EX-99 4 a4534552ex992.txt EXHIBIT 99.2 Exhibit 99.2 ROGERS CORPORATION Introduction to Unaudited Pro Forma Condensed Combined Financial Statements On September 30, 2003, Rogers Corporation (the "Company") and 3M Company ("3M") executed a Stock Purchase Agreement (the "Purchase Agreement") pursuant to which the Company acquired 3M's 50 percent interest in Durel Corporation ("Durel"), a 50/50 joint venture established between the Company and 3M in 1988. Pursuant to the Purchase Agreement, on September 30, 2003 3M delivered to the Company 1,000 of its $.01 per share par value common shares in Durel, representing 50 percent of the 2,000 outstanding common shares of Durel. The Company delivered to 3M $26 million in cash consideration, which was funded from the Company's available working capital. The unaudited pro forma combined balance sheet has been prepared as if the acquisition occurred on September 28, 2003, and the unaudited pro forma combined statements of income have been prepared as if the acquisition occurred on December 29, 2002 for the nine months ended September 28, 2003 and as if it had occurred on December 31, 2001 for the year ended December 29, 2002. These unaudited combined financial statements illustrate the pro forma effect on the Company's financial results as if the Company acquired 3M's 50 percent interest in Durel on the dates previously noted. The unaudited pro forma combined financial information set forth below reflects pro forma adjustments that are based upon available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma combined financial information does not purport to represent the Company's results of operations or financial position that would have resulted had the Durel acquisition been consummated as of the dates or for the periods indicated. Additionally, the pro forma combined statements of income should not be considered indicative of expected future results. The Durel acquisition has been accounted for by the purchase method of accounting. The pro forma information below sets forth the preliminary allocation of the purchase price for the Durel acquisition, which may be adjusted as a result of the finalization of certain valuations. Management does not expect such adjustments to be material. The unaudited pro forma combined financial statements and accompanying notes should be read in conjunction with the historical consolidated financial statements of the Company and Durel included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2002 and the historical consolidated financial statements of the Company included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2003, both filed with the Securities and Exchange Commission, and the additional financial statements of Durel included in Item 7(a) of this Current Report.
Exhibit 99.2 Rogers Corporation Unaudited Pro forma Condensed Combined Balance Sheet As of September 28, 2003 ($ amounts in thousands) Rogers Durel Pro Forma Pro Forma Historical Historical Adjustments Combined ----------------- ---------------- ------------------- ----------------- Cash and Cash Equivalents $ 35,273 $ 8,344 $ (26,000) (c) $ 17,617 Accounts Receivable, net 43,480 8,333 186 (a) 51,999 Inventories, net 18,135 4,632 2,209 (a) 24,976 Other Current Assets 10,133 98 (302) (h) 9,929 ----------------- ---------------- ------------------- ----------------- Total Current Assets 107,021 21,407 (23,907) 104,521 Property Plant and Equipment, net 104,479 19,355 2,000 (a) 125,834 Goodwill and Other Intangibles, net 22,204 - 2,168 (b) 24,372 Investments in Joint Ventures 23,145 200 (13,551) (d) 9,794 Other Long-Term Assets 24,245 2,426 (563) (a) 26,108 ----------------- ---------------- ------------------- ----------------- Total Assets $ 281,094 $ 43,388 $ (33,853) $ 290,629 ================= ================ =================== ================= Accounts Payable And Other Accrued Liabilities $ 27,331 $ 7,600 $ 448 (a) $ 35,379 Accrued Income Taxes Payable 13,169 782 - 13,951 ----------------- ---------------- ------------------- ----------------- Total Current Liabilities 40,500 8,382 448 49,330 Non-current Deferred Tax Liability 8,868 1,439 (2,534) (i) 7,773 Other Non-current Liabilities 25,523 - 1,800 (a) 27,323 ----------------- ---------------- ------------------- ----------------- Common Shares, $1 par value 50,000,000 shares authorized, 16,175,689 shares issued 16,176 - - 16,176 Additional Paid-in Capital 38,584 7,040 (7,040) (d) 38,584 Retained Earnings 165,335 26,527 (26,527) (d) 165,335 Accumulated Other Comprehensive Loss (1,959) - - (1,959) Treasury Shares (330,516 shares), at cost (11,933) - - (11,933) ----------------- ---------------- ------------------- ----------------- Total Shareholders' Equity 206,203 33,567 (33,567) 206,203 ----------------- ---------------- ------------------- ----------------- Total Liabilities and Shareholders' Equity $ 281,094 $ 43,388 $ (33,853) $ 290,629 ================= ================ =================== ================= The accompanying notes are an integral part of these pro forma financial statements.
