-----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, FW5FnZqTuCBPTAdnafE2E62giQopcy9jXCmL9RUkPHoL8YwD7nMf1EYUP/OU/EWD hWRskgLpcrn7JFhFziLovQ== 0000084748-98-000026.txt : 19981119 0000084748-98-000026.hdr.sgml : 19981119 ACCESSION NUMBER: 0000084748-98-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981004 FILED AS OF DATE: 19981118 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: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04347 FILM NUMBER: 98754685 BUSINESS ADDRESS: STREET 1: P.O. BOX 188 STREET 2: ONE TECHNOLOGY DRIVE CITY: ROGERS STATE: CT ZIP: 06263-0188 BUSINESS PHONE: 860 774-96 10-Q 1 Total pages included - 14 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (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 4, 1998 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 November 1, 1998: Capital Stock, $1 Par Value-7,620,383 shares -1- ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q October 4, 1998 INDEX Page No. PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Nine Months Ended October 4, 1998 and September 28, 1997 3 Consolidated Balance Sheets-- October 4, 1998 and December 28, 1997 4-5 Consolidated Statements of Cash Flows-- Nine Months Ended October 4, 1998 and September 28, 1997 6 Supplementary Notes 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13 PART II--OTHER INFORMATION Item 6. Reports on Form 8-K 14 SIGNATURES 14 -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 4, September 28, October 4, September 28, 1998 1997 1998 1997 ------------------------- ------------------------- Net Sales $ 51,319 $ 47,752 $ 163,021 $ 137,880 Cost of Sales 38,409 33,359 120,884 96,808 Selling and Administrative Expenses 6,432 6,387 21,238 18,176 Research and Development Expenses 2,933 2,441 8,065 7,408 ----------------------- ------------------------ Total Costs and Expenses 47,774 42,187 150,187 122,392 ----------------------- ------------------------ Operating Income 3,545 5,565 12,834 15,488 Other Income less Other Charges 19 205 339 1,139 Interest Income, Net 230 172 592 473 ----------------------- ------------------------ Income Before Income Taxes 3,794 5,942 13,765 17,100 Income Taxes: Federal and Foreign 981 1,479 3,632 4,242 State 120 125 360 375 ----------------------- ------------------------ Net Income $ 2,693 $ 4,338 $ 9,773 $ 12,483 ======================= ======================== Net Income Per Share (Note G): Basic $ 0.36 $ 0.58 $ 1.29 $ 1.67 ======================= ======================== Diluted $ 0.34 $ 0.55 $ 1.23 $ 1.60 ======================= ======================== Shares Used in Computing (Note G): Basic 7,593,000 7,488,000 7,591,000 7,457,000 ======================= ======================== Diluted 7,837,000 7,883,000 7,914,000 7,808,000 ======================= ======================== 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 4, 1998 December 28, 1997 --------------- ----------------- Current Assets: Cash and Cash Equivalents $ 9,417 $ 18,791 Marketable Securities 1,369 2,764 Accounts Receivable, Net 32,342 28,658 Inventories: Raw Materials 9,285 10,262 In-Process and Finished 9,960 11,323 --------- --------- Total Inventories 19,245 21,585 Current Deferred Income Taxes 1,938 1,936 Assets Held for Sale, Net of Valuation Reserves of $492 in each period (Note B) 5,158 5,158 Other Current Assets 735 591 --------- --------- Total Current Assets 70,204 79,483 --------- --------- Property, Plant and Equipment, Net of Accumulated Depreciation of $71,383 and $63,856 72,669 52,201 Investment in Unconsolidated Joint Venture 5,359 5,373 Pension Asset 4,731 4,731 Goodwill and Other Intangibles, Net 14,253 14,500 Other Assets 2,546 2,152 --------- --------- Total Assets $ 169,762 $ 158,440 ========= ========= 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 4, 1998 December 28, 1997 --------------- ----------------- Current Liabilities: Accounts Payable $ 13,780 $ 16,771 Current Maturities of Long-Term Debt 600 600 Accrued Employee Benefits and Compensation 8,058 8,098 Accrued Income Taxes Payable 5,259 3,628 Taxes, Other than Federal and Foreign Income 1,471 839 Other Accrued Liabilities 6,122 4,047 --------- --------- Total Current Liabilities 35,290 33,983 --------- --------- Long-Term Debt, less Current Maturities 13,060 13,660 Noncurrent Deferred Income Taxes 2,417 2,311 Noncurrent Pension Liability 3,901 3,900 Noncurrent Retiree Health Care and Life Insurance Benefits 6,277 6,277 Other Long-Term Liabilities 4,467 3,931 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 50,000,000; Issued and Outstanding Shares 7,618,883 and 7,543,699 7,619 7,544 Additional Paid-In Capital 31,614 31,097 Less Treasury Stock (12,800 shares) (423) 0 Unrealized Gain/(Loss) on Marketable Securities 1 (4) Currency Translation Adjustment 1,184 1,160 Retained Earnings 64,355 54,581 --------- --------- Total Shareholders' Equity 104,350 94,378 --------- --------- Total Liabilities and Shareholders' Equity $ 169,762 $ 158,440 ========= ========= 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 