Rogers Corp. (ROG, Financial) filed Quarterly Report for the period ended 2009-09-30.
Rogers Corporation manufactures and sells specialty polymer composite materials and components which it develops for growing markets and applications around the world. The company has two business segments: Polymer Materials and Electronic Materials. The company's products are based on its core technologies in polymers fillers and adhesion. Most products are proprietary or incorporate proprietary technology in their development and processing and are sold under the company's valuable brandnames. Rogers Corp. has a market cap of $410.9 million; its shares were traded at around $26.2 with a P/E ratio of 51.4 and P/S ratio of 1.1. Rogers Corp. had an annual average earning growth of 2.4% over the past 10 years.
Selling and administrative expenses declined 18.0% from $20.0 million in the third quarter of 2008 to $16.4 million in the third quarter of 2009 and 7.2% from $55.9 million in the first nine months of 2008 to $51.9 million in the first nine months of 2009. The quarter-over-quarter decline in expense experienced in 2009 as compared to 2008 can be primarily attributable to our overall cost reduction initiatives which began in the first half of 2009, as well as certain costs that were incurred in 2008 that did not reoccur in 2009, such as additional incentive compensation costs, expenditures related to global tax minimization projects, and incremental litigation costs; partially offset by $0.5 million of incremental pension and postretirement benefit costs, as the overall pension expense in 2009 increased due primarily to the poor asset portfolio performance in 2008 as a result of the global recession s impact on the stock market.
Research and development (R&D) expense declined from $5.7 million to $3.8 million in the third quarter of 2009 as compared to the third quarter of 2008 and from $16.9 million in the first nine months of 2008 to $13.5 million in the first nine months of 2009. As a percentage of sales, R&D expense was 4.7% in the third quarter of 2009 as compared to 5.9% in the third quarter of 2008. On a year-to-date basis, R&D expense as a percentage of sales increased slightly from 5.9% in 2008 to 6.3% in 2009. We continue to target a reinvestment percentage of approximately 6% of sales into R&D activities each year. We are focused on continually investing in R&D, both in our efforts to improve the technology and products in our current portfolio, as well as researching product extensions and new business development opportunities to further expand and grow our product portfolio. We believe that investment in technology and R&D initiatives are a fundamental strength of our company that has been a key driver to our past success and will be a key aspect to our continued success in the future.
In the first half of 2009, we announced certain cost reduction initiatives that included a workforce reduction and a significant reduction in our operating and overhead expenses in an effort to better align our cost structure with the lower sales volumes experienced at the end of 2008 and in 2009. As a result, we recognized approximately $0.2 million and $4.7 million in severance charges in the third quarter and first nine months of 2009, respectively, and paid out approximately $1.1 million and $2.9 million related to severance in the third quarter and first nine months of 2009, respectively.
Equity income in unconsolidated joint ventures decreased from $2.5 million in the third quarter of 2008 to $2.3 million in the third quarter of 2009 and from $5.1 million in the first nine months of 2008 to $3.5 million in the first nine months of 2009. These declines were driven by significant volume declines in our foam joint ventures, Rogers Inoac Suzhou Corporation (RIS) in China and Rogers Inoac Corporation (RIC) in Japan, due in part to the global economic recession and excess inventory availability, which drove significant sales volume declines in the first half of 2009 and on a year-over-year and quarter-over-quarter comparative bases. However, volumes have improved over the course of 2009, as these ventures returned to profitability in the second quarter of 2009 and began to approach comparable period volume and profit levels in the third quarter of 2009.
In the third quarter, operating results improved from breakeven in 2008 to a profit of $1.5 million in the third quarter of 2009. On a year-to-date basis, operating results declined from a profit of $4.6 million in the first nine months of 2008 to a loss of $1.5 million in the first nine months of 2009. Year-to-date 2009 results included approximately $0.8 million of costs related to the impairment of certain equipment, as well as $1.9 million related to a product liability claim, severance charges of $1.7 million and approximately $0.4 million of other one-time costs, as described in Note 14 to the condensed consolid
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Rogers Corporation manufactures and sells specialty polymer composite materials and components which it develops for growing markets and applications around the world. The company has two business segments: Polymer Materials and Electronic Materials. The company's products are based on its core technologies in polymers fillers and adhesion. Most products are proprietary or incorporate proprietary technology in their development and processing and are sold under the company's valuable brandnames. Rogers Corp. has a market cap of $410.9 million; its shares were traded at around $26.2 with a P/E ratio of 51.4 and P/S ratio of 1.1. Rogers Corp. had an annual average earning growth of 2.4% over the past 10 years.
