CONSOLIDATED BALANCE SHEETS
December 31, January 2,
(Dollars in Thousands) 2000 2000
------------ ----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 10,100 $ 9,955
Accounts Receivable, Less Allowance for
Doubtful Accounts of $1,804 and $794 35,067 33,601
Accounts Receivable, Joint Ventures 11,198 283
Inventories:
Raw Materials 12,702 10,566
In-Process and Finished 19,145 13,688
Less LIFO Reserve (1,424) (935)
---------- ----------
Total Inventories 30,423 23,319
Current Deferred Income Taxes 5,000 4,728
Other Current Assets 1,061 661
---------- ----------
Total Current Assets 92,849 72,547
---------- ----------
Property, Plant and Equipment, Net of
Accumulated Depreciation of
$78,319 and $75,069 94,199 84,652
Investments in Unconsolidated
Joint Ventures 11,577 5,294
Penison Assets 6,407 4,223
Goodwill and Other Intangible Assets 14,068 14,510
Other Assets 2,414 2,180
----------- ----------
Total Assets $ 221,514 $ 183,406
=========== ==========
26
December 31, January 2,
(Dollars in Thousands) 2000 2000
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 12,418 $ 14,855
Accrued Employee Benefits
and Compensation 12,830 10,782
Accrued Income Taxes Payable 5,554 4,341
Taxes, Other than Federal
and Foreign Income 1,643 518
Other Accrued Liabilities 6,300 6,245
---------- ---------
Total Current Liabilities 38,745 36,741
---------- ---------
Long-Term Debt 9,116 9,740
Noncurrent Deferred Income Taxes 8,626 6,362
Noncurrent Pension Liability 9,676 4,215
Noncurrent Retiree Health Care and Life
Insurance Benefits 5,990 5,966
Other Long-Term Liabilities 3,548 3,965
Shareholders' Equity:
Capital Stock, $1 Par Value (Notes A & I):
Authorized Shares 50,000,000; Issued
Shares 15,485,570 and 15,047,552 15,486 15,048
Additional Paid-In Capital 32,262 27,383
100: Treasury Stock
(382,900 shares for both years)(Note A) (13,436) (13,436)
Accumulated Other Comprehensive
Income (Loss),
Net of Tax (Note I) (2,203) 438
Retained Earnings 113,704 86,984
---------- ---------
Total Shareholders' Equity 145,813 116,417
---------- ---------
Total Liabilities and Shareholders'
Equity $ 221,514 $ 183,406
========= =========
The accompanying notes are an integral part of the consolidated
financial statements.
27
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
2000 1999 1998
(52 weeks) (52 weeks) (53 weeks)
---------- ---------- ----------
Net Sales $ 248,215 $ 247,839 $ 216,574
Cost of Sales 165,710 175,964 158,509
Selling and Administrative
Expenses 40,529 36,735 28,073
Research and Development
Expenses 12,493 10,791 10,352
---------- -------- --------
Total Costs and Expenses 218,732 223,490 196,934
---------- -------- --------
Operating Income 29,483 24,349 19,640
Other Income less
Other Charges 7,838 1,626 (981)
Interest Income (Expense), Net 313 (98) 467
---------- --------- --------
Income Before Income Taxes 37,634 25,877 19,126
Income Taxes 10,914 7,246 5,355
---------- --------- --------
Net Income $ 26,720 $ 18,631 $ 13,771
========== ========= ========
Net Income Per Share (Notes A & I):
Basic $ 1.79 $ 1.24 $ .91
---------- --------- --------
Diluted $ 1.69 $ 1.19 $ .87
---------- --------- --------
Shares Used in Computing (Notes A & I):
Basic 14,896,227 15,055,034 15,202,470
---------- ---------- ----------
Diluted 15,848,736 15,642,844 15,799,826
---------- ---------- ----------
The accompanying notes are an integral part of the consolidated
financial statements.
28
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in
Thousands, Accumulated
Except Capital Other Com-
Capital Stock Additional prehensive Share-
Stock (Number Paid-In Retained Income Treasury holders'
Amounts) of Shares) Capital Earnings (Loss) Stock Equity
----------------------------------------------------------
Balance at
December 28,
1997 15,087,398 $ 23,554 $ 54,582 $ 1,155 $ -- $ 94,378
----------------------------------------------------------
Comprehensive
Income:
Net Income for
1998 13,771 13,771
Other
Comprehensive
Income 193 193
-----------
Total
Comprehensive
Income 13,964
Stock Options
Exercised 180,334 794 974
Stock Issued
to Directors 21,932 341 363
Shares Reacquired
and Cancelled (28,732) (576) (604)
Tax Benefit on
Stock Options
Exercised 1,579 1,579
Treasury Stock
Acquisitions
(12,800 Shares) (423) (423)
Stock Split
Impact on
Treasury Stock (12,800) 13
----------------------------------------------------------
Balance at
January 3,
1999 15,248,132 $ 25,705 $ 68,353 $ 1,348 $ (423) $110,231
----------------------------------------------------------
Comprehensive
Income:
Net Income
for 1999 18,631 18,631
Other
Comprehensive
Income(Loss) (910) (910)
--------
Total
Comprehensive
Income 17,721
Stock Options
Exercised 171,778 781 953
Stock Issued
to Directors 15,468 283 299
Shares Reacquired
and Cancelled (17,726) (206) (224)
Tax Benefit on
Stock Options
Exercised 450 450
Treasury Stock
Acquisitions
(370,100 Shares) (13,013) (13,013)
Stock Split
Impact on
Treasury Stock (370,100) 370
----------------------------------------------------------
Balance at
January 2,
2000 15,047,552 $ 27,383 $ 86,984 $ 438 $ (13,436) $116,417
----------------------------------------------------------
Comprehensive
Income:
Net Income
for 2000 26,720 26,720
Other
Comprehensive
Income(Loss) (2,641) (2,641)
-------
Total
Comprehensive
Income 24,079
Stock Options
Exercised 513,511 3,120 3,633
Stock Issued
to Directors 12,993 1,000 1,013
Shares Reacquired
and Cancelled (88,486) (2,848) (2,936)
Tax Benefit on
Stock Options
Exercised 3,607 3,607
----------------------------------------------------------
Balance at
December 31,
2000 15,485,570 $ 32,262 $113,704 $(2,203) $ (13,436) $145,813
==========================================================
The dollar amount of the capital stock ($1 par value) is equal to the
indicated number of shares.
