þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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06-0513860
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I. R. S. Employer Identification No.)
|
|
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2225 W. Chandler Blvd., Chandler, Arizona
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85224-6155
|
(Address of Principal Executive Offices)
|
(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
|
||
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $1 Par Value
|
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New York Stock Exchange
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|
|
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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TABLE OF CONTENTS
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Part I
|
||
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
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Item 4.
|
Mine Safety Disclosures
|
|
Part II
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||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management’s Discussion and Analysis of Results of Operations and Financial Position
|
|
Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
|
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
|
|
Part III
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||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
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Principal Accountant Fees and Services
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|
Part IV
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||
Item 15.
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Exhibits, Financial Statement Schedules
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Item 16.
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Form 10-K Summary
|
|
|
Signatures
|
•
|
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;
|
•
|
uncertain business, economic and political conditions in the United States and abroad, particularly in China, South Korea, Germany, Hungary and Belgium, where we maintain significant manufacturing, sales or administrative operations;
|
•
|
the ongoing trade policy dispute between the United States and China, as well as adverse changes in trade policy, tariff regulation or other trade restrictions;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
our ability to develop innovative products and have them incorporated into end-user products and systems;
|
•
|
the extent to which end-user products and systems incorporating our products achieve commercial success;
|
•
|
the ability of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely manner;
|
•
|
intense global competition affecting both our existing products and products currently under development;
|
•
|
failure to realize, or delays in the realization of, anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses;
|
•
|
our ability to attract and retain management and skilled technical personnel;
|
•
|
our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights;
|
•
|
changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate;
|
•
|
failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants;
|
•
|
the outcome of ongoing and future litigation, including our asbestos-related product liability litigation;
|
•
|
changes in environmental laws and regulations applicable to our business; and
|
•
|
disruptions in, or breaches of, our information technology systems.
|
Name
|
Age
|
Present Position
|
Year Appointed to Present Position
|
Other Relevant Positions Held
|
Bruce D. Hoechner
|
59
|
President and Chief Executive Officer, Director, Principal Executive Officer
|
2011
|
|
Michael M. Ludwig
|
57
|
Senior Vice President, Chief Financial Officer and Treasurer, Principal Financial Officer
|
2018
|
Senior Vice President and Chief Financial Officer, FormFactor, Inc., from May 2011 to March 2018.
|
Marc J. Beulque
|
54
|
Vice President, Global Operations
|
2016
|
Vice President, Power Electronics Solutions Operations and Research and Development, Rogers, from June 2013 to April 2016; General Manager, Power Distribution Systems from December 2011 to May 2013. Mr. Beulque was promoted to Vice President, Global Operations in April 2016 and was appointed as an executive officer in February 2018 as a result of an expansion of his responsibility to oversee all global operations of the Company.
|
Benjamin M. Buckley
|
46
|
Vice President and Chief Human Resources Officer
|
2019
|
Associate General Counsel and Director of Global Compliance and Integrity, Rogers, from October 2014 to January 2019. President and Chief Executive Officer, Verge America Ltd., from May 2013 to October 2014.
|
Robert C. Daigle
|
55
|
Senior Vice President and Chief Technology Officer
|
2009
|
|
Jeffrey M. Grudzien
|
57
|
Senior Vice President and General Manager, Advanced Connectivity Solutions
|
2017
|
Vice President, Advanced Connectivity Solutions, Rogers, from February 2012 to February 2017.
|
Jay B. Knoll
|
55
|
Senior Vice President, Corporate Development, General Counsel and Secretary
|
2017
|
Vice President and General Counsel, Rogers, from November 2014 to February 2017; Senior Vice President, General Counsel PKC Group Oyj - North America from June 2012 to November 2014.
|
Helen Zhang
|
55
|
Senior Vice President and General Manager, Power Electronics Solutions and President, Rogers Asia
|
2017
|
Vice President, Power Electronics Solutions and President, Rogers Asia, Rogers, from May 2012 to February 2017.
|
•
|
foreign currency fluctuations, particularly in the value of the Euro, the Hungarian forint, the Japanese yen, the Chinese yuan and the South Korean won against the U.S. dollar;
|
•
|
economic and political instability, due to regional or country-specific events or changes in relations between the United States and the countries in which we operate;
|
•
|
accounts receivable practices across countries, including longer payment cycles;
|
•
|
export control or customs matters, the ongoing trade policy dispute between the United States and China and adverse changes in trade policy, tariff regulations or other trade restrictions;
|
•
|
complications in complying, and failure to comply, with a variety of foreign laws, including due to unexpected changes in the laws or regulations of the countries in which we operate;
|
•
|
failure to comply with the Foreign Corrupt Practices Act or other applicable anti-corruption laws;
|
•
|
greater difficulty protecting our intellectual property;
|
•
|
compliance with foreign employment regulations, as well as work stoppages and labor and union disputes.
|
•
|
innovation;
|
•
|
historical customer relationships;
|
•
|
product quality, reliability, performance and price;
|
•
|
technical and engineering service and support;
|
•
|
breadth of product line; and
|
•
|
manufacturing capabilities.
|
•
|
decisions to redeploy foreign earnings outside of their country of origin for which we have not previously provided for income taxes;
|
•
|
increased scrutiny of our transactions by taxing authorities;
|
•
|
changes in the geographic mix of our profits among jurisdictions with differing statutory income tax rates;
|
•
|
ability to utilize, or changes in the valuation of, deferred tax assets; and
|
•
|
changes in tax laws and regulations or issuance of new interpretations of the law applicable to us.
|
Location
|
|
Floor Space (Square Feet)
|
|
Type of Facility
|
|
Leased / Owned
|
|
Operating Segment
|
United States
|
|
|
|
|
|
|
|
|
Chandler, Arizona
|
|
147,000
|
|
Manufacturing
|
|
Owned
|
|
ACS
|
Chandler, Arizona
|
|
105,100
|
|
Manufacturing
|
|
Owned
|
|
ACS
|
Chandler, Arizona
|
|
100,000
|
|
Manufacturing
|
|
Owned
|
|
ACS
|
Chandler, Arizona
|
|
75,000
|
|
Administrative Offices
|
|
Owned
|
|
All
|
Chandler, Arizona
|
|
17,000
|
|
Warehouse / Administrative Offices
|
|
Leased through 3/2020
|
|
ACS
|
Rogers, Connecticut
|
|
388,100
|
|
Manufacturing / Administrative Offices
|
|
Owned
|
|
All
|
Moosup, Connecticut
|
|
185,500
|
|
Manufacturing
|
|
Owned
|
|
EMS
|
Woodstock, Connecticut
|
|
150,600
|
|
Manufacturing
|
|
Owned
|
|
EMS
|
Carol Stream, Illinois
|
|
216,600
|
|
Manufacturing
|
|
Owned
|
|
EMS
|
Bear, Delaware
|
|
125,000
|
|
Manufacturing / Administrative Offices
|
|
Owned
|
|
ACS & EMS
|
Burlington, Massachusetts
|
|
6,000
|
|
R&D Lab / Administrative Offices
|
|
Leased through 2/2021
|
|
All
|
Narragansett, Rhode Island
|
|
84,600
|
|
Manufacturing
|
|
Owned
|
|
EMS
|
North Kingston, Rhode Island
|
|
10,000
|
|
Warehouse
|
|
Leased through 3/2020
|
|
EMS
|
Santa Fe Springs, California
|
|
42,000
|
|
Manufacturing / Administrative Offices
|
|
Leased through 3/2019
|
|
EMS
|
Europe
|
|
|
|
|
|
|
|
|
Eschenbach, Germany
|
|
149,000
|
|
Manufacturing / Administrative Offices
|
|
Leased through 6/2021
|
|
PES
|
Eschenbach, Germany
|
|
24,100
|
|
Warehouse / Administrative Offices
|
|
Leased through 3/2020
|
|
PES
|
Eschenbach, Germany
|
|
1,050
|
|
Warehouse
|
|
Leased through 3/2020
|
|
PES
|
Evergem, Belgium
|
|
122,000
|
|
Manufacturing / Administrative Offices
|
|
Owned
|
|
ACS & PES
|
Evergem, Belgium
|
|
55,700
|
|
Warehouse / Administrative Offices
|
|
Leased through 5/2021
|
|
ACS & PES
|
Ghent, Belgium
|
|
45,000
|
|
Warehouse
|
|
Leased through 3/2020
|
|
ACS & EMS
|
Budapest, Hungary
|
|
64,000
|
|
Manufacturing
|
|
Leased through 2/2023
|
|
PES
|
Asia
|
|
|
|
|
|
|
|
|
Suzhou, China
|
|
821,000
|
|
Manufacturing / Administrative Offices
|
|
Owned
|
|
All
|
Ansan, South Korea
|
|
40,000
|
|
Manufacturing
|
|
Leased through 10/2021
|
|
EMS
|
(Dollars in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Financial Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
879,091
|
|
|
$
|
821,043
|
|
|
$
|
656,314
|
|
|
$
|
641,443
|
|
|
$
|
610,911
|
|
Income before income tax expense
|
$
|
110,589
|
|
|
$
|
132,925
|
|
|
$
|
82,280
|
|
|
$
|
66,173
|
|
|
$
|
81,224
|
|
Net income
|
$
|
87,651
|
|
|
$
|
80,459
|
|
|
$
|
48,283
|
|
|
$
|
46,320
|
|
|
$
|
53,412
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic earnings per share
|
$
|
4.77
|
|
|
$
|
4.43
|
|
|
$
|
2.68
|
|
|
$
|
2.52
|
|
|
$
|
2.94
|
|
Diluted earnings per share
|
$
|
4.70
|
|
|
$
|
4.34
|
|
|
$
|
2.65
|
|
|
$
|
2.48
|
|
|
$
|
2.86
|
|
Book value
|
$
|
46.12
|
|
|
$
|
41.99
|
|
|
$
|
35.28
|
|
|
$
|
32.55
|
|
|
$
|
31.91
|
|
Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Current assets
|
$
|
485,786
|
|
|
$
|
454,523
|
|
|
$
|
458,401
|
|
|
$
|
428,665
|
|
|
$
|
438,174
|
|
Current liabilities
|
$
|
107,180
|
|
|
$
|
113,808
|
|
|
$
|
101,185
|
|
|
$
|
78,648
|
|
|
$
|
120,445
|
|
Ratio of current assets to current liabilities
|
4.5 to 1
|
|
4.0 to 1
|
|
4.5 to 1
|
|
5.5 to 1
|
|
3.6 to 1
|
||||||||||
Cash and cash equivalents
|
$
|
167,738
|
|
|
$
|
181,159
|
|
|
$
|
227,767
|
|
|
$
|
204,586
|
|
|
$
|
237,375
|
|
Net working capital
|
$
|
378,606
|
|
|
$
|
340,715
|
|
|
$
|
357,216
|
|
|
$
|
350,017
|
|
|
$
|
317,729
|
|
Property, plant and equipment, net
|
$
|
242,759
|
|
|
$
|
179,611
|
|
|
$
|
176,916
|
|
|
$
|
178,661
|
|
|
$
|
150,420
|
|
Total assets
|
$
|
1,279,344
|
|
|
$
|
1,125,134
|
|
|
$
|
1,056,500
|
|
|
$
|
930,355
|
|
|
$
|
840,435
|
|
Borrowings under revolving credit facility
|
$
|
228,482
|
|
|
$
|
130,982
|
|
|
$
|
235,877
|
|
|
$
|
173,557
|
|
|
$
|
25,000
|
|
Shareholders’ equity
|
$
|
848,324
|
|
|
$
|
766,573
|
|
|
$
|
635,786
|
|
|
$
|
584,582
|
|
|
$
|
587,281
|
|
Borrowings under revolving credit facility as a percentage of shareholders’ equity
|
26.9
|
%
|
|
17.1
|
%
|
|
37.1
|
%
|
|
29.7
|
%
|
|
4.3
|
%
|
|||||
Other Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
$
|
50,073
|
|
|
$
|
44,099
|
|
|
$
|
37,847
|
|
|
$
|
34,054
|
|
|
$
|
26,268
|
|
Research and development expenses
|
$
|
33,075
|
|
|
$
|
29,547
|
|
|
$
|
28,582
|
|
|
$
|
27,644
|
|
|
$
|
22,878
|
|
Capital expenditures
|
$
|
90,549
|
|
|
$
|
27,215
|
|
|
$
|
18,136
|
|
|
$
|
24,837
|
|
|
$
|
28,755
|
|
Number of employees (approximate)
|
3,700
|
|
|
3,400
|
|
|
3,100
|
|
|
2,800
|
|
|
2,800
|
|
|||||
Net sales per employee
|
$
|
238
|
|
|
$
|
241
|
|
|
$
|
212
|
|
|
$
|
229
|
|
|
$
|
218
|
|
Number of shares outstanding at year end
|
18,395
|
|
|
18,255
|
|
|
18,021
|
|
|
17,957
|
|
|
18,403
|
|
•
|
Our net sales
increase
in
2018
was attributable to increases in net sales in our EMS and PES strategic operating segments.
