Rogers' effective tax rate for 2019 was 14.2% compared to 20.7% in 2018. The 2019 rate decreased primarily due to the increased utilization of research and development credits and excess tax deductions on stock-based compensation, partially offset by the disproportionate tax effect of the pension settlement charge and an increase in reserves for uncertain tax positions.
Pension Plan Termination
On October 17, 2019, in connection with the Company’s previously announced plans, the Company terminated the Rogers Corporation Defined Benefit Pension Plan, which had sufficient assets to satisfy all transaction obligations. This decision continues the Company’s strategy to improve cost competitiveness and reduces future risk. The Company recorded a total non-cash pre-tax settlement charge in connection with the termination of $53.2 million in the fourth quarter of 2019, or approximately $2.35 per diluted share.
Financial outlook
Rogers guides its 2020 first quarter net sales to a range of $185 to $200 million. The revenue range incorporates a 7% to 10% reduction from the expected impact of the coronavirus outbreak and is wider than normal due to uncertainty related to the evolving situation. The Company guides to a gross margin range of 32.5% to 33.5%. First quarter earnings is expected to be in the range of $0.50 to $0.70 per diluted share and adjusted earnings is expected to be in the range of $0.75 to $0.95 per diluted share. The 2020 full year effective tax rate is expected to be 20% to 21%. For the full year 2020, Rogers expects capital expenditures to be in a range of $40 to $45 million.
About Rogers Corporation
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.
Safe Harbor Statement
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: 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; the results of our research and development efforts; adverse competitive developments, including the extent to which our products are incorporated into end-user products and systems and the extent to which those products and systems achieve commercial success; business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises; business development transactions and related integration considerations, including failure to realize, or delays in the realization of anticipated benefits of such transactions; the outcome of ongoing and future litigation, including our asbestos-related product liability litigation; inability to obtain raw materials, including commodities, from single or limited source suppliers in a timely and cost effective manner; and changes in laws and regulations applicable to our business. 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 2019 fourth quarter and full year results will take place today, Thursday February 20, 2020 at 5pm ET.
A live webcast and slide presentation will be available under the investors section of https://www.rogerscorp.com/investors.
To participate, please dial:
1-800-574-8929 |
Toll-free in the United States |
1-973-935-8524 |
Internationally |
The passcode for the live teleconference is 8027919. |
|
If you are unable to attend, a conference call playback will be available from February 20, 2020 at approximately 8 pm ET through March 5, 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 8027919.
Additionally, the archived webcast will be available on the Rogers website at approximately 8 pm ET February 21, 2020.
Additional information
Please contact the Company directly via email or visit the Rogers website.
Website address: http://www.rogerscorp.com
(Financial statements follow)
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
December 31, 2019 |
|
December 31, 2018 |
|
December 31, 2019 |
|
December 31, 2018 |
|||||||||
Net sales |
$ |
193,768 |
|
|
$ |
222,942 |
|
|
$ |
898,260 |
|
|
$ |
879,091 |
|
|
| Cost of sales |
129,565 |
|
|
144,567 |
|
|
583,968 |
|
|
568,308 |
|
|||||
| Gross margin |
64,203 |
|
|
78,375 |
|
|
314,292 |
|
|
310,783 |
|
|||||
| Selling, general and administrative expenses |
41,333 |
|
|
40,966 |
|
|
168,682 |
|
|
164,046 |
|
|||||
| Research and development expenses |
8,403 |
|
|
8,561 |
|
|
31,685 |
|
|
33,075 |
|
|||||
| Restructuring and impairment charges |
— |
|
|
