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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 29, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission file number 1-4347
ROGERS CORPORATION
[Exact name of Registrant as specified in its charter]
Massachusetts 06-0513860
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Technology Drive
P.O. Box 188
Rogers, Connecticut 06263-0188
(Address of principal executive offices) (Zip Code)
(860) 774-9605
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Capital Stock, $1 Par Value New York Stock Exchange, Inc.
Rights to Purchase Capital Stock New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter periods that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No ________
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the Capital Stock, $1 par value, held by
non-affiliates of the Registrant as of March 5, 2003 was $444,639,478.
The number of shares of Capital Stock, $1 par value, outstanding as of
March 5, 2003 was 15,364,184.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's annual report to shareholders for the
fiscal year ended December 29, 2002 are incorporated by reference
into Parts I and II.
Portions of the proxy statement for the Registrant's 2003 annual meeting
of stockholders to be held April 24, 2003, are incorporated by reference
into Part III.
TABLE OF CONTENTS
PART I
Item Page
1. Business 1
2. Properties 6
3. Legal Proceedings 6
4. Submission of Matters to a Vote of Security Holders 8
PART II
5. Market for Registrant's Common Equity and Related
Stockholder Matters 8
6. Selected Financial Data 8
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
7A. Quantitative and Qualitative Disclosures About
Market Risk 8
8. Financial Statements and Supplementary Data 8
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 8
PART III
10. Directors and Executive Officers of the Registrant 9
11. Executive Compensation 9
12. Security Ownership of Certain Beneficial Owners
and Management 9
13. Certain Relationships and Related Transactions 9
14. Controls and Procedures 9
PART IV
15. Exhibits and Reports on Form 8-K 10
SIGNATURES
Signatures 14
Certifications Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 15
PART I
Item 1. BUSINESS
GENERAL
Rogers Corporation ("the Company"), founded in 1832, is one of the oldest
publicly traded U.S. companies in continuous operation. The Company
has adapted its products over the years to meet changing market
needs, moving from specialty paperboard to transformer boards for
electrical insulation, and now predominantly to a range of specialty
polymer composite materials for communications, imaging, computer,
transportation, and consumer applications.
New leadership in 1992 restructured the Company to focus on its
materials based businesses, which include printed circuit materials,
high performance foams, and other polymer materials and components.
The Company's management, operations, sales and marketing, and
technology development activities were redirected to efforts intended
to grow the materials based businesses. In so doing, the Company
takes advantage of its core competencies in polymers, fillers, and
adhesion, and applies its related materials technologies to identified
market needs. Materials based businesses were the core businesses
responsible for the Company's strong growth in the 1960's and 1970's,
and provided most of the Company's profits in the 1980's. During
that time, the profits from the materials based businesses were often
offset by substantial losses in the Company's former electronic
components businesses, which are now divested.
The materials based businesses are guided by clearly developed
strategic business plans for profitable growth. The current focus is
on worldwide markets for printed circuit materials, high performance
foams; and the electroluminescent lamp joint venture with 3M. An
increasingly large percentage of these materials are going into
growing high technology applications, such as cell telephone base
stations and antennas, handheld wireless devices and satellite
television receivers.
BUSINESS SEGMENT FINANCIAL AND GEOGRAPHIC INFORMATION
"Business Segment and Geographic Information" on pages 48-50 of the
annual report to shareholders for the year ended December 29, 2002, is
incorporated herein by reference.
PRODUCTS
Rogers Corporation manufactures and sells specialty polymer composite
materials and components which it develops for growing markets and
applications around the world. The Company has three business segments:
High Performance Foams, Printed Circuit Materials, and Polymer Materials
and Components. The Company's products are based on its core technologies
in polymers, fillers, and adhesion. Most products are proprietary, or
incorporate proprietary technology in their development and processing,
and are sold under the Company's valuable brand names.
HIGH PERFORMANCE FOAMS
High Performance Foams include urethane foams, silicone foams, and
polyolefin foams. The Company's High Performance Foams have
characteristics that offer functional advantages in many market
applications, and serve to differentiate the Company's products from
competitors' materials and from other commonly available materials.
High Performance Foams are sold to fabricators, printers and original
equipment manufacturers for applications in imaging, communications,
computer, transportation, consumer and other markets. Trade names for
the Company's High Performance Foams include: PORON(R) urethane foams
used for making high performance gaskets and seals in vehicles,
communications devices, computers and peripherals; PORON cushion
insole materials for footwear and related products; PORON healthcare
and medical materials for body cushioning, orthotic appliances;
BISCO(R) silicone foams used for making flame
1
retardant gaskets and seals in aircraft, trains, cars and trucks, and
for shielding extreme temperature or flame; and R/bak(R) compressible
printing plate backing and mounting products for cushioning
flexographic printing on packaging materials. The Company's polyolefin
foams are used in a range of industrial and consumer applications.
