Rogers Corp (ROG) 2005 Q1 法說會逐字稿

At this time I would like to welcome everyone to the Rogers Corporation first-quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the Speaker's remarks there will be a question and answer period. (OPERATOR INSTRUCTIONS) Mr. Wachob you may begin your conference.

Good morning ladies and gentlemen. With me at Rogers this morning are Paul Middleton acting Chief Financial officer and Corporate Controller, Bob Soffer Vice President, Treasurer and Corporate Secretary, Deb Granger Director of Corporate Compliance and Ed Joyce Investor Relations Manager. Thank you for joining us. First Paul will dispense with the formalities and then we will get right down to business.

Thank you Bob and good morning everyone. I would like to point out to all of our listeners that statements in this conference that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. And should be considered as subject to the many uncertainties that exist in Rogers' operations and environment. These uncertainties include economic conditions, market demands and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statement. I will now turn it back over to Bob.

Thanks, Paul. The first quarter of 2005 did not have any significant surprises as the volatility of 2004 has decided. We did have a 44% sequential drop in sales of flex circuit materials but most of that was foreseen due to the end of life programs on several cell telephones. Looking forward we expect to steadily rebuild the flex business through the rest of this year. And that's because we have had recent design wins and we are diversifying the customer base.

Diversifying the customer base in our opinion will decrease the volatility. During the quarter we introduced a new family of flexible circuit materials; this new family is based on an all polyimide construction and will address the growing need for denser circuits and thinner constructions. We expect some sales in 2005 but significant sales will probably occur in 2006. Now the market for this new material already exists and is growing at a 20 to 25% annual rate.

High frequency circuit materials had a solid quarter as the customer base finished the inventory drawdown during Q4 2004. We expect steady growth in the second quarter as 3G infrastructure spending, where we have higher content, continues to increase while spending on 2G and 2.5G declines. Our forecast indicates that our sales to the satellite TV business will be stronger than usual in Q2. The whole high frequency productline will operate at about 75% of manufacturing capacity during the second quarter.

That being said we intend to begin construction of a new facility in China later this year for the lamination of high frequency circuit materials. The High Performance Foams business segment had a solid quarter with sales and earnings increasing from Q1 2004. We are making steady progress with polyolefin productline in yield and throughput. But we still have a long way to go. Future success for this productline requires that new and significantly higher valued products be developed.

Polymer Materials and Components segment had several significant growth opportunities. Durel is in production on 6 EL lamps for backlighting keypads for 5 cell phone manufacturers. It is our current expectation that as many as 15 programs will be in production for 6 cell phone OEMs by the end of the fourth quarter. To address this growth we will have increased lamp capacity in Arizona by 50% by the end of the second quarter. And then by the end of Q4 we will have duplicated the capacity that we currently have in Arizona in China. By then our lamp capacity should exceed 70 million units annually.

Our current view of this business is that our success in keypads will exceed what we previously achieved in monochrome display backlighting. In China our floats business is expanding rapidly and we plan to increase capacity by 75% during 2005. We have made steady progress with this business in China and most of the startup issues are behind us.

Finally we began shipping busbars from China in March and all indications are that the business will grow rapidly and be at breakeven by Q4. An example of the customer enthusiasm was that one week after announcing the opening of the factory we received 30 requests for quote from Asian customers worth more than $12 million in potential new incremental business. We believe that the Polymer Materials and Components segment will be the fastest-growing segment during the rest of 2005.

We are optimistic about our prospects for the rest of the year and for Q2 we expect to make steady progress versus Q1 with sales between 89 and 93 million. With earnings per share between $0.40 and $0.44. I will now turn it over to Paul Middleton for a closer look at the details of the quarter and then we will be happy to answer your questions.

Thank you, Bob. For the first quarter we achieved 86.5 million in sales, and net income of 5.1 million. Which equates to $0.30 in diluted earnings per share. These results are in line with guidance we had provided for the quarter of between 85 and 89 million in sales and between $0.28 and $0.32 sense in diluted earnings per share.

Looking at sales for the quarter we saw strong sales of our rigid high frequency materials and the cell phone base station infrastructure applications and even more strength in the LNB satellite business marking what we believe may be the beginning of these markets rebounding and a work down of inventories in the sales channel. In the case of LNB applications current forecasts indicate the second quarter should see continued strength and may even be close to record shipment levels.

