PARK ELECTROCHEMICAL PRESIDENT AND CEO COMMENTS ON MARKET REACTION TO PARK’S FISCAL YEAR 2007 FIRST QUARTER EARNINGS ANNOUNCEMENT
Melville, New York, June 30, 2006……Park Electrochemical Corp. (NYSE-PKE) President and CEO, Brian Shore, commented on the market reaction to Park’s earnings announcement for its 2007 fiscal year first quarter ended May 28, 2006. Mr. Shore said, “Although we are generally very reluctant to comment on trading activity relating to Park’s stock, I feel compelled to do so in this case, because, in my opinion, the market reaction to our first quarter earnings announcement is absurd. As far as we are concerned, our first quarter was a very strong quarter. Nonetheless, there has been a lot of reporting about Park missing its numbers and disappointing Wall Street, and there seems to be a lot of confusion about the quarter in general! The facts are as follows:
1) During our fiscal year 2006 fourth quarter earnings conference call held May 8, 2006, we commented that Park’s tax rate would be higher in our 2007 fiscal year than it was in our 2006 fiscal year.
2) Outside of that comment, we offered no further or specific guidance regarding the tax rate for Park’s 2007 fiscal year.
3) Each one of Park’s security analysts underestimated our 2007 tax rate in their earnings estimates for Park’s 2007 fiscal year.
4) Most importantly, if Park’s analysts had used our actual first quarter tax rate of 23% to compute their earnings per share estimates for Park’s 2007 first quarter, Park’s 2007 first quarter earnings per share would have equaled or exceeded each of the analysts earnings per share estimates for the quarter!”
Brian Shore continued, “Of course, it would not have been possible for the analysts to precisely estimate our tax rate for the first quarter. And, we are in no respect blaming our analysts for underestimating our 2007 tax rate. As always, the analysts do the best they can based upon the information they have. The point here is that the only reason that our earnings per share for the first quarter were lower than the analysts’ estimates is that Park’s first quarter tax rate was higher than anticipated by the analysts.”
Brian Shore concluded, “We are issuing this new release at this time because I want the investing public to understand how we feel about our first quarter performance. Further, I want the investing public to understand that the singular reason why Park’s 2007 first quarter earnings per share were lower than the analysts’ estimates was because the analysts underestimated Park’s fiscal year 2007 tax rate! The way I see it, Park has lost a very significant amount of its market value over the last two days solely because its first quarter tax rate was higher than expected! Obviously, the investing public is free to buy, sell and trade our stock how it sees fit…and that is how it should be. In this case, however, I feel it is important that the investing public also understand our perspective on the market reaction to our first quarter earnings announcement.”
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 in Item 1A “Risk Factors” and 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 26, 2006.
Park Electrochemical Corp. is a global advanced materials company which develops and manufactures high-technology digital and RF/microwave printed circuit materials (the Nelco® product line) and advanced composite materials (the Nelcote™ product line) principally for the telecommunications and internet infrastructure, high-end computing and aerospace markets. Park’s core capabilities are in the areas of polymer chemistry formulation and coating technology. The Company’s manufacturing facilities are located in Singapore, China, France, Connecticut, New York, Arizona and California.