Good morning. My name is Christy 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. Bob Wachob you may begin your conference.

Good morning ladies and gentlemen. With me are Dennis Loughran, Chief Financial Officer; Deb Granger, Vice President, Corporate Compliance and Controls, Robert Soffer, Vice President and Secretary, Ron Pelletier, Corporate Controller and Bill Tryon, Manager of Investor and Public Relations. 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 the 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 of any forward-looking statements. I'll now turn it back over to Bob.

Thanks, Dennis. Q2 was better than was better than we anticipated it would be and certainly a dramatic turnaround from Q2 2009. Most of our markets were strong during the quarter especially the three mega trend markets of the internet, mass transit and sustainable energy. We expect these three markets will continue to grow. We already have solid positions in most of these application areas and they remain the key focus for additional product and market development efforts. In these market areas we are currently involved in over 490 customer projects. We have over 40 programs that have gone into production this year. And in addition we have more than 55 design wins which we expect will go into production in the next 18 months. In total, across all our markets the number of customer projects is growing. And the average size of the projects is increasing. Customer project activity is generally a positive sign for the future. Other reporting segment while usually a positive cash generator is now generating positive operating profit due to the significant productivity improvements in cost reductions during the last view years In summary, we had a strong second quarter and first half and we remain cautiously optimistic going forward. Denise, turn it over you for all the details.

Thank you Bob and good morning again everyone. For the second quarter of 2010 operating leverage continued to be the major positive story for us. In 2009 we established a significantly lower breakeven point and developed an infrastructure that was poised to support significantly higher levels of sales. In 2010 we are providing the evidence that the business structure we put in place can deliver on the promises made. In the second quarter we delivered gross profit that were up 69% and the sales increase of 43%. At the same time our SG&A overhead excluding performance based incentive compensation supporting the $29 million increase in sales went up only $2 million or just 7% of incremental sales. We remain committed to retaining that leverage going forward, as we focus on driving growth in both top line and profits. Now a little more detail behind our financial performance. Second quarter 2010 sales of $96.6 million represent an increase of $29.2 million above last year's recession driven levels with all of our businesses performing at improved levels. Second quarter 2010 results included sales of $8.3 million from our PLS and Utis operations which were included in our consolidated results for the first time this quarter. High performance foams and printed circuit materials contributed to the strongest levels of growth as they lead the way to Rogers' overall 43.3% increase in sales. Rogers reported a GAAP profit of $0.52 per diluted share for the second quarter 2010 compared to a GAAP loss of $4.31 per share for the same period in 2009. Excluding one-time items Q2 2009 non-GAAP results were a net loss of $0.02 per share. The quarter-over-quarter non-GAAP increase of $0.54 per diluted share represents a significant improvement driven primarily by improved sales and excellent operating leverage. Those factors also contributed…

Thank you Dennis. Now, we will be pleased to answer any questions you might have.

(Operator Instructions) And your first question comes from the line of Fred Buonocore with CJS Securities.

Just in the past you've kind of given us some color Bob on initiatives and new programs and awards within your three mega trend markets that you've been talking about. Can you break that out for us please?

Sure, within the internet we have this year three programs that have gone into production on the wireless side. And we've had 18 design wins that we would expect to go into production sometime in the next 12 months to 18 months. And in addition, we have 77 active opportunities we're working on with our customers. In the antenna area which is really new for us we have two programs that have gone into production, we have another spec end and we have 59 active programs. This is really tide to 4G which is clearly just beginning in the US and really hasn't started in anywhere else. In the mobile internet devices we've had 22 programs go into production this year, 10 more spec ends and 148 active opportunities. So that whole area is going very well and on the wired side we continue to have the evaluations go on and none of them have been completed and its probably another six months before any of them are. It's a very long term evaluation is the people who make these very expensive pieces of equipment are very cautious and want to be sure that they have absolute reliability. But we are very optimistic that we will have some success here. We just have to be patient. On the mass transit side we've had seven programs go into production this year and some major wins in China and those who were delayed, they turned out to be second quarter rewards when they had planned to be first quarter. So that bodes very well for power distribution systems in China in the second half of the year. We expect that business to grow quite rapidly in the second half at least in Europe. And in addition we have a 101 active opportunities…

And then secondly, can you give me a sense for your recent SK Utis acquisition. The kind of penetration that may be gaining with some of the large mobile communication device, OEMs that the core Rogers business previously hadn't had much of a presence?

