UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of Report (Date of Earliest Event Reported):
October
28, 2014
ROGERS
CORPORATION
(Exact
name of Registrant as specified in Charter)
Massachusetts |
1-4347 |
06-0513860 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
One Technology Drive, P.O. Box 188, Rogers, Connecticut 06263-0188 |
(Address of Principal Executive Offices and Zip Code) |
(860)
774-9605
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 |
Results of Operations and Financial Condition |
Item 7.01 |
Regulation FD Disclosure |
In a press release dated October 28, 2014, the Company announced its third quarter 2014 results and provided guidance for the fourth quarter of 2014. A copy of the press release is furnished herewith as Exhibit 99.1. The Company will also host a conference call and webcast on October 29, 2014 to discuss its results of operations.
All information in this Form 8-K and the Exhibit attached hereto, including guidance or any other forward-looking statements, speaks as of October 28, 2014, and the Company undertakes no duty to update this information to reflect subsequent events, actual results or changes in the Company’s expectations, unless required by law.
The information in Items 2.02 and 7.01 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 |
Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. |
|
Description |
99.1 |
|
Press release, dated October 28, 2014, issued by Rogers Corporation |
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 hereunto duly authorized.
ROGERS CORPORATION |
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By: |
/s/ David Mathieson |
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David Mathieson |
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Vice President, Finance and Chief Financial Officer |
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Date: October 28, 2014 |
Exhibit 99.1
Rogers Corporation Reports All-Time Record Quarterly Sales for the Third Quarter of 2014
ROGERS, Conn.--(BUSINESS WIRE)--October 28, 2014--Rogers Corporation (NYSE:ROG) today announced results for the third quarter of 2014, reporting all-time record net sales of $163.1 million and net income from continuing operations of $1.09 per diluted share. Net sales and net income from continuing operations exceeded the Company’s guidance provided on July 29, 2014 of $153 to $159 million in net sales and net income from continuing operations of $0.65 to $0.75 per diluted share. Third quarter 2013 net sales were $142.8 million with net income from continuing operations of $0.76 per diluted share, which included net special charges of $0.06 per diluted share.
Bruce D. Hoechner, President and CEO commented: “We are very pleased to report that in the third quarter, we set another all-time quarterly revenue record and posted our seventh consecutive quarter of year-over-year revenue growth. All three of our business segments contributed solid results and, overall, we saw strong gains in both gross margin and operating margin resulting in excellent earnings. These strong results were driven by the success we achieved in a number of higher growth markets, as well as our disciplined approach to operational improvements. Specifically, in the area of margin expansion, we continue to benefit from our implementation of manufacturing process improvements, enhancements of our business systems and processes, and high value products created through our market-driven innovation efforts.”
Business Segment Discussion
Printed Circuit Materials
Printed Circuit
Materials reported all-time record quarterly net sales of $63.4 million
for the third quarter of 2014, an increase of 34.5% from the $47.1
million reported in the third quarter of 2013. This strong growth was
driven primarily by significant demand for high frequency circuit
materials to support wireless base station and antenna applications in
connection with the global 4G/LTE infrastructure build-out, automotive
radar applications for Advanced Driver Assistance Systems, and certain
applications in portable electronic devices for improved internet
connectivity.
High Performance Foams
In the third quarter of
2014, High Performance Foams reported net sales of $46.7 million, an
increase of 5.1% compared to third quarter 2013 net sales of $44.5
million. Higher demand in general industrial, battery applications for
hybrid electric vehicles, consumer comfort and impact protection
applications offset slightly weaker demand in portable electronics
(mobile internet devices and feature phones) applications.
Power Electronics Solutions
Power Electronics
Solutions reported net sales of $46.5 million for the third quarter of
2014, up 2.5% compared to third quarter 2013 net sales of $45.3 million.
Results were driven by strong demand in hybrid electric vehicles, mass
transit, energy efficient motor control applications and vehicle
electrification (x-by-wire) applications. These increases more than
offset weaker demand in laser diode and certain renewable energy
applications.
Joint Ventures
Rogers’ 50% owned High Performance Foams
joint ventures’ net sales totaled $12.0 million this quarter, a decrease
of 26.8% compared to the $16.4 million sold in the third quarter of
2013. The decline was due to lower demand across many of their end
markets.
Operational Highlights
Rogers ended the third quarter
of 2014 with cash and cash equivalents of $228.0 million, an increase of
$36.1 million, or 18.8%, from $191.9 million at December 31, 2013.
Capital expenditures were approximately $8.5 million for the third
quarter and $18.8 million year-to-date 2014, and are expected to be in
the range of $25.0 to $30.0 million for the year.
