Q1 Sales And EPS Exceed Mid-Point Of
Guidance As Outlook Improves
Rogers Corporation (NYSE:ROG) today announced financial results
for the first quarter of 2024.
"We are encouraged by the improving demand that we saw in the
first quarter, which resulted in sales near the top end of our
guidance expectations,” stated Colin Gouveia, Rogers' President and
CEO. "Aerospace and defense sales were strong in the first quarter
and after a prolonged downturn, the outlook for the general
industrial market is improving with lower customer inventory levels
and positive order trends. We expect overall sales to improve
further in the coming quarters, tempered by some markets which
continue to face near-term inventory challenges. We remain intently
focused on driving improved profitability and cash flow, while also
ensuring we are positioned to grow as demand strengthens."
Financial Overview
GAAP Results (dollars in millions, except
per share amounts)
Q1 2024
Q4 2023
Q1 2023
Net Sales
$213.4
$204.6
$243.8
Gross Margin
32.0%
32.9%
32.7%
Operating Margin
5.5%
14.9%
(0.1%)
Net Income (Loss)
$7.8
$23.2
$(3.5)
Net Income (Loss) Margin
3.7%
11.3%
(1.4)%
Diluted Earnings (Loss) Per Share
$0.42
$1.24
$(0.19)
Net Cash Provided by Operating
Activities
$28.1
$71.9
$1.8
Non-GAAP Results1 (dollars in millions,
except per share amounts)
Q1 2024
Q4 2023
Q1 2023
Adjusted Operating Margin
7.5%
6.3%
10.5%
Adjusted Net Income
$10.9
$11.3
$16.2
Adjusted Earnings Per Diluted Share
$0.58
$0.60
$0.87
Adjusted EBITDA
$28.3
$23.4
$35.1
Adjusted EBITDA Margin
13.3%
11.4%
14.4%
Free Cash Flow
$18.7
$49.4
$(14.6)
Net Sales by Operating Segment (dollars in
millions)
Q1 2024
Q4 2023
Q1 2023
Advanced Electronics Solutions (AES)
$122.1
$117.3
$135.9
Elastomeric Material Solutions (EMS)
$85.7
$83.4
$102.2
Other
$5.6
$3.9
$5.7
1 - A reconciliation of GAAP to non-GAAP measures is provided in
the schedules included below
Q1 2024 Summary of
Results
Net sales of $213.4 million increased 4.3% versus the prior
quarter resulting from higher sales in the AES and EMS business
units. AES net sales increased by 4.1% primarily related to higher
aerospace and defense (A&D), wireless infrastructure,
industrial and renewable energy sales, partially offset by lower
EV/HEV and ADAS sales. EMS net sales increased by 2.8% primarily
from higher general industrial, A&D and EV/HEV sales, partially
offset by seasonally lower portable electronics sales. Currency
exchange rates favorably impacted total company net sales in the
first quarter of 2024 by $1.6 million compared to the prior
quarter.
Gross margin decreased to 32.0% from 32.9% in the prior quarter
due to unfavorable product mix, partially offset by higher sales
volumes.
Selling, general and administrative (SG&A) expenses
decreased by $4.3 million from the prior quarter to $47.5 million.
The lower SG&A expense was due primarily to a decrease in
professional service fees, compensation costs and other
administrative expenses.
GAAP operating margin of 5.5% decreased from 14.9% in the prior
quarter. Operating margin declined primarily due to a decrease in
other operating income, partially offset by lower SG&A
expenses. Other operating income was higher in the fourth quarter
mainly related to a $24.0 million insurance recovery received in
connection with the fire that occurred at the UTIS facility in
2021. Adjusted operating margin of 7.5% increased by 120 basis
points versus the prior quarter.
GAAP earnings per diluted share were $0.42 compared to earnings
per diluted share of $1.24 in the previous quarter. The decrease in
GAAP earnings per diluted share was due to lower operating income,
partially offset by lower tax expense. On an adjusted basis,
earnings were $0.58 per diluted share compared to adjusted earnings
of $0.60 per diluted share in the prior quarter.
