ROG - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session. now call will host, to I Mr. Instructions] turn over the your [Operator of Relations. Haymore, Investor Steve Director Sir, begin you may your conference.

Steve Haymore

X. The XXXX Thank and you, the Please the conference Investors quarter along our found issued today. news welcome everyone today’s Slide call. earnings with to the section turn can Kelly. Rogers Corporation’s on Good be slides for afternoon, release website was call of first to that

Such differ that measures are financial in materially this Before the Reconciliation any may during and in I financial Accounting GAAP most in could to results call Accepted in like subject Rogers’ call the should this include statements note forward-looking cause include to Private of statements. Reform call Act section is on to to exist can environment. be were discussions slide the the of Principles. statements and those strictly uncertainties for factors. we These directly uncertainties of that which that demands as not within XXXX factors posted be operations begin, market comparable economic that in actual forward-looking would Also from with Litigation the today’s meaning considered are website. our Generally measures of those Investors deck found certain not non-GAAP conditions, the historical many measures conference financial the Securities competitive conference accordance and prepared

Bruce. will President is CFO; I now Bob Mike Senior and Ludwig, me CTO. to and over the Turning call CEO; Slide Vice Senior Vice with Bruce to turn Hoechner, and today President X, Daigle, President and

Bruce Hoechner

for thank joining us everyone you Thanks, Steve. today’s afternoon and Good for call.

Steve like Steve would Investor I is Relations. to Rogers. welcome begin, new Director we of our to Haymore Before

anticipating over quarterly XXXX. QX materials. for adjusted positive will a to guidance applications to Please to getting were our range. previously over has infrastructure Both In million, meaningful as net increase exceeded month here X. has He adjusted XG been the you $X.XX an of driven him XXXX, earnings XX% our first wireless demand share, delivered for and well QX strong EPS contributions the am Rogers sales of These emergence as made in record number announced exciting in earnings is by capitalize as of to the increase several $XXX Korea. I know achieved of China well. X% an a results XG we advent Rogers sure it growth. also beginning quarter and The just quarters over extremely all-time sales and development now for quarterly well-positioned are been an So be is already per Rogers This industry Slide of record of has this quarterly to for net XXXX. of ramp. turn on

XX growth as for was at demand XX.X%, addition, the Also results, advanced of advanced negatively demand Gross QX to outlook adding strong great XG for increase XXXX. we these basis return impacted have margins ADAS semiconductor specifically the Even materials. infrastructure midpoint over Advanced substrates QX. PES Gross overall to were with business. improvement. demand guidance in our included range EV/HEV and to were our well mobility wireless to solid of points battery Assistance for a tailwinds This solutions or In business for be quarter the pad as applications, connectivity margin applications. in room applications strength Systems the above by power an applications ceramic Driver slightly of contributing the continues

for substrate sector. demand the a acceleration EV/HEV the in months, solutions XX used business Over automotive experienced PES significant the has in its semiconductor past

yields product increased demanded by developed, affecting this has overall been thus more margins. performance costs, stringent As requirements requirements impacted customers. have have and business These negatively our

are We issues. root yield the causes our of aggressively tackling

address price our in addition, recovery original plans is of the committed to estimates. Unfortunately, this a opportunity consuming Rogers EV/HEV costs. has provides our than creation and decade. actions been being presented execution to our value and market. over increased a are leader market complexity tremendous us next has underway for The growth greater In with more time the

the forward. to has well positioned technology this assure necessary as making investments our us area move and in long-term Our secure the to leadership are we success position we

with encouraged For the earnings our pleased and and performance markets. the tailwinds by record revenue many our key quarter, we highly in were of

increasing for that infrastructure X, in about driving Slide are optimistic demand Turning applications growth XG is wireless we the connectivity. to advanced

maker. growth and Demand positive XXXX advanced the remainder XXX,XXX for of development strong the for engineered specifically in regarding from have operators enhance mentioned expect provider base performance outlook to saw We support are good the response This units. bid the expected leading experts’ indicators view XG stable received and products, that deployments robust our advanced shipments during as Market service of reported customers. Rogers an outlook XG the MIMO our to as to developed year. newly mobility systems X be supported growth a enthusiastic Chinese QX was station in stations. top QX going of news remains that the to applications. leading exceed previously strong XG equipment base continue impact massive the trend expected is particularly telecom Our telecom announced XG XXX,XXX remains connectivity this a XXXX CapEx the could well to antenna China the in for by Chinese demand the following for announcement out XQ the for widely plans Adding by mobile equipment, this markets,

