Good morning. My name is Joanne and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation 2013 First 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) I would now like to hand today's call over to President and CEO, Mr. Bruce Hoechner. Sir, you may begin your conference.

Thanks Joanne. Good morning everyone. Thank you for joining us today. Slides for today’s call can be found on our website’s Investor section along with the news release that was issued yesterday. 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.

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.

Thanks Dennis. During the first quarter, Rogers continued to see positive impacts from our transforming initiatives that began in 2012. Building off of our streamlining results from 2012, we expect to achieve an annualized cost savings in 2013 of approximately $20 million and we continue to see further opportunities for cost savings. A portion of these savings are being reinvested in growth enabling initiatives, in sales, marketing, research and development, as well as into improving our capabilities in information technology and operations. A key indicator of our progress is the improvement in our non-GAAP gross margins in Q1 2013 to 33% from 30.3% in Q1 in 2012, reflecting our improved operating discipline. Looking forward, we expect that as sales increase through the rest of the year, our streamlining savings will hold and our gross margins will continue to improve. We have a very positive outlook for Rogers' full year, both on the top and bottom line. Moving to Slide 4, you will see an overview of our first quarter performance by market and megatrend. Our megatrend focus areas of Internet growth, clean technology and mass transit, drove 55% of net sales in the quarter with applications in automotive and industrial also adding to our growth engine. We are seeing robust growth in wireless telecom infrastructure. Sales for our Printed Circuit Materials in this market were up about 12% for the quarter versus Q1 2012. We believe we are seeing the much anticipated ramping of 4G installations around the world. This is good news for Rogers where in this segment we have greater than 90% market share in high-frequency circuit board technology used in 4G base station applications. In mobile Internet devices, sales were essentially flat in the category due to seasonal inventory adjustments. Specifically in tablets, growth was moderated by…

Thank you, Bruce, and good morning again to everyone. As reported in the press release, we achieved earnings from continuing operations of $0.39 per diluted share, which includes net special charges of $0.05 per diluted share. A majority of that special charge was related to our previously announced moving certain Curamik inspection operations to Hungary. We expect this move to generate an additional $0.5 million of charges over the second and third quarters of 2013 and expect to begin realizing financial benefits by the fourth quarter of this year, building to an annualized total savings of $2 million in 2014. Our non-GAAP results of $0.44 per diluted share matches the recently restated Q1 guidance, although it did represent a shortfall to our original expectations for the quarter. This shortfall was related primarily to lost contribution on lower sales. In addition, we were also impacted by negative absorption related to proactively reducing inventories to align with first-quarter sales levels as well as certain production issues that are being addressed. Despite those issues, we were successful in improving profitability levels, having increased operating profit margin from 6% in 1Q 2012 to 10% in 1Q 2013. On a $5.8 million or 5% increase in sales compared to the first quarter of 2012, we delivered $4.9 million in pre-tax income or an 87% pre-tax contribution level on the strength of both manufacturing and SG&A improvements made during 2012. Slide 8, our gross margins. Our gross margins for the last five quarters are depicted on this slide, with the first quarter 2013 at 32.8% on a GAAP basis and 33% on a non-GAAP basis, after removing a portion of the cost associated with the start-up and inspection operations at Curamik's Hungary location. That non-GAAP result represents a 270 basis point improvement as compared to the…

Thanks Dennis. This concludes the prepared remarks and we'll now open up the call for questions. Joanne?

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

Bruce, focusing on Curamik, you're starting to show signs of improvement, you talked about the backlog, a little bit more detail there and what type of contribution margins we should think about over the coming quarters?

So, in terms of backlog, we've seen we are tracking about six weeks now of backlog and we believe that this is very helpful, let's say, that this will be sustained. We're ramping up production. As a matter of fact, we had moved from about 400,000 cards a month, we're now up to 525,000 cards a month. So we're seeing a real pickup there, and I'll have Dennis talk about the…

Yes, in terms of Curamik as a business, I said it in my presentation, about 50% is our average. They are currently depending on whatever mix they have between 30% and 40% contribution on incremental sales, Dan.

