-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGC9rNLUDgiKSUhsCrsAKxQa4b/sfEYg6sgdEYFLwesjvg+jZTGA572T9xGPK7jW me5aalnzL/vhSZ2JDzifyQ== 0000084748-96-000010.txt : 19960806 0000084748-96-000010.hdr.sgml : 19960806 ACCESSION NUMBER: 0000084748-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960805 SROS: AMEX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROGERS CORP CENTRAL INDEX KEY: 0000084748 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 060513860 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04347 FILM NUMBER: 96603663 BUSINESS ADDRESS: STREET 1: ONE TECHNOLOGY DR STREET 2: P.O. BOX 188 CITY: ROGERS STATE: CT ZIP: 06263-0188 BUSINESS PHONE: 2037749605 10-Q 1 Total pages included - 13 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4347 ROGERS CORPORATION (Exact name of Registrant as specified in its charter) Massachusetts 06-0513860 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) P.O. Box 188, One Technology Drive, Rogers, Connecticut 06263-0188 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (860) 774-9605 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of the Registrant's classes of common stock as of July 29, 1996: Capital Stock, $1 Par Value--7,376,206 shares -1- ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q June 30, 1996 INDEX Page No. -------- PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Six Months Ended June 30, 1996 and July 2, 1995 3 Consolidated Balance Sheets-- June 30, 1996 and December 31, 1995 4-5 Consolidated Statements of Cash Flows-- Six Months Ended June 30, 1996 and July 2, 1995 6 Supplementary Notes 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 PART II--OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Reports on Form 8-K 13 SIGNATURES 13 -2- PART I - FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands Except for Per Share Amounts) Three Months Ended: Six Months Ended: ------------------------------------------------- June 30, July 2, June 30, July 2, 1996 1995 1996 1995 ------------------------------------------------- Net Sales $ 35,424 $ 37,422 $ 70,362 $ 73,839 Cost of Sales 24,145 25,255 47,562 50,163 Selling and Administrative Expenses 5,362 5,671 10,775 11,336 Research and Development Expenses 2,303 2,354 4,721 4,758 ------------------------------------------------- Total Costs and Expenses 31,810 33,280 63,058 66,257 ------------------------------------------------- Operating Income 3,614 4,142 7,304 7,582 Other Income less Other Charges 865 347 1,380 1,101 Interest Income (Expense), Net 118 (46) 177 (81) ------------------------------------------------- Income Before Income Taxes 4,597 4,443 8,861 8,602 Income Taxes: Federal and Foreign 932 630 1,788 1,212 State 125 125 250 250 ------------------------------------------------- Net Income $ 3,540 $ 3,688 $ 6,823 $ 7,140 ================================================= Net Income Per Share: Primary $ 0.47 $ 0.47 $ 0.91 $ 0.92 ================================================= Fully Diluted $ 0.47 $ 0.47 $ 0.90 $ 0.92 ================================================= Shares Used in Computing: Primary 7,570,330 7,799,838 7,527,044 7,781,032 ================================================= Fully Diluted 7,570,330 7,812,494 7,547,776 7,801,248 ================================================= The accompanying notes are an integral part of the consolidated financial statements. -3- ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) June 30, 1996 December 31, 1995 ----------------------------------- Current Assets: Cash and Cash Equivalents $ 20,678 $ 13,111 Marketable Securities 2,249 1,565 Accounts Receivable, Net 22,151 18,439 Inventories: Raw Materials 6,648 5,267 In-Process and Finished 8,423 7,336 Less LIFO Reserve (1,791) (1,791) --------------------------- Total Inventories 13,280 10,812 Current Deferred Income Taxes 2,560 2,560 Assets Held for Sale, Net of Valuation Reserves of $2,032 in each period (Note B) 6,242 8,809 Other Current Assets 514 470 --------------------------- Total Current Assets 67,674 55,766 --------------------------- Property, Plant and Equipment, Net of Accumulated Depreciation of $56,717 and $53,669 35,877 36,473 Investment in Unconsolidated Joint Venture 4,643 4,763 Intangible Pension Asset 3,479 3,479 Other Assets 1,963 2,035 --------------------------- Total Assets $113,636 $102,516 =========================== The accompanying notes are an integral part of the consolidated financial statements. -4- ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - CONTINUED LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in Thousands) June 30, 1996 December 31, 1995 --------------- ----------------- Current Liabilities: Accounts Payable $ 9,031 $ 8,338 Current Maturities of Long-Term Debt 600 600 Accrued Employee Benefits and Compensation 8,354 8,703 Other Accrued Liabilities 5,092 4,667 Accrued Income Taxes Payable 1,534 1,084 Taxes Other than Federal and Foreign Income 1,233 1,020 -------- -------- Total Current Liabilities 25,844 24,412 -------- -------- Long-Term Debt, less Current Maturities 4,200 4,200 Noncurrent Deferred Income Taxes 1,606 1,632 Noncurrent Pension Liability 3,223 3,223 Noncurrent Retiree Health Care and Life Insurance Benefits 5,942 5,942 Other Long-Term