What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-05 · 133 added, 117 removed, 614 unchanged (29% of the section changed)

3 unchanged sentences

(Dollars and shares in thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Net sales $ 247,231 $ 238,263 $ 747,467 $ 702,434

7 unchanged sentences

Equity income in unconsolidated joint ventures 1,162 1,773 4,237 5,884

Pension settlement charges — ( 534 ) — ( 534 )

Other income (expense), net 977 ( 469 ) 1,563 3,738

12 unchanged sentences

(Dollars in thousands)

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Net income $ 14,838 $ 25,129 $ 49,321 $ 85,002

1 unchanged sentence

Pension and other postretirement benefits:

Actuarial net gain incurred, net of tax (Note 4) ( 15 ) — ( 15 ) —

Actuarial net loss incurred, net of tax (Note 4) — — ( 15 ) —

Amortization of loss, net of tax (Note 4) 87 52 260 173

5 unchanged sentences

(Dollars and shares in thousands, except par value )

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets

47 unchanged sentences

(Dollars in thousands)

Six Months Ended

June 30, 2022 June 30, 2021

Nine Months Ended

September 30, 2022 September 30, 2021

Operating Activities:

6 unchanged sentences

Dividends received from unconsolidated joint ventures 4,677 4,965

Pension settlement charges (benefits) 534

Pension and other postretirement benefits 23 ( 300 )

12 unchanged sentences

Other, net 16,040 8,458

Net cash (used in) provided by operating activities ( 11,676 ) 66,206

Net cash provided by operating activities 1,834 106,115

Investing Activities:

23 unchanged sentences

(Dollars and shares in thousands)

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Capital Stock

42 unchanged sentences

For additional information regarding this balance, refer to “Note 11 – Pension Benefits and Other Postretirement Benefits.” Available-for-sale investments measured at fair value on a recurring basis, categorized by the level of inputs used in the valuation, were as follows:

Available-for-Sale Investment at Fair Value as of June 30, 2022

Available-for-Sale Investment at Fair Value as of September 30, 2022

(Dollars in thousands) Level 1 Level 2 Level 3 Total

6 unchanged sentences

(1) This balance was invested in funds comprised of short-term cash and fixed income securities, and was recorded in the “Other long-term assets” line item in the condensed consolidated statements of financial position as of December 31, 2021.

The fair value of these investments approximated its carrying value as of December 31, 2021.

The fair value of this investment approximated its carrying value as of December 31, 2021.

From time to time we enter into various instruments that require fair value measurement, including foreign currency contracts and copper derivative contracts.

Derivative instruments measured at fair value on a recurring basis, categorized by the level of inputs used in the valuation, were as follows:

Derivative Instruments at Fair Value as of June 30, 2022

Derivative Instruments at Fair Value as of September 30, 2022

(Dollars in thousands) Level 1 Level 2 Level 3 Total (1)

22 unchanged sentences

Foreign Currency

During the three months ended June 30, 2022, we entered into U.S.

During the three months ended September 30, 2022, we entered into U.S.

dollar, euro, and Korean won forward contracts.

2 unchanged sentences

As a result, any fair value adjustments required on these contracts are recorded in “Other income (expense), net” in our condensed consolidated statements of operations in the period in which the adjustment occurred.

As of June 30, 2022, the notional values of the remaining foreign currency forward contracts were as follows:

As of September 30, 2022, the notional values of the remaining foreign currency forward contracts were as follows:

Notional Values of Foreign Currency Derivatives

2 unchanged sentences

KRW/USD ₩ 8,081,640,000

As of June 30, 2022, we had 12 outstanding contracts to hedge exposure related to the purchase of copper in our AES operating segment.

As of September 30, 2022, we had 12 outstanding contracts to hedge exposure related to the purchase of copper in our AES operating segment.

These contracts are held with financial institutions and are intended to offset rising copper prices and do not qualify for hedge accounting treatment.

