What changed in this filing

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Item 1. Business

2021-02-19 compared with 2020-02-21 · 67 added, 48 removed, 133 unchanged (46% of the section changed)

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Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:

• the duration and impacts of the novel coronavirus (COVID-19) global pandemic and efforts to contain its transmission and distribute vaccines, including the effect of these factors on our business, suppliers, customers, end users and economic conditions generally;

• failure to capitalize on, volatility within, or other adverse changes with respect to the Company’s growth drivers, including advanced mobility and advanced connectivity, such as delays in adoption or implementation of new technologies;

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We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

Company Background and Strategy

Rogers Corporation designs, develops, manufactures and sells high-performance and high-reliability engineered materials and components to meet our customers’ demanding challenges.

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The remaining operations, which represent our non-core businesses, are reported in the Other operating segment.

We have a history of innovation and have established

Innovation Centers for our research and development activities in Chandler, Arizona;

We have a history of innovation and have established Innovation Centers for our research and development (R&D) activities in Chandler, Arizona;

Burlington, Massachusetts;

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We are headquartered in Chandler, Arizona.

Growth Strategy and Recent Acquisitions

Our growth strategy is based upon the following principles:

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As a market-driven organization, we are focused on growth drivers, including advanced mobility and advanced connectivity.

More specifically, the key trends currently affecting our business include the increasing use of advanced driver assistance systems (ADAS) and increasing electrification of vehicles, including electric and hybrid electric vehicles (EV/HEV), in the automotive industry and new technology adoption in the telecommunications industry, including next generation wireless infrastructure.

In addition to our focus on advanced mobility and advanced connectivity in the automotive and telecommunications industries, we sell into a variety of other markets including general industrial, portable electronics, connected devices, aerospace and defense, mass transit and renewable energy.

More specifically, in addition to the impact COVID-19 discussed below, the key medium- to long-term trends currently affecting our business include the increasing use of advanced driver assistance systems (ADAS) and increasing electrification of vehicles, including electric and hybrid electric vehicles (EV/HEV), in the automotive industry and the growth of 5G smartphones in the portable electronics industry.

In addition to our focus on advanced mobility and advanced connectivity in the automotive, portable electronics and telecommunications industries, we sell into a variety of other markets including general industrial, aerospace and defense, mass transit, renewable energy and connected devices.

Our sales and marketing approach is based on addressing these trends, while our strategy focuses on factors for success as a manufacturer of engineered materials and components:

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We have expanded our capabilities through organic investment and acquisitions and strive to ensure high quality solutions for our customers.

We continue to review and re-align our manufacturing and engineering footprint in an effort to attain a leading competitive position globally.

We continue to review and re-align our manufacturing and engineering footprint in an effort to maintain a leading competitive position globally.

We have established or expanded our capabilities in various locations in support of our customers’ growth initiatives.

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We strive to evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business.

In executing on our growth strategy, we have completed the following strategic acquisitions in the last two fiscal years:

(1) in July 2018, we acquired Griswold LLC (Griswold), a manufacturer of a wide range of high-performance engineered cellular elastomer and microcellular polyurethane products and solutions and (2) in August 2018, we acquired a production facility and related machinery and equipment located in Chandler, Arizona from Isola USA Corp (Isola).

COVID-19 Update

The global COVID-19 pandemic has affected and continues to affect Rogers’ business and operations, although to a lesser extent than the first half of 2020.

In response to the outbreak, Rogers prioritized the safety and well-being of its employees—including implementing social distancing initiatives in its facilities, providing remote working arrangements for certain employees, expanding personal protective equipment usage, enhancing plant hygiene processes, and extending employee benefits, which increased our expenses in 2020—while at the same time taking actions to preserve business continuity.

Our non-manufacturing employees transitioned seamlessly to remote working arrangements and are maintaining effective collaboration, both internally and with our customers.

In some cases, based on local conditions, non-manufacturing employees have returned to their worksites.

Our China business and operations were the first to be impacted by the virus, with the government temporarily suspending our operations, as well as the operations of most Chinese business, including our Chinese customers and suppliers, at the beginning of February.

We resumed production in mid-February and reached full production capacity by early-March.

and European businesses were first impacted later in the first quarter, and the impact continued through the rest of the fiscal year and through the date of this filing.

In both the U.S.

and Europe, we generally maintained operations at close to normal levels, with the additional employee safety precautions implemented at our facilities.

We do not believe these additional precautions, in the aggregate, had a material impact on our financial performance in 2020.

In the U.S., exemptions from state-level “shelter in place” directives with respect to numerous sectors, including the Communications, Healthcare and Public Health, Defense Industrial Base, Critical Manufacturing and Information Technology sectors, have largely enabled us to continue our operations while those directives were in place through the date of this filing.

Our operations were not affected by any material shortages, as our inventory and supply chain met our manufacturing requirements.

Global demand continued to be impacted in the fourth quarter by the COVID-19 pandemic, although to a lesser extent than prior quarters.

General industrial and mass transit market demand continued to be the most impacted.

