EX-99.1

BRUSH ENGINEERED MATERIALS INC. REPORTS THIRD QUARTER RESULTS SALES UP 48% AND NET INCOME UP 82%

Cleveland, Ohio — October 26, 2006 — Brush Engineered Materials Inc. (NYSE-BW) today reported third quarter sales of $200.4 million, up $64.8 million or 48% compared to the third quarter of 2005. Net income for the quarter was $7.1 million, up $3.2 million or 82% compared to the prior year. Earnings per share diluted were $0.35 compared to $0.20 for the third quarter of 2005. Sales and earnings were consistent with the increased expectations for the quarter that were announced recently. .

Counter to the lower seasonal demand that the Company normally sees in the third quarter, overall demand across the Company’s major key markets actually increased compared to the first half. The stronger sales growth was driven by increased demand from consumer electronics, an improvement in telecommunications infrastructure product applications and continued strength from the oil and gas, heavy equipment and automotive electronics markets. In addition, the Company has been experiencing continued success in the marketplace for its new product initiatives, which has also contributed to the growth. Approximately 17 percentage points of the 48 point year-over-year quarterly sales increase is related to higher metal prices that the Company has been able to pass on to customers. An additional 5 percentage points of the sales increase for the quarter was related to acquisitions made in 2005 and early 2006. The Company’s organic growth was approximately 26% in the quarter. Third quarter sales of $200.4 million were the highest reported quarterly sales in the Company’s history and the fifteenth consecutive quarter where sales were higher than the comparable quarter of the prior year.

While earnings for the third quarter improved substantially when compared to the prior year, gross margin in the quarter, while higher than the prior year, was lower than the Company would have expected due to a number of factors. These factors included a less favorable product mix, higher than expected new product ramp-up costs, and other manufacturing costs. Combined, the above lowered the Company’s gross profit margin by approximately 1.0 percentage point and the Company’s pretax profit by approximately $2.0 million in the quarter. Gross margin for the quarter as a percent of sales, including the negative affect of the above, was 19.8%, up .7 percentage points, compared to the gross margin of 19.1% for the third quarter of 2005.

During the quarter, copper prices had less of a negative impact on results than in the first half of the year. The Company is continuing to make good progress in passing the cost of copper through to customers, and currently estimates that the pass through rate will be over 90% by the end of the year. This, along with an expected improvement in product mix, improved operating efficiencies and lower administrative costs should improve operating margins in the fourth quarter of 2006 compared to the third quarter.

Income before income taxes for the quarter was $9.7 million, up 130% or $5.5 million compared to the third quarter of 2005. A 26.6% tax rate was applied to the third quarter income before income taxes versus 7.6% to the third quarter of 2005. The major difference between the two rates is that the domestic federal tax expense was offset in 2005 by the reversal of a portion of the Company’s deferred tax asset valuation allowance. Therefore, the third quarter 2006 earnings per share comparison to the prior year is negatively affected by approximately $0.04 per share due to the prior year having a lower effective tax rate.

For the first nine months of the year, sales were $555.2 million, up $154.6 million or 39% compared to the same period of the prior year. Sales growth, net of the impact of increased metal prices, was approximately 25%. Net income for the first nine months of the year was $19.3 million or $0.96 diluted per share, up 41% or $5.6 million compared to net income of $13.7 million or $0.71 per share diluted for the same period last year. A 29.9% tax rate was applied to the first nine months’ income before income taxes versus 7.3% for the same period last year, negatively affecting the earnings per share comparison by approximately $0.17 due to the prior year lower effective tax rate. On a pre-tax basis, year-to-date earnings were $27.5 million, up $12.7 million or 86% compared to the prior year.

The Microelectronics Group includes Williams Advanced Materials Inc. (WAM) and Electronic Products.

The Microelectronics Group’s sales for the third quarter of 2006 were $99.8 million, up 61% compared to the third quarter 2005 sales of $61.9 million. Sales for the first nine months were $271.7 million up $102.8 million or 61% compared to the first nine months of 2005. Operating profit for the third quarter was $6.2 million, 9% above the third quarter 2005 operating profit of $5.7 million. For the first nine months of 2006 operating profit was $24.1 million, up $10.0 million or 71% compared to the same period of 2005. Operating profit growth was negatively impacted year to date and especially in the third quarter by product mix, excessive manufacturing ramp up and process development costs and increased overhead costs related to domestic and international expansion initiatives.