30% to 40% on Curamik versus – okay, perfect.

Versus the 50% average, yes.

Got it, very helpful. And looking at the High Performance Foams, just kind of looking at the landscape, Apple doesn't look like they'll have new product launches for a quarter or two, and Samsung has some constraints in terms of inventories. Do you expect tablet, smartphones to continue to be kind of flattish for the next one to two quarters or are you seeing some potential improvement there?

What we believe is that that whole segment, if you look at the industry data, particularly on phones in general, it was relatively flat year on year and we're tracking that. What we believe is that as units increase, we should track along with that. We're maintaining our market share which is about 60% to 65% across all of the smartphones, tablets, as well as feature phones. So, we'll see how things go. It seems like a very – somewhat volatile, particularly on the tablet side as market shares are moving, smaller formats are becoming more popular, and that certainly does impact us because there's a volume associated difference between a larger format and a smaller format, but like we said, we're maintaining our share and it will be driven by units.

Helpful, and one follow-up and then I'll jump back in queue. Looking at the balance sheet, it continues to improve, net cash position, cash continues to build on the balance sheet, have you given thoughts of flexing balance sheet perhaps pursuing more aggressive share repurchases now before your stock reflects the full benefit of the higher levels of revenue and cash flow that you're contemplating over the coming quarters?

It would be a little bit longer term view than the coming quarters but we do look at it annually with our Board and every year we do our strategic review of business and opportunities, both organic and non-organic. So, we will again look at it this summer and make that determination like we do every year with the Board. Certainly I mentioned it is dry powder reserves, we have stated that we like to be acquisitive in the marketplace, and as long as we have that as the tenor of our strategy, we probably wouldn't consider it this year, but certainly if that changes and our cash keeps building, it's always up for consideration.

(Operator Instructions) Your next question comes from the lie of Avinash Kant. Your line is now open. Avinash Kant - D.A. Davidson & Co.: A few questions actually. So I think you did give us some idea about the charges, looks like it's going to be a $0.02 impact in Q2, that's what you're talking about, should we expect more charges in Q3 and Q4 of this year?

The Curamik is about $250,000 in each of the quarters, and I think it's a slightly higher number if they have moving costs as well as severances related to bringing down the workforce in the Eschenbach location. So, that plan is on track. They had a little bit more accelerated expense in the first quarter than they had originally planned, but they will finish it off by the end of the third quarter, and hopefully be up, fully ramped up to what they expect to be doing in the fourth quarter. So, two more quarters, second and third quarter, Avinash. Avinash Kant - D.A. Davidson & Co.: Okay, and roughly in the $250,000 kind of fringe?

Yes. Avinash Kant - D.A. Davidson & Co.: Okay. And if you talk about the High Performance Foams business side now, could you give us some idea, what percentage of this business on a quarterly basis, on a full-year basis, at this point, seems to be tracking, that is related to the smartphones and the tablets and what is the rest?

Avinash, it's approximately 20% to 25% of the total sales. So, it's interesting, we talk a lot in these kinds of calls about the smartphones and tablets and so forth, but what's been interesting is that we've seen very good growth on the industrial side of the market, and that is really not only maybe a little bit of recovery on industrial but also our share gains, because of our network throughout the world, particularly here in North America and in Asia. So, while that segment is the MID segment and phone segment is about 20%, 25%, there's other areas that are growing well. In addition to the industrial, the consumer side also saw a very, very strong growth over the last six to eight months, and we continue to anticipate that. Avinash Kant - D.A. Davidson & Co.: So Bruce, if I were to try to understand, if the smartphones and the cell phones, the pads and iPads and all are like close to 20%, 25% of the High Performance Foams sales, what do we attribute the sequential decline in this segment to? Like there's roughly more than 10%, 11% decline sequentially. So, what was that coming from?