The accompanying notes are an integral part of the consolidated financial
statements.
29
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES: 2000 1999 1998
(52weeks) (52 weeks) (53 weeks)
-------------------------------------------
- ----------
Net Income $ 26,720 $ 18,631 $ 13,771
Adjustments to Reconcile
Net Income
to Cash Provided by Operating
Activities:
Depreciation and Amortization 12,507 10,375 8,439
(Benefit) Expense for Deferred
Income Taxes 3,299 (577) 2,009
Equity in Undistributed Income of
Unconsolidated Joint
Ventures, Net (5,945) (1,897) (414)
Loss on Disposition of Assets 546 304 249
Noncurrent Pension and Postretirement
Benefits 1,215 441 (58)
Other, Net 376 247 (161)
Changes in Operating Assets and
Liabilities Excluding Effects of
Acquisition and Disposition
of Assets:
Accounts Receivable (11,946) 264 (3,984)
Inventories (7,465) (1,261) (912)
Prepaid Expenses (436) (233) 124
Accounts Payable and
Accrued Expenses 4,843 6,203 (1,196)
------------------------------------------
Net Cash Provided by
Operating
Activities 23,714 32,497 17,867
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
- ----------
Capital Expenditures (22,744) (13,621) (28,965)
Acquisition of Businesses (252) (4,302) (1,500)
Proceeds from Sale of Property,
Plant and Equipment 83 118 100
Proceeds from Sale of Marketable
Securities -- 256 2,508
Investment in Unconsolidated Joint Ventures
and Affiliates (1,592) 737 333
------------------------------------------
Net Cash Used in
Investing
Activities (24,505) (16,812) (27,524)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
- ----------
(Repayments) Proceeds from Short- and
Long-Term Borrowings 296 (16) 736
Repayments of Debt Principal -- (3,369) (603)
Acquisition of Treasury Stock -- (13,013) (423)
Proceeds from Sale of
Capital Stock - Net 697 729 370
------------------------------------------
Net Cash Provided by (Used in)
Financing Activities 993 (15,669) 80
Effect of Exchange Rate
Changes on Cash (57) 346 379
------------------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents 145 362 (9,198)
Cash and Cash Equivalents at Beginning
of Year 9,955 9,593 18,791
------------------------------------------
Cash and Cash Equivalents
at End of Year $ 10,100 $ 9,955 $ 9,593
==========================================
- ----------
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------
NOTE A-ACCOUNTING POLICIES
- ----------
ORGANIZATION:
- ----------
Rogers Corporation manufactures specialty materials, which are sold to
targeted markets around the world. These specialty materials are grouped
into three distinct business segments (see Note K). High Performance Foams
include urethane foams and silicone materials. These foams are sold
principally to manufacturers in the communications, computer, imaging,
transportation, and consumer markets. Printed Circuit Materials include
circuit board laminates for high-frequency printed circuits, flexible
circuit board laminates for flexible interconnections, and industrial
laminates for shielding of radio and electromagnetic interference. Printed
Circuit Materials are sold principally to printed circuit board manufacturers
and equipment manufacturers for applications in the computer, communications,
and consumer markets. Polymer Materials and Components are composed of
elastomer components, moldable composite materials, nitrophyl floats,
nonwoven materials, and bus bars for power distribution. Polymer Materials
and Components are sold principally to the imaging, transportation, consumer
and communications markets.
PRINCIPLES OF CONSOLIDATION:
- ----------
The consolidated financial statements include the accounts of Rogers
Corporation and its wholly-owned subsidiaries (the Company), after
elimination of significant intercompany accounts and transactions.
CASH EQUIVALENTS:
- ----------
Cash equivalents include commercial paper and U.S. federal agency securities
with a maturity of three months or less at the time of purchase. These
investments are stated at cost, which approximates market value.
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES:
- ----------
The Company accounts for its investments in and advances to unconsolidated
joint ventures, all of which are 50% owned, using the equity method.
RELATED PARTY TRANSACTIONS:
- ----------
Sales to unconsolidated joint ventures are made on terms similar to those
prevailing with unrelated customers. However, payment terms for amounts
owed by the joint ventures may be extended.
FOREIGN CURRENCY TRANSLATION:
- ----------
All balance sheet accounts of foreign subsidiaries are translated at rates
of exchange in effect at each year-end, and income statement items are
translated at the average exchange rates for the year. Resulting translation
adjustments are made directly to a separate component of shareholders'
equity. Currency transaction adjustments are reported as income or expense.
NOTE A-ACCOUNTING POLICIES--CONTINUED
- ----------
INVENTORIES:
- ----------
Inventories are valued at the lower of cost or market. Certain inventories,
amounting to $11,095,000 at December 31, 2000, and $8,395,000 at
January 2, 2000, or 36% of total Company inventories for both periods,
are valued at the lower of cost, determined by the last-in, first-out
(LIFO) method, or market. The cost of the remaining portion of the
inventories was determined principally on the basis of standard costs,
which approximate actual first-in, first-out (FIFO) costs.
PROPERTY, PLANT AND EQUIPMENT:
- ----------
Property, plant and equipment is stated on the basis of cost, including
capitalized interest. For financial reporting purposes, provisions for
depreciation are calculated on a straight-line basis over the following
estimated useful lives of the assets:
Years
Buildings 20 -- 45
Building improvements 10 -- 25
Machinery and equipment 5 -- 15
Office equipment 3 -- 10
INTANGIBLE ASSETS:
- ----------
Goodwill, representing the excess of the cost over the net tangible and
identifiable assets of acquired businesses, is stated at cost. Goodwill
is being amortized on a straight-line method over periods ranging from
10-40 years. Amortization charges to operations amounted to $851,000 in
2000 and $625,000 in 1999. When events and circumstances so indicate,
all long-term assets are assessed for recoverability based upon cash flow
forecasts. Based on its most recent analysis, the Company believes that
no material impairment of goodwill exists at December 31, 2000.
Purchased patents and licensed technology are capitalized and amortized
on a straight-line basis over their estimated useful lives, generally
from 2 to 17 years.
