ROG, Rogers Corporation

Will it survive?

• Can it pay its interest? —
  No meaningful interest burden
  Little or no interest expense reported
  What this means

  Little or no interest expense reported, the business isn't leaning on lenders to operate.

• How heavy is the debt, net of cash? +$197M
  Net cash, debt-free
  Cash $197M − debt $0
  What this means

  Cash and short-term investments exceed every dollar of debt by $197M, on net the company owes nothing, and can act from strength when others can't. It also holds $26M in longer-dated marketable securities; counting those, it sits at net cash of $223M. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? 113d
  Long (60+ days)
  DSO 59 + DIO 82 − DPO 28 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

• Return on invested capital 7%
  Below average through the cycle
  10-yr median, range -4%–11%; -4% latest = NOPAT ($36M) ÷ invested capital $999M
  Industry peers: median 7%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -4% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 9%
  Solid through the cycle
  10-yr median margin, range 1%–16%; latest $71M = operating cash $101M − maintenance capex $30M
  Industry peers: median 9%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 9% of revenue this year, a 9% median across 10 years. Treating stock comp as the real expense it is (less $11M of SBC) leaves $60M.

• Are earnings backed by cash? $101M
  Loss, but cash-generative
  Net income ($62M) · cash from operations $101M
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

• Where do the earnings go? 74%
  Returns about half
  Dividends + buybacks $52M ÷ Owner Earnings $71M
  What this means

  Of $71M Owner Earnings, $52M (74%) went back to shareholders, $0 dividends, $52M buybacks. Net of $11M stock comp, the real buyback was about $42M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.55×
  Harvesting
  Capex $30M ÷ depreciation $54M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size Miss
  Revenue ≥ $2B · $811M
  What this means

  Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

• Strong liquidity Pass
  Current ratio ≥ 2× · 3.97×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt Pass
  Debt ≤ working capital · $0 vs $374M WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Earnings stability Near
  A profit every year (10-yr record) · 1 loss year
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · none paid
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth Miss
  Earnings +33% over the record · −90%
  What this means

  At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.39/share (latest year $-3.46), the averaged base the calculator's gate runs on, and book value is $66.99/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 9 of 10
  What this means

  Lost money in 1 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 0 of 9 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 14% → 2% (3-yr avg ends)

  In the filing’s words Input costs rose and the filing says it could not fully pass them on — which is where this margin compressed.

  What this means

  Through the cycle the operating margin slipped — about 14% early to 2% lately, median 12% — competition or costs are biting in.

• Reinvestment, incremental ROIC −15%
  What this means

  Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.

• Owner earnings growth −4%/yr
  What this means

  Owner earnings shrank about 4% a year over the record.

• Worst year 2025 · −5.6% op. margin
  What this means

  Operations went underwater in 2025, understand why before trusting the good years.

• Share count −0.0%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.

• How management talks about it Promotional
  What this means

  The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.