WAM’s third quarter sales were $92.0 million, up 66% above third quarter 2005 sales of $55.6 million. Year to date, WAM grew 67% to $250.3 million compared to $149.6 million in the prior year. Metal prices that were passed through to customers accounted for approximately one third of the sales increase for both the third quarter and the year to date. Acquisitions subsequent to the first quarter of 2005 added approximately $7.1 million or 13 percentage points of the sales growth in the third quarter and $24.1 million or 16 percentage points of the sales growth for the first nine months of the year. The sales growth in the third quarter and first nine months of the year is due to strong demand and new product growth in the magnetic data storage, wireless/photonics, handset and semiconductor markets. This strength is expected to continue into the fourth quarter. WAM is in the process of expanding its Brewster, New York operations to accommodate the stronger demand in the magnetic data storage market. During the third quarter WAM also continued to expand its operations geographically in Europe and Asia.

Electronic Products’ third quarter 2006 sales were $7.8 million and first nine months’ sales were $21.4 million, up 24% and 11% respectively as compared to the third quarter and first nine months of 2005. The sales increase has been driven primarily from strong demand from the telecommunications and computer, and automotive markets.

The Metal Systems Group consists of Alloy Products, Technical Materials, Inc. (TMI), Beryllium Products and Brush Resources Inc.

The Metal Systems Group’s third quarter sales were $100.6 million, 36% higher than the third quarter 2005 sales of $73.8 million. For the first nine months, sales were $283.5 million, up approximately 22% compared to $231.7 million in the same period of the prior year. The third quarter operating profit was $5.4 million, up $5.2 million compared to the third quarter 2005 operating profit of $0.2 million. Operating profit for the first nine months was $10.0 million, up $3.7 million, or 58%, compared to the same period of last year. The improvement in operating profit is primarily due to the increased sales volume, improved product mix and higher copper price pass through.

Alloy Products’ third quarter sales of $70.8 million were up $19.4 million or 38% compared to third quarter 2005 sales of $51.5 million. Sales for the first nine months of the year were $200.1 million, up $45.0 million or 29% compared to the first nine months of 2005. The strength in Alloy Products’ sales in the third quarter and for the year to date has been driven by strong demand from its key markets, including telecommunications and computer, automotive electronics, and industrial components, particularly oil and gas and heavy equipment. During the third quarter, Alloy began seeing increased demand from the infrastructure segment of the telecommunications market. Alloy Products’ sales growth has also been enhanced throughout the year by the continued improvements/enhancements to products such as our line of ToughMet® alloys and strip products to meet new and more demanding needs in our key markets. Although copper prices had a negative impact on margins during the quarter, the impact was less than in prior quarters due to Alloy’s progress in successfully achieving its goal of over 90% pass through of copper to customers by the end of the year.

TMI’s third quarter sales of $17.0 million were up 45% compared to the third quarter of 2005. Year-to-date sales were $53.0 million, up 43% versus the same period last year. TMI’s higher sales are attributed to the strength in the telecommunications and computer market and automotive electronics. In addition, TMI is experiencing opportunities in the medical and energy markets. New product growth has accounted for approximately 52% of TMI’s growth thus far in 2006.

Beryllium Products’ third quarter sales were up 30% or $2.4 million to $10.4 million compared to the third quarter of 2005. For the first nine months of the year, sales of $28.1 million were 17% lower compared to the same period in 2005. Sales of x-ray windows for the industrial/analytical scanner markets, materials for acoustic applications and initial shipments for the previously announced JET Project contributed to the sales strength during the third quarter. Year-to-date sales comparisons to the prior year were affected by the completion of the initial material supply contract for the James Webb Telescope in 2005. It is anticipated that demand from the defense market will increase in the fourth quarter of 2006, which, along with higher JET Project shipments during the quarter should result in a strong increase in Beryllium Products’ sales compared to earlier quarters.

Brush Resources had external beryllium hydroxide sales in the third quarter of $2.4 million, about flat with 2005 third quarter sales of $2.5 million. For the first nine months of the year, external sales were $2.4 million as compared to $5.7 million for the same period last year. It is anticipated that additional external sales of beryllium hydroxide will occur in the fourth quarter of 2006.

