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Rogers Corporation (NYSE:ROG)

Q4 2013 Earnings Conference Call

February 24, 2014 9:00 AM ET

Executives

Bruce Hoechner – President and Chief Executive Officer

Dennis Loughran – Vice President Finance and Chief Financial Officer

Bob Daigle – Senior Vice President and Chief Technology Officer

Analysts

Daniel Moore – CJS Securities

Avinash Kant – D.A. Davidson & Co.

John Reilly – ACK Assets

Operator

Good morning. My name is Shirley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Year-End 2013 Earnings 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. Bruce Hoechner, President and CEO, you may begin your conference sir.

Bruce Hoechner

Thank you, Shirley. Good morning everyone. Thanks for joining us. The slides for today’s call can be found on the Investors section of our website along with the news release that was issued this morning. With me today are Dennis Loughran, Vice President, Finance and Chief Financial Officer; and Bob Daigle, Senior Vice President and Chief Technology Officer. I will now turn it over to Dennis to dispense with the formalities. Dennis?

Dennis Loughran

Thank you, Bruce. 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.

Also, the discussions during this conference call will include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. 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 that can be found on our website’s Investors section.

I will now turn it back over to Bruce.

Bruce Hoechner

Thanks Dennis. I am pleased to share with you today Rogers’ fourth quarter results. Our transformational initiatives which began about two years ago are clearly delivering meaningful outcomes. Our strong focus on technology innovations to benefit our customers as well as our emphasis on operational performance and cost management has helped us build what we believe is a sustainable advantage.

We finished the year well with fourth quarter revenues of $136.2 million, an increase of 9.7% over Q4 2012 which exceeded our guidance. For the full year of 2013, Rogers’ revenues were $537.5 million, up 7.8% versus 2012 full year results.

Globally, we benefited from improving market conditions, propelled by growing demand for clean energy, internet connectivity and safety and protection applications. Higher sales combined with rigorous cost management discipline enabled us to complete the fourth quarter ahead of earnings guidance as well.

Earnings per share for the quarter were up 40% net of special charges, compared to Q4 of 2012. Overall, it was another very good quarter for Rogers. We are pleased and encouraged by our ability to execute well on our strategies which enabled us to deliver strong results.

Moving to slide four, you will find an overview of fourth quarter revenue performance by markets. For the quarter, 61% of our sales fell into our strategic megatrend categories as our focus on solving material challenges in support of global megatrends continues to drive our growth.

In Clean Technology category, sales were up 40% over Q4 of 2012 with growth across all major segments including power modules for variable frequency motor drives, hybrid electric vehicles and solar applications.

In support of the growing global demand for Internet connectivity, we achieved 11% growth in revenues for the category. The market for 4G LTE base station deployment continues to be very active, especially in China. Once again, growth in new applications enabling wireless connectivity for mobile Internet devices also help boost demand for Rogers high-frequency printed circuit materials.

In mass transit, revenues were essentially flat compared to the fourth quarter of last year as some programs for interior applications ramped up offsetting growth in rolling bus bars for rail traction power distribution. This market is typically program-driven and subject to fluctuations.

Demand for radar-based automotive safety systems continues to drive growth for Rogers printed circuit materials as the benefits of these systems in reducing fatal power crashes becomes increasingly evident, we expect consumer demand and governmental safety initiatives to continue to spur adoption of these systems around the world.

Turing to slide five; let’s look at the company’s performance by business segment. Our printed circuit materials business delivered record sales for the quarter and overall record sales for the year.

Sales were up 26% for the quarter over Q4 2012 and up 14% year-over-year as momentum continued in the 4G LTE wireless infrastructure market, applications enabling wireless, connectivity for mobile internet devices and the automotive safety sensors that we just discussed.

In Power Electronics Solutions, we delivered another strong quarter with revenues up 24% versus the fourth quarter of last year, as demand surged across all of our major clean energy application areas.

As stated in our earnings release, we have restructured this business to better align with our markets and streamline management.

Going forward, we will manage and report Power Electronics Solutions as one core strategic segment that is comprised of two main product lines, Curamik direct bonded copper substrates and RO-LINX power distribution systems and products.

High Performance Foams revenues were down 13% versus fourth quarter of 2012 despite growth in many of its segments. The business reported year-over-year sales decline due largely to changes in applications for mobile internet devices including changes in tablet device design, a shift to smaller tablets and better production utilization at our customers which resulted in a lower amount of total phone content in those devices.

