Exhibit 99.1
Rogers Corporation Reports Fourth Quarter and Yearly Results;
''All-time record year in both sales and income''
ROGERS, Conn.--(BUSINESS WIRE)--March 3, 2005--Rogers Corporation
(NYSE:ROG) announced today that diluted earnings per share for the
fourth quarter of 2004 were $0.56, compared to the $0.54 earned in the
fourth quarter of 2003. For the year, net income increased 53% to a
record $40.1 million, with earnings per diluted share of $2.34 in 2004
compared to $1.61 in 2003. Both the fourth quarter and year-end net
income results include a one-time increase to earnings of $5.0 million
related to adjustments required to properly state certain deferred tax
accounts as of January 2, 2005. This adjustment caused an increase in
earnings per diluted share of $0.29 for the fourth quarter and full
year 2004.
Net sales in the fourth quarter were $87.3 million, compared to
the $85.8 million sold in the fourth quarter of 2003. As a result of
increases in each of Rogers' business segments, for the full year
2004, net sales increased by 50% for a record $365 million. Net sales
in 2003 were $243.3 million.
In connection with the Company's year-end financial statement
closing process and the audit of the consolidated financial statements
by the Company's independent public accountant, it was determined that
the method of accounting for deferred income taxes was not consistent
with the application of the provisions of FAS 109. The one-time,
non-cash increase to earnings reflects the adjustment required to
properly state certain deferred income tax accounts for temporary tax
differences that may have accumulated over many years. Management
believes that any temporary differences not properly accounted for
would not have materially affected the Company's reported results in
any one year nor was the cumulative amount material in relation to the
Company's financial position. As such, with the concurrence of the
Company's independent auditors, the adjustment for these items was
recorded in the fourth quarter 2004 results.
Printed Circuit Materials segment sales totaled $43.4 million, up
14% from the fourth quarter of 2003. For the full year 2004, this
business segment experienced tremendous growth with revenues up 59% to
$181.2 million. However, this year was also marked by increasing
volatility in some of our key market segments such as cellular
handsets. Robert D. Wachob, President and CEO, commented, "Since
consumer preferences, product features, and styles drive purchase
decisions, this can result in very steep production ramp requirements,
and in some cases, abrupt and unexpected program terminations. Also as
noted previously, high frequency material sales have been difficult to
predict as the Company's infrastructure customers try to anticipate
their own customers' demands. Rogers ended the year with significant
unused capacity in Printed Circuit Materials. However, high frequency
material orders from our customers, serving the cellular
communications infrastructure and satellite television markets picked
up late in the fourth quarter helped us to reduce some of our finished
goods inventory."
Fourth quarter sales of High Performance Foams were at a record
$23.7 million, up over 33% from the fourth quarter of last year. This
quarter also marked an all-time record for sales of PORON(R) urethane
foams, with a significant contribution from Rogers' high level of
penetration into the global cell phone market. For the year, High
Performance Foams also reached an all-time record of $88.4 million in
sales, up 27% from the $69.5 million sold in 2003. This growth was
driven by strength across all markets and was positively impacted by
PORON urethane foam sales to Rogers joint venture in Japan. Although
negatively affected by the costs associated with the startup of new
polyolefin operations in Carol Stream, IL, this business segment
achieved the second highest operating profit levels in its history for
both the fourth quarter and the full year. However, the polyolefin
foam facility is making great strides towards process improvement and
is now transitioning many of its technical resources back to R&D to
develop the new products that will fuel future growth.
Sales of Polymer Materials and Components totaled $20.1 million
for the quarter, compared to last year's fourth quarter sales of $29.9
million. For the full year, Polymer Materials and Components had
revenues of $95.4 million, compared to 2003 sales of $59.6 million.
Durel, acquired in late 2003, had sales of $51.1 million in 2004,
compared to $72.0 million in 2003, of which $20.7 million were
achieved after the Company's acquisition and accordingly included in
Rogers' 2003 consolidated results. The fourth quarter saw the end of
the transition expenses associated with moving the Company's elastomer
components operation to China, and Durel's sales began to recover from
their third quarter low.
Rogers' 50% owned joint ventures had record sales for both the
quarter and the full year. Fourth quarter sales were $24.9 million and
for all of 2004 revenues increased 52% to $85.2 million. In total, the
Company's joint ventures contributed profits of $1.1 million and $8.2
million to Rogers for the fourth quarter and full year, respectively.
Fourth quarter gross margin was 27.4%, and 31.0% for the year.
