Rogers (US:ROG)2025-04-29 21:48Financial Performance - Net sales for the three months ended March 31, 2025, were $190.5 million, a decrease of 10.6% compared to $213.4 million for the same period in 2024[12]. - Gross margin decreased to $57.0 million, representing a gross margin percentage of 29.9%, down from $68.2 million and 32.0% in the prior year[12]. - Operating loss for the quarter was $(0.3) million, compared to an operating income of $11.7 million in the same quarter last year[12]. - Net loss for the three months ended March 31, 2025, was $(1.4) million, compared to a net income of $7.8 million for the same period in 2024[14]. - Basic and diluted earnings per share were both $(0.08) for the current quarter, down from $0.42 in the prior year[12]. - Comprehensive income for the quarter was $16.3 million, compared to a comprehensive loss of $(1.3) million in the same quarter last year[14]. - The Advanced Electronics Solutions segment generated net sales of $104.2 million for the three months ended March 31, 2025, down from $122.1 million in the same period of 2024, a decline of approximately 14.7%[84]. - In Q1 2025, net sales decreased by approximately 10.7% to $190.5 million compared to Q1 2024, with a gross margin decline of 210 basis points to 29.9%[115][118]. Assets and Liabilities - Total assets increased to $1,510.4 million as of March 31, 2025, compared to $1,481.1 million at the end of 2024[16]. - Cash and cash equivalents at the end of the period were $175.6 million, up from $159.8 million at the beginning of the period[20]. - As of March 31, 2025, the total accounts receivable, net, increased to $139.2 million from $135.3 million as of December 31, 2024, reflecting a growth of 2.9%[32]. - The total inventories increased slightly to $143.0 million as of March 31, 2025, compared to $142.3 million as of December 31, 2024[35]. - The total contract assets rose to $25.0 million as of March 31, 2025, up from $23.7 million as of December 31, 2024, indicating a growth of 5.5%[34]. - The company recognized asbestos-related liabilities of $57.4 million and insurance receivables of $52.3 million as of March 31, 2025[62]. - The company had no outstanding borrowings under its revolving credit facility as of March 31, 2025, and had discretionary principal payments of $30.0 million in 2024[54]. Expenses and Charges - Research and development expenses decreased to $7.1 million from $8.9 million year-over-year[12]. - The company recognized restructuring and impairment charges of $5.9 million for the three months ended March 31, 2025, compared to $0.1 million in the same period of 2024[85]. - The company incurred $4.0 million in restructuring charges for the three months ended March 31, 2025, with $3.2 million as cash-based expenditures and $0.7 million as non-cash expenditures[87]. - Total equity compensation expense for the three months ended March 31, 2025, was $3.6 million, slightly up from $3.5 million in the same period of 2024[66]. - SG&A expenses decreased by 6.3% to $44.5 million, accounting for 23.4% of net sales, compared to 22.3% in Q1 2024[120]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $11.7 million in Q1 2025, down from $28.1 million in Q1 2024[137]. - The company expects capital spending in 2025 to be between $30.0 million and $40.0 million, funded by cash from operations and existing credit facilities[137]. - Cash and cash equivalents increased by $15.8 million, or 9.9%, to $175.6 million as of March 31, 2025, primarily due to $13.4 million from the sale of the Price Road facility and operational cash flows[140]. Strategic Initiatives - The company operates two strategic segments: Advanced Electronics Solutions (AES) and Elastomeric Material Solutions (EMS)[108]. - The growth strategy focuses on market-driven organization, innovation leadership, synergistic mergers and acquisitions, and operational excellence[109]. - The company is capitalizing on growth opportunities in the automotive industry, aerospace and defense, portable electronics, and renewable energy markets[110]. - The company anticipates annual operating income improvement between $7.0 million and $9.0 million from the consolidation of its high-frequency circuit material manufacturing operations, with expected pre-tax restructuring charges of $22.0 million to $28.0 million[86]. Market and Economic Conditions - The company is facing potential adverse impacts from U.S. trade policy changes, including tariffs, which may affect operating results and financial condition[149]. - The EV/HEV market is projected to grow at a compound annual growth rate of 10% to 15% over the next several years, presenting significant opportunities for the company[114]. Tax and Regulatory Matters - The effective tax rate for the first quarter of 2025 was 12.5%, with a loss before income taxes of $1.6 million[94]. - The company expects no material impact from the OECD Pillar 2 global minimum tax of 15% in 2025[96]. Workforce and Operations - A global workforce reduction plan was announced in March 2025, resulting in $1.8 million in pre-tax restructuring charges, all cash-based[88]. - The company is in the process of implementing a new global ERP system, with the first phase completed at one manufacturing site[144].