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Rogers Corporation Reports 2013 First Quarter Results



  Rogers Corporation Reports 2013 First Quarter Results

Business Wire

ROGERS, Conn. -- April 30, 2013

Rogers Corporation (NYSE:ROG) today announced financial results for its first
quarter of 2013, reporting net sales of $126.0 million and net income from
continuing operations of $0.39 per diluted share, which includes net special
charges of $0.05 per diluted share. Excluding these net special charges,
non-GAAP net income from continuing operations was $0.44 per diluted share.
Net sales and both GAAP and non-GAAP net income from continuing operations
were in line with the Company’s updated guidance announced on April 18, 2013
of $126 million in net sales and GAAP and non-GAAP net income from continuing
operations of $0.39 and $0.44 per diluted share, respectively. First quarter
2012 net sales were $120.2 million with a net loss from continuing operations
of $0.10 per share, which included special charges of $0.36 per share related
to restructuring and streamlining initiatives. First quarter 2012 non-GAAP net
income per diluted share from continuing operations was $0.26.

Reconciliations of the GAAP to non-GAAP guidance and operating results
discussed in this press release are set forth at its conclusion.

Business Segment Discussion

Printed Circuit Materials

Net sales of Printed Circuit Materials totaled $43.6 million for the first
quarter of 2013, an increase of 10.6% from the $39.4 million reported in the
first quarter of 2012. The increase in net sales is mainly due to strong
demand for high frequency printed circuit materials for use in the telecom
base station market and in automotive safety sensor applications. In addition,
the segment continues to gain adoptions in new wireless antenna applications.
These strong growth developments were partially offset by weaker demand in
high reliability applications.

High Performance Foams

In the first quarter of 2013, High Performance Foams reported record first
quarter net sales of $42.4 million, an increase of 5.0% compared to the first
quarter 2012 net sales of $40.4 million. The increase in net sales is due
primarily to strong demand for high performance foams in general industrial
and consumer applications for cushioning, sealing and impact protection
materials, particularly in North America. The business continues to command
high market share in sealing applications for mobile internet devices. In this
segment, sales into the mobile phone markets, as well as into the tablet
device market, were relatively flat quarter over quarter.

Power Electronics Solutions

Curamik Electronics Solutions reported net sales of $23.3 million for the
first quarter of 2013, a decrease of 4.1% compared to the first quarter 2012
net sales of $24.3 million. Lower net sales at Curamik in the first quarter of
2013 were largely related to the constriction in global capital and
infrastructure spending that originated in the first half of 2012. However,
there are signs that this segment is beginning to experience a recovery in
demand in most key application areas. In addition, the previously announced
cost-cutting move of certain finishing operations to Hungary is on schedule
and is expected to result in a positive financial impact by the fourth quarter
of 2013.

Power Distribution Systems’ net sales in the first quarter of 2013 were $11.0
million, an increase of 4.5% compared to $10.5 million in the first quarter of
2012. The increase in sales was due primarily to continued demand for power
distribution products in the electric vehicle automotive market. Further
improvement in demand is expected when the Chinese government implements its
announced investments in rail infrastructure.

Joint Ventures

Rogers’ 50% owned High Performance Foams joint ventures’ net sales totaled
$10.7 million this quarter, a decrease of 16.4% compared to the $12.8 million
sold in the first quarter of 2012. The decrease was mainly due to the
depreciation of the Japanese yen against the US dollar of approximately 14%
quarter over quarter, as well as the continued weakness in the Japanese
domestic and export markets, particularly related to LCD TVs, domestic mobile
phones and general industrial applications.

Operational Highlights

Rogers’ statement of financial position ended the first quarter of 2013 with
cash and cash equivalents of $126.4 million, an increase of $11.5 million, or
10.1%, from $114.9 million at December 31, 2012. Capital expenditures were
approximately $7.7 million for the first quarter of 2013 and are expected to
total approximately $26 million for the year.

The Company’s gross margin improved to 32.8% in the first quarter of 2013 from
30.3% in the first quarter of 2012. This improvement was due to increased
sales volume and the positive impact of streamlining actions taken in 2012.
This was partially offset by lower operating utilization resulting from
inventory declines in the quarter.