Liabilities 3,309 3,009 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 25,000,000; Issued and Outstanding Shares 7,368,806 and 7,135,090 7,369 7,135 Additional Paid-In Capital 29,079 26,286 Unrealized Gain(Loss) on Marketable Securities (17) -- Currency Translation Adjustment 2,126 2,545 Retained Earnings 30,955 24,132 -------- -------- Total Shareholders' Equity 69,512 60,098 -------- -------- Total Liabilities and Shareholders' Equity $113,636 $102,516 ======== ======== The accompanying notes are an integral part of the consolidated financial statements. -5- ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) Six Months Ended: -------------------- June 30, July 2, 1996 1995 -------------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 6,823 $ 7,140 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 3,193 3,265 Benefit for Deferred Income Taxes 57 135 Equity in Undistributed Income of Unconsolidated Joint Ventures, Net (192) (395) Loss on Disposition of Assets 50 186 Noncurrent Pension and Postretirement Benefits 803 710 Other, Net 271 521 Changes in Operating Assets and Liabilities Excluding Effects of Disposition of Assets: Accounts Receivable (4,103) (3,741) Inventories (2,561) (912) Prepaid Expenses (64) 18 Accounts Payable and Accrued Expenses 788 1,708 -------------------- Net Cash Provided by Operating Activities 5,065 8,635 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (2,868) (3,598) Proceeds from Sale of Business 2,567 -- Proceeds from Sales of Property, Plant & Equipment 14 -- Investment in Unconsolidated Joint Ventures & Affiliates 490 -- Purchase of Marketable Securities (684) -- -------------------- Net Cash Used in Investing Activities (481) (3,598) CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: Repayments of Debt Principal -- (2,500) Proceeds from Sale of Capital Stock 3,026 718 -------------------- Net Cash Provided by (Used in) Financing Activities 3,026 (1,782) Effect of Exchange Rate Changes on Cash (43) 243 -------------------- Net Increase in Cash and Cash Equivalents 7,567 3,498 Cash and Cash Equivalents at Beginning of Year 13,111 13,851 -------------------- Cash and Cash Equivalents at End of Quarter $ 20,678 $ 17,349 ==================== The accompanying notes are an integral part of the consolidated financial statements. -6- ROGERS CORPORATION AND SUBSIDIARIES SUPPLEMENTARY NOTES A. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 1995. B. Net Assets Held for Sale consist of land and a building in Chandler, Arizona, currently being leased to the buyer of the Flexible Interconnections Division and the land and building in Mesa, Arizona, related to the divested business of the Power Distribution Division. C. At the end of the first quarter of 1996, the Company could borrow up to a maximum of $10.0 million under an unsecured revolving credit arrangement with Fleet National Bank. On April 30, 1996, the termination date of this agreement was extended from March 31, 1998 until March 31, 1999. In addition, the Company exercised its unilateral right to reduce the maximum borrowings permitted to $5.0 million. There have been no borrowings under this credit facility in 1996. D. Interest paid during the first six months of 1996 and 1995 was $411,000 and $680,000, respectively. E. Income taxes paid were $1,639,000 and $483,000 in the first six months of 1996 and 1995, respectively. F. To help widen the distribution and enhance the marketability of the Company's capital stock, the Board of Directors in 1995 effected a two-for-one stock split in the form of a 100% stock dividend on July 7, 1995. All references in the financial statements to number of shares and per share amounts of the Company's capital stock have been retroactively restated to reflect the increased number of capital shares outstanding. G. Certain reclassifications were made for 1995 to report results consistent with 1996 reporting practices. -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales were $35.4 million in the second quarter and $70.4 million for the first six months, both about the same as in the corresponding periods last year after adjustments for the divestiture made at the end of 1995 and for currency rate changes. Although first-half 1996 sales were 11% above the adjusted level in the last half of 1995, sales did not increase from last year's comparable period, primarily because of slower growth in the computer market and lower sales of two product lines, power distribution components for cellular telephone base stations in Europe and ENDURr paper handling components. Both product lines are expected to show gains over last year in the second half. Sales of Polymer Products in the second quarter and first half of 1996 were 5% and 2%, respectively, above the levels in the same periods in 1995. In these periods, worldwide sales of PORONr urethane foam materials were at record levels for both Rogers and Rogers INOAC Corporation (RIC), the Company's 50% owned joint venture with the INOAC Corporation in Japan. Sales of PORON urethane materials for industrial applications, computer disk drives, and compressible printing plate mounting products were particularly strong. The Molding Materials Division also posted record sales for the quarter and for