Total pages included - 10
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4347
ROGERS CORPORATION
(Exact name of Registrant as specified in its charter)
Massachusetts 06-0513860
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
P.O. Box 188, One Technology Drive, Rogers, Connecticut 06263-0188
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 774-9605
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of the Registrant's classes of common
stock as of May 1, 1995:
Capital Stock, $1 Par Value--3,541,033 shares
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ROGERS CORPORATION AND SUBSIDIARIES
FORM 10-Q
April 2, 1995
INDEX
Page No.
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Statements of Income--
Three Months Ended April 2, 1995 and
April 3, 1994 3
Consolidated Balance Sheets--
April 2, 1995 and January 1, 1995 4-5
Consolidated Statements of Cash Flows--
Three Months Ended April 2, 1995 and
April 3, 1994 6
Supplementary Notes 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II--OTHER INFORMATION
Item 6. Reports on Form 8-K 10
SIGNATURES 10
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended:
April 2, April 3,
1995 1994
Net Sales $ 36,417 $ 34,005
Cost of Sales 24,908 23,879
Selling and Administrative Expenses 5,732 5,114
Research and Development Expenses 2,414 2,269
Total Costs and Expenses 33,054 31,262
Operating Income 3,363 2,743
Other Income less Other Charges 831 (9)
Interest Expense, Net 35 371
Income Before Income Taxes 4,159 2,363
Income Taxes:
Federal and Foreign 582 58
State 125 36
Net Income $ 3,452 $ 2,269
Income Per Share $ .90 $ .67
Average Shares Outstanding and Common
Stock Equivalents 3,824,359 3,375,103
The accompanying notes are an integral part of the consolidated financial
statements.
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ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in Thousands)
April 2, 1995 January 1, 1995
Current Assets:
Cash and Cash Equivalents $ 17,337 $ 13,851
Accounts Receivable 19,225 16,495
Inventories:
Raw Materials 4,632 4,311
In-Process and Finished 5,489 5,302
Less LIFO Reserve (1,056) (1,056)
Total Inventories 9,065 8,557
Net Assets Held for Sale (Note B) 6,687 6,687
Other Current Assets 1,195 1,596
Total Current Assets 53,509 47,186
Property, Plant and Equipment, Net of
Accumulated Depreciation of
$54,776 and $52,464 33,931 34,061
Investments in Unconsolidated Joint
Ventures 4,186 4,072
Intangible Pension Asset 2,365 2,365
Other Assets 1,714 1,759
Total Assets $ 95,705 $ 89,443
The accompanying notes are an integral part of the consolidated financial
statements.
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ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in Thousands)
April 2, 1995 January 1, 1995
Current Liabilities:
Accounts Payable $ 8,541 $ 7,778
Current Maturities of Long-Term Debt 1,225 1,225
Accrued Employee Benefits and
Compensation 6,192 6,646
Other Accrued Liabilities 6,916 5,849
Taxes Other than Federal and Foreign
Income 1,135 984
Total Current Liabilities 24,009 22,482
Long-Term Debt, less Current Maturities 6,675 6,675
Noncurrent Deferred Income Taxes 1,658 1,520
Noncurrent Pension Liability 4,497 4,497
Noncurrent Retiree Health Care and Life
Insurance Benefits 6,560 6,560
Other Long-Term Liabilities 2,673 2,584
Shareholders' Equity:
Capital Stock, $1 Par Value:
Authorized Shares 25,000,000; Issued
and Outstanding Shares 3,532,915
and 3,522,635 3,533 3,523
Additional Paid-In Capital 28,884 28,632
Equity Translation Adjustment 2,713 1,918
Retained Earnings 14,503 11,052
Total Shareholders' Equity 49,633 45,125
Total Liabilities and
Shareholders' Equity $ 95,705 $ 89,443
The accompanying notes are an integral part of the consolidated financial
statements.
