• Fourth Quarter Revenue: $192 million, a decline of 9% from the prior quarter.
• Full Year 2024 Revenue: $830 million, 9% lower than the prior year.
• Fourth Quarter Gross Margin: 32.1%, a decrease of 310 basis points from Q3.
• Full Year 2024 Gross Margin: 33.4%, 40 basis points lower than the prior year.
• Fourth Quarter Adjusted EPS: $0.46, compared to $0.98 in Q3.
• Full Year 2024 Adjusted Earnings: $2.72 per share, down from $3.78 in 2023.
• Free Cash Flow 2024: $71 million, similar to prior year levels.
• Cash Position at Year-End 2024: $160 million.
• Capital Expenditures 2024: $56 million.
• Share Repurchases 2024: $20 million, with $12 million in Q4.
• First Quarter 2025 Revenue Guidance: $180 million to $195 million.
• First Quarter 2025 Gross Margin Guidance: 29% to 30.5%.
• First Quarter 2025 Adjusted EPS Guidance: $0.10 to $0.40.

• Warning! GuruFocus has detected 3 Warning Sign with ROG.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rogers Corp (NYSE:ROG) delivered fourth-quarter results in line with expectations, with sales, gross margin, and adjusted earnings near the midpoint of guidance ranges.
• The company made significant progress in commercial innovation and operational excellence initiatives, securing new design wins and launching new products.
• Rogers Corp (NYSE:ROG) achieved robust free cash flow conversion in 2024, maintaining a strong balance sheet to support organic and inorganic growth objectives.
• Aerospace and defense sales grew at a double-digit rate, driven by strong demand for military radar applications.
• The company successfully executed its local-for-local manufacturing strategy, adding new facilities in China to support growth and mitigate tariff impacts.

Negative Points

• Fourth-quarter revenues declined by 9% from the prior quarter, primarily due to challenging market conditions and normal seasonality.
• The company faced significant market headwinds in 2024, particularly in industrial and EV/HEV markets, leading to a major inventory destocking among customers.
• Gross margin decreased by 310 basis points in Q4 due to lower volume and unfavorable product mix.
• Rogers Corp (NYSE:ROG) experienced a significant decline in curamik power substrate sales, impacting overall sales performance.
• The company anticipates a relatively flat sales outlook for the first quarter of 2025 due to cautious customer ordering and ongoing inventory challenges.

Q & A Highlights

Q: Q1 guidance implies a 12% revenue decline year-over-year at the midpoint. How should we think about revenue on a segment basis, as well as an end market basis for Q1 relative to Q4? And what end markets are you experiencing further sequential softness in? A: Colin Gouveia, President and CEO, explained that the sequential decrease is primarily related to Portable Electronics, which typically sees its highest revenue in Q3, decreasing in Q4, and reaching a low point in Q1. Year-over-year, the decline is mainly due to the curamik business, which faced significant inventory and EV/HEV market slowdowns in 2024.

Q: Given the implied year-over-year decline in Q1, do you expect to get back to positive top-line growth on a year-over-year basis by the second half of '25? Are there further cost reduction actions planned to protect margins and cash flow? A: Colin Gouveia stated that Q1 is expected to be the low point, with a stronger second half anticipated. The curamik market is expected to gradually recover, and new manufacturing capabilities in China will support growth. Laura Russell, CFO, added that margin recovery is expected as volumes improve, driven by customer demand recovery.

Q: Can you provide insights into the Aerospace & Defense (A&D) business, which has been characterized as a high-growth area? Is the improvement quarter-to-quarter or a base lift? A: Colin Gouveia noted that A&D is a core business, with aerospace and defense segments showing solid growth. The business is expected to continue growing at a mid-single-digit rate in the near, medium, and long term.

Q: How is Rogers Corp managing geopolitical uncertainties, particularly tariffs, and what impact do they have on your operations? A: Colin Gouveia explained that the company is closely monitoring the dynamic tariff situation. The local-for-local manufacturing strategy allows Rogers to produce and supply products within key regions, mitigating potential tariff impacts. The company feels strategically positioned to handle any tariff changes.

Q: Is the hesitance in the market due to geopolitical uncertainties affecting Rogers directly, or is it more downstream in the supply chain? A: Colin Gouveia indicated that the hesitance is largely due to macroeconomic uncertainties, with customers being cautious about inventory and economic conditions. As geopolitical issues and macroeconomic conditions stabilize, a more reasonable order cadence and economic confidence are expected to return.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.