EXHIBIT 99.1
Rogers Corporation Reports Third Quarter Results
ROGERS, Conn.--(BUSINESS WIRE)--Nov. 1, 2007--Rogers Corporation
(NYSE:ROG) today announced for the third quarter of 2007, net earnings
from continuing operations of $0.52 per diluted share compared to net
earnings from continuing operations of $0.97 per diluted share
reported for the third quarter of 2006.
Net sales from continuing operations in this year's third quarter
were $110 million compared to the all-time quarterly sales record of
$122 million recorded for the third quarter of 2006. This quarter's
sales exceeded the Company's original guidance primarily due to record
quarterly sales of high performance foams, high frequency circuit
materials and power distribution systems, in addition to an unexpected
$3.6 million increase from forecasted sales of Durel products related
to a few mature cell phone programs. The one time benefit of those
improved Durel sales totaling $1.7 million in pre-tax profits, or
$0.06 per diluted share, is not projected to repeat in the future.
During the third quarter, the Company ceased manufacturing of
polyolefin foams. As a result, this operating segment has been
classified as a discontinued operation for reporting purposes and
prior period results have been restated accordingly. In the third
quarter of 2007, operating results related to the polyolefin foam
operation were immaterial. In the third quarter of 2006, polyolefin
foams reported revenues of $2.4 million and a net operating profit of
$0.4 million, or $0.02 per diluted share. The polyolefin operation had
previously been included in the Company's "Other Polymer Products"
reportable segment. Additional details on continuing and discontinued
operations are provided in the financial statements below.
Earlier this year, the Company announced it would incur
restructuring charges as a result of a change in business conditions
and future outlook associated with its Durel and flexible circuit
materials businesses and recorded the majority of the associated
charges in the second quarter of 2007. Additional pretax of
approximately $1.7 million related to the second quarter restructuring
charges were recorded in the third quarter. These charges were
substantially offset by the sale of inventory previously reserved,
related to EL lamps and flexible circuit materials, resulting in a net
unfavorable pretax impact in the quarter of approximately $0.5
million, or $0.02 per diluted share. The Company expects to record
additional charges related to the second quarter restructuring of
approximately $1.5 million in total over the next two quarters.
Printed Circuit Materials
Sales of Printed Circuit Materials totaled $37.1 million, down
7.2% from the third quarter of 2006 on lower sales into the portable
communications and hard disk drive markets. The Company expects to
transfer all commodity based flexible circuit material production
servicing these markets to its joint venture in Taiwan starting in the
fourth quarter of 2007. High frequency circuit materials achieved
record quarterly sales as the Company continues to benefit from the
satellite TV market's addition of new high definition channels and
increased penetration into digital applications.
Custom Electrical Components
Custom Electrical Components sales for the quarter were $32.9
million, compared to the record sales reported in last year's third
quarter of $46.0 million. The year-over-year sales decline is
attributed to the previously announced diminishing demand for EL
backlighting in the portable communications market. The Company is
investigating other potential opportunities in advertising, automotive
and consumer electronics markets, among others, for its EL and
integrated circuit technology while transferring existing automotive
lamp production to its Suzhou, China facility over the next several
months. The power distribution systems business reported its third
sequential quarter of record sales. Strong demand for power
distribution systems in North America and Europe helped bolster sales,
and the business continued to gain share in Asia. Rogers believes that
it is well positioned globally to service the worldwide growing demand
for power distribution systems with manufacturing operations in Europe
and Asia.
High Performance Foams
High Performance Foams (HPF) achieved record quarterly sales of
$29.5 million, up $3.4 million or 12.8% from the third quarter of last
year. Sales growth was primarily driven by new penetration in the
portable communications market. New product introductions over the
past few years are helping drive market share gains, as the Company
continually focuses on bringing enabling material solutions to the
global communications marketplace. Additionally, HPF is making
advances in its product technologies for the transportation, printing
and healthcare markets. In order to add needed worldwide capacity, a
new polyurethane foam line was installed, customer qualifications were
completed and production will begin during the fourth quarter at the
Rogers facility in Suzhou, China. Rogers believes that HPF is well
aligned to serve its global customers with manufacturing capabilities
in the U.S., China, and Japan.
Joint Ventures
Rogers' 50% owned joint ventures had quarterly sales totaling
$31.4 million compared to $25.9 million in the third quarter of 2006.
The increase is primarily attributed to increased sales in the high
performance foams joint ventures with INOAC Corporation in China and
Japan.
