(Source: Business Wire)
Rogers Corporation (NYSE:ROG) announced today second quarter 2009 revenues of $67.4 million and a net loss of $4.31 per share. As reported in the press release dated July 27, 2009 included in the net loss for the quarter are net special charges of $67.2 million or $4.29 per share. Without the net special charges the non-GAAP results for the quarter were a loss of $0.02 per share. The Company's May 4, 2009 guidance was $68 to $73 million in sales and a loss of $0.26 to $0.36 per share, including approximately $3.0 million or $0.16 per share of special charges. Second quarter 2008 revenues were $92.4 million with net earnings of $0.41 per diluted share from continuing operations. A reconciliation of GAAP to non-GAAP operating results for the second quarter 2009 is included at the end of this release.
High Performance Foams
High Performance Foams sales were $25.4 million for the second quarter of 2009, down 14.8% from the second quarter 2008 sales of $29.8 million. Compared to 2008, sales were lower across many market segments due to the ongoing global economic recession. Sales into the consumer electronics market segment, including portable handset applications, improved during the second quarter versus the previous quarter, as the severe supply chain inventory corrections that marked the first quarter were largely completed. Sales into the sports, leisure and apparel markets showed significant improvement in the quarter as customers introduced new products using the Company's materials. The integration of the recently acquired MTI Global Inc.'s silicone foam product lines is currently on schedule and is expected to be completed by the end of the year.
Printed Circuit Materials
Sales of Printed Circuit Materials for the quarter totaled $24.5 million, down 16.9% from the $29.5 million reported in the second quarter of 2008. Sales into the wireless infrastructure market were down on the overall worldwide softness in this market and lack of 3G program awards in China for the expected infrastructure build-out in the second half of 2009. These awards have now been issued, and the Company expects a related sales increase in the second half of 2009. Demand increased for high frequency circuit materials for low noise block-down converters into the satellite TV market this quarter, on greater activity in the US and China. High frequency circuit material sales into the defense and high reliability markets remain steady. Additionally, the Company has decided to exit the flexible laminate product lines manufactured in Arizona, which have been in decline in recent years as the products were commoditized.
Custom Electrical Components
Custom Electrical Components sales for the second quarter were $12.2 million, compared to sales of $24.6 million reported in the second quarter of 2008. This quarter-over-quarter decrease in sales is directly related to the previously announced decline in the demand for electroluminescent (EL) lamps for keypad backlighting in the portable communications market. Power Distribution System products continued to have steady demand in traction systems for the mass transit market.
Joint Ventures
Rogers' 50% owned joint ventures had quarterly sales totaling $23.2 million, a decrease of 20.5% compared to the $29.2 million sold in the second quarter of 2008. The decrease in sales at the Company's joint ventures for the second quarter 2009 were a result of a combination of declines in consumer electronics, excess inventory throughout the supply chain, and a softness in the hard disk drive and cell phone markets. However, operating results at Rogers' joint ventures were slightly higher in the second quarter of 2009 as compared to the second quarter of 2008, even though sales volumes were significantly lower, due primarily to the strong performance of the Company's foam joint ventures in China and Japan.
Operational Highlights
Rogers' balance sheet ended the second quarter with a cash and short-term investment balance of $38.4 million and an auction rate securities balance of $42.4 million. During the second quarter the Company had approximately $1.4 million of such securities redeemed at par. Capital expenditures were approximately $3.6 million for the second quarter 2009 and are expected to be in the $16 million range for the year.
Rogers' gross margin for the second quarter of 2009 was 25.3% versus 32.8% in the second quarter of 2008 which is due primarily to a 27.1% decline in quarter-over-quarter sales. Inventories at the end of the second quarter totaled $37.6 million versus $48.3 million at the end of the second quarter 2008 and $41.6 million at the end of 2008. The Company believes its tax rate will be in the range of 3% to 6% for the remainder of 2009.
