Press Release
Park Electrochemical Corp.
(516) 354-4100
PARK ELECTROCHEMICAL REPORTS FIRST QUARTER RESULTS
LAKE SUCCESS, New York, June 27, 2000…Park Electrochemical Corp. (NYSE-PKE) reported sales of $120,159,000 for the first quarter ended May 28, 2000 compared to $104,454,000 for the first quarter of last year. Park reported net earnings of $8,829,000 for the first quarter of this year, which compares to $5,698,000 for last year’s first quarter. Park’s earnings per share for the quarter were $.84 basic and $.75 diluted compared to $.55 basic and $.51 diluted for last year’s first quarter.
The company previously 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 of the fiscal year ended February 27, 2000. 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 a 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.
As described in the press release announcing the company’s fiscal year 2000 results, NTI historically 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. As a result of this transfer, 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. The former NTI business, which includes the current NTI masslam operation and the former NTI materials operation which was transferred to Nelco New York, incurred a pre-tax loss of $977,000 in the company’s first quarter. The trend for the combined masslam and materials businesses was favorable during the first quarter and continues to be favorable into the beginning of the second quarter. During the months of April and May, the combined businesses generated a small pre-tax profit.
Brian Shore, Park’s President and CEO, said, “We said in our fourth quarter report that 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 by the whole Delco situation. I am very pleased to share with you that Mary Wathen and the NTI leadership team have made tremendous progress in turning around and improving our NTI business. While the numbers speak for themselves, the performance of our NTI masslam business has improved in almost every respect, including throughput, quality, safety, yields, on-time performance, cost control and productivity. There still remains much work to be done and the final chapters of the NTI story are yet to be written, but the news is very positive and the outlook for NTI is much brighter.”
Brian Shore concluded, “Certainly, we are pleased with our company’s performance in our first quarter. The business climate for our company was very strong throughout the first quarter in all regions of the world, and continues to be very strong at this time. We are working very, very hard under extremely difficult circumstances to satisfy our customers’ global needs for high technology product. The pressure from the market has been unrelenting and I must say our people are holding up very well under the circumstances. The good news is that our major expansion programs are proceeding very nicely, and we expect to see significant amounts of new capacity begin to come on line toward the end of this fiscal year. Through the ongoing major plant expansions and other means, we continue to position our company for the future as a key leader in the global electronics materials industry.”
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 27, 2000.
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 electronics, aerospace and industrial markets.
The performance table…
| For the 13 weeks ended* | 5/28/00 | 5/30/99 |
| Sales | $120,159,000 | $104,454,000 |
| Net Earnings | $8,829,000 | $5,698,000 |
| Shares Outstanding: | ||
| Basic | 10,573,000 | 10,430,000 |
| Diluted | 13,069,000 | 12,972,000 |
| Earnings Per Share: | ||
| Basic | $.84 | $.55 |
| Diluted | $.75 | $.51 |
| *unaudited | ||
| The comparative balance sheet (in thousands): | ||
| 5/28/00* | 2/27/00 | |
| ASSETS | ||
| Current Assets | ||
| Cash & Temporary Investments | $142,735 | $131,462 |
| Accounts Receivable, Net | 71,977 | 68,335 |
| Inventories | 29,462 | 27,368 |
| Other Current Assets | 8,155 | 9,614 |
| Total Current Assets | 252,329 | 236,779 |
| Fixed Assets, Net | 130,512 | 125,977 |
| Other Assets | 3,163 | 2,496 |
| Total | $386,004 | $365,252 |
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||
| Current Liabilities | ||
| Accounts Payable | $35,772 | $24,964 |
| Accrued Liabilities | 32,511 | 28,973 |
| Income Taxes Payable | 7,748 | 6,729 |
| Total Current Liabilities | 76,031 | 60,666 |
| Long-Term Debt | 100,000 | 100,000 |
| Deferred Income Taxes | 12,295 | 11,933 |
| Deferred Pension Liability & Other | 12,975 | 13,535 |
| Total Liabilities | 201,301 | 186,134 |
| Stockholders’ Equity | 184,703 | 179,118 |
| Total | $386,004 | $365,252 |
| Equity Per Share | $17.48 | $16.95 |
| *unaudited | ||
| Detailed operating information (in thousands—unaudited): | ||
| 13 Weeks Ended | ||
| 5/28/00 | 5/30/99 | |
| Net Sales | $120,159 | $104,454 |
| Cost of Sales | 96,464 | 85,424 |
| % | 80.3% | 81.8% |
| Gross Profit | 23,695 | 19,030 |
| % | 19.7% | 18.2% |
| Operating Expenses | 11,927 | 11,666 |
| % | 9.9% | 11.2% |
| Profit from Operations | 11,768 | 7,364 |
| % | 9.8% | 7.0% |
| Other Income (Net) | 407 | 233 |
| % | 0.3% | 0.3% |
| Pre-Tax Earnings | 12,175 | 7,597 |
| % | 10.1% | 7.3% |
| Income Tax Provision | 3,346 | 1,899 |
| Effective Tax Rate | 27.5% | 25.0% |
| Net Earnings | $8,829 | $5,698 |
| % | 7.3% | 5.5% |
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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.