Net sales were favorably impacted by higher net sales in electric and hybrid electric vehicle and micro-channel cooler applications in our PES operating segment and higher net sales in portable electronics and automotive applications in our EMS operating segment, partially offset by lower net sales in wireless 4G LTE and portable electronics applications in our ACS operating segment. The increase in net sales was also driven in part by net sales of
$13.7 million
, or
1.7%
, related to our acquisition of Griswold, as well as
$15.5 million
, or
1.9%
, of favorable impacts from appreciation in value of the Euro and Renminbi relative to the U.S. dollar. The adoption of new accounting guidance for revenue recognition favorably impacted net sales in
2018
by
$4.6 million
, or
0.6%
.
|
•
|
Our gross margin
decreased
approximately
340
basis points to
35.4%
in
2018
from
38.8%
in
2017
.
Gross margin was unfavorably impacted as a result of strategic investments in capacity optimization and infrastructure to support future growth initiatives, increased costs for raw materials, facility consolidation and new product launch, as well as unfavorable
|
•
|
Our operating income
decreased
12.7%
to
$112.7 million
in
2018
, as compared to
$129.1 million
in
2017
.
The
decrease
was primarily due to a decrease in gross margin, as well as a
$2.4 million
increase
in selling, general & administrative (SG&A) expenses and a
$3.5 million
increase
in research and development (R&D) expenses, furthered by a decrease in other operating income of
$2.2 million
. The increase in SG&A expenses was driven by increases in acquisition expenses as well as other intangible assets amortization related to Griswold. SG&A expenses decreased as a percentage of net sales from
19.7%
in
2017
to
18.7%
in
2018
. The decrease in other operating income was primarily due to the
$3.5 million
of depreciation expense on leased assets netted against the
$0.9 million
of imputed income related to the Isola asset acquisition.
|
•
|
We are an innovation company, and in
2018
we continued our investment in R&D,
with R&D expenses comprising
3.8%
of net sales, an
increase
of approximately
20
basis points from
2017
. R&D expenses were
$33.1 million
in
2018
, as compared to
$29.5 million
in
2017
. We have made concerted efforts to realign our R&D organization to better fit the expected future direction of our Company, including dedicating resources to focus on current product extensions and enhancements to meet our expected short-term and long-term technology needs.
|
•
|
We acquired Griswold in July 2018, as we continue to execute on our synergistic acquisition strategy.
Acquisitions are a core part of our growth strategy, and the Griswold acquisition extends the product portfolio and technology capabilities of our EMS operating segment. We financed our acquisition of Griswold with
$82.5 million
in borrowings under our revolving credit facility. As a result, borrowings under our revolving credit facility increased in
2018
.
|
•
|
In preparation for expected demand in advanced connectivity and advanced mobility, we acquired a production facility and related machinery and equipment from Isola in August 2018.
We intend to use the purchased assets for capacity expansion within our ACS operating segment in contemplation of expected future demand from our 5G customers. We financed the asset acquisition with
$43.4 million
in cash on hand.
|
|
2018
|
|
2017
|
|
2016
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Gross margin
|
35.4
|
%
|
|
38.8
|
%
|
|
38.0
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
18.7
|
%
|
|
19.7
|
%
|
|
21.2
|
%
|
Research and development expenses
|
3.8
|
%
|
|
3.6
|
%
|
|
4.4
|
%
|
Restructuring and impairment charges
|
0.5
|
%
|
|
0.4
|
%
|
|
0.1
|
%
|
Other operating (income) expense, net
|
(0.4
|
)%
|
|
(0.6
|
)%
|
|
—
|
%
|
Operating income
|
12.8
|
%
|
|
15.7
|
%
|
|
12.3
|
%
|
|
|
|
|
|
|
|||
Equity income in unconsolidated joint ventures
|
0.6
|
%
|
|
0.6
|
%
|
|
0.6
|
%
|
Other income (expense), net
|
(0.1
|
)%
|
|
0.6
|
%
|
|
0.2
|
%
|
Interest expense, net
|
(0.7
|
)%
|
|
(0.7
|
)%
|
|
(0.6
|
)%
|
Income before income tax expense
|
12.6
|
%
|
|
16.2
|
%
|
|
12.5
|
%
|
Income tax expense
|
2.6
|
%
|
|
6.4
|
%
|
|
5.1
|
%
|
Net income
|
10.0
|
%
|
|
9.8
|
%
|
|
7.4
|
%
|
Net Sales
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Net sales
|
|
$
|
879,091
|
|
|
$
|
821,043
|
|
|
7.1%
|
Gross Margin
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Gross margin
|
|
$
|
310,783
|
|
|
$
|
318,575
|
|
|
(2.4)%
|
Percentage of net sales
|
|
35.4
|
%
|
|
38.8
|
%
|
|
|
Selling, General and Administrative Expenses
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Selling, general and administrative expenses
|
|
$
|
164,046
|
|
|
$
|
161,651
|
|
|
1.5%
|
Percentage of net sales
|
|
18.7
|
%
|
|
19.7
|
%
|
|
|
Research and Development Expenses
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Research and development expenses
|
|
$
|
33,075
|
|
|
$
|
29,547
|
|
|
11.9%
|
Percentage of net sales
|
|
3.8
|
%
|
|
3.6
|
%
|
|
|
Restructuring and Impairment Charges and Other Operating (Income) Expense, Net
|
||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Restructuring and impairment charges
|
|
$
|
4,038
|
|
|
$
|
3,567
|
|
|
13.2%
|
Other operating (income) expense, net
|
|
$
|
(3,087
|
)
|
|
$
|
(5,329
|
)
|
|
(42.1)%
|
Equity Income in Unconsolidated Joint Ventures
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Equity income in unconsolidated joint ventures
|
|
$
|
5,501
|
|
|
$
|
4,898
|
|
|
12.3%
|
Other Income (Expense), Net
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Other income (expense), net
|
|
$
|
(994
|
)
|
|
$
|
5,019
|
|
|
(119.8)%
|
Interest Expense, Net
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Interest expense, net
|
|
$
|
(6,629
|
)
|
|
$
|
(6,131
|
)
|
|
8.1%
|
Income Tax Expense
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
Percent Change
|
||||
Income tax expense
|
|
$
|
22,938
|
|
|
$
|
52,466
|
|
|
(56.3)%
|
Effective tax rate
|
|
20.7
|
%
|
|
39.5
|
%
|
|
|
Net Sales
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Net sales
|
|
$
|
821,043
|
|
|
$
|
656,314
|
|
|
25.1%
|
Gross Margin
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Gross Margin
|
|
$
|
318,575
|
|
|
$
|
249,485
|
|
|
27.7%
|
Percentage of sales
|
|
38.8
|
%
|
|
38.0
|
%
|
|
|
Selling, General and Administrative Expenses
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Selling, general and administrative expenses
|
|
$
|
161,651
|
|
|
$
|
139,272
|
|
|
16.1%
|
Percentage of net sales
|
|
19.7
|
%
|
|
21.2
|
%
|
|
|
Research and Development Expenses
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Research and development expenses
|
|
$
|
29,547
|
|
|
$
|
28,582
|
|
|
3.4%
|
Percentage of net sales
|
|
3.6
|
%
|
|
4.4
|
%
|
|
|
Restructuring and Impairment Charges and Other Operating (Income) Expense, Net
|
||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Restructuring and impairment charges
|
|
$
|
3,567
|
|
|
$
|
734
|
|
|
386.0%
|
Other operating (income) expense, net
|
|
$
|
(5,329
|
)
|
|
$
|
—
|
|
|
N/A
|
Equity Income in Unconsolidated Joint Ventures
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Equity income in unconsolidated joint ventures
|
|
$
|
4,898
|
|
|
$
|
4,146
|
|
|
18.1%
|
Other Income (Expense), Net
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Other income (expense), net
|
|
$
|
5,019
|
|
|
$
|
1,167
|
|
|
(330.1)%
|
Interest Expense, Net
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Interest expense, net
|
|
$
|
(6,131
|
)
|
|
$
|
(3,930
|
)
|
|
56.0%
|
Income Tax Expense
|
|
|
|
|
|
|
||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Percent Change
|
||||
Income tax expense
|
|
$
|
52,466
|
|
|
$
|
33,997
|
|
|
54.3%
|
Effective tax rate
|
|
39.5
|
%
|
|
41.3
|
%
|
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
294,154
|
|
|
$
|
301,092
|
|
|
$
|
277,787
|
|
Operating income
|
$
|
33,827
|
|
|
$
|
55,410
|
|
|
$
|
42,455
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
341,364
|
|
|
$
|
312,661
|
|
|
$
|
203,181
|
|
Operating income
|
$
|
52,502
|
|
|
$
|
50,908
|
|
|
$
|
25,884
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
223,338
|
|
|
$
|
184,954
|
|
|
$
|
152,367
|
|
Operating income
|
$
|
19,648
|
|
|
$
|
15,668
|
|
|
$
|
5,229
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
20,235
|
|
|
$
|
22,336
|
|
|
$
|
22,979
|
|
Operating income
|
$
|
6,734
|
|
|
$
|
7,153
|
|
|
$
|
7,329
|
|
(Dollars in thousands
)
|
As of December 31,
|
||||||
Key Financial Position Accounts:
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
167,738
|
|
|
$
|
181,159
|
|
Accounts receivable, less allowance for doubtful accounts
|
144,623
|
|
|
140,562
|
|
||
Contract assets
|
22,728
|
|
|
—
|
|
||
Inventories
|
132,637
|
|
|
112,557
|
|
||
Borrowings under revolving credit facility
|
228,482
|
|
|
130,982
|
|
|
As of December 31,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
41,833
|
|
|
$
|
35,653
|
|
|
$
|
95,481
|
|
Europe
|
31,244
|
|
|
41,307
|
|
|
37,791
|
|
|||
Asia
|
94,661
|
|
|
104,199
|
|
|
94,495
|
|
|||
Total cash and cash equivalents
|
$
|
167,738
|
|
|
$
|
181,159
|
|
|
$
|
227,767
|
|
•
|
Accounts receivable, less allowance for doubtful accounts
increased
2.9%
to
$144.6 million
as of December 31, 2018
, from
$140.6 million
as of
December 31, 2017
. The
increase
was primarily due to higher net sales at the end of
2018
compared to at the end of the
2017
.
