What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-02-22 · 65 added, 64 removed, 143 unchanged (47% 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:

• 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;

• failure to successfully execute on the Company’s long-term growth strategy as a standalone company;

• 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;

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• business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises;

• the impact of sanctions, export controls and other foreign asset or investment restriction;

• failure to realize, or delays in the realization of, anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses;

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• disruptions in, or breaches of, our information technology systems;

• our terminated merger with DuPont de Nemours, Inc.

(DuPont), 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, including as a result of litigation.

Our forward-looking statements are expressly qualified by these cautionary statements, which you should consider carefully, along with the risks discussed under the headings “Item 1A.

Risk Factors” and “Item 7.

Management’s Discussion and Analysis of Results of Operations and Financial Position” and elsewhere in this report, any of which could cause actual results to differ materially from historical results or anticipated results.

Management’s Discussion and Analysis of Results of Operations and Financial Position” and elsewhere in this report, any of which could cause actual results to differ

materially from historical results or anticipated results.

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.

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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 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.

Our growth strategy is based upon the following principles:

Our growth and profitability strategy is based upon the following principles:

(1) market-driven organization, (2) innovation leadership, (3) synergistic mergers and acquisitions, and (4) operational excellence.

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

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.

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, clean energy and connected devices.

Our priorities in executing this strategy are focused on driving near-term improvements to profitability and improving the growth outlook for the Company over the next several years by further strengthening our focus on commercial activities, expanding capacity to meet customer demand and driving innovation.

As a market-driven organization, we are focused on capitalizing on growth opportunities in 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, the advancement of communication systems in aerospace and defense and the growth of 5G smartphones in the portable electronics industry.

In addition to our focus on these markets, we sell into a variety of other markets including general industrial, clean energy, wireless infrastructure and mass transit.

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, 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.

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.

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

Through this strategy we expect to be able to drive further commercial wins, which provide the potential for higher growth in the future.

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

Our operational excellence efforts are focused on driving significant near-term improvement in our profitability.

These efforts include focusing on adding strategic new hires and improving processes and tools to achieve better performance.

We have also taken specific cost improvement actions in the fourth quarter of 2022 and first quarter of 2023 that will benefit subsequent quarters.

These actions include optimizing our manufacturing footprint, divesting non-core product lines and reduction to manufacturing and corporate employees.

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

We seek to enhance our operational and financial performance by investing in research and development, manufacturing and materials efficiencies, and new product initiatives that respond to the needs of our customers.

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.

If we are able to successfully execute on our strategy, we see an opportunity to return to historical levels of profitability and accelerate revenue growth, relative to 2022, over the next several years, led by organic growth and complemented by targeted acquisitions.

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

The fastest growing market opportunity is expected to be EV/HEV where third-party analysis projects that the market will grow at compound annual growth rate of more than 25% over the next several years.

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

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

Each of these markets is expected to contribute to our growth strategy.

Terminated Merger Agreement 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.

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 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.

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 incurred a transaction-related fee of $20.4 million.

COVID-19 Update

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.

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.

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.

Surges in COVID-19 cases in China resulted in lockdowns as well as various restrictions.

These measures have not disrupted our manufacturing efforts, however, they are causing logistics challenges.

Even since China ended its zero COVID policy in late 2022, although a significant percentage of our employees in Suzhou, China were diagnosed with COVID, our manufacturing was not materially disrupted and to date we have received no reports of permanent disability or death among our employees.

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.

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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.

AES products are sold globally to converters, fabricators, distributors and original equipment manufacturers (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.

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, SpeedWave ® Prepreg, RO4400™/RO4400T™ Series and Radix™.

As of December 31, 2022, our AES 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 ® , 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;

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

As of December 31, 2022, our EMS operating segment had manufacturing and administrative facilities in Rogers, Connecticut;

Woodstock, Connecticut;

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Blackburn, England;

Ansan, South Korea;

Siheung, South Korea;

and Suzhou, China.

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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.

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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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.

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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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.

As part of this technology commitment, we have a Rogers Innovation Center co-located at Northeastern University in Burlington, Massachusetts, as well as Rogers Innovation Centers at our facilities in Chandler, Arizona, Eschenbach, Germany and Suzhou, China.

Eschenbach, Germany;

and Suzhou, China.

Our Innovation Centers focus on early stages of technical and commercial development of new high-tech materials solutions in an effort to align with market direction and needs.

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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.

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

In 2022, 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, 2022, we employed approximately 3,800 people, of whom approximately 1,350 were employed in the U.S., 1,300 in Europe and 1,100 in China.

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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.

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

Health and Safety

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

Promoting the health and safety of our employees is one of our most important objectives.

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.

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

As part of our efforts to promote 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.

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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.

Diversity, Equity and Inclusion

We continue to advance efforts to improve diversity, equity 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, equity and inclusion will make the Company a more desirable workplace and will lead to improved business performance.

Information About Our Executive Officers

Our executive officers as of February 22, 2022 were as follows:

Our executive officers as of March 1, 2023 were as follows:

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

Hoechner 62 President and Chief Executive Officer, Director, Principal Executive Officer 2011

Colin Gouveia 59 President and Chief Executive Officer, Director, Principal Executive Officer 2022 Senior Vice President and General Manager of Elastomeric Material Solutions June 2019 to December 2022;Vice President and General Manager, Eastman Chemical Co., from December 2014 to June 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;

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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.

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 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

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

Brian Larabee 56 Vice President and General Manager of Elastomeric Material Solutions 2022 Senior Director, Product Management from February 2021 to December 2022;

Director, EMS New Product and Business Development from November 2016 to February 2021.

Larry Schmid 61 Senior Vice President, Global Operations and Supply Chain 2023 President, Pilko & Associates, from 2020 to 2023;

Global Manufacturing & Engineering Operations Director, The Dow Chemical Company, Performance Materials & Coatings, from 2018 to 2019;

Global Operations Director, The Dow Chemical Company, Dow Performance Silicones, from 2016 to 2018.

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