One of the Company's joint ventures extends and complements the Company's
worldwide business in High Performance Foams. Rogers Inoac Corporation
("RIC"), a 50% owned joint venture with Japan-based Inoac Corporation,
manufactures high performance PORON urethane foam materials in Mie and
Nagoya, Japan.
PRINTED CIRCUIT MATERIALS
Printed Circuit Materials include printed circuit board laminates for
high frequency circuits, flexible printed circuit board laminates for
high performance flexible circuits, and polyester based industrial
laminates. The Company's Printed Circuit Materials have characteristics
that offer performance and other advantages in many market applications,
and serve to differentiate the Company's products from competitors'
products and from other commonly available materials.
Printed Circuit Materials are sold principally to independent and captive
printed circuit board manufacturers who convert the Company's laminates to
custom printed circuits.
The polymer based dielectric layers of the Company's high frequency
circuit board laminates are proprietary materials that provide highly
specialized electrical and mechanical properties. Trade names for the
Company's high frequency printed circuit board materials include RO3000(R),
RO4000(R), DUROID(R), RT/duroid(R), ULTRALAM(R), and TMM(R) laminates. All
of these laminates are used for making circuitry that receive, transmit,
and process high frequency communications signals. Each laminate
addresses specific needs and applications within the communications market.
High frequency circuits are used throughout the equipment and devices that
comprise wireless communications systems, including cellular communications,
digital cellular communications, paging, direct broadcast television, global
positioning, mobile radio communications, and radar.
The flexible circuit materials that the Company manufactures are called
R/flex(R) materials. They are mainly used to make interconnections for
handheld and laptop computers, portable electronic devices, and hard
disk drives. The performance characteristics of R/flex materials
differentiate these laminates from commonly available flexible circuit
materials.
The adhesiveless flexible circuit materials that the Company sold to
Hutchinson Technology Incorporated ("HTI"), for making trace suspension
assemblies in magneto resistive hard disk drives, are called SSLAM
materials. SSLAM materials are manufactured by Mitsui Chemicals, Inc.
of Japan, under a technology license from Rogers Corporation. Effective
January 3, 2000 the Company started a joint venture with Mitsui Chemicals,
Inc. to eventually manufacture this flexible circuit board laminate in
Chandler, Arizona. Beginning in 2000, this joint venture, Polyimide
Laminate Systems, LLC ("PLS") made these sales to HTI rather than having
the resale go through the Company. Eventually PLS will provide HTI with
a second source of supply.
Rogers Chang Chun Technology Co., Ltd. ("RCCT"), the Company's joint
venture with Chang Chun Plastics Co., Ltd., which was established in
late 2001 to manufacture flexible circuit material for customers in
Taiwan, saw its first sales in 2002. While the sales were slightly
lower than the Company's expectations, progress was definitely made in
establishing a foothold in this market and the Company looks to the
future for this positive trend to continue.
Industrial laminates are manufactured by the Company under the Induflex(R)
trade name. These polyester based laminates, with thin aluminum and copper
cladding, are sold to telecommunications and data communication cable
manufacturers for shielding electromagnetic and radio frequency
interference, and to automotive component manufacturers for making flat,
etched-foil heaters.
2
POLYMER MATERIALS AND COMPONENTS
Polymer Materials and Components include high performance elastomer
components, composite materials, and power distribution bus bars. The
Company's Polymer Materials and Components have characteristics that
offer functional advantages in many market applications, and serve to
differentiate the Company's products from competitors' materials and
from other commonly available materials.
Polymer Materials and Components are sold to printers and original
equipment manufacturers for applications in transportation, communications,
imaging, computer, consumer and other markets. Trade names for the
Company's Polymer Materials and Components include: NITROPHYL(R) floats
for fill level sensing in fuel tanks, motors, and storage tanks; and
ENDUR(R) elastomer rollers and belts for document handling in copiers,
computer printers, mail sorting machines and automated teller machines.
Power distribution bus bars are manufactured by the Company under the
MEKTRON(R) trade name. Bus bars are sold to manufacturers of high voltage
electrical traction systems for use in mass transit and industrial
applications, and to manufacturers of communication and computer equipment.
The Company's nonwoven composite materials are manufactured for medical
padding, industrial pre-filtration applications, and as consumable
supplies in the lithographic printing industry.
One of the Company's joint ventures complements the Company's worldwide
business in Polymer Materials and Components. This is Durel Corporation,
a 50% owned venture with 3M, which manufactures DUREL(R) electroluminescent
lamps ("EL Lamps") and phosphor, in Chandler, Arizona. The Company also
designs and sells inverters that power EL lamps.
BACKLOG
Excluding joint venture activity, the backlog of firm orders for High
Performance Foams was $5,841,000 at December 29, 2002 and $3,611,000
at December 30, 2001. The backlog of firm orders for Printed Circuit
Materials was $7,210,000 at December 29, 2002 and $7,384,000 at
December 30, 2001. The backlog of firm orders for Polymer Materials
and Components was $8,629,000 at December 29, 2002 and $12,273,000 at
December 30, 2001. The amount of unfilled orders is reasonably stable
throughout the year.
