10-K

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

X	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: February 28, 2013 OR
	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from              to              Commission file number: 1-8803

Material Sciences Corporation

(Exact name of registrant as specified in its charter)

Delaware	95-2673173
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2200 East Pratt Boulevard, Elk Grove Village, Illinois	60007
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 847-439-2210

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.02 par value	The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes                 No         X        

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes                  No         X        

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes         X         No                 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes         X         No                 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.         X        

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		Accelerated filer        X
Non accelerated filer	(Do not check if a smaller reporting company)	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes                  No         X        

The aggregate market value of the voting and non-voting stock of the registrant held by shareowners of the registrant (not including any voting and non-voting stock owned by directors, executive officers or other affiliates of the registrant) was $80,783,339 as of August 31, 2012, the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing sale price on the NASDAQ on such date).

As of May 2, 2013, the registrant had outstanding 10,198,121 shares of its common stock.

Documents Incorporated by Reference

Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareowners are incorporated herein by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I		3
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	8
ITEM 1B.	UNRESOLVED STAFF COMMENTS	11
ITEM 2.	PROPERTIES	11
ITEM 3.	LEGAL PROCEEDINGS	11
ITEM 4.	MINE SAFETY DISCLOSURES	11
PART II		12
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	12
ITEM 6.	SELECTED FINANCIAL DATA	12
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	24
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	52
ITEM 9A.	CONTROLS AND PROCEDURES	52
ITEM 9B.	OTHER INFORMATION	53
PART III		54
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	54
ITEM 11.	EXECUTIVE COMPENSATION	54
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	54
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	54
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	54
PART IV		55
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	55
SIGNATURES		56
EXHIBIT INDEX		57

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PART I

This report contains forward-looking statements concerning our future business performance, strategy, outlook, plans, liquidity, pending regulatory matters and outcomes of contingencies including legal proceedings, among others. Forward-looking statements may be typically identified by the use of words such as “may,” “will,” “should,” “expect,” “anticipate,” “seek,” “believe,” “intend,” “plan” and “estimate,” among others. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, any or all of our forward-looking statements may prove to be incorrect. Consequently, no forward-looking statements may be guaranteed. Factors that could cause our actual results to differ from expectations include the risks set forth under Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” among other items in this report. Forward-looking statements speak only as of the date of this report.

ITEM 1. BUSINESS

Overview

Material Sciences Corporation and its subsidiaries (“MSC,” “Company,” “we,” “our” or “us”) design, manufacture and market material-based solutions for acoustical and coated applications. We currently report under one segment based on how we view our business for evaluating performance and making operating decisions. Headquartered in Elk Grove Village, Illinois, MSC has been in operation since 1971 and is incorporated under the laws of the State of Delaware.

MSC operates three manufacturing plants in the United States and Europe: one facility in Elk Grove Village, Illinois (“Elk Grove Village”); one facility in Walbridge, Ohio (“Walbridge”); and one facility in Eisenach, Germany (“Eisenach”). We also operate two research and development facilities: one in Canton, Michigan and one co-located with our manufacturing facility in Eisenach, Germany.

We have expanded our global reach and presence as a leading supplier of material-based solutions primarily through subsidiaries, partnerships, alliances and third-party agreements.

• In South America, we own 51% of the equity and hold 50% of the voting rights in a joint venture partnership with Tekno S.A. (“Tekno”), which manufactures and sells acoustical products.

• We provide for the production of our acoustical products in Asia through a third party in Malaysia.

• We have an agreement with a Korean company, Hae Won Steel (“Hae Won”), to produce Quiet Steel^® and other laminate products in Korea.

• We have a subsidiary in China which serves as a trading company for Asia.

Products and Services

MSC is a supplier of engineered material-based solutions. We apply our expertise to solve design challenges for many of the largest automotive and non-automotive manufacturers in the world. Management believes the Company maintains strong customer relationships by providing global engineering innovation, technical application assistance, manufacturing expertise and delivery infrastructure. This combination enhances our ability to deliver cost-effective engineered material-based solutions to customers’ manufacturing facilities on time and within design specifications.

Acoustical Material-Based Solutions. We believe that we are a leader in the development and manufacturing of continuously processed materials that provide mass-efficient solutions to reduce noise and vibration. Our proprietary Quiet Steel is engineered to meet a variety of needs in the markets we serve. The automotive industry is currently the largest market for our acoustical products. These products are being used to replace solid sheet metal parts and accompanying acoustical treatments, including body panels, floor pans, wheel wells, brake shims, oil pans, valve covers and engine covers. In addition, we supply acoustical products for use in other non-automotive applications for appliances, electronics, and other industrial applications. We produce acoustical products at our Elk Grove Village, Walbridge and Eisenach locations. Acoustical products are also manufactured in Malaysia, in Brazil, through our joint venture partnership with Tekno, and in Korea, through our strategic alliance with Hae Won. Management also believes that our Application Research Center in Michigan and our Application Development Center in Europe provide us with state-of-the-art facilities to accelerate the development of new products and

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technologies. Acoustical material-based solutions represented approximately 61% of consolidated net sales in fiscal year 2013, approximately 50% in fiscal year 2012 and approximately 53% in fiscal year 2011.

Coated Material-Based Solutions. We continue to be recognized for our research and development and new product and process development activities involving the continuous, high-speed, roll-to-roll coating of metal. Our coated material-based solutions include painted, electrogalvanized (“EG”), rubber and film protective, decorative and functional coatings applied to coiled metal of various widths and thicknesses. Coated metal material-based solutions represented approximately 39% of consolidated net sales in fiscal year 2013, approximately 50% in fiscal year 2012 and approximately 47% in fiscal 2011.

We believe that coil coating is the most environmentally safe and energy-efficient method for applying paint, rubber and other coatings to metal. In the process, sheet metal is unwound from a coil, cleaned, leveled, chemically treated, coated, oven-cured and rewound into coils for shipment to manufacturers. They, in turn, fabricate the coated metal into finished products that are sold in a variety of industrial and commercial markets. The coatings are designed to produce protective, decorative and functional finishes. The finished coil-coated metal is a versatile material capable of being drawn, formed, bent, bolted, riveted, chemically bonded and welded. Our coated products are primarily used by manufacturers of automotive products, building products, appliances and other industrial products. Manufacturers that use these materials can eliminate or significantly reduce on-site post-fabrication coating lines and the associated costs. Coil coated materials also facilitate the adoption of just-in-time and continuous process manufacturing techniques providing lower manufacturing costs and improved product quality. Use of coil coated metal may, however, require product design or fabrication changes and more stringent handling procedures during manufacturing. Our strategy in coated materials is to develop and produce specialty niche products that meet specific customer requirements.

Electrogalvanizing is a corrosion-resistant steel coating process used primarily in making automobile and light-truck body skins. We manufacture EG solutions at our Walbridge facility. That facility has the ability to provide a full complement of pure zinc and zinc-nickel plated products, and organic coatings. These products offer corrosion resistance—as well as forming and cosmetic advantages—over competitive products, such as plastic and hot-dip galvanized steel. Most EG customers are suppliers of steel to the United States automobile industry. We believe that Walbridge is the only facility in North America capable of meeting the wide-width EG and paint coating steel demand in a single production pass through its line. In addition, as vehicle manufacturers explore the expanded use of weight-reducing materials in vehicles—such as Quiet Steel, electrogalvanized high-strength steel and pre-treated aluminum—we are expanding our capabilities in Walbridge to process these materials and remain a key partner to the manufacturers in their mass-reduction efforts.

Competition

The markets for our material-based solutions—both acoustical and coated—are highly competitive, both domestically and internationally. There are competitors in each product market we serve, some of which have greater resources than we do.

In the acoustical market, we believe that our technology, product development capability, technical support, global manufacturing and customer service place us in a strong competitive position. The competition for acoustical products includes other metal-to-metal laminates, rubber coated metals, as well as mastics, doublers, sound absorbing mats and other add-on damping treatments, which can add cost, mass and complexity in their applications.

Our coated material-based solutions compete with other methods of producing coated sheet metal—principally post-fabrication finishing methods such as spraying, dipping and brushing—and alternative materials such as plastic or stainless steel.

Demand for our EG coated products may fluctuate based on variations in steel mill captive coating capacity and continued competition from alternative coating technologies, such as hot-dip galvanizing.

International

We believe that significant international opportunities exist for MSC, particularly for our acoustical products. In an effort to capitalize on these opportunities, we maintain certain distribution, manufacturing, licensing and royalty agreements with agents and companies in North America, Europe, South America and Asia that cover our acoustical products. To further the penetration of our acoustical products in the Asian market, we entered into an agreement with Hae Won to produce Quiet Steel and other laminate products and installed our laminating equipment on one of their lines. Hae Won has paid for the right to use our equipment, and makes royalty payments for the right to produce and sell products. In addition,

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we have many Asian initiatives designed to help us penetrate this growing market. During fiscal 2009, we established a trading company in Shanghai, China to enable us to better serve the growing Asian market for our products. Through our sales and technical offices in Korea, Malaysia and China, we continue to expand existing relationships with appliance, electronic and automotive manufacturers. We continue to pursue a variety of other business relationships, including direct sales, distribution agreements, licensing, acquisitions and other forms of partnering to increase our international sales and expand our international presence.

The following table shows our domestic and foreign net sales for fiscal years 2013, 2012 and 2011:

	Fiscal 2013				Fiscal 2012				Fiscal 2011
Net Sales ($ in millions)	$		%		$		%		$		%
Domestic	$	105.5		87	$	121.7		89	$	125.2		91
Foreign		15.5		13		15.0		11		12.4		9
Total	$	121.0		100	$	136.7		100	$	137.6		100

Property, plant and equipment, net of accumulated depreciation (“PPE”) that we own in foreign countries were $4.1 million and $4.5 million as of February 28, 2013 and February 29, 2012, respectively. The remaining $25.0 million and $30.2 million in PPE at February 28, 2013, and February 29, 2012, respectively, were in the United States.

Marketing and Sales

We market our products, services and technologies nationally and internationally through our sales and marketing organization and occasionally through the use of agents and licensees. Primary target markets for our products include transportation (automobiles and light, medium and heavy-duty trucks), appliance, building products, lighting and electronics. We believe MSC is a valued leader in the industries it serves because of our engineering innovation, technical application assistance, manufacturing expertise and delivery infrastructure.

We employ people with noise, vibration and harshness (“NVH”) experience, and they use a proven sales methodology for penetrating transportation markets. These individuals also seek to increase penetration of our products in non-transportation based markets to expand sales of all acoustical products. All of our selling activities are supported by technical service departments, which aid customers in choosing the right materials for their manufacturing processes.

We estimate that customers in the transportation industry were the end users for approximately 87%, 89%, and 84% of our net sales in fiscal 2013, 2012 and 2011, respectively. Due to a concentration in the automotive industry, we believe that direct and indirect sales to individual automotive companies are significant. See Item 1A, “Risk Factors,” for more discussion on automotive sales. The following table shows direct sales to our significant customers that represented 10% or more of consolidated net sales for any of fiscal 2013, 2012 or 2011.

	% of Consolidated Net Sales
Customer	Fiscal 2013			Fiscal 2012			Fiscal 2011
Chrysler LLC		20	%		17	%		17	%
U.S. Steel		16	%		22	%		15	%
Ford Motor Company		8	%		12	%		18	%

Backlog. In the Company’s experience, the actual amount of order backlog at any particular time is not a meaningful indication of its future business prospects. In particular, backlog often fluctuates due to changes in the planning activities of our customers and their customers, as well as product introductions or change-overs. Because of the foregoing, backlog should not be considered a reliable indicator of the Company’s ability to achieve any particular level of revenue or financial performance.

Raw Materials. We are generally not dependent on any one source for raw materials or purchased components essential to our business for which an alternative source is not readily available. We are, however, affected by the price and availability of certain raw material inputs such as steel, zinc, nickel, electricity and natural gas. The prices of all these inputs fluctuated in all periods presented, which has affected our profitability. We anticipate the prices for these inputs will continue to be changeable and the fluctuations may be greater as the economy continues to recover. We participate in purchasing programs supported by our customers, usually large original equipment manufacturers, to maintain an adequate supply of metal at competitive prices. See Item 1A, “Risk Factors,” for more discussion on raw material inputs.

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Seasonality. We believe that our business, in the aggregate, is not subject to significant swings in seasonal demand. However, changes in production cycles in the automotive industry, particularly around model changes and summer and holiday shutdown periods, can affect sales in those periods.

Environmental Matters

We believe we operate our facilities and conduct our business, in all material respects, in accordance with applicable environmental laws. Our environmental management policies and practices have been certified under ISO 14001 standards. We spent approximately $2.1 million ($1.6 million of expense and $0.5 million on capital projects) on environmental controls at our facilities in fiscal 2013 and have budgeted expense of approximately $1.4 million and no capital for fiscal 2014. For additional information regarding our environmental matters, see Item 3, “Legal Proceedings,” and Note 3 of the Notes to the Consolidated Financial Statements, entitled “Commitments and Contingencies.”

Research and Development

We spent approximately $4.1 million in fiscal 2013 for product and process development activities. This compares with $3.9 million and $2.3 million, in fiscal 2012 and 2011, respectively. The increase in research and development spending during fiscal 2013 reflected efforts to increase our product development efforts, including expanding applications for our current products and developing new technologies that leverage our production expertise.

We are dedicated to our research and development efforts. To build on our position as an industry leader, we opened the Application Research Center in Canton, Michigan in June 2006. This testing and development center concentrates on the continued engineering, application and validation of our NVH material solutions and provides technical and development facilities for all of our products. We also operate our Application Development Center in Europe, which has enhanced our ability to develop, test and market our NVH brake solutions in Europe.

When possible, we seek patent and trademark protection for our products. We own, or are licensed under, a number of U.S. and foreign patents, patent applications, trademarks and trademark applications. Patents for individual products extend for varying periods according to the date of patent filing or grant and the legal terms of patents in the various countries where patent protection is obtained. While we consider our various patents, patent applications, trademarks and trademark applications to be important, we do not believe that the loss of any one of them would have a material adverse effect upon our business as a whole.

Employees

As of February 28, 2013, we had 267 full- and part-time employees, which compares with 269 on February 29, 2012. Of this number, approximately 77 were engaged in selling, general and administrative activities. During fiscal 2011, in connection with the sale of certain coil coating assets to Roll Coater, Inc., we terminated 56 union and 22 non-union positions. See Note 17 of the Notes to the Consolidated Financial Statements, entitled “Elk Grove Village Asset Sale.” During fiscal 2012, in connection with a restructuring plan implemented in our German subsidiary, we terminated ten positions. See Note 14 of the Notes to the Consolidated Financial Statements, entitled “Restructuring.”

Our Walbridge production employees are covered by a union contract expiring in September 2016. The production employees at our Elk Grove Village location are covered by a union contract expiring in February 2017. Employees at our Eisenach facility are not represented by a union. Our union employees are vital to our operations. We consider our relationships with them and their unions to be good.

Available Information

MSC’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on our Web site at www.matsci.com as soon as reasonably practicable after electronically filing the reports with the Securities and Exchange Commission (“SEC”). We will also furnish paper copies of these filings free of charge upon request. Our corporate headquarters is located at 2200 East Pratt Boulevard, Elk Grove Village, Illinois 60007, and our telephone number is (847) 439-2210. Copies of any materials we file with the SEC are also available at the SEC’s Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a Web site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

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Executive Officers of the Registrant

As of May 2, 2013, our executive officers, who are elected by and serve at the discretion of our Board of Directors, were as follows:

Executive Officer	Age		Position(s)	Executive Officer Since
Clifford D. Nastas		50	Chief Executive Officer		2001
James D. Pawlak		44	Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary		2010
Michael R. Wilson		51	Vice President, Global Operations		2008
Matthew M. Murphy		46	Vice President, General Manager of Asia		2008

Clifford D. Nastas. On December 1, 2005, Mr. Nastas was named our Chief Executive Officer. Previously, Mr. Nastas served as President and Chief Operating Officer since June 2005. Prior to that time he held numerous executive positions with us, including Executive Vice President and Chief Operating Officer from October 2004 to June 2005; Vice President and General Manager of the Engineered Materials and Solutions Group (“EMS”) from May 2004 to October 2004; Vice President of Sales and Marketing of EMS from July 2003 to May 2004; and Vice President of Marketing of MSC Laminates and Composites from January 2001 to July 2003. Before joining MSC, Mr. Nastas served as the Global Automotive Business Director for Honeywell International Inc., a technology and manufacturing provider of aerospace products, control technologies, automotive products, specialty chemicals and advanced materials, from 1995 to 2001. Mr. Nastas was a director of Quixote Corporation from November 2009 until the company was sold in March 2010.

James D. Pawlak. On February 10, 2010, Mr. Pawlak was named our Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary. Since joining MSC in 1990, Mr. Pawlak has progressed through several financial positions of increasing responsibility, including serving as Business Unit Controller from September 1996 to July 2005, as Director of Financial Planning and Analysis from July 2005 to September 2006 and as Director of Finance from September 2006 to February 2010. Mr. Pawlak is a registered certified public accountant.

Michael R. Wilson. On February 1, 2008, Mr. Wilson was named our Vice President, Global Operations. Prior to this appointment, Mr. Wilson worked for Ford Motor Company, an automobile manufacturer, in operations and manufacturing engineering for more than 24 years. Mr. Wilson held many operating positions for Ford in stamping and assembly, and he also served as Chief Engineer, Final Assembly Engineering, and Chief Engineer, Paint Engineering, where he had global responsibility for facilities, product launch and materials development.

Matthew M. Murphy. Mr. Murphy has served as Vice President, General Manager of Asia since December 2009. Before this, Mr. Murphy held a number of positions with MSC, including Vice President, Global Transportation Sales and Marketing from March 2008 to December 2009; Plant Manager at the MSC Walbridge Coatings facility from May 2007 to March 2008; Director of Automotive Sales and Marketing from March 2005 to May 2007; Marketing Manager of Automotive Accounts from December 2002 to March 2005; and Strategic Account Manager from April 2001 to December 2002. Prior to joining MSC, Mr. Murphy held positions in manufacturing, sales and marketing with General Motors Corporation, AlliedSignal Inc. and GW Plastics, Inc.

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ITEM 1A. RISK FACTORS

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Form 10-K contains forward-looking statements, which include, without limitation, statements regarding anticipated results based on management’s plans and assumptions. We have tried, wherever possible, to identify these statements by using words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and similar words and terms in any discussion of future operating or financial performance.

Achieving future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected here. Many factors also could cause actual results to be materially different from any future results that may be expressed or implied by the forward-looking statements contained in this Form 10-K. We undertake no obligation to update forward-looking statements as a result of future events or developments.

Outlined below are some of the risks that we face that could affect the business and financial position for fiscal 2014 and beyond. However, they are not the only risks that we face. There may be other risks that are not presently known or that management currently believes are immaterial, which could also negatively affect our business or financial statements.

We rely on sales to a small number of customers. The loss of substantial sales to any one of them could have an adverse effect on revenues and profits.

We derive a substantial portion of our revenue from a limited number of customers, most of which are North American automobile manufacturers or related suppliers. The loss of substantial sales to any one of them could adversely affect our operations. In fiscal 2013, our three largest customers—Chrysler, U.S. Steel, and Ford—represented 20%, 16% and 8% of consolidated net sales, respectively. During the past several years, the North American automobile manufacturing sector has lost market share in the United States, primarily to Asian competitors. Although we are actively targeting Asian and European manufacturers as potential customers, any further market share loss by these North American-based automakers or suppliers could have a material adverse effect on our business.

Uncertainty in the global economy, global credit markets and the financial services industry may affect the automotive and consumer/industrial markets, and as a result, our business, financial position and liquidity.

A significant portion of our revenues come from customers in the automotive industry. Purchases of new vehicles are typically discretionary for consumers and may be particularly affected by negative trends in the general economy. In addition, we sell in various automotive markets around the world, principally in North America, Europe and Asia. Those three markets are experiencing different trends in activity—North America and Asia are growing while Europe’s outlook is uncertain. Our sales and results of operations can be positively or negatively affected by changes in these three markets.

Severe financial difficulties or key component shortages—including bankruptcy or other problems experienced by any automotive manufacturer or significant automotive supplier—or a significant downturn in any sector of the global economy, could have a significant disruptive effect on the entire automotive industry, including us, leading to supply chain disruptions and labor unrest, among other things. Severe financial difficulties at any of our major suppliers could also have a material adverse effect on us if we are unable to obtain, on a timely basis, the quantity and quality of components or materials needed to produce our products.

We face intense competition in the acoustical and coated application industries and failure to successfully compete may negatively affect our business and financial performance.

We operate in a highly competitive business environment and face intense competition from a growing number of competitors, including an increasing number of foreign-based companies that may have greater resources than us. The elements of competition include price, quality, technical support and customer service. In the past, our competitors—especially global competitors with low cost sources of supply outside the United States—have aggressively priced their products and/or introduced new products to increase their market share. If we are unable to compete in this highly competitive environment, our business and financial performance could be negatively affected. A large portion of our sales are EG-related products. While we believe we offer an outstanding range of EG products and capabilities, we

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face the risk of substantial competition from other EG facilities and from alternative technologies, such as hot-dipping. We can offer no assurance that MSC will maintain the current volume of EG sales in the future.

The acceptance of our acoustical products for brake shims, engine components and body panel laminate parts by customers in North America, Europe and Asia is critical to our financial performance.

We have made a significant investment in the design and development of our material-based solutions to address NVH and mass-reduction problems in the automotive industry. If these solutions are not accepted by our customers in North America, Europe and Asia, our results of operations and financial position may be adversely affected.

Our business could be negatively affected by deterioration in labor relations.

As of February 28, 2013, we had 267 full- and part-time employees, of which approximately 44% were represented by labor unions with separate collective bargaining agreements. As these agreements expire, we cannot be assured that we will be able to renew the collective bargaining agreements on the same or similar terms, or at all. This could affect our business, results of operations or financial condition. In addition, if new labor agreements are negotiated, there can be no guarantee that these will be on satisfactory terms with regard to the efficiency and productivity of the work force. Further, we cannot be assured that the Company will not be subject to work stoppages or other labor disruptions that could have a material adverse effect on its business, results of operations or financial condition.

Our sales and profitability in Asia could be adversely impacted by manufacturing problems at our third-party manufacturing partner in Malaysia.

We continue to grow our sales in Asia. Our strategy to expand in Asia relies, in part, on the availability of lower cost, locally sourced products made available through our third-party manufacturing arrangement in Malaysia. If production problems arise in that facility, or our relationship with that manufacturer deteriorates, we could experience difficulty supporting our sales growth and/or profitability in Asia.

Our sales and profitability in Europe could be adversely impacted by the ongoing uncertain economic conditions in the European Union.

The ongoing economic challenges being faced in Europe have negatively impacted key automotive customers and continue to pose a challenge in meeting our strategic sales and profit goals there. Until the economy in Europe stabilizes, our results of operations and financial position may be adversely affected.

Many of our customers in the automotive industry have major union contracts with the same automobile workers’ unions. Any extended work stoppage could have a material adverse effect on our operating results and financial position.

Two of our largest customers, and many of their key suppliers, have major union contracts with the same automobile workers unions. Some of these union contracts may expire or be subject to modification during fiscal 2014. Any extended work stoppage that may occur during these negotiations could have a material adverse effect on our operating results and financial position.

Fluctuations in the price and availability of raw materials, which includes steel and coatings, and other inputs used by us—particularly zinc, nickel, natural gas and electricity—could adversely affect our ability to conduct business in a timely and profitable manner.

In recent years, the availability and price of metal have fluctuated, as mills increased or decreased their production in response to economic changes. Those changes have driven price changes that, at times, caused us to increase prices in a competitive market and/or absorb higher costs. We also experienced fluctuations in the price of zinc, nickel, electricity and natural gas in all periods presented. Our future profitability may be adversely affected to the extent we are unable to pass higher raw material costs to our customers. For more information, see the discussion in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.”

Our customers or suppliers may be affected by natural disasters.

In recent years, a series of natural disasters have had short- to medium-term negative impacts on local economies around the world, including areas where we have operations, resulting in temporary reductions or changes in our customers’ purchase practices. The occurrence of natural disasters in any part of the world, especially North America, could have a negative effect on our sales or operating costs.

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An increase in the environmental risks, costs, recoveries and penalties associated with our past and present manufacturing operations could adversely affect our financial performance.

We are a party to various legal proceedings in connection with the remediation of certain environmental matters. We record reserves for these environmental matters using our historical experience and relevant information available from various third parties. There are a number of assumptions made in establishing these reserves including, without limitation, the estimated extent of environmental damage to any particular site, the available methods of remedy, estimated contribution of various other potentially responsible parties and the discretionary authority of federal and state regulatory authorities in bringing enforcement actions. New environmental issues, including potential new laws related to reducing greenhouse gasses, or changes in the assumptions surrounding existing environmental issues could have an adverse effect on our results of operations and financial condition.

Our business and future development may be adversely affected if we are unable to retain key personnel.

Our success is highly dependent upon the services of key personnel in all areas of our business including, but not limited to, senior management, sales (including people trained in our NVH sales methodology) and operations, administration and finance. The loss of the services of one or more of these people could have an adverse effect upon the business and plans for future development. In addition, we have significantly reduced management and administrative positions in recent years as a result of cost-cutting initiatives. Lack of management resources could affect our ability to operate and compete in our industry.

Shifts in supply models could adversely affect our revenue and profits.

As market conditions change, there may be shifts in the supply model for certain products. We must adapt our pricing strategy accordingly, which may affect the comparability of revenues, operating margins and working capital for the fiscal years presented.

The trading price of our common stock may fluctuate substantially in the future.

In recent years, the trading price of our common stock has fluctuated substantially and may continue to do so as a result of a number of factors, some of which are not in our control. Here are some of the key factors:

• Actual or anticipated fluctuations in our financial condition or annual or quarterly results of operations

• Our inability to meet or exceed expectations of analysts or investors

• Changes in the market valuations of companies viewed as similar to us

• Changes in key personnel

• Future sales of our common stock

• Share repurchase programs

• Increased competition

• Realization of any of the risks described elsewhere under “Risk Factors”

• General market and economic conditions.

These factors may adversely affect the trading price of our common stock—regardless of our actual operating performance—and could prevent investors from selling shares of our common stock above the purchase price they paid. In addition, from time to time stock markets experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies trading on them. These broad fluctuations may adversely affect the market price of our common stock, regardless of our operating performance.

Our access to credit may be limited.

Although we currently have a $7.5 million credit line, our ability to draw on that line of credit is limited by outstanding letters of credit and by a borrowing base of accounts receivable and liens on other Company assets, including inventory, equipment, real property and intellectual property. At February 28, 2013, the net amount available to us under the line of credit was $3.9 million due to borrowing base limitations. There can be no assurances that we will continue to have access to this portion or any of the credit line if our operating and financial performance do not satisfy relevant borrowing base criteria. If we do not satisfy these criteria, and if we are unable to secure necessary waivers or other amendments from the lender of the credit line, we will not have access to this credit. In addition, the lender may, at its discretion, modify the percentage used in computing the borrowing base, which may limit the amounts available for future borrowings.

10

Although we believe that our operating cash flows, on-hand cash levels and access to credit will give us the ability to meet our financing needs for the foreseeable future, there can be no assurance that they will do so. The lack of the borrowing availability under the credit line and our potential inability to obtain a replacement source of credit could materially affect our operations and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We own or lease facilities with an aggregate of approximately 664,000 square feet of space. In addition to the principal physical properties we use in our manufacturing operations as summarized in the table below, we lease sales and administrative offices under operating leases.

In fiscal 2013, we sold our Plant No. 7, located in Elk Grove Village, Illinois and leased a portion of the building for our corporate and general offices. In fiscal 2011, we sold our Middletown, Ohio facility and equipment. Additional information concerning these transactions is included in Note 16, “Middletown Asset Sale,” and Note 18, “Sale of Elk Grove Village Building,” in the Notes to the Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data.”

We consider all of our principal facilities to be in good operating condition and sufficient to meet our near term operating requirements.

Location	Approximate Area in Square Feet		Ownership or Lease Expiration			Description
Elk Grove Village, Illinois Plant No. 2		205,000		Owner		Laminating and Coil Coating Facility, General Offices
Elk Grove Village, Illinois Plant No. 7(1)		35,000		August 2016		Corporate and General Offices
Walbridge, Ohio		351,000		April 2015	(2)	Electrogalvanizing, Laminating and Coil Coating Facility
Canton, Michigan		57,000		Sept. 2018	(3)	NVH Testing and Product Development Center, General Offices
Eisenach, Germany		16,000		Owner		Stamping and NVH Testing Facility, General Offices

(1) For further information, see Note 18, “Sale of Elk Grove Village Building,” in the Notes to Consolidated Financial Statements in Item 8.

(2) The lease automatically extends in three-year increments through April 30, 2027, unless either party explicitly cancels the lease prior to each extension date.

(3) The Company has an option to extend this lease in five-year increments through September 2043 which includes an option to purchase beginning in March 2015.

ITEM 3. LEGAL PROCEEDINGS

Note 3 of the Notes to the Consolidated Financial Statements in Item 8, entitled “Commitments and Contingencies,” is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the NASDAQ Capital Market under the symbol “MASC.” The table below sets forth, by fiscal quarter, the high and low closing sales prices of our common stock during the past two fiscal years as reported by the NASDAQ.

Fiscal Year	Fiscal Quarter			High		Low
2013		1	st	$	9.07	$	7.64
		2	nd		9.02		7.90
		3	rd		9.14		8.67
		4	th		10.40		8.91
Fiscal Year	Fiscal Quarter			High		Low
2012		1	st	$	7.99	$	6.18
		2	nd		8.88		6.61
		3	rd		8.52		6.07
		4	th		8.72		7.83

There were 338 stockholders of record of our common stock at the close of business on May 2, 2013.

Dividends

MSC has not paid cash dividends other than a nominal amount in lieu of fractional shares in connection with stock dividends. If business circumstances should change, the Board of Directors may declare and instruct us to pay dividends.

Issuer Purchases of Equity Securities

Our Board of Directors authorized the repurchase of 1,000,000 shares of the Company’s common stock on September 14, 2011, and again on September 27, 2012. The shares may be repurchased from time-to-time on the open market, subject to market conditions and other factors, and generally will be funded with internally generated cash. The Company repurchased 283,388 shares under the September 2011 authorization during the twelve months ended February 28, 2013, none of which were repurchased during the three months ended February 28, 2013. At February 28, 2013, there were 364,476 shares available for purchase under the September 2011 authorization and 1,000,000 shares available for purchase under the September 2012 authorization.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with our Consolidated Financial Statements. The information set forth below does not necessarily indicate results of operations in the future. To fully understand factors that may affect the comparability of this financial data, it should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements and Notes included in Item 8, “Financial Statements and Supplementary Data.”

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Selected Financial Data

Material Sciences Corporation and Subsidiaries

(Dollars and number of shares in thousands, except per share data, shareowners of record and number of employees)	Fiscal Year
	2013			2012			2011			2010			2009
Statement of Operations Data
Net Sales	$	121,007		$	136,734		$	137,624		$	137,820		$	187,026
Gross Profit		28,514			33,668			31,682			16,091			11,085
Income (Loss) from Continuing Operations Before Income Taxes(1)		12,609			13,551			12,368			(11,705	)		(25,628	)
Income (Loss) from Continuing Operations		8,994			28,467			12,044			(11,620	)		(33,111	)
Provision (Benefit) for Income Taxes		3,615			(14,916	)		324			(85	)		7,483
Net Income (Loss)(1)		8,994			28,467			12,044			(11,620	)		(33,111	)
Diluted Net Income (Loss) Per Share	$	0.86		$	2.49		$	0.93		$	(0.89	)	$	(2.41	)
Balance Sheet Data
Working Capital	$	66,810		$	52,457		$	56,223		$	31,573		$	33,176
Net Property, Plant and Equipment		29,160			34,735			30,476			41,138			47,746
Total Assets		127,106			125,096			113,930			104,050			110,039
Total Long Term Liabilities		12,716			15,350			11,795			13,812			13,824
Total Debt		—			—			—			—			—
Shareowners’ Equity		94,936			87,980			78,198			62,680			74,220
Average Capital Employed(2)	$	91,458		$	83,089		$	70,439		$	68,450		$	94,676
Cash Flow Data
Depreciation, Amortization and Accretion	$	4,670		$	4,906		$	5,572		$	8,536		$	10,671
Net Cash Provided by (Used in) Operating Activities		7,359			19,329			9,302			2,808			(1,840	)
Capital Expenditures	$	4,897		$	9,194		$	2,359		$	1,094		$	3,720
Financial Ratios
Gross Profit as a % of Net Sales		23.6	%		24.6	%		23.0	%		11.7	%		5.9	%
SG&A Expenses as a % of Net Sales		16.6	%		15.4	%		16.4	%		19.3	%		18.1	%
Income (Loss) from Continuing Operations Before Income Taxes as a % of Net Sales		10.4	%		9.9	%		9.0	%		(8.5	%)		(13.7	%)
Net Income (Loss) as a % of Net Sales		7.4	%		20.8	%		8.8	%		(8.4	%)		(17.7	%)
Research and Development as a % of Net Sales		3.4	%		2.8	%		1.7	%		2.0	%		2.4	%
Effective Income Tax Rate on Continuing Operations		28.7	%		(110.1	%)		2.6	%		0.7	%		(29.2	%)
Return on Average Shareowners’ Equity		9.8	%		34.3	%		17.1	%		(17.0	%)		(35.0	%)
Return on Average Capital Employed		9.8	%		34.3	%		17.1	%		(17.0	%)		(35.0	%)
Other Data
Per Share Information:
Book Value	$	9.11		$	7.69		$	6.04		$	4.80		$	5.41
Market Price:
High	$	10.40		$	8.88		$	7.32		$	2.25		$	8.67
Low	$	7.64		$	6.07		$	1.70		$	0.51		$	0.90
Close	$	10.15		$	8.66		$	7.32		$	1.91		$	1.01
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares		10,425			11,441			12,957			13,049			13,716
Shareowners of Record		338			399			416			443			559
Number of Employees		267			269			264			339			372

(1) In fiscal 2013, MSC recorded a gain on the sale of the Plant #7 building in Elk Grove Village, Illinois of $3,216. In fiscal 2012, MSC recorded restructuring expenses of $583, consisting primarily of employee termination benefit expenses in the U.S. and Germany. In fiscal 2011, MSC recorded a gain of $6,643 on the sales of our Middletown facility and equipment and certain of our Elk Grove Village coil coating assets, a charge of $3,720 related to asset impairment, and a charge of $1,324 related to restructuring expenses in connection with the sale of the Elk Grove Village coil coating assets. In fiscal 2010, the Company recorded restructuring expenses of $1,639, consisting primarily of employee termination benefits, in connection with a restructuring plan that eliminated production and selling, general and administrative (“SG&A”) positions. In fiscal 2009, MSC recorded a charge of $8,092 related to long-lived asset impairment; a gain of $5,897 on the sale of the assets and real property located in Morrisville, Pennsylvania; and a charge of $2,206 related to forward purchase contracts for nickel and natural gas.

(2) Average capital employed represents the average of the total debt and shareowners’ equity at the beginning and ending of the fiscal year.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

We report segment information based on how we view our business for evaluating performance and making operating decisions. For the periods discussed in this Item 7, we report results on the basis of one reportable segment. This segment focuses on providing material-based solutions for acoustical and coated applications. Our acoustical material-based solutions consist of layers of metal and other coated materials used to manage noise and vibration in such products as vehicle body panel parts, brake dampers, engine parts, appliances, electronics, and other industrial applications. Our coated material-based solutions include coil coated, electrogalvanized (“EG”) and film protective and decorative coatings applied to coils of metal in a continuous, high-speed, roll-to-roll process for such products as automotive fuel tanks, building products, gaskets, appliances and lighting fixtures. We use a significant level of shared assets and resources across each of our product categories. It is common for a single customer or end-user to purchase products from several product categories.

We have taken steps in recent years to adjust our capacity to match market needs and to exit certain low-profitability coil coating markets. These actions were taken because we recognized that the coil coating marketplace had excess capacity, which was having a negative effect on our results. Leaving these markets allows us to focus our activities in higher value, more specialized products. We have also sought to optimize our invested capital, selling assets that no longer provide positive contributions to our results. These were the significant steps taken:

• In August 2012, we sold our Plant #7 building in Elk Grove Village, generating $9.2 million in cash—the principal reason our cash balance increased in fiscal 2013

• During fiscal 2011 and fiscal 2012, management implemented restructuring plans that resulted in the elimination of production and SG&A positions.

• In June 2010, we sold the idled facility and related production equipment located in Middletown, Ohio (“Middletown”).

• In April 2010, we sold a portion of our coil coating assets—including the coil coating machinery, related processing equipment and corresponding customer base—associated with our Plant #7 in Elk Grove Village, Illinois (“Elk Grove Village”).

See additional discussion of all these transactions in the Notes to the Consolidated Financial Statements.

As a result, MSC has improved its gross profit by moving away from low margin coil coated products and reducing excess capacity and overhead costs. The Company also generated cash by selling the excess non-performing assets. However, the sale of the coil coating assets has left us more dependent on fewer customers, and on a smaller selection of products, than in prior years. Although MSC has engaged in significant sales of production assets in recent years, it is unlikely this will continue. We will consider selling other non-core assets if the circumstances are appropriate.