work customers We to that performance continue products with support broad of enable technologies. closely range demand develop emerging of a and current to the will

outlook modules. gigahertz seeing are as radar growth introducing EV a these opportunities industry in meet several well XX substantial areas advanced years. of goals next nitride of of The a next the year-over-year number in strive steady the significant include growth through annual indicates to as models EV/HEV silicon generation XX% their for compounded in performance automakers We substrates at as that ADAS power XXXX

moves industry towards auto penetration systems, vehicle. both per x-by-wire increased Rogers for the opportunity content expands through and the and higher market As EV/HEV

the protocol Europe. ADAS have worked automakers at a emissions Demand being automotive market, new in tempered somewhat by is Looking the essentially through global market. weakening

ADAS However, well. market is still penetration progressing of systems

the higher uniquely features Furthermore, performance As models. autonomy, of from mass-market higher continued gigahertz transitioning is sensors, safety market to these Rogers XX proliferate gigahertz moves requirements. to towards radar meet levels to positioned across XX

growth for and to QX Given million, sales these primarily conditions, we In XXXX, results ADAS wireless deliver in for the applications. next ACS net $XX XG X. expect increase our XXXX. These and of market and QX, Please XX% by share turn XG an were infrastructure double-digits maintain ADAS driven demand Slide to year. were over

China As revenues XXXX XXXX. mentioned previous anticipate in and ramped the slides, as into deployments growth in throughout we XG substantial

to XG its expect through XXXX. we addition, In maintain pace current

expect in of We see balance demand the for growth also to applications steady year. for ADAS the

the Over increased ACS current positioning to we X significantly meet well capacity us demand. years, have last

improve In addition, operations. several we addressed have in to invested in multi-site efficiency qualifications production ACS the and bottlenecks

substantially our and ACS, this projected materials XXXX optimistic Given meet XXXX we key for are in outlook ADAS. in in demand advanced adding to more of capacity the market and XG

demand sequential $XX sales EV/HEV XXXX. was in achieved improvement PES due QX PES to applications increase energy. X, and X% for results over an XXXX, million in of renewable of net Slide for to The Turning QX

market PES EV/HEV experienced tremendous packaging. discussed, for acceptance previously silicon materials has semiconductor its business are excellent gap As in and generation tailwinds favorable. wide-band nitride growth market new The for

mass material, in transit pad expansion our EV sequential driven X. from and commercial $XX EMS to we enhanced address by of take portfolio. mentioned, ongoing to XXXX, also comprehensive general opportunities. delivered to The continues projects battery continuing expanding significant sales enables in Results PES are advantage an in we QX and battery gain Slide applications. life. One our the market EMS benefited X% actions this growth QX capacity have increase the design net extend over business these growth is XXXX. its of solid I on of is wins double-digit great market. In to position turn As PORON and which applications issues new of business million, product were operational industrial lithium-ion and Please example the to to execute EV/HEV

of expands globally. market expect portable solid and we with industrial in as For applications year, electronics the general this growth EV/HEV the higher balance growth in

Turning to X, roadmap of growth the proven to our long-term Slide the pillars strategy four our continue as serve goals. to

to Our on markets opportunities. the market-driven connectivity and top advanced growth contributed significant have growth line mobility innovation focus advanced of high

Our innovation markets. significant a pipeline supporting is growth in robust these and is

design securing our wins applications next-generation customers’ in and products. are current We and

XXXX as and to have As we growth see progress expect continued in we beyond. through we these areas discussed,

for look acquisitions will As the our in and to growth synergistic opportunities our capabilities. we our to organic augment EMS expand continue M&A business, current we optimize

previously, improvement. Overall, we the pleased substantially. growth our enabling addressing grow margin Rogers PES challenges we business ability are on QX these and to to to our results markets are in innovate focus with in operational our and in solutions areas detailed is As excellence drive

that As to of and significant capacity innovation we take move ahead, mobility expansion our of growth advantage in to opportunities key connectivity lie and we advanced continue the will invest in ahead. drivers advanced

to greater I in over our Mike? will Now, report turn Mike on to it results detail. QX

