Rogers (ROG) Updates on Restructuring, Streamlining; Sees Savings Exceeding Initial Views
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Price: $126.55 +0.01%
Financial Fact:
Interest income (expense), net: -811K
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Interest income (expense), net: -811K
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Rogers Corporation (NYSE: ROG) updates on its planned restructuring and streamlining initiatives. Operating savings from recent efforts are expected to begin in the second quarter of 2012 and reach approximately $13 million of annualized savings by the fourth quarter of 2012, exceeding the earlier forecasted savings of $10 million.
As a result of the reorganization, product development, marketing and sales resources are now better aligned with the Company's growth businesses in Printed Circuit Materials, High Performance Foams and Power Electronics Solutions. Additional resources have been allocated to marketing and new business development activities to stimulate growth and expand revenue opportunities. The Company continues to pursue an active partnering and acquisition strategy for several of its core businesses.
Among the other improvement initiatives that concluded in the first quarter was the liquidation of the Company’s portfolio of auction rate securities, resulting in net proceeds of $25.4 million. In 2008, when the auction rate markets initially became illiquid, Rogers held $54.4 million of auction rate securities at par. Over the course of the past few years, it had redeemed $24.9 million of these securities, mostly at par. Since such redemptions have slowed with no clear path for full redemption over the next several years, and the rate of return on these securities being very low, the Company determined it would be best to liquidate the remaining balance now so the cash could be better utilized going forward. For example, the Company has used $10 million of the proceeds to accelerate funding of its defined benefit pension plan, which is expected to result in an annual savings of approximately $1.2 million.
Overall, these actions will result in one-time charges related to the cost savings initiatives of approximately $9.4 million, which will be included in first quarter results when the Company reports in early May 2012. These costs are primarily comprised of $5.7 million related to the early retirement and other staffing reductions and $3.2 million related to the liquidation of the auction rate securities. Excluding these charges, the annualized operating cost savings are estimated to be approximately $8.4 million in 2012 and $13 million in 2013.
As a result of the reorganization, product development, marketing and sales resources are now better aligned with the Company's growth businesses in Printed Circuit Materials, High Performance Foams and Power Electronics Solutions. Additional resources have been allocated to marketing and new business development activities to stimulate growth and expand revenue opportunities. The Company continues to pursue an active partnering and acquisition strategy for several of its core businesses.
Among the other improvement initiatives that concluded in the first quarter was the liquidation of the Company’s portfolio of auction rate securities, resulting in net proceeds of $25.4 million. In 2008, when the auction rate markets initially became illiquid, Rogers held $54.4 million of auction rate securities at par. Over the course of the past few years, it had redeemed $24.9 million of these securities, mostly at par. Since such redemptions have slowed with no clear path for full redemption over the next several years, and the rate of return on these securities being very low, the Company determined it would be best to liquidate the remaining balance now so the cash could be better utilized going forward. For example, the Company has used $10 million of the proceeds to accelerate funding of its defined benefit pension plan, which is expected to result in an annual savings of approximately $1.2 million.
Overall, these actions will result in one-time charges related to the cost savings initiatives of approximately $9.4 million, which will be included in first quarter results when the Company reports in early May 2012. These costs are primarily comprised of $5.7 million related to the early retirement and other staffing reductions and $3.2 million related to the liquidation of the auction rate securities. Excluding these charges, the annualized operating cost savings are estimated to be approximately $8.4 million in 2012 and $13 million in 2013.
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