ROGERS CORP Q4 FY2024 earnings call

• Fourth quarter results were in line with expectations, but sales were lower due to market conditions and seasonality. • Focus on managing operational costs and expenses led to robust free cash flow conversion in 2024. • Secured new design wins in key markets like ADAS, EV/HEV, etc. • Launched new products in AES and EMS, with innovation in thermoset laminates, PORON materials, etc. • Made progress on local-for-local manufacturing strategy with new facilities in China for curamik power substrates and BISCO silicone line.

Fourth quarter revenues were $192 million, down 9% from the prior quarter and in line with guidance midpoint. Gross margin was 32.1%, 300 basis points lower than Q3 due to volume. Full year sales declined 9%, primarily affected by industrial and EV/HEV markets. Gross margin for 2024 was 33.4%, 40 basis points lower than prior year. Sales by market: EV/HEV had modest Q4 increase but full year lower; EMS sales to EV/HEV were solid; ADAS improved; Aerospace and defense grew; Portable electronics were sequentially lower; Industrial was lower due to inventory; Wireless infrastructure had largest quarter-to-quarter decline.

• Q1 sales expected to be between $180 million and $195 million, a decrease from Q4 due to foreign currency impact and lower portable electronics sales. • Gross margin for Q1 guided to 29%-30.5% due to lower volume and product mix. • EPS range for Q1 is -$0.26 to $0.04. • Full year tax rate projected to be approximately 27%. • Expect Q1 to be the low point of 2025, with second half expected to be stronger.

• Geopolitical uncertainties and trade policies pose risks. • Inventory challenges in EV/HEV persisting into Q1. • Foreign exchange fluctuations tempering growth potential.

Q: Hi. This is Jeremy on for Dan Moore with CJS. 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 then what end markets are you experiencing further sequential softness in?

A: Colin Gouveia started by saying sequentially, portable electronics is a major issue with Q1 being the low point. Year-over-year is primarily related to the curamik business. Laura Russell added the EV impact was the big year-over-year factor.

Q: Unidentified Analyst: Hi. Yes, it's [Indiscernible] on for Craig. And thanks for taking my question. I wanted to ask about the A&D business...

A: Colin Gouveia said A&D is a core business, breaking into aerospace and RFS solutions, expecting mid-single-digit growth in the near, medium, and longer term.

Q: Unidentified Analyst: Okay. And then sort of shifting over to some of the geopolitical uncertainty...

A: Colin Gouveia said tariff situation is dynamic, they have a local-for-local strategy for mitigation, and customers are cautious due to macro headwinds, expecting things to settle as geopolitical issues clear.