A message from Bruce Hoechner, CEO, Rogers Corporation:

Read the corporate financials news release: Rogers Corporation Reports Results for the Second Quarter of 2015.

In Q2 2015, Rogers achieved strong growth in non-GAAP earnings delivering $0.67 per diluted share, an increase of 15.5% versus Q2 2014. In addition, we achieved record setting second quarter net sales for the period of $163.1M, up 6.3% over Q2 2014.

In Q2, organic net sales decreased, primarily as a result of a sudden sales decline into the Chinese wireless telecom market. The Company believes that the widely-reported government actions in Chinese state-owned telecom enterprises may have temporarily delayed certain projects. In addition, actions by Chinese circuit fabricators to reduce inventory levels further impacted Rogers’ sales into this sector. We believe this situation is temporary and we expect to see a progressive recovery in organic net sales during the remainder of 2015.

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During the second quarter, our disciplined approach on cost management and operational excellence initiatives helped us maintain strong organic margin performance.

Roadmap for Consistent Profitable Growth

I’d like to review the four elements of our growth strategy. We continue to have confidence in this roadmap, which led us to record results in 2014 and has helped us maintain profitability during challenging market conditions this quarter.

We are building a more Market-Driven organization through a deep understanding of global growth markets. A good example of this was the Q1 introduction of our new megatrend category, Safety and Protection. This change was based on our ongoing assessment of market opportunities, as well as the growth we have experienced in worldwide demand for innovative solutions in consumer safety and protection. From a customer perspective, we are developing deeper partnerships through cooperative activities, including Innovation Days and joint development projects with industry leaders. These efforts help us to uncover customer needs and identify ways that Rogers can help our customers win in a competitive market.

We are accelerating our efforts in Innovation Leadership, increasing our R&D investment and finding creative approaches to new product development, as well as continuous improvement of our innovation processes. This commitment is leading us to develop a strong pipeline of next generation and new products to meet market demand.

We continue to pursue Synergistic M&A opportunities, focused on targeted, bolt-on businesses that leverage our global strengths and broaden the portfolio of solutions we provide to our customers. We are now six months into the Arlon integration, and we are very pleased with the fit between our legacy businesses as the team turns its focus to joint opportunities that drive top-line growth. The integration is going smoothly and we are on track to meet our initial integration goals by year’s end. I’ll speak more to Arlon’s contributions later in the call.

We are also excited about our progress within the final element of our strategy – Operational Excellence. Over the past two years we have invested in resources to drive process and system improvements that have helped us increase yields, achieve greater manufacturing efficiency and control costs. Each of our business segments are reducing scrap and increasing throughput through formalized programs such as Six Sigma and Business Process Management, as well as grass roots efforts from our dedicated front-line employees. This focus is helping us deliver strong organic margins, higher profitability, better service to our customers and greater returns to our shareholders.

While we face some short-term market headwinds, we are confident in our longer-term growth prospects of achieving 15% revenue growth through a combination of organic and acquired growth.

Operating Highlights

We achieved net sales of $163.1M, an increase of 6.3%, and delivered strong earnings with non-GAAP EPS of $.67 per diluted share, which is a 15.5% increase over last year. On a currency-adjusted basis, organic net sales declined 4.9% compared to Q2 2014. In addition to the aforementioned market dynamics in China, fluctuations in foreign currency exchange rates unfavorably impacted Rogers’ revenues by approximately $8.3M, or 5.4%.

We are very pleased with the consistent performance of the recently acquired Arlon business, which more than offset the decline in organic sales during the quarter contributing $25.4M, or 16.5%, and EPS of $.14.

Gross margin was 37.1%, which is essentially flat year-over-year. Non-GAAP operating margin was 12.9%, up 230 basis points over Q2 2014. We expect to see continued margin strength from our ongoing commitment to process and system improvements.

Advanced Connectivity Solutions

I want to take a moment to introduce the new name of our Printed Circuit Materials segment, which is now known as Advanced Connectivity Solutions (or ACS). As we looked at our business from an Outside-In perspective, we determined that the name Advanced Circuit Materials was somewhat limiting. The new name better reflects our capabilities and takes into account the addition of the Arlon business. This change represents an important philosophical shift in how Rogers approaches this segment by expanding its potential areas of business beyond existing material sets into new areas of RF/Microwave and Digital connectivity.

