Rogers Corp (ROG) 2008 Q2 法說會逐字稿

Good morning. My name is Carrie and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation second-quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you.

Mr. Wachob, you may begin your conference.

Good morning, ladies and gentlemen. With me today are Denis Loughran, Chief Financial Officer; Deb Granger, Vice President Compliance and Controls; Paul Middleton, Treasurer; Robert Soffer, Vice President and Secretary; Bill Tryon, Manager of Investor Relations; and Ron Pelletier, Manager of Financial Reporting. First Dennis will dispense with the formalities and then we will get right down to business.

Thank you, Bob. I would like to point out to all our listeners that statements in this conference call 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.

Thank you, Dennis. Despite a very slow US economy and a slowing in Europe, Rogers continues to perform as projected. Our new products introduced over the last few years as well as some new applications are making up for the declines at Durel and allowing us to perform reasonably well considering the external environment.

The quarter turned out as we expected. Once again, High Performance Foams films in Power Distribution Systems led the way with record sales. High Performance Foams' second shift in China is fully operational and we are now preparing a third shift. This has allowed a significant reduction in overtime in the US.

The Silicone Foam business in Carol Stream, Illinois also significantly reduced overtime as the third shift there is now operating. The new High Performance Foam products introduced over the last several years are continuing to fuel our growth.

In our Printed Circuit Materials segment, while new applications such as automotive lane change sensors and voice-over-Internet protocol continue to grow, our satellite television application experienced a year-over-year decline. However, we expect a pickup in cell phone infrastructure sales in the second half of this year as the China 3G rollout finally begins.

We are continuing to fully fund our strategic initiatives and have increased our new business development efforts. When others are pulling back, we see these unsettled times as an opportunity to extend our lead on our competitors. We are, however, remaining restrained in our hiring and our spending. Our strong cash flow and solid balance sheet puts us in a position to take full advantage of any opportunities which we uncover.

I will now turn it over to Dennis for the detailed results.

Thank you, Bob. Good morning again to everyone. Rogers turned in a solid performance against our goals for the quarter. As you look at and interpret our numbers, it represents one of the more challenging comparison periods because of the restructurings that took place during the second quarter of last year, requiring the elimination of the restructuring impacts and acknowledgment of the topline impacts from lower sales in the restructured Flex and Durel businesses.

Excluding those restructured businesses, our top line up for Q2 2008 was up 8%. Eliminating the restructuring impact from last year, total operating profits including the restructured businesses improved more than 3.5 fold from $1.9 million to the reported $6.6 million in the financials accompanying our press release.

In sales, our second quarter achieved a level of $97.7 million, just above the low end of our guidance range, with strength across most reporting segments with the exception of Printed Circuit Materials, where sales into LNB applications were below year-ago run rates. Earnings per share of $0.44 reflect an improved manufacturing margin at 32.1%.

Our balance sheet continues to be a strength, which cash short-term investments doubling during the quarter to over $43 million and inventories being maintained at levels comparable to those reported in 1Q of this year but over $20 million lower than the same period last year.

Overall, the second quarter of 2008, Rogers reported earnings of $0.44 per diluted share from continuing operations. This compares to a loss from continuing operations of $0.28 per diluted share in the second quarter of 2007 which included $12.9 million or $0.47 per diluted share of restructuring charges. The year-over-year change is attributable primarily to improved sales in operating profits across most business segments as well as improved results from the restructured businesses.

The second-quarter 2008 sales total of $97.7 million represents a slight decrease from the sales of $97.9 million in the same period in 2007. With the decline primarily driven by lower revenues in our restructured businesses, Durel and Flex, totaling $6.1 million, which was offset by growth in our High Performance Foams and Power Distribution Systems business units.

Second-quarter 2008 gross margin was 32.1% versus 16% or 25.2% excluding restructuring for the second quarter 2007. In the quarter, margins improved across our strategic business segments. These results stand out as very positive as we have managed to significantly increase margins on essentially flat sales levels through our continued efforts to manage inventories and achieve a more favorable, profitable product mix.

Selling and administrative expenses for the second quarter of 2008 and 2007 were $18.8 million and $17.6 million respectively. This increase was driven primarily by one-time costs related to tax reduction programs initiated in 2Q of $0.7 million; litigation costs totaling approximately $0.4 million, which we eventually expect to recover through insurance; and $0.6 million in additional expense due to annual incentive compensation accruals.

