Rogers Corporation · NYSE:ROG
Rogers — Q1 2017 Earnings Presentation
31 slides from Rogers's earnings presentation, Apr 27, 2017
Slide 1: Rogers Corporation Q1-2017 Earnings Call
Rogers Corporation Q1-2017 Earnings Call April 27, 2017
Slide 2: Forward-looking statements
Forward-looking statements Safe Harbor Statement This presentation contains forward-looking statements, which may concern our plans, objectives, outlook, goals, strategies, future events, future net sales or performance, capital expenditures, financing needs, future restructuring, plans or intention
Slide 3: Introductions
Introductions Bruce Hoechner Janice Stipp Bob Daigle President & Senior Vice President & Senior Vice President & Chief Executive Officer Chief Financial Officer Chief Technology Officer 3
Slide 4: Highlights
Highlights • All-time record sales of $204 million, growth of 27%, constant currency 29% • Gross margin of 39.4%, an increase of 170 basis points Q1 2017 • Adjusted operating margin* of 22.2%, up 530 basis points • Adjusted EPS* record at $1.68, up 79% • Successfully closed Diversified Silicone Prod
Slide 5: Rogers' strategic roadmap
Rogers’ strategic roadmap Strategic intent… Build and optimize businesses for profitable growth and scale through innovation and acquisitions For markets that demand performance, Rogers applies technical … leveraging our problem solving and engineering capabilities to identify, develop and competenc
Slide 6: Market driven innovation
Market driven innovation Providing enabling solutions for: TODAY’s TOMORROW’s Growth Applications Emerging Market Opportunities • HEV Power Modules Autonomous • EV Batteries ADVANCED • Vehicle Electrification Vehicles • Advanced Driver MOBILITY Assistance Systems Vehicle-to-Vehicle Communications A
Slide 7: Synergistic M&A: strategy and execution
Synergistic M&A: strategy and execution “Top of the Pyramid” criteria: • Market and technology leadership • Highly engineered applications • Strong margins Timeline Q1 2015 Q4 2016 Q1 2017 Future transactions… Continuing focus on differentiated growth businesses 7
Slide 8: Advanced Connectivity Solutions (ACS)
Advanced Connectivity Solutions (ACS) • All-time record quarterly sales, 7% growth • Strong demand for ADAS, aerospace / defense Highlights • Some softness in wireless 4G/LTE base stations and antennas • Asset utilization driving profitability • Pipeline of products for growth & diversification • Co
Slide 9: Elastomeric Material Solutions (EMS)
Elastomeric Material Solutions (EMS) • All-time record quarterly sales, 66% growth • Organic sales increase of 17% (~$8 million); Highlights higher demand for portable electronics, general industrial, auto and mass transit • Completed Diversified Silicone Products acquisition • Acquisitions contribu
Slide 10: Power Electronics Solutions (PES)
Power Electronics Solutions (PES) • Outstanding quarterly sales, 21% growth • Higher demand for renewable energy, hybrid- Highlights electric vehicles, variable frequency motor drives, and laser diode coolers • Sales growth and operational excellence driving profitability improvement • Broaden Advan
Slide 11: Market outlook
Market outlook Favorable Neutral Unfavorable Internet connectivity Global GDP growth Geopolitical tensions Clean energy and increased Inflation Currency exchange rates safety Business confidence Competitive intensity Commodity prices Corporate tax policy Interest rates Managing through an uncertain
Slide 12: Financial Overview
Financial Overview Janice Stipp, Senior Vice President & Chief Financial Officer 12
Slide 13: Q1-2017 summary results
Q1-2017 summary results ($ in millions, except EPS) Q1-2017 Q1-2016 Variance Net Sales $203.8 $160.6 $43.2 Growth % 26.9% Operating Income $39.4 $24.1 $15.3 Operating Margin % 19.4% 15.0% 440bps Adjusted Operating Income* $45.2 $27.2 $18.0 Adjusted Operating Margin %* 22.2% 16.9% 530bps Net Income $
Slide 14: Q1-2017 revenue bridge
Q1-2017 revenue bridge ($ in millions) 14.1% (1.6)% 26.9% $2.6 -.-% Q1 revenue highlights $22.7 14.3% • Revenues of $203.8 million $23.0 • Reported growth nearly 27% $203.8 $203.8 • Underlying organic growth of 14.3% $183.6 $160.6 • Acquisition driven growth of 14.1% • Currency impact of (1.6)% Q1-2
Slide 15: Q1-2017 adjusted operating income bridge
Q1-2017 adjusted operating income* bridge ($ in millions) +12.9% -11.0% +65.8% $3.5 $3.0 -1.5% $0.4 $17.9 $45.2 $27.2 Q1-2016 Adj. Op. Volume Performance SG&A R&D Q1-2017 Adj. Op. Income* & Other Income* Adjusted operating margins* increase to 22.2% *See reconciliations in the appendix: adjusted ope
Slide 16: Q1-2017 adjusted EBITDA bridge
