Total pages included - 14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 4, 1998
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 (860) 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 November 1, 1998:
Capital Stock, $1 Par Value-7,620,383 shares
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<PAGE>
ROGERS CORPORATION AND SUBSIDIARIES
FORM 10-Q
October 4, 1998
INDEX
Page No.
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Statements of Income--
Three Months and Nine Months Ended
October 4, 1998 and September 28, 1997 3
Consolidated Balance Sheets--
October 4, 1998 and December 28, 1997 4-5
Consolidated Statements of Cash Flows--
Nine Months Ended October 4, 1998 and
September 28, 1997 6
Supplementary Notes 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-13
PART II--OTHER INFORMATION
Item 6. Reports on Form 8-K 14
SIGNATURES 14
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except for Per Share Amounts)
Three Months Ended: Nine Months Ended:
------------------------- -------------------------
October 4, September 28, October 4, September 28,
1998 1997 1998 1997
------------------------- -------------------------
Net Sales $ 51,319 $ 47,752 $ 163,021 $ 137,880
Cost of Sales 38,409 33,359 120,884 96,808
Selling and Administrative
Expenses 6,432 6,387 21,238 18,176
Research and Development
Expenses 2,933 2,441 8,065 7,408
----------------------- ------------------------
Total Costs and Expenses 47,774 42,187 150,187 122,392
----------------------- ------------------------
Operating Income 3,545 5,565 12,834 15,488
Other Income less Other
Charges 19 205 339 1,139
Interest Income, Net 230 172 592 473
----------------------- ------------------------
Income Before Income Taxes 3,794 5,942 13,765 17,100
Income Taxes:
Federal and Foreign 981 1,479 3,632 4,242
State 120 125 360 375
----------------------- ------------------------
Net Income $ 2,693 $ 4,338 $ 9,773 $ 12,483
======================= ========================
Net Income Per Share
(Note G):
Basic $ 0.36 $ 0.58 $ 1.29 $ 1.67
======================= ========================
Diluted $ 0.34 $ 0.55 $ 1.23 $ 1.60
======================= ========================
Shares Used in Computing
(Note G):
Basic 7,593,000 7,488,000 7,591,000 7,457,000
======================= ========================
Diluted 7,837,000 7,883,000 7,914,000 7,808,000
======================= ========================
The accompanying notes are an integral part of the consolidated financial
statements.
-3-
<PAGE>
ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in Thousands)
October 4, 1998 December 28, 1997
--------------- -----------------
Current Assets:
Cash and Cash Equivalents $ 9,417 $ 18,791
Marketable Securities 1,369 2,764
Accounts Receivable, Net 32,342 28,658
Inventories:
Raw Materials 9,285 10,262
In-Process and Finished 9,960 11,323
--------- ---------
Total Inventories 19,245 21,585
Current Deferred Income Taxes 1,938 1,936
Assets Held for Sale, Net of Valuation
Reserves of $492 in each period
(Note B) 5,158 5,158
Other Current Assets 735 591
--------- ---------
Total Current Assets 70,204 79,483
--------- ---------
Property, Plant and Equipment, Net of
Accumulated Depreciation of
$71,383 and $63,856 72,669 52,201
Investment in Unconsolidated Joint
Venture 5,359 5,373
Pension Asset 4,731 4,731
Goodwill and Other Intangibles, Net 14,253 14,500
Other Assets 2,546 2,152
--------- ---------
Total Assets $ 169,762 $ 158,440
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
-4-
<PAGE>
ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in Thousands)
October 4, 1998 December 28, 1997
--------------- -----------------
Current Liabilities:
Accounts Payable $ 13,780 $ 16,771
Current Maturities of Long-Term Debt 600 600
Accrued Employee Benefits and
Compensation 8,058 8,098
Accrued Income Taxes Payable 5,259 3,628
Taxes, Other than Federal and Foreign
Income 1,471 839
Other Accrued Liabilities 6,122 4,047
--------- ---------
Total Current Liabilities 35,290 33,983
--------- ---------
Long-Term Debt, less Current Maturities 13,060 13,660
Noncurrent Deferred Income Taxes 2,417 2,311
Noncurrent Pension Liability 3,901 3,900
Noncurrent Retiree Health Care and Life
Insurance Benefits 6,277 6,277
Other Long-Term Liabilities 4,467 3,931
Shareholders' Equity:
Capital Stock, $1 Par Value:
Authorized Shares 50,000,000; Issued
and Outstanding Shares 7,618,883
and 7,543,699 7,619 7,544
Additional Paid-In Capital 31,614 31,097
Less Treasury Stock (12,800 shares) (423) 0
Unrealized Gain/(Loss) on Marketable
Securities 1 (4)
Currency Translation Adjustment 1,184 1,160
