Rogers Corporation CAPEX surged on 73.1% and Revenue increased on 7.1%
02/20/2019 • About Rogers Corporation (
$ROG) • By InTwits
Rogers Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rogers Corporation is a growth stock: 2018 revenue growth was 7.1%, 5 year revenue CAGR was 10.3% at 2018 ROIC 11.3%
- Rogers Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 13.3%.
- CAPEX is quite volatile: $47m in 2018, $27m in 2017, $18m in 2016, $25m in 2015, $29m in 2014
- In the last 5 years the company invested considerably less than D&A: $146m vs. $192m
- The company has business model with average profitability: ROIC is 11.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.4x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Rogers Corporation's Revenue increased on 7.1%. Revenue growth showed small slowdown in 18Q4 - it was 6.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018.
Gross Margin decreased on 3.4 pp from 38.8% to 35.4% in 2018. SG&A as a % of Revenue decreased slightly on 0.83 pp from 19.5% to 18.7% in 2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018. During 2014-2018 SBC as a % of Revenue topped in 2016 at 1.7% and was declining since that time.
Net Income margin showed almost no change in 2018. During 2014-2018 Net Income margin bottomed in 2015 at 7.2% and was growing since that time. The efficient tax rate was 20.7% in 2018 while the average for the last five years was 33.2%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.4% in 2018. The company showed small growth in CAPEX/Revenue of 1.5 pp from 3.9% in 2015 to 5.4% in 2018. For the last three years the average CAPEX/Revenue was 3.8%. During 2014-2018 CAPEX as a % of Revenue bottomed in 2016 at 2.8% and was growing since that time.
Accounts receivable as a % of Revenue decreased slightly on 0.67 pp from 17.1% to 16.5% in 2018. Inventories as a % of Revenue increased slightly on 1.4 pp from 13.7% to 15.1% in 2018. Accounts payable as a % of Revenue showed almost no change in 2018.
Rogers Corporation has spent
$78m on M&A in 2018 which accounts for 8.9% of revenue.
Return on investment
The company operates at low ROIC (11.3%) and ROE (10.9%). ROIC decreased on 3.3 pp from 14.5% to 11.3% in 2018. ROE decreased slightly on 0.62 pp from 11.5% to 10.9% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 1.4x. Net Debt / EBITDA jumped on 0.7x from -0.3x to 0.4x in 2018. Debt surged on 74.0% while cash decreased on 7.4%.
Rogers Corporation has no short term refinancing risk: cash is higher than short term debt (39,937.6%).
Valuation and dividends
The company's trades at EV/EBITDA 17.6x and P/E 31.9x.
Management team
Rogers Corporation's CEO is Bruce D Hoechner. Bruce D Hoechner is a founder and has 7 years tenure with the company. CEO total compensation was
$3,673,711 in 2018 which included
$690,817 salary. The company's CFO is Michael M Ludwig. Michael M Ludwig has 0 years tenure at the company.
1.4% of the company is owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 3,700 employees. The number of employees increased on 8.8%. Average revenue per employee in 2018 was
$237,592 and it decreased slightly on 1.6%.
Financial and operational results
FY ended 12/31/2018
Rogers Corporation ($ROG) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 610.9 | 641.4 | 656.3 | 821.0 | 879.1 | 7.1% |
| Gross Profit | 234.8 | 235.4 | 249.5 | 318.6 | 310.8 | -2.4% |
| SG&A | 125.2 | 131.5 | 136.3 | 160.0 | 164.0 | 2.5% |
| EBITDA | 107.5 | 110.3 | 121.7 | 174.9 | 162.8 | -6.9% |
| EBIT | 81.2 | 76.3 | 83.9 | 130.8 | 112.7 | -13.8% |
| Tax | 27.8 | 19.9 | 34.0 | 52.5 | 22.9 | -56.3% |