Results of Operations as a Percentage of Net Sales (Fiscal Years)

	2013			2012			2011
Net Sales		100.0	%		100.0	%		100.0	%
Cost of Sales		76.4			75.4			77.0
Gross Profit		23.6			24.6			23.0
Selling, General and Administrative Expenses		16.6			15.4			16.4
Gain on Sale of Assets		(2.7	)		—			(4.8	)
Asset Impairment Charges		—			—			2.7
Restructuring and Other		—			0.4			1.0
Income from Operations		9.7			8.8			7.7
Total Other Income, Net		0.7			1.1			1.2
Income from Continuing Operations Before Income Taxes		10.4			9.9			9.0
Provision (Benefit) for Income Taxes		3.0			(10.9	)		0.2
Net Income		7.4	%		20.8	%		8.8	%

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Results of Operations—Fiscal 2013 Compared with Fiscal 2012

($ in thousands)	2013			2012			Fav(Unfav) Variance			% Fav(Unfav) Variance
Net Sales	$	121,007		$	136,734		$	(15,727	)		(11.5	)%
Gross Profit	$	28,514		$	33,668		$	(5,154	)		(15.3	)%
% of Net Sales		23.6	%		24.6	%
Selling, General and Administrative	$	20,024		$	21,117		$	1,093			(5.2	)%
% of Net Sales		16.6	%		15.4	%

Net Sales

($ in thousands)	Net Sales
Application	Fiscal 2013		Fiscal 2012		Variance $			Variance %
Acoustical	$	73,851	$	68,343	$	5,508			8.1	%
Coated		47,156		68,391		(21,235	)		(31.0	)%
Total	$	121,007	$	136,734	$	(15,727	)		(11.5	)%

Sales for the fiscal year ended February 28, 2013, decreased by $15.7 million from the prior fiscal year.

Acoustical sales increased $5.5 million. Brake sales increased $5.3 million due to higher aftermarket (“AM”) and original equipment (“OE”) brake sales in North American and Asian markets, partially offset by lower brake sales in Europe. Body panel Quiet Steel sales were up $1.3 million and sales related to engine products declined $0.1 million. Other acoustical sales, net of returns & allowances (which includes scrap sales), declined $0.8 million.

Coated metal products sales declined $21.2 million. Sales of EG material declined $14.3 million, primarily because a significant portion of the prior year’s opportunistic shipments to our steel mill customers did not repeat in the current fiscal year. Fuel tank sales declined $5.9 million primarily due to lower sales to Ford as they continue their conversion of certain vehicles to plastic fuel tanks. These sales declines were partially offset by a $0.9 million increase in aluminum pretreatment sales. Other coated sales, net of returns & allowances (which includes scrap sales), declined by $1.9 million, driven primarily by a decline in scrap sales due to lower production volumes.

Gross Profit. Gross profit was $28.5 million, or 23.6% of net sales, for fiscal 2013 compared with $33.7 million, or 24.6% of net sales, for fiscal 2012. The decline resulted from several factors. The most significant cause was our lower sales of EG and fuel tank products and the corresponding decline in facility utilization. Scrap sales declined due to lower production volumes and lower market prices for scrap. We also incurred higher product quality-related expenses, due in part to new product development efforts on our production lines. These factors were partially offset by lower raw material prices.

SG&A Expenses. Selling, general and administrative expenses were $20.0 million, 5.2% lower than fiscal 2012’s $21.1 million. The main reasons for the improvement were a $1.1 million decrease in management incentive expense, a decrease in facility costs of $0.7 million due to the sale of the Elk Grove Village Plant #7 building and lower professional fees of $0.3 million. These improvements were partially offset by higher workers’ compensation expense of $0.5 million due mainly to legacy claims from a former California subsidiary, and higher product development and employee expenses of $0.5 million due to expanding sales and product development efforts to accelerate our growth.

Gain on Sale of Assets. We recorded a gain of $3.2 million on the sale of the Elk Grove Village Plant #7 during fiscal 2013. No asset sales occurred in fiscal 2012. See Note 18, “Sale of Elk Grove Village Building,” in the Notes to the Consolidated Financial Statements in Item 8 for further discussion of this gain.

Restructuring. There were no restructuring expenses in fiscal 2013; there were $0.6 million in fiscal 2012. We did not have any restructuring activities in the current year. See Note 14, “Restructuring,” in the Notes to the Consolidated Financial Statements in Item 8 for further discussion of our restructuring activities.

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Total Other Income, Net. Total other income, net, was $0.9 million in fiscal 2013 compared with $1.6 million in fiscal 2012. The decrease was principally due to a $0.5 million decline in rental income due to the sale of our Elk Grove Village Plant #7 building and a $0.2 million decline in income from our joint venture partnership with Tekno. Total other income, net includes rental income of $0.6 million and $1.1 million in fiscal 2013 and fiscal 2012, respectively. The rental income was from leases in our Elk Grove Village Plant #7, which had operating expenses of $0.6 million (including depreciation of $0.3 million) during the six months ended August 31, 2012, (the period we owned the building in fiscal 2013) and $1.5 million (including depreciation of $0.9 million) during the twelve months ended February 29, 2012.

Income Taxes. Our effective income tax rate was an expense of 28.7% in fiscal 2013 as compared with a benefit of 110.1% in fiscal 2012. The change was primarily due to the reversal of $18.8 million of the valuation allowance on our U.S. and German deferred tax assets during fiscal 2012. See Note 8, “Income Taxes,” in the Notes to the Consolidated Financial Statements in Item 8.

Results of Operations—Fiscal 2012 Compared with Fiscal 2011

($ in thousands)	2012			2011			Fav(Unfav) Variance			% Fav(Unfav) Variance
Net Sales	$	136,734		$	137,624		$	(890	)		(0.6	)%
Gross Profit	$	33,668		$	31,682		$	1,986			6.3	%
% of Net Sales		24.6	%		23.0	%
Selling, General and Administrative	$	21,117		$	22,621		$	1,504			6.7	%
% of Net Sales		15.4	%		16.4	%

Net Sales

($ in thousands)	Net Sales
Application	Fiscal 2012		Fiscal 2011		Variance $			Variance %
Acoustical	$	68,343	$	73,094	$	(4,751	)		(6.5	)%
Coated		68,391		64,530		3,861			6.0	%
Total	$	136,734	$	137,624	$	(890	)		(0.6	)%

Sales for the fiscal year ended February 29, 2012, decreased by $0.9 million from the prior fiscal year.

Acoustical sales declined $4.8 million. Body panel laminate sales declined $4.3 million, due primarily to $3.5 million in lower shipments to General Motors (“GM”), as some models containing Quiet Steel have gone out of production and GM stopped using the technology on certain other models, and $1.0 million of lower shipments to Chrysler—due to lower builds of vehicles which use our product—partially offset by higher sales for Ford applications. Sales related to engine products declined $0.2 million due to lower sales to automotive manufacturers partially offset by higher sales to Class 8 truck manufacturers. Brake sales declined by $0.2 million, with higher sales to Asian and European customers offsetting lower North American after-market shipments. All other sales decreased by $0.1 million.

Sales of coated metal products increased $3.9 million. The increase was driven by $13.5 million in stronger sales of EG products used primarily in automotive body panel applications, as well as $2.5 million in higher sales from our ElectroBrite^® product. The prior-year sale of coil coating assets at the Elk Grove Village Plant #7, and the associated revenue, accounted for a $7.5 million reduction in net sales. Fuel tank sales decreased $6.1 million because certain vehicles at Ford have converted from the coated steel supplied by MSC to plastic fuel tank materials. Other coated sales accounted for an increase of $0.7 million, primarily in products used in lighting. Returns and allowances (a component of net sales) improved by $0.8 million mainly due to higher scrap sales associated with a higher production volume mix.

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Gross Profit. Gross profit was $33.7 million, or 24.6% of net sales, for fiscal 2012 compared with $31.7 million, or 23.0% of net sales, for fiscal 2011. This change resulted primarily from the two factors detailed below:

• Sales and operating factors accounted for a $1.0 million increase in gross profit, reflecting an improvement in the coated metal sales mix and gross margin due to lower volumes of coil coating sales, and higher sales of EG coated metal; partially offset by higher material costs.

• The cost of non-conformance (product quality, net of scrap sales) improved by $0.9 million from a year ago because scrap metal sales—which are a byproduct of our manufacturing process—increased. This increase was partially offset by higher product claim and production scrap expenses.

SG&A Expenses. Selling, general and administrative expenses (“SG&A”) were $21.1 million, 6.7% lower than fiscal 2011’s $22.6 million. The main reason for the improvement was a $1.1 million decrease in expense for the directors’ phantom stock incentive program—because of a smaller increase in the market price of the Company’s stock compared to last year—and decreases in professional fees of $1.1 million and depreciation expense of $0.3 million. These improvements were partially offset by higher product development and employee expenses of $1.0 million due to expanding sales and product development efforts to accelerate our growth.

Restructuring. Restructuring expenses were $0.6 million, 56% lower than fiscal 2011’s $1.3 million. The amount is lower because we engaged in fewer restructuring activities in the current year. See Note 14, “Restructuring,” in the Notes to the Consolidated Financial Statements in Item 8 for further discussion of our restructuring activities.

Total Other Income, Net. Total other income, net, was $1.6 million in fiscal 2012 compared with $1.7 million in fiscal 2011. The decrease was due to higher interest expense in our German subsidiary, as discussed in Note 19, “German Subsidy,” in the Notes to the Consolidated Financial Statements in Item 8. Total other income, net includes rental income of $1.1 million and $0.9 million in fiscal 2012 and fiscal 2011, respectively. The rental income was from leases in our Elk Grove Village Plant #7, which had operating expenses of $1.4 million (including depreciation of $0.8 million) and $1.5 million (including depreciation of $0.9 million) recorded in SG&A during the twelve months ended February 29, 2012 and February 28, 2011, respectively.

Income Taxes. Our effective income tax rate was a benefit of 110.1% in fiscal 2012 as compared with an expense of 2.6% in fiscal 2011. The change was primarily due to the reversal of the valuation allowance on our U.S. and German deferred tax assets during the fourth quarter of fiscal 2012. See Note 8, “Income Taxes,” in the Notes to the Consolidated Financial Statements in Item 8.

Liquidity and Capital Resources

We have historically financed our operations with funds generated from operating activities, borrowings under credit facilities and sales of various assets. We believe that our cash on hand and cash flows will be sufficient to fund our operations and meet our working capital needs for the foreseeable future.

We generated $7.4 million of cash from operating activities in fiscal 2013 compared with $19.3 million and $9.3 million in fiscal 2012 and fiscal 2011, respectively. The main components of cash generated from operating activities consisted of net income of $9.0 million, non-cash activities of $5.6 million, negative cash flow of $7.4 million from changes in assets and liabilities (primarily working capital and long-term liabilities) and a cash dividend received from our joint venture partnership with Tekno of $0.5 million.

The $12.0 million decrease in cash generated from operations from fiscal 2012 to fiscal 2013 is due to several factors:

• A $4.2 million increase in inventories in fiscal 2013 compared to fiscal 2012, driven by a shift in sales mix to products with slower inventory turns, higher stock levels in Asia to support our growth, lower fourth quarter sales, and advance purchases of certain commodity raw materials to take advantage of favorable prices. The Company believes that inventory levels are too high relative to sales at the end of fiscal 2013. MSC will take steps to reduce inventory levels relative to sales in fiscal 2014.

• Fiscal 2013 net income, after adjustment for non-cash items, decreased by $3.8 million from the prior year.

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• Fiscal 2012 included a $2.4 million payment from a significant customer that was delayed from fiscal 2011; this was not repeated in fiscal 2013.

• Our income tax receivable position at the end of fiscal 2013 was $1.3 million higher than at the end of fiscal 2012. The refundable position is due to the tax loss on the sale of our Elk Grove Village Plant #7 building during fiscal 2013.

• At February 28, 2013, accounts receivable, relative to sales, was higher than at February 29, 2012, because:

• Our sales mix has shifted to a product mix in which we are experiencing longer payment terms, increasing DSO.

• Changes in payment systems and technical issues with electronic billing transactions at three of our significant domestic customers resulted in delays in payments of approximately $0.9 million that were expected to be received in fiscal 2013, based on payment terms. We expect to receive these payments in the first quarter of fiscal 2014.

• Other changes in assets and liabilities generated $0.6 million more cash in fiscal 2013 than fiscal 2012.

In fiscal 2013, we invested $4.9 million in capital improvement projects compared with $9.2 million and $2.4 million in fiscal 2012 and 2011, respectively. The fiscal 2013 investments were primarily to improve productivity and expand our production and product testing capabilities. Fiscal 2014 capital expenditures are projected to be approximately $6.1 million.

In December 2008, we sold the Morrisville assets and received $5.0 million in cash and a note receivable for $4.1 million. In February 2009, the note was increased to $4.7 million for inventory sold to the buyer. We received $1.1 million in principal payments through February 28, 2010; reduced the note balance by $1.9 million in consideration for the transfer of all warranty liability to the buyer; and the buyer paid $1.7 million and retired the note in the first quarter of fiscal 2011.

In April 2010, we sold a portion of our coil coating assets, including the coil coating machinery, related processing equipment and corresponding customer base associated with our Plant #7 in Elk Grove Village to Roll Coater, Inc. for $10.0 million ($9.3 million after investment banking fees). In addition, we entered into a three-year lease agreement to store the purchased equipment. The transaction did not include the sale of any real estate by MSC. The Company recorded a gain on the sale of approximately $4.7 million (net of fees) in the first quarter of fiscal 2011. MSC also recorded $1.1 million of employee termination benefit expenses and $0.2 million of inventory write-off expenses in connection with the sale. See Note 17 of the Notes to the Consolidated Financial Statements entitled “Elk Grove Village Asset Sale” for further discussion.

In June 2010, we sold the idled facility and related production equipment located in Middletown, Ohio to NCI Group for $4.9 million. The Company recorded a gain on the sale of approximately $1.9 million (net of fees) in the second quarter of fiscal 2011. See Note 16 of the Notes to the Consolidated Financial Statements entitled “Middletown Asset Sale” for further discussion.

In August 2012, we sold our Plant #7 building in Elk Grove Village, Illinois for $9.2 million, net of selling and other costs. The Company recorded a gain of approximately $3.2 million on the sale, but will report a tax loss on the sale of approximately $5.4 million, generating cash tax savings of approximately $1.8 million. See Note 18 of the Notes to the Consolidated Financial Statements entitled “Sale of Elk Grove Village Building” for further details.

The Company has a credit line (“Line”) with JPMorgan Chase Bank, N.A. Interest on the Line is at the bank’s prime rate (3.25% as of February 28, 2013) or Libor plus 1.50%, at our discretion. There are annual letter of credit fees of 1.50% on outstanding letters of credit and a 0.25% fee on the annual unused credit line. The Line is secured by a borrowing base equal to a specified percentage of accounts receivable and liens on other assets of the Company (including inventory, equipment, real property and intellectual property), reduced by outstanding letters of credit, and may require consent from the lender before any significant sales of the equipment or real property securing the Line. In April 2010, the Line was amended to reduce the credit line to $7.5 million and increase the minimum availability covenant to $2.5 million. In May 2011, the Line was amended to extend the expiration date from May 12, 2011, to May 13, 2013. The Line does not contain any material financial covenants. The Company does not intend to renew the Line when it expires on May 13, 2013, because it has adequate cash flows and on-hand cash levels to meet current and foreseeable financing needs. In order to continue the availability of letters of credit, as needed, MSC will restrict an appropriate amount of its cash to secure the letters of credit.

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Due to the borrowing base limitations and outstanding letters of credit of $1.1 million, the net amount available for borrowing at February 28, 2013, was $3.9 million. The lender may, at its discretion subject to the terms of the Line, modify the advance rates used in computing the borrowing base, which may limit the amounts available for future borrowings. There were no borrowings outstanding under the Line as of February 28, 2013, nor were any amounts borrowed during the 12 months ended February 28, 2013, or February 29, 2012.

Our Board of Directors authorized the repurchase of 1,000,000 shares of the Company’s common stock on September 14, 2011, and again on September 27, 2012. The shares may be repurchased from time-to-time on the open market, subject to market conditions and other factors, and generally will be funded with internally generated cash. The Company repurchased 283,388 shares under the September 2011 authorization during the twelve months ended February 28, 2013. At February 28, 2013, there were 364,476 shares available for purchase under the September 2011 authorization and 1,000,000 shares available for purchase under the September 2012 authorization.

The following table provides information about Company purchases of common stock (in thousands).

Period	Total Number of Shares Purchased		Total Cost		Total Number of Shares Purchased as Part of a Written Trading Plan(1)		Maximum Number of Shares that May Yet Be Purchased Pursuant to the Board Authorization
March 1, 2010 – February 28, 2011		16		111		16		1,098
March 1, 2011 – February 29, 2012		2,450		17,538		2,450		648
March 1, 2012 – February 28, 2013		283		2,333		283		364
Total		2,749	$	19,982		2,749

(1) On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

We continually review the potential for investments in our growth markets. In addition, we also evaluate the potential value to shareowners of divesting facilities or other assets that are not performing to our expectations. The Company does not have an active strategy of selling assets, but will consider appropriate opportunities if they will improve shareowner value. During fiscal 2013, at the direction of the Board of Directors, MSC sold the building at 2200 East Pratt Boulevard in Elk Grove Village, Illinois, because it was no longer an operating asset. See Note 18 of the Notes to the Consolidated Financial Statements entitled “Sale of Elk Grove Village Building” for further information.

Contractual Obligations. The following table summarizes the contractual obligations we have outstanding as of February 28, 2013 (in thousands).

Contractual Obligations	Obligations Due In
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Operating Leases	$	5,532	$	1,660	$	2,412	$	1,229	$	231
Purchase Obligations		3,258		3,257		1		—		—
Other Long-term Liabilities(1)		10,178		3,331		2,294		1,308		3,245
Unrecognized Tax Benefits(2)		526		—		—		—		526
Total	$	19,494	$	8,248	$	4,707	$	2,537		$4,002

1) Other Long-term Liabilities represent the expected payments for the Company’s funding requirements for pension and other postretirement benefits. See Note 6 of the Notes to the Consolidated Financial Statements for further information.

2) Unrecognized tax benefits consist of uncertain tax positions for which we are not able to reasonably estimate the timing of the potential future payments. See Note 8 of the Notes to the Consolidated Financial Statements for further information.

Off-Balance Sheet Arrangements. We had no off-balance sheet arrangements as of February 28, 2013, other than the operating leases presented in the table of contractual obligations.

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Contingencies

MSC’s environmental reserves were approximately $1.2 million as of both February 28, 2013 and February 29, 2012. The Company does not believe that the outcome of its environmental legal proceedings will have a material adverse effect on its results of operations, financial position or cash flows, given the reserves recorded as of February 28, 2013, and, where applicable, taking into account contributions from other PRPs. There are, however, a number of uncertainties including, without limitation, the cost of site cleanup, the discretionary authority of federal and state regulatory authorities in bringing enforcement actions and other factors that affect the Company’s range of exposures.

Inflation

We believe that general inflation has not had a significant impact on fiscal 2013, 2012 or 2011 results of operations. However, as explained below in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” we have experienced fluctuating costs for both raw materials and energy that have had an effect on our gross profit in fiscal 2013, 2012 and 2011.

Critical Accounting Policies

Our significant accounting policies are presented within the Notes to the Consolidated Financial Statements (see Note 1 of the Notes to the Consolidated Financial Statements entitled “Summary of Significant Accounting Policies”) included elsewhere in this Form 10-K. While all of the significant accounting policies affect our Consolidated Financial Statements, some of the policies may be viewed to be critical. These policies are those that are both most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective or complex judgments and estimates. We base these judgments and estimates on historical experience and various other factors that we believe are reasonable under the circumstances. The results of judgments and estimates form the basis for making judgments about our value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in preparing our Consolidated Financial Statements.

Revenue Recognition. We recognize revenue when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. We record shipping and handling billed to a customer in a sales transaction as revenue. Costs incurred for shipping and handling are recorded in cost of sales. Volume discounts due customers are recognized as earned and reported as reductions of revenue in the Consolidated Statements of Operations. We also record reductions to revenue for credits issued to customers resulting from scrap credits and manufacturing claims for product defects, based upon historical experience and upon specific claims issues as they arise. We also record as revenue all sales of scrapped and distressed inventory.

Allowance for Doubtful Accounts. We provide for an allowance for uncollectible accounts using both specific and general estimates. We calculate a specific reserve for disputed accounts receivable items by assessing specific receivables that are aged and evaluating the aging of the total receivable pool using both historical data and current knowledge of particular items. We calculate a general reserve for bankruptcy and insolvency by applying a fixed allowance percentage to the total receivable pool.

Inventory. We carry inventory at the lower of cost or market, using either the specific identification or average cost method of cost valuation. Obsolete, damaged and excessive inventories are carried at net realizable value. Historical recovery rates, current market conditions, inventory receipt date and sales plans are key factors used in assessing the net realizable value of obsolete, damaged and excess inventory. We evaluate the overheads allocated to inventory based upon factory run hours and charge costs related to abnormal under-utilization directly against income. We evaluate our ability to sell inventory and recover costs of inventory through the normal sales process and record “lower of cost or market” reserves in cases where we cannot. We evaluate these factors on an interim basis as well as at year end and record adjustments as appropriate to reflect necessary write-downs. There are inherent uncertainties related to determining the recoverability of inventory that may affect our future financial statements as we reevaluate the recoverable amounts during each interim period and year end.

Long-Lived Assets. Long-lived assets consist of property, plant and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on projections of cash flows on a non-discounted basis. If the carrying value of the long-lived assets is higher than the undiscounted cash flows related to the asset group, an impairment loss

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may be necessary. This loss is measured by the difference between the fair value of the assets and their carrying value. Fair value is determined based on market quotes, if available, or on valuation techniques such as discounted cash flows. The valuation techniques use certain assumptions we make including, but not limited to, the estimated fair market value of assets, which are based on additional assumptions such as public market data; depreciation factors for orderly liquidation, including allowances such as dismantlement and removal; and the relationship between replacement cost (new) and market value based on the age of the assets.

We did not perform an analysis of the carrying amount of our long-lived assets during fiscal 2013 or 2012, because we did not experience an event or conditions which indicated the carrying amount might be impaired. However, we did analyze the carrying amount of certain assets affected by the sale in fiscal 2011 of coil coating assets located in Elk Grove Village. See Note 15 of the Notes to the Consolidated Financial Statements entitled “Asset Impairment” for further discussion of the analysis and results.

Income Taxes.

We account for income taxes in accordance with the liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences. These are attributed to the differences between the financial statement and income tax bases of assets and liabilities and tax credit and operating loss carryforwards using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled. The recoverability of deferred tax assets depends on our assessment of whether it is more likely than not that sufficient future taxable income will be generated in the relevant tax jurisdiction to utilize the deferred tax asset.

In evaluating our ability to recover our deferred tax assets, in full or in part, we consider a number of factors. These involve all available positive and negative evidence including our past operating results, the existence of cumulative income or losses in the most recent fiscal years and our forecast of future taxable income on a jurisdiction-by-jurisdiction basis. In determining future taxable income, we review the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. In the event we determine that our future taxable income will not be sufficient to utilize our deferred tax assets, a valuation allowance is recorded. If that assessment changes, a charge or a benefit would be recorded in our statement of operations. We currently believe that we will realize the benefit of our deferred tax assets in the United States and Germany, except for net operating losses in certain state jurisdictions, and therefore we have and will maintain our valuation allowance on certain state net operating losses.

We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. There are inherent uncertainties related to interpreting tax regulations in the jurisdictions in which we transact business. If judgments and estimates change, there is a risk that the tax rate may increase or decrease in any period.

Retirement Plans. The plan obligations and related assets of defined benefit retirement plans (including the non-contributory supplemental pension plans for some of our prior officers) and other postretirement health care plans are presented in Note 6 of the Notes to Consolidated Financial Statements entitled “Retirement and Savings Plans.” Plan assets, which consist primarily of marketable equity and debt instruments, are valued using market quotations. Plan obligations and the annual pension expense are determined by using a number of assumptions including the discount rate and the estimated future return on plan assets.

Environmental Reserves. We are a party to various legal proceedings in connection with the remediation of certain environmental matters. We record these environmental reserves based on historical experience and the extent of relevant information available from various third parties. A number of assumptions are made including, without limitation, the estimated extent of the environmental damage to any particular site, the available methods of remedy, the contribution expected from various other potentially responsible parties and the discretionary authority of federal and state regulatory authorities in bringing enforcement actions.

Accounting Pronouncements

On June 16, 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of

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comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include components of net income, which is consistent with the income statement format used today, and the second statement would include components of other comprehensive income (“OCI”). The ASU does not change the items that must be reported in OCI. For public entities, the ASU’s amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted the guidance in the ASU effective with its first quarter fiscal 2013 Form 10-Q. No material changes resulted from the adoption except for the addition of a statement of comprehensive income to the primary financial statements presented in Forms 10-Q and 10-K subsequent to the adoption date.

On February 5, 2013, the FASB issued ASU 2013-02, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the ASU is effective for reporting periods beginning after December 15, 2012. The Company is currently evaluating the impact of adopting this guidance, which may result in changes in the presentation of its financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally in Europe, China, Japan and Malaysia, have a joint venture in Brazil, and have a production agreement with a company in Korea. This means we are subject to potentially adverse movements in foreign currency rates. For the years ended February 28, 2013, and February 29, 2012, foreign sales were approximately 13.0% and 11.0% of consolidated net sales, respectively. Historically, the effect of movements in the exchange rates has not been material to our financial position or our results of operations. We believe the movement in foreign currency exchange rates will not have a material adverse effect on our financial statements.

We had a $7.5 million line of credit at the lender’s prime rate of interest (3.25% on February 28, 2013) or at LIBOR plus 1.50%. There was no debt outstanding as of February 28, 2013, although we did have $1.1 million in outstanding letters of credit at that date. See Note 4 of the Notes to the Consolidated Financial Statements entitled “Indebtedness.”

In the ordinary course of business, the Company enters into purchase contracts for procuring nickel carbonate, zinc shot and natural gas which are commodities used in its manufacturing processes. The intent of entering into these agreements is to mitigate the market risk and volatility associated with the pricing of these commodities. MSC maintains a commodity forward purchase policy which seeks to ensure that at any point in time the majority of the expected consumption over the next 12 months will be secured under a purchase contract at a pre-determined price. The following table lists contracts in place at February 28, 2013. We have applied the Normal Purchase/Normal Sale election to all these contracts.

Commodity	Contract Period		Remaining Contract Obligation (000s)
Natural Gas		11/1/2012 - 3/31/2013	$	59
Natural Gas		4/1/2013 - 10/31/2013		433
Natural Gas		11/1/2013 - 3/31/2014		304
Total Natural Gas				796
Zinc shot		3/1/2013 - 2/28/2014		1,605
Nickel Carbonate		3/1/2013 - 2/28/2014		711
Total Commodities			$	3,112

The table below presents the carrying amount of the Company’s nickel carbonate, zinc shot and natural gas inventory as of February 28, 2013.

	Carrying Amount (000s)
Inventory
Nickel Carbonate	$	1,352
Zinc Shot		821
Natural Gas		82
Total	$	2,255

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following pages contain the Financial Statements and Supplementary Data as required by Item 8 of Part II of Form 10-K.

	Page No.
Reports of Independent Registered Public Accounting Firms		25
Consolidated Statements of Operations for the years ended February 28, 2013, and February  29, 2012, and February 28, 2011		28
Consolidated Statements of Comprehensive Income (Loss) for the years ended February 28, 2013, February  29, 2012, and February 28, 2011		29
Consolidated Balance Sheets as of February 28, 2013, and February 29, 2012		30
Consolidated Statements of Cash Flows for the years Ended February 28, 2013, and February  29, 2012, and February 28, 2011		31
Consolidated Statements of Changes in Shareowners’ Equity for the years ended February  28, 2013, and February 29, 2012, and February 28, 2011		32
Notes to Consolidated Financial Statements		33
Schedule II. Reserve for Receivable Allowances and Inventory Reserves		55

Note: All other financial statement schedules are omitted because they are not applicable or the required information is included in the Consolidated Financial Statements or related notes.

24

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Material Sciences Corporation

We have audited the accompanying consolidated balance sheet of Material Sciences Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of February 28, 2013 and the related consolidated statements of operations, cash flows, shareowners’ equity, and comprehensive income for the period ended February 28, 2013. Our audit of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 15(1)(b). These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Material Sciences Corporation and subsidiaries as of February 28, 2013, and the results of their operations and their cash flows for the period ended February 28, 2013 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of February 28, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May 6, 2013 expressed an unqualified opinion.

/s/ GRANT THORNTON LLP

Chicago, IL

May 6, 2013

25

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareowners of

Material Sciences Corporation

Elk Grove Village, IL

We have audited the internal control over financial reporting of Material Sciences Corporation (a Delaware corporation) and Subsidiaries (the “Company”) as of February 28, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 28, 2013, based on criteria established in Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and for the year ended February 28, 2013, and our report dated May 6, 2013 expressed an unqualified opinion on those financial statements.

/s/ GRANT THORNTON LLP

Chicago, IL

May 6, 2013

26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Material Sciences Corporation

Elk Grove Village, IL

We have audited the accompanying consolidated balance sheet of Material Sciences Corporation and subsidiaries (the “Company”) as of February 29, 2012, and the related consolidated statements of operations, changes in shareowners’ equity, cash flows and comprehensive income for the years ended February 29, 2012 and February 28, 2011. Our audits also included the financial statement schedule for fiscal years 2012 and 2011 listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Material Sciences Corporation and subsidiaries as of February 29, 2012, and the results of their operations and their cash flows for the years ended February 29, 2012 and February 28, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule for fiscal years 2012 and 2011, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Chicago, IL

May 4, 2012

27

Consolidated Statements of Operations

Material Sciences Corporation and Subsidiaries

	For the years ended February 28 or 29
(In thousands, except per share data)	2013			2012			2011
Net Sales	$	121,007		$	136,734		$	137,624
Cost of Sales		92,493			103,066			105,942
Gross Profit		28,514			33,668			31,682
Selling, General and Administrative Expenses		20,024			21,117			22,621
Gain on Sale of Assets		(3,216	)		—			(6,643	)
Asset Impairment Charges		—			—			3,720
Restructuring		—			583			1,324
Income from Operations		11,706			11,968			10,660
Other Income, Net:
Interest and Dividend Income (Expense), Net		14			(48	)		79
Equity in Results of Joint Venture		270			503			491
Rental Income		648			1,107			912
Other, Net		(29	)		21			226
Total Other Income, Net		903			1,583			1,708
Income Before Provision (Benefit) for Income Taxes		12,609			13,551			12,368
Provision (Benefit) for Income Taxes		3,615			(14,916	)		324
Net Income	$	8,994		$	28,467		$	12,044
Basic Net Income Per Share	$	0.87		$	2.51		$	0.93
Diluted Net Income Per Share	$	0.86		$	2.49		$	0.93
Weighted Average Number of Common Shares Outstanding Used for Basic Net Income Per Share		10,298			11,350			12,906
Dilutive Shares		127			91			51
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares		10,425			11,441			12,957
Outstanding Common Stock Options Having No Dilutive Effect		400			318			261

The accompanying notes are an integral part of these statements.

28

Consolidated Statements of Comprehensive Income

Material Sciences Corporation and Subsidiaries

	For the years ended February 28 or February 29
(In thousands)	2013			2012			2011
Net Income	$	8,994		$	28,467		$	12,044
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments		(582	)		(294	)		359
Retirement Liability, Net of Benefit for Income Taxes of $141, $795, and $0, Respectively		228			(1,290	)		3,006
Total Other Comprehensive Income (Loss)		(354	)		(1,584	)		3,365
Comprehensive Income	$	8,640		$	26,883		$	15,409

The accompanying notes are an integral part of these statements.

29

Consolidated Balance Sheets

Material Sciences Corporation and Subsidiaries

(In thousands, except share data)	February 28, 2013			February 29, 2012
Assets
Current Assets:
Cash and Cash Equivalents	$	37,508		$	28,201
Receivables, Less Reserves of $489 and $696, Respectively		17,675			20,136
Income Taxes Receivable		1,392			141
Prepaid Expenses		554			674
Inventories:
Raw Materials		8,802			9,019
Finished Goods		16,142			11,739
Short Term Deferred Tax Assets		4,191			4,313
Total Current Assets		86,264			74,223
Property, Plant and Equipment:
Land and Building		15,271			26,149
Machinery and Equipment		103,327			100,563
Construction in Progress		1,988			1,240
Gross Property, Plant and Equipment		120,586			127,952
Accumulated Depreciation		(91,426	)		(93,217	)
Net Property, Plant and Equipment		29,160			34,735
Other Assets:
Investment in Joint Venture		2,394			2,955
Long Term Deferred Tax Assets		9,147			13,024
Other		141			159
Total Other Assets		11,682			16,138
Total Assets	$	127,106		$	125,096
Liabilities
Current Liabilities:
Accounts Payable	$	11,061		$	13,364
Accrued Payroll Related Expenses		2,594			3,113
Accrued Expenses		5,799			5,289
Total Current Liabilities		19,454			21,766
Long-Term Liabilities:
Pension and Postretirement Liabilities		7,344			8,500
Long-Term Incentives		2,652			3,420
Other		2,720			3,430
Total Long-Term Liabilities		12,716			15,350
Commitments and Contingencies		—			—
Shareowners’ Equity
Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 1,000,000 Designated Series B Junior Participating Preferred; None Issued		—			—
Common Stock, $.02 Par Value; 40,000,000 Shares Authorized; 19,058,923 Shares Issued and 10,198,121 Shares Outstanding as of February 28, 2013, and 19,030,983 Shares Issued and 10,470,199 Shares Outstanding as of February 29, 2012		381			381
Additional Paid-In Capital		81,089			80,440
Treasury Stock at Cost, 8,824,172 Shares as of February 28, 2013, and 8,540,784 Shares as of February 29, 2012		(76,756	)		(74,423	)
Retained Earnings		93,046			84,052
Accumulated Other Comprehensive Loss		(2,824	)		(2,470	)
Total Shareowners’ Equity		94,936			87,980
Total Liabilities and Equity	$	127,106		$	125,096

The accompanying notes are an integral part of these statements.

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Consolidated Statements of Cash Flows

Material Sciences Corporation and Subsidiaries

	For the years ended February 28 or 29
(In thousands)	2013			2012			2011
Cash Flows From:
Operating Activities:
Net Income	$	8,994		$	28,467		$	12,044
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation, Amortization and Accretion		4,670			4,906			5,572
Gain on Sale of Assets		(3,216	)		—			(6,643	)
Non-Cash Loss on Impairment of Fixed Assets		—			—			3,720
Equity in Results of Joint Venture		(270	)		(503	)		(491	)
Cash Distribution Received from Joint Venture		501			586			763
Deferred Income Taxes		3,762			(14,824	)		—
Compensatory Effect of Stock Plans		642			299			204
Changes in Assets and Liabilities:
Receivables		2,280			2,390			(1,881	)
Income Taxes		(1,241	)		121			(12	)
Prepaid Expenses		125			(248	)		56
Inventories		(4,248	)		98			(1,008	)
Accounts Payable		(2,542	)		(1,725	)		(2,172	)
Accrued Expenses		174			(280	)		(1,879	)
Other, Net		(2,272	)		42			1,029
Net Cash Provided by Continuing Operations		7,359			19,329			9,302
Investing Activities:
Capital Expenditures		(4,897	)		(9,194	)		(2,359	)
Proceeds from Sale of Assets		9,180			—			14,089
Proceeds from Note Receivable		—			—			1,732
Net Cash Provided by (Used in) Investing Activities		4,283			(9,194	)		13,462
Financing Activities:
Purchase of Treasury Stock		(2,333	)		(17,649	)		—
Issuance of Common Stock		7			138			16
Net Cash Provided by (Used in) Financing Activities		(2,326	)		(17,511	)		16
Effect of Exchange Rate Changes on Cash		(9	)		(52	)		(17	)
Net Increase (Decrease) in Cash		9,307			(7,428	)		22,763
Cash and Cash Equivalents at Beginning of Year		28,201			35,629			12,866
Cash and Cash Equivalents at End of Year	$	37,508		$	28,201		$	35,629
Non-Cash Transactions:
Capital Expenditures in Accounts Payable at Year End	$	1,112		$	854		$	873
Treasury Stock Purchases in Accrued Liabilities at Year-End	$	—		$	—		$	111
Supplemental Cash Flow Disclosures:
Interest Paid	$	33		$	35		$	37
Net Income Taxes Paid, Net	$	1,746		$	356		$	463

The accompanying notes are an integral part of these statements.

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Consolidated Statements of Changes in Shareowners’ Equity

Material Sciences Corporation and Subsidiaries

	Common Stock				Additional Paid-In Capital		Retained Earnings		Treasury Stock
(In thousands, except share data)	Shares		Amount						Shares			Amount
Balance as of February 28, 2010		18,979,796	$	380	$	79,784	$	43,541		(6,074,567	)	$	(56,774	)
Net Income		—		—		—		12,044		—			—
Issuance of Common Stock, Net of Cancellations		14,096		—		16		—		—			—
Compensatory Effect of Stock Plans		—		—		204		—		—			—
Purchase of Treasury Stock		—		—		—		—		(15,765	)		(111	)
Balance as of February 28, 2011		18,993,892	$	380	$	80,004	$	55,585		(6,090,332	)	$	(56,885	)
Net Income		—		—		—		28,467		—			—
Issuance of Common Stock, Net of Cancellations		37,091		1		137		—		—			—
Compensatory Effect of Stock Plans		—		—		299		—		—			—
Purchase of Treasury Stock		—		—		—		—		(2,450,452	)		(17,538	)
Balance as of February 29, 2012		19,030,983	$	381	$	80,440	$	84,052		(8,540,784	)	$	(74,423	)
Net Income		—		—		—		8,994		—			—
Issuance of Common Stock, Net of Cancellations		27,940		—		7		—		—			—
Compensatory Effect of Stock Plans		—		—		642		—		—			—
Purchase of Treasury Stock		—		—		—		—		(283,388	)		(2,333	)
Balance as of February 28, 2013		19,058,923	$	381	$	81,089	$	93,046		(8,824,172	)	$	(76,756	)

The accompanying notes are an integral part of these statements.

