Slide 1: Q4 2023 Earnings Call
Q4 2023 Earnings Call FEBRUARY 21, 2024 1
Slide 2: Forward-looking statements
Forward-looking statements Safe Harbor Statement Statements included in this presentation 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
Slide 3: Non-GAAP and Additional Information
Non-GAAP and Additional Information Non-GAAP Information This presentation 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 income, which the Company defines a
Slide 4: Introductions
Introductions Colin Gouveia Ram Mayampurath Larry Schmid President & Senior Vice President & Senior Vice President of Chief Executive Officer Chief Financial Officer Global Operations & Supply Chain 4
Slide 5: Today's Key Messages
Today’s Key Messages 1 Macroeconomic headwinds persisted in Q4, contributing to lower sales and gross margin. Delivered meaningful Restore strategy progress in 2023: improved gross margin and free cash flow, 2 and bolstered organization. 3 Continued focus on positioning Rogers for growth when demand
Slide 6: 2023 Highlights Restore
2023 Highlights Restore RESTORE PHASE OBJECTIVES RESULTS ACHIEVED COST IMPROVEMENT • Adjusted cost structure to match demand • Portfolio and operations improvements • Optimize capacity footprint • Divested non-core, low-margin product line • Drove cost savings with consolidation of smaller facilit
Slide 7: Operations Highlights And Priorities
Results Achieved Operations Highlights And Priorities Continuing Priority HUMAN CAPITAL DEVELOPMENT OPERATIONAL EXCELLENCE • Significant manufacturing & procurement cost savings • Filled key leadership positions • Fortified foundational safety management systems • Improved on-time delivery to
Slide 8: Results Overview
Results Overview Q4 2023 SUMMARY REVENUE BY MARKET SEGMENT HIGHLIGHTS Significant • Higher Q4 EV/HEV market sales versus the prior quarter Growth Other • Strong full year sales growth in renewable energy and ADAS markets 14% Wireless EV/HEV • New design wins in EV/HEV, renewable energy and medical m
Slide 9: Q4 and Full Year 2023 Financial Highlights
Q4 and Full Year 2023 Financial Highlights (in millions, except for EPS) Q4 2023 Q3 2023 2023 2022 Net sales $204.6 $229.1 $908.4 $971.2 Gross margin $67.4 $80.4 $307.1 $321.0 Gross margin % 32.9% 35.1% 33.8% 33.1% Operating income $30.5 $27.1 $85.3 $144.4 Operating margin % 14.9% 11.8% 9.4% 14.9% A
Slide 10: Q4 2023 Revenue Results
Q4 2023 Revenue Results Consolidated Revenue QoQ Revenue by Operating Segment QoQ** ($ in millions) (9.9%) ($ in millions) (0.8%) (10.7%) $22.6 (7.2%) $229.1 $1.9 $204.6 $126.4 $117.3 (14.9%) $98.0 $83.4 Q3'23 Volume Currency Q4'23 AES Q3'23 AES Q4'23 EMS Q3'23 EMS Q4'23 & Other* • Revenues of $204.
Slide 11: Q4 2023 Gross Margin and Adjusted Net Income
Q4 2023 Gross Margin and Adjusted Net Income* Q4 Gross Margin Adjusted Net Income* ($ in millions) (15.0%) ($ in millions) (85.3%) $80.4 $23.2 +38.8% (51.3%) (1.1%) (16.2%) $11.3 $12.1 $0.9 $67.4 (4.7%) 35.1% 32.9% 10.1% $19.8 5.5% $1.1 $9.0 Q3'23 Volume* Performance Q4'23 Q3'23 Adj Op Other Income
Slide 12: Cash Utilization
Cash Utilization Net cash provided by operating activities $ 131.4 ($ in millions) $147.7 Net cash used in investing activities $ (47.9) Net cash used in financing activities $ (190.3) Effect of exchange rate fluctuations $ 2.6 Net increase (decrease) in cash $ (104.2) $185.0 $13.2 $6.4 $10.4 $235.9
Slide 13: Q1 2024 Guidance
Q1 2024 Guidance Net sales $205M - $215M Gross Margin 32.0% - 33.0% EPS $0.30 - $0.50 Adjusted EPS* $0.45 - $0.65 *See reconciliation of adjusted earnings per diluted share to GAAP earnings per diluted share in the appendix. 13
Slide 14: Multi-Year Financial Targets
Multi-Year Financial Targets Extending timeline to achieve previously communicated targets beyond 2025 WHAT HAS CHANGED Net Sales Gross Margin • Persistent challenges in the global manufacturing $1.2B - $1.3B 38% - 40% economy, with recovery expected to be gradual • Lack of near-term visibility to r
Slide 15: Market Growth Expectations Over Multi-Year Period
Market Growth Expectations Over Multi-Year Period LOW SINGLE MID SINGLE HIGH TEENS DIGIT DIGIT PLUS GROWTH RATE GROWTH RATE GROWTH RATE CORE HIGH SIGNIFICANT GROWTH GROWTH GROWTH Near-term headwinds from macro Led by A&D & renewable energy markets Phase 1 of new power substrate factory Gradual marke
Slide 16: Appendix
\ Appendix ROGERS CORPORATION, 16
Slide 17: Q4 2023: Adjusted operating expenses reconciliation
