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Rogers, Connecticut, February 18, 2010: Rogers Corporation (NYSE:ROG) announced today that fourth quarter 2009 revenues were $78.0 million with net earnings of $0.45 per diluted share, which includes one-time net favorable adjustments of $0.05 per diluted share. Excluding these one-time adjustments, non-GAAP earnings per diluted share for the fourth quarter of 2009 were $0.40. Fourth quarter 2008 revenues were $78.6 million with net earnings from continuing operations of $0.01 per diluted share which includes one-time net charges of $0.20 per diluted share. Excluding one-time adjustments, non-GAAP earnings per diluted share from continuing operations for the fourth quarter of 2008 were $0.21.
Net sales for the full year of 2009 were $291.8 million, a decrease of 20.1% from the $365.4 million in 2008. Full year 2009 resulted in a net loss of $4.01 per share compared to net income from continuing operations of $1.36 per diluted share for 2008. 2009 results included approximately $67.2 million, or $4.29 per share, of one-time adjustments related primarily to asset impairments, a valuation allowance on the Company’s US deferred tax assets, and other tax adjustments. Excluding one-time adjustments, non-GAAP diluted earnings per share from continuing operations for 2009 would have been $0.28 per diluted share versus $1.79 for 2008.
A reconciliation of GAAP to non-GAAP operating results for the fourth quarter and full year 2009 and 2008 is included at the end of this release.
Printed Circuit Materials
Sales of Printed Circuit Materials for the fourth quarter of 2009 totaled $29.8 million, up 3.1% from the $28.9 million reported in the fourth quarter of 2008. During the fourth quarter of 2009 there was continued strong demand for high frequency circuit materials in the satellite TV market for low noise block-down converters (LNB’s) in China. Sales into the wireless infrastructure market were down in the fourth quarter of 2009 as 3G system procurement in China was delayed until 2010 while high frequency circuit material sales into the defense and high reliability markets were up modestly in the fourth quarter of 2009.
High Performance Foams
High Performance Foam sales were $28.4 million for the fourth quarter of 2009, approximately 7.2% higher than the $26.5 million reported in the fourth quarter of 2008. The year-over-year quarterly increase is attributed to incremental revenues from the Company’s acquisition of certain assets of MTI Global Inc., and an increase in demand in the portable communications market. Also, customer inventory liquidation issues in the portable communications market negatively impacted sales volumes in the fourth quarter of 2008, but did not reoccur in the fourth quarter of 2009.
Custom Electrical Components
Custom Electrical Component sales for the fourth quarter of 2009 were $13.4 million, compared to sales of $16.7 million reported in the fourth quarter of 2008. This year-over-year quarterly 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 in the fourth quarter of 2009. These products continue to make good progress in penetrating the sustainable energy market for wind turbine applications, especially in Asia, even though some large scale projects have been delayed.
Joint Ventures
Rogers’ 50% owned joint ventures had quarterly sales totaling $30.5 million, an increase of 16.4% compared to the $26.2 million sold in the fourth quarter of 2008. Revenues in the fourth quarter of 2009 versus the prior quarter increased on strength in sales at the Company’s high performance foams joint ventures. Total 2009 joint venture sales were $95.3 million compared to $114.4 million in 2008.
Operational Highlights
Rogers’ gross margin was 27.2% for the full year and 30.4% for the fourth quarter 2009, which compares to 31.2% for the full year and 27.4% for the fourth quarter 2008. Inventories at year end totaled $33.8 million versus $41.6 million at the end of 2008, as the Company intensified its focus on working capital management during the economic downturn.
Rogers ended the year with a very strong balance sheet with a combined cash and short-term investment balance of $58.1 million. The Company had redeemed $6.6 million at par value of auction rate securities during 2009 and has $43.4 million of par value of such securities remaining. Capital expenditures were approximately $12.1 million for the full year 2009, down from the approximately $21 million in 2008. Rogers has a capital expenditure budget of $17 million for 2010.
The Company's 2009 effective tax rate was a negative 212.0%, which was primarily driven by the need to establish a valuation allowance on the Company’s US deferred tax assets in the second quarter of 2009. The Company believes the tax rate for 2010 will be approximately 22%.
Robert D. Wachob, Rogers’ President and CEO commented: “The significant cost reductions we implemented in the first half of 2009 resulted in sequentially improving profits as sales increased from a dismal first half. Our gross margin remained constant sequentially, even with lower sales and lower inventories as compared to the third quarter. When sales begin to increase we expect to see further improvement in our gross margin. Looking ahead, Rogers is focused on addressing three megatrends: the continued growth of the internet, the expansion of mass transit systems, and investment in sustainable energy. We currently have over 200 active projects with prospective customers within these three megatrends. In 2010, we expect that more than 35% of our sales will be in these three growth areas. We already have or plan to introduce in 2010 the products needed to address the immediate needs of the three megatrends. Therefore, we feel we are well positioned to grow as our customers introduce new products, such as LTE (4G) base stations and hybrid electric and electric vehicles, to the market beginning in 2010 and increasing over the next several years. The people at Rogers have worked very hard and have collaborated well to put us in an excellent position to grow and prosper in the future. The first quarter of 2010 has so far been stronger than expected as LNB sales in China continue at the fourth quarter rate. China Mobil has awarded the next round of TD-SCDMA contracts and our customers are buying high frequency circuit board laminate at a very rapid rate. With this in mind, I expect sales of $75 to $80 million and earnings of $0.23 to $0.30 per diluted share for the first quarter of 2010.”
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: communications infrastructure, consumer products, portable communications, mass transit, defense, automotive, and sustainable energy. Most of the Company’s products are covered by trade secrets or patents. Rogers operates manufacturing facilities in the United States (Arizona, Connecticut, and Illinois), 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 filed with the Securities and Exchange Commission (SEC) and other Company filings made with the SEC. All information in this press release is as of February 18, 2010 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
Email: william.tryon@rogerscorporation.com
A conference call to discuss 2009 fourth quarter and full year results will be held on Friday, February 19, 2010 at 9:00AM (Eastern Time).
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), Friday, February 26, 2010. The passcode for the audio replay is 56330339.