-----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, VHjsK/6zDt1w3crpvSgmLMaK3b0LySb+cFS4dpU4VvgOpyvwFWfZchKTHyp1V9bs YQE2mUBn5Zg0M5+XEj7h4Q== 0000084748-96-000015.txt : 19961111 0000084748-96-000015.hdr.sgml : 19961111 ACCESSION NUMBER: 0000084748-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960929 FILED AS OF DATE: 19961108 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: 96657009 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 - 12 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 September 29, 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 October 28, 1996: Capital Stock, $1 Par Value--7,387,457 shares -1- ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q September 29, 1996 INDEX Page No. PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Nine Months Ended September 29, 1996 and October 1, 1995 3 Consolidated Balance Sheets-- September 29, 1996 and December 31, 1995 4-5 Consolidated Statements of Cash Flows-- Nine Months Ended September 29, 1996 and October 1, 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 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 12 -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: Nine Months Ended: ------------------------- ------------------------- September 29, October 1, September 29, October 1, 1996 1995 1996 1995 ------------- ---------- ------------- ---------- Net Sales $ 33,972 $ 32,943 $ 104,334 $ 106,782 Cost of Sales 23,461 23,049 71,023 73,212 Selling and Administrative Expenses 5,046 5,078 15,821 16,414 Research and Development Expenses 2,388 2,190 7,109 6,948 ---------- ---------- ---------- ---------- Total Costs and Expenses 30,895 30,317 93,953 96,574 ---------- ---------- ---------- ---------- Operating Income 3,077 2,626 10,381 10,208 Other Income less Other Charges 933 524 2,313 1,625 Interest Income, Net 134 112 311 31 ---------- ---------- ---------- ---------- Income Before Income Taxes 4,144 3,262 13,005 11,864 Income Taxes Expense: Federal and Foreign 698 311 2,486 1,523 State 125 125 375 375 ---------- ---------- ---------- ---------- Net Income $ 3,321 $ 2,826 $ 10,144 $ 9,966 ========== ========== ========== ========== Net Income Per Share: Primary $ .43 $ .36 $ 1.34 $ 1.28 ========== ========== ========== ========== Fully Diluted $ .43 $ .36 $ 1.33 $ 1.28 ========== ========== ========== ========== Shares Used in Computing: Primary 7,711,231 7,787,089 7,588,439 7,783,223 ========== ========== ========== ========== Fully Diluted 7,711,231 7,787,089 7,602,261 7,796,700 ========== ========== ========== ========== The accompanying notes are an integral part of the consolidated financial statements. -3- ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) September 29, 1996 December 31, 1995 ------------------ ----------------- Current Assets: Cash and Cash Equivalents $ 25,016 $ 13,111 Marketable Securities 958 1,565 Accounts Receivable, Net 21,313 18,439 Inventories: Raw Materials 6,881 5,267 In-Process and Finished 8,082 7,336 Less LIFO Reserve (1,791) (1,791) -------- -------- Total Inventories 13,172 10,812 Current Deferred Income Taxes 2,560 2,560 Assets Held for Sale, Net of Valuation Reserves of $513 and $2,032 (Note B) 5,138 8,809 Other Current Assets 606 470 -------- -------- Total Current Assets 68,763 55,766 -------- -------- Property, Plant and Equipment, Net of Accumulated Depreciation of $58,327 and $53,669 35,800 36,473 Investment in Unconsolidated Joint Venture 4,892 4,763 Intangible Pension Asset 3,479 3,479 Other Assets 2,287 2,035 -------- -------- Total Assets $115,221 $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) September 29, 1996 December 31, 1995 ------------------ ----------------- Current Liabilities: Accounts Payable $ 8,084 $ 8,338 Current Maturities of Long-Term Debt 600 600 Accrued Employee Benefits and Compensation 6,774 8,703 Other Accrued Liabilities 5,249 4,667 Accrued Income Tax Payable 2,131 1,084 Taxes, Other than Federal and Foreign Income 922 1,020 -------- -------- Total Current Liabilities 23,760 24,412 -------- -------- Long-Term Debt, less Current Maturities 4,200 4,200 Noncurrent Deferred Income Taxes 1,603 1,632 Noncurrent Pension Liability 3,223 3,223 Noncurrent Retiree Health Care and Life Insurance Benefits 6,192 5,942 Other Long-Term Liabilities 3,321 3,009 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 25,000,000; Issued and Outstanding Shares 7,378,710 and 7,135,090 7,379 7,135 Additional Paid-In Capital 29,166 26,286 Unrealized Gain(Loss) on Marketable Securities (16) -- Currency Translation Adjustment 2,117 2,545 Retained Earnings 34,276 24,132 -------- -------- Total Shareholders' Equity 72,922 60,098 -------- -------- Total Liabilities and Shareholders' Equity $115,221 $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) Nine