Yes that business is going quite well we are now at capacity, we expected by the end of the third quarter to have increase capacity between 40% and 50% which have multiple design wins that will be going in to production at the beginning of the fourth quarters, some of which are major tablet programs in Korea and certainly several smart phone programs with both of the major players there. We're very pleased with that acquisition and of course it was immediately accretive and is meeting all of our projections.

Your next question comes from the line of Avinash Kant - D.A. Davidson & Co. Avinash Kant - D.A. Davidson & Co.: Actually for Dennis first, so, how should we think about gross margins going forward specifically in terms of your guidance for the September quarter, should we expect margins to be currently better on higher revenues?

We have planned increase in sales, the production level should be at least as good or slightly better and we've seen that incremental business does bring slightly better contribution. So I think our third quarter guidance would have comparable to slightly improved margins at the upper end of the guidance range. Avinash Kant - D.A. Davidson & Co.: It looks like the record margins that you have been seeing could pretty much be a sustainable model here. There is nothing one time.

Absolutely and out in the future, 2011 when we bring on the laminate facility there obviously would be a slight increase in overhead related to that facility for our certain materials business. But there are no other major facility expenses we're seeing for 2011. Obviously we're going to use that capacity at some point. You have to add facilities but we have a lot floor space in our facilities around the world in the US and China and so we expect incremental equipment to be less of a burden than putting those facilities in place would cost. Avinash Kant - D.A. Davidson & Co.: And may be a as an extension of that, could you talk a little about what's your capacity utilization in most of the segments or overall if any.

Sure, in High Performance Foam area, we are working six days a week here in the US and five days a week in China. So we have capacity remaining. Our joint venture, it is working five days a week in China and in Japan is only working two shifts. So, there is a significant capacity remaining there and I mentioned the [ASK] users that acquisition, it is at capacity, however we're adding 40% to 50% within the next few months. In high frequency, we are at six days a week in the US and at five days a week in Europe. And of course at the beginning of next year, we'll be adding a very significant amount of capacity there. Our Power Distribution system business has plenty of capacity remaining, if they have not grown all that much. Avinash Kant - D.A. Davidson & Co.: Okay. So...

We're in good shape capacity wise at least for a while here. This won't go on forever, eventually we do have to add some but not near term. Avinash Kant - D.A. Davidson & Co.: Okay. So, would that mean that CapEx in '11 could be higher given you're going to be bringing them to some capacity?

The capacity for certain materials will be completed, they will be testing and evaluating in the first quarter. So that was approximately $19 million CapEx that will be completed with about $4.5 million in 2010. So next year we would expect sort of normal capital levels between that $14, $18 to $20 million level is where we sort of been at in terms of needed increments annually. Avinash Kant - D.A. Davidson & Co.: So, $14 million to $18 million roughly.

That's sort of the ballpark guess. We've already said about $12 million to $14 million of maintenance capital, anything above that would be sort of incremental capacity expansion. Avinash Kant - D.A. Davidson & Co.: All right. Okay and what was the depreciation and amortization in the current quarter and what should we think of it for the year?

$4.1 million for the quarter and nothing too dissimilar to that for the rest of the year. Avinash Kant - D.A. Davidson & Co.: Okay, and then for Bob off course, you do talk about the opportunity for HEV. Now I believe you mentioned just two segments there, one was the barrier separator and then some stabilizer. Could you explain a little bit where are those materials going into?

Yes the polyurethane foam is used in, between the individual cells of the lithium ion battery. Those cells need to be separated and they also need to have a constant pressure on them to maintain their contact and the reason they need to be separated is that they expand when they get hot and they contract when they get cold. If they are allowed to touch each other, then you will have friction and eventually you will wear a hole in that of course then generates a fire. So they need that separation and they need a material like our polyurethane that doesn't take a (inaudible) question set, so it has a constant force whether the cell has expanded or contracted or foamed makes up the difference there. And the other application in the electric vehicle that's going to go under production soon is for the silicone foam that actually seals the case that the separators or that the battery is in, and that needs to be silicone because it's such a wide variety of the chemicals that could come in contact with that case and they don't want any failures. Avinash Kant - D.A. Davidson & Co.: Right and you talk about one customer, are you designing to only one customer or more than one customers?

