-----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, H71Ww1f2QF63h/F2Ab3r4/T090kyFddcXrJxU7Hq9AZOa+QwgpDRJcC01EZcKHpm WbotF96zL5xs7js4TkfDSg== 0000084748-95-000016.txt : 19951102 0000084748-95-000016.hdr.sgml : 19951102 ACCESSION NUMBER: 0000084748-95-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951001 FILED AS OF DATE: 19951101 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: 95586444 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 October 1, 1995 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 (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 October 29, 1995: Capital Stock, $1 Par Value--7,132,696 shares -1- ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q October 1, 1995 INDEX Page No. PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Nine Months Ended October 1, 1995 and October 2, 1994 3 Consolidated Balance Sheets-- October 1, 1995 and January 1, 1995 4-5 Consolidated Statements of Cash Flows-- Nine Months Ended October 1, 1995 and October 2, 1994 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 6. Exhibits and Reports on Form 8-K 11 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: October 1, October 2, October 1, October 2, 1995 1994 1995 1994 ---------------------------------------------- Net Sales $ 32,943 $ 32,605 $ 106,782 $ 101,605 Cost of Sales 23,049 22,786 73,212 71,663 Selling and Administrative Expenses 5,078 4,714 16,414 14,967 Research and Development Expenses 2,190 2,349 6,948 6,912 ----------------------------------------------- Total Costs and Expenses 30,317 29,849 96,574 93,542 ----------------------------------------------- Operating Income 2,626 2,756 10,208 8,063 Other Income less Other Charges 524 270 1,625 535 Interest Income (Expense), Net 112 (137) 31 (857) ----------------------------------------------- Income Before Income Taxes 3,262 2,889 11,864 7,741 Income Taxes Expense: Federal and Foreign 311 158 1,523 279 State 125 35 375 108 ---------------------------------------------- Net Income $ 2,826 $ 2,696 $ 9,966 $ 7,354 ============================================== Net Income Per Share: Primary $ .36 $ .37 $ 1.28 $ 1.05 ============================================== Fully Diluted $ .36 $ .37 $ 1.28 $ 1.04 ============================================== Average Shares Outstanding: Primary 7,787,089 7,371,684 7,783,223 6,998,858 =============================================== Fully Diluted 7,787,089 7,389,026 7,796,700 7,048,610 =============================================== The accompanying notes are an integral part of the consolidated financial statements. -3- ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) October 1, 1995 January 1, 1995 --------------------------------- Current Assets: Cash and Cash Equivalents $ 14,126 $ 13,851 Accounts Receivable 20,563 16,495 Inventories: Raw Materials 5,407 4,311 In-Process and Finished 5,924 5,302 Less LIFO Reserve (1,056) (1,056) ---------------------------------- Total Inventories 10,275 8,557 Net Assets Held for Sale (Note B) 6,562 6,687 Other Current Assets 1,032 1,596 ---------------------------------- Total Current Assets 52,558 47,186 ---------------------------------- Property, Plant and Equipment, Net of Accumulated Depreciation of $57,316 and $52,464 35,041 34,061 Investments in Unconsolidated Joint Ventures 4,584 4,072 Intangible Pension Asset 2,365 2,365 Other Assets 1,640 1,759 ---------------------------------- Total Assets $ 96,188 $ 89,443 ================================== 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) October 1, 1995 January 1, 1995 ---------------------------------- Current Liabilities: Accounts Payable $ 8,128 $ 7,778 Current Maturities of Long-Term Debt 600 1,225 Accrued Employee Benefits and Compensation 3,946 6,646 Other Accrued Liabilities 6,154 5,849 Taxes, Other than Federal and Foreign Income 400 984 ---------------------------------- Total Current Liabilities 19,228 22,482 ---------------------------------- Long-Term Debt, less Current Maturities 4,800 6,675 Noncurrent Deferred Income Taxes 1,623 1,520 Noncurrent Pension Liability 4,497 4,497 Noncurrent Retiree Health Care and Life Insurance Benefits 6,560 6,560 Other Long-Term Liabilities 2,917 2,584 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 25,000,000; Issued and Outstanding Shares 7,132,696 and 7,045,270 7,133 7,045 Additional Paid-In Capital 25,901 25,110 Equity Translation Adjustment 2,512 1,918 Retained Earnings 21,017 11,052 --------------------------------- Total Shareholders' Equity 56,563 45,125 --------------------------------- Total Liabilities and Shareholders' Equity $ 96,188 $ 89,443 ================================= 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: ---------------------- October 1, October 2, 1995 1994 ---------------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 9,966 $ 7,354 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 4,602 5,000 Equity in Undistributed (Income) Loss of Unconsolidated Joint Ventures - Net (333) 28 Loss on Disposition of Property, Plant & Equipment 217 30 Other - Net 1,196 (449) Changes in Operating Assets and Liabilities Excluding Effects of Acquisition and Disposition of Assets: Accounts Receivable (4,052) (4,579) Inventories (1,628) (105) Prepaid Expenses (97) 283 Accounts Payable and Accrued Expenses (2,821) (925) -------------------- Net Cash Provided by Operating Activities 7,050 6,637 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (5,373) (2,851) Proceeds from Sale of Businesses -- 909 Proceeds from Sale of Property, Plant and Equipment 8 1,664 ------------------- Net Cash Used in Investing Activities (5,365) (278) CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Repayments