Rogers Corporation · NYSE:ROG
Rogers — Q4 2022 Earnings Presentation
27 slides from Rogers's earnings presentation, Feb 28, 2023
Slide 1: Q4 2022 Earnings Call
Q4 2022 Earnings Call Feb 28th, 2023 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 President & Senior Vice President & Chief Executive Officer Chief Financial Officer 4
Slide 5: Key Near-Term Priorities
Key Near-Term Priorities 1 Implement Immediate Actions to Improve Profitability 2 Drive Operational Excellence Across the Organization 3 Bolstering Organization With Key New Hires 4 Continue to Drive Design Wins Balancing Improved Cost Structure With Growth Focus 5
Slide 6: Actions To Drive Improved Profitability
Actions To Drive Improved Profitability Targeting ~34% Gross Margin in Q2 2023 and ~35% in the Second Half of 2023 Streamline • Aggregate reduction in workforce of ~7% Organization • Reductions in corporate and manufacturing employees Portfolio and • Divesting the non-core, low-margin, Griswold rubb
Slide 7: Results Overview
Results Overview Q4 2022 Summary Revenue by Market Segment FY 2022 • Continued growth in Advanced Mobility ADAS Portable Highlights Electronics • EV growth in Q4, with 35% YoY increase 6% 9% Wireless Infrastructure • ADAS improvement with double-digit growth in Q4 6% • Executing on profitability imp
Slide 8: Growth Opportunities Across Our Market Portfolio
Growth Opportunities Across Our Market Portfolio Core High Significant Growth Growth Growth High margins and Strong growth EV/HEV >25% CAGR1 strong cash generation applications ~50% >25% >20% Of Revenue Of Revenue Of Revenue 2022 2022 2022 Electric Vehicles Mass Wireless Industrial Renewable Portabl
Slide 9: Financial Overview
Financial Overview Ram Mayampurath, Sr. Vice President and Chief Financial Officer and Treasurer
Slide 10: Q4 and Full Year 2022 Financial Highlights
Q4 and Full Year 2022 Financial Highlights ($ in millions, except EPS) Q4-2022 Q3-2022 2022 2021 Net sales $223.7 $247.2 $971.2 $932.9 Gross margin $71.0 $78.1 $321.0 $349.2 Gross margin % 31.8% 31.6% 33.1% 37.4% Operating income $82.7 $18.5 $144.4 $117.2 Operating margin % 37.0% 7.5% 14.9% 12.6% Ad
Slide 11: Q4 2022 Revenue Results
Q4 2022 Revenue Results Consolidated Revenue QTD Revenue by Business Unit QTD** (7.7%) (4.1%) $247.2 $130.6 (1.8%) $125.3 (15.6%) ($ in millions) ($ in millions) (9.5%) $111.0 $19.2 $4.4 $223.7 $93.7 Q3'22 Volume Currency Q4'22 AES Q3 AES Q4 EMS Q3 EMSQ4 & Other* • Revenues of $223.7 million decline
Slide 12: Q4 2022 Gross Margin Results
Q4 2022 Gross Margin Results ($ in millions) • Lower volume primarily from decline (13.6%) in EMS sales $78.1 • Favorable performance driven by +5.9% (1.3%) reductions in lower manufacturing 31.6% spend, yield improvements and lower $1.0 $71.0 logistics costs $10.6 $4.6 • Increase in new capacity ex
Slide 13: Q4 2022 Operating Income Results
Q4 2022 Operating Income Results ($ in millions) • Other operating (income) expense: Increase primarily from $142.1 million termination fee, net of expenses $65.1 $11.3 • Restructuring and impairment: Mainly $82.7 charges associated with the divestiture of the natural rubber business and exit of the
Slide 14: Cash Utilization
Cash Utilization ($ in millions) Net cash provided by operating activities $ 129.5 $25.0 $142.1 Net cash used in investing activities $ (113.1) Net cash provided by financing activities $ (10.1) Effect of FX $ (2.7) Net increase (decrease) in cash $ 3.6 $160.2 $116.8 $90.5 $60.8 $25.0 $9.7 $21.0 $23
Slide 15: Q1 2023 Guidance
Q1 2023 Guidance Net sales $230M - $240M Gross Margin 31.5% - 32.5% EPS $(0.10) - $0.10 Adjusted EPS* $0.65 - $0.85 • Includes $3 million of sales from the natural rubber product line, which will be divested by the end of the first quarter • The recently announced cost improvement actions will begin
Slide 16: Appendix
Appendix CORPORATION ad ROGERS
Slide 17: Q4 2022: Adjusted operating expenses reconciliation
