Coronavirus (COVID-19) Second Quarter 2022 Update

The change in precious metal and copper prices favorably impacted net sales during the second quarter of 2022 by $1.3 million compared to prior year.

Other non-operating (income)-net includes components of pension and post-retirement expense other than service costs. Refer to Note J to the Consolidated Financial Statements for details of the components.

The change in precious metal and copper market prices favorably impacted net sales during the first six months of 2022 by $6.5 million compared to prior year.

Other non-operating (income)-net includes components of pension and post-retirement expense other than service costs. Refer to Note J to the Consolidated Financial Statements for details of the components.

Value-Added Sales - Reconciliation of Non-GAAP Financial Measure

A reconciliation of net sales to value-added sales, a non-GAAP financial measure, for each reportable segment and for the total Company for the second quarter and first six months of 2022 and 2021 is as follows:

By presenting information on net sales and value-added sales, it is our intention to allow users of our financial statements to review our net sales with and without the impact of the pass-through metals.

The Company consists of four reportable segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The Other reportable segment includes unallocated corporate costs.

Value-added sales of $134.0 million in the second quarter of 2022 were 23% higher than value-added sales of $108.6 million in the second quarter of 2021. The increase in value-added sales was due to the same factors driving the increase in net sales.

Net sales from the Precision Optics segment of $29.4 million in the second quarter of 2022 decreased 10% compared to net sales of $32.6 million in the second quarter of 2021. The change was primarily driven by a reduction in sales related to COVID-19 PCR testing programs, the discontinuation of a consumer electronic application, foreign currency headwinds and the temporary government-mandated shut down of our Shanghai facility due to COVID-19.

The Other reportable segment in total includes unallocated corporate costs.

Corporate costs were $7.2 million in the second quarter of 2022 compared to $5.8 million in the second quarter of 2021. Corporate costs accounted for 3% of Company-wide value-added sales in the second quarter of both 2022 and 2021. The

A summary of cash flows provided by (used in) operating, investing, and financing activities is as follows:

Net cash provided by operating activities $ 21,415 $ 44,065 $ (22,650)

Net cash provided by financing activities 38,418 11,522 26,896

Net change in cash and cash equivalents $ 17,713 $ (1,533) $ 19,246

OFF-BALANCE SHEET ARRANGEMENTS AND CASH OBLIGATIONS

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