Rigid high frequency circuit materials sales overall were up 23% from the fourth quarter in 2004. Unfortunately, however we also some significant softening in the quarter for flexible circuit materials sales commensurate with a number of programs coming to conclusion. Flexible circuit material sales overall for the quarter were down 44% from the fourth quarter 2004. (indiscernible) these trends for these two businesses drove our overall Printed Circuit Materials segment quarter sales down 9% sequentially.

We saw continued success in our flexible keypad lamps during the quarter. This program is well ahead of original forecast. And current orders and forecast are requiring considerable capacity investment in the U.S. and China. We also saw sequential quarterly sales growth in our busbars business stemming from power drive and transportation applications in Europe. And the startup of the new China busbar production including our first shipments from that operation. These events drove our overall Polymer Materials and Components quarterly segment sales up sequentially by 17%.

Sales for our high performance foam segment in the quarter remains strong particularly for polyurethane foams and industrial and consumer applications. This segment's overall sales were only slightly below last quarter's all-time record.

Our four 40% joint ventures had sales of 23.9 million for the quarter. We saw sequential softening in Rogers Chang Chun flexible laminate circuit materials sales commensurate with our wholly-owned flexible circuit material product sales as they too are seeing various programs come to end of life. However, our High Performance Foams joint ventures with Inoac Corporation continue to show strong growth. The long-standing operation in Japan had 5% sequential sales growth and the new operation in China ramped up in the first quarter and became profitable in March as expected.

Manufacturing margin as a percentage of sales was 27% for the quarter. We saw a great deal of improvement in ramping up the flow production recently shifted to China but it continues to prove more difficult than we originally planned. We experienced a number of process and quality issues with floats in the quarter creating a backlog in customer orders, generating much higher than normal scrap and requiring air freight to meet deliveries for normal shipping needs.

A number of Six Sigma and operational resources have been deployed and as of early April they have caught up on the backlog, solved many of the process issues and resumed normal shipping means. We also continue to experience higher-than-expected operating losses in our polyolefin operation. We've made significant progress improving throughput, increasing yields and catching up on the backlog created by the fourth quarter 2004 move to Carol Stream.

In addition with recent capacity created by the improvements we've made progress on new product development with production trials and samples being generated. However, as Bob said we still have a long way to go. And therefore we are critically evaluating current product offerings to determine whether we need to discontinue certain nonstrategic products, to reduce operating losses and focus our resources on developing the technology for which we acquired the business originally.

Commercial expenses which include selling, general administrative and R&D, totaled 19 for the quarter or 22.4% of sales as compared to 21.6 million or 24.7 for the fourth quarter of 2004. The biggest driver in the chain was the conclusion of restructuring costs in the 2004 results for the move of the float and roller production to China. Excluding these charges commercial expenses are barely consistent sequentially.

Other income which for purposes of the press release includes our joint venture income, royalties and other miscellaneous items, was 2.6 million for the quarter as compared to 3.7 million for the fourth quarter 2004. The variance reflects the inclusion in the fourth quarter of 2004 of the 2.1 million gain on the sale of the idle property at Chandler, Arizona. And significant improvement in the joint venture income in 2005. Particularly the startup foam venture in China.

Tax rate for the first quarter of 2005 was 24% as compared to 25% for 2004. Reflecting the benefits starting to be realized with increased business and the lower tax jurisdictions in China. Taking a look at our financial position we enjoyed another quarter of strong cash flows. The Company generated over 6.8 million in operating cash flow and made significant progress in reducing inventories. The Company's overall cash and short-term investment position increased by over $700,000 despite investing 4.2 million in capital expenditures and approximately 7 million in stock repurchases. The Company continues to remain debt free and able to fund capital expenditures from operating cash flows. That concludes my financial remarks. I will now turn the call back over to Bob.

Thanks, Paul. At this point we will be happy to answer any questions.

(OPERATOR INSTRUCTIONS) Shawn Severson with Raymond James.

Good morning gentlemen. Bob, could you translate the 70 million units in total capacity at Durel into what that will mean for dollar value you think?

Lamps generally vary between $0.75 and $1.50. A good rough number is to assume a dollar.

