Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2017 Fourth Quarter and Full Year Conference Call. [Operator Instructions] I will now turn the call over to Jack Monti, Rogers Director and Head of Investor Relations, you may begin your conference.

Thank you, Mike. And thanks so much everyone for joining Rogers' fourth quarter and full year 2017 earnings call. To follow along with the presentation, please see the Investors section of our website. Turning to Slide 2, we have a disclosure on forward-looking statements. During the call, we'll be making certain forward-looking statements subject to a number of risks and uncertainties, which may cause actual results to differ materially versus today's outlook. In addition, some of our financial metrics discussed will be on a non-GAAP basis, which management believes better reflects the underlying core operating performance of the business. Turning to Slide 3, it’s my pleasure to introduce Roger's Management team. Bruce Hoechner, President and CEO, is joined by Janice Stipp, SVP and CFO, and Bob Daigle, SVP and CTO. I will now turn it call over to Bruce.

Thanks Jack, good afternoon everyone and thank you for joining us on today's call. Please turn to Slide 4. I'm very pleased to report that in Q4 2017 Rogers achieved another quarter of double-digit sales growth to capital record setting year in both revenue and profitability. For the quarter net sales were $209 million an increase of 21% and at the high-end of our previously announced guidance. Notably we experienced healthy demand in nearly every one of our key markets across all three of our business segments. In Q4 gross margin was 36.1%, a decline of 252 basis points from Q4 2016 due to several items that I will discuss shortly. Also during the quarter, adjusted EBITDA was $38 million an increase of 17% over Q4 2016. Adjusted EPS was $1.36 up 45% over Q4 2016 and within our guidance range. Rogers delivered exceptional full-year results with net sales of $821 million an increase of 25%. Gross margin was 38.8% up 79 basis points over 2016. Adjusted EBITDA was $190 million up 46% while adjusted earnings per share were $5.76, an increase of 55%. For the year we achieved 13% organic growth which is a clear indication that our strategy to target robust markets across all three businesses is paying off. In addition, our new acquisitions increased net sales by 12%. While we are very pleased with our topline growth, as I mentioned we encountered several items that impacted operating performance in Q4. These were due primarily to initiatives focused on capacity optimization, new products scale up costs, additional integration expenses, and investments in strategic projects. Also affecting profitability in Q4 was the escalation of commodity prices and the time required to implement our cost recovery efforts. These challenges are being addressed. We are optimistic about the outlook for 2018…

Thank you, Bruce. Good afternoon everyone. 2017 marked a record year as we successfully executed upon key milestones. Highlights for the year included record revenue of $821 million growing 25.1% versus 2016, record gross margin at 38.8%, record net income and record earnings with adjusted earnings per share of $5.76. This past year success is in large part of the result of the strong foundation that we built around our leadership position in technology, operational excellence and accretive acquisition. Turning to our fourth quarter, we had continued sales momentum finishing the New Year with strong growth across all our business units driven by our market focus strategy. However, it was a challenging quarter for earnings as we work through operational issues, made strategic investment experienced acquisition integration difficulties and manage through capacity balancing demand. Also in Q4 adjusted earnings primarily from a favorable income tax provision primarily driven by reduced accruals for foreign taxes and undistributed foreign earnings. Increased international tax benefits due to earning mix an equity compensation excess tax deduction. In today’s presentation I’ll review our fourth quarter and full year results in more detail followed by discussion on operational excellence and conclude with our first quarter guidance forecast. Now please turn to Slide 17, Q4 2017 revenue as previously noted was $209 million this is at the high-end of our guidance range mix EBIT Q4 2016 by 20.8%. Our growth was primarily the result of strong volumes across all our business unit and the recent acquisition. Adjusted operating income was $27.6 million in Q4, 2017 increasing $1.9 million versus $25.7 million last year. Adjusted operating margin was down 150 basis points from 14.8% in Q4, 2016 to 13.2% in Q4, 2017. Adjusted EBITDA of $38.1 million improved $5.4 million or approximately 16.5% compared to the fourth quarter…

Thanks Janice. And now, we’ll open the line for Q&A.

