Rogers, Connecticut, November 20, 2006: Rogers Corporation (NYSE:ROG) announced today that final GAAP earnings for the third quarter of 2006 were $0.99 per diluted share, which includes a net tax benefit of $1.4 million, or $0.08 per diluted share attributable to specific tax related issues discussed below. Third quarter 2005 GAAP earnings were $0.59 per share, which includes a $0.10 positive adjustment from one-time tax benefits. As previously announced in the Company’s October 26, 2006 press release reporting preliminary third quarter results, the Company had all-time record quarterly sales in the third quarter of $124.0 million, up 45% compared to the $85.4 million in the third quarter of 2005. Third quarter GAAP income and balance sheet statements, as well as a reconciliation of non-GAAP to GAAP earnings for 2005 and 2006, are included at the end of this release.
As previously announced in the October 26, 2006 press release, the net tax benefit recorded in the third quarter is primarily related to the successful resolution of an IRS audit covering tax years 2002 and 2003, and the completion of certain state tax audits. The final resolution of these audits resulted in a benefit of $0.14 per diluted share; however, this benefit was mitigated in part by the final reconciliation of the approximate $2.3 million in tax assets requiring additional review as previously disclosed in the October 26, 2006 release. In addition, the benefit was also reduced in part by certain one-time provision adjustments associated with the Company’s final 2005 fiscal year federal tax filing. The final reconciliation of the approximate $2.3 million in tax assets and resulting adjustments were predominantly balance sheet reclassifications, but did include a $0.6 million tax expense; all associated adjustments were included in the 2006 third quarter GAAP results.
Dennis M. Loughran, Rogers’ Vice President Finance and CFO, commented, “The results of this tax reconciliation stem directly from our continuing efforts to remedy the tax accounting material weakness identified in late 2005. The adjustments we have identified have been non-cash and mainly balance sheet reclassifications for tax assets not properly reflected. We have made great strides in our efforts to address the material weakness and are working to fully remediate by year end.”
Rogers Corporation, headquartered in Rogers, CT, U.S.A., develops and manufactures high-performance specialty material based products, which serve a diverse range of markets including: portable communication devices, communication infrastructure, consumer products, computer and office equipment, ground transportation, and aerospace and defense. Rogers operates manufacturing facilities in Connecticut, Arizona, and Illinois in the U.S., in Gent, Belgium, in Suzhou, China, and in Hwasung City, Korea. Sales offices are located in Belgium, Japan, Taiwan, Korea, China, and Singapore.
Safe Harbor Statement
Statements in this news release that are not strictly historical may be deemed to be “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and are subject to the many uncertainties that exist in the Company’s operations and environment. These uncertainties, which include economic conditions, market demand and pricing, competitive and cost factors, rapid technological change, new product introductions, legal proceedings, and the like, are incorporated by reference in the Rogers Corporation 2005 Form 10-K filed with the Securities and Exchange Commission. Such factors could cause actual results to differ materially from those in the forward-looking statements. All information in this press release is as of November 20, 2006, and Rogers undertakes no duty to update this information unless required by law.
(Financial Statements Follow)
Consolidated Statements of Income
|
|
Three Months Ended
|
Nine Months Ended
|
|
(In Thousands, Except Per Share Amounts)
|
October 1,
2006
|
October 2,
2005
|
October 1,
2006
|
October 2,
2005
|
|
Net Sales
|
$123,951
|
$85,391
|
$331,863 |
$258,127 |
|
Costs and Expenses:
|
|
|
|
|
|
Cost of Sales*
|
85,446
|
61,072
|
223,074 |
186,027 |
|
Selling and Administrative**
|
15,495
|
12,369
|
47,123
|
41,893
|
|
Research and Development
|
6,016
|
4,897
|
17,986 |
15,133 |
|
Impairment Charge***
|
-
|
-
|
11,272 |
20,030 |
|
Total Costs and Expenses****
|
106,957
|
78,338
|
299,455 |
263,083 |
|
Operating Income (Loss)
|
16,994
|
7,053
|
32,408 |
(4,956) |
|
Other Income (Loss) less Other Charges
|
2,137
|
1,000
|
7,588 |
3,254 |
|
Interest Income/(Expense), Net
|
607
|
194
|
1,585 |
556 |
|
Income (Loss) Before Taxes
|
19,738
|
8,247
|
41,581 |
(1,146) |
|
Income Taxes
|
2,559
|
(1,630)
|
7,798 |
(7,335) |
|
Net Income (Loss)
|
$ 17,179
|
$ 9,877
|
$ 33,783 |
$ 6,189 |
|
Net Income (Loss) Per Share:
|
|
|
|
|
|
Basic
|
$ 1.02
|
$ 0.61
|
2.02 |
$ 0.38 |
|
Diluted
|
$ 0.99
|
$ 0.59
|
$ 1.92 |
$ 0.37 |
|
Shares Used in Computing:
|
|
|
|
|
|
Basic
|
16,846
|
16,267
|
16,703 |
16,314 |
|
Diluted
|
17,327
|
16,727
|
17,551 |
16,756 |
* Nine months ended 2005 includes $1,158 write down of inventory associated with the polyolefin foam operation
** Nine months ended 2005 includes $440 of receivable write offs associated with the polyolefin foam operation
*** Nine months ended 2005 includes $19,766 of charges related to impairment of long-lived assets associated with the polyolefin foam operation and $264 related to the impairment of a held-for-sale building formerly used for the Elastomer Components Division in South Windham, CT.
