PARK ELECTROCHEMICAL REPORTS SECOND QUARTER RESULTS

Melville, New York, September 21, 2005……Park Electro
chemical Corp. (NYSE-PKE) reported sales
of $52,442,000 for its 2006 fiscal year second quarter ended August 28, 2005 compared to sales of
$51,098,000 for the second quarter of last year. Park’s
sales for the six months ended August 28, 2005
were $108,118,000 compared to sales of $109,616,000 for last year’s first six months.
Park reported net earnings of $6,057,000 for the second quarter ended August 28, 2005 compared to
net earnings of $2,947,000 for last fiscal yea
r’s second quarter e
nded August
29,
2004.
For the six-month period ended August 28, 2005, Pa
rk reported net earnings of $12,444,000 before a
special item compared to net earnings of $8,968,000
for last year’s first six-month period. The
special item consisted of an after-tax restruct
uring charge of $1,059,000 for employment termination
benefits related to the reduction in workforce at
the Company’s Neltec Europe SAS subsidiary in
Mirebeau, France, which the Company recorded in the first quarter ended May 29, 2005. Net
earnings were $11,385,000 for the six-month peri
od ended August 28, 2005 compared to net
earnings of $8,968,000 for last year’s first six months.
Park’s basic and diluted earnings per share were $.30 for the second quarter ended August 28, 2005,
compared to $.15 for last year’s second quarter ended August 29, 2004.
For the six-month period ended August 28, 2005, Park re
ported earnings of $.62 before the special item
compared to basic and diluted earnings per share of $.45
for the first six months of last year. Basic and
diluted earnings per share were $.57 for the firs
t six months ended August 28, 2005, compared to $.45
for last year’s first six months.
Brian Shore, Park’s President and CEO, said, “The
condition of the global markets for our electronic
materials products during our second quarter was si
milar to the condition of those markets during
the prior several quarters. Although the global elect
ronics markets which we serve seem to have
improved to some degree over the last few weeks,
we do not have an opinion as to whether those
improvements will continue. I would like to remi
nd you once again that our short-term visibility
into the global electronics markets is very lim
ited. The markets for our advanced composite
materials products were strong during the second quart
er as we expected, and we believe that that
strength will persist through the third quarter.”
Brian Shore concluded, “We continue to focus a
significant amount of our energy and time toward
reinventing ourselves into a Technology Company
and toward our Advanced Material Company growth initiatives.”
The Company will conduct 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) 289-0533.
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 11:59 p.m. EDT on Sunday, September 25, 2005. The conference call
replay can be accessed by dialing (888) 203-1112 and entering passcode 3694443 or on the Company’s
web site at www.parkelectro.com
under the caption “Investor Conference Calls”.
Any additional material financial or statistical data disclosed in the conference call will also be available
at the time of the conference call on the Company’s web site at www.parkelectro.com
under the caption
“Investor Conference Calls”
.
Park believes that an evaluation of its ongoing operations would be difficult if the disclosure of its
financial results were limited to generally accepted
accounting principles (“GAAP”) financial measures,
which include special items, such as restructuring and severance charges. Accordingly, in addition to
disclosing its financial results determined in accordance with GAAP, Park discloses non-GAAP
operating results that exclude special items in order
to assist its shareholders and other readers in
assessing the Company’s operating performance, since the Company’s on-going, normal business
operations do not include such special items. The detailed operating information presented below
reconciles the non-GAAP operating results before special items to net earnings determined in
accordance with GAAP. Such non-GAAP financial measures are provided to supplement the results
provided in accordance with GAAP.
Certain portions of this press release may be deem
ed 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” af
ter Item 7 of Park’s
Annual Report on Form 10-K for the fiscal year ended February 27, 2005.
Park Electrochemical Corp. is a global adva
nced materials company which develops and
manufactures high-technology digital and RF/microwa
ve printed circuit materials and advanced
composite materials for the electronics, military, aerospace, wireless communication, specialty and
industrial markets. The Company’s manufacturing facilities are located in Singapore, China
(currently under construction), France (two f
acilities), Connecticut, New York, Arizona and
California. The Company operates under the FiberCote™, Nelco® and Neltec® names.
