PARK ELECTROCHEMICAL REPORTS THIRD QUARTER RESULTS

Melville, New York, December 20, 2005……Park Electroch
emical Corp. (NYSE-PKE) reported sales
of $57,159,000 for its 2006 fiscal year third quarter
ended November 27, 2005 compared to sales of
$50,359,000 for the third quarter of last year. Park’s sa
les for the first nine months ended November
27, 2005 were $165,277,000 compared to sales of $159,975,000 for last year’s first nine months.
Park reported net profit before special items
of $8,233,000 for the third quarter ended November 27,
2005 compared to net profit before special items
of $4,189,000 for last fiscal year’s third quarter.
During the current year’s third quarter, the Comp
any recognized a tax benefit of $1,512,000 relating to
the reversal of valuation allowances against deferred tax assets previously recorded in the United
States. During last year’s third quarter, the Co
mpany recognized a $4,745,000 gain related to insurance
proceeds from the November 2002 accident at its
Singapore facility and a $625,000 after-tax charge for
termination benefits related to workforce reductions
at its North American and European operations.
Accordingly, net earnings were $9,745,000 for the th
ird quarter ended November 27, 2005 compared
to net earnings of $7,692,000 for last fiscal year’s third quarter ended November 28, 2004.
For the nine-month period ended November 27, 2005, Park reported net profit before special items
of $20,677,000 compared to net profit before special
items of $13,157,000 for last year’s nine-month
period. During the current year’s nine-month period,
the Company recorded an
after-tax charge of
$1,059,000 for termination benefits related to the re
duction in workforce at the its Neltec Europe
SAS subsidiary in Mirebeau, France and the $1,512,000 tax benefit referred to above. Last year’s
nine-month period ended November 28, 2004 in
cluded the gain of $4,745,000 on the insurance
settlement and the employment termination benefits charge of $625,000 described above.
Accordingly, net earnings were $21,130,000 for th
e nine-month period ended November 27, 2005
compared to net earnings of $16,660,000 for last year’s first nine-month period.
Park reported diluted earnings per share before
special items of $.41 and $1.03, respectively, for the
third quarter and nine months ended November
27, 2005 compared to $.21 and $.66, respectively, for
last year’s third quarter and nine-month period. Diluted earnings per share were $.48 and $1.05,
respectively, for the third quarter and nine m
onths ended November 27, 2005 compared to $.38 and
$.83, respectively, for last year’s third quarter and first nine-month period.
Brian Shore, Park’s President and CEO, said,
“Not too surprisingly, the condition of the global
markets for our electronic materials products duri
ng our third quarter was a little better than the
condition of those markets during our second quarter
. (Remember that our second quarter is our
“summer” quarter during which business tends to be
a little slower.) At th
is point, our visibility
regarding the condition of the electronics markets fo
r our fourth quarter is particularly poor, because
it is very difficult to anticipate how those markets
will emerge from the New Year’s holiday. On the
other hand, the markets for our advanced materials products were relatively strong during the third
quarter, and we believe that this strength will pe
rsist through our fourth quarter.” Brian Shore
concluded, “As has been the case for the last severa
l quarters, we continue to focus our attention,
energy and resources on the development and growth of our advanced material business.”
The Company will conduct a conference call to discuss its financial results at 11:00 a.m. EST today.
Forward-looking and other material information may be discussed in this conference call. The conference
call dial-in number is (877) 704-5378.
For those unable to listen to the call live, a conference call replay will be available from approximately
2:00 p.m. EST today through 11:59 p.m. EST on Saturday, December 24, 2005. The conference call
replay can be accessed by dialing (888) 203-1112 and entering passcode 2647350 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 employment termination benefits charges and the gain on the
insurance claim settlement. 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
39 weeks Ended
11/27/05
11/28/04
11/27/05
11/28/04
Sales
$57,159 $50,359 $165,277 $159,975
Net Profit before Special Items
Special Items
Net Profit
$8,233
1,512
$ 9,745
$4,189
3,503
$7,692
$20,677
453
$21,130
$13,157
3,503
$16,660
Basic Earnings Per Share:
Net Profit before Special Items
$0.41
$0.21
$1.04
$0.66
Special Items
0.07
0.17
0.02
0.17
Net Earnings
$0.48
$0.38
$1.06
$0.83
Diluted Earnings Per Share:
Net Profit before Special Items
$0.41
$0.21
$1.03
$0.66
Special Items
$0.07
$0.17
$0.02
$0.17
Net Earnings
$0.48
$0.38
$1.05
$0.83
Weighted Average Shares Outstanding:
Basic
20,099 19,901 20,026 19,866
Diluted
20,251 20,061 20,183 20,081
The comparative balance sheets (in thousands):
11/27/05
(unaudited)
2/27/05
Assets
Current Assets
Cash and Marketable Securities
$206,895
$189,578
Accounts Receivable, Net
36,944
35,722
Inventories
14,155
15,418
Other Current Assets
3,620
2,944
Total Current Assets
261,614
243,662
Fixed Assets, Net
58,503
63,251
Other Assets
2,484
398
Total Assets
$322,601
$307,311
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable
$ 14,020
$ 15,121
Accrued Liabilities
39,448
20,566
Income Taxes Payable
7,337
6,474
Total Current Liabilities
60,805
42,161
Deferred Income Taxes
5,039
5,042
Liability from Discontinued Operations
17,252
17,251
Total Liabilities
83,096
64,454
Stockholders’ Equity
239,505
242,857
Total Liabilities and Stockholders’ Equity
$322,601
$307,311
Equity Per Share
$11.91
$12.19
Detailed operating information
(in thousands – unaudited):
13 Weeks Ended
39 Weeks Ended
11/27/05
11/28/04
11/27/05
11/28/04
Net Sales
$ 57,159
$ 50,359
$ 165,277
$ 159,975
Cost of Sales
41,867
40,519
126,360
127,005
%
73.2% 80.5%
76.5%
79.4%
Gross Profit
15,292
9,840
38,917
32,970
%
26.8%
19.5%
23.5%
20.6%
Selling, General and Administrative
Expenses
6,092
6,282
18,314
21,144
%
10.7% 12.4% 11.0% 13.2%
Profit from Operations
9,200
3,558
20,603
11,826
%
16.1% 7.1% 12.5% 7.4%
Other Income
1,562
971
4,381
2,398
%
2.7% 1.9% 2.7% 1.5%
Pre-Tax Operating Profit
10,762
4,529
24,984
14,224
%
18.8% 9.0% 15.1% 8.9%
Income Tax Provision
2,529
340
4,307
1,067
Effective Tax Rate
23.5%
7.5%
17.2%
7.5%
Net Profit Before Special Items
8,233 4,189
20,677
13,157
%
14.4% 8.3% 12.5% 8.2%
Special Items:
Employment Termination
Benefits Charges
– 625 1,059 625
%
–
1.2%
0.6%
0.4%
Insurance Gain
–
4,745
–
4,745
%
–
9.4%
–
3.0%
Income Tax Provision
(1,512)
617
(1,512)
617
Effective Tax Rate
(14.0%)
15.0%
(6.0%)
15.0%
After-Tax Special Items
1,512
3,503
453
3,503
%
2.6% 7.0% 0.3% 2.2%
After Special Items:
Earnings before Income Taxes
10,762 8,649
23,925
18,344
%
18.8%
17.2%
14.5%
11.5%
Income Tax Provision
1,017
957
2,795
1,684
Effective Tax Rate
9.4%
11.1%
11.7%
9.2%
Net Earnings
9,745
7,692
21,130
16,660
%
17.0%
15.3%
12.8%
10.4%