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Rogers Reports Modest Sales Increase in 1Q19
May 1, 2019 | Rogers CorporationEstimated reading time: 4 minutes
Rogers Corporation has announced financial results for the 2019 first quarter. The company reported 2019 first quarter net sales of $239.8 million, a 7.6% increase compared to 2018 fourth quarter net sales of $222.9 million and an 11.7% increase compared to 2018 first quarter net sales of $214.6 million. Net sales for the 2019 first quarter exceeded the high-end of the Company's previously announced guidance range of $220 to $230 million. Currency exchange rates favorably impacted the 2019 first quarter net sales by $0.2 million compared to 2018 fourth quarter net sales, but had an unfavorable impact of $6.1 million compared to 2018 first quarter net sales.
First quarter 2019 net income was $28.4 million compared to $24.5 million in the fourth quarter of 2018 and $26.1 million in the first quarter of 2018. Earnings for 2019 first quarter were $1.52 per diluted share compared to $1.31 per diluted share in the fourth quarter of 2018 and $1.40 per diluted share in the first quarter of 2018. Earnings per diluted share exceeded the Company's previously announced guidance range of $0.97 to $1.12. On an adjusted basis, earnings were $1.85 per diluted share for the 2019 first quarter compared to adjusted earnings of $1.67 per diluted share in the fourth quarter of 2018 and $1.48 per diluted share in the first quarter of 2018. Adjusted earnings exceeded the Company's previously announced guidance range of $1.25 to $1.40 per diluted share.
Adjusted EBITDA was $53.1 million, or 22.2% of net sales, for the first quarter of 2019 compared to $46.7 million, or 20.9% of net sales, reported in the fourth quarter of 2018 and $44.1 million, or 20.6% of net sales, reported in the first quarter of 2018. Beginning in the first quarter of 2019 the Company modified its definition of adjusted EBITDA to add-back stock-based compensation expense. This adjustment has been applied retrospectively to all periods presented.
Gross margin was 35.6% in the first quarter of 2019 compared to 35.2% in the fourth quarter of 2018 and 35.7% in the first quarter of 2018. First quarter 2019 gross margin exceeded the mid-point of the Company's previously announced guidance range of 35% to 36%. Operating margin was 13.7% in the first quarter of 2019 compared to 12.0% in the fourth quarter of 2018 and 14.5% in the first quarter of 2018. Adjusted operating margin was 17.1% in the first quarter of 2019 compared to 16.0% in the fourth quarter of 2018 and 15.4% in the first quarter of 2018.
"Our record Q1 revenue and earnings performance exceeded our expectations due to strong tailwinds in Advanced Connectivity and Advanced Mobility applications. In particular, meaningful 5G demand began to ramp during the quarter and ADAS returned to strong sequential growth. Demand for specific EV/HEV applications also continued to be strong," stated Bruce D. Hoechner, Rogers’ President and CEO. “We remain focused on capacity expansions and operational improvements in order to capitalize on these opportunities and deliver increased revenues and profitability. We are seeing the results of our targeted strategy and believe we are extremely well positioned to take advantage of the significant market opportunities ahead."
Business Segment Discussion:
Advanced Connectivity Solutions (ACS)
Advanced Connectivity Solutions reported 2019 first quarter net sales of $80.5 million, an 11.0% increase compared to 2018 fourth quarter net sales of $72.5 million and a 9.6% increase compared to 2018 first quarter net sales of $73.5 million. The sequential increase in 2019 first quarter net sales was largely driven by growth in high frequency circuit materials for 5G and 4G wireless infrastructure and Advanced Driver Assistance Systems (ADAS). First quarter 2019 net sales were favorably impacted by $0.4 million due to fluctuations in currency exchange rates compared to 2018 fourth quarter net sales, but had an unfavorable impact of $1.8 million compared to 2018 first quarter net sales.
Elastomeric Material Solutions (EMS)
Elastomeric Material Solutions reported 2019 first quarter net sales of $92.8 million, a 5.1% increase compared to 2018 fourth quarter net sales of $88.3 million and an 18.8% increase compared to 2018 first quarter net sales of $78.1 million. The sequential increase in 2019 first quarter net sales was due to strong demand in automotive and mass transit and growth in general industrial applications. Fluctuations in currency exchange rates favorably impacted net sales by $0.2 million in the 2019 first quarter compared to 2018 fourth quarter net sales, but had an unfavorable impact of $1.5 million compared to 2018 first quarter net sales.
Power Electronics Solutions (PES)
Power Electronics Solutions reported 2019 first quarter net sales of $59.8 million, a 5.4% increase compared to 2018 fourth quarter net sales of $56.8 million and a 3.6% increase compared to 2018 first quarter net sales of $57.7 million. The 2019 first quarter sequential increase was primarily due to higher demand for power semiconductor substrates for EV/HEV applications and renewable energy applications. First quarter 2019 net sales were unfavorably impacted by $0.4 million due to fluctuations in currency exchange rates compared to 2018 fourth quarter net sales and by $2.7 million compared to 2018 first quarter net sales.
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