Rogers Corporation

Good afternoon. My name is Alicia, and I will be your conference operator today. At this time, I would like to welcome everyone to Rogers Corporation's first quarter 2024 earnings conference call. I will now turn the call over to your host, Mr. Steve Haymore, Director of Investor Relations. Mr. Haymore, you may begin.

Good afternoon, everyone, and welcome to the Rogers Corporation's first quarter 2024 earnings conference call. The slides for today's call can be found on the investor section of our website, along with the news release that was issued earlier today. Please turn to slide two. Before we begin, I would like to note 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 Roger's 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 made today. Please turn to slide three. The discussions during this conference call will also reference certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. A reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the slide deck for today's call, which are available on our Investor Relations website. Turning to slide four, with me today is Colin Gavea, President and Chief Executive Officer Ram Mayampurath, Senior Vice President and Chief Financial Officer, and Griffin Gappert, Vice President and Chief Technology Officer. I will now turn the call over to Colin.

Thanks, Steve. Good afternoon to everyone, and thank you for joining us today. I'll begin with the key messages for the quarter and outlook on slide five. Overall, we are encouraged by the improving end market demand that we saw in the first quarter. Sales were near the high end of our guidance expectations, which led to adjusted EPS above the midpoint of the range. The markets where we saw the most growth were aerospace and defense, wireless infrastructure, and industrial. The improved industrial demand is significant as it is both our largest end market and was hit hardest by the prolonged cyclical downturn in manufacturing activity. It appears that demand in many of these industrial markets has hit bottom and a gradual market recovery is beginning to take hold. The improving outlook for industrial demand adds to the likelihood that Q1 sales will be the low point for the year and that sales should continue to improve into the second half of 2024. Other signs that point to a stronger second half of the year include improving manufacturing PMI data, input from customers, and the typical seasonality in our portable electronics business. Returning to Q1, excess inventory at the customer level remains a challenge for certain product lines. Our Keramic power substrate business, which had a record year in 2023, had several high-profile customers push out orders in late February due to inventory levels. The sales outlook for power modules used in industrial, renewable energy, and EVHEV inverter applications is very dynamic right now. and we are closely watching for better indications regarding demand levels in the second half of the year. We do expect this headwind to continue into Q2 based on customer feedback. As we continue to drive improvement in our top line, we are also taking steps to improve profitability and cash flow. These actions include adjusting manufacturing costs and startup expenses for specific product lines to match lower near-term demand levels. In some cases, we are taking out more cost where the recovery may be further away and carrying some cost where we see demand returning sooner. As we manage through the very dynamic near-term environment, we remain firmly focused on executing on our strategic growth plans. This includes continuing to fund our R&D and innovation initiatives and investing in capacity and capabilities to support this growth. We continue to take a measured approach to capacity investments and will adjust the timing of spend to align with demand levels. We are working to strike the right balance between readiness to capitalize on growth opportunities while actively improving margin and cash flow. In terms of our innovation, we have a rich opportunity pipeline that we anticipate will help drive our future growth. I'll now turn it over to Griffin to discuss more about our innovation and technology development efforts.