Demand improved in some markets in the second half of 2020, such as portable electronics, EV/HEV, aerospace and defense and automotive relative to the first half of 2020.

We expect that the COVID-19 pandemic will have a continuing but uncertain impact on our business and operations in the short- and medium-term.

Operating Segments

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Trade names for our ACS products include:

RO4000 ® Series, RO3000 ® Series, RT/duroid ® , CLTE Series ® , AD Series ® , CuClad ® Series, TMM ® , Kappa ® , XTremeSpeed RO1200 TM Laminates, DiClad ® Series, IsoClad ® Series, COOLSPAN ® , MAGTREX TM , TC Series ® , IM Series TM , 92ML TM , 2929 Bondply and 3001 Bondply Film.

RO4000 ® Series, RO3000 ® Series, RT/duroid ® , CLTE Series ® , TMM ® , AD Series ® , DiClad ® Series, CuClad ® Series, Kappa ® , COOLSPAN ® , TC Series ® , 92ML™, IsoClad ® Series, MAGTREX™, XTremeSpeed RO1200™ Laminates, IM Series™, 2929 Bondply, 3001 Bondply Film and SpeedWave™ Prepreg.

As of December 31, 2020, our ACS operating segment had manufacturing and administrative facilities in Chandler, Arizona;

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Trade names for our EMS products include:

PORON ® , BISCO ® , DeWAL ® , ARLON ® , eSorba ® , Griswold ® , Diversified Silicone Products ® , XRD ® , R/bak ® and HeatSORB™.

PORON ® , BISCO ® , DeWAL ® , ARLON ® , eSorba ® , Griswold ® , XRD ® , R/bak ® and HeatSORB™.

As of December 31, 2020, our EMS operating segment had administrative and manufacturing facilities in Moosup, Connecticut;

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Narragansett, Rhode Island;

Ansan, South Korea;

and Suzhou, China.

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however, there are concentrations of OEM customers in our ACS (Chinese telecommunications equipment manufacturers) and PES (semiconductor and automotive manufacturers) operating segments.

Although the loss of any one of our larger customers would require a period of adjustment, during which the results of operations could be materially adversely impacted, we believe that such events could be successfully mitigated over a period of time due to the diversity of our customer base.

Although the loss of any one of our larger customers would

require a period of adjustment, during which the results of operations could be materially adversely impacted, we believe that such events could be successfully mitigated over a period of time due to the diversity of our customer base.

We employ a technical sales and marketing approach pursuant to which we work collaboratively to provide design engineering, testing, product development and other technical support services to OEMs that incorporate our engineered materials and components in their products.

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The markets we serve are typically characterized by rapid technological changes and advances.

Accordingly, the success of our strategy is in part dependent on our ability to develop market-leading products, which is primarily driven by efforts in research and development.

Accordingly, the success of our strategy is in part dependent on our ability to develop market-leading products, which is primarily driven by efforts in R&D.

We are focused on identifying technologies and innovations related to both our current product portfolio as well as initiatives targeted at further diversifying and growing our business.

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We also own a number of registered and unregistered trademarks and have acquired and developed certain confidential and proprietary technologies, including trade secrets that we believe to be of some importance to our business.

While we believe our patents and other intellectual property provide a competitive advantage to our operating segments, we believe that a significant part of our competitive position and future success will be determined by factors such as the innovative skills,

systems and process knowledge, and technological expertise of our personnel;

the range of new products we develop;

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for our ACS operating segment, copper, polymer, polytetraflouroethylene and fiberglass materials;

for our EMS operating segment, polyurethane, polytetraflouroethylene, polyethylene, silicone and natural rubber materials;

and for our PES operating segment, copper, ceramic and brazing paste materials.

for our EMS operating segment, polyol, isocyanates, polytetraflouroethylene, ultra-high molecular weight polyethylene materials, silicone and natural rubber materials;

and for our PES operating segment, copper, ceramic and brazing paste materials, including silver.

Some of the raw materials used in our business are available through sole or limited-source suppliers.

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Except for some minor seasonality for consumer products, which often aligns with year-end holidays and product launch cycles, the operations of our segments have not been seasonal.

Our Employees

As of December 31, 2019 , we employed approximately 3,600 people.

Our backlog of firm orders was $130.6 million as of December 31, 2019 , compared to $152.8 million as of December 31, 2018 .

The $22.1 million year-over-year decrease in backlog was mainly comprised of decreases in the backlog for our EMS and PES operating segments of $9.1 million and $8.7 million , respectively.

The decrease in the backlog for our EMS operating segment was primarily due to lower outstanding orders year-over-year attributable to the general industrial market.

The decrease in the backlog for our PES operating segment was primarily due to lower outstanding orders year-over-year attributable to the general industrial and mass transit markets.

The backlog of firm orders is expected to be filled within the next 12 months.

Human Capital Management

The Company’s continuing success derives from our talented and dedicated employees globally, who are responsible for the innovation, operations and ethics foundational to our business and its future.

In 2020, our employees navigated the challenges from COVID-19, and, with an overarching commitment to health and safety, maintained a steady flow of materials for our customers, including for critical infrastructure and health applications.