And then in terms of the rebound you are seeing in wireless infrastructure, how much of that is just due to conclusion of the inventory correction and starting to see some reordering off of (technical difficulty) what you think is more of a sustainable 3, 6 month, twelve-month type of trend from your customers?

I think half of it was from the inventory rebound and half is from sustainable growth.

okay, and then just one last question. On the flex circuit business, you said diversifying the customer base -- can you kind of give some color on where the customer base is today and quantify what that means in terms of new business wins for you or program wins?

We had one customer who had one program that was generating about $2.5 million a month worth of sales, and that program ended. We are now in at least 5 different cell phone manufacturers' telephones, at least with design wins. And we have some design wins with that one manufacturer also, it is our problem is because we were sole source and we were at capacity we missed the six-month design window. Because they wouldn't design us in because we could not supply anymore than we worked. There's a penalty for having a big success.

Absolutely. What are the other competitors out there -- I mean what are the other source they would go to? I am trying to understand as the new product launches and you are diversifying the customer base, what is the competitive landscape out there that you're running into?

Right now it's fairly competitive with a lot of demand for price decreases. As everyone added capacity last year and now there is more than sufficient capacity. The demand seems to be down as some of the newer phones are using less material than they did before.

Thank you.

Mark Keeler (ph) with Paradigm.

Good morning everyone. Bob you said that satellite TV was strong in Q1 and I guess you have quite a positive outlook for Q2. Could you just refresh our memory? Last year were they building inventory in Q1 and Q2 and then they weakened toward the end of the year?

Actually Q2 is normally the weakest quarter and that's the reason we mentioned it this year because it doesn't appear that is going to be the case. And last year it was a pretty normal year in that it was the first year that they had managed to get their inventories and their selling cycle under control. If we go back in history it used to be that the third and especially the fourth quarter could be 50% greater than the first and second as they were in a Christmas kind of rush situation. But once they started giving it all away they were able to level that demand. And that is really what has happened. Now this is a much better business for us because steady is a lot -- it's easier to make money when business is steady increases than it is when it has huge spikes up and down.

On the flex side just one question there. When do you think given the new product introduction and the ramp that you expect in the second half, when do you think we will reach the point of being flat year-over-year in flex sales? Will that happen in '05?

I think that will be at least the first quarter of 2006.

Given that we assume that any estimate of what the segment operating margins could exit the year at? I know that might be kind of tough to estimate.

I haven't really looked at that, that far out.

Okay, that is fine. I just want to switch to Durel. On the display lamps you used to have inverters on with that product. And I think at one point you were talking about trying to get a redesign for inverters for the flexible keypad. Is that still ongoing?

Yes. Currently our inverter is designed into four of the programs that we are in production on, and the inverter is in another five programs were we don't have the lamp specifically in Korea.

I think you pretty much have that, you subcontract the manufacture of the inverter, is that correct?

Yes, that is correct.

How much does that mean to you in sales or if you want operating margin?

I'm hesitating, Mark, because our customers are on this phone call.

Of course.

I'd rather not give out details about profitability of product.

Switching then, let's go on to High Performance Foams. In Q4 I believe the China operation which you said in the press release turned profitable in Q1. They had some higher costs from qualification trials.

Yes, that was in Q4.

Is that over now?

Yes, it is. Well, I shouldn't say it is over.

Greatly diminished.

Well yes, we are continuing to qualify but now we are making enough goods that it is profitable. And qualification will go on for a while as we transfer more products there.

That is all I had, thank you.

Greg Wyrick (ph) with West Cap Investors.

Good morning, Bob. There's a lot of conjecture about what is going on in the economy. Is it still strong out of January or did we really slow down in March. Can you kind of go through your end market and just kind of give us a little bit of a macro feel for where you see strengths and weaknesses?

Sure. In the cell phone area, we continue to see strength there. The units are growing and it is just a matter of which programs are we getting designed into. In some cases, we are winning and in other cases, we've reached them into light (ph). But in total, that is going up. We talked about infrastructure, and wireless communication area is doing quite well. Automotive is not doing very well. Automotive is down, but everything associated with trains is up. The military is pretty steady, as is the aerospace. So overall, I think we still see some growth.

For us, our best predictor of how the general economy is going is the High Performance Foams area. Because we cover such a broad section of the economy with those products that they do tend to rise and fall with economic activity with a multiplier, unfortunately, of about five. So that is a good thing when the stuff is going up. It's not such a good thing when it's going down.