4, September 28, 1998 1997 ------------------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 9,773 $ 12,483 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 6,983 5,668 Equity in Undistributed (Income) Loss of Unconsolidated Joint Ventures, Net (118) (803) Noncurrent Pension and Postretirement Benefits 1,034 939 Other, Net 156 502 Changes in Operating Assets and Liabilities Excluding Effects of Disposition of Assets: Accounts Receivable (3,269) (7,985) Inventories 2,659 (3,206) Prepaid Expenses (107) (141) Accounts Payable and Accrued Expenses 292 3,790 --------- --------- Net Cash Provided by Operating Activities 17,403 11,247 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (25,410) (9,721) Proceeds from Sales of Business -- -- Acquisition of Business (2,250) (1,294) Acquisition Escrow -- (10,759) Proceeds from Sale of Property, Plant & Equipment (97) 57 Proceeds from Sale of Marketable Securities 1,395 247 Purchase of Marketable Securities -- -- Investment in Unconsolidated Joint Ventures and Affiliates 333 386 --------- --------- Net Cash Provided by (Used in) Investing Activities (26,029) (21,084) CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds from Short and Long-Term Borrowings 290 12,259 Repayments of Debt Principal (603) (1,500) Acquisition of Treasury Stock (423) -- Proceeds from Sale of Capital Stock 592 830 --------- --------- Net Cash Provided by Financing Activities (144) 11,589 Effect of Exchange Rate Changes on Cash (604) 186 --------- --------- Net Increase in Cash and Cash Equivalents (9,374) 1,938 Cash and Cash Equivalents at Beginning of Year 18,791 18,675 --------- --------- Cash and Cash Equivalents at End of Quarter $ 9,417 $ 20,613 ========= ========= 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 28, 1997. B. Net Assets Held for Sale consist of land and a building in Chandler, Arizona, currently being leased to the purchaser of the Company's flexible interconnection business in 1993. C. In September 1997 the Company cancelled its $5.0 million unsecured revolving credit agreement with Fleet National Bank and replaced it with an unsecured multi-currency revolving credit agreement, also with Fleet. Under the new arrangement, the Company can borrow up to $15.0 million, or the equivalent in Belgian Francs and/or Japanese Yen. Amounts borrowed under this agreement are to be paid in full by September 19, 2002. The Company borrowed 390,207,039 Belgian Francs under the new arrangement to facilitate the Rogers Induflex acquisition in Belgium in September 1997. D. Interest paid during the first nine months of 1998 and 1997 was $794,000 and $500,000, respectively. E. Income taxes paid were $2,230,000 and $1,953,000 in the first nine months of 1998 and 1997, respectively. F. As of the beginning of 1998, the Company adopted Financial Accounting Standard Board Statement No. 130 (FAS No. 130), "Reporting Comprehensive Income". FAS No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or shareholders' equity. FAS No. 130 requires unrealized gains or losses on the Company's available-for-sale securities and foreign currency translation adjustments, which prior to adoption were reported separately in shareholders' equity, to be included in other comprehensive income. Prior year financial statements have been reclassified to conform to the requirements of Statement 130. During the third quarters of 1998 and 1997, total comprehensive income amounted to $3.5 million and $4.3 million, respectively. For the first nine months of 1998 and 1997, total comprehensive income amounted to $9.8 million and $11.5 million, respectively. -7- SUPPLEMENTARY NOTES, CONTINUED G. In 1997, the Financial Accounting Standards Board issued Statement No. 128 (FAS No. 128), "Earnings per Share." FAS No. 128 replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods presented have been restated to conform to the FAS No. 128 requirements. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended: Nine Months Ended: ------------------------ ------------------------- (In Thousands, Except October 4, September 28, October 4, September 28, Per Share Amounts) 1998 1997 1998 1997 ------------------------ ------------------------- Numerator: Net income $ 2,693 $ 4,338 $ 9,773 $ 12,483 Denominator: Denominator for basic earnings per share - weighted-average shares 7,593 7,488 7,591 7,457 Effect of stock options 244 395 323 351 Denominator for diluted earnings per share - adjusted weighted-average shares and assumed conversions 7,837 7,883 7,914 7,808 Basic earnings per share $ 0.36 $ 0.58 $ 1.29 $ 1.67 Diluted earnings per share $ 0.34 $ 0.55 $ 1.23 $ 1.60 H. The Company's fiscal year begins on the Monday nearest January 1 and ends on the Sunday nearest December 31. The fiscal year ending January 3, 1999 is a 53 week year and the additional week is included in the first quarter of 1998. -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales were $51.3 million in the third quarter and $163.0 million for the