What changed in this filing

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Item 1. Business

2022-02-22 compared with 2021-02-19 · 81 added, 74 removed, 126 unchanged (55% 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;

• our ability to complete the proposed merger with DuPont de Nemours, Inc.

(DuPont), the termination of which may cause us to incur substantial costs that may adversely affect our financial results and operations and the market price of our capital stock;

• 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, supply chains, 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;

• uncertain business, economic and political conditions in the United States (U.S.) and abroad, particularly in China, South Korea, Germany, Hungary and Belgium, where we maintain significant manufacturing, sales or administrative operations;

• uncertain business, economic and political conditions in the United States (U.S.) and abroad, particularly in China, South Korea, Germany, Belgium, England and Hungary, where we maintain significant manufacturing, sales or administrative operations;

• the trade policy dynamics between the U.S.

and China reflected in trade agreement negotiations and the imposition of tariffs and other trade restrictions, including trade restrictions on Huawei Technologies Co., Ltd.

and China reflected in trade agreement negotiations, the imposition of tariffs and other trade restrictions, as well as the potential for U.S.-China supply chain decoupling;

• fluctuations in foreign currency exchange rates;

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• the extent to which end-user products and systems incorporating our products achieve commercial success;

• the ability of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner;

• the ability and willingness of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner;

• intense global competition affecting both our existing products and products currently under development;

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

We operate three strategic operating segments:

Advanced Connectivity Solutions (ACS), Elastomeric Material Solutions (EMS) and Power Electronics Solutions (PES).

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 (R&D) activities in Chandler, Arizona;

Burlington, Massachusetts;

Eschenbach, Germany;

and Suzhou, China.

We operate two strategic operating segments:

Advanced Electronics Solutions (AES) and Elastomeric Material Solutions (EMS).

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

We have a history of innovation and have established Innovation Centers for our research and development (R&D) activities in Chandler, Arizona, Burlington, Massachusetts, Eschenbach, Germany and Suzhou, China.

We are headquartered in Chandler, Arizona.

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

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.

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

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:

performance, quality, service, cost, efficiency, innovation and technology.

performance, reliability, service, cost, efficiency, innovation and technology.

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

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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.

If we are able to successfully execute on our growth strategy, we see an opportunity to double our annual revenues over the next five years.

This robust outlook is supported by our participation in a number of fast-growing markets and by our strong competitive positions in these markets.

Advanced mobility markets, which are comprised of EV/HEV and ADAS, are expected to grow at the fastest rate.

Third-party analysis projects that the EV/HEV market will grow at compound annual growth rate of more than 25% over the next five years and ADAS at a rate of more than 15% over that time period.

Within the EV/HEV market, we believe our advanced battery cell pads, ceramic substrates and power interconnects provide multiple content opportunities to capitalize on this growth.

In each of these areas we have secured a number of design wins and have a strong pipeline, which provides confidence in our growth outlook.

In the ADAS market, we continue to build on our current position with new design wins, including those for next-generation automotive radar systems.

Other markets with a strong growth trajectory include aerospace and defense, clean energy and portable electronics.

These markets are projected to grow at high single digit rates and we expect that they will contribute to our growth strategy’s aim of doubling revenues over the next five years.

To support our revenue growth opportunity during the five-year strategic planning period, we have initiated a manufacturing expansion plan, which includes expanding capacity at existing Rogers’ manufacturing facilities, relocating existing manufacturing capabilities to enhance operational efficiency and adding new manufacturing facilities.

This expansion plan will require a significant increase in capital spending together with an associated increase in operating expenses, as compared to historic capital spending and operating expenses over the previous five years.

During the five-year strategic planning period, we also will have significant capital expenditures associated with implementing our enterprise resource planning system.

Proposed Merger with DuPont

On November 1, 2021, we entered into a definitive merger agreement to be acquired by DuPont in an all-cash transaction at a price of $277.00 per share of the Company’s capital stock.

The merger agreement provides for the acquisition of Rogers Corporation by DuPont through the merger of Cardinalis Merger Sub, Inc., a wholly owned subsidiary of DuPont, with and into Rogers Corporation, with Rogers Corporation surviving the merger as a wholly owned subsidiary of DuPont.

Company shareholders approved the merger agreement at a special shareholder meeting held on January 25, 2022.

The merger is subject to receipt of regulatory approvals and satisfaction of other customary conditions.

The merger is expected to close by the end of the second quarter of 2022.

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.

The global COVID-19 pandemic has affected and continues to affect Rogers’ business, operations and demand from customers with the emergence and spread of new variants of the virus, such as Delta and Omicron, although to a lesser extent than in

2020, mainly due to the rollout of vaccinations.

