Rogers Corporation Q1 2010 Earnings Call Transcript

Rogers Corporation Q1 2010 Earnings Call Transcript
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Rogers Corporation (ROG)

Q1 2010 Earnings Call Transcript

May 4, 2010 9:00 am ET

Executives

Bob Wachob – President and CEO

Dennis Loughran – CFO

Analysts

Fred Buonocore – CJS Securities

Avinash Kant – D.A. Davidson & Co.

Jiwon Lee – Sidoti & Co.

Dana Walker – Kalmar Investments

Presentation

Operator

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Previous Statements by ROG
» Rogers Corp. Q4 2008 Earnings Call Transcript
» Rogers Corporation F2Q08 (Quarter End 6/29/2008) Earnings Call Transcript
» Rogers Corporation Q1 2008 Earnings Call Transcript

Good morning. My name is Brooke and I’ll be your conference operator today. At this time I’d like to welcome everyone to the Rogers Corporation first quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator instructions)

I will now turn the conference over to Bob Wachob, President and CEO of Rogers Corporation. Thank you Mr. Wachob, you may begin your conference.

Bob

Wachob

Good morning ladies and gentlemen. With me are Dennis Loughran, Chief Financial Officer; Deb Granger, Vice President of Corporate Compliance and Controls; Robert Soffer, Vice President and Secretary; Ron Pelletier, Corporate Controller; and Bill Tryon, Manager of Investor and Public Relations.

First, Dennis will dispense with the formalities and then we will get right down to business.

Dennis Loughran

Thank you, Bob. I would like to point out to all our listeners that statements in this conference call that are not strictly historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered as subject to the many uncertainties that exist in the Rogers operations and environment. These uncertainties include economic conditions, market demands and competitive factors. Such factors could cause actual results to differ materially from those of any forward-looking statements.

I’ll now turn it back over to Bob.

Bob

Wachob

Thanks, Dennis. Q1 certainly much better than our plan and significantly better than we expected at the start of the quarter. (inaudible) feels much better being where we’re today versus this time last year.

During the quarter we benefited from a strong rebound in most of our markets. And from the China 3G rollout which compressed a couple quarters the business into one. Also, some of our new products introduced in last three years is starting to grow nicely. Like our high frequency laminate with low product profile sank very smooth copper. Especially in antenna applications for communication towers.

As we look forward we expect most of our growth will come from three long lasting market mega trends. And they are the continued growth of the internet. Expansion of mass transit and the global drive to sustainable energy.

Within each of these three mega trends there are several exciting applications spaces that we project with our growth rates bearing from 10 to 30% of compound and annually over the next five years. We already have solid positions in most of these application areas. They are the key focus for our additional products and market development work.

In these three market areas we are currently involved in over 450 customer projects. That’s up from 200 when we reported in early February. And we have 29 programs that have already gone into production this year. In addition, we have more than 30 design wins which we expect will go into production sometime in the future.

One notable design was achieved by our start-up business – Thermal Management Solutions. We received an order for an aluminum silicon carbide component for heat removal and hybrid electric and electric cars.

Tier 1 automotive customer has provided a forecast that totals $25 million in sales between 2011 and 2015. Now who knows what the real sales would be? But the win validates the premise behind the start-up business.

In total, across all markets our sales people are involved in more than 1,000 customer projects, up from 700 this time last year. Customer project activities always a positive sign for the feature and this is one of the highest levels of activity that we’ve seen in many years. In summary, we had a strong beginning to the year and are cautiously optimistic going forward.

I will now turn it over to Dennis to go over the details.

Dennis Loughran

Thank you, Bob, and good morning, again to everyone. As evidenced in our press release and Bob’s comments our strong sales and operating performance have allowed us to report results that exceeded even our recent guidance update. We’re in a strong position moving forward in 2010.

We have ample market opportunities upon which we’re diligently focusing our strategic efforts. Our balance sheet and improved earnings provide us with the resources to quickly take advantage of those efforts. As we do with the acquisition of SK Utis this quarter and will do with both organic and acquisitive opportunities moving forward.

With first quarter 2010 sales of $83.9 million rising over $18 million above last year’s recession driven levels. All of our businesses performed at/or above our previous guidance levels. As you have read both High Performance Foams and Printed Circuit Materials outperformed all others as they combine operational readiness with strong customer demand.

That sales performance combined with excellent operating efficiency helped generate a reported GAAP profit of $0.43 per diluted share for the first quarter 2010 compared to a GAAP loss of $0.56 per diluted share to the same period in 2009.

As reported in the press release, include in the net earned premiums profit for the quarter our net charges of $0.01per diluted share primarily related to SK Utis acquisition costs offset by one-time tax benefits. First quarter 2010 gross margin was 36.1%, an all-time record for our company versus 21.3% for the first quarter of 2009.

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