One Technology Drive / P.O. Box 217 / Rogers, CT 06263-0217 /
860.774.9605 / Fax: 860.779.5509
Rogers Corporation Reports 30% Increase in Earnings for the
Third Quarter of 2003
"Results Exceed Guidance and Consensus Estimates"
Rogers, Connecticut, October 15, 2003: Rogers Corporation (NYSE:ROG) announced
today that earnings per share for the third quarter of 2003 were up 30% compared
to the third quarter of 2002 and exceeded the guidance of the July 16th news
release. Diluted earnings per share for the quarter were $0.39 compared to the
$0.30 earned in last year's third quarter. Rogers had projected earnings of
between $0.33 and $0.37 per diluted share.
Net sales in the third quarter were $56.5 million, compared to the $56.0 million
sold in the third quarter of 2002. Revenues of the Moldable Composites Division
(MCD), divested in November of 2002, were $8.5 million in last year's third
quarter. Compared to this year's second quarter, net sales increased 15% and
were $3.5 million higher than the Company's guidance of $50 to $53 million.
Rogers' four unconsolidated joint ventures had total revenues in the third
quarter of $29.8 million versus $33.9 million in the same quarter last year.
Adding the Company's 50% share of these joint venture sales to the Company's net
sales, Rogers' Combined Sales this quarter were $71.4 million compared to $73.0
million in last year's third quarter. (See reconciliation for Combined Sales to
net sales under Non-GAAP information included at the end of this press release.)
Sales of Printed Circuit Materials for the quarter reached record levels
totaling $30.0 million, up 41% from the $21.3 million reported in the third
quarter of 2002. Revenue increases were driven by seasonally strong sales of
high frequency laminates into the satellite television market, as well as
accelerating wireless infrastructure sales as more 3G base stations are built.
This quarter also saw a dramatic 70% rise in flexible circuit laminate revenues
as new cellular phone programs ramped into full production. This success is the
result of continuing design wins at OEM's and strong fabricator support as they
are finding improved yields using Rogers' flexible circuit laminates.
Third quarter sales of High Performance Foams were $17.3 million, up almost 8%
from the third quarter last year. Sales of industrial high performance foams
into the cellular telephone, automotive and wireless infrastructure markets all
improved in September. Profits for this segment of the Company's operations
continue to be negatively affected by duplicate staffing and other operating
expenses, as the result of the move to Illinois from New York, of the previously
acquired polyolefin business. The Company expects to see some relief from this
transition beginning in the second quarter of next year.
Sales of Polymer Materials and Components totaled $9.2 million for the quarter,
down from the $18.7 million in last year's third quarter, mostly as a result of
the Company's divestiture of MCD. The Company's bus bar and non-woven businesses
were up significantly this quarter however, revenues from the Elastomer
Components Division, that produces rollers used in various office equipment and
other devices, continued to decline. Going forward, revenues for this portion of
Rogers' business will increase significantly as sales from the recent Durel
acquisition will be included in net sales as part of this segment.
All of Rogers' joint ventures had operating profits in the quarter. Total
revenues from the joint ventures were down 12% year-over-year, but up 10%
sequentially. Rogers Inoac Corporation (RIC) and Rogers Chang
Chun Technologies (RCCT) both recorded the highest quarterly sales in their
history. Durel sales were down year-over-year for the quarter, however up 18%
sequentially. At both Durel and RIC, sales were primarily driven by the seasonal
strength of the cell phone business. RCCT made very substantial progress as
design wins reported last quarter resulted in a significant increase in
shipments. Polyimide Laminate Systems sales were down due to loss of market
share.
As previously announced, Rogers acquired 3M's 50% share in its Durel joint
venture, a manufacturer of electroluminescent backlights, on September 30, 2003.
The Company anticipates this will substantially add to net sales and increase
earnings per share by approximately $0.05 in the fourth quarter.
