Rogers Corporation · NYSE:ROG
Rogers — Q1 2019 Earnings Presentation
23 slides from Rogers's earnings presentation, Apr 30, 2019
Slide 1: Q1 2019 Earnings Call
Q1 2019 Earnings Call April 30, 2019 1
Slide 2: Forward-looking statements
Forward-looking statements Safe Harbor Statement This presentation 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 expansi
Slide 3: Introductions
Introductions Bruce Hoechner Mike Ludwig Bob Daigle President & Senior Vice President & Senior Vice President & Chief Executive Officer Chief Financial Officer Chief Technology Officer 3
Slide 4: Q1-2019 Summary
Q1-2019 Summary • Record quarterly net sales of $239.8M Results • Gross margin of 35.6% • Record quarterly adjusted EPS* of $1.85 per diluted share • Advanced Connectivity: Acceleration in 5G deployments and strong 4G demand Highlights • Advanced Mobility: Rebound in ADAS and growth in power semicon
Slide 5: Market Drivers
Market Drivers TODAY’s TOMORROW’s Growth applications Emerging market opportunities • 5G wireless infrastructure Internet of Things Advanced • 4G wireless infrastructure (IoT) Connectivity • Portable electronics Low Earth Orbit (LEO) Broadband A history of enabling innovation for today’s and tomorro
Slide 6: Advanced Connectivity Solutions (ACS)
Advanced Connectivity Solutions (ACS) Q1 2019 Update Strategy • Net sales of $80.5M, up 11% over • Leveraging innovation to capitalize Q4 2018 on market opportunities in key areas: • Accelerating 5G wireless • Wireless infrastructure infrastructure demand • Automotive safety sensors • Strong demand
Slide 7: Power Electronics Solutions (PES)
Power Electronics Solutions (PES) Q1 2019 Update Strategy • Net sales of $59.8M, up 5% over • Leverage our proven technology to Q4 2018 capitalize on strong market growth opportunities in Advanced Mobility • Strength in power semiconductor applications substrates for EV/HEV and • Invest in capacity
Slide 8: Elastomeric Material Solutions (EMS)
Elastomeric Material Solutions (EMS) Q1 2019 Update Strategy • Net sales of $92.8M, up 5% over • Continue focus on applications in Q4 2018 key markets of EV/HEV, portable electronics and general industrial • Double digit growth in automotive (EV/HEV) and mass transit • Optimize acquisitions to expan
Slide 9: Rogers Vision for 2020
Rogers Vision for 2020 Strategic Elements Financial Objectives Organic $1.2B Synergistic Market-Driven Innovation growth: Revenues M&A growth: Organization Leadership 7-10% 5-8% 15% Total growth Synergistic Operational M&A Excellence 20% Margin: Adjusted Operating Adjusted operating margin* 20% Capi
Slide 10: Financial overview
Financial overview Mike Ludwig, Sr. Vice President and Chief Financial Officer
Slide 11: Q1 2019 Financial highlights
Q1 2019 Financial highlights ($ in millions, except EPS) Q1-2019 Q4-2018 Q1-2018 Net sales $239.8 $222.9 $214.6 Gross margin $85.4 $78.4 $76.6 Gross margin % 35.6% 35.2% 35.7% Operating income $32.8 $26.8 $31.0 Operating margin % 13.7% 12.0% 14.5% Adjusted operating income* $41.0 $35.6 $33.0 Adjuste
Slide 12: Revenue bridge vs prior quarter
Revenue bridge vs prior quarter ($ in millions) Q1-2019 Update +7.5% +0.1% +7.6% $0.2 • Revenues of $240 million or 7.6% $16.7 increase sequentially • Volume & other impact driven by $239.8 strong performance in all segments $222.9 • Favorable currency of 0.1% as Renminbi appreciation offsets weaker
Slide 13: Gross margin bridge vs prior quarter