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ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Three Months Ended:
April 2, April 3,
1995 1994
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net Income $ 3,452 $ 2,269
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 1,648 1,710
Benefit for Deferred Income Taxes (330) --
Equity in Undistributed (Income) Loss of
Unconsolidated Joint Ventures - Net (255) 197
(Gain) Loss on Disposition of Property, Plant
and Equipment 85 (16)
Other - Net 914 129
Changes in Operating Assets and Liabilities Excluding
Effects of Disposition of Assets:
Accounts Receivable (2,148) (3,837)
Inventories (377) (644)
Prepaid Expenses (76) (86)
Accounts Payable and Accrued Expenses 1,150 1,731
Net Cash Provided by Operating Activities 4,063 1,453
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Capital Expenditures (1,085) (968)
Proceeds from Sale of Property, Plant and Equipment -- 37
Net Cash Used in Investing Activities (1,085) (931)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Repayments of Debt Principal -- (1,387)
Proceeds from Sale of Capital Stock 263 564
Net Cash Provided by (Used in) Financing
Activities 263 (823)
Effect of Exchange Rate Changes on Cash 245 13
Net Increase (Decrease) in Cash and Cash Equivalents 3,486 (288)
Cash and Cash Equivalents at Beginning of Year 13,851 4,533
Cash and Cash Equivalents at End of Quarter $ 17,337 $ 4,245
The accompanying notes are an integral part of the consolidated financial
statements.
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ROGERS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY NOTES
A. The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. For further
information, refer to the audited consolidated financial statements
and footnotes thereto included in the Company's annual report on
Form 10-K for the fiscal year ended January 1, 1995.
B. Net Assets Held for Sale consists of the land and building in
Chandler, Arizona, currently being leased to the buyer of the
Flexible Interconnections Division and the land and building in
Mesa, Arizona, related to the divested business of the Power
Distribution Division.
C. The Company had a $15.0 million secured revolving credit
arrangement with Fleet Bank, N.A. at the end of the first quarter
1995. A new unsecured arrangement with Fleet Bank, N.A. for a
maximum of $10.0 million of borrowings was entered into on April
13, 1995. At April 2, 1995, there were no borrowings under this
arrangement.
D. Net Interest paid to lenders during the first three months of 1995
and 1994 was approximately $100,000 and $300,000, respectively.
E. Income taxes paid (refunded) were $83,000 and $36,000 in the first
three months of 1995 and 1994, respectively.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net sales were $36.4 million for the first quarter of 1995, compared
with $34.0 million for the same period in 1994. When adjusted for
divestitures and for currency rate changes, net sales increased 15%.
These sales gains are the result primarily of unit volume increases.
Sales of Polymer Products increased 10% in the first three months of
1995, compared with the same period in 1994. The Polymer Product
sales increase was led by the Willimantic and Molding Materials
Divisions. Strong commutator sales and greater sales to Europe
accounted for the majority of the increase in molding materials. The
Willimantic Division increase was attributable primarily to gains in
sales to the automotive and imaging markets.
Sales of Electronic Products for the initial three-month period
increased 21% from the prior year, after adjusting for divestitures
and for currency rate changes. The largest rate of growth in sales
was in circuit materials, and was attributable to continued strong
orders for R/flex flexible laminates from several key flex circuit
fabricators, and by the adoption of the Corporation's LEAD-lock tapes
for new high capacity memory chip applications.
Sales at Durel Corporation, the Corporation's 50% owned joint venture
with 3M, grew substantially to another record high. A new 77,000
square foot Durel manufacturing plant in Arizona is nearing completion
and will be ready in the second quarter to meet increased demand from
transportation, consumer and communication markets.
Profits, both before and after taxes, and earnings per share, were the
highest for any quarter in the Corporation's history. Before-tax
profits for 1995 increased 76% compared with the record results in the
first quarter of 1994. Net income and earnings per share in the first
quarter were $3.5 million and 90 cents, respectively, compared with
$2.3 million and 67 cents for the same period last year. The tax rate
for the first three months of 1995 was 17%; last year's first quarter
rate was 4%. Higher profits resulted from increased sales, better
manufacturing margins, greater joint venture and royalty income, and
reduced net interest costs.
Manufacturing profit as a percentage of sales in the first three
months increased from 30% in 1994 to 32% in 1995. This increase is
due to better manufacturing margins in several operations, including
at the Soladyne Division, the Corporation's small microwave printed
circuit operation which has continued to make progress in its drive to
increase commercial applications.
Selling and administrative expenses for the first three months of 1995
as a percentage of sales were approximately the same as the previous
year.