Thanks.

Rob Crystal (ph) with Brant Point Capital.

Yes. You had mentioned that some flex programs were concluding in the first quarter and that's part of the weakness there. Are there any more programs that you have that are concluding, or is that behind you? And did you say how many shares you bought back?

No, we didn't. I think it had to be in the 150, 160,000 range. And as far as the flex, we don't see anything major as far as end of life as we think new designs will be coming on faster than things end.

And in terms of CFO search, what are your plans there?

We are actively searching.

And you think that is a six-month process or?

You never know. It could be two weeks and it could be 6 months.

But on the far side that is probably about right. Okay, thanks.

(OPERATOR INSTRUCTIONS) Dana Walker with Kalmar Investment.

Good morning all. As I look at the foam profits which are not anywhere near where we would like them to be, is there something different about -- aside from the fact or aside from the influence of polyolefin. Is there something different about margin realized with PORON and BISCO compared to (technical difficulty)?

No.

Would one be too demanding to expect an operating margin of 15% or is that too demanding?

No, I think we can get into that range.

Could one believe that those two better performing product lines are earning margins like that and that the difference is the transition costs of moving to China and the burden of Carol Stream?

Yes.

How would you expect those numbers to maneuver as we progress through the year? And how important a role is that playing in the difference between Q1 and Q2 earnings?

Expect that it will be significant as the year moves on. We intend to make some improvements here. And it is important for that sales increase or excuse me, the profit increase in the second quarter as our projection certainly have our profits going up a lot more than the sales forecast would indicate. And it is mostly associated with improving polyolefins and having most of the startup problems associated with floats in China.

Is most of the roughly 4 to 5 million in sequential revenue that you expect coming in the circuit material area as well as Durel?

Actually it mostly comes from floats, really the whole polymer materials and components area is about half of it and their it is spread among Durel, busbar, floats. And then the other half is in the high frequency.

One last question. Can you talk about the cost of ramping at Durel and how that is likely to affect Durel margins this year versus at a moment when you might be having to ramp as hard to meet demand?

Actually we have been able to make some significant improvements in our yield and our throughput this year. In fact the throughput is up by 40% on existing equipment. That has helped Durel quite a bit. We think we have the processes under control now and what we are really doing is adding new pieces of equipment that are exactly the same as the equipment we're using. So we think, well we have already ramped up using two new pieces and that went without any issue. Two more will be going in place in June.

The part that we have to work hard on is putting a dozen of them in China in the fourth quarter. We expect to have a large contingent of people from the U.S. over there to make that startup run mostly. As this will be the fourth product line we've started in China, we have gained some experience about the level of resources and the amount of time that they need to be in place. What we have learned is the more resources and more time than we originally thought. But now that we know it we know how to deal with it.

Bob, you mentioned that the incremental revenue Q2 to Q1 in circuit materials was mostly coming from high frequency. At what point would you expect there to be some positive progress in flex? Compared to the Q1 level?

Q3. Maybe even late Q2. It is always hard to say at the end of quarters whether it starts or it starts at the beginning of the next.

I will be a sneak and insert one more question. Can you talk about your gross margin expectations given the 27 level we saw in Q1 as we move through the year?

As we move through the year I expect those to increase and would hope that we are at least at 31 by the end of the year.

I will step back. Thank you.

Juam Lee (ph) with Sidoti and Company.

Good morning gentlemen. First of all could you comment on the level of capital expenditure as you see it in 2005? And if you could possibly break down where do you see the level of polyolefin business? I was a little surprised at the high level of polyolefin CapEx in the last few years. And also did if you can comment on the high frequency expansion in China, what do you see there?

We spent 4.2 million in the first quarter and I would expect we will spend in the last three quarters between 30 and 35 million on capital.

That is this year?

That is this year. And the vast majority of that will be in China and a big chunk of it will be on infrastructure. Expect to add as much as 280,000 square feet of manufacturing space and 18 acres of land. And then the rest will be significant expenditures on presses for high frequency. And clean rooms for Durel along with total capital spending for Durel is likely to be 13 million, out of that 30 to 35.

And the rest would go to mostly polyolefin then?

No, there will be no more capital on polyolefin. We finished spending capital. Now it just becomes all the rest is a lot of maintenance capital, things are wearing out, we are doing some things different with the polyurethane machine to give it a little more capability to make the new product.

