Rogers Corporation · NYSE:ROG
Rogers — Q3 2014 Earnings Presentation
22 slides from Rogers's earnings presentation, Oct 30, 2014
Slide 1: Rogers Corporation Q3 2014 Earnings Call
Global leaders in engineered materials to power, protect, connect our world. Rogers Corporation Q3 2014 Earnings Call 1
Slide 2: Introductions
Introductions Bruce Hoechner David Mathieson Bob Daigle President & CEO VP Finance & CFO Senior VP & CTO 2
Slide 3: Forward Looking and Cautionary Statements
Forward Looking and Cautionary Statements Safe Harbor Statement Statements in this presentation other than historical facts, including without limitation statements regarding the Company’s business strategy, future results of operations and financial position, and plans and objectives of management,
Slide 4: Q3 Operating Highlights
Q3 Operating Highlights Record performance… Q3 Comments* • Record sales of $163.1M, Q1 Q2 Q3 an increase of 14.2%, Sales $156.6 $153.5 $163.1 driven by strong position in megatrend markets Gross 36.8% 37.2% 39.6% • Record gross margin of Margin % 39.6% driven by Operating operational efficiency 14.6
Slide 5: Q3 Business Segment Highlights
Q3 Business Segment Highlights Strong positions in global growth markets led to sales growth across all business segments… Printed Circuit Materials Power Electronics Solutions High Performance Foams Other Q3 Comments* $180,000,000 $163.1 • Another quarterly record $160,000,000 in Printed Circuit $1
Slide 6: Q3 Performance by Market
Q3 Performance by Market 61% of sales from megatrend categories… Q3 Megatrend Results* Internet Connectivity Up 26% YOY Other, 12% Cell Phones Clean Energy, Base station infrastructure up Defense, 6% (non-Internet), 23% 5% 39% and 4G antenna up 75% Automotive, 7% Mass Transit Up 20% YOY Strong growt
Slide 7: Roadmap for Consistent Profitable Growth
Roadmap for Consistent Profitable Growth Positioned for growth, driven by megatrends and our strategic focus Our strategy to drive performance Global leaders in Market- Technology Synergistic Operational Driven Innovation M&A Excellence engineered materials to • Focused on • Increasing • Bolt-on • M
Slide 8: Financial Highlights
Financial Highlights David Mathieson VP Finance and Chief Financial Officer 8 This presentation may not be reproduced, copied, published, transmitted or otherwise distributed for any reason.
Slide 9: Total Company Revenue Growth and Gross Margin
Total Company Revenue Growth and Gross Margin Revenue Growth Q3-2014 Commentary*** $175.0 18.0% $150.0 16.4% 15.9% 16.0% Revenue Growth* 14.2% 14.0% $125.0 12.0% All-time quarterly sales record of $100.0 10.6% 10.0% 2013 $ 9.7% $163.1M, an increase of 14.2% $75.0 8.0% 2014 $ 6.0% $50.0 4.8% 5.7% 4.0
Slide 10: Total Company S&A and R&D
Total Company S&A and R&D S&A Q3-2014 Commentary*** $40.0 22.5% 25.0% 22.1% S&A* 19.2%** 19.1%** 18.5% 20.0% $30.0 18.8% $30.2M includes $1.3 million of the 17.8%** 15.0% 2013 $ Rogers Work Smart business systems $20.0 expense we discussed last quarter. The 10.0% 2014 $ 2013 % third quarter expense
Slide 11: Total Company Operating Margin and EPS
Total Company Operating Margin and EPS Operating Margin Q3-2014 Commentary*** $30.0 20.0% 18.0% $25.0 17.4% 16.0% Operating Margin* 14.6% 14.4%** 14.0% $20.0 10.6% 11.7%** 12.0% 2013 $ Operating Margin up 300bps $15.0 9.6%** 10.1%** 10.0% 8.0% 2014 $ $10.0 6.0% 2013 % • Gross Margin increases 370bps
Slide 12: Printed Circuit Materials
Printed Circuit Materials The Leader in circuit materials enabling high-speed connectivity and high-reliability radar systems Segment Revenue ($ in millions) Growth Drivers 2013 2014 • Internet Connectivity - Wireless infrastructure and $70 $61.5 $63.4 $60 $58.5 devices $45.6 $47.1 $48.7 $50 $40 $43
Slide 13: Power Electronics Solutions
Power Electronics Solutions Energy-efficient substrates and components for power systems, modules and motor drives Segment Revenue ($ in millions) Growth Drivers 2013 2014 • Clean energy applications: $50 $46.5 $40.8 $40.8$42.9 $45.3 $40.3 – Variable frequency drives $40 $34.3 – Vehicle electrificat
Slide 14: High Performance Foams
High Performance Foams Critical cushioning and sealing to protect against impact, vibration or environmental damage Segment Revenue ($ in millions) Growth Drivers 2013 2014 $42.8 $44.5 $46.7 • Safety & impact protection $50 $42.4 $41.2 $41.2 $40 $39.9 • Mass transit vibration management & sealing $3
Slide 15: Liquidity
Liquidity Cash Generation ($ in millions) Cash ($ in millions) 9 Months 9 Months $250 $216.5 $218.7 $228.0 Ended Ended $191.9 Sept 30, 2014 Sept 30, 2013 $200 $158.6 Cash at beginning of $191.9 $114.9 $137.0 $150 $126.4 2013 period $100 2014 Cash flow from operations 57.5 45.1 $50 Capital expenditur
Slide 16: Guidance
Guidance Q4-2014 Financial Guidance As of October 30, 2014 Net Sales $147-$154 million EPS (non-GAAP)* $0.64-$0.76 per diluted share EPS (GAAP) $0.47-$0.59 per diluted share This guidance takes account of estimated P&L spending on Rogers Work Smart Business Systems of approximately $2M in the quarte
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (In % of Sales) (Unaudited) Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Gross Margin GAAP 32.8% 33.5% 35.8% 37.3% 36.8% 37.2% 39.6% Curamik reorganization charges 0.2 0.1 0.1 - - - - Union Contract Ratific
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (In % of Sales) (Unaudited) Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Operating Margin GAAP 8.6% 6.1% 13.3% 8.3% 14.6% 10.6% 17.4% Severance & related charges 0.6 2.3 0.9 - - - - Pension curtailment/sett
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 GAAP income per diluted share from continuing $ 0.39 $ 0.32 $ 0.76 $0.64 $0.79 $ 0.58 $ 1.09 operations Add back special adjustments, net of tax: Sev
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non-GAAP Earnings Per Diluted Share for the Third Quarter of 2012 (Unaudited) Q3-12 GAAP income per diluted share from continuing operations $ 3.47 Special item adjustments, net of tax: Pension settlement charge 0.08 Closure of Bre
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of non-GAAP to GAAP Income Per Share Guidance for the Fourth Quarter of 2014: The following table includes non-recurring special charges related to streamlining costs and a non-cash pension charge. Reconciliation of non-GAAP to GAAP Income Per Share Guidance Q4
Slide 22: Questions?
The world runs better with Rogers.® Questions? ] ROG Ss The world runs better with Rogers.® 22