Additional corporate information is available on
the Company’s web site at www.parkelectro.com.
The performance table (in thousands, except per share amounts–unaudited):
13 weeks Ended
26 weeks Ended
8/28/05
8/29/04
8/28/05
8/29/04
Sales
$52,442 $51,098 $108,118 $109,616
Net Earnings before Special Item
Special Item
Net Earnings
$ 6,057
–
$ 6,057
$ 2,947
–
$ 2,947
$ 12,444
(1,059)
$ 11,385
$ 8,968
–
$ 8,968
Basic and Diluted Earnings Per Share:
Earnings before Special Item
$0.30
$0.15
$0.62
$0.45
Special Item
–
–
(0.05)
–
Earnings Per Share
$0.30
$0.15
$0.57
$0.45
Weighted Average Shares Outstanding:
Basic
20,032 19,885 19,989 19,847
Diluted
20,223 20,112 20,149 20,090
The comparative balance sheets (in thousands):
8/28/05
(unaudited)
2/27/05
Assets
Current Assets
Cash and Marketable Securities
$199,901
$189,578
Accounts Receivable, Net
32,260
35,722
Inventories
14,550
15,418
Other Current Assets
5,586
2,944
Total Current Assets
252,297
243,662
Fixed Assets, Net
59,554
63,251
Other Assets
344
398
Total Assets
$312,195
$307,311
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable
$ 11,238
$ 15,121
Accrued Liabilities
18,821
20,566
Income Taxes Payable
6,709
6,474
Total Current Liabilities
36,768
42,161
Deferred Income Taxes
6,156
5,042
Liability from Discontinued Operations
17,251
17,251
Total Liabilities
60,175
64,454
Stockholders’ Equity
252,020
242,857
Total Liabilities and Stockholders’ Equity
$312,195
$307,311
Equity Per Share
$12.55
$12.19
Detailed operating information
(in thousands – unaudited):
13 Weeks Ended
26 Weeks Ended
8/28/05
8/29/04
8/28/05
8/29/04
Net Sales
$52,442
$51,098
$108,118
$109,616
Cost of Sales
40,847
41,680
84,493
86,486
%
77.9% 81.6%
78.1%
78.9%
Gross Profit
11,595
9,418
23,625
23,130
%
22.1%
18.4%
21.9%
21.1%
Selling, General and Administrative
Expenses
5,953
6,521
12,222
14,862
%
11.3% 12.7% 11.4% 13.6%
Profit from Operations
5,642
2,897
11,403
8,268
%
10.8% 5.7% 10.5% 7.5%
Other Income
1,483
776
2,819
1,427
%
2.8% 1.5% 2.6% 1.3%
Pre-Tax Operating Profit
7,125
3,673
14,222
9,695
%
13.6% 7.2% 13.2% 8.8%
Income Tax Provision
1,068
726
1,778
727
Effective Tax Rate
15.0%
19.8%
12.5%
7.5%
Net Profit Before Special Item
6,057 2,947
12,444
8,968
%
11.5% 5.8% 11.5% 8.2%
Special Item:
Restructuring charge
– – 1,059 –
%
–
–
1.0%
–
Income Tax Provision
–
–
– –
Effective Tax Rate
–
–
–
–
After-Tax Restructuring Charge
–
–
1,059 –
%
–
– 1.0%
–
After Special Item:
Earnings before Income Taxes
7,125 3,673
13,163
9,695
%
13.6%
7.2%
12.2%
8.8%
Income Tax Provision
1,068
726
1,778
727
Effective Tax Rate
15.0%
19.8%
13.5%
7.5%
Net Earnings
$ 6,057
$ 2,947
$ 11,385
$ 8,968
%
11.5%
5.8%
10.5%
8.2%