Research and development expenses were $5.9 million in the second quarter of 2008 as compared to $6.0 million in the second quarter of 2007. As a percentage of sales, research and development expenses were 6.1% in the second quarter of 2008 as compared to 6.2% in the second quarter of 2007. For the full year of 2008, our long-standing commitment to target a reinvestment percentage of approximately 6% of sales into R&D is still in effect.

Other income and expense, which includes income from our joint ventures and royalties less other expenses, amounted to $2.6 million in the second quarter 2008, compared to $1.7 million in last year's second quarter. The improvement is primarily related to increases in commission income of $0.4 million and a lower net impact of all other expense items totaling $0.5 million.

Rogers 50% owned joint ventures had second-quarter sales totaling $29.2 million, up 11% from $26.2 million in the second quarter of 2007 led by strength in our two polyurethane foam joint ventures. However, overall equity income in unconsolidated joint ventures in the second quarter of 2008 as compared to the second quarter of 2007 remained flat at $1.5 million as volume improvements were offset during the period by increases in depreciation and one-time startup costs related to new production capacity coming online.

The Company's second-quarter 2008 effective tax rate was 29.6%. The Company believes that the tax rate will continue to be in this range for the remainder of 2008.

As mentioned earlier in my presentations, the Company currently is pursuing certain long-term tax planning initiatives related to the realignment of our legal entity structure and to our transfer pricing strategies with the goal of favorably impacting the international tax component of our rate structure for 2009 and beyond. These potential impacts cannot be quantified at this time. However, we will provide an update when the expected figures have been confirmed.

Turning to our financial position, Rogers ended the second quarter with a cash and short-term investment position of $43.5 million, compared to $89.6 million at the end of 2007. That decline continues to relate to the 1Q 2008 reclassification of $54.4 million of our investments in auction rate securities from short-term investments to other long-term assets as previously disclosed and described. There has been no significant change in the status of the auction rate securities during the quarter.

During the quarter, cash and cash equivalents increased by $21.5 million with strong cash flow supplemented by a decrease in accounts receivable of $11 million. Capital expenditures were approximately $6.1 million for the quarter and Rogers anticipates capital expenditures in 2008 of approximately $25 million.

From a balance sheet perspective, we continue to have no outstanding long-term debt, although we are supported by available credit facilities totaling $100 million. Our current assets were 2.9 times current liabilities and inventory levels ended the quarter at $48.3 million, as compared to $51.2 million at the end of the fourth quarter of 2007. Accounts receivable ended with 62.5 days outstanding, an improvement from the 67.3 days reported at the end of the fourth quarter 2007.

This concludes my remarks and I will now turn the call back over to Bob for some closing remarks.

Thank you, Dennis. Now we will entertain any questions.

(OPERATOR INSTRUCTIONS) Jiwon Lee, Sidoti & Co.

A few questions, please. First, could you give us a little more color on your third-quarter guidance as to how each of your key segments are expected to do?

Yes, we expect the High Performance Foams segment to continue to do well. We also expect the Printed Circuit Materials to do better than the second quarter. However, Custom Electrical Components will be down. The Durel portion of it down as much as $12 million, while the Power Distribution Systems, we expect that also to be up slightly although they do take several weeks off in Europe during the month in the third quarter. Not much change in the Other category.

And the Durel is expected to be down more because of your legacy program or --?

Yes, end of life on multiple cell phone programs.

Okay and could you talk, Bob, a little bit more about your opportunities that you have on the polyurethane form especially with the horrible electronics market? What type of growth from that particular market could we expect?

We are continuing to see significant growth there, as we have several new products. One is a 12-pound density, another a 9-pound, and then one we call Soft Seal that is at 6-pound density. And those appear to have been -- become the materials of choice for a very large number of cell phones and those materials carry somewhat higher prices than the materials they are replacing. And in addition, the number of cell phones is going up. Our market share is somewhere in the 60% range.

For a product like Soft Seal, is that sort of a meaningful competition out there?

No, neither for the 9-pound or the 12-pound.