The Company’s gross margin improved to 39.6% in the third quarter of 2014 from 35.8% in the third quarter of 2013. Operating margin for the third quarter of 2014 was 17.4% compared to the 13.3% GAAP (non-GAAP of 14.4%) in the third quarter of 2013, reflecting good progress on the Company’s overall goal to improve operating performance. Reconciliations of the GAAP to non-GAAP operating margin measure as well as the fourth quarter net income per diluted share guidance provided below appear at the end of this press release.
The Company’s 2014 third quarter effective tax rate was 28.6%. The Company currently projects its effective tax rate for 2014 will be approximately 28%.
Outlook
The Company projects fourth quarter 2014 net
sales will be between $147 and $154 million with non-GAAP net income
from continuing operations of between $0.64 and $0.76 per diluted share,
excluding projected special charges of $0.17 per diluted share. GAAP net
income from continuing operations is projected to be between $0.47 and
$0.59 per diluted share. The estimated special non-cash charge of $0.17
per diluted share is related to the lump sum payment of certain long
term pension obligations in connection with the Company’s offer to buy
out certain eligible former employees as part of its continued efforts
to reduce the risk and volatility associated with its defined benefit
pension plans.
About Rogers Corporation
Rogers Corporation (NYSE:ROG)
is a global leader in engineered materials to power, protect, and
connect our world. With more than 180 years of materials science
experience, Rogers delivers high-performance solutions that enable clean
energy, internet connectivity, advanced transportation and other
technologies where reliability is critical. Rogers delivers Power
Electronics Solutions for energy-efficient motor drives, vehicle
electrification and alternative energy; High Performance Foams for
sealing, vibration management and impact protection in mobile devices,
transportation interiors, industrial equipment and performance apparel;
and Printed Circuit Materials for wireless infrastructure, automotive
safety and radar systems. Headquartered in Connecticut (USA), Rogers
operates manufacturing facilities in the United States, China, Germany,
Belgium, Hungary, and South Korea, with joint ventures and sales offices
worldwide. For more information, visit www.rogerscorp.com.
Safe Harbor Statement
Certain statements in this press
release may, including but not limited to those set forth in the Outlook
section above, constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on management's expectations,
estimates, projections and assumptions. Words such as “expects,”
“anticipates,” “intends,” “believes,” “estimates,” “should,” “target,”
“may,” “project,” “guidance,” and variations of such words and similar
expressions are intended to identify such forward-looking statements.
Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause our actual results or
performance to be materially different from any future results or
performance expressed or implied by such forward-looking statements.
Such factors include, but are not limited to, the possibility that
results in the fourth quarter of 2014 will be negatively impacted by the
record sales achieved in the third quarter to the extent record sales
reflected a shift in the timing of customer orders or other factors,
changing business, economic, and political conditions both in the United
States and in foreign countries, particularly in light of the uncertain
outlook for global economic growth, particularly in several of our key
markets; increasing competition; any difficulties in integrating
acquired businesses into our operations and the possibility that
anticipated benefits of acquisitions and divestitures may not
materialize as expected; delays or problems in completing planned
operational enhancements to various facilities; our achieving less than
anticipated benefits and/or incurring greater than anticipated costs
relating to streamlining initiatives or that such initiatives may be
delayed or not fully implemented due to operational, legal or other
challenges; changes in product mix; the possibility that changes in
technology or market requirements will reduce the demand for our
products; the possibility of significant declines in our backlog; the
possibility of breaches of our information technology infrastructure;
the development and marketing of new products and manufacturing
processes and the inherent risks associated with such efforts and the
ability to identify and enter new markets; the outcome of current and
future litigation; our ability to retain key personnel; our ability to
adequately protect our proprietary rights; the possibility of adverse
effects resulting from the expiration of issued patents; the possibility
that we may be required to recognize impairment charges against goodwill
and non-amortizable assets in the future; the possibility of increasing
levels of excess and obsolete inventory; increases in our employee
benefit costs could reduce our profitability; the possibility of work
stoppages, union and work council campaigns, labor disputes and adverse
effects related to changes in labor laws; the accuracy of our analysis
of our potential asbestos-related exposure and insurance coverage; the
fact that our stock price has historically been volatile and may not be
indicative of future prices; changes in the availability and cost and
quality of raw materials, labor, transportation and utilities; changes
in environmental and other governmental regulation which could increase
expenses and affect operating results; our ability to accurately predict
reserve levels; our ability to obtain favorable credit terms with our
customers and collect accounts receivable; our ability to service our
debt; certain covenants in our debt documents could adversely restrict
our financial and operating flexibility; fluctuations in foreign
currency exchange rates; and changes in tax rates and exposure which may
increase our tax liabilities. Such factors also apply to our joint
ventures. We make no commitment to update any forward-looking statement
or to disclose any facts, events, or circumstances after the date hereof
that may affect the accuracy of any forward-looking statements, unless
required by law. Additional information about certain factors that could
cause actual results to differ from such forward-looking statements
include, but are not limited to, those items described in our filings
with the Securities and Exchange Commission ("SEC"), including those in
Item 1A, Risk Factors, of the Company's Form 10-K for the year ended
December 31, 2013 and subsequent Securities and Exchange Commission
filings.
