What changed in this filing

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Item 1. Business

2024-02-27 compared with 2023-03-01 · 52 added, 83 removed, 125 unchanged (52% of the section changed)

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Forward-Looking Statements

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.

Such statements are generally accompanied by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “seek,” “target” or similar expressions that convey uncertainty as to future events or outcomes.

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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, 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;

• failure to capitalize on, volatility within, or other adverse changes with respect to our growth drivers, such as delays in adoption or implementation of new technologies;

• failure to successfully execute on our long-term growth strategy as a standalone company;

• uncertain business, economic and political conditions in the 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.

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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 terminated merger with 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 Annual Report on Form 10-K, 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.

Company Background and Strategy

Company Background

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

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.

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

We are headquartered in Chandler, Arizona.

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.

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, 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 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.

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 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 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.

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.

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.

Operating Segments

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 internet protocol (IP) infrastructure) markets.

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

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

curamik ® , ROLINX ® , RO4000 ® Series, RO3000 ® Series, RT/duroid ® , CLTE Series ® , TMM ® , AD Series ® , DiClad ® Series, CuClad ® Series, Kappa ® , COOLSPAN ® , TC Series ® , IsoClad ® Series, MAGTREX ® , IM Series™, 2929 Bondply, SpeedWave ® Prepreg, RO4400™/RO4400T™ Series and Radix™.

As of December 31, 2023, our AES operating segment had manufacturing and administrative facilities in Chandler, Arizona;

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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 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;

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We also own 50% of two unconsolidated joint ventures:

(1) Rogers Inoac Corporation (RIC), a joint venture established in Japan to design, develop, manufacture and sell PORON ® products predominantly for the Japanese market and (2) Rogers INOAC Suzhou Corporation (RIS), a joint venture established in China to design, develop, manufacture and sell PORON ® products primarily for RIC customers in various Asian countries.

(1) RIC, a joint venture established in Japan to design, develop, manufacture and sell PORON ® products predominantly for the Japanese market and (2) RIS, a joint venture established in China to design, develop, manufacture and sell PORON ® products primarily for RIC customers in various Asian countries.

INOAC Corporation owns the remaining 50% of both RIC and RIS.

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

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

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.

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

Consummation of the merger was subject to various customary closing conditions, including regulatory approval by the SAMR, and either party had the right to terminate the merger agreement if the merger had not closed on or before November 1, 2022.

As of November 1, 2022, the parties had not received regulatory approval from SAMR and on that date, DuPont issued a notice of termination of the merger agreement.

Pursuant to the terms of the merger agreement, we received a regulatory termination fee in the amount of $162.5 million, before taxes, and incurred a transaction-related fee of $20.4 million.

Sales and Competition

We sell our materials and components primarily through direct sales channels positioned near major concentrations of our customers in North America, Europe and Asia.

We sold to approximately 3,500 customers worldwide in 2022, primarily OEMs and component suppliers.

We sold to approximately 3,200 customers worldwide in 2023, consisting primarily of OEMs and component suppliers.

No individual customer represented more than 10% of our total net sales for 2023;

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

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 and silicone materials.

for our AES operating segment, copper, including copper foil, polymer, polytetrafluoroethylene, fiberglass materials, ceramic and brazing paste materials, including silver, and various fillers and flame retardants;

and for our EMS operating segment, polyol, isocyanates, polytetrafluoroethylene, 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 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.

As of December 31, 2023, we employed approximately 3,300 people, of whom approximately 1,200 were employed in North America, 1,100 in the EMEA region and 1,000 in APAC region.

Approximately 300 of our domestic employees are covered by collective bargaining agreements or by specific labor agreements and approximately 600 of our European employees are covered by work council arrangements.

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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 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.

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.

To promote awareness and accountability, our vision is clear:

Everyone, Everywhere goes home safely Every Day.

Our commitment is to put safety first and we ask for everyone’s commitment to never compromise their safety or the safety of others.

Employment Experience

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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.

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

Information About Our Executive Officers

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

Our executive officers as of February 26, 2024 were as follows:

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

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.

Colin Gouveia 60 President and Chief Executive Officer, Director, Principal Executive Officer 2022 Senior Vice President and General Manager of EMS from June 2019 to December 2022;

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

Ramakumar Mayampurath 60 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.

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

Brian Larabee 57 Senior Vice President and General Manager of Elastomeric Material Solutions 2023 Vice President and General Manager of EMS from November 2022 to November 2023;

Senior Director, EMS 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.

Jeff Tsao 45 Senior Vice President and General Manager of Advanced Electronics Solutions, Senior Vice President of Asia 2023 Vice President and General Manager of AES from September 2019 to November 2023;

Vice President of Sales and Marketing of PES from December 2018 to September 2019;

Global Sales Director of PES from August 2017 to November 2018.

Larry Schmid 62 Senior Vice President, Global Operations and Supply Chain 2023 President, Pilko & Associates, from January 2020 to January 2023;

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

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

Jessica Morton 44 Vice President, General Counsel and Corporate Secretary 2023 Associate General Counsel and Assistant Secretary of FMC Corporation from April 2021 to March 2023;

Assistant General Counsel and Assistant Secretary of FMC Corporation from April 2019 to March 2021;

Assistant General Counsel of FMC Corporation from July 2016 to March 2019.

Griffin Gappert 50 Vice President and Chief Technology Officer 2023 Global Head of Innovation for Automotive OEMs at Henkel from April 2021 to August 2023;

Vice President of Innovation and Technical Customer Service at Henkel from January 2020 to April 2021;

Vice President of Product Development and Technical Customer Service at Henkel from June 2018 to January 2020;

Global Technical Director of Industrial Supplies at Ashland Inc from June 2016 to May 2018.

Michael Webb 56 Senior Vice President and Chief Administrative Officer 2023 Executive Vice President - Chief Human Resources Officer and Chief Administrative Officer at Nutrien from January 2018 to May 2022;

Senior Vice President, Human Resources at Agrium from January 2014 to January 2018;

Senior Vice President of Human Resources at HSBC from August 2010 to January 2014.

Available Information

We make available on our website (http://www.rogerscorp.com), or through a link posted on our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, reports filed by our executive officers and directors pursuant to Section 16 of the Exchange Act, and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).

We make available on our website (http://www.rogerscorp.com), or through a link posted on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, reports filed by our executive officers and directors pursuant to Section 16 of the Exchange Act, and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

In addition, the SEC maintains an internet site that contains these reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (http://www.sec.gov).

We also make available on our website the charters for our Audit Committee, Compensation and Organization Committee, and Nominating and Governance Committee, in addition to our Corporate Governance Guidelines, Bylaws, Code of Business Ethics, and Compensation Recovery Policy.

Our website is not incorporated into or a part of this Form 10-K.

Our website is not incorporated into or a part of this Annual Report on Form 10-K.

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