of Debt Principal (2,500) (4,903) Proceeds from Sale of Capital Stock 879 1,667 ------------------- Net Cash Used in Financing Activities (1,621) (3,236) Effect of Exchange Rate Changes on Cash 211 130 ------------------- Net Increase in Cash and Cash Equivalents 275 3,253 Cash and Cash Equivalents at Beginning of Year 13,851 4,533 ------------------ Cash and Cash Equivalents at End of Quarter $14,126 $7,786 ================== 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 January 1, 1995. B. Net Assets Held for Sale consist primarily of 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 business of the Power Distribution Division. C. The Company had a $15.0 million secured revolving credit arrangement with Fleet Bank, N.A. at the end of the first quarter 1995. This secured arrangement was replaced with a new unsecured arrangement with Fleet Bank, N.A. on April 13, 1995, for a maximum of $10.0 million of borrowings. There have been no borrowings under this new arrangement. D. Interest paid to lenders during the first nine months of 1995 and 1994 was approximately $800,000 and $1,800,000, respectively. E. Income taxes paid were $1,168,000 and $290,000 in the first nine months of 1995 and 1994, respectively. F. To help widen the distribution and enhance the marketability of the Corporation's Capital Stock, the Board of Directors, at its June 22nd meeting, authorized a 2 for 1 stock split for shareholders of record on July 7th, payable on July 28th. -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales of $32.9 million for the third quarter of 1995 were only slightly above the comparable period in 1994. For the first nine months, sales totaled $106.8 million, and after adjustment for currency rate changes and past divestitures, increased 9% over the same period in 1994. These sales gains were mainly the result of unit volume increases. Although sales in the third quarter are usually below the rate in the first half of the year because of certain seasonal factors, this past quarter also had some unexpected, significant customer inventory corrections. Sales, however, are quite strong in the Company's circuit material products for the communications and computer and peripheral markets. Flexible laminate material sales are at record levels and the Company is experiencing growing demand for its newer, lower-priced circuit materials for the wireless communications markets. Sales of Polymer Products decreased 2% for the third quarter but increased 6% for the first nine months of 1995, compared with the same periods in 1994. The largest sales gain in this segment during the first months of 1995 has been realized from molding materials, which are sold in both the U.S. and European automotive markets. Sales of Electronic Products for the third quarter and for the first nine months increased 2% and 13%, respectively, compared with the same periods last year, after adjusting for divestitures and currency rate changes. Sales of flexible circuit material for disk drives and laptop computers have contributed to a significant portion of this segment's sales increase. Additionally, the Company's position as an important supplier of materials for wireless communications is becoming stronger. Sales of RO3000(TM) commercial microwave laminate, introduced in 1994, are growing nicely, and widespread interest is developing for RO4000(TM) microwave laminate introduced earlier this year. The Company's customers are starting to convert to its lower priced materials for some applications. Compared with the same periods last year, before-tax profits rose 13% in the quarter and 53% for the nine months. Net income, incorporating a higher income tax rate in 1995, was up 5% for the quarter and gained 36% for the nine months. Earnings per share were slightly below last year's for the quarter but were 22% higher year to date. Better profits for the nine month period were attributable to higher sales, improved operating margins, lower net interest expense, and increased royalty and other income. Manufacturing profit as a percentage of sales in the first nine months increased from 29% in 1994 to 31% in 1995. This increase was attributable to stronger manufacturing margins in several operations. Selling and administrative expenses for the first nine months of 1995 as a percentage of sales were approximately the same as the previous year. Research and development expenses for the first nine months of 1995 were at about the same level as the comparable period in 1994. Three new circuit materials aimed at the wireless communications market were introduced during the first quarter of 1995, and technical support activity and the development of lower cost processes is continuing and is a key consideration in the market positioning of these new circuit materials. Durel Corporation, the Company's 50% owned electroluminescent lamp joint venture with 3M, had lower than expected sales in the quarter due to inventory corrections by a major customer. Management understands this situation will continue at least through the fourth quarter. As a result, the Company's 50% share of Durel's earnings should not have a significant impact on the Company's earnings for the full year 1995. Important patents have been issued recently which should solidify the joint venture's leadership position in electroluminescent lamps. -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED During the quarter, the Company announced the signing of a memorandum of understanding for the sale of its small microwave printed circuit board fabricating operation, the Soladyne Division, to Merix Corporation, one of the Company's important high frequency