The strong organic sales growth experienced throughout the year is being driven by strong demand across all of the Company’s key markets as well as the continued success of new products targeted at new markets and high growth technology applications in existing markets and the success of the Company’s geographic expansion efforts. The Company’s strategic acquisitions have also added to the Company’s overall growth. The consumer electronics related markets, which include portions of telecommunications and computer, as well as magnetic data storage, have been especially strong. The Company’s oil and gas, heavy equipment and aerospace and defense markets also continue to show strong demand. Although lead times are short and visibility beyond a few weeks is unclear, order entry has been strong thus far in the fourth quarter. Some of this strength may be partially offset by a general softening in the domestic automotive electronics and semiconductor markets later in the quarter.

Assuming no change in the factors noted above and no change in overall global economic conditions, the Company is raising its outlook from what was published recently. At this time, sales for the fourth quarter are expected to be in the range of $180.0 million to $190.0 million, up 28% to 35% compared to the fourth quarter of 2005. The sales range for the full year 2006 is, therefore, now expected to be $735.0 million to $745.0 million, up 36% to 38% compared to 2005. For the year, the previous estimate was for sales to be in the range of $725.0 million to $735.0 million.

The Company expects gross margins to improve during the fourth quarter by up to three percentage points as compared to the third quarter of 2006 due to a more favorable product mix, improved operating efficiencies and continued progress with the pass through of copper prices. Thus, fourth quarter earnings are expected to be in the range of $0.34 to $0.42 per share. For the full year 2006, earnings are now expected to be in the range of $1.30 to $1.38 per share, an increase of approximately $0.10 a share from the estimate recently published.

While trends are certainly favorable, the Company believes that commenting on expectations for 2007 would be premature given that macro economic conditions for the markets the Company serves and the overall economic climate are not clear at this time.

Commenting on the results, Dick Hipple, Chairman, President and CEO stated, “I am pleased to report the record quarterly sales and the fifteen consecutive quarters of sales growth we have experienced along with the substantial increase in earnings. Our performance continues to demonstrate that we are well positioned in our markets and that our new product, new market and geographic expansion initiatives continue to reinforce our goal to grow sales consistently over time. We are intensely focused on leveraging our higher sales into increased margins while we invest in capturing our expanding global opportunities.

Brush Engineered Materials will conduct a teleconference in conjunction with today’s release. The teleconference begins at 2:00 p.m. Eastern Time, October 26, 2006. The conference call will be available via webcast through the Company’s website at www.beminc.com or through www.InvestorCalendar.com. By phone, please dial (877) 407-0782, callers outside the U.S. can dial (201) 689-8567.

Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned herein:

•

The condition of the markets which we serve, whether defined geographically or by segment, with the major market segments being telecommunications and computer, magnetic and optical data storage, aerospace and defense, automotive electronics, industrial components and appliance;

•

Our success in implementing our strategic plans and the timely and successful completion of any capital projects;

•

The availability of adequate lines of credit and the associated interest rates;

•

Other financial factors, including cost and availability of materials, tax rates, exchange rates, pension and other employee benefit costs, energy costs, regulatory compliance costs, and the cost and availability of insurance;

•

Changes in government regulatory requirements and the enactment of new legislation that impacts our obligations; and

•

The conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects.

Brush Engineered Materials Inc., commemorating its 75th year in 2006, is headquartered in Cleveland, Ohio. The Company, through its wholly-owned subsidiaries, supplies worldwide markets with beryllium products, alloy products, electronic products, precious metal products, and engineered material systems.


	Sept 29		Dec 31
(Dollars in thousands)	2006		2005
Assets
Current assets
Cash and cash equivalents	$	11,818	$	10,642
Accounts receivable		104,390		69,938
Inventories		143,793		104,060
Prepaid expenses		15,041		14,417
Deferred income taxes		1,143		1,118

Total current assets		276,185		200,175
Other assets		79,869		8,252
Related-party notes receivable		98		358
Long-term deferred income taxes		—		4,109
Property, plant and equipment		558,424		540,420
Less allowances for depreciation,
depletion and impairment		381,426		363,358

		176,998		177,062
Goodwill		15,390		12,746

	$	486,540	$	402,702

Liabilities and Shareholders’ Equity
Current liabilities
Short-term debt		31,598		23,634
Current portion of long-term debt		632		636
Accounts payable		29,920		20,872
Other liabilities and accrued items		50,600		38,522
Unearned revenue		444		254
Income taxes		1,186		726

Total current liabilities		114,380		84,644
Other long-term liabilities		7,541		8,202
Retirement and post-employment benefits		66,732		65,290
Deferred income taxes		2,995		172
Long-term debt		48,282		32,916
Shareholders’ equity		246,610		211,478

	$	486,540	$	402,702

See notes to consolidated financial statements.


