-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, RVH4DGx1LBYBkx7Q2015zu0LHsoeHHz9QNYX3AR9YW8Sc/F0A+4/RHwC31tdDHlO XHAuIswdbMZ8qZYGr3p9LA== 0000084748-94-000022.txt : 19940819 0000084748-94-000022.hdr.sgml : 19940819 ACCESSION NUMBER: 0000084748-94-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940703 FILED AS OF DATE: 19940816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROGERS CORP CENTRAL INDEX KEY: 0000084748 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94544584 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 ROGERS CORPORATION 2ND QUARTER 10-Q 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 July 3, 1994 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.) One Technology Drive, Rogers, Connecticut 06263 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 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 August 1, 1994: Capital Stock, $1 Par Value--3,502,757 shares -1- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q July 3, 1994 INDEX Page No. PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Six Months Ended July 3, 1994 and July 4, 1993 3 Consolidated Balance Sheets-- July 3, 1994 and January 2, 1994 4-5 Consolidated Statements of Cash Flows-- Six Months Ended July 3, 1994 and July 4, 1993 6 Supplementary Notes 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II--OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11-12 SIGNATURES 13 -2- [PAGE] 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: July 3, July 4, July 3, July 4, 1994 1993 1994 1993 Net Sales $ 34,995 $ 30,939 $ 69,000 $ 63,718 Cost of Sales 25,663 22,657 50,207 45,873 Selling and Administrative Expenses 5,139 4,293 10,253 9,741 Research and Development Expenses 1,669 1,732 3,313 3,408 Total Costs and Expenses 32,471 28,682 63,773 59,022 Operating Income 2,524 2,257 5,227 4,696 Other Income less Other Charges 314 163 345 145 Interest Expense, Net 349 789 720 1,547 Income Before Income Taxes 2,489 1,631 4,852 3,294 Income Taxes Expense: Federal and Foreign 63 18 121 40 State 37 1 73 1 Net Income $ 2,389 $ 1,612 $ 4,658 $ 3,253 Net Income Per Share: Primary $ 0.70 $ 0.51 $ 1.37 $ 1.04 Fully Diluted $ 0.68 $ 0.51 $ 1.34 $ 1.03 Average Shares Outstanding: Primary 3,436,342 3,140,550 3,405,722 3,127,321 Fully Diluted 3,673,501 3,145,975 3,656,992 3,144,162 The accompanying notes are an integral part of the consolidated financial statements.
-3- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) July 3, 1994 January 2, 1994 Current Assets: Cash and Cash Equivalents $ 5,310 $ 4,533 Accounts Receivable 19,180 15,008 Inventories: Raw Materials 4,273 3,432 In-Process and Finished 5,363 5,404 Less LIFO Reserve (808) (808) Total Inventories 8,828 8,028 Current Deferred Income Taxes 1,861 1,820 Net Assets Held for Sale (Note D) 6,785 6,785 Prepaid Expenses 457 668 Total Current Assets 42,421 36,842 Property, Plant and Equipment, Net of Accumulated Depreciation of $58,006 and $54,271 34,534 36,807 Investments in Unconsolidated Joint Ventures 3,342 3,051 Intangible Pension Asset 3,295 3,295 Other Assets 1,736 1,842 Total Assets $ 85,328 $ 81,837 The accompanying notes are an integral part of the consolidated financial statements. -4- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - CONTINUED LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in Thousands) July 3, 1994 January 2, 1994 Current Liabilities: Accounts Payable $ 8,715 $ 7,679 Current Maturities of Long-Term Debt 2,734 3,140 Accrued Employee Benefits and Compensation 4,966 5,296 Accrued Cost Reduction Charge 1,924 2,222 Accrued Interest 477 542 Other Accrued Liabilities 3,890 3,258 Taxes, Other than Federal and Foreign Income 1,027 1,546 Total Current Liabilities 23,733 23,683 Long-Term Debt, less Current Maturities 10,932 14,190 Noncurrent Deferred Income Taxes 2,164 2,055 Noncurrent Pension Liability 5,660 5,660 Noncurrent Retiree Health Care and Life Insurance Benefits 6,122 6,122 Other Long-Term Liabilities 2,402 2,236 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 25,000,000; Issued and Outstanding Shares 3,282,289 and 3,222,461 3,282 3,222 Additional Paid-In Capital 23,846 22,558 Equity Translation Adjustment 1,612 1,193 Retained Earnings 5,575 918 Total Shareholders' Equity 34,315 27,891 Total Liabilities and Shareholders' Equity $ 85,328 $ 81,837 The accompanying notes are an integral part of the consolidated financial statements. -5- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