Research and development expenses were 7% of sales in the first
quarters of both 1995 and 1994. Three new circuit materials aimed at
the wireless communications market were introduced during the first
quarter 1995. These products result from intensive R&D and marketing
activities over the past three years to support the transition from
defense-related applications. The Corporation's traditional strength
in materials R&D continues to be important, but is now supplemented by
increased technical effort aimed at the development of lower cost
processes.
Net interest expense for the first quarter of 1995 decreased
substantially from the comparable 1994 quarter because of lower
borrowings and the significant increase in cash and cash equivalents
which led directly to increased investment income. Total debt
outstanding at April 2, 1995, was $7.9 million compared with $15.9
million at April 3, 1994.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Net cash provided by operating activities in the first three months of
1995 was $4.1 million, compared with $1.5 million in the same 1994
period. The year-to-year increase is attributable mainly to increased
net income and other working capital changes.
As of April 13, 1995, the Corporation can borrow up to a maximum of
$10.0 million under a new unsecured revolving credit arrangement with
Fleet Bank, N.A. Amounts borrowed under this arrangement are to be
paid in full by March 31, 1998. The Corporation had no borrowings
under revolving credit arrangements at April 2, 1995.
Capital expenditures in the first three months of 1995 and 1994 were
$1.1 million and $1.0 million, respectively. Management expects that
the level of spending for 1995 will approximate $7.0 million and will
be primarily for capacity expansions and new process equipment. It is
anticipated that these expenditures will be financed with internally
generated funds.
Other income less other charges aggregated $831,000 for the first
three months of 1995 compared with $(9,000) for the same period in
1994. This increase is attributable primarily to higher income from
the Corporation's 50% owned joint ventures and from royalties. For
the first time the Corporation was able to recognize its share of the
profits of Durel Corporation, Rogers' electroluminescent lamp joint
venture with 3M. In addition, a royalty payment related to the sale in
1994 of the U.S. power distribution business was reflected in first
quarter 1995 results. Quarterly royalty payments related to this sale
are expected to continue to be included in the Corporation's
statements at decreasing rates over the next four years.
The Corporation is subject to federal, state and local laws and
regulations concerning the environment and is currently engaged in
proceedings involving a number of sites under these laws, usually as a
participant in a group of potentially responsible parties (PRPs). The
Corporation has been named as a PRP in six cases involving waste
disposal sites, all of which are superfund sites. Several of these
proceedings are at a preliminary stage and it is impossible to
estimate the cost of remediation, the timing and extent of remedial
action which may be required by governmental authorities, and the
amount of liability, if any, of the Corporation alone or in relation
to that of any other potentially responsible parties. The Corporation
also has been seeking to identify insurance coverage with respect to
these matters. Where it has been possible to make a reasonable
estimate of the Corporation's liability, a provision has been
established. Insurance proceeds have only been taken into account
when they have been confirmed by or received from the insurance
company. Actual cost to be incurred in future periods may vary from
these estimates. Based on facts presently known to it, the
Corporation does not believe that the outcome of these proceedings
will have a material adverse effect on its financial condition.
In addition to the above proceedings, the Corporation has been
actively working with the Connecticut Department of Environmental
Protection (CT DEP) related to certain PCB contamination in the soil
beneath a small section of cement flooring at its East Woodstock,
Connecticut facility. The Corporation is developing a remediation plan
with CT DEP. On the basis of estimates prepared by the Corporation's
environmental engineers and consultants, the Corporation recorded a
provision of approximately $0.9 million in 1994 for costs related to
this matter. Management believes, based on facts currently available,
that the implementation of the aforementioned remediation will not
have a material additional adverse impact on earnings.
At April 2, 1995, other accrued liabilities were greater than April 3,
1994, primarily because of environmental reserves.
The Corporation has not had any material recurring costs and capital
expenditures relating to environmental matters, except as specifically
described in the preceding statements.
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PART II - OTHER INFORMATION
Item 6. Reports on Form 8-K
(b) There were no reports on Form 8-K filed for the three months ended
April 2, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ROGERS CORPORATION
(Registrant)
By s/WILLIAM A. KREIN
William A. Krein
Authorized Officer
Vice President, Finance
Dated: May 16, 1995
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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