take advantage of any attractive augmentation opportunities that surface that supports the key growth initiatives. Maintaining flexibility I think is a basic tenace of the approach that we would take. And having said that I also commented earlier that we would govern our buybacks. So let me extend that by saying we govern the allocation of our capital as quarters unfold, right, as weeks, days and month unfold. Hopefully that's helpful, I am not going to project a future number.

Thank you. Our next question comes from the line of Mark Rodriguez with Stonegate Securities You may proceed with your question.

Good morning, guys. Thanks for taking my questions. Bunch of my questions have been asked and answered here already. But a couple extra just kind of follow up. On the debt side, your debt level is dropped sequentially, pretty substantial level. Can you talk a little bit about what your expectations are there? What sort of kind of debt levels you are guys targeting?

Yes. I mean our long-term capital allocation strategy is -- we would like about 30% debt to cap, but if you think about what the reduction was in the quarter, it was mainly driven by the payback of the gold denominated loan.

Got you, okay. And then from your cash flow, from operations perspective, just kind of trying to get a little bit better rough feel and coming here in the Q4, are you expecting somewhat a similar level that you saw here in Q3 or a large improvement?

Yes. Typically in Q4, you see an improvement in our working capital efficiency. Not so much the efficiency but just due to season, the timing, we liquidate lot of working capital in the fourth quarter which increases our free cash flow. And so as you see year-to-date we've invested approximately $37 million in working capital. We will liquidate a lot of that working capital here in the fourth quarter. So the fourth quarter cash flow, free cash flow will be much better than the third quarter and our year-to-date actual free cash flow.

Got you. And you mentioned in the prepared remarks that you are going to start to I guess reduce a bit of the working capital investment, so just trying to get a feel again and then also in the 2015, are you expecting levels that might approach 2013 for the full year or improvement?

Approach a 2013, I am sorry I don't have --

The fiscal 2013, is it about $75 million, $76 million in cash flow from op?

Yes. I think we should be in the range of approximately $50 million of free cash flow -- and from a cash flow, from op, so I would anticipate to be in the range of around $70 million to $75 million.

Got you, and last quick question. Just kind of surfing back around on the acquisitions. Understand that you had other priorities the last couple of years, it kind of sounds like maybe you are giving the team up a little bit more to be little more active here, am I kind of reading too much into that?

No. You are not. We are starting to build a pipeline and taking look at building out our three strong platform. So you are actually very correctly.

Got you. And was that team umpire, would do they just some allocated elsewhere and doing other types of activity or they still kind of looking around oil and gas?

Well, actually the organization has changed over the last couple of years. And we actually have some new people in the organization that have had some really nice background in this area. So we actually think we have a stronger team today than we did several years ago.

Thank you. Our next question comes from the line of Tyler Kenyon with Keybanc Capital Markets. You may proceed with your question.

Hey, gentlemen, good morning. Just I was wondering if you could provide us some color just on your CapEx priorities moving forward and just kind of how we should be thinking of G&A as well?

The capital-- our depreciation rate, it is running about $40 million including amortization. And our capital will probably creep a little bit not above depreciation but maybe I could see it had been $5 million $7 million higher than what we've seen last couple of years. And it's simply because we have some pretty nice organic growth opportunities here that we will be investing in. So we are pretty excited about that. That's obviously very healthy growth when you have those kind of opportunities.

Sure, appreciate that. And I guess I appreciate your comment but just kind of in light of a potential weakness that you kind of highlighting as far as some of the melodious we have seen in Europe and Asia recently. Can you remind us of your exposure there and kind of one which end markets would you see most at risk at this particular point and then also which segments do you see most at risk as well should you begin to see some fallout in order trend?

The actual foreign shipment that we have, it is about 37% of the company's sale. But we are actually even more global than that because a lot of our shipments let say would go direct to United States or going to companies, pick it a Boeing, Schlumberger RF Micro Devices, their shipments are gone all over the world. So I would think we are 50% to 55% globally depended than just the 37% of direct sales that we talk about. So I would say that if you think about slowdowns in Germany and slowdown or-- I wouldn't say Germany, I would say Europe. And slowdowns in China, you certainly be talking about markets like automotive and you be talking about markets being in electronic area will certainly be probably the most sensitive in our sales and then as we talked about earlier, you got to kind of different factor in the oil and gas for some reasons we saw something really decline in the oil and gas area. So those would be three, I would say automotive, oil and gas and consumer electronics.

Thank you, ladies and gentlemen. There are no further questions at this time. I would now like to turn the floor back over to Mike Hasychak.

We would like to thank all of you for participating on the call this morning. I will be around for the remainder of the day to answer any questions. My direct dial number is area code 216- 3836823. Thank you very much.

Ladies and gentlemen, thank you for your participation. You may disconnect your line.