Park Electrochemical Corp.

 

 

September 25, 2009 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 September 25, 2009.  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 2010 fiscal year second quarter earnings news release dated September 25, 2009 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 second quarter ended August 30, 2009 on or about October 9, 2009.  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 September 25, 2009 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 1, 2009 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 would first like to summarize the financial information included in the news release for the second quarter ended August 30, 2009.

 

Net sales for the 2010 fiscal year second quarter ended August 30, 2009 were $42.5 million compared to net sales of $55.6 million for the prior fiscal year’s second quarter. Park’s sales for the first six months were $79.2 million compared to sales of $115.4 million for last year’s first six months.

 

Net earnings for the 2010 fiscal year second quarter were $4.8 million compared to $4.9 million for the prior year’s second quarter.  Park’s net earnings for the first six months were $7.8 million compared to net earnings of $12.5 million for last year’s first six months.

 

Park reported basic and diluted earnings per share for the 2010 fiscal year second quarter and first six months of $0.23 and $0.38, respectively, compared to basic and diluted earnings per share of $0.24 and $0.61 for the prior year second quarter and six-month period.

 

Now I'd like to briefly review some of the other significant items in our second quarter P&L:

 

Comparing the current fiscal year’s second quarter sales to last year’s second quarter sales, Park’s sales volumes decreased 21% in North America, 36% in Europe and 23% in Asia. During the fiscal year 2010 second quarter, North American sales were 51% of total sales, European sales were 10% of total sales and Asian sales were 39% of total sales, all the same as last year’s second quarter.

 

Sales of high temperature laminate and prepreg materials comprised 100% of total laminate and prepreg sales during the second quarter of both fiscal year 2010 and fiscal year 2009. 

 

Sales of Park’s high performance (non-FR-4) printed circuit materials, which are a subset of high temperature printed circuit materials, were 64% of total laminate and prepreg material sales in the second quarter of fiscal year 2010, 58% in the second quarter of the prior year and 67% in the first quarter of fiscal year 2010. 

 

Sales of Park’s advanced composite materials, parts and assemblies were $6.8 million in the second quarter of fiscal year 2010, $6.6 million in the second quarter of the prior year and $6.2 million in the first quarter of fiscal year 2010 and comprised 16% of total sales in the second quarter of fiscal year 2010, 12% in the second quarter of the prior year and 17% in the first quarter of fiscal year 2010.

 

The gross profit percentage for the second quarter of fiscal 2010 was 25.7% compared to 19.7% for the prior year second quarter. Selling, general and administrative expenses were 12.2% of net sales for the 2010 fiscal year second quarter compared to 11.1% for the prior year’s comparable period. 

 

Investment income for the second quarter was $205,000 or 0.5% of net sales compared to $1,692,000 or 3.0% of net sales for the second quarter of 2009.  The decrease in investment income was primarily attributable to decreases in prevailing interest rates.

 

As a result, pre-tax operating profit was 14.0% of net sales for the 2010 fiscal year second quarter compared to 11.6% for the prior year second quarter. 

 

The effective tax rate was 20.1% for the 2010 fiscal year second quarter compared to an effective tax rate 23.75% for the prior fiscal year second quarter.

 

Turning to Park’s balance sheet, cash and marketable securities were $233.7 million at August 30, 2009 compared to $225.3 million at the end of the prior fiscal year. Working capital was $244.8 million at the end of the 2010 second quarter compared to $239.6 million at the end of the prior fiscal year.  During the current year’s first six months, the Company had capital expenditures of $1.3 million and depreciation expense of $3.4 million compared to capital expenditures of $8.1 million and depreciation expense of $3.9 million for the prior year’s first six month period.

 

Stockholders' equity was $300.2 million at August 30, 2009 compared to $295.7 million at the end of the prior fiscal year. Finally, stockholders' equity per share at August 30, 2009 was $14.62 per share compared to $14.45 per share at the end of the prior 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 industry, 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 1, 2009.  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 2009 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.