As of June 30, 2022, the volume of our copper contracts outstanding was as follows:

As of September 30, 2022, the volume of our copper contracts outstanding was as follows:

Volume of Copper Derivatives

July 2022 - September 2022 69 metric tons per month

October 2022 - December 2022 69 metric tons per month

1 unchanged sentence

April 2023 - June 2023 69 metric tons per month

July 2023 - September 2023 69 metric tons per month

Effects on Financial Statements

The impacts from our derivative instruments on the statement of operations and statements of comprehensive income (loss) were as follows:

Three Months Ended Six Months Ended

(Dollars in thousands) Financial Statement Line Item June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) Financial Statement Line Item September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Foreign Currency Contracts

9 unchanged sentences

Net current-period other comprehensive income (loss) ( 80,383 ) 245 ( 80,138 )

Balance as of June 30, 2022 $ ( 80,989 ) $ ( 9,444 ) $ ( 90,433 )

Balance as of September 30, 2022 $ ( 116,024 ) $ ( 9,357 ) $ ( 125,381 )

Balance as of December 31, 2020 $ ( 10,571 ) $ ( 9,004 ) $ ( 19,575 )

2 unchanged sentences

Net current-period other comprehensive income (loss) ( 18,627 ) 173 ( 18,454 )

Balance as of June 30, 2021 $ ( 21,072 ) $ ( 8,883 ) $ ( 29,955 )

(1) Net of taxes of $ 2,081 and $ 2,125 as of June 30, 2022 and December 31, 2021, respectively.

Net of taxes of $ 1,923 and $ 1,951 as of June 30, 2021 and December 31, 2020, respectively.

Balance as of September 30, 2021 $ ( 29,198 ) $ ( 8,831 ) $ ( 38,029 )

(1) Net of taxes of $ 2,056 and $ 2,125 as of September 30, 2022 and December 31, 2021, respectively.

Net of taxes of $ 1,902 and $ 1,951 as of September 30, 2021 and December 31, 2020, respectively.

Note 5 – Inventories

Inventories, which are valued at the lower of cost or net realizable value, consisted of the following:

(Dollars in thousands) June 30, 2022 December 31, 2021

(Dollars in thousands) September 30, 2022 December 31, 2021

Raw materials $ 81,797 $ 60,208

8 unchanged sentences

Foreign currency translation adjustment ( 9,552 ) ( 21,400 ) — $ ( 30,952 )

June 30, 2022 $ 114,158 $ 235,429 $ 2,224 $ 351,811

September 30, 2022 $ 110,015 $ 226,073 $ 2,224 $ 338,312

Other Intangible Assets

The gross and net carrying amounts, as well as the accumulated amortization of other intangible assets were as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

7 unchanged sentences

In the table above, gross carrying amounts and accumulated amortization may differ from prior periods due to foreign exchange rate fluctuations.

Amortization expense was $ 4.2 million and $ 3.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 8.5 million and $ 6.3 million for the six months ended June 30, 2022 and 2021, respectively.

Amortization expense was $ 4.1 million and $ 3.1 million for the three months ended September 30, 2022 and 2021, respectively, and $ 12.6 million and $ 9.4 million for the nine months ended September 30, 2022 and 2021, respectively.

The estimated future amortization expense is $ 3.9 million for the remainder of 2022 and $ 14.9 million, $ 13.6 million, $ 11.9 million and $ 11.3 million for 2023, 2024, 2025 and 2026, respectively.

The weighted average amortization period as of June 30, 2022, by definite-lived other intangible asset class, was as follows:

The weighted average amortization period as of September 30, 2022, by definite-lived other intangible asset class, was as follows:

Definite-Lived Other Intangible Asset Class Weighted Average Remaining Amortization Period

8 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share:

(Dollars and shares in thousands, except per share amounts) Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(Dollars and shares in thousands, except per share amounts) Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Net income $ 14,838 $ 25,129 $ 49,321 $ 85,002

6 unchanged sentences

Anti-dilutive shares are excluded from the calculation of diluted shares and diluted earnings per share.

For the three months ended June 30, 2022 and 2021, 226 shares and 1,769 shares were excluded, respectively.

For the three months ended September 30, 2022 and 2021, no shares and 1,994 shares were excluded, respectively.

Note 8 – Capital Stock and Equity Compensation

1 unchanged sentence

Performance-Based Restricted Stock Units

As of June 30, 2022, we had performance-based restricted stock units from 2021 and 2020 outstanding.

As of September 30, 2022, we had performance-based restricted stock units from 2021 and 2020 outstanding.

These awards generally cliff vest at the end of a three-year measurement period.