The Company’s 2013 first quarter effective tax rate was 29.2%. The Company
currently projects its effective tax rate for 2013 will be approximately 28%.

Bruce D. Hoechner, President and CEO commented: “For the first quarter of
2013, we delivered solid revenue and margin improvements and saw promising
signs of recovery across most of our markets compared to the first quarter of
2012. In Printed Circuit Materials, we profited from strong demand for our
advanced circuit materials in 4G internet infrastructure and automotive sensor
applications. Our High Performance Foams business generated record first
quarter sales buoyed by general industrial applications and impact protection
segments. In Power Electronics, we delivered growth in Power Distribution
Systems and saw an increase in demand across many of the markets we serve. We
expect market conditions to improve for the balance of 2013. For the second
quarter of 2013, we forecast net sales between $129 to $134 million and
non-GAAP income from continuing operations of between $0.47 and $0.58 per
diluted share, which excludes special charges.”

About Rogers Corporation

Rogers Corporation (NYSE:ROG) is a global technology leader in specialty
materials and components for consumer electronics, power electronics, mass
transit, clean technology, and telecommunications infrastructure. With more
than 180 years of materials science and engineering experience, Rogers
provides product designers with solutions to help them power, protect and
connect our world with greater reliability, efficiency and performance.
Rogers’ three core businesses include Power Electronics Solutions for
high-voltage rail traction, energy efficient motor drives, wind and solar
power conversion; High Performance Foams for cushioning, sealing and impact
protection in tablets and smart phones, aircraft, rail and automotive
interiors, sporting goods, apparel and gear; and Printed Circuit Materials for
wireless infrastructure, power amplifiers, smart antennas, and radar systems
for automotive and defense applications. 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 sovereign debt
crisis being experienced globally and the uncertain outlook for global
economic growth, particularly in several of our key markets; uncertainty
regarding resolution of the United States fiscal cliff and debt ceiling
issues; 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, 2012 and subsequent Securities and Exchange Commission filings.

            Additional Information and May 1, 2013 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

A conference call to discuss 2013 first quarter results will be held on
Wednesday, May 1, 2013 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
Robert C. Daigle, Senior Vice President and CTO
Dennis M. Loughran, Vice President Finance and CFO

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, May
8, 2013. The passcode for the audio replay is 36307742.

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.

                                                               
Condensed Consolidated Statements of Income (Loss) (Unaudited)
                                                                 
                                             Three Months Ended
                                             March 31,          March 31,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE      2013               2012
AMOUNTS)
                                                                 
Net sales                                    $ 125,979          $ 120,155
Cost of sales                                  84,690             83,751      
Gross margin                                   41,289             36,404
                                                                 
Selling and administrative expenses            25,206             24,239
Research and development expenses              5,269              5,323
Restructuring and impairment charges           -                  7,349       
Operating income (loss)                        10,814             (507       )
                                                                 
Equity income in unconsolidated joint          529                657
ventures
Other income (expense), net                    (589       )       (140       )
Net realized investment gain (loss)            -                  (3,245     )
Interest income (expense), net                 (905       )       (1,190     )
Income (loss) before income tax expense        9,849              (4,425     )
                                                                 
Income tax expense (benefit)                   2,873              (2,839     )
Income (loss) from continuing operations       6,976              (1,586     )
Income (loss) from discontinued                120                (222       )
operations, net of income taxes
Net income (loss)                            $ 7,096            $ (1,808     )
                                                                 
Basic net income (loss) per share:
Income (loss) from continuing operations     $ 0.41             $ (0.10      )
Income (loss) from discontinued                0.01               (0.01      )
operations
Net Income (loss)                            $ 0.42             $ (0.11      )
                                                                 
Diluted net income (loss) per share:
Income (loss) from continuing operations     $ 0.39             $ (0.10      )
Income (loss) from discontinued                0.01               (0.01      )
operations
Net Income (loss)                            $ 0.40             $ (0.11      )
                                                                 
Shares used in computing:
Basic                                          17,072,459         16,232,856
Diluted                                        17,673,399         16,232,856  
                                                                              