Mike Ludwig

guidance. results In review Bruce I slides XXXX Thank quarter everyone. good second our you, ahead, quarter will the first afternoon and our by followed

QX we XXXX. Turning Slide will to the for financial results XX, preview

guidance quarter. XG sequential First revenues previously in XXXX. to quarter to were and to at recovery of gross or to additional XXXX than in EPS strength than revenues share quarter the to and guidance operating of the of million of expenses diluted share margin $XXX the fourth my our both GAAP noted EPS basis half and as contributed Adjusted consistent of discrete XX.X% performance-based for I Higher $XX.X rate will in to of QX the tax an add compared significant margin to revenue million. and due above QX the resulted metrics. the were a and or primarily commentary expenses XXXX upper along presentation. increased rate revenues XX% I on continued both our of improved diluted the range XXXX. $XXX on fully EPS of a effective XXXX with to high-end mainly adjusted expense QX in contributed the metrics an per first the midpoint XX% quarter meaningful fully significantly revenues forecasted compared X% improved with of quarter subsequent quarter million EPS guidance in was higher later for good $X.XX GAAP the above XX.X% revenues the first my higher $X.XX from million ADAS XG above for comparable end of of beat increase significantly for quarter QX back QX million effective and $XXX.X all benefits our first tax measurably our well the diluted million cover will quarter EV/HEV The of commencement expected revenues control revenues, operating diluted gross the an revenues $XX portfolio than in QX per on XX%. adjusted for $X.X revenues of realized lower results. expected tax income Higher just mix Adjusted fully in due commentary.

business new The and XX, our our to across growing each million $XX.X of and revenues wireless ACS PES and both quarter infrastructure multi-quarter XG ACS reversing versus in strong meaningfully XXXX. all experienced revenues revenues X%. a XG’s of with from in the trend revenues Slide grew increase EMS increase growing our first increased increased was sequential revenues revenues negative fourth or to by the inventory QX the revenues both Turning installations XXXX mainly XXXX in XX% quarter products renewable end resulted as from as challenges driven back X% The QX application compared primarily ADAS slightly as segments in primarily despite capacity of was standard due power been and with add strong recovering energy China. also applications well increased continuing demand semiconductor as substrates to applications a for acceleration. were market and keep sequential in EV/HEV weak challenges higher the pace to revenues Revenues emission increase to first quarter Europe applications second have from continued half demand expected PES in The ramp addressed. for as

applications the Currency address increased expect applications. and EMS XXXX increased added segment We of in Revenues bring demand general exchange transit quarter our throughout and demand. in to online strong XXXX. in to due $X.X rates and sequentially QX to beginning by impacted million to the growth in automotive mass compared first XXXX favorably capacity QX revenues reminder industrial

in first better XX.X% and or gross fourth the to increase reductions XX.X%. portfolio due revenues, The higher performance-driven of all for in was our from with $XX.X than was levels mix, in quarter revenues. higher were XX, both XXXX higher margin Slide to in Turning QX our the production cost opportunities business favorable EMS and QX PES of the progress the percentage margin businesses made exit our part be XX million particularly Improvement gross through factory working challenges basis our to of utilization ACS margin we gross ACS call QX a points would and opportunities issues earnings on EMS the We offset that of optimization businesses. we by communicated in in continued and these consolidation XXXX. essentially half expect We QX. as in be EMS through later through

decrement longer XXXX commercial the to anticipated business to taking quarter the grow. in QX the mentioned, address our in QX further new improvement continues margin and to nitride new progress for product of and mainly the wide-band related continued is to gap margin Bruce operational semiconductor demand silicon in As volume PES business we as products. as XXXX to to saw our production issues gross our second decrement than expect ceramic PES compared We in and

the are in approximately The to we second performance gross plan. PES business company mainly progress through XXXX quarter. improve XXX these the slight able the initially our basis see on recovery approximately our continue be as we XX improvement Even discussed issues, earnings half the to from segments drag in points first call. gross with and on XXXX margin point will basis gross margin the PES We EMS points from headwinds, basis from headwinds margin showing QX XXX of in execute performance