Certainly part of that is inventory, inventory movement and we saw over the course of the quarter some pretty substantial swings in demand and that affected obviously the quarterly results. The other thing, and we've alluded to this in the past, is the more efficient use of our foam sheets. So the converters find ways of nesting some of the – more efficiently nesting some of the gaskets and so forth, and so they get a little bit more output than they normally would. So that's had some effect. And as I said I think in the last call, we are also looking at – and launching, actually we just launched yesterday, some new technology to address the new designs that are coming out, some of the gasket with smartphones and so on, and we believe that based on our market analysis and the work with the OEMs, that there is a big demand here for this and so we're very positive on that outlook, that as designs are changing, we are addressing from a technology perspective and applications perspective and we believe we've identified some very good performance benefits of our new materials for impact. So, it's a very dynamic market, and as you know, the design cycles are now getting down to six to eight months, and so that means that we are moving very quickly on new applications and technologies in that sector. Avinash Kant - D.A. Davidson & Co.: Okay, and then a little bit of a guidance, the revenue guidance that you are providing, qualitatively if you could give us some idea about how should we think of the various segments, like which are going to be up, which are going to be down, flattish, how should we think of that on a sequential basis?

This is specifically to the phones business? Avinash Kant - D.A. Davidson & Co.: No, just the overall June quarter guidance in revenues, which sector is expected to improve?

This is Dennis. The guidance that we have, and it sort of aligns with how Bruce described the segments year-over-year, so the Circuit Materials business is in a strong growth mode and sequentially they would follow that pattern. Power Electronics, led by the Curamik piece of the world growing, and with HPF being in that flattish kind of state in the projection, and then we obviously, we roll up our forecast and try to always be on a conservative basis with that projection, so we hope the world will look favorably positive in the second quarter and we can beat that guidance by bottom line as we put out there what we think is a decent conservative expectation for these businesses. Avinash Kant - D.A. Davidson & Co.: And given what you have talked about margin, should we expect a meaningful ramp in Q4, is that how we should think about?

I'll refer back to Bruce's comments that we expect improvement sequentially through the year, and with our businesses and available capacity in the manufacturing, when sales go up, we typically get improvement in margin on a contribution basis because it comes in at 50% compared to 33% average. So, we absolutely get a nice bump when we increase our sales. Avinash Kant - D.A. Davidson & Co.: And did you give out the depreciation and amortization number for the quarter?

I didn't, but I expected you to ask, $6.6 million for the quarter.

(Operator Instructions) Your next question comes from the line of Dana Walker from Kalmar Investments. Your line is now open.

Bruce, can you talk about what in your judgment is driving the improvement in tone for Curamik end market-wise, and how you folks have reassessed the outlook for that business?

What is driving it is, we have seen, particularly I'd say in some of the industrial variable speed drive applications, some improvement there. I'm also going to ask Bob to comment in a little bit more detail on this.

Dana, a couple of things are going on. I think what we talked about last year is, part of the depressed volumes last year was inventory correction. So it's pretty clear from the order patterns that we are seeing from our customers that there are pretty short lead times that they are expecting from us, that that inventory has been more down. So you're seeing partly a bump because of that. The other thing you can read about is that even markets like solar, photovoltaic, are quite strong. We are starting to see the increased supply that had been created in places like China are being consumed, there's heavy activity in Asia, and if you read about what's going on in China and the investment levels even in the wind market had picked up. So, we're seeing this as a pretty broad recovery, and as Bruce referred to it, CapEx spend that's driving demand, and because everybody had worked down inventory, we are seeing a pretty quick impact on our volume demand.

Do you have some impression that solar and wind account for a larger part of the demand profile for that business compared to what you had earlier thought?

No, I think it's still very similar to what we've talked about in the past, 10% or so, it's not a huge part of the business.

Once upon a time, this was viewed as being a pretty important secular growth business. Do you have some reason to back off of that view today?

Not at all. I mean we're still looking at again the industry reports and projections, CapEx spend and how that's translating into demand for us, continue to be very positive, and just a couple of things that we've talked about in the past that are key growth drivers are automotive electrification and what you're seeing in electrical power steering, you're continuing even though hybrid electric vehicles are still a relatively small part of the market, they're growing at very nice rates. So, we continue to feel very – we're very optimistic about that this is a double-digit fundamental demand business for us.