In Q2 2015, ACS achieved net sales of $66.4M, including $13.8M from Arlon, which is an increase of 8.0% over Q2 2014. We continue to see healthy demand for Advanced Driver Assistance Systems (up 19%) as well as aerospace and defense applications (up 65%). The strong growth in these segments, however, was more than offset by a sudden sales decline in the Chinese wireless telecom market, which resulted in a higher than expected inventory build in the supply chain. We are beginning to see acceleration in the 4G/LTE build out in China and believe that demand will progressively improve during the remainder of the year.

The ACS team has been implementing industry best practices to increase productivity and improve yields across its three global manufacturing facilities. These initiatives have helped the business reduce manufacturing costs and deliver consistent margin performance.

Looking ahead in ACS, we expect to see a recovery in the China 4G/LTE build out. Recently, one of the top three telecom providers in China announced plans to build additional base stations in 2015. This increases the total of all three telecom providers to 930,000, up from the previous estimate of 800,000. While the industry outlook for base station deployments in China is positive for the second half of the year, we remain cautious in Q3 about the timing of that build out. In the automotive market, we expect to see continued growth in Advanced Driver Assistance Systems where the compounded annual growth rate is projected to be 31% through 2019.

Elastomeric Material Solutions

We have also changed the name of our High Performance Foams (or HPF) segment. Moving forward, we will refer to this business as Elastomeric Material Solutions (EMS). Like we did in ACS, we arrived at this new name by taking a market-driven approach, viewing the business from the perspective of our customers and markets. Our intent is to more clearly reflect the broad capabilities we offer our customers, particularly with the addition of the Arlon product lines. By definition, elastomeric materials are elastic materials composed of long chain-like molecules, or polymers, which are capable of recovering their original shape after being stretched to great extents. Our PORON®, BISCO®, Arlon and e-Sorba® materials would all be classified as elastomeric materials. These solutions help our customers to protect, isolate and secure their products to ensure optimal performance and reliability.

For the quarter, EMS achieved net sales of $47.0M, including $6.7M from Arlon, yielding an increase of 9.9% over Q2 2014. Weaker demand in portable electronics (down 26%) partially offset strong demand in applications for the general industrial (up 80%) and mass transit (up 40%) markets. There two main drivers for the shift in the portable electronics market: First, is the decline in overall mobile phone volume and, more specifically, feature phone volume, and second is the continued migration away from the use of LCD foam gaskets in smartphone and tablet designs.

EMS has implemented a number of process improvements that contributed to yield increases. In addition, enhancements to Sales and Operations Planning have helped lead to greater accuracy in production planning and improvement in on time delivery.

The EMS organization is addressing headwinds in the portable electronics market by re-focusing the business on other growth categories. For example, we see opportunity in the mass transit segment, where the confluence of global urbanization along with long-term climate and energy goals is expected to drive a compounded annual growth rate of 7% through 2020. In addition, EMS has intensified its efforts around the higher-growth market segments within the General Industrial and Consumer Comfort and Impact Protection sectors. We see additional opportunities for growth through geographic expansion in both the consumer and General Industrial segments.

Power Electronics Systems

Power Electronics Systems (PES) net sales were $38.5M, a decrease of 10.2% compared to Q2 2014. On a currency adjusted basis, PES sales grew 5.3% from the prior year, indicating solid volume growth. Our results primarily reflect strong demand in EV/HEV applications (up 105%) as well as laser diodes (up 13%). This performance was offset in part by weaker demand in variable frequency drives (down 25%) and certain renewable energy applications (down 38%).

From an operational standpoint, PES is investing in automation and process technology improvements to lower costs and reduce lead times. These efforts are also leading to yield increases and substantial improvement in on time delivery.

Looking ahead in PES, we see continued growth in the EV/HEV markets where the compounded annual growth rate is expected to be 32% through 2020 based on worldwide demand for improved fuel efficiency and a reduction in Carbon Dioxide emissions. This focus is also driving growth in vehicle electrification, or X-by-wire, where the compounded annual growth rate is estimated at 12% through 2020.

Megatrends and Markets

Of Rogers Q2 revenues, 62% were in our key megatrend markets. We remain confident that we are in the right global growth markets based on the projected growth rates in key applications.

For example, consumer demand for mobile video content is expected to drive nearly 60% growth in mobile data traffic over the next four years, presenting a great opportunity for Rogers’ wireless telecommunications applications.