operating shape from connectivity be margin gross leverage the improvements in gross especially the in XX believe we investments majority to margin recovery is quarter basis will consolidation XG advanced PES revenues, in to we begin on not which volume points improvements expect Other net to path XXXX see QX completed in adjusted million XXXX million than first businesses, that and XXXX the basis optimization Adjusted resulted $X.X as or expense $XX.X currency revenues a from QX income or higher benefits XX.X% operating XXXX $X.X changes million a higher result adjusted QX of or quarter. $XX.X to expenses expenses with The XXXX SG&A QX for revenues income revenues. million of million first wait all and and plan. EMS the of XX margin opportunities and through XXXX. a in of $XX.X was in on in increased of profitability of The the EMS of expenses quarter favorable any and PES higher resulting execute the and commencing operating QX XXXX incremental QX compared performance hedging $XX.X ramp to details after sequential for the QX third commenced of for commodity benefits points as We generate of did were strategic than compared activities. adjusted the million of anticipated make adjusted of are good XXX adjusted We from to higher QX income. higher from and net QX. The $XX Slide from strong expenses million. the of XX.X% operating the significantly income performance-based XX.X% income gross increased the for

of QX in QX annual compared strategies implemented to tax fourth quarter. X.X%. fourth rate in the effective tax XXXX effective foreign for rate XX.X% jurisdictions rate incorporate quarter the Lastly, The tax planning our tax XXXX of effective our was impact

XX% pre-tax as XX% effective lower effective expected rate discrete in tax tax change forecasted items The the of well than mix to the the as to is geographic in quarter. rate the income first XXXX of due measurably quarter tax favorable

rate forward, tax and to of Going between discrete XX%, excluding tax we the expect effective the impact XX% items. be

a of from $XX.X decrease Turning cash company expenditures. the In on $XXX.X ended the position spent million capital December first million, QX, XX, million Slide to XX, quarter a XXXX with XXXX. of $X.X we

net from and to be guidance the QX paid earlier. by on expect we primarily XX, revenues operating to million. Taking are from receivable margin $XX.X from working in increase accounts an The company gross the due portfolio $XX.X increase million in of XXXX improved down resulting of $XXX capital of quarter. generated increase Slide from from advanced mix connectivity strong challenges company primarily the the first in revenues XG are the of estimated expected expected timing range activities debt. the addition, discussed ramp million look both the in revenues of to revenues In margin a million to gross be at of million $X QX to in Therefore, offset continued QX The for $XXX applications. the our benefit

guiding result, an are gross gross of the $X.XX GAAP to margin. we range margin $X.XX diluted XX% the we of adjusted for XX% per basis, consistent range to a in $X.XX in diluted with $X.XX As per the QX EPS QX in to fully diluted guide for On of range QX share. We share. guide earnings our

capacity We million for Bruce. guide as we continue for $XX now to I for call of range will demand add back XG continue and applications. million serving $XX to products capital over EV/HEV to in turn year the increasing the the to spending

Bruce Hoechner

Mike. Thanks for line now And our concludes This remarks. we Q&A. prepared the will open

Operator

ahead. comes Instructions] of [Operator CJS from the go Daniel first Moore from question line Your Please Securities.

Your open. is line

Daniel Moore

today. I Bruce. should say my Good call Good afternoon Good third morning, morning, Mike.

you down back incremental guess I to number on I great revenue XX drill And side? would and EMS expect apologize. through to and nice that’s two, specifically gross color us a quick see margin know in on that appreciate a PES are color, little good margin basis ACS. I more as that could you little lot. you a on be challenges in point roadmap So little coming to in in are particularly number if more but of digging more, you right get uplift, I the one the the really ACS I Congrats to that you obviously gross seeing a sort think give just quarter, the on on in total margins of or maybe follow-up? a headwind And now, you bit gave might bit margin on color said a seeing margin the string, that normalized a where pulling the sort

Mike Ludwig

Sure, Dan.