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Material Sciences Corporation and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Nature of Operations

The operations of Material Sciences Corporation and its wholly owned subsidiaries (“MSC,” “Company,” “we,” “our” or “us”) consist of providing material-based solutions for acoustical and coated applications. Principal markets include automotive, appliance, building products, lighting and electronics.

Summary of Significant Accounting Policies

The significant accounting policies of MSC, as summarized below, conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and the disclosures in the financial statements. Actual results could differ from those estimates. Significant estimates include deferred tax asset valuation allowances, reserves for inventory and receivable exposures, product claims, income taxes, health and workers compensation benefits, pension and postretirement benefits and contingencies.

Reclassifications

Reclassifications were made to prior-year financial statements to conform to the current-year presentations—amounts previously reported as “Other, Net” in the Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities were reclassified to “Equity in Results of Joint Venture” and “Other, Net” in the Changes in Assets and Liabilities and “Long-Term Incentives” was reclassified from “Other” within the Long-Term Liabilities section of the Condensed Consolidated Balance Sheets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts for MSC after all intercompany transactions have been eliminated. In South America, the Company owns 51% of the equity and holds 50% of the voting rights in a joint venture partnership with Tekno S.A. (“Tekno”), which manufactures and sells acoustical products. Under the terms of the Tekno agreement, significant actions require unanimous consent of all parties and, as a result, MSC does not have a controlling interest in Tekno. Accordingly, the Company accounts for Tekno under the equity method.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts of these financial assets and liabilities approximate fair value due to the short maturities of these instruments.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments, principally U.S. Treasury bills, with original maturities of three or fewer months. At February 28, 2013, we held approximately $30.0 million of U.S. Treasury bills with maturities from March 14 to May 30, 2013. The Company has not experienced any losses as a result of its cash concentration. Consequently, no significant concentration of credit risk is considered to exist.

Accounts Receivable

Accounts receivable are recorded at their estimated fair value, net of allowances for doubtful accounts, claims, discounts and other credits expected to be granted to customers. The Company provides reserves for uncollectible receivables due to customer bankruptcy, insolvency or disputes over terms and conditions. The methodology for calculating the allowance for doubtful accounts includes an assessment of specific receivables that are aged and an assessment of the aging of the total receivable pool. MSC also records reductions of revenue for credits issued to customers resulting from manufacturing claims for product defects based upon historical experience and upon specific claims issues as they arise. Any differences between these estimates and actual costs are recorded on a monthly basis and are reflected in the historical experience prospectively. Total accounts receivable reserves were $0.5 million and $0.7 million at February 28, 2013, and February 29, 2012, respectively.

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Inventories

Inventories are stated at the lower of cost or market, using either the specific identification or average cost method of cost valuation. Due to the continuous nature of the Company’s operations, work-in-process inventories are not material. MSC holds some of its inventory at outside processors and locations. The Company had approximately $5.3 million and $2.7 million of inventory at outside processors at February 28, 2013, and February 29, 2012, respectively. We had inventory reserves and other valuation adjustments of $1.2 million as of February 28, 2013, and February 29, 2012, net of scrap inventory that can be sold on the secondary market.

Commodity Contracts

We are exposed to certain risks related to ongoing business operations. We enter into derivative instruments with the objective of managing our financial and operational exposure arising from these risks. The primary risk managed by using derivative instruments is commodity price risk. From time-to-time in the ordinary course of business, the Company enters into purchase contracts for procuring nickel carbonate, zinc shot and natural gas, which are commodities used in its manufacturing processes. These agreements are intended to mitigate the market risk and volatility associated with the pricing of these commodities. MSC maintains a commodity forward purchase policy, which seeks to ensure that at any time the majority of the expected consumption over the next 12 months is secured under a purchase contract at a predetermined price. When we enter into these contracts, we apply the Normal Purchase/Normal Sale election for each of them, which excludes them from being accounted for as derivative instruments at fair value as long as they qualify for the election.

Long-Lived Assets

Property, plant and equipment are recorded at cost. Improvements and replacements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows: buildings and building improvements, 5 to 20 years; operating equipment, 5 to 20 years; furniture and fixtures, 5 to 10 years; software, 5 years. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining life of the lease.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, based on projections of non-discounted cash flows. If the carrying value of the depreciable long-lived assets is higher than the undiscounted cash flows related to the asset group, an impairment loss may be necessary. The impairment would be measured by the difference between the fair value of the assets and their carrying value. Fair value is determined based on market quotes, if available, or based on valuation techniques such as discounted cash flows. The valuation techniques require us to make assumptions, including, but not limited to, estimated fair value of assets, which are based on additional assumptions, such as public market data; depreciation factors for orderly liquidation, including allowances such as dismantlement and removal; and the relationship between replacement cost and market value based on the age of the assets.

There were no events during fiscal 2013 or fiscal 2012 that would trigger a review for impairment. There was an event in fiscal 2011 that triggered an impairment review of the assets at our Plant #7 in Elk Grove Village, IL. For further information, see Note 15, “Asset Impairment.”

Revenue Recognition

The Company recognizes revenue when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue. Costs incurred for shipping and handling are recorded in cost of sales. Volume discounts due customers are recognized as earned and reported as reductions of revenue in the Consolidated Statements of Operations.

Research and Development

The Company expenses all research and product development costs in the period incurred. Research and product development expenses of $4.1 million, $3.9 million and $2.3 million in fiscal 2013, 2012 and 2011, respectively, are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

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Foreign Currency

The Company’s international operations are translated into U.S. dollars using current exchange rates at the balance sheet date for assets and liabilities. A weighted average exchange rate is used to translate sales, expenses, gains and losses. The currency translation adjustments are reflected in accumulated other comprehensive loss in Shareowners’ Equity. Transactions denominated in currencies other than U.S. dollars are translated at the spot rate when the transaction is settled. Any gains or losses from the settlement are reflected in other income in the Consolidated Statement of Operations.

Income Taxes

Deferred income taxes have been provided to show the effect of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefit, or that future deductibility is uncertain. The Company regularly reviews and adjusts the valuation allowance to reflect changes in the realizability of the deferred tax assets. MSC maintains a liability for the potential tax adjustment related to our uncertain tax positions.

Equity Plans

Stock-based compensation is accounted for based on the grant date fair value of the awards, or, for phantom stock, based on the market value of the underlying stock. The fair value of equity grants is amortized over the vesting period for each grant. The fair value of stock options is computed using the Black-Scholes model. The Company has one active equity award plan: the Material Sciences Corporation 2012 incentive Compensation Plan (“2012 Plan”). See Note 10 entitled “Equity and Compensation Plans” for additional discussion.

The Company recorded $0.6 million, $0.3 million, and $0.2 million of compensation expense related to stock options and restricted stock grants in fiscal 2013, 2012, and 2011, respectively. See Note 10 entitled “Equity and Compensation Plans” for a complete discussion of these items.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at February 28, 2013, and February 29, 2012, are as follows:

(in thousands)	February 28, 2013			February 29, 2012
Foreign Currency Translation	$	1,182		$	1,764
Pension Liability, Net of Tax of $1,974 and $2,208		(4,532	)		(4,911	)
Other Post Retirement Liabilities, Net of Tax of $1,027 and $935		526			677
Total	$	(2,824	)	$	(2,470	)

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include components of net income, which is consistent with the income statement format used today, and the second statement would include components of other comprehensive income (“OCI”). The ASU does not change the items that must be reported in OCI. For public entities, the ASU’s amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted the guidance in the ASU effective with its first quarter fiscal 2013 Form 10-Q. No material changes resulted from the adoption except for the addition of a statement of comprehensive income to the primary financial statements presented in Forms 10-Q subsequent to the adoption date.

On February 5, 2013, the FASB issued ASU 2013-02, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail

35

about those amounts. For public entities, the ASU is effective for reporting periods beginning after December 15, 2012. The Company is currently evaluating the impact of adopting this guidance, which may result in changes in the presentation of its financial statements.

Consideration of Events Subsequent to the Date of the Consolidated Balance Sheet

The Company recognizes in the consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Consolidated Balance Sheet, including the estimates inherent in the process of preparing the consolidated financial statements. MSC does not recognize subsequent events that provide evidence about conditions that did not exist at the date of the Consolidated Balance Sheet but arose after that date and before the consolidated financial statements are issued. For these purposes, and relating to the February 28, 2013, Consolidated Balance Sheet, the Company has evaluated events occurring after that date through the date of this report. Any significant events that occurred after February 28, 2013, and which had an effect on the February 28, 2013, consolidated financial statements are reflected in these statements or the related notes, and are identified as subsequent events.

Note 2: Joint Venture

In November 2000, a subsidiary of MSC formed a joint venture partnership with Tekno to manufacture and sell Quiet Steel^® and disc brake noise damper material for the South American market. The joint venture’s sales were $3.1 million, $4.6 million and $4.5 million in fiscal 2013, 2012 and 2011, respectively. The joint venture’s income was $0.5 million, $1.0 million and $1.0 million in fiscal 2013, 2012 and 2011, respectively. MSC owns 51% of the equity interest and holds 50% of the voting interest in the joint venture.

Under the equity method, MSC includes its portion of the joint venture’s results of operations in the Consolidated Statements of Operations under equity in results of joint venture. The equity in results of joint venture was net income of $0.3 million, $0.5 million and $0.5 million in fiscal 2013, 2012 and 2011, respectively. The Company received cash dividends of $0.5 million, $0.6 million and $0.8 million in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

Note 3: Commitments and Contingencies

MSC is a party to various legal proceedings in connection with the remediation of certain environmental matters as detailed below. We record these environmental reserves based upon historical experience and the extent of relevant information available from various third parties. A number of assumptions are made including, without limitation, the estimated extent of the environmental damage to any particular site, the available methods of remedy, the contribution expected from various other potentially responsible parties (“PRP”) and the discretionary authority of federal and state regulatory authorities in bringing enforcement actions.

In 1984, MSC was named as a PRP under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) for the surface, soil and ground water contamination at a Superfund site in Gary, Indiana. The U.S. District Court for the Northern District of Indiana entered a Consent Decree between the government and certain PRPs (including MSC) on the scope of the remediation work at the site. We receive periodic updates on the projected costs of the remediation work from the environmental consultant employed by certain PRPs (including MSC) to manage the remediation project. Remediation work is ongoing and we maintain a letter of credit for approximately $1.0 million to secure our estimated share of these expenses. The estimate of our liability for this site was $0.8 million at February 28, 2013.

In 2003, MSC, along with many other companies, was named as a PRP by the United States Environmental Protection Agency (“USEPA”) under CERCLA at the Lake Calumet Cluster Site in Chicago, Illinois, for allegedly sending certain waste from its Elk Grove Village facility to the site. No lawsuits have been filed against any of the PRPs, but it is likely that the USEPA and the Illinois Environmental Protection Agency will seek reimbursement of their costs. In March 2010, the USEPA proposed the site for listing as a federal Superfund site, which has the potential to provide additional federal funds for the remediation. To date, we have not received any notice that this designation has

36

occurred. The Company cannot determine what effect, if any, this change in designation will have on its liability. As of February 28, 2013, the USEPA was in final discussions with the principal PRPs to design and fund an investigation of the appropriate methods of remediation for the groundwater at the site. Once approved, the investigation is expected to take approximately two years. The estimate of the Company’s liability for this site was $0.3 million, including the pending groundwater investigation, at February 28, 2013.

In 1998, the California Environmental Protection Agency (“CEPA”) named MSC and many other entities as PRPs under CERCLA at the Chatham Brothers Barrelyard Site in Escondido, California (“Chatham Site”) for surface, soil and ground water contamination associated with former waste handling activities at the site. CEPA alleged that a predecessor to MSC arranged for the transportation and treatment of waste handled at the site. MSC and the other PRPs are obligated to perform and complete the environmental investigation and cleanup activities at the Chatham Site in accordance with a Remedial Action Plan approved in 1999. Two CEPA agencies (Department of Toxic Substances Control and San Diego Regional Water Quality Control Board are overseeing the long-term remediation required at the Chatham Site. The activities necessary to complete the groundwater remediation are expected to last well into the future. The estimate of the Company’s liability for this site was $0.1 million at February 28, 2013.

MSC’s environmental reserves were approximately $1.2 million as of both February 28, 2013 and February 29, 2012. The Company does not believe that the outcome of its environmental legal proceedings will have a material adverse effect on its results of operations, financial position or cash flows, given the reserves recorded as of February 28, 2013, and, where applicable, taking into account contributions from other PRPs. There are, however, a number of uncertainties including, without limitation, the cost of site cleanup, the discretionary authority of federal and state regulatory authorities in bringing enforcement actions and other factors that affect the Company’s range of exposures.

Other Matters

MSC is also a party to various legal actions and customer disputes arising in the ordinary course of its business. These legal actions and customer disputes cover a broad variety of claims spanning MSC’s entire business. The Company believes that the resolution of these legal actions and customer disputes will not, individually or in the aggregate, have a material adverse effect on its results of operations, financial position or cash flows.

Note 4: Indebtedness

The Company has a credit line (“Line”) with JPMorgan Chase Bank, N.A. Interest on the Line is at the bank’s prime rate (3.25% as of February 28, 2013) or Libor plus 1.50%, at our discretion. There are annual letter of credit fees of 1.50% on outstanding letters of credit and a 0.25% fee on the annual unused credit line. The Line is secured by a borrowing base equal to a specified percentage of accounts receivable and liens on other assets of the Company (including inventory, equipment, real property and intellectual property), reduced by outstanding letters of credit, and may require consent from the lender before any significant sales of the equipment or real property securing the Line. In April 2010, the Line was amended to reduce the credit line to $7.5 million and increase the minimum availability covenant to $2.5 million. In May 2011, the Line was amended to extend the expiration date from May 12, 2011, to May 13, 2013. The Line does not contain any material financial covenants. The Company does not intend to renew the Line when it expires on May 13, 2013, because it has adequate cash flows and on-hand cash levels to meet current and foreseeable financing needs. In order to continue the availability of letters of credit, as needed, MSC will restrict an appropriate amount of its cash to secure the letters of credit.

Due to the borrowing base limitations and outstanding letters of credit of $1.1 million, the net amount available for borrowing at February 28, 2013, was $3.9 million. The lender may, at its discretion subject to the terms of the Line, modify the advance rates used in computing the borrowing base, which may limit the amounts available for future borrowings. There were no borrowings outstanding under the Line as of February 28, 2013, nor were any amounts borrowed during the 12 months ended February 28, 2013, or February 29, 2012.

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Note 5: Leases

MSC leases one manufacturing facility (Walbridge, Ohio) under a lease that ends on April 30, 2015, and which automatically extends in three-year increments through April 30, 2027, unless either party explicitly cancels the lease prior to each extension date. The Company leases its Application Research Center in Michigan under a lease ending in September 2018, with the option to extend in five-year increments through September 2043. MSC also leases space for its corporate and general offices in a building the Company sold in August 2012 located in Elk Grove Village, Illinois. The Company is in compliance with all the terms of these leases. Other equipment is leased under non-cancelable operating leases. The table below presents future minimum lease payments.

(in thousands)
2014	$	1,660
2015		1,508
2016		904
2017		674
2018		555
2019 and Thereafter		231
Total Minimum Lease Payments	$	5,532

Total rental expense under operating leases was $1.7 million in fiscal 2013, $1.5 million in fiscal 2012 and $1.5 million in fiscal 2011. Rental income was $1.0 million, $1.1 million and $0.9 million in fiscal 2013, 2012 and 2011, respectively.

Note 6: Retirement and Savings Plans

As of February 28, 2013, the Company had one defined contribution retirement plan qualifying under the Internal Revenue Code Section 401(k): Material Sciences Corporation Savings & Investment Plan (the “SIP”). All employees of MSC are automatically enrolled in the SIP for a basic contribution, unless they elect not to participate. Employees may also elect to contribute more or less than the basic contribution level. Mercer Trust Company is the custodial trustee of all SIP assets and participant loans.

Under the SIP, participants may contribute up to 85% of their annual compensation, as defined in the SIP, subject to certain Internal Revenue Code limitations. The Company may, at its discretion, make matching contributions to the SIP at varying rates by location on the first 6% of base compensation. MSC also makes an annual contribution into the SIP at varying rates by location for employees who are active participants in the SIP. The cost of the SIP was $0.6 million in fiscal 2013 and $0.5 million in both fiscal 2012 and fiscal 2011.

MSC has non-contributory defined benefit pension plans that cover some of its employees. The Company provides amounts required to meet ERISA funding requirements for these defined benefit plans. All the defined benefit plans are frozen, so no additional benefits accrue under them and there are no new participants. In addition to the benefits previously described, some former MSC officers participated in a non-contributory supplemental pension plan that is still outstanding.

The Company provides some of its retired employees with certain postretirement health care benefits, which MSC may periodically amend or modify. Certain employees may be eligible for these benefits if they reach normal retirement age while employed by the Company.

During the third quarter of fiscal 2011, the Company identified an error in computing benefit costs for certain of its postretirement benefit plans. Benefit costs in fiscal 2008, 2009, 2010 and the first two quarters of fiscal 2011 were overstated because a reduction in benefits implemented in fiscal 2008 was not reflected in the computation of benefit costs for those periods. The cumulative effect of the error at November 30, 2010, was a $0.4 million reduction in expense, of which $0.2 million related to prior fiscal years, and a reduction of the accrued liability at November 30, 2010, of $0.6 million. MSC recorded the cumulative effect in the third quarter of fiscal 2011.

Additionally, in November 2010 the Company notified beneficiaries of its postretirement benefit plans that the plans would be amended and the benefits available under the plans would be reduced effective January 1, 2011. The effect of the amendments was a reduction of the accrued liability at November 30, 2010, of $1.5 million. Actuarial adjustments, changes in employee participation, and normal

38

benefit payments accounted for an additional reduction of the accrued liability at November 30, 2010, of $0.3 million. In total, the liability for postretirement benefits was reduced by $2.4 million at November 30, 2010.

The following tables present a reconciliation of the change in benefit obligation, a reconciliation of the change in plan assets, a statement of the funded status of the plans, the components of net periodic benefit cost and the assumptions used in determining the plans’ funded status and periodic cost. The assumptions do not consider salary increases as the majority of plans are either frozen or do not account for salary increases in determining future benefits.

	Pension Benefits						Postretirement Benefits
(in thousands except %)	2013			2012			2013			2012
Change in Benefit Obligation:
Obligation, March 1	$	15,964		$	14,475		$	1,958		$	1,842
Service Cost Benefits Earned During the Period		—			—			23			20
Interest Cost on Benefit Obligation		574			678			78			86
Plan Amendments		—			—			—			—
Actuarial (Gain) Loss		269			2,080			164			94
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Curtailments		—			—			—			—
Other Plan Changes		—			—			—			—
Obligation, February 29 & February 28	$	15,551		$	15,964		$	1,986		$	1,958
Change in Plan Assets:
Plan Assets at Fair Value, March 1	$	8,517		$	8,305			—		$	—
Actual Return on Plan Assets		831			324			—			—
Company Contributions		1,356			1,157			237			84
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Plan Assets at Fair Value, February 29 & February 28	$	9,448		$	8,517		$	—		$	—
Funded Status:
Funded Status	$	(6,103	)	$	(7,447	)	$	(1,986	)	$	(1,958	)

	Pension Benefits
	2013		2012
Plans with Accumulated Benefit Obligation in excess of Plan Assets
Accumulated Benefit Obligation	$	15,551	$	15,964

	Pension Benefits									Postretirement Benefits
	2013			2012			2011			2013			2012			2011
Components of Net Periodic Benefit Cost:
Service Cost Benefits Earned During the Period	$	—		$	—		$	—		$	23		$	20		$	63
Interest Cost on Benefit Obligation		574			677			674			78			86			205
Expected Return on Assets		(566	)		(577	)		(534	)		—			—			—
Amortization of Prior Service Cost		—			—			—			(276	)		(276	)		(64	)
Amortization of Net (Gain) Loss		630			431			389			196			188			218
Settlements and Curtailment		—			—			—			—			—			—
Net Periodic Benefit Cost	$	638		$	531		$	529		$	21		$	18		$	422

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Amounts Recognized in the Consolidated Balance Sheets
Prepaid Benefit Cost	$	—		$	—		$	—		$	—
Current Liability		(650	)		(780	)		(94	)		(126	)
Non-Current Liability		(5,453	)		(6,667	)		(1,891	)		(1,833	)
Net Amount Recognized	$	(6,103	)	$	(7,447	)	$	(1,985	)	$	(1,959	)

39

	Pension Benefits				Postretirement Benefits
	2013		2012		2013			2012
Amounts Recognized in Accumulated Other Comprehensive Loss
Prior Service Cost (Credit)	$	—	$	—	$	(1,341	)	$	(1,617	)
Net (Gain) or Loss		6,494		7,119		1,842			1,875
Net Amount Recognized	$	6,494	$	7,119	$	501		$	258

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net (Gain) or Loss	$	5		$	2,333		$	163		$	95
Amortization of Prior Service Cost (Credit)		—			—			276			276
Prior Service Cost (Credit)		—			—			—			—
Adjustment for 2007 Plan Amendment		—			—			—			—
Amortization of Net (Gain) or Loss		(630	)		(431	)		(196	)		(188	)
Net Amount Recognized	$	(625	)	$	1,902		$	243		$	183

	2013			2012			2011
Assumptions Used in Determining the Plans’ Funded Status:
Discount Rate		3.79%-4.04	%		4.00%-4.23	%		5.22%-5.50	%
Rate of Increase in Compensation Levels		N/A			N/A			N/A

	2013		2012			2011
Assumptions Used in Determining Net Periodic Benefit Cost:
Discount Rate		4.00%-4.23%		5.22%-5.50	%		5.64%-5.94	%
Expected Long-Term Rate of Return on Assets		6.60%		7.00	%		7.50	%

Plan obligations and the annual pension expense are determined by using a number of assumptions including the discount rate and the estimated future return on plan assets. To the extent actual amounts differ from these assumptions and estimated amounts, results could be adversely affected. A one percentage point increase in the estimated discount rate would decrease the net pension expense by less than $0.1 million and decrease the estimated pension liability by $1.5 million. A one percentage point decrease in the discount rate would increase the net pension expense by $0.1 million and increase the estimated pension liability by $1.8 million. A one percentage point increase or decrease in the estimated future return on plan assets would have a $0.1 million relative effect on fiscal 2013 net pension expense. The estimated future return on plan assets for the fiscal 2013 pension benefit income calculation was 6.6%.

MSC continues to review its postretirement benefits, incorporating actual and anticipated benefit changes. In determining the present value of the accumulated postretirement benefit obligation and net cost, MSC assumed health care cost annual increases would decline from 7% to 5% per year over the life of the obligation. However, for some benefits no trend rate is applicable.

A 1% increase in assumed health care cost trend rates will raise the total of the service and interest cost components of net periodic postretirement benefit cost by less than $0.1 million, and the health care component of the accumulated postretirement benefit obligation by $0.1 million as of February 28, 2013. A 1% decrease in assumed health care cost trend rates will lower the total of the service and interest cost components of net periodic postretirement benefit cost by less than $0.1 million, and the health care component of the accumulated postretirement benefit obligation by $0.1 million as of February 28, 2013.

Plan Assets. The Company’s pension plan weighted-average asset allocations at February 28, 2013, and February 29, 2012, by asset category, were as follows:

	2013			2012
Equity Securities		63	%		65	%
Debt Securities		37	%		35	%
Total		100	%		100	%

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The investment objective of MSC’s pension plans is to meet the current and future defined benefit payments of participants and beneficiaries of its retirement plans. The plans will invest in funds with appropriate long-term goals and objectives. Individual funds included will seek to provide a long-term competitive rate of return, net of expenses, at appropriate risk levels—which over the long run is equal to or exceeds outlined benchmarks. To maximize diversification, the plans will invest in portfolios within four broad asset classes: bonds, large company stocks, small company domestic stocks and foreign stocks. To provide additional diversification and further reduce the volatility of the portfolio, the Plans will divide the large and small stock domestic portions between value and growth managers.

The approach used to determine the expected long-term rate of return on plan assets assumption is based on weighting historical market index returns for various asset classes in proportion to the assets held in the Material Sciences Corporation Master Trust (“Trust”). The Trust targets an asset allocation of approximately 61% in equity securities and 39% in fixed income securities.

The Company determines the fair value of plan assets using observable market data obtained from independent sources when available. The Company classifies its plan assets according to the fair value hierarchy:

• Level 1—Quoted prices for identical instruments in active markets.

• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The table below summarizes the fair value measurements of the Trust’s assets at February 28, 2013, and February 29, 2012, by asset class (in thousands).

(in thousands)	Balance as of February 28, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	75	$	75	$	—	$	—
Mutual Funds—Equity Securities		5,886		5,886		—		—
Mutual Funds—Bonds		3,487		3,487		—		—
Total	$	9,448	$	9,448	$	—	$	—

(in thousands)	Balance as of February 29, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	52	$	52	$	—	$	—
Mutual Funds—Equity Securities		5,528		5,528		—		—
Mutual Funds—Bonds		2,937		2,937		—		—
Total	$	8,517	$	8,517	$	—	$	—

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The Company expects to contribute approximately $3.1 million, which includes $1.1 of required minimum contributions and $2.0 million of additional contributions to its qualified and non-qualified defined benefit pension plans in fiscal 2014. The additional contributions are being made after management considered the advantages of making the contributions—higher earnings in the pension funds compared to the low interest currently being earned on cash and the reduction of tax payments due to the deductibility of the contributions. Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years after that, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	1,196
2015		1,130
2016		939
2017		803
2018		741
2019 through 2023		4,152
Total	$	8,961

MSC expects to contribute approximately $0.1 million to its postretirement benefit plans other than pensions in fiscal 2014. Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five following fiscal years, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	94
2015		85
2016		91
2017		95
2018		106
2019 through 2023		575
Total	$	1,046

Note 7: Interest Income, Net

The table presented below analyzes the components of interest income, net.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Interest Expense	$	(32	)	$	(113	)	$	(36	)
Interest Income		46			65			115
Interest Income, Net	$	14		$	(48	)	$	79

Note 8: Income Taxes

Income (loss) from continuing operations before income taxes was as follows:

(in thousands)	Fiscal 2013		Fiscal 2012			Fiscal 2011
United States	$	12,282	$	13,778		$	12,900
Foreign		327		(227	)		(532	)
	$	12,609	$	13,551		$	12,368

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The components of the provision (benefit) for income taxes and reconciliation between the statutory rate for federal income taxes and the effective tax rate are summarized and presented below.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Provision (Benefit)
Current:
Federal	$	(85	)	$	(817	)	$	(32	)
State		(126	)		853			341
Foreign		64			(128	)		15
		(147	)		(92	)		324
Deferred:
Federal		4,091			(9,530	)		—
State		(317	)		(1,565	)		—
Foreign		(12	)		(3,729	)		—
		3,762			(14,824	)		—
Tax Provision (Benefit)	$	3,615		$	(14,916	)	$	324

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Rate Reconciliation
Tax Provision (Benefit) at Federal Statutory Rate	$	4,413		$	4,743		$	4,329
State and Local Taxes, Net of Federal Tax Benefit		172			525			521
Effect of Changes in Tax Rates		(41	)		(76	)		(88	)
Change in Unrecognized Tax Benefits		(562	)		(1,029	)		(96	)
Valuation Allowance		—			(18,807	)		(4,398	)
Research and Development Credit		(106	)		(22	)		(79	)
Manufacturing Deduction		(80	)		(440	)		—
Other, Net		(181	)		190			135
Tax Provision (Benefit) at Effective Income Tax Rate	$	3,615		$	(14,916	)	$	324

Temporary differences that give rise to deferred tax assets and (liabilities) were as follows:

(in thousands)	Fiscal 2013			Fiscal 2012
Reserves Not Deductible Until Paid	$	1,145		$	1,270
Employee Benefit Liabilities		5,859			6,257
Net Operating Loss and Tax Credit Carryforwards		5,011			4,855
Property and Equipment		1,539			5,088
Other		351			434
Total Gross Deferred Tax Asset	$	13,905		$	17,904
Valuation Allowance		(567	)		(567	)
Total Net Deferred Tax Assets	$	13,338		$	17,337

The Company records deferred tax assets and liabilities using enacted tax rates on the differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. During fiscal 2012, MSC reduced its valuation allowance by $4.0 million for reductions in the deferred tax assets during the year. After considering all available positive and negative evidence, the Company reversed $14.8 million of the remaining valuation allowance on its U.S. and German deferred tax assets as of February 29, 2012, as the Company determined that it was more likely than not that these benefits would be realized. The Company maintains a valuation allowance of $0.6 million on its deferred tax asset for certain state net operating losses as of February 28, 2013, because it is not more likely than not that these benefits will be realized.

As of February 28, 2013, deferred tax assets for federal, state and foreign net operating losses and tax credit carry forwards of $3.8 million were available with an unlimited expiration date, and the remaining $1.2 million (net of federal taxes) expires in varying amounts in fiscal years 2018 through 2032.

The company considers its China location earnings to be permanently reinvested, and therefore has not recorded a provision for U.S. income tax or foreign withholding taxes on the cumulative undistributed earnings of its China subsidiary. Such undistributed earnings from MSC’s China subsidiary have been

43

included in consolidated retained earnings in the amount of $0.6 million and $0.6 million as of February 28, 2013, and February 29, 2012, respectively. If MSC were to change its intentions and such earnings were remitted to the U.S., these earnings would be subject to U.S. income taxes. However, as of February 28, 2013, and February 29, 2012, foreign tax credits would be available to offset these taxes such that the U.S. tax impact would be insignificant. MSC’s other consolidated foreign entities have cumulative undistributed losses. However, MSC considers all of its consolidated foreign entity earnings to be permanently reinvested.

There are inherent uncertainties related to the interpretation of tax laws in the jurisdictions in which the Company transacts business. In evaluating its various tax filing positions, the Company records tax benefits only if management determines that they are more likely than not to be sustained. Adjustments are made to the Company’s liability for unrecognized tax benefits in the period in which an issue is settled with the respective tax authorities, the statute of limitations expires or when new information becomes available. Adjustments to the amounts accrued may increase or decrease tax expense in any period. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in millions):

	Fiscal 2013			Fiscal 2012			Fiscal 2011
Gross unrecognized tax benefits at beginning of year	$	1.1		$	2.2		$	2.5
Decreases in tax positions for prior years		(0.2	)		(0.1	)		(0.2	)
Lapse in statute of limitations		(0.4	)		(1.0	)		(0.1	)
Gross unrecognized tax benefits at end of year	$	0.5		$	1.1		$	2.2

Amounts accrued for tax liabilities due to the potential change in judgments and estimates are $0.5 million at February 28, 2013. The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.2 million at February 28, 2013, $0.9 million at February 29, 2012, and $1.4 million at February 28, 2011.

The Company anticipates that it is reasonably possible that the total amount of unrecognized tax benefits of $0.5 million will decrease by up to $0.2 million during the next 12 months.

We file income tax returns in the U.S. on a federal basis and in a number of U.S., state and foreign jurisdictions. Our major tax jurisdictions are the U.S., Illinois, Michigan and Germany. For the U.S., Illinois, Michigan and Germany, the earliest fiscal years open for examination are 2012, 2009, 2008 and 2008, respectively. In January 2013, a U.S. income tax examination covering our fiscal years 2010 and 2011 was completed. The resolution of the U.S. tax audit did not materially affect the results of operations, financial position or cash flows.

The Company classifies interest expense and any penalties related to income tax uncertainties as a component of income tax expense. The Company recorded negligible interest and penalties in the fiscal 2013, 2012 and 2011 Consolidated Statement of Operations, respectively. The total accrued interest expense related to tax uncertainties recognized in the Consolidated Balance Sheets was $0.2 million at February 28, 2013, and $0.3 million at February 29, 2012.

Note 9: Significant Customers and Export Sales

Due to the concentration in the automotive industry, sales to individual automotive customers—including indirect sales—are significant. The following table shows direct sales to our significant customers that represented 10% or more of consolidated net sales for any of fiscal 2013, 2012 or 2011.

	% of Consolidated Net Sales
Customer	Fiscal 2013			Fiscal 2012			Fiscal 2011
Chrysler LLC		20	%		17	%		17	%
U.S. Steel		16	%		22	%		15	%
Ford Motor Company		8	%		12	%		18	%

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The following table shows gross accounts receivable from these significant customers as a percentage of total consolidated gross accounts receivable as of February 28, 2013, and February 29, 2012.

	% of Consolidated Gross Accounts Receivable
Customer	February 28, 2013			February 29, 2012
Chrysler LLC		18	%		18	%
Ford Motor Company		8	%		15	%
U.S. Steel		5	%		12	%

For certain automotive customers, we may purchase unprocessed steel and then sell the finished, coated or laminated steel back to the same customer. Thus, for those companies, we may carry significant accounts payable balances.

MSC’s domestic and foreign net sales are presented in the chart below. Sales to customers in any one foreign country did not comprise greater than 10% of consolidated net sales for any period presented.

Net Sales (in thousands)	Fiscal 2013		Fiscal 2012		Fiscal 2011
Domestic	$	105,513	$	121,684	$	125,179
Foreign		15,494		15,050		12,445
Total	$	121,007	$	136,734	$	137,624

Domestic net sales included sales originated by our domestic subsidiaries and shipped to customers located in Asia of $0.4 million and $3.5 million for fiscal 2012 and 2011, respectively. There were no sales from our domestic subsidiaries to customers located in Asia in fiscal 2013.

Note 10: Equity and Compensation Plans

The Company has one active equity award plan: the Material Sciences Corporation 2012 Incentive Compensation Plan (“2012 Plan”). The plan was approved on June 28, 2012, by the Company’s shareowners and replaced the Material Sciences Corporation Amended and Restated 1992 Omnibus Awards Plan for Key Employees (“1992 Plan”) and the Material Sciences Corporation Fiscal year 2006 Long-Term Incentive Plan for Non-Employee Directors (the “Director Plan”).

There are 2,130,789 shares authorized under the 2012 Plan (including 1,130,789 shares previously authorized under the 1992 Plan and either issued or available when that plan ended) to provide stock options, restricted stock and other equity awards under various programs to both employees and non-employee directors. Any shares related to forfeited, terminated or expired awards issued under the 1992 Plan will become available under the 2012 Plan. Non-qualified stock options generally vest over three years from the date of grant and expire between five and 10 years from the date of grant. Restricted stock and cash awards generally vest over three to five years from the date of grant. Shares of restricted stock are awarded in the name of the employee, who has all the rights of a shareowner, subject to certain restrictions or forfeitures. Restricted stock and cash awards have been issued with restrictions based upon time, Company performance, or a combination of both.

There were 150,000 shares authorized under the 2001 Directors Plan. This plan consisted of grants of stock options that provided for all or a portion of each non-employee director’s annual retainer. The 2001 Directors Plan expired on February 29, 2004 and no additional grants will be made under the plan. As of February 28, 2013, options for 3,537 shares were outstanding and exercisable under the 2001 Directors Plan.

The Company recorded $0.6 million, $0.3 million and $0.2 million of compensation expense related to stock options and restricted stock grants in fiscal 2013, 2012 and 2011, respectively.

Stock Option Activity

The Company granted 200,000 stock options during fiscal 2013, with a weighted average Black-Scholes value of $4.24 for each option. The Company granted 200,000 stock options during fiscal 2012 and the weighted average Black-Scholes value of each option granted was $4.13. The Company granted 200,000 stock options during fiscal 2011 and the weighted average Black-Scholes value of each option granted was $0.93. 22,304 options were exercised during fiscal 2012. As of February 28, 2013, there was $1.0 million of total gross compensation expense related to unvested stock option grants which is expected to be recognized ratably over a period ending in the first quarter of fiscal 2016.

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The following tables summarize stock option activity for fiscal 2013:

	Options Outstanding
Stock Option Activity	Directors			Key Employees		Weighted Average Exercise Price		Aggregate Intrinsic Value (in $000’s)
Outstanding as of February 29, 2012		18,087			488,138	$	5.84	$	1,472
Granted		—			200,000		8.75
Exercised		—			—		—
Canceled/Forfeited		(14,550	)		—	$	11.00
Outstanding as of February 28, 2013		3,537			688,138	$	6.57	$	2,479
Exercisable as of February 28, 2013		3,537			113,138	$	8.10
Vested or Expected to Vest as of February 28, 2013		3,537			688,138	$	6.57	$	2,479

The total intrinsic value of options exercised in fiscal 2012 was $0.1 million; no options were exercised in fiscal 2013 or fiscal 2011.