In response to the outbreak, Rogers prioritized the safety and well-being of its employees—including incentivizing vaccinations, 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, while at the same time taking actions to preserve business continuity.

Our non-manufacturing employees transitioned seamlessly to remote working arrangements and are effectively collaborating 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

Advanced Connectivity Solutions

Our ACS operating segment designs, develops, manufactures and sells circuit materials and solutions enabling high-performance and high-reliability connectivity for applications in wireless infrastructure (e.g., power amplifiers, antennas and small cells), automotive (e.g., ADAS, telematics and thermal solutions), aerospace and defense (e.g.

antenna systems, communication systems and phased array radar systems), connected devices (e.g., mobile internet devices and thermal solutions) and wired infrastructure (e.g., computing and IP infrastructure) markets.

We believe these products have characteristics that offer performance and other functional advantages in many market applications that serve to differentiate our products from other commonly available materials.

ACS products are sold principally to independent and captive printed circuit board fabricators that convert our laminates to custom printed circuits.

Trade names for our ACS products include:

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;

Advanced Electronics Solutions

Our AES operating segment designs, develops, manufactures and sells circuit materials, ceramic substrate materials, busbars and cooling solutions for applications in EV/HEV, wireless infrastructure (i.e., power amplifiers, antennas and small cells), automotive (i.e., ADAS), telematics and thermal solutions, aerospace and defense (i.e., antenna systems, communication systems and phased array radar systems), mass transit, clean energy (i.e., variable frequency drives, renewable energy), connected devices (i.e., mobile internet devices and thermal solutions) and wired infrastructure (i.e., computing and IP infrastructure) markets.

We believe these materials have characteristics that offer performance and other functional advantages in many market applications, which serve to differentiate our products from other commonly available materials.

AES products are sold globally to converters, fabricators, distributors and OEMs.

Trade names for our AES products include:

curamik ® , ROLINX ® , 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, 2021, our AES operating segment had manufacturing and administrative facilities in Chandler, Arizona;

Rogers, Connecticut;

Bear, Delaware;

Eschenbach, Germany;

Evergem, Belgium;

Budapest, Hungary;

and Suzhou, China.

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Our EMS operating segment designs, develops, manufactures and sells engineered material solutions for a wide variety of applications and markets.

These include polyurethane and silicone materials used in cushioning, gasketing and sealing, and vibration management applications for general industrial, portable electronics, automotive, mass transit, aerospace and defense, footwear and impact mitigation and printing markets;

customized silicones used in flex heater and semiconductor thermal applications for general industrial, portable electronics, automotive, mass transit, aerospace and defense and medical markets;

polytetrafluoroethylene and ultra-high molecular weight polyethylene materials used in wire and cable protection, electrical insulation, conduction and shielding, hose and belt protection, vibration management, cushioning, gasketing and sealing, and venting applications for general industrial, automotive and aerospace and defense markets.

We believe these materials have characteristics that offer functional advantages in many market applications which serve to differentiate Rogers’ products from other commonly available materials.

EMS products are sold globally to converters, fabricators, distributors and original equipment manufacturers (OEMs).

These include polyurethane and silicone materials used in cushioning, gasketing and sealing, and vibration management applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense, footwear and impact mitigation and printing markets;

customized silicones used in flex heater and semiconductor thermal applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense and medical markets;

polytetrafluoroethylene and ultra-high molecular weight polyethylene materials used in wire and cable protection, electrical insulation, conduction and shielding, hose and belt protection, vibration management, cushioning, gasketing and sealing, and venting applications for EV/HEV, general industrial, automotive and aerospace and defense markets.

We believe these materials have characteristics that offer functional advantages in many market applications, which serve to differentiate our products from other commonly available materials.

EMS products are sold globally to converters, fabricators, distributors and OEMs.

Trade names for our EMS products include:

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;

PORON ® , BISCO ® , DeWAL ® , ARLON ® , eSorba ® , Griswold ® , XRD ® , Silicone Engineering and R/bak ® .

As of December 31, 2021, our EMS operating segment had manufacturing and administrative facilities in Moosup, Connecticut;

Rogers, Connecticut;

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Narragansett, Rhode Island;

Evergem, Belgium;

Blackburn, England;

Ansan, South Korea;

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RIC has manufacturing facilities at the INOAC facilities in Nagoya and Mie, Japan, and RIS has manufacturing facilities at Rogers’ facilities in Suzhou, China.