RAW MATERIALS
The manufacture of High Performance Foams, Printed Circuit Materials
and Polymer Materials and Components requires a wide variety of purchased
raw materials. Some of these raw materials are available only from
limited sources of supply that, if discontinued, could interrupt
production. When this has occurred in the past, the Company has
purchased sufficient quantities of the particular raw material to sustain
production until alternative materials and production processes could be
qualified with customers. Management believes that similar responses
would mitigate any raw material availability issues in the future.
EMPLOYEES
The Company employed an average of 210 people in the High Performance
Foams operations, 430 people in the Printed Circuit Materials operations,
and 611 people in the Polymer and Materials operations during 2002.
SEASONALITY
In the Company's opinion, there is no material concentration of products
or markets within the business which are seasonal in nature.
3
CUSTOMERS & MARKETING
The Company's products were sold to approximately 2,400 customers
worldwide in 2002. Although the loss of all the sales made to any one of
the Company's major customers would require a period of adjustment
during which the business of a segment would be adversely affected, the
Company believes that such adjustment could be made over a period of time.
The Company also believes that its business relationships with the major
customers within all of its segments are generally favorable, and that
it is in a good position to respond promptly to variations in customer
requirements. However, the possibility exists of losing all the business
of any major customer as to any product line. Likewise, the possibility
exists of losing all the business of any single customer.
The Company markets its full range of products throughout the United
States and in most foreign markets. Over 90% of the Company's sales are
sold through the Company's own domestic and foreign sales force,
with the balance sold through independent agents and distributors.
COMPETITION
There are no firms that compete with the Company across its full range
of product lines. However, each of the Company's products faces
competition in each business segment in domestic and foreign markets.
Competition comes from firms of all sizes and types, including those
with substantially more resources than the Company. The Company's
strategy is to offer technically advanced products that are price
competitive in their markets, and to link the offerings with market
knowledge and customer service. The Company believes this serves to
differentiate the Company's products in many markets.
RESEARCH & DEVELOPMENT
The Company has many domestic and foreign patents and licenses and has
additional patent applications on file related to all business segments.
In some cases, the patents result in license royalties. The patents are
of varying duration and provide some protection. Although the Company
vigorously defends its patents, the Company believes that its patents
have most value in combination with its equipment, technology, skills,
and market position. The Company also owns a number of registered and
unregistered trademarks that it believes to be of importance.
ENVIRONMENTAL REGULATION
The nature and scope of the Company's business bring it in regular
contact with the general public and a variety of businesses and
government agencies. Such activities inherently subject the Company
to the possibility of litigation, including environmental matters
that are defended and handled in the ordinary course of business.
The Company has established accruals for matters for which management
considers a loss to be probable and reasonably estimable.
The Company does not believe that the outcome of any of these
matters will have a material adverse effect on its financial
position nor has the Company had any material recurring costs or
capital expenditures relating to environmental matters, except as
disclosed in Item 3 of this report. However, there can be no assurances
that the ultimate liability concerning these matters will not have
a material adverse effect on the Company.
4
EXECUTIVE OFFICERS OF THE REGISTRANT
All officers hold office until the first meeting of the Board of Directors
following the annual meeting of stockholders or until successors are elected.
There are no family relationships between or among executive officers and
directors of the Company.
Name, Age Prior Business Experience Served in Present
and Present Position in Past Five Years Position Since
- ------------------------------------------------------------------------------
Walter E. Boomer, 64 President and Chief Executive Officer April 2002
Chairman of the Board from March 1997 to April 2002
of Directors and Chief
Executive Officer
Robert D. Wachob, 55 Executive Vice President from January April 2002
President and Chief 2000 to April 2002; Senior
Operating Officer Vice President, Sales and Marketing
from May 1997 to January 2000.
James M. Rutledge, 50 Vice President, Finance and Chief December 2002
Vice President, Financial Officer from June 2002 to
Finance and Chief December 2002; Vice President, Finance
Financial Officer and Chief Financial Officer and Secretary
and Treasurer from January 2002 to June 2002; Chief
Financial Officer of Baldwin Technology
Company Inc. from January 2000 to July
2001; Vice President Finances and Taxes
of Rayonier, Inc. from March 1999 to
January 2000; Vice President and
Treasurer of Witco Corporation
October 1990 to March 1999.
Bruce G. Kosa, 63 October 1994
Vice President,
Technology
John A. Richie, 55 October 1994
Vice President,
Human Resources
Robert M. Soffer, 55 Vice President, Secretary and Treasurer December 2002
Vice President and and Clerk from June 2002 to December
Secretary and Clerk 2002; Vice President, Assistant Secretary
and Treasurer and Clerk from April 2000
to June 2002; Treasurer and Assistant
Secretary and Clerk from February 1992
to April 2000.
Paul B. Middleton, 35 Division Controller for Cooper December 2001
Corporate Controller Industries from November 1999 to
December 2001; Internal Audit Manager
of Cooper Industries from December 1997
to November 1999; Audit Manager for KPMG
Peat Marwick from April 1996 to
December 1997.