As of December 31, 2020, we employed approximately 3,350 people, of whom approximately 1,250 were employed in the U.S., 1,150 in Europe and 950 in China.

Approximately 375 of our domestic employees are covered by collective bargaining

agreements or by specific labor agreements and approximately 750 of our European employees are covered by work council arrangements.

Our approach to human capital management is based on our culture of respect, which is built on the ethical foundation of our Code of Business Ethics and our commitment to making choices that are based on what is ethically sound and not just what is easy or expedient.

Additionally, we connect our day-to-day work with our organizational objectives through our Cultural Behaviors:

Live Safely, Trust, Just Decide, Speak Openly, Simply Improve, Innovate and Deliver Results.

Management’s principal objectives, with oversight from our Board of Directors, are Health and Safety, Employee Experience and Diversity and Inclusion.

Health and Safety

The health and safety of our employees is a paramount objective.

We strive to minimize lost workdays and recordable incidents.

To promote awareness and accountability, safety performance data is shared throughout the company and executive compensation includes safety performance factors.

Employment Experience

We take a comprehensive approach to the employment experience, striving to use a fair and inclusive recruiting process to select talented individuals.

Once we hire, we endeavor to provide our employees a safe and ethical work environment that includes fair compensation, opportunities for career development and employee engagement.

We are proud to invest in our employees’ futures through a variety of technical and other training opportunities internally, as well as education reimbursement programs globally.

Diversity and Inclusion

We continue to advance efforts to improve diversity and inclusion within the Company, focusing on attracting and maintaining diverse talent within the organization and promoting awareness and acceptance globally.

We believe that our diversity and inclusion will make the Company a more desirable workplace and will lead to improved business performance.

Our sales are generally pursuant to short-term purchase orders.

These purchase orders are made without deposits and may be rescheduled, canceled or modified on relatively short notice, without substantial penalty.

Therefore, even though we may have a large backlog from time to time, we believe the purchase orders or backlog are not necessarily a reliable indicator of future sales.

Information About Our Executive Officers

Our executive officers as of February 18, 2021 were as follows:

Present Position

Year Appointed to Present Position

Other Relevant Positions Held

President and Chief Executive Officer, Director, Principal Executive Officer

Senior Vice President, Chief Financial Officer and Treasurer, Principal Financial Officer

Senior Vice President and Chief Financial Officer, FormFactor, Inc., from May 2011 to March 2018.

Senior Vice President and

Name Age Present Position Year Appointed to Present Position Other Relevant Positions Held

Hoechner 61 President and Chief Executive Officer, Director, Principal Executive Officer 2011

Ludwig 59 Senior Vice President, Chief Financial Officer and Treasurer, Principal Financial Officer 2018 Senior Vice President and Chief Financial Officer, FormFactor, Inc., from May 2011 to March 2018.

Rowntree 49 Senior Vice President and

General Manager,

Advanced Connectivity

Senior Vice President and Global Head of Industrial Electronics, Henkel Electronic Materials, from January 2017 to May 2019;

Solutions 2019 Senior Vice President and Global Head of Industrial Electronics, Henkel Electronic Materials, from January 2017 to May 2019;

Senior Vice President and General Manager, Henkel Electronic Materials, from July 2015 to December 2016.

Global Product Management, Henkel Electronic Materials, from 2010 to June 2015.

Colin Gouveia

Senior Vice President and

Colin Gouveia 57 Senior Vice President and

General Manager,

Elastomeric Material

Vice President and General Manager, Eastman Chemical Co., from December 2014 to June 2019;

Executive Vice President & President of North America, Taminco, from August 2012 to December 2014.

Vice President and General Manager, Power Electronics Solutions

Vice President, Rogers Corporation, from December 2018 to September 2019;

Global Sales Director, Rogers Corporation, from August 2017 to November 2018;

General Manager, Dow Chemical, from March 2015 to May 2017;

Global Marketing Director, Dow Chemical, from March 2012 to March 2015.

Senior Vice President, Global Operations and Supply Chain

Vice President of Global Operations, MKS Instruments, 2011 to July 2019.

Senior Vice President and Chief Technology Officer

Senior Vice President, Corporate Development, General Counsel and Secretary

Solutions 2019 Vice President and General Manager, Eastman Chemical Co., from December 2014 to June 2019.

Williams 58 Senior Vice President, Global Operations and Supply Chain 2019 Vice President of Global Operations, MKS Instruments, 2011 to July 2019.

Daigle 57 Senior Vice President and Chief Technology Officer 2009

Knoll 57 Senior Vice President, Corporate Development, General Counsel and Secretary

2017 Vice President and General Counsel, Rogers Corporation, from November 2014 to February 2017.

Senior Vice President, General Counsel PKC Group Oyj - North America, from June 2012 to November 2014.

Vice President and Chief Human Resources Officer

Buckley 48 Vice President and Chief Human Resources Officer

2019 Associate General Counsel and Director of Global Compliance and Integrity, Rogers Corporation, from October 2014 to January 2019.

President and Chief Executive Officer, Verge America Ltd., from May 2013 to October 2014.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business