ACS margins the are expected the on seeing So ACS we see yes, from we the strong. incremental that business, to that’s

think as we that perspective, about we I So talked significant will margin that good PES that headwinds expansion EMS we once a we as part feel from be move forward in and our and about. address fact of

through we structure So the PES, business. move talked our the we Carol we had – we then on one the EMS consolidation That’s both and in your side, EMS about from Springs Fe the as Santa so put from and acquisitions as production into question as where we area we EMS acquisitions optimization and that previously, have intro but challenges, of have some integrate our Stream. those the again getting have

maybe So QX, issues expect and and in challenges again QX in as seen primarily get we we have seen through some progress be some talked these as – QX. to have late through we about larger we QX

some the I delivery wideband the applications, us some again, labor on of issues ramp have issue of silicon products, products that so second gap year take yield to main of nitride or yield, that’s are on-time addressing also And with semiconductor Bruce’s around listened On and result And to to meaningful and issues we going be tend PES materials. associated there. commentary think struggled a again, again freight struggling our challenges the make there, the you the side, progress with capacity through to as the half associated with then there. new

basis the So we improvements that I into the talked if would points from margin, we see about as improvement the QX have and that the with points second again to believe as of basis believe those we EMS that, on go in respect I the will XXX majority majority that XX will respect I issues say, we at quarter. be with the drag look to through that worked of

PES see and basis as order in much I PES, into slight significant more in think quarter both QX we then I as fourth drive will then think the XX the in improvements but improvement those quarter, see well. we improvements in to QX probably we points first into will get from

that. that’s think how I at So, I would look

Daniel Moore

it. Got

of the same sort that along some that Bruce as alluded the is And initiatives timeline those well? that of – that follow pricing to,

Bruce Hoechner

Dan. contracts the of The work price through with will the customers out so hi, Yes, ongoing and and of Bruce. rest is forth, This year. this because stretch

we a So, of move we an towards the but move, into forward immediate as year, tail this contracts it’s as not marketplace. lot move those end and should of through the we moving see

So, of the as move up it’s combination our on work our gross margins well to PES the business. on our work a as in pricing operational side

Daniel Moore

talk quarters quarters? gears report expect tax and for Got the the is remaining continued year next rate the which tax XX% again, three imply full maybe you on employed, for rates about to little XX%, a or would a expect drive XX%, higher tax do XX% three for it. to you but nitpicking, do just this strategies Shifting the the strategies, it bit down

Bruce Hoechner

Yes.

So of will structures, again, us give of to of terms some results in think generate where sort strategies our I pre-tax several with we ownership income. different look beneficial of kind at respect we which tax

to three it expect certainly want the that but to quarters quarters, there, say XX% we So, will I be that’s next for all looks next three XX%. as the

the year than be something imply obviously, So, quarter less coming that the that, because would at would first in XX.X%. for

Daniel Moore

of quarters? of it to expect – the do use that a source in continue be over. to hand of does Do ramp. and build do or very we about, cash we inventories, a continued Thanks to Perfect. had flow more obviously, then we cash coming turn turn But I’ll to conversion, again. it lastly cash talk back built and you’ve capacity, just inventories free And – jump expected

Mike Ludwig

Dan, generated the interestingly that first of that, capital included we be the on from we from million receivable million enough, didn’t again, increase happened when that working look so an $XX.X build-up we significant in ago in And in, year you a ramp. inventories of XXXX, down we we the that in if the had expect much increase inventories. in to of a $XX accounts work build quarter to operating expected at a activities, look in majority even fact, actually what at which in have and XXXX with and in XG Yes, did actually $XX million,

Daniel Moore

you, quarter. Very a congrats again, helpful. Thank on nice

Bruce Hoechner

Thanks, Dan.

Operator

Your next question Ellis Riley comes Please Craig of B. ahead. from from the line FBR. go

is open. Your line

Craig Ellis

Thanks on research that. a congratulations on there, But margin, assumption detailed thanks further significant for would environment see and one you’re margin, question little you’re gross and clarifying going also for in ramping with I of albeit some the significant new what’s business. you starting be XG start a ACS record there earlier. from your by that gross for business, taking capacity. the secular guys of what’s and PES the ramp underlying should expect just that has to but good form on forward happening one difficult volumes I for a financial the seeing and volume to what clearly, lines wanted performance pretty very in were you On nice inquiry very, out Mike,

the over you can puts us segment next quarters? margins X with walk the So, of to and X as gross look some takes out for through just we that