|
•
|
We recorded contract assets of
$22.7 million
as of December 31, 2018
related to the adoption of ASU 2014-09. For additional information, refer to “
Note 16 – Revenue from Contracts with Customers
” to “
Item 8. Financial Statements and Supplementary Data
.”
|
•
|
Inventories
increased
17.8%
to
$132.6 million
as of December 31, 2018
, from
$112.6 million
as of
December 31, 2017
, as a result of our acquisition of Griswold, additional purchases as a result of changes in vendor allocations, supplier transition, safety stock replenishment and raw material cost increases, partially offset by the impact from the adoption of new accounting guidance for revenue recognition. For additional information regarding the impact of the new revenue recognition adoption, refer to “
Note 16 – Revenue from Contracts with Customers
” to “
Item 8. Financial Statements and Supplementary Data
.”
|
•
|
Accrued employee benefits and compensation
decreased
to
$30.5 million
as of December 31, 2018
, from
$39.4 million
as of
December 31, 2017
. This
decrease
is primarily due to incentive compensation payouts of
$18.2 million
that occurred during 2018, partially offset by
$5.8 million
of accruals for projected incentive compensation payouts for the 2018 performance year.
|
•
|
Goodwill
increased
11.7%
to
$264.9 million
as of December 31, 2018
, from
$237.1 million
as of
December 31, 2017
, primarily due to the acquisition of Griswold in July 2018.
|
•
|
Other intangible assets, net of amortization
,
increased
10.4%
to
$177.0 million
as of December 31, 2018
, from
$160.3 million
as of
December 31, 2017
, primarily due to the acquisition of Griswold in July 2018.
|
(Dollars in thousands
)
|
For the year ended December 31,
|
||||||||||
Key Cash Flow Measures:
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
66,820
|
|
|
$
|
138,982
|
|
|
$
|
116,967
|
|
Net cash used in investing activities
|
(167,437
|
)
|
|
(78,270
|
)
|
|
(151,804
|
)
|
|||
Net cash provided by (used in) financing activities
|
88,682
|
|
|
(113,187
|
)
|
|
57,869
|
|
|
Payments Due by Period
|
||||||||||||||||||
(Dollars in thousands)
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Operating leases
|
$
|
11,217
|
|
|
$
|
3,951
|
|
|
$
|
5,268
|
|
|
$
|
1,998
|
|
|
$
|
—
|
|
Capital leases
|
5,344
|
|
|
543
|
|
|
4,801
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments on capital lease
|
295
|
|
|
125
|
|
|
170
|
|
|
—
|
|
|
—
|
|
|||||
Inventory purchase obligations
|
344
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital commitments
(1)
|
17,606
|
|
|
17,606
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Borrowings under revolving credit facility
(2)
|
228,482
|
|
|
—
|
|
|
—
|
|
|
228,482
|
|
|
—
|
|
|||||
Interest payments on outstanding borrowings
(3)
|
28,000
|
|
|
8,955
|
|
|
17,851
|
|
|
1,194
|
|
|
—
|
|
|||||
Retiree health and life insurance benefits
|
1,880
|
|
|
334
|
|
|
436
|
|
|
285
|
|
|
825
|
|
|||||
Total
|
$
|
293,168
|
|
|
$
|
31,858
|
|
|
$
|
28,526
|
|
|
$
|
231,959
|
|
|
$
|
825
|
|
(1)
|
This amount represents non-cancelable vendor purchase commitments.
|
(2)
|
All outstanding borrowings under our revolving credit facility are due on
February 17, 2022
.
|
(3)
|
Estimated future interest payments are based on a leverage ratio based spread that ranges from 1.375% to 1.75%, plus projected forward 1-month LIBOR rates, and have been adjusted for the impact of the floating to fixed rate interest rate swap on
$75.0 million
of the outstanding borrowings under our revolving credit facility. For additional information, refer to “
Note 3 – Hedging Transactions and Derivative Financial Instruments
” to “
Item 8. Financial Statements and Supplementary Data
.”
|
|
September 17, 2018
|
|
February 8, 2018
|
|
February 9, 2017
|
Expected volatility
|
36.6%
|
|
34.8%
|
|
33.6%
|
Expected term (in years)
|
3.0
|
|
3.0
|
|
3.0
|
Risk-free interest rate
|
2.85%
|
|
2.28%
|
|
1.38%
|
•
|
Foreign Currency Risk
|
•
|
Interest Rate Risk
|
•
|
Commodity Risk
|
/s/ PricewaterhouseCoopers LLP
|
|
Hartford, Connecticut
|
February 20, 2019
|
|
We have served as the Company’s auditor since 2015.
|
(Dollars and shares in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
879,091
|
|
|
$
|
821,043
|
|
|
$
|
656,314
|
|
Cost of sales
|
568,308
|
|
|
502,468
|
|
|
406,829
|
|
|||
Gross margin
|
310,783
|
|
|
318,575
|
|
|
249,485
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
164,046
|
|
|
161,651
|
|
|
139,272
|
|
|||
Research and development expenses
|
33,075
|
|
|
29,547
|
|
|
28,582
|
|
|||
Restructuring and impairment charges
|
4,038
|
|
|
3,567
|
|
|
734
|
|
|||
Other operating (income) expense, net
|
(3,087
|
)
|
|
(5,329
|
)
|
|
—
|
|
|||
Operating income
|
112,711
|
|
|
129,139
|
|
|
80,897
|
|
|||
|
|
|
|
|
|
||||||
Equity income in unconsolidated joint ventures
|
5,501
|
|
|
4,898
|
|
|
4,146
|
|
|||
Other income (expense), net
|
(994
|
)
|
|
5,019
|
|
|
1,167
|
|
|||
Interest expense, net
|
(6,629
|
)
|
|
(6,131
|
)
|
|
(3,930
|
)
|
|||
Income before income tax expense
|
110,589
|
|
|
132,925
|
|
|
82,280
|
|
|||
Income tax expense
|
22,938
|
|
|
52,466
|
|
|
33,997
|
|
|||
Net income
|
$
|
87,651
|
|
|
$
|
80,459
|
|
|
$
|
48,283
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
4.77
|
|
|
$
|
4.43
|
|
|
$
|
2.68
|
|
Diluted earnings per share
|
$
|
4.70
|
|
|
$
|
4.34
|
|
|
$
|
2.65
|
|
|
|
|
|
|
|
||||||
Shares used in computing:
|
|
|
|
|
|
||||||
Basic earnings per share
|
18,374
|
|
|
18,154
|
|
|
17,991
|
|
|||
Diluted earnings per share
|
18,659
|
|
|
18,547
|
|
|
18,223
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
87,651
|
|
|
$
|
80,459
|
|
|
$
|
48,283
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(12,505
|
)
|
|
28,463
|
|
|
(5,081
|
)
|
|||
Derivative instrument designated as cash flow hedge:
|
|
|
|
|
|
||||||
Change in unrealized gain (loss) before reclassifications, net of tax (Note 4)
|
519
|
|
|
(6
|
)
|
|
—
|
|
|||
Unrealized (gain) loss reclassified into earnings, net of tax (Note 4)
|
(191
|
)
|
|
32
|
|
|
11
|
|
|||
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Actuarial net gain (loss) incurred, net of tax (Note 4)
|
(1,678
|
)
|
|
(1,481
|
)
|
|
1,106
|
|
|||
Amortization of gain, net of tax (Note 4)
|
176
|
|
|
99
|
|
|
160
|
|
|||
Other comprehensive income (loss)
|
(13,679
|
)
|
|
27,107
|
|
|
(3,804
|
)
|
|||
Comprehensive income
|
$
|
73,972
|
|
|
$
|
107,566
|
|
|
$
|
44,479
|
|
(Dollars and share amounts in thousands, except par value of capital stock)
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
167,738
|
|
|
$
|
181,159
|
|
Accounts receivable, less allowance for doubtful accounts of $1,354 and $1,525
|
144,623
|
|
|
140,562
|
|
||
Contract assets
|
22,728
|
|
|
—
|
|
||
Inventories
|
132,637
|
|
|
112,557
|
|
||
Prepaid income taxes
|
3,093
|
|
|
3,087
|
|
||
Asbestos-related insurance receivables, current portion
|
4,138
|
|
|
5,682
|
|
||
Assets held for sale
|
—
|
|
|
896
|
|
||
Other current assets
|
10,829
|
|
|
10,580
|
|
||
Total current assets
|
485,786
|
|
|
454,523
|
|
||
Property, plant and equipment, net of accumulated depreciation of $317,414 and $289,909
|
242,759
|
|
|
179,611
|
|
||
Investments in unconsolidated joint ventures
|
18,667
|
|
|
18,324
|
|
||
Deferred income taxes
|
8,236
|
|
|
6,008
|
|
||
Goodwill
|
264,885
|
|
|
237,107
|
|
||
Other intangible assets, net of amortization
|
177,008
|
|
|
160,278
|
|
||
Asbestos-related insurance receivables, non-current portion
|
59,685
|
|
|
63,511
|
|
||
Other long-term assets
|
22,318
|
|
|
5,772
|
|
||
Total assets
|
$
|
1,279,344
|
|
|
$
|
1,125,134
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
40,321
|
|
|
$
|
36,116
|
|
Accrued employee benefits and compensation
|
30,491
|
|
|
39,394
|
|
||
Accrued income taxes payable
|
7,032
|
|
|
6,408
|
|
||
Capital lease obligations, current portion
|
420
|
|
|
579
|
|
||
Asbestos-related liabilities, current portion
|
5,547
|
|
|
5,682
|
|
||
Other accrued liabilities
|
23,369
|
|
|
25,629
|
|
||
Total current liabilities
|
107,180
|
|
|
113,808
|
|
||
Borrowings under revolving credit facility
|
228,482
|
|
|
130,982
|
|
||
Capital lease obligations, non-current portion
|
4,629
|
|
|
5,873
|
|
||
Pension liability
|
270
|
|
|
8,720
|
|
||
Retiree health care and life insurance benefits
|
1,469
|
|
|
1,685
|
|
||
Asbestos-related liabilities, non-current portion
|
64,799
|
|
|
70,500
|
|
||
Non-current income tax
|
8,418
|
|
|
12,823
|
|
||
Deferred income taxes
|
10,806
|
|
|
10,706
|
|
||
Other long-term liabilities
|
4,967
|
|
|
3,464
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
||||
Capital stock - $1 par value; 50,000 authorized shares; 18,395 and 18,255 shares issued and outstanding
|
18,395
|
|
|
18,255
|
|
||
Additional paid-in capital
|
132,360
|
|
|
128,933
|
|
||
Retained earnings
|
776,403
|
|
|
684,540
|
|
||
Accumulated other comprehensive loss
|
(78,834
|
)
|
|
(65,155
|
)
|
||
Total shareholders' equity
|
848,324
|
|
|
766,573
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,279,344
|
|
|
$
|
1,125,134
|
|
(Dollars in thousands)
|
Capital Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Shareholders’ Equity
|
||||||||||
Balance as of December 31, 2015
|
$
|
17,957
|
|
|
$
|
112,017