Gross margins increased to 33% compared to 31% for last year's third quarter and
30% for the second quarter of this year. Improved gross margins were triggered
by the operating leverage resulting from higher sales. Net income as a
percentage of sales jumped to 11.2% this quarter, from 8.5% in the third quarter
of last year.
Capital expenditures were $3.1 million for the third quarter. Due to
underestimated lead times for machines and equipment the Company expects total
capital spending for the year will be approximately $17 to $20 million instead
of the $25 million previously estimated.
Rogers' balance sheet remains in excellent condition. The Company continues to
be debt free. Due to strong cash flow, Rogers' cash balance increased to $35
million. The Durel acquisition will cause an $18 million reduction in cash in
the fourth quarter. Accounts receivables days of sales outstanding were reduced
from 55 days to 53 days during the third quarter.
Walter E. Boomer, Chairman and CEO stated, "I am very pleased with our progress
year to date and the fact that our earnings are up 30% for the year. That is
really how Rogers looks at things - year-to-year, not quarter-to-quarter. It is
our long range focus that has brought us to this point. That and the
determination to pay attention to the fundamentals of good business and to
achieve the goals we set for ourselves. We are optimistic looking forward and
anticipate continued strength, particularly in printed circuit materials. We
also expect other parts of our business to accelerate as we gain market share
and the economy continues to improve. Our guidance for the fourth quarter,
including the impact of the Durel acquisition, is for net sales between $71 and
$75 million, with earnings per diluted share of between $0.45 and $0.49. Even at
the low end of the guidance that's an improvement of 39% in revenue and 32% in
earnings per share as compared to last year."
Safe Harbor Statement
Statements in this news release that are not strictly historical may be deemed
to be "forward-looking" statements which should be considered as subject to the
many uncertainties that exist in the Company's operations and environment. These
uncertainties, which include economic conditions, market demand and pricing,
competitive and cost factors, rapid technological change, new product
introductions, legal proceedings, and the like, are incorporated by reference in
the Rogers Corporation 2002 Form 10-K filed with the Securities and Exchange
Commission. Such factors could cause actual results to differ materially from
those in the forward-looking statements.
Additional Information and October 16th Conference Call
For more information, please contact the Company directly, visit Rogers website
on the Internet, or send a message by email.
Website Address: http://www.rogerscorporation.com
Financial E-mail: finfo@rogers-corp.com
---------------------
Financial News Contact: James M. Rutledge, Vice President Finance and Chief
Financial Officer, Phone: 860-779-9605, FAX: 860-779-5585
Editorial Contact: Edward J. Joyce, Phone: 860-774-5705, FAX: 860-779-5509,
email: edward.joyce@rogerscorporation.com
----------------------------------
A conference call to discuss third quarter results will be held on Thursday,
October 16th at 9:00AM (Eastern Time).
Rogers participants in the conference call will be:
Walter E. Boomer, Chairman of the Board and CEO
Robert D. Wachob, President and COO
James M. Rutledge, Vice President Finance and CFO
Robert M. Soffer, Vice President and Secretary
A Q&A session will immediately follow management's comments.
To participate in the conference call, please call: 1-800-574-8929 toll-free in
the United States and 1-706-634-1907 internationally. There is no passcode for
the live teleconference. For playback access, please call: 1-800-642-1687 in the
United States and 1-706-645-9291 internationally through 11:00PM, Thursday
October 23rd. The passcode for the audio replay is 3017614.
The call will also be webcast live in a listen only mode. The webcast may be
accessed through links available on the Rogers Corporation website at
www.rogerscorporation.com. Replay of the archived webcast will be available on
the Rogers website beginning two hours following the webcast.
Presentation of Information in this Press Release
- -------------------------------------------------
In an effort to provide investors with additional information regarding the
Company's results, the Company may disclose certain Non-GAAP information which
management believes provides useful information to investors. Management
sometimes refers to "Combined Sales" which are defined as net sales (as reported
under GAAP) plus 50% of the revenues from the Company's four unconsolidated
joint ventures. These unconsolidated joint ventures are viewed by management as
important to the Company's business and make a significant contribution towards
the Company's profits.