18 unchanged sentences

therefore, a dividend yield of 0 % was used in the Monte Carlo simulation valuation model.

A summary of activity of the outstanding performance-based restricted stock units for the six months ended June 30, 2022 is presented below:

A summary of activity of the outstanding performance-based restricted stock units for the nine months ended September 30, 2022 is presented below:

Performance-Based

4 unchanged sentences

Awards cancelled ( 1,860 )

Awards outstanding as of June 30, 2022 79,905

We recognized $ 1.1 million and $ 1.1 million of compensation expense for performance-based restricted stock units for the three months ended June 30, 2022 and 2021, respectively.

We recognized $ 2.2 million and $ 3.2 million of compensation expense for performance-based restricted stock units for the six months ended June 30, 2022 and 2021, respectively.

Awards outstanding as of September 30, 2022 79,460

We recognized $ 1.1 million and $ 2.6 million of compensation expense for performance-based restricted stock units for the three months ended September 30, 2022 and 2021, respectively.

We recognized $ 3.3 million and $ 5.8 million of compensation expense for performance-based restricted stock units for the nine months ended September 30, 2022 and 2021, respectively.

Time-Based Restricted Stock Units

As of June 30, 2022, we had time-based restricted stock unit awards from 2022, 2021, 2020 and 2019 outstanding.

As of September 30, 2022, we had time-based restricted stock unit awards from 2022, 2021, 2020 and 2019 outstanding.

The outstanding awards all ratably vest on the first, second and third anniversaries of the original grant date.

4 unchanged sentences

We account for forfeitures as they occur.

A summary of activity of the outstanding time-based restricted stock units for the six months ended June 30, 2022 is presented below:

A summary of activity of the outstanding time-based restricted stock units for the nine months ended September 30, 2022 is presented below:

Restricted Stock Units

3 unchanged sentences

Awards cancelled ( 3,766 )

Awards outstanding as of June 30, 2022 111,256

We recognized $ 2.5 million and $ 1.9 million of compensation expense for time-based restricted stock units for the three months ended June 30, 2022 and 2021, respectively.

We recognized $ 4.6 million and $ 3.7 million of compensation expense for time-based restricted stock units for the six months ended June 30, 2022 and 2021, respectively.

Awards outstanding as of September 30, 2022 108,773

We recognized $ 2.4 million and $ 2.0 million of compensation expense for time-based restricted stock units for the three months ended September 30, 2022 and 2021, respectively.

We recognized $ 7.0 million and $ 5.8 million of compensation expense for time-based restricted stock units for the nine months ended September 30, 2022 and 2021, respectively.

Chief Executive Officer’s 2021 Equity Award Grants

9 unchanged sentences

The fair value of the award is determined by the market value of the underlying stock price at the grant date.

A summary of activity of the outstanding deferred stock units for the six months ended June 30, 2022 is presented below:

A summary of activity of the outstanding deferred stock units for the nine months ended September 30, 2022 is presented below:

Deferred Stock Units

2 unchanged sentences

Stock issued ( 7,450 )

Awards outstanding as of June 30, 2022 6,850

We recognized $ 1.3 million compensation expense for deferred stock units for the three and six months ended June 30, 2022 and $ 1.2 million of compensation expense for the three and six months ended June 30, 2021.

Awards outstanding as of September 30, 2022 6,850

We recognized no compensation expense for deferred stock units for the three months ended September 30, 2022 and 2021, respectively.

We recognized $ 1.3 million and $ 1.2 million of compensation expense for deferred stock units for the nine months ended September 30, 2022 and 2021, respectively.

Note 9 – Debt

4 unchanged sentences

All obligations under the Fourth Amended Credit Agreement are guaranteed by each of our existing and future material domestic subsidiaries, as defined in the Fourth Amended Credit Agreement (the Guarantors).

The obligations are also secured by a Fourth Amended and Restated Pledge and Security Agreement, dated as of October 16, 2020, entered into by us and the Guarantors which grants to the administrative agent, for the benefit of the lenders, a security interest, subject to certain exceptions, in substantially all of our and the Guarantors’ non-real estate assets.

The obligations are also secured by a Fourth Amended and Restated Pledge and Security Agreement, dated as of October 16, 2020, entered into by us and the

Guarantors which grants to the administrative agent, for the benefit of the lenders, a security interest, subject to certain exceptions, in substantially all of our and the Guarantors’ non-real estate assets.