PENSIONS AND OTHER POSTRETIREMENT BENEFIT PLANS:
- ----------
The Company adopted Statement of Financial Accounting Standards
(FAS No. 132), "Employers' Disclosures about Pensions and Other
Postretirement Benefits," in 1998. The provisions of FAS No. 132 revise
employers' disclosures about pension and other postretirement benefit plans.
It does not change the measurement or recognition of these plans. It
standardizes the disclosure requirements for pensions and other postretirement
benefits to the extent practicable.
NOTE A-ACCOUNTING POLICIES--CONTINUED
- ----------
INCOME TAXES:
- ----------
The Company recognizes income taxes under the liability method. No provision
is made for U.S. income taxes on the undistributed earnings of consolidated
foreign subsidiaries because such earnings are substantially reinvested in
those companies for an indefinite period. Provision for the tax consequences
of distributions, if any, from consolidated foreign subsidiaries is recorded
in the year the distribution is declared.
REVENUE RECOGNITION:
- ----------
Revenue is recognized when goods are shipped.
NET INCOME PER SHARE:
- ----------
The following table sets forth the computation of basic and diluted
earnings per share:
(Dollars in Thousands, Except Per Share Amounts)
2000 1999 1998
--------------------------------------------
Numerator:
Net income $ 26,720 $ 18,631 $ 13,771
Denominator:
Denominator for basic earnings
per share weighted-average
shares 14,896,227 15,055,034 15,202,470
Effect of stock options 952,509 587,810 597,356
--------------------------------------------
Denominator for diluted
earnings per share - adjusted
weighted-average shares and
assumed conversions 15,848,736 15,642,844 15,799,826
============================================
Basic earnings per share $ 1.79 $ 1.24 $ .91
============================================
Diluted earnings per share $ 1.69 $ 1.19 $ .87
============================================
STOCK SPLIT:
- ------------
To help widen the distribution and enhance the marketability of the Company's
capital stock, the Board of Directors effected a two-for-one stock split in
the form of a 100% stock dividend on May 12, 2000. Treasury Stock was not
doubled. All references in the financial statements to the number of shares
and per share amounts have been restated to reflect the increased number of
capital shares outstanding.
USE OF ESTIMATES:
- ----------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
NOTE A-ACCOUNTING POLICIES--CONTINUED
- ----------
TREASURY STOCK:
- ----------
From time to time the Company's Board of Directors authorizes the repurchase,
at management's discretion, of shares of the Company's capital stock. The
most recent authorization was approved on August 17, 2000 and provided for
the repurchase of up to an aggregate of $2.0 million in market value of such
stock. Currently, Treasury Stock totals 382,900 shares and is shown at cost
on the balance sheet as a reduction of Shareholders' Equity.
NOTE B-ACQUISITIONS
- ----------
Proforma information has not been provided for the following acquisitions
because the results would not be material.
CYTEC ACQUISITION
- -----------------
Effective January 19, 1999, the Company acquired certain assets of the
engineered molding compounds business of Cytec Industries, Inc. for
approximately $4.3 million. These assets included machinery and equipment,
intellectual property rights, accounts receivable and customer lists. This
acquisition was accounted for as a purchase and, accordingly, results are
included in the Company's consolidated financial statements since the date
of acquisition.
IMATION SLEEVES BUSINESS ACQUISITION:
- ----------
Effective September 30, 1998, the Company acquired a line of printing
pressroom products from Imation Corp., formerly a business of 3M Corporation,
for $2.25 million. The acquisition included a line of dampening and ductor
sleeves used in lithographic printing, along with related manufacturing
assets and intellectual property rights. This acquisition was accounted for
as a purchase and, accordingly, results are included in the Company's
consolidated financial statements since the date of acquisition.
NOTE C-PROPERTY, PLANT AND EQUIPMENT
- ----------
December 31, January 2,
(Dollars in Thousands) 2000 2000
---------- ----------
Land $ 5,709 $ 1,580
Buildings and improvements 58,118 52,298
Machinery and equipment 89,711 85,829
Office equipment 15,442 11,169
Installations in process 3,538 8,845
---------- ----------
172,518 159,721
Accumulated depreciation (78,319) (75,069)
---------- ----------
$ 94,199 $ 84,652
========== ==========
Depreciation expense was $11,656,000 in 2000, $9,750,000 in 1999, and
$7,986,000 in 1998. Interest costs incurred during the years 2000, 1999, and
1998 were $1,080,000, $1,423,000, and $1,358,000, respectively, of which
$457,000 in 2000, $506,000 in 1999, and $894,000 in 1998 were capitalized as
part of the cost of plant and equipment additions.
NOTE D-SUMMARIZED FINANCIAL INFORMATION OF UNCONSOLIDATED JOINT VENTURES
AND RELATED PARTY TRANSACTIONS
- ----------
The Company has four joint ventures, each 50% owned, which are accounted for
by the equity method. Equity income of $5,945,000, $1,897,000 and $414,000
for 2000, 1999 and 1998, respectively, is included in other income less other
charges on the consolidated statements of income. Each of the joint ventures
is described below:
Fiscal
Joint Venture Location Business Segment Year-End
Durel Corporation U.S. Polymer Materials
and Components December 31
Rogers Inoac Corporation Japan High Performance Foams
/Polymer Materials
and Components October 31
Polyimide Laminate
Systems, LLC U.S. Printed Circuit
Materials December 31
Rogers Chang Chun
Technology Co. Ltd. Taiwan Printed Circuit
Materials December 31
The summarized financial information for these joint ventures is included
in the following tables. Note that there is a difference between the
Company's investment in unconsolidated joint ventures and its one-half
interest in the underlying shareholders' equity of the joint ventures due
primarily to three factors. First, the Company's major initial contribution
to two joint ventures was technology that was valued differently by the joint
ventures than it was on the Company's books. Secondly, one of the joint
ventures had a negative retained earnings balance. Lastly, the translation
of foreign currency at current rates differs from that at historical rates.
Correspondingly, there is a difference between the Company's recorded income
from unconsolidated joint ventures and a 50% share of the income of those
joint ventures.