Retained Earnings 64,355 54,581
--------- ---------
Total Shareholders' Equity 104,350 94,378
--------- ---------
Total Liabilities and
Shareholders' Equity $ 169,762 $ 158,440
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
-5-
<PAGE>
ROGERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Nine Months Ended:
-------------------------
October 4, September 28,
1998 1997
-------------------------
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net Income $ 9,773 $ 12,483
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 6,983 5,668
Equity in Undistributed (Income) Loss of
Unconsolidated Joint Ventures, Net (118) (803)
Noncurrent Pension and Postretirement
Benefits 1,034 939
Other, Net 156 502
Changes in Operating Assets and Liabilities
Excluding Effects of Disposition of Assets:
Accounts Receivable (3,269) (7,985)
Inventories 2,659 (3,206)
Prepaid Expenses (107) (141)
Accounts Payable and Accrued Expenses 292 3,790
--------- ---------
Net Cash Provided by Operating
Activities 17,403 11,247
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Capital Expenditures (25,410) (9,721)
Proceeds from Sales of Business -- --
Acquisition of Business (2,250) (1,294)
Acquisition Escrow -- (10,759)
Proceeds from Sale of Property, Plant & Equipment (97) 57
Proceeds from Sale of Marketable Securities 1,395 247
Purchase of Marketable Securities -- --
Investment in Unconsolidated Joint Ventures and
Affiliates 333 386
--------- ---------
Net Cash Provided by (Used in)
Investing Activities (26,029) (21,084)
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Proceeds from Short and Long-Term Borrowings 290 12,259
Repayments of Debt Principal (603) (1,500)
Acquisition of Treasury Stock (423) --
Proceeds from Sale of Capital Stock 592 830
--------- ---------
Net Cash Provided by Financing
Activities (144) 11,589
Effect of Exchange Rate Changes on Cash (604) 186
--------- ---------
Net Increase in Cash and Cash Equivalents (9,374) 1,938
Cash and Cash Equivalents at Beginning of Year 18,791 18,675
--------- ---------
Cash and Cash Equivalents at End of Quarter $ 9,417 $ 20,613
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
-6-
<PAGE>
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 December 28, 1997.
B. Net Assets Held for Sale consist of land and a building in Chandler,
Arizona, currently being leased to the purchaser of the Company's
flexible interconnection business in 1993.
C. In September 1997 the Company cancelled its $5.0 million unsecured
revolving credit agreement with Fleet National Bank and replaced it with
an unsecured multi-currency revolving credit agreement, also with Fleet.
Under the new arrangement, the Company can borrow up to $15.0 million,
or the equivalent in Belgian Francs and/or Japanese Yen. Amounts
borrowed under this agreement are to be paid in full by September 19,
2002. The Company borrowed 390,207,039 Belgian Francs under the new
arrangement to facilitate the Rogers Induflex acquisition in Belgium in
September 1997.
D. Interest paid during the first nine months of 1998 and 1997 was $794,000
and $500,000, respectively.
E. Income taxes paid were $2,230,000 and $1,953,000 in the first nine
months of 1998 and 1997, respectively.
F. As of the beginning of 1998, the Company adopted Financial Accounting
Standard Board Statement No. 130 (FAS No. 130), "Reporting Comprehensive
Income". FAS No. 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the
adoption of this Statement had no impact on the Company's net income or
shareholders' equity. FAS No. 130 requires unrealized gains or losses
on the Company's available-for-sale securities and foreign currency
translation adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in other
comprehensive income. Prior year financial statements have been
reclassified to conform to the requirements of Statement 130.
During the third quarters of 1998 and 1997, total comprehensive income
amounted to $3.5 million and $4.3 million, respectively. For the first
nine months of 1998 and 1997, total comprehensive income amounted to
$9.8 million and $11.5 million, respectively.
-7-
<PAGE>
SUPPLEMENTARY NOTES, CONTINUED
G. In 1997, the Financial Accounting Standards Board issued Statement No.
128 (FAS No. 128), "Earnings per Share." FAS No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic
and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is very
similar to the previously reported fully diluted earnings per share.
All earnings per share amounts for all periods presented have been
restated to conform to the FAS No. 128 requirements.