Okay, perfect. On the China 3G front, could you, Bob, talk a little bit more about what you see out there right now? How and when -- some of these recent development and restructuring that they are undertaking over there could affect you and the opportunities that you may see?

We see the restructuring as being almost complete. This is a very positive thing for us as it will initiate the beginning of the 3G introduction there. China Mobile will be first. They will be using TDS/CDMA technology, which is the homegrown Chinese, and they will be purchasing from four Chinese vendors. At least that is what our belief is at the moment and we expect to see orders in the first half. But this is just the beginning. This will take a little while. This isn't going to be -- it does not appear to be there's going to be an explosion in one quarter. Instead it's going to be a controlled roll off.

Okay, and you have a good positioning with any of these four Chinese vendors that may get some orders?

Yes, we have a very significant market share.

Okay, perfect. A couple of quick housekeeping questions. The percent of international sales for the quarter, Dennis?

I am not sure.

I don't think we know. I doubt that it has changed much.

In the low 70%, is that --?

Yes, probably actually shrinking a little as all of the Durel sales that are going away were international.

Okay, then with your tax study that is hitting SG&A line, how should we look at your SG&A line for the rest of the year?

To me, it should be going down each quarter. The last quarter I projected an average spend rate of about $17 million to $17.5 million and without the unusual onetime items we had this quarter, we would have been pretty much in that range. So our committed funded activity levels is in that $17 million to $17.5 million range.

We still may have a little overhang on the tax study in the third quarter, but that is going to be a good project when we get done with it.

Okay, I will jump back to the queue. Thank you.

Tom Lewis, Century Management.

First off, the satellite TV business customer or customer group that -- where it is down some, could you give us a little perspective? Is that something that just kind of comes and goes quarter-by-quarter or are we getting over the mountain on a great big program that's not going to repeat? How should we understand the ebb and flow of that particular end market?

That application was down 6% compared with last year and we believe it is affected by the housing slump. Typically when someone buys a new house, you put in some kind of TV hookup, either cable or -- and generally when people move.

All right, so it is more of a consumer thing than a program ramp?

Right, this really is -- the LNB, the satellite stuff is all consumer-driven, so if a consumer is feeling not so good, he is probably not going to commit to that extra $60 or $70 a month.

Okay, as you look at across your customer base, are there any places where it is apparent to you that there is either -- where customers -- manufacturers taking down their inventories, has been a factor? Or conversely, are there any areas that you are concerned that they might be doing that over the balance of the quarter we are in now?

We don't see anything in the way of inventory reductions, but then we didn't see much in the way of a build-up either previously. It seems most of our customers have kept their inventories fairly under control. It could be that satellite TV stuff, some of that may actually be inventory reductions. Typically what you do if your sales go down, you also cut your inventory. So we think that is all in pretty good shape.

Okay, and as you look at -- you've got -- talking in terms of getting -- going to third shifts, what is your sense of how startup-related costs will add up in the second half as compared with the first half? And I guess just taking another step further, do you anticipate much of that kind of activity in the earlier part of next year?

The adding of the additional shifts during the second quarter was in silicone and of course that's just adding a shift, so that really didn't -- actually it was a net plus because we reduced the overtime enough that it more than covered the added expense of the people. And the second shift in China went very smooth. That helped us cut the overtime in the US and also allowed us to expand our sales while we continued to run trial, because trials are very important to us for the new products.

Where we had some significant expense is inside the joint venture, where a new plant and the new machine in Japan were brought on stream and therefore, they were running mostly trials and not shipping quite as much product. We expect they will ship more product and run fewer trials in the third quarter. Also, we have to keep in mind that in Japan their depreciation mode is quite different than ours. It is a 25% per year [declining] balance. So when you bring on new equipment, you don't make any money right away. (multiple speakers)

But you make the cash flows. The cash flow is good.

And of course that is how the Japanese look at things, cash flow. They don't really seem to look at profits as much as we do.

Even with that startup, the change in profitability was de minimis in terms of the very marginal slight decline that will go away as they ramp up their good production.

Okay, last question, then. If you think -- looking at your new products that we've talked about on calls in the past, as compared -- are there any new products, any products in that group that you would point to that are tracking significantly better or maybe prove to be that wasn't such a great idea relative to what you were thinking at the first of the year?