As previously mentioned, consumer demand and government mandates for clean energy alternatives are contributing to a strong outlook in the EV/HEV market, where the CAGR is 32% through 2020.

And we expect additional growth from our newest megatrend – Safety & Protection. This is due in large part to the strong demand for applications in automotive radar systems. Industry experts are predicting a compounded annual growth rate of more than 30% through 2020, and growth from less than 20 million units in 2014 to nearly 96 million units in 2020.

View the accompanying presentation here.

 

The High Performance Foams business segment of Rogers Corporation (NYSE: ROG) has changed its name to Elastomeric Material Solutions (EMS). This reflects the growing range of products and capabilities available to meet customer needs.

Screen Shot 2015-07-29 at 12.14.56 PM“This name change is the result of productive input and dialogue with customers and employees from around the world,” said John Quinn, Vice President, Elastomeric Material Solutions. “Elastomeric Material Solutions more clearly reflects who we have become through years of innovation and development, and where we expect to be in the future.  More than just foams, we are a technology-based material solution provider.”

Elastomeric materials are, by definition, any resilient material composed of chainlike molecules, or polymers, that recover their original shape after being stretched.

EMS produces a variety of elastomeric products such as PORON® foams, BISCO®  silicones, XRD® extreme impact protection materials, and the recently acquired ARLON® silicones. These solutions, along with a variety of other offerings, are designed into products and applications in segments where high reliability and performance are critical:

  • industrial equipment,
  • mobile internet devices,
  • planes, trains,
  • automobiles,
  • protective gear,
  • footwear,
  • medical products, and more.

To learn more about EMS, please visit www.rogerscorp.com/ems or read the news release.

Earlier this year, Rogers’ Printed Circuit Materials business segment changed its name to Advanced Connectivity Solutions (ACS), signaling a strategic shift in how Rogers approaches its printed circuit materials segment by expanding its potential areas of business beyond existing material sets into new areas of RF/microwave and digital connectivity

 

BUMPS (Bike Up the Mountain Points Series) is a cycling series for riders who love the challenge of one good climb after another…for a total of 10 climbs!  Each year, BUMPS introduces 10 races on nine mountains in the Northeast.  The courses feature varying lengths and pitches. Riders accumulate points from up to five races.

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XRD® Impact Protection and Rogers Corp are proud to have Marc, our North American Sales Manager, compete at the The Okemo Bike Climb – the fourth leg of the BUMPS series.

Held on June 27th, The Okemo Bike Climb starts in Jackson Gore, VT and winds it way up 5.8 miles to the top of Okemo Mountain.  At 2,200 feet (670m), Okemo boasts the largest vertical drop in southern Vermont.  Basically the first two miles offer a brief warm-up, then riders are faced with an aggressive 11% grade to the summit.

We want to share a huge congratulations to Marc for participating in the Okemo Bike Climb, and for finishing 3rd in his class!  Thank you for sharing your photos and bringing your XRD jersey along for the ride.

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Now you can download the microwave PCB Microapps presentations given by John Coonrod, Market Development Manger, at the International Microwave Symposium, IMS/MTT 2015:

•  Microwave PCB Structure Considerations: Microstrip vs Grounded Coplanar Waveguides

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•  PCB Fabrication Influences on Microwave Performance

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This post authored by John Coonrod originally appeared on the ROG Blog hosted by Microwave Journal.

High-frequency circuit designers must often consider the performance limits, physical dimensions, and even the power levels of a particular design when deciding upon an optimum printed-circuit-board (PCB) material for that design. But the choice of transmission-line technology, such as microstrip or grounded coplanar waPrintveguide (GCPW) circuitry, can also influence the final performance expected from a design. Many designers may be familiar with the stark differences between high-frequency microstrip and stripline circuitry. But GCPW circuitry, while also having its differences from traditional microstrip, also offers many benefits for high-frequency circuit designers to consider. In making the choice, it can help to understand just what different types of PCB material can have on the microstrip and GCPW circuits. The differences between the two structures can be seen in the illustration below.

As a quick comparison, microstrip circuitry features a signal conductor fabricated on top of a dielectric layer, with a conductive metal ground plane on the bottom of the dielectric material. GCPW achieves an extra level of grounding and isolation by fabricating a signal conductor in between two ground conductors, all on the top of a dielectric layer, with an additional ground plane on the bottom of the dielectric layer. Conductive-metal-filled viaholes connect the top-layer and bottom-layer ground planes for consistent ground performance. In addition, many GCPW circuits employ ground straps to provide electrical connections for the two top-layer ground conductors for consistency around circuit discontinuities, such as junctions.

