Rogers Corporation has announced financial results for the first quarter of 2014, reporting net sales of $146.6 million, a record first quarter, and net income from continuing operations of $0.79 per diluted share. Net sales and net income from continuing operations exceeded the company’s guidance provided on February 24, 2014 of $134 to $138 million in net sales and net income from continuing operations of $0.68 and $0.75 per diluted share. First quarter 2013 net sales were $126.0 million with net income from continuing operations of $0.39 per diluted share, which included net special charges of $0.05 per diluted share.
Business Segment Discussion
Printed Circuit Materials
Printed Circuit Materials reported all-time record net sales of $58.5 million for the first quarter of 2014, an increase of 34.4% from the $43.6 million reported in the first quarter of 2013. This growth was driven primarily by an increase in orders for high-frequency materials to support wireless base station and antenna applications in connection with the global 4G/LTE infrastructure build-out, especially in China. All major market segments showed solid increases versus the first quarter of 2013, including automotive radar applications for Advanced Driver Assistance Systems, high reliability materials for use in aerospace and defense systems, and satellite TV applications.
High Performance Foams
In the first quarter of 2014, High Performance Foams reported net sales of $41.2 million, a decrease of 2.9% compared to record first quarter 2013 net sales of $42.4 million. The decrease in net sales is primarily due to previously reported mobile internet device design changes that negatively impacted Rogers sales into that market compared to the year ago first quarter. The business continues to see increased demand in clean energy and consumer applications as sales of cushioning, sealing and impact protection materials in these market segments were up again this quarter.
Power Electronics Solutions
Power Electronics Solutions reported net sales of $40.8 million for the first quarter of 2014, an increase of 19.0% compared to first quarter 2013 net sales of $34.3 million. This increase was led by a strong rebound in demand for curamik® direct bonded copper substrates in renewable energy, automotive and variable frequency motor drive applications across all regions. In addition, RO-LINX® power distribution systems experienced increased orders for locomotive applications in Asia and Europe. China has recently announced an increase in overall rail spend for 2014 which should benefit this segment as these projects unfold.
Joint Ventures
Rogers’ 50% owned High Performance Foams joint ventures’ net sales totaled $11.3 million this quarter, an increase of 5.6% compared to the $10.7 million sold in the first quarter of 2013. The increase is due to generally improved demand across most end markets.
Operational Highlights
Rogers’ statement of financial position ended the first quarter of 2014 with cash and cash equivalents of $216.5 million, an increase of $24.6 million, or 12.8%, from $191.9 million at December 31, 2013. Capital expenditures were approximately $2.2 million for the first quarter of 2014 and are expected to total approximately $25 million for the year.
The company’s gross margin improved to 36.8% in the first quarter of 2014 from 32.8% in the first quarter of 2013. This improvement was due to increased sales volume, the positive impact of streamlining actions taken over the last two years and improved absorption and mix. Reflecting the company’s overall goal to improve operating performance, operating margins for the first quarter of 2014 were 14.6% compared to 8.6% in the first quarter of 2013.
The company’s 2014 first quarter effective tax rate was 28.9%. The Company currently projects its effective tax rate for 2014 will be approximately 28%.
Bruce D. Hoechner, president and CEO, commented, “We are very pleased with our record-setting first quarter 2014 sales performance, up 16.4% over the first quarter of 2013. Our growth was led by all-time record quarterly sales in the Printed Circuit Materials division along with strong sales growth in our Power Electronics Solutions business. We delivered on the bottom line as well with just over a 100% increase in EPS over our first quarter 2013 performance and made significant improvement in our operating margins moving to 14.6% from 8.6% in the first quarter of 2013. These results demonstrate that our operational excellence initiatives, market focus and investments in innovation are benefitting the company. We believe we will see a continuation of robust market conditions into the second quarter of 2014. Therefore, we project second quarter 2014 net sales to be between $143 to $148 million with net income from continuing operations of between $0.68 and $0.77 per diluted share.”
About Rogers Corporation
Rogers Corporation is a global leader in engineered materials to power, protect, and connect our world. With more than 182 years of materials science experience, Rogers delivers high-performance solutions that enable clean energy, internet connectivity, advanced transportation, and other technologies where reliability is critical. Rogers’ delivers Power Electronics Solutions for energy-efficient motor drives, vehicle electrification and alternative energy; High Performance Foams for sealing, vibration management and impact protection in mobile devices, transportation interiors, industrial equipment and performance apparel; and Printed Circuit Materials for wireless infrastructure, automotive safety and radar systems. Headquartered in Connecticut, Rogers operates manufacturing facilities in the United States, China, Germany, Belgium, Hungary, and South Korea, with joint ventures and sales offices worldwide.