Yes, the Soft Seal continues to do much better than we expected. Whereas the [Dermabak] material for medical applications has turned out to be one of those that was a bad idea.

Okay, all right. Let's let somebody else ask a question and keep up the good work, guys.

(OPERATOR INSTRUCTIONS) Russ Piazza, Front Street Capital.

Hey Bob. Soffer, too, how are you doing?

Hi, Russ.

I was wondering if you could update us a little bit on what's happening with the thermal management products. I also saw that in the press release you mentioned something about chip packaging. I was wondering if that ties into it at all?

The chip packing is an application we are referring to is a single, very large customer that uses a high-frequency material. So it is part of the Printed Circuit Materials. Their business is down by more than half. Some of their applications just have run out and they don't have that many new ones.

In the thermal management business, we continue to make progress. It's slow. All new businesses take a long time. The progress during the second quarter was that the thermal interface material didn't gel. We have developed a new product that has a much lower viscosity and therefore, will have a much wider range of applications. And the manufacturing equipment for that is now in place and we are in the process of starting it up and beginning to sample customers.

So are there things you still need to develop on your end or is it the market you are waiting to --?

Both, both. On the aluminum silicon carbide side, we are working on a less expensive way of making preforms, but we are also waiting for just evaluations by customers. Some of these evaluations take three to six months before you can get approved as they go through all their reliability testing. That is mostly what we are doing is shipping samples for qualification. Then we would expect by the fourth quarter to start to get some orders here.

Russ Piazza; Great, thank you. Thanks again for the awesome job of managing through this Durel thing. We appreciate it.

Thank you.

Bob Fetch, Lord, Abbett.

Good morning. On the satellite business there a moment, how much to your knowledge is domestic versus international in terms of where the material goes?

I think it's about 50-50. Because the majority of the domestic is the high definition, where they are using about 50 square inches and the international is the Ku and C-Bands where they use between a 1.5 and 15 square inches.

Meaning that you are seeing -- do you know in terms of where the material is going which application and which geography it's going into or is it largely the same customer?

Largely the same, to answer. We sell them to all the same people. They make all the systems. So when we get the orders, we don't really know. Our knowledge comes from talking to them about what's going on. Certainly the C-Band, which is a very low frequency stuff, always has significant price pressure. Because it is the kind of materials that go into places like India, where it's cost first, function later.

Right, so is your pricing for the product actually down?

Down every single year.

okay, but on a planned basis?

Yes.

We know we have to lower it and we plan on that.

Okay, so with whatever impact has been going on out there, what are the sales for that material? What was the rate of change actually?

6%.

Okay. So again, it would suggest that even with "if you said it is housing slump affected", half the business is international by definition not be affected by the same factor?

Right.

But at the same time the offset positive even domestic is if people are going to continue to keep their satellite TVs, they're going to be upgrading to digital. So it should offset some of that housing weakness as well.

Yes, that is why I think probably the domestic was down roughly 12% total being 6% versus a number that you would think might be like 25 or so.

Okay, getting back to some of the other product areas there, are we developing any momentum in the auto safety area, lane changing -- and cruise control, radar and so on?

That continues to grow very nicely, especially the lane change, because that is much less expensive than the -- I have to figure out what they call us -- adaptive cruise control. That still remains very expensive. We have to wait until someone comes up with a less expensive semiconductor because that's what's driving the cost of that.

You had previously talked about -- PORON just seems to be just a nice, steady product line and even more so as time goes by. A new 9-pound material you mentioned last time and it was already running at a few million dollar rate. That's just finding more applications all the time?

All the time, more applications, absolutely. Not all parts of that business are strong. The general industrial part is actually down year-over-year but it is so diversified and very heavy on the international, it continues to do well.

All right. On your auction rate securities, what is the maturity on some of that stuff?

We have -- we actually had one small tranche of a little over $2 million that just went current. But most of them -- and there's probably 12 to 15 tranches -- are in the between 10, 20, and even after 30 years on some of them.

Okay, so at least for the time being it could -- the value could just be held up there for some time?

Yes, our position is that we have sufficient cash and other resources to allow us to treat those as long-term investments right now. And the slight valuation decrease we have taken of about 3% year to date is basically based on the long-term interest rates compared to what we are receiving on those as a premium. So it has been fairly marginal. We don't expect much change.