the first half. The Company is intensifying activities in foreign markets for the division's glass fiber- reinforced phenolic molding materials and, last month, approved a substantial increase in manufacturing capacity to come on line next year. The above mentioned record sales were partially offset by decreased sales in the Elastomer Components Unit. Sales of floats have been affected by slowness in the automotive industry and inventory corrections are being made by a large customer of Endurr paper handling components. Sales of Electronic Products for the second quarter and first six months decreased 7% and 2%, respectively, from the comparable 1995 periods, after adjusting for the year-end 1995 divestiture. Sales of European bus bars are at a lower level in 1996 due to inventory corrections by several customers and the weaker demand for power distribution components for cellular telephone base stations. Demand continues to increase for Rogers commercial high frequency laminate materials for wireless communications applications. As expected, this growth is more significantly reflected in units than in dollars, as we develop more high volume applications and, in some cases, replace our own higher-priced materials. A significant number of new applications are in the prototype and early production stage for the Company's RO4000 materials which offer high frequency performance, along with the ease of fabrication of conventional -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED printed circuit board materials. In June, the Company introduced the second product in the RO4000 materials family, RO4350 laminate, a flame retardant grade. Sales of flexible circuit materials were up in the second quarter and first half despite a decline in sales to parts of the disk drive market, and long-term trends remain quite favorable. Installation of the new flexible laminate production line has been completed as scheduled, and the line will become operational in the third quarter. Before-tax profits of $4.6 million for the second quarter and $8.9 million for the first half were the highest in Rogers history, up about 3% over last year's record results in the comparable periods. Net income of $3.5 million for the quarter, and $6.8 million for the half, was down slightly from last year in both periods because of the higher tax rate of 23% in 1996, compared to 17% in 1995. Based on a slightly lower number of shares, earnings per share for the second quarter of 1996 were $0.47, the same as in the comparable quarter last year. For the first half of 1996, earnings per share were $0.91, compared to $0.92 in the initial six-month period a year ago. Manufacturing profit as a percentage of sales in the first six months was 32% in both 1995 and 1996. Production cost improvements in certain domestic product lines and higher inventories offset a continuing decline in sales price per square foot of high frequency microwave materials resulting from the ongoing shift of microwave business to lower cost commercial applications. Selling and administrative expenses for the first six months of 1996 as a percentage of sales were approximately the same as in the previous year. Research and development expenses for the first half of 1996 were similar to 1995 expenses for the comparable period. Significant product and process development activities included the following: continued process and product development for RO4003 and RO4350 high frequency circuit materials; process improvement effort to enhance performance of RO3003 and RO3010 fluoropolymer laminates; process and formulation support to expand the number of Poron formulations which are both low outgassing and flame retardant; and improved compounding processes that result in higher strength phenolic materials. Durel Corporation, the Company's 50% owned joint venture with 3M, achieved record sales for its electroluminescent lamps and inverters in the second quarter. The strong sales and continuing improvements in manufacturing effectiveness led to a solid profit performance despite the ongoing high costs associated with the patent infringement lawsuit brought by Durel to protect its proprietary technology. -9- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Net interest income was recognized for the first half of 1996 compared to net interest expense in the corresponding 1995 period. This increase in earnings was due to lower borrowings. Total debt outstanding at June 30, 1996, was $4.8 million compared with $7.9 million at July 2, 1995. As of April 30, 1996, the Company can borrow up to a maximum of $5.0 million under an unsecured revolving credit agreement with Fleet National Bank. Amounts borrowed under this arrangement are to be paid in full by March 31, 1999. The one-year extension of the loan agreement and the reduction in the level of maximum borrowings was requested by the Company. There have been no borrowings under this credit facility in 1996. Other income less other charges was $1.4 million for the first six months of 1996 compared with $1.1 million for the same period in 1995. The somewhat lower amount in 1995 resulted primarily from a penalty of $180,000 for the prepayment of debt which was included in 1995 charges. Net cash provided