	Third Quarter Ended					Nine Months Ended
	Sept 29		Sept 30,			Sept 29		Sept 30,
(Dollars in thousands except share and per share amounts)	2006		2005			2006		2005
Net sales	$	200,426	$	135,614		$	555,227	$	400,637
Cost of sales		160,715		109,674			441,554		317,014

Gross margin		39,711		25,940			113,673		83,623
Selling, general and administrative expenses		26,848		19,219			77,951		56,981
Research and development expenses		971		1,137			3,006		3,673
Other-net		1,258		(219	)		1,960		3,444

Operating profit		10,634		5,803			30,756		19,653
Interest expense		983		1,575			3,250		4,843

Income before income taxes		9,651		4,228			27,506		14,810
Income taxes		2,564		320			8,224		1,085

Net income	$	7,087	$	3,908		$	19,282	$	13,725

Per share of common stock: basic	$	0.36	$	0.20		$	0.99	$	0.71
Weighted average number		19,784,000		19,227,000			19,547,000		19,216,000
of common shares outstanding
Per share of common stock: diluted	$	0.35	$	0.20		$	0.96	$	0.71
Weighted average number
of common shares outstanding		20,111,000		19,372,000			19,998,000		19,372,000


	Nine Months Ended
	Sept 29,			Sept 30,
(Dollars in thousands)	2006			2005
Net income	$	19,282		$	13,725
Adjustments to reconcile net income to net cash provided from
operating activities:
Depreciation, depletion and amortization		17,668			16,042
Amortization of deferred financing costs in interest expense		440			874
Derivative financial instrument ineffectiveness		(163	)		(487	)
Stock-based compensation expense		451			—
Decrease (increase) in accounts receivable		(29,654	)		(8,552	)
Decrease (increase) in inventory		(33,966	)		(5,906	)
Decrease (increase) in prepaid and other current assets		(1,189	)		(185	)
Decrease (increase) in deferred income taxes		6,075			—
Increase (decrease) in accounts payable and accrued expenses		14,212			(9,094	)
Increase (decrease) in unearned revenue		190			(7,789	)
Increase (decrease) in interest and taxes payable		1,198			(734	)
Increase (decrease) in long-term liabilities		3,013			1,870
Other – net		6,868			1,791

Net cash provided from operating activities		4,425			1,555
Cash flows from investing activities:
Payments for purchase of property, plant and equipment		(9,659	)		(9,083	)
Payments for purchase of business less cash received		(72	)		(3,982	)
Purchase of equipment previously held under operating lease		—			(448	)
Payments for purchase of business net of cash operating lease		(25,694	)		(3,982	)
Proceeds from sale of property, plant and equipment		—			45
Other investments – net		33			(48	)

Net cash used in investing activities		(35,392	)		(13,516	)
Cash flows from financing activities:
Proceeds from issuance/(repayment) of short-term debt		7,619			5,355
Proceeds from issuance of long-term debt		26,000			—
Repayment of long-term debt		(10,633	)		(19,205	)
Issuance of common stock under stock option plans		9,441			367

Net cash provided from (used in) financing activities		32,427			(13,483	)
Effects of exchange rate changes		(284	)		(1,046	)

Net change in cash and cash equivalents		1,176			(26,490	)
Cash and cash equivalents at beginning of period		10,642			49,643

Cash and cash equivalents at end of period	$	11,818		$	23,153

See notes to consolidated financial statements.

In management’s opinion, the accompanying consolidated financial statements contain all adjustments
necessary to present fairly the financial position as of September 29, 2006 and December 31, 2005 and
the results of operations for the third quarter and nine months ended September 29, 2006 and September
30, 2005. All of the adjustments were of a normal and recurring nature.


