What changed in this filing

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Item 1A. Risk Factors

2023-03-01 compared with 2022-02-22 · 29 added, 42 removed, 183 unchanged (28% of the section changed)

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Management’s Discussion and Analysis of Results of Operations and Financial Position,” when evaluating an investment in our capital stock.

Risks Relating to the DuPont Merger

We may not be able to complete the proposed merger with DuPont and we may incur substantial costs that may adversely affect our financial results and operations and the market price of our capital stock.

Adoption of the merger agreement is subject to customary closing conditions, including the receipt of foreign and domestic regulatory approvals, which may not be fulfilled in a timely manner or at all, and accordingly, the merger may not be completed.

In addition, the parties can mutually decide to terminate the merger agreement, or Rogers or DuPont may unilaterally elect to terminate the merger agreement under certain circumstances.

If the merger agreement is terminated under certain circumstances, we may be required to pay a $135.0 million termination fee to DuPont.

If the proposed merger with DuPont is not completed, the price of our capital stock may decline to the extent that the current market price of our capital stock reflects a market assumption that the merger will be completed.

Additionally, if the merger is not completed, we may experience negative reactions from financial markets and our suppliers, customers and employees.

Each of these factors may adversely affect the trading price of our capital stock, as well as our results and operations and financial condition.

Several lawsuits relating to the merger have been filed, as discussed further in “Item 3.

Legal Proceedings.” Rogers and DuPont may be subject to additional lawsuits challenging the merger, and adverse rulings in these lawsuits may delay or prevent the merger from being completed or require Rogers or DuPont to incur significant costs to defend or settle these lawsuits.

Any delay in completing the merger could cause us not to realize, or be delayed in realizing, some or all of the benefits that we expect to achieve if the merger is successfully completed within the anticipated time frame.

While the proposed merger is pending, we will be subject to contractual restrictions that could adversely affect our business and operations.

The merger agreement with DuPont restricts us from taking specified actions without DuPont’s consent until the merger is completed or the merger agreement is terminated, including making certain significant acquisitions or investments, incurring certain indebtedness, making non-ordinary course capital expenditures in excess of certain thresholds, amending or modifying certain material contracts, divesting certain assets, and making certain non-ordinary course changes to personnel and employee compensation.

These restrictions, and others more fully described in the merger agreement, may affect our ability to execute our business strategies and attain our financial and other goals and may impact our financial condition, results of operations and cash flows.

Uncertainties related to the merger could adversely affect our businesses, sales and gross margins.

In response to the announcement of the merger or due to ongoing uncertainty about the merger, customers may delay or defer purchasing decisions or elect to switch to other suppliers.

In particular, prospective customers could be reluctant to purchase our products and services due to uncertainty about the direction of our offerings and willingness to support our products.

To the extent that the merger creates uncertainty among those persons and organizations contemplating purchases such that one large customer, or a significant group of smaller customers, delays, defers or changes purchases in connection with the planned merger, our revenues could be adversely affected.

We may make assurances to customers to address their uncertainty about the direction of our products and related support offerings, which may result in additional obligations.

In addition, the announcement of the merger may cause prospective customers to delay or defer purchasing decisions resulting in a decline in our net sales, which could have a significant impact on our results of operations and financial condition.

Our quarterly net sales and net income could be substantially below expectations of market analysts, potentially resulting in a decline in our stock price.

We may also experience negative reactions from the Company’s employees, suppliers, vendors, or regulators.

Additionally, matters relating to the merger will require substantial commitments of time and resources by our management and the expenditure of significant funds in the form of fees and expenses, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to us as an independent company.

Risks Relating to the COVID-19 Pandemic

The COVID-19 pandemic and global responsive measures have impacted our business and results of operations and could materially adversely affect our business, results of operations and financial position in future periods.

The COVID-19 pandemic continues to have global impacts and has resulted in governmental authorities implementing numerous responsive measures, such as travel bans and other restrictions, including quarantines, shelter-in-place and stay-home

orders, transportation disruptions, closures and shutdowns.

We maintain significant manufacturing and administrative operations in the U.S., China, Belgium, Germany, England, South Korea and Hungary, and each of these countries has been significantly affected by the outbreak and taken measures to try to contain it and to distribute vaccines as they are approved.

