Press Release
Park Electrochemical Corp.
(516) 354-4100
PARK ELECTROCHEMICAL REPORTS FISCAL YEAR RESULTS AND CLOSURE OF ITS PLUMBING HARDWARE BUSINESS
LAKE SUCCESS, New York, April 28, 2000.… Park Electrochemical Corp. (NYSE-PKE) reported sales of $104,895,000 for the fourth quarter ended February 27, 2000 compared to $98,141,000 for last year’s fourth quarter. Park reported net earnings of $762,000 for the fourth quarter versus $5,367,000 for the fourth quarter of last year. Park’s earnings per share were $.07 on both a basic and diluted basis for the current year’s fourth quarter compared to $.52 basic and $.47 diluted for the prior year’s fourth quarter. The average number of shares outstanding for the 2000 fiscal year’s fourth quarter was 10,565,000 basic and 10,723,000 on a diluted basis compared to 10,422,000 basic and 13,014,000 diluted for last year.
During the fourth quarter of the 2000 fiscal year, the Company decided to close its plumbing hardware business. The pre-tax charge included in the fourth quarter results for the closure of the plumbing hardware business and for the related write-down of the assets of the plumbing hardware business was $4,464,000. In addition to the closure and write-down charge, the plumbing hardware business had an operating loss of $520,000 during the fourth quarter of the 2000 fiscal year. Without the closure and write-down charge and the fourth quarter operating loss of the plumbing hardware business, the net earnings for the fiscal 2000 fourth quarter would have been $4,002,000, and the earnings per share for the quarter would have been $.38 basic and $.37 on a diluted basis.
Park’s sales were $425,261,000 for the fiscal year ended February 27, 2000 compared to the previous fiscal year’s sales of $387,634,000. Park reported net earnings for the fiscal year of $18,297,2000 compared to $15,376,000 for the previous fiscal year. Park’s earnings per share for the fiscal year were $1.74 basic and $1.68 on a diluted basis on average outstanding shares of 10,507,000 and 13,096,000, respectively. This compares to the prior year’s earnings per share of $1.40 basic and $1.38 diluted on average outstanding shares of 10,980,000 basic and 11,138,000 diluted, respectively. Without the closure and write-down charge and the fiscal 2000 operating loss of the plumbing hardware business, the net earnings for the fiscal 2000 year would have been $21,561,000, and the earnings per share for the year would have been $2.05 basic and $1.93 on a diluted basis.
The Company also reported that Nelco Technology, Inc. (“NTI”), the Company’s Tempe, Arizona based business unit which formerly supplied Delco Electronics Corporation with semi-finished multilayer circuit boards or masslam product, incurred a pre-tax loss of $4,404,000 in the fourth quarter. Without this loss, the charge related to the closure of the plumbing business and the fourth quarter operating loss of the plumbing business, the Company’s pre-tax earnings for the fourth quarter would have been $10,390,000. As previously reported, Delco Electronics closed its circuit board manufacturing plant in Kokomo, Indiana and ceased purchasing masslam product from NTI in approximately June of 1998. Prior to Delco’s closure of its circuit board fabrication plant, Delco purchased the large majority of its requirements of masslam used to produce finished circuit boards from NTI. As also previously announced, the Company sued Delco Electronics and the Delphi Automotive Systems unit of General Motors Corp. for substantial compensatory and punitive damages in connection with this matter. The company continues to prosecute this lawsuit.
Historically, NTI produced masslam product, as well as laminate and prepreg materials for use by NTI to produce masslam and for sale to outside customers. During the fourth quarter, the Company transferred NTI’s laminate and prepreg materials business to New England Laminates Co., Inc. (“Nelco New York”) based in Newburgh, New York. (Nelco New York is one of the Company’s leading high-volume multilayer circuitry materials business units.) As a result, the laminate and prepreg materials operations which were formerly part of NTI are now part of the Nelco New York business unit and NTI’s sole remaining business is the production and sale of masslam product. In addition, during the fourth quarter, the Company brought a new leadership team into the NTI business headed by its new President, Mary Wathen. Ms. Wathen has many years of experience in leadership positions in the masslam and circuit board industries.
The Company also reported that there currently remain approximately 1,500,000 shares of Park Electrochemical 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.