|
|
|
$
|
543,066
|
|
|
$
|
(88,458
|
)
|
|
$
|
584,582
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
48,283
|
|
|
—
|
|
|
48,283
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,804
|
)
|
|
(3,804
|
)
|
|||||
Shares issued for vested restricted stock units, net of cancellations for tax withholding
|
63
|
|
|
(1,440
|
)
|
|
—
|
|
|
—
|
|
|
(1,377
|
)
|
|||||
Stock options exercised
|
95
|
|
|
4,048
|
|
|
—
|
|
|
—
|
|
|
4,143
|
|
|||||
Shares issued for employee stock purchase plan
|
23
|
|
|
835
|
|
|
—
|
|
|
—
|
|
|
858
|
|
|||||
Shares issued to directors
|
24
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity compensation expense
|
—
|
|
|
11,275
|
|
|
—
|
|
|
—
|
|
|
11,275
|
|
|||||
Tax adjustments on share-based compensation
|
—
|
|
|
(179
|
)
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
|||||
Shares repurchased
|
(141
|
)
|
|
(7,854
|
)
|
|
—
|
|
|
—
|
|
|
(7,995
|
)
|
|||||
Balance as of December 31, 2016
|
18,021
|
|
|
118,678
|
|
|
591,349
|
|
|
(92,262
|
)
|
|
635,786
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
80,459
|
|
|
—
|
|
|
80,459
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
27,107
|
|
|
27,107
|
|
|||||
Shares issued for vested restricted stock units, net of cancellations for tax withholding
|
121
|
|
|
(5,430
|
)
|
|
—
|
|
|
—
|
|
|
(5,309
|
)
|
|||||
Stock options exercised
|
83
|
|
|
3,002
|
|
|
—
|
|
|
|
|
3,085
|
|
||||||
Shares issued for employee stock purchase plan
|
15
|
|
|
880
|
|
|
—
|
|
|
|
|
895
|
|
||||||
Shares issued to directors
|
15
|
|
|
(15
|
)
|
|
—
|
|
|
|
|
—
|
|
||||||
Equity compensation expense
|
—
|
|
|
11,818
|
|
|
—
|
|
|
|
|
11,818
|
|
||||||
Cumulative-effect adjustment of change in accounting for share-based compensation
|
—
|
|
|
—
|
|
|
12,732
|
|
|
—
|
|
|
12,732
|
|
|||||
Shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of December 31, 2017
|
18,255
|
|
|
128,933
|
|
|
684,540
|
|
|
(65,155
|
)
|
|
766,573
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
87,651
|
|
|
—
|
|
|
87,651
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,679
|
)
|
|
(13,679
|
)
|
|||||
Shares issued for vested restricted stock units, net of cancellations for tax withholding
|
117
|
|
|
(6,717
|
)
|
|
—
|
|
|
—
|
|
|
(6,600
|
)
|
|||||
Stock options exercised
|
22
|
|
|
839
|
|
|
—
|
|
|
—
|
|
|
861
|
|
|||||
Shares issued for employee stock purchase plan
|
12
|
|
|
1,070
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
|||||
Shares issued to directors
|
12
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity compensation expense
|
—
|
|
|
11,223
|
|
|
—
|
|
|
—
|
|
|
11,223
|
|
|||||
Cumulative-effect adjustment of revenue recognition
|
—
|
|
|
—
|
|
|
4,212
|
|
|
—
|
|
|
4,212
|
|
|||||
Shares repurchased
|
(23
|
)
|
|
(2,976
|
)
|
|
—
|
|
|
—
|
|
|
(2,999
|
)
|
|||||
Balance as of December 31, 2018
|
$
|
18,395
|
|
|
$
|
132,360
|
|
|
$
|
776,403
|
|
|
$
|
(78,834
|
)
|
|
$
|
848,324
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
87,651
|
|
|
$
|
80,459
|
|
|
$
|
48,283
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
50,073
|
|
|
44,099
|
|
|
37,847
|
|
|||
Equity compensation expense
|
11,223
|
|
|
11,818
|
|
|
11,275
|
|
|||
Deferred income taxes
|
(3,325
|
)
|
|
17,513
|
|
|
7,382
|
|
|||
Equity in undistributed income of unconsolidated joint ventures
|
(5,501
|
)
|
|
(4,898
|
)
|
|
(4,146
|
)
|
|||
Dividends received from unconsolidated joint ventures
|
4,431
|
|
|
3,529
|
|
|
2,757
|
|
|||
Pension and other postretirement benefits
|
(1,552
|
)
|
|
(1,561
|
)
|
|
(2,822
|
)
|
|||
Asbestos-related charges
|
704
|
|
|
3,400
|
|
|
313
|
|
|||
(Gain) loss on sale or disposal of property, plant and equipment
|
(164
|
)
|
|
(5,154
|
)
|
|
225
|
|
|||
Impairment charges
|
1,506
|
|
|
807
|
|
|
—
|
|
|||
Provision (benefit) for doubtful accounts
|
236
|
|
|
(439
|
)
|
|
1,321
|
|
|||
Proceeds from insurance related to operations
|
—
|
|
|
932
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,824
|
)
|
|
(14,059
|
)
|
|
(13,005
|
)
|
|||
Contract assets
|
(22,728
|
)
|
|
—
|
|
|
—
|
|
|||
Inventories
|
(19,013
|
)
|
|
(14,208
|
)
|
|
9,689
|
|
|||
Pension and postretirement benefit contributions
|
(25,354
|
)
|
|
(906
|
)
|
|
(842
|
)
|
|||
Other current assets
|
(648
|
)
|
|
(576
|
)
|
|
1,933
|
|
|||
Accounts payable and other accrued expenses
|
(7,886
|
)
|
|
12,341
|
|
|
21,472
|
|
|||
Other, net
|
991
|
|
|
5,885
|
|
|
(4,715
|
)
|
|||
Net cash provided by operating activities
|
66,820
|
|
|
138,982
|
|
|
116,967
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities:
|
|
|
|
|
|
||||||
Acquisition of business, net of cash received
|
(77,969
|
)
|
|
(60,191
|
)
|
|
(133,943
|
)
|
|||
Isola asset acquisition
|
(43,434
|
)
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(47,115
|
)
|
|
(27,215
|
)
|
|
(18,136
|
)
|
|||
Proceeds from the sale of property, plant and equipment, net
|
1,081
|
|
|
8,095
|
|
|
—
|
|
|||
Proceeds from insurance claims
|
—
|
|
|
1,041
|
|
|
275
|
|
|||
Net cash used in investing activities
|
(167,437
|
)
|
|
(78,270
|
)
|
|
(151,804
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings under revolving credit facility
|
102,500
|
|
|
—
|
|
|
166,000
|
|
|||
Line of credit issuance costs
|
—
|
|
|
(1,169
|
)
|
|
—
|
|
|||
Repayment of debt principal and capital lease obligations
|
(6,162
|
)
|
|
(110,689
|
)
|
|
(103,760
|
)
|
|||
Payments of taxes related to net share settlement of equity awards
|
(6,600
|
)
|
|
(5,309
|
)
|
|
(1,377
|
)
|
|||
Proceeds from the exercise of stock options, net
|
861
|
|
|
895
|
|
|
858
|
|
|||
Proceeds from issuance of shares to employee stock purchase plan
|
1,082
|
|
|
3,085
|
|
|
4,143
|
|
|||
Share repurchases
|
(2,999
|
)
|
|
—
|
|
|
(7,995
|
)
|
|||
Net cash provided by (used in) financing activities
|
88,682
|
|
|
(113,187
|
)
|
|
57,869
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate fluctuations on cash
|
(1,486
|
)
|
|
5,867
|
|
|
149
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(13,421
|
)
|
|
(46,608
|
)
|
|
23,181
|
|
|||
Cash and cash equivalents at beginning of period
|
181,159
|
|
|
227,767
|
|
|
204,586
|
|
|||
Cash and cash equivalents at end of period
|
$
|
167,738
|
|
|
$
|
181,159
|
|
|
$
|
227,767
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Accrued capital additions
|
$
|
2,744
|
|
|
$
|
2,376
|
|
|
$
|
1,081
|
|
Assets obtained under leasing arrangements
|
$
|
—
|
|
|
$
|
883
|
|
|
$
|
—
|
|
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
7,040
|
|
|
$
|
5,787
|
|
|
$
|
3,924
|
|
Income taxes
|
$
|
29,161
|
|
|
$
|
36,918
|
|
|
$
|
23,952
|
|
|
As of December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Raw materials
|
$
|
59,321
|
|
|
$
|
43,092
|
|
Work-in-process
|
30,086
|
|
|
28,133
|
|
||
Finished goods
|
43,230
|
|
|
41,332
|
|
||
Total inventories
|
$
|
132,637
|
|
|
$
|
112,557
|
|
Property, Plant and Equipment Classification
|
Estimated Useful Lives
|
Buildings and improvements
|
30-40 years
|
Machinery and equipment
|
5-15 years
|
Office equipment
|
3-10 years
|
•
|
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Derivative Instruments at Fair Value as of December 31, 2018
|
||||||||||||||
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
522
|
|
|
$
|
—
|
|
|
$
|
522
|
|
Copper derivative contracts
|
$
|
—
|
|
|
$
|
583
|
|
|
$
|
—
|
|
|
$
|
583
|
|
Interest rate swap
|
$
|
—
|
|
|
$
|
461
|
|
|
$
|
—
|
|
|
$
|
461
|
|
|
Derivative Instruments at Fair Value as of December 31, 2017
|
||||||||||||||
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
(396
|
)
|
|
$
|
—
|
|
|
$
|
(396
|
)
|
Copper derivative contracts
|
$
|
—
|
|
|
$
|
2,016
|
|
|
$
|
—
|
|
|
$
|
2,016
|
|
Interest rate swap
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
41
|
|
•
|
Foreign Currency
- The fair value of any foreign currency option derivative is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics.
|
•
|
Commodity -
The fair value of copper derivatives is computed using a combination of intrinsic and time value valuation models, which are collectively a function of five primary variables: price of the underlying instrument, time to expiration, strike price, interest rate and volatility. The intrinsic valuation model reflects the difference between the strike price of the underlying copper derivative instrument and the current prevailing copper prices in an over-the-counter market at period end. The time value valuation model incorporates changes in the price of the underlying copper derivative instrument, the time value of money, the underlying copper derivative instrument’s strike price and the remaining time to the underlying copper derivative instrument’s expiration date from the period end date.
|
•
|
Interest Rates
- The fair value of interest rate swap instruments is derived by comparing the present value of the interest rate forward curve against the present value of the swap rate, relative to the notional amount of the swap. The net value represents the estimated amount we would receive or pay to terminate the agreements. Settlement amounts for an “in the money” swap would be adjusted down to compensate the counterparty for cost of funds, and the adjustment is directly related to the counterparties’ credit ratings.