The following table sets forth the computation of basic and diluted
earnings per share:
Three Months Ended: Nine Months Ended:
------------------------ -------------------------
(In Thousands, Except October 4, September 28, October 4, September 28,
Per Share Amounts) 1998 1997 1998 1997
------------------------ -------------------------
Numerator:
Net income $ 2,693 $ 4,338 $ 9,773 $ 12,483
Denominator:
Denominator for basic
earnings per share -
weighted-average shares 7,593 7,488 7,591 7,457
Effect of stock options 244 395 323 351
Denominator for diluted
earnings per share -
adjusted weighted-average
shares and assumed
conversions 7,837 7,883 7,914 7,808
Basic earnings per share $ 0.36 $ 0.58 $ 1.29 $ 1.67
Diluted earnings per share $ 0.34 $ 0.55 $ 1.23 $ 1.60
H. The Company's fiscal year begins on the Monday nearest January 1 and
ends on the Sunday nearest December 31. The fiscal year ending January
3, 1999 is a 53 week year and the additional week is included in the
first quarter of 1998.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Net sales were $51.3 million in the third quarter and $163.0 million for
the first nine months of 1998, up 7% and 18%, respectively, over the
comparable periods in 1997. Combined Sales, which include one-half of the
sales from Rogers two 50% owned joint ventures, were $58.4 million for the
quarter and $185.3 million for the nine month period, up 4% and 14%,
respectively, over the same periods in 1997.
In the third quarter sales of flexible circuit materials manufactured by
Rogers were down about 40% mainly because of depressed conditions in
Southeast Asia and in the computer disk drive industry. Offsetting the
drop was a substantial gain in sales of FLEX-I-MID(R) adhesiveless laminate
materials supplied to us by Mitsui Chemicals, Inc. and sold to Hutchinson
Technology Incorporated for suspension assemblies used in advanced disk
drives. Other Rogers product lines were either about the same or down
modestly from the third quarter last year.
Sales of Polymer Materials in the third quarter were 2% below the third
quarter of 1997. Sales for the first nine months of 1998 were 6% above the
same period of 1997. A new application for NITROPHYL(R) floats for fuel level
sensing in propane tanks contributed to substantial sales growth at the
Elastomer Components Unit during the first nine months of 1998. The
moldable composites business, bolstered by increasing sales to Europe, and
with the recent addition of a major new U. S. customer for electrical
commutator materials is on course to achieve record sales for the year. The
major expansion completed in 1997 is now effectively supporting the growth
of moldable composites in Europe and in the U.S.
Sales of Electronic Materials for the third quarter and first nine months
increased 18% and 33%, respectively, from the comparable 1997 periods
despite the decline in sales of the flexible circuit materials manufactured
in Chandler, Arizona. Sales by the recently acquired Induflex unit and
sales of FLEX-I-MID material to Hutchinson Technology Incorporated
accounted for much of this increase.
In the third quarter, the Microwave Materials Division had record sales
which were made possible by the completion and startup of its manufacturing
facility in Arizona. This new facility not only substantially increases
the Company's capacity to make high frequency laminates, but now the
Company is able to manufacture, rather than purchase a critical material
used in this product line. In addition, in Ghent, Belgium, installation of
the microwave laminates production line is proceeding about on schedule,
with startup expected to begin late in the fourth quarter. These major
investments will place Rogers in an even stronger position to serve the
fast growing worldwide wireless communications market.
Over the past several years, Rogers has intensified its sales and marketing
activities in Europe. This effort is now paying off handsomely. Sales in
Europe for all product lines, other than those of the recently acquired
Induflex business, increased 22% in local currency during the first nine
months of the year. Induflex, which was acquired at the end of September,
1997, currently
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
manufactures thin aluminum and copper laminates, primarily for shielding
electromagnetic and radio frequency interference. The Company has begun to
broaden the Induflex product range and plans to increase sales in a number
of new, higher margin application areas.
Profits before tax of $3.8 million for the third quarter and $13.8 million
for the first nine months of 1998 were down 36% and 20%, respectively, from
the same periods in 1997. Net income of $2.7 million for the third quarter
and $9.8 million for the first nine months were down 38% and 22%,
respectively.
Earnings per share (diluted) for the third quarter this year were $0.34,
down from $0.55 in the same period last year. For the first nine months of
1998, earnings per share (diluted) were $1.23 compared to $1.60 in the
initial nine-month period a year ago.