first nine months of 1998, up 7% and 18%, respectively, over the comparable periods in 1997. Combined Sales, which include one-half of the sales from Rogers two 50% owned joint ventures, were $58.4 million for the quarter and $185.3 million for the nine month period, up 4% and 14%, respectively, over the same periods in 1997. In the third quarter sales of flexible circuit materials manufactured by Rogers were down about 40% mainly because of depressed conditions in Southeast Asia and in the computer disk drive industry. Offsetting the drop was a substantial gain in sales of FLEX-I-MID(R) adhesiveless laminate materials supplied to us by Mitsui Chemicals, Inc. and sold to Hutchinson Technology Incorporated for suspension assemblies used in advanced disk drives. Other Rogers product lines were either about the same or down modestly from the third quarter last year. Sales of Polymer Materials in the third quarter were 2% below the third quarter of 1997. Sales for the first nine months of 1998 were 6% above the same period of 1997. A new application for NITROPHYL(R) floats for fuel level sensing in propane tanks contributed to substantial sales growth at the Elastomer Components Unit during the first nine months of 1998. The moldable composites business, bolstered by increasing sales to Europe, and with the recent addition of a major new U. S. customer for electrical commutator materials is on course to achieve record sales for the year. The major expansion completed in 1997 is now effectively supporting the growth of moldable composites in Europe and in the U.S. Sales of Electronic Materials for the third quarter and first nine months increased 18% and 33%, respectively, from the comparable 1997 periods despite the decline in sales of the flexible circuit materials manufactured in Chandler, Arizona. Sales by the recently acquired Induflex unit and sales of FLEX-I-MID material to Hutchinson Technology Incorporated accounted for much of this increase. In the third quarter, the Microwave Materials Division had record sales which were made possible by the completion and startup of its manufacturing facility in Arizona. This new facility not only substantially increases the Company's capacity to make high frequency laminates, but now the Company is able to manufacture, rather than purchase a critical material used in this product line. In addition, in Ghent, Belgium, installation of the microwave laminates production line is proceeding about on schedule, with startup expected to begin late in the fourth quarter. These major investments will place Rogers in an even stronger position to serve the fast growing worldwide wireless communications market. Over the past several years, Rogers has intensified its sales and marketing activities in Europe. This effort is now paying off handsomely. Sales in Europe for all product lines, other than those of the recently acquired Induflex business, increased 22% in local currency during the first nine months of the year. Induflex, which was acquired at the end of September, 1997, currently -9- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED manufactures thin aluminum and copper laminates, primarily for shielding electromagnetic and radio frequency interference. The Company has begun to broaden the Induflex product range and plans to increase sales in a number of new, higher margin application areas. Profits before tax of $3.8 million for the third quarter and $13.8 million for the first nine months of 1998 were down 36% and 20%, respectively, from the same periods in 1997. Net income of $2.7 million for the third quarter and $9.8 million for the first nine months were down 38% and 22%, respectively. Earnings per share (diluted) for the third quarter this year were $0.34, down from $0.55 in the same period last year. For the first nine months of 1998, earnings per share (diluted) were $1.23 compared to $1.60 in the initial nine-month period a year ago. Manufacturing profit as a percentage of sales in the first nine months of 1998 and 1997 was 26% and 30%, respectively. This comparative profit margin continues to be negatively impacted by the lower percentage of sales earned on the resale of the FLEX-I-MID material as contrasted with profit margins on the Company's own manufactured materials. In addition, only relatively modest profits were earned by the two operations that were acquired last year, the Bisco silicone foam business and the Induflex unit in Europe. Both acquisitions have excellent future prospects, but are still in the early stages of integration into the Company. Also, in the third quarter, the major expansions and startup activities for microwave materials and PORON(R) materials reduced profitability. Selling and administrative expenses for the first nine months of 1998 increased in total dollars, but as a percentage of sales were approximately the same as the comparable period in the previous year. The increase in dollars primarily reflects steps taken to strengthen the internal organization