The Company has elected to use the Black-Scholes option pricing model and straight-line amortization of compensation expense over the requisite service period of the grant. MSC will reconsider use of this pricing model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants in future periods have characteristics that cannot be reasonably estimated using this model. The following weighted average assumptions were used for the option grants in fiscal 2013 and 2012:

	2013			2012
Dividend Yield		0.0	%		0.0	%
Risk-Free Interest Rate		0.7	%		2.5	%
Expected Volatility		58.8	%		58.8	%
Expected Life (in Years)		5.0			6.5

MSC has not paid dividends in the past. As such, the Company uses a dividend yield percentage of zero. It uses a risk-free interest rate consistent with the yield available on a U.S. Treasury Note with a term equal to the expected term of the underlying grant. The expected volatility was estimated based upon the historical volatility of the Company’s share price. The expected life was an average of the initial vesting period and the original contractual term, as the Company does not have sufficient historical exercise data to otherwise estimate the expected life. The following table shows stock options outstanding and stock options exercisable at February 28, 2013:

	Options Outstanding as of February 28, 2013								Exercisable Options as of February 28, 2013
Range of Exercise Prices	Shares		Weighted Average Remaining Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)
$  2.00  -  $  5.00		175,000		4.0	$	2.00				—	$	0.00
$  5.01  -  $  8.00		313,138		5.0	$	7.68				113,138	$	8.00
$  8.01  -  $11.00		200,000		6.0	$	8.75				—	$	0.00
$11.01  -  $14.05		3,537		1.0	$	11.31				3,537	$	11.31
$  2.00  -  $14.05		691,675		5.0	$	6.57	$	2,479		116,675	$	8.10	$	243

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Restricted Stock Activity

The following table summarizes restricted stock transactions for fiscal 2012 and 2013:

Unvested as of February 28, 2011	30,000
Granted	—
Vested	—
Canceled	—
Unvested as of February 29, 2012	30,000
Granted	17,330
Vested	(10,554	)
Canceled	(146	)
Unvested as of February 28, 2013	36,630

Beginning in September 2012, MSC began making quarterly grants of restricted stock to the non-employee directors of the company. Each grant represents the number of shares of our common stock equal to the quotient of $8,500 divided by the closing sale price of our common stock on the day preceding the grant date. Each non-employee director received 959 restricted shares in September 2012 and 946 restricted shares in December 2012. The shares will vest on the third anniversary of the grant date.

In March 2012, MSC granted 5,900 shares of restricted stock, which vested over one year, to certain members of management who elected to receive restricted stock in lieu of their annual compensation increase.

As of February 28, 2013, there was less than $0.1 million of total gross compensation expense related to unvested restricted stock grants which is expected to be recognized over a period ending in the first quarter of fiscal 2015, and less than $0.1 million of total gross expense related to unvested restricted stock granted to our non-employee directors which is expected to be recognized ratably over a period ending in the second quarter of fiscal 2016.

Employee Stock Purchase Plan

MSC has an Employee Stock Purchase Plan that permits eligible employees to buy shares of common stock on the last day of two six-month purchase periods (February 28 or 29 and August 31 of each year) at 85% of the fair market value of the stock on these dates. Shares of common stock sold to employees under this plan were 756 in fiscal 2013, 4,787 in fiscal 2012, and 4,096 in fiscal 2011. The amount the Company recorded as compensation expense related to this plan was less than $10 thousand in each period presented.

Treasury Stock

Our Board of Directors authorized the repurchase of 1,000,000 shares of the Company’s common stock on September 14, 2011, and again on September 27, 2012. The shares may be repurchased from time-to-time on the open market, subject to market conditions and other factors, and generally will be funded with internally generated cash. The Company repurchased 283,388 shares under the September 2011 authorization during the twelve months ended February 28, 2013. At February 28, 2013, there were 364,476 shares available for purchase under the September 2011 authorization and 1,000,000 shares available for purchase under the September 2012 authorization.

The following table provides information about Company purchases of common stock (in thousands).

Period	Total Number of Shares Purchased		Total Cost		Total Number of Shares Purchased as Part of a Written Trading Plan(1)		Maximum Number of Shares that May Yet Be Purchased
March 1, 2010 – February 28, 2011		16		111		16		1,098
March 1, 2011 – February 29, 2012		2,450		17,538		2,450		648
March 1, 2012 – February 28, 2013		283		2,233		283		364
Total		2,749	$	19,882		2,749

(1) On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On

47

May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

Note 11: Business Segments

MSC operates in one segment based on how the Chief Operating Decision Maker views its business for evaluating performance and making operating decisions. The Company provides material-based solutions for acoustical and coated applications. The acoustical material-based solutions include multilayer composites consisting of metals, polymers, rubber and other coated materials used to manage noise and vibration. The coated metal material-based solutions include painted, electrogalvanized (“EG”), rubber and film protective, decorative and functional coatings applied to coiled metal of various widths and thicknesses. MSC’s material-based solutions are designed to meet specific customer requirements for the automotive, appliance, building products, lighting and electronics markets. The Company uses a significant level of shared assets and personnel across each of its product categories. Some customers purchase products from several different product categories.

Each of our domestic facilities houses one or more principal production lines. These lines are used to transform the coils of metal into materials for our customers in a continuous process. The process varies somewhat, depending on the application and what materials are to be bonded to the metal coil. However, the core production line equipment does not change markedly. The products are differentiated by the type of material bonded to the metal and the method used to bond them. Various coatings and/or films are applied by running the uncoiled metal ribbon through an applicator and baking the coating onto the metal in high temperature ovens. Our proprietary Quiet Steel is produced by bonding two metal coils together with highly engineered viscoelastic core materials. Zinc and zinc-nickel corrosion protections are applied by running the steel through electrolyte baths and galvanizing the material to the metal with electricity. This galvanization process is only performed at our Walbridge, Ohio facility.

We use a significant level of shared assets, and share resources for sales, general and administrative expense, and management across each of our product categories. It is common for a single customer to purchase products from several different product categories as well as from different plants. Capital projects—whether for cost savings or generating incremental revenue—are evaluated individually based on estimated economic returns (e.g., net present value, return on investment), not based on related product line or geographic location. We use a centralized functional management structure, and share administration and production resources, to deliver individual products that, together, provide solutions to our customers.

Net sales by product category, net of intercompany activity, were as follows:

	Fiscal 2013				Fiscal 2012				Fiscal 2011
Net Sales ($ in millions)	$		%		$		%		$		%
Acoustical	$	73.8		61	$	68.3		50	$	73.1		53
Coated		47.2		39		68.4		50		64.5		47
Total Net Sales	$	121.0		100	$	136.7		100	$	137.6		100

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Note 12: Earnings Per Share

Below is the computation of basic and diluted earnings per share for the fiscal years ended February 28 or 29, 2013, 2012 and 2011.

(in thousands except per share amounts)	2013		2012		2011
Net Income	$	8,994	$	28,467	$	12,044
Weighted Average Number of Common Shares Outstanding Used for Basic Net Loss Per Share		10,298		11,350		12,906
Dilutive Stock Options		108		91		51
Dilutive Restricted Stock		19		—		—
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares		10,425		11,441		12,957
Basic Net Income Per Share:
Basic Net Income Per Share	$	0.87	$	2.51	$	0.93
Diluted Net Income Per Share:
Diluted Net Income Per Share	$	0.86	$	2.49	$	0.93

Approximately 400,000 options to purchase shares of common stock and shares of restricted stock were outstanding at the end of fiscal 2013 but were not included in the computation of diluted earnings per share because the effect was anti-dilutive.

Note 13: Selected Quarterly Results of Operations (Unaudited)

The table presented below is a summary of quarterly data for the years ended February 28, 2013 and February 29, 2012.

(in thousands except per share amounts) 2013	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Fiscal Year
Net Sales	$	34,834	$	29,927	$	30,387	$	25,859	$	121,007
Gross Profit		8,555		6,553		7,238		6,168		28,514
Income From Operations(1)		3,097		4,784		2,289		1,536		11,706
Total Other Income, Net		329		387		107		80		903
Net Income	$	2,218	$	3,253	$	2,171	$	1,352	$	8,994
Basic Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.87
Diluted Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.86
2012
Net Sales	$	36,036	$	34,417	$	34,009	$	32,272	$	136,734
Gross Profit		9,522		7,651		9,307		7,188		33,668
Income From Operations(2)		3,972		2,580		3,693		1,723		11,968
Total Other Income, Net		447		436		461		239		1,583
Net Income	$	4,157	$	3,021	$	3,726	$	17,563	$	28,467
Basic Net Income Per Share(3)	$	0.33	$	0.26	$	0.35	$	1.65	$	2.51
Diluted Net Income Per Share(3)	$	0.33	$	0.26	$	0.34	$	1.67	$	2.49

(1) Income from operations in the second quarter of fiscal 2013 included a gain on sale of $3.2 million as discussed in Note 18, “Sale of Elk Grove Village Building.”

(2) Income from operations in the second and fourth quarters of fiscal 2012 included charges of $0.3 million and $0.3 million related to employee termination benefit expenses as discussed in Note 14, “Restructuring.”

(3) The sum of the four quarters is not necessarily the same as the total for the year.

Note 14: Restructuring

In the fourth quarter of fiscal 2010, management executed restructuring plans that eliminated additional production and SG&A positions. The Company recognized approximately $1.6 million in employee termination benefit and related expenses, $1.5 million in the U.S. and $0.1 million in Europe. Of this

49

expense, approximately $0.2 million was paid as of February 28, 2010; the remainder was paid by the end of fiscal 2011.

In the first quarter of fiscal 2011, MSC executed a restructuring plan in conjunction with the sale of certain coil-coating assets located in Elk Grove Village, Illinois. See Note 17, “Elk Grove Village Asset Sale,” for additional discussion. The plan included eliminating positions in production and SG&A departments. The Company recognized approximately $1.1 million in employee termination benefit and related expenses, all of which was paid by the end of fiscal 2011. During the fourth quarter of fiscal 2011, MSC recognized severance expense of $0.2 million, which was paid by the end of fiscal 2012.

In the second quarter of fiscal 2012, MSC incurred employee termination benefit expenses of $0.3 million for certain SG&A positions. In the fourth quarter of fiscal 2012, MSC executed a restructuring plan that eliminated ten positions in our German subsidiary. The Company recognized approximately $0.3 million in employee termination benefit and related expenses. Of these expenses related to fiscal 2012 terminations, $0.4 million was paid in fiscal 2012; the remainder was paid in fiscal 2013.

The restructuring reserve as of February 28, 2013, is presented in the table below, which includes the fiscal 2011, 2012 and 2013 restructuring activities. The reserve is included in accrued payroll related expenses on the Consolidated Balance Sheets.

(in thousands)	Severance			Other			Total
Restructuring Reserve as of February 28, 2010	$	1,424		$	0		$	1,424
Restructuring Reserve Recorded During Fiscal 2011		1,324			0			1,324
Cash Payments		(2,546	)		0			(2,546	)
Restructuring Reserve as of February 28, 2011	$	202		$	0		$	202
Restructuring Reserve Recorded During Fiscal 2012		430			153			583
Cash Payment		(484	)		(66	)		(550	)
Restructuring Reserve as of February 29, 2012	$	148		$	87		$	235
Restructuring Reserve Recorded During Fiscal 2013		—			—			—
Cash Payment		(148	)		(87	)		(235	)
Restructuring Reserve as of February 28, 2013	$	—		$	—		$	—

Note 15: Asset Impairment

During the first quarter of fiscal 2011, in conjunction with the sale of a portion of our coil coating assets, we conducted an impairment analysis of the real estate and building improvement assets at our Plant #7 in Elk Grove Village, Illinois. These assets housed the coil coating assets that were sold. With the sale, the future cash flow generated by the building was substantially reduced. (See Note 17, “Elk Grove Village Asset Sale,” for further discussion.) We compared the projected undiscounted future cash flows of the real estate and building improvement assets to their carrying value and determined their value might be impaired. We requested a valuation from a commercial real estate firm. Based on that valuation, we determined the assets were impaired and recorded a $3.7 million write-down of the assets in the first quarter of fiscal 2011.

There were no impairments during fiscal 2012 or 2013.

Note 16: Middletown Asset Sale

The Company closed its coil coating facility in Middletown, Ohio, in July 2004. The carrying value of these assets prior to the sale was $2.9 million. On June 24, 2010, MSC sold the facility to NCI Group for $4.9 million. The Company recorded a gain on the sale of approximately $1.9 million (net of fees) in the second quarter of fiscal 2011.

Note 17: Elk Grove Village Asset Sale

On April 12, 2010, the Company sold a portion of its coil coating assets and associated business base to Roll Coater, Inc. (“Roll Coater”) for $10.0 million ($9.3 million after investment banking fees). Roll Coater

50

purchased the coil coating machinery, related processing equipment, and corresponding customer base associated with MSC’s Plant #7 in Elk Grove Village, Illinois. Based on fiscal 2010 shipments, the associated business base included approximately $28.6 million in sales of general-line coil coated products. In addition, MSC and Roll Coater entered into a multi-year lease agreement to store the purchased equipment. The transaction did not include the sale of any real estate by MSC. The Company recorded a gain on the sale of approximately $4.7 million (net of $0.3 million of legal fees) in the first quarter of fiscal 2011. MSC also recorded $1.1 million of employee severance expense and $0.2 million of inventory write-off expenses in connection with the sale.

Note 18: Sale of Elk Grove Village Building

In April 2011, after receiving authorization from the Board of Directors, management committed to a plan to sell the building located at 2200 East Pratt Boulevard in Elk Grove Village, Illinois (the “Facility”). This building houses our corporate and general offices and previously housed our coil coating assets before they were sold in April 2010.

On July 23, 2012, MSC began leasing a portion of the Facility to Main Steel Polishing Company, Inc. The lease included approximately 240,000 square feet of the 280,000 square foot Facility. MSC entered into this lease to enhance the attractiveness of the Facility to potential buyers.

On August 31, 2012, MSC sold the Facility to Torburn Partners, Inc. (“Torburn”) for cash. The net proceeds from the sale were approximately $9.2 million, which reflects all selling costs and the executory costs related to the lease discussed above. The Company recognized a gain of approximately $3.2 million on the sale. MSC will report a tax loss on the sale of approximately $5.4 million on the fiscal 2013 tax return. The Company expects to realize cash tax savings of approximately $1.8 million due to the tax loss.

MSC entered into a four-year lease with Torburn under which MSC continues to occupy approximately 35,000 square feet of office space in the Facility to house its corporate and domestic operations.

Note 19: German Subsidy

In December 2006, our German subsidiary, MSC Europe GmbH, entered into a subsidy program with the State of Thüringen. The subsidy provided €335 thousand for investment in our Application Development Center in Eisenach, Germany, and required we increase our staff by five positions and maintain 45 total positions for a five year monitoring period, from February 2009 through February 2014. The monitoring period was subsequently extended to February 2017. Under the subsidy, if we did not maintain the specified staff levels during the monitoring period, we would be liable to pay back the subsidy, with interest. Because of the uncertainty of maintaining hiring levels, we have carried a liability on the German books in the amount of the subsidy.

As discussed in Note 14, “Restructuring,” in the fourth quarter of fiscal 2012, MSC executed a restructuring plan that eliminated eight production and two SG&A positions in our German subsidiary. As a consequence of this reduction, we determined we would not be in compliance with the staff level requirements of the subsidy. We entered into negotiations with the State of Thüringen to settle the subsidy, and agreed to repay approximately $62 thousand of the subsidy plus approximately $12 thousand of accumulated interest on the repaid amount. We also agreed to a revised target staff level of 34 employees until February 2014. We carry the remaining balance of the subsidy as a current liability and amortize it into income over the remaining life of the surveillance period. The total remaining liability for the subsidy was $251 thousand at February 28, 2013.

51

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

During the second quarter of fiscal 2013, the Audit Committee (the “Committee”) of the Board of Directors of Material Sciences Corporation (the “Company”) completed a competitive process to review the appointment of the Company’s independent registered public accounting firm for the year ending February 28, 2013. As a result of this process, on July 20, 2012, the Company notified Deloitte & Touche LLP (“Deloitte”) of their dismissal as the Company’s independent registered public accounting firm.

Deloitte’s audit reports on the Company’s consolidated financial statements for each of the years ended February 29, 2012, and February 28, 2011, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the years ended February 29, 2012, and February 28, 2011, and the subsequent interim period through July 20, 2012, there were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to Deloitte’s satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company’s financial statements for such years. During the years ended February 29, 2012, and February 28, 2011, and the subsequent interim period through July 20, 2012, there were no “reportable events” as defined in Item 304 (a)(1)(v) of Regulation S-K. The Company has provided Deloitte with a copy of the foregoing statements.

On July 20, 2012, the Committee approved the appointment of Grant Thornton LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2013. During the years ended February 29, 2012, and February 28, 2011, and through July 20, 2012, the date of Grant Thornton’s engagement as the Company’s independent auditors, neither the Company nor anyone on its behalf had consulted with Grant Thornton with respect to (1) the application of accounting principles as to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and Grant Thornton did not provide either written or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issuer or (2) any matter that was the subject of a disagreement with Deloitte (of which there were none) or any “reportable event.”

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, included our Chief Executive Officer and Chief financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(a) Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and maintaining adequate “internal control over financial reporting,” as the term is defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). There are inherent limitations to the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation of our CEO and CFO, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of February 28, 2013, based on

52

the framework published by the Committee of Sponsoring Organizations of the Treadway Commission, referred to as the Internal Control—Integrated Framework. The objective of this assessment is to determine whether MSC’s internal control over financial reporting was effective as of February 28, 2013. Based on managements’ assessment using the criteria in the Internal Control—Integrated Framework the Company’s internal control over financial reporting was effective on that date.

The effectiveness of internal control over financial reporting as of February 28, 2013, has been audited by Grant Thornton LLP, our independent registered public accounting firm, who also audited our consolidated financial statements for the year ended February 28, 2013. Grant Thornton’s attestation report on our internal control over financial reporting is included herein.

(b) Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 which occurred during the quarter ended February 28, 2013, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item concerning executive officers is included in Part 1, Item 1 of this report under the heading “Executive Officers of the Registrant.”

Code of Ethics

We have adopted a code of ethics entitled Material Sciences Corporation Code of Business Ethics (“MSC Code of Ethics”) that applies to all of our employees, officers and directors, including our principal executive officer and principal financial and accounting officer. A copy of the MSC Code of Ethics is available on our Web site at www.matsci.com. Amendments to, or waivers from, certain provisions of the MSC Code of Ethics for executive officers and directors are disclosed on our Web site following the date of the amendment or waiver. A copy of the MSC Code of Ethics also may be requested, free of charge, by writing to us at 2200 East Pratt Boulevard, Elk Grove Village, Illinois 60007, Attn.: Corporate Secretary.

We also have adopted written charters for our Audit and Compensation, Organization and Corporate Governance Committees; and Corporate Governance Guidelines; all of which are posted on our Web site at www.matsci.com. Investors may request a free copy of the charters and guidelines from the address noted above.

Other information required by this Item is incorporated by reference to the information in the sections entitled “Election of Directors,” “Board of Directors and Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the proxy statement for the Annual Meeting of Shareowners on June 27, 2013 (“Proxy Statement”) to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the information in the sections entitled “Executive Compensation Tables” in the Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to the information in the sections entitled “Stock Ownership” and “Equity Compensation Plan Information” in the Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference to the information in the subsection entitled “Transactions with Related Persons” and the section entitled “Board of Directors and Corporate Governance” in the Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated by reference to the information in the section entitled “Ratification of Appointment of Grant Thornton LLP” in the Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1. Financial Statements and Schedule of the Company

a) Financial Statements. The Company’s financial statements are filed as a part of this report.

b) Supplemental Schedule. Schedule II, Reserve for Receivable Allowances and Inventory Reserves appears below. All other schedules have been omitted, since the required information is not significant, or included in the financial statements or the related notes or are not applicable.

SCHEDULE II

Material Sciences Corporation and Subsidiaries Reserve for Receivable Allowances and Inventory Reserves

(In thousands)

			Additions
	Balance at Beginning of Year		Charged to Costs and Expense		Charged to Other Accounts		Reclassifications and Acquisitions		Deductions from Reserve			Balance at End of Year
Fiscal 2011 Receivable Allowances	$	716	$	1,328	$	—	$	—	$	(1,624	)	$	420
Inventory Reserves	$	2,527	$	4,391	$	—	$	—	$	(5,262	)	$	1,656
Fiscal 2012 Receivable Allowances	$	420	$	1,717	$	—	$	—	$	(1,441	)	$	696
Inventory Reserves	$	1,656	$	4,710	$	—	$	—	$	(5,024	)	$	1,342
Fiscal 2013 Receivable Allowances	$	696	$	1,920	$	—	$	—	$	(2,127	)	$	489
Inventory Reserves	$	1,342	$	3,099	$	—	$	—	$	(3,269	)	$	1,172

The activity in the receivable allowances account includes the Company’s bad debt, product claims and customer scrap allowance.

2. Exhibits

Reference is made to the Exhibit Index which begins on page 57.

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Material Sciences Corporation
By:	/s/    CLIFFORD D. NASTAS
	Clifford D. Nastas
	Chief Executive Officer and Director

Date: May 6, 2013

Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities indicated on May 6, 2013.

/s/    CLIFFORD D. NASTAS         Clifford D. Nastas	Chief Executive Officer and Director (Principal Executive Officer)
/s/    JAMES D. PAWLAK         James D. Pawlak	Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary (Principal Financial and Accounting Officer)
/s/    TERRY L. BERNANDER         Terry L. Bernander	Director
/s/    FRANK L. HOHMANN III         Frank L. Hohmann III	Director
/s/    SAMUEL LICAVOLI         Samuel Licavoli	Director
/s/    PATRICK J. MCDONNELL         Patrick J. McDonnell	Director
/s/    JOHN P. REILLY         John P. Reilly	Non-Executive Chairman of the Board
/s/    DOMINICK J. SCHIANO         Dominick J. Schiano	Director

56

EXHIBIT INDEX

Exhibit Number			Description of Exhibit
	3	(a)	Registrant’s Restated Certificate of Incorporation.(1)
	3	(b)	Form of Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred Stock.(2)
	3	(c)	Registrant’s By-laws, as amended.(3)
	4	(a)	Credit Agreement between the Company and JPMorgan Chase Bank, N.A., dated May 12, 2008.(4)
	4	(b)	Revolving Loan Note between the Company and JPMorgan Chase Bank, N.A., dated May 12, 2008.(5)
	4	(c)	Pledge and Security Agreement between the Company and JPMorgan Chase Bank, N.A., dated May 12, 2008.(5)
	4	(d)	Mortgage by the Company in favor of JPMorgan Chase Bank, N.A., dated May 12, 2008.(5)
	4	(e)	First Amendment to Credit Agreement between the Company and JPMorgan Chase Bank, N.A., dated May 28, 2009.(6)
	4	(f)	Second Amendment to Credit Agreement between the Company and JPMorgan Chase Bank, N.A., dated April 15, 2010.(7)
	4	(g)	Third Amendment to Credit Agreement between the Company and JPMorgan Chase Bank, N.A., dated January 31, 2011.(8)
	4	(h)	First Amendment to Mortgage and Assignment of Leases and Rents between the Company and JPMorgan Chase Bank, N.A., dated May 10, 2011.(8)
	4	(i)	Fourth Amendment to Credit Agreement between the Company and JPMorgan Chase Bank, N.A., dated May 10, 2011.(8)
	10	(a)	Material Sciences Corporation Supplemental Pension Plan.(9)†
	10	(b)	Material Sciences Corporation 1992 Omnibus Stock Awards Plan for Key Employees.(9)†
	10	(c)	Fiscal Year 2006 Long-Term Incentive Plan for Non-Employee Directors.(10)†
	10	(d)	Lease and Agreement dated as of December 1, 1980, between Line 6 Corp. and Pre Finish Metals Incorporated, relating to Walbridge, Ohio facility.(11)
	10	(e)	First Amendment to Lease and Agreement dated as of May 30, 1986, between Corporate Property Associates and Corporate Property Associates 2 and Pre Finish Metals Incorporated.(12)
	10	(f)	Lease Guaranty dated as of May 30, 1986, from Material Sciences Corporation to Corporate Property Associates and Corporate Property Associates 2.(12)
	10	(g)	Second Amendment to Lease and Agreement dated as of April 23, 2007, by and between Corporate Property Associates and Corporate Property Associates 4 as successor by merger with Corporate Property Associates 2 and MSC Engineered Materials and Solutions Group, Inc.(13)
	10	(h)	Agreement dated as of May 30, 1986, between Material Sciences Corporation and Corporate Property Associates and Corporate Property Associates 2.(12)
	10	(i)	Form of Indemnification Agreement between Material Sciences Corporation and each of its officers and directors.(12)†
	10	(j)	Material Sciences Corporation Supplemental Retirement Plan.(14)†
	10	(k)	Material Sciences Corporation 2012 Incentive Compensation Plan.(23)†
	10	(l)	Form of Non-Qualified Stock Option Agreement for options granted under the Material Sciences Corporation 2012 Incentive Compensation Plan.**†

57

Exhibit Number			Description of Exhibit
	10	(m)	Form of Material Sciences Corporation Restricted Stock Award Agreement for merit/stock exchange program awards granted under the Material Sciences Corporation 2012 Incentive Compensation Plan.**†
	10	(n)	Form of Material Sciences Corporation Restricted Stock Award Agreement for awards granted to non-employee directors on or after September 1, 2012, under the Material Sciences Corporation 2012 Incentive Compensation Plan.(24)
	10	(o)	Form of Non-Qualified Stock Option Agreement for options granted on or after April 11, 2008, under Material Sciences Corporation’s 1992 Omnibus Stock Awards Plan for Key Employees.(15)†
	10	(p)	Material Sciences Corporation Fiscal Year 2009 Incentive Plan.(16)†
	10	(q)	Form of Material Sciences Corporation Restricted Stock Award Agreement for awards granted on or after June 21, 2006 under the 1992 Omnibus Stock Awards Plan for Key Employees.(17)†
	10	(r)	Form of Material Sciences Corporation Non-Qualified Stock Option Agreement for options granted on or after June 21, 2006, and before April 11, 2008, under the Material Sciences Corporation 1992 Omnibus Stock Awards Plan for Key Employees.(17)†
	10	(s)	Employment agreement dated June 12, 2008, between Matthew M. Murphy and the Company regarding the assignment of Mr. Murphy to the role of Vice President— China Sales & Marketing based in Shanghai, China.(13)†
	10	(t)	Material Sciences Corporation 2007 Employee Stock Purchase Plan.(19)†
	10	(u)	Asset Purchase Agreement by and among Material Sciences Corporation, MSC Pre Finish Metals (EGV), Inc. and Roll Coater, Inc. dated as of April 12, 2010.(18)
	10	(v)	Asset Purchase Agreement by and among Material Sciences Corporation, MSC Pre Finish Metals (MT) Inc. and NCI Group, Inc. dated as of June 24, 2010.(20)
	10	(w)	Form of Material Sciences Corporation Restricted Stock Award Agreement for awards granted to Clifford D. Nastas under the 1992 Omnibus Stock Awards Plan for Key Employees.(22)†
	10	(x)	Form of Material Sciences Corporation Restricted Stock Award Agreement for merit/stock exchange program awards granted after February 29, 2012 under the 1992 Omnibus Stock Awards Plan for Key Employees.(22)†
	10	(y)	Form of Severance and Change in Control Agreement for Executive Officers of Material Sciences Corporation dated July 1, 2011 for Messrs. Nastas, Pawlak, Murphy, and Wilson.(22)†
	10	(z)	Lease between Material Sciences Corporation as Landlord and Main Steel Polishing Company, Inc. as Tenant dated July 23, 2012. Certain exhibits and schedules to this Exhibit 10.1 have not been filed. Upon request, the registrant will furnish supplementally to the SEC a copy of any omitted exhibits or schedules.(24)(25)
	10	(aa)	Purchase and Sale Agreement between Material Sciences Corporation as Seller and Torburn Partners, Inc. as Purchaser dated July 31, 2012. Certain exhibits and schedules to this Exhibit 10.2 have not been filed. Upon request, the registrant will furnish supplementally to the SEC a copy of any omitted exhibits or schedules.(24)(25)
	10	(bb)	Lease between Torburn Partners, Inc. as Landlord and Material Sciences Corporation as Tenant dated July 31, 2012. Certain exhibits and schedules to this Exhibit 10.3 have not been filed. Upon request, the registrant will furnish supplementally to the SEC a copy of any omitted exhibits or schedules.(24)(25)
	21		Subsidiaries of the Registrant.**
	23.1		Consent of Grant Thornton LLP.**
	23.2		Consent of Deloitte & Touche LLP.**

58

Exhibit Number		Description of Exhibit
	31.1	Rule 13a-14(a) / 15(d)-14(a) Certification of Chief Executive Officer.**
	31.2	Rule 13a-14(a) / 15(d)-14(a) Certification of Chief Financial Officer.**
	32	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.**
	101	The following materials from the Material Sciences Corporation’s Annual Report on Form 10-K for the year ended February 28, 2013, formatted in eXtensible Business Reporting Language (XBRL): i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Comprehensive Income, and (v) related notes.** (25)

** Filed herewith.

† Management contract or compensatory plan.

(1) Incorporated by reference to the Registrant’s Form 10-Q Quarterly Report for the Period Ended August 31, 1997 (File No. 1-8803).

(2) Incorporated by reference to the Registrant’s Form 8-A filed on June 20, 1996 (File No. 1-8803).

(3) Incorporated by reference to the Registrant’s Form 10-Q Report for the Period Ended November 30, 2007 (File No. 1-8803).

(4) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 28, 2011 (File No. 1-8803).

(5) Incorporated by reference to the Registrant’s Form 8-K filed on May 16, 2008 (File No. 1-8803).

(6) Incorporated by reference to the Registrant’s Form 10-Q Report for the Period Ended May 31, 2009 (File No. 1-8803).

(7) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 28, 2010 (File No. 1-8803).

(8) Incorporated by reference to the Registrant’s Form 10-Q Report for the Period Ended May 31, 2011 (File No. 1-8803).

(9) Incorporated by reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-15679) filed on November 6, 1996.

(10) Incorporated by reference to the Registrant’s Form 8-K filed on March 7, 2005 (File No. 1-8803).

(11) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (Registration No. 2-93414), which was declared effective on November 27, 1984.

(12) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 28, 1999 (File No. 1-8803).

(13) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 28, 2009 (File No. 1-8803).

(14) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 28, 2003 (File No. 1-8803).

(15) Incorporated by reference to the Registrant’s Form 8-K filed on April 14, 2008 (File No. 1-8803).

(16) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 29, 2008 (File No. 1-8803).

(17) Incorporated by reference to the Registrant’s Form 8-K filed on June 26, 2006 (File No. 1-8803).

(18) Incorporated by reference to the Registrant’s Form 10-Q Report for the Period Ended November 30, 2008 (File No. 1-8803). The Company will furnish to the Securities and Exchange Commission a copy of any of the omitted schedules or exhibits upon request.

(19) Incorporated by reference to the Registrant’s Schedule 14A filed on May 29, 2007.

(20) Incorporated by reference to the Registrant’s Form 8-K filed on April 12, 2010 (File No. 1-8803).

(21) Incorporated by reference to the Registrant’s Form 8-K filed on June 25, 2010 (File No. 1-8803).

(22) Incorporated by reference to the Registrant’s Form 10-K Annual Report for the Fiscal Year Ended February 29, 2012 (File No. 1-8803).

(23) Incorporated by referents to the Registrant’s Form 8-K filed on June 29, 2012.

(24) Incorporated by reference to the Registrant’s form 10-Q Report for the Period Ended August 31, 2012 (File No. 1-8803).

(25) This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

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EX-10.(L)

Exhibit 10(l)

MATERIAL SCIENCES CORPORATION

FY 201_ LONG-TERM INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is entered into between Material Sciences Corporation, a Delaware corporation (the “Company”), and                      (“Employee”), pursuant to the MATERIAL SCIENCES CORPORATION 2012 Incentive Compensation Plan (the “Plan”), to document an award made as of                     , 201     (“Grant Date”). All capitalized terms used, but otherwise not defined herein, have the meanings set forth in the Plan.

1. Option Grant. Subject to the terms and conditions set forth in the Plan, the FY 201_ LTIP and this Agreement, the Company hereby grants to the Employee the right to purchase (the “Option”) from the Company                      shares (the “Option Shares”) of the Company’s common stock, $.02 par value (the “Common Stock”) at an exercise price per share (the “Option Price”) equal to $             (which is the closing price of a share of the Common Stock on the NASDAQ Stock Market (“NASDAQ”) as of the trading day immediately preceding the Grant Date, rounded up to the next highest Twenty-Five Cent ($0.25) amount), to be exercisable at the times and on the terms and subject to the conditions set forth herein. The Option shall be null and void unless the Employee executes this Agreement and returns it to the Secretary of the Company at its office in Elk Grove Village, Illinois, within thirty (30) days of receipt by the Employee. The Option will expire on the seventh anniversary of the Grant Date (the “Final Expiration Date”), unless terminated earlier as provided under Sections 3 or 4. The Option is not intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be interpreted and construed in accordance with that intention.

2. Vesting and Exercise. The Option shall be exercisable only to the extent vested in accordance with this Section 2.

a) The Option shall become vested as to one hundred percent (100%) of the Option Shares on the third anniversary of the Grant Date, provided that Employee remains continuously in Employment by the Company through such date.

b) Notwithstanding Section 2(a) hereof, but subject to the provisions of this Section 2(b) hereof, the Option shall become vested in one hundred percent (100%) of the Option Shares on the date of Employee’s death or Disability or upon a Change in Control. Death, Disability, and Change in Control are the only events that accelerate the vesting of the Option granted under this Agreement.

c) Notwithstanding Section 2(a) hereof, but subject to the provisions of this Section 2(b) hereof, the Option shall become vested for Retirement and Termination of Employment without Cause as follows:

i) Option shall become vested as to a number of Option Shares (rounded to the whole nearest share) equal to the product of (A) the total number of Option Shares, multiplied by (B) a fraction, (y) the numerator equals the number of whole or partial calendar months which have elapsed from the Grant Date, and (z) the denominator of which is 36.

d) Any portion of the Option that is not, or shall not have become, vested as of the termination of Employee’s Employment by the Company, shall be forfeited to the Company effective on the termination date of Employee’s Employment by the Company. Any portion of the Option that is or shall have become vested as of the termination of Employee’s Employment by the Company, shall be exercisable in accordance with the applicable terms of this Agreement.

e) Subject to the foregoing, the Option shall be exercisable, and Employee shall have the right to purchase the Option Shares, from time to time and in whole or in part, only if Employee is in Employment by the Company on the exercise date, except as provided under Section 3 or Section 4, as applicable.

f) Eligibility for this FY 201_ LTIP is based on the employee being actively employed on the day the grant is granted.

3. Termination of Employment. Subject to this Section 3, the Option shall expire and permanently terminate upon, and shall not be exercisable or exercised after, Employee’s Termination of Employment for any reason other than a cessation of employment due to death or Disability. Upon a Termination of Employment described in this Section 3, except as specifically set forth in Section 4, Employee may exercise the Option, to the extent vested, until the earlier to occur of (a) the ninetieth (90th) day after the effective date of the Termination of Employment or (b) the Final Expiration Date; provided, however that no portion of the Option may be exercised in the event of or after Executive’s dismissal for Cause.

4. Death, Disability, or Retirement. If Employee (a) dies while in Employment by the Company, (b) incurs a Disability while in Employment by the Company, or (c) terminates his employment as a result of Retirement, the Option, to the extent vested, may be exercised until the earlier to occur of (i) the third (3rd) anniversary of Employee’s death, Disability, or Retirement, as applicable, and (ii) the Final Expiration Date.

5. Method of Exercise and Payment. Subject to the limitations herein set forth, Employee or Employee’s beneficiary, if applicable, may exercise the Option by delivery of written notice to the Secretary of the Company in Elk Grove Village, Illinois, specifying the number of Option Shares to be purchased and payment of the Option Price, as described below; provided, however, that no fractional shares may be purchased hereunder at any time. Payment of the Option Price shall be made (a) in cash or by check, bank draft or money order to the order of Material Sciences Corporation (collectively, “cash”), (b) at the discretion of Employee and with the consent of the Committee, in shares of Common Stock (valued as of the date of the notice of exercise) with a total value equal to or less than the aggregate Option Price, plus cash in the amount, if any, by which the aggregate Option Price exceeds the value of such shares of Common Stock or (c) at the discretion of the Committee, by delivery of a properly executed exercise notice together with such other documentation as the Committee and a qualified broker, if applicable, shall require to effect an exercise of the Option, and delivery to the Company of the proceeds required to pay the exercise price; provided, however, that this method of payment shall not be available to an “Executive Officer” (as defined in Rule 3b-7 of the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto) if it would constitute a loan by the Company to the Employee.

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6. Tax Withholding. As a condition precedent to the exercise of the Option, Employee shall, if requested by the Company, pay to the Company, in addition to the aggregate Option Price, such amount of cash as the Company may be required, under applicable federal, state or local law or regulations, to withhold and pay over as income or other withholding taxes.

7. Delivery of Option Shares. Upon the exercise of the Option in whole or in part, the Company shall deliver a certificate or certificates representing the number of shares of Common Stock purchased against full payment therefore in the manner set forth in Section 5 hereof, and the Company shall pay all original issue or transfer taxes and all other fees and expenses incident to such delivery except as otherwise provided in Section 6 hereof.

8. Transferability. None of the Option, this Agreement or any rights under this Agreement may be transferred other than by will or the laws of descent and distribution, and during Employee’s lifetime the Option shall be exercisable only by Employee or his or her legal representative. Any other transfer or any attempted assignment, pledge or hypothecation, whether or not by operation of law, shall be void and shall nullify the Option. The Option shall not be subject to execution, attachment or other process, and no person or entity shall be entitled to exercise any rights of Employee under this Agreement or possess any rights under this Agreement by virtue of any attempted execution, attachment or other process. Notwithstanding the foregoing, the Option may be transferred by law or pursuant to the laws of descent and distribution or by domestic relations order.

