Park Electrochemical Corp.

 

 

January 10, 2014 Investor Conference Call – Supplementary Financial Information

 

 

The financial and other data contained herein (the “Supplementary Data”) is being provided pursuant to the requirements of Regulation G promulgated by the U.S. Securities and Exchange Commission (the “SEC”).  The Supplementary Data is time-sensitive information and is accurate as of January 10, 2014.  Park Electrochemical Corp. (“Park” or the “Company”) is under no obligation to (and expressly disclaims any such obligation to) update or alter the Supplementary Data whether as a result of new information, future events or otherwise.

 

The Supplementary Data should be read in conjunction with our 2014 fiscal year third quarter earnings news release dated January 10, 2014 and the reports and documents that we file from time to time with the SEC.  In particular, please read our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K that we may file from time to time.  Park currently expects to file its Quarterly Report on Form 10-Q for the third quarter year ended December 1, 2013 on or about January 10, 2014.  We make available free of charge on or through our website located at www.parkelectro.com our SEC filings on Forms 10-K, 10-Q and 8-K and any amendments to those filings as soon as reasonably practicable after electronic filing with the SEC.

 

Information to be presented at the January 10, 2014 investor conference call by Matt Farabaugh

 

Certain statements we may make during the course of this discussion which do not relate to historical financial information may be deemed to constitute forward-looking statements.  Any forward-looking statements are subject to various factors that could cause actual results to differ materially from our expectations.  We have set forth in our most recent Annual Report on Form 10-K for the fiscal year ended March 3, 2013 various factors that could affect future results.  Those factors are found in Item 1A and after Item 7 of that Form 10-K. Any forward-looking statements we may make are subject to those factors.

 

I'd like to briefly review some of the items in our third quarter ended December 1, 2013 P&L, which are not specifically addressed in the earnings release. 

 

During the fiscal year 2014 third quarter, North American sales were 51% of total sales, European sales were 6% of total sales and Asian sales were 43% of total sales, compared to 46%, 8% and 46%, respectively, for the third quarter of the prior fiscal year and 51%, 6% and 43%, respectively, for the 2014 fiscal year second quarter.

 

Sales of Park’s high performance (non-FR-4) printed circuit materials were 89% of total laminate and prepreg material sales in the third quarter of fiscal year 2014, 82% in the third quarter of the prior fiscal year and 88% in the second quarter of fiscal year 2014. 

 

Sales of Park’s aerospace materials and parts were $8.2 million in the third quarter of the 2014 fiscal year compared to $5.5 million in the third quarter of the prior fiscal year and compared to $7.5 million in the second quarter of the 2014 fiscal year. 

 

Investment income, net of interest expense, for the third quarter of the 2014 fiscal year was negative $48,000 compared to positive $143,000 in the third quarter of the prior fiscal year and negative $108,000 in the second quarter of the 2014 fiscal year. The net expenses in the second and third quarters of the 2014 fiscal year were primarily the result of the interest expense associated with the Company’s borrowing under a five-year revolving credit agreement in the fourth quarter of the 2013 fiscal year.

 

Depreciation and amortization expense for the third quarter of the 2014 fiscal year was $1,012,000 compared to $1,034,000 in the third quarter of the prior fiscal year and $995,000 in the second quarter of the 2014 fiscal year.

 

As reported in this morning’s earnings release, the effective tax rate for the third quarter ended December 1, 2013 was 3.3% compared to 18.2% in the third quarter of last fiscal year. The low effective tax rate in the third quarter ended December 1, 2013 was due to higher portions of taxable income in jurisdictions with lower effective income tax rates and tax incentives associated with the Company’s operations in Singapore.

 

During the third quarter of the 2014 fiscal year, the Company had one customer, TTM Technologies, which accounted for more than 10% of total sales. The four remaining customers in the top five were Sanmina, Shennan Circuits, Viasystems and WUS, in alphabetical order. The top five customers totaled approximately 44% of total sales. Our top 10 customers totaled approximately 60% of total sales and the top 20 customers totaled approximately 77% of total sales.

 

Safe Harbor Statement

 

The Supplementary Data may contain “forward-looking statements,” as defined under the Federal Securities Laws, including the Private Securities Litigation Reform Act of 1995.  Certain portions of the Supplementary Data which do not relate to historical financial information may be deemed to constitute forward-looking statements that are subject to various factors which could cause actual results to differ materially from Park’s expectations or from results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking statements.  Generally, you can identify forward-looking statements by the use of words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “goal,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions or the negative or other variations thereof.  Such forward-looking statements are based on current expectations that involve a number of uncertainties and risks that may cause actual events or results to differ materially from Park’s expectations.  Factors that could cause actual events or results to differ materially include but are not limited to general conditions in the electronics and aerospace industries, Park’s competitive position, the status of Park’s relationships with its customers, economic conditions in international markets, the cost and availability of raw materials, transportation and utilities, and the various other factors set forth in Item 1A “Risk Factors” and under the caption “Factors That May Affect Future Results” after Item 7 of Park’s Annual Report on Form 10-K for the fiscal year ended March 3, 2013.  These and other risks may be detailed from time to time in Park’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its fiscal year 2013 Annual Report on Form 10-K and other SEC filings, copies of which may be obtained from http://www.sec.gov/.  Park is under no obligation to (and expressly disclaims any such obligation to) update any of the information contained herein if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.