Ending cash and cash equivalents were $116.9 million, an
decrease of $14.8 million versus the prior quarter. Net cash
provided by operating activities in the first quarter was $28.1
million and capital expenditures were $9.4 million. A principal
payment of $30.0 million was made on the remaining outstanding
borrowings under the Company’s revolving credit facility.
Financial Outlook
(dollars in millions, except per share
amounts)
Q2 2024
Net Sales
$210 to $220
Gross Margin
32.5% to 33.5%
Earnings Per Diluted Share
$0.34 to $0.54
Adjusted Earnings Per Diluted Share1
$0.50 to $0.70
2024
Capital Expenditures
$60 to $70
1 - A reconciliation of GAAP to non-GAAP measures is provided in
the schedules included below
Conference Call and Additional
Information
A conference call to discuss the results for the first quarter
will take place today, Thursday, April 25, 2024 at 5:00 pm 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.
About Rogers Corporation
Rogers Corporation (NYSE:ROG) is a global leader in engineered
materials to power, protect and connect our world. Rogers delivers
innovative solutions to help our customers solve their toughest
material challenges. Rogers’ advanced electronic and elastomeric
materials are used in applications for EV/HEV, automotive safety
and radar systems, mobile devices, renewable energy, wireless
infrastructure, energy-efficient motor drives, industrial equipment
and more. Headquartered in Chandler, Arizona, Rogers operates
manufacturing facilities in the United States, Asia and Europe,
with sales offices worldwide.
Safe Harbor Statement
Statements included in this release that are not a description
of historical facts are forward-looking statements. Words or
phrases such as “believe,” “may,” “could,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,”
“should,” “would” or similar expressions are intended to identify
forward-looking statements, and are based on Rogers’ current
beliefs and expectations. This release contains forward-looking
statements regarding 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 those indicated by the forward-looking
statements. Other risks and uncertainties that could cause such
results to differ include the following, without limitation:
failure to capitalize on, volatility within, or other adverse
changes with respect to the Company's growth drivers, such as
delays in adoption or implementation of new technologies; failure
to successfully execute on our long-term growth strategy as a
standalone company; uncertain business, economic and political
conditions in the United States (U.S.) and abroad, particularly in
China, South Korea, Germany, Belgium, England and Hungary, 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, as well as the potential for
U.S.-China supply chain decoupling; 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 and willingness 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, including the
ongoing conflict between Russia and Ukraine, terrorism or public
health crises; the impact of sanctions, export controls and other
foreign asset or investment restrictions; 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 or risks arising from the terminated DuPont
Merger; changes in environmental laws and regulations applicable to
our business; and disruptions in, or breaches of, our information
technology systems. Should any risks and uncertainties develop into
actual events, these developments could have a material adverse
effect on the Company. 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.
(Financial statements follow)
Condensed Consolidated Statements of
Operations (Unaudited)
Three Months Ended
(DOLLARS AND SHARES IN MILLIONS, EXCEPT
PER SHARE AMOUNTS)
March 31, 2024
March 31, 2023
Net sales
$
213.4
$
243.8
Cost of sales
145.2
164.1
Gross margin
68.2
79.7
Selling, general and administrative
expenses
47.5
60.1
Research and development expenses
8.9
9.6
Restructuring and impairment charges
0.1
10.5
Other operating (income) expense, net
—
(0.2
)
Operating income (loss)
11.7
(0.3
)
Equity income in unconsolidated joint
ventures
0.3
0.1
Other income (expense), net
0.4
0.1
Interest expense, net
(0.8
)
(3.5
)
Income (loss) before income tax
expense
11.6
(3.6
)
Income tax expense (benefit)
3.8
(0.1
)
Net income (loss)
$
7.8
$
(3.5
)
Basic earnings (loss) per share
$
0.42
$
(0.19
)
Diluted earnings (loss) per
share
$
0.42
$
(0.19
)
Shares used in computing:
Basic earnings (loss) per share
18.6
18.6
Diluted earnings (loss) per share
18.7
18.6
Condensed Consolidated Statements of
Financial Position (Unaudited)
(DOLLARS AND SHARES IN MILLIONS, EXCEPT