Additional Information and October 29, 2014 Conference Call
For more information, please contact the Company directly, via email or visit the Rogers website.
Website Address: http://www.rogerscorp.com
A conference call to discuss 2014 third quarter results will be held on Wednesday, October 29, 2014 at 9:00AM (Eastern Time).
A slide presentation will be made available prior to the start of the call. The slide presentation can be accessed under the investor relations sections of the Rogers Corporation website (www.rogerscorp.com/ir).
The Rogers participants in the conference call will be:
Bruce D. Hoechner, President and CEO
David Mathieson, Vice President
Finance and CFO
Robert C. Daigle, Senior Vice President and CTO
A Q&A session will immediately follow management’s comments.
To participate in the conference call, please call:
1-800-574-8929 | Toll-free in the United States | ||||||||
1-973-935-8524 | Internationally | ||||||||
There is no passcode for the live teleconference. | |||||||||
For playback access, please call: 1-855-859-2056 in the United States and 1-404-537-3406 internationally through 11:59PM (Eastern Time), Wednesday, November 5, 2014. The passcode for the audio replay is 98226626.
The call will also be webcast live in a listen-only mode. The webcast may be accessed through links available on the Rogers Corporation website at www.rogerscorp.com/ir. Replay of the archived webcast will be available on the Rogers website approximately two hours following the webcast.
(Financial Statements Follow)
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |
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Three Months Ended | Nine Months Ended | |||||||||||
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
September 30,
2014 |
September 30,
2013 |
September 30, 2014 |
September 30,
2013 |
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Net sales | $ | 163,052 | $ | 142,820 | $ | 463,187 | $ | 401,252 | ||||
Cost of sales | 98,504 | 91,634 | 287,583 | 264,347 | ||||||||
Gross margin | 64,548 | 51,186 | 175,604 | 136,905 | ||||||||
Selling and administrative expenses | 30,182 | 25,582 | 92,279 | 76,335 | ||||||||
Research and development expenses | 5,977 | 5,364 | 17,259 | 16,883 | ||||||||
Restructuring and impairment charges | - | 1,231 | - | 5,756 | ||||||||
Operating income | 28,389 | 19,009 | 66,066 | 37,931 | ||||||||
Equity income in unconsolidated joint ventures |
953 |
1,754 |
2,992 |
3,045 |
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Other income (expense), net | (107) | (101) | (1,374) | (867) | ||||||||
Interest income (expense), net | (698) | (881) | (2,167) | (2,616) | ||||||||
Income before income tax expense | 28,537 | 19,781 | 65,517 | 37,493 | ||||||||
Income tax expense | 8,149 | 6,209 | 19,647 | 11,361 | ||||||||
Income from continuing operations | 20,388 | 13,572 | 45,870 | 26,132 | ||||||||
Income from discontinued operations, net of income taxes |
- |
- |
- |
102 |
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Net income | $ | 20,388 | $ | 13,572 | $ | 45,870 | $ | 26,234 | ||||
Basic net income per share: | ||||||||||||
Income from continuing operations | $ | 1.12 | $ | 0.79 | $ | 2.53 | $ | 1.52 | ||||
Income from discontinued operations |
- |
- |
- |
.01 |
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Net Income | $ | 1.12 | $ | 0.79 | $ | 2.53 | $ | 1.53 | ||||
Diluted net income per share: | ||||||||||||
Income from continuing operations | $ | 1.09 | $ | 0.76 | $ | 2.46 | $ | 1.48 | ||||
Income from discontinued operations |
- |
- |
- |
.01 |
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Net Income | $ | 1.09 | $ | 0.76 | $ | 2.46 | $ | 1.49 | ||||
Shares used in computing: | ||||||||||||
Basic | 18,258,709 | 17,244,831 | 18,122,599 | 17,141,672 | ||||||||
Diluted | 18,733,777 | 17,863,035 | 18,657,258 | 17,711,972 | ||||||||
Condensed Consolidated Statements of Financial Position (Unaudited) |
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(IN THOUSANDS) |
September 30, 2014 |
December 31, 2013 |
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Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 227,973 | $ | 191,884 | ||
Accounts receivable, net | 106,625 | 85,126 | ||||
Accounts receivable from joint ventures | 2,171 | 1,897 | ||||
