Good morning everyone and welcome to the Rogers Corporation Third Quarter 2015 Earnings Conference Call. The slides for today's call can be found on the Investor section of our website along with the news release that was issued yesterday. Turning to slide 2, with us today is Bruce Hoechner, President and CEO; David Mathieson, Vice President-Finance and CFO; and Bob Daigle, Senior Vice President and CTO. Please turn to Slide 3. Before we begin, I would like to note that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and should be considered as subject to the many uncertainness 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 may 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, which is posted on the Investors section of our website. I will now turn the call over to Bruce.

Good morning everyone. In Q3 2015 Rogers achieved another quarter of strong non-GAAP earnings delivering $0.79 per diluted share exceeding our previously announced guidance. Although net sales decreased by 1.6% from Q3 2014 to $160.4 million, we delivered non-GAAP operating margin of 14.7% which is in line with our goal of 15%. The company believes our revenue decline is linked to the impact of the uncertain global macroeconomic conditions. This situation has resulted in the delay of infrastructure spending leading to weaker demand in certain applications across all three business segments. During the third quarter we maintained a disciplined approach to cost management and continued our focus on operational excellence initiatives. These efforts contributed to our solid margin performance despite sizable market headwinds. While we are cautious in the near-term based on current market conditions, we remain confident in the longer-term growth expectations in our key megatrend markets. I will speak more about the growth outlook for our key markets later in the call. Turning to slide 4, I would like to review the four elements of our growth strategy. This roadmap has proven to be the right approach and we are firmly -- and we firmly believe that it will lead us to a strong recovery when the global markets improve. As a market driven organization, we believe the diversity of Rogers' three megatrend categories provides an effective counter balance for the variability of any specific market. For example, the impact of slower than expected recovery in China's wireless telecommunications base station build out has been partially offset by the strong demand in Advanced Driver Assistance Systems. We remain confident that we are in the right global growth markets based on the projected long-term growth rates in key applications. In the area of innovation and leadership, we are pleased…

Thanks Bruce. In the third quarter 2015, we achieved net sales of $160.4 million down 1.6% compared to the third quarter of 2014. Net sales were slightly below and non-GAAP earnings exceeded the company's guidance provided on July 29, 2015. Despite a lower organic volume, we continued to be pleased with our margins due to operational excellence initiatives and cost management. Turning to slide 12, as Bruce mentioned, the macro economic conditions weighted heavily on our organic sales this quarter which declined by 14.1% and we estimate an unfavorable currency impact of 4.6%. The acquisition of Arlon contributed 27.8 million or 17.1% of additional revenue in the quarter. On slide 13, there is a waterfall chart to help explain the changes to EPS from the third quarter of 2014 to Q3 2015. The $1.90 of EPS last year was reduced by the lower volume impact to margin of $0.58. Continued improvements from operational excellence programs and lower commercial expenses primarily due to lower incentive compensation accruals relative to 2014, contributed $0.19 of EPS improvement. This was further offset by another $0.10 related unfavorable foreign currency transaction costs, increased interest expense due to the debt related to the Arlon acquisition, and a higher tax rate. Arlon added $0.19 to the EPS. This results in a sub total of $0.79 which is a non-GAAP earnings from these adjustments after which we deduct $0.02 from restructuring severance charges and $0.10 for a discreet tax charge related to an update of inter-company transfer pricing which impacted prior periods to arrive at our GAAP EPS of $0.67 for the quarter. On slide 14 consolidated gross margin of 37.1% in the quarter is lower by 250 basis points compared to the previous year. Gross margin from organic business declined by a 180 basis points due to…

Thanks David and so this concludes the prepared remarks. Let's open the lines for Q&A. Tanya.

[Operator Instructions]. Your first question comes from the line of Daniel Moore with CJS Securities. Your line is open.

Good morning, thanks for taking the questions. Bruce you mentioned obviously some of the inventory challenges that you are seeing, how much of declines in revenue in Q3 and what you expect in Q4, and maybe break it up between ACS and PCS, would you attribute to draw down some inventory versus actual declining your weakness in end market demand and any data points that you could help us -- that could help us understand where that confidence of that thought process is coming from will be very helpful?

Sure. So as we look forward into Q4 and look at where we are on the inventory side specifically around the base station materials, we think that the inventory is relatively imbalanced, could be a little bit -– should be imbalanced. Perhaps a little bit more to pull down but what we’ve done going out to the Board shops and so forth, what we’re hearing is that we’re pretty much in tune and in balance. On the antenna side we are very sure about that side of the balance on inventory. I think you meant the PES side of the business, I think that’s more strictly a straight demand and we don’t see inventory necessarily being an issue in that world. It is just a question of when the orders come in and this is much more related to CAPEX and of course with the headwinds with the economics around the world that’s what we’re seeing driving what will save the decline there in the quarter.