	Pension Benefits						Other Benefits
	Third Quarter Ended						Third Quarter Ended
	Sept 29			Sept 30,			Sept 29			Sept 30,
(Dollars in thousands)	2006			2005			2006			2005
Components of net periodic benefit cost
Service cost	$	1,253		$	1,187		$	74		$	75
Interest cost		1,742			1,616			476			560

Expected return on plan assets		(2,078	)		(2,189	)		—			—
Amortization of prior service cost		(178	)		(169	)		(9	)		(21	)
Amortization of net loss		517			312			—			—
Net periodic benefit cost	$	1,256		$	766		$	541		$	614

	Pension Benefits						Other Benefits
	Nine Months Ended						Nine Months Ended
	Sept 29			Sept 30,			Sept 29			Sept 30,
(Dollars in thousands)		2006			2005			2006			2005

Components of net periodic benefit cost
Service cost	$	3,760		$	3,561		$	222		$	225
Interest cost		5,227			4,847			1,427			1,682

Expected return on plan assets		(6,235	)		(6,566	)		—			—
Amortization of prior service cost		(534	)		(506	)		(27	)		(64	)
Amortization of net loss		1,550			963			—			—
Net periodic benefit cost	$	3,768		$	2,299		$	1,622		$	1,843

The Company amended its domestic defined benefit pension plan effective in the second quarter 2005. The amendment revised the pension benefit payout formula for the majority of the plan participants and various other aspects of the plan as well. The amendment was deemed to be a significant event and therefore the plan assets, liabilities and net periodic cost were remeasured in accordance with Statement No. 87, “Employers’ Accounting for Pensions”. As part of the remeasurement process, management reviewed the key valuation assumptions and made adjustments as warranted. As a result of the remeasurement, a charge of $11.1 million was recorded against other comprehensive income, a component of shareholders’ equity, with the offset credited against the minimum pension liability and the prior service cost asset.

The reconciliation between net income and comprehensive income for the three and nine month periods ended September 29, 2006 and September 30, 2005 is as follows:


	Third Quarter Ended						Nine Months Ended
	Sept 29			Sept 30			Sept 29		Sept 30,
(Dollars in thousands)	2006			2005			2006		2005
Net income	$	7,087		$	3,908		$	19,282	$	13,725
Cumulative translation adjustment		(14	)		(446	)		476		(1,443	)
Change in the fair value of derivative
financial instruments		(1,034	)		1,123			4,732		6,772
Minimum pension liability		—			—			—		(11,138	)

Comprehensive income	$	6,039		$	4,585		$	24,490	$	7,916

The $11.1 million charge to comprehensive income in 2005 for the minimum pension liability resulted from the
remeasurement of the domestic defined benefit pension plan as described in Note C to the Consolidated Financial
Statements.


					Total
(Dollars in thousands)	Metal Systems		Micro Electronics		Segments		All Other			Total
Third Quarter 2006

Revenues from external customers	$	100,647	$	99,779	$	200,426	$	—		$	200,426
Intersegment revenues		1,586		619		2,205		—			2,205
Operating profit (loss)		5,420		6,247		11,667		(1,033	)		10,634
Third Quarter 2005

Revenues from external customers	$	73,762	$	61,852	$	135,614	$	—		$	135,614
Intersegment revenues		832		429		1,261		—			1,261
Operating profit (loss)		240		5,675		5,915		(112	)		5,803
First Nine Months 2006

Revenues from external customers	$	283,540	$	271,687	$	555,227	$	—		$	555,227
Intersegment revenues		3,626		1,987		5,613		—			5,613
Operating profit (loss)		10,020		24,134		34,154		(3,398	)		30,756
Assets		346,904		172,910		519,814		(33,274	)		486,540
First Nine Months 2005

Revenues from external customers	$	231,746	$	168,891	$	400,637	$	—		$	400,637
Intersegment revenues		2,053		1,202		3,255		—			3,255
Operating profit		6,348		14,137		20,485		(832	)		19,653
Assets		299,536		89,242		388,778		5,326			394,104

The “All Other” assets were a net credit balance as of September 29, 2006 as a result of the LIFO reserve
being larger than the debit balances of the other items. The $38,6 million change in the assets within “All
Other” from the third quarter 2005 to the third quarter 2006 resulted from a change in the LIFO reserve of
$23.9 million, a reduction in cash of $11.3 million and changes in property, plant and equipment and other
assets.


	Sept 29		Dec. 31,
(Dollars in thousands)	2006		2005
Principally average cost:
Raw materials and supplies	$	29,338	$	24,050
Work in process		119,585		88,480
Finished goods		52,342		30,553

Gross inventories		201,265		143,083
Excess of average cost over LIFO inventory value		57,472		39,023
Net inventories	$	143,793	$	104,060