PAR VALUE)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
116.9
$
131.7
Accounts receivable, less allowance for
credit losses of $1.0 and $1.1
159.2
161.9
Contract assets
40.3
45.2
Inventories, net
150.9
153.5
Asbestos-related insurance receivables,
current portion
4.3
4.3
Other current assets
29.8
30.3
Total current assets
501.4
526.9
Property, plant and equipment, net of
accumulated depreciation of $386.2 and $385.7
363.4
366.3
Operating lease right-of-use assets
18.6
18.9
Goodwill
357.2
359.8
Other intangible assets, net of
amortization
120.3
123.9
Asbestos-related insurance receivables,
non-current portion
52.2
52.2
Investments in unconsolidated joint
ventures
10.9
11.1
Deferred income taxes
55.7
49.7
Other long-term assets
8.3
8.4
Total assets
$
1,488.0
$
1,517.2
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
51.7
$
50.3
Accrued employee benefits and
compensation
29.5
31.1
Accrued income taxes payable
7.3
2.0
Operating lease obligations, current
portion
3.8
3.5
Asbestos-related liabilities, current
portion
5.5
5.5
Other accrued liabilities
19.2
24.0
Total current liabilities
117.0
116.4
Borrowings under revolving credit
facility
—
30.0
Operating lease obligations, non-current
portion
15.1
15.4
Asbestos-related liabilities, non-current
portion
56.0
56.0
Non-current income tax
7.2
7.2
Deferred income taxes
22.7
22.9
Other long-term liabilities
10.2
10.3
Shareholders’ equity
Capital stock - $1 par value; 50.0
authorized shares; 18.7 and 18.6 shares issued and outstanding
18.7
18.6
Additional paid-in capital
153.8
151.8
Retained earnings
1,162.8
1,155.0
Accumulated other comprehensive loss
(75.5
)
(66.4
)
Total shareholders' equity
1,259.8
1,259.0
Total liabilities and shareholders'
equity
$
1,488.0
$
1,517.2
Reconciliation of non-GAAP financial
measures to the comparable GAAP measures
Non-GAAP Financial Measures:
This earnings release includes the following financial measures
that are not presented in accordance with generally accepted
accounting principles in the United States of America (“GAAP”):
(1) Adjusted operating margin, which the Company defines as
operating margin excluding acquisition and related integration
costs, dispositions, intangible amortization, (gains) losses on the
sale or disposal of property, plant and equipment, restructuring,
severance, impairment and other related costs, non-routine
shareholder advisory costs, (income) costs associated with
terminated merger, UTIS fire (recoveries) charges, asbestos-related
charges (credits), and the related income tax effect on these
items;
(2) Adjusted net income, which the Company defines as net income
(loss) excluding acquisition and related integration costs,
dispositions, intangible amortization, (gains) losses on the sale
or disposal of property, plant and equipment, restructuring,
severance, impairment and other related costs, non-routine
shareholder advisory costs, (income) costs associated with
terminated merger, UTIS fire (recoveries) charges, asbestos-related
charges (credits), pension settlement charges and the related
income tax effect on these items;
(3) Adjusted earnings per diluted share, which the Company
defines as earnings per diluted share excluding acquisition and
related integration costs, dispositions, intangible amortization,
(gains) losses on the sale or disposal of property, plant and
equipment, restructuring, severance, impairment and other related
costs, non-routine shareholder advisory costs, (income) costs
associated with terminated merger, UTIS fire (recoveries) charges,
asbestos-related charges (credits), pension settlement charges, and
the related income tax effect on these items, divided by adjusted
weighted average shares outstanding - diluted;
(4) Adjusted EBITDA, which the Company defines as net income
(loss) excluding acquisition and related integration costs,
dispositions, intangible amortization, (gains) losses on the sale
or disposal of property, plant and equipment, restructuring,
severance, impairment and other related costs, non-routine
shareholder advisory costs, (income) costs associated with
terminated merger, UTIS fire (recoveries) charges, asbestos-related
charges (credits), pension settlement charges, interest expense,
net, income tax expense (benefit), depreciation of fixed assets,
equity compensation expense, and the related income tax effect on
these items;
(5) Adjusted EBITDA Margin, which the Company defines as the
percentage that results from dividing Adjusted EBITDA by total net
sales;
(6) Free cash flow, which the Company defines as net cash
provided by (used in) operating activities less non-acquisition
capital expenditures.