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As different as the two circuit approaches may appear, the tight spacing of the top-layer grounds and signal conductor for the GCPW approach enables it to achieve low impedances and to tune the impedance by adjusting the spacing between the grounds and the signal line. The impedance increases as the spacing between the top-level ground conductors and the signal conductor increases. In fact, as the spacing of a GCPW circuit’s top-layer grounds from the signal conductor increase, those grounds have less effect on the circuit and a GCPW circuit with enough spacing between the top-layer grounds and the signal conductor electrical resembles a microstrip circuit.

Why use one transmission-line approach over the other? Obviously, microstrip has an “elegant simplicity” to it, which makes it easier to fabricate and even easier to model via computer than GCPW circuits. With their strong ground structure, GCPW circuits are capable of lower-loss performance at much higher frequencies than microstrip circuits, and offer great potential for designs working well into the millimeter-wave frequency range, even to frequencies of 100 GHz and beyond. Microstrip which, with stripline, is one of the most popular transmission-line formats at microwave frequencies, suffers increased circuit losses into the millimeter-wave frequency range, making the circuit technology less efficient for use at frequencies of 30 GHz and beyond.

What roles do PCB materials play in the choice of using microstrip or GCPW transmission-line approaches? Such material parameters as dielectric constant (Dk) and consistency of Dk through the material will impact the electrical performance of either transmission-line approach. The manner in which the electromagnetic (EM) fields travel through each circuit structure will have a great deal to do with the effective Dk that is exhibited for a particular circuit material, since those EM fields can flow within the dielectric material and outside of the dielectric material. In microstrip circuits, for example, with their top-side transmission lines and bottom-side ground planes, the EM fields are contained mainly within the dielectric material between the two metal planes, with a high field concentration at the edges of the signal conductor. For microstrip circuits, the effective dielectric constant is closely related to the specified Dk of the PCB material, such as Rogers’ RO4350B™ PCB material, which has a process specification of 3.48 in the z direction (thickness) at 10 GHz. The material’s Dk is held to impressive ±0.05 tolerance across the material.

The effective Dk of a PCB material will essentially determine the size of circuit structures required to achieve a specific characteristic impedance, such as 50 ohms. So, for microstrip transmission lines on, for example, RO4350B circuit material, circuit width for 50 ohms will be based on a Dk of 3.48. But for GCPW using the same material, because the circuit’s effective Dk is reduced because more of the EM field is in the air above the circuit rather than in the PCB dielectric material, the effective Dk is lower when compared to microstrip. The difference in effective Dk for GCPW and microstrip depends on the thickness of the substrate used by the GCPW circuitry and the spacing between the ground-signal-ground conductors on the top layer.

PCB fabrication issues have less impact on microstrip circuits than GCPW circuits. For example, PCB copper plating thickness variations have little effect on the performance of microstrip circuits but they can impact the performance of GCPW circuits. Thicker copper plating on PCBs for microstrip circuits can slightly reduce the insertion loss and lower the effective Dk of the circuit. For GCPW circuits, PCBs with thicker copper plating lead to an increase in the EM fields between the top-layer ground, signal, and ground field paths, with more of the EM fields in the air above the GCPW circuit. With more of the fields in the air above the circuit, signal losses decrease and the effective Dk of the PCB decreases for a GCPW circuit, all because of thicker PCB copper plating thickness.

As a quick comparison, microstrip supports moderate-bandwidth circuits through microwave frequencies, although with high radiation loss at higher, millimeter-wave frequencies and difficulty at achieving mode suppression at millimeter-wave frequencies. Microstrip circuits suffer minimal sensitivity to PCB fabrication techniques and material characteristics, such as copper plating thickness and copper thickness variations. In contrast, GPCW suffer only moderate radiation loss at millimeter-wave frequencies, and are capable of moderate or better mode suppression at millimeter-wave frequencies, making this circuit technology a strong candidate for designs at 30 GHz and higher. In addition, GCPW circuits are only moderately sensitive to PCB fabricate techniques and variations, making them well suited for production-volume applications at higher frequencies.

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