9. Adjustments. Upon the occurrence of any of the following events, the Option shall be adjusted as follows:

a) In case the number of outstanding shares of Common Stock shall be increased by stock split, stock dividend, or other relevant change in the capitalization of the Company (which shall not include the sale by the Company of shares of Common Stock or securities convertible into shares of Common Stock), the number of Option Shares which may thereafter be purchased under the Option shall be proportionately increased and the Option Price shall be proportionately decreased.

b) In case the number of outstanding shares of Common Stock shall be decreased by reverse stock split, combination of shares, recapitalization or other relevant change in the capitalization of the Company (which shall not include the purchase or retirement by the Company of shares of Common Stock or securities convertible into such shares of Common Stock), the number of Option Shares which may thereafter be purchased hereunder shall be proportionately decreased and the Option Price shall be proportionately increased.

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10. Registration. The Option and this Agreement is subject to the condition that if at any time the Committee shall determine, in its discretion, that the listing of the Option Shares on any securities exchange, or the registration or qualification of the Option Shares under any federal or state law, or the consent or approval of any regulatory body, shall be necessary or desirable as a condition of, or in connection with, the granting of this Option or the purchase or delivery of Option Shares, the Option may not be exercised, in whole or in part, and the Option Shares may not be delivered, as the case may be, unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Company agrees to make every reasonable effort to effect or obtain any such listing, registration, qualification, consent or approval.

11. Reservation. The Company shall at all times prior to the expiration or termination of the Option reserve and keep available, either in its treasury or out of its authorized but unissued shares of Common Stock, the full number of shares subject hereto from time to time.

12. No Privileges. Employee shall not be entitled to any privileges of ownership with respect to the Option Shares unless and until purchased and delivered upon the exercise in whole or in part of the Option.

13. Rights of Employee. In no event shall the granting of the Option or the acceptance of this Agreement by Employee interfere with or limit in any way the right of the Company to terminate Employee’s employment at any time with or without cause, nor confer upon Employee any right to continue in Employment by the Company for any period of time or to continue his or her present or any other rate of compensation.

14. Beneficiary Designation. Subject to Section 8, Employee may name, from time to time, beneficiaries as provided in the Plan.

15. Committee Resolution. The Committee shall have the right and discretion to resolve all questions which may arise in connection with the Option and with its exercise.

16. Miscellaneous.

a) This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons (or entity or entities) who shall, upon the death of Employee, acquire any rights hereunder.

b) The parties to this Agreement agree to execute such further instruments and to take such further actions as may reasonably be required to carry out the intent of this Agreement.

c) Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given when personally delivered or five (5) business days after deposit in the United States Post Office, by certified mail with postage and fees prepaid, return receipt requested. Notices shall be addressed, in the case of Employee, to the address set forth below his or her signature on the signature page hereto and in the case of the Company, to it at its principal executive office, or at such other address as such party may designate by ten (10) days’ advance written notice to the other party.

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d) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

e) The corporate law of the State of Delaware shall govern all questions concerning the relative rights of the Company and its shareowners. All other questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws (and not the laws of conflicts) of the State of Illinois.

f) The captions used herein are for convenience of reference only and shall not be considered in the interpretation of the provisions hereof.

17. Certain Definitions. As used herein, the following terms have the following meanings:

a) “Affiliate” means any corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company, including the subsidiaries of the Company and other entities controlled by such subsidiaries.

b) “Agreement” has the meaning set forth in the preamble hereof.

c) “Cause” with respect to the termination of Employee’s Employment by the Company, means one or more of the following: (i) Employee’s commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving dishonesty, disloyalty or fraud with respect to the Company or any of its Affiliates or any of their customers or suppliers, (ii) Employee’s reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other conduct causing the Company or any of its Affiliates public disgrace or disrepute or economic harm, (iii) failure by Employee to perform duties as reasonably directed by the Company officer or other employee to whom Employee primarily reports (or, with respect to the Chief Executive Officer, the Board), (iv) any willful act or omission aiding or abetting a competitor, supplier or customer of the Company or any of its subsidiaries to the disadvantage or detriment of the Company and its Affiliates, (v) breach of fiduciary duty, gross negligence or willful misconduct with respect to the Company or any of its Affiliates or (vi) if Employee is covered by an employment agreement with the Company or an Affiliate, any breach of such agreement which is not cured to the Company’s Chief Executive Officer (or, with respect to such Chief Executive Officer, the Board) reasonable satisfaction within fifteen (15) days after written notice thereof to Employee.

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d) “Change in Control” means:

i) the acquisition by any Person or Persons acting in concert, of beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), directly or indirectly, of more than fifty percent (50%) of the outstanding stock of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange Act in the case of rights to acquire stock); or

ii) the consummation of (A) any consolidation or merger of the Company, other than a consolidation or merger of the Company in which holders of its stock immediately prior to the consolidation or merger hold proportionately at least a majority of the outstanding common stock of the continuing or surviving corporation; or (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company (“Transfer Transaction”), except where (1) the Company owns all of the outstanding stock of the transferee entity or (2) the holders of the Company’s common stock immediately prior to the Transfer Transaction own proportionately at least a majority of the outstanding stock of the transferee entity, immediately after the Transfer Transaction; or (C) any consolidation or merger of the Company where, after the consolidation or merger, one Person owns one hundred percent (100%) of the shares of stock of the Company (except where the holders of the Company’s common stock immediately prior to such merger or consolidation own proportionately at least a majority of the outstanding stock of such Person immediately after such consolidation or merger).

e) “Code” has the meaning set forth in Section 1 hereof.

f) “Committee” means the Company’s Compensation, Organization and Corporate Governance Committee or other committee authorized by the Company’s Board of Directors to administer the Plan (or any successor plan thereto).

g) “Common Stock” has the meaning set forth in Section 1 hereof.

h) “Company” has the meaning set forth in the preamble hereof.

i) “Disability” means a mental or physical illness that entitles Employee to receive benefits under the long-term disability plan of the Company, or if there is no such plan or Employee is not covered by such a plan or a mental or physical illness that renders Employee totally and permanently incapable of performing Employee’s duties for the Company, as determined by the Committee. The determination of Disability for purposes of this Agreement shall not be construed to be an admission of disability for any other purpose.

j) “Employee” has the meaning set forth in the preamble hereof.

k) “Employment by the Company” shall mean continuous employment by the Company or an Affiliate. For purposes of determining whether Employee has been continuously employed, any leave of absence for periods and purposes conforming to the personnel policies of the Company and approved by the Committee shall not be deemed to be an interruption of continuous service.

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l) “Final Expiration Date” has the meaning set forth in Section 1 hereof

m) “Grant Date” has the meaning set forth in the preamble hereof.

n) “Option Price” has the meaning set forth in Section 1 hereof

o) “Option Shares” has the meaning set forth in Section 1 hereof.

p) “Person” has the meaning provided in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) except that such term shall not include: (i) the Company or any of its subsidiaries; (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates; (iii) an underwriter temporarily holding securities pursuant to an offering of such securities; or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

q) “Plan” has the meaning set forth in the preamble hereof.

r) “Retirement” means Employee’s voluntary termination of Employee’s Employment by the Company after Employee has attained his or her full Social Security retirement age (i.e., the age at which the Participant may receive unreduced Social Security benefits), other than a termination by the Company or an Affiliate for Cause.

s) “Termination of Employment” means Employee ceasing to be in continuous Employment by the Company for any reason whatsoever, including without limitation, Employee’s death, Disability or discharge.

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.

MATERIAL SCIENCES CORPORATION

By:

Name:

Title: Corporate Director, Human Resources

Employee

By:

Name:

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EX-10.(M)

Exhibit 10(m)

MATERIAL SCIENCES CORPORATION

RESTRICTED STOCK AWARD AGREEMENT

MERIT/STOCK EXCHANGE PROGRAM

UNDER THE 2012 INCENTIVE COMPENSATION PLAN

Material Sciences Corporation, a Delaware corporation (the “Company”), hereby grants to                      (“Employee”), pursuant to the Merit/Stock Exchange Program under the Material Sciences Corporation 2012 Incentive Compensation Plan,              shares (the “Restricted Shares”) of its common stock, $.02 par value (the “Common Stock”), subject to the terms, conditions and restrictions set forth in this Agreement. The award of the Restricted Shares is subject to the terms and conditions set forth in the 2012 Incentive Compensation Plan and the following terms and conditions:

1. Rights of Shareowner. Except as otherwise provided herein, Employee shall have all of the rights of a shareowner with respect to the Restricted Shares (including the right to vote the Restricted Shares and the right to receive dividends with respect to the Restricted Shares), provided, however, that the Company will retain custody of all dividends and other distributions (“Retained Distributions”), if any, made or declared with respect to the Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such time, if ever, as the Restricted Shares with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested, at which time the Retained Distributions will be paid to Employee. Retained Distributions shall not bear interest or be segregated in separate accounts. Upon Termination of Employment, Employee shall forfeit any Retained Distributions on any Restricted Shares in which Employee is not vested in accordance with Section 3 and such Retained Distributions shall be returned to the Company.

2. Restrictions on Transfer. Except as otherwise provided in this Agreement, Employee may not sell, transfer, assign, pledge, encumber or otherwise dispose of any of the Restricted Shares or the rights granted hereunder (any such disposition or encumbrance being referred to herein as a “transfer”). Any transfer or purported transfer by Employee of any of the Restricted Shares shall be null and void and the Company shall not recognize or give effect to such transfer on its books and records or recognize the person to whom such purported transfer has been made as the legal or beneficial holder of such shares. The Restricted Shares shall not be subject to execution, attachment or other process and no person shall be entitled to exercise any rights of Employee as the holder of such Restricted Shares by virtue of any attempted execution, attachment or other process until the restrictions imposed herein on the transfer of the Restricted Shares lapse as provided in paragraph 3 or 5 hereof. All certificates representing the Restricted Shares shall have endorsed thereon the following legend:

“The shares represented by this certificate are subject to restrictions on transfer set forth in a Restricted Stock Award Agreement dated as of                      between the Company and the registered holder, a copy of which is on file at the principal office of the Company. Any transfer or purported transfer of the shares represented by this certificate in violation of such Restricted Stock Award Agreement shall be null and void.”

Employee may request the removal of such legend from certificates representing any Restricted Shares as to which the restrictions imposed herein on the transfer thereof shall have lapsed as provided in paragraph 3 or 5 hereof. Employee (or the legal representative, estate or heirs of Employee) shall promptly deliver to the Company the certificates representing any Restricted Shares which have been forfeited as set forth herein.

3. Lapse of Restrictions and Forfeiture.

(a) The restrictions on transfer imposed on the Restricted Shares by paragraph 2 shall lapse following the first anniversary of this Agreement.

(b) Notwithstanding paragraph 3(a), in the event that prior to the lapse of restrictions on transfer pursuant to paragraph 3(a), Employee’s employment is terminated by the Company for Cause (as hereinafter defined), Employee shall forfeit, on the date on which his employment is terminated, all of the Restricted Shares as to which the restrictions on transfer imposed thereon by paragraph 2 hereof shall not have lapsed prior to such date.

For purposes hereof, the term “Cause”, with respect to the Employee, one or more of the following: (i) the Employee’s commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving dishonesty, disloyalty or fraud with respect to the Company or any of its Affiliates or any of their customers or suppliers, (ii) the Employee’s reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other conduct causing the Company or any of its Affiliates public disgrace or disrepute or economic harm, (iii) failure by the Employee to perform duties as reasonably directed by the Company officer or other employee to whom the Employee primarily reports (or, with respect to the Chief Executive Officer, the Board), (iv) any act or omission aiding or abetting a competitor, supplier or customer of the Company or any of its subsidiaries to the disadvantage or detriment of the Company and its Affiliates, (v) breach of fiduciary duty, negligence or misconduct with respect to the Company or any of its Affiliates or (vi) if the Employee is covered by an employment agreement with the Company or an Affiliate, any breach of such agreement which is not cured to the Company’s Chief Executive Officer (or, with respect to such Chief Executive Officer, the Board) reasonable satisfaction within fifteen (15) days after written notice thereof to the Employee.

(c) Notwithstanding paragraph 3(a), in the event that prior to the lapse of restrictions on transfer pursuant to paragraph 3(a), Employee’s employment with the Company is terminated for any reason, other than by the Company for Cause, (i) the restrictions on transfer imposed on the Restricted Shares by paragraph 2 shall lapse as to the number of Restricted Shares (rounded to the nearest whole share) equal to the product of (A) the total number of Restricted Shares, multiplied by (B) a fraction, (y) the numerator of which equals the number of whole or partial calendar months which have elapsed from the effective date of this Agreement, and (z) the denominator of which is 12; and (ii) Employee shall forfeit, on the date on which his employment is terminated, all of the Restricted Shares as to which the restrictions on transfer imposed thereon by paragraph 2 hereof shall not have lapsed as a result of the operation of this paragraph 3(c).

4. Transferability. Notwithstanding anything contained in this Agreement to the contrary, Restricted Shares may be transferred (i) by law or pursuant to the laws of descent and distribution and (ii) by the Employee to a “family member” of such Employee by gift or by domestic relations order. For purposes of this paragraph 4, “family member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Employee’s household (other than as a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Employee) control the management of assets, and any other entity in which these persons (or the Employee) own more than fifty percent of the voting interests (each, a “Permitted Transferee”). In the case of any transfer pursuant to this paragraph 4, this Agreement shall be interpreted such that the term “Employee” shall mean the transferring Employee and his or her Permitted Transferees (it being agreed that all of the obligations of the Employee hereunder shall be allocated as appropriate between the transferring Employee and his or her Permitted Transferee).

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5. Adjustments. Upon the occurrence of any of the following events prior to the lapse of the restrictions imposed by paragraph 2 hereof or the forfeiture of Restricted Shares as provided herein, this grant shall be adjusted as follows:

(a) in case the number of outstanding shares of Common Stock shall be increased by stock split, stock dividend, or other relevant change in the capitalization of the Company (which shall not include the sale by the Company of shares of Common Stock or securities convertible into such shares), the Committee shall make or cause to be made any proportionate adjustments herein or otherwise necessary to reflect such change with respect to the Restricted Shares, notwithstanding that the Restricted Shares are subject to the restrictions on transfer imposed by paragraph 2 above;

(b) in case the number of outstanding shares of Common Stock shall be decreased by reverse stock split, combination of shares, recapitalization or other relevant change in the capitalization of the Company (which shall not include the purchase or retirement by the Company of shares of Common Stock or securities convertible into such shares), the Committee shall make or cause to be made any proportionate adjustments herein or otherwise necessary to reflect such change with respect to the Restricted Shares, notwithstanding that the Restricted Shares are subject to the restrictions on transfer imposed by paragraph 2 above; and

(c) in case the Company shall effect a merger, consolidation or other reorganization, pursuant to which the outstanding shares of Common Stock shall be exchanged for other shares or securities of the Company or of another corporation which is a party to such merger, consolidation or other reorganization, the Company shall use its best efforts to provide in any agreement or plan which it enters into or adopts to effect any such merger, consolidation or reorganization that Employee shall receive in such merger, consolidation or reorganization, subject to substantially the same transfer restrictions as set forth herein, the kind and number of shares or other securities of the Company or of such other corporation which would have been issuable to Employee in respect of the Restricted Shares owned by him immediately prior to the effective date of such merger, consolidation or reorganization if such Restricted Shares were not subject to the transfer restrictions set forth herein.

If the provision described in paragraph 5(c) above has not been made with respect hereto by the effective date of any such merger, consolidation or other reorganization, then the restrictions imposed by paragraph 2 hereof shall thereupon lapse. The decision of the Committee as to the exact manner, amount and timing of any adjustment described in this paragraph 5 or any other matter under this paragraph 5 shall be conclusive.

6. Tax Withholding. As a condition precedent to the receipt of any Restricted Shares hereunder, Employee agrees to pay to the Company at such times as the Company shall determine such amounts as the Company shall deem necessary to satisfy any withholding taxes due on income that Employee recognizes as a result of (i) the lapse of the restrictions imposed by paragraph 2 hereof on the Restricted Shares or (ii) Employee’s filing of an election pursuant to Section 83(b) of the Internal Revenue Code of 1986 (the “Code”), as amended, with respect to the Restricted Shares.

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7. Employment. As used herein, employment by the Company shall include employment by a corporation which is a “parent corporation” or a “subsidiary corporation” of the Company, as such terms are defined in subsections (e) and (f) of Section 424 of the Code, and employment by any corporation, or a “parent corporation” or “subsidiary corporation” of such corporation, assuming this grant in lieu thereof, in a transaction to which Section 424(a) of the Code shall apply. Partnerships, joint ventures, and limited liability companies of what the Company owns an interest of 50% or more should be considered a “subsidiary” of the Company.

8. Registration. This grant is subject to the condition that if at any time the Committee shall determine, in its discretion, that the listing of the shares of Common Stock subject hereto on any securities exchange, or the registration or qualification of such shares under any federal or state law, or the consent or approval of any regulatory body, shall be necessary or desirable as a condition of, or in connection with, the grant, receipt or delivery of shares hereunder, such grant, receipt or delivery will not be effected unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Company agrees to make every reasonable effort to effect or obtain any such listing, registration, qualification, consent or approval.

9. Rights of Employee. In no event shall the granting of the Restricted Shares or the other provisions hereof or the acceptance of the Restricted Shares by Employee interfere with or limit in any way the right of the Company to terminate Employee’s employment at any time, nor confer upon Employee any right to continue in the employ of the Company for any period of time or to continue his or her present or any other rate of compensation.

10. Interpretation of Agreement. This Agreement is intended to be consistent with the 1992 Plan, and it shall be interpreted consistently with that intent. Any questions which arise in connection with the interpretation or performance of this grant shall be resolved by the Committee in its sole and absolute discretion.

11. Successors of the Company. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of Employee, acquire any rights hereunder.

12. Further Instruments. The parties agree to execute such further instruments and to take such further actions as may reasonably be required to carry out the intent of this Agreement.

13. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given when personally delivered or five (5) business days after deposit in the United States Post Office, by certified mail with postage and fees prepaid, return receipt requested. Notices shall be addressed, in the case of Employee, to the address set forth below his signature on the signature page hereto and in the case of the Company, to it at its principal executive office, or at such other address as such party may designate by ten (10) days’ advance written notice to the other party.

14. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

15. Governing Law. The corporate law of the State of Delaware shall govern all questions concerning the relative rights of the Company and its shareowners. All other questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws (and not the laws of conflicts) of the State of Illinois.

- 4 -

16. Payment of Transfer Taxes. The Company agrees to pay any original issue or transfer taxes incurred as a result of the award of the Restricted Shares.

17. Condition under which Award Null and Void. This award shall be null and void unless Employee shall accept the same below and return it to the Chief Executive Officer of the Company at its office in Elk Grove Village, Illinois by                     .

Dated as of the                     .

MATERIAL SCIENCES CORPORATION
By:	James D. Pawlak
	Its: Chief Financial Officer

Accepted as of this                      day

of                     , 201    .

Employee

Address:

- 5 -

EX-21

Exhibit 21

Subsidiaries of the Registrant (as of February 28, 2013)

Name of Subsidiary	State or Jurisdiction of Incorporation
Material Sciences Corporation, Engineered Materials and Solutions Group, Inc.	Illinois
MSC Pre Finish Metals (EGV) Inc.	Delaware
MSC Walbridge Coatings Inc.	Delaware
MSC Laminates and Composites Inc.	Delaware
MSC Laminates and Composites (EGV) Inc.	Delaware
Material Sciences Service Corporation	Delaware
MSC Europe GmbH	Germany
MSC/TEKNO Laminates and Composites LTDA	Brazil
Material Sciences Japan Corporation	Japan
Material Sciences (Shanghai) Trading Co., Ltd.	China

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated May 6, 2013, with respect to the consolidated financial statements, schedule, and internal control over financial reporting included in the Annual Report of Material Sciences Corporation and subsidiaries on Form 10-K for the year ended February 28, 2013. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Material Sciences Corporation and subsidiaries on Forms S-8 (File No. 33-57648, 333-15679, 333-33885, 333-47536, 333-47538, 333-88387, and 333-182734).

/s/ GRANT THORNTON LLP

Chicago, IL

May 6, 2013

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 33-57648, 333-15679, 333-33885, 333-47536, 333-47538, 333-88387 and 333-182734 on Form S-8 of our report dated May 4, 2012, relating to the consolidated financial statements and financial statement schedule of Material Sciences Corporation and subsidiaries appearing in this Annual Report on Form 10-K of Material Sciences Corporation for the year ended February 28, 2013.

/s/ DELOITTE & TOUCHE LLP

Chicago, IL

May 6, 2013

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER Rule 13a-14(a)/ 15(d)-14(a)

I, Clifford D. Nastas, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Material Sciences Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d.) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 6, 2013

By:	/s/    CLIFFORD D. NASTAS
	Clifford D. Nastas
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER Rule 13a-14(a)/ 15(d)-14(a)

I, James D. Pawlak, Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary, certify that:

1. I have reviewed this annual report on Form 10-K of Material Sciences Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d.) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 6, 2013

By:	/s/    JAMES D. PAWLAK
	James D. Pawlak
	Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary

EX-32

EXHIBIT 32

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER Section 1350

In connection with the Annual Report of Material Sciences Corporation (the “Company”) on Form 10-K for the fiscal year ended February 28, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clifford D. Nastas, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: May 6, 2013

By:	/s/    CLIFFORD D. NASTAS
	Clifford D. Nastas
	Chief Executive Officer

In connection with the Report, I, James D. Pawlak, Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: May 6, 2013

By:	/s/    JAMES D. PAWLAK
	James D. Pawlak
	Vice President, Chief Financial Officer, Corporate Controller and Corporate Secretary

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Restructuring (Tables)

12 Months Ended

Feb. 28, 2013

Restructuring Reserve

The restructuring reserve as of February 28, 2013, is presented in the table below, which includes the fiscal 2011, 2012 and 2013 restructuring activities. The reserve is included in accrued payroll related expenses on the Consolidated Balance Sheets.

(in thousands)	Severance			Other			Total
Restructuring Reserve as of February 28, 2010	$	1,424		$	0		$	1,424
Restructuring Reserve Recorded During Fiscal 2011		1,324			0			1,324
Cash Payments		(2,546	)		0			(2,546	)
Restructuring Reserve as of February 28, 2011	$	202		$	0		$	202
Restructuring Reserve Recorded During Fiscal 2012		430			153			583
Cash Payment		(484	)		(66	)		(550	)
Restructuring Reserve as of February 29, 2012	$	148		$	87		$	235
Restructuring Reserve Recorded During Fiscal 2013		—			—			—
Cash Payment		(148	)		(87	)		(235	)
Restructuring Reserve as of February 28, 2013	$	—		$	—		$	—

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Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net Amount Recognized	$ (228)	$ 1,290	$ (3,006)
Pension Plans, Defined Benefit
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net (Gain) or Loss	5	2,333
Prior Service Cost (Credit)
Adjustment for 2007 Plan Amendment
Amortization of Net (Gain) or Loss	(630)	(431)
Net Amount Recognized	(625)	1,902
Other Postretirement Benefit Plans, Defined Benefit
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net (Gain) or Loss	163	95
Amortization of Prior Service Cost (Credit)	276	276
Prior Service Cost (Credit)
Adjustment for 2007 Plan Amendment
Amortization of Net (Gain) or Loss	(196)	(188)
Net Amount Recognized	$ 243	$ 183

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Retirement and Savings Plans - Additional Information (Detail) (USD $)	12 Months Ended							1 Months Ended	3 Months Ended		3 Months Ended		1 Months Ended
	Feb. 28, 2013 CompensationPlan	Feb. 29, 2012	Feb. 28, 2011	Feb. 28, 2013 Equity Securities	Feb. 28, 2013 Fixed Income Securities	Feb. 28, 2013 Maximum	Feb. 28, 2013 Minimum	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit	Feb. 28, 2013 Other Postretirement Benefit Plans, Defined Benefit	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit Prior Fiscal Years	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit Error Correction	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit Amendment	Nov. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit Other adjustments	Feb. 28, 2013 Pension Plans, Defined Benefit	Feb. 28, 2013 Pension Plans, Defined Benefit Minimum
Employee Benefit And Retirement Plans [Line Items]
Number of defined contribution retirement plans	1
Maximum participants contribution percentage of annual compensation	85.00%
Defined contribution plan employer matching contribution percentage	6.00%
Saving and investment plan cost	$ 600,000	$ 500,000	$ 500,000
Reduction in expense									400,000		200,000
Reduction in accrued liability	174,000	(280,000)	(1,879,000)					2,400,000				600,000	1,500,000	300,000
Effect of one percentage point increase in estimated discount rate on net pension expense	100,000
Effect of one percentage point increase in estimated discount rate on estimated pension liability	1,500,000
Effect of one percentage point decrease in discount rate on net pension expense	100,000
Effect of one percentage point decrease in discount rate on estimated pension liability	1,800,000
Effect of one percentage point increase or decrease in estimated future return on plan assets on net pension expense	100,000
Estimated future return on plan assets	6.60%
Assumed health care cost annual increases trend						7.00%	5.00%
Effect of a 1% increase in assumed health care cost trend rate on service and interest cost	100,000
Effect of a 1% increase in assumed health care cost trend rate on accumulated postretirement obligation	100,000
Effect of a 1% decrease in assumed health care cost trend rate on service and interest cost	100,000
Effect of a 1% decrease in assumed health care cost trend rate on accumulated postretirement obligation	100,000
Percentage of targeted asset allocation				61.00%	39.00%
Benefit plan expected future contribution in next fiscal year										100,000					3,100,000	1,100,000
Benefit plan additional expected future contribution in next fiscal year															$ 2,000,000

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Net Sales of Domestic and Foreign Units (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 29, 2012	Nov. 30, 2011	Aug. 31, 2011	May 31, 2011	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Segment Reporting Information [Line Items]
Net Sales	$ 25,859	$ 30,387	$ 29,927	$ 34,834	$ 32,272	$ 34,009	$ 34,417	$ 36,036	$ 121,007	$ 136,734	$ 137,624
Domestic Net Sales
Segment Reporting Information [Line Items]
Net Sales									105,513	121,684	125,179
Foreign Net Sales
Segment Reporting Information [Line Items]
Net Sales									$ 15,494	$ 15,050	$ 12,445

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Assumptions Used in Determining Plans' Funded Status (Detail)	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Assumptions Used in Determining the Plans' Funded Status:
Rate of Increase in Compensation Levels
Minimum
Assumptions Used in Determining the Plans' Funded Status:
Discount Rate	3.79%	4.00%	5.22%
Maximum
Assumptions Used in Determining the Plans' Funded Status:
Discount Rate	4.04%	4.23%	5.50%

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Purchases of Common Stock During Last Three Fiscal Years (Parenthetical) (Detail)	12 Months Ended						36 Months Ended		1 Months Ended			9 Months Ended	1 Months Ended	6 Months Ended	1 Months Ended
	Feb. 28, 2013		Feb. 29, 2012		Feb. 28, 2011		Feb. 28, 2013		May 27, 2011 February Twenty Eleven Plan	Sep. 22, 2011 May Two Thousand Eleven Authorized Amount	Oct. 10, 2011 October 2011 plan	Jul. 16, 2012 October 2011 plan	Oct. 10, 2012 July 2012 plan	Feb. 15, 2013 July 2012 plan	Feb. 28, 2013 February Twenty Thirteen Plan
Equity, Class of Treasury Stock [Line Items]
Common stock authorized to be repurchased	283,000	[1]	2,450,000	[1]	16,000	[1]	2,749,000	[1]	1,000,000		1,000,000		551,853		364,476
Total Number of Shares Purchased	283,000		2,450,000		16,000		2,749,000			1,000,000		448,147		187,377
Stock repurchase program, expiration date									Sep. 22, 2011		Jul. 16, 2012		Feb. 15, 2013
Common stock available for repurchase	364,000		648,000		1,098,000		364,000								364,476

[1] On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

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Leases - Additional Information (Detail) (USD $)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Operating Leased Assets [Line Items]
Total rental expense under operating leases	$ 1,700,000	$ 1,500,000	$ 1,500,000
Rental Income	$ 648,000	$ 1,107,000	$ 912,000
Walbridge Ohio Facility
Operating Leased Assets [Line Items]
Lease expiration date	Apr. 30, 2015
Lease extension period	3 years
Lease expiration, automatic extension end date	Apr. 30, 2027
Michigan
Operating Leased Assets [Line Items]
Lease extension period	5 years
Lease expiration date	2018-09
Lease expiration, automatic extension end date	2043-09

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Income Taxes (Tables)

12 Months Ended

Feb. 28, 2013

Income (Loss) from Continuing Operations Before Income Taxes

Income (loss) from continuing operations before income taxes was as follows:

(in thousands)	Fiscal 2013		Fiscal 2012			Fiscal 2011
United States	$	12,282	$	13,778		$	12,900
Foreign		327		(227	)		(532	)
	$	12,609	$	13,551		$	12,368

Components of Provision (Benefit) for Income Taxes

The components of the provision (benefit) for income taxes and reconciliation between the statutory rate for federal income taxes and the effective tax rate are summarized and presented below.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Provision (Benefit)
Current:
Federal	$	(85	)	$	(817	)	$	(32	)
State		(126	)		853			341
Foreign		64			(128	)		15
		(147	)		(92	)		324
Deferred:
Federal		4,091			(9,530	)		—
State		(317	)		(1,565	)		—
Foreign		(12	)		(3,729	)		—
		3,762			(14,824	)		—
Tax Provision (Benefit)	$	3,615		$	(14,916	)	$	324

Tax Rate Reconciliation

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Rate Reconciliation
Tax Provision (Benefit) at Federal Statutory Rate	$	4,413		$	4,743		$	4,329
State and Local Taxes, Net of Federal Tax Benefit		172			525			521
Effect of Changes in Tax Rates		(41	)		(76	)		(88	)
Change in Unrecognized Tax Benefits		(562	)		(1,029	)		(96	)
Valuation Allowance		—			(18,807	)		(4,398	)
Research and Development Credit		(106	)		(22	)		(79	)
Manufacturing Deduction		(80	)		(440	)		—
Other, Net		(181	)		190			135
Tax Provision (Benefit) at Effective Income Tax Rate	$	3,615		$	(14,916	)	$	324

Temporary Differences That Give Rises to Deferred Tax Assets and Liabilities

Temporary differences that give rise to deferred tax assets and (liabilities) were as follows:

(in thousands)	Fiscal 2013			Fiscal 2012
Reserves Not Deductible Until Paid	$	1,145		$	1,270
Employee Benefit Liabilities		5,859			6,257
Net Operating Loss and Tax Credit Carryforwards		5,011			4,855
Property and Equipment		1,539			5,088
Other		351			434
Total Gross Deferred Tax Asset	$	13,905		$	17,904
Valuation Allowance		(567	)		(567	)
Total Net Deferred Tax Assets	$	13,338		$	17,337

Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in millions):

	Fiscal 2013			Fiscal 2012			Fiscal 2011
Gross unrecognized tax benefits at beginning of year	$	1.1		$	2.2		$	2.5
Decreases in tax positions for prior years		(0.2	)		(0.1	)		(0.2	)
Lapse in statute of limitations		(0.4	)		(1.0	)		(0.1	)
Gross unrecognized tax benefits at end of year	$	0.5		$	1.1		$	2.2

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Net Sales by Product Category Net of Intercompany Activity (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 29, 2012	Nov. 30, 2011	Aug. 31, 2011	May 31, 2011	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Segment Reporting Information [Line Items]
Net Sales	$ 25,859	$ 30,387	$ 29,927	$ 34,834	$ 32,272	$ 34,009	$ 34,417	$ 36,036	$ 121,007	$ 136,734	$ 137,624
Percentage of net sales									100.00%	100.00%	100.00%
Acoustical
Segment Reporting Information [Line Items]
Net Sales									73,800	68,300	73,100
Percentage of net sales									61.00%	50.00%	53.00%
Coated
Segment Reporting Information [Line Items]
Net Sales									$ 47,200	$ 68,400	$ 64,500
Percentage of net sales									39.00%	50.00%	47.00%

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Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Options Outstanding
Granted	200,000	200,000	200,000
Exercised		(22,304)
Weighted Average Exercise Price
Beginning Balance	$ 5.84
Granted	$ 8.75
Exercised
Canceled/Forfeited	$ 11.00
Ending Balance	$ 6.57	$ 5.84
Exercisable as of February 28, 2013	$ 8.10
Vested or Expected to Vest as of February 28, 2013	$ 6.57
Aggregate Intrinsic Value
Beginning Balance	$ 1,472
Ending Balance	2,479	1,472
Vested or Expected to Vest as of February 28, 2013	$ 2,479
Director
Options Outstanding
Beginning Balance	18,087
Exercised
Canceled/Forfeited	(14,550)
Ending Balance	3,537
Exercisable as of February 28, 2013	3,537
Vested or Expected to Vest as of February 28, 2013	3,537
Key Employees
Options Outstanding
Beginning Balance	488,138
Granted	200,000
Exercised
Ending Balance	688,138
Exercisable as of February 28, 2013	113,138
Vested or Expected to Vest as of February 28, 2013	688,138

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Sale of Elk Grove Village Building - Additional Information (Detail) (USD $)	6 Months Ended	12 Months Ended
	Aug. 31, 2012 sqft	Feb. 28, 2013	Feb. 28, 2011	Jul. 23, 2012 sqft
Discontinued Operations [Line Items]
Facility leased to Main Steel Polishing Company, Inc.				240,000
Leasable area of facility				280,000
Proceeds from Sale of Assets	$ 9,200,000	$ 9,180,000	$ 14,089,000
Gain on sales of assets	3,200,000	3,216,000	6,643,000
Tax loss on sale of assets	5,400,000
Expected tax savings due to tax loss	$ 1,800,000
Lease agreement with Torburn	35,000
Lease term	4 years

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Pension Plan Weighted Average Asset Allocations (Detail)	Feb. 28, 2013	Feb. 29, 2012
Defined Benefit Plan Disclosure [Line Items]
Weighted-average asset allocations	100.00%	100.00%
Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Weighted-average asset allocations	63.00%	65.00%
Debt Securities
Defined Benefit Plan Disclosure [Line Items]
Weighted-average asset allocations	37.00%	35.00%

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Restricted Stock Transactions (Detail) (Restricted Stock)	1 Months Ended			12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Mar. 31, 2012	Feb. 28, 2013	Feb. 28, 2011
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance			30,000	30,000	30,000
Granted	946	959	5,900	17,330
Vested				(10,554)
Canceled				(146)
Ending Balance				36,630	30,000

XML

Asset Impairment - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 31, 2010
Long Lived Assets Held-for-sale [Line Items]
Asset impairment	$ 3.7

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Earnings Per Share - Additional Information (Detail)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Computation Of Earnings Per Share Line Items
Option not included in computation of earnings per share	400,000	318,000	261,000
Stock Options
Computation Of Earnings Per Share Line Items
Option not included in computation of earnings per share	400,000

XML

Middletown Asset Sale - Additional Information (Detail) (USD $)	6 Months Ended	12 Months Ended		1 Months Ended	3 Months Ended
	Aug. 31, 2012	Feb. 28, 2013	Feb. 28, 2011	Jun. 24, 2010 Middletown	Aug. 31, 2011 Middletown
Long Lived Assets Held-for-sale [Line Items]
Carrying value of asset prior to sale				$ 2,900,000
Cash received from sale of assets	9,200,000	9,180,000	14,089,000	4,900,000
Gain on sale of asset		$ 3,216,000	$ 6,643,000		$ 1,900,000

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Purchases of Common Stock During Last Three Fiscal Years (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended						36 Months Ended
	Feb. 28, 2013		Feb. 29, 2012		Feb. 28, 2011		Feb. 28, 2013
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	283		2,450		16		2,749
Total Cost	$ 2,233		$ 17,538		$ 111		$ 19,882
Total Number of Shares Purchased as Part of a Written Trading Plan	283	[1]	2,450	[1]	16	[1]	2,749	[1]
Maximum Number of Shares that May Yet Be Purchased	364		648		1,098		364

[1] On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

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Significant Customers and Export Sales - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 29, 2012	Nov. 30, 2011	Aug. 31, 2011	May 31, 2011	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Concentration Risk [Line Items]
Domestic sales	$ 25,859	$ 30,387	$ 29,927	$ 34,834	$ 32,272	$ 34,009	$ 34,417	$ 36,036	$ 121,007	$ 136,734	$ 137,624
Asia
Concentration Risk [Line Items]
Domestic sales										$ 400	$ 3,500

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Sale of Elk Grove Village Building

12 Months Ended

Feb. 28, 2013

Sale of Elk Grove Village Building

Note 18: Sale of Elk Grove Village Building

In April 2011, after receiving authorization from the Board of Directors, management committed to a plan to sell the building located at 2200 East Pratt Boulevard in Elk Grove Village, Illinois (the “Facility”). This building houses our corporate and general offices and previously housed our coil coating assets before they were sold in April 2010.

On July 23, 2012, MSC began leasing a portion of the Facility to Main Steel Polishing Company, Inc. The lease included approximately 240,000 square feet of the 280,000 square foot Facility. MSC entered into this lease to enhance the attractiveness of the Facility to potential buyers.