5
Item 2. PROPERTIES
The Company owns its properties, except as noted below. The Company
considers that its properties are well maintained, in good operating
condition, and suitable for its current and anticipated business.
Floor Space
(Square Feet) Type of Facility Leased/Owned
------------- ---------------- ------------
High Performance Foams
- ----------------------
Woodstock, Connecticut 152,000 Manufacturing Owned
Carol Stream, Illinois 215,000 Manufacturing Owned
Printed Circuit Materials
- -------------------------
Chandler, Arizona 156,000 Manufacturing Owned
4,000 Warehouse Owned
11,000 Rental Property Owned
Chandler, Arizona 142,000 Manufacturing Owned
Evergem, Belgium 80,000 Manufacturing Owned
Ghent, Belgium
Rogers NV 17,000 Manufacturing Owned
Rogers Induflex NV 96,000 Manufacturing Owned
Polymer Materials and Components
- --------------------------------
South Windham, Connecticut 88,000 Manufacturing Owned
Rogers, Connecticut 290,000 Manufacturing Owned
Ghent, Belgium
Rogers NV 96,000 Manufacturing Owned
Other
- -----
Rogers, Connecticut 116,000 Corporate Headquarters/
Research &
Development Owned
Chandler, Arizona 160,000 Manufacturing Owned
Suzhou, China 93,000 Manufacturing Leased through 6/05
Suzhou, China 93,000 Manufacturing Leased through 6/05
Tokyo, Japan 2,000 Sales Office Leased through 9/04
Wanchai, Hong Kong 1,000 Sales Office Leased through 3/04
Guangzhou, China 1,000 Sales Office Leased through 3/04
Taipei, Taiwan, R.O.C. 1,000 Sales Office Leased through 7/04
Seoul, Korea 1,000 Sales Office Leased through 2/04
50 Warehouse Leased through 5/04
Singapore 1,000 Sales Office Leased through 6/04
Item 3. LEGAL PROCEEDINGS
The Company is subject to federal, state, and local laws and regulations
concerning the environment and is currently engaged in proceedings related to
such matters.
The Company is currently involved as a potentially responsible party ("PRP") .
in two cases involving waste disposal sites, both of which are Superfund sites.
These proceedings are at a stage where it is still not possible to estimate
the cost of remediation, the timing and extent of remedial action which may
be required by governmental authorities, and the amount of liability, if
any, of the Company alone or in relation to that of any other PRPs. Where
it has been possible to make a reasonable estimate of the Company's liability,
a provision has been established. Insurance proceeds have only been taken into
account when they have been confirmed by or received from the insurance
company. Actual costs to be incurred in future periods
6
may vary from these estimates. Based on facts presently known to it, the
Company does not believe that the outcome of these proceedings will have a
material adverse effect on its financial position.
In addition to the above proceedings, the Company worked with the
Connecticut Department of Environmental Protection ("CT DEP") related to
certain polychlorinated biphenyl ("PCB") contamination in the soil beneath
a section of cement flooring at its Woodstock, Connecticut facility. The
Company completed clean-up efforts in 2000, monitored the site in 2001 and
2002, and will continue to monitor the site for the next two years. On the
basis of estimates prepared by environmental engineers and consultants, the
Company recorded a provision of $2,200,000 prior to 1999 and based on
updated estimates provided an additional $400,000 in 1999 for costs related
to this matter. Prior to 2000, $1,300,000 was charged against this provision.
In 2000, 2001, and 2002 expenses of $900,000, $100,000, and $200,000 were
charged, respectively, against the provision. The remaining reserve is
primarily for testing, monitoring, sampling and any minor residual treatment
activity. Management believes, based on facts currently available, that
the balance of this provision is adequate to complete the project.
In this same matter the United States Environmental Protection Agency ("EPA")
alleged that the Company improperly disposed of PCBs. An administrative law
judge found the Company liable for this alleged disposal and assessed a
penalty of approximately $300,000. The Company reflected this fine in
expense in 1998 but disputed the EPA allegations and appealed the
administrative law judge's findings and penalty assessment. The original
findings were upheld internally by the EPA's Environmental Appeals Board,
and the Company placed that decision on appeal with the District of Columbia
Federal Court of Appeals in 2000. In early January of 2002, the Company was
informed that the Court of Appeals reversed the decision. As a result of
this favorable decision, the $300,000 reserve for the fine was taken into
income in 2001. However, subsequent to the favorable decision by the Court
of Appeals, the EPA continued to pursue this issue and settlement discussions
with the EPA were more protracted and difficult than originally anticipated.
As such, the Company recorded $325,000 for legal and other costs associated
with this matter in 2002. On January 16, 2003, a settlement agreement was
signed with the EPA. The costs associated with the settlement will not
exceed the provision recorded, which included a cash settlement payment to
the government of $45,000 plus a commitment to undertake some energy-related
environmental improvements at its facilities, as well as assistance to a
local Woodstock, Connecticut Fire Department for emergency preparedness.