These assets include, but are not limited to, receivables, equipment, intellectual property, inventory, and stock in certain subsidiaries.

9 unchanged sentences

RFR loans bears interest based upon the Sterling Overnight Index Average (SONIA) plus 0.0326 % plus a spread of 162.5 to 200.0 basis points.

Based on our leverage ratio as of June 30, 2022, the spread was 162.5 basis points.

Based on our leverage ratio as of September 30, 2022, the spread was 175.0 basis points.

In addition to interest payable on the principal amount of indebtedness outstanding, we incur an annual fee of 25 to 35 basis points (based upon our leverage ratio), paid quarterly, of the unused amount of the lenders’ commitments under the Fourth Amended Credit Agreement.

5 unchanged sentences

If our total net leverage ratio exceeds 2.75 to 1.00, we may nonetheless make up to $ 20.0 million in restricted payments, including cash dividends, during the fiscal year, provided that no default or event of default has occurred and is continuing or would result from the payments.

Our total net leverage ratio did not exceed 2.75 to 1.00 as of June 30, 2022.

We borrowed $ 70.0 million under the Fourth Amended Credit Agreement for the three and six months ended June 30, 2022.

There were no borrowings for the three and six months ended June 30, 2021.

Our total net leverage ratio did not exceed 2.75 to 1.00 as of September 30, 2022.

We borrowed $ 30.0 million under the Fourth Amended Credit Agreement for the three months ended September 30, 2022, and $ 100.0 million for the nine months ended September 30, 2022.

There were no borrowings for the three and nine months ended September 30, 2021.

We are not required to make any quarterly principal payments under the Fourth Amended Credit Agreement.

We made no payments for the three and six months ended June 30, 2022, and $ 4.0 million and $ 25.0 million of discretionary principal payments on our revolving credit facility for the for the three and six months ended June 30, 2021, respectively.

We had $ 260.0 million outstanding borrowings under our revolving credit facility as of June 30, 2022, and $ 190.0 million as of December 31, 2021.

We had $ 1.3 million and $ 1.6 million of outstanding line of credit issuance costs as of June 30, 2022 and December 31, 2021, respectively, which will be amortized over the life of the Fourth Amended Credit Agreement.

We made no payments for the three and nine months ended September 30, 2022, and no payments for the three months ended September 30, 2021.

We made $ 25.0 million of discretionary principal payments on our revolving credit facility for the nine months ended September 30, 2021.

We had $ 290.0 million outstanding borrowings under our revolving credit facility as of September 30, 2022, and $ 190.0 million as of December 31, 2021.

We had $ 1.1 million and $ 1.6 million of outstanding line of credit issuance costs as of September 30, 2022 and December 31, 2021, respectively, which will be amortized over the life of the Fourth Amended Credit Agreement.

Note 10 - Leases

Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2022 and 2021.

Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2022 and 2021.

Payments made on the principal portion of our finance lease obligations were immaterial for each of the three- and six-month periods ended June 30, 2022 and 2021, excluding the $ 5.0 million net cash payment to exercise the Eschenbach, Germany manufacturing facility purchase option.

Payments made on the principal portion of our finance lease obligations were immaterial for each of the three- and nine-month periods ended September 30, 2022 and 2021, excluding the $ 5.0 million net cash payment to exercise the Eschenbach, Germany manufacturing facility purchase option.

We have operating leases primarily related to building space and vehicles.

4 unchanged sentences

Our expenses and payments for operating leases were as follows:

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Operating leases expense $ 652 $ 594 $ 1,896 $ 2,054

3 unchanged sentences

(Dollars in thousands) Location in Statements of

Financial Position June 30, 2022 December 31, 2021

Financial Position September 30, 2022 December 31, 2021

Finance lease right-of-use assets Property, plant and equipment, net $ 1,629 $ 389

7 unchanged sentences

Net Future Minimum Lease Payments

The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of June 30, 2022:

The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of September 30, 2022:

Finance Operating

16 unchanged sentences

In April 2022, we successfully negotiated the termination of a lease signed for the facility in South Korea, which went into effect in October 2021, in exchange for an approximately $ 0.4 million settlement fee.

The termination of this lease reduces our operating lease right-of-use assets and lease liabilities by approximately $ 9.2 million each.