Highlight of Business Operations:
Net sales for the three month period ended September 30, 2009 were $81.0 million as compared to $96.3 million for the three month period ended September 28, 2008, a decrease of 15.9%, and $213.9 million versus $286.8 million for the respective nine month periods in 2009 and 2008, a decrease of 25.4%. The declines in the third quarter and year-to-date in 2009 were driven by declines across all of our reportable segments. See “Segment Sales and Operations” below for further discussion on segment performance.Selling and administrative expenses declined 18.0% from $20.0 million in the third quarter of 2008 to $16.4 million in the third quarter of 2009 and 7.2% from $55.9 million in the first nine months of 2008 to $51.9 million in the first nine months of 2009. The quarter-over-quarter decline in expense experienced in 2009 as compared to 2008 can be primarily attributable to our overall cost reduction initiatives which began in the first half of 2009, as well as certain costs that were incurred in 2008 that did not reoccur in 2009, such as additional incentive compensation costs, expenditures related to global tax minimization projects, and incremental litigation costs; partially offset by $0.5 million of incremental pension and postretirement benefit costs, as the overall pension expense in 2009 increased due primarily to the poor asset portfolio performance in 2008 as a result of the global recession s impact on the stock market.
Research and development (R&D) expense declined from $5.7 million to $3.8 million in the third quarter of 2009 as compared to the third quarter of 2008 and from $16.9 million in the first nine months of 2008 to $13.5 million in the first nine months of 2009. As a percentage of sales, R&D expense was 4.7% in the third quarter of 2009 as compared to 5.9% in the third quarter of 2008. On a year-to-date basis, R&D expense as a percentage of sales increased slightly from 5.9% in 2008 to 6.3% in 2009. We continue to target a reinvestment percentage of approximately 6% of sales into R&D activities each year. We are focused on continually investing in R&D, both in our efforts to improve the technology and products in our current portfolio, as well as researching product extensions and new business development opportunities to further expand and grow our product portfolio. We believe that investment in technology and R&D initiatives are a fundamental strength of our company that has been a key driver to our past success and will be a key aspect to our continued success in the future.
In the first half of 2009, we announced certain cost reduction initiatives that included a workforce reduction and a significant reduction in our operating and overhead expenses in an effort to better align our cost structure with the lower sales volumes experienced at the end of 2008 and in 2009. As a result, we recognized approximately $0.2 million and $4.7 million in severance charges in the third quarter and first nine months of 2009, respectively, and paid out approximately $1.1 million and $2.9 million related to severance in the third quarter and first nine months of 2009, respectively.
Equity income in unconsolidated joint ventures decreased from $2.5 million in the third quarter of 2008 to $2.3 million in the third quarter of 2009 and from $5.1 million in the first nine months of 2008 to $3.5 million in the first nine months of 2009. These declines were driven by significant volume declines in our foam joint ventures, Rogers Inoac Suzhou Corporation (RIS) in China and Rogers Inoac Corporation (RIC) in Japan, due in part to the global economic recession and excess inventory availability, which drove significant sales volume declines in the first half of 2009 and on a year-over-year and quarter-over-quarter comparative bases. However, volumes have improved over the course of 2009, as these ventures returned to profitability in the second quarter of 2009 and began to approach comparable period volume and profit levels in the third quarter of 2009.
In the third quarter, operating results improved from breakeven in 2008 to a profit of $1.5 million in the third quarter of 2009. On a year-to-date basis, operating results declined from a profit of $4.6 million in the first nine months of 2008 to a loss of $1.5 million in the first nine months of 2009. Year-to-date 2009 results included approximately $0.8 million of costs related to the impairment of certain equipment, as well as $1.9 million related to a product liability claim, severance charges of $1.7 million and approximately $0.4 million of other one-time costs, as described in Note 14 to the condensed consolid
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