Release Date: 04/30/2020
Chandler, Arizona, April 30, 2020: Rogers Corporation (NYSE: ROG) today announced financial results for the first quarter of 2020.
"Rogers delivered solid first quarter results at the high end of our guidance range, despite the impact of the ongoing COVID-19 pandemic," stated Bruce D. Hoechner, Rogers' President and CEO. "The global Rogers team responded swiftly to focus on employee safety and health while maintaining continuity of our operations in order to meet commitments to our customers. Looking ahead we anticipate Q2 sales to be comparable to Q1 due to stronger wireless infrastructure demand from China offsetting weakness in automotive and industrial markets. The current environment remains dynamic, however with a strong balance sheet, a history of adaptability, resilience and innovation, and leading positions in global diversified markets, Rogers is well positioned to navigate these challenges."
|GAAP Results||Q1 2020||Q4 2019||Q1 2019|
|Net Sales ($M)||$198.8||$193.8||$239.8|
|Net Income/ (Loss) ($M)||$13.3||$(28.8)||$28.4|
|Earnings Per Share1||$0.71||$(1.55)||$1.52|
|Non-GAAP Results2||Q1 2020||Q4 2019||Q1 2019|
|Adjusted Operating Margin||11.3%||11.6%||17.1%|
|Adjusted Net Income ($M)||$17.2||$21.3||$34.6|
|Adjusted Earnings Per Share||$0.92||$1.14||$1.85|
|LAdjusted EBITDA ($M)||$33.4||$34.5||$53.1|
|Adjusted EBITDA Margin||16.8%||17.8%||22.2%|
|Net Sales by Operating Segment (dollars in millions)||Q1 2020||Q4 2019||Q1 2019|
|Advanced Connectivity Solutions (ACS)||$64.6||$64.6||$80.5|
|Elastomeric Material Solutions (EMS)||$83.5||$80.0||$92.8|
|Power Electronic Solutions (PES)||$46.7||$43.9||$59.8|
1 - Q4 2019 net loss and earnings per share inclusive of a non-cash after-tax pension settlement charge of $43.9 million, or $2.35 per diluted share
2 - A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below
Net sales of $198.8 million increased 2.6% versus the prior quarter, despite some impact to demand from the COVID-19 pandemic. PES and EMS segment sales increased versus the fourth quarter of 2019 and ACS segment revenue was essentially flat. PES net sales increased sequentially due to stronger EV/HEV and renewable energy market demand, partially offset by lower rail market demand. EMS net sales increased sequentially due to higher general industrial, EV/HEV battery and mass transit market demand, partially offset by lower portable electronics demand. In the ACS segment, higher ADAS and wireless infrastructure sales were offset by a decline in aerospace and defense market demand. Currency exchange rates favorably impacted total company net sales in the first quarter of 2020 by $0.5 million compared to prior quarter net sales.
Gross margin was 33.0%, compared to 33.1% in the prior quarter. The decline in gross margin was primarily due to unfavorable product mix and the impact of COVID-19 related costs of $0.6 million, partially offset by higher volume and operational savings.
GAAP operating margin of 8.8% increased by approximately 130 basis points sequentially. Adjusted operating margin of 11.3% decreased by approximately 30 basis points versus the prior quarter.
GAAP earnings per share were $0.71, compared to a net loss per share of $(1.55) in the fourth quarter of 2020. The sequential improvement in GAAP earnings is primarily a result of a non-cash pension settlement charge of $2.35 per diluted share in Q4 2019, partially offset by increased tax expense. On an adjusted basis, earnings were $0.92 per diluted share compared to adjusted earnings of $1.14 per diluted share in the prior quarter. The decrease in adjusted earnings was primarily due to higher tax expense in Q1.