We do have to evaluate it quarter-to-quarter as the duration of this thing goes on. Some of the facts and circumstances may change and we haven't taken a hit on our P&L in terms of that valuation, but that is also up for conjecture in every quarter.

And what is the average interest rate on those securities?

About -- is it -- 4% to 5% pretax.

Okay, so obviously if they became more liquid, your balance sheet would reflect that pretty much overnight, too.

Yes, sir.

(inaudible) a lot more flexibility, not that you generally consume the cash that you degenerate anyhow. Right, Bob?

Yes.

Okay, last time you also talked about an oversupply in Korea of Flex materials. Has that largely taken care of itself?

No, the Korean manufacturers continue to lower their prices to fill their capacity. They seem to have a different view of the world than most other people. Our Flex business associated with that has stabilized and was approximately the same this year as last year. We expect it to stay that way. But of course, the margins have become quite small and that is why we're having the joint venture make the material for us and we are functioning as a reseller distributor.

Okay, China represented how much of your production in the first half and what do you expect in the second half? At what rate is that becoming a larger contributor?

Actually the China production is going down. It is going down because of the rapid shrinkage of Durel.

I remember last time you had talked about it having gone from 25% to 30% of your sales.

I'd say it's back down to 25%.

And where is the inflection point, say, back up I guess?

I don't expect Durel to go back up in the near term.

When we installed -- when the high frequency materials facility gets online in the first quarter of 2010 would probably be the inflection point up again.

But the polyurethane foam production is of course doubled as we went from one shift to two and that will go up again by 50% as we add the third shift. In the floats business is growing, so those two pieces are --mm our Power Distribution is growing very quickly.

Okay, can you elaborate on "China finally going 3G beginning in the second half"? What one ought to have as an expectation?

I believe in the second half it is only a couple million dollars. Right now it looks like it's only China Mobile and they are going to start pretty slow. But then that should grow significantly in 2009 as the other two players come on stream and as they -- I believe they are going slow on the TDS/CDMA because it may have some bugs that need to be worked out yet. So you are better off not having a huge number of things that have to be fixed.

So if we're looking out now and you've been talking about a stable of products in the kind of progression that you might typically have in their first couple of years of introduction, what are we looking towards in terms of those products having the most impact in the next two years?

I would say we are going to continue to see positive impacts from some of the new silicone products that go into trains and also from the products, the polyurethanes, the 12, the 9, and the pound densities in the Soft Seal, the 6-pound density. And then I expect that we will see some increase in the business for high frequency associated with cell phone antennas, base station antennas. And then hopefully within the next six months, we will have a couple very new special products to announce there their introduction. I only mention it because we're very close now. It will --

And you don't normally announce them until you are actually generating some sales, correct?

Yes, yes.

And on the antenna business, any impact from CommScope buying Andrew?

No.

And how large a customer is Motorola still?

They are still a very significant customer. I don't know exactly how much because we hardly sell anything to them.

Not directly, I know.

We sell Printed Circuit Materials into the board shops and the same material that Motorola uses for base stations, Ericsson uses so you can't tell. But they are still a significant customer because they cut across quite a few product lines. But as far as Durel is concerned, that of course is in significant decline.

And can you update us on your thoughts on your 2012 "objectives", which you have discussed previously?

Right. In 2012, we don't believe we will get to $1 billion by then, but we would hope to be probably 60%, 70% larger than we are today.

Which means you'd be a little less than maybe the $900 million you hoped or talked about last quarter as well.

Yes. (multiple speakers)

And earnings may be a little (multiple speakers)

I believe last quarter we talked about it as 2013.

Okay, so pushed it out a year and with similar earnings of $7.

Yes, lower sales but higher earnings.

Thank you.

Dana Walker, Kalmar Investments.

I feel like I am waterskiing behind a very competent high engine boat when I go behind Bob Fetch. How is everybody?

We're good, Dana.

Gross margin, how would you describe your gross margin today versus where you believe it might be a year from now? Talk about the tugs and pulls on gross margin that you saw in the quarter.

As we look out into that long-term time range that Mr. Fetch just talked about, we see periods of time when we can achieve that close to 35% range. As you look into next year, as capacity fills up some of these things, we won't have a major capacity coming on line until the first quarter 2010. So we do believe that next year could be an improvement of what we're looking at on average this year through the absorption impact.