Other Information
Third quarter 2007 gross margin from continuing operations was
28.4% compared to 31.0% in the prior year. Progress was made on
working capital initiatives as inventory was reduced by approximately
$8.9 million during the quarter and roughly $14 million from the peak
earlier in the year.
Rogers' balance sheet ended the quarter with a cash and short-term
investment balance of $66.1 million. Capital expenditures were
approximately $3.4 million for the third quarter and $20.1 million
year-to-date. Total expenditures for the year are expected to be in
the range of $25 to $30 million.
During the third quarter the Company repurchased as part of its
stock buyback program approximately 214,000 shares for $8.7 million.
To date the Company has repurchased approximately 743,000 shares for
$32.6 million under its current buyback program which authorizes a
total buyback of up to $50 million depending on market and business
circumstances.
The Company's third quarter effective tax rate was 18.5% which
represents a favorable $0.05 per diluted share compared to previous
estimates, and is expected to be in the range of 21-22% in the fourth
quarter.
Robert D. Wachob, Rogers' President and CEO commented; "During the
third quarter we started to realize the benefits from our
restructuring efforts, coupled with an increase in revenues. Efforts
to gain sales in our core operating units are showing progress as
three businesses attained record quarterly sales this period - high
performance foams, high frequency circuit materials and power
distribution systems. More importantly for our future success, the
Company continues to gain momentum in its new business developments
and new product offerings. We believe that fourth quarter Durel sales
will return to the lower forecasted levels, compared to the higher
amounts experienced in the third quarter. Therefore, as we look to
close out 2007, I expect fourth quarter sales to be in the range of
$99 to $103 million with net earnings per diluted share of $0.38 to
$0.42 including anticipated pretax charges related to the second
quarter restructuring of approximately $1.1 million."
Rogers Corporation (NYSE:ROG), headquartered in Rogers, CT, is a
global technology leader in the development and manufacture of high
performance, specialty-material-based products for a variety of
applications in diverse markets including: portable communications,
communications infrastructure, computer and office equipment, consumer
products, ground transportation, aerospace and defense. Rogers
operates manufacturing facilities in the United States (Arizona,
Connecticut and Illinois), Europe (Ghent, Belgium) and Asia (Suzhou,
China). In Asia, the Company maintains sales offices in Japan, China,
Taiwan, Korea and Singapore. Rogers has joint ventures in Japan and
China with INOAC Corporation, in Taiwan with Chang Chun Plastics and
in the U.S. with Mitsui Chemicals.
The world runs better with Rogers. (R) www.rogerscorporation.com
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 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 November 1,
2007 and Rogers undertakes no duty to update this information unless
required by law.
Additional Information and November 2, 2007 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
Investor Contact: William J. Tryon, Manager of Investor and Public
Relations
Phone: 860-779-4037
FAX: 860-779-5509
Email: william.tryon@rogerscorporation.com
A conference call to discuss third quarter results will be held on
Friday, November 2, 2007 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
Pete G. Kaczmarek, Vice President, High Performance Foams Division
and Information Technology
Debra J. Granger, Vice President, Corporate Compliance and
Controls
Robert M. Soffer, Vice President and Secretary
Paul B. Middleton, Principal Accounting Officer and Treasurer
William J. Tryon, 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, November 9, 2007. The passcode for the audio replay is
22086385.
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.