Manufacturing profit as a percentage of sales in the first nine months of
1998 and 1997 was 26% and 30%, respectively. This comparative profit
margin continues to be negatively impacted by the lower percentage of sales
earned on the resale of the FLEX-I-MID material as contrasted with profit
margins on the Company's own manufactured materials. In addition, only
relatively modest profits were earned by the two operations that were
acquired last year, the Bisco silicone foam business and the Induflex unit
in Europe. Both acquisitions have excellent future prospects, but are
still in the early stages of integration into the Company. Also, in the
third quarter, the major expansions and startup activities for microwave
materials and PORON(R) materials reduced profitability.
Selling and administrative expenses for the first nine months of 1998
increased in total dollars, but as a percentage of sales were approximately
the same as the comparable period in the previous year. The increase in
dollars primarily reflects steps taken to strengthen the internal
organization and to improve information systems.
Research and Development expense in the first nine months of 1998 increased
3% over the comparable 1997 period. Major development activities in
Electronic Materials included process and product improvements to the
RO3000(TM) and RO4000(R) high frequency circuit laminate materials, which are
designed for use in high volume, low cost commercial wireless communication
applications. In flexible circuit materials, development efforts focused
on new material technology, improved adhesives and improved processing in
the Company's plant and at customers' facilities. Polymer Materials
activity continue to include the commercialization of a slow rebound PORON
urethane material for the foot comfort market, as well as improvements to a
variety of other PORON materials for industrial and printing applications.
New ENDUR(R) component formulations are being developed to provide improved
friction properties and longevity in document handling applications.
Finally, higher strength phenolic composites continue to receive technical
support as does improved cure monitoring of phenolic compounds which should
lead to improved processing by customers.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The Company's core technical capabilities in polymers, fillers and adhesion
continued to improve with these specialized technologies now applied to
immediate as well as longer term development tasks.
Net interest income for 1998 increased from 1997 due mainly to a tax
interest refund received from the Internal Revenue Service.
At the end of the quarter, the Company acquired the dampening sleeve
business of Imation Corp., formerly a business of 3M. Dampening sleeves
are used in lithographic printing. The acquisition complements the
Company's existing line of R/bak(R) compressible plate mounting materials for
flexography. This small acquisition will also take advantage of the
Company's existing capabilities in nonwoven products, the basic material
used in dampening sleeves and will permit better utilization of the Rogers,
Connecticut facility. Although the dampening sleeve business is mature,
the Company's familiarity with nonwoven materials and with the graphic arts
industry should contribute to the quick and profitable integration of this
business into the Company.
As of September 1997, the Company can borrow up to $15.0 million or the
equivalent in Belgian Francs and/or Japanese Yen under an unsecured multi-
currency revolving credit agreement with Fleet National Bank. Amounts
borrowed under this agreement are to be repaid in full by September 19,
2002. The Company has borrowed 390 million Belgian Francs under this
agreement as of October 4, 1998.
Other income less other charges was $0.3 million for the first nine months
of 1998 compared with $1.1 million for the same period in 1997. This
change is attributable to lower gains on sales of assets and to a decline
in joint venture and royalty income.
Durel Corporation, the joint venture with 3M, which manufactures
electroluminescent lamps, is making slower progress than anticipated in
shifting its sales and manufacturing toward the high volume, low price
demands of the wireless communications market. A new judge has been
appointed for the patent infringement lawsuit brought by Durel to protect
its proprietary technology, and Rogers is hopeful that a trial will take
place within the next six months. Subsequent to the end of the third
quarter, the U. S. District Court in Phoenix, Arizona made several
important rulings mainly in favor of Durel. Rogers INOAC Corporation
(RIC), the joint venture with INOAC Corporation, continues to deal with
changes in the disk drive industry and is being hurt by economic conditions
in Japan and Southeast Asia.
Net cash provided by operating activities in the first nine months of 1998
totaled $17.4 million compared with $11.2 million in the comparable 1997
period. This difference is primarily attributable to the change in the
level of inventories and receivables.
-11-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
Capital expenditures totaled $25.4 million and $9.7 million for the first
nine months of 1998 and 1997, respectively. More than half of 1998
spending is related to expansion projects in the Microwave Materials
Division and the Poron Materials Unit. Management expects that spending
for 1998, primarily for capacity expansions, new process equipment, and new
information systems capability will total about $31 million, nearly double
the amount spent in 1997. It is anticipated that the spending will be
financed with internal funds.
Management believes that in the near term internally generated funds and
the Fleet National Bank credit facility will be sufficient to meet the
needs of the business. The Company continually reviews and assesses its
lending relationships.
