EX-99.1 2 fy074qresults.txt FY07 4Q RESULTS PARK ELECTROCHEMICAL CORP. NEWS RELEASE Contact: James W. Kelly 48 South Service Road Melville, NY 11747 (631) 465-3600 PARK ELECTROCHEMICAL REPORTS FOURTH QUARTER AND FISCAL YEAR RESULTS MELVILLE, New York, May 1, 2007......Park Electrochemical Corp. (NYSE- PKE) reported sales of $59,826,000 for the fourth quarter ended February 25, 2007 compared to sales of $56,974,000 for the fourth quarter of last year. Park's sales for the fiscal year ended February 25, 2007 were $257,377,000 compared to sales of $222,251,000 for the prior year. Park reported net earnings before special items of $8,109,000 for the fourth quarter ended February 25, 2007 compared to net earnings before special items of $10,943,000 for last fiscal year's fourth quarter. The Company believes it is important to highlight that, in evaluating the quarter to quarter net earnings comparisons, the income tax provision for the 2007 fiscal year's fourth quarter was $2,430,000 compared to an income tax benefit of $399,000 for the prior fiscal year's fourth quarter. Similarly, the effective tax rate for the 2007 fiscal year's fourth quarter was 23.1% compared to a tax rate of negative 3.8% for the prior fiscal year's fourth quarter. In the fourth quarter ended February 25, 2007, the Company recorded a tax benefit of $715,000 relating to the recognition of tax credits resulting from operating losses sustained in prior years in France. In the fourth quarter ended February 26, 2006, the Company recorded a tax charge of $3,088,000 in connection with the repatriation of approximately $70 million of the accumulated earnings and profits of the Company's Nelco Products Pte. Ltd. subsidiary in Singapore and an asset impairment charge of $2,280,000 related to the write-off of construction costs for the installation of an advanced high-speed treater at the Company's Neltec Europe SAS facility in Mirebeau, France. The treater, which was installed at the Neltec Europe facility when the business environment in Europe was more suited for such a treater, has been moved to the Company's Nelco manufacturing facility in Singapore. In the 2006 fiscal year fourth quarter, the Company also recorded a benefit of $170,000 relating to the reduction of a portion