Six Months Ended: July 3, July 4, 1994 1993 CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 4,658 $ 3,253 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 3,432 3,381 Equity in Undistributed (Income) Loss of Unconsolidated Joint Ventures - Net 407 (285) Other - Net 231 649 Changes in Operating Assets and Liabilities Excluding Effects of Acquisition and Disposition of Assets: Accounts Receivable (4,099) (3,191) Accounts Receivable from Unconsolidated Joint Ventures (568) 339 Inventories (792) 589 Prepaid Expenses 343 (58) Accounts Payable and Accrued Expenses (152) 4,064 Net Cash Provided by Operating Activities 3,460 8,741 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (1,979) (4,018) Proceeds from Sale of Business 360 7,634 Proceeds from Sale of Property, Plant and Equipment 1,235 95 Net Cash (Used In) Provided by Investing Activities (384) 3,711 CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds from Short and Long-Term Borrowings 1,250 6,956 Repayments of Debt Principal (4,887) (15,485) Net Increase in Repayments of Revolving Lines of Credit -- (3,552) Proceeds from Sale of Capital Stock 1,348 173 Net Cash Used in Financing Activities (2,289) (11,908) Effect of Exchange Rate Changes on Cash (10) 406 Net Increase in Cash and Cash Equivalents 777 950 Cash and Cash Equivalents at Beginning of Year 4,533 5,356 Cash and Cash Equivalents at End of Quarter $ 5,310 $ 6,306 The accompanying notes are an integral part of the consolidated financial statements.
-6- [PAGE] 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 January 2, 1994. B. Sales in 1994 include flexible circuit material sales to ADFlex Solutions, Inc., the company that purchased Rogers' flexible interconnections business in June 1993. C. In February 1994 the Company concluded an agreement to sell its U.S. power distribution business to Methode Electronics, Inc., a manufacturer of bus bar products based in Chicago, Illinois. In addition to an initial cash payment, the Company will receive royalties on sales for five years. This divestiture is essentially complete; the equipment has been sold and the plant, located in Mesa, Arizona, is being offered for sale. D. Net Assets Held for Sale consists primarily of the land and 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 Power Distribution Division. E. The Company has a revolving credit arrangement with Fleet Bank, N.A. which is currently a $15.0 million facility. At July 3, 1994, there were no borrowings under this arrangement. F. Interest paid to lenders during the first six months of 1994 and 1993 was approximately $815,000 and $2.1 million, respectively. G. Income taxes paid (refunded) were $188,000 and $(17,000) in the first six months of 1994 and 1993, respectively. -7- [PAGE] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Income in the second quarter and first half of 1994 was $2.4 million and $4.7 million, respectively, as compared to $1.6 million and $3.3 million in the same periods of 1993. Profits, both before and after taxes, were the highest for any second quarter and any initial six-month period in Rogers' history. Before-tax profits increased close to 50% in both the second quarter and in the first half over the comparable periods a year ago, primarily due to improved effectiveness in a number of areas and significantly lower interest expense. After-tax profits, shown in the accompanying statements, include only a minimal tax provision in each of the periods presented. The Company expects to use substantially all of its domestic tax loss carryforwards in 1994. In addition, there are approximately $6 million of tax credit carryforwards and other adjustments for which no tax benefit has been recorded. Recognition of tax benefits associated with these items is dependent on future taxable earnings. The Company currently anticipates a tax rate in the range of 10% - 20% for the full year 1995. Sales were 13% higher in the second quarter, and up 8% in the first half, compared to the same periods in 1993. However, after adjustment for divestiture related changes, sales volume was up more modestly in both periods. The sales increase was mainly attributable to greater market penetration as opposed to higher selling prices. Polymer Product sales increased by 7% in the first six months of 1994, compared to the same period in 1993. The revenue increase