The first quarter of 2020 ending cash and cash equivalents was $308.3 million, an increase of $141.4 million versus the prior quarter. The increase in cash was primarily due to $150 million of new borrowing under the Company’s revolving credit facility and net cash provided by operating activities of $8.6 million, partially offset by capital expenditures of $11.2 million and $5.0 million in tax payments related to net share settlement of equity awards. The borrowing under the revolving credit facility was a precautionary measure to preserve financial flexibility in the current market environment. At the end of the first quarter of 2020, cash exceeded borrowings by $35 million.
|Net Sales ($M)||$190 to $205|
|Gross Margin||32.5% to 33.5%|
|Earnings Per Share||$0.58 to $0.78|
|Non-GAAP Earnings Per Share1||$0.80 to $1.00|
|Effective Tax Rate||24% to 25%|
|Capital Expenditures ($M)||$40 to $45|
Rogers 2020 second quarter guidance incorporates the Company's best estimate of the impact of COVID-19 and the net sales range is wider than historically provided due to an increased level of uncertainty in the outlook.
1 - A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below
Rogers Corporation (NYSE:ROG) is a global leader in engineered materials to power, protect, and connect our world. With more than 180 years of materials science experience, Rogers delivers high-performance solutions that enable the company’s growth drivers-- advanced connectivity and advanced mobility applications, as well as other technologies where reliability is critical. Rogers delivers Power Electronics Solutions for energy-efficient motor drives, e-Mobility and renewable energy; Elastomeric Material Solutions for sealing, vibration management and impact protection in mobile devices, transportation interiors, industrial equipment and performance apparel; and Advanced Connectivity Solutions for wireless infrastructure, automotive safety and radar systems. Headquartered in Arizona (USA), Rogers operates manufacturing facilities in the United States, China, Germany, Belgium, Hungary, and South Korea, with joint ventures and sales offices worldwide.
This release contains forward-looking statements, which concern our plans, objectives, outlook, goals, strategies, future events, future net sales or performance, capital expenditures, future restructuring, plans or intentions relating to expansions, business trends and other information that is not historical information. All forward-looking statements are based upon information available to us on the date of this release and are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Risks and uncertainties that could cause such results to differ include: the duration and impacts of the novel coronavirus global pandemic and efforts to contain its transmission, including the effect of these factors on our business, our customers and economic conditions generally; failure to capitalize on, volatility within, or other adverse changes with respect to the Company's growth drivers, including advanced mobility and advanced connectivity, such as delays in adoption or implementation of new technologies; uncertain business, economic and political conditions in the United States and abroad, particularly in China, South Korea, Germany, Hungary and Belgium, where we maintain significant manufacturing, sales or administrative operations; the trade policy dynamics between the U.S. and China reflected in trade agreement negotiations and the imposition of tariffs and other trade restrictions, including trade restrictions on Huawei Technologies Co., Ltd.; fluctuations in foreign currency exchange rates; our ability to develop innovative products and the extent to which our products are incorporated into end-user products and systems and the extent to which end-user products and systems incorporating our products achieve commercial success; the ability of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner; intense global competition affecting both our existing products and products currently under development; business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises; failure to realize, or delays in the realization of anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses; our ability to attract and retain management and skilled technical personnel; our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights; changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate; failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants; the outcome of ongoing and future litigation, including our asbestos-related product liability litigation; changes in environmental laws and regulations applicable to our business; and disruptions in, or breaches of, our information technology systems. For additional information about the risks, uncertainties and other factors that may affect our business, please see our most recent annual report on Form 10-K and any subsequent reports filed with the Securities and Exchange Commission, including quarterly reports on Form 10-Q. Rogers Corporation assumes no responsibility to update any forward-looking statements contained herein except as required by law.
Conference call and additional information
A conference call to discuss the results for the first quarter of 2020 will take place today, Thursday, April 30, 2020 at 5pm ET.
A live webcast of the event and the accompanying presentation can be accessed on the Rogers Corporation website at https://www.rogerscorp.com/investors.
To participate, please dial:
1-800-574-8929 Toll-free in the United States
The passcode for the live teleconference is 1277251.
If you are unable to attend, a conference call playback will be available from April 30, 2020 at approximately 8 pm ET through May 14, 2020 at 11:59 pm ET, by dialing 1-855-859-2056 from the United States, and 1-404-537-3406 from outside of the US, each with passcode 1277251.
Additionally, the archived webcast will be available on the Rogers website at approximately 8 pm ET May 1, 2020.
Please contact the Company directly via email or visit the Rogers website.
Website address: https://www.rogerscorp.com