Before we begin I would like to note that statements in this conference call that are not strictly historical or forward looking statements within the meaning of the private securities litigation Reform Act of 1995 and should be considered as subject Too many uncertainties that exists in Rogers operations and environment.
In addition ongoing trade tensions are generating headwinds and in some cases limiting near-term demand visibility from a market perspective industrial and conventional automotive demand which had begun to slow in late Q2 weakened further in the third quarter.
Rogers achieved q3 net sales of 220 $2 million and adjusted earnings of $1 51 per share.
For example portable electronics demand was reasonably favorable in q3 and we achieve sequential revenue growth of approximately 5%.
Based upon customer and industry analyst inputs we expect the recent pause in the 5G rollout to continue through the end of the year and believe that China 5G deployments will rebound in the first half of 2020.
At a recent forum China Mobile increased their target for 5G coverage to 340 cities by the end of next year underscoring their expansion plans.
This followed recent news from Chinese telecoms that advanced subscriptions for 5G service which is not yet available have already reached approximately 9 million.
Third-party experts expect 2020 5G deployments to be in the range of 600000 base stations which at that scale would provide an opportunity for substantial growth in our 5G wireless infrastructure business next year.
A recent IHS market report projects that through 2025 sales of EVs and HEVs will increase at a compounded annual growth rate of approximately 30%.
This is the first step in VW's plan to sell up to 3 million EVs and HEVs annually by 2025.
By 2022 Daimler is scheduled to bring 10 all-electric vehicles to market and plans to eventually electrify the entire Mercedes Benz portfolio.
ACS third quarter net sales were $79 million a decrease of 15% from the prior quarter and an increase of 10% versus the prior year.
ADAS demand remained strong in Q3 and year-to-date sales have grown 8% compared to 2018.
Aerospace and defense sales increased 17% versus Q2 and year-to-date results are up over 20% versus the prior year.
Turning to Slide 7 in Q3 EMS net sales were $95 million a slight increase compared to Q2.
Year-to-date sales of applications for EV/HEV battery pads and battery pack sealing systems have increased 29% versus the prior year highlighting the excellent growth opportunity in this area.
Turning to Slide 8 PES third quarter net sales were $43 million a decrease of 17% from Q2.
Third quarter revenues as previously noted were $221.8 million below our Q3 guidance range of $225 million to $235 million.
Q3 revenues decreased 9% on a sequential basis and 2% compared to the third quarter 2018.
We achieved a gross margin of 35.6% for the third quarter 30 basis points higher than Q2 and within our guidance range of 35% to 36% due primarily to a favorable product mix and reduced spending in all of our business segments to react to the softer market demand in Q3 and expected to continue through Q4.
Adjusted operating income for Q3 2019 was $36.2 million or 16.3% of revenues compared to $41.7 million or 17.2% of revenues for Q2.
Adjusted operating expenses decreased by $1.4 million in the third quarter compared to the second quarter.
GAAP earnings per share of $1.25 per fully diluted share and adjusted earnings per share of $1.51 per fully diluted share for Q3 2019 were above the upper end of our guidance range for Q3 but below Q2 levels.
The company generated $33.4 million of free cash flow in the third quarter and $76.8 million year-to-date.
The company has paid down $98 million of debt year-to-date and ended the third quarter in a net cash position of $10.3 million.
Turning to Slide 12 our Q3 2019 revenues of $221.8 million decreased $21.1 million or 9% compared to the second quarter of 2019.
The sequential decrease was experienced in our ACS business segment down 15%; and our PES segment down 17%.
Currency exchange rate negatively impacted 2019 third quarter revenues by $1.6 million compared to Q2.
As a result our wireless infrastructure revenues declined 35% sequentially.
4G revenues which were basically flat year-to-date through June compared to the same period in 2018 are now 10% lower year-to-date through September compared to 2018 and are expected to remain soft through Q4.
Revenues from aerospace and defense programs were strong in Q3 growing 19% sequentially and are up 17% year-to-date compared to 2018.