Q4 2022: Adjusted operating expenses reconciliation* ($ in millions) Q3-22($) Q3-22(%) Q4-22($) Q4-22(%) GAAP operating expenses $ 59.6 24.1% $ (11.6) (5.2%) Restructuring, severance, impairment and other related costs $ (1.3) (0.5%) $ (68.6) (30.7%) Acquisition and related integration costs $ (0.1)
Slide 18: Q4 2022: Adjusted operating income and margin reconciliation
Q4 2022: Adjusted operating income and margin reconciliation ($ in millions) Q3-22($) Q3-22(%) Q4-22($) Q4-22(%) GAAP operating margin $ 18.5 7.5% $ 82.7 37.0% Restructuring, severance, impairment and other related costs $ 1.3 0.5% $ 68.6 30.7% Acquisition and related integration costs $ 0.1 0.0% $
Slide 19: Q4 2022: Adjusted EBITDA and adjusted EBITDA margin reconciliation
Q4 2022: Adjusted EBITDA and adjusted EBITDA margin reconciliation ($ in millions) Q3-22($) Q4-22($) GAAP net income $ 14.8 $ 67.3 Interest expense, net $ 2.9 $ 4.0 Income tax expense $ 2.8 $ 11.1 Depreciation $ 7.3 $ 7.7 Amortization $ 4.1 $ 3.8 Stock-based compensation expense $ 3.5 $ 0.2 Restruct
Slide 20: Q4 2022: Adjusted net income reconciliation
Q4 2022: Adjusted net income reconciliation ($ in millions) Q3-22($) Q3-22(%) Q4-22($) Q4-22(%) GAAP Net Income $ 14.8 6.0% $ 67.3 30.1% Restructuring, severance, impairment and other related costs $ 1.3 0.5% $ 68.6 30.7% Acquisition and related integration costs $ 0.1 0.0% $ 0.1 0.1% Dispositions $
Slide 21: Q4 2022: Adjusted EPS reconciliation
Q4 2022: Adjusted EPS reconciliation Q3-22($) Q4-22($) GAAP earnings per diluted share $ 0.78 $ 3.58 Restructuring, severance, impairment and other related costs $ 0.05 $ 2.81 Acquisition and related integration costs $ 0.00 $ 0.00 Gain on sale or disposal of property, plant and equipment $ 0.00 $ 0
Slide 22: Q4 2022: Free cash flow reconciliation
Q4 2022: Free cash flow reconciliation* ($ in millions) Q3-22($) Q4-22($) Net cash provided by operating activities $ 13.5 $ 127.6 Non-acquisition capital expenditures $ (33.8) $ (29.8) Free cash flow $ (20.3) $ 97.8 Note: dollars may not add due to rounding. *Free cash flow defined as net cash prov
Slide 23: FY 2022: Adjusted operating margin reconciliation
FY 2022: Adjusted operating margin reconciliation ($ in millions) 2021($) 2021(%) 2022($) 2022(%) GAAP operating margin $ 117.2 12.6% $ 144.4 14.9% Restructuring, severance, impairment and other related costs $ 6.1 0.7% $ 71.4 7.4% Acquisition and related integration costs $ 3.9 0.4% $ 0.8 0.1% Gain
Slide 24: FY 2022: Adjusted EBITDA and adjusted EBITDA margin reconciliation
FY 2022: Adjusted EBITDA and adjusted EBITDA margin reconciliation ($ in millions) 2021($) 2022($) GAAP net income $ 108.1 $ 116.6 Interest expense, net $ 2.5 $ 9.5 Income tax expense $ 18.1 $ 23.8 Depreciation $ 29.0 $ 29.5 Amortization $ 14.3 $ 16.4 Stock-based compensation expense $ 17.0 $ 11.8 R
Slide 25: FY 2022: Adjusted EPS reconciliation
FY 2022: Adjusted EPS reconciliation 2021($) 2022($) GAAP earnings per diluted share $ 5.73 $ 6.15 Restructuring, severance, impairment and other related costs $ 0.24 $ 2.90 Acquisition and related integration costs $ 0.15 $ 0.03 Gain on sale or disposal of property, plant and equipment $ (0.04) $ 0
Slide 26: FY 2022: Segment adjusted operating income and operating margin reconciliation
FY 2022: Segment adjusted operating income and operating margin reconciliation EMS AES ($ in millions) 2022 ($) 2022 (%) 2022 ($) 2022 (%) Operating income and operating margin $61.7 14.7% $80.9 15.3% Restructuring, severance, impairment & other related costs $26.3 6.3% $45.1 8.5% Acquisition and re
Slide 27: Q1 2023: Guidance reconciliation
Q1 2023: Guidance reconciliation Q1-23 GAAP earnings per diluted share $(0.10) – $0.10 Discrete items* $0.62 Acquisition intangible amortization $0.13 Adjusted earnings per diluted share $0.65 - $0.85 *Includes severance, advisory fees and other items Note: dollars may not add due to rounding. 27