Brian Shore, Park’s President and CEO, said, “Obviously, our Delco problem has hurt us and hurt us badly. When Delco elected to close its factory and exit the circuit board manufacturing business, we were left with an NTI facility which was essentially built for Delco and no meaningful market opportunity to replace the Delco business. We certainly could have quit at that time and walked away from NTI, but we did not believe that would have been the right thing to do! We felt we owed it to our shareholders, our employees, our community, our customers and ourselves to do everything within our power to save our NTI business which had been so badly crippled. Unlike others who cut and run in the face of adversity and give up without even really trying, it is not in our nature to turn our backs on our responsibilities to our shareholders and our people. It never has been and it never will be! Rather than taking the easy way out, we have done the right thing by trying to save our NTI business.”
Brian Shore continued, “Transferring the laminate and prepreg materials portion of NTI to Nelco New York has already yielded very positive results. Nelco New York is clearly one of our best volume circuitry materials business units, and we believe the former NTI materials operation will fare very well under the leadership and stewardship of the Nelco New York organization. I am also pleased to report that Mary Wathen and her NTI leadership team have already produced meaningful improvements in the financial and operating performance of the NTI masslam business. I am confident that transferring the NTI laminate and prepreg materials business to Nelco New York and bringing Mary and the new leadership team into the NTI masslam business were the very best things that could be done for the NTI business. We do not know how things will turn out, but we do know we have done everything in our power to help NTI succeed!”
Brian Shore added, “Fiscal 2000 was a year of significant accomplishment for our company. We completed the major expansion of our Singapore facility, and Nelco Singapore now has about $100 million of high-technology manufacturing capacity available to serve the fast growing and exciting Asian electronics industry. Our Nelco New York and Nelco California large expansion programs are moving forward as planned, and we are all very anxiously looking forward to beginning to bring on the new New York and California capacity toward the end of the year. We are continuing to strengthen our parent company leadership team by bringing on new key people to lead our company in the future. We have a portfolio of exciting new high-technology products currently being introduced to the marketplace, and we have more in the pipeline too. We have a lot to feel good about and to be thankful for.”
Brian Shore concluded, “Most importantly, Park has come through a year of major organizational and cultural change in fiscal 2000, and I personally believe we are a much better and stronger company as a result. As with most transitional periods and periods of intensive change, fiscal 2000 was a challenging but also extremely rewarding year for many of us in the company. Our new culture involves very powerful concepts which we describe as “Customer Intimacy” and “Enlightened Decentralization”. These concepts are directed toward becoming more and more intimate with our customer’s business in order to help our customer succeed. I have worked at Park for 12 years, and I can honestly say that I feel better about our company and its future now than at any time during the past 12 years. Our business is currently very solid around the globe, and we expect to report a strong fiscal year 2001 first quarter.”
Certain portions of this press release 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. 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, 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 February 28, 1999.
Park Electrochemical Corp. is a leading designer and producer of advanced electronic materials used to fabricate complex multilayer printed circuit boards and interconnection systems. Park’s electronic materials business operates under the “Nelco” name. Park also manufactures specialty adhesive tapes and advanced composite materials for the electron-ics, aerospace and industrial markets.