of this business segment was led by sales of moldable composite materials, which were up 17% in the second quarter and 14% for the first half over the comparable 1993 periods. These increases were based on strong automotive production, an increasing share of the electric motor commutator insulator market, and penetration of foreign markets. In addition, the Willimantic Division achieved record second quarter sales benefitting from strong sales of Endur (Registered Trademark) C-LE conductive rollers for laser printer applications and from strong nitrophyl float sales to the automotive market. These increases were offset somewhat by lower shipments of high performance elastomer materials by the Poron Materials Division, which were down 9% in the second quarter from the same period last year. These lower sales are primarily a reflection of inventory reductions by customers who because of our recent doubling of capacity, are once again being serviced with short lead times. Poron material sales are expected to return to higher levels in the second half. First half sales of Electronic Products increased 10% from the comparable period in 1993. This is primarily attributable to growing flexible circuit material sales for computer and data storage applications, which have helped offset declining sales to military customers. -8- [PAGE] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Manufacturing profit as a percentage of sales in the first six months of 1994 was 27%, compared to 28% during the same period in 1993. This decline reflects the impacts of the additional costs to double capacity in the Poron Materials Division and the change in sales mix within the Circuit Materials Group away from military applications to lower priced commercial applications. Selling and administrative expenses for the first half of 1994 grew at a slower rate than the sales increase reflecting the impact of continuing expense reduction efforts. Research and development expenditures decreased slightly from 1993, but were approximately 5% of sales in both years. The Company is continuing concentration on spending for materials-related projects. Net interest expense decreased significantly from the same six-month period of 1993, due primarily to a reduction in total borrowings. Total debt outstanding at July 4, 1993 was $23.3 million compared to $13.7 million at July 3, 1994, a decrease of $9.6 million. In July of 1994 shortly after the end of the second quarter, the Company's outstanding $4.5 million convertible subordinated notes were converted into 204,545 shares of capital stock, which lowered debt even further. Due to the lower borrowings, management expects 1994 interest expense will continue to decline. At July 3, 1994 other accrued liabilities were about the same as at the end of the first quarter of 1994. The increase over year-end 1993 is primarily attributable to two factors. Approximately $300,000 relates to reserves provided for employee severance costs of the U.S. power distribution business. The balance of the change is caused by our period accrual approach to a number of costs such as vacation and holiday pay, advertising, property taxes, professional services, etc. The actual payments for these costs are normally somewhat lower in the first six months of the year. This results in increased levels of accruals above the total at year-end. Net cash provided from operating activities in the first six months of 1994 was $3.5 million, compared to $8.7 million in the first half of 1993. This year-to- year decrease is mainly attributable to the increased levels of accounts payable and accrued expenses in 1993 and the increased levels of accounts receivable and inventory in 1994. The Company may borrow up to a maximum of $15 million under a revolving credit arrangement with Fleet Bank, N.A. Amounts borrowed under this arrangement are to be paid in full on April 14, 1996. Repayments on the revolving credit facility are necessary to the extent the Company's collateral decreases to a level which does not support borrowings under the facility, although this is not likely. Borrowings under the revolving credit facility are secured by virtually all of the Company's domestic assets other than real property and intellectual property. The Company had no borrowings under this arrangement at July 3, 1994. -9- [PAGE] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Capital expenditures in the first half of 1994 and 1993 were $2.0 million and $4.0 million, respectively. The higher level of spending in 1993 reflected the acquisition and related costs of the new Poron production line, which more than doubled capacity of the Poron Materials Division. The Company is subject to federal, state, and local regulations concerning the environment and is currently engaged in proceedings involving a number of sites under these laws. In each of these cases, Rogers is a participant in a group of potentially responsible parties (PRPs). 