Could you comment on the pricing trends for high frequency materials as you saw them in the first quarter, as you mentioned that the business has picked up a little bit?

Pricing is quite stable, as are the raw materials at the moment.

Finally, could you break down where the inventory is at this point in terms of product?

The largest single piece of inventory is raw materials in the flex circuit materials business. And that came about as the supply chain is 6 to 8 weeks long, so we ended up with a lot of raw materials as the business slowed down. And then there is a fair amount of finished goods either on the water or in inventory in Asia. We try to keep four weeks of finished good sales in inventory in Asia and then we have another five to six weeks on the water. That is one of the reasons we are continuing to expand in China is ultimately we would like to be making most of what we sell in the region of the world that we are selling it. It lets us become much more responsive, it's hard to be responsive if it takes you six weeks to get it there.

That is all my questions. Thank you.

Steve McNeil (ph) with Jennison Associates.

Good morning. I just wanted to just walk through some capacity questions. I think you for (technical difficulty) printed circuit that you would expect 75% capacity in the second quarter, or is that just within high frequency?

It's just high frequency, the flex materials are at about 50% of capacity.

Today?

Today. And our joint venture is probably only at 30% of capacity.

Okay. Where was high frequency capacity wise in the first quarter of this year?

It would have been about 66, something like that, 67%.

And then just to review, you had indicated within high frequency that you'd be adding a new facility in China during this quarter?

No, we will begin construction of a building, this will take at least a year. This equipment is very long lead times and buildings take quite a while to build. These are not warehouse type buildings, we have to have floors that will withstand some very large presses.

So that would be kind of in 06?

Yes, I would expect startup during '06.

Is that facility going to sell into the Asian markets then?

Oh, yes. (multiple speakers) We are building a building to handle what we believe the sales will be in three to four years. But we're only putting in equipment that will handle most of what we are currently selling.

And then skipping over to Durel. What was the capacity in Durel during the second quarter? I'm sorry during the first quarter.

At 100%. We made everything we could make was already sold.

You were increasing the capacity towards the end of the second quarter it sounds like by 50%?

Yes.

Okay.

We expected that that will be sold out also. (technical difficulty) we expect this ramp and in some cases we have customers who are using this could be 2006 late, that have half of their phones EL in the keypads. Part of our strategy is we have licensed someone as a second source and we have signed a manufacturing contract with someone else who we are going to train to make these lamps and we are going to use those for peak capacity. Because we've seen this business run way up and followed by running down some. I think that is the pattern. So we are going to clip the top off so that we are not stuck with a lot of unused capacity, we will let someone else have that issue.

Can you help us understand your pricing strategy in a business like Durel where you've got, you're running at capacity, demand sounds like it's warranted for the incremental investment for new capital equipment. How do you think about things from a pricing standpoint in a market like this? In a market environment that Durel is currently experiencing?

Our goal is to not lower the prices and our customer's goal are always to lower the prices between 5 to 6% a quarter. When we are in these big ramps we generally get our way, as it settles down then the prices will come down some.

It is not like you are getting price, you're just holding it? Is that a fair way to think of it?

That is right. One of the things we've learned, if you try to take advantage of your customer when things are tight, and some people do, you will pay the price later.

Within Durel I know you had restructured the cost base to lower the breakeven, is that activity pretty much behind us now?

Oh, yes.

Just one more thing. I want to understand how you're thinking about the gross margin. It sounds like you expect to exit the year at 31%. Can you help us understand that and particularly as it relates to some of this capacity that is coming on, you've got it sounds like at least this year it's going to be mostly focused within Durel. So you've got the Arizona coming on in the second quarter, some of the China stuff is going to be in the fourth quarter. But what gives you the confidence to think about that 31% number as an exit gross margin?

Well, several things. This isn't any one place. We don't expect in Arizona to be adding any additional overhead. So that will cause the gross margin to go up as we have more units and more dollars to absorb the existing overhead. We expect that China as we put some of these startup issues behind us and the rollers and the float areas that those gross margins will improve significantly. Little things like stopping air freight and going back to shipping by boat is a huge cost change. And then we expect in several of the businesses to be able to get more goods out of the same equipment. That is the best capacity increases I can ever think of is get 10 or 15% more out of the same equipment and the same people.