Could you gentleman talk about some of the drivers to industrial and consumer demand for your foam business?

I would say in the industrial side, this is just a general increase in demand and it goes into automotive, it goes into appliances, it goes into industrial equipment, and so what I believe is part of this is just the return of some industrial capital spend, but it's also, as I mentioned in some of my comments, based upon our very extensive network where we have converters that have their tentacles out everywhere, and so as new opportunities come, they bring them to us. So, that's a growth area and it continues to be in. So it's a share plus just uptick. On the consumer side, this is the protective cases for smartphones, for tablets, and also apparel and sporting equipment padding, and that is very much predicated on getting those applications, those designing wins, and we've been very, very aggressive there and been able to do that. So, we continue, we added a new machine, started up a new machine, moulding machine here in Connecticut this past quarter, we're running it pretty hard right now, so we're looking for the next one. So, there's a lot of pull in the marketplace, we are getting what we want on our pricing, and it's pretty unique stuff. So, that's really driving that consumer side for us.

So within (indiscernible), you do make a distinction between a OE sourced gasket or seal that goes into a handheld versus the external walk through a different channel protective case?

Oh yes, yes. So the protective cases and so forth, we would call consumer, and we wouldn't bump it with MID..

On Bloomberg yesterday, I think it was yesterday, there was a piece about the higher than normal or protected Samsung handheld seem to experience higher breakage, in part because of the larger screen. I don't know if this would just pass upon some type of internal discussion but do you see that type of sensitivity going on as these larger screens are becoming more pervasive, and the way that your products will be used?

This is exactly where we are playing. So on two fronts, one is the protective covers and cases and so forth, so we've got a lot of that work ongoing and a lot of the designs that we're working on are specifically for some of these types of MIDs. On the other side of it, we just yesterday introduced a new foam technology that is really targeted for the AMOLED screens, these larger screens, Samsung clearly is one of those folks who use those types of screens, and based on feedback we've had from OEMs, this is an area of real opportunity that they are looking for a lot of help on. So, the technology that we've introduced, we believe really has a lot of legs to it and so we'll see over the next two or three quarters how we track on design-ins and so forth, but this is a problem, right, I mean as you pointed out, it was on Bloomberg yesterday. So, we think we're at the right place in the market right now for that introduction.

So you would like to believe that even if you're going through flattish moments, that you ought to begin to grow against as you address the MID market?

Yes, we are very excited by the potential on that side within the foam materials.

Dennis, as you laid out the numbers that will present some operating drag comparing Q2 to Q1 and compared to last year within the SG&A category, would some of those incentives comp drags on further incremental revenue moderate in the back half of the year compared to the starting point in Q2?

The Q2, based on our current expectations, the Q2 accrual would represent a one quarter worth of that, and if we started exceeding our expectations, we might ramp it up a little bit, but it wouldn't be as significant a drag as comparing to zero in the previous quarter. But as you know, we have pretty aggressive AICP targets in terms of being able to earn a bonus where we are basically in that 10% to double-digit growth rate for target and double that in terms of income improvement. But [we've got] (ph) pretty substantial targets to get to target, and to achieve above that they'll go much higher. So, a little bit drag if we start really booming in the third and fourth quarter but it won't offset the contribution coming in from the much higher sales.

Bob, is there any update on SATA?

Let me take that. A couple of things that have gone over the past quarter in that area. Our relationship with Hitachi Chemical, we have decided to part ways and this was actually early in our development here, it was a very good relationship, we learned a lot about the market that we had not had access to, but what we discovered as we went through our diligence and our greater understanding of the market needs, is that the ultra-low loss area was one where we thought we can compete very effectively in our area of strength around designing materials to meet very tough, strict performance criteria, and so we've decided to really put our efforts into that area, and R&D is working very diligently with OEMs and so forth to understand and to develop materials that can complete there. We think that this is, it's a market that is going to be growing substantially over the next three to five years, and it moves away from a little bit more of the commoditized low loss area. So, that's where we are headed in that.

Final question, can you update us on where you think you stand on various auto programs, including the auto sensors that seem to be growing so nicely?