During the first half of this year the Company reduced operating and overhead expenses for targeted annual savings of $34 million. As of June, all of the expense reduction initiatives were in place and the Company expects to realize the full benefit of these actions during the second half of 2009. These actions have substantially lowered the Company's breakeven point to an annualized sales rate below $270 million.
Robert D. Wachob, Rogers' President and CEO commented; "I believe the worst is behind us. We have completed our planned cost reduction efforts and have dealt with all the known asset impairments including the required current accounting treatment of our deferred tax assets. Additionally, we have exited some product lines that did not have significant future prospects. While these actions were necessary in today's market we have not lost sight of the future and continue to introduce new products at a record pace and are funding over 30 new product development projects. I have confidence the future is bright for Rogers as the worldwide recession abates. For the third quarter we project sales of $68 to $73 million and earnings of $0.05 to $0.15 per share, which include $1 million or $0.06 per share of one-time integration costs associated with the silicone business assets the Company acquired during the second quarter."
About Rogers Corporation
Rogers Corporation, headquartered in Rogers, CT, is a global technology leader in the development and manufacture of high performance, specialty-material-based products for a variety of applications in diverse markets including: portable communications, communications infrastructure, computer and office equipment, consumer products, ground transportation, aerospace and defense. Rogers operates manufacturing facilities in the United States (Arizona, Connecticut, Illinois and Virginia), Europe (Ghent, Belgium and Bremen, Germany) and Asia (Suzhou, China). In Asia, Rogers maintains sales offices in Japan, China, Taiwan, Korea and Singapore. Rogers has joint ventures in Japan and China with INOAC Corporation, in Taiwan with Chang Chun Plastics Co., Ltd. and in the US with Mitsui Chemicals, Inc.
The world runs better with Rogers.® www.rogerscorp.com
Safe Harbor Statement
Statements in this news release other than historical facts, including without limitation statements regarding the Company's business strategy, future results of operations and financial position, and plans and objectives of management, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause results to differ materially from those set forth in or implied by such forward-looking statements. These risks and uncertainties include economic conditions, market demand and pricing, competitive and cost factors, rapid technological change, new product introductions, legal proceedings, and other risk factors described in the Company's Form 10-K for the fiscal year ended December 31, 2008 with the Securities and Exchange Commission (SEC) and other Company filings with the SEC. All information in this press release is as of August 3, 2009 and Rogers undertakes no duty to update this information unless required by law.
Additional Information and August 4, 2009 Conference Call
For more information, please contact the Company directly, visit Rogers' website on the Internet, or send a message by email.
Website Address: http://www.rogerscorp.com
Financial News Contact: Dennis M. Loughran, Vice President Finance and Chief Financial Officer
Phone: 860-779-5508
FAX: 860-779-4714
Investor Contact: William J. Tryon, Manager of Investor and Public Relations
Phone: 860-779-4037
FAX: 860-779-5509
Email: william.tryon@rogerscorporation.com
A conference call to discuss first quarter results will be held on Tuesday, August 4, 2009 at 9:00AM (Eastern Time).
The Rogers participants in the conference call will be:
Robert D. Wachob, President and CEO
Dennis M. Loughran, Vice President, Finance and CFO
Debra J. Granger, Vice President, Corporate Compliance and Controls
Robert M. Soffer, Vice President and Secretary
Ronald J. Pelletier, Corporate Controller
William J. Tryon, Manager of Investor and Public Relations
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: 1-800-642-1687 in the United States and 1-706-645-9291 internationally through 11:59PM (Eastern Time), Tuesday, August 11, 2009. The passcode for the audio replay is 21881002.