Management believes, based on the facts currently available, that the
provision recorded in 2002 is adequate to cover the requirement of the
settlement.
On February 7, 2001, the Company entered into a definitive agreement to
purchase the Advanced Dielectric Division ("ADD") of Tonoga, Inc. (commonly
known as Taconic), which operates facilities in Petersburgh, New York and
Mullingar, Ireland. On May 11, 2001, the Company announced that active
discussions with Taconic to acquire the ADD business had been suspended
and it was not anticipated that the acquisition would occur. Accordingly,
$1,500,000 in costs associated with this potential acquisition were written
off during the second quarter of 2001. On October 23, 2001, the Company
terminated the acquisition agreement. On October 24, 2001, Taconic filed
a breach of contract lawsuit against the Company in the United States
District Court for the District of Connecticut seeking damages in the
amount of $25,000,000 or more, as well as specific performance and
attorneys' fees. In September 2002, a confidential settlement agreement
concerning all matters raised in this litigation was negotiated and
entered into. The settlement had no material impact on the 2002 results.
There recently has been a significant increase in certain U.S.
states in asbestos-related product liability claims against
numerous industrial companies. The Company has been named,
along with hundreds of other industrial companies, as a defendant
in some of these cases. The Company strongly believes it has
valid defenses to these claims and intends to defend itself
vigorously. In addition, the Company believes that it has sufficient
insurance to cover all costs associated with these claims. Based upon
past claims experience and available insurance coverage, management
believes these matters will not have a material adverse effect on the
financial position, results of operations, or cash flows of the Company.
In addition to the above issues, the nature and scope of the Company's
business bring it in regular contact with the general public and a variety
of businesses and government agencies. Such activities inherently
7
subject the Company to the possibility of litigation, including
environmental and product liability matters that are defended and handled
in the ordinary course of business. The Company has established accruals
for matters for which management considers a loss to be probable and
reasonably estimable. It is the opinion of management that facts known
at the present time do not indicate that such litigation, after taking
into account insurance coverage and the aforementioned accruals, will have
a material adverse effect on the financial position of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth under the
caption "Capital Stock Market Prices" on page 53, under the caption
"Restriction on Payment of Dividends" in Note G on page 42, and under
the caption "Dividend Policy" in the "Management's Discussion and
Analysis" on page 20-21 of the 2002 annual report to shareholders.
At March 5, 2003, there were 927 shareholders of record.
Item 6. SELECTED FINANCIAL DATA
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth under the
caption "Selected Financial Data" on page 15 of the 2002 annual report
to shareholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth under the
caption "Management's Discussion and Analysis" on pages 16 through 25
of the 2002 annual report to shareholders.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth under the
caption "Market Risk" in the "Management's Discussion and Analysis" on
page 23 of the 2002 annual report to shareholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth on pages 26
through 51 and under the caption "Quarterly Results of Operations" on
the back inside cover of the 2002 annual report to shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
8
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information with respect to the
Directors of the Registrant set forth under the caption "Nominees for
Director" on page 2 of the Registrant's definitive proxy statement
dated March 20, 2003, for its 2003 annual meeting of stockholders
filed pursuant to Section 14(a) of the Act. Information with respect
to Executive Officers of the Registrant is presented in Part I, Item 1
of this report.
Item 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information set forth under the
captions "Directors' Compensation" on pages 6 and 7 and "Executive
Compensation" on pages 8 through 16 of the Registrant's definitive
proxy statement, dated March 20, 2003, for its 2003 annual meeting of
stockholders filed pursuant to Section 14(a) of the Act.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Pursuant to General Instruction G to Form 10-K, there is hereby
incorporated by this reference the information with respect to Security
Ownership of Certain Beneficial Owners and Management set forth under
the captions "Stock Ownership of Management" on page 3 and "Beneficial
Ownership of More Than Five Percent of Rogers Stock" on page 4 of the
Registrant's definitive proxy statement, dated March 20, 2003, for its
2003 annual meeting of stockholders filed pursuant to Section 14(a) of
the Act.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction G to form 10-K, there is hereby
incorporated by reference the iformation with respect to certain
relationships and related transactions set forth in Note D under
the caption "Summarzied Financial Information of Unconsolidated
Joint Ventures and Related Party Transactions" on page 38 of the
2002 annual report to shareholders.
Item 14. CONTROLS AND PROCEDURES
a. Our Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the "Exchange Act"), as of a date
within 90 days prior to the filing date of this report (the
"Evaluation Date"). Based on such evaluation, such officers
have concluded that, as of the Evaluation Date, our disclosure
controls and procedures are effective in alerting our management
on a timely basis to material information required to be disclosed
in our reports filed under the Exchange Act.
b. There have been no significant changes in our internal controls or
in other factors that could significantly affect such controls since
the Evaluation Date.
