Exhibit 99.1
Rogers Corp. Reports Preliminary Record Second Quarter Results
ROGERS, Conn.--(BUSINESS WIRE)--July 27, 2006--Rogers Corporation
(NYSE:ROG) announced today that net sales in the second quarter were
again an all-time quarterly record of $104.8 million, up 24% compared
to the $84.6 million sold in the second quarter of 2005. The Company
cannot at this time report final results, as the analysis regarding
the potential non-cash impairment charges announced previously has not
yet been completed. Excluding any impairment charges, non-GAAP second
quarter operating earnings were a record $0.75 per diluted share. This
compares to non-GAAP earnings of $0.27 per diluted share in the second
quarter of 2005. Non-GAAP net income for the quarter was $13.0
million, which includes $1.1 million of expense to comply with the new
equity-based compensation rules.
The Company cannot at this time reconcile the 2006 non-GAAP
financial measures to the most directly comparable GAAP financial
measures. The Company does not know the exact amount of the potential
impairment charges, discussed above and below, at this time. A
reconciliation of non-GAAP to GAAP earnings for the second quarter of
2005 is included at the end of this release.
Printed Circuit Materials
The Printed Circuit Materials reporting segment sales totaled
$35.9 million, up 6% from the second quarter of 2005. Positive sales
growth this quarter was driven in part by on-going cellular
communication infrastructure installations in emerging global
locations. Sales into portable communication devices were unchanged
this quarter, with various new programs replacing those reaching end
of life. Sales into hard disk drives for personal computers and
storage systems were strong in the second quarter. To further address
the portable communication, hard disk drive, and consumer electronic
markets, Rogers recently launched new next generation products that
meet recently introduced industry environmental requirements.
High Performance Foams
Sales of High Performance Foams were again a record for the
quarter at $26.1 million, an increase of 25% over the second quarter
of last year. Foams sales were driven by strength across all
geographic regions and most notably in consumer products, portable
communication devices, aerospace, mass transit and general industrial
applications. The Company continues to be pleased with the efficient
operational performance of this reporting segment's production lines,
as well as its ability to continue to gain market share in high
performance applications. Other significant influences on the record
revenue performance included the effect of the April 1 price increase
for some product lines and a shift in mix to the segment's newer,
higher-margin products.
Custom Electrical Components
Sales of Custom Electrical Components were a record $30.5 million
for the quarter, up 72% compared to last year's second quarter, with
both operating units in this reporting segment generating record
quarterly sales. The Company's market share increased in the portable
communication market, as more cell phone manufacturers are choosing to
use Rogers' solutions for efficiency, elegance, and superior
performance. The capacity expansion project recently completed in
Suzhou, China, is running at efficiencies and yields in-line with the
domestic operation. This quarter sales growth was also driven from
components sold for use in mass data storage, along with significant
increases in sales into power electronics.
Other Polymer Products
Other Polymer Products revenues were $12.4 million in the second
quarter, consistent with sales during the second quarter of 2005. As
previously announced on June 29, 2006, the future outlook of the
Company's polyolefin foams and polyester-based laminates operating
units has changed from previous expectations. Based on recent market
and customer developments, and in accordance with generally accepted
accounting principles (GAAP), the Company believes that indicators of
impairment exist in its polyolefin foam and polyester-based laminates
operating units and is currently in the process of performing its
analysis with the assistance of an independent third-party appraisal
firm. The Company believes that it will complete its review prior to
the filing of its second quarter 2006 Form 10-Q filing. The assets
under review include only long-lived tangible and intangible assets of
the polyolefin foam and polyester-based laminates operating units,
which currently have a book value of approximately $16 million, of
which approximately $11 million represents residual goodwill. The
Company expects that the majority of any impairment charge would
represent a reduction in residual goodwill from the original
acquisitions of these two operating units.
Joint Ventures
Rogers' 50% owned joint ventures had record second quarterly sales
totaling $25.2 million, up 19% from the second quarter of 2005.