Okay and then is it sort of a corollary, any evidence that you could point to or help us gain confidence that the delays in infrastructure investments are in fact a temporary and not systemic and what is your visibility to exactly how temporary you think they maybe?

Well we’re paying very close attention to what our co-suppliers, the equipment manufacturers are saying and the visibility that they have. And frankly if you look at the releases that have come out over the last week or so, they’re basically saying they don’t have very good visibility but very confident in the mid-term and longer-term outlook for the markets. And so if we look specifically at China where we have heard and seen the announced 930,000 base stations, what we’re hearing is they probably won't get there this year. So it will be up by about 100,000, so it will be about 830,000 produced this year. Our belief is that, that will roll into next year and so that will add to the demand that was on tap for next year. So we see this coming back. It is just a question of variability on the timing of it. That’s specific to the China LTE, 4G LTE build-out. More broadly and this is where the visibility is a little bit more difficult, is the macroeconomic impacts whether it is in China, whether it is in Europe or North America, we’re seeing pull back in lot of our businesses driven by capital investments and expansion and so that’s what we are seeing in terms of pull down in the near term. When we see things start picking up, our belief there obviously is that things will pickup for us. I will reiterate also that our belief is that in each of the markets and the applications that we’re in, these are still very, very good outlooks, very strong outlooks for us. We don’t see any major share issues or anything like that within Roger’s, within our markets. This is very much related to what I’ll call the macro economic impacts.

Very helpful, I will ask one more and jump back, just switching over to EMS, just in terms of Smartphones and Tablets, do you see your revenue as bottoming out anywhere here in the next few quarters or do you expect the declines that we’ve seen given some of the changes in technologies are more likely to continue going forward?

Our belief is that we’ve come to a reasonable point of stabilization. Now, there is still variation quarter-to-quarter that is having to do with new releases and so on, but our view going forward is there is maybe a little bit more downside pressure on us in the Tablets area. But what we are looking at is the return to growth in that business that would be really powered by the consumer impact area as well as general industrial as we see the economies start picking up again and seeing that investment. Automotive is also an area that we have seen some good strength moving forward that will help offset maybe a little bit of the weakness and softness on the portable electronic side.

Okay, I will jump back in queue, thank you.

Thanks Dan.

Your next question comes from the line of David Cohen with Midwood. Your line is open.

Hi, guys. So looking at the revenue bridge you provided in Q3 and Q4, that organic dollar decline was 7.5 in Q2, 23 million in Q3. I was wondering if you can give some more detail about the sources of that organic decline, I know you have generally attributed it to say base stations offset by asset that sort of thing but what are the biggest contributors there and also what is the expectation for those contributors into Q4 from an organic perspective?

So, our view on the organic side is that this is broad economic headwind that we see across the economies and it is not a specific -- it is really not related to a specific area. We are just being very, very cautious on our outlook given what occurred in Q3 and what we are seeing in the global market. So, we don’t necessarily see this as a specific application or market issue. It is a general issue and like I said we are just -- we are being cautious, in line with what we are hearing and seeing with our co-suppliers and OEMs in the market.

Well let me ask it in a different way. Let's say for base stations was the decrement from base stations significantly bigger in Q3 than it was in Q2 and what is your expectation for the base station impact in Q4 versus Q3, in terms of dollar decline year-over-year?

Yeah, we think it will be similar, slightly perhaps down but similar for Q3 in many areas. We think that in China specifically again, we had basically thought that we would start seeing a buildup in September. We haven’t seen that. People are still projecting that for the rest of the year. We are stepping back and saying let's see it before we actually say it in our guidance. So, we don’t necessarily view that the base stations are going to significantly decline. But we haven’t built in any real return to what we think would be normal level there.

Okay, and one last question, in terms of your use of capital, buying back stock like you did, maybe you could just provide some degree of sort of a framework from a returns perspective that you look at and say okay, this is the highest return use of this chunk of capital, what is your financial logic behind whatever level of buybacks versus deploying the capital elsewhere?

Well we think buying back at 55 bucks, I think the average was for the third quarter is a great deal for our shareholders. We think these levels we are getting significantly good returns given the long-term rate.