| Net Income | 53.4 | 46.3 | 48.3 | 80.5 | 87.7 | 8.9% |
| Stock Based Compensation | 7.5 | 9.6 | 11.3 | 11.8 | 11.2 | -5.0% |
Balance Sheet
|
|---|
| Cash | 237.4 | 204.6 | 227.8 | 181.2 | 167.7 | -7.4% |
| Accounts Receivable | 99.1 | 101.4 | 119.6 | 140.6 | 144.6 | 2.9% |
| Inventory | 76.8 | 91.8 | 91.1 | 112.6 | 132.6 | 17.8% |
| Accounts Payable | 20.0 | 22.3 | 28.4 | 36.1 | 40.3 | 11.6% |
| Short Term Debt | 35.7 | 3.3 | 4.0 | 0.6 | 0.4 | -27.5% |
| Long Term Debt | 25.0 | 173.6 | 235.9 | 131.0 | 228.5 | 74.4% |
Cash flow
|
|---|
| Capex | 28.8 | 24.8 | 18.1 | 27.2 | 47.1 | 73.1% |
| Acquisitions | | 158.4 | 133.9 | 60.2 | 78.0 | 29.5% |
Ratios
|
|---|
| Revenue growth | 13.7% | 5.0% | 2.3% | 25.1% | 7.1% | |
| EBITDA growth | 42.1% | 2.6% | 10.3% | 43.7% | -6.9% | |
|
|---|
| Gross Margin | 38.4% | 36.7% | 38.0% | 38.8% | 35.4% | -3.4% |
| EBITDA Margin | 17.6% | 17.2% | 18.5% | 21.3% | 18.5% | -2.8% |
| EBIT Margin | 13.3% | 11.9% | 12.8% | 15.9% | 12.8% | -3.1% |
| SG&A, % of revenue | 20.5% | 20.5% | 20.8% | 19.5% | 18.7% | -0.8% |
| SBC, % of revenue | 1.2% | 1.5% | 1.7% | 1.4% | 1.3% | -0.2% |
| Net Income Margin | 8.7% | 7.2% | 7.4% | 9.8% | 10.0% | 0.2% |
| CAPEX, % of revenue | 4.7% | 3.9% | 2.8% | 3.3% | 5.4% | 2.0% |
|
|---|
| ROIC | 13.1% | 11.0% | 10.1% | 14.5% | 11.3% | -3.3% |
| ROE | 9.3% | 7.9% | 7.9% | 11.5% | 10.9% | -0.6% |
| Net Debt/EBITDA | -1.6x | -0.3x | 0.1x | -0.3x | 0.4x | 0.7x |
People
|
|---|
| Insider ownership | 1.4% | 1.4% | 1.4% | 1.4% | 1.4% | 0.0% |
| Employees | 2,800 | 2,800 | 3,100 | 3,400 | 3,700 | 8.8% |
| Revenue/Employee, th. $ | 218 | 229 | 212 | 241 | 238 | -1.6% |
Rogers Corporation ($ROG) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 215 | 215 | 227 | 223 | | 5.3% | 6.6% | 9.7% | 6.7% |
| EBITDA | 42 | 36 | 43 | 42 | | -15.0% | -16.4% | -14.8% | 36.6% |
| Net Income | 26 | 17 | 20 | 24 | | -3.3% | -17.1% | -22.7% | 249.4% |
Balance Sheet
|
|---|
| Cash | 173 | 175 | 150 | 168 | | -7.0% | -1.5% | -1.0% | -7.4% |
| Short Term Debt | 1 | 1 | 0 | 0 | | 69.7% | 56.7% | 9.3% | -27.5% |
| Long Term Debt | 131 | 131 | 233 | 228 | | -45.7% | -31.5% | 78.0% | 74.4% |
Ratios
|
|---|
| Gross Margin | 35.7% | 35.7% | 34.9% | 35.2% | | -3.7% | -4.3% | -4.9% | -1.0% |
| EBITDA Margin | 19.6% | 16.9% | 18.9% | 18.6% | | -4.7% | -4.6% | -5.4% | 4.1% |
| Net Income Margin | 12.2% | 8.1% | 8.7% | 11.0% | | -1.1% | -2.3% | -3.6% | 7.6% |
Peers in Electronic Components
Below you can find Rogers Corporation benchmarking vs. other companies in Electronic Components industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| |
|---|
| Median (22 companies) | | -5.9% | 1.1% | 7.7% | 16.6% |
|---|
| Rogers Corporation ($ROG) | | 5.0% | 2.3% | 25.1% | 7.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 31.7% | 36.6% | 33.7% | 34.9% | 37.6% |
|---|
| Rogers Corporation ($ROG) | 38.4% | 36.7% | 38.0% | 38.8% | 35.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 8.6% | 11.9% | 13.6% | 8.7% | 9.3% |
|---|
| Rogers Corporation ($ROG) | 17.6% | 17.2% | 18.5% | 21.3% | 18.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 3.9% | 2.7% | 3.4% | 5.1% | 3.8% |
|---|
| Rogers Corporation ($ROG) | 4.7% | 3.9% | 2.8% | 3.3% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| |
|---|
| Median (22 companies) | 6.8% | 5.8% | 4.7% | 6.0% | 7.8% |
|---|
| Rogers Corporation ($ROG) | 13.1% | 11.0% | 10.1% | 14.5% | 11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| |
|---|
| Median (14 companies) | -0.6x | -0.1x | -0.5x | -0.1x | 0.7x |
|---|
| Rogers Corporation ($ROG) | -1.6x | -0.3x | 0.1x | -0.3x | 0.4x |