On the positive side, volume was up for the quarter in cushioning and sealing applications for consumer electronics and hybrid electric vehicles as well as advanced sport impact protection.

Moving to Slide six, we continue to build a market-driven culture across Rogers that is solutions-oriented, growth focused and propelled by innovation excellence. Our investments in technology innovation continues. In the fourth quarter of 2013, we moved some of our corporate research and business development teams to the new Rogers Innovation Center located in Burlington Massachusetts.

Our Innovations Center is co-located with Northeastern University enabling us to expand our collaboration with them as well as other weeding universities on novel technologies that we believe will provide exciting business opportunities for Rogers.

For near-term opportunities, we continue to closely collaborate with our customers to build a high-quality pipeline of opportunities. At the end of the fourth quarter, in our targeted megatrend categories of clean energy, internet connectivity, and mass transit, we were tracking a cumulative total of 722 major design opportunities, over 300 advanced to designing phase of the selling process and we moved 84 megatrend opportunities from design into production.

The key message here is that we have a robust sales pipeline that would continue to refill as we convert these projects into sales.

I’ll now turn it over to Dennis to report our financial highlights.

Dennis Loughran

Thank you, Bruce, and good morning again to everyone. As reported in the press release, we achieved earnings from continuing operations of $0.64 per diluted share, which includes a net special charge of $0.17 per diluted share. The special charge was related to year-end valuation impairment of an investment made in 2009 in a start-up company engaged primarily in the production of lithium battery powered security applications for credit cards.

The impairment reduced the carrying value of the investment from $5.1 million, down to $500,000 and was the result of the pricing of a fourth quarter 2013 equity funding event by the company to raise additional needed cash.

Excluding that non-cash one-time event, you can see from our results that our underlying non-GAAP performance exceeded expectations for both sales and earnings per share. Our non-GAAP result of $0.81 per diluted share, put us $0.01 per share above the high end of our Q4 2013 guidance, while sales for the quarter came in at $136.2 million, to slightly above the high end of our guided range of $135 million.

The combination of stronger sales and better than anticipated manufacturing performance produced better than expected gross margins at 37.3%.

Higher commercial expenses, primarily related to increased year-end accruals for incentive compensation and other accruals offset gains in manufacturing margins. However, we were still able to deliver a quarter with a non-GAAP operating profit as a percent of sales at 11.7%.

That performance is a 120 basis points higher than the fourth quarter of 2012 and represents the second best performance in the last eight quarters since we started our profit improvement efforts in 2012 and second only to our recent third quarter results which achieved 14.4% on a $7 million higher than sales with more normalized level of commercial expenses.

We believe we are positioned well to deliver continued improvements in operating profit performance as our sales grow based on the strengths Bruce discussed in his comments. Toward that end, in comparison to last year’s fourth quarter, the top-line is at $12.1 million or 9.7%.

For the year, sales improved by 7.8% with strength building from the start of the year culminating in a second half performance that generated 10.2% growth. We also achieved net sustainable SG&A cost reductions in the quarter totaling approximately $2.2 million resulting from our 2013 profit improvement efforts.

Overall, we improved non-GAAP operating profit by 23%. On a comparative basis, adjusting for differences in the level of incentive compensation, operating profit achieved a 64% year-over-year gain confirming our improvement efforts have achieved what we committed to at the start of our efforts two years ago.

Turning to slide number eight, profitability improvement that continued to track favorably to previously committed performance improvements with fourth quarter non-GAAP operating profit at 11.7% which is 600 basis points higher than our Q1 2012 starting profit level of 5.7%.

The last point on the chart indicates our new Q1 2014 guidance which at the high-end of the range will deliver operating profit at 13.7% or 410 basis point improvement over Q1 2013.

Slide number nine, gross margins. With the fourth quarter 2013 at 37.3% on a non-GAAP basis, that result represents a 430 basis point improvement as compared to the 33% non-GAAP gross margin reported in the fourth quarter of 2012. Approximately 48 basis points of this improvement is the result of the $0.7 million in streamlined benefits realized this quarter as compared to last year’s fourth quarter.