Reconciliation of Non-GAAP Financial Information
------------------------------------------------
(Dollars in Thousands) Third Quarter
-----------------------------
2003 2002
------------- ------------
Net Sales, as reported in this report and in $56.5 $56.0
accordance with generally accepted
accounting principles
50% of Rogers' Joint Venture Sales 14.9 17.0
----- ----
Combined Sales $71.4 $73.0
===== =====
(Financial Statements Follow)
Consolidated Statements of Income (Unaudited)
Quarters Ended Nine Months Ended
(In Thousands, Except Per Share Amounts) Sept 28, Sept 29, Sept 28, Sept 29,
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Net Sales $56,497 $56,034 $157,534 $167,922
Costs and Expenses:
Cost of Sales 37,791 38,571 107,614 116,520
Selling and Administrative 10,269 9,568 29,085 29,776
Research and Development 3,484 3,417 9,132 10,522
-----------------------------------------------------------------
Total Costs and Expenses (Including Depreciation and
Amortization of: 2003 - $9,645; 2002 - $11,033)* 51,544 51,556 145,831 156,818
-----------------------------------------------------------------
Operating Income 4,953 4,478 11,703 11,104
Other Income less Other Charges 3,438 2,435 11,158 7,215
Interest Income/ (Expense), Net 48 (71) 179 (257)
-----------------------------------------------------------------
Income Before Income Taxes 8,439 6,842 23,040 18,062
Income Taxes 2,110 2,072 5,760 4,877
-----------------------------------------------------------------
Net Income $ 6,329 $ 4,770 $ 17,280 $ 13,185
=================================================================
Net Income Per Share:
Basic $ 0.40 $ 0.31 $ 1.10 $ 0.85
-----------------------------------------------------------------
Diluted $ 0.39 $ 0.30 $ 1.07 $ 0.82
-----------------------------------------------------------------
Shares Used in Computing:
Basic 15,897 15,516 15,712 15,460
-----------------------------------------------------------------
Diluted 16,325 15,896 16,214 16,003
=================================================================
*For the nine month periods.
Consolidated Balance Sheets (Unaudited)
(IN THOUSANDS) Sept. 28, December 29,
2003 2002
- ---------------------------------------------------------------------------------------------------------------
Assets
Current Assets:
Cash and Cash Equivalents $ 35,273 $ 22,300
Short -term Investments -- 6,628
Accounts Receivable, Net 43,480 32,959
Accounts Receivable - Joint Ventures 1,385 1,414
Note Receivable, Current 2,100 --
Inventories 18,135 18,069
Other Current Assets 6,648 6,305
-----------------------------------------
Total Current Assets 107,021 87,675
-----------------------------------------
Notes Receivable, Long Term 9,900 12,000
Property, Plant and Equipment, Net 104,479 99,883
Investment in Unconsolidated Joint Ventures 23,145 21,860
Pension Asset 8,951 8,951
Goodwill and Other Intangible Assets, Net 22,204 22,204
Other Assets 5,394 5,128
-----------------------------------------
Total Assets $281,094 $257,701
=========================================
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts Payable $ 10,484 $ 10,125
Accrued Employee Benefits and Compensation 11,516 10,414
Other Current Liabilities 18,500 14,241
-----------------------------------------
Total Current Liabilities 40,500 34,780
-----------------------------------------
Noncurrent Deferred Income Taxes 8,868 8,308
Noncurrent Pension Liability 17,124 22,658
Noncurrent Retiree Health Care and Life Insurance
Benefits 6,197 6,197
Other Long-Term Liabilities 2,202 2,720
Shareholders' Equity 206,203 183,038
-----------------------------------------
Total Liabilities and Shareholders' Equity $281,094 $257,701
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