2,023 |
|
|
2,485 |
|
|
4,038 |
|
|||||
| Other operating (income) expense, net |
(116 |
) |
|
24 |
|
|
959 |
|
|
(3,087 |
) |
|||||
| Operating income |
14,583 |
|
|
26,801 |
|
|
110,481 |
|
|
112,711 |
|
|||||
| Equity income in unconsolidated joint ventures |
1,242 |
|
|
1,048 |
|
|
5,319 |
|
|
5,501 |
|
|||||
| Pension settlement charges |
(53,213 |
) |
|
— |
|
|
(53,213 |
) |
|
— |
|
|||||
| Other income (expense), net |
323 |
|
|
(347 |
) |
|
(592 |
) |
|
(994 |
) |
|||||
| Interest expense, net |
(1,146 |
) |
|
(2,126 |
) |
|
(6,869 |
) |
|
(6,629 |
) |
|||||
| Income (loss) before income tax expense |
(38,211 |
) |
|
25,376 |
|
|
55,126 |
|
|
110,589 |
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income tax expense |
(9,451 |
) |
|
924 |
|
|
7,807 |
|
|
22,938 |
|
|||||
| Net income (loss) |
$ |
(28,760 |
) |
|
$ |
24,452 |
|
|
$ |
47,319 |
|
|
$ |
87,651 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
$ |
(1.55 |
) |
|
$ |
1.33 |
|
|
$ |
2.55 |
|
|
$ |
4.77 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted earnings per share |
$ |
(1.55 |
) |
|
$ |
1.31 |
|
|
$ |
2.53 |
|
|
$ |
4.70 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| Shares used in computing: |
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
18,587 |
|
|
18,385 |
|
|
18,573 |
|
|
18,374 |
|
|||||
| Diluted earnings per share |
18,587 |
|
|
18,687 |
|
|
18,713 |
|
|
18,659 |
|
|||||
| Condensed Consolidated Statements of Financial Position (Unaudited) |
||||||||
| (IN THOUSANDS) |
December 31, 2019 |
|
December 31, 2018 |
|||||
| Assets |
|
|
|
|||||
| Current assets |
|
|
|
|||||
| Cash and cash equivalents |
$ |
166,849 |
|
|
$ |
167,738 |
|
|
| Accounts receivable, less allowance for doubtful accounts of $1,691 and $1,354 |
122,285 |
|
|
144,623 |
|
|||
| Contract assets |
22,455 |
|
|
22,728 |
|
|||
| Inventories |
132,859 |
|
|
132,637 |
|
|||
| Prepaid income taxes |
4,524 |
|
|
3,093 |
|
|||
| Asbestos-related insurance receivables, current portion |
4,292 |
|
|
4,138 |
|
|||
| Other current assets |
10,838 |
|
|
10,829 |
|
|||
| Total current assets |
464,102 |
|
|
485,786 |
|
|||
| Property, plant and equipment, net of accumulated depreciation of $341,119 and $317,414 |
260,246 |
|
|
242,759 |
|
|||
| Investments in unconsolidated joint ventures |
16,461 |
|
|
18,667 |
|
|||
| Deferred income taxes |
17,117 |
|
|
8,236 |
|
|||
| Goodwill |
262,930 |
|
|
264,885 |
|
|||
| Other intangible assets, net of amortization |
158,947 |
|
|
177,008 |
|
|||
| Pension assets |
12,790 |
|
|
19,273 |
|
|||
| Asbestos-related insurance receivables, non-current portion |
74,024 |
|
|
59,685 |
|
|||
| Other long-term assets |
6,564 |
|
|
3,045 |
|
|||
| Total assets |
$ |
1,273,181 |
|
|
$ |
1,279,344 |
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|||||
| Current liabilities |
|
|
|
|||||
| Accounts payable |
$ |
33,019 |
|
|
$ |
40,321 |
|
|
| Accrued employee benefits and compensation |
29,678 |
|
|
30,491 |
|
|||
| Accrued income taxes payable |
10,649 |
|
|
7,032 |
|
|||
| Asbestos-related liabilities, current portion |
5,007 |
|
|
5,547 |
|
|||
| Other accrued liabilities |
21,872 |
|
|
23,789 |
|
|||
| Total current liabilities |
100,225 |
|
|
107,180 |
|
|||
| Borrowings under revolving credit facility |
123,000 |
|
|
228,482 |
|
|||
| Pension and other postretirement benefits liabilities |
1,567 |
|
|
1,739 |
|
|||
| Asbestos-related liabilities, non-current portion |
80,873 |
|
|
64,799 |
|
|||
| Non-current income tax |
10,423 |
|
|
8,418 |
|
|||
| Deferred income taxes |
9,220 |
|
|
10,806 |
|
|||
| Other long-term liabilities |
13,973 |
|
|
9,596 |
|
|||
| Shareholders’ equity |
|
|
|
|||||
| Capital stock - $1 par value; 50,000 authorized shares; 18,577 and 18,395 shares issued and outstanding |
18,577 |
|
|
18,395 |
|
|||
| Additional paid-in capital |
138,526 |
|
|
132,360 |
|
|||
| Retained earnings |
823,702 |
|
|
776,403 |
|
|||
| Accumulated other comprehensive loss |
(46,905 |
) |
|
(78,834 |
) |
|||
| Total shareholders' equity |
933,900 |
|
|
848,324 |
|
|||
| Total liabilities and shareholders' equity |
$ |
1,273,181 |
|
$ |
1,279,344 |
|||
Reconciliation of non-GAAP financial measures to the comparable GAAP measures