And that's been a huge growth opportunity for us, it continues to be, there's adoption that's going on down into the mid-market and lower end cars across both Europe, North America as well as Asia. And what we're seeing is more and more demand for sensors, not only just side but front, back, and so forth, that's been required, in Europe for example, to get the five-star safety rating, those authorities are saying you need to have these types of sensors. So that's driving it up and down the product lines for many of the car manufacturers. So, we continue to see ourselves having very significant market share, certainly north of 50%, 60%, higher than that actually. And as I mentioned in my comments, both the 24 GHz and 77 GHz, we have very good designs in both of those technologies. So, as car companies make their choices, we're right with them.

Thank you for the update.

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

Bob, you started to talk about it a little bit, but maybe you can elaborate on what you're seeing in the alternative energy markets, specifically in China, just sort of breakout wind and solar, what the outlook looks like for the coming quarters and into 2014?

It's Bob Daigle. So basically, I'll start with wind and in particular, China. What you're seeing is the Chinese government is implementing what was in their five-year plan in terms of adding capacity to wind pretty much on target, and what we're seeing in solar is actually not just China, but it seems to be pretty broad throughout Asia. I was reading an article just a couple of days ago that when the flood of capacity came in for photovoltaics in China, it had hit the European market pretty hard in terms of pricing for PV, and I thought what was very encouraging is the fact that that excess capacity has been consumed now by market demand and you're seeing pricing firming up in the photovoltaic sell side of things. Now for us, as we've always talked about, we've been pretty insulated from that factor because we play in the power inverters with our ceramic substrates and then in the large-scale solar farms, we're playing with our power distribution systems. We haven't seen that kind of pressure because of where we play but I view the fact that they have consumed this capacity, is showing pretty strong fundamental demand in the marketplace. At least what I'm reading suggests that should continue into 2014.

And that five-year plan in wind, what sort of growth rate in 2014 would that translate into for Rogers in terms of wind specifically?

Yes, I think that they were in the neighborhood of, they were double-digit growth year-over-year kind of numbers, what I recall reading in their plan, working out to about something like 100 gigawatts of capacity over a five-year period. And the other opportunity that's creating, that we've talked about is really on the smart grid side as well. We're seeing fairly nice activity that's creating some opportunities and some business for us in power distribution, both in Europe and now to a pretty significant degree in China as they upgrade the grid, putting in these power systems that would utilize our power distribution systems, and we're seeing good activity there.

And lastly, maybe a little bit more detail, whether it is you or Bruce, around the pickup in rail infrastructure spend, how much of that do you expect to see in the back half of this year versus 2014?

Yes, so what you read, what's being published from the Ministry of Rail is they're basically saying that there should be stronger demand in the second half of 2013, into 2014. It's been relatively stable for us over the past several quarters. It's upside right now for what we see, I mean our plan was based on a relatively stable outlook for rail, but we're encouraged by what we're hearing out of China right now about the second half and into 2014.

I would now like to hand today's call back over to Mr. Bruce Hoechner for closing remarks.

Thanks Joanne. We entered 2013 in an environment of continued global economic uncertainty. We cannot control the external environment but we are aggressively managing Rogers to ensure we perform well in the short-term and build a foundation that provides sustainable top line and bottom line growth for years to come. We are encouraged by our continued progress in cost streamlining and our Q1 improvements in gross margin. We are confident in our strategies and our ability to execute and believe that as 2013 unfolds, we will see our markets improve. We believe that the long anticipated buildout in 4G infrastructure is here and it will help drive strong results for our Printed Circuit Materials business. We see positive signs of recovery in the markets for our Power Electronics materials and are confident in the continued market leadership of our High Performance Foams business. With our portfolio diversified across many markets, we have demonstrated our ability to perform well in the face of changing economic and market dynamics. As global economies get moving again, demand is increasing for better ways to power, protect and connect our world, and Rogers is a leader in unique, innovative material solutions to address those challenges. We see many opportunities for growth ahead in 2013 and beyond and remain focused on delivering value to our customers and consistent results for our shareholders. Thank you for joining us today on the call. Have a good day.

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