|
|
|
|
|
The Effect of Current Derivative Instruments on the Financial Statements for the period ended December 31, 2018
|
|
Fair Values of Derivative Instruments as of December 31, 2018
|
||||
(Dollars in thousands)
|
|
Location
|
|
Gain (Loss)
|
|
Other Assets/
(Other Liabilities) (1) |
||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
||||
Contracts not designated as hedging instruments
|
|
Other income (expense), net
|
|
$
|
(333
|
)
|
|
$
|
522
|
|
Copper Derivatives
|
|
|
|
|
|
|
||||
Contracts not designated as hedging instruments
|
|
Other income (expense), net
|
|
$
|
(2,101
|
)
|
|
$
|
583
|
|
Interest Rate Swap
|
|
|
|
|
|
|
||||
Contract designated as hedging instrument
|
|
Other comprehensive income (loss)
|
|
$
|
420
|
|
|
$
|
461
|
|
|
|
|
|
The Effect of Current Derivative Instruments on the Financial Statements for the period ended December 31, 2017
|
|
Fair Values of Derivative Instruments as of December 31, 2017
|
||||
(Dollars in thousands)
|
|
Location
|
|
Gain (Loss)
|
|
Other Assets/
(Other Liabilities) (1) |
||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
||||
Contracts not designated as hedging instruments
|
|
Other income (expense), net
|
|
$
|
(7
|
)
|
|
$
|
(396
|
)
|
Copper Derivatives
|
|
|
|
|
|
|
||||
Contracts not designated as hedging instruments
|
|
Other income (expense), net
|
|
$
|
1,928
|
|
|
$
|
2,016
|
|
Interest Rate Swap
|
|
|
|
|
|
|
||||
Contract designated as hedging instrument
|
|
Other comprehensive income (loss)
|
|
$
|
41
|
|
|
$
|
41
|
|
(Dollars and accompanying footnotes in thousands)
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Postretirement Benefits
(1)
|
|
Derivative Instrument Designated as Cash Flow Hedge
(2)
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
(46,446
|
)
|
|
$
|
(45,816
|
)
|
|
$
|
—
|
|
|
$
|
(92,262
|
)
|
Other comprehensive income (loss) before reclassifications
|
28,463
|
|
|
—
|
|
|
(6
|
)
|
|
28,457
|
|
||||
Actuarial net loss incurred in the fiscal year
|
—
|
|
|
(1,481
|
)
|
|
—
|
|
|
(1,481
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
99
|
|
|
32
|
|
|
131
|
|
||||
Net current-period other comprehensive income (loss)
|
28,463
|
|
|
(1,382
|
)
|
|
26
|
|
|
27,107
|
|
||||
Balance as of December 31, 2017
|
(17,983
|
)
|
|
(47,198
|
)
|
|
26
|
|
|
(65,155
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(12,505
|
)
|
|
—
|
|
|
519
|
|
|
(11,986
|
)
|
||||
Actuarial net loss incurred in the fiscal year
|
—
|
|
|
(1,678
|
)
|
|
—
|
|
|
(1,678
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
176
|
|
|
(191
|
)
|
|
(15
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(12,505
|
)
|
|
(1,502
|
)
|
|
328
|
|
|
(13,679
|
)
|
||||
Balance as of December 31, 2018
|
$
|
(30,488
|
)
|
|
$
|
(48,700
|
)
|
|
$
|
354
|
|
|
$
|
(78,834
|
)
|
(Dollars in thousands)
|
December 31, 2018
|
December 31, 2017
|
Financial Statement Line Item
|
||||
Amortization of pension and other postretirement benefits
|
|
|
|
||||
|
$
|
(227
|
)
|
$
|
(154
|
)
|
Other income (expense), net
(1)
|
|
51
|
|
55
|
|
Income tax expense
|
||
|
$
|
(176
|
)
|
$
|
(99
|
)
|
Net income
|
|
|
|
|
||||
Unrealized gains (losses) on derivative instruments held at year end
|
|
|
|
||||
|
$
|
247
|
|
$
|
(51
|
)
|
Other income (expense), net
|
|
(56
|
)
|
19
|
|
Income tax expense
|
||
|
$
|
191
|
|
$
|
(32
|
)
|
Net income
|
(Dollars in thousands)
|
July 6, 2018
|
||
Assets:
|
|
||
Accounts receivable, less allowance for doubtful accounts
|
$
|
2,553
|
|
Inventories
|
2,951
|
|
|
Other current assets
|
155
|
|
|
Property, plant & equipment
|
7,554
|
|
|
Other intangible assets
|
34,120
|
|
|
Goodwill
|
31,738
|
|
|
Total assets
|
79,071
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable
|
711
|
|
|
Accrued employee benefits and compensation
|
299
|
|
|
Other accrued liabilities
|
92
|
|
|
Total liabilities
|
1,102
|
|
|
|
|
|
|
Fair value of net assets acquired
|
$
|
77,969
|
|
(Dollars in thousands)
|
January 6, 2017
|
||
Assets:
|
|
||
Accounts receivable
|
$
|
2,724
|
|
Prepaid expenses
|
21
|
|
|
Inventory
|
2,433
|
|
|
Property, plant & equipment
|
1,589
|
|
|
Other intangible assets
|
35,860
|
|
|
Goodwill
|
17,793
|
|
|
Total assets
|
60,420
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable
|
179
|
|
|
Accrued expenses
|
50
|
|
|
Total liabilities
|
229
|
|
|
|
|
|
|
Fair value of net assets acquired
|
$
|
60,191
|
|
(Dollars in thousands)
|
November 23, 2016
|
||
Assets:
|
|
||
Cash and cash equivalents
|
$
|
1,539
|
|
Accounts receivable
|
7,513
|
|
|
Other current assets
|
691
|
|
|
Inventory
|
9,915
|
|
|
Property, plant & equipment
|
9,932
|
|
|
Other intangible assets
|
73,500
|
|
|
Goodwill
|
35,985
|
|
|
Other long-term assets
|
101
|
|
|
Total assets
|
139,176
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable
|
2,402
|
|
|
Other current liabilities
|
1,292
|
|
|
Total liabilities
|
3,694
|
|
|
|
|
|
|
Fair value of net assets acquired
|
$
|
135,482
|
|
|
For the Years Ended December 31,
|
||||||||
(Dollars in thousands)
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
893,878
|
|
$
|
851,122
|
|
$
|
724,877
|
|
Net income
|
87,584
|
|
80,283
|
|
50,349
|
|
(Dollars in thousands)
|
August 28, 2018
|
||
Land
|
$
|
6,104
|
|
Buildings
|
8,401
|
|
|
Machinery and equipment
|
18,616
|
|
|
Equipment in process
|
12,633
|
|
|
Total property, plant and equipment
|
$
|
45,754
|
|
|
As of December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Land
|
$
|
21,525
|
|
|
$
|
14,620
|
|
Buildings and improvements
|
175,279
|
|
|
135,191
|
|
||
Machinery and equipment
|
256,301
|
|
|
238,000
|
|
||
Office equipment
|
64,886
|
|
|
56,554
|
|
||
Property plant and equipment, gross
|
517,991
|
|
|
444,365
|
|
||
Accumulated depreciation
|
(317,414
|
)
|
|
(289,909
|
)
|
||
Property, plant and equipment, net
|
200,577
|
|
|
154,456
|
|
||
Equipment in process
|
42,182
|
|
|
25,155
|
|
||
Total property, plant and equipment, net
|
$
|
242,759
|
|
|
$
|
179,611
|
|
(Dollars in thousands)
|
Advanced Connectivity Solutions
|
|
Elastomeric Material Solutions
|
|
Power Electronics Solutions
|
|
Other
|
|
Total
|
||||||||||
December 31, 2017
|
$
|
51,693
|
|
|
$
|
111,575
|
|
|
$
|
71,615
|
|
|
$
|
2,224
|
|
|
$
|
237,107
|
|
Acquisition
|
—
|
|
|
32,305
|
|
|
—
|
|
|
—
|
|
|
32,305
|
|
|||||
Purchase accounting adjustment
|
—
|
|
|
(567
|
)
|
|
—
|
|
|
—
|
|
|
(567
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
(724
|
)
|
|
(3,236
|
)
|
|
—
|
|
|
(3,960
|
)
|
|||||
December 31, 2018
|
$
|
51,693
|
|
|
$
|
142,589
|
|
|
$
|
68,379
|
|
|
$
|
2,224
|
|
|
$
|
264,885
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(Dollars in thousands)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Customer relationships
|
$
|
149,753
|
|
|
$
|
30,078
|
|
|
$
|
119,675
|
|
|
$
|
128,907
|
|
|
$
|
22,514
|
|
|
$
|
106,393
|
|
Technology
|
81,535
|
|
|
38,624
|
|
|
42,911
|
|
|
73,891
|
|
|
33,491
|
|
|
40,400
|
|
||||||
Trademarks and trade names
|
12,019
|
|
|
3,213
|
|
|
8,806
|
|
|
10,213
|
|
|
2,157
|
|
|
8,056
|
|
||||||
Covenants not to compete
|
1,340
|
|
|
249
|
|
|
1,091
|
|
|
1,799
|
|
|
1,108
|
|
|
691
|
|
||||||
Total definite-lived other intangible assets
|
244,647
|
|
|
72,164
|
|
|
172,483
|
|
|
214,810
|
|
|
59,270
|
|
|
155,540
|
|
||||||
Indefinite-lived other intangible asset
|
4,525
|
|
|
—
|
|
|
4,525
|
|
|
4,738
|
|
|
—
|
|
|
4,738
|
|
||||||
Total other intangible assets
|
$
|
249,172
|
|
|
$
|
72,164
|
|
|
$
|
177,008
|
|
|
$
|
219,548
|
|
|
$
|
59,270
|
|
|
$
|
160,278
|
|
Definite-Lived Other Intangible Asset Class
|
Weighted Average Remaining Amortization Period
|
Customer relationships
|
7.6
|
Technology
|
4.4
|
Trademarks and trade names
|
5.0
|
Covenants not to compete
|
2.1
|
Total definite-lived other intangible assets
|
6.6
|
|
Years Ended December 31,
|
||||||||||
(In thousands, except per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
87,651
|
|
|
$
|
80,459
|
|
|
$
|
48,283
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares outstanding - basic
|
18,374
|
|
|
18,154
|
|
|
17,991
|
|
|||
Effect of dilutive shares
|
285
|
|
|
393
|
|
|
232
|
|
|||
Weighted-average shares outstanding - diluted
|
18,659
|
|
|
18,547
|
|
|
18,223
|
|
|||
Basic earnings per share:
|
$
|
4.77
|
|
|
$
|
4.43
|
|
|
$
|
2.68
|
|
Diluted earnings per share:
|
$
|
4.70
|
|
|
$
|
4.34
|
|
|
$
|
2.65
|
|
(1)
|
The Company ceased offering capital stock under the stock acquisition program prior to the periods covered by this table.
|
(2)
|
The Company ceased offering its capital stock as an investment option under the Rogers Employee Savings and Investment Plan prior to the periods covered by this table.