Sequentially sales were down, as efficiency of the new equipment in
the foams joint venture in China increased sufficiently in the first
quarter to fill orders accumulated during startup. Leading the
year-over-year increase in joint venture sales was Rogers Chang Chun
Technology flexible circuit materials as well as the Company's high
performance foams joint ventures with Inoac Corporation. All of these
joint ventures had strong sales into the consumer electronics, and
portable communication markets.
Second quarter gross margin was 32.4%, a substantial improvement
this year compared to 29% in the second quarter of 2005. Rogers'
improved gross margin is the result of the efficient operation of
recently added capacity, increased productivity, and sales leverage.
The Company's non-GAAP second quarter tax rate, excluding any
impairment charge, was 23%, up 1% over the first quarter primarily due
to projected increased annual earnings.
Rogers' balance sheet ended the quarter with a cash and short-term
investment balance of $79.1 million. Capital expenditures were
approximately $3.3 million for the second quarter, but are still
expected to be in the range of $30 to $35 million for the year. The
approved list of current and future capital expenditure projects
exceeds $50 million. The Company expects to make a significant pension
contribution in the third quarter.
Robert D. Wachob, Rogers' President and CEO, commented, "The sales
growth this quarter has been driven by all three of our strategic
reporting segments: Printed Circuit Materials, High Performance Foams,
and Custom Electrical Components. To remain responsive to the
fast-paced market and needs of our customers, we will again be adding
capacity in our Custom Electrical Components segment. We are expanding
capacity in China to meet the expected future demand for the latter
part of the year and into 2007, due to the strong outlook in the
portable communication market. Although we are providing increased
third quarter sales guidance of $105 to $109 million, a large part of
this increase is the result of a secondary operation we are
subcontracting at no margin to Rogers to assist our customers. Third
quarter earnings are expected to be in the range of $0.73 to $0.77 per
diluted share. As I have stated previously, we expect to have a record
year for both sales and profits, including any aforementioned
impairment charges."
Rogers Corporation, headquartered in Rogers, CT, U.S.A., develops
and manufactures high-performance specialty material products, 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,
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 within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on management's current
expectations and are 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 2005 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. All information in this press release is as of July 27,
2006, and Rogers undertakes no duty to update this information unless
required by law.
Additional Information and July 28 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: Dennis M. Loughran, Vice President Finance
and Chief Financial Officer, Phone: 860-779-5508, 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 second quarter results will be held
on Friday, July 28 at 9:00AM (Eastern Time).
The Rogers participants in the conference call will be:
Robert D. Wachob, President and CEO
Dennis M. Loughran, Vice President Finance and CFO
Paul B. Middleton, Corporate Controller
Edward J. Joyce, Manager of Investor and Public Relations
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
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 (Eastern
Time), Friday, August 4, 2006. The passcode for the audio replay is
3495741.
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.
Reconciliation of Second Quarter 2005 Non-GAAP Earnings (Loss) per
Share
GAAP Earnings (Loss) per Share (Basic and Diluted) $(0.54)
Less Non-cash Impairment Charge per Share 0.81
- ----------------------------------------------------------------------
Non-GAAP Earnings (Loss) per Share (Basic and Diluted) $0.27
Rogers believes that net income from continuing operations and
diluted earnings per share, excluding the effect of any asset
impairment or unusual event, is a measure that should be presented in
addition to income determined in accordance with generally accepted
accounting principles (GAAP) and is useful to investors. The following
matters should be considered when evaluating these non-GAAP financial
measures:
-- Rogers reviews the operating results of its businesses
excluding the impact of any asset impairment because it
provides an additional basis of comparison. We believe that
these events are unusual in nature, and would not be
indicative of ongoing operating results. As a result,
management believes such charges should be excluded in order
to compare past, current and future periods.
-- Asset impairments principally represent adjustments to the
carrying value of certain assets and do not typically require
a cash payment.
-- Asset impairments are typically material and are considered to
be outside the normal operations of a business. Corporate
management is responsible for making decisions about asset
impairment and related charges.
CONTACT: Rogers Corporation
Edward J. Joyce, 860-779-5705
FAX: 860-779-5509
Email: edward.joyce@rogerscorporation.com