December 31, January 2,
(Dollars in Thousands) 2000 2000
----------- ----------
Current Assets $ 48,808 $ 27,296
Noncurrent Assets 26,312 13,628
Current Liabilities 32,403 12,392
Noncurrent Liabilities 14,646 12,287
Shareholders' Equity 28,071 16,245
Year Ended
----------------------------------------------
December 31, January 2, January 3,
(Dollars in Thousands) 2000 2000 1999
----------- ---------- ----------
Net Sales $ 138,006 $ 73,411 $ 58,570
Gross Profit 39,809 20,909 18,530
Net Income 11,608 4,049 718
Other Information:
(Dollars in Thousands)
2000 1999 1998
Commissions Income from
one Joint Venture $3,430 -- --
50% Loan Guarantee for
one Joint Venture $4,286 $4,636 $5,000
Loan to Durel Corporation $6,500 $ 500 --
The Company believes that the unconsolidated joint venture that has the
50% loan guarantee will be able to meet its obligations under the
financing arrangement and accordingly no payments will be required and
no losses will be incurred under this guarantee by the Company.
Terms for the loan to Durel Corporation: Borrowings must be made in
increments of $250,000, may not exceed $8.0 million in the aggregate,
will be at the prime rate of interest, and any amounts repaid by Durel
may subsequently be re-borrowed during the term of the loan arrangement.
The arrangement expires in September of 2001, unless extended at the sole
discretion of the Company.
Sales made to unconsolidated joint ventures were immaterial in all years
presented above.
NOTE E-PENSIONS AND OTHER POSTRETIREMENT BENEFIT PLANS
- ----------
PENSIONS:
- ----------
The Company has two qualified noncontributory defined benefit pension plans
covering substantially all U.S. employees. The Company also has established a
nonqualified unfunded noncontributory defined benefit pension plan to restore
certain retirement benefits that might otherwise be lost due to limitations
imposed by federal law on qualified pension plans. In addition, the Company
sponsors three unfunded defined benefit health care and life insurance plans
for retirees. The following provides a reconciliation of benefit obligations,
plan assets, and funded status of the plans:
Other
Pension Benefits Postretirement Benefits
(Dollars
in Thousands) 2000 1999 1998 2000 1999 1998
-------- -------- -------- -------- -------- -------
Components of net periodic
benefits cost:
Service
cost $ 1,641 $ 1,853 $ 1,569 $ 228 $ 218 $ 304
Interest
cost 4,643 4,257 3,791 331 264 354
Expected
return
on plan
assets (5,644) (5,359) (5,346) -- -- --
Amortizations
and
deferrals 485 524 417 (117) (152) (75)
Amortization of
transition
asset (352) (335) (335) -- -- --
--------- -------- -------- --------- -------- -------
Net periodic
benefit
costs $ 773 $ 940 $ 96 $ 442 $ 330 $ 583
======== ======== ======== ========= ======== =======
Change in plan assets:
Fair value of
plan assets
January 1 $ 61,383 $ 58,211 $ -- $ --
Actual return
on plan
assets 4,724 5,760 -- --
Employer
contributions 356 268 518 632
Benefit
payments (3,160) (2,856) (518) (632)
-------- -------- -------- ---------
Fair value of
plan assets
December
31 $ 63,303 $ 61,383 $ -- $ --
======== ======== ======== =========
Change in benefit obligation:
Benefit obligation
at
January 1 $ 56,555 $ 63,548 $ 3,395 $ 5,288
Service cost 1,641 1,853 228 218
Interest cost 4,643 4,257 332 264
Actuarial losses
(gains) 5,271 (10,247) 895 (1,743)
Benefit
payments (3,160) (2,856) (518) (632)
Plan
amendments 1,917 -- -- --
-------- -------- -------- ---------
Benefit obligation
at
December 31 $ 66,867 $ 56,555 $ 4,332 $ 3,395
======== ======== ======== =========
Reconciliation of funded status:
Funded status $ (3,564) $ 4,828 $ (4,332) $ (3,395)
Unrecognized net
gain/(loss) 1,304 (4,888) (2,158) (3,171)
Unrecognized prior
service cost 3,168 1,736 -- --
Unrecognized
transition
asset (1,025) (1,376) -- --
-------- -------- -------- ---------
Prepaid/(accrued) benefit
cost at
December 31 $ (117) $ 300 $ (6,490) $ (6,566)
======== ======== ======== =========
Amounts recognized in the Balance Sheet
consist of:
Prepaid benefit
cost $ 3,638 $ 4,223 $ -- $ --
Accrued benefit
liability (9,538) (4,157) (6,490) (6,566)
Intangible
asset 2,769 83 -- --
Deferred tax
asset 1,145 -- -- --
Accumulated other
comprehensive
income 1,869 151 -- --
-------- -------- -------- ---------
Net amount recognized
at
December 31 $ (117) $ 300 $ (6,490) $ (6,566)
========= ======== ========= =========
NOTE E-PENSIONS AND OTHER POSTRETIREMENT BENEFIT PLANS, CONTINUED
- ----------
In accordance with FASB Statement No. 87, the Company has recorded an
additional minimum pension liability for underfunded plans of $5,783,000,
representing the excess of unfunded accumulated benefit obligations over
previously recorded pension liabilities. A corresponding amount is
recognized as an intangible asset except to the extent that these
additional liabilities exceed related unrecognized prior service cost and
net transition obligation, in which case the increase in liabilities is
charged directly to shareholders' equity, net of taxes.
Assumptions as
of December 31: 2000 1999 2000 1999
Discount rate 7.50% 8.00% 7.50% 8.00%
Rate of compensation
increase 4.00% 4.00% -- --
The expected long-term rates of investment return were assumed to be 9.00%
for the pension plan covering unionized hourly employees and 9.50% for the
other pension plan in each year presented.
The Company has two pension plans with accumulated benefit obligations in
excess of plan assets in 2000 and one plan with accumulated benefit
obligations in excess of plan assets in 1999. Amounts applicable are:
2000 1999
--------- ---------
Projected benefit obligation $ 15,649 $ 1,284
Accumulated benefit obligation 15,427 1,018
Fair value of plan assets 12,667 --
OTHER POSTRETIREMENT BENEFITS:
- ----------
The assumed health care cost trend rate of increase is 4.5% for 1999-2001
and it is expected to continue at 4.5% after 2001. The health care cost
trend rate assumption has the following effect on the amounts reported:
increasing the assumed health care cost trend rates by one percentage point
for each future year would increase the accumulated postretirement benefit
obligation as of the beginning of 2001 by $317,000 and the aggregate of
service cost and interest cost components of net periodic postretirement
benefit cost for fiscal 2000 by $55,000; decreasing the assumed rates by
one percentage point would decrease the accumulated postretirement benefit
obligation at the beginning of 2001 by $286,000 and the aggregate of service
cost and interest cost components of net periodic postretirement benefit cost
for fiscal 2000 by $48,000.
