Exhibit 99.1
Rogers Corporation Announces
Additional Restructuring and Updates Second Quarter Guidance
ROGERS, Conn.--(BUSINESS WIRE)--June 27, 2007--Rogers Corporation
(NYSE:ROG) today announced further restructuring, in addition to the
actions related to its Custom Electrical Components segment previously
reported on June 13, 2007. The Company stated it has taken a number of
measures to reduce costs, including a company-wide reduction in
employees intended to streamline the business and a number of other
initiatives aimed at further reducing expenses and improving
operations. Also, related to the decreased production at one of its
Printed Circuit Materials segment facilities, the Company may incur an
additional non-cash impairment charge related to certain underutilized
assets. The Company is revising guidance for the second quarter of
fiscal 2007 and will hold a conference call for investors today at
4:00PM to discuss these items. A Q&A session will immediately follow
management's comments.
Rogers currently projects second quarter net sales of $95 to $97
million, compared to the May 2, 2007 guidance of $102 to $106 million.
The sales decline is primarily due to decreased sales within both the
Custom Electrical Components and Printed Circuit Materials reporting
segments. As mentioned in the June 13, 2007 release, the Durel
Division, part of the Custom Electrical Components reporting segment,
is subject to asset impairment due to a significant reduction in
current and forecasted future sales. In addition, sales of flexible
circuit materials have decreased due to on-going commoditization of
cell phone flexible circuit materials. Non-GAAP earnings for the
second quarter, excluding any impairment charges and the severance
expenses discussed below, are expected to be between $0.16 and $0.19
per diluted share versus the previous guidance of $0.45 to $0.49 per
diluted share.
The Company cannot at this time reconcile the non-GAAP financial
measures to the most directly comparable GAAP financial measures, as
the potential impairment charges resulting in the non-GAAP financial
measures are not known to the Company at this time.
As previously announced on June 13, 2007, the Company is
restructuring its Custom Electrical Components reporting segment's
Durel Division, which manufactures electroluminescent (EL) lamps, and
is expected to incur a non-cash impairment charge this quarter. The
total assets included in the restructuring analysis, including land, a
building, equipment, unamortized technology licenses, and inventory,
have a book value of approximately $24 million. The Company now
expects to incur an additional non-cash impairment charge related to
its flexible circuit materials product line, which is included in the
Printed Circuit Materials reporting segment. Flexible circuit
materials, which are used in a variety of consumer electronic
products, have been transformed into a commodity product with
increased global competition and price pressure driven by over
capacity. Rogers believes this condition is not temporary and as a
result, some of its assets are potentially subject to impairment.
These assets currently have a book value of approximately $7 million
and are comprised of land, a building, equipment and inventory. All
impairment evaluations are expected to be completed within the next
month and associated charges will be included in the Company's second
quarter earnings results.
Considering the impact of the reduced sales, the Company evaluated
its overhead structure and costs and has reduced staffing accordingly.
The total cash severance expense associated with this restructuring is
expected to be about $3 million, and is also expected to impact second
quarter GAAP earnings.
The Company also plans to dispose of its polyolefin foam operation
and this is not expected to incur any material gain or loss for the
Company. The Company expects to complete this transaction during the
third quarter.
Robert D. Wachob, Rogers' President and CEO, commented, "Rogers
businesses have long been subject to the ebbs and flows of business
trends and cycles. Unfortunately, the speed of our success with our EL
cell phone products comes with an almost equally speedy decline. Due
to the magnitude of the sales decline, we are making some significant
changes to reduce expenses. By the end of 2007, we expect to decrease
payroll expenses by approximately $18 million due to the elimination
of approximately 300 hourly and 100 salaried positions. The result of
these difficult actions positions Rogers to return to reasonable
levels of profitability while preserving our ability to grow."
Mr. Wachob concluded, "Our core strategic businesses both in
Printed Circuit Materials and High Performance Foams continue to
perform in line with our expectations, and we have more new products
in various stages of deployment than ever in our history. In addition,
we are fully committed to our new business development strategy of
seeking out new products and new markets and have preserved almost all
of our new product development pipeline. Our Thermal Management
Solutions (TMS) business is currently installing equipment and we
expect sales in 2008. Recently, we announced a joint development and
option to buy agreement with Optodot, with the potential to develop a
superior membrane for lithium-ion batteries. TMS started with a
similar single agreement and has grown to encompass several agreements
and a family of products; it's an example of where our future
stand-alone reporting segments may come from. In summary, we have
taken the necessary actions to return to reasonable profitability in
the near term. We remain committed to achieving our long-term growth
targets through developing new products, entering new markets and
maintaining our technology leadership position."
To participate in today's 4:00PM conference call, please call:
1-800-574-8929 toll-free in the United States and 1-706-634-1907
internationally. There is no pass code for the live teleconference.
For playback access, available through 11:59PM (Eastern Time) July 5,
2007, please call: 1-800-642-1687 in the United States and
1-706-645-9291 internationally. The pass code for the audio replay is
5119382. The call will also be webcast live in a listen-only mode. The
webcast may be accessed through links available on the Rogers
Corporation Web site at www.rogerscorporation.com. Replay of the
archived webcast will be available on the Rogers Web site beginning
two hours following the webcast.
Rogers expects to report its fiscal second quarter results on
August 1, 2007 and hold its quarterly earnings conference call on
August 2, 2007.
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,
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 from the Rogers Corporation 2006 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 June 27,
2007, and Rogers undertakes no duty to update this information unless
required by law.
CONTACT: Rogers Corporation
Debra Granger, 860-779-5596
Vice President Corporate Compliance and Controls
Fax: 860-779-5509
debra.granger@rogerscorporation.com
Rogers' Web site: www.rogerscorporation.com