The termination of this lease reduced our operating lease right-of-use assets and lease liabilities by approximately $ 9.2 million each.

Note 11 – Pension Benefits and Other Postretirement Benefits

Pension and Other Postretirement Benefit Plans

As of June 30, 2022, we had one qualified noncontributory defined benefit pension plan, the Rogers Corporation Employees’ Pension Plan (the Union Plan), which was frozen and ceased accruing benefits in 2013.

As of September 30, 2022, we had one qualified noncontributory defined benefit pension plan, the Rogers Corporation Employees’ Pension Plan (the Union Plan), which was frozen and ceased accruing benefits in 2013.

Additionally, we sponsor other postretirement benefit plans, including multiple fully insured or self-funded medical plans and life insurance plans for certain retirees.

10 unchanged sentences

The funds in the RESIP trust suspense account have been, and will continue to be, used to fund certain employer contributions.

There was no remaining balance for the pension surplus investments as of June 30, 2022.

There was no remaining balance for the pension surplus investments as of September 30, 2022.

Components of Net Periodic Benefit (Credit) Cost

1 unchanged sentence

Pension Benefits Other Postretirement Benefits

Three Months Ended Six Months Ended Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended

September 30, September 30, September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021 2022 2021 2022 2021

6 unchanged sentences

Employer Contributions

There were no required or voluntary contributions made to the Union Plan or the Merged Plan for each of the three and six- months ended June 30, 2022 and 2021.

There were no required or voluntary contributions made to the Union Plan or the Merged Plan for each of the three and nine- months ended September 30, 2022 and 2021.

Additionally, we are no t required to make additional contributions to the Union Plan for the remainder of 2022.

As there is no funding requirement for the other postretirement benefit plans, we funded these benefit payments as incurred, which were immaterial for each of the three and six- months ended June 30, 2022 and 2021, using cash from operations.

As there is no funding requirement for the other postretirement benefit plans, we funded these benefit payments as incurred, which were immaterial for each of the three and nine- months ended September 30, 2022 and 2021, using cash from operations.

Note 12 – Commitments and Contingencies

5 unchanged sentences

Remediation activities on the site are ongoing and are recorded as reductions to the accrual as they are incurred.

We incurred $ 1.9 million of aggregate remediation costs through June 30, 2022, and the accrual for future remediation efforts is $ 0.8 million.

We incurred $ 1.9 million of aggregate remediation costs through September 30, 2022, and the accrual for future remediation efforts is $ 0.8 million.

We, like many other industrial companies, have been named as a defendant in a number of lawsuits filed in courts across the country by persons alleging personal injury from exposure to products containing asbestos.

2 unchanged sentences

Most of the claims filed against us involve numerous defendants, sometimes as many as several hundred.

The following table summarizes the change in number of asbestos claims outstanding for the six months ended June 30, 2022:

The following table summarizes the change in number of asbestos claims outstanding for the nine months ended September 30, 2022:

Asbestos Claims

2 unchanged sentences

Pending claims concluded (1)

Claims outstanding as of June 30, 2022

(1) For the six months ended June 30, 2022, 67 claims were dismissed and 10 claims were settled.

Settlements totaled approximately $ 1.5 million for the six months ended June 30, 2022.

Claims outstanding as of September 30, 2022

(1) For the nine months ended September 30, 2022, 94 claims were dismissed and 13 claims were settled.

Settlements totaled approximately $ 1.7 million for the nine months ended September 30, 2022.

Impact on Financial Statements

9 unchanged sentences

We expect to continue to exhaust individual primary, excess and umbrella coverages over time, and there is no assurance that such exhaustion will not accelerate due to additional claims, damages and settlements or that coverage will be available as expected.

We are responsible for uninsured indemnity and defense costs, and we incurred an immaterial amount of expenses for each of the three- and six-month periods ended June 30, 2022 and 2021, respectively, related to such costs.

We are responsible for uninsured indemnity and defense costs, and we incurred an immaterial amount of expenses for each of the three- and nine-month periods ended September 30, 2022 and 2021, respectively, related to such costs.

The amounts recorded for the asbestos-related liability and the related insurance receivables are based on facts known at the time and a number of assumptions.