by operating activities in the first half of 1996 totaled $5.1 million, compared with $8.6 million in the same 1995 period. The year-to-year decrease from 1995 to 1996 is primarily attributable to higher levels of inventories and accounts receivable. Capital expenditures in the first six months of 1996 and 1995 totaled $2.9 million and $3.6 million, respectively. Management expects that spending for 1996, primarily for capacity expansions and new process equipment, will approximate $8.0 million. It is anticipated that these expenditures will be financed with internally generated funds. In June, the Company issued 200,000 shares and received $2.7 million in cash through exercise of the Company's only outstanding stock purchase warrants. These warrants had been issued in 1989 in connection with a research and development arrangement. The Company is subject to federal, state and local laws and regulations concerning the environment and is currently engaged in proceedings involving a number of sites under these laws, usually as a participant in a group of potentially responsible parties (PRPs). The Company has been named as a PRP in six cases involving waste disposal sites, all of which are Superfund sites. Several of these proceedings are at a preliminary stage and it is impossible to estimate the cost of remediation, the timing and extent of remedial action which may be required by governmental authorities, and the amount of liability, if any, of the Company alone or in relation to that of any other PRPs. The Company also has been seeking to identify insurance coverage with respect to these matters. Where it has been possible to make a reasonable estimate of the Company's liability, a provision has been established. Insurance proceeds have only been taken into account when they have been confirmed by or received from the insurance company. -10- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Actual cost to be incurred in future periods may vary from these estimates. Based on facts presently known to it, the Company does not believe that the outcome of these proceedings will have a material adverse effect on its financial position. In addition to the above proceedings, the Company has been actively working with the Connecticut Department of Environmental Protection (CT DEP) related to certain polychlorinated biphenyl (PCB) contamination in the soil beneath a small section of cement flooring at its East Woodstock, Connecticut facility. The Company is developing a remediation plan with CT DEP. On the basis of estimates prepared by the Company's environmental engineers and consultants, the Company recorded a provision of approximately $0.9 million in 1994 for costs related to this matter. During 1995 and 1996, $0.5 million was charged against this provision. Management believes, based on facts currently available, that the implementation of the aforementioned remediation will not have a material additional adverse impact on earnings. The Company has not had any material recurring costs and capital expenditures relating to environmental matters, except as specifically described in the preceding statements. -11- PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Registrant held its Annual Meeting of Stockholders on April 16, 1996. The following members were elected to the Company's Board of Directors to hold office in the ensuing year: Nominee In Favor Withheld ------------------------------------------------- Leonid V. Azaroff 6,696,393 2,272 Leonard M. Baker 6,696,611 2,054 Wallace Barnes 6,696,195 2,470 Harry H. Birkenruth 6,695,435 3,230 Mildred S. Dresselhaus 6,696,535 2,130 Donald J. Harper 6,695,395 3,270 Gregory B. Howey 6,696,613 2,052 Leonard R. Jaskol 6,339,711 358,954 William E. Mitchell 6,695,613 3,052 Item 5. Other Information On July 30, 1996, the Company announced that it had signed a Letter of Intent with a subsidiary of Dow Corning Corporation to purchase its Bisco Products business. This agreement is expected to lead to a final purchase agreement before the end of the year. This acquisition would initially add less than 10% to the Company's sales. Bisco Products, based in Elk Grove Village, Illinois, is the leading manufacturer of silicone foam products. Bisco's silicone foams, which offer high temperature resistance and flame retardant properties, are used for gasketing, heat shielding, and cushioning, particularly in transportation, electric, and electronic applications. Bisco has been owned by a subsidiary of Dow Corning Corporation since 1991. The Company plans to continue Bisco Products' operations in Elk Grove Village as part of its High Performance Elastomers Division. -12- PART II - OTHER INFORMATION, CONTINUED Item 6. Reports on Form 8-K (b) There were no reports on Form 8-K filed for the six months ended June 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROGERS CORPORATION (Registrant) Donald F. O'Leary By s/DONALD F. O'LEARY Donald F. O'Leary Authorized Officer Corporate Controller Dated: August 5, 1996 -13- EX-27 2
5 1000 6-MOS DEC-29-1996 JUN-30-1996 20678 2249 22513 362 13280 67674 92595 56718 113636 25844 0 0 0 7369 62143 113636 70362 70362 47562 63058 (1380) 0 (177) 8861 2038 6823 0 0 0 6823 .91 .90
-----END PRIVACY-ENHANCED MESSAGE-----