Condensed Consolidated Statements of Financial Position (Unaudited)
                                                            
(IN THOUSANDS)                            March 31, 2013     December 31, 2012
Assets
Current assets:
Cash and cash equivalents                 $  126,414         $   114,863
Restricted cash                              -                   950
Accounts receivable, net                     79,518              78,788
Accounts receivable from joint               2,374               2,142
ventures
Accounts receivable, other                   2,053               2,297
Taxes receivable                             2,099               5,079
Inventories                                  69,544              73,178
Prepaid income taxes                         4,941               4,914
Deferred income taxes                        6,878               7,225
Asbestos related insurance                   8,195               8,195
receivables
Other current assets                         7,932               8,559
Assets of discontinued operations            140                 746        
Total current assets                         310,088             306,936
                                                              
Property, plant and equipment, net           150,157             149,017
Investments in unconsolidated joint          18,490              21,171
ventures
Deferred income taxes                        70,454              71,439
Goodwill                                     102,045             105,041
Other intangible assets                      50,321              53,288
Asbestos related insurance                   40,067              40,067
receivables
Investments, other                           5,000               5,000
Other long term assets                       7,820               8,065      
Total assets                              $  754,442         $   760,024    
                                                              
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable                          $  16,423          $   16,730
Accrued employee benefits and                24,850              23,156
compensation
Accrued income taxes payable                 3,748               3,135
Current portion of lease obligation          1,185               1,423
Current portion of long term debt            21,750              20,500
Asbestos related liabilities                 8,195               8,195
Other current liabilities                    11,411              11,363
Liabilities of discontinued                  -                   3          
operations
Total current liabilities                    87,562              84,505
                                                              
Long term lease obligation                   6,681               6,942
Long term debt                               73,750              77,500
Pension liability                            59,442              65,942
Retiree health care and life                 10,654              10,654
insurance benefits
Asbestos related liabilities                 43,222              43,222
Non-current income tax                       19,957              19,300
Deferred income taxes                        16,494              17,545
Other long term liabilities                  310                 262
                                                              
Shareholders’ equity
Capital stock                                17,070              16,904
Additional paid in capital                   77,599              74,272
Retained earnings                            407,880             400,784
Accumulated other comprehensive              (66,178  )          (57,808   )
income (loss)
Total shareholders’ equity                   436,371             434,152    
Total liabilities and shareholders’       $  754,442         $   760,024    
equity
                                                                            

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 Income Per Diluted Share from Continuing
Operations for the First Quarter of 2013 and 2012:

The following table includes non-recurring charges related to special
adjustments.

                                                         Q1 2013     Q1 2012
                                                                    
GAAP income per diluted share from continuing            $  0.39     $ (0.10 )
operations
Add back special adjustments, net of tax:
Severance and related charges                               0.03       0.24
Relocation charges for Curamik’s final inspection           0.02       -
operation
Impairment charge on auction rate security                  -          0.10
liquidation
Other special charges                                       -          0.02   
Total special charges                                       0.05       0.36   
                                                                      
Non-GAAP income per diluted share from continuing        $  0.44     $ 0.26   
operations
                                                                              

Reconciliation of GAAP to non-GAAP Income Per Diluted Share from Continuing
Operations Guidance for the Second Quarter of 2013:

The following table includes non-recurring charges related to special
adjustments.

                                                                 Q2 2013
Guidance Q2 2013 GAAP income per diluted share from              $0.45 - $0.56
continuing operations
                                                                  
Add back special charges, net of tax:
Relocation charges for Curamik’s final inspection operation      0.02
                                                                  
Guidance Q2 2013 non-GAAP income per diluted share from          $0.47 - $0.58
continuing operations
                                                                  

Contact:

Rogers Corporation
Financial News Contact:
Dennis M. Loughran, 860-779-5508
Vice President Finance and Chief Financial Officer
FAX: 860-779-4714
or
Investor Contact:
William J. Tryon, 860-779-4037
Director of Investor and Public Relations
FAX: 860-779-5509
william.tryon@rogerscorp.com
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