We also improved 150 basis points related to the addition of incremental volume at our average portfolio’s 50% contribution level and an additional 232 basis points as we continue to absorb lower cost incremental manufacturing capacities to our manufacturing base and implement continuous improvements in supply chain, product quality and procurements.

Turning to commercial expenses on slide number ten. Non-GAAP selling and administrative expenses as a percent of sales for the fourth quarter of 2013 and 2012 were 22.1% and 18.8% respectively. The net increase was primarily related to incentive and stock compensation costs of $5.4 million not in the 2012 comparable period.

In addition, as previously described, SG&A spending was negatively impacted by $2.9 million due to higher intangible amortizations related to Curamik purchase accounting. Higher costs related to investments in key strategic areas including IT, sales and marketing, as well as other organizational initiatives that we have said would be incurred as we earned our right to spend through profit improvement efforts.

And as I mentioned earlier, we did incur approximately $0.8 million related to year-end accrual true-ups that do not representing ongoing operating costs.

Research and development expenses were 3.5% of sales in the fourth quarter of 2013, slightly lower than the 3.8% rate experienced in the fourth quarter of 2012. In the near term, we expect our new innovation efforts announced in 2013 to begin increasing our R&D spending rate.

However in our Q1 2014 guidance we expect the rate to increase only marginally to 4% moving toward the range of 4.5% to 5.0% of sales throughout 2014 as we accelerated initiatives related to the opening of the Rogers Innovation Center at Northeastern University later this quarter.

Turning to Slide number 11, Rogers ended the fourth quarter with a cash and cash equivalents position of $191.9 million as compared to $158.6 million at September 30, 2013 and $114.9 million at the end of Q4 2012.

As represented in the slide, we also improved our net debt metric to a positive $114.4 million representing a $97.5mln improvement versus the fourth quarter last year providing added liquid reserves in support of future strategic needs.

In the fourth quarter 2013, the net increase in cash was primarily attributable to strong cash generated from operations of approximately $33.3 million, the quarter benefited from a $16 million decrease in net working capital primarily related to decreases in accounts receivable of $11.6 million and a net increase in short-term liabilities, $3.6 million offset by a slight increase in inventory $1.1 million and cash received from the exercise of stock options of $6.4 million.

Those amounts were partially offset by capital expenditures of $3.3 million and long-term debt repayments totaling $3.75 million, representing a scheduled repayment against our term loan facility. We currently have $77.5 million of outstanding debt, down from $98 million at the end of 2012.

Turning to Slide number 12, for the first quarter of 2014, we forecast net sales between $134 million and $138 million and net income from continuing operations on a GAAP basis of between $0.68 and $0.75 per diluted share.

At the high-end of the range, this guidance represents a $12 million or 9.5% sales improvement versus Q1 2013 net sales. In operating profit, as shown in the table at the bottom of this slide, at the high-end of our range, we expect to deliver $8.9 million in margin improvement with contribution on the increased sales at 74%.

That percentage is well above our normal expected average of 50% as the benefit of $2.9 million and improved cost performance of that $0.7 million related to the 2013 streamlining and $2.2 million related to improved absorption in mix favorably impacting our gross margins, which we expect will improve to a level approaching 36.5% from last year’s 33.0% in the first quarter of 2013.

That contribution is expected to be offset by the accrual of an additional $1.5 million in costs related to incentive compensation in the first quarter of 2014 as compared to the fourth quarter of 2013, which had a lower than target incentive compensation accrual.

You will also see we are estimating $3 million in cost savings, offset by annual inflation impacts of $1.3, as well as strategic investments in IT and growth initiatives totaling approximately $1.9 million.

Overall, we expect that the high-end of our guidance should deliver a 57% improvement in operating income compared to Q1 2013. That should achieve an operating profit of 13.7% as a percent of sales, compared to the 9.6% reported in Q1 2013.

Below operating income, we project approximately $0.8 million of net impact primarily from improvements in joint venture performance; we are currently projecting a slightly favorable Q1 2014 tax rate of 28% versus the 29.2% in the first quarter of 2013 resulting in favorable impacted taxes of approximately $0.2 million.

For those of you comparing earnings per share sequentially, the tax rate differential is much more significant comparing a 9.3% effective rate for Q4 2013, versus the projected Q1 2014 rate of 28%.

