Park Electrochemical Corp.

 

May 16, 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 May 16, 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 fourth quarter earnings news release dated May 16, 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 Annual Report on Form 10-K for the fiscal year ended March 2, 2014 on or about May 16, 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 May 16, 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 fourth quarter and fiscal year 2014 P&L, which are not specifically addressed in the earnings release. Please note that the fourth quarter ended March 2, 2014 was a 13-week period compared to the fourth quarter ended March 3, 2013, which was a 14-week period, and that the fiscal year ended March 2, 2014 was a 52-week period compared to the fiscal year ended March 3, 2013, which was a 53-week period.  

 

During the fiscal year 2014 fourth quarter, North American sales were 48% of total sales, European sales were 7% of total sales and Asian sales were 45% of total sales, compared to 49%, 9% and 42%, respectively, for the fourth quarter of the prior fiscal year and 51%, 6% and 43%, respectively, for the 2014 fiscal year third quarter.

 

Sales of Park’s high performance (non-FR-4) printed circuit materials were 90% of total laminate and prepreg material sales in the fourth quarter of fiscal year 2014, 82% in the fourth quarter of the prior fiscal year and 89% in the third quarter of fiscal year 2014. 

 

Sales of Park’s aerospace materials and parts were $8.0 million in the fourth quarter of the 2014 fiscal year compared to $7.0 million in the fourth quarter of the prior fiscal year and compared to $8.2 million in the third quarter of the 2014 fiscal year. Sales of aerospace materials and parts were $30.4 million in the 2014 fiscal year compared to $25.9 million in the prior year.

 

Investment income, net of interest expense, for the fourth quarter of the 2014 fiscal year was negative $45,000 compared to positive $113,000 in the fourth quarter of the prior fiscal year and negative $48,000 in the third quarter of the 2014 fiscal year. The net expenses in the third and fourth quarters of the 2014 fiscal year were primarily the result of the interest expense associated with the Company’s borrowing under its credit facility agreement which was entered into during the fourth quarter of the 2013 fiscal year and amended and restated in the fourth quarter of the 2014 fiscal year.

 

Depreciation and amortization expense for the fourth quarter of the 2014 fiscal year was $782,000 compared to $1.1 million in the fourth quarter of the prior fiscal year and $1.0 million in the third quarter of the 2014 fiscal year. Capital expenditures for the fourth quarter of the 2014 fiscal year were $344,000 compared to $257,000 in the fourth quarter of the prior fiscal year and $160,000 in the third quarter of the 2014 fiscal year. Capital expenditures were $1.1 million in the 2014 fiscal year compared to $1.4 million in the prior year.

 

As reported in this morning’s earnings release, the effective tax rate before special items was 11.3% in the fourth quarter of the 2014 fiscal year compared to 15.7% in the fourth quarter of the prior fiscal year and compared to 3.3% in the third quarter of the 2014 fiscal year. The U.S. GAAP income tax provision in the fourth quarter of the 2014 fiscal year included a non-cash charge of $63,958,000 for the accrual of U.S. income tax on the undistributed earnings of the Company’s subsidiary in Singapore. The low effective tax rate in the third quarter of the 2014 fiscal year 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 fourth quarter of the 2014 fiscal year, the Company had two customers, TTM Technologies and WUS, which accounted for more than 10% of total sales. The three remaining customers in the top five were Sanmina, Shennan Circuits and Viasystems, in alphabetical order. The top five customers totaled approximately 42% of total sales. Our top 10 customers totaled approximately 55% of total sales and the top 20 customers totaled approximately 70% of total sales in the 2014 fiscal year fourth quarter.

 

During the 2014 fiscal year, the Company had one customer that was more than 10% of total sales, which was TTM. The four remaining customers rounding out the top five were ISUPETASYS, Sanmina, Viasystems and WUS, in alphabetical order. The top five customers totaled approximately 45% of total sales. Our top 10 customers totaled approximately 59% of total sales and the top 20 customers totaled approximately 70% of total sales in the 2014 fiscal year.

 

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 2014 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.