No we have eight design wins so far. Some of those are for thermo management systems, they have one customer at the moment, but that customer has three hybrid electric car programs in Europe. And then in the foam side, there are multiple programs going on now with both in China, US and Europe. Avinash Kant - D.A. Davidson & Co.: Okay, but the earliest production, you have been talking about the customer not the US based customer.

Yes it is and I believe they announced recently that they were going to production sooner and they were going to double they're projected build. Avinash Kant - D.A. Davidson & Co.: There's one more major call expected to be introduced later this year other than the one that you're talking about. Are you in that vehicle too?

I can't answer you, because I don't know what vehicle that is. Avinash Kant - D.A. Davidson & Co.: Okay but that opportunity per vehicle here is roughly how much?

Well on the foam side its in the neighborhood of $50 and the thermal management side is between a $100 and a $150 and when you get to the all-electric vehicles then the Power Distribution opportunity is between a $100 and a $200 as we currently have one active program that's in production with a small US based company where there are several $100 worth of bus bars being used in this sport car and a larger amount in the planned Sedan that is coming out later.

(Operator Instructions). Your next question comes from of the line of Jiwon Lee of Sidoti & Company. Jiwon Lee - Sidoti & Company: Just a couple of quick questions please, but could you give us a little more color on what kind of a mix was assumed in your third quarter revenue guidance?

We assume that the fair amount of growth in the Power Distribution systems, also some growth in High Performance foams and a little growth in the high frequency printed circuit materials area. Jiwon Lee - Sidoti & Company: Okay, so when you talk about a little bit of a growth in the high frequency circuit materials, what sort of a stock market would drive that growth in third quarter?

It is more a general economic situation around the world where our business has picked up dramatically from last year in Europe, the US and China is pretty much the same as it was. So we see some continued growth there, certainly in the defense and high reliability area we are seeing some growth in that area. I expected the fourth quarter we're going to begin to see some benefit from the India rollout as they plan to light up some of their systems in the first quarter. Jiwon Lee - Sidoti & Company: Okay

That's really the fourth quarter I have been, not a third. Jiwon Lee - Sidoti & Company: I see, and could you talk a little bit more about the logic for delaying the China laminate capacity into the early part of next year, especially if you are anticipating some of the growth coming out of Asian side later in the year.

We are trying to time it so that we don't have it on screen too early, because if we do, then we are absorbing all the depreciation other overhead and labor costs associated with that facility. I don't really believe this is a delay. We've always thought of it as a startup during the later part of 2010 and actual production in the first quarter 2011. Jiwon Lee - Sidoti & Company: All right, that's fair enough. And you talked a little bit about your auto business and the potential tied to that, how should we be expecting that out of the business with the multiple products going in sort of the ramp rate when we think about perhaps into next year?

Next year we'll benefit from the two programs that will be in production. The real increase occurs in 2012 when there is multiple vehicles being introduced and we would expect to get of course some revenue associated with those in the later part of 2011 because even though they call it 2012, in most cases they start shipping in 2011, some Europeans actually do have a calendar year. Jiwon Lee - Sidoti & Company: Okay until then, how do you feel about your sort of your pipeline on the mass transit side?

Well with 101 active opportunities and trains and (inaudible) in commercial aircraft, we feel pretty good about what we have going on there and we continue to gain market share and the fact I just heard yesterday that some business that one of our competitors had is coming back to us because they don't seem to be able to deliver, sometimes they to lower its price isn't the best thing. Jiwon Lee - Sidoti & Company: Okay good and lastly for Dennis, what was the operating cash flow during the quarter?

With the working capital we were pretty much flat in terms of operating cash flow.

Your next question comes from the line of Dana Walker with Kalmar Investments

When you talk about opportunities, you mentioned over a 100 for mass transit and over a 100 for some other of the end-markets that you addressed. Are we talking about transit systems or some type of a local simpler or manufacture what are we talking about?

There would be individual programs, so on the train side for example, there would be 101 different train programs certainly is with not 101 different customers for us, but a 101 different end users around the world.

So if Italy had a program going in, is Italy a program or are we talking about whoever is making the end product for Italy?

Italy would be the program because trains are all custom. Its surprising they have a basic design but then every single program is different. There we have different bus bars.

If there is a common manufacturer though or someone who you sell to, who then makes the product for the transit system, the transit system is the opportunity.

Yes.

Which tends to close up the number of steaming opportunities compared to some other end markets that you might address. Is that a fair statement?

