ROG Rogers Corp

Management Discussion

• ACS net sales increased by 21.1% in the second quarter of 2019 compared to the second quarter of 2018. The increase in net sales over the second quarter of 2018 was primarily driven by higher net sales in both 5G and 4G wireless infrastructure, as well as automotive radar and portable electronics applications. Net sales were unfavorably impacted by $2.5 million, or 3.3%, due to the depreciation in value of the Euro and Renminbi relative to the U.S. dollar.
• Operating income increased by 74.2% in the second quarter of 2019 from the second quarter of 2018. As a percentage of net sales, operating income in the second quarter of 2019 was 19.9%, an approximately 600 basis point increase as compared to the 13.9% reported in the second quarter of 2018. The increase in operating income was primarily due to higher net sales, favorable product mix, productivity improvements and increased asset utilization, partially offset by an increase in freight expenses, including tariffs and duties, incurred and a $0.9 million in impairment charges on certain assets in connection with the Isola asset acquisition.