[Operator Instructions] Your first question is from Craig Ellis with B. Riley FBR.

And to start off just congratulations on all the financial performance records of 2017. First, just to clarify couple of things in the middle of income statement, Bruce I think you mentioned about five items that were play in gross margin. The clarification is, one did they all contribute about equally to the 250 basis point year-on-year decline or were some much more significant than others. And secondly to what extent were some of those items more one-timers that just impacted the fourth quarter versus things that you'll be executing against as you go through the first half of the year, the full year?

I'm going to ask Janice to give us an outline on - to respond to that question?

In the Q4 just to go, when we you look at it year-over-year, we had obviously copper is consistent. I mean we don't see copper going down as we talked about it we're looking at different pricing programs and also our initiatives to offset some of our copper – might be engineering changing and things like that of our product. So we're looking at that. So we'll continue on that. The increase freight in some of the operational efficiencies, we had a lot of demand surges with some of our customer obviously with ADAS and 4G, we don't have that timed out perfectly. And some of our customers really have only process approved on certain locations. So what we're trying to do is get our customers to qualify multiple processes so that we have the capacity, flexibility to move things around the world. So right now as we did product launches, we put them – some of them on inefficient process because the other process were full due to customer qualification demands on certain process. So that will go away. We just have – it’s take time for the engineering to get that approved for their customers, along with the commodity pricing pass through. So we'll see that going away shortly, but it will take a little bit of time. The SG&A which was largely- we had some one-timers as we talk about one of our strategic pillars is M&A. Obviously we're very active in the market and we had some calls that came into Q4, unfortunately we were unable to close on some of our targets, but those were costs that were increased and other professional services that coincide with that. So those are one-time, although they might come back because obviously we’re active in the M&A market and we hope we will be able to tell you something in the future on some of those. So those will be off and on depending on what we're working on. And then the incentive compensation obviously it was Q4 last year it was a record year, so we paid very high bonuses. We are back to our target level in 2018 at this point in time. Hopefully, we will go increase it as the year progresses, but if the profits there obviously will increase that. So we have a mix of items that we think that won't repeat in Q1, but some of that might take a bit longer than other to resolve and might fall into Q2.

Probably upon the SG&A point Janice - I had SG&A of about 6 million versus what I thought. So of the two items that you mentioned some expenses related to the M&A strategy and then incentive competition. Can you break down the relative contribution to the sequential increase in OpEx between those two?

I would say the – a large portion was due to an M&A activity that was a one-time in Q4.

Okay.

A large portion was related to that.

And then following up on some end market dynamics as we as we talk here right now we've got Mobile World Congress wrapping up over in Europe. And it seems like the data points on 5G are pretty encouraging, not dramatic pull-ins, but it seems like we've got a nice list of smartphone OEMs will be launching 5G-enabled product a year from now more in the second half of the year. Bruce I think you mentioned some longer term 5G developments for ACS. But when do you think we'll start to see the material impact of the increased content that goes along with 5G in the Rogers business?

So our view is, I was just in China about a month ago talking with some of our key customers there and their view that they shared with me was certainly towards in the second half of 2018, they're doing testing and so forth. And what we anticipate is in the first half of 2019, we'll start seeing the real rollout of 5G. And so again this is, - I have read different things as well since I've returned some people saying it's being pulled in a little bit more. Some people saying it's pushed out another six months, but we believe that during 2019, we'll start seeing the real roll out here. In the meantime, just to address maybe some thoughts that people have. We are seeing 4.5G continue some strong activity there with deployments in higher traffic areas of the 4G networks. And also specifically in China, India NB-IoT narrowband Internet of Things, machine-to-machine build out for 4.5G is also occurring. And some of the information that we have 500 base stations of NB-IoT were built in 2017 probably somewhere around 750,000 will get constructed in 2018. So the bridging between the 4G and 5G is at 4.5G narrowband internet of things that we'll see during the year which is going to cause, I - think some noise and variability quarter-to-quarter in our telecom space.