That rate differential equates to a $0.17 per share impact converting Q4 2013 to an apples-to-apples comparison would yield earnings per share of $0.64 per share versus our Q1 2014 guidance range of $0.68 to $0.75 per share, putting the earnings per share comparison much more in line with the expected improvement in profitability at any level of potential sales outcomes for the first quarter of 2014.

This concludes my remarks and I will now turn the call back over to Bruce.

Bruce Hoechner

This concludes our prepared remarks and we will now open the call up for questions.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from the line of Daniel Moore from CJS Securities. Your line is open.

Daniel Moore – CJS Securities

Good morning. Thanks for taking the questions.

Bruce Hoechner

Hi, Dan.

Daniel Moore – CJS Securities

You made significant inroads obviously in electric, in hybrid electric vehicles in North America. Talk a little bit about the opportunity in China. How are some of the potential environmental concerns shaping the market opportunity and maybe you describe your competitive position there?

Bruce Hoechner

Great, well, it’s a great question. We are very pleased with – as you mentioned inroads with North America with one of the large EV producers and they continue to grow. But in Chinas as well, one of the things that we are seeing is the impact of the air pollution and the government now setting some targets for EV, HEV automobile licensing.

And, so we will be seeing that, particularly in places like Beijing, Shanghai, where they are targeting somewhere around 30% of the new licenses by 2016 to be EV, HEV automobiles. So, where we are participating in that is with the automotive manufacturers actually based in China, but other locations as well, but primarily in China and we are seeing a lot of new developments there that we are linked to.

So, that’s been a very good opportunity for us and that demand for clean energy in China is carrying on – even beyond the HEV, EV area and it’s going into solar, we saw quite an uptick in demand for our products going into solar energy in Q4 and we anticipate even more going forward. The Chinese government has announced another six gigawatt quota for solar power in the next couple of years. So that’s also good news for us.

Daniel Moore – CJS Securities

Great and on the – not the other end of the spectrum, but maybe talk a little bit about high-performance foams, little lighter than we had expected, given all the cross currents of different trends, do you expect to be able to return to positive growth in 2014 in that segment?

Bruce Hoechner

So, over the last couple of calls – earnings calls, we’ve talked about the changes in the market, particularly in MID and particularly in the tablet market, and we believe that things have settled in a sense as the designs have changed and also some of the supply chain efficiencies have been starting to be built in moving forward. But, as it relates to design changes, we are working very closely with the OEMs introducing new products like the foam tapes that are being now evaluated for those new designs.

So we’ll see how we move during the year, specifically around the tablets, but on a more broader basis, we continue to be very energized by the growth in the impact sporting goods protection impact apparel, industrial apparels, shoe protection and safety shoe protection and so on. It’s double-digit growth that continues for us.

And we also have 50% of that business are industrial applications and we continue to see strong growth there for Rogers across many different markets. So that business, we think will certainly – during 2014 stabilize and as we see some of these new applications coming in we are very encouraged by that.

Daniel Moore – CJS Securities

Okay and lastly and then I’ll jump back in queue, maybe talk about the practical operational changes being made in streamlining Curamik with power distribution businesses now and what are some of the tangible benefits you have to achieve?

Bruce Hoechner

Well, part of that streamlining is really from a customer perspective. Our ability to offer a full range of power control capabilities from the direct bonded copper to the bus bars and so we are seeing some synergies in that as we work together with customers on their designs.

But, also from a management streamlining perspective, we’ve organized ourselves under one global leader for that and also down through the organization. So, R&D, manufacturing all consolidated.

We continue to share learnings across the different parts of the company of those parts that the bus bars and the direct bonding copper parts and those learning’s are helping us really improve things like throughputs, reducing scrap rates and so forth. So, that’s enabled us to really help, I would say our efficiencies as we move forward.

Daniel Moore – CJS Securities

It sounds like not the larger step function improvements that we’ve seen obviously in terms of streamlining over the last 18 months?

Bruce Hoechner

Well, one of the big things that we did with the Curamik product line was to move final inspection to Hungary and we continue to evaluate our opportunities there and evaluate opportunities to really boost efficiencies in that product line.

Daniel Moore – CJS Securities

Great.

Dennis Loughran

This is Dennis, I would comment, because what you inferred was the Herculean efforts over the last two years that came with them big restructuring costs and severances of things, but the operations are definitely on an ongoing basis making tremendous strides in yield improvement, throughput efficiencies, utilization of equipment, scrap improvements that are impacting our bottom-line every day, but in that normal operational mode, that doesn’t require the things we had to do in the first two years to accelerate that growth in the range.