2 unchanged sentences

Our projected asbestos-related liabilities and insurance receivables were as follows:

(Dollars in thousands) June 30, 2022 December 31, 2021

(Dollars in thousands) September 30, 2022 December 31, 2021

Asbestos-related liabilities $ 64,215 $ 68,332

5 unchanged sentences

Note 13 – Income Taxes

Our effective income tax rate was 25.4 % and 25.6 % for the three months ended June 30, 2022 and 2021, respectively.

The decrease from the second quarter of 2021 was primarily due to the beneficial impact of a decrease in current quarter accruals of reserves for uncertain tax positions.

Our effective income tax rate was 22.2 % and 25.4 % for the six months ended June 30, 2022 and 2021, respectively.

The decrease from the first half of 2021 was primarily due to the decrease in the current quarter accruals of reserves of unrecognized tax benefits, as well as the increase in the excess tax benefits associated with stock compensation windfalls.

The total amount of unrecognized tax benefits as of June 30, 2022 was $ 7.3 million, of which $ 6.7 million would affect our effective tax rate if recognized.

Additionally, the balance of unrecognized tax benefits as of June 30, 2022 also included $ 0.6 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

Our effective income tax rate was 16.0 % and 26.4 % for the three months ended September 30, 2022 and 2021, respectively.

The decrease from the third quarter of 2021 was primarily due to the beneficial impact of a decrease in current quarter accruals of reserves for uncertain tax positions.

Our effective income tax rate was 20.5 % and 25.7 % for the nine months ended September 30, 2022 and 2021, respectively.

The decrease from the first nine months of 2021 was primarily due to the beneficial impact of a decrease in current quarter accruals of reserves for uncertain tax positions.

The total amount of unrecognized tax benefits as of September 30, 2022 was $ 6.5 million, of which $ 5.9 million would affect our effective tax rate if recognized.

Additionally, the balance of unrecognized tax benefits as of September 30, 2022 also included $ 0.6 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

We recognize interest and penalties related to unrecognized tax benefits through income tax expense.

As of June 30, 2022, we had $ 1.2 million accrued for the payment of interest.

As of September 30, 2022, we had $ 0.7 million accrued for the payment of interest.

We are subject to taxation in the U.S.

11 unchanged sentences

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, EV/HEV and aerospace and defense markets.

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 tank, motor, and storage tank 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.

2 unchanged sentences

(Dollars in thousands) Advanced Electronics Solutions Elastomeric Material Solutions Other Total

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Net sales - recognized over time $ 72,969 $ 3,346 $ 4,110 $ 80,425

2 unchanged sentences

Operating income $ 2,263 $ 14,322 $ 1,891 $ 18,476

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Net sales - recognized over time $ 64,277 $ 4,612 $ 4,829 $ 73,718

2 unchanged sentences

Operating income $ 13,945 $ 18,104 $ 1,750 $ 33,799

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Net sales - recognized over time $ 214,091 $ 9,090 $ 12,763 $ 235,944

2 unchanged sentences

Operating income $ 12,342 $ 43,920 $ 5,501 $ 61,763

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Net sales - recognized over time $ 176,339 $ 11,057 $ 14,802 $ 202,198

5 unchanged sentences

Region/Country Advanced Electronics Solutions Elastomeric Material Solutions Other Total

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

United States $ 33,969 $ 46,772 $ 1,087 $ 81,828

8 unchanged sentences

Total net sales $ 130,608 $ 110,983 $ 5,640 $ 247,231

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

United States $ 22,119 $ 42,338 $ 1,510 $ 65,967

12 unchanged sentences

Region/Country Advanced Electronics Solutions Elastomeric Material Solutions Other Total

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

United States $ 94,907 $ 136,340 $ 3,075 $ 234,322

8 unchanged sentences

Total net sales $ 404,926 $ 326,313 $ 16,228 $ 747,467

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

United States $ 67,740 $ 120,736 $ 3,535 $ 192,011

8 unchanged sentences

Total net sales $ 407,309 $ 279,131 $ 15,994 $ 702,434

(1) Net sales are allocated to countries based on the location of the customer.

The table above lists individual countries with 10% or more of net sales for the periods indicated.

