0000084748-25-000057
SEC filingNet sales decreased 5.3% to $202.8M, gross margin fell 250 bps to 31.6%, and impairment charges drove operating loss.
In Q2 2025, Rogers Corporation reported net sales of $202.8 million, a 5.3% decrease from $214.2 million in Q2 2024. The decline was primarily driven by lower volumes in the EV/HEV and wireless infrastructure markets, partially offset by growth in aerospace/defense and ADAS. Gross margin fell 250 basis points to 31.6% from 34.1%, due to utilization headwinds from reduced volumes and an unfavorable product mix. The company recorded an operating loss of 33.3% of sales, compared to a 5.3% operating margin in the prior year, largely because of $71.8 million in non-cash impairment charges related to the curamik reporting unit within the AES segment. Additional restructuring charges of $4.3 million from the wind-down of AES manufacturing in Belgium and workforce reductions further pressured margins. Net loss margin was 36.3%, versus a net income margin of 3.8% in the year-ago period. R&D expenses decreased 26.3% to $7.0 million, driven by cost savings from the exit of the Burlington Innovation Center.
Advanced Electronics Solutions (AES): Net sales fell 5.6% to $109.0 million. The segment experienced lower sales in wireless infrastructure (due to the completion of a key customer program) and EV/HEV markets, partially offset by growth in aerospace/defense and ADAS. Gross margin contracted to 28.3% from 31.2%, reflecting volume-related utilization headwinds and inventory reserve charges.
Elastomeric Material Solutions (EMS): Net sales also declined 5.6% to $89.4 million, driven by lower EV/HEV sales, though general industrial sales improved. Gross margin decreased to 35.2% from 37.7%, as unfavorable mix and lower volumes weighed on profitability.
Other: The non-core segment saw net sales increase 10.0% to $4.4 million, with gross margin rising to 36.4% from 35.0% on higher volumes.
The MD&A does not provide specific forward guidance for revenue or margins. Management's strategic priorities include capitalizing on growth in EV/HEV, ADAS, aerospace/defense, and renewable energy, while driving operational excellence through cost structure improvements and manufacturing optimization. The company expects capital spending of $30-40 million in 2025, funded by operations and existing credit. Liquidity remains adequate with $157.2 million in cash and equivalents, though $87.5 million is held overseas and considered indefinitely reinvested.
As of June 30, 2025, Rogers held $157.2M in cash and cash equivalents, a slight decrease from $159.8M at year-end 2024. The company had no outstanding borrowings under its $450M revolving credit facility (maturity March 2028), with only $1.3M in unamortized issuance costs. Total shareholders' equity stood at $1,206.7M, down from $1,251.6M at December 31, 2024, primarily due to a net loss of $75.0M and share repurchases of $28.1M, partially offset by a $51.4M increase in other comprehensive income. Inventory increased to $151.2M from $142.3M, driven by raw materials ($74.7M vs. $62.7M). Accounts receivable net was $141.6M, up from $135.3M.
The Notes disclose no material purchase commitments or contractual obligations beyond lease obligations. Total operating lease obligations were $23.7M (present value $23.7M) and finance lease obligations $9.5M (present value $9.5M). Asbestos-related liabilities totaled $57.3M (current $5.4M, non-current $51.9M), with corresponding insurance recoverables of $52.3M. Environmental remediation accrual was $0.7M for the Rogers, CT site. No other significant commitments were reported.
Rogers repurchased 425,990 shares for $28.1M in Q2 2025, leaving $76.1M remaining under the $200M program (original $100M plus $100M authorized in 2024). No dividends were paid. Capital expenditures totaled $17.7M in H1 2025 (4.5% of sales), down from $23.5M in H1 2024. The company made no debt repayments in 2025 (vs. $30M in H1 2024). No new debt was issued. The company's total net leverage ratio was below 2.75x, allowing dividend payments under the credit agreement.
For Q2 2025, AES segment net sales were $109.0M (down 5.6% YoY), EMS $89.4M (down 5.6%), and Other $4.4M (up 10%). Gross margin for AES was $30.9M (28.4% of sales), EMS $31.5M (35.2%), Other $1.6M (36.4%). AES incurred $71.8M in impairment charges (goodwill $67.3M, intangible $4.5M) related to the curamik reporting unit. Geographically, APAC contributed 40.9% of total sales ($82.9M), Americas 29.9% ($60.7M), and EMEA 29.2% ($59.2M). China was the largest single country at $61.1M (30.1% of total).
Operating cash flow (CFO) was $25.4M for the six months ended June 30, 2025, down 50.2% from $51.0M in the prior year. Despite a net loss of $75.0M (vs. net income of $15.9M in 2024), CFO remained positive due to non-cash adjustments: depreciation and amortization of $26.5M, equity compensation of $7.9M, and a $71.8M impairment charge partly offset by deferred tax benefits ($3.6M). Working capital changes were largely neutral: accounts receivable decreased $0.1M, inventories increased $2.8M, and accounts payable plus accrued expenses increased $6.2M. Net cash used in investing was $(3.4)M, with capital expenditures of $17.7M (down from $23.5M) and proceeds from asset sales of $13.4M. Financing activities used $(29.6)M, driven by $28.1M in share repurchases (up from $7.9M) and $0.8M debt repayment. No dividends were paid. The company's free cash flow is not explicitly stated, but CFO less capex would be $7.7M. Overall, CFO covered capex, but increased share repurchases consumed additional cash.