Power Electronics Solutions

Our PES operating segment designs, develops, manufactures and sells ceramic substrate materials, busbars and cooling solutions for a variety of applications in EV/HEV, general industrial, mass transit, renewable energy, aerospace and defense and wired infrastructure markets.

We sell our ceramic substrate materials and cooling solutions under the curamik ® trade name and our busbars under the ROLINX ® trade name.

As of December 31, 2020, our PES operating segment had manufacturing and administrative facilities in Evergem, Belgium;

Eschenbach, Germany;

Budapest, Hungary;

and Suzhou, China.

Our Other operating segment consists of elastomer components for applications in general industrial market, as well as elastomer floats for level sensing in fuel tanks, motors, and storage tanks applications in the general industrial and automotive markets.

Our Other operating segment consists of elastomer components for applications in the general industrial market, as well as elastomer floats for level sensing in fuel tanks, motors, and storage tanks applications in the general industrial and automotive markets.

We sell our elastomer components under our ENDUR ® trade name and our floats under our NITROPHYL ® trade name.

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No individual customer represented more than 10% of our total net sales for 2021;

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.

however, there are concentrations of OEM customers in our AES operating segment (semiconductor and automotive manufacturers).

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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We also compete with manufacturers of commodity materials, including smaller regional producers with lower overhead costs and profit requirements located in Asia that attempt to upsell their products based principally upon price, particularly for products that have matured in their life cycle.

We believe that we have a competitive advantage because of our reputation for innovation, the performance, quality and reliability of our materials and components, and our commitment to technical support and customer service.

We believe that we have a competitive advantage because of our reputation for innovation, the performance, reliability and quality of our materials and components, and our commitment to technical support and customer service.

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.

Research and Development

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The key raw materials used in our business are as follows:

for our ACS operating segment, copper, polymer, polytetraflouroethylene and fiberglass 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.

for our AES operating segment, copper, polymer, polytetraflouroethylene, fiberglass materials and ceramic and brazing paste materials, including silver;

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

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

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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.

In 2021, 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, 2021, we employed approximately 3,675 people, of whom approximately 1,350 were employed in the U.S., 1,400 in Europe and 800 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.

Approximately 425 of our domestic employees are covered by collective bargaining agreements or by specific labor agreements and approximately 950 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.

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

As part of our efforts to ensure employee safety related to COVID-19, we have taken a structured approach to control potential onsite exposures.

We have global, regional and site-specific pandemic steering committees ensuring that policies and procedures are developed and implemented in accordance with recommendations put forth by the recognized health authorities in each part of the world in which we operate.

All policy recommendations, new or changed, are reviewed and approved by our executive leadership team, ensuring timely communication to our employees prior to implementation.

The global committee has worked to ensure that employees understand that the Company supports the position that vaccination is the best means of minimizing the effects of a COVID-19 infection.

In 2021, we provided a financial incentive for employees who became fully vaccinated, which helped drive a global employee vaccination rate of approximately 70%.

As a means of continuing to incentivize employees to seek vaccination, policies now offer paid time for employees to get vaccinated, recover from any side effects from vaccination, or to seek testing.

We have implemented a number of exposure control requirements for all individuals at our operating locations.

We continue to follow the guidance issued by recognized authorities around the world and make adjustments to our global, regional, and local policies as necessary.

The global committee will continue to meet regularly to provide guidance to our organization as circumstances evolve.

Employment Experience

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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

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Hoechner 62 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

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

Ramakumar Mayampurath 58 Senior Vice President and Chief Financial Officer, Principal Financial Officer 2021 Vice President, Corporate Finance from December 2020 to May 2021;

Vice President, Business Transformation from March 2020 to December 2020;

Vice President, Financial Planning and Analysis from November 2014 to December 2020

Rowntree 50 Senior Vice President and General Manager, Advanced Electronics 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.

Colin Gouveia 57 Senior Vice President and

General Manager,

Elastomeric Material

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

Gouveia 58 Senior Vice President and General Manager, Elastomeric Material Solutions 2019 Vice President and General Manager, Eastman Chemical Co., from December 2014 to June 2019.

Williams 59 Senior Vice President, Global Operations and Supply Chain 2019 Vice President of Global Operations, MKS Instruments, 2011 to July 2019.

Daigle 58 Senior Vice President and Chief Technology Officer 2009

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

Knoll 58 Senior Vice President, Corporate Development, General Counsel, Chief Sustainability Officer and Secretary

2021 Vice President and General Counsel, Rogers Corporation, from November 2014 to February 2017.

Senior Vice President, Corporate Development, General Counsel and Secretary, from February 2017 to October 2021.

Buckley 49 Vice President and Chief Human Resources Officer

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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