9
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) and (2)- The following consolidated financial statements of
Rogers Corporation and Subsidiaries, included in the
Annual Report of the Registrant to its shareholders for
the fiscal year ended December 29, 2002, are incorporated
by reference in Item 8:
Consolidated Balance Sheets - December 29, 2002 and
December 30, 2001
Consolidated Statements of Income - Fiscal Years Ended
December 29, 2002, December 30, 2001, and
December 31, 2000
Consolidated Statement of Shareholders' Equity -
Fiscal Years Ended December 29, 2002,
December 30, 2001, and December 31, 2000
Consolidated Statements of Cash Flows - Fiscal Years
Ended December 29, 2002, December 30, 2001, and
December 31, 2000
Notes to Consolidated Financial Statements -
December 29, 2002
The following consolidated financial statement schedule of Rogers
Corporation and Subsidiaries is included in Item 15 (d):
Schedule II Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable, and
therefore have been omitted.
(3) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
2a Asset Purchase Agreement, dated September 19, 2002, between
Rogers Corporation, Perstorp Composites Holding B.V., and Vyncolit
North America Inc. for the divestiture of the Moldable Composites
Division is file herewith.
3a Restated Articles of Organization, filed with the Secretary of
State of the Commonwealth of Massachusetts on April 6, 1966,
were filed as Exhibit 3a to the Registrant's Annual Report on
Form 10-K for the fiscal year ended January 1, 1989 (the 1988
Form 10-K)*.
3b Articles of Amendment to the Articles of Organization, filed
with the Secretary of State of the Commonwealth of Massachusetts
on August 10, 1966, were filed as Exhibit 3b to the 1988 Form 10-K*.
3c Articles of Merger of Parent and Subsidiary Corporations, filed
with the Secretary of State of the Commonwealth of Massachusetts
on December 29, 1975, were filed as Exhibit 3c to the 1988
Form 10-K*.
3d Articles of Amendment, filed with the Secretary of State of the
Commonwealth of Massachusetts on March 29, 1979, were filed as
Exhibit 3d to the 1988 Form 10-K*.
3e Articles of Amendment, filed with the Secretary of State of the
Commonwealth of Massachusetts on March 29, 1979, were filed as
Exhibit 3e to the 1988 Form 10-K*.
3f Articles of Amendment, filed with the Secretary of State of the
Commonwealth of Massachusetts on April 2, 1982, were filed as
Exhibit 3f to the 1988 Form 10-K*.
3g Articles of Merger of Parent and Subsidiary Corporations, filed
with the Secretary of State of the Commonwealth of Massachusetts
on December 31, 1984, were filed as Exhibit 3g to the 1988
Form 10-K*.
10
3h Articles of Amendment, filed with the Secretary of State of the
Commonwealth of Massachusetts on April 6, 1988, were filed as
Exhibit 3h to the 1988 Form 10-K*.
3i By-Laws of the Company as amended on March 28, 1991, September 10,
1991, June 22, 1995, April 25, 2002 and June 19, 2002. The
March 28, 1991, September 10, 1991 and June 22, 1995, amendments
were filed as Exhibit 3i to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (the 1995 Form
10-K)*. The April 25, and June 19, 2002 amendments are filed
herewith.
3j Articles of Amendment, as filed with the Secretary of State of
the Commonwealth of Massachusetts on May 24, 1994, were filed as
Exhibit 3j to the 1995 Form 10-K*.
3k Articles of Amendment, as filed with the Secretary of State of
the Commonwealth of Massachusetts on May 8, 1998 were filed as
Exhibit 3k to the 1998 Form 10-K*.
4a 1997 Shareholder Rights Plan was filed on Form 8-A dated March 24,
1997. The June 19, 1997 and July 7, 1997 amendments were filed
on Form 8-A/A dated July 21, 1997*.
4b Certain Long-Term Debt Instruments, each representing indebtedness
in an amount equal to less than 10 percent of the Registrant's
total consolidated assets, have not been filed as exhibits to
this Annual Report on Form 10-K. The Registrant hereby undertakes
to file these instruments with the Commission upon request.
10a Rogers Corporation Incentive Stock Option Plan** (1979, as amended
July 9, 1987 and October 23, 1996). The 1979 plan and the July 9,
1987 amendment were filed as Exhibit 10c to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 3, 1988 (the
1987 Form 10-K). The October 23, 1996 amendment was filed
as Exhibit 10a to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 29, 1996 (the 1996 Form 10-K)*.
10b Description of the Company's Life Insurance Program**, was filed
as Exhibit K to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 28, 1980*.
10c Rogers Corporation Annual Incentive Compensation Plan** (as
restated and amended on December 18, 1996) was filed as Exhibit
10c to the 1996 Form 10-K*.
10d Rogers Corporation 1988 Stock Option Plan** (as amended December
17, 1988, September 14, 1989, and October 23, 1996). The 1988
plan, the 1988 amendment, and the 1989 amendment were filed as
Exhibit 10d to the Registrant's Annual Report on Form 10-K for
the fiscal year ended January 1, 1995 (the 1994 Form 10-K)*.