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/. 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 Income (Unaudited) Three Months Ended Six Months Ended (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) June 30, 2009 June 29, 2008 June 30, 2009 June 29, 2008 Net sales $ 67,368 $ 92,432 $ 132,843 $ 190,471 Cost of sales 50,325 62,133 101,871 128,622 Gross margin 17,043 30,299 30,972 61,849 Selling and administrative expenses 18,809 18,166 35,551 35,920 Research and development expenses 4,244 5,921 9,714 11,201 Restructuring and impairment charges 15,127 - 17,922 - Operating income (expense) net (21,137 ) 6,212 (32,215 ) 14,728 Equity income (loss) in unconsolidated jointventures 1,579 1,517 1,207 2,610 Other income (loss) less other charges (228 ) 1,090 (302 ) 1,686 Net impairment losses (472 ) - (472 ) - Interest income, net 111 590 286 1,430 Acquisition gain 2,908 - 2,908 - Income (loss) from continuing operations beforeincome taxes (17,239 ) 9,409 (28,588 ) 20,454 Income tax expense 50,294 2,908 47,663 6,150 Income (loss) from continuing operations (67,533 ) 6,501 (76,251 ) 14,304 Income (loss) from discontinued operations - 395 - 412 Net income (loss) $ (67,533 ) 6,896 $ (76,251 ) $ 14,716 Basic net income (loss) per share: Income (loss) from continuing operations $ (4.31 ) $ 0.42 $ (4.87 ) $ 0.90 Income (loss) from discontinued operations, net - 0.03 - 0.03 Net income (loss) $ (4.31 ) $ 0.45 $ (4.87 ) $ 0.93 Diluted net income (loss) per share: Income (loss) from continuing operations $ (4.31 ) $ 0.41 $ (4.87 ) $ 0.90 Income (loss) from discontinued operations, net - 0.03 - 0.03 Net income (loss) $ (4.31 ) $ 0.44 $ (4.87 ) $ 0.93 Shares used in computing: Basic 15,673,924 15,529,891 15,655,985 15,831,709 Diluted 15,673,924 15,592,453 15,655,985 15,872,119 -------------------------------------------------------------------------------
Condensed Consolidated Statements of Financial Position (Unaudited) (IN THOUSANDS) June 30,2009 December 31,2008 Assets Current assets: Cash and cash equivalents $ 38,406 $ 70,170 Short -- term investments - 455 Accounts receivable, net 45,464 44,492 Accounts receivable from joint ventures 3,491 3,185 Accounts receivable, other 1,601 2,765 Inventories 37,603 41,617 Prepaid income taxes 1,819 1,579 Deferred income taxes - 9,803 Asbestos-related insurance receivables 4,632 4,632 Assets held for sale 6,400 - Other current assets 5,610 5,595 Total current assets 145,026 184,293 Property, plant and equipment, net 130,706 145,222 Investments in unconsolidated joint ventures 29,080 31,051 Deferred income taxes - 37,939 Goodwill and other intangibles 10,361 9,634 Asbestos-related insurance receivables 19,416 19,416 Long-term marketable securities 42,374 42,945 Other long-term assets 5,003 4,933 Total assets $ 381,966 $ 475,433 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 10,840 $ 11,619 Accrued employee benefits and compensation 18,849 23,378 Accrued income taxes payable 1,734 1,318 Asbestos-related liabilities 4,632 4,632 Other current liabilities 9,753 18,889 Total current liabilities 45,808 59,836 Noncurrent pension liability 35,678 43,683 Noncurrent retiree health care and life insurancebenefits 7,793 7,793 Asbestos-related liabilities 19,644 19,644 Other long-term liabilities 8,745 8,333 Shareholders' equity 264,298 336,144 Total liabilities and shareholders' equity $ 381,966 $ 475,433 -------------------------------------------------------------------------------
Reconciliation of GAAP to Non-GAAP Operating Results Per Share for the Second Quarter 2009 GAAP loss per share $ (4.31 ) Less: Valuation allowance on US deferred tax asset (3.39 ) Impairment of certain long-lived assets (0.86 ) Severance charges (0.11 ) Product liability claim (0.12 ) Incremental equity compensation expense (0.11 ) Other charges (0.10 ) Gain on acquisition of MTI Global assets 0.19 Tax benefit on foreign impairment charges 0.21 Non-GAAP loss per diluted share $ (0.02 ) -------------------------------------------------------------------------------
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