On August 31, 2012, MSC sold the Facility to Torburn Partners, Inc. (“Torburn”) for cash. The net proceeds from the sale were approximately $9.2 million, which reflects all selling costs and the executory costs related to the lease discussed above. The Company recognized a gain of approximately $3.2 million on the sale. MSC will report a tax loss on the sale of approximately $5.4 million on the fiscal 2013 tax return. The Company expects to realize cash tax savings of approximately $1.8 million due to the tax loss.

MSC entered into a four-year lease with Torburn under which MSC continues to occupy approximately 35,000 square feet of office space in the Facility to house its corporate and domestic operations.

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Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) (Pension Plans, Defined Benefit, USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Pension Plans, Defined Benefit
Plans with Accumulated Benefit Obligation in excess of Plan Assets
Accumulated Benefit Obligation	$ 15,551	$ 15,964

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Components of Accumulated Other Comprehensive Loss (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss, Tax	$ 1,974	$ 2,208
Accumulated Other Post Retirement Liabilities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss, Tax	$ 1,027	$ 935

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Stock Options Outstanding and Stock Options Exercisable (Detail) (USD $) In Thousands, except Share data, unless otherwise specified			12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2013 Range One	Feb. 28, 2013 Range Two	Feb. 28, 2013 Range Three	Feb. 28, 2013 Range Four	Feb. 28, 2013 Range Five
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower range			$ 2.00	$ 5.01	$ 8.01	$ 11.01	$ 2.00
Range of Exercise Prices, upper range			$ 5.00	$ 8.00	$ 11.00	$ 14.05	$ 14.05
Options outstanding Shares			175,000	313,138	200,000	3,537	691,675
Options outstanding weighted average remaining life (years)			4 years	5 years	6 years	1 year	5 years
Options outstanding weighted average Exercise Price			$ 2.00	$ 7.68	$ 8.75	$ 11.31	$ 6.57
Options outstanding aggregate Intrinsic Value	$ 2,479	$ 1,472					$ 2,479
Exercisable Options Shares				113,138		3,537	116,675
Exercisable Options Weighted Average Exercise Price			$ 0.00	$ 8.00	$ 0.00	$ 11.31	$ 8.10
Exercisable Options aggregate Intrinsic Value							$ 243

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Earnings Per Share (Tables)

12 Months Ended

Feb. 28, 2013

Computation of Basic and Diluted Earnings Per Share

Below is the computation of basic and diluted earnings per share for the fiscal years ended February 28 or 29, 2013, 2012 and 2011.

(in thousands except per share amounts)	2013		2012		2011
Net Income	$	8,994	$	28,467	$	12,044
Weighted Average Number of Common Shares Outstanding Used for Basic Net Loss Per Share		10,298		11,350		12,906
Dilutive Stock Options		108		91		51
Dilutive Restricted Stock		19
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares		10,425		11,441		12,957
Basic Net Income Per Share:
Basic Net Income Per Share	$	0.87	$	2.51	$	0.93
Diluted Net Income Per Share:
Diluted Net Income Per Share	$	0.86	$	2.49	$	0.93

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Amounts Recognized in Consolidated Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Amounts Recognized in the Consolidated Balance Sheets
Non-Current Liability	$ (7,344)	$ (8,500)
Pension Plans, Defined Benefit
Amounts Recognized in the Consolidated Balance Sheets
Prepaid Benefit Cost
Current Liability	(650)	(780)
Non-Current Liability	(5,453)	(6,667)
Net Amount Recognized	(6,103)	(7,447)
Other Postretirement Benefit Plans, Defined Benefit
Amounts Recognized in the Consolidated Balance Sheets
Prepaid Benefit Cost
Current Liability	(94)	(126)
Non-Current Liability	(1,891)	(1,833)
Net Amount Recognized	$ (1,985)	$ (1,959)

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Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Income Tax Contingency [Line Items]
Gross unrecognized tax benefits at beginning of year	$ 1.1	$ 2.2	$ 2.5
Decreases in tax positions for prior years	(0.2)	(0.1)	(0.2)
Lapse in statute of limitations	(0.4)	(1.0)	(0.1)
Gross unrecognized tax benefits at end of year	$ 0.5	$ 1.1	$ 2.2

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Components of Interest Income, Net (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Net Interest Income [Line Items]
Interest Expense	$ (32)	$ (113)	$ (36)
Interest Income	46	65	115
Interest Income, Net	$ 14	$ (48)	$ 79

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Future Minimum Lease Payments (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013
Operating Leased Assets [Line Items]
2014	$ 1,660
2015	1,508
2016	904
2017	674
2018	555
2019 and Thereafter	231
Total Minimum Lease Payments	$ 5,532

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Summary of Significant Accounting Policies

12 Months Ended

Feb. 28, 2013

Summary of Significant Accounting Policies

Note 1: Summary of Significant Accounting Policies

Nature of Operations

The operations of Material Sciences Corporation and its wholly owned subsidiaries (“MSC,” “Company,” “we,” “our” or “us”) consist of providing material-based solutions for acoustical and coated applications. Principal markets include automotive, appliance, building products, lighting and electronics.

Summary of Significant Accounting Policies

The significant accounting policies of MSC, as summarized below, conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and the disclosures in the financial statements. Actual results could differ from those estimates. Significant estimates include deferred tax asset valuation allowances, reserves for inventory and receivable exposures, product claims, income taxes, health and workers compensation benefits, pension and postretirement benefits and contingencies.

Reclassifications

Reclassifications were made to prior-year financial statements to conform to the current-year presentations—amounts previously reported as “Other, Net” in the Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities were reclassified to “Equity in Results of Joint Venture” and “Other, Net” in the Changes in Assets and Liabilities and “Long-Term Incentives” was reclassified from “Other” within the Long-Term Liabilities section of the Condensed Consolidated Balance Sheets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts for MSC after all intercompany transactions have been eliminated. In South America, the Company owns 51% of the equity and holds 50% of the voting rights in a joint venture partnership with Tekno S.A. (“Tekno”), which manufactures and sells acoustical products. Under the terms of the Tekno agreement, significant actions require unanimous consent of all parties and, as a result, MSC does not have a controlling interest in Tekno. Accordingly, the Company accounts for Tekno under the equity method.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts of these financial assets and liabilities approximate fair value due to the short maturities of these instruments.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments, principally U.S. Treasury bills, with original maturities of three or fewer months. At February 28, 2013, we held approximately $30.0 million of U.S. Treasury bills with maturities from March 14 to May 30, 2013. The Company has not experienced any losses as a result of its cash concentration. Consequently, no significant concentration of credit risk is considered to exist.

Accounts Receivable

Accounts receivable are recorded at their estimated fair value, net of allowances for doubtful accounts, claims, discounts and other credits expected to be granted to customers. The Company provides reserves for uncollectible receivables due to customer bankruptcy, insolvency or disputes over terms and conditions. The methodology for calculating the allowance for doubtful accounts includes an assessment of specific receivables that are aged and an assessment of the aging of the total receivable pool. MSC also records reductions of revenue for credits issued to customers resulting from manufacturing claims for product defects based upon historical experience and upon specific claims issues as they arise. Any differences between these estimates and actual costs are recorded on a monthly basis and are reflected in the historical experience prospectively. Total accounts receivable reserves were $0.5 million and $0.7 million at February 28, 2013, and February 29, 2012, respectively.

Inventories

Inventories are stated at the lower of cost or market, using either the specific identification or average cost method of cost valuation. Due to the continuous nature of the Company’s operations, work-in-process inventories are not material. MSC holds some of its inventory at outside processors and locations. The Company had approximately $5.3 million and $2.7 million of inventory at outside processors at February 28, 2013, and February 29, 2012, respectively. We had inventory reserves and other valuation adjustments of $1.2 million as of February 28, 2013, and February 29, 2012, net of scrap inventory that can be sold on the secondary market.

Commodity Contracts

We are exposed to certain risks related to ongoing business operations. We enter into derivative instruments with the objective of managing our financial and operational exposure arising from these risks. The primary risk managed by using derivative instruments is commodity price risk. From time-to-time in the ordinary course of business, the Company enters into purchase contracts for procuring nickel carbonate, zinc shot and natural gas, which are commodities used in its manufacturing processes. These agreements are intended to mitigate the market risk and volatility associated with the pricing of these commodities. MSC maintains a commodity forward purchase policy, which seeks to ensure that at any time the majority of the expected consumption over the next 12 months is secured under a purchase contract at a predetermined price. When we enter into these contracts, we apply the Normal Purchase/Normal Sale election for each of them, which excludes them from being accounted for as derivative instruments at fair value as long as they qualify for the election.

Long-Lived Assets

Property, plant and equipment are recorded at cost. Improvements and replacements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows: buildings and building improvements, 5 to 20 years; operating equipment, 5 to 20 years; furniture and fixtures, 5 to 10 years; software, 5 years. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining life of the lease.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, based on projections of non-discounted cash flows. If the carrying value of the depreciable long-lived assets is higher than the undiscounted cash flows related to the asset group, an impairment loss may be necessary. The impairment would be measured by the difference between the fair value of the assets and their carrying value. Fair value is determined based on market quotes, if available, or based on valuation techniques such as discounted cash flows. The valuation techniques require us to make assumptions, including, but not limited to, estimated fair value of assets, which are based on additional assumptions, such as public market data; depreciation factors for orderly liquidation, including allowances such as dismantlement and removal; and the relationship between replacement cost and market value based on the age of the assets.

There were no events during fiscal 2013 or fiscal 2012 that would trigger a review for impairment. There was an event in fiscal 2011 that triggered an impairment review of the assets at our Plant #7 in Elk Grove Village, IL. For further information, see Note 15, “Asset Impairment.”

Revenue Recognition

The Company recognizes revenue when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue. Costs incurred for shipping and handling are recorded in cost of sales. Volume discounts due customers are recognized as earned and reported as reductions of revenue in the Consolidated Statements of Operations.

Research and Development

The Company expenses all research and product development costs in the period incurred. Research and product development expenses of $4.1 million, $3.9 million and $2.3 million in fiscal 2013, 2012 and 2011, respectively, are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

Foreign Currency

The Company’s international operations are translated into U.S. dollars using current exchange rates at the balance sheet date for assets and liabilities. A weighted average exchange rate is used to translate sales, expenses, gains and losses. The currency translation adjustments are reflected in accumulated other comprehensive loss in Shareowners’ Equity. Transactions denominated in currencies other than U.S. dollars are translated at the spot rate when the transaction is settled. Any gains or losses from the settlement are reflected in other income in the Consolidated Statement of Operations.

Income Taxes

Deferred income taxes have been provided to show the effect of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefit, or that future deductibility is uncertain. The Company regularly reviews and adjusts the valuation allowance to reflect changes in the realizability of the deferred tax assets. MSC maintains a liability for the potential tax adjustment related to our uncertain tax positions.

Equity Plans

Stock-based compensation is accounted for based on the grant date fair value of the awards, or, for phantom stock, based on the market value of the underlying stock. The fair value of equity grants is amortized over the vesting period for each grant. The fair value of stock options is computed using the Black-Scholes model. The Company has one active equity award plan: the Material Sciences Corporation 2012 incentive Compensation Plan (“2012 Plan”). See Note 10 entitled “Equity and Compensation Plans” for additional discussion.

The Company recorded $0.6 million, $0.3 million, and $0.2 million of compensation expense related to stock options and restricted stock grants in fiscal 2013, 2012, and 2011, respectively. See Note 10 entitled “Equity and Compensation Plans” for a complete discussion of these items.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at February 28, 2013, and February 29, 2012, are as follows:

(in thousands)	February 28, 2013			February 29, 2012
Foreign Currency Translation	$	1,182		$	1,764
Pension Liability, Net of Tax of $1,974 and $2,208		(4,532	)		(4,911	)
Other Post Retirement Liabilities, Net of Tax of $1,027 and $935		526			677
Total	$	(2,824	)	$	(2,470	)

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include components of net income, which is consistent with the income statement format used today, and the second statement would include components of other comprehensive income (“OCI”). The ASU does not change the items that must be reported in OCI. For public entities, the ASU’s amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted the guidance in the ASU effective with its first quarter fiscal 2013 Form 10-Q. No material changes resulted from the adoption except for the addition of a statement of comprehensive income to the primary financial statements presented in Forms 10-Q subsequent to the adoption date.

On February 5, 2013, the FASB issued ASU 2013-02, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the ASU is effective for reporting periods beginning after December 15, 2012. The Company is currently evaluating the impact of adopting this guidance, which may result in changes in the presentation of its financial statements.

Consideration of Events Subsequent to the Date of the Consolidated Balance Sheet

The Company recognizes in the consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Consolidated Balance Sheet, including the estimates inherent in the process of preparing the consolidated financial statements. MSC does not recognize subsequent events that provide evidence about conditions that did not exist at the date of the Consolidated Balance Sheet but arose after that date and before the consolidated financial statements are issued. For these purposes, and relating to the February 28, 2013, Consolidated Balance Sheet, the Company has evaluated events occurring after that date through the date of this report. Any significant events that occurred after February 28, 2013, and which had an effect on the February 28, 2013, consolidated financial statements are reflected in these statements or the related notes, and are identified as subsequent events.

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Income (Loss) from Continuing Operations Before Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Income Loss From Operations Before Provision Benefit For Income Taxes [Line Items]
United States	$ 12,282	$ 13,778	$ 12,900
Foreign	327	(227)	(532)
Income Before Provision (Benefit) for Income Taxes	$ 12,609	$ 13,551	$ 12,368

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Joint Venture - Additional Information (Detail) (USD $)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Schedule of Equity Method Investments [Line Items]
Net income under equity method investments	$ 270,000	$ 503,000	$ 491,000
Cash dividends received	501,000	586,000	763,000
Tekno
Schedule of Equity Method Investments [Line Items]
Net sales	3,100,000	4,600,000	4,500,000
Net income	$ 500,000	$ 1,000,000	$ 1,000,000
Percentage of outstanding equity in a joint venture partnership with Tekno S.A. ("Tekno")	51.00%
Percentage of voting rights in a joint venture partnership with Tekno S.A. ("Tekno")	50.00%

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Feb. 28, 2013

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at February 28, 2013, and February 29, 2012, are as follows:

(in thousands)	February 28, 2013			February 29, 2012
Foreign Currency Translation	$	1,182		$	1,764
Pension Liability, Net of Tax of $1,974 and $2,208		(4,532	)		(4,911	)
Other Post Retirement Liabilities, Net of Tax of $1,027 and $935		526			677
Total	$	(2,824	)	$	(2,470	)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Feb. 28, 2013

Reclassifications

Reclassifications

Reclassifications were made to prior-year financial statements to conform to the current-year presentations—amounts previously reported as “Other, Net” in the Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities were reclassified to “Equity in Results of Joint Venture” and “Other, Net” in the Changes in Assets and Liabilities and “Long-Term Incentives” was reclassified from “Other” within the Long-Term Liabilities section of the Condensed Consolidated Balance Sheets.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts for MSC after all intercompany transactions have been eliminated. In South America, the Company owns 51% of the equity and holds 50% of the voting rights in a joint venture partnership with Tekno S.A. (“Tekno”), which manufactures and sells acoustical products. Under the terms of the Tekno agreement, significant actions require unanimous consent of all parties and, as a result, MSC does not have a controlling interest in Tekno. Accordingly, the Company accounts for Tekno under the equity method.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts of these financial assets and liabilities approximate fair value due to the short maturities of these instruments.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments, principally U.S. Treasury bills, with original maturities of three or fewer months. At February 28, 2013, we held approximately $30.0 million of U.S. Treasury bills with maturities from March 14 to May 30, 2013. The Company has not experienced any losses as a result of its cash concentration. Consequently, no significant concentration of credit risk is considered to exist.

Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at their estimated fair value, net of allowances for doubtful accounts, claims, discounts and other credits expected to be granted to customers. The Company provides reserves for uncollectible receivables due to customer bankruptcy, insolvency or disputes over terms and conditions. The methodology for calculating the allowance for doubtful accounts includes an assessment of specific receivables that are aged and an assessment of the aging of the total receivable pool. MSC also records reductions of revenue for credits issued to customers resulting from manufacturing claims for product defects based upon historical experience and upon specific claims issues as they arise. Any differences between these estimates and actual costs are recorded on a monthly basis and are reflected in the historical experience prospectively. Total accounts receivable reserves were $0.5 million and $0.7 million at February 28, 2013, and February 29, 2012, respectively.

Inventories

Inventories

Inventories are stated at the lower of cost or market, using either the specific identification or average cost method of cost valuation. Due to the continuous nature of the Company’s operations, work-in-process inventories are not material. MSC holds some of its inventory at outside processors and locations. The Company had approximately $5.3 million and $2.7 million of inventory at outside processors at February 28, 2013, and February 29, 2012, respectively. We had inventory reserves and other valuation adjustments of $1.2 million as of February 28, 2013, and February 29, 2012, net of scrap inventory that can be sold on the secondary market.

Commodity Contracts

Commodity Contracts

We are exposed to certain risks related to ongoing business operations. We enter into derivative instruments with the objective of managing our financial and operational exposure arising from these risks. The primary risk managed by using derivative instruments is commodity price risk. From time-to-time in the ordinary course of business, the Company enters into purchase contracts for procuring nickel carbonate, zinc shot and natural gas, which are commodities used in its manufacturing processes. These agreements are intended to mitigate the market risk and volatility associated with the pricing of these commodities. MSC maintains a commodity forward purchase policy, which seeks to ensure that at any time the majority of the expected consumption over the next 12 months is secured under a purchase contract at a predetermined price. When we enter into these contracts, we apply the Normal Purchase/Normal Sale election for each of them, which excludes them from being accounted for as derivative instruments at fair value as long as they qualify for the election.

Long-Lived Assets

Long-Lived Assets

Property, plant and equipment are recorded at cost. Improvements and replacements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows: buildings and building improvements, 5 to 20 years; operating equipment, 5 to 20 years; furniture and fixtures, 5 to 10 years; software, 5 years. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining life of the lease.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, based on projections of non-discounted cash flows. If the carrying value of the depreciable long-lived assets is higher than the undiscounted cash flows related to the asset group, an impairment loss may be necessary. The impairment would be measured by the difference between the fair value of the assets and their carrying value. Fair value is determined based on market quotes, if available, or based on valuation techniques such as discounted cash flows. The valuation techniques require us to make assumptions, including, but not limited to, estimated fair value of assets, which are based on additional assumptions, such as public market data; depreciation factors for orderly liquidation, including allowances such as dismantlement and removal; and the relationship between replacement cost and market value based on the age of the assets.

There were no events during fiscal 2013 or fiscal 2012 that would trigger a review for impairment. There was an event in fiscal 2011 that triggered an impairment review of the assets at our Plant #7 in Elk Grove Village, IL. For further information, see Note 15, “Asset Impairment.”

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue. Costs incurred for shipping and handling are recorded in cost of sales. Volume discounts due customers are recognized as earned and reported as reductions of revenue in the Consolidated Statements of Operations.

Research and Development

Research and Development

The Company expenses all research and product development costs in the period incurred. Research and product development expenses of $4.1 million, $3.9 million and $2.3 million in fiscal 2013, 2012 and 2011, respectively, are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

Foreign Currency

Foreign Currency

The Company’s international operations are translated into U.S. dollars using current exchange rates at the balance sheet date for assets and liabilities. A weighted average exchange rate is used to translate sales, expenses, gains and losses. The currency translation adjustments are reflected in accumulated other comprehensive loss in Shareowners’ Equity. Transactions denominated in currencies other than U.S. dollars are translated at the spot rate when the transaction is settled. Any gains or losses from the settlement are reflected in other income in the Consolidated Statement of Operations.

Income Taxes

Income Taxes

Deferred income taxes have been provided to show the effect of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefit, or that future deductibility is uncertain. The Company regularly reviews and adjusts the valuation allowance to reflect changes in the realizability of the deferred tax assets. MSC maintains a liability for the potential tax adjustment related to our uncertain tax positions.

Equity Plans

Equity Plans

Stock-based compensation is accounted for based on the grant date fair value of the awards, or, for phantom stock, based on the market value of the underlying stock. The fair value of equity grants is amortized over the vesting period for each grant. The fair value of stock options is computed using the Black-Scholes model. The Company has one active equity award plan: the Material Sciences Corporation 2012 incentive Compensation Plan (“2012 Plan”). See Note 10 entitled “Equity and Compensation Plans” for additional discussion.

The Company recorded $0.6 million, $0.3 million, and $0.2 million of compensation expense related to stock options and restricted stock grants in fiscal 2013, 2012, and 2011, respectively. See Note 10 entitled “Equity and Compensation Plans” for a complete discussion of these items.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at February 28, 2013, and February 29, 2012, are as follows:

(in thousands)	February 28, 2013			February 29, 2012
Foreign Currency Translation	$	1,182		$	1,764
Pension Liability, Net of Tax of $1,974 and $2,208		(4,532	)		(4,911	)
Other Post Retirement Liabilities, Net of Tax of $1,027 and $935		526			677
Total	$	(2,824	)	$	(2,470	)

Recent Accounting Pronouncements

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include components of net income, which is consistent with the income statement format used today, and the second statement would include components of other comprehensive income (“OCI”). The ASU does not change the items that must be reported in OCI. For public entities, the ASU’s amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted the guidance in the ASU effective with its first quarter fiscal 2013 Form 10-Q. No material changes resulted from the adoption except for the addition of a statement of comprehensive income to the primary financial statements presented in Forms 10-Q subsequent to the adoption date.

On February 5, 2013, the FASB issued ASU 2013-02, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the ASU is effective for reporting periods beginning after December 15, 2012. The Company is currently evaluating the impact of adopting this guidance, which may result in changes in the presentation of its financial statements.

Consideration of Events Subsequent to the Date of the Consolidated Balance Sheet

Consideration of Events Subsequent to the Date of the Consolidated Balance Sheet

The Company recognizes in the consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Consolidated Balance Sheet, including the estimates inherent in the process of preparing the consolidated financial statements. MSC does not recognize subsequent events that provide evidence about conditions that did not exist at the date of the Consolidated Balance Sheet but arose after that date and before the consolidated financial statements are issued. For these purposes, and relating to the February 28, 2013, Consolidated Balance Sheet, the Company has evaluated events occurring after that date through the date of this report. Any significant events that occurred after February 28, 2013, and which had an effect on the February 28, 2013, consolidated financial statements are reflected in these statements or the related notes, and are identified as subsequent events.

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Assumptions Used in Determining Net Periodic Benefit Cost (Detail)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Assumptions Used in Determining Net Periodic Benefit Cost:
Expected Long-Term Rate of Return on Assets	6.60%	7.00%	7.50%
Minimum
Assumptions Used in Determining Net Periodic Benefit Cost:
Discount Rate	4.00%	5.22%	5.64%
Maximum
Assumptions Used in Determining Net Periodic Benefit Cost:
Discount Rate	4.23%	5.50%	5.94%

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Commitments and Contingencies [Line Items]
Letter of credit secure for environmental loss contingencies	$ 1.1
Reserve for environmental legal proceedings	1.2	1.2
Superfund
Commitments and Contingencies [Line Items]
Letter of credit secure for environmental loss contingencies	1.0
Estimated , site contingency liability	0.8
Lake Calumet Cluster
Commitments and Contingencies [Line Items]
Estimated , site contingency liability	0.3
Chatham
Commitments and Contingencies [Line Items]
Estimated , site contingency liability	$ 0.1
California Environmental Protection Agency
Commitments and Contingencies [Line Items]
Number of CEPA agencies	2

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Leases (Tables)

12 Months Ended

Feb. 28, 2013

Future Minimum Lease Payments

The table below presents future minimum lease payments.

(in thousands)
2014	$	1,660
2015		1,508
2016		904
2017		674
2018		555
2019 and Thereafter		231
Total Minimum Lease Payments	$	5,532

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Retirement and Savings Plans (Tables)

12 Months Ended

Feb. 28, 2013

Reconciliation of Change in Benefit Obligation

The following tables present a reconciliation of the change in benefit obligation, a reconciliation of the change in plan assets, a statement of the funded status of the plans, the components of net periodic benefit cost and the assumptions used in determining the plans’ funded status and periodic cost. The assumptions do not consider salary increases as the majority of plans are either frozen or do not account for salary increases in determining future benefits.

	Pension Benefits						Postretirement Benefits
(in thousands except %)	2013			2012			2013			2012
Change in Benefit Obligation:
Obligation, March 1	$	15,964		$	14,475		$	1,958		$	1,842
Service Cost Benefits Earned During the Period		—			—			23			20
Interest Cost on Benefit Obligation		574			678			78			86
Plan Amendments		—			—			—			—
Actuarial (Gain) Loss		269			2,080			164			94
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Curtailments		—			—			—			—
Other Plan Changes		—			—			—			—
Obligation, February 29 & February 28	$	15,551		$	15,964		$	1,986		$	1,958
Change in Plan Assets:
Plan Assets at Fair Value, March 1	$	8,517		$	8,305			—		$	—
Actual Return on Plan Assets		831			324			—			—
Company Contributions		1,356			1,157			237			84
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Plan Assets at Fair Value, February 29 & February 28	$	9,448		$	8,517		$	—		$	—
Funded Status:
Funded Status	$	(6,103	)	$	(7,447	)	$	(1,986	)	$	(1,958	)

Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets

	Pension Benefits
	2013		2012
Plans with Accumulated Benefit Obligation in excess of Plan Assets
Accumulated Benefit Obligation	$	15,551	$	15,964

Components of Net Periodic Benefit Costs

	Pension Benefits									Postretirement Benefits
	2013			2012			2011			2013			2012			2011
Components of Net Periodic Benefit Cost:
Service Cost Benefits Earned During the Period	$	—		$	—		$	—		$	23		$	20		$	63
Interest Cost on Benefit Obligation		574			677			674			78			86			205
Expected Return on Assets		(566	)		(577	)		(534	)		—			—			—
Amortization of Prior Service Cost		—			—			—			(276	)		(276	)		(64	)
Amortization of Net (Gain) Loss		630			431			389			196			188			218
Settlements and Curtailment		—			—			—			—			—			—
Net Periodic Benefit Cost	$	638		$	531		$	529		$	21		$	18		$	422

Amounts Recognized in Consolidated Balance Sheets

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Amounts Recognized in the Consolidated Balance Sheets
Prepaid Benefit Cost	$	—		$	—		$	—		$	—
Current Liability		(650	)		(780	)		(94	)		(126	)
Non-Current Liability		(5,453	)		(6,667	)		(1,891	)		(1,833	)
Net Amount Recognized	$	(6,103	)	$	(7,447	)	$	(1,985	)	$	(1,959	)

Amounts Recognized in Accumulated Other Comprehensive Loss

	Pension Benefits				Postretirement Benefits
	2013		2012		2013			2012
Amounts Recognized in Accumulated Other Comprehensive Loss
Prior Service Cost (Credit)	$	—	$	—	$	(1,341	)	$	(1,617	)
Net (Gain) or Loss		6,494		7,119		1,842			1,875
Net Amount Recognized	$	6,494	$	7,119	$	501		$	258

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net (Gain) or Loss	$	5		$	2,333		$	163		$	95
Amortization of Prior Service Cost (Credit)		—			—			276			276
Prior Service Cost (Credit)		—			—			—			—
Adjustment for 2007 Plan Amendment		—			—			—			—
Amortization of Net (Gain) or Loss		(630	)		(431	)		(196	)		(188	)
Net Amount Recognized	$	(625	)	$	1,902		$	243		$	183

Pension Plan Weighted Average Asset Allocations

The Company’s pension plan weighted-average asset allocations at February 28, 2013, and February 29, 2012, by asset category, were as follows:

	2013			2012
Equity Securities		63	%		65	%
Debt Securities		37	%		35	%
Total		100	%		100	%

Summary of Fair Value Measurements of Trust's Assets

The table below summarizes the fair value measurements of the Trust’s assets at February 28, 2013, and February 29, 2012, by asset class (in thousands).

(in thousands)	Balance as of February 28, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	75	$	75	$	—	$	—
Mutual Funds—Equity Securities		5,886		5,886		—		—
Mutual Funds—Bonds		3,487		3,487		—		—
Total	$	9,448	$	9,448	$	—	$	—

(in thousands)	Balance as of February 29, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	52	$	52	$	—	$	—
Mutual Funds—Equity Securities		5,528		5,528		—		—
Mutual Funds—Bonds		2,937		2,937		—		—
Total	$	8,517	$	8,517	$	—	$	—

Pension Plans, Defined Benefit

Expected Benefit Payments

Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years after that, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	1,196
2015		1,130
2016		939
2017		803
2018		741
2019 through 2023		4,152
Total	$	8,961

Plan Funded Status

Assumptions Used

	2013			2012			2011
Assumptions Used in Determining the Plans’ Funded Status:
Discount Rate		3.79%-4.04	%		4.00%-4.23	%		5.22%-5.50	%
Rate of Increase in Compensation Levels		N/A			N/A			N/A

Net Periodic Benefit Cost

Assumptions Used

	2013		2012			2011
Assumptions Used in Determining Net Periodic Benefit Cost:
Discount Rate		4.00%-4.23%		5.22%-5.50	%		5.64%-5.94	%
Expected Long-Term Rate of Return on Assets		6.60%		7.00	%		7.50	%

Other Postretirement Benefit Plans, Defined Benefit

Expected Benefit Payments

Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five following fiscal years, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	94
2015		85
2016		91
2017		95
2018		106
2019 through 2023		575
Total	$	1,046

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Consolidated Statements of Changes in Shareowners' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock
Beginning Balance at Feb. 28, 2010		$ 380	$ 79,784	$ 43,541	$ (56,774)
Beginning Balance (in shares) at Feb. 28, 2010		18,979,796			(6,074,567)
Net Income	12,044			12,044
Issuance of Common Stock, Net of Cancellations (in shares)		14,096
Issuance of Common Stock, Net of Cancellations			16
Compensatory Effect of Stock Plans			204
Purchase of Treasury Stock(Shares)	(16,000)				(15,765)
Purchase of Treasury Stock	(111)				(111)
Ending Balance at Feb. 28, 2011		380	80,004	55,585	(56,885)
Ending Balance (in shares) at Feb. 28, 2011		18,993,892			(6,090,332)
Net Income	28,467			28,467
Issuance of Common Stock, Net of Cancellations (in shares)		37,091
Issuance of Common Stock, Net of Cancellations		1	137
Compensatory Effect of Stock Plans			299
Purchase of Treasury Stock(Shares)	(2,450,000)				(2,450,452)
Purchase of Treasury Stock	(17,538)				(17,538)
Ending Balance at Feb. 29, 2012	87,980	381	80,440	84,052	(74,423)
Ending Balance (in shares) at Feb. 29, 2012		19,030,983			(8,540,784)
Net Income	8,994			8,994
Issuance of Common Stock, Net of Cancellations (in shares)		27,940
Issuance of Common Stock, Net of Cancellations			7
Compensatory Effect of Stock Plans			642
Purchase of Treasury Stock(Shares)	(283,000)				(283,388)
Purchase of Treasury Stock	(2,233)				(2,333)
Ending Balance at Feb. 28, 2013	$ 94,936	$ 381	$ 81,089	$ 93,046	$ (76,756)
Ending Balance (in shares) at Feb. 28, 2013		19,058,923			(8,824,172)

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Interest Income, Net (Tables)

12 Months Ended

Feb. 28, 2013

Components of Interest Income, Net

The table presented below analyzes the components of interest income, net.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Interest Expense	$	(32	)	$	(113	)	$	(36	)
Interest Income		46			65			115
Interest Income, Net	$	14		$	(48	)	$	79

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Summary of Quarterly Data (Parenthetical) (Detail) (USD $)	3 Months Ended			6 Months Ended	12 Months Ended		3 Months Ended
	Feb. 29, 2012	Aug. 31, 2011	Feb. 28, 2010	Aug. 31, 2012	Feb. 28, 2013	Feb. 28, 2011	Aug. 31, 2012 Elk Grove Village	May 31, 2011 Elk Grove Village
Quarterly Financial Data [Line Items]
Gain on sales of assets				$ 3,200,000	$ 3,216,000	$ 6,643,000	$ 3,200,000
Employee termination benefit and related expenses	$ 300,000	$ 300,000	$ 1,600,000					$ 1,100,000

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011	Feb. 28, 2010
Significant Accounting Policies [Line Items]
Cash and cash equivalent	$ 37,508,000	$ 28,201,000	$ 35,629,000	$ 12,866,000
Receivables, Reserves	489,000	696,000
Inventory at outside processors	5,300,000	2,700,000
Inventory valuation reserves	1,200,000	1,200,000
Research and product development expenses	4,100,000	3,900,000	2,300,000
Compensation expenses	600,000	300,000	200,000
U.S. Treasury bills
Significant Accounting Policies [Line Items]
Cash and cash equivalent	$ 30,000,000
2012 Plan
Significant Accounting Policies [Line Items]
Number of active equity award plan	1
Tekno
Significant Accounting Policies [Line Items]
Percentage of outstanding equity in a joint venture partnership with Tekno S.A. ("Tekno")	51.00%
Percentage of voting rights in a joint venture partnership with Tekno S.A. ("Tekno")	50.00%
Building and Building Improvements | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years
Building and Building Improvements | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	20 years
Operating Equipment | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years
Operating Equipment | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	20 years
Furniture and Fixtures | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years
Furniture and Fixtures | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years
Software
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years
Leasehold Improvements
Significant Accounting Policies [Line Items]
Leasehold improvements, amortization period	Lesser of their expected useful life or the remaining life of the lease.

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Amounts Recognized in Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Pension Plans, Defined Benefit
Amounts Recognized in Accumulated Other Comprehensive Loss
Net (Gain) or Loss	$ 6,494	$ 7,119
Net Amount Recognized	6,494	7,119
Other Postretirement Benefit Plans, Defined Benefit
Amounts Recognized in Accumulated Other Comprehensive Loss
Prior Service Cost (Credit)	(1,341)	(1,617)
Net (Gain) or Loss	1,842	1,875
Net Amount Recognized	$ 501	$ 258

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Equity and Compensation Plans - Additional Information (Detail) (USD $)	12 Months Ended			36 Months Ended	12 Months Ended				1 Months Ended			12 Months Ended							12 Months Ended				12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011	Feb. 28, 2013	Feb. 28, 2013 September 2011 authorization	Sep. 14, 2011 September 2011 authorization	Feb. 28, 2013 September 2012 authorization	Sep. 27, 2012 September 2012 authorization	Dec. 31, 2012 Restricted Stock	Sep. 30, 2012 Restricted Stock	Mar. 31, 2012 Restricted Stock	Feb. 28, 2013 Restricted Stock	Feb. 28, 2013 Restricted Stock Maximum	Feb. 28, 2013 Restricted Stock Maximum Non-employee directors	Feb. 28, 2013 2012 Plan CompensationPlan	Feb. 28, 2013 1992 Plan	Feb. 28, 2013 1992 Plan Minimum	Feb. 28, 2013 1992 Plan Maximum	Feb. 28, 2013 1992 Plan Stock Options	Feb. 28, 2013 1992 Plan Restricted Stock Minimum	Feb. 28, 2013 1992 Plan Restricted Stock Maximum	Feb. 28, 2013 2001 Directors Plan	Feb. 28, 2013 Employee Stock Purchase Plan	Feb. 29, 2012 Employee Stock Purchase Plan	Feb. 28, 2011 Employee Stock Purchase Plan	Feb. 28, 2013 Employee Stock Purchase Plan Maximum	Feb. 29, 2012 Employee Stock Purchase Plan Maximum	Feb. 28, 2011 Employee Stock Purchase Plan Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of active equity award plan															1
Shares authorized under compensation plans															2,130,789	1,130,789						150,000
Share based payment award, award vesting period											1 year								3 years	3 years	5 years
Non-qualified stock options, expiration period from date of grant																	5 years	10 years
Stock options outstanding and exercisable																						3,537
Compensation expense	$ 600,000	$ 300,000	$ 200,000
Share based payment award, stock option granted	200,000	200,000	200,000							8,500
Share based payment award, value of each option granted	$ 4.24	$ 4.13	$ 0.93
Stock options exercised		22,304
Compensation expense related to unvested stock option grants not yet recognized	1,000,000			1,000,000
Intrinsic value of Options Exercised	0	100,000	0
Restricted stock granted, non employee directors									946	959	5,900	17,330
Compensation expense related to unvested restricted stock grants not yet recognized													100,000	100,000
Percentage of fair market value of stock price																							85.00%
Stock sold to employees																							756	4,787	4,096
Amount recorded as compensation expense																										$ 10,000	$ 10,000	$ 10,000
Number of shares authorized to be repurchased						1,000,000		1,000,000
Common stock repurchased	283,000	2,450,000	16,000	2,749,000	283,388
Common stock available for repurchase	364,000	648,000	1,098,000	364,000	364,476		1,000,000

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Feb. 28, 2013		Feb. 29, 2012		Feb. 28, 2011
Net Sales	$ 121,007		$ 136,734		$ 137,624
Cost of Sales	92,493		103,066		105,942
Gross Profit	28,514		33,668		31,682
Selling, General and Administrative Expenses	20,024		21,117		22,621
Gain on Sale of Assets	(3,216)				(6,643)
Asset Impairment Charges					3,720
Restructuring			583		1,324
Income from Operations	11,706	[1]	11,968	[2]	10,660
Other Income, Net:
Interest and Dividend Income (Expense), Net	14		(48)		79
Equity in Results of Joint Venture	270		503		491
Rental Income	648		1,107		912
Other, Net	(29)		21		226
Total Other Income, Net	903		1,583		1,708
Income Before Provision (Benefit) for Income Taxes	12,609		13,551		12,368
Provision (Benefit) for Income Taxes	3,615		(14,916)		324
Net Income	$ 8,994		$ 28,467		$ 12,044
Basic Net Income Per Share	$ 0.87	[3]	$ 2.51	[3]	$ 0.93
Diluted Net Income Per Share	$ 0.86	[3]	$ 2.49	[3]	$ 0.93
Weighted Average Number of Common Shares Outstanding Used for Basic Net Income Per Share	10,298		11,350		12,906
Dilutive Shares	127		91		51
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares	10,425		11,441		12,957
Outstanding Common Stock Options Having No Dilutive Effect	400		318		261

[1] Income from operations in the second quarter of fiscal 2013 included a gain on sale of $3.2 million as discussed in Note 18, "Sale of Elk Grove Village Building."