NOTE F-EMPLOYEE SAVINGS AND INVESTMENT PLAN
- ----------
The Company sponsors the Rogers Employee Savings and Investment Plan (RESIP)
for domestic employees. The plan allows such employees to contribute up to
18% of their compensation through payroll deductions. Currently up to 5% of
an eligible employee's annual pre-tax contribution is matched at a rate of
50% by the Company. In 2000 and 1999, 100% of the Company's matching
contribution was invested in Company stock. RESIP related expense amounted
to $859,000 in 2000, $723,000 in 1999, and $697,000 in 1998, including
Company matching contributions of $813,000, $703,000, and $686,000,
respectively.
NOTE G-DEBT
- ----------
LONG-TERM DEBT:
- ----------
In December 2000 the Company cancelled its $20.0 million unsecured
multi-currency revolving credit agreement with one domestic bank and replaced
it with an unsecured multi-currency revolving credit agreement with two
domestic banks. Under the new arrangement, the Company can borrow up to
$75 million, or the equivalent in certain other foreign currencies. Amounts
borrowed under this agreement are to be paid in full by December 8, 2005.
The rate of interest charged on outstanding loans can, at the Company's
option and subject to certain restrictions, be based on the prime rate or at
rates from 50 to 112.5 basis points over a Eurocurrency loan rate. The
spreads over the Eurocurrency rate are based on the Company's leverage ratio.
Under the arrangement, the ongoing commitment fee varies from 30.0 to 37.5
basis points of the maximum amount that can be borrowed, net of any
outstanding borrowings and the maximum amount that beneficiaries may draw
under outstanding letters of credit. The borrowing at December 31, 2000 was
denominated in Belgian francs and the interest rate on the loan was 5.47%.
The carrying value of this debt approximates fair value as of
December 31, 2000. The loan agreement contains restrictive covenants
primarily related to total indebtedness, interest expense, capital
expenditures and net worth. The Company is in compliance with these
covenants.
The Company has designated 390.2 million Belgian francs ($9.1 million) as a
hedge of its net investment in a foreign subsidiary in Belgium. Realized
and unrealized gains and losses from these hedges are not included in the
Income Statement, but are shown in the cumulative translation adjustment
account included in other comprehensive income. During the year ended
December 31, 2000, the Company recorded $.6 million of net gains in the
cumulative translation adjustment related to the hedge.
MATURITIES:
- ----------
The required long-term debt principal repayment due on December 8, 2005 is
$9,116,000.
INTEREST PAID:
- ----------
Interest paid during the years 2000, 1999, and 1998, was $1,132,000,
$1,523,000, and $1,362,000, respectively.
RESTRICTION ON PAYMENT OF DIVIDENDS:
- ----------
Pursuant to the aforementioned loan agreement, the Company cannot make
a cash dividend payment if a default or event of default has occurred
and is continuing or shall result from the cash dividend payment.
NOTE H-INCOME TAXES
- ----------
Consolidated income before income taxes consists of:
(Dollars in Thousands) 2000 1999 1998
-----------------------------------
Domestic $ 30,263 $ 21,523 $ 14,756
Foreign 7,371 4,354 4,370
-----------------------------------
$ 37,634 $ 25,877 $ 19,126
===================================
The income tax expense (benefit) in the consolidated statements of income
consists of:
(Dollars in Thousands) Current Deferred Total
---------------------------------------
2000:
Federal $ 5,050 $ 2,507 $ 7,557
International 2,665 299 2,964
State (100) 493 393
---------------------------------------
$ 7,615 $ 3,299 $ 10,914
=======================================
1999:
Federal $ 6,365 $ (1,074) $ 5,291
International 1,338 408 1,746
State 120 89 209
---------------------------------------
$ 7,823 $ (577) $ 7,246
=======================================
1998:
Federal $ 2,276 $ 1,322 $ 3,598
International 1,066 687 1,753
State 4 -- 4
---------------------------------------
$ 3,346 $ 2,009 $ 5,355
=======================================
NOTE H-INCOME TAXES, CONTINUED
- ----------
Deferred tax assets and liabilities as of December 31, 2000 and
January 2, 2000, respectively, are comprised of the following:
(Dollars in Thousands) December 31, January 2,
2000 2000
----------- ----------
Deferred tax assets:
Accruals not currently deductible
for tax purposes:
Accrued employee benefits
and compensation $ 3,610 $ 2,110
Accrued post-retirement
benefits 1,964 2,228
Other accrued liabilities
and reserves 2,553 2,015
Investments in joint
ventures, net -- 1,563
Other 528 262
--------- ---------
Total deferred tax assets 8,655 8,178
Less deferred tax asset
valuation allowance 759 1,053
--------- ---------
Net deferred tax assets 7,896 7,125
--------- ---------
Deferred tax liabilities:
Depreciation and
amortization 11,287 8,759
Investments in joint
ventures, net 235 --
--------- ---------
Total deferred tax liabilities 11,522 8,759
--------- ---------
Net deferred tax asset (liability) $ (3,626) $ (1,634)
========= =========
Deferred taxes are classified on the consolidated balance sheet at
December 31, 2000 and January 2, 2000 as a net short-term deferred tax
asset of $5,000 and $4,728, respectively, and a net long-term deferred
tax liability of $8,626 and $6,362, respectively.