Months Ended: --------------------------- September 29, October 1, 1996 1995 ------------- ---------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 10,144 $ 9,966 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 4,898 4,602 Benefit for Deferred Income Taxes 61 103 Equity in Undistributed Income of Unconsolidated Joint Ventures, Net (747) (333) Loss on Disposition of Property, Plant and Equipment 113 217 Noncurrent Pension and Postretirement Benefits 1,473 1,065 Other, Net (83) 28 Changes in Operating Assets and Liabilities Excluding Effects of Disposition of Assets: Accounts Receivable (2,881) (4,052) Inventories (2,452) (1,628) Prepaid Expenses (161) (97) Accounts Payable and Accrued Expenses (1,531) (2,821) ---------- --------- Net Cash Provided by Operating Activities 8,834 7,050 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (4,499) (5,373) Proceeds from Sale of Businesses 2,529 -- Proceeds from Sale of Property, Plant and Equipment 946 8 Investment in Unconsolidated Joint Ventures and Affiliates 408 -- Sales of Marketable Securities 607 -- ---------- --------- Net Cash Used in Investing Activities (9) (5,365) CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Repayments of Debt Principal -- (2,500) Proceeds from Sale of Capital Stock 3,124 879 ---------- --------- Net Cash Provided by (Used in) Financing Activities 3,124 (1,621) Effect of Exchange Rate Changes on Cash (44) 211 ---------- --------- Net Increase in Cash and Cash Equivalents 11,905 275 Cash and Cash Equivalents at Beginning of Year 13,111 13,851 ---------- --------- Cash and Cash Equivalents at End of Quarter $ 25,016 $ 14,126 ========== ========= 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. The land and building in Mesa, Arizona, which were formerly included in Net Assets Held for Sale, were sold essentially at book value during the third quarter of 1996. 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 nine months of 1996 and 1995 was $500,000 and $800,000, respectively. E. Income taxes paid were $1,819,000 and $1,168,000 in the first nine months of 1996 and 1995, respectively. F. 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 Third quarter sales of $34.0 million, when adjusted for a divestiture at the end of 1995 and for currency rate changes, increased 9% over last year's third quarter sales. Sales in the first nine months of 1996, after adjustments, were modestly ahead of the comparable period last year. Due to somewhat softer market conditions, third quarter sales were below expectations for ENDUR(R) paper handling components in copier and laser printer applications, for flexible circuit materials used in personal computers, and for power distribution bus bars in Europe. Sales of Polymer Products in the third quarter and first nine months of 1996 were 11% and 5%, respectively, above the comparable periods in 1995. Worldwide sales of PORON(R) urethane foam materials continued their 1996 record-setting pace at both Rogers and Rogers INOAC Corporation (RIC), the Company's 50% owned joint venture in Japan. Increased sales were primarily driven by strong demand in industrial and printing markets. On July 30, 1996, the Company announced that it had signed a Letter of Intent to purchase Dow Corning Corporation's Bisco Products business based in Elk Grove Village, Illinois. Bisco Products is the leading manufacturer of silicone foam materials. These silicone foam products offer high temperature resistance and flame retardant properties for gasketing, heat shielding and cushioning, primarily in transportation, electrical, and electronic applications. On November 7, 1996, the Company announced that it had reached definitive agreement with Dow Corning to purchase the Bisco Products business. Pending appropriate approvals, the Company expects that the transaction will close at the end of the year. Sales of Electronic Products for the third quarter and first nine months increased 7% and 1%, respectively, from the comparable 1995 periods, after adjusting for the year-end 1995 divestiture. Sales of European power-distribution bus bars are at a lower level in 1996 due to weaker than anticipated demand in power electronics and cellular telephone base station applications. Hutchinson Technology Incorporated, the world leader in suspension assemblies for hard disk drives (HDD's), has selected the Company's adhesiveless flexible circuit material for a new generation of assemblies for magneto-resistive drives. This material is manufactured in Japan for the Company by Mitsui Toatsu Chemicals, Inc., under a technology license and cooperation agreement. The Company continues to invest heavily in bringing to market lower- cost high frequency materials for wireless communications