Your current return on that is basically single-digit right? When you think about your earnings, the inverse -- your earnings yield and what you are buying back that is a single-digit return, so you are making a longer-term view about the sort of the earnings yield with this company and the multiple that you are effectively buying?

I am sorry, I mean we are not looking at the short-term here, we are looking at the long-term. The long-term trends are still intact, the megatrends are still intact. Our company is capable of growing at faster rates than we are currently and we are looking at that. And currently we think our stock price is undervalued. So, we think we are making the best use of our surplus cash.

Alright, thanks guys.

Thank you.

[Operator Instructions]. Your next question comes from the line of Kwan Malta [ph] with B. Riley. Your line is open.

Hey, hi good morning guys, thank you for taking the questions. Nice job on the cost management. Question we’ve gotten here from some people regarding your guidance and the limited visibility, as you enter these higher growth markets where we only have expected CAGRs do you expect the visibility to continue as is or will that be or you will have a little bit more clear visibility as the markets mature or any other factor?

Historically we’ve not had more than really one good quarter of visibility across our businesses and that’s why we don’t actually give annual views on where we are headed. But we do believe that these markets as they recover we will start seeing indications and as we go through the fourth quarter and into the first, I anticipate that if the global economies cooperate and things start recovering we’ll see that very much in our back orders and so forth that will come through the system.

Okay, perfect. Quick question, I will jump around maybe a little bit on China, is the transfer of the tower assets from tri-carrier to the Tower Corporation, has that been contributed to the slowdown here, the temporary slowdown in base stations?

Actually it is not a factor. As a matter of fact what it is its consolidating the three providers to one piece of real estate, one tower, and actually we’ve seen continued strong demand there because they still have to install individual antennas. So it is actually making it better for us because there had been a tower shortage issue on the real estate side. And now with the consolidated approach that we are taking each one of the carriers will install their own antenna which is good news for us. And as a matter fact in Q3 as we look back at that, and this was a lot of the Arlon business that we had acquired is in those tower antennas. And that’s stayed very consistently strong for us. So going forward we see this as a positive for us.

Okay, that’s great. And a broad question as you look across the three operating segments could you comment if there is anything to highlight on pricing versus volume, what you saw this last quarter?

Our pricing has remained steady. In a few market areas we have been able to push some pricing but we’ve kept pricing in line and our margins are showing that. As a matter of fact given the decline in the top line I would say that our gross margins have really demonstrated a lot of the good work that we’ve done on the operational excellence side. And coming in with a 14.7% operating margin in this environment I think it kind of demonstrates that. So the leverage we’re getting on the margin side has not really been driven by pricing although we’ve held it. It is much more on the operating side.

Okay and then I’ll ask one more, don’t know if it is possible to answer but you can do the best efforts, regarding the different scenarios in terms of your quarterly revenues as we model out for 2016 and we look at what type of revenue level you can deliver and look at historical margins based on that revenue level. Can you give us a sense of where your margins would look given say you are making $160 million quarter this quarter, what would it look like at a 150 million or a 170 million given that you made all these operating initiatives to improve efficiencies on the rest?

Well again we don’t go beyond the quarter in terms of estimates but what I will tell you is we still see many opportunities on the operating side of the company to continue to take cost out and continue to be more efficient. So quite frankly obviously we are very disappointed with the top line and with how the markets have performed which directly impacts us on our margin side because of the lower volume. But at 50% to 60% contribution margin when things come back in place here on the volume side a lot of that drops right to the bottom line. That in addition to the operational excellence initiatives that are ongoing I think you could make a case that the margins will continue to be strong and move upward.

Okay, thank you very much guys.

Your next question comes from the line of Alan Mitrani with Sylvan Lake Asset management. Your line is open.

Hi, thank you. I appreciate all the color and the details, so thank you. With regard to Dave, is there already a replacement hired or you are currently interviewing?

We’ve identified a suitable candidate and that’s why David now has decided that now it is time for him to go back to the Golf Course. So it’s a just a question of timing and getting that person on Board.

Okay, I appreciate that. And then with regard to the non-core assets from Arlon, you said it’s roughly $20 million and it’s basically breakeven, that’s on an operating line?

Yes.

Can you just give us a little more detail as to what specifically that goes towards and what you think, I mean I realize are there strategic that might buy it or is it the kind of thing that might be a management buyout because the company not making any profit to 20 million of sales probably doesn’t rank high on peoples wish list?

I am going to ask Bob Daigle who is also overseeing our M&A and divestitures to have some comment on that.

Yes, so kind of I think as David mentioned when we bought Arlon and I think we talked about it in the announcement there were really three pieces of the Arlon acquisition. About half the revenue was around our high frequency circuit material area with a large part of that, what's driving our growth in the antenna area. There was a piece that was about over 25% that really was new platform technology for our EMS business in the silicones area. And then there was this piece that we call -- that’s out in Rancho, California that does some [indiscernible] materials and frankly that for us when we looked at it and be diligent it was a negative. Something that we didn’t consider to be an attractive part of the portfolio. As David pointed out a relatively lower margin profile. We have had a fair amount of -- there are always buyers out there that are looking for businesses that do generate some cash and potential to bundle with other things they might do to get some growth out of it. And then that’s really what we are focused on is, is there a good home for there with somebody who frankly for us it’s the distraction for others. We think it could be hopefully a good viable business for them.

So, do you think this is a 2015 close in terms of being able to exit that business?

Yes, we really -- right now again we can't, we are just actively marketing and time will tell as we move forward here on when we can do something.

And then lastly in terms of acquisitions, I realize you still have some of the stock buyback out, stocks down today to 49. I am just wondering how the stock buyback fits in with acquisitions and whether you still think here the market is good for acquisitions or buybacks, just talk a bit about where you see capital allocation in the next year?

Well we believe we can do the level of buyback over time and still continue to do acquisitions. We use cash basically to buy back stock so far and with borrowing capacities intact and we could do another Arlon today. So that remains intact

And then its Bob Daigle again, we have a pipeline in place for putting a lot of effort. We’ve got our business unit and our corporate teams really focused on trying to find new platforms to bring in to the company, again supplement organic growth with some new capabilities. So we’re driving there. I don’t -- I think the environment is actually pretty good right now for China bringing something into the company.

Great, thank you.

And we do have a follow up question from Daniel Moore with CJS Securities. Your line is open.

Thank you again, just wanted one or two on some of the areas where you’re still seeing growth. Advance Driver Assistance Systems, the number is still relatively small but has a rate of growth slowed or changed at all in the back half of this compared to what you have been seeing previously?

No Dan, as a matter of fact this is a bright spot and it really is a nice counter balance to some of the other parts of the businesses. We have seen growth here in this quarter, year-on year growth of 39% and so this is becoming a much bigger part of the ACS business. And again the projections out there are phenomenally about 30% CAGR up to 2020. So we’re very positive on that and again we’ve been able to really maintain our position in that market quite well.

And similar question you mentioned Bruce some tempered expectations for x-by-wire near-term, can you elaborate on those and how temporary you think that might be?

Well I think some of that has to do with timing of this new designs coming in and some designs moving out, that include some of our material. So that still is a very positive outlook on x-by-wire for us in the PES business. So I think there is some noise quarter-to-quarter but on the uptick for and moving forward.

Okay and lastly just to follow up on the capital allocation question, significantly aggressive you bought 680,000 shares almost in Q3 at prices higher than they are today. Assuming when you win the blackout period and any reason why you wouldn’t be similarly aggressive going forward?

We wouldn’t like to give guidance for that Dan. It is something we’re looking at but it is certainly not something that I want to sort of figure in to our guidance.

Okay, understood. Thank you again.

Thanks Dan.

[Operator Instructions]. And we have a follow up question from David Cohen with Midwood. Your line is open.

I was wondering if you could give a little more color on the cadence of Arlon, what sort of performance on a year-over-year basis if it is comparable to the pre-acquisition period or sequentially you are expecting for Q4, at least Q2 or Q3 has actually held up very well certainly in context to the core business?

Absolutely and so we see continued strength in Arlon in the -- particularly in the ACS side of the business where as I mentioned earlier the antennas, the multiband antennas are a big part of that acquisition for us. And so moving forward we see continued strength. So the nominal increase year-to-year 3% to 5% is what we are thinking about through the rest of the year. So we’re pretty pleased with that.

Great, thank you.

There are no further questions at this time. I’d like to turn the call back to Bruce Hoechner for closing remarks.

Thanks Tanya. Like many global companies Q3 presented Rogers' with greater challenges than anticipated a few months ago due to the increasing uncertainty in our global economy. Our markets were softer than we expected and that was reflected in our revenues. Looking ahead we will continue our discipline around operational excellence as well as cost management to help us deliver solid margin and profitability performance. We remained confident in our growth strategy including the long-term strength of our global megatrends markets and our approach to M&A. This blueprint for our future has us well positioned for growth when the global macroeconomic conditions improve. Thank you for joining us today. Have a great day.