Press Release
Park Electrochemical Corp.
(516) 354-4100
PARK ELECTROCHEMICAL REPORTS SECOND QUARTER RESULTS AND ANNOUNCES PROPOSED CLOSURE OF ITS NELCO U.K. MANUFACTURING FACILITY
LAKE SUCCESS, New York, October 2, 2002...Park Electrochemical Corp. (NYSE-PKE) reported sales of $56,901,000 for the second quarter ended September 1, 2002 compared to $51,743,000 for the second quarter of last year. Park’s sales for the first six months were $113,462,000 compared to last year’s first six month’s sales of $120,845,000. Park reported a net loss of $633,000, before a non-recurring, pre-tax gain of $3,170,000 (related to the sale of its Dielectric Polymers business discussed below), for the second quarter compared to a net loss of $3,779,000 for last year’s second quarter. For the six months ended September 1, 2002, Park reported a net loss of $1,269,000 (before the $3,170,000 non-recurring, pre-tax gain referred to above), compared to a net loss of $6,919,000 for last year’s first six months (before a non-recurring, pre-tax charge of $16,388,000 incurred in last year’s first quarter). Before the non-recurring gain, Park’s basic and diluted losses per share were $.03 for the second quarter and $.06 for the six months ended September 1, 2002 compared to losses per share, before non-recurring charges, of $.19 and $.36 basic and diluted, respectively, for the same periods in the prior year.
As previously reported, the Company sold its Dielectric Polymers, Inc. subsidiary on June 27, 2002 and recorded a one-time, pre-tax gain of $3,170,000 in the second quarter in connection with the sale.
The Company also announced that it is proposing to close its Nelco U.K. manufacturing facility located in Skelmersdale, England and is commencing a consultation process with its Nelco U.K. employees regarding the proposed closure. Park expects to record a one-time, pre-tax charge of $4.0 million to $5.0 million in its 2003 fiscal year third quarter in connection with this proposed closure.
Brian Shore, Park’s President and CEO, said, “Today is certainly one of our saddest days since we started the business in 1954. We opened our Nelco U.K. facility way back in the 1960s and, for many, many years, Nelco U.K. was one of the most vital parts of our global high technology circuit materials business. Unfortunately, due at least in part to the greed and arrogance of a few, the U.K. high technology circuit board industry has been decimated. We will consult with our Nelco U.K. employees on this devastating development, but, unfortunately, the closure of our Nelco U.K. facility now seems to be unavoidable. The bottom line is that there simply is not enough business available in the entire U.K. market to come even close to allowing us to justify a business operation in the U.K. in the future. The volume market for our product in the U.K. has essentially been destroyed. There remain a few very important customers of ours in the U.K., and we plan to supply those customers with product produced at our Nelco facility located in Mirebeau, France. We will continue to provide these very important U.K. customers with local account management, technical service and materials and inventory support as well.”
Brian Shore continued, “I would like to personally express my sincere thanks and gratitude to all of our Nelco U.K. employees (past and present) for giving it their very best over the years. I also would like all of our Nelco U.K. employees to know that I am deeply sorry that things ended up this way. We worked very hard to find a different result but, unfortunately, it has become obvious to me that the closure of our Nelco U.K. facility will be unavoidable. I would like our Nelco U.K. employees to understand that this decision is not at all related to the downturn in the industry. If I believed that the U.K. market collapse was a temporary event, I would be happy to wait until things got better. However, as I previously indicated, the U.K. market has been devastated, and I do not believe this is a temporary event at all. Lastly, I would like to wish all of our Nelco U.K. employees the very best of luck in the future and Godspeed. I will think of you often in years to come.”
Commenting on the second quarter results, Brian Shore said, “The global electronics market continued to be very depressed during our fiscal 2003 second quarter. The severe downturn which occurred approximately one and a half years ago continues with no clear signs of recovery in sight at this time. Because the downturn has lasted so long, I believe we are starting to see real signs of attrition in our industry. The story for our Company, however, is simple and is unchanged. We continue to work our hardest every day to build lasting and enduring value for our Company for the long term future, and, most importantly, we continue to do everything within our power to help our customers succeed. We continue to believe in the long term future of the high technology global electronics industry, and we continue to work hard every day to be a very important part of that future.”
The Company also reported that there currently remain approximately 2,250,000 shares of Park Electrochemical Corp. Common Stock available to be purchased by the Company pursuant to previous share purchase authorizations announced on June 24, 1998 and September 9, 1998. Pursuant to these authorizations, the Company is authorized to purchase its shares from time to time on the open market or in privately negotiated transactions.
The Company will host a conference call to discuss its financial results at 11:00 a.m. EDT today. Forward-looking and other material information may be discussed in this conference call. The conference call dial-in number is (800) 589-4298.
For those unable to listen to the call live, a conference call replay will be available from approximately 2:00 p.m. EDT today through 2:00 p.m. EDT on Friday, October 4, 2002. The conference call replay can be accessed by dialing (888) 203-1112 and entering passcode 677428.
Certain portions of this press release 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. Such factors 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 utilities, and the various factors set forth 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, 2002.
Park Electrochemical Corp. is a leading global designer and producer of electronic materials used to fabricate complex multilayer printed circuit boards and interconnection systems. Park specializes in advanced materials for high layer count circuit boards and high speed digital broadband telecommunications, internet and networking applications. Park’s electronic materials business operates through fully integrated business units in Asia, Europe and North America. The Company’s manufacturing facilities are located in Singapore, China, Germany, France, England, Connecticut, New York, Arizona and California. Park’s electronic materials business operates under the “Nelco” name.
Additional corporate information is available on the World Wide Web at http://www.parkelectro.com.
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