materials customers. This action, for which a modest gain will be realized at closing, completes the planned divestiture of the Company's electronic components businesses and allows the Company to concentrate fully on its growing line of high performance specialty materials. To intensify focus on both operating improvements and sales growth in Rogers elastomer product lines, two divisions were combined into a new High Performance Elastomers Division in July and a new Consumer and Printing Marketing Center was formed to concentrate initially on sales of PORON materials. Net interest expense for the first three quarters of 1995 decreased substantially from the comparable 1994 period because of lower borrowings. The significant increase in cash and cash equivalents produced investment income which exceeded interest costs for the third quarter and the first nine months of 1995. During the second quarter, debt of $2.5 million bearing an interest rate of 10.5% was prepaid. The prepayment expense of $180,000 is reflected in Other Income less Other Charges. Total debt outstanding at October 1, 1995, was $5.4 million compared with $7.9 million at October 2, 1994. As of April 13, 1995, the Company can borrow up to a maximum of $10.0 million under a new unsecured revolving credit arrangement with Fleet Bank, N.A. Amounts borrowed under this arrangement are to be paid in full by March 31, 1998. The Company had no borrowings under revolving credit arrangements at October 1, 1995. Net cash provided by operating activities in the first nine months of 1995 totaled $7.1 million, compared with $6.6 million in the same 1994 period. The year-to-year increase is attributable mainly to increased net income and other working capital changes. In the third quarter the Company made a $3.0 million contribution to its union pension plan. Capital expenditures in the first three quarters of 1995 and 1994 totaled $5.4 million and $2.9 million, respectively. Management expects that spending for 1995, 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. Other income less other charges was $1.6 million for the first nine months of 1995 compared with $0.5 million for the same period in 1994. Royalty payments related to the 1994 sale of the U.S. power distribution business had a significant positive impact on 1995 results. Quarterly royalty payments related to this sale are expected to be included in the Company's statements at decreasing rates over the next four years. 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 potentially responsible parties. 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. 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 condition. -9- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED In addition to the above proceedings, the Company has been actively working with the Connecticut Department of Environmental Protection (CT DEP) related to certain 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. Management believes, based on facts currently available, that the implementation of the aforementioned remediation will not have a material additional adverse impact on earnings. At October 1, 1995, other accrued liabilities were greater than October 2, 1994, primarily because of environmental reserves. The Company has not had any material recurring costs and capital expenditures relating to environmental matters, except as specifically described in the preceding statements. -10- 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 October 1, 1995. EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Three Months Ended: Nine Months Ended: ---------------------------------------------- October 1, October 2, October 1, October 2, 1995 1994 1995 1994 ---------------------------------------------- 1. Net income $2,826,000 $2,696,000 $9,966,000 $7,354,000 ============================================== 2. Weighted average number of shares outstanding during period 7,125,208 7,017,068 7,093,633 6,676,652 3. Net effect of dilutive stock options - based on the treasury stock method using average market price 592,674 354,616 592,415 322,206 4. Additional net shares due to windfall tax benefit - based on average market price 69,207 -- 97,175 -- ---------------------------------------------- 5. Total weighted average number of shares and capital equivalent shares assumed outstanding 7,787,089 7,371,684 7,783,223 6,998,858 6. Additional net shares, issuable when market value at period end exceeds average market value during period -- 17,342 (4,008) 49,752 7. Adjustment of additional net shares due to windfall tax benefit - based on higher of market or closing price -- -- 17,485 -- ----------------------------------------------- 8. Shares assumed outstanding for computation of fully diluted earnings per share 7,787,089 7,389,026 7,797,700 7,048,610 =============================================== Net income per capital share (1 / 2) $.40 $.38 $1.40 $1.10 =============================================== Net income per capital share and capital share equivalent (1 / 5) $.36 $.37 $1.28 $1.05 =============================================== Net income per capital share assuming full dilution (1 / 8) $.36 $.37 $1.28 $1.04 =============================================== This calculation is submitted in accordance with Regulation S-K Item 601(b)(11). -11- 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 Controller Dated: November 1, 1995 -12- EX-27 2
5 1000 9-MOS DEC-31-1995 OCT-01-1995 3,228 10,898 20,563 0 10,275 52,558 92,357 57,316 96,188 19,228 0 7,133 0 0 49,430 96,188 106,782 106,782 73,212 96,574 (1,625) 0 (31) 11,864 1,898 9,966 0 0 0 9,966 1.28 1.28
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