Revenue from Contracts with Customers

3 unchanged sentences

Contract assets by operating segment were as follows:

(Dollars in thousands) June 30, 2022 December 31, 2021

(Dollars in thousands) September 30, 2022 December 31, 2021

Advanced Electronics Solutions $ 36,015 $ 31,398

2 unchanged sentences

Total contract assets $ 41,809 $ 36,610

We did not have any contract liabilities as of June 30, 2022 or December 31, 2021.

No impairment losses were recognized for the three or six-month periods ended June 30, 2022 and 2021, respectively, on any receivables or contract assets arising from our contracts with customers.

We did not have any contract liabilities as of September 30, 2022 or December 31, 2021.

No impairment losses were recognized for the three or nine-month periods ended September 30, 2022 and 2021, respectively, on any receivables or contract assets arising from our contracts with customers.

Note 15 – Supplemental Financial Information

1 unchanged sentence

The components of “Restructuring and impairment charges” line item in the condensed consolidated statements of operations, which contains restructuring charges and related expenses, as well as impairment charges, were as follows:

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Restructuring charges

5 unchanged sentences

Total restructuring and impairment charges $ 373 $ 1,007 $ 1,119 $ 3,260

Our AES operating segment incurred $ 0.7 million and $ 0.7 million of restructuring and impairment charges, respectively, for the three and six months ended June 30, 2022, while our EMS operating segment incurred an immaterial amount of restructuring and impairment charges for the three and six months ended June 30, 2022.

Our AES operating segment incurred $ 0.7 million and $ 2.3 million of restructuring and impairment charges, respectively, for the three and six months ended June 30, 2021, while our EMS operating segment incurred an immaterial amount of restructuring and impairment charges for the three and six months ended June 30, 2021.

Our AES operating segment incurred $ 0.4 million and $ 1.1 million of restructuring and impairment charges for the three and nine months ended September 30, 2022, respectively, while our EMS operating segment incurred an immaterial amount of restructuring and impairment charges for the three and nine months ended September 30, 2022.

Our AES operating segment incurred $ 1.0 million and $ 3.2 million of restructuring and impairment charges, respectively, for the three and nine months ended September 30, 2021, while our EMS operating segment incurred an immaterial amount of restructuring and impairment charges for the three and nine months ended September 30, 2021.

Restructuring Charges & Related Expenses - Manufacturing Footprint Optimization

1 unchanged sentence

The majority of the restructuring activities were completed in the first half of 2021.

We incurred an immaterial amount of restructuring charges and related expenses for the three and six months ended June 30, 2022, including severance and related benefits.

Severance and related benefits activity related to the manufacturing footprint optimization plan is presented in the table below for the six months ended June 30, 2022:

We incurred an immaterial amount of restructuring charges and related expenses for the three and nine months ended September 30, 2022, including severance and related benefits.

Severance and related benefits activity related to the manufacturing footprint optimization plan is presented in the table below for the nine months ended September 30, 2022:

(Dollars in thousands) Manufacturing Footprint Optimization Restructuring Severance

Balance as of December 31, 2021 $ 1,395

Provisions 363

Payments ( 1,479 )

Foreign currency translation adjustment ( 111 )

Balance as of June 30, 2022 $ 296

Balance as of September 30, 2022 $ 168

Other Operating (Income) Expense, Net

The components of “Other operating (income) expense, net” line item in the condensed consolidated statements of operations, were as follows:

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Fixed assets write-offs $ — $ — $ — $ 891

2 unchanged sentences

Lease obligations 91 60 369 600

Lease impairments — 495 — 495

Compensation & benefits 562 614 1,931 1,458

Third-party property claims — 4,650 — 4,650

Other 2 — 15 76

7 unchanged sentences

Operations in South Korea will be disrupted into the first half of 2023.

We recognized additional insurance recoveries of $ 2.9 million and $ 5.0 million for the three and six months ended June 30, 2022, respectively, as a result of an initial $ 2.5 million insurance payout related to our property damage claims and $ 2.5 million of additional in-process payouts communicated by the insurer.

This was partially offset by incurred expenses of $ 0.5 million and $ 0.9 million for various professional services, $ 0.6 million and $ 1.4 million for compensation and benefits for UTIS manufacturing employees subsequent to the fire, an immaterial amount and $ 0.3 million for expenses related to obligations under our manufacturing facility lease agreement and an immaterial amount and $ 0.2 million of inventory charges for the three and six months ended June 30, 2022.

