BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2011

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 15 - BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

In the first quarter of 2011, as a result of our acquisition of Curamik and the manner in which we manage our business, we determined that it was appropriate to adjust our segment reporting structure.

Our previous reporting structure was comprised of three business categories – Core Strategic, Development Stage, and Other.  Our new structure eliminates the Development Stage category and expands the Core Strategic category, as shown in the below table:

Old Structure		New Structure
Core Strategic		Core Strategic
	High Performance Foams		High Performance Foams
	Printed Circuit Materials		Printed Circuit Materials
	Power Distribution Systems		Power Electronics Solutions
Development Stage				Curamik Electronics Solutions
	Custom Electrical Components			Power Distribution Systems
Other		Other

In the new structure, we created a new category called “Power Electronics Solutions”, which is comprised of two operating segments – Curamik Electronics Solutions (CES) and Power Distribution Systems (PDS).  Since the first quarter of 2011, we will now separately report the results of operations for each of these segments.  We also eliminated the Development Stage category, as the Custom Electrical Components (CEC) segment is now aggregated in the “Other” reportable segment.  Management concluded that the development activities at the CEC segment were not gaining traction in the market and, therefore, ended the development efforts associated with the segment.  During the fourth quarter of 2011, we also ended operations at our Thermal Management Solutions (TMS) operating segment.  This segment will be treated as a discontinued operation for reporting purposes.  This new structure aligns our reporting with management’s current view of the business, particularly as we work to further penetrate our core target mega trend markets.

Core Strategic

· High Performance Foams:  This operating segment consists of polyurethane and silicone foam products, which includes two joint ventures that manufacture products consisting primarily of high performance urethane and silicone foams.  These foams are designed to perform to predetermined specifications where combinations of properties are needed to satisfy rigorous mechanical and environmental requirements.  These materials are sold primarily though fabricators and OEM’s on a worldwide basis.

· Printed Circuit Materials:  This operating segment includes printed circuit board laminate products for high frequency, high performance applications.  These products tend to be proprietary materials that provide highly specialized electrical and mechanical properties to meet the demands imposed by increasing speed, complexity, and power in analog, digital, and microwave equipment.  These materials are fabricated, coated and/or customized as necessary to meet customer demands and are sold worldwide.

· Power Electronics Solutions: This category includes Curamik Electronics Solutions and Power Distribution Systems.  We now separately report the results of operations for both of these operating segments.

·    Curamik Electronics Solutions

We acquired Curamik in the first quarter of 2011.  Founded in 1983, Curamik is a manufacturer of power electronic substrate products and is headquartered in Eschenbach, Germany.  We believe that Curamik is the global leader for the development and production of direct copper bonded (DCB) ceramic substrate products used in the design of intelligent power management devices, such as Insulated Gate Bipolar Transistor (IGBT) modules.  These devices enable a wide range of products including highly efficient industrial motor drives, wind and solar converters and hybrid electric vehicle drive systems.  Most of Curamik’s products are manufactured using state-of-the-art automated processes in its facility in Eschenbach.

· Power Distribution Systems

Our PDS operating segment is comprised of our busbar products, which are used primarily in power distribution systems products in mass transit and clean technology applications.  We manufacture power distribution components in Ghent, Belgium and Suzhou, China and Chandler, Arizona, under the RO-LINX POWERCIRCUIT® trade name.  We sell these RO-LINX POWERCIRCUIT® products to manufacturers of high power electrical inverter and converter systems for use in mass transit (e.g. high speed trains) and clean technology applications (e.g. wind turbines, solar farms and electric vehicles).  In the industrial application area, our RO-LINX POWERCIRCUIT® products are utilized in a large variety of variable frequency drives for high to mid power applications.

In the first three quarters of 2011, this segment included our Thermal Management Solutions operating segment, which is now being treated as a discontinued operation as of December 31, 2011 as a result of the shut down of the segment in the fourth quarter of 2011.

Other

Our Other reportable segment consists of elastomer rollers, floats and non-woven material products; as well as our inverter distribution activities.

Elastomer components are sold to OEMs for applications in ground transportation, office equipment, consumer and other markets.  Trade names for our elastomer components include:  NITROPHYL® floats for level sensing in fuel tanks, motors, and storage tanks and ENDUR® elastomer rollers and belts for document handling in copiers, printers, mail sorting machines and automated teller machines. Our nonwoven composite materials are manufactured for use in medical padding, industrial pre-filtration applications, and as consumable supplies in the lithographic printing industry.

Our inverters are sold primarily to OEMs and fabricators that in turn sell to various other third parties that primarily serve the portable communication and automotive markets.  Prior to 2011, this segment included sales of our electroluminescent lamp (EL) products, which came to end of life and are no longer produced.

In the fourth quarter of 2010, we sold our 50% interest in Rogers Chang Chun Technologies, Inc. (RCCT) to our partner, Chang Chun Plastics Co., Ltd, effectively ending our remaining interests in the flexible circuit materials market.

All prior periods have been recast accordingly for the new reporting presentation.

Segment Information

(Dollars in thousands)
	High Performance Foams		Printed Circuit Materials		Curamik Electronic Solutions		Power Distribution Systems		Other			Total
2011
Net sales	$	177,645	$	166,424	$	132,891	$	47,343	$	28,847		$	553,150
Operating income (loss)		28,280		11,127		7,842		3,478		2,076			52,803
Total assets		192,829		123,883		265,346		73,072		22,448			677,578
Capital expenditures		5,325		5,901		7,018		2,344		728			21,316
Depreciation & amortization		7,873		6,348		9,126		1,863		1,098			26,308
Investment in unconsolidated joint ventures		23,868		-		-		-		-			23,868
Equity income (loss) in unconsolidated joint ventures		5,451		-		-		-		-			5,451
2010
Net sales	$	149,671	$	141,055	$	-	$	42,059	$	45,416		$	378,201
Operating income (loss)		17,378		10,951		-		2,873		20			31,222
Total assets		217,335		140,667		-		80,894		44,418			483,314
Capital expenditures		3,679		5,825		-		1,605		1,132			12,241
Depreciation & amortization		6,705		2,793		-		5,301		901			15,700
Investment in unconsolidated joint ventures		25,452		-		-		-		-			25,452
Equity income (loss) in unconsolidated joint ventures		7,746		-		-		-		912			8,658
2009
Net sales	$	104,824	$	112,917	$	-	$	40,293	$	33,563		$	291,597
Operating income (loss)		5,054		250		-		3,172		(34,303	)		(25,827	)
Total assets		159,816		118,517		-		94,291		33,444			406,068
Capital expenditures		3,093		7,214		-		1,332		448			12,087
Depreciation & amortization		6,660		2,663		-		5,659		2,230			17,212
Investment in unconsolidated joint ventures		26,052		40		-		-		7,876			33,968
Equity income (loss) in unconsolidated joint ventures		5,756		-		-		-		(294	)		5,462

Information relating to our operations by geographic area is as follows:

	Net Sales (1)						Long-lived Assets (2)
(Dollars in thousands)	2011		2010		2009		2011		2010
United States	$	112,774	$	110,511	$	79,967	$	65,432	$	63,325
Asia		272,622		180,962		136,563		177,196		66,349
Europe		154,534		72,507		62,920		64,181		25,114
Other		13,220		14,221		12,147		-		-
Total	$	553,150	$	378,201	$	291,597	$	306,809	$	154,788

(1) Net sales are allocated to countries based on the location of the customer.

(2) Long-lived assets are based on the location of the asset and are comprised of goodwill and other intangibles and property, plant and equipment.