(Financial Statements Follow)
Consolidated Statements of Income
Three Months Ended Nine Months Ended
(In thousands, except September October 1, September October 1,
per share amounts) 30, 2007 2006 30, 2007 2006
- ---------------------- -----------------------------------------------
Net sales $ 109,626 $ 121,588 $ 322,588$ 324,885
Cost of sales(a) 78,448 83,948 240,688 218,382
-----------------------------------------------
Gross margin 31,178 37,640 81,900 106,503
Selling and
administrative(b) 16,874 15,376 53,733 46,060
Research and
development 5,577 5,977 17,301 17,905
Restructuring and
impairment
charges(c) 202 - 3,283 5,013
-----------------------------------------------
Operating income (d) 8,525 16,287 7,583 37,525
-----------------------------------------------
Equity income in
unconsolidated
joint ventures 2,110 1,437 4,852 5,971
Other income less
other charges 72 700 844 1,617
Interest income, net 449 607 1,334 1,585
-----------------------------------------------
Income from continuing
operations before
income taxes 11,156 19,031 14,613 46,698
Income tax expense 2,060 2,290 741 9,742
-----------------------------------------------
Income from continuing
operations 9,096 16,741 13,872 36,956
Income (loss) from
discontinued
operations (146) 438 259 (3,173)
-----------------------------------------------
Net income $ 8,950 $ 17,179 $ 14,131$ 33,783
-----------------------------------------------
Basic net income per
share:
Income from
continuing
operations $ 0.55 $ 0.99 $ 0.84$ 2.21
Income (loss) from
discontinued
operations (0.01) 0.03 0.01 (0.19)
-----------------------------------------------
Net income $ 0.54 $ 1.02 $ 0.85$ 2.02
Diluted net income per
share:
Income from
continuing
operations $ 0.52 $ 0.97 $ 0.79$ 2.10
Income (loss) from
discontinued
operations (0.01) 0.02 0.01 (0.18)
-----------------------------------------------
Net income $ 0.51 $ 0.99 $ 0.80$ 1.92
Shares used in
computing:
Basic 16,431,017 16,845,874 16,609,229 16,702,800
Diluted 17,448,146 17,327,140 17,538,537 17,551,484
(a) Third quarter 2007 results include $0.8 million of net
positive adjustments related primarily to the reversal of certain
inventory reserves originally recorded in the second quarter of 2007
related to the restructuring charges taken at that time. Year-to-date
2007 results include $8.2 million of net restructuring charges related
primarily to increased inventory reserves and accelerated depreciation
of production equipment recorded in the Custom Electrical Components
and Printed Circuit Materials segments.
(b) Third quarter and year-to-date 2007 results include $1.1
million and $2.0 million, respectively, in restructuring charges
related to the accelerated expense recognition of a prepaid license
agreement and the accelerated depreciation of certain assets related
to the Custom Electrical Components segment.
(c) Third quarter and year-to-date 2007 results include $0.2
million and $2.8 million, respectively, in charges related to
severance associated with the company-wide work force reductions.
Additionally, year-to-date 2007 results include a $0.5 million charge
related to the impairment of goodwill related to the composite
materials operating segment. Year to date 2006 results include a $5.0
million charge related to the impairment of goodwill related to the
polyester based laminate materials operating segment.
(d) Includes depreciation and amortization for the third quarter
and year-to-date periods in 2007 of $6.0 million and $18.2 million,
respectively, and in 2006 of $4.5 million and $14.0 million,
respectively.
Consolidated Balance Sheets
(In thousands) September December
30, 2007 31, 2006
- ------------------------------------------------ ---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 34,557 $ 13,638
Short-term investments 31,500 68,185
Accounts receivable, net 76,990 85,339
Accounts receivable from joint ventures 1,975 5,437
Accounts receivable, other 1,819 3,552
Note receivable 2,100 2,100
Inventories 59,444 70,135
Deferred income taxes 10,910 15,430
Asbestos-related insurance receivables 4,244 4,244
Other current assets 4,939 3,415
Assets of discontinued operations - 1,079
---------- ----------
Total current assets 228,478 272,554
Property, plant and equipment, net 144,694 141,406
Investments in unconsolidated joint ventures 29,305 26,629
Deferred income taxes 14,451 4,828
Pension asset 974 974
Goodwill 10,131 10,656
Other intangible assets 112 454
Asbestos-related insurance receivables 18,503 18,503
Other assets 5,082 4,576
Assets of discontinued operations - 322
---------- ----------
Total assets $ 451,730 $480,902
---------- ----------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 15,322 $ 25,712
Accrued employee benefits and compensation 18,196 27,322
Accrued income taxes payable 5,774 9,970
Asbestos-related liabilities 4,244 4,244
Other current liabilities 17,655 12,979
Liabilities of discontinued operations - 1,916
---------- ----------
Total current liabilities 61,191 82,143
---------- ----------
Noncurrent pension liability 11,698 11,698
Noncurrent retiree health care and life
insurance
benefits 10,021 10,021
Asbestos-related liabilities 18,694 18,694
Other long-term liabilities 1,117 1,169
Shareholders' equity 349,009 357,177
---------- ----------
Total liabilities and shareholders' equity $ 451,730 $480,902
---------- ----------
CONTACT: Financial News Contact:
Dennis M. Loughran, 860-779-5508
Vice President Finance and Chief Financial Officer
FAX: 860-779-4714
or
Investor Contact:
Rogers Corporation
William J. Tryon, 860-779-4037
Manager of Investor and Public Relations
FAX: 860-779-5509
Email: william.tryon@rogerscorporation.com