applications. Management is encouraged by the strong reception these new microwave materials are receiving, especially the growing family of RO4000 laminates. To satisfy the demand and meet the Company's -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED price targets, new automated equipment is being installed, capacity is being expanded, and experienced people are being added to the organization to spur the growth of these products and solidify the Company's leadership position in microwave materials. Compared to the same periods last year, before tax profits rose 27% in the quarter and 10% for the nine months. Net income and earnings per share, reflecting a higher income tax rate in 1996, were up 18% and 19% respectively for the quarter and were up slightly for the nine months. After-tax profits reflect a 16% tax rate in 1995 and a 22% tax rate in 1996. These rates result from the use in 1995 of the Company's domestic tax loss carryforwards and the recognition in 1995 and 1996 of a significant amount of domestic tax credit carryforwards. Manufacturing profit as a percentage of sales in the first nine months of 1996 and 1995 was 32% and 31%, respectively. Production mix and production cost improvements in certain domestic product lines offset a continuing decline in sales price per square foot of high frequency microwave materials resulting from the ongoing shift of the microwave business to lower cost commercial applications. Selling and administrative expenses for the first nine months of 1996 as a percentage of sales were approximately the same as in the previous year. Research and development expenses for the first nine months of 1996 were about the same as in the comparable 1995 period. Significant product and process development activities included the following: continued process and product development for RO4003 and RO4350 high frequency circuit materials for commercial applications; process improvements to enhance performance of RO3003 and RO3010 fluoropolymer laminates also for commercial applications; 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. Year-to-date sales at Durel Corporation, the Company's 50% owned electroluminescent lamp joint venture with 3M, are running almost 20% higher than in the comparable period in 1995. Sales records were set in the third quarter in each major market: automotive, watch and communication devices. These sales increases have led to improved profits at Durel despite the high ongoing costs associated with the patent infringement lawsuit brought by Durel to protect its proprietary technology. Net interest income for the first nine months of 1996 increased from the comparable 1995 period due mainly to lower borrowings and more interest income from the higher level of cash equivalents and marketable securities. Average debt outstanding during the first nine months was $4.8 million compared with $7.1 million for the corresponding 1995 period. -9- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED 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 were requested by the Company. There have been no borrowings under this credit facility in 1996. Other income less other charges was $2.3 million for the first nine months of 1996 compared with $1.6 million for the same period in 1995. The primary factor contributing to this increase was higher joint venture income. Net cash provided by operating activities in the first nine months of 1996 totaled $8.8 million, compared with $7.1 million in the same 1995 period. The year-to-year increase from 1995 to 1996 is attributable mainly to increased net income and other working capital changes. In 1996 and 1995, the Company made $1.6 million and $3.6 million contributions, respectively, to its union pension plan. Capital expenditures in the first nine months of 1996 and 1995 totaled $4.5 million and $5.4 million, respectively. Management expects that spending for 1996, primarily for capacity expansions and new process equipment, will approximate $7.0 million. It is anticipated that these expenditures will be financed with internally generated funds. In June 1996, the Company issued 200,000 shares and received $2.7 million in cash from the 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 6. Reports on Form 8-K (b) There were no reports on Form 8-K filed for the nine months ended September 29, 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) By s/DONALD F. O'LEARY Donald F. O'Leary Authorized Officer Corporate Controller Dated: November 8, 1996 -12- EX-27 2
5 1000 9-MOS DEC-29-1996 SEP-29-1996 25016 958 21597 284 13172 68763 94126 58326 115221 23760 0 0 0 7379 65543 115221 104334 104334 71023 93953 (2313) 0 (311) 13005 2861 10144 0 0 0 10144 1.34 1.33
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