|
|
September 17, 2018
|
|
February 8, 2018
|
|
February 9, 2017
|
Expected volatility
|
36.6%
|
|
34.8%
|
|
33.6%
|
Expected term (in years)
|
3.0
|
|
3.0
|
|
3.0
|
Risk-free interest rate
|
2.85%
|
|
2.28%
|
|
1.38%
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|||||||||
Awards outstanding as of January 1
|
169,202
|
|
|
$
|
97.16
|
|
|
151,769
|
|
|
$
|
89.72
|
|
|
107,229
|
|
|
$
|
66.13
|
|
Awards granted
|
75,760
|
|
|
163.55
|
|
|
56,147
|
|
|
110.77
|
|
|
84,443
|
|
|
69.01
|
|
|||
Stock issued
|
(81,230
|
)
|
|
131.72
|
|
|
(34,442
|
)
|
|
86.59
|
|
|
(25,397
|
)
|
|
72.68
|
|
|||
Awards forfeited
|
(21,298
|
)
|
|
114.40
|
|
|
(4,272
|
)
|
|
99.35
|
|
|
(14,506
|
)
|
|
104.83
|
|
|||
Awards outstanding as of December 31
|
142,434
|
|
|
$
|
110.19
|
|
|
169,202
|
|
|
$
|
97.16
|
|
|
151,769
|
|
|
$
|
89.72
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|||||||||
Awards outstanding as of January 1
|
173,331
|
|
|
$
|
69.10
|
|
|
239,189
|
|
|
$
|
57.71
|
|
|
208,318
|
|
|
$
|
64.27
|
|
Awards granted
|
46,810
|
|
|
143.93
|
|
|
80,535
|
|
|
83.17
|
|
|
118,660
|
|
|
51.70
|
|
|||
Stock issued
|
(82,921
|
)
|
|
84.92
|
|
|
(140,208
|
)
|
|
58.18
|
|
|
(60,326
|
)
|
|
64.03
|
|
|||
Awards forfeited
|
(19,744
|
)
|
|
112.06
|
|
|
(6,185
|
)
|
|
60.70
|
|
|
(27,463
|
)
|
|
64.60
|
|
|||
Awards outstanding as of December 31
|
117,476
|
|
|
$
|
116.10
|
|
|
173,331
|
|
|
$
|
69.10
|
|
|
239,189
|
|
|
$
|
57.71
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|
Awards Outstanding
|
|
Weighted-
Average Grant Date Fair Value |
|||||||||
Awards outstanding as of January 1
|
9,250
|
|
|
$
|
109.48
|
|
|
11,900
|
|
|
$
|
58.82
|
|
|
23,950
|
|
|
$
|
27.22
|
|
Awards granted
|
8,400
|
|
|
108.86
|
|
|
9,250
|
|
|
109.48
|
|
|
11,900
|
|
|
58.82
|
|
|||
Stock issued
|
(9,250
|
)
|
|
109.48
|
|
|
(11,900
|
)
|
|
58.82
|
|
|
(23,950
|
)
|
|
52.69
|
|
|||
Awards outstanding as of December 31
|
8,400
|
|
|
$
|
108.86
|
|
|
9,250
|
|
|
$
|
109.48
|
|
|
11,900
|
|
|
$
|
58.82
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Options
Outstanding |
|
Weighted-
Average Exercise Price Per Share |
|
Options
Outstanding |
|
Weighted-
Average Exercise Price Per Share |
|
Options
Outstanding |
|
Weighted-
Average Exercise Price Per Share |
|||||||||
Options outstanding, vested and exercisable as of January 1
|
33,283
|
|
|
$
|
36.40
|
|
|
116,575
|
|
|
$
|
37.76
|
|
|
212,038
|
|
|
$
|
40.47
|
|
Options exercised
|
(22,333
|
)
|
|
38.57
|
|
|
(83,292
|
)
|
|
37.04
|
|
|
(95,113
|
)
|
|
43.56
|
|
|||
Options forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
44.32
|
|
|||
Options outstanding, vested and exercisable as of December 31
|
10,950
|
|
|
$
|
31.99
|
|
|
33,283
|
|
|
$
|
36.40
|
|
|
116,575
|
|
|
$
|
37.76
|
|
Joint Venture
|
Location
|
Operating Segment
|
Fiscal Year-End
|
Rogers INOAC Corporation (RIC)
|
Japan
|
Elastomeric Material Solutions
|
October 31
|
Rogers INOAC Suzhou Corporation (RIS)
|
China
|
Elastomeric Material Solutions
|
December 31
|
|
As of December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Current assets
|
$
|
38,730
|
|
|
$
|
40,934
|
|
Non-current assets
|
$
|
4,839
|
|
|
$
|
4,947
|
|
Current liabilities
|
$
|
6,376
|
|
|
$
|
9,519
|
|
Shareholders' equity
|
$
|
37,193
|
|
|
$
|
36,362
|
|
|
For the Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
55,465
|
|
|
$
|
54,597
|
|
|
$
|
47,321
|
|
Gross profit
|
$
|
21,229
|
|
|
$
|
21,462
|
|
|
$
|
16,829
|
|
Net income
|
$
|
11,002
|
|
|
$
|
9,796
|
|
|
$
|
8,292
|
|
(Dollars in thousands)
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||||||
Change in benefit obligation:
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Benefit obligation at beginning of year
|
$
|
185,760
|
|
$
|
177,696
|
|
|
$
|
2,037
|
|
$
|
2,504
|
|
Service cost
|
—
|
|
—
|
|
|
73
|
|
80
|
|
||||
Interest cost
|
6,758
|
|
7,356
|
|
|
62
|
|
71
|
|
||||
Actuarial (gain) loss
|
(10,805
|
)
|
9,601
|
|
|
(5
|
)
|
460
|
|
||||
Benefit payments
|
(9,105
|
)
|
(8,893
|
)
|
|
(364
|
)
|
(533
|
)
|
||||
Plan amendment
|
—
|
|
—
|
|
|
—
|
|
(545
|
)
|
||||
Benefit obligation at end of year
|
$
|
172,608
|
|
$
|
185,760
|
|
|
$
|
1,803
|
|
$
|
2,037
|
|
Change in plan assets:
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Fair value of plan assets at the beginning of the year
|
$
|
180,056
|
|
$
|
171,778
|
|
|
$
|
—
|
|
$
|
—
|
|
Actual return on plan assets
|
(4,299
|
)
|
16,799
|
|
|
—
|
|
—
|
|
||||
Employer contributions
|
25,000
|
|
372
|
|
|
364
|
|
533
|
|
||||
Benefit payments
|
(9,105
|
)
|
(8,893
|
)
|
|
(364
|
)
|
(533
|
)
|
||||
Fair value of plan assets at the end of the year
|
191,652
|
|
180,056
|
|
|
—
|
|
—
|
|
||||
Funding status
|
$
|
19,044
|
|
$
|
(5,704
|
)
|
|
$
|
(1,803
|
)
|
$
|
(2,037
|
)
|
(Dollars in thousands)
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Noncurrent assets
|
$
|
19,273
|
|
$
|
3,021
|
|
|
$
|
—
|
|
$
|
—
|
|
Current liabilities
|
(4
|
)
|
(5
|
)
|
|
(334
|
)
|
(352
|
)
|
||||
Noncurrent liabilities
|
(225
|
)
|
(8,720
|
)
|
|
(1,469
|
)
|
(1,685
|
)
|
||||
Net amount recognized at end of year
|
$
|
19,044
|
|
$
|
(5,704
|
)
|
|
$
|
(1,803
|
)
|
$
|
(2,037
|
)
|
(Dollars in thousands)
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Net actuarial (loss) gain
|
$
|
(59,972
|
)
|
$
|
(59,645
|
)
|
|
$
|
68
|
|
$
|
63
|
|
Prior service benefit
|
—
|
|
—
|
|
|
1,220
|
|
2,821
|
|
||||
Net amount recognized at end of year
|
$
|
(59,972
|
)
|
$
|
(59,645
|
)
|
|
$
|
1,288
|
|
$
|
2,884
|
|
(Dollars in thousands)
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
73
|
|
|
$
|
80
|
|
|
$
|
133
|
|
|
Interest cost
|
6,758
|
|
|
7,356
|
|
|
7,530
|
|
|
62
|
|
|
71
|
|
|
75
|
|
||||||
Expected return of plan assets
|
(8,662
|
)
|
|
(9,221
|
)
|
|
(10,808
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,602
|
)
|
|
(1,602
|
)
|
|
(1,489
|
)
|
||||||
Amortization of net loss
|
1,828
|
|
|
1,755
|
|
|
1,784
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
||||||
Settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (benefit)
|
$
|
(76
|
)
|
|
$
|
(110
|
)
|
|
$
|
(1,494
|
)
|
|
$
|
(1,467
|
)
|
|
$
|
(1,451
|
)
|
|
$
|
(1,328
|
)
|
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||
Discount rate
|
4.25
|
%
|
3.70
|
%
|
|
3.75
|
%
|
3.25
|
%
|
|
Pension Benefits
|
|
Retirement Health and Life Insurance Benefits
|
||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||
Discount rate
|
3.70
|
%
|
4.25
|
%
|
|
3.25
|
%
|
3.25
|
%
|
Expected long-term rate of return on plan assets
|
4.94
|
%
|
5.51
|
%
|
|
—
|
%
|
—
|
%
|
(Dollars in thousands)
|
Increase
|
|
Decrease
|
||||
Effect on total service and interest cost
|
$
|
8
|
|
|
$
|
(8
|
)
|
Effect on other postretirement benefit obligations
|
$
|
65
|
|
|
(60
|
)
|
|
Assets at Fair Value as of December 31, 2018
|
||||||||||||||
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Pooled separate accounts
|
$
|
—
|
|
|
$
|
1,216
|
|
|
$
|
—
|
|
|
$
|
1,216
|
|
Fixed income bonds
|
—
|
|
|
186,385
|
|
|
—
|
|
|
186,385
|
|
||||
Mutual funds
|
2,691
|
|
|
—
|
|
|
—
|
|
|
2,691
|
|
||||
Guaranteed deposit account
|
—
|
|
|
—
|
|
|
1,360
|
|
|
1,360
|
|
||||
Total assets at fair value
|
$
|
2,691
|
|
|
$
|
187,601
|
|
|
$
|
1,360
|
|
|
$
|
191,652
|
|
|
Assets at Fair Value as of December 31, 2017
|
||||||||||||||
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Pooled separate accounts
|
$
|
—
|
|
|
$
|
4,610
|
|
|
$
|
—
|
|
|
$
|
4,610
|
|
Fixed income bonds
|
—
|
|
|
162,934
|
|
|
—
|
|
|
162,934
|
|
||||
Mutual funds
|
6,223
|
|
|
—
|
|
|
—
|
|
|
6,223
|
|
||||
Guaranteed deposit account
|
—
|
|
|
—
|
|
|
6,289
|
|
|
6,289
|
|
||||
Total assets at fair value
|
$
|
6,223
|
|
|
$
|
167,544
|
|
|
$
|
6,289
|
|
|
$
|
180,056
|
|
(Dollars in thousands)
|
Guaranteed Deposit Account
|
||
Balance at beginning of year
|
$
|
6,289
|
|
Change in unrealized gain (loss)
|
(194
|
)
|
|
Purchases, sales, issuances and settlements (net)
|
(4,735
|
)
|
|
Balance at end of year
|
$
|
1,360
|
|
(Dollars in thousands)
|
Pension Benefits
|
|
Retiree Health and Life Insurance Benefits
|
||||
2019
|
$
|
9,500
|
|
|
$
|
334
|
|
2020
|
$
|
9,597
|
|
|
$
|
265
|
|
2021
|
$
|
9,818
|
|
|
$
|
171
|
|
2022
|
$
|
10,038
|
|
|
$
|
134
|
|
2023
|
$
|
10,228
|
|
|
$
|
151
|
|
2024-2028
|
$
|
53,901
|
|
|
$
|
825
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Leases
|
$
|
3,850
|
|
|
$
|
3,819
|
|
|
$
|
3,567
|
|
Capital Leases
|
$
|
472
|
|
|
$
|
608
|
|
|
$
|
564
|
|
|
2018
|
|
2017
|
||
Claims outstanding at beginning of year
|
687
|
|
|
605
|
|
New claims filed
|
275
|
|
|
362
|
|
Pending claims concluded*
|
(217
|
)
|
|
(280
|
)
|
Claims outstanding at end of year
|
745
|
|
|
687
|
|
(Dollars in millions)
|
2018
|
|
2017
|
||||