Yes. A good advantage would be in the wireless base stations. If they were dealing with just a manufacturer and so it's a smaller number of programs. However, some of them have custom also that's why we ended up with 77 opportunities or 77 different designs going on today. It seems surprising to me actually but comparably, every system operator has a little different set of requirements.

When you describe how you have 59 active programs in the antenna market, are there truly 59 assemblers or manufacturers of those types of products?

No, no there are not 59 manufacturers of antennas there, 59 different programs, main programs which would relate to operators.

If as a hypothetical if you were to sell to the three wireless telecom companies in China, those could be three active programs.

Yes.

That's the way to think about the math.

That's the way to think about it if it was 2G for example then there could be six. So it depends on how many, which technology is being used.

Switching gears in the hybrid electric vehicle market in the short term your revenue opportunity is with foam primarily silicone and in bus bars and somewhat further out it's with your thermal management products.

Yes the foam's both silicone and polyurethane, actually polyurethane is a bigger opportunity.

How awkward is it to talk about specific programs that you address.

Well, since all these people make us sign agreements we won't say that we are doing business with them. It's pretty awkward.

So when the (leaf) and the volts are the two that seem to be at the very front and are your, we can just generally point in the direction to the fact that there are programs and that they are scheduled for certain times and some of those you will be on.

Yes.

Can you however, is it possible to contrast if we look at a vehicle like the Prius, which is an earlier stage product versus the volts of the Tesla. How are those different and how hypothetically would your product either apply or not apply.

Prius, we have nothing in the Prius. Prius, the people in the know would say that it's a joke as far as being a hybrid vehicle. It is really an extremely efficient gasoline engine with a little battery. And it allows them to call it hybrid electric. As you move up in power, that's when, the power of the battery, that's when we begin to play and we play the most when its all electric because when you get to all electric you are dealing with a large amount of power and then there's what's called full hybrid so there will be all kinds of variations there as far as how much of the energy from the automobile or other vehicle will come from electricity and how much will come from the gasoline engine. It becomes very difficult to get real specific here because every designer has a little different idea. In someway that's really good for us because everything is different, there's no commonality and therefore it's really hard to think of things as commodities because we like that.

Understood. Your thermal family, as you work your way into making product, where is your plant going to be?

The facility is in Chandler, Arizona and we are establishing a finishing operation in Suzhou. So the hard labor part will be in China and the technology part will be in Chandler, Arizona in an existing building.

What type of invested capital will be necessary to support a business of what size?

Currently, we have the capability of making $6 million worth of product a year with our existing equipment. We have a program that if successful will allow us to go past $25 million or $30 million worth of capacity with the existing equipment and probably a minor investment of less than a million dollars.

Given the segmentation that you intend to roll out related to thermal and the renamed Durel or the follow on elements of Durel, how would, in what timeframe would you expect that business to go from how it would look today to a contributing part at the bottom line?

2012 should see profitability on an operating profit.

Final question from me will be if we were to look at the rail today, what does it look like from a P&L standpoint and how would you expect that to play out whether its with the smart card program or other things, cars or other markets that you might address?

Currently, it's about breakeven cash flow wise and has a relatively small operating profit loss. Should we have some success, whether it would be in the batteries or some of the other areas we are looking at and I expect it could quickly become profitable as we have all the manufacturing capability, it is in China and a very small staff here in the US. And the battery opportunity continues to look positive. We're making good progress but at the same time Bessette has introduced the card in Europe as MasterCard which Solicore is a part of and they also have a significant order from the company that makes an accelerometer that's used to qualify people for CPR training. You need to be qualified every year. There's an issue with most people do not press the chest bar enough and by using this little battery powered device you lay it on the chest and it let's you know if you would depress the chest enough and it can also certify you once a year and that's a few million units per year. So we see them making good progress and we and they are together on the development project are making good progress also.

Your next question will be coming from Ralph Reis. He is a private investor. And Ralph your line is open.

Can you break down the $5 million increase in compensation?

That's our annual variable incentive compensation. When you look at our performance basically on our targets for 2010 we have to accrue each quarter based on our annual estimate of the payout. So that would represent the second quarter accrual as well as catching up any first quarter adjustments that we would have had to get to our annual estimates.

And is that all for management or is that.

It has incentive comp and stock comp for the management team exactly.

It also has for every single employee a profit sharing plan. It is pretty significant. It could be as much as 6% on people's income. This applies to hourly also. And it does not apply to management.