Income tax expense differs from the amount computed by applying the
United States federal statutory income tax rate to income before income
tax expense. The reasons for this difference are as follows:
(Dollars in Thousands) 2000 1999 1998
--------------------------------
Tax expense at statutory rate $ 13,172 $ 9,056 $ 6,694
Net U.S. tax (foreign tax credit)
on foreign earnings (799) 1,552 (326)
General business credits (537) (446) (400)
Nontaxable foreign sales company income (861) (424) (421)
State income taxes, net of federal benefit 256 136 3
Valuation Allowance (294) (2,274) --
Other (23) (354) (195)
------------------------------
Income tax expense $ 10,914 $ 7,246 $ 5,355
=================================
NOTE H-INCOME TAXES, CONTINUED
- ----------
The deferred tax asset valuation allowance decreased by $294,000 and
$2,274,000 during 2000 and 1999, respectively. The decreases resulted
primarily from the Company's utilization of foreign tax credits on
undistributed profits from its Japanese joint venture. The deferred tax
asset valuation allowance remained unchanged during 1998.
Undistributed foreign earnings, on which United States income tax had
not been provided, before available tax credits and deductions, amounted
to $15,429,000 at December 31, 2000, $10,956,000 at January 2, 2000, and
$8,601,000 at January 3, 1999.
Income taxes paid were $3,598,000, $4,795,000, and $4,442,000, in 2000,
1999, and 1998, respectively.
NOTE I-SHAREHOLDERS' EQUITY AND STOCK OPTIONS
- ----------
Components of Other Comprehensive Income (Loss) consist of the following:
(Dollars in Thousands) 2000 1999 1998
-------------------------------
Foreign currency translation
adjustments $ (923) $ (683) $ 112
Change in unrealized gains
(losses) on marketable
securities -- 2 3
Change in minimum pension
liability, net of $1,053
in taxes in 2000 (1,718) (229) 78
-------------------------------
Other comprehensive
income (loss) $(2,641) $ (910) $ 193
===============================
Accumulated balances related to each component of Other Comprehensive
Income (Loss) are as follows:
(Dollars in Thousands) December 31, 2000 January 2, 2000
-----------------------------------
Foreign currency translation
adjustments $ (334) $ 589
Minimum pension liability,
net of $1,145 in taxes in 2000 (1,869) (151)
-----------------------------------
Accumulated balance $ (2,203) $ 438
===================================
Under various plans the Company may grant stock options to officers and other
key employees at exercise prices that range as low as 50% of the fair market
value of the Company's stock as of the date of grant. To date virtually all
such options have been granted at an exercise price equal to the fair market
value of the Company's stock as of the date of grant. In general, regular
employee options become exercisable over a four-year period from the grant
date and expire ten years after the date of the grant. Stock option grants
are also made to non-employee directors, generally on a semi-annual basis.
For such stock options, the exercise price is equal to the fair market value
of the Company's stock and they are immediately exercisable and expire ten
years after the date of grant. Stock grants in lieu of cash compensation
are also made to non-employee directors.
Shares of capital stock reserved for possible future issuance are as
follows:
December 31, January 2,
2000 2000
----------- -----------
Shareholder Rights Plan 19,949,400 20,038,692
Stock options 4,141,519 4,668,444
Rogers Employee Savings
and Investment Plan 169,044 169,044
Long-Term Enhancement Plan 119,625 129,902
Stock to be issued in lieu of
deferred compensation 33,642 23,750
----------- -----------
Total 24,413,230 25,029,832
=========== ===========
NOTE I-SHAREHOLDERS' EQUITY AND STOCK OPTIONS, CONTINUED
- ----------
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123 (FAS No. 123), "Accounting for
Stock-Based Compensation." Accordingly, no compensation cost has been
recognized in the financial statements for the stock option plans. Had
compensation cost for the Company's stock option plans been determined
based on the fair value at the grant date for awards in 2000, 1999, and
1998 consistent with the provisions of FAS No. 123, the Company's net
earnings and earnings per share would have been reduced to the pro forma
amounts indicated below:
(Dollars in Thousands,
Except Per Share Amounts) 2000 1999 1998
-------------------------------------------
Net income As Reported $26,720 $18,631 $13,771
Pro Forma 24,234 17,207 12,440
-------------------------------------------
Basic earnings per share As Reported $ 1.79 $ 1.24 $ .91
Pro Forma 1.63 1.15 .82
-------------------------------------------
Diluted earnings per share As Reported $ 1.69 $ 1.19 $ .87
Pro Forma 1.62 1.11 .78
-------------------------------------------
The effects on pro forma net income and earnings per share of expensing
the estimated fair value of stock options are not necessarily
representative of the effects on reported net income for future years, due
to such things as the vesting period of the stock options and the
potential for issuance of additional stock options in future years.
An average vesting period of 36 months was used for the assumption regarding
stock options issued in 2000, 1999, and 1998. Regular options granted to
officers and other key employees usually become exercisable in one-third
increments beginning on the second anniversary of the grant date. The fair
value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants:
2000 1999 1998
------------------------------------------
Risk-free interest rate 5.14% 6.42% 4.65%
Dividend yield 0% 0% 0%
Volatility factor 33.2% 30.6% 30.6%
Weighted-average
expected life 6.1 years 5.8 years 5.5 years
A summary of the status of the Company's stock option program at year-end
2000, 1999 and 1998, and changes during the years ended on those dates
is presented below:
NOTE I-SHAREHOLDERS' EQUITY AND STOCK OPTIONS, CONTINUED
- ----------
--------------------------------------------------------------
2000 1999 1998
--------------------------------------------------------------
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Stock Options Shares Price Shares Price Shares Price
-------------------------------------------------------------
Outstanding at
beginning
of year 2,518,850 $12.00 2,380,646 $10.91 2,260,366 $10.27
Granted 429,479 32.56 356,320 17.69 320,836 12.58
Exercised (513,511) 6.94 (171,778) 6.03 (180,334) 5.40
Cancelled (77,604) 5.12 (46,338) 19.77 (20,222) 15.16
-------------------------------------------------------------
Outstanding at
end of year 2,357,214 17.12 2,518,850 12.00 2,380,646 10.91
=============================================================
Options
exercisable at
end of year 1,496,710 1,864,032 1,384,134
=============================================================
Weighted-average fair
value of
options granted
during year $13.97 $7.31 $4.68
=============================================================
The following table summarizes information about stock options outstanding
at December 31, 2000:
--------------------------------------------------------------
Options Outstanding Options Exercisable
--------------------------------------------------------------
Weighted-
Average Weighted- Weighted-
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices at 12/31/00 Life in Years Price at 12/31/00 Price
---------------------------------------------------------------
$3 to $11 406,330 2.9 $ 6.75 406,330 $ 6.75
$12 to $28 1,588,405 7.0 $15.74 958,708 $15.26
$29 to $43 362,479 9.7 $34.77 104,672 $35.73
--------------------------------------------------------------
$3 to $43 2,357,214 6.7 $17.12 1,496,710 $14.38
==============================================================
NOTE J-COMMITMENTS AND CONTINGENCIES
- ----------
LEASES:
- ----------
The Company's principal noncancellable operating lease obligations are for
building space and vehicles. The leases generally provide that the Company
pay maintenance costs. The lease periods range from one to five years and
include purchase or renewal provisions at the Company's option. The Company
also has leases that are cancellable with minimal notice. Lease expense was
$1,084,000 in 2000, $1,076,000 in 1999, and $975,000 in 1998.