Q4 2023: Adjusted operating expenses reconciliation* ($ in millions) Q3 2023 Q3 2023 Q4 2023 Q4 2023 GAAP operating expenses and margin $53.2 23.2% $36.8 18.0% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.0 0.0% $0.0 0.0% Dispositions $0.7 0.3% ($1.1) (0.5
Slide 18: Q4 2023: Adjusted operating income and margin reconciliation
Q4 2023: Adjusted operating income and margin reconciliation ($ in millions) Q3 2023 Q3 2023 Q4 2023 Q4 2023 GAAP operating income and margin $27.1 11.8% $30.5 14.9% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.0 0.0% $0.0 0.0% Dispositions ($0.7) (0.3%) $
Slide 19: Q4 2023: Adjusted net income and margin reconciliation
Q4 2023: Adjusted net income and margin reconciliation ($ in millions) Q3 2023 Q3 2023 Q4 2023 Q4 2023 GAAP net income and margin $19.0 8.3% $23.2 11.3% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.0 0.0% $0.0 0.0% Acquisition intangible amortization $3.4
Slide 20: Q4 2023: Adjusted earnings per share reconciliation
Q4 2023: Adjusted earnings per share reconciliation Q3 2023 Q4 2023 GAAP earnings per diluted share $1.02 $1.24 Acquisitions and divestiture related costs: Acquisition and related integration costs $0.00 $0.00 Dispositions ($0.03) $0.13 Loss/(gain) on sale or disposal of assets ($0.01) ($0.07) Restr
Slide 21: Q4 2023: Adjusted EBITDA and margin reconciliation
Q4 2023: Adjusted EBITDA and margin reconciliation ($ in millions) Q3 2023 Q4 2023 GAAP net income $19.0 $23.2 Interest expense, net $2.3 $1.4 Income tax expense $7.2 $5.4 Depreciation $8.1 $7.9 Amortization $3.4 $3.3 Stock-based compensation expense $3.8 $3.4 Acquisitions and divestiture related co
Slide 22: Q4 2023: Free cash flow reconciliation
Q4 2023: Free cash flow reconciliation ($ in millions) Q3 2023 Q4 2023 Net cash provided by operating activities $42.0 $71.9 Non-acquisition capital expenditures ($6.7) ($22.5) Free cash flow $35.3 $49.4 Note: dollars may not add due to rounding. 22 *Free cash flow defined as net cash provided by op
Slide 23: 2023: Adjusted operating expenses reconciliation
2023: Adjusted operating expenses reconciliation* ($ in millions) 2022 2022 2023 2023 GAAP operating expenses $176.6 18.2% $221.8 24.4% Acquisitions and divestiture related costs: Acquisition and related integration costs ($0.8) (0.1%) ($0.1) 0.0% Dispositions ($3.2) (0.3%) ($1.6) (0.2%) Loss/(gain)
Slide 24: 2023: Adjusted operating income and margin reconciliation
2023: Adjusted operating income and margin reconciliation ($ in millions) 2022 2022 2023 2023 GAAP operating income and margin $144.4 14.9% $85.3 9.4% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.8 0.1% $0.1 0.0% Dispositions $3.2 0.3% $1.6 0.2% Loss/(gain
Slide 25: 2023: Segment adjusted operating income and margin reconciliation
2023: Segment adjusted operating income and margin reconciliation AES AES EMS EMS ($ in millions) 2023 2023 2023 2023 GAAP operating income and margin $2.6 0.5% $76.1 20.1% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.0 0.0% $0.1 0.0% Dispositions ($0.0) 0
Slide 26: 2023: Adjusted net income and margin reconciliation
2023: Adjusted net income and margin reconciliation ($ in millions) 2022 2022 2023 2023 GAAP net income and margin $116.6 12.0% $56.6 6.2% Acquisitions and divestiture related costs: Acquisition and related integration costs $0.8 0.1% $0.1 0.0% Acquisition intangible amortization $16.4 1.7% $13.4 1.
Slide 27: 2023: Adjusted earnings per share reconciliation
2023: Adjusted earnings per share reconciliation 2022 2023 GAAP earnings per diluted share $6.15 $3.03 Acquisitions and divestiture related costs: Acquisition and related integration costs $0.03 $0.01 Dispositions $0.13 $0.15 Loss/(gain) on sale or disposal of assets $0.02 ($0.11) Restructuring, bus
Slide 28: 2023: Adjusted EBITDA and margin reconciliation
2023: Adjusted EBITDA and margin reconciliation ($ in millions) 2022 2023 GAAP net income $116.6 $56.6 Interest expense, net $9.5 $10.1 Income tax expense $23.8 $19.7 Depreciation $29.5 $37.7 Amortization $16.4 $13.4 Stock-based compensation expense $11.8 $14.3 Acquisitions and divestiture related c
Slide 29: Q1 2024: Guidance Reconciliation
Q1 2024: Guidance Reconciliation ($ in millions) Q1 2024 GAAP earnings per diluted share $0.30 – $0.50 Discrete items $0.03 Acquisition intangible amortization $0.12 Adjusted earnings per diluted share $0.45 - $0.65 Note: dollars may not add due to rounding. 29