The 1996 amendment was filed as Exhibit 10d to the 1996
Form 10-K*.
10e Rogers Corporation 1990 Stock Option Plan** (as restated and
amended on October 18, 1996, December 21, 1999 and October 7,
2002). The October 18, 1996 restatement and amendment was
filed as Registration Statement No. 333-14419 on Form S-8 dated
October 18, 1996*. The December 21, 1999 amendment was filed
as Exhibit 10e to the 1999 Form 10-K*. The October 7, 2002
amendment is filed herewith.
10f Rogers Corporation Deferred Compensation Plan** (1983) was
filed as Exhibit O to the Registrant's Annual Report on Form
10-K for the fiscal year ended January 1, 1984*.
10g Rogers Corporation Deferred Compensation Plan** (1986) was
filed as Exhibit 10e to the 1987 Form 10-K*.
10h Rogers Corporation 1994 Stock Compensation Plan** (as restated
and amended on October 17, 1996 and amended on December 18, 1997).
The 1994 plan, as amended and restated on October 17, 1996, was
filed as Exhibit 10h to the 1996 Form 10-K. The 1997 amendment
was filed as Exhibit 10h to the 1997 Form 10-K*.
10i Rogers Corporation Voluntary Deferred Compensation Plan for
Non-Employee Directors** (1994, as amended December 26, 1995,
December 27, 1996 and as restated and amended December 21, 1999
and October 7, 2002). The 1994 plan, the December 26, 1995 and
December 27, 1996 amendments were filed as Exhibit 10i to the
1994 Form 10-K, 1995 Form 10-K, and 1996 Form 10-K, respectively.
The December 21, 1999 restatement and amendment were filed as
Exhibit 10i to the 1999 Form 10-K*. The October 7, 2002
amendment is filed herewith.
11
10j Rogers Corporation Voluntary Deferred Compensation Plan for
Key Employees** (1993, as amended on December 22, 1994,
December 21, 1995, December 22, 1995, April 17, 1996 and
as restated and amended on December 21, 1999 and October 7,
2002). The 1993 plan and the 1994 amendments were filed as
Exhibit 10j to the 1994 Form 10-K. The 1995 and 1996 amendments
were filed as Exhibit 10j to the 1995 Form 10-K and 1996
Form 10-K, respectively. The December 21, 1999 restatement and
amendment were filed as Exhibit 10j to the 1999 Form 10-K*.
The October 7, 2002 amendment is filed herewith.
10k Rogers Corporation Long-Term Enhancement Plan for Senior
Executives of Rogers Corporation** (December 18, 1997*, as amended
April 4, 2000 and October 7, 2002) . The April 4, 2000 amendment
was file as Exhibit 10k to the 2000 Form 10-K*. The October 7,
2002 amendment is filed herewith.
10l Rogers Corporation 1998 Stock Incentive Plan (1998, as amended
September 9, 1999, December 21, 1999, October 10, 2001 and
November 7, 2002 ).** The 1998 Plan was filed as Registration
Statement No. 333-50901 on April 24, 1998*. The September 9, 1999
and December 21, 1999 amendments were filed as Exhibit 10l to the
1999 Form 10-K*. The October 10, 2001 and November 7, 2002
amendments are file herewith.
10m Multicurrency Revolving Credit Agreement dated December 8, 2000
was filed as Exhibit 10m to the 2000 Form 10-K*.
10n Rogers Corporation Excecutive Supplemental Agreement** for the
Chairman of the Board and Chief Executive Officer dated
December 5, 2002, is filed herewith.
14 Portions of the Rogers Corporation 2002 Annual Report to
Shareholders which are specifically incorporated by reference in
this Annual Report on Form 10-K.
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
23.1 Consent of Independent Auditors.
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3 Financial Statements for the Company's joint venture with 3M,
Durel Corporation
* In accordance with Rule 12b-23 and Rule 12b-32 under the Securities
Exchange Act of 1934, as amended, reference is made to the documents
previously filed with the Securities and Exchange Commission, which
documents are hereby incorporated by reference.
** Management Contract.
(b) No reports on Form 8-K were filed during the three months ended
December 29, 2002.
(c) Exhibits - The response to this portion of Item 15 is submitted
within Item 15(a)(3) of this report.
(d) Financial Statement Schedule
12
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
ROGERS CORPORATION AND CONSOLIDATED SUBSIDIARIES
(Dollars in Thousands) Balance
Balance at Charged to at End
Beginning Costs and Other of
Description of Period Expenses Deductions Period
- --------------------------------------------------------------------------
December 29, 2002:
Allowance for
doubtful accounts $ 1,363 $ -- $ (261) $ 1,102
December 30, 2001:
Allowance for
doubtful accounts $ 1,804 $ -- $ (441) $ 1,363
December 31, 2000:
Allowance for
doubtful accounts $ 794 $ 987 $ (23) $ 1,804
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ROGERS CORPORATION
(Registrant)
Date: March 31, 2003 By /s/James M. Rutledge
James M. Rutledge
Vice President, Finance and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 31, 2003, by the following persons
on behalf of the Registrant and in the capacities indicated.