[2] Income from operations in the second and fourth quarters of fiscal 2012 included charges of $0.3 million and $0.3 million related to employee termination benefit expenses as discussed in Note 14, "Restructuring."

[3] The sum of the four quarters is not necessarily the same as the total for the year.

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Indebtedness - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended					12 Months Ended
	May 30, 2011	Feb. 28, 2013	Apr. 30, 2010	Feb. 28, 2013 Prime Rate	Feb. 28, 2013 LIBOR	Feb. 28, 2013 Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, interest rate				3.25%	1.50%
Annual letter of credit fee						1.50%
Annual letter of credit fee on unused credit line						0.25%
Credit line with JP Morgan Chase Bank			$ 7.5
Credit line with JP Morgan Chase Bank, minimum availability covenant			2.5
Line of credit, expiry date	May 13, 2013
Outstanding letters of credit		1.1
Net amount available for borrowing		$ 3.9

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Receivables, Reserves	$ 489	$ 696
Preferred Stock, Par Value	$ 1.00	$ 1.00
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Designated	1,000,000	1,000,000
Preferred Stock, Issued
Common Stock, Par Value	$ 0.02	$ 0.02
Common Stock, Shares Authorized	40,000,000	40,000,000
Common Stock, Shares Issued	19,058,923	19,030,983
Common Stock, Shares Outstanding	10,198,121	10,470,199
Treasury Stock, Shares	8,824,172	8,540,784

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Defined Benefit Pension Plans Expected to be Paid (Detail) (Pension Plans, Defined Benefit, USD $) In Thousands, unless otherwise specified	Feb. 28, 2013
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
2014	$ 1,196
2015	1,130
2016	939
2017	803
2018	741
2019 through 2023	4,152
Total	$ 8,961

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Equity and Compensation Plans (Tables)

12 Months Ended

Feb. 28, 2013

Stock Option Activity

The following tables summarize stock option activity for fiscal 2013:

	Options Outstanding
Stock Option Activity	Directors			Key Employees		Weighted Average Exercise Price		Aggregate Intrinsic Value (in $000’s)
Outstanding as of February 29, 2012		18,087			488,138	$	5.84	$	1,472
Granted		—			200,000		8.75
Exercised		—			—		—
Canceled/Forfeited		(14,550	)		—	$	11.00
Outstanding as of February 28, 2013		3,537			688,138	$	6.57	$	2,479
Exercisable as of February 28, 2013		3,537			113,138	$	8.10
Vested or Expected to Vest as of February 28, 2013		3,537			688,138	$	6.57	$	2,479

Weighted Average Assumptions Used for Option Grants

The following weighted average assumptions were used for the option grants in fiscal 2013 and 2012:

	2013			2012
Dividend Yield		0.0	%		0.0	%
Risk-Free Interest Rate		0.7	%		2.5	%
Expected Volatility		58.8	%		58.8	%
Expected Life (in Years)		5.0			6.5

Stock Options Outstanding and Stock Options Exercisable

The following table shows stock options outstanding and stock options exercisable at February 28, 2013:

	Options Outstanding as of February 28, 2013								Exercisable Options as of February 28, 2013
Range of Exercise Prices	Shares		Weighted Average Remaining Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)
$  2.00  -  $  5.00		175,000		4.0	$	2.00				—	$	0.00
$  5.01  -  $  8.00		313,138		5.0	$	7.68				113,138	$	8.00
$  8.01  -  $11.00		200,000		6.0	$	8.75				—	$	0.00
$11.01  -  $14.05		3,537		1.0	$	11.31				3,537	$	11.31
$  2.00  -  $14.05		691,675		5.0	$	6.57	$	2,479		116,675	$	8.10	$	243

Restricted Stock Transactions

The following table summarizes restricted stock transactions for fiscal 2012 and 2013:

Unvested as of February 28, 2011	30,000
Granted	—
Vested	—
Canceled	—
Unvested as of February 29, 2012	30,000
Granted	17,330
Vested	(10,554	)
Canceled	(146	)
Unvested as of February 28, 2013	36,630

Purchases of Common Stock During Last Three Fiscal Years

The following table provides information about Company purchases of common stock (in thousands).

Period	Total Number of Shares Purchased		Total Cost		Total Number of Shares Purchased as Part of a Written Trading Plan(1)		Maximum Number of Shares that May Yet Be Purchased
March 1, 2010 – February 28, 2011		16		111		16		1,098
March 1, 2011 – February 29, 2012		2,450		17,538		2,450		648
March 1, 2012 – February 28, 2013		283		2,233		283		364
Total		2,749	$	19,882		2,749

(1) On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

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Temporary Differences That Give Rises to Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Deferred Tax Assets And Liabilities [Line Items]
Reserves Not Deductible Until Paid	$ 1,145	$ 1,270
Employee Benefit Liabilities	5,859	6,257
Net Operating Loss and Tax Credit Carryforwards	5,011	4,855
Property and Equipment	1,539	5,088
Other	351	434
Total Gross Deferred Tax Asset	13,905	17,904
Valuation Allowance	(567)	(567)
Total Net Deferred Tax Assets	$ 13,338	$ 17,337

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Restructuring

12 Months Ended

Feb. 28, 2013

Restructuring

Note 14: Restructuring

In the fourth quarter of fiscal 2010, management executed restructuring plans that eliminated additional production and SG&A positions. The Company recognized approximately $1.6 million in employee termination benefit and related expenses, $1.5 million in the U.S. and $0.1 million in Europe. Of this expense, approximately $0.2 million was paid as of February 28, 2010; the remainder was paid by the end of fiscal 2011.

In the first quarter of fiscal 2011, MSC executed a restructuring plan in conjunction with the sale of certain coil-coating assets located in Elk Grove Village, Illinois. See Note 17, “Elk Grove Village Asset Sale,” for additional discussion. The plan included eliminating positions in production and SG&A departments. The Company recognized approximately $1.1 million in employee termination benefit and related expenses, all of which was paid by the end of fiscal 2011. During the fourth quarter of fiscal 2011, MSC recognized severance expense of $0.2 million, which was paid by the end of fiscal 2012.

In the second quarter of fiscal 2012, MSC incurred employee termination benefit expenses of $0.3 million for certain SG&A positions. In the fourth quarter of fiscal 2012, MSC executed a restructuring plan that eliminated ten positions in our German subsidiary. The Company recognized approximately $0.3 million in employee termination benefit and related expenses. Of these expenses related to fiscal 2012 terminations, $0.4 million was paid in fiscal 2012; the remainder was paid in fiscal 2013.

The restructuring reserve as of February 28, 2013, is presented in the table below, which includes the fiscal 2011, 2012 and 2013 restructuring activities. The reserve is included in accrued payroll related expenses on the Consolidated Balance Sheets.

(in thousands)	Severance			Other			Total
Restructuring Reserve as of February 28, 2010	$	1,424		$	0		$	1,424
Restructuring Reserve Recorded During Fiscal 2011		1,324			0			1,324
Cash Payments		(2,546	)		0			(2,546	)
Restructuring Reserve as of February 28, 2011	$	202		$	0		$	202
Restructuring Reserve Recorded During Fiscal 2012		430			153			583
Cash Payment		(484	)		(66	)		(550	)
Restructuring Reserve as of February 29, 2012	$	148		$	87		$	235
Restructuring Reserve Recorded During Fiscal 2013		—			—			—
Cash Payment		(148	)		(87	)		(235	)
Restructuring Reserve as of February 28, 2013	$	—		$	—		$	—

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Business Segments (Tables)

12 Months Ended

Feb. 28, 2013

Net Sales by Product Category Net of Intercompany Activity

Net sales by product category, net of intercompany activity, were as follows:

	Fiscal 2013				Fiscal 2012				Fiscal 2011
Net Sales ($ in millions)	$		%		$		%		$		%
Acoustical	$	73.8		61	$	68.3		50	$	73.1		53
Coated		47.2		39		68.4		50		64.5		47
Total Net Sales	$	121.0		100	$	136.7		100	$	137.6		100

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Asset Sale

12 Months Ended

Feb. 28, 2013

Elk Grove Village, Illinois

Asset Sale

Note 17: Elk Grove Village Asset Sale

On April 12, 2010, the Company sold a portion of its coil coating assets and associated business base to Roll Coater, Inc. (“Roll Coater”) for $10.0 million ($9.3 million after investment banking fees). Roll Coater purchased the coil coating machinery, related processing equipment, and corresponding customer base associated with MSC’s Plant #7 in Elk Grove Village, Illinois. Based on fiscal 2010 shipments, the associated business base included approximately $28.6 million in sales of general-line coil coated products. In addition, MSC and Roll Coater entered into a multi-year lease agreement to store the purchased equipment. The transaction did not include the sale of any real estate by MSC. The Company recorded a gain on the sale of approximately $4.7 million (net of $0.3 million of legal fees) in the first quarter of fiscal 2011. MSC also recorded $1.1 million of employee severance expense and $0.2 million of inventory write-off expenses in connection with the sale.

Middletown, Ohio

Asset Sale

Note 16: Middletown Asset Sale

The Company closed its coil coating facility in Middletown, Ohio, in July 2004. The carrying value of these assets prior to the sale was $2.9 million. On June 24, 2010, MSC sold the facility to NCI Group for $4.9 million. The Company recorded a gain on the sale of approximately $1.9 million (net of fees) in the second quarter of fiscal 2011.

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Sales to Major Customer As Percentage of Consolidated Net Sales (Detail) (Sales Revenue, Goods, Net, Customer Concentration Risk)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Chrysler LLC
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	17.00%	17.00%
U.S. Steel
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	22.00%	15.00%
Ford Motor Company
Concentration Risk [Line Items]
Concentration risk, percentage	8.00%	12.00%	18.00%

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Cash Flows From: Operating Activities:
Net Income	$ 8,994	$ 28,467	$ 12,044
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Amortization and Accretion	4,670	4,906	5,572
Gain on Sale of Assets	(3,216)		(6,643)
Non-Cash Loss on Impairment of Fixed Assets			3,720
Equity in Results of Joint Venture	(270)	(503)	(491)
Cash Distribution Received from Joint Venture	501	586	763
Deferred Income Taxes	3,762	(14,824)
Compensatory Effect of Stock Plans	642	299	204
Changes in Assets and Liabilities:
Receivables	2,280	2,390	(1,881)
Income Taxes	(1,241)	121	(12)
Prepaid Expenses	125	(248)	56
Inventories	(4,248)	98	(1,008)
Accounts Payable	(2,542)	(1,725)	(2,172)
Accrued Expenses	174	(280)	(1,879)
Other, Net	(2,272)	42	1,029
Net Cash Provided by Continuing Operations	7,359	19,329	9,302
Investing Activities:
Capital Expenditures	(4,897)	(9,194)	(2,359)
Proceeds from Sale of Assets	9,180		14,089
Proceeds from Note Receivable			1,732
Net Cash Provided by (Used in) Investing Activities	4,283	(9,194)	13,462
Financing Activities:
Purchase of Treasury Stock	(2,333)	(17,649)
Issuance of Common Stock	7	138	16
Net Cash Provided by (Used in) Financing Activities	(2,326)	(17,511)	16
Effect of Exchange Rate Changes on Cash	(9)	(52)	(17)
Net Increase (Decrease) in Cash	9,307	(7,428)	22,763
Cash and Cash Equivalents at Beginning of Year	28,201	35,629	12,866
Cash and Cash Equivalents at End of Year	37,508	28,201	35,629
Non-Cash Transactions:
Capital Expenditures in Accounts Payable at Year End	1,112	854	873
Treasury Stock Purchases in Accrued Liabilities at Year-End			111
Supplemental Cash Flow Disclosures:
Interest Paid	33	35	37
Net Income Taxes Paid, Net	$ 1,746	$ 356	$ 463

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Net Income	$ 8,994	$ 28,467	$ 12,044
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	(582)	(294)	359
Retirement Liability, Net of Benefit for Income Taxes of $141, $795, and $0, Respectively	228	(1,290)	3,006
Total Other Comprehensive Income (Loss)	(354)	(1,584)	3,365
Comprehensive Income	$ 8,640	$ 26,883	$ 15,409

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Significant Customers and Export Sales

12 Months Ended

Feb. 28, 2013

Significant Customers and Export Sales

Note 9: Significant Customers and Export Sales

Due to the concentration in the automotive industry, sales to individual automotive customers—including indirect sales—are significant. The following table shows direct sales to our significant customers that represented 10% or more of consolidated net sales for any of fiscal 2013, 2012 or 2011.

	% of Consolidated Net Sales
Customer	Fiscal 2013			Fiscal 2012			Fiscal 2011
Chrysler LLC		20	%		17	%		17	%
U.S. Steel		16	%		22	%		15	%
Ford Motor Company		8	%		12	%		18	%

The following table shows gross accounts receivable from these significant customers as a percentage of total consolidated gross accounts receivable as of February 28, 2013, and February 29, 2012.

	% of Consolidated Gross Accounts Receivable
Customer	February 28, 2013			February 29, 2012
Chrysler LLC		18	%		18	%
Ford Motor Company		8	%		15	%
U.S. Steel		5	%		12	%

For certain automotive customers, we may purchase unprocessed steel and then sell the finished, coated or laminated steel back to the same customer. Thus, for those companies, we may carry significant accounts payable balances.

MSC’s domestic and foreign net sales are presented in the chart below. Sales to customers in any one foreign country did not comprise greater than 10% of consolidated net sales for any period presented.

Net Sales (in thousands)	Fiscal 2013		Fiscal 2012		Fiscal 2011
Domestic	$	105,513	$	121,684	$	125,179
Foreign		15,494		15,050		12,445
Total	$	121,007	$	136,734	$	137,624

Domestic net sales included sales originated by our domestic subsidiaries and shipped to customers located in Asia of $0.4 million and $3.5 million for fiscal 2012 and 2011, respectively. There were no sales from our domestic subsidiaries to customers located in Asia in fiscal 2013.

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Schedule Two, Reserve for Receivable Allowances and Inventory Reserves (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Allowance for Doubtful Accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	$ 696	$ 420	$ 716
Charged to Costs and Expense	1,920	1,717	1,328
Additions Charged to Other Accounts
Reclassifications and Acquisitions
Deductions from Reserve	(2,127)	(1,441)	(1,624)
Balance at End of Year	489	696	420
Inventory Valuation Reserve
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	1,342	1,656	2,527
Charged to Costs and Expense	3,099	4,710	4,391
Additions Charged to Other Accounts
Reclassifications and Acquisitions
Deductions from Reserve	(3,269)	(5,024)	(5,262)
Balance at End of Year	$ 1,172	$ 1,342	$ 1,656

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Document and Entity Information (USD $)	12 Months Ended
	Feb. 28, 2013	May 02, 2013	Aug. 31, 2012
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Feb. 28, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Trading Symbol	MASC
Entity Registrant Name	MATERIAL SCIENCES CORP
Entity Central Index Key	0000755003
Current Fiscal Year End Date	--02-28
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,198,121
Entity Public Float			$ 80,783,339

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Equity and Compensation Plans

12 Months Ended

Feb. 28, 2013

Equity and Compensation Plans

Note 10: Equity and Compensation Plans

The Company has one active equity award plan: the Material Sciences Corporation 2012 Incentive Compensation Plan (“2012 Plan”). The plan was approved on June 28, 2012, by the Company’s shareowners and replaced the Material Sciences Corporation Amended and Restated 1992 Omnibus Awards Plan for Key Employees (“1992 Plan”) and the Material Sciences Corporation Fiscal year 2006 Long-Term Incentive Plan for Non-Employee Directors (the “Director Plan”).

There are 2,130,789 shares authorized under the 2012 Plan (including 1,130,789 shares previously authorized under the 1992 Plan and either issued or available when that plan ended) to provide stock options, restricted stock and other equity awards under various programs to both employees and non-employee directors. Any shares related to forfeited, terminated or expired awards issued under the 1992 Plan will become available under the 2012 Plan. Non-qualified stock options generally vest over three years from the date of grant and expire between five and 10 years from the date of grant. Restricted stock and cash awards generally vest over three to five years from the date of grant. Shares of restricted stock are awarded in the name of the employee, who has all the rights of a shareowner, subject to certain restrictions or forfeitures. Restricted stock and cash awards have been issued with restrictions based upon time, Company performance, or a combination of both.

There were 150,000 shares authorized under the 2001 Directors Plan. This plan consisted of grants of stock options that provided for all or a portion of each non-employee director’s annual retainer. The 2001 Directors Plan expired on February 29, 2004 and no additional grants will be made under the plan. As of February 28, 2013, options for 3,537 shares were outstanding and exercisable under the 2001 Directors Plan.

The Company recorded $0.6 million, $0.3 million and $0.2 million of compensation expense related to stock options and restricted stock grants in fiscal 2013, 2012 and 2011, respectively.

Stock Option Activity

The Company granted 200,000 stock options during fiscal 2013, with a weighted average Black-Scholes value of $4.24 for each option. The Company granted 200,000 stock options during fiscal 2012 and the weighted average Black-Scholes value of each option granted was $4.13. The Company granted 200,000 stock options during fiscal 2011 and the weighted average Black-Scholes value of each option granted was $0.93. 22,304 options were exercised during fiscal 2012. As of February 28, 2013, there was $1.0 million of total gross compensation expense related to unvested stock option grants which is expected to be recognized ratably over a period ending in the first quarter of fiscal 2016.

The following tables summarize stock option activity for fiscal 2013:

	Options Outstanding
Stock Option Activity	Directors			Key Employees		Weighted Average Exercise Price		Aggregate Intrinsic Value (in $000’s)
Outstanding as of February 29, 2012		18,087			488,138	$	5.84	$	1,472
Granted		—			200,000		8.75
Exercised		—			—		—
Canceled/Forfeited		(14,550	)		—	$	11.00
Outstanding as of February 28, 2013		3,537			688,138	$	6.57	$	2,479
Exercisable as of February 28, 2013		3,537			113,138	$	8.10
Vested or Expected to Vest as of February 28, 2013		3,537			688,138	$	6.57	$	2,479

The total intrinsic value of options exercised in fiscal 2012 was $0.1 million; no options were exercised in fiscal 2013 or fiscal 2011.

The Company has elected to use the Black-Scholes option pricing model and straight-line amortization of compensation expense over the requisite service period of the grant. MSC will reconsider use of this pricing model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants in future periods have characteristics that cannot be reasonably estimated using this model. The following weighted average assumptions were used for the option grants in fiscal 2013 and 2012:

	2013			2012
Dividend Yield		0.0	%		0.0	%
Risk-Free Interest Rate		0.7	%		2.5	%
Expected Volatility		58.8	%		58.8	%
Expected Life (in Years)		5.0			6.5

MSC has not paid dividends in the past. As such, the Company uses a dividend yield percentage of zero. It uses a risk-free interest rate consistent with the yield available on a U.S. Treasury Note with a term equal to the expected term of the underlying grant. The expected volatility was estimated based upon the historical volatility of the Company’s share price. The expected life was an average of the initial vesting period and the original contractual term, as the Company does not have sufficient historical exercise data to otherwise estimate the expected life. The following table shows stock options outstanding and stock options exercisable at February 28, 2013:

	Options Outstanding as of February 28, 2013								Exercisable Options as of February 28, 2013
Range of Exercise Prices	Shares		Weighted Average Remaining Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (000s)
$  2.00  -  $  5.00		175,000		4.0	$	2.00				—	$	0.00
$  5.01  -  $  8.00		313,138		5.0	$	7.68				113,138	$	8.00
$  8.01  -  $11.00		200,000		6.0	$	8.75				—	$	0.00
$11.01  -  $14.05		3,537		1.0	$	11.31				3,537	$	11.31
$  2.00  -  $14.05		691,675		5.0	$	6.57	$	2,479		116,675	$	8.10	$	243

Restricted Stock Activity

The following table summarizes restricted stock transactions for fiscal 2012 and 2013:

Unvested as of February 28, 2011	30,000
Granted	—
Vested	—
Canceled	—
Unvested as of February 29, 2012	30,000
Granted	17,330
Vested	(10,554	)
Canceled	(146	)
Unvested as of February 28, 2013	36,630

Beginning in September 2012, MSC began making quarterly grants of restricted stock to the non-employee directors of the company. Each grant represents the number of shares of our common stock equal to the quotient of $8,500 divided by the closing sale price of our common stock on the day preceding the grant date. Each non-employee director received 959 restricted shares in September 2012 and 946 restricted shares in December 2012. The shares will vest on the third anniversary of the grant date.

In March 2012, MSC granted 5,900 shares of restricted stock, which vested over one year, to certain members of management who elected to receive restricted stock in lieu of their annual compensation increase.

As of February 28, 2013, there was less than $0.1 million of total gross compensation expense related to unvested restricted stock grants which is expected to be recognized over a period ending in the first quarter of fiscal 2015, and less than $0.1 million of total gross expense related to unvested restricted stock granted to our non-employee directors which is expected to be recognized ratably over a period ending in the second quarter of fiscal 2016.

Employee Stock Purchase Plan

MSC has an Employee Stock Purchase Plan that permits eligible employees to buy shares of common stock on the last day of two six-month purchase periods (February 28 or 29 and August 31 of each year) at 85% of the fair market value of the stock on these dates. Shares of common stock sold to employees under this plan were 756 in fiscal 2013, 4,787 in fiscal 2012, and 4,096 in fiscal 2011. The amount the Company recorded as compensation expense related to this plan was less than $10 thousand in each period presented.

Treasury Stock

Our Board of Directors authorized the repurchase of 1,000,000 shares of the Company’s common stock on September 14, 2011, and again on September 27, 2012. The shares may be repurchased from time-to-time on the open market, subject to market conditions and other factors, and generally will be funded with internally generated cash. The Company repurchased 283,388 shares under the September 2011 authorization during the twelve months ended February 28, 2013. At February 28, 2013, there were 364,476 shares available for purchase under the September 2011 authorization and 1,000,000 shares available for purchase under the September 2012 authorization.

The following table provides information about Company purchases of common stock (in thousands).

Period	Total Number of Shares Purchased		Total Cost		Total Number of Shares Purchased as Part of a Written Trading Plan(1)		Maximum Number of Shares that May Yet Be Purchased
March 1, 2010 – February 28, 2011		16		111		16		1,098
March 1, 2011 – February 29, 2012		2,450		17,538		2,450		648
March 1, 2012 – February 28, 2013		283		2,233		283		364
Total		2,749	$	19,882		2,749

(1) On February 25, 2011, the Company entered into a written trading plan as part of the existing share repurchase program. The plan expired on May 26, 2011, when all of the shares authorized in the plan had been purchased. On May 27, 2011, the Company entered into a written trading plan to purchase up to 1,000,000 shares as part of the existing share repurchase program. The plan commenced on June 1, 2011, and expired on September 22, 2011, when 1,000,000 shares had been repurchased. On October 10, 2011, MSC entered into a new written trading plan to purchase up to 1,000,000 shares. 448,147 shares were purchased under this plan before it was replaced on July 16, 2012, by a new written trading plan to purchase up to 551,853 shares. 187,377 shares were purchased under the July 2012 plan before it expired on February 15, 2013. On February 15, 2013, MSC entered into a new written trading plan to purchase up to 364,476 shares. All of the trading plans were written under Rule 10b5-1 of the Exchange Act. As of February 28, 2013, all 364,476 shares remained to be purchased under this trading plan.

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Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Feb. 28, 2013		Nov. 30, 2012		Aug. 31, 2012		May 31, 2012		Feb. 29, 2012		Nov. 30, 2011		Aug. 31, 2011		May 31, 2011		Feb. 28, 2013		Feb. 29, 2012		Feb. 28, 2011
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Net Income	$ 1,352		$ 2,171		$ 3,253		$ 2,218		$ 17,563		$ 3,726		$ 3,021		$ 4,157		$ 8,994		$ 28,467		$ 12,044
Weighted Average Number of Common Shares Outstanding
Used for Basic Net Loss Per Share																	10,298		11,350		12,906
Dilutive Stock Options																	108		91		51
Dilutive Restricted Stock																	19
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares																	10,425		11,441		12,957
Basic Net Income Per Share:
Basic Net Income Per Share	$ 0.13	[1]	$ 0.21	[1]	$ 0.31	[1]	$ 0.21	[1]	$ 1.65	[1]	$ 0.35	[1]	$ 0.26	[1]	$ 0.33	[1]	$ 0.87	[1]	$ 2.51	[1]	$ 0.93
Diluted Net Income Per Share:
Diluted Net Income Per Share	$ 0.13	[1]	$ 0.21	[1]	$ 0.31	[1]	$ 0.21	[1]	$ 1.67	[1]	$ 0.34	[1]	$ 0.26	[1]	$ 0.33	[1]	$ 0.86	[1]	$ 2.49	[1]	$ 0.93

[1] The sum of the four quarters is not necessarily the same as the total for the year.

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German Subsidy - Additional Information (Detail) (Germany) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended		3 Months Ended
	Dec. 31, 2006 EUR (€) Employee	Feb. 29, 2012 USD ($) Seat Employee	Feb. 28, 2013 USD ($)	Feb. 29, 2012 Production Services Seat	Feb. 29, 2012 Selling, General and Administrative Seat
Subsidiary or Equity Method Investee [Line Items]
Subsidy received from government	€ 335
Number of employees to be added	5
Total number of employee	45	34
Monitoring period	5 years
Monitoring entry date	2009-02
Monitoring expiration date	2014-02
Extended expiration date	2017-02
Positions eliminated		10		8	2
Payment for settlement of subsidy		62
Payment for settlement of subsidy accumulated interest		12
Remaining liability for the subsidy			$ 251

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Retirement Liability, Income Taxes	$ 141	$ 795	$ 0

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Indebtedness

12 Months Ended

Feb. 28, 2013

Indebtedness

Note 4: Indebtedness

The Company has a credit line (“Line”) with JPMorgan Chase Bank, N.A. Interest on the Line is at the bank’s prime rate (3.25% as of February 28, 2013) or Libor plus 1.50%, at our discretion. There are annual letter of credit fees of 1.50% on outstanding letters of credit and a 0.25% fee on the annual unused credit line. The Line is secured by a borrowing base equal to a specified percentage of accounts receivable and liens on other assets of the Company (including inventory, equipment, real property and intellectual property), reduced by outstanding letters of credit, and may require consent from the lender before any significant sales of the equipment or real property securing the Line. In April 2010, the Line was amended to reduce the credit line to $7.5 million and increase the minimum availability covenant to $2.5 million. In May 2011, the Line was amended to extend the expiration date from May 12, 2011, to May 13, 2013. The Line does not contain any material financial covenants. The Company does not intend to renew the Line when it expires on May 13, 2013, because it has adequate cash flows and on-hand cash levels to meet current and foreseeable financing needs. In order to continue the availability of letters of credit, as needed, MSC will restrict an appropriate amount of its cash to secure the letters of credit.

Due to the borrowing base limitations and outstanding letters of credit of $1.1 million, the net amount available for borrowing at February 28, 2013, was $3.9 million. The lender may, at its discretion subject to the terms of the Line, modify the advance rates used in computing the borrowing base, which may limit the amounts available for future borrowings. There were no borrowings outstanding under the Line as of February 28, 2013, nor were any amounts borrowed during the 12 months ended February 28, 2013, or February 29, 2012.

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Commitments and Contingencies

12 Months Ended

Feb. 28, 2013

Commitments and Contingencies

Note 3: Commitments and Contingencies

MSC is a party to various legal proceedings in connection with the remediation of certain environmental matters as detailed below. We record these environmental reserves based upon historical experience and the extent of relevant information available from various third parties. A number of assumptions are made including, without limitation, the estimated extent of the environmental damage to any particular site, the available methods of remedy, the contribution expected from various other potentially responsible parties (“PRP”) and the discretionary authority of federal and state regulatory authorities in bringing enforcement actions.

In 1984, MSC was named as a PRP under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) for the surface, soil and ground water contamination at a Superfund site in Gary, Indiana. The U.S. District Court for the Northern District of Indiana entered a Consent Decree between the government and certain PRPs (including MSC) on the scope of the remediation work at the site. We receive periodic updates on the projected costs of the remediation work from the environmental consultant employed by certain PRPs (including MSC) to manage the remediation project. Remediation work is ongoing and we maintain a letter of credit for approximately $1.0 million to secure our estimated share of these expenses. The estimate of our liability for this site was $0.8 million at February 28, 2013.

In 2003, MSC, along with many other companies, was named as a PRP by the United States Environmental Protection Agency (“USEPA”) under CERCLA at the Lake Calumet Cluster Site in Chicago, Illinois, for allegedly sending certain waste from its Elk Grove Village facility to the site. No lawsuits have been filed against any of the PRPs, but it is likely that the USEPA and the Illinois Environmental Protection Agency will seek reimbursement of their costs. In March 2010, the USEPA proposed the site for listing as a federal Superfund site, which has the potential to provide additional federal funds for the remediation. To date, we have not received any notice that this designation has occurred. The Company cannot determine what effect, if any, this change in designation will have on its liability. As of February 28, 2013, the USEPA was in final discussions with the principal PRPs to design and fund an investigation of the appropriate methods of remediation for the groundwater at the site. Once approved, the investigation is expected to take approximately two years. The estimate of the Company’s liability for this site was $0.3 million, including the pending groundwater investigation, at February 28, 2013.

In 1998, the California Environmental Protection Agency (“CEPA”) named MSC and many other entities as PRPs under CERCLA at the Chatham Brothers Barrelyard Site in Escondido, California (“Chatham Site”) for surface, soil and ground water contamination associated with former waste handling activities at the site. CEPA alleged that a predecessor to MSC arranged for the transportation and treatment of waste handled at the site. MSC and the other PRPs are obligated to perform and complete the environmental investigation and cleanup activities at the Chatham Site in accordance with a Remedial Action Plan approved in 1999. Two CEPA agencies (Department of Toxic Substances Control and San Diego Regional Water Quality Control Board are overseeing the long-term remediation required at the Chatham Site. The activities necessary to complete the groundwater remediation are expected to last well into the future. The estimate of the Company’s liability for this site was $0.1 million at February 28, 2013.

MSC’s environmental reserves were approximately $1.2 million as of both February 28, 2013 and February 29, 2012. The Company does not believe that the outcome of its environmental legal proceedings will have a material adverse effect on its results of operations, financial position or cash flows, given the reserves recorded as of February 28, 2013, and, where applicable, taking into account contributions from other PRPs. There are, however, a number of uncertainties including, without limitation, the cost of site cleanup, the discretionary authority of federal and state regulatory authorities in bringing enforcement actions and other factors that affect the Company’s range of exposures.

Other Matters

MSC is also a party to various legal actions and customer disputes arising in the ordinary course of its business. These legal actions and customer disputes cover a broad variety of claims spanning MSC’s entire business. The Company believes that the resolution of these legal actions and customer disputes will not, individually or in the aggregate, have a material adverse effect on its results of operations, financial position or cash flows.

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Asset Impairment

12 Months Ended

Feb. 28, 2013

Asset Impairment

Note 15: Asset Impairment

During the first quarter of fiscal 2011, in conjunction with the sale of a portion of our coil coating assets, we conducted an impairment analysis of the real estate and building improvement assets at our Plant #7 in Elk Grove Village, Illinois. These assets housed the coil coating assets that were sold. With the sale, the future cash flow generated by the building was substantially reduced. (See Note 17, “Elk Grove Village Asset Sale,” for further discussion.) We compared the projected undiscounted future cash flows of the real estate and building improvement assets to their carrying value and determined their value might be impaired. We requested a valuation from a commercial real estate firm. Based on that valuation, we determined the assets were impaired and recorded a $3.7 million write-down of the assets in the first quarter of fiscal 2011.

There were no impairments during fiscal 2012 or 2013.

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Business Segments

12 Months Ended

Feb. 28, 2013

Business Segments

Note 11: Business Segments

MSC operates in one segment based on how the Chief Operating Decision Maker views its business for evaluating performance and making operating decisions. The Company provides material-based solutions for acoustical and coated applications. The acoustical material-based solutions include multilayer composites consisting of metals, polymers, rubber and other coated materials used to manage noise and vibration. The coated metal material-based solutions include painted, electrogalvanized (“EG”), rubber and film protective, decorative and functional coatings applied to coiled metal of various widths and thicknesses. MSC’s material-based solutions are designed to meet specific customer requirements for the automotive, appliance, building products, lighting and electronics markets. The Company uses a significant level of shared assets and personnel across each of its product categories. Some customers purchase products from several different product categories.

Each of our domestic facilities houses one or more principal production lines. These lines are used to transform the coils of metal into materials for our customers in a continuous process. The process varies somewhat, depending on the application and what materials are to be bonded to the metal coil. However, the core production line equipment does not change markedly. The products are differentiated by the type of material bonded to the metal and the method used to bond them. Various coatings and/or films are applied by running the uncoiled metal ribbon through an applicator and baking the coating onto the metal in high temperature ovens. Our proprietary Quiet Steel is produced by bonding two metal coils together with highly engineered viscoelastic core materials. Zinc and zinc-nickel corrosion protections are applied by running the steel through electrolyte baths and galvanizing the material to the metal with electricity. This galvanization process is only performed at our Walbridge, Ohio facility.

We use a significant level of shared assets, and share resources for sales, general and administrative expense, and management across each of our product categories. It is common for a single customer to purchase products from several different product categories as well as from different plants. Capital projects—whether for cost savings or generating incremental revenue—are evaluated individually based on estimated economic returns (e.g., net present value, return on investment), not based on related product line or geographic location. We use a centralized functional management structure, and share administration and production resources, to deliver individual products that, together, provide solutions to our customers.

Net sales by product category, net of intercompany activity, were as follows:

	Fiscal 2013				Fiscal 2012				Fiscal 2011
Net Sales ($ in millions)	$		%		$		%		$		%
Acoustical	$	73.8		61	$	68.3		50	$	73.1		53
Coated		47.2		39		68.4		50		64.5		47
Total Net Sales	$	121.0		100	$	136.7		100	$	137.6		100

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Restructuring - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				12 Months Ended	3 Months Ended		12 Months Ended	3 Months Ended	12 Months Ended
	Feb. 29, 2012	Aug. 31, 2011	Feb. 28, 2011	Feb. 28, 2010	Feb. 28, 2011	Feb. 28, 2010 U.S.	Feb. 28, 2010 Europe	Feb. 28, 2010 U.S. and Europe	Feb. 29, 2012 Germany Seat	Feb. 29, 2012 Germany
Restructuring Cost and Reserve [Line Items]
Employee termination benefit and related expenses	$ 0.3	$ 0.3		$ 1.6		$ 1.5	$ 0.1
Payment of employee benefits			$ 0.2		$ 1.1			$ 0.2		$ 0.4
Positions eliminated									10

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Interest Income, Net

12 Months Ended

Feb. 28, 2013

Interest Income, Net

Note 7: Interest Income, Net

The table presented below analyzes the components of interest income, net.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Interest Expense	$	(32	)	$	(113	)	$	(36	)
Interest Income		46			65			115
Interest Income, Net	$	14		$	(48	)	$	79

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Defined Benefit Postretirement Plans Expected to be Paid (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Thousands, unless otherwise specified	Feb. 28, 2013
Other Postretirement Benefit Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
2014	$ 94
2015	85
2016	91
2017	95
2018	106
2019 through 2023	575
Total	$ 1,046

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Leases

12 Months Ended

Feb. 28, 2013

Leases

Note 5: Leases

MSC leases one manufacturing facility (Walbridge, Ohio) under a lease that ends on April 30, 2015, and which automatically extends in three-year increments through April 30, 2027, unless either party explicitly cancels the lease prior to each extension date. The Company leases its Application Research Center in Michigan under a lease ending in September 2018, with the option to extend in five-year increments through September 2043. MSC also leases space for its corporate and general offices in a building the Company sold in August 2012 located in Elk Grove Village, Illinois. The Company is in compliance with all the terms of these leases. Other equipment is leased under non-cancelable operating leases. The table below presents future minimum lease payments.

(in thousands)
2014	$	1,660
2015		1,508
2016		904
2017		674
2018		555
2019 and Thereafter		231
Total Minimum Lease Payments	$	5,532

Total rental expense under operating leases was $1.7 million in fiscal 2013, $1.5 million in fiscal 2012 and $1.5 million in fiscal 2011. Rental income was $1.0 million, $1.1 million and $0.9 million in fiscal 2013, 2012 and 2011, respectively.

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Retirement and Savings Plans

12 Months Ended

Feb. 28, 2013

Retirement and Savings Plans

Note 6: Retirement and Savings Plans

As of February 28, 2013, the Company had one defined contribution retirement plan qualifying under the Internal Revenue Code Section 401(k): Material Sciences Corporation Savings & Investment Plan (the “SIP”). All employees of MSC are automatically enrolled in the SIP for a basic contribution, unless they elect not to participate. Employees may also elect to contribute more or less than the basic contribution level. Mercer Trust Company is the custodial trustee of all SIP assets and participant loans.