As you can tell from our inventory numbers, we're down to what we think is close to our target levels across most of our businesses. So we've only seen $2 million or $3 million reduction, but. So next year we probably don't expect that if they are in a growing position on some of the businesses, absorption will be better and we always have price impacts and foreign currency exchange, which this year has impacted us negatively in the operations.

We do have hedge facilities contracts on most of our currencies that offsets in Other income. But at the expense level for the first half and the second quarter, at the local levels, they are dealing with that certainly. So we were 32.6 I believe or 32.1, and so we think that will improve next year.

Describe what it is like to be running with such -- much more modest inventory levels. How is it changing the way your customers interface with you? How is it changing the way you behave internally?

I think the ability to run with lower inventory levels is preceded by how we've changed how we operate and so the businesses have shortened their supply chains. So by producing more stuff in China, we are much shorter supply chain than we would have been several years ago. But the businesses have to operate lean and we have a continuous Six Sigma improvement process that allows cycle times within the facilities to be shorter and to lower leadtimes. And I think you do run into the benefit of most of our facilities not running at capacity. Woodstock for phones is, but they are running with our leanest level of inventory.

And so I think we've got operations that over the last three to four years have improved their lean and able to ship out with lower leadtimes and it's really -- we're responding to customers. They are asking for shorter lead times and to this date, most of our businesses are keeping up with that and maintaining very good customer relationships and delivery statistics.

I also think we have -- we're experiencing less volatility at our customers and therefore, we are able to pull down the inventories as they have become more predictable than they were 18 months ago.

Your satellite TV business was benefiting from the high-definition upgrade going on. Has that run its course?

No, still is.

That is part of what kept it from going down more.

The drivers behind your phone business, you said that some things are better, some things are less, which would always be the case in a portfolio effect. Do you view any of the very strong drivers to not be sustainable as you look at a softening environment?

We think we are sustainable and part of it is that the products that are growing are higher priced and they are replacing products that are 15% to 20% lower priced.

A fair amount of your growth, though, is cannibalizing your lower value product.

Yes, and that is by plan, because there are competitors out there in Korea who pursue the Rogers minus 25 strategy and so we are moving as quickly and we are having success doing that into new products that they can't do. They can do the old stuff. They can do 40-pound density really easily, so that is disappearing. But it is being replaced by 12 and 9 and 6.

When you quite frankly described -- and I hate to use the expression quite frankly -- but when you very candidly admit that your healthcare push for Dermabak is not progressing, can you talk about what you thought you saw versus what we have today and whether it is now something that you dig a hole and bury and move on?

Yes, what we thought was that the material being a bacterial barrier was sufficient differentiation to get people to switch because everyone else has to use a film to get the bacterial barrier. What we found was that unless we could be both a bacteria and a viral barrier without a film, it wasn't enough for people to go through the trouble of switching.

So you can ask what's important, but unfortunately you never really find out until you have the product and say what do you think about this? That is when we found out over time that it wasn't going to work. It does not mean we've given up trying to make one that can satisfy those two criteria, it is just we are pretty convinced we won't sell what we have.

As China goes 3G, as the iPod brings forward 3G products, I'm not sure whether there is a chicken or an egg at work here, but is there likely to be more momentum outside of China as China goes and as we have more handsets that provide the functionality that people want? Or are the two not connected?

Absolutely. I was surprised recently when I read that only 10% or 11% of the phones in use in Europe are 3G. That is a pretty good indication of what is available in the future. Because they will need a lot of infrastructure if that number grows to 20 or 25. You will have to increase the infrastructure significantly.

Final question, if you were to project how you believe your -- pardon me -- your microwave business were to progress from here, your high frequency business, how would you view the lower end of that range versus the higher end of that range over the next couple of years?

I believe that business should be able to sustain a 10% to 14% compounded annual growth rate.

When was the last time it was within that range?

2006.

So you believe '09 is when we get back into that range?

Yes.

Okay, thank you. Good job.

At this time, there are no questions. Mr. Wachob, do you have any closing remarks?

Thank you very much for attending today. Have a nice day.

That concludes today's Rogers Corporation second-quarter conference call. You may now disconnect.