Asbestos-related claims
|
$
|
70.3
|
|
|
$
|
76.2
|
|
Asbestos-related insurance receivables
|
$
|
63.8
|
|
|
$
|
69.2
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic
|
$
|
14,381
|
|
|
$
|
39,751
|
|
|
$
|
10,888
|
|
International
|
96,208
|
|
|
93,174
|
|
|
71,392
|
|
|||
Total
|
$
|
110,589
|
|
|
$
|
132,925
|
|
|
$
|
82,280
|
|
(Dollars in thousands)
|
Current
|
|
Deferred
|
|
Total
|
||||||
2018
|
|
|
|
|
|
||||||
Domestic
|
$
|
(341
|
)
|
|
$
|
(3,007
|
)
|
|
$
|
(3,348
|
)
|
International
|
26,604
|
|
|
(318
|
)
|
|
26,286
|
|
|||
Total
|
$
|
26,263
|
|
|
$
|
(3,325
|
)
|
|
$
|
22,938
|
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
||||||
Domestic
|
$
|
7,535
|
|
|
$
|
21,936
|
|
|
$
|
29,471
|
|
International
|
27,418
|
|
|
(4,423
|
)
|
|
22,995
|
|
|||
Total
|
$
|
34,953
|
|
|
$
|
17,513
|
|
|
$
|
52,466
|
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
||||||
Domestic
|
$
|
2,078
|
|
|
$
|
3,376
|
|
|
$
|
5,454
|
|
International
|
24,537
|
|
|
4,006
|
|
|
28,543
|
|
|||
Total
|
$
|
26,615
|
|
|
$
|
7,382
|
|
|
$
|
33,997
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Accrued employee benefits and compensation
|
$
|
4,269
|
|
|
$
|
8,410
|
|
Tax loss and credit carryforwards
|
18,604
|
|
|
7,905
|
|
||
Reserves and accruals
|
4,935
|
|
|
4,699
|
|
||
Other
|
1,953
|
|
|
2,977
|
|
||
Total deferred tax assets
|
29,761
|
|
|
23,991
|
|
||
Less deferred tax asset valuation allowance
|
(16,889
|
)
|
|
(8,754
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
12,872
|
|
|
15,237
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Depreciation and amortization
|
8,335
|
|
|
14,300
|
|
||
Postretirement benefit obligations
|
3,234
|
|
|
2,311
|
|
||
Unremitted earnings
|
1,778
|
|
|
3,100
|
|
||
Other
|
2,094
|
|
|
224
|
|
||
Total deferred tax liabilities
|
15,441
|
|
|
19,935
|
|
||
Net deferred tax asset (liability)
|
$
|
(2,569
|
)
|
|
$
|
(4,698
|
)
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Tax expense at Federal statutory income tax rate
|
$
|
23,224
|
|
|
$
|
46,529
|
|
|
$
|
28,798
|
|
International tax rate differential
|
826
|
|
|
(9,603
|
)
|
|
(2,260
|
)
|
|||
Foreign source income, net of tax credits (excluding U.S. Tax Reform)
|
(197
|
)
|
|
1,087
|
|
|
1,215
|
|
|||
State tax, net of federal
|
121
|
|
|
279
|
|
|
(200
|
)
|
|||
Unrecognized tax benefits
|
(869
|
)
|
|
2,874
|
|
|
(5,555
|
)
|
|||
U.S. Tax Reform
|
209
|
|
|
13,683
|
|
|
—
|
|
|||
Equity compensation excess tax deductions
|
(2,238
|
)
|
|
(3,867
|
)
|
|
—
|
|
|||
General business credits
|
(2,172
|
)
|
|
(1,080
|
)
|
|
(1,125
|
)
|
|||
Distribution related foreign taxes
|
1,916
|
|
|
2,173
|
|
|
12,433
|
|
|||
Valuation allowance change (excluding U.S. Tax Reform)
|
602
|
|
|
1,393
|
|
|
171
|
|
|||
Other
|
1,516
|
|
|
(1,002
|
)
|
|
520
|
|
|||
Income tax expense (benefit)
|
$
|
22,938
|
|
|
$
|
52,466
|
|
|
$
|
33,997
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
14,565
|
|
|
$
|
5,883
|
|
Gross increases - current period tax positions
|
2,583
|
|
|
7,056
|
|
||
Gross increases - tax positions in prior periods
|
505
|
|
|
3,243
|
|
||
Gross decreases - tax positions in prior periods
|
—
|
|
|
(375
|
)
|
||
Foreign currency exchange
|
(142
|
)
|
|
467
|
|
||
Lapse of statute of limitations
|
(7,710
|
)
|
|
(1,709
|
)
|
||
Ending balance
|
$
|
9,801
|
|
|
$
|
14,565
|
|
(Dollars in thousands)
|
Advanced Connectivity Solutions
|
|
Elastomeric Material Solutions
|
|
Power Electronics Solutions
|
|
Other
|
|
Total
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales - recognized over time
|
$
|
—
|
|
|
$
|
5,788
|
|
|
$
|
221,896
|
|
|
$
|
16,973
|
|
|
$
|
244,657
|
|
Net sales - recognized at a point in time
|
$
|
294,154
|
|
|
$
|
335,576
|
|
|
$
|
1,442
|
|
|
$
|
3,262
|
|
|
$
|
634,434
|
|
Total net sales
|
$
|
294,154
|
|
|
$
|
341,364
|
|
|
$
|
223,338
|
|
|
$
|
20,235
|
|
|
$
|
879,091
|
|
Operating income
|
$
|
33,827
|
|
|
$
|
52,502
|
|
|
$
|
19,648
|
|
|
$
|
6,734
|
|
|
$
|
112,711
|
|
Total assets
|
$
|
396,075
|
|
|
$
|
588,841
|
|
|
$
|
273,212
|
|
|
$
|
21,216
|
|
|
$
|
1,279,344
|
|
Capital expenditures
|
$
|
61,425
|
|
|
$
|
10,917
|
|
|
$
|
18,051
|
|
|
$
|
156
|
|
|
$
|
90,549
|
|
Depreciation & amortization
|
$
|
20,121
|
|
|
$
|
18,501
|
|
|
$
|
10,640
|
|
|
$
|
811
|
|
|
$
|
50,073
|
|
Investment in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
18,667
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,667
|
|
Equity income in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
5,501
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,501
|
|
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net sales
|
$
|
301,092
|
|
|
$
|
312,661
|
|
|
$
|
184,954
|
|
|
$
|
22,336
|
|
|
$
|
821,043
|
|
Operating income
|
$
|
55,410
|
|
|
$
|
50,908
|
|
|
$
|
15,668
|
|
|
$
|
7,153
|
|
|
$
|
129,139
|
|
Total assets
|
$
|
353,786
|
|
|
$
|
489,456
|
|
|
$
|
261,034
|
|
|
$
|
20,858
|
|
|
$
|
1,125,134
|
|
Capital expenditures
|
$
|
9,900
|
|
|
$
|
7,563
|
|
|
$
|
9,238
|
|
|
$
|
514
|
|
|
$
|
27,215
|
|
Depreciation & amortization
|
$
|
16,351
|
|
|
$
|
16,270
|
|
|
$
|
10,572
|
|
|
$
|
906
|
|
|
$
|
44,099
|
|
Investment in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
18,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,324
|
|
Equity income in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
4,898
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,898
|
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net sales
|
$
|
277,787
|
|
|
$
|
203,181
|
|
|
$
|
152,367
|
|
|
$
|
22,979
|
|
|
$
|
656,314
|
|
Operating income
|
$
|
42,455
|
|
|
$
|
25,884
|
|
|
$
|
5,229
|
|
|
$
|
7,329
|
|
|
$
|
80,897
|
|
Total assets
|
$
|
361,746
|
|
|
$
|
421,011
|
|
|
$
|
247,187
|
|
|
$
|
26,556
|
|
|
$
|
1,056,500
|
|
Capital expenditures
|
$
|
7,569
|
|
|
$
|
4,051
|
|
|
$
|
6,009
|
|
|
$
|
507
|
|
|
$
|
18,136
|
|
Depreciation & amortization
|
$
|
15,654
|
|
|
$
|
10,141
|
|
|
$
|
11,208
|
|
|
$
|
844
|
|
|
$
|
37,847
|
|
Investment in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
16,183
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,183
|
|
Equity income in unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
4,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,146
|
|
|
Long-Lived Assets
(1)
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
476,560
|
|
|
$
|
370,964
|
|
|
$
|
326,199
|
|
China
|
58,205
|
|
|
57,404
|
|
|
62,728
|
|
|||
Germany
|
113,412
|
|
|
114,497
|
|
|
101,725
|
|
|||
Other
|
36,475
|
|
|
34,131
|
|
|
32,242
|
|
|||
Total
|
$
|
684,652
|
|
|
$
|
576,996
|
|
|
$
|
522,894
|
|
|
December 31, 2018
|
|||||||||||||
(Dollars in thousands)
|
Advanced Connectivity Solutions
|
|
Elastomeric Material Solutions
|
|
Power Electronics Solutions
|
|
Other
|
|
Total
|
|||||
Contract Assets
|
—
|
|
|
943
|
|
|
19,738
|
|
|
2,047
|
|
|
22,728
|
|
|
As of
|
||||||||||
Consolidated Statements of Financial Position:
|
December 31, 2017
|
|
|
|
January 1, 2018
|
||||||
(Dollars in thousands)
|
Under ASC 605
|
|
Impact of Adoption
|
|
Under ASC 606
|
||||||
Contract assets
|
$
|
—
|
|
|
$
|
18,099
|
|
|
$
|
18,099
|
|
Inventories
|
112,557
|
|
|
(12,307
|
)
|
|
100,250
|
|
|||
Deferred income taxes
|
10,706
|
|
|
1,580
|
|
|
12,286
|
|
|||
Retained earnings
|
684,540
|
|
|
4,212
|
|
|
688,752
|
|
Consolidated Statements of Operations:
|
Year Ended
|
||||||||||
December 31, 2018
|
|
|
|
December 31, 2018
|
|||||||
(Dollars in thousands, except per share amounts)
|
Under ASC 605
|
|
Impact of Adoption
|
|
Under ASC 606
|
||||||
Net sales
|
$
|
874,462
|
|
|
$
|
4,629
|
|
|
$
|
879,091
|
|
Cost of sales
|
565,160
|
|
|
3,148
|
|
|
568,308
|
|
|||
Income tax expense
|
22,558
|
|
|
380
|
|
|
22,938
|
|
|||
Net income
|
86,550
|
|
|
1,101
|
|
|
87,651
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
4.71
|
|
|
$
|
0.06
|
|
|
$
|
4.77
|
|
Diluted earnings per share
|
$
|
4.64
|
|
|
$
|
0.06
|
|
|
$
|
4.70
|
|
|
As of
|
||||||||||
Consolidated Statements of Financial Position:
|
December 31, 2018
|
|
|
|
December 31, 2018
|
||||||
(Dollars in thousands)
|
Under ASC 605
|
|
Impact of Adoption
|
|
Under ASC 606
|
||||||
Contract assets
|
$
|
—
|
|
|
$
|
22,728
|
|
|
$
|
22,728
|
|
Inventories
|
148,092
|
|
|
(15,455
|
)
|
|
132,637
|
|
|||
Deferred income taxes
|
8,846
|
|
|
1,960
|
|
|
10,806
|
|
|||
Retained earnings
|
771,090
|
|
|
5,313
|
|
|
776,403
|
|
|
Year Ended
|
||||||||||
Consolidated Statements of Cash Flows:
|
December 31, 2018
|
|
|
|
December 31, 2018
|
||||||
(Dollars in thousands)
|
Under ASC 605
|
|
Impact of Adoption
|
|
Under ASC 606
|
||||||
Cash provided by operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
86,550
|
|
|
$
|
1,101
|
|
|
$
|
87,651
|
|
Deferred income taxes
|
(3,705
|
)
|
|
380
|