We maintain significant manufacturing and administrative operations in the U.S., China, Germany, Belgium, England, South Korea and Hungary, and each of these countries has been significantly affected by the outbreak and taken measures to try to contain it and to distribute vaccines as they are approved.

In particular, the recent end to ‘zero COVID’ policies in China may have unpredictable impacts on our operations, suppliers, and customers.

In recent months, a significant percentage of our employees in Suzhou, China were diagnosed with COVID, but to-date we have received no reports of permanent disability or death among our employees.

We have also modified our business practices in an effort to ensure business continuity while promoting continued employee health and well-being.

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We expect our net sales in foreign markets to continue to represent a substantial majority of our consolidated net sales.

We maintain significant manufacturing and administrative operations in China, Belgium, Germany, England, South Korea and Hungary, and approximately 60% of our employees were located outside the U.S.

We maintain significant manufacturing and administrative operations in China, Germany, Belgium, England, South Korea and Hungary, and approximately 63% of our employees were located outside the U.S.

as of December 31, 2022.

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In addition, our business has been, and may continue to be, adversely affected by the lack of development, or disruptions, of transportation or other critical infrastructure, including wireless infrastructure, in emerging markets.

If we are unable to successfully manage the risks associated with expanding our global business, or to

adequately manage operational fluctuations, it may materially adversely affect our business, results of operations and financial position.

If we are unable to successfully manage the risks associated with expanding our global business, or to adequately manage operational fluctuations, it may materially adversely affect our business, results of operations and financial position.

Deteriorating trade relations between the U.S.

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We strive to differentiate our products and secure long-term demand through our engagement with our customers to design in our materials and components as part of their product development processes.

The value of any design-in largely depends upon the decision of our customers to manufacture their products or systems in sufficient production quantities, the commercial success of the end product and the extent to which the design of our customers’ products or systems could accommodate substitution of competitor products.

A consistent failure to introduce new products in a timely manner, achieve design-ins or achieve market acceptance on commercially reasonable terms could materially adversely affect our business, results of operations and financial position.

The value of any design-in largely depends upon

the decision of our customers to manufacture their products or systems in sufficient production quantities, the commercial success of the end product and the extent to which the design of our customers’ products or systems could accommodate substitution of competitor products.

A consistent failure to introduce new products in a timely manner, achieve design wins or achieve market acceptance on commercially reasonable terms could materially adversely affect our business, results of operations and financial position.

The introduction of new products presents particularly significant business challenges in our business because product development commitments and expenditures must be made well in advance of product sales.

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Even if a system redesign is feasible, increased costs associated with such a redesign would decrease our profit margins, perhaps materially, if we could not effectively pass such costs along to our customers.

Further, it would likely result in

production and delivery delays, which could lead to lost sales and damage to our relationships with current and potential customers.

Further, it would likely result in production and delivery delays, which could lead to lost sales and damage to our relationships with current and potential customers.

We face intense global competition, which could reduce demand for our products or create additional pricing pressure on our products.

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If we are unable to maintain our competitive advantage for any reason, demand for our products may be materially reduced, which may adversely affect our business, results of operations and financial position.

Moreover, as OEMs, particularly in the electronics and automotive markets, seek cost reductions from their supply chains, our customers may make greater demands on us with regard to pricing and other contractual terms.

This may adversely affect our gross margins on certain products or exacerbate competition that we face which could ultimately result in lower potential sales.

We have engaged in transactions in the past and may in the future acquire or dispose of businesses, or engage in other transactions, which expose us to a variety of risks that could materially adversely affect our business operating results and financial position.

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We may spend a significant portion of available cash, incur substantial debt or issue equity securities, which would dilute current shareholders’ equity ownership, to pay for the acquisitions.

In addition, if we are unsuccessful in integrating any acquired company or business into our operations or if integration is more difficult than anticipated, we may experience disruptions that could harm our business and result in our failure to realize the anticipated benefits of the acquisitions.

benefits of the acquisitions.

In the case of divestitures, we may agree to indemnify acquiring parties for known or unknown liabilities arising from the businesses we are divesting.

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Competition for these personnel from other companies, academic institutions and government entities is intense, and our expected growth and future success will depend, in large part, upon our ability to attract and retain these individuals.

