Rogers Corporation Announces Further Actions To Streamline Operations And Drive Margin Improvement

Rhea-AI Summary

Rogers (NYSE: ROG) announced plans to streamline operations and improve margins by consolidating advanced circuit materials manufacturing. The company will cease operations at its Evergem, Belgium factory by mid-2025, shifting production to facilities in China and the U.S. This move is projected to enhance annual operating profit by $7 to $9 million. However, the process will incur charges ranging from $18 to $28 million, including employee severance and shutdown expenses. The restructuring aims to boost customer service, factory utilization, and cost efficiency.

Positive

• Projected annual operating profit improvement of $7 to $9 million.
• Enhanced customer service levels.
• Increased factory utilization rates.
• Lower future operational costs.
• Increased profit margins.

Negative

• Expected charges of $18 to $28 million for employee severance and shutdown expenses.
• Potential disruption for customers during the transition period.
• Uncertainty for employees affected by the shutdown.

Insights

Financial Analyst

Rogers Corporation's decision to consolidate its advanced circuit materials manufacturing to locations in China and the United States is aimed at improving operational efficiency and increasing margins. The projected annual improvement in operating profit between $7 to $9 million is a significant positive outcome. However, the anticipated total charges of $18 to $28 million for employee severance and related shutdown expenses need to be weighed against these gains.

From a short-term perspective, investors should be aware of the possible impact on earnings due to these charges. Nevertheless, in the long term, the company aims to benefit from improved factory utilization, lower costs and enhanced customer service levels, which could drive profitability and potentially enhance shareholder value.

Overall, this move aligns with industry norms where companies continually optimize their global manufacturing footprints to align with shifting customer demands and cost structures.

Market Research Analyst

The reorganization of manufacturing operations indicates Rogers Corporation's proactive approach to adapting to market trends. The shift in demand for high-frequency circuit materials to regions such as China and the U.S. is a key factor in this decision. By realigning its production, Rogers is positioning itself closer to its customer base, which is likely to enhance customer satisfaction and service.

This strategic move also suggests a focus on regions with potentially lower production costs and higher market growth potential, which can be beneficial in terms of competitiveness and market positioning.

Investors should recognize this as an effort to stay agile in response to changing market dynamics, which is important for long-term sustainability and growth.

Operations Expert

Consolidating manufacturing operations is a common strategic move to improve operational efficiency. For Rogers Corporation, closing the Evergem, Belgium site and centralizing operations in China and the U.S. should lead to better capacity utilization and cost savings. These regions are already part of their existing footprint, meaning they have established infrastructures and processes in place, which can help streamline the transition.

However, it's essential to consider the implementation risks, such as potential disruptions during the transition period and the impact on employees. Effective management of these risks is important to realizing the anticipated benefits.

Advanced Circuit Materials Manufacturing Operations To Be Consolidated

CHANDLER, Ariz.--(BUSINESS WIRE)-- Rogers Corporation (NYSE: ROG) (“Rogers”) announced today plans to drive further operational efficiency and margin improvement. Rogers intends to wind down manufacturing of advanced circuit materials and other related activities at its Evergem, Belgium factory by mid-2025. Rogers will continue to support its advanced circuit materials customers through its existing footprint in China and the United States.

These actions are expected to improve operating profit between $7 to $9 million annually, once fully implemented. To achieve these savings the Company expects to incur total charges in the range of $18 to $28 million, comprised of employee severance and related shutdown expenses.

“Providing high levels of support to our customers, in the regions they operate, is at the core of our global operations footprint strategy,” said Colin Gouveia, Rogers' President and CEO. “As customer demand for our high frequency circuit materials continues to shift to other regions, we are adjusting our manufacturing operations in response. These intended actions will improve customer service levels, drive higher factory utilization rates, lower future costs, and increase margins. We are committed to treating all affected employees fairly and respectfully.”

About Rogers Corporation

Rogers Corporation (NYSE:ROG) is a global leader in engineered materials to power, protect and connect our world. Rogers delivers innovative solutions to help our customers solve their toughest material challenges. Rogers’ advanced electronic and elastomeric materials are used in applications for EV/HEV, automotive safety and radar systems, mobile devices, renewable energy, wireless infrastructure, energy-efficient motor drives, industrial equipment and more. Headquartered in Chandler, Arizona, Rogers operates manufacturing facilities in the United States, Asia and Europe, with sales offices worldwide. For more information, visit www.rogerscorp.com.

Safe Harbor Statement

Statements included in this release that are not a description of historical facts are forward-looking statements. Words or phrases such as “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” or similar expressions are intended to identify forward-looking statements, and are based on Rogers’ current beliefs and expectations. This release contains forward-looking statements regarding our plans, objectives, outlook, goals, strategies, future events, future net sales or performance, capital expenditures, future restructuring, plans or intentions relating to expansions, business trends and other information that is not historical information, including our estimates of future operating profit improvements expected from our planned wind-down of activities at our Evergem, Belgium factory. All forward-looking statements are based upon information available to us on the date of this release and are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from those indicated by the forward-looking statements, including the uncertainty associated with the actual charges that will be incurred in connection with our planned wind-down of activities at our Evergem, Belgium factory. For additional information about the risks, uncertainties, and other factors that may affect our business, please see our most recent annual report on Form 10-K and any subsequent reports filed with the Securities and Exchange Commission, including quarterly reports on Form 10-Q. Rogers Corporation assumes no responsibility to update any forward-looking statements contained herein except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606084192/en/

Media Contact:

Amy Kweder

Senior Director, Corporate Communications

Phone: 480.203.0058

Email: amy.kweder@rogerscorporation.com

Investor Contact:

Steve Haymore

Senior Director, Investor Relations

Phone: 480.917.6026

Email: stephen.haymore@rogerscorporation.com

Source: Rogers Corporation

FAQ

What changes did Rogers (ROG) announce in their latest press release?

Rogers announced plans to consolidate advanced circuit materials manufacturing, ceasing operations at their Evergem, Belgium factory by mid-2025.

How much is Rogers (ROG) expected to improve their annual operating profit?

Rogers expects to improve their annual operating profit by $7 to $9 million through these changes.

What costs will Rogers (ROG) incur due to the consolidation?

Rogers expects to incur charges ranging from $18 to $28 million for employee severance and shutdown expenses.

Where will Rogers (ROG) continue to support their advanced circuit materials customers?

Rogers will continue to support their advanced circuit materials customers through their existing facilities in China and the United States.

When will the manufacturing halt at Rogers 's (ROG) Evergem, Belgium facility take place?

The manufacturing halt at Rogers 's Evergem, Belgium factory is planned for mid-2025.