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Rogers, Connecticut, November 2, 2009: Rogers Corporation (NYSE:ROG) announced today third quarter 2009 revenues of $81.0 million and net earnings of $0.40 per diluted share, which includes $0.04 per diluted share of one-time integration expenses associated with the acquisition concluded in the second quarter of this year. Revenues and earnings exceeded the Company’s September 15, 2009 updated guidance of $74 to $77 million in sales and earnings of $0.22 to $0.28 per diluted share, which included an estimate of $1.0 million or $0.06 per share of one-time integration costs associated with the acquisition. Third quarter 2008 revenues were $96.3 million with net earnings of $0.46 per diluted share from continuing operations. A reconciliation of GAAP to non-GAAP operating results for the third quarter and year-to-date 2009 is included at the end of this release.
High Performance Foams
High Performance Foam sales were $33.8 million for the third quarter of 2009, on par with the third quarter 2008 sales of $33.9 million. Sales of high performance urethane foams in the third quarter of 2009 were strong into the portable communications and consumer electronics market segments. Additionally during the quarter, orders increased for silicone foam materials into the aerospace, mass transit and general industrial markets. The integration of the silicone foam product lines acquired from MTI Global in the second quarter of 2009 is currently on schedule and is expected to be completed on plan and within budget.
Printed Circuit Materials
Sales of Printed Circuit Materials for the quarter totaled $28.6 million, down 10.1% from the $31.8 million reported in the third quarter of 2008. During the third quarter of 2009 there was strong demand for high frequency circuit materials into the satellite TV market for low noise block-down converters (LNB’s) in China and moderate demand for this application in the US and Europe. Sales into the wireless infrastructure market were down slightly in the third quarter compared to last year’s third quarter as sales for 3G systems in China were minimal. Additionally, high frequency circuit material sales into the defense and high reliability markets were up modestly in the third quarter. The Company expects sales for high frequency printed circuit materials for the China 3G build-out to increase slightly in the fourth quarter.
Custom Electrical Components
Custom Electrical Component sales for the third quarter were $12.1 million, compared to sales of $23.2 million reported in the third quarter of 2008. This year-over-year 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. Sales of Power Distribution System products into the mass transit market were stable for the third quarter of 2009. Power Distribution System products continue to make good progress in the sustainable energy markets for wind turbine applications although funding for these large scale projects continues to be challenging.
Joint Ventures
Rogers’ 50% owned joint ventures had quarterly sales totaling $30.4 million, a decrease of 7.3% compared to the $32.8 million sold in the third quarter of 2008. Although down year-over-year, there was a sequential rebound in joint venture sales into the consumer electronics, hard disk drive and cell phone markets in the third quarter of 2009.
Operational Highlights
Rogers’ balance sheet ended the third quarter with a cash and short-term investment balance of $43.3 million and an auction rate securities balance of $38.6 million. During the third quarter, the Company had approximately $3.1 million of auction rate securities redeemed at par. Capital expenditures were approximately $2.7 million for the third quarter of 2009 and are expected to be in the $14 million range for the year.
Rogers’ gross margin for the third quarter of 2009 was 30.4% versus 31.7% in the third quarter of 2008. The third quarter 2009 gross margin benefited from enhanced operational efficiencies and significant cost reduction efforts that were implemented earlier this year. Inventories at the end of the third quarter totaled $34.7 million versus $46.0 million at the end of the third quarter of 2008 and $41.6 million at the end of 2008. The Company’s third quarter effective tax rate was 6.7%. The Company believes its tax rate will be in the range of 6% to 9% for the fourth quarter of 2009.
Robert D. Wachob, Rogers’ President and CEO commented; “All year we have been working to position ourselves to take advantage of the eventual economic recovery. It has begun and our results reflect that preparation. While we did reduce costs earlier this year we also expended considerable effort in improving our productivity and that contributed significantly to our performance in the third quarter. We are poised to continue to take advantage of the developing economic recovery around the world. With China celebrating National Day Golden Week at the beginning of October, I believe $3 to $4 million of September sales would have normally occurred during the October holiday week. With that in mind I expect fourth quarter sales of $73 to $77 million and earnings of $0.30 to $0.36 per diluted share, which include an estimated $0.8 million or $0.05 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 November 2, 2009 and Rogers undertakes no duty to update this information unless required by law.
For more information, please contact the Company directly, visit Rogers’ website on the Internet, or send a message by email.
Website Address: www.rogerscorp.com
A conference call to discuss first quarter results will be held on Tuesday, November 3, 2009 at 9:00AM (Eastern Time).
The Rogers participants in the conference call will be:
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, November 10, 2009. The passcode for the audio replay is 37754429.
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.