Management believes adjusted operating margin, adjusted net
income, adjusted earnings per diluted share, adjusted EBITDA and
adjusted EBITDA margin are useful to investors because they allow
for comparison to the Company’s performance in prior periods
without the effect of items that, by their nature, tend to obscure
the Company’s core operating results due to potential variability
across periods based on the timing, frequency and magnitude of such
items. As a result, management believes that these measures enhance
the ability of investors to analyze trends in the Company’s
business and evaluate the Company’s performance relative to peer
companies. Management also believes free cash flow is useful to
investors as an additional way of viewing the Company's liquidity
and provides a more complete understanding of factors and trends
affecting the Company's cash flows. However, non-GAAP financial
measures have limitations as analytical tools and should not be
considered in isolation from, or as alternatives to, financial
measures prepared in accordance with GAAP. In addition, these
non-GAAP financial measures may differ from, and should not be
compared to, similarly named measures used by other companies.
Reconciliations of the differences between these non-GAAP financial
measures and their most directly comparable financial measures
calculated in accordance with GAAP are set forth below.
Reconciliation of GAAP Operating Margin to Adjusted Operating
Margin*:
2024
2023
Q1
Q4
Q1
GAAP Operating Margin Income
(Loss)
5.5%
14.9%
(0.1)%
Acquisition & Divestiture Related
Costs:
Acquisition & Related Integration
Costs
—%
—%
—%
Dispositions
—%
0.5%
0.5%
Intangible Amortization
1.5%
1.6%
1.4%
(Gain) Loss on Sale or Disposal of PPE
—%
(0.9)%
—%
Restructuring, Business Realignment &
Other Cost Saving Initiatives:
Restructuring, Severance, Impairment &
Other Related Costs
0.5%
0.7%
4.9%
Non-Routine Shareholder Advisory Costs
—%
0.3%
3.1%
(Income) Costs Associated with Terminated
Merger
—%
0.5%
0.8%
UTIS Fire (Recoveries) Charges
—%
(11.5)%
(0.1)%
Asbestos-Related Charges (Credits)
—%
0.1%
—%
Total Adjustments
2.0%
(8.7)%
10.6%
Adjusted Operating Margin
7.5%
6.3%
10.5%
*Percentages in table may not add due to
rounding.
Reconciliation of GAAP Net Income (Loss) to Adjusted Net
Income (Loss)*:
2024
2023
(dollars in millions)
Q1
Q4
Q1
GAAP Net Income (Loss)
$
7.8
$
23.2
$
(3.5
)
Acquisition & Divestiture Related
Costs:
Acquisition & Related Integration
Costs
—
—
0.1
Dispositions
—
1.1
1.2
Intangible Amortization
3.1
3.3
3.3
(Gain) Loss on Sale or Disposal of PPE
—
(1.9
)
—
Restructuring, Business Realignment &
Other Cost Saving Initiatives:
Restructuring, Severance, Impairment &
Other Related Costs
1.1
1.4
11.9
Non-Routine Shareholder Advisory Costs
—
0.6
7.6
(Income) Costs Associated with Terminated
Merger
—
1.1
1.9
UTIS Fire (Recoveries) Charges
—
(23.6
)
(0.2
)
Asbestos-Related Charges (Credits)
—
0.2
—
Pension Settlement Charges
—
0.1
—
Estimated Income Tax Impacts of
Adjustments
$
(1.1
)
$
5.6
$
(6.1
)
Total Adjustments
$
3.1
$
(12.1
)
$
19.7
Adjusted Net Income (Loss)
$
10.9
$
11.3
$
16.2
*Values in table may not add due to
rounding.
