|By Business Wire||
|July 29, 2014 04:02 PM EDT||
Rogers Corporation (NYSE:ROG) today announced financial results for the second quarter of 2014, reporting all-time record net sales of $153.5 million and net income from continuing operations of $0.58 per diluted share. Second quarter 2013 net sales were $132.5 million with net income from continuing operations of $0.32 per diluted share, which included net special charges of $0.21 per diluted share.
Bruce D. Hoechner, President and CEO commented: "We are very pleased to report that in the second quarter we achieved strong top-line performance and continued to improve our gross margins. Growth across each of the business segments led Rogers to record all-time quarterly net sales.
On the spending side, our selling and administrative expenses increased as we accelerated investments in business systems that will allow us to scale the company more efficiently and in our evaluation efforts of M&A opportunities. We also had a significant increase in bonus accruals due to our very strong first half performance and current strength of the business. We believe the investments we are making in the near term will position us to build upon the excellent top-line growth we've achieved over the past several quarters.
We believe Rogers’ strong sales performance reflects the health of the businesses and our participation in growing markets with strong tailwinds. In our view, these factors will continue to have a positive impact on the Company’s results."
Business Segment Discussion
Printed Circuit Materials
Printed Circuit Materials reported all-time record quarterly net sales of $61.5 million for the second quarter of 2014, an increase of 34.9% from the $45.6 million reported in the second quarter of 2013. This strong growth was driven primarily by significant demand for high frequency materials to support wireless base station and antenna applications in connection with the global 4G/LTE infrastructure build-out, especially in China. In addition, there was increased demand for automotive radar applications for Advanced Driver Assistance Systems and certain applications in handheld devices for improved internet connectivity.
Power Electronics Solutions
Power Electronics Solutions reported net sales of $42.9 million for the second quarter of 2014, an increase of 5.2% compared to second quarter 2013 net sales of $40.8 million. This increase was led by strong growth in curamik® direct bonded copper substrates in x-by-wire and energy efficient motor drive applications across all regions. In addition, RO-LINX® power distribution systems experienced increased orders in mass transit and energy efficient drive applications in Asia and Europe. These increases more than offset weaker demand in laser diode and hybrid electric vehicle applications during the quarter.
High Performance Foams
In the second quarter of 2014, High Performance Foams reported net sales of $42.8 million, an increase of 7.2% compared to second quarter 2013 net sales of $39.9 million. The increase in net sales is primarily due to increased demand in battery applications for hybrid electric vehicles, as well as mass transit and consumer applications for cushioning, sealing and impact protection materials. Demand for High Performance Foams products from the mobile internet device market, including feature phones, was relatively flat this quarter.
Rogers’ 50% owned High Performance Foams joint ventures’ net sales totaled $12.8 million this quarter, an increase of 1.6% compared to the $12.6 million sold in the second quarter of 2013. The increase is due to generally improved demand across most end markets.
Rogers ended the second quarter of 2014 with cash and cash equivalents of $218.7 million, an increase of $26.8 million, or 14.0%, from $191.9 million at December 31, 2013. Capital expenditures were approximately $8.1 million for the second quarter and $10.3 million year-to-date 2014, and are expected to total approximately $25.0 million for the year.
The Company’s gross margin improved to 37.2% in the second quarter of 2014 from the 33.9% non-GAAP (33.5% GAAP) gross margin reported in the second quarter of 2013. The improvement was driven by the increased operating leverage on the increased sales volumes and by the operational efficiency improvement initiatives undertaken over the past year. Operating margin for the second quarter of 2014 was 10.6% compared to the non-GAAP of 10.1% (6.1% GAAP) in the second quarter of 2013, reflecting good progress on the Company’s overall goal to improve operating performance. Non-GAAP to GAAP reconciliations appear at the end of the press release.
The increase in selling and administrative expenses was driven by incentive compensation accruals, accelerated investments in internal process improvement projects and M&A evaluation efforts, Chief Financial Officer transition expenses, and other severance costs. The strong top-line performance makes this an opportune time to invest in business process improvements and M&A efforts in order to support the Company’s growth expectations.
The Company’s 2014 second quarter effective tax rate was 33.9%, higher than expected due to improved operating performance in higher tax jurisdictions. The Company currently projects its effective tax rate for 2014 will be approximately 29%.
The Company projects third quarter 2014 net sales to be between $153 to $159 million with net income from continuing operations of between $0.65 and $0.75 per diluted share.
About Rogers Corporation
Rogers Corporation (NYSE:ROG) is a global leader in engineered materials to power, protect, and connect our world. With more than 182 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 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, 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 July 30, 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 second quarter results will be held on Wednesday, July 30, 2014 at 9:00AM (Eastern Time).
A slide presentation will be made available prior to the start of the call. The slide presentation may 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|
|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, August 6, 2014. The passcode for the audio replay is 60797684.