Under the SIP, participants may contribute up to 85% of their annual compensation, as defined in the SIP, subject to certain Internal Revenue Code limitations. The Company may, at its discretion, make matching contributions to the SIP at varying rates by location on the first 6% of base compensation. MSC also makes an annual contribution into the SIP at varying rates by location for employees who are active participants in the SIP. The cost of the SIP was $0.6 million in fiscal 2013 and $0.5 million in both fiscal 2012 and fiscal 2011.

MSC has non-contributory defined benefit pension plans that cover some of its employees. The Company provides amounts required to meet ERISA funding requirements for these defined benefit plans. All the defined benefit plans are frozen, so no additional benefits accrue under them and there are no new participants. In addition to the benefits previously described, some former MSC officers participated in a non-contributory supplemental pension plan that is still outstanding.

The Company provides some of its retired employees with certain postretirement health care benefits, which MSC may periodically amend or modify. Certain employees may be eligible for these benefits if they reach normal retirement age while employed by the Company.

During the third quarter of fiscal 2011, the Company identified an error in computing benefit costs for certain of its postretirement benefit plans. Benefit costs in fiscal 2008, 2009, 2010 and the first two quarters of fiscal 2011 were overstated because a reduction in benefits implemented in fiscal 2008 was not reflected in the computation of benefit costs for those periods. The cumulative effect of the error at November 30, 2010, was a $0.4 million reduction in expense, of which $0.2 million related to prior fiscal years, and a reduction of the accrued liability at November 30, 2010, of $0.6 million. MSC recorded the cumulative effect in the third quarter of fiscal 2011.

Additionally, in November 2010 the Company notified beneficiaries of its postretirement benefit plans that the plans would be amended and the benefits available under the plans would be reduced effective January 1, 2011. The effect of the amendments was a reduction of the accrued liability at November 30, 2010, of $1.5 million. Actuarial adjustments, changes in employee participation, and normal benefit payments accounted for an additional reduction of the accrued liability at November 30, 2010, of $0.3 million. In total, the liability for postretirement benefits was reduced by $2.4 million at November 30, 2010.

The following tables present a reconciliation of the change in benefit obligation, a reconciliation of the change in plan assets, a statement of the funded status of the plans, the components of net periodic benefit cost and the assumptions used in determining the plans’ funded status and periodic cost. The assumptions do not consider salary increases as the majority of plans are either frozen or do not account for salary increases in determining future benefits.

	Pension Benefits						Postretirement Benefits
(in thousands except %)	2013			2012			2013			2012
Change in Benefit Obligation:
Obligation, March 1	$	15,964		$	14,475		$	1,958		$	1,842
Service Cost Benefits Earned During the Period		—			—			23			20
Interest Cost on Benefit Obligation		574			678			78			86
Plan Amendments		—			—			—			—
Actuarial (Gain) Loss		269			2,080			164			94
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Curtailments		—			—			—			—
Other Plan Changes		—			—			—			—
Obligation, February 29 & February 28	$	15,551		$	15,964		$	1,986		$	1,958
Change in Plan Assets:
Plan Assets at Fair Value, March 1	$	8,517		$	8,305			—		$	—
Actual Return on Plan Assets		831			324			—			—
Company Contributions		1,356			1,157			237			84
Benefit Payments		(1,256	)		(1,269	)		(237	)		(84	)
Plan Assets at Fair Value, February 29 & February 28	$	9,448		$	8,517		$	—		$	—
Funded Status:
Funded Status	$	(6,103	)	$	(7,447	)	$	(1,986	)	$	(1,958	)

	Pension Benefits
	2013		2012
Plans with Accumulated Benefit Obligation in excess of Plan Assets
Accumulated Benefit Obligation	$	15,551	$	15,964

	Pension Benefits									Postretirement Benefits
	2013			2012			2011			2013			2012			2011
Components of Net Periodic Benefit Cost:
Service Cost Benefits Earned During the Period	$	—		$	—		$	—		$	23		$	20		$	63
Interest Cost on Benefit Obligation		574			677			674			78			86			205
Expected Return on Assets		(566	)		(577	)		(534	)		—			—			—
Amortization of Prior Service Cost		—			—			—			(276	)		(276	)		(64	)
Amortization of Net (Gain) Loss		630			431			389			196			188			218
Settlements and Curtailment		—			—			—			—			—			—
Net Periodic Benefit Cost	$	638		$	531		$	529		$	21		$	18		$	422

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Amounts Recognized in the Consolidated Balance Sheets
Prepaid Benefit Cost	$	—		$	—		$	—		$	—
Current Liability		(650	)		(780	)		(94	)		(126	)
Non-Current Liability		(5,453	)		(6,667	)		(1,891	)		(1,833	)
Net Amount Recognized	$	(6,103	)	$	(7,447	)	$	(1,985	)	$	(1,959	)

	Pension Benefits				Postretirement Benefits
	2013		2012		2013			2012
Amounts Recognized in Accumulated Other Comprehensive Loss
Prior Service Cost (Credit)	$	—	$	—	$	(1,341	)	$	(1,617	)
Net (Gain) or Loss		6,494		7,119		1,842			1,875
Net Amount Recognized	$	6,494	$	7,119	$	501		$	258

	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)
Net (Gain) or Loss	$	5		$	2,333		$	163		$	95
Amortization of Prior Service Cost (Credit)		—			—			276			276
Prior Service Cost (Credit)		—			—			—			—
Adjustment for 2007 Plan Amendment		—			—			—			—
Amortization of Net (Gain) or Loss		(630	)		(431	)		(196	)		(188	)
Net Amount Recognized	$	(625	)	$	1,902		$	243		$	183

	2013			2012			2011
Assumptions Used in Determining the Plans’ Funded Status:
Discount Rate		3.79%-4.04	%		4.00%-4.23	%		5.22%-5.50	%
Rate of Increase in Compensation Levels		N/A			N/A			N/A

	2013		2012			2011
Assumptions Used in Determining Net Periodic Benefit Cost:
Discount Rate		4.00%-4.23%		5.22%-5.50	%		5.64%-5.94	%
Expected Long-Term Rate of Return on Assets		6.60%		7.00	%		7.50	%

Plan obligations and the annual pension expense are determined by using a number of assumptions including the discount rate and the estimated future return on plan assets. To the extent actual amounts differ from these assumptions and estimated amounts, results could be adversely affected. A one percentage point increase in the estimated discount rate would decrease the net pension expense by less than $0.1 million and decrease the estimated pension liability by $1.5 million. A one percentage point decrease in the discount rate would increase the net pension expense by $0.1 million and increase the estimated pension liability by $1.8 million. A one percentage point increase or decrease in the estimated future return on plan assets would have a $0.1 million relative effect on fiscal 2013 net pension expense. The estimated future return on plan assets for the fiscal 2013 pension benefit income calculation was 6.6%.

MSC continues to review its postretirement benefits, incorporating actual and anticipated benefit changes. In determining the present value of the accumulated postretirement benefit obligation and net cost, MSC assumed health care cost annual increases would decline from 7% to 5% per year over the life of the obligation. However, for some benefits no trend rate is applicable.

A 1% increase in assumed health care cost trend rates will raise the total of the service and interest cost components of net periodic postretirement benefit cost by less than $0.1 million, and the health care component of the accumulated postretirement benefit obligation by $0.1 million as of February 28, 2013. A 1% decrease in assumed health care cost trend rates will lower the total of the service and interest cost components of net periodic postretirement benefit cost by less than $0.1 million, and the health care component of the accumulated postretirement benefit obligation by $0.1 million as of February 28, 2013.

Plan Assets. The Company’s pension plan weighted-average asset allocations at February 28, 2013, and February 29, 2012, by asset category, were as follows:

	2013			2012
Equity Securities		63	%		65	%
Debt Securities		37	%		35	%
Total		100	%		100	%

The investment objective of MSC’s pension plans is to meet the current and future defined benefit payments of participants and beneficiaries of its retirement plans. The plans will invest in funds with appropriate long-term goals and objectives. Individual funds included will seek to provide a long-term competitive rate of return, net of expenses, at appropriate risk levels—which over the long run is equal to or exceeds outlined benchmarks. To maximize diversification, the plans will invest in portfolios within four broad asset classes: bonds, large company stocks, small company domestic stocks and foreign stocks. To provide additional diversification and further reduce the volatility of the portfolio, the Plans will divide the large and small stock domestic portions between value and growth managers.

The approach used to determine the expected long-term rate of return on plan assets assumption is based on weighting historical market index returns for various asset classes in proportion to the assets held in the Material Sciences Corporation Master Trust (“Trust”). The Trust targets an asset allocation of approximately 61% in equity securities and 39% in fixed income securities.

The Company determines the fair value of plan assets using observable market data obtained from independent sources when available. The Company classifies its plan assets according to the fair value hierarchy:

• Level 1—Quoted prices for identical instruments in active markets.

• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The table below summarizes the fair value measurements of the Trust’s assets at February 28, 2013, and February 29, 2012, by asset class (in thousands).

(in thousands)	Balance as of February 28, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	75	$	75	$	—	$	—
Mutual Funds—Equity Securities		5,886		5,886		—		—
Mutual Funds—Bonds		3,487		3,487		—		—
Total	$	9,448	$	9,448	$	—	$	—

(in thousands)	Balance as of February 29, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	52	$	52	$	—	$	—
Mutual Funds—Equity Securities		5,528		5,528		—		—
Mutual Funds—Bonds		2,937		2,937		—		—
Total	$	8,517	$	8,517	$	—	$	—

The Company expects to contribute approximately $3.1 million, which includes $1.1 of required minimum contributions and $2.0 million of additional contributions to its qualified and non-qualified defined benefit pension plans in fiscal 2014. The additional contributions are being made after management considered the advantages of making the contributions—higher earnings in the pension funds compared to the low interest currently being earned on cash and the reduction of tax payments due to the deductibility of the contributions. Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years after that, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	1,196
2015		1,130
2016		939
2017		803
2018		741
2019 through 2023		4,152
Total	$	8,961

MSC expects to contribute approximately $0.1 million to its postretirement benefit plans other than pensions in fiscal 2014. Benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five following fiscal years, are shown in the table below (in thousands).

Expected Benefit Payments:
2014	$	94
2015		85
2016		91
2017		95
2018		106
2019 through 2023		575
Total	$	1,046

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Income Taxes

12 Months Ended

Feb. 28, 2013

Income Taxes

Note 8: Income Taxes

Income (loss) from continuing operations before income taxes was as follows:

(in thousands)	Fiscal 2013		Fiscal 2012			Fiscal 2011
United States	$	12,282	$	13,778		$	12,900
Foreign		327		(227	)		(532	)
	$	12,609	$	13,551		$	12,368

The components of the provision (benefit) for income taxes and reconciliation between the statutory rate for federal income taxes and the effective tax rate are summarized and presented below.

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Provision (Benefit)
Current:
Federal	$	(85	)	$	(817	)	$	(32	)
State		(126	)		853			341
Foreign		64			(128	)		15
		(147	)		(92	)		324
Deferred:
Federal		4,091			(9,530	)		—
State		(317	)		(1,565	)		—
Foreign		(12	)		(3,729	)		—
		3,762			(14,824	)		—
Tax Provision (Benefit)	$	3,615		$	(14,916	)	$	324

(in thousands)	Fiscal 2013			Fiscal 2012			Fiscal 2011
Tax Rate Reconciliation
Tax Provision (Benefit) at Federal Statutory Rate	$	4,413		$	4,743		$	4,329
State and Local Taxes, Net of Federal Tax Benefit		172			525			521
Effect of Changes in Tax Rates		(41	)		(76	)		(88	)
Change in Unrecognized Tax Benefits		(562	)		(1,029	)		(96	)
Valuation Allowance		—			(18,807	)		(4,398	)
Research and Development Credit		(106	)		(22	)		(79	)
Manufacturing Deduction		(80	)		(440	)		—
Other, Net		(181	)		190			135
Tax Provision (Benefit) at Effective Income Tax Rate	$	3,615		$	(14,916	)	$	324

Temporary differences that give rise to deferred tax assets and (liabilities) were as follows:

(in thousands)	Fiscal 2013			Fiscal 2012
Reserves Not Deductible Until Paid	$	1,145		$	1,270
Employee Benefit Liabilities		5,859			6,257
Net Operating Loss and Tax Credit Carryforwards		5,011			4,855
Property and Equipment		1,539			5,088
Other		351			434
Total Gross Deferred Tax Asset	$	13,905		$	17,904
Valuation Allowance		(567	)		(567	)
Total Net Deferred Tax Assets	$	13,338		$	17,337

The Company records deferred tax assets and liabilities using enacted tax rates on the differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. During fiscal 2012, MSC reduced its valuation allowance by $4.0 million for reductions in the deferred tax assets during the year. After considering all available positive and negative evidence, the Company reversed $14.8 million of the remaining valuation allowance on its U.S. and German deferred tax assets as of February 29, 2012, as the Company determined that it was more likely than not that these benefits would be realized. The Company maintains a valuation allowance of $0.6 million on its deferred tax asset for certain state net operating losses as of February 28, 2013, because it is not more likely than not that these benefits will be realized.

As of February 28, 2013, deferred tax assets for federal, state and foreign net operating losses and tax credit carry forwards of $3.8 million were available with an unlimited expiration date, and the remaining $1.2 million (net of federal taxes) expires in varying amounts in fiscal years 2018 through 2032.

The company considers its China location earnings to be permanently reinvested, and therefore has not recorded a provision for U.S. income tax or foreign withholding taxes on the cumulative undistributed earnings of its China subsidiary. Such undistributed earnings from MSC’s China subsidiary have been included in consolidated retained earnings in the amount of $0.6 million and $0.6 million as of February 28, 2013, and February 29, 2012, respectively. If MSC were to change its intentions and such earnings were remitted to the U.S., these earnings would be subject to U.S. income taxes. However, as of February 28, 2013, and February 29, 2012, foreign tax credits would be available to offset these taxes such that the U.S. tax impact would be insignificant. MSC’s other foreign entities have losses and no positive earnings yet. However, MSC considers all of its foreign entity earnings to be permanently reinvested.

There are inherent uncertainties related to the interpretation of tax laws in the jurisdictions in which the Company transacts business. In evaluating its various tax filing positions, the Company records tax benefits only if management determines that they are more likely than not to be sustained. Adjustments are made to the Company’s liability for unrecognized tax benefits in the period in which an issue is settled with the respective tax authorities, the statute of limitations expires or when new information becomes available. Adjustments to the amounts accrued may increase or decrease tax expense in any period. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in millions):

	Fiscal 2013			Fiscal 2012			Fiscal 2011
Gross unrecognized tax benefits at beginning of year	$	1.1		$	2.2		$	2.5
Decreases in tax positions for prior years		(0.2	)		(0.1	)		(0.2	)
Lapse in statute of limitations		(0.4	)		(1.0	)		(0.1	)
Gross unrecognized tax benefits at end of year	$	0.5		$	1.1		$	2.2

Amounts accrued for tax liabilities due to the potential change in judgments and estimates are $0.5 million at February 28, 2013. The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.2 million at February 28, 2013, $0.9 million at February 29, 2012, and $1.4 million at February 28, 2011.

The Company anticipates that it is reasonably possible that the total amount of unrecognized tax benefits of $0.5 million will decrease by up to $0.2 million during the next 12 months.

We file income tax returns in the U.S. on a federal basis and in a number of U.S., state and foreign jurisdictions. Our major tax jurisdictions are the U.S., Illinois, Michigan and Germany. For the U.S., Illinois, Michigan and Germany, the earliest fiscal years open for examination are 2012, 2009, 2008 and 2008, respectively. In January 2013, a U.S. income tax examination covering our fiscal years 2010 and 2011 was completed. The resolution of the U.S. tax audit did not materially affect the results of operations, financial position or cash flows.

The Company classifies interest expense and any penalties related to income tax uncertainties as a component of income tax expense. The Company recorded negligible interest and penalties in the fiscal 2013, 2012 and 2011 Consolidated Statement of Operations, respectively. The total accrued interest expense related to tax uncertainties recognized in the Consolidated Balance Sheets was $0.2 million at February 28, 2013, and $0.3 million at February 29, 2012.

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Tax Rate Reconciliation (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Tax Rate Reconciliation
Tax Provision (Benefit) at Federal Statutory Rate	$ 4,413	$ 4,743	$ 4,329
State and Local Taxes, Net of Federal Tax Benefit	172	525	521
Effect of Changes in Tax Rates	(41)	(76)	(88)
Change in Unrecognized Tax Benefits	(562)	(1,029)	(96)
Valuation Allowance		(18,807)	(4,398)
Research and Development Credit	(106)	(22)	(79)
Manufacturing Deduction	(80)	(440)
Other, Net	(181)	190	135
Tax Provision (Benefit) at Effective Income Tax Rate	$ 3,615	$ (14,916)	$ 324

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Restructuring Reserve (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve Beginning Balance	$ 235	$ 202	$ 1,424
Restructuring Charges		583	1,324
Cash Payment	(235)	(550)	(2,546)
Restructuring Reserve Ending Balance		235	202
Employee Severance
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve Beginning Balance	148	202	1,424
Restructuring Charges		430	1,324
Cash Payment	(148)	(484)	(2,546)
Restructuring Reserve Ending Balance		148	202
Other Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve Beginning Balance	87	0	0
Restructuring Charges		153	0
Cash Payment	(87)	(66)	0
Restructuring Reserve Ending Balance		$ 87	$ 0

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended			12 Months Ended
	Feb. 29, 2012	Feb. 28, 2013	Feb. 28, 2011	Feb. 28, 2013 Minimum	Feb. 28, 2013 Maximum	Feb. 29, 2012 U.S. and German	Feb. 28, 2013 State and Local Jurisdiction
Income Tax [Line Items]
Deferred tax asset valuation allowance reduced	$ (4)
Reversed valuation allowance						14.8
Deferred tax asset valuation allowance for net operating losses							0.6
Deferred tax assets net operating loss and tax credit with unlimited expiration date		3.8
Deferred tax assets net operating loss and tax credit subject to expiration date		1.2
Deferred tax assets net operating loss and tax credit expiration date				2018	2032
Undistributed earnings from MSC's China subsidiary	0.6	0.6
Amounts accrued for tax liabilities		0.5
Unrecognized tax benefits that would impact effective tax rate If recognized	0.9	0.2	1.4
Unrecognized tax benefits		0.5
Estimated change in tax rate lower bound		0.2
Accrued interest related to tax uncertainties recognized	$ 0.3	$ 0.2

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Components of Provision (Benefit) for Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Current:
Federal	$ (85)	$ (817)	$ (32)
State	(126)	853	341
Foreign	64	(128)	15
Current Income Tax Expense (Benefit), Total	(147)	(92)	324
Deferred:
Federal	4,091	(9,530)
State	(317)	(1,565)
Foreign	(12)	(3,729)
Deferred Income Taxes	3,762	(14,824)
Tax Provision (Benefit)	$ 3,615	$ (14,916)	$ 324

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Significant Customers and Export Sales (Tables)

12 Months Ended

Feb. 28, 2013

Domestic and Foreign Net Sales

MSC’s domestic and foreign net sales are presented in the chart below. Sales to customers in any one foreign country did not comprise greater than 10% of consolidated net sales for any period presented.

Net Sales (in thousands)	Fiscal 2013		Fiscal 2012		Fiscal 2011
Domestic	$	105,513	$	121,684	$	125,179
Foreign		15,494		15,050		12,445
Total	$	121,007	$	136,734	$	137,624

Sales Revenue, Goods, Net

Concentration Risk, Percentage for Significant Customers

The following table shows direct sales to our significant customers that represented 10% or more of consolidated net sales for any of fiscal 2013, 2012 or 2011.

	% of Consolidated Net Sales
Customer	Fiscal 2013			Fiscal 2012			Fiscal 2011
Chrysler LLC		20	%		17	%		17	%
U.S. Steel		16	%		22	%		15	%
Ford Motor Company		8	%		12	%		18	%

Accounts Receivable

Concentration Risk, Percentage for Significant Customers

The following table shows gross accounts receivable from these significant customers as a percentage of total consolidated gross accounts receivable as of February 28, 2013, and February 29, 2012.

	% of Consolidated Gross Accounts Receivable
Customer	February 28, 2013			February 29, 2012
Chrysler LLC		18	%		18	%
Ford Motor Company		8	%		15	%
U.S. Steel		5	%		12	%

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Components of Net Periodic Benefit Costs (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Pension Plans, Defined Benefit
Components of Net Periodic Benefit Cost:
Interest Cost on Benefit Obligation	$ 574	$ 677	$ 674
Expected Return on Assets	(566)	(577)	(534)
Amortization of Net (Gain) Loss	630	431	389
Settlements and Curtailment
Net Periodic Benefit Cost	638	531	529
Other Postretirement Benefit Plans, Defined Benefit
Components of Net Periodic Benefit Cost:
Service Cost Benefits Earned During the Period	23	20	63
Interest Cost on Benefit Obligation	78	86	205
Amortization of Prior Service Cost	(276)	(276)	(64)
Amortization of Net (Gain) Loss	196	188	218
Settlements and Curtailment
Net Periodic Benefit Cost	$ 21	$ 18	$ 422

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Selected Quarterly Results of Operations (Unaudited)

12 Months Ended

Feb. 28, 2013

Selected Quarterly Results of Operations (Unaudited)

Note 13: Selected Quarterly Results of Operations (Unaudited)

The table presented below is a summary of quarterly data for the years ended February 28, 2013 and February 29, 2012.

(in thousands except per share amounts) 2013	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Fiscal Year
Net Sales	$	34,834	$	29,927	$	30,387	$	25,859	$	121,007
Gross Profit		8,555		6,553		7,238		6,168		28,514
Income From Operations(1)		3,097		4,784		2,289		1,536		11,706
Total Other Income, Net		329		387		107		80		903
Net Income	$	2,218	$	3,253	$	2,171	$	1,352	$	8,994
Basic Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.87
Diluted Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.86
2012
Net Sales	$	36,036	$	34,417	$	34,009	$	32,272	$	136,734
Gross Profit		9,522		7,651		9,307		7,188		33,668
Income From Operations(2)		3,972		2,580		3,693		1,723		11,968
Total Other Income, Net		447		436		461		239		1,583
Net Income	$	4,157	$	3,021	$	3,726	$	17,563	$	28,467
Basic Net Income Per Share(3)	$	0.33	$	0.26	$	0.35	$	1.65	$	2.51
Diluted Net Income Per Share(3)	$	0.33	$	0.26	$	0.34	$	1.67	$	2.49

(1) Income from operations in the second quarter of fiscal 2013 included a gain on sale of $3.2 million as discussed in Note 18, “Sale of Elk Grove Village Building.”

(2) Income from operations in the second and fourth quarters of fiscal 2012 included charges of $0.3 million and $0.3 million related to employee termination benefit expenses as discussed in Note 14, “Restructuring.”

(3) The sum of the four quarters is not necessarily the same as the total for the year.

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German Subsidy

12 Months Ended

Feb. 28, 2013

German Subsidy

Note 19: German Subsidy

In December 2006, our German subsidiary, MSC Europe GmbH, entered into a subsidy program with the State of Thüringen. The subsidy provided €335 thousand for investment in our Application Development Center in Eisenach, Germany, and required we increase our staff by five positions and maintain 45 total positions for a five year monitoring period, from February 2009 through February 2014. The monitoring period was subsequently extended to February 2017. Under the subsidy, if we did not maintain the specified staff levels during the monitoring period, we would be liable to pay back the subsidy, with interest. Because of the uncertainty of maintaining hiring levels, we have carried a liability on the German books in the amount of the subsidy.

As discussed in Note 14, “Restructuring,” in the fourth quarter of fiscal 2012, MSC executed a restructuring plan that eliminated eight production and two SG&A positions in our German subsidiary. As a consequence of this reduction, we determined we would not be in compliance with the staff level requirements of the subsidy. We entered into negotiations with the State of Thüringen to settle the subsidy, and agreed to repay approximately $62 thousand of the subsidy plus approximately $12 thousand of accumulated interest on the repaid amount. We also agreed to a revised target staff level of 34 employees until February 2014. We carry the remaining balance of the subsidy as a current liability and amortize it into income over the remaining life of the surveillance period. The total remaining liability for the subsidy was $251 thousand at February 28, 2013.

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Reconciliation of Change in Benefit Obligation (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Change in Plan Assets:
Plan Assets at Fair Value, February 29 & February 28	$ 9,448	$ 8,517
Pension Plans, Defined Benefit
Change in Benefit Obligation:
Obligation, March 1	15,964	14,475
Interest Cost on Benefit Obligation	574	678
Plan Amendments
Actuarial (Gain) Loss	269	2,080
Benefit Payments	(1,256)	(1,269)
Curtailments
Other Plan Changes
Obligation, February 29 & February 28	15,551	15,964
Change in Plan Assets:
Plan Assets at Fair Value, March 1	8,517	8,305
Actual Return on Plan Assets	831	324
Company Contributions	1,356	1,157
Benefit Payments	(1,256)	(1,269)
Plan Assets at Fair Value, February 29 & February 28	9,448	8,517
Funded Status:
Funded Status	(6,103)	(7,447)
Other Postretirement Benefit Plans, Defined Benefit
Change in Benefit Obligation:
Obligation, March 1	1,958	1,842
Service Cost Benefits Earned During the Period	23	20	63
Interest Cost on Benefit Obligation	78	86
Plan Amendments
Actuarial (Gain) Loss	164	94
Benefit Payments	(237)	(84)
Curtailments
Other Plan Changes
Obligation, February 29 & February 28	1,986	1,958	1,842
Change in Plan Assets:
Company Contributions	237	84
Benefit Payments	(237)	(84)
Funded Status:
Funded Status	$ (1,986)	$ (1,958)

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Components of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss	$ (2,824)	$ (2,470)
Accumulated Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss	1,182	1,764
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss	(4,532)	(4,911)
Accumulated Other Post Retirement Liabilities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Loss	$ 526	$ 677

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Current Assets:
Cash and Cash Equivalents	$ 37,508	$ 28,201
Receivables, Less Reserves of $489 and $696, Respectively	17,675	20,136
Income Taxes Receivable	1,392	141
Prepaid Expenses	554	674
Inventories:
Raw Materials	8,802	9,019
Finished Goods	16,142	11,739
Short Term Deferred Tax Assets	4,191	4,313
Total Current Assets	86,264	74,223
Property, Plant and Equipment:
Land and Building	15,271	26,149
Machinery and Equipment	103,327	100,563
Construction in Progress	1,988	1,240
Gross Property, Plant and Equipment	120,586	127,952
Accumulated Depreciation	(91,426)	(93,217)
Net Property, Plant and Equipment	29,160	34,735
Other Assets:
Investment in Joint Venture	2,394	2,955
Long Term Deferred Tax Assets	9,147	13,024
Other	141	159
Total Other Assets	11,682	16,138
Total Assets	127,106	125,096
Current Liabilities:
Accounts Payable	11,061	13,364
Accrued Payroll Related Expenses	2,594	3,113
Accrued Expenses	5,799	5,289
Total Current Liabilities	19,454	21,766
Long-Term Liabilities:
Pension and Postretirement Liabilities	7,344	8,500
Long-Term Incentives	2,652	3,420
Other	2,720	3,430
Total Long-Term Liabilities	12,716	15,350
Commitments and Contingencies
Shareowners' Equity
Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 1,000,000 Designated Series B Junior Participating Preferred; None Issued
Common Stock, $.02 Par Value; 40,000,000 Shares Authorized; 19,058,923 Shares Issued and 10,198,121 Shares Outstanding as of February 28, 2013, and 19,030,983 Shares Issued and 10,470,199 Shares Outstanding as of February 29, 2012	381	381
Additional Paid-In Capital	81,089	80,440
Treasury Stock at Cost, 8,824,172 Shares as of February 28, 2013, and 8,540,784 Shares as of February 29, 2012	(76,756)	(74,423)
Retained Earnings	93,046	84,052
Accumulated Other Comprehensive Loss	(2,824)	(2,470)
Total Shareowners' Equity	94,936	87,980
Total Liabilities and Equity	$ 127,106	$ 125,096

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Elk Grove Village Asset Sale - Additional information (Detail) (USD $)	3 Months Ended			6 Months Ended	12 Months Ended		1 Months Ended	3 Months Ended	12 Months Ended
	Feb. 29, 2012	Aug. 31, 2011	Feb. 28, 2010	Aug. 31, 2012	Feb. 28, 2013	Feb. 28, 2011	Apr. 12, 2010 Elk Grove Village	May 31, 2011 Elk Grove Village	Feb. 28, 2010 Elk Grove Village
Long Lived Assets Held-for-sale [Line Items]
Consideration received from sale of assets, gross							$ 10,000,000
Cash received from sale of assets, net				9,200,000	9,180,000	14,089,000	9,300,000
Revenue from associated business									28,600,000
Gain on sales of property plant and equipment					3,216,000	6,643,000		4,700,000
Legal fees								300,000
Employee Severance Expense	300,000	300,000	1,600,000					1,100,000
Inventory write-off expenses								$ 200,000

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Joint Venture

12 Months Ended

Feb. 28, 2013

Joint Venture

Note 2: Joint Venture

In November 2000, a subsidiary of MSC formed a joint venture partnership with Tekno to manufacture and sell Quiet Steel^® and disc brake noise damper material for the South American market. The joint venture’s sales were $3.1 million, $4.6 million and $4.5 million in fiscal 2013, 2012 and 2011, respectively. The joint venture’s income was $0.5 million, $1.0 million and $1.0 million in fiscal 2013, 2012 and 2011, respectively. MSC owns 51% of the equity interest and holds 50% of the voting interest in the joint venture.

Under the equity method, MSC includes its portion of the joint venture’s results of operations in the Consolidated Statements of Operations under equity in results of joint venture. The equity in results of joint venture was net income of $0.3 million, $0.5 million and $0.5 million in fiscal 2013, 2012 and 2011, respectively. The Company received cash dividends of $0.5 million, $0.6 million and $0.8 million in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

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Summary of Fair Value Measurements of Trust's Assets (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	Feb. 29, 2012
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	$ 9,448	$ 8,517
Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	75	52
Mutual Funds-Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	5,886	5,528
Mutual Funds-Bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	3,487	2,937
Fair Value, Inputs, Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	9,448	8,517
Fair Value, Inputs, Level 1 | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	75	52
Fair Value, Inputs, Level 1 | Mutual Funds-Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	5,886	5,528
Fair Value, Inputs, Level 1 | Mutual Funds-Bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets, at fair value	$ 3,487	$ 2,937

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Summary of Quarterly Data (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Feb. 28, 2013		Nov. 30, 2012		Aug. 31, 2012		May 31, 2012		Feb. 29, 2012		Nov. 30, 2011		Aug. 31, 2011		May 31, 2011		Feb. 28, 2013		Feb. 29, 2012		Feb. 28, 2011
Quarterly Financial Data [Line Items]
Net Sales	$ 25,859		$ 30,387		$ 29,927		$ 34,834		$ 32,272		$ 34,009		$ 34,417		$ 36,036		$ 121,007		$ 136,734		$ 137,624
Gross Profit	6,168		7,238		6,553		8,555		7,188		9,307		7,651		9,522		28,514		33,668		31,682
Income From Operations	1,536	[1]	2,289	[1]	4,784	[1]	3,097	[1]	1,723	[2]	3,693	[2]	2,580	[2]	3,972	[2]	11,706	[1]	11,968	[2]	10,660
Total Other Income, Net	80		107		387		329		239		461		436		447		903		1,583		1,708
Net Income	$ 1,352		$ 2,171		$ 3,253		$ 2,218		$ 17,563		$ 3,726		$ 3,021		$ 4,157		$ 8,994		$ 28,467		$ 12,044
Basic Net Income Per Share	$ 0.13	[3]	$ 0.21	[3]	$ 0.31	[3]	$ 0.21	[3]	$ 1.65	[3]	$ 0.35	[3]	$ 0.26	[3]	$ 0.33	[3]	$ 0.87	[3]	$ 2.51	[3]	$ 0.93
Diluted Net Income Per Share	$ 0.13	[3]	$ 0.21	[3]	$ 0.31	[3]	$ 0.21	[3]	$ 1.67	[3]	$ 0.34	[3]	$ 0.26	[3]	$ 0.33	[3]	$ 0.86	[3]	$ 2.49	[3]	$ 0.93

[1] Income from operations in the second quarter of fiscal 2013 included a gain on sale of $3.2 million as discussed in Note 18, "Sale of Elk Grove Village Building."

[2] Income from operations in the second and fourth quarters of fiscal 2012 included charges of $0.3 million and $0.3 million related to employee termination benefit expenses as discussed in Note 14, "Restructuring."

[3] The sum of the four quarters is not necessarily the same as the total for the year.

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Gross Accounts Receivable from Significant Customers as Percentage of Total Consolidated Gross Accounts Receivable (Detail) (Accounts Receivable, Customer Concentration Risk)	Feb. 28, 2013	Feb. 29, 2012
Chrysler LLC
Concentration Risk [Line Items]
Percentage of Consolidated Gross Accounts Receivable	18.00%	18.00%
Ford Motor Company
Concentration Risk [Line Items]
Percentage of Consolidated Gross Accounts Receivable	8.00%	15.00%
U.S. Steel
Concentration Risk [Line Items]
Percentage of Consolidated Gross Accounts Receivable	5.00%	12.00%

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SCHEDULE II

12 Months Ended

Feb. 28, 2013

SCHEDULE II

SCHEDULE II

Material Sciences Corporation and Subsidiaries Reserve for Receivable Allowances and Inventory Reserves

(In thousands)

			Additions
	Balance at Beginning of Year		Charged to Costs and Expense		Charged to Other Accounts		Reclassifications and Acquisitions		Deductions from Reserve			Balance at End of Year
Fiscal 2011 Receivable Allowances	$	716	$	1,328	$	—	$	—	$	(1,624	)	$	420
Inventory Reserves	$	2,527	$	4,391	$	—	$	—	$	(5,262	)	$	1,656
Fiscal 2012 Receivable Allowances	$	420	$	1,717	$	—	$	—	$	(1,441	)	$	696
Inventory Reserves	$	1,656	$	4,710	$	—	$	—	$	(5,024	)	$	1,342
Fiscal 2013 Receivable Allowances	$	696	$	1,920	$	—	$	—	$	(2,127	)	$	489
Inventory Reserves	$	1,342	$	3,099	$	—	$	—	$	(3,269	)	$	1,172

The activity in the receivable allowances account includes the Company’s bad debt, product claims and customer scrap allowance.

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Weighted Average Assumptions Used for Option Grants (Detail)	12 Months Ended
	Feb. 28, 2013	Feb. 29, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend Yield	0.00%	0.00%
Risk-Free Interest Rate	0.70%	2.50%
Expected Volatility	58.80%	58.80%
Expected Life (in Years)	5 years	6 years 6 months

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Selected Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Feb. 28, 2013

Summary of Quarterly Data

The table presented below is a summary of quarterly data for the years ended February 28, 2013 and February 29, 2012.

(in thousands except per share amounts) 2013	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Fiscal Year
Net Sales	$	34,834	$	29,927	$	30,387	$	25,859	$	121,007
Gross Profit		8,555		6,553		7,238		6,168		28,514
Income From Operations(1)		3,097		4,784		2,289		1,536		11,706
Total Other Income, Net		329		387		107		80		903
Net Income	$	2,218	$	3,253	$	2,171	$	1,352	$	8,994
Basic Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.87
Diluted Net Income Per Share(3)	$	0.21	$	0.31	$	0.21	$	0.13	$	0.86
2012
Net Sales	$	36,036	$	34,417	$	34,009	$	32,272	$	136,734
Gross Profit		9,522		7,651		9,307		7,188		33,668
Income From Operations(2)		3,972		2,580		3,693		1,723		11,968
Total Other Income, Net		447		436		461		239		1,583
Net Income	$	4,157	$	3,021	$	3,726	$	17,563	$	28,467
Basic Net Income Per Share(3)	$	0.33	$	0.26	$	0.35	$	1.65	$	2.51
Diluted Net Income Per Share(3)	$	0.33	$	0.26	$	0.34	$	1.67	$	2.49

(1) Income from operations in the second quarter of fiscal 2013 included a gain on sale of $3.2 million as discussed in Note 18, “Sale of Elk Grove Village Building.”

(2) Income from operations in the second and fourth quarters of fiscal 2012 included charges of $0.3 million and $0.3 million related to employee termination benefit expenses as discussed in Note 14, “Restructuring.”

(3) The sum of the four quarters is not necessarily the same as the total for the year.

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Earnings Per Share

12 Months Ended

Feb. 28, 2013

Earnings Per Share

Note 12: Earnings Per Share

Below is the computation of basic and diluted earnings per share for the fiscal years ended February 28 or 29, 2013, 2012 and 2011.

(in thousands except per share amounts)	2013		2012		2011
Net Income	$	8,994	$	28,467	$	12,044
Weighted Average Number of Common Shares Outstanding Used for Basic Net Loss Per Share		10,298		11,350		12,906
Dilutive Stock Options		108		91		51
Dilutive Restricted Stock		19
Weighted Average Number of Common Shares Outstanding Plus Dilutive Shares		10,425		11,441		12,957
Basic Net Income Per Share:
Basic Net Income Per Share	$	0.87	$	2.51	$	0.93
Diluted Net Income Per Share:
Diluted Net Income Per Share	$	0.86	$	2.49	$	0.93

Approximately 400,000 options to purchase shares of common stock and shares of restricted stock were outstanding at the end of fiscal 2013 but were not included in the computation of diluted earnings per share because the effect was anti-dilutive.