|
|
(3,325
|
)
|
|||
Contract assets
|
—
|
|
|
(22,728
|
)
|
|
(22,728
|
)
|
|||
Inventories
|
(34,468
|
)
|
|
15,455
|
|
|
(19,013
|
)
|
|||
Other, net
|
(4,801
|
)
|
|
5,792
|
|
|
991
|
|
|||
Net cash provided by operating activities
|
66,820
|
|
|
—
|
|
|
66,820
|
|
(Dollars in thousands)
|
Severance Related to Headquarters Relocation
|
||
Balance as of December 31, 2017
|
$
|
183
|
|
Provisions
|
186
|
|
|
Payments
|
(264
|
)
|
|
Balance as of December 31, 2018
|
$
|
105
|
|
(Dollars in thousands)
|
Severance Related to Facility Consolidation
|
||
Balance as of December 31, 2017
|
$
|
—
|
|
Provisions
|
546
|
|
|
Payments
|
(23
|
)
|
|
Balance as of December 31, 2018
|
$
|
523
|
|
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Advanced Connectivity Solutions
|
|
|
|
|
|
||||||
Severance and other related costs
|
$
|
244
|
|
|
$
|
1,305
|
|
|
$
|
375
|
|
Allocated impairment charges
|
1,506
|
|
|
161
|
|
|
—
|
|
|||
Elastomeric Material Solutions
|
|
|
|
|
|
||||||
Severance and other related costs
|
2,152
|
|
|
834
|
|
|
176
|
|
|||
Allocated impairment charges
|
—
|
|
|
103
|
|
|
—
|
|
|||
Power Electronics Solutions
|
|
|
|
|
|
||||||
Severance and other related costs
|
136
|
|
|
621
|
|
|
183
|
|
|||
Allocated impairment charges
|
—
|
|
|
543
|
|
|
—
|
|
|||
Total Restructuring and Impairment Charges
|
$
|
4,038
|
|
|
$
|
3,567
|
|
|
$
|
734
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Gain from antitrust litigation settlement
|
$
|
(4,231
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain on sale of property, plant and equipment
|
(164
|
)
|
|
(5,329
|
)
|
|
—
|
|
|||
Lease income
|
(948
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation on leased assets
|
3,512
|
|
|
—
|
|
|
—
|
|
|||
Indemnity claim settlement from acquisitions
|
(700
|
)
|
|
—
|
|
|
—
|
|
|||
Economic incentive grants
|
(556
|
)
|
|
—
|
|
|
—
|
|
|||
|
$
|
(3,087
|
)
|
|
$
|
(5,329
|
)
|
|
$
|
—
|
|
|
2018
|
||||||||||||||
(Dollars in thousands, except per share amounts)
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Net sales
|
$
|
214,611
|
|
|
$
|
214,675
|
|
|
$
|
226,863
|
|
|
$
|
222,942
|
|
Gross margin
|
$
|
76,606
|
|
|
$
|
76,672
|
|
|
$
|
79,130
|
|
|
$
|
78,375
|
|
Net income
|
$
|
26,136
|
|
|
$
|
17,329
|
|
|
$
|
19,734
|
|
|
$
|
24,452
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.43
|
|
|
$
|
0.94
|
|
|
$
|
1.07
|
|
|
$
|
1.33
|
|
Diluted
|
$
|
1.40
|
|
|
$
|
0.93
|
|
|
$
|
1.06
|
|
|
$
|
1.31
|
|
(Dollars in thousands, except per share amounts)
|
2017
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Net sales
|
$
|
203,828
|
|
|
$
|
201,424
|
|
|
$
|
206,783
|
|
|
$
|
209,008
|
|
Gross margin
|
$
|
80,350
|
|
|
$
|
80,546
|
|
|
$
|
82,188
|
|
|
$
|
75,491
|
|
Net income
|
$
|
27,032
|
|
|
$
|
20,896
|
|
|
$
|
25,532
|
|
|
$
|
6,999
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.50
|
|
|
$
|
1.15
|
|
|
$
|
1.40
|
|
|
$
|
0.38
|
|
Diluted
|
$
|
1.47
|
|
|
$
|
1.13
|
|
|
$
|
1.37
|
|
|
$
|
0.37
|
|
|
For the Years Ended December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Shares of capital stock repurchased
|
23,138
|
|
|
—
|
|
||
Value of capital stock repurchased
|
$
|
2,999
|
|
|
$
|
—
|
|
(Dollars in thousands)
|
|
Balance at Beginning of Period
|
|
Charged to (Reduction of) Costs and Expenses
|
|
Taken Against Allowance
|
|
Other (Deductions) Recoveries
|
|
Balance at End of Period
|
||||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
$
|
1,525
|
|
|
$
|
189
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
|
$
|
1,354
|
|
December 31, 2017
|
|
$
|
1,952
|
|
|
$
|
(275
|
)
|
|
$
|
(152
|
)
|
|
$
|
—
|
|
|
$
|
1,525
|
|
December 31, 2016
|
|
$
|
695
|
|
|
$
|
1,321
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
1,952
|
|
(Dollars in thousands)
|
|
Balance at Beginning of Period
|
|
Charged to (Reduction of) Costs and Expenses
|
|
Taken Against Allowance
|
|
Other (Deductions) Recoveries
|
|
Balance at End of Period
|
||||||||||
Valuation on Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
$
|
8,754
|
|
|
$
|
8,135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,889
|
|
December 31, 2017
|
|
$
|
6,388
|
|
|
$
|
2,366
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,754
|
|
December 31, 2016
|
|
$
|
6,202
|
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,388
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
3.1
|
3.2
|
10.1
|
10.1.1
|
10.1.2
|
10.2
|
10.2.1
|
10.2.2
|
10.2.3
|
10.2.4
|
10.3
|
10.3.1
|
10.3.2
|
10.4
|
10.5
|
10.6
|
10.7
|
10.8
|
10.9
|
10.10
|
10.11
|
10.12
|
10.13
|
21
|
23.1
|
31.1
|
31.2
|
32
|
101
|
The following materials from Rogers Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Financial Position for the fiscal years ended December 31, 2018 and 2017; (ii) Consolidated Statements of Operations for the fiscal years ended December 31, 2018, 2017 and 2016; (iii) Consolidated Statements of Shareholders’ Equity for the fiscal years ended December 31, 2018, 2017 and 2016; and (iv) Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2018, 2017 and 2016; and (v) Notes to Consolidated Financial Statements.
|
**
|
Management contract or compensatory plan or arrangement.
|
ROGERS CORPORATION
(Registrant)
|
/s/ Bruce D. Hoechner
|
Bruce D. Hoechner
|
President and Chief Executive Officer
Principal Executive Officer
|
|
Dated: February 20, 2019
|
|
|
|
/s/ Bruce D. Hoechner
|
|
/s/ Keith L. Barnes
|
Bruce D. Hoechner
President and Chief Executive Officer
Director
Principal Executive Officer
|
|
Keith L. Barnes
Director
|
|
|
|
/s/ Michael M. Ludwig
|
|
/s/ Carol R. Jensen
|
Michael M. Ludwig
Senior Vice President, Chief Financial Officer and Treasurer
Principal Financial Officer
|
|
Carol R. Jensen
Director
|
|
|
|
/s/ Mark D. Weaver
|
|
|
Mark D. Weaver
Chief Accounting Officer and Corporate Controller
Principal Accounting Officer
|
|
Jeffrey J. Owens
Director
|
|
|
|
/s/ Michael F. Barry
|
|
/s/ Ganesh Moorthy
|
Michael F. Barry
Director
|
|
Ganesh Moorthy
Director
|
|
|
|
/s/ Helene Simonet
|
|
/s/ Peter C. Wallace
|
Helene Simonet
Director
|
|
Peter C. Wallace
Director
|
|
|
|
Company
|
Percentage of Voting Securities Owned
|
Jurisdiction of Incorporation or Organization
|
|
|
|
Rogers Japan Inc.
|
100%
|
Delaware
|
Rogers Southeast Asia, Inc.
|
100%
|
Delaware
|
Rogers Taiwan, Inc.
|
100%
|
Delaware
|
Rogers Technologies Singapore, Inc.
|
100%
|
Delaware
|
Rogers Technologies (Suzhou) Co., Ltd.
|
100%
|
China
|
World Properties, Inc.
|
100%
|
Illinois
|
Rogers BVBA
|
100%
|
Belgium
|
Rogers GmbH
|
100%
|
Germany
|
Rogers U.K. Ltd.
|
100%
|
England
|
Rogers International Trading (Shanghai) Co. Ltd.
|
100%
|
China
|
Rogers KF, Inc.
|
100%
|
Delaware
|
Rogers Luxembourg Sarl
|
100%
|
Luxembourg
|
Rogers Benelux Sarl
|
100%
|
Luxembourg
|
Rogers Worldwide LLC
|
100%
|
Delaware
|
Rogers New Territories Corporation Limited
|
100%
|
Hong Kong
|
Rogers Asia Holding Company Limited
|
100%
|
Hong Kong
|
Rogers Pacific Limited
|
100%
|
Hong Kong
|
Utis Co., Ltd.
|
100%
|
Korea
|
Rogers Germany GmbH
|
100%
|
Germany
|
Rogers Korea, Inc.
|
100%
|
Korea
|
Arlon Holdings, LLC
|
100%
|
Delaware
|
Arlon LLC
|
100%
|
Delaware
|
Arlon MED International LLC
|
100%
|
Delaware
|
Rogers Material Technologies (Suzhou) Co., Ltd
|
100%
|
China
|
Arlon Materials for Electronics Co., Ltd
|
100%
|
China
|
Rogers Hungary KfT
|
100%
|
Hungary
|
Rogers Finance (Ireland) Unlimited Company
|
100%
|
Ireland
|
Rogers Finance (Luxembourg) Sarl
|
100%
|
Luxembourg
|
Chandler Holdings I Corporation
|
100%
|
Delaware
|
DeWAL Industries, Inc.
|
100%
|
Rhode Island
|
Diversified Silicone Products Corporation
|
100%
|
Delaware
|
Griswold LLC
|
100%
|
Delaware
|
Rogers Inoac Corporation *
|
50%
|
Japan
|
Rogers Inoac Suzhou Corporation *
|
50%
|
China
|
*
|
These entities are unconsolidated joint ventures and accordingly are not included in the consolidated financial statements of Rogers Corporation, except to the extent required by the equity method of accounting.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Rogers Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 20, 2019
|
/s/ Bruce D. Hoechner
|
Bruce D. Hoechner
|
President and Chief Executive Officer
Principal Executive Officer |
1.
|
I have reviewed this Annual Report on Form 10-K of Rogers Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 20, 2019
|
/s/ Michael M. Ludwig
|
Michael M. Ludwig
|
Senior Vice President, Chief Financial Officer and Treasurer
Principal Financial Officer
|
/s/ Bruce D. Hoechner
|
Bruce D. Hoechner
|
President and Chief Executive Officer
Principal Executive Officer |
February 20, 2019
|
/s/ Michael M. Ludwig
|
Michael M. Ludwig
|
Senior Vice President, Chief Financial Officer and Treasurer
Principal Financial Officer
|
February 20, 2019
|