Daniel Moore – CJS Securities

That’s helpful. I’ll jump back in queue. Thanks.

Bruce Hoechner

Thanks, Dan.

Operator

(Operator Instructions) Our next question comes from the line of Avinash Kant. Your line is open.

Bruce Hoechner

Hello, Avinash.

Avinash Kant – D.A. Davidson & Co.

So, one or two questions. The first one was that, could you give us some color in terms of the revenue guidance that you are giving in Q1; it looks like it’s up sequentially and could you give us some color in terms of which segments are going to be seeing growth in Q1 compared to Q4 and relatively?

Bruce Hoechner

So, Avinash, first, our PCM business continues to see strength. We talked a little bit earlier in the prepared remarks around the growth that we are seeing in China. But we are also seeing PCM growth in places like North America where Verizon continues to expand their footprint and particularly in the urban areas where there has been some bandwidth issues.

So we continue to see investment there. So quarter-over-quarter we should see an uptick. On the Power Electronics Solution side of the business, again, we are looking at a Q1, where we will see some strength, the variable speed motor drive recovery as we see investments continuing to move forward. And then also in clean tech, clean energy; on solar and even smart grids we are seeing that growth.

Avinash Kant – D.A. Davidson & Co.

Okay, and you talked a little bit about, of course weakness coming from the pad, could you give us some idea what percentage of your high-performance foams come from the tablets and everything and then how much is coming from the cushioning applications, if you could?

Bruce Hoechner

So, the way we look at it and we categorize, I would say, the mobile internet device as a grouping, that’s about 30% or so of our revenue. So full 50% is coming from the industrial side of the business that we talked about and lesser percentage probably around 10% or 15% is coming from the impact apparels, sporting goods and so forth.

But what I will say about that segment is, that segment is growing in the range of 15% to 20% to 25% depending on how we look at it year-on-year. So, that’s – as I look at that and I think about where Rogers is headed towards in the future, that area is one that’s very exciting for us.

Avinash Kant – D.A. Davidson & Co.

Okay, and also quickly on the tax rate, you said the tax rate in Q4 was 9.3%?

Dennis Loughran

Correct.

Avinash Kant – D.A. Davidson & Co.

Now, Dennis, I think in the guidance, when you gave in Q3, you have talked about 16.6%. So, what would have been the differential in EPS at that tax rate which 9.3%?

Dennis Loughran

Just – I believe you calculate the numbers about $0.06, so we would be just above the midpoint of the range without that tax impact, but we also had impacts up in the operating statement about $3 million of extra incentives and the year-end accruals of about $800,000, Avinash.

So, we are non-continuous in nature. So when you back-off the fourth quarter to a target rate of incentive of about $1.5 million a quarter, that would have more than offset the tax rate benefit and we probably would have ended up above the high end of the guidance range on a sort of an adjusted level – commercial expense level of tax rate to the guidance basis.

Avinash Kant – D.A. Davidson & Co.

Okay, so, for the next quarter though in the guidance, you are talking, where should we think of SG&A line, because that seems to be the biggest variable you gave us the gross margin anyway and that you gave R&D, where should that come out?

Dennis Loughran

We believe about $26 million - $25.5 million to $26 million a quarter is where we are at.

Avinash Kant – D.A. Davidson & Co.

Perfect, thank you so much.

Dennis Loughran

Thank you.

Bruce Hoechner

Thanks, Avinash.

Operator

Our next question comes from the line of Daniel Moore from CJS Securities. Your line is open.

Daniel Moore – CJS Securities

Following up on Avinash’s question, just in terms of the tax rate, you are looking at a 28% tax rate for next year, I think, Dennis, you had mentioned in the last call, 25% to 28%, is something changing materially in the business? Or are you just being a little bit conservative as we look out to 2014?

Dennis Loughran

We’ll always try to do the latter there, but 25% to 28%, you know discrete items that we can’t reflect in the rates, so we tend to try toward the high-end in terms of our initial guidance for the year and it really takes all the way to look late third quarter, fourth quarter to get it to a nice blended rate. The 28% is maybe a conservative look at 2014.