Reconciliation of GAAP Earnings Per Diluted Share to Adjusted
Earnings Per Diluted Share*:
2024
2023**
Q1
Q4
Q1
GAAP Earnings Per Diluted Share
$
0.42
$
1.24
$
(0.19
)
Acquisition & Divestiture Related
Costs:
Acquisition & Related Integration
Costs
—
—
0.01
Dispositions
—
0.06
0.06
Intangible Amortization
0.17
0.18
0.17
(Gain) Loss on Sale or Disposal of PPE
—
(0.10
)
—
Restructuring, Business Realignment &
Other Cost Saving Initiatives:
Restructuring, Severance, Impairment &
Other Related Costs
0.06
0.08
0.64
Non-Routine Shareholder Advisory Costs
—
0.03
0.41
(Income) Costs Associated with Terminated
Merger
—
0.06
0.10
UTIS Fire (Recoveries) Charges
—
(1.26
)
(0.01
)
Asbestos-Related Charges (Credits)
—
0.01
—
Pension Settlement Charges
—
0.01
—
Estimated Income Tax Impacts of
Adjustments
(0.06
)
(0.30
)
(0.33
)
Impact of Including Dilutive
Securities
—
—
—
Total Adjustments
$
0.17
$
(0.64
)
$
1.06
Adjusted Earnings Per Diluted
Share
$
0.58
$
0.60
$
0.87
*Values in table may not add due to
rounding. **Some amounts have been updated to conform to current
period presentation.
The following table reconciles weighted average shares
outstanding - diluted under US GAAP to adjusted weighted average
shares outstanding diluted used in the calculation of adjusted
diluted EPS:
2024
2023
(shares in millions)
Q1
Q4
Q1
Weighted Average Shares Outstanding -
Diluted
18.7
18.7
18.6
Dilutive Effect of Awards under Equity
Compensation Plans
—
—
—
Adjusted Weighted Average Shares
Outstanding - Diluted
18.7
18.7
18.6
Reconciliation of GAAP Net Income (Loss) to Adjusted
EBITDA*:
2024
2023
(dollars in millions)
Q1
Q4
Q1
GAAP Net Income (Loss)
$
7.8
$
23.2
$
(3.5
)
Acquisition & Divestiture Related
Costs:
Acquisition & Related Integration
Costs
—
—
0.1
Dispositions
—
1.1
1.2
Intangible Amortization
3.1
3.3
3.3
(Gain) Loss on Sale or Disposal of PPE
—
(1.9
)
—
Restructuring, Business Realignment &
Other Cost Saving Initiatives:
Restructuring, Severance, Impairment &
Other Related Costs
1.1
1.4
8.6
Non-Routine Shareholder Advisory Costs
—
0.6
7.6
(Income) Costs Associated with Terminated
Merger
—
0.7
1.3
UTIS Fire (Recoveries) Charges
—
(23.6
)
(0.2
)
Asbestos-Related Charges (Credits)
—
0.2
—
Pension Settlement Charges
—
0.1
—
Interest Expense, net
0.8
1.4
3.5
Income Tax Expense (Benefit), net
3.8
5.4
(0.1
)
Depreciation
8.2
7.9
11.3
Equity Compensation
3.5
3.4
2.1
Total Adjustments
$
20.5
$
—
$
38.7
Adjusted EBITDA
$
28.3
$
23.4
$
35.1
*Values in table may not add due to
rounding.
Calculation of Adjusted EBITDA margin*:
2024
2023
(dollars in millions)
Q1
Q4
Q1
Adjusted EBITDA
$
28.3
$
23.4
$
35.1
Divided by Total Net Sales
213.4
204.6
243.8
Adjusted EBITDA Margin
13.3
%
11.4
%
14.4
%
*Values in table may not add due to
rounding.
Reconciliation of Net Cash Provided By (Used In) Operating
Activities to Free Cash Flow*:
2024
2023
(dollars in millions)
Q1
Q4
Q1
Net Cash Provided By (Used In)
Operating Activities
$
28.1
$
71.9
1.8
Non-Acquisition Capital Expenditures
(9.4
)
(22.5
)
(16.4
)
Free Cash Flow
$
18.7
$
49.4
$
(14.6
)
*Values in table may not add due to
rounding.
Reconciliation of GAAP Earnings Per Diluted Share to Adjusted
Earnings Per Diluted Share Guidance for the 2024 Second
Quarter:
Guidance Q2
2024
GAAP Earnings per Diluted Share
$0.34 to $0.54
Intangible Amortization
$0.13
Other Adjustments
$0.03
Adjusted Earnings per Diluted
Share
$0.50 - $0.70
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425710274/en/
Investor Contact: Steve Haymore Phone: 480-917-6026
Email: stephen.haymore@rogerscorporation.com Website
Address: https://www.rogerscorp.com
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