CHANDLER, AZ – Rogers Corp. reported fourth quarter net sales of $230.5 million, up 9.4% year-over-year and down 3.3% sequentially.
The sequential decline is primarily due to the impact of supply chain constraints, which reduced customer demand and resulted in lower production levels. The decline was partially offset by the Silicone Engineering acquisition in early October.
EMS posted net sales increased 1% due to growth in EV/HEV sales and the Silicone Engineering acquisition. This growth was tempered by lower sales in all other markets as a result of component shortages and labor and supply constraints, which reduced customer demand and lowered production levels.
AES net sales decreased 5.8% due to lower defense, wireless infrastructure and ADAS revenues, partially offset by much higher EV/HEV sales. Component shortages continued to temper customer demand in the ADAS and wireless infrastructure markets. Currency exchange rates unfavorably impacted total company net sales in the fourth quarter by $1.1 million compared to prior quarter net sales.
"Rogers delivered record full-year revenue and earnings in 2021 led by tremendous growth in EV/HEV market sales," said Bruce D. Hoechner, president and CEO, Rogers. "Ongoing supply chain challenges tempered fourth quarter customer demand and financial results, which is necessitating further commercial actions. The long-term growth outlook in our markets remains strong, and we are investing to capitalize on these opportunities, particularly in the EV/HEV market where demand is accelerating. We are very pleased with the progress being made related to DuPont’s proposed acquisition of Rogers, including the recent approval of the transaction by Rogers’ shareholders. We anticipate the combination with DuPont will provide many compelling benefits for our employees and our customers, as together we leverage our expertise in advanced materials to drive new and innovative solutions."
Ending cash and cash equivalents were $232.3 million, an increase of $11.4 million versus the prior quarter. Net cash provided by operating activities of $18.2 million was offset by capital expenditures of $27.7 million. Free cash flow was approximately $(9.5) million in the fourth quarter.
Total 2021 net sales of $932.9 million increased 16.2% compared to 2020, led by robust sales growth in the EV/HEV market for both the AES and EMS business units. AES net sales increased in the EV/HEV, ADAS, clean energy and defense markets. EMS net sales were higher in the EV/HEV, general industrial, and consumer markets, partially offset by lower portable electronics market sales.
The Silicone Engineering acquisition contributed to EMS sales in the fourth quarter. Further sales growth in 2021 for both the AES and EMS business units was tempered by lower demand from customers impacted by component shortages and labor and supply constraints, which reduced production levels. Currency exchange rates favorably impacted total company net sales in 2021 by $22.3 million compared to the prior year.
Restructuring and impairment charges were $3.6 million, compared to $13 million in 2020. The decrease was due to lower charges related to manufacturing footprint optimization plans to better align capacity with end market demand, improve factory utilization and increase cost competitiveness.
Ending cash and cash equivalents of $232.3 million increased $40.5 million versus the prior year. The company generated operating cash flow of $124.4 million and free cash flow of $53.2 million in 2021.
As announced on Nov. 2, Rogers has entered into a definitive merger agreement to be acquired by DuPont for $277.00 per share in cash. As a result of the pending acquisition, Rogers will not hold an earnings call or provide forward-looking guidance. Rogers' shareholders approved the merger agreement at a shareholder meeting on Jan. 25. The transaction is expected to close by the end of the second quarter, subject to the satisfaction of other customary closing conditions, including receipt of certain regulatory approvals.