Mike Ludwig

very Craig, Yes, be that’s for I going right. to very, us, of positive think all

on. two things going got we’ve So,

has So, in we’ve higher that the got, general, of margin business products. part

in tailwinds. we’ll continue to going very, and think very capacity for both again, see I again, factory to tailwinds utilization and and the But as So, place as spend we’ll the put because we’re us that you associated see see XXXX, do to significant in we in also XXXX mentioned, those – with XXXX. money the in that XXXX ramp better we

basis profitability terms I into but from to both of we also just improvement, without of in incremental, just business think top performance So, as talked the general and with EMS in se, be it terms incremental benefits standpoint it to PES. as a it’s utilization, getting it’s both factory XX on the that so respect of should per the mostly to tailwinds about again profitability, points a specifics ACS relates the

Craig Ellis

will you. color from Bruce, The with ramp on customers next play standpoint, the Bruce. to ramps us builds appreciate XG’s the base comments the for customers talking XG indications as I your guidance, this year helpful. as guys further of it’s out help us for for not XG? give look how Can is getting but linearity that’s you from know some that, pacing the starting you the That’s a you and give sense Thank you’re quarterly question wouldn’t underway. are some station can about looking and they at on that

Bruce Hoechner

Craig. the Hi, Thanks. for Thanks question.

demand demand or what to into And So, should towards XXX seeing progression QX the of pretty XXX of what rest out strong tail relatively QX. had strong this at we we the there’s – year. we’re hearing XXX base base the end saw stations, remain rest we’re from much the of our customers think relatively and is targeted that progressing stable we essentially – because will China, go about the stations, believe relatively and play that the that, potential to a we’re through this hearing year XXX is, been to through the in

So, of be should month-to-month stable terms demands. relatively in we think it

Craig Ellis

would manufacturers. little bit to equipment we think some term, a of to of the trial you and orders there into this Rogers? If the move looking some when commercialization or year would mass those start from you the [ph] or year, for to adoption those deployments mass next when builds city start come into larger start then longer referred I are forecasts indications from that to out And get mentioned

Bruce Hoechner

year. of new getting We there the fourth notifications year, would quarter, would the and moving do then end into and we probably think some building towards the start

the that Our on into will things moving base stations. XXXX sense is substantially ramp

Craig Ellis

Okay. And then…

Bruce Hoechner

That’s what, that the referred folks. the cover what being by that’s I’m are consultants that’s of also to space and some equipment sorry, this basically indicating

Craig Ellis

a laterally of companies to observers of some some this think is I looking question, same More just thing industry the hear the up. technical are we what And saying. conveying of back other across the Bob, and that

be that up in to be ‘XX fair they’re moving are wave content company ‘XX, be said on out might ‘XX. and a it stations said least to would in and content as that precise And to at morning indicative any If any and can would base that, $X this and think X-gigahertz that So, these get reported average to for be stations a there the broadly deployments, started that view implications that, exposed the on and of early to millimeter that if ‘XX play helpful? that $X, base XG were we of there? extent initial more just we their is in Rogers, innings is majority

Bob Daigle

Yes.

I yes, important think Craig. an think, distinction, I So, that’s

you your think numbers to talk China us a today, the for that, out sub X-gigahertz that’s that I typically base accurate. generally, I the about if top the sub the X-gigahertz. sub XXX,XXX those X-gigahertz. are So, X large translates basic to the some And typically millimeter they in activity sub that about what year, opportunity wave, on adding material into very characterization mobile a to this the is XXX,XXX, seeing we’re would of fixed wireless, XG of frankly, in the of be opportunity America, in activity and that most gives you be is you you XXX,XXX – and year small tell of is application. next X-gigahertz basic really the referred – And it for additive when for most volumes stations case North areas, network. are those it’s higher higher basically millimeter cases XG don’t there but to of top than of we’re it’s little of talking The the content that, times wave network that tends bandwidth, are but have referring what’s or tends bit On – which complementary. not your X to much smaller to

Craig Ellis

strong very benefiting businesses can seeing the there’s bit on one out too? we’ve could broadly, benefits be growth segments, in jump a Quite divergent then rates geographically That’s helpful. that numbers for that content HEV touch about and Thank be but Thanks, I you’re you. EV guys. just before where recent color in discussion geographically, I the And queue. strength China, of helpful or extent the opportunities of back last on seen the numerous suspect you the more either to any would and those me

Bruce Hoechner

to ask Bob I’ll take that.