ADAS revenues were down 7% sequentially from a strong second quarter but are up 8% year-to-date compared to 2018 in the face of a weak auto market.
The third quarter is typically the strongest quarter for portable electronics revenues which grew 5% sequentially and 10% compared to Q3 2018 due to our customers' commercialization of new handset and tablet designs.
General industrial application revenues which comprise close to 40% of the business segment's revenues were down slightly compared to the second quarter and down 5% compared to the third quarter 2018.
Revenues for these applications decreased sequentially by 20% and 13% respectively and decreased 27% and 26% respectively compared to Q3 2018.
As a result revenues per EV/HEV applications declined 35% sequentially.
However revenues were up 16% year-to-date.
Turning to Slide 13 our gross margin for Q3 2019 was $78.9 million or 35.6% of revenues 30 basis points higher than our second quarter gross margin of 35.3%.
Tariffs continued to be a headwind to gross margin in the third quarter impacting gross margin by approximately $2.3 million or 106 basis points an increase of 26 basis points compared to Q2.
Relative to our third quarter gross margin the path to the higher gross margin is through improved operational execution in PES and EMS contributing 200 to 250 basis points mitigating the impact of tariffs contributing 50 to 100 basis points and increased volume in all our businesses particularly 5G revenues contributing 100 to 200 basis points.
Slide 14 details the changes to adjusted net income for Q3 2019 of $28.2 million compared to adjusted net income for Q2 of $30.7 million.
Adjusted operating expenses for Q3 of $42.7 million or 19.2% of revenues or $1.4 million lower than Q2 adjusted operating expenses of $44.1 million or 18.2% of revenues.
Our effective tax rate for Q3 2019 was 18.6% compared to our Q2 effective tax rate of 22.9%.
The company expects the 2019 effective tax rate to be 20% to 22% with the fourth quarter effective tax rate of 22% to 24%.
Turning to Slide 15 we ended the third quarter 2019 with a cash position of $140.7 million a decrease of $32.4 million from June 30 and a decrease of $27 million from December 31.
In Q3 the company spent $14.8 million on capital expenditures.
We have spent $38.8 million year-to-date and we guide capital spending for the year in the range of $50 million to $55 million.
The company paid down $65 million of debt in the quarter and has paid down $98 million of debt in 2019.
As of September 30 we are in a net cash position of $10.3 million.
The company generated $48.2 million from operating activities in Q3 including a decrease in working capital of $9.9 million.
Through September the company generated $115.7 million from operating activities net of an increase in working capital of $4 million primarily from the increase in inventory with long lead times.
Therefore revenues for Q4 are estimated to be in the range of $200 million to $210 million.
As a result we are guiding gross margin in the range of 33% to 34% for Q4.
The company will however take a $52 million to $56 million non-cash charge to income for other accumulated losses for the plan that were recorded as part of our equity.
As a result we guided GAAP Q4 loss in the range of $1.43 to $1.28 per share.
On an adjusted basis we guide the fully diluted earnings in the range of $1.00 to $1.15 per share for the fourth quarter.

Summary:
In addition ongoing trade tensions are generating headwinds and in some cases limiting near-term demand visibility from a market perspective industrial and conventional automotive demand which had begun to slow in late Q2 weakened further in the third quarter.
Based upon customer and industry analyst inputs we expect the recent pause in the 5G rollout to continue through the end of the year and believe that China 5G deployments will rebound in the first half of 2020.
Third quarter revenues as previously noted were $221.8 million below our Q3 guidance range of $225 million to $235 million.
GAAP earnings per share of $1.25 per fully diluted share and adjusted earnings per share of $1.51 per fully diluted share for Q3 2019 were above the upper end of our guidance range for Q3 but below Q2 levels.
Therefore revenues for Q4 are estimated to be in the range of $200 million to $210 million.
As a result we guided GAAP Q4 loss in the range of $1.43 to $1.28 per share.
On an adjusted basis we guide the fully diluted earnings in the range of $1.00 to $1.15 per share for the fourth quarter.