and to improve information systems. Research and Development expense in the first nine months of 1998 increased 3% over the comparable 1997 period. Major development activities in Electronic Materials included process and product improvements to the RO3000(TM) and RO4000(R) high frequency circuit laminate materials, which are designed for use in high volume, low cost commercial wireless communication applications. In flexible circuit materials, development efforts focused on new material technology, improved adhesives and improved processing in the Company's plant and at customers' facilities. Polymer Materials activity continue to include the commercialization of a slow rebound PORON urethane material for the foot comfort market, as well as improvements to a variety of other PORON materials for industrial and printing applications. New ENDUR(R) component formulations are being developed to provide improved friction properties and longevity in document handling applications. Finally, higher strength phenolic composites continue to receive technical support as does improved cure monitoring of phenolic compounds which should lead to improved processing by customers. -10- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED The Company's core technical capabilities in polymers, fillers and adhesion continued to improve with these specialized technologies now applied to immediate as well as longer term development tasks. Net interest income for 1998 increased from 1997 due mainly to a tax interest refund received from the Internal Revenue Service. At the end of the quarter, the Company acquired the dampening sleeve business of Imation Corp., formerly a business of 3M. Dampening sleeves are used in lithographic printing. The acquisition complements the Company's existing line of R/bak(R) compressible plate mounting materials for flexography. This small acquisition will also take advantage of the Company's existing capabilities in nonwoven products, the basic material used in dampening sleeves and will permit better utilization of the Rogers, Connecticut facility. Although the dampening sleeve business is mature, the Company's familiarity with nonwoven materials and with the graphic arts industry should contribute to the quick and profitable integration of this business into the Company. As of September 1997, the Company can borrow up to $15.0 million or the equivalent in Belgian Francs and/or Japanese Yen under an unsecured multi- currency revolving credit agreement with Fleet National Bank. Amounts borrowed under this agreement are to be repaid in full by September 19, 2002. The Company has borrowed 390 million Belgian Francs under this agreement as of October 4, 1998. Other income less other charges was $0.3 million for the first nine months of 1998 compared with $1.1 million for the same period in 1997. This change is attributable to lower gains on sales of assets and to a decline in joint venture and royalty income. Durel Corporation, the joint venture with 3M, which manufactures electroluminescent lamps, is making slower progress than anticipated in shifting its sales and manufacturing toward the high volume, low price demands of the wireless communications market. A new judge has been appointed for the patent infringement lawsuit brought by Durel to protect its proprietary technology, and Rogers is hopeful that a trial will take place within the next six months. Subsequent to the end of the third quarter, the U. S. District Court in Phoenix, Arizona made several important rulings mainly in favor of Durel. Rogers INOAC Corporation (RIC), the joint venture with INOAC Corporation, continues to deal with changes in the disk drive industry and is being hurt by economic conditions in Japan and Southeast Asia. Net cash provided by operating activities in the first nine months of 1998 totaled $17.4 million compared with $11.2 million in the comparable 1997 period. This difference is primarily attributable to the change in the level of inventories and receivables. -11- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Capital expenditures totaled $25.4 million and $9.7 million for the first nine months of 1998 and 1997, respectively. More than half of 1998 spending is related to expansion projects in the Microwave Materials Division and the Poron Materials Unit. Management expects that spending for 1998, primarily for capacity expansions, new process equipment, and new information systems capability will total about $31 million, nearly double the amount spent in 1997. It is anticipated that the spending will be financed with internal funds. Management believes that in the near term internally generated funds and the Fleet National Bank credit facility will be sufficient to meet the needs of the business. The Company continually reviews and assesses its lending relationships. The year 2000 issue is the result of computer programs using two digits rather than four to define the applicable year. Such software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in