The performance table…
| For the quarter ended | 2/27/00 | 2/28/99 |
| Net Sales | $104,895,000 | $98,141,000 |
| Net Earnings | $762,000 | $5,367,000 |
| Shares Outstanding: | ||
| Basic | 10,565,000 | 10,422,000 |
| Diluted | 10,723,000 | 13,014,000 |
| Earnings Per Share: | ||
| Basic | $.07 | $.52 |
| Diluted | $.07 | $.47 |
| For the year ended | 2/27/00 | 2/28/99 |
| Net Sales | $425,261,000 | $387,634,000 |
| Net Earnings | $18,297,000 | $15,376,000 |
| Shares Outstanding: | ||
| Basic | 10,507,000 | 10,980,000 |
| Diluted | 13,096,000 | 11,138,000 |
| Earnings Per Share: | ||
| Basic | $1.74 | $1.40 |
| Diluted | $1.68 | $1.38 |
Net earnings and earnings per share without the plumbing hardware business closure and write-down charge and fourth quarter loss…
| For the quarter ended | 2/27/00 |
| Net Earnings | $4,002,000 |
| Earnings Per Share: | |
| Basic | $.38 |
| Diluted | $.37 |
| For the year ended | 2/27/00 |
| Net Earnings | $21,561,000 |
| Earnings Per Share: | |
| Basic | $2.05 |
| Diluted | $1.93 |
| The comparative balance sheets (in thousands): | ||
| 2/27/00 | 2/28/99 | |
| ASSETS | ||
| Current Assets | ||
| Cash & Temporary Investments | $131,462 | $139,702 |
| Accounts Receivable, Net | 68,335 | 56,917 |
| Inventories | 27,368 | 25,703 |
| Other Current Assets | 9,614 | 7,874 |
| Total Current Assets | 236,779 | 230,196 |
| Fixed Assets, Net | 125,977 | 118,012 |
| Other Assets | 2,496 | 3,490 |
| Total | $365,252 | $351,698 |
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||
| Current Liabilities | ||
| Accounts Payable | $24,964 | $31,019 |
| Accrued Liabilities | 28,973 | 23,154 |
| Income Taxes Payable | 6,729 | 9,183 |
| Total Current Liabilities | 60,666 | 63,356 |
| Long-Term Debt | 100,000 | 100,000 |
| Deferred Income Taxes | 11,933 | 9,501 |
| Deferred Pension and Other Liabilities | 13,535 | 14,195 |
| Total Liabilities | 186,134 | 187,052 |
| Stockholders’ Equity | 179,118 | 164,646 |
| Total | $365,252 | $351,698 |
| Equity Per Share | $16.95 | $15.79 |
| Detailed operating information (in thousands): | ||||
| 13 Weeks Ended | 52 Weeks Ended | |||
| (unaudited) | ||||
| 2/27/00 | 2/28/99 | 2/27/00 | 2/28/99 | |
| Continuing Operations: | ||||
| Net Sales | $102,818 | $93,993 | $411,770 | $369,437 |
| Cost of Sales | 86,586 | 78,647 | 340,355 | 313,804 |
| % | 84.2% | 83.7% | 82.7% | 84.9% |
| Gross Profit | 16,232 | 15,346 | 71,415 | 55,633 |
| % | 15.8% | 16.3% | 17.3% | 15.1% |
| Operating Expenses | 10,554 | 9,826 | 42,945 | 38,638 |
| % | 10.3% | 10.4% | 10.4% | 10.5% |
| Profit from Operations | 5,678 | 5,520 | 28,470 | 16,995 |
| % | 5.5% | 5.9% | 6.9% | 4.6% |
| Other Income | 308 | 471 | 934 | 2,242 |
| % | 0.3% | 0.5% | 0.2% | 0.6% |
| Pre-Tax Earnings | 5,986 | 5,991 | 29,404 | 19,237 |
| % | 5.8% | 6.4% | 7.1% | 5.2% |
| Plumbing Hardware Business Closed | ||||
| During FYE 2/00: | ||||
| Net Sales | 2,077 | 4,148 | 13,491 | 18,197 |
| Cost of Sales | 2,041 | 3,104 | 11,486 | 15,080 |
| % | 98.3% | 74.8% | 85.1% | 82.9% |
| Gross Profit | 36 | 1,044 | 2,005 | 3,117 |
| % | 1.7% | 25.2% | 14.9% | 17.1% |
| Operating Expenses | 556 | 667 | 2,563 | 2,641 |
| % | 26.8% | 16.1% | 19.0% | 14.5% |
| Profit (Loss) from Operations | (520) | 377 | (558) | 476 |
| % | (25.1%) | 9.1% | (4.1%) | 2.6% |
| Plumbing Hardware Business | ||||
| Closure Costs | (4,464) | - | (4,464) | - |
| Combined: |
|
|||
| Pre-Tax Earnings | 1,002 | 6,368 | 24,382 | 19,713 |
| % | 1.0% | 6.5% | 5.7% | 5.1% |
| Income Tax Provision | 240 | 1,001 | 6,085 | 4,337 |
| Rate | 24.0% | 15.7% | 25.0% | 22.0% |
| Net Earnings | $762 | $5,367 | $18,297 | $15,376 |
| % | 0.7% | 5.5% | 4.3% | 4.0% |
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Park Electrochemical Corporation
48 So. Service Road, Suite 300MelvilleNY11747
(631) 465-3600Fax: 465-3100
Copyright 2000 (c) All Rights Reserved. Park Electrochemical Corp.