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 responsible parties. The Company also has been seeking to identify insurance coverage with respect to these matters. 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 condition. The Company has not had any material recurring costs and capital expenditures relating to the above environmental matters. -10- [PAGE] PART II - OTHER INFORMATION Item 4. Submission of Matters to Vote of Security Holders The Registrant held its Annual Meeting of shareholders on April 28, 1994. 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 2,734,010 202,374 Leonard M. Baker 2,662,145 274,239 Wallace Barnes 2,661,641 274,743 Harry H. Birkenruth 2,733,405 202,979 Mildred S. Dresselhaus 2,726,745 209,639 Donald J. Harper 2,662,941 273,443 Gregory B. Howey 2,662,445 273,939 Leonard R. Jaskol 2,733,414 202,970 William E. Mitchell 2,662,445 273,939 The results of the voting on additional items were as follows: Broker In Favor Opposed Abstained Non-Vote 1. To approve the Corporation's 1994 Stock Compensation Plan 2,212,518 290,471 22,820 464,475 2. To amend the Corporation's Restated Articles of Organization to increase the authorized Capital Stock, $1 par value per share to 25,000,000 shares 2,471,132 496,783 22,369 -- Item 6. Reports on Form 8-K (b) There were no reports on Form 8-K filed for the six months ended July 3, 1994. -11- [PAGE] EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Three Months Ended: Six Months Ended: ----------------------- --------------------- July 3, July 4, July 3, July 4, 1994 1993 1994 1993 ------------------------------------------------- 1. Net income $2,389,000 $1,612,000 $4,658,000 $3,253,000 2. Interest on convertible subordinated debentures, net of taxes* 113,000 -- 227,000 -- ------------------------------------------------- 3. Net income as adjusted $2,502,000 $1,612,000 $4,885,000 $3,253,000 ================================================= 4. Weighted average number of shares outstanding during period 3,269,230 3,111,061 3,252,721 3,109,248 5. Net effect of dilutive stock options - based on the treasury stock method using average market price 167,112 29,490 153,001 18,073 -------------------------------------------------- 6. Total weighted average number of shares and capital equivalent shares assumed outstanding 3,436,342 3,140,550 3,405,722 3,127,321 7. Additional net shares, issuable when market value at period end exceeds average market value during period 32,613 5,424 46,724 16,841 8. Assuming conversion of convertible subordinated debentures* 204,545 -- 204,545 -- -------------------------------------------------- 9. Shares assumed outstanding for computation of fully diluted earnings per share 3,673,501 3,145,975 3,656,992 3,144,162 ================================================== Net income per capital share (1 / 4) $.73 $.52 $1.43 $1.05 ================================================== Net income per capital share and capital share equivalent (1 / 6) $.70 $.51 $1.37 $1.04 ================================================== Net income per capital share assuming full dilution (3 / 9) $.68 $.51 $1.34 $1.03 ================================================== * In 1993, convertible subordinated debentures were not included in the computation of per share earnings because they did not lower fully diluted per share earnings. This calculation is submitted in accordance with Regulation S-K Item 601(b)(11). -12- [PAGE] 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 Assistant Controller Dated: August 16, 1994 -13- [PAGE] EX-27 2 ROGERS CORPORATION 2ND QTR 10-Q FDS
5 1,000 6-MOS JAN-01-1995 JUL-03-1994 5,310 0 19,180 0 8,828 42,421 34,534 58,006 85,328 23,733 0 3,282 0 0 31,033 85,328 69,000 69,000 50,207 63,773 (345) 0 720 4,852 194 4,658 0 0 0 4,658 1.37 1.34
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