Future minimum lease payments under noncancellable operating leases at
December 31, 2000, aggregate $3,618,000. Of this amount, annual minimum
payments are $866,000, $695,000, $630,000, $427,000, and $365,000 for years
2001 through 2005, respectively.
CONTINGENCIES:
- ----------
The Company is subject to federal, state, and local laws and regulations
concerning the environment and is currently engaged in proceedings involving
a number of sites under these laws, as a participant in a group of potentially
responsible parties (PRPs). The Company is currently involved as a PRP in
two cases involving waste disposal sites, both of which are Superfund sites.
These proceedings are at a preliminary stage and it is impossible to estimate
the cost of remediation, the timing and extent of remedial action which may
be required by governmental authorities, and the amount of liability, if any,
of the Company alone or in relation to that of any other PRPs. The Company
also has been seeking to identify insurance coverage with respect to these
matters. Where it has been possible to make a reasonable estimate of the
Company's liability, a provision has been established. Insurance proceeds
have only been taken into account when they have been confirmed by or received
from the insurance company. Actual costs to be incurred in future periods
may vary from these estimates. Based on facts presently known to it, the
Company does not believe that the outcome of these proceedings will have a
material adverse effect on its financial position.
In addition to the above proceedings, the Company has been actively working
with the Connecticut Department of Environmental Protection (CT DEP) related
to certain polychlorinated biphenyl (PCB) contamination in the soil beneath a
section of cement flooring at its Woodstock, Connecticut facility. The
Company completed clean-up efforts in 2000 and will be continually monitoring
the site for the next three years. On the basis of estimates prepared by
environmental engineers and consultants, the Company recorded a provision of
$1,600,000 prior to 1998 and based on updated estimates provided an additional
$600,000 in 1998 and $400,000 in 1999 for costs related to this matter. Prior
to 1998, $700,000 was charged against this provision. In 1998, 1999, and
2000, expenses of $200,000, $400,000, and $900,000 were charged, respectively,
against the provision. The remaining amount in the reserve is primarily for
testing, monitoring, sampling and any minor residual treatment activity.
Management believes, based on facts currently available, that the balance of
this provision is adequate to complete the project.
In this same matter the United States Environmental Protection Agency (EPA)
has alleged that the Company improperly disposed of PCBs. An administrative
law judge found the Company liable for this alleged disposal and assessed a
penalty of approximately $300,000. The Company reflected this fine in expense
in 1998 but disputes the EPA allegations and appealed the administrative law
judge's findings and penalty assessment. The original findings were upheld
internally by the EPA's Environmental Appeals Board, and the Company has now
placed that decision on appeal with the District of Columbia Federal Court of
Appeals.
In addition to the environmental issues, the nature and scope of the Company's
business bring it in regular contact with the general public and a variety of
businesses and government agencies. Such activities inherently subject the
Company to the possibility of litigation that is defended and handled in the
ordinary course of business. The Company has established accruals for matters
for which management considers a loss to be probable and reasonably estimable.
It is the opinion of management that facts known at the present time do not
indicate that such litigation, after taking into account insurance coverage
and the aforementioned accruals, will have a material adverse effect on the
financial position of the Company.
NOTE K-BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION
- ----------
The Company adopted Statement of Financial Accounting Standards (FAS) No. 131,
"Disclosures about Segments of an Enterprise and Related Information" in 1998
which changed the way the Company reported information about its operating
segments. Certain reclassifications were made in 2000 to reflect the way that
the business segments are viewed by top management and the Board of Directors.
The prior year information presented has been restated to reflect these
reclassifications.
The Company's nine business units and four joint ventures have separate
management teams and infrastructures that in most cases offer different
products and services. The business units and joint ventures have been
aggregated into three reportable segments: High Performance Foams, Printed
Circuit Materials, and Polymer Materials and Components.
High Performance Foams: This segment consists of two business units and 50%
of one joint venture. The products produced by these operations consist
primarily of high-performance urethane and silicone foams that are designed
to perform to predetermined specifications where combinations of properties
are needed to satisfy rigorous mechanical and environmental requirements.
These materials are sold worldwide and for the most part are sold to
fabricators and original equipment manufacturers.
Printed Circuit Materials: There are three business units and two joint
ventures in this segment. Laminate materials used in electronics equipment
for transmitting, receiving, and controlling electrical signals are the
products produced by these operations. These products tend to be proprietary
materials which provide highly specialized electrical and mechanical
properties to meet the demands imposed by increasing speed, complexity, and
power in analog, digital, and microwave equipment. These materials are
fabricated, coated and/or customized as necessary to meet customer demands
and are sold worldwide.
Polymer Materials and Components: This segment is comprised of four business
units, one joint venture and 50% of another joint venture. The products
produced by these operations consist primarily of molded elastomer
components, reinforced plastics, power distribution components and nonwoven
materials. These products have been engineered to provide special
performance characteristics to suit a wide range of markets and applications.
These products are sold worldwide to a varied customer base.
The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company evaluates performance
based on operating income of the respective business units.
The principal manufacturing operations of the Company are located in the
United States and Europe. The Company markets its products throughout the
United States and sells in foreign markets directly, through distributors
and agents, and through its 50% owned joint venture in Japan. In 2000,
approximately 54% of total sales were to the electronics industry.
Approximately 27% of the Company's sales of products manufactured by
U.S. divisions were made to customers located in foreign countries.