When can we expect the shareholders to get the return (inaudible).

The Board reviews on a regular basis whether or not they should have declared a dividend and it's their opinion. At this point in time the dividend is not appropriate.

And it's been that way for the years.

Yes it has.

Your next question comes from the line of Greg Weaver with Invicta Capital.

Yeah, good morning could you just flush out the thermal management as it is highlighted here in the press release, what's the application you are talking about with the two IGBT guys?

Well, there's a multitude of applications. One very large one would be in train. It is the IGBTs that switch the electrical power and trains at sometimes 3000 to 3500 volts and up to a 1000 amps but also in variable frequency motor controls think of them as the motors that control heating, ventilation, and air-conditioning systems in office buildings. Those are giant systems and use huge amounts of power and that power is switched by IGBTs and when you go to a variable frequency drive you save about 30% on the energy versus the all type which affects that (inaudible) in the line you continue to use power whether you run it slow or you run it fast.

Okay. So, from automotive perspective there's an opportunity there in the near term.

No. we are producing through automotive now but they are pre-production type of things and again IGBTs are used in electric vehicles. They are also used in full hybrid electric vehicles as they have to step up the voltage to 650 volts and then convert it to AC power because they actually run off of AC but of course the batteries only generate DC and they use the IGBTs to do that. What we've contrasted is that the company, we currently have an order that they value at $25 million over a five-year period. It is for automotive and they are buying the IGBTs and assembling their own drive system that is being sold through the automobile manufacturers. Whereas the IGBT makers themselves also sell a module that goes into all kinds of applications like as I mentioned motor controls and trains, anything else that has to switch large amounts of power. IGBTs are used in winter, they are used in solar farms. These are devices that have some pretty high growth rates at the moment in the whole sustainable energy area.

Okay. So, what in your mind the near term opportunity is probably not automotive related but eventually it will be.

Well, 2012 is when the plant production for three vehicles occurs, which means there will be some business in the latter part of 2011 and in the short term it certainly trains in wind turbines and variable frequency motor controls and that's why we mentioned that the two biggest manufacturers in Europe have now approved our systems and placed orders.

Your final question comes from the line of Avinash Kant with D.A. Davidson & Co. Avinash Kant - D.A. Davidson & Co.: Quick follow ups. Bob, of course in terms of the visibility that you have related to businesses and from what you have seen at your customers, have you lately seen any kind push outs or cancellations or any weakness in the body language.

Actually things seem to be going along pretty steadily. We continue to have at the beginning of each month about 40% of what we ship eventually for the month in backlog. That gives you a clue about our visibility, it isn't all that good, mostly because our lead times are between five and seven working days so people don't place orders way ahead of time. And even the bus bars down to several weeks, which is probably the one place we have the best visibility. But we see everything going along pretty smoothly as I mentioned. We have many more orders than in the past. There are smaller which to me is an indication that no one is building inventories but instead is ordering as they needed which is a good sign because that means we don't have to deal with an inventory reduction at some point. Avinash Kant - D.A. Davidson & Co.: And what's been the typical seasonality for the fourth quarter?

Let's see, typically the second quarter is the lowest but that wasn't the case this year. Third quarter is the largest and the fourth quarter is less than the third, pretty much similar to the first. So, third quarter is generally our best quarter. We're a little cautious this year since the second quarter was so good, makes us wonder we are going to have as big a change in the third quarter as normally we do or is it going to be smaller we've forecasted smaller change than norm. Avinash Kant - D.A. Davidson & Co.: Okay and at some point you did say that the revenues from the three key segments that you talk about were close to 40%, was that for the year or the quarter.

For the quarter. Avinash Kant - D.A. Davidson & Co.: For the quarter.

Yes, and I expect a similar number for the year. Avinash Kant - D.A. Davidson & Co.: So would you be able to give us something as sustainability seems to be the one where you have the most near term traction. How big a percentage do you think coming out of that for the year?

I can't remember, sorry, that's a number that I have. I have the total. I don't have in my head the individual.

And that concludes our Q & A session for today. Please continue with any closing our remarks or further comments.

Well in closing I would just like to remind all of you that we've worked very hard at laying a foundation for faster growth and increase profitability, especially as the world economy continues to revive. We continue to invest in new product development and look for opportunities to diversify into new markets. We think we're having some significant success here. Thank you very much and good bye everyone.

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