system failures or miscalculations leading to disruptions in a company's activities and operations. If a company, its significant customers, or suppliers fail to make necessary modifications and conversions on a timely basis, the year 2000 issue could have a material adverse effect on company operations. The Company is confident that its own internal systems are Year 2000 compliant, or planned up-grades will be in place. Although the Company is not aware of any material operational issues or costs associated with preparing its internal systems for the Year 2000, there can be no assurance that the Company will not experience unanticipated negative consequences and /or material costs caused by undetected errors or defects in the technology used in its internal operating systems which are composed predominately of third party software and hardware technology. The Company is in the process of determining the impact those parties that are not Year 2000 compliant may have on the operation of the Company primarily through the use of questionnaires. Non-compliance by any of the Company's major distributors, suppliers, customers, vendors, or financial organizations could result in business disruptions that could have a material adverse affect on the Company's results of operations, liquidity and financial condition. The Company plans on developing a contingency plan once it has completed its assessment of significant third party compliance. The contingency plan will be developed to minimize the Company's exposure to work slowdowns or business disruptions and any adverse affects on the Company's results of operations. 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. The Company is currently involved as a participant in various groups of potentially responsible parties (PRPs) in four cases involving waste disposal sites, all of which are Superfund sites. In addition, the Company has recently received a notice from the U.S. Environmental Protection Agency concerning the Company's alleged minor involvement with -12- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED another waste disposal site, which is also a Superfund site. 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. Actual costs 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 (CTDEP) related to certain polychlorinated biphenyl (PCB) soil contamination beneath a section of concrete flooring in a basement area of its Woodstock, Connecticut facility. The Company and the CTDEP are in the last stages of developing an action plan for the final phase of remediation of contaminated soils at that site. On the basis of estimates prepared by environmental engineers and consultants, the Company recorded a provision of approximately $900,000 in 1994 and based on updated estimates provided an additional $700,000 in 1997 for costs related to this matter. During 1995, $300,000 was charged against this provision and $200,000 was charged in both 1996 and 1997. Management believes, based on facts currently available, that the implementation of the aforementioned remediation will not have a material additional adverse impact on earnings. In this same matter, the United States Environmental Protection Agency (EPA) originally sought an administrative penalty of $227,000, which was later changed to $300,000. The EPA has alleged that the Company improperly disposed of PCBs. An administrative law judge found the Company liable for this alleged disposal and assessed a penalty of $281,000. The Company vigorously disputes the EPA allegations and has appealed the administrative law judge's findings and penalty assessment to the EPA Environmental Appeals Board. This appeal has not yet been ruled on. The Company has not had any material recurring costs and capital expenditures relating to environmental matters, except as specifically described in the preceding statements. Statements in this report that are not strictly historical may be deemed to be "forward-looking" statements which should be considered as subject to the many uncertainties that exist in the Company's operations and environment. These uncertainties, which include economic conditions, market demand and pricing, competitive and cost factors, and the like, are incorporated by reference in the Rogers Corporation 1997 Form 10-K filed with the Securities and Exchange Commission. Such factors could cause actual results to differ materially from those in the forward-looking statements. -13- PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) List of Exhibits: (27) Financial Data Schedule (b) There were no reports on Form 8-K filed for the three months ended October 4, 1998. 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 18, 1998 -14- EX-27 2
5 1000 9-MOS JAN-03-1999 OCT-04-1998 9417 1369 32490 148 19245 70204 144052 71383 169762 35290 0 0 0 7619 96731 169762 163021 163021 120884 150187 339 0 (592) 13765 3992 9773 0 0 0 9773 1.29 1.23 This is basic earnings per share.
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