Q1-2017 adjusted EBITDA* bridge ($ in millions) +11.8% -7.7% -1.2% +4.4% +52.8% $4.0 $2.6 $0.4 $1.5 $17.9 $54.3 $33.9 Q1-2016 Volume Performance SG&A R&D Misc. Inc/Exp Q1-2017 Adj. EBITDA* & Other Adj. EBITDA* Adjusted EBITDA margins* increase to 26.6% *See reconciliations in the appendix: adjusted
Slide 17: Q1-2017 adjusted EPS bridge
Q1-2017 adjusted EPS* bridge +12.8% -11.7% +6.4% +78.7% +68.1% -1.1% +4.2% $0.06 $0.12 $0.11 $0.01 $0.04 +--.-% $0.64 $1.68 $0.94 Q1-2016 Volume Performance SG&A R&D Misc.Inc/Exp Tax Rate Q1-2017 Adj. EPS* & Other Adj. EPS* Strong double digit adjusted EPS* growth *Reconciliation of adjusted earning
Slide 18: Q1-2017 segment revenue
Q1-2017 segment revenue ($ in millions) Q1 2017 Change ACS 7.0% EMS 65.9% PES 21.0% Other 2.9% Consolidated 26.9% $78.5 $76.8 $73.4 $46.3 $42.7 $35.3 ACS EMS PES Q1-2016 Q1-2017 Solid Q1 revenue growth across all core business segments 18
Slide 19: Q1-2017 segment adjusted operating income
Q1-2017 segment adjusted operating income* ($ in millions) Segment adjusted operating margin* Q1-2016 Q1-2017 ACS 23.2% 26.0% EMS 13.4% 22.4% PES 6.8% 13.4% Other** 28.4% 32.9% Consolidated 16.9% 22.2% $20.4 $17.0 $17.2 $5.7 $6.2 $2.4 ACS EMS PES Q1-2016 Q1-2017 Underlying profitability improves acr
Slide 20: YTD 2017 cash utilization
YTD 2017 cash utilization ($ in millions) Net cash provided by operating activities $23.2M Net cash used in investing activities $63.4M $54.3 $60.2 Net cash used in financing activities $2.5M Effect of FX $1.0M Net increase (decrease) in cash $(41.7) $14.6 $5.3 $4.8 $1.2 $1.1 $8.7 $227.8 $207.3 $202
Slide 21: Q2-2017 guidance
Q2-2017 guidance ($ in millions, except EPS) Net sales $190M - $200M EPS $0.98 - $1.08 Adjusted EPS* $1.16 - $1.26 *See reconciliation of adjusted earnings per diluted share to earnings per diluted share in the appendix. 21
Slide 22: Q&A
Q&A Helping power, protect, connect our world
Slide 23: Appendix
CORPORATION Wein Helping power, protect, connect our world’ 23
Slide 24: Q1-2017 adjusted operating income and operating margin reconciliation
Q1-2017 adjusted operating income and operating margin reconciliation* ($ in millions) Q1-17 (%) Q1-17 ($) Q1-16 (%) Q1-16 ($) Operating margin & operating income 19.4% $39.4 15.0% $24.1 Restructuring, severance and other related costs 0.3% $0.7 0.4% $0.6 Purchase accounting inventory adjustment 0.8
Slide 25: Q1-2017 adjusted EBITDA and EBITDA margin reconciliation
Q1-2017 adjusted EBITDA and EBITDA margin reconciliation* ($ in millions) Q1-17 Q1-17 Q1-16 Q1-16 ($) (%) ($) (%) Net Income $27.0 13.3% $14.9 9.3% Interest, net $1.3 0.6% $1.1 0.7% Income tax expense (benefit) $12.9 6.3% $8.1 5.1% Depreciation $7.2 3.5% $6.3 3.9% Intangible amortization $3.3 1.6% $
Slide 26: Q1-2017 adjusted EPS reconciliation
Q1-2017 adjusted EPS reconciliation ($ per diluted share) Q1-17 ($) Q1-16 ($) Earnings per diluted share $1.47 $0.82 Restructuring, severance and other related costs 0.03 $0.02 Acquisition related costs 0.04 - Purchase accounting inventory adjustment 0.05 - Gain / Loss on sales of non-core assets (0
Slide 27: Q1-2017 ACS adjusted operating income reconciliation
Q1-2017 ACS adjusted operating income and operating margin reconciliation ($ in millions) Q1-17 Q1-17 Q1-16 Q1-16 (%) ($) (%) ($) Operating margin & operating income (ACS) 25.1% $19.7 21.7% $15.9 Restructuring severance & other related costs 0.4% $0.3 0.4% $0.3 Purchase accounting inventory adjustme
Slide 28: Q1-2017 EMS adjusted operating income reconciliation
Q1-2017 EMS adjusted operating income and operating margin reconciliation ($ in millions) Q1-17 Q1-17 Q1-16 Q1-16 (%) ($) (%) ($) Operating margin & operating income (EMS) 16.8% $12.9 11.5% $5.3 Restructuring severance & other related costs 0.3% $0.2 0.3% $0.1 Purchase accounting inventory adjustmen
Slide 29: Q1-2017 PES adjusted operating income reconciliation
Q1-2017 PES adjusted operating income and operating margin reconciliation ($ in millions) Q1-17 Q1-17 Q1-16 Q1-16 (%) ($) (%) ($) Operating margin & operating income (PES) 11.5% $4.9 3.7% $1.3 Restructuring severance & other related costs 0.4% $0.2 0.4% $0.2 Purchase accounting inventory adjustment
Slide 30: Q2-2017 guidance reconciliation
Q2-2017 guidance reconciliation Q2-17 ($) Guidance Q2-17 earnings per diluted share $0.98 - $1.08 Add back adjustments: Restructuring/other expenses $0.07 Acquisition intangible amortization $0.11 Guidance Q2-17 adjusted earnings per diluted share $1.16 - $1.26 30
Slide 31: Power | protect | connect
protect | connect ROGERS CORPORATION Helping power, protect, connect our world