Rogers Corporation News

Home >> Investor Relations >> News >> Release 08/09/2006

Rogers Corporation Releases Final Second Quarter Results
Release Date: 08/09/2006

Rogers, Connecticut, August 9, 2006: Rogers Corporation (NYSE:ROG) announced today that final GAAP earnings for the second quarter of 2006 were $0.23 per diluted share, which includes a non-cash impairment charge of $11.3 million, or $0.52 per diluted share. As previously announced on July 27, 2006, excluding the impairment charge, non-GAAP earnings per share for the quarter were a record $0.75 per diluted share. This compares to non-GAAP earnings of $0.27 per diluted share in the second quarter of 2005. Second 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 on June 29, 2006, the future outlook of the Company’s polyolefin foams and polyester-based laminates operating units, within the Other Polymer Products reporting segment, changed from previous expectations. This reportable segment, which also includes other operating units, represented 12% of the Company’s sales in the second quarter of 2006. The Company has now completed an impairment analysis with the assistance of an independent third-party appraisal firm. The two operating units had assets including long-lived tangible and intangible assets with a book value of approximately $16 million. The entire non-cash impairment charge represents a reduction in goodwill of the two operating units. This impairment is the result of reduced future business prospects and does not involve any facility closures.

Robert D. Wachob, Rogers’ President and CEO, commented, “The impairment charge described above was entirely goodwill and affected no tangible assets. Although we now have lower long-term expectations for these parts of our Other Polymer Products reporting segment, we are committed to revamping and restructuring this segment.

Overall, this year sales-to-date have been driven by our success in several markets, most notably portable communications. We expect the strength in our market segments to continue in the third and fourth quarters, resulting in a record year for sales and profits. Our third quarter guidance, stated in our July 27, 2006 release, is for sales of $105 to $109 million and earnings in the range of $0.73 to $0.77 per diluted share.”

Rogers Corporation, headquartered in Rogers, CT, U.S.A., develops and manufactures high-performance specialty material 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 August 9, 2006, and Rogers undertakes no duty to update this information unless required by law.

For more information, please contact the Company directly, visit Rogers’ website on the Internet, or send a message by email.

Website Address: http://www.rogerscorporation.com

Financial News Contact: Dennis M. Loughran, Vice President Finance and Chief Financial Officer,
Phone: 860-779-5508, FAX: 860-779-4714

Editorial Contact: Edward J. Joyce, Manager of Investor and Public Relations
Phone: 860-779-5705, FAX: 860-779-5509, Email: edward.joyce@rogerscorporation.com

(FINANCIAL STATEMENTS FOLLOW)

Consolidated Statements of Income

	Three Months Ended		Six Months Ended
(In Thousands, Except Per Share Amounts)	July 2, 2006	July 3, 2005	July 2, 2006	July 3, 2005
Net Sales	$104,781	$84,633	$207,913	$172,736
Costs and Expenses:
Cost of Sales*	70,784	60,256	137,629	124,955
Selling and Administrative**	14,244	15,122	31,629	29,524
Research and Development	6,009	5,177	11,970	10,236
Impairment Charges***	11,272	20,030	11,272	20,030
Total Costs and Expenses****	102,309	100,585	192,500	184,745
Operating Income (Loss)	2,472	(15,952)	15,413	(12,009)
Other Income (Loss) less Other Charges	2,578	(321)	5,451	2,252
Interest Income (Expense), Net	629	134	979	362
Income (Loss) Before Taxes	5,679	(16,139)	21,843	(9,395)
Income Taxes (Benefit)	1,682	(7,326)	5,238	(5,707)
Net Income (Loss)	$ 3,997	$ (8,813)	$ 16,605	$ (3,688)
Net Income (Loss) Per Share:
Basic	$ 0.24	$ (0.54)	$ 1.00	$ (0.23)
Diluted	$ 0.23	$ (0.54)	$ 0.97	$ (0.23)
Shares Used in Computing:
Basic	16,773	16,271	16,630	16,338
Diluted	17,224	16,271	17,094	16,338

* Second quarter 2005 includes $1.2 million write down of inventory associated with the polyolefin foam operation

** Second quarter 2005 includes $0.5 million of receivable write offs associated with the polyolefin foam operation

*** Second quarter 2006 includes an $11.3 million charge related to the impairment of goodwill for the polyolefin foams and the polyester based laminate materials operating units. Second quarter 2005 includes a $19.8 million charge related to the impairment of long-lived assets associated with the polyolefin foams operation.

**** Including Depreciation and Amortization of: 2006 - $4.0 million and $9.4 million; 2005 - $5.2 million and $10.5 million

Consolidated Balance Sheets

(IN THOUSANDS)	July 2, 2006	January 1, 2006
Assets
Current Assets:
Cash and Cash Equivalents	$ 79,130	$ 46,401

Accounts Receivable, Net	76,541	62,850
Accounts Receivable – Joint Ventures	4,357	5,570
Note Receivable	2,100	2,100
Inventories	54,769	43,502
Deferred Income Taxes	11,356	10,823
Asbestos-Related Insurance Receivables	7,023	7,023
Other Assets	4,542	2,761
Total Current Assets	239,818	181,030
Notes Receivable	2,100	2,100
Property, Plant and Equipment, Net	132,786	131,616
Investments in Unconsolidated Joint Ventures	23,764	20,260
Pension Asset	6,667	6,667
Goodwill	10,656	21,928
Other Intangible Assets	588	764
Asbestos-Related Insurance Receivables	30,581	30,581
Other Assets	4,547	5,654
Total Assets	$ 451,507	$400,600
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts Payable	$ 19,674	$ 18,992
Accrued Employee Benefits and Compensation	25,972	13,916
Accrued Income Taxes Payable	5,956	7,209
Asbestos-Related Liabilities	7,023	7,023
Other Liabilities	11,131	10,226
Total Current Liabilities	69,756	57,366
Deferred Income Taxes	4,498	6,359
Pension Liability	15,370	16,973
Retiree Health Care and Life Insurance Benefits	7,048	7,048
Asbestos-Related Liabilities	30,867	30,867
Other Liabilities	949	1,737
Shareholders’ Equity	323,019	280,250
Total Liabilities and Shareholders’ Equity	$ 451,507	$400,600

Reconciliation of Second Quarter 2006 Non-GAAP Earnings per Diluted Share

GAAP Income per Diluted Share		$ 0.23
Less: Non-cash Impairment Charge per Diluted Share		0.52
Non-GAAP Earnings per Diluted Share		$ 0.75

Reconciliation of Second Quarter 2005 Non-GAAP Earnings (Loss) per Diluted Share

GAAP Loss per Diluted Share		$ (0.54)
Less: Non-cash Impairment Charge per Diluted Share		0.81
Non-GAAP Earnings per Diluted Share		$ 0.27

Rogers believes that diluted earnings per share, excluding the effect of any asset impairment or unusual event, is a measure that should be presented in addition to income determined in accordance with generally accepted accounting principles (GAAP) and is useful to investors. The following matters should be considered when evaluating these non-GAAP financial measures:

Rogers reviews the operating results of its businesses excluding the impact of any asset impairment because it provides an additional basis of comparison. The Company believes that these events are unusual in nature, and would not necessarily be indicative of ongoing operating results. As a result, management believes that excluding such charges is useful in comparing past, current and future periods.
Asset impairments principally represent adjustments to the carrying value of certain assets and do not typically require a cash payment.
While asset impairments are typically material, they are generally considered to be outside the normal operations of a business.
Corporate management is responsible for the initial and ongoing investments and for making decisions about asset impairment and related charges on those investments.

# # # # #