Accounts receivable, other | 6,997 | 2,638 | ||||
Taxes receivable | 439 | 1,578 | ||||
Inventories | 65,003 | 66,889 | ||||
Prepaid income taxes | 4,773 | 5,519 | ||||
Deferred income taxes | 8,381 | 7,271 | ||||
Asbestos related insurance receivables | 7,542 | 7,542 | ||||
Other current assets | 8,163 | 7,363 | ||||
Total current assets | 438,067 | 377,707 | ||||
Property, plant and equipment, net | 146,596 | 146,931 | ||||
Investments in unconsolidated joint ventures | 20,153 | 18,463 | ||||
Deferred income taxes | 41,940 | 44,854 | ||||
Pension Asset | 4,047 | 2,982 | ||||
Goodwill | 101,676 | 108,671 | ||||
Other intangible assets | 41,230 | 49,171 | ||||
Asbestos related insurance receivables | 49,508 | 49,508 | ||||
Investments, other | 507 | 507 | ||||
Other long term assets | 7,170 | 7,740 | ||||
Total assets | $ | 850,894 | $ | 806,534 | ||
Liabilities and Shareholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 24,454 | $ | 17,534 | ||
Accrued employee benefits and compensation | 29,548 | 29,724 | ||||
Accrued income taxes payable | 9,438 | 4,078 | ||||
Current portion of lease obligation | 777 | 849 | ||||
Current portion of long term debt | 27,500 | 17,500 | ||||
Asbestos related liabilities | 7,542 | 7,542 | ||||
Other accrued liabilities | 22,052 | 12,813 | ||||
Total current liabilities | 121,311 | 90,040 | ||||
Long term lease obligation |
6,356 |
7,170 |
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Long term debt | 37,500 | 60,000 | ||||
Pension liability | - | 5,435 | ||||
Retiree health care and life insurance benefits | 9,649 | 9,649 | ||||
Asbestos related liabilities | 52,205 | 52,205 | ||||
Non-current income tax | 11,498 | 10,208 | ||||
Deferred income taxes | 14,999 | 16,077 | ||||
Other long term liabilities | 396 | 223 | ||||
Shareholders’ equity | ||||||
Capital stock | 18,286 | 17,855 | ||||
Additional paid in capital | 130,660 | 110,577 | ||||
Retained earnings | 484,415 | 438,545 | ||||
Accumulated other comprehensive income (loss) | (36,381) | (11,450) | ||||
Total shareholders’ equity | 596,980 | 555,527 | ||||
Total liabilities and shareholders’ equity | $ | 850,894 | $ | 806,534 | ||
Reconciliation of non-GAAP Financial Measures to the Comparable GAAP Measures
Non-GAAP Financial Measures
Management believes non-GAAP information provides meaningful supplemental information regarding the Company’s performance by excluding certain expenses that are generally non-recurring and accordingly may not be indicative of the core business operating results. The Company believes that this additional financial information is useful to management and investors in assessing the Company’s historical performance and when planning, forecasting and analyzing future periods. However, the non-GAAP information has limitations as an analytical tool and should not be considered in isolation from, or as alternatives to, financial information prepared in accordance with GAAP.
Reconciliation of GAAP to non-GAAP Operating Margin from Continuing Operations for the Third Quarter of 2013:
The following tables include non-recurring charges related to special adjustments:
Operating Margin | Q3 2013 | |||||
GAAP operating margin from continuing operations | 13.3% | |||||
Severance and related charges | 0.9 | |||||
Curamik reorganization charges | 0.2 | |||||
Total special charges | 1.1 | |||||
Non-GAAP operating margin from continuing operations | 14.4% | |||||
Reconciliation of GAAP to non-GAAP Income Per Share Guidance for the Fourth Quarter of 2014:
The following table includes non-recurring special charges related to a non-cash pension charge.
Q4 2014 | ||||
Guidance Q4 2014 GAAP income per diluted share from continuing operations | $0.47 - $0.59 | |||
Add back special charges, net of tax: | ||||
Estimated expense related to non-cash pension charge | 0.17 | |||
Total special adjustment charge | 0.17 | |||
Guidance Q4 2014 non-GAAP income per diluted share from continuing operations | $0.64 - $0.76 |
CONTACT:
Rogers Corporation
Financial News Contact:
David
Mathieson, 860-779-4033
Vice President Finance and Chief Financial
Officer
Fax: 860-779-5509
or
Investor Contact:
William
J. Tryon, 860-779-4037
Director of Investor and Public Relations
Fax:
860-779-5509
william.tryon@rogerscorp.com