Gross margin bridge vs prior quarter ($ in millions) Q1-2019 Update +8.9% 0.0% 0.0% +8.9% $0.0 $0.0 • Volume & other benefit from strong $85.4 demand across all segments $7.0 $78.4 35.6% • ACS performance improvements offset 35.2% by PES operational challenges Q4-2018 Volume Performance Strategic Q1
Slide 14: Adjusted net income bridge vs prior quarter
Adjusted net income* bridge vs prior quarter ($ in millions) Q1-2019 Update +5.8% (12.2%) +17.3% +10.9% $1.8 • Adjusted Op Income* positively $3.8 impacted by higher revenue $5.4 • Other income/expense favorably $34.6 impacted by currencies and $31.2 commodities gain 14.0% 14.4% • GAAP tax rate 14.2
Slide 15: Cash utilization
Cash utilization ($ in millions) Net cash provided by operating activities $17.1M Net cash used in investing activities (10.0M) Net cash used by financing activities ($11.4M) Effect of FX ($1.3M) Net increase (decrease) in cash ($5.6M) $53.1 $5.0 $12.6 $25.1 $2.2 $2.0 $11.8 $167.7 $162.1 12/31/2018
Slide 16: Q2-2019 guidance
Q2-2019 guidance ($ in millions, except EPS) Net sales $240M - $250M Gross Margin 35.0% - 36.0% EPS $1.16 - $1.31 Adjusted EPS* $1.47 - $1.62 *See reconciliation of adjusted earnings per diluted share to earnings per diluted share in the appendix. 16
Slide 17: Appendix
ROGERS CORPORATION
Slide 18: Q1-2019: Adjusted operating income and operating margin reconciliation
Q1-2019: Adjusted operating income and operating margin reconciliation ($ in millions) Q1-18($) Q1-18(%) Q4-18($) Q4-18(%) Q1-19($) Q1-19(%) Operating income and operating margin $31.0 14.5% $26.8 12.0% $32.8 13.7% Restructuring, severance, impairment and other related costs $1.4 0.7% $2.7 1.2% $1.9
Slide 19: Q1-2019: Adjusted EBITDA and adjusted EBITDA margin reconciliation
Q1-2019: Adjusted EBITDA and adjusted EBITDA margin reconciliation ($ in millions) Q1-18($) Q1-18(%) Q4-18($) Q4-18(%) Q1-19($) Q1-19(%) Net Income $26.1 12.2% $24.5 11.0% $28.4 11.8% Interest expense, net $1.2 0.6% $2.1 1.0% $1.9 0.8% Income tax expense $4.8 2.2% $0.9 0.4% $4.7 2.0% Depreciation $7
Slide 20: Q1-2019: Adjusted EPS reconciliation
Q1-2019: Adjusted EPS reconciliation Q1-18 ($) Q4-18 ($) Q1-19 ($) GAAP earnings per diluted share $1.40 $1.31 $1.52 Restructuring, severance, impairment and other related costs $0.06 $0.11 $0.07 Acquisition and related integration costs $0.02 $0.02 $0.02 Change in foreign jurisdiction tax regulatio
Slide 21: Q1-2019: Adjusted net income reconciliation
Q1-2019: Adjusted net income reconciliation ($ in millions) Q4-18 ($) Q4-18 (%) Q1-19 ($) Q1-19(%) Net Income $24.5 11.0% $28.4 11.8% Restructuring, severance, impairment and other related costs $2.7 1.2% $1.9 0.8% Acquisition and related integration costs $0.4 0.2% $0.5 0.2% Change in foreign juris
Slide 22: Q1-2019: Adjusted operating expenses reconciliation
Q1-2019: Adjusted operating expenses reconciliation* ($ in millions) Q4-18($) Q4-18(%) Q1-19($) Q1-19(%) Operating expenses $51.6 23.2% $52.6 21.9% Restructuring, severance, impairment and other related costs ($2.7) (1.2%) ($1.9) (0.8%) Acquisition and related integration costs ($0.4) (0.2%) ($0.5)
Slide 23: Q2-2019: Guidance reconciliation
Q2-2019: Guidance reconciliation Q2-19 ($) GAAP earnings per diluted share $1.16 - $1.31 Discrete items $0.13 Acquisition intangible amortization $0.18 Adjusted earnings per diluted share $1.47 - $1.62 Note: percentages and dollars may not add due to rounding. 23