Gross margin in the quarter was affected by a combination of things.
While sales in flexible laminates grew, almost all of the increase was
manufactured by our joint venture Rogers Chang Chun Technologies, as
Rogers was at capacity until the end of the quarter. Also as
previously announced, the Company's high frequency products saw a
significant sales decline requiring a reduction in operations in its
Belgium factory to about 50% of the third quarter's production rate
for most of the fourth quarter resulting in a dramatic drop in
operating leverage. Mr. Wachob, commented, "With our Asian sales
continuing to increase and having a lack of critical production
capacity in that region, we have had to serve our customers from local
inventories. This, coupled with increasing market volatility, has
caused our production levels to fluctuate dramatically as the time
from order to delivery to Asia is often six to seven weeks long
whereas customer expectations are often three to four days delivery
from time of order. These factors have had a negative impact on our
recent operating margins. However, we expect to continue making steady
operating gains during 2005 through yield, efficiency, and forecasting
improvements."
Rogers' cash and short-term investments balance increased to $40
million versus $34.5 million at the end of 2003. Capital expenditures
were approximately $8 million for the fourth quarter, and
approximately $28 million for the year. The Company continues to be
debt free, thus capital expenditures continue to be funded from
operations. In October of 2004, the Board of Directors authorized the
repurchase of up to $25 million of Rogers' stock. Through March 3rd,
the Company repurchased 155,200 shares at a total cost of
approximately $6.7 million.
In connection with asbestos related claims, in the fourth quarter
of 2004, the Company recorded a projected liability of $36.2 million
and recorded $36.0 million as a receivable for the related projected
insurance recovery, resulting in $200,000 of net expense.
As previously disclosed, Rogers is one of many companies named as
a defendant in a number of asbestos related claims. The claims
relating to Rogers are associated with products that were discontinued
many years ago. To date, the Company has been successful in obtaining
dismissals for many of the claims and has settled only a limited
number. The majority of settled claims were settled for immaterial
amounts, and such costs have been paid by the Company's insurance
carriers.
Until recently, the Company has had limited data to evaluate its
potential asbestos exposure. However, given continuing claims
activity, the Company recently completed an evaluation, with the
assistance of industry recognized consultants, to project potential
liabilities and insurance coverage. Because the ultimate outcome and
any associated costs cannot be estimated with certainty, in accordance
with generally accepted accounting principles, the Company recorded
the minimum projected liability. It is anticipated that the Company's
insurance carriers will be paying those liabilities reflected on the
balance sheet. The Company will continue to vigorously defend itself
and believes it has substantial unutilized insurance coverage to
mitigate future costs related to this matter.
Mr. Wachob commented, "Over the last four quarters, we completed
many initiatives and projects that will allow us to better serve our
global customers on a truly local level. However, the sizeable growth
in our Asian sales, shrinking lead-times, and less visibility in our
end markets have forced us to re-examine how we do business and best
serve our customers. Whereas 2004 was a year of transition, 2005 will
be a year of steady operational improvement throughout all of our new
and relocated facilities. In our Polymer Materials and Components
segment, we expect significant improvement in 2005 with much of our
restructuring complete. Durel will continue to make progress with
flexible keypad lamps and other applications, the elastomer components
production transfer to China is complete, and we expect a smooth ramp
up for the new bus bar operation recently installed in China. We are
also very positive about the outlook for our joint ventures in 2005.
Based on these and other factors for the first quarter of 2005, we
expect net sales to be in the range of $85 to $89 million, and profits
between $0.28 to $0.32 per diluted share. While the first quarter is
projected to be a slower start than we would like, overall we expect
that 2005 will be another strong year for Rogers in both sales and
profits."
Rogers Corporation, headquartered in Rogers, CT, U.S.A., develops
and manufactures high-performance specialty materials, which serve a
diverse range of markets including: portable communication devices,
communication infrastructure, consumer products, computer and office
equipment, ground transportation, and aerospace and defense. Rogers
operates manufacturing facilities in Connecticut, Arizona, and
Illinois in the U.S., in Gent, Belgium, in Suzhou, China, and in
Hwasung City, Korea. Sales offices are located in Belgium, Japan, Hong
Kong, Taiwan, Korea, China, and Singapore.