This includes sales to Europe of 12%, sales to Asia of 12%, and sales
to Canada of 1%.
At December 31, 2000, the electronics industry accounted for approximately 67%
of the total accounts receivable due from customers. Accounts receivable due
from customers located within the United States accounted for 74% of the
total accounts receivable owed to the Company at the end of 2000. The
Company performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral. Receivables are
generally due within 30 days. Credit losses relating to customers have been
minimal and have been within management's expectations.
Inter-segment and inter-area sales, which are generally priced with reference
to costs or prevailing market prices, are not material in relation to
consolidated net sales and have been eliminated from the sales data reported
in the following tables.
NOTE K-BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION, CONTINUED
- ----------
BUSINESS SEGMENT INFORMATION
(Dollars in
Thousands) High Printed Polymer
Performance Circuit Materials &
Foams Materials * Components Total
--------------------------------------------------------
2000:
Net sales $ 58,877 $ 100,701 $ 88,637 $ 248,215
Operating income 11,191 12,189 6,103 29,483
Total assets 44,172 91,255 86,087 221,514
Capital expenditures 1,185 12,818 8,741 22,744
Depreciation 2,106 5,306 4,244 11,656
Joint Venture Equity
Income 994 -- 4,951 5,945
========================================================
1999:
Net sales $ 51,364 $ 105,897 $ 90,578 $ 247,839
Operating income 7,758 7,468 9,123 24,349
Total assets 44,418 73,979 65,009 183,406
Capital expenditures 1,508 5,459 6,654 13,621
Depreciation 1,869 4,136 3,745 9,750
Joint Venture Equity
Income 342 -- 1,555 1,897
========================================================
1998:
Net sales $ 46,074 $ 98,171 $ 72,329 $ 216,574
Operating income 5,451 6,222 7,967 19,640
Total assets 41,383 80,335 54,456 176,174
Capital expenditures 6,498 16,574 5,893 28,965
Depreciation 1,632 3,033 3,321 7,986
Joint Venture Equity
Income 213 -- 201 414
========================================================
* Beginning in January 2000, sales of a specialty flexible circuit board
laminate sold to Hutchinson Technology, Inc.(HTI) are reported in the
Polyimide Laminate Systems joint venture. Sales of $30.7 million in 1999
and $28.2 million in 1998 were included in net sales in the Printed Circuit
Materials business segment.
Information relating to the Company's operations by geographic area are as
follows:
Europe
United (primarily
(Dollars in Thousands) States Belgium) Total
----------------------------------------------
2000:
Net sales $ 197,954 $ 50,261 $ 248,215
Long-lived assets 91,333 19,347 110,680
==============================================
1999:
Net sales $ 202,505 $ 45,334 $ 247,839
Long-lived assets 83,258 18,084 101,342
==============================================
1998:
Net sales $ 173,694 $ 42,880 $ 216,574
Long-lived assets 78,032 18,905 96,937
==============================================
Net sales are attributed to the business unit making the sale. Long-lived
assets are attributed to the location of the asset.
The net assets of wholly-owned foreign subsidiaries were $19,698,000 at
December 31, 2000, and $16,916,000 at January 2, 2000. Net income of these
foreign subsidiaries was $4,399,000 in 2000, $2,600,000 in 1999, and
$2,631,000 in 1998, including net currency transaction gains (losses) of
$61,000 in 2000, $(51,000) in 1999, and $62,000 in 1998.
NOTE L - SUBSEQUENT EVENTS
On February 7, 2001, the Company entered into a definitive agreement to
purchase the Advanced Dielectric Division (ADD) of Tonoga, Inc. (commonly
known as Taconic), which operates facilities in Petersburgh, New York and
Mullingar, Ireland. The transaction is subject to regulatory and government
review and is expected to be made final during the second quarter of 2001.
ADD is a worldwide leader in the manufacture of polytetrafluoroethylene-based
laminates used in the wireless communications and high-speed digital markets.
The purchase price of approximately $70 million will be paid for partially in
Rogers stock and partially with cash from the recently negotiated credit
facility. The acquisition will be accounted for as a purchase; accordingly,
the purchase price will be allocated to the underlying assets and liabilities
based on their respective estimated fair values at the date of acquisition.
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
- ----------
Board of Directors and Shareholders
Rogers Corporation
- ----------
We have audited the accompanying consolidated balance sheets of Rogers
Corporation and subsidiaries as of December 31, 2000 and January 2, 2000, and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the three fiscal years in the period ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the 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. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Rogers
Corporation and subsidiaries at December 31, 2000 and January 2, 2000, and
the consolidated results of their operations and their cash flows for each
of the three fiscal years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
Providence, Rhode Island
February 1, 2001, except as to Note L, as to which the date
is February 7, 2001
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------
(Dollars in Thousands, Except Per Share Amounts)
Basic Diluted
Net Manufacturing Net Net Income Net Income
Quarter Sales Profit Income Per Share* Per Share*
- ----------------------------------------------------------------------------
2000 Fourth $ 60,952 $ 20,591 $ 7,434 $ .49 $ .47
Third 62,357 20,695 6,936 .46 .44
Second 61,266 20,072 6,442 .43 .41
First 63,640 21,147 5,908 .40 .37
- ----------------------------------------------------------------------------
1999 Fourth $ 59,058 $ 18,751 $ 4,985 $ .34 $ .32
Third 61,076 18,365 4,608 .30 .29
Second 62,801 16,425 4,341 .29 .28
First 64,904 18,334 4,697 .31 .30
- -----------------------------------------------------------------------------
*Restated for the two-for-one stock split in 2000.
CAPITAL STOCK MARKET PRICES*
- ----------
The Company's capital stock is traded on the New York Stock Exchange. The
following table sets forth the composite high and low closing prices during
each quarter of the last two years on a per share basis.
2000 1999
- ---------------------------------------------------------------------
Quarter High Low High Low
- ---------------------------------------------------------------------
Fourth $ 45-1/4 $ 29-1/16 $ 20-7/16 $ 18-1/16
Third 38-15/16 31-3/8 19-13/16 14-3/4
Second 39-1/2 29-27/32 16-3/4 12-7/16
First 35-1/4 18-1/32 16 11-3/4
- ---------------------------------------------------------------------
*Restated for the two-for-one stock split in 2000.