By /s/Walter E. Boomer Chairman of the Board of Directors
------------------- and Chief Executive Officer
Walter E. Boomer
By /s/Leonard M. Baker Director
-------------------
Leonard M. Baker
By /s/Harry H. Birkenruth Director
----------------------
Harry H. Birkenruth
By /s/Edward L. Diefenthal Director
-----------------------
Edward L. Diefenthal
By /s/Gregory B. Howey Director
-------------------
Gregory B. Howey
By /s/Leonard R. Jaskol Director
--------------------
Leonard R. Jaskol
By /s/Eileen S. Kraus Director
------------------
Eileen S. Kraus
By /s/William E. Mitchell Director
----------------------
William E. Mitchell
By /s/Robert G. Paul Director
-----------------
Robert G. Paul
14
- ----------------------------------------------------------------------
ROGERS CORPORATION
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Walter E. Boomer, certify that:
1. I have reviewed this annual report on Form 10-K of Rogers
Corporation;
2. Based on my knowledge, this annual 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 annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual 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 annual report;
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:
a. designed such disclosure controls and procedures 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 annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, 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 in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
/s/ Walter E. Boomer
- --------------------------------
Walter E. Boomer
Chairman of the Board and Chief Executive Officer
March 31, 2003
15
- ----------------------------------------------------------
CERTIFICATION
I, James M. Rutledge, certify that:
1. I have reviewed this annual report on Form 10-K of Rogers
Corporation;
2. Based on my knowledge, this annual 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 annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual 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 annual report;
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:
a. designed such disclosure controls and procedures 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 annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, 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 in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
/s/ James M. Rutledge
- ---------------------
James M. Rutledge
Vice President, Finance and Chief Financial Officer
March 31, 2003
16
EXHIBIT 21 - SUBSIDIARIES OF THE REGISTRANT
Percentage
of Voting Jurisdiction
Securities of Incorporation
Company Owned or Organization
Rogers L-K Corp. 100% Delaware
Rogers Japan Inc. 100% Delaware
Rogers Southeast Asia, Inc. 100% Delaware
Rogers Taiwan, Inc. 100% Delaware
Rogers Korea, Inc. 100% Delaware
Rogers China, Inc. 100% Delaware
Rogers Technologies
Singapore, Inc. 100% Delaware
Rogers Specialty Materials
Corporation 100% Delaware
Rogers Circuit Materials,
Incorporated 100% Delaware
Rogers Technologies
(Suzhou) Co., Ltd. 100% China
TL Properties, Inc. 100% Arizona
World Properties, Inc. 100% Illinois
Rogers Technologies
(Barbados) SRL 100% Barbados
Rogers Induflex N.V. 100% Belgium
Rogers N.V. 100% Belgium
Rogers GmbH 100% Germany
Rogers (UK) LTD 100% England
Rogers S.A. 100% France
* Rogers Inoac Corporation 50% Japan
* Durel Corporation 50% Delaware
* Polyimide Laminate Systems, LLC 50% Delaware
* Rogers Chang Chun
Technology Co., LTD 50% Taiwan, R.O.C.
* These entities are unconsolidated joint ventures and accordingly
are not consolidated in the consolidated financial statements
of Rogers Corporation.
F-1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report
(Form 10-K) of Rogers Corporation of our report dated February 4,
2003, included in the 2002 Annual Report to Shareholders of Rogers
Corporation.
Our audits also included the financial statement schedule of Rogers
Corporation listed in Item 15(a). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion
based on our audits. In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects
the information set forth therein.
We also consent to the incorporation by reference in Registration
Statements (Form S-8 Nos. 2-84992, 33-21121, 33-38219, 33-38920,
33-64314, 33-44087, 33-53353, 333-14419, 333-42545, 333-50901, and
333-59634 and Form S-3 No. 33-53369) pertaining to various stock option
plans, employee savings plans, employee stock ownership plans, and stock
grants, of Rogers Corporation of our report dated February 4, 2003, with
respect to the consolidated financial statements incorporated herein by
reference, and our report included in the preceding paragraph with
respect to the financial statement schedule included in this Annual
Report (Form 10-K) for the year ended December 29, 2002.
ERNST & YOUNG LLP
Providence, Rhode Island
March 25, 2003
F-2
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in
Registration Statements (Form S-8 Nos. 2-84992, 33-21121,
33-38219, 33-38920, 33-64314, 33-44087, 33-53353, 333-
14419, 333-42545, 333-50901, and 333-59634 and Form S-3
No. 33-53369) pertaining to various stock option plans,
employee savings plans, employee stock ownership plans,
and stock grants, of Rogers Corporation of our report
dated March 14, 2003, with respect to the financial
statements of Durel Corporation, included in this Annual
Report (Form 10-K) of Rogers Corporation for the year
ended December 29, 2002.
/s/ Ernst & Young LLP
Phoenix, Arizona
March 25, 2003
F-3