The year 2000 issue is the result of computer programs using two digits
rather than four to define the applicable year. Such software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in system failures or miscalculations leading to
disruptions in a company's activities and operations. If a company, its
significant customers, or suppliers fail to make necessary modifications
and conversions on a timely basis, the year 2000 issue could have a
material adverse effect on company operations. The Company is confident
that its own internal systems are Year 2000 compliant, or planned up-grades
will be in place.
Although the Company is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year 2000,
there can be no assurance that the Company will not experience
unanticipated negative consequences and /or material costs caused by
undetected errors or defects in the technology used in its internal
operating systems which are composed predominately of third party software
and hardware technology.
The Company is in the process of determining the impact those parties that
are not Year 2000 compliant may have on the operation of the Company
primarily through the use of questionnaires. Non-compliance by any of the
Company's major distributors, suppliers, customers, vendors, or financial
organizations could result in business disruptions that could have a
material adverse affect on the Company's results of operations, liquidity
and financial condition. The Company plans on developing a contingency
plan once it has completed its assessment of significant third party
compliance. The contingency plan will be developed to minimize the
Company's exposure to work slowdowns or business disruptions and any
adverse affects on the Company's results of operations.
The Company 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. The Company is currently
involved as a participant in various groups of potentially responsible
parties (PRPs) in four cases involving waste disposal sites, all of which
are Superfund sites. In addition, the Company has recently received a
notice from the U.S. Environmental Protection Agency concerning the
Company's alleged minor involvement with
-12-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
another waste disposal site, which is also a Superfund site. 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 Company alone or in relation to that of any other
PRPs. The Company 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 Company'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
costs to be incurred in future periods may vary from these estimates.
Based on facts presently known to it, the Company does not believe that the
outcome of these proceedings will have a material adverse effect on its
financial position.
In addition to the above proceedings, the Company has been actively working
with the Connecticut Department of Environmental Protection (CTDEP) related
to certain polychlorinated biphenyl (PCB) soil contamination beneath a
section of concrete flooring in a basement area of its Woodstock,
Connecticut facility. The Company and the CTDEP are in the last stages of
developing an action plan for the final phase of remediation of
contaminated soils at that site. On the basis of estimates prepared by
environmental engineers and consultants, the Company recorded a provision
of approximately $900,000 in 1994 and based on updated estimates provided
an additional $700,000 in 1997 for costs related to this matter. During
1995, $300,000 was charged against this provision and $200,000 was charged
in both 1996 and 1997. Management believes, based on facts currently
available, that the implementation of the aforementioned remediation will
not have a material additional adverse impact on earnings.
In this same matter, the United States Environmental Protection Agency
(EPA) originally sought an administrative penalty of $227,000, which was
later changed to $300,000. The EPA has alleged that the Company improperly
disposed of PCBs. An administrative law judge found the Company liable for
this alleged disposal and assessed a penalty of $281,000. The Company
vigorously disputes the EPA allegations and has appealed the administrative
law judge's findings and penalty assessment to the EPA Environmental
Appeals Board. This appeal has not yet been ruled on.
The Company has not had any material recurring costs and capital
expenditures relating to environmental matters, except as specifically
described in the preceding statements.
Statements in this report that are not strictly historical may be deemed to
be "forward-looking" statements which should be considered as 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, and the like, are
incorporated by reference in the Rogers Corporation 1997 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.
-13-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits:
(27) Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three months
ended October 4, 1998.
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/DONALD F. O'LEARY
Donald F. O'Leary
Authorized Officer
Corporate Controller
Dated: November 18, 1998
-14-
<END>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-END> OCT-04-1998
<CASH> 9417
<SECURITIES> 1369
<RECEIVABLES> 32490
<ALLOWANCES> 148
<INVENTORY> 19245
<CURRENT-ASSETS> 70204
<PP&E> 144052
<DEPRECIATION> 71383
<TOTAL-ASSETS> 169762
<CURRENT-LIABILITIES> 35290
<BONDS> 0
0
0
<COMMON> 7619
<OTHER-SE> 96731
<TOTAL-LIABILITY-AND-EQUITY> 169762
<SALES> 163021
<TOTAL-REVENUES> 163021
<CGS> 120884
<TOTAL-COSTS> 150187
<OTHER-EXPENSES> 339
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (592)
<INCOME-PRETAX> 13765
<INCOME-TAX> 3992
<INCOME-CONTINUING> 9773
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9773
<EPS-PRIMARY> 1.29<F1>
<EPS-DILUTED> 1.23
<FN>
<F1>This is basic earnings per share.
</FN>
</TABLE>
