Rogers Posts 2012 4th Quarter and Year-End Results
Feb 22, 2013 (Close-Up Media via COMTEX) --
Rogers Corp. announced fourth quarter 2012 net sales of $124.2 million and income from continuing operations of $0.30 per diluted share, which includes net special charges of $0.28 per diluted share.
In a release on February 19, the Company noted that excluding these net special charges, non-GAAP income from continuing operations was $0.58 per diluted share. Net sales and GAAP income from continuing operations were within the Company's updated guidance announced on January 29, of approximately $124 million in net sales and GAAP income of $0.24 to $0.30 per diluted share. Actual non-GAAP income per diluted share from continuing operations was also within the updated guidance range. Fourth quarter 2011 net sales were $125.3 million with income from continuing operations of $0.22 per diluted share, which included net special charges of $0.20 per diluted share.
Net sales from continuing operations for the full year 2012 were $498.8 million, a decrease from the all-time record $548.3 million for the full year 2011. Full year 2012 income from continuing operations was $4.07 per diluted share compared to $2.64 per diluted share for the full year 2011. Full year 2012 income included a net benefit from special items of $2.06 per diluted share, which is primarily related to the reversal of a tax valuation allowance on the majority of the Company's US deferred tax assets. Full year 2011 results included net special charges of $0.20 per diluted share.
In the fourth quarter of 2012, High Performance Foams reported an all-time record for fourth quarter net sales of $47.6 million, an increase of 6.5 percent compared to the fourth quarter 2011 net sales of $44.7 million. The increase in net sales is primarily due to increased sales of PORON foam cushioning and sealing materials into tablet computer devices, as this market segment continues to grow. This business segment also experienced strong demand for PORON XRD extreme impact protection materials for use in protective cases for smart phones and tablets, as well as sports performance apparel. Demand also increased in the industrial and mass transit markets. In addition, during the fourth quarter this segment substantially completed the announced shut down of its manufacturing operations in Bremen, Germany and successfully moved certain production to its existing facility in Carol Stream, Illinois.
Net sales of Printed Circuit Materials totaled $38.5 million for the fourth quarter of 2012, an increase of 3.6 percent from the $37.2 million reported in the fourth quarter of 2011. The increase in net sales is primarily due to strong demand for high frequency printed circuit materials for use in the telecom base station market, especially in China and the US. This increase offset weaker demand into the satellite TV markets for LNB (Low Noise Blockdown) converters, as well as high reliability applications. Market growth continues to drive use of the Company's high frequency circuit materials for automotive safety sensors. In addition, the Company continues to gain share in new wireless antenna applications.
Curamik Electronics Solutions reported net sales of $22.1 million for the fourth quarter of 2012, a decrease of 22.7 percent compared to the fourth quarter 2011 net sales of $28.6 million. Lower net sales at Curamik in the fourth quarter of 2012 were primarily related to the ongoing pull back in global capital and infrastructure spending, as well as inventory corrections throughout the supply chain, both of which negatively impacted demand for industrial motor drives and renewable energy applications. The Company believes that inventories have now stabilized at current levels.
Power Distribution Systems' fourth quarter of 2012 net sales were $10.4 million, an increase of 8.2 percent compared to $9.6 million in the fourth quarter of 2011. The increase in sales was due primarily to continued demand for its power distribution products in the automotive market. This offset the continued lower spending on infrastructure projects in the mass transit and renewable energy markets, primarily in Europe and China.
Rogers' 50 percent owned High Performance Foams joint ventures' net sales totaled $15.3 million this quarter, a decrease of 16.4 percent compared to the $18.3 million sold in the fourth quarter of 2011. The decrease was due to continued weakness in the Japanese domestic and export markets, particularly related to LCD TVs, domestic mobile phones and general industrial applications.
The net special adjustments in the fourth quarter of 2012 were comprised primarily of the following:
-$4.3 million of pre-tax charges primarily associated with moving the final inspection operation for Curamik Electronics Solutions from its site in Eschenbach, Germany to Hungary.
-$2.9 million pre-tax charge related to the lengthening of the forecast period for asbestos liabilities and the related insurance receivables. In the fourth quarter of 2012, the Company deemed it appropriate to increase the forecast period for asbestos litigation claims from 5 to 10 years as it now has a longer, more meaningful history of asbestos claims activity, which provides greater confidence in the reasonableness of the longer forecast period.
-$1.1 million in fourth quarter losses relate to the negative foreign currency impact of the Japanese Yen depreciation and unfavorable mark to market valuation declines on copper commodity hedges during the period. The Company expects that in both cases, these valuation changes will result in lower costs to the Company in 2013 as currencies are exchanged and materials are purchased at the lower rates.
-These charges were partially offset by approximately $2.1 million of favorable inventory adjustments as the Company updated its costing methodology during the quarter.
The Company ended the fourth quarter of 2012 with cash and cash equivalents of $114.9 million. Capital expenditures were $23.8 million for the full year 2012 compared to the $21.3 million in 2011. Rogers expects capital expenditures of approximately $28 million in 2013.
The Company reported gross margins of 34.4 percent in the fourth quarter and 31.8 percent for the full year of 2012, which compares to 29.7 percent for the fourth quarter and 32.6 percent for the full year of 2011, respectively.
The Company's 2012 effective tax rate was a benefit of 205.2 percent. This rate was favorably impacted by net discrete tax items, the most significant of which was the reversal of a valuation allowance on the majority of the Company's US deferred tax assets, which occurred in the third quarter of 2012. The Company believes its tax rate for 2013 will be approximately 28 percent.
Bruce D. Hoechner, President and CEO commented: "Rogers' two largest businesses, High Performance Foams and Printed Circuit Materials, ended the quarter solidly above the same quarter of last year. Streamlining programs initiated early in 2012 helped improve profitability by $5.0 million in the fourth quarter and we anticipate these savings will carry forward through 2013. Sales dropped in December across most of our businesses due to global economic concerns and inventory draw downs in some markets. However, early indicators for 2013 are positive, including a January rebound in demand that impacted most markets. For the first quarter of 2013, we forecast revenues between $129 to $133 million and non-GAAP income from continuing operations of between $0.57 and $0.61 per diluted share, which excludes any restructuring expenses related to the relocation of certain Curamik inspection operations and other special charges."
Rogers Corp. is a global technology company focusing on specialty materials and components for consumer electronics, power electronics, mass transit, clean technology, and telecommunications infrastructure.
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