Rogers (US:ROG)2025-07-31 21:33Part I – Financial Information Condensed Consolidated Financial Statements (Unaudited) Rogers Corporation reported a Q2 2025 net loss of $73.6 million, primarily due to a 5.3% sales decline and $76.1 million in restructuring and impairment charges, including a $71.8 million curamik® unit impairment Condensed Consolidated Statements of Operations Q2 2025 net sales decreased 5.3% to $202.8 million, resulting in a $67.5 million operating loss and a $73.6 million net loss, largely due to $76.1 million in restructuring and impairment charges Consolidated Statements of Operations Highlights (Q2 & H1 2025 vs 2024) | Metric (in millions, except EPS) | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $202.8 | $214.2 | -5.3% | $393.3 | $427.6 | -8.0% | | Gross Margin | $64.0 | $73.1 | -12.4% | $121.0 | $141.3 | -14.4% | | Restructuring & Impairment | $76.1 | $1.4 | +5336% | $82.0 | $1.5 | +5367% | | Operating Income (Loss) | $(67.5) | $11.3 | N/A | $(67.8) | $23.0 | N/A | | Net Income (Loss) | $(73.6) | $8.1 | N/A | $(75.0) | $15.9 | N/A | | Diluted EPS | $(4.00) | $0.44 | N/A | $(4.08) | $0.85 | N/A | Condensed Consolidated Statements of Financial Position As of June 30, 2025, total assets decreased to $1,451.3 million, primarily due to a $51.7 million goodwill reduction from impairment, with cash at $157.2 million and total shareholders' equity at $1,206.7 million Key Balance Sheet Items (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $157.2 | $159.8 | | Total current assets | $500.1 | $493.9 | | Goodwill | $305.9 | $357.6 | | Total assets | $1,451.3 | $1,481.1 | | Total liabilities | $244.6 | $229.5 | | Total shareholders' equity | $1,206.7 | $1,251.6 | Condensed Consolidated Statements of Cash Flows Net cash from operations for H1 2025 decreased to $25.4 million, while investing activities used $3.4 million and financing activities used $29.6 million, largely for share repurchases Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25.4 | $51.0 | | Net cash used in investing activities | $(3.4) | $(23.5) | | Net cash used in financing activities | $(29.6) | $(38.4) | | Net decrease in cash | $(2.6) | $(11.8) | Notes to Condensed Consolidated Financial Statements Notes detail a $67.3 million goodwill and $4.5 million intangible asset impairment in the curamik® unit, $28.1 million in share repurchases, ongoing asbestos litigation, and post-quarter executive departures with new cost reduction initiatives - In Q2 2025, the company recorded non-cash impairment charges of $67.3 million for goodwill and $4.5 million for an indefinite-lived intangible asset related to its curamik® reporting unit within the AES segment, triggered by changing market competition, supply dynamics, and reduced demand forecasts48 - The company repurchased 425,990 shares for $28.1 million during the first six months of 2025, with $76.1 million remaining available under the share repurchase program as of June 30, 202569 - Subsequent to the quarter end, on July 12, 2025, the President and CEO, R. Colin Gouveia, left the company, and on July 30, 2025, new cost reduction initiatives for the curamik® reporting unit were announced, expecting to incur charges of $12.0 million to $20.0 million114116 - The company's effective tax rate was negative for Q2 and H1 2025, primarily due to tax expense on a pre-tax loss, an increase in the valuation allowance, and a non-deductible goodwill impairment charge104105 Management's Discussion and Analysis of Results of Operations and Financial Position Management attributes the 5.3% Q2 2025 sales decline to lower EV/HEV and wireless demand, resulting in a gross margin drop and significant operating loss due to a $71.8 million curamik® impairment, with both AES and EMS segments experiencing sales decreases Results of Operations Q2 2025 net sales decreased 5.3% due to lower EV/HEV and wireless demand, with gross margin contracting to 31.6% and a significant operating loss driven by a $76.1 million restructuring and impairment charge - The decrease in net sales for Q2 2025 was primarily due to lower demand in the EV/HEV market as customers managed inventory, and in the wireless infrastructure market following the completion of a key customer program in 2024131 - Gross margin declined in Q2 2025 due to utilization headwinds from lower volumes and an unfavorable product mix133 - The company incurred impairment charges of $71.8 million and restructuring charges of $4.3 million in Q2 2025, with restructuring related to the wind-down of the Evergem, Belgium facility and a global workforce reduction139 Operating Segment Net Sales and Gross Margin In Q2 2025, both AES and EMS segments experienced 5.6% sales declines to $109.0 million and $89.4 million respectively, with gross margins contracting due to lower volumes and unfavorable product mix Q2 2025 Segment Performance vs. Q2 2024 | Segment | Q2 2025 Net Sales (M) | YoY Change | Q2 2025 Gross Margin % | Q2 2024 Gross Margin % | | :--- | :--- | :--- | :--- | :--- | | AES | $109.0 | -5.6% | 28.3% | 31.2% | | EMS | $89.4 | -5.6% | 35.2% | 37.7% | | Other | $4.4 | +10.0% | 36.4% | 35.0% | - AES sales decline was driven by lower demand in wireless infrastructure and EV/HEV markets, partially offset by aerospace & defense and ADAS148 - EMS sales decline was driven by lower demand in the EV/HEV market, partially offset by the general industrial market152 Liquidity, Capital Resources and Financial Position The company ended Q2 2025 with $157.2 million in cash, a $2.6 million decrease driven by share repurchases and capital expenditures, with full-year 2025 capital spending projected at $30.0-$40.0 million - Cash and cash equivalents decreased by $2.6 million during the first six months of 2025, primarily due to share repurchases and capital expenditures163 - The company expects capital spending for 2025 to be in the range of $30.0 million to $40.0 million164 - As of June 30, 2025, approximately $87.5 million (55.7%) of the company's cash was held by non-U.S. subsidiaries160 Quantitative and Qualitative Disclosures About Market Risk The company reported no material changes in its exposure to market risk during the second quarter of 2025 - There have been no material changes in the company's market risk exposure during Q2 2025169 Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting despite ongoing ERP system implementation - The Principal Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025170 - The company is undergoing a multi-year ERP system implementation, but there were no changes in internal control over financial reporting during Q2 2025 that materially affected, or are reasonably likely to materially affect, these controls171172 Part II – Other Information Legal Proceedings The company refers to Note 9 for details on legal proceedings, including ongoing asbestos litigation where outstanding claims decreased to 488 in H1 2025 - For details on legal proceedings, the report refers to Note 9, which covers environmental, asbestos, and other litigation matters174 - The number of outstanding asbestos claims decreased from 523 at the start of the year to 488 as of June 30, 202560 Risk Factors The company refers to its Annual Report on Form 10-K and other SEC filings for risk factors, with no new or updated risks presented in this report - The report refers to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings175 Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the company repurchased 425,990 shares for $28.1 million, with $76.1 million remaining available under the repurchase program as of June 30, 2025 Share Repurchases in Q2 2025 | Period | Shares Purchased | Average Price Paid | Total Value (M) | | :--- | :--- | :--- | :--- | | April 2025 | 0 | N/A | $0 | | May 2025 | 406,560 | $63.09 | ~$25.6 | | June 2025 | 19,430 | $66.01 | ~$1.3 | - Total repurchases for the three months ended June 30, 2025, amounted to $28.1 million, with $76.1 million remaining authorized for repurchase under the program177 Other Information During the second quarter of 2025, no directors or officers of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025178 Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications (pursuant to Sarbanes-Oxley Sections 302 and 906) and iXBRL data files - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and iXBRL formatted financial statements179