Nine months ended 2006 includes impairment of goodwill of $6,259 related to the polyolefin foam operation and $5,013 related to the polyester based industrial laminates operation.
**** Including Depreciation and Amortization of: 2006 - $4,849 & $14,216; 2005 - $4,182 & $14,658;
Consolidated Balance Sheets
|
(IN THOUSANDS)
|
Oct. 1, 2006
|
Jan. 1, 2006
|
|
Assets
|
|
|
|
Current Assets:
|
|
|
|
Cash and Cash Equivalents
|
$ 33,731
|
$ 22,001 |
|
Short-term Investments
|
43,718
|
24,400 |
|
Accounts Receivable, Net
|
89,210
|
59,474 |
|
Accounts Receivable from Joint Ventures
|
5,145
|
5,570 |
|
Accounts Receivable, Other
|
5,950
|
3,376 |
|
Note Receivable, Current
|
2,100
|
2,100 |
|
Inventories
|
62,251
|
43,502 |
|
Current Deferred Income Taxes
|
14,477
|
10,823 |
|
Asbestos-related insurance receivables
|
7,023
|
7,023 |
|
Other Current Assets
|
3,555
|
2,761 |
|
Total Current Assets
|
267,160
|
181,030 |
|
Notes Receivable, Long-term
|
2,100
|
2,100 |
|
Property, Plant and Equipment, Net
|
134,244
|
131,616 |
|
Investment in Unconsolidated Joint Ventures
|
23,318
|
20,260 |
|
Pension Asset
|
6,667
|
6,667 |
|
Goodwill, Net
|
10,656
|
21,928 |
|
Other Intangible Assets, Net
|
487
|
764 |
|
Asbestos-related insurance receivables
|
30,581
|
30,581 |
|
Other Assets
|
6,230
|
5,654 |
|
Total Assets
|
$ 481,443
|
$ 400,600 |
|
Liabilities and Shareholders’ Equity
|
|
|
|
Current Liabilities:
|
|
|
|
Accounts Payable
|
$ 31,295
|
$ 18,992 |
|
Accrued Employee Benefits and Compensation
|
29,377
|
13,916 |
|
Accrued Income Taxes Payable
|
6,421
|
7,209 |
|
Asbestos-related insurance liabilities
|
7,023
|
7,023 |
|
Other Current Liabilities
|
15,112
|
10,226 |
|
Total Current Liabilities
|
89,228
|
57,366 |
|
Noncurrent Deferred Income Taxes
|
3,320
|
6,359 |
|
Noncurrent Pension Liability
|
7,016
|
16,973 |
|
Noncurrent Retiree Health Care & Life Insurance Benefits
|
7,048
|
7,048 |
|
Asbestos-related insurance liabilities
|
30,867
|
30,867 |
|
Other Long-term Liabilities
|
1,031
|
1,737 |
|
Shareholders’ Equity
|
342,933
|
280,250 |
|
Total Liabilities and Shareholders’ Equity
|
$ 481,443
|
$ 400,600 |
These statements are subject to year-end audit.
Reconciliation of Third Quarter 2005 Non-GAAP Earnings per Share
|
GAAP Earnings per Diluted Share
|
|
$ 0.59
|
|
Tax Adjustment per share
|
|
0.10
|
|
Non-GAAP Earnings per Diluted Share
|
|
$ 0.49
|
Reconciliation of Third Quarter 2006 Non-GAAP Earnings per Share
|
GAAP Earnings per Diluted Share
|
|
$ 0.99
|
|
Tax Adjustment per share
|
|
0.08
|
|
Non-GAAP Earnings per Diluted Share
|
|
$ 0.91
|
Notes to our Non-GAAP Financial Measures:
Rogers believes that net income from continuing operations and diluted earnings per share, excluding the effect of one-time adjustments, is useful information for investors and should be presented in addition to income determined in accordance with generally accepted accounting principles (GAAP).
The third quarter 2005 results include additional one-time adjustments to earnings required to properly state certain tax accounts as of the end of that period. These adjustments primarily relate to an IRS audit of Durel Corporation tax filings for certain years prior to the Company’s acquisition of this business in 2003.
The one-time tax adjustment in the third quarter of 2006 was the result of a favorable determination of IRS audits for the 2002 and 2003 fiscal years, adjustments relating to the fiscal 2005 federal tax filing, and a one-time tax expense associated with reconciliation of the above mentioned $2.3 million tax assets.
Rogers reviews the operating results of its businesses excluding the impact of any one-time tax adjustments because it provides an additional basis of comparison. As a result, management believes that excluding such adjustments is useful in comparing past, current and future periods.
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