Exhibit 99.2 Rogers Corporation Unaudited Pro forma Condensed Combined Statement of Income For the nine months ended September 28, 2003 ($ and share amounts in thousands, except per share amounts) Rogers Durel Pro forma Pro forma Historical Historical Adjustments Combined ----------- ----------- --------------- ------------ Net Sales $ 157,534 $51,331 $ - $208,865 Cost of Sales 107,614 29,243 1,316 (e) 138,173 Selling and Administrative Expenses 29,085 6,377 - 35,462 Research and Development 9,132 2,410 - 11,542 ----------- ----------- --------------- ------------ Total Costs and Expenses 145,831 38,030 1,316 185,177 ----------- ----------- --------------- ------------ Operating Income 11,703 13,301 (1,316) 23,688 Other Income (Expense), net 11,158 (154) (4,783) (g) 6,221 Interest Income (Expense), net 179 77 - 256 ----------- ----------- --------------- ------------ Income Before Taxes 23,040 13,224 (6,099) 30,165 Income Taxes 5,760 3,968 (1,282) (f) 8,446 ----------- ----------- --------------- ------------ Net Income $ 17,280 $ 9,256 $ (4,817) $ 21,719 =========== =========== =============== ============ EARNINGS PER SHARE Basic $ 1.10 $ 1.38 =========== ============ Diluted $ 1.07 $ 1.34 =========== ============ WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 15,712 15,712 ----------- ------------ Diluted 16,214 16,214 ----------- ------------ The accompanying notes are an integral part of these pro forma financial statements.
Exhibit 99.2 Rogers Corporation Unaudited Pro forma Condensed Combined Statement of Income For the year ended December 29, 2002 ($ and share amounts in thousands, except per share amounts) Rogers Durel Pro forma Pro forma Historical Historical Adjustments Combined ------------ ------------ --------------- ------------- Net Sales $ 219,438 $ 84,062 $ - $ 303,500 Cost of Sales 150,183 47,168 1,529 (e) 198,880 Selling and Administrative Expenses 39,335 10,988 - 50,323 Acquisition/Restructuring Costs 2,150 - - 2,150 Research and Development 13,596 2,991 - 16,587 ------------ ------------ --------------- ------------- Total Costs and Expenses 205,264 61,147 1,529 267,940 ------------ ------------ --------------- ------------- Operating Income 14,174 22,915 (1,529) 35,560 Other Income (Expense), net 10,861 29 (7,272) (g) 3,618 Interest Income (Expense), net (226) (913) - (1,139) ------------ ------------ --------------- ------------- Income Before Taxes 24,809 22,031 (8,801) 38,039 Income Taxes 6,202 7,490 (3,041) (f) 10,651 ------------ ------------ --------------- ------------- Net Income $ 18,607 $ 14,541 $ (5,760) $ 27,388 ============ ============ =============== ============= EARNINGS PER SHARE Basic $ 1.20 $ 1.77 ============ ============= Diluted $ 1.16 $ 1.71 ============ ============= WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 15,471 15,471 ------------ ------------- Diluted 16,023 16,023 ------------ ------------- The accompanying notes are an integral part of these pro forma financial statements.
Exhibit 99.2 Rogers Corporation Notes to Unaudited Pro Forma Condensed Combined Financial Statements GENERAL Basis for presentation - The unaudited Pro Forma Combined Statement of Income for the nine months ended September 28, 2003 is based on the Company's and Durel's nine months ended September 28, 2003. The unaudited Pro Forma Combined Statement of Income for the year ended December 29, 2002 is based on the Company's and Durel's fiscal year ended December 29, 2002 fiscal year. These financial statements have been prepared using generally accepted accounting principles. Purchase Price Allocation - The purchase price of the Durel acquisition has been allocated to the acquired identifiable assets and liabilities based on their estimated fair values. The Company is still obtaining appraisals for certain assets acquired, and, accordingly the purchase price allocation is preliminary and subject to adjustment based on the final determination of the fair value of the net assets acquired. Any purchase price in excess of the fair value of acquired identifiable assets and liabilities has been allocated to goodwill. NOTES (a) To adjust the assets and liabilities acquired to their estimated fair market value based on a preliminary allocation of purchase price to net assets acquired. Since the Company had owned 50% of Durel's common shares, fair value adjustments are based on 50% of the excess of fair market value over the net book value. The Company is still in the process of obtaining appraisals for certain of the net assets and determining the fair value and, therefore, the amounts allocated to various net assets is subject to change. (b) To record goodwill equal to the excess of purchase price over the estimated fair value of identifiable net assets acquired. (c) To record funding of the acquisition. The purchase price was paid using excess cash. (d) To eliminate shareholders' equity of Durel. Since Durel had been a 50%-owned investment of the Company, a portion of this equity has been eliminated against the Company's investment in joint ventures. (e) To reflect the estimated pro forma income statement impact for the incremental effect in adjusting for the fair market value of the assets and liabilities acquired. (f) To reflect the pro forma tax effects of the acquisition. The effective tax rate on consolidated pro forma income before taxes is estimated to be 28%. (g) To eliminate equity income for Durel earnings already reflected in the Company's financial statements. (h) To eliminate trading balances between the Company and Durel. (i) To eliminate the Company's deferred tax liability resulting from the Company's historical investment in Durel and to reflect the deferred tax effect of the acquisition adjustments.