Is that mostly in foam or is it in --?

Yes, that part is in foam although expect that we could get some more in the high frequency area.

It sounds like when you say that you really -- this is all internally driven in the sense that the revenue, the composition of the revenue at the end of '05 -- I mean, can we say it's going to be roughly the same as it was in '04 as a percent of the total so -- just to get a flavor are you expecting a richer mix shift back to the high margin high frequency stuff that would help as well? Or is this more just internal execution using your current resources better?

This is more internal execution plus an upside would be if sales went up a little higher. The 31 is mostly internal.

I think on the last call we talked about a 35% number.

Absolutely, we did. And I believe I said if we can get up to the 430 to 450 million sales range that we will be able to get to the 35. We need some volume increase to get there.

Just to take a step back and just look at from a bigger perspective. I mean the gross margins declined quarter-over-quarter starting in '04 second, third, and fourth and then I guess can we use this quarter or the March quarter as the bottom from a gross margin perspective? Just and sequentially we should see a nice ramp from here?

Yes.

Barring any unforeseen circumstances of course?

That is always the case.

Okay, fair enough. Thank you very much.

Michael Judd with Greenwich Consultants.

Good morning. You repurchased some shares but it sounds like you're going to be spending some more money on CapEx this year. What should we expect in terms of further share repurchases for the rest of the year? That is my first question.

I think we will wait and see how our cash flow is. We would 0be willing to use some of our cash for repurchases but would not be willing to take it down to something like 10 or 12 million.

Secondly, your inventories declined around $4 million sequentially. But they were at a high at the end of the year. Where would you like to see inventory levels at the end of the second quarter?

I would like to bring them down a couple million more, and by the end of the year to have them down 4 or 5 million from where we are.

In terms of the tax rate it was just a little bit lower, 24% versus 25%, is that the kind of rate we should use for the rest of the year?

As of right now that is true. One of the major benefits we are seeing is the increase in business and profits in our China operations. And as that ramps up we could see even some positive effects of that in the latter part of the year. It potentially could do go down but right now 24% is our best guess for the year.

On the tax rate again, obviously China is going to be an even bigger impact next year. What is a reasonable type of tax rate to use on those (indiscernible) because most of us are doing our evaluation work on '06?

I'd say low '20s is a good guess right now.

About like 22% then basically?

I think that is a fair rate.

In terms of the polyolefins business, can you just refresh us in terms of what are the issues there? Are there raw material issues, what are the, is it demand related, raw materials, what is it?

One of the issues is that raw materials have increased very significantly and we've been unable to pass those price increases along. And the other is yield and throughput, not being where we had planned.

It looks like polyethylene prices are going down by $0.02 in April and polypropylene prices went down by $0.02 in March. So shouldn't there be some benefit in terms of margins in the second quarter?

I'm not aware that we've got any price decreases from any of our suppliers.

Okay. Fair enough. Thank you.

(OPERATOR INSTRUCTIONS) Rob Crystal from Brant Point Capital.

My question was answered, thank you.

Steve McNeil with Jennison Associates.

On the CapEx number was it 30 to 35 for the full year or just for the next three quarters?

For the next three quarters.

Okay, and it was 4.2 I think in the first quarter, right?

Yes.

Is that a change from what you had articulated previously?

That is probably 7 to potentially 10 million higher as we didn't know that Durel would expand quite so quickly.

That is where the incremental investment is from?

That is a big chunk of it. And we have a special opportunity to create a campus in China, just sort of happened.

Okay, so where I mean, if we think about CapEx, a normalized level or I mean would we expect it to continue at such a high rate in '06 as well? I know it is early but? Because I think you talked about the maintenance CapEx being about 10 million a year, rough order 10 to 15 million.

That is probably -- 10 to 15 is probably about right. I would expect it would be around 8% of sales is probably a normal number. Which puts us in the 27, 28 million kind of range. Probably stay on the high-end for another year or so until we have built out China.

Our plan is here try to not add it so fast that we hurt the existing operation. So there is a little bit of a balance here.

All right. Fair enough, thanks again.

At this time there are no further questions. Mr. Wachob, are there any closing remarks?

I want to thank all of you for joining us this morning and have a good day and good luck.

This concludes today's Rogers Corporation first-quarter earnings conference call. You may now disconnect.