We recognized fixed asset write-offs and inventory charges of $ 0.9 million and $ 0.3 million, respectively, related to property destroyed in the fire for the for the six months ended June 30, 2021.

Additionally, we recognized a $ 0.5 million contingent liability pertaining to our obligations for the fire damage to the building in connection with the underlying lease agreement.

We incurred $ 1.1 million and $ 1.6 million of fees for various professional services for the three and six months ended June 30, 2021, respectively, in connection with the assessment of the fire and the efforts to rebuild and resume operations.

Further, we incurred $ 0.6 million and $ 0.8 million of compensation and benefits for UTIS manufacturing employees, subsequent to the fire, for the three and six months ended June 30, 2021.

In connection with the UTIS fire, we recognized anticipated insurance recoveries of $ 0.4 million and $ 1.5 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees, less the applicable $ 0.3 million deductible, for the three and six months ended June 30, 2021, respectively.

In connection with the UTIS fire, we recognized insurance recoveries of $ 1.6 million and $ 6.6 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees for the three and nine months ended September 30, 2022, respectively.

We incurred $ 0.4 million and $ 1.3 million for various professional services for the three and nine months ended September 30, 2022, respectively, in connection with the assessment of the fire and the efforts to rebuild and resume operations.

Further, we incurred $ 0.6 million and $ 1.9 million for compensation and benefits for UTIS manufacturing employees subsequent to the fire for the three and nine months ended September 30, 2022, respectively.

We recognized fixed asset write-offs and inventory charges of $ 0.9 million and $ 0.4 million, respectively, related to property destroyed in the fire for the nine months ended September 30, 2021.

Additionally, we recognized a $ 4.7 million contingent liability pertaining to damage to nearby property and a $ 0.5 million contingent liability pertaining to our obligations for the fire damage to the building in connection with the underlying lease agreement.

We incurred $ 0.6 million and $ 2.2 million of fees for various professional services for the three and nine months ended September 30, 2021, respectively, in connection with the assessment of the fire and the efforts to rebuild and resume operations.

Further, we incurred $ 0.6 million and $ 1.5 million of compensation and benefits for UTIS manufacturing employees, subsequent to the fire, for the three and nine months ended September 30, 2021, respectively.

In connection with the UTIS fire, we recognized insurance recoveries of $ 5.0 million and $ 6.5 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees, less the applicable $ 0.3 million deductible, for the three and nine months ended September 30, 2021, respectively.

Interest Expense, Net

The components of “Interest expense, net” line item in the condensed consolidated statements of operations, were as follows:

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Interest on revolving credit facility $ 2,831 $ — $ 5,014 $ 106

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In April 2022, we paid $ 1.3 million of the holdback in exchange for a 6-month extension of the holdback period.

In October 2022, we paid back the remaining of the holdback, less an immaterial amount for claims.

Substantially all of our $ 190.0 million in borrowings under our existing credit facility in October 2021 were used to fund the transaction, with the remaining amounts being used for general corporate purposes.

3 unchanged sentences

The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the Silicone Engineering acquisition been completed as of January 1, 2020 and should not be taken as indicative of our future consolidated results of operations.

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2021 June 30, 2021

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2021 September 30, 2021

Net sales $ 248,679 $ 733,404

Net income $ 26,419 $ 88,271

Merger Agreement with DuPont

Terminated Merger Agreement with DuPont

On November 1, 2021, we entered into a definitive merger agreement to be acquired by DuPont de Nemours, Inc.

(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.

The merger agreement provided 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 transaction is expected to close in the third quarter of 2022, subject to the satisfaction of other customary closing conditions, including receipt of certain regulatory approvals.

The merger agreement provided both Rogers Corporation and DuPont with a right to terminate the merger agreement if the merger had not closed on or before November 1, 2022.

Consummation of the merger was subject to various customary closing conditions, including regulatory approval by the State Administration for Market Regulation of China (SAMR).

As of November 1, 2022, the parties had not received regulatory approval from SAMR.

On November 1, 2022, the Company received from DuPont a notice of termination of the merger agreement.

Pursuant to the terms of the merger agreement, the Company received a regulatory termination fee from DuPont in the amount of $ 162.5 million, before taxes and transaction-related fees.

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-Q

Item 1. Financial Statements