In addition, we have recently appointed a new Chief Executive Officer and have undergone other management changes as we execute on our growth strategy as a standalone company.

Our continued performance will depend in part on the success of our new leadership.

If we suffer loss or disruption to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our business could be seriously harmed.

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For instance, the COVID-19 pandemic and related quarantines and work and travel restrictions have disrupted, and may continue to disrupt, production of and demand for certain of our products.

Additionally, there was a fire at our UTIS manufacturing facility in Ansan, South Korea in early

February 2021, which resulted in extensive damage to the manufacturing site.

While some commercial operations resumed in late 2021, with the launch of a replacement production line at one of our Suzhou, China facilities, as we have not yet resumed commercial operations in South Korea.

The extent to which these events will affect our results of operations and financial position remains uncertain.

Additionally, there was a fire at our UTIS manufacturing facility in Ansan, South Korea in early February 2021, which resulted in extensive damage to the manufacturing site.

Commercial operations resumed in late 2021, with the launch of a replacement production line at one of our Suzhou, China facilities, and commercial production at our new location in Siheung, South Korea commenced in late-January 2023.

The extent to which these events will continue to affect our results of operations and financial position remains uncertain.

The third-party insurance coverage that we maintain will vary from time to time in both type and amount depending on cost, availability and our decisions regarding risk retention, and may be unavailable or insufficient to protect us against losses or disruptions.

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In addition, the processing and storage of certain information is increasingly subject to privacy and data security regulations, and many such regulations are country-specific.

The interpretation and application of data protection laws in the U.S., Europe, and elsewhere, including the EU General Data Protection Regulation and the California Consumer Privacy Act, are uncertain, evolving and may be inconsistent among jurisdictions.

evolving and may be inconsistent among jurisdictions.

Compliance with these various laws may be onerous and require us to incur substantial costs or to change our business practices in a manner that adversely affects our business, while failure to comply with such laws may subject us to substantial penalties.

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The defense and prosecution of intellectual property infringement suits are both costly and time consuming, even if the outcome is favorable to us.

If we are not successful in protecting our proprietary technology or if the protection afforded to us is

not sufficiently broad, our competitors may be able to manufacture and offer products substantially similar to our own, thereby reducing demand for our products and adversely affecting our results of operations and financial position.

If we are not successful in protecting our proprietary technology or if the protection afforded to us is not sufficiently broad, our competitors may be able to manufacture and offer products substantially similar to our own, thereby reducing demand for our products and adversely affecting our results of operations and financial position.

We may also be adversely affected by, and subject to increased competition as a result of, the normal expiration of our issued patents.

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Rogers Corporation and JPMorgan Chase Bank, N.A.

entered into an amendment to our credit agreement that provides for a a new benchmark interest rate to replace the discontinued LIBOR reference rates as necessary.

entered into an amendment to our credit agreement that provides for a new benchmark interest rate to replace the discontinued LIBOR reference rates as necessary.

There is a risk that this new reference rate may be higher than our projected future LIBOR interest rates, thereby causing the cost of our borrowings to increase.

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Any failure to comply with present or future environmental laws, rules and regulations could result in criminal and civil liabilities, fines, suspension of production or cessation of certain operations, any of which could have a material adverse effect on our business, results of operations and financial position.

For example, governmental authorities in the U.S.

and in other jurisdictions are increasingly focused on potential contamination resulting from the use of so-called “forever chemicals,” most notably per- and polyfluoroalkyl, substances (PFAS).

Products containing PFAS have been used in manufacturing, industrial, and consumer applications over many decades, including in some of our engineered materials and components.

In 2021, the Biden Administration announced a multi-agency plan to address PFAS contamination and the U.S.

Environmental Protection Agency released its PFAS Strategic Roadmap, which identified a comprehensive approach to addressing PFAS.

We may incur costs in connection with any obligations to transition away from the usage of PFAS-containing products, to dispose of PFAS-containing waste or to remediate any PFAS contamination, which could have a negative effect on our financial position, results of operations and cash flows.

In addition, some environmental laws impose liability, sometimes without fault, for investigating and/or cleaning up contamination on, or emanating from, properties currently or formerly owned, leased or operated by us, as well as for damages to property or natural resources and for personal injury arising out of such contamination.

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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 1A. Risk Factors