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)
|Three Months Ended||Six Months Ended|
|(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)||
|Cost of sales||96,357||88,023||189,078||172,713|
|Selling and administrative expenses||34,499||25,547||62,097||50,753|
|Research and development expenses||6,420||6,250||11,283||11,519|
|Restructuring and impairment charges||-||4,525||-||4,525|
Equity income in unconsolidated joint ventures
|Other income (expense), net||(76)||(177)||(1,268)||(766)|
|Net realized investment gain (loss)||-||-||-||-|
|Interest income (expense), net||(720)||(830)||(1,468)||(1,735)|
|Income before income tax expense||16,485||7,862||36,980||17,712|
|Income tax expense||5,583||2,279||11,498||5,152|
|Income (loss) from continuing operations||10,902||5,583||25,482||12,560|
Income (loss) from discontinued operations, net of income taxes
|Basic net income (loss) per share:|
|Income from continuing operations||$||0.60||$||0.33||$||1.41||$||0.73|
|(Loss) from discontinued operations||-||-||-||0.01|
|Diluted net income (loss) per share:|
|Income from continuing operations||$||0.58||$||0.32||$||1.37||$||0.71|
|(Loss) from discontinued operations||-||-||-||0.01|
|Shares used in computing:|
Condensed Consolidated Statements of Financial Position (Unaudited)
|(IN THOUSANDS)||June 30, 2014||December 31, 2013|
|Cash and cash equivalents||$||218,692||$||191,884|
|Accounts receivable, net||102,360||85,126|
|Accounts receivable from joint ventures||1,974||1,897|
|Accounts receivable, other||2,857||2,638|
|Prepaid income taxes||4,156||5,519|
|Deferred income taxes||7,789||7,271|
|Asbestos related insurance receivables||7,542||7,542|
|Other current assets||9,854||7,363|
|Total current assets||418,636||377,707|
|Property, plant and equipment, net||146,796||146,931|
|Investments in unconsolidated joint ventures||19,223||18,463|
|Deferred income taxes||40,847||44,854|
|Other intangible assets||45,874||49,171|
|Asbestos related insurance receivables||49,508||49,508|
|Other long term assets||7,437||7,740|
|Liabilities and Shareholders’ Equity|
|Accrued employee benefits and compensation||24,562||29,724|
|Accrued income taxes payable||2,917||4,078|
|Current portion of lease obligation||842||849|
|Current portion of long term debt||20,000||17,500|
|Asbestos related liabilities||7,542||7,542|
|Other current liabilities||18,025||12,813|
|Total current liabilities||97,795||90,040|
|Long term debt||50,000||60,000|
|Long term lease obligation||6,960||7,170|
|Retiree health care and life insurance benefits||9,649||9,649|
|Asbestos related liabilities||52,205||52,205|
|Non-current income tax||11,045||10,208|
|Deferred income taxes||16,204||16,077|
|Other long term liabilities||340||223|
|Additional paid in capital||127,930||110,577|
|Accumulated other comprehensive income (loss)||(12,875)||(11,450)|
|Total shareholders’ equity||597,309||555,527|
|Total liabilities and shareholders’ equity||$||841,507||$||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 Gross Margin and Operating Margin from Continuing Operations for the Second Quarter of 2013:
The following tables include non-recurring charges related to special adjustments:
|Gross Margin||Q2 2013|
|GAAP gross margin from continuing operations||33.5%|
|Curamik reorganization charges||0.1|
|Union contract ratification bonus||0.3|
|Total special charges||0.4|
|Non-GAAP gross margin from continuing operations||33.9%|
|Operating Margin||Q2 2013|
|GAAP operating margin from continuing operations||6.1%|
|Severance and related charges||2.3|
|Pension curtailment/settlement charges||1.2|
|Curamik reorganization charges||0.3|
|Other special charges||0.3|
|Total special charges||4.0|
|Non-GAAP operating margin from continuing operations||10.1%|
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
Oct. 25, 2016 01:45 PM EDT Reads: 1,251
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Oct. 25, 2016 01:30 PM EDT Reads: 2,682
SYS-CON Events announced today that MathFreeOn will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
Oct. 25, 2016 01:15 PM EDT Reads: 1,034
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Oct. 25, 2016 12:45 PM EDT Reads: 4,931
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
Oct. 25, 2016 12:30 PM EDT Reads: 8,476
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Oct. 25, 2016 12:00 PM EDT Reads: 2,671
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Oct. 25, 2016 11:45 AM EDT Reads: 3,798
Although it has gained significant traction in the consumer space, IoT is still in the early stages of adoption in enterprises environments. However, many companies are working on initiatives like Industry 4.0 that includes IoT as one of the key disruptive technologies expected to reshape businesses of tomorrow. The key challenges will be availability, robustness and reliability of networks that connect devices in a business environment. Software Defined Wide Area Network (SD-WAN) is expected to...
Oct. 25, 2016 11:45 AM EDT Reads: 2,092
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
Oct. 25, 2016 11:45 AM EDT Reads: 2,164
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
Oct. 25, 2016 11:42 AM EDT Reads: 177
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
Oct. 25, 2016 11:30 AM EDT Reads: 2,022
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service.
Oct. 25, 2016 11:30 AM EDT Reads: 1,120
SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
Oct. 25, 2016 11:30 AM EDT Reads: 3,598
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Oct. 25, 2016 11:15 AM EDT Reads: 1,524
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will present at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they manag...
Oct. 25, 2016 11:15 AM EDT Reads: 3,644