Daniel Moore – CJS Securities

Got it, so nothing different in that as you’ve reflected in the past.

Dennis Loughran

There are so many different jurisdictions and since the weighted average.

Daniel Moore – CJS Securities

And then one last one, Bruce, $114 million in net cash, what you are going to do with all that cash in 2014?

Bruce Hoechner

Well, we continue – we have a very active effort right now looking at opportunities for technology licensing acquisitions and so forth. And so, those things come as they do sometimes you can’t force it, but we are very, very active right now.

Daniel Moore – CJS Securities

Could you characterize it as more active and optimistic than at this time last year or things been relatively the same?

Bruce Hoechner

Yes – no, no, I would say, we are more active and more optimistic.

Daniel Moore – CJS Securities

Okay, thank you very much.

Operator

Our next question comes from the line of John Reilly from ACK Assets. Your line is open.

John Reilly – ACK Assets

John Reilly.

Bruce Hoechner

Good morning.

Dennis Loughran

Hi, John.

John Reilly – ACK Assets

Good morning. How are you?

Bruce Hoechner

Great.

John Reilly – ACK Assets

Dan beat me to the punch, the balance sheet obviously has gotten tremendously strong since you’ve come here Bruce, when would you think about multiple approaches in return to shareholders in addition to M&A obviously being number one and we can get high returns for that. Have you thought about is the Board thinking about other returns to shareholders?

Bruce Hoechner

This conversation is an ongoing one with the Board looking what options are in terms of stock buyback, in terms of dividends. We, right now, are believing that our best option is investing in the company itself and looking at investments in acquisitions as well. But again, we are in the midst of those conversations with the Board.

John Reilly – ACK Assets

Now that’s great, high-class problems to have. And then just, a follow-up obviously, as the incrementals being so high and you are guiding for the incrementals to be in excess of 70% again for Q1, how much of that is mix and how much of that is really structural? I know you are not changing your long-term thinking about it in the 50% range, but how much of it is product mix? How much of it is structural and can we think about higher incrementals going forward?

Dennis Loughran

I’ll tell you, I don’t know if you could look for too much higher incremental profitability to 74%.

John Reilly – ACK Assets

No, I’ll take that, I am going, is what I meant.

Dennis Loughran

So, I think, part of it is structurally – we told folks at the beginning of last year that we had an 18 to 24 month runway of filling up capacity, so that I believe over the next year or so, you will see nice above 50% contributions on bringing volume into our facilities. We start adding capacity in 2015, so next year, I wouldn’t expect higher year-over-year contributions like that because there will be some negative, but it will still be nice. But this is a robust year for contribution level of bringing volume into the system.

John Reilly – ACK Assets

Got it and then just that also focusing on the incentive comp as we go forward, is that a normalized and now where we are looking at a more normalized rate based upon your guidance for Q1? Are you accruing at a normal rate going forward?

Dennis Loughran

We had a situation in 2013 of much heavier towards year end and because profitability improved throughout the year and we are looking at basically normalized average quarterly rate – I think in the $1.7 million range at an average basis per quarter.

John Reilly – ACK Assets

That’s great. Congratulations on the good numbers. Thanks guys.

Bruce Hoechner

Thanks a lot John.

Operator

There are no further questions in queue at this time. I will turn the call back over to Mr. Hoechner.

Bruce Hoechner

Great, thank you, Shirley. Well, in closing, let me summarize a few highlights of our call, first, we delivered strong revenue growth for the quarter and for 2013 overall. We finished the year with record results for printed circuit materials and robust growth in Power Electronics Solutions. The recovery in clean energy and global demand for internet connectivity drove much of that growth and market indications going forward are positive.

Secondly, we continued to improve our margins as we reap the benefits of operational excellence and organizational improvements that began in 2012. Lastly, we are investing in our capabilities to continue to increase our value to shareholders utilizing an outside in approach to gain greater knowledge about our customers, markets and technology is helping us identify new opportunities.

This approach extends to many other areas of the company as well, but we are using external benchmarks to evaluate and improve our performance. These efforts are paying off for our shareholders as we have delivered double-digit earnings growth over the past three quarters. The positive indicators from our key markets lead us to expect healthy demand for our products in the years ahead and we believe we are well positioned for future success.

Thanks a lot for joining us on the call today. Have a great day.

Operator

This concludes today’s conference call. You may now disconnect.

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