Bob Daigle

Yes.

exposure So, packages. EV/HEV our most are semiconductor the activity power power in we the PES, in on where have semiconductor, in we’ve areas got again the two

regions the broadest activity are is one we for a who driven But with case Craig, it’s the bit us battery it also would our in in In of products. pads, to case to double-digit We because our have substrates, global power the their modules battery guys semi sell all pads. solid in the we’re Smith pad of it’s we’re we’ve the sense power is applications three all Rolling distribution particular the the EMS, little semiconductor exposure by track, basically in specifically Probably And region. for harder power from the we’re [ph] – which global regions. – then fact seen both be not the the growth it’s seeing battery have being and various very that all selling into major materials.

Craig Ellis

you, Got it. Bob. Thank

Bob Daigle

also And electrification content, it’s magnitude our of we’re – on the and previous think on the EV, it’s big impact significant in – one got of one that the tailwinds seeing calls also to of the I said just this and drivers, I has opportunity. you’ve cover important of story growth but a degree penetration note the oh, to we’ve

a in somewhere opportunity a hybrid vehicle than between. battery that’s a full have larger in mild plugin much or electric in and We

are you is the numbers the as increase, dynamic of that powertrains see produced with electric numbers being vehicles of that the the XX%. XX% such in to So, are neighborhood

also a the electrification degrees tailwind of us in to that area. mix, a We’re also give helps higher nice seeing shift which in

Craig Ellis

you. Thank it. Got

Bruce Hoechner

Craig. Thanks,

Operator

[Operator Riley Instructions] line FBR. Your next the question ahead. Please Craig comes of from from Ellis go B.

open. Your line is

Craig Ellis

Thank you.

going opportunity, jump with one income a Mike, opportunities are of are I’ll an clearly, there there’s in more. – significant that for number As statement, on the to turning long as things Rogers. that back is

needed the you to current of which like fund the we to you and you. at the calendar Thank look direction the can over second that, speak OpEx Beyond opportunities is OpEx all degree investment feel see? general XXXX you further or to just as quarter, that

Bruce Hoechner

Sure.

Mike Ludwig

QX. XX.X% of adjusted expenses were – in XX.X% of our operating Yes, so revenues

So in XX.X%. that was which QX, than was better they were

– I the quarter. be them think range specific go be on to going forward I to in would expect you that timing that issues have in particular any may

quarter to being of to expect I the XX.X% for X% though, would be them of X% range. XX.X% R&D forward any to the expenses particular anywhere revenues in with range in Going

nice point good extent And to to that have time, at we our so Bruce, at bring still fruition. time, X% exploit in to X% heard the in opportunities. we fund think and sufficient we’ll range from this the I we as out this have But to those I will that like really feel continue in point have – to be that do R&D opportunities order there believe we some you’ve to in

to again, XX.X% So, go-forward I think a XX.X% I think on sense basis. makes

Craig Ellis

a Mike, last sectors that. that stocking of question for there’s concern question are to have what players other come chain procedures things? is topical concerns ask up one of the do with it’s have XG, in you To Thanks some different that’s that and these extent, of what the part some OEMs and in any and related about been place inventory? supply some inventory excess really something types you preclude to building that I’ll

Bruce Hoechner

working other And build is is also be We to demand side it of the – our there obviously could needs. are it’s understanding depleted. getting the responding is very Bruce. that is this closely some think chain, we our customers and there so with and I their but Well, in supply

level start up start our given initial move now should supply an we that that think was there is the and it we’ve that as think as chain we’ve mentioned, belief year, here. relatively in I be rest a built seen I of the the demand even I supply reasonable through of the

Craig Ellis

Thanks, Bruce.

Operator

I this questions call now comments. the no And are will for further time. closing turn at there back Hoechner to Bruce

Bruce Hoechner

Thank you. great joining call. today’s everyone Have us for a Thanks on afternoon.

Operator

This call. concludes conference today’s

disconnect. You may now

Rogers (ROG) 1 May 192019 Q1 Earnings call transcript