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 2003 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 March 4th 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 News Contact: James M. Rutledge, Vice President Finance
and Chief Financial Officer, Phone: 860-774-9605, FAX: 860-779-4714
Editorial Contact: Edward J. Joyce, Manager of Investor and Public
Relations, Phone: 860-779-5705, FAX: 860-779-5509, email:
edward.joyce@rogerscorporation.com
A conference call to discuss fourth quarter and full year results
will be held on Friday, March 4th at 9:00AM (Eastern Time).
The Rogers participants in the conference call will be:
Robert D. Wachob, President and CEO
James M. Rutledge, Vice President Finance and CFO
Robert M. Soffer, Vice President and Secretary
Paul B. Middleton, Corporate Controller
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 11:59PM, Friday March 11th. The pass code for
the audio replay is 4452930.
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.
Consolidated Statements of Income(a)
Quarters Ended Years Ended
(IN THOUSANDS, EXCEPT PER Jan 2, Dec 28, Jan 2, Dec 28,
SHARE AMOUNTS) 2005 2003 2005 2003
- ---------------------------- ---------- --------- ---------- ---------
Net Sales $87,269 $85,795 $365,002 $243,329
Costs and Expenses:
Cost of Sales 63,439 57,175 251,811 164,789
Selling and Administrative 16,066 14,219 58,410 43,304
Research and Development 5,511 4,533 20,490 13,665
---------- --------- ---------- ---------
Total Costs and Expenses
(Including Depreciation and
Amortization of: 2004 -
$18,068; 2003 - $11,488)(b) 85,016 75,927 330,711 221,758
---------- --------- ---------- ---------
Operating Income 2,253 9,868 34,291 21,571
Other Income less Other
Charges 3,740 1,985 12,228 13,143
Interest Income/ (Expense),
Net 129 141 260 320
---------- --------- ---------- ---------
Income Before Income Taxes 6,122 11,994 46,779 35,034
Income Tax (Benefit)
Expense (3,483) 2,999 6,681 8,759
---------- --------- ---------- ---------
Net Income $9,605 $8,995 $40,098 $26,275
---------- --------- ---------- ---------
Net Income Per Share:
Basic $0.58 $0.56 $2.45 $1.67
---------- --------- ---------- ---------
Diluted $0.56 $0.54 $2.34 $1.61
---------- --------- ---------- ---------
Shares Used in Computing:
Basic 16,497 15,964 16,381 15,775
---------- --------- ---------- ---------
Diluted 17,054 16,627 17,104 16,319
---------- --------- ---------- ---------
Note - 2005 amounts reflect a $5.0 million tax benefit taken in
the fourth quarter of 2004 as a result of a one-time, non-cash
adjustment to the Company's deferred tax accounts.
Consolidated Balance Sheets(a)
(IN THOUSANDS) Jan 2, Dec 28,
2005 2003
- ----------------------------------------------- ----------- ----------
Assets
Current Assets:
Cash and Cash Equivalents $37,967 $31,476
Short -term Investments 2,000 3,005
Accounts Receivable, Net 57,264 52,981
Accounts Receivable - Joint Ventures 5,176 3,178
Note Receivable, Current 2,100 2,100
Inventories 49,051 27,501
Other Current Assets 8,068 6,856
----------- ----------
Total Current Assets 161,626 127,097
----------- ----------
Notes Receivable, Long Term 4,200 7,800
Property, Plant and Equipment, Net 140,384 131,157
Investment in Unconsolidated Joint Ventures 18,671 10,741
Pension Asset 5,831 6,886
Goodwill and Other Intangible Assets, Net 29,072 25,121
Other Assets 41,257 5,638
----------- ----------
Total Assets $401,041 $314,440
----------- ----------
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts Payable $21,117 $20,442
Accrued Employee Benefits and Compensation 18,427 13,359
Other Current Liabilities 11,492 16,222
----------- ----------
Total Current Liabilities 51,036 50,023
----------- ----------
Noncurrent Deferred Income Taxes 9,154 14,058
Noncurrent Pension Liability 14,757 14,909
Noncurrent Retiree Health Care and Life
Insurance Benefits 6,483 6,198
Other Long-Term Liabilities 38,244 2,383
Shareholders' Equity 281,367 226,869
----------- ----------
Total Liabilities and Shareholders' Equity $401,041 $314,440
----------- ----------
(a) Statements are subject to year-end audit.
(b) For the twelve month periods.
CONTACT: Rogers Corporation
Financial News Contact:
James M. Rutledge, 860-774-9605
or
Editorial Contact:
Edward J. Joyce, 860-779-5705
edward.joyce@rogerscorporation.com