And following up within Elastomeric a part of the business has exposure to the smartphone market and we've had some mixed dynamics there. China weak in 4Q, but it seems like it's coming back now when some other things going on with Tier 1 smartphone programs. Can you give us your sense of what you're seeing in that market and how you think we should be looking at that particular opportunity as we think about the full year 2018?

So we were very successful in 2017 in a number of new applications there. As we move into 2018, we've also seen a few new arrivals and new specs and so forth that will work through as those products get introduced through the year. So we're anticipating another pretty good year probably not as good as what we saw in 2017, but we still continue to see our design wins and we'll move through. We're particularly pleased with some of the work that we've been doing with the local Chinese handheld folks. And so that's, we should start seeing some of that as we move through first half of the year.

And then lastly Janice, just on the tax rate guidance, is your expectation to provide us with more quarterly guidance as we go through the year or would you expect the next time we meet sometime in April or early May timeframe to be able to provide us with our full year guidance. And if you did that on a quarterly basis what are the prospects for the tax rate to settle in lower than the 28% to 30% we're looking at for the first quarter? Thank you team.

We anticipate having the numbers in April/May. And as we recourse the problem with going on with the tax rate reform as you know is there's a lot of interpretation they are switching back and forth as rules came out. And we're waiting for the final interpretations before we actually give our full guidance and also. So that's one of the reasons why we won’t, but we will have it hopefully in April/May timeframe. And when we look at the guidance in 20%, 30% we're hoping it might be a little bit lower, but you have to remember 70% of our income is offshore. So we're not getting the total benefit in the U.S. And as we look at our investments, we're looking to see if they will actually help us lower some of our tax positions or our assertions that were taking our offshore income. So with that, we usually have a better indication in April/May and let you know, but we're hoping that it will be lower also.

Your next question comes from Daniel Moore with CGS Securities.

I want to start with just the outlook for growth. The guidance implied for Q1 low to mid single digit growth, a little bit below the longer term 7% plus organic growth target. And Bruce it sounds like 2019 is when 5G kicks in an earnest is that growth for Q1 kind of a good way to think about 2018 or do you see some room for acceleration as we go out through the back half of year?

We view Q1 to be a little bit on the low side, but we will accelerate through the year. Couple of things going on, I referenced in the last question, the variability in 4G as we go to 4.5G and so forth through the year we think that'll start building more momentum in 4.5G as we move through into second third quarter. We also see in the PES business extremely robust sales moving through the year particularly related to EV HEV. And also as I mentioned on the EMS side, we'll start seeing some of the new design wins coming in second/third quarter so that'll boost sales. And also just generally in the general industrial side of the business, we're seeing continued strength there. A little bit of variability here in Q1, but again our outlook for the year is strong in the EMS PES business. And also strong, I will mention also in the segment of ADAS in the automotive segment in ACS we will continue to see strength there. So we're looking - I'm very optimistic about 2018. I think Q1 is as you point out a little bit lower than what we had. What we have in our 2020 targets on a percentage basis. But we'll see this moving forward and recovering through second, third, fourth quarter.

And similarly as it relates to the EBIT margin we exited 2017, 18.5%. Your 2020 goals is 20%, given some of the incremental costs that you went through in detail, do we anticipate taking a little bit of a step back in 2018 or more kind of flat and then start to build toward that 20% level over the next two years?

We're reaffirming our 2020 targets we’ll recover here through this quarter probably into Q2. We have very clear programs in place – as Janice I think did a great job in outlining the specifics here. Some of them are operational we know what the issues are. The good news for us is we control that. It's not like in some cases things that you don't control. We control our destiny here. So we've got teams working on it and we have a very clear path. We're also working through on cost recovery on the commodity side and working closely with customers on that, as well and looking for efficiencies as we go forward. So again I think we'll see very good recovery as we move through the year.

And as we don't give guidance for the full year, you obviously know the management team here and we don't really look backwards ever, we always look going forward and improving so that will be something we'll be striving for always.

And then lastly M&A obviously it sounds like you were down the path – in Q4. I won’t ask you what that was, but maybe just talk about the environment in general. And if you're seeing, you know is it going to be more – likely to see smaller tuck-ins like DeWAL and DSP or are there larger deals that you're out there looking at as well?

Our strategy is clearly top of the pyramid. We like the DeWAL deal, we like DSP. So we continue to look for those kinds of opportunities. It is, as I think you probably hear from other folks in the M&A market it's a tough place and we have targets we're going after. Obviously, we can’t talk about what happened here in Q4, but we're very active out there.

And we have the liquidity division activity right...

I mean again I think Janice's point here is a good one. The liquidity is there, we are ready and able to go when the right opportunity comes. But I will also reinforce the point that we are disciplined and that discipline also could have caused some problems in Q4 here for us as we looked at the target and came to a conclusion that maybe we were better off moving to others.

The next question comes from Sean Hannan with Needham & Company.

So actually folks kind of coming back to the guidance here. If I were to pull out the DSP deal you did last year and certainly taking out the currency tailwind, it actually looks like your guide is going to be down year-on-year. So I want to check if that’s correct, and if so hoping to really understand a little bit better on what's getting us there. And I realize you don't necessarily guide on a segment basis, but some directional color for each of these segments would certainly be helpful to better understand the components that get you to that that revenue guidance? Thanks.

Yes just, I mean honestly DSP is so small it's not – really and we’ll take out as minimal for us or we really look at some Q1 of last year to Q1 of this year as we said ACS is somewhat the one that's really causing the deterioration to 4G transitioning moving into 5G. But it's the timing because 4G we still believe there's a lot of sales growth in the 4G market, it's just the timing. And I think a lot of people at Nokia and other people that had their earnings call talk about the sort – the Q1 downturn. And so that's kind of what we're seeing the market kind downturn, but we do see a lot in the EV HEV, we see an upturn on that, that’s very strong and EMS is strong. So really the markets when we look at it for Q1 in our guidance it’s really strong except for that one market which is the 4G and that’s the transition type of period. So we anticipate 2018 to be very good year for us.

Sean, advanced connectivity, advanced mobility those two core are growth sectors for us. Those are the ones that are driving the company forward. And so a little bit of noise here and there, but with 4G. But certainly ADAS as I mentioned previously is a big growth driver in the ACS business overcoming some of the weakness that we're seeing in 4G in the quarter. And again EMS and PES in particular are on a good growth trajectory.

And I also think the recent announcement from the China government spending $180 billion approximately in the 5G is very encouraging for us. So if they move forward it’s just the timing we know they'll eventually want to take the lead. It's very encouraging for us and we also know ADAS is growing between 30% and 70% from different kind of market study. So we're anticipating a lot of growth. It's just kind of a timing thing is between Q1 at this point in time.

So EMS, PES some relatively cause a repeatable growth as we go into this fourth quarter offset then by ACS and that's where we get to that that range you've got?

Right.

And then also to follow up around thinking about you the paces of SG&A investments here and obviously there are some other factors that have been in play that I think you are trying to get a little bit more efficient on. How do we think about the cadence of the dollar number from here moving forward and what – should we think about specifically starting with that first quarter as we kind of move through the year then?

I will say, obviously our sales are growing, we're growing as a company, the markets are growing. We're going to have to put some investment in SG&A, we need sales and marketing expertise and other steps. So you're going to see the absolute dollar increasing a little bit. But our percent to sales you will see deteriorate as we move forward, obviously look more efficient as we grow. But there will be some basic ads that will have to do so you'll see about really happening. And liked we talked about it depends on the M&A if there's a target we're working on. We'll spend some money on professional services and M&A activity and other ones will be low. So that about will depend on – really on what's out there and what we're working on. But really there is going to be a little bit of a SG&A growth as we’re growing, but the absolute percent is going down.

You’re talking on a year-on-year basis not coming off of fourth quarter base, correct?

Correct.

So we’ll take it down or moving up.

You'll see quite a bit of a moving down on a percentage basis from Q4.

There are no further questions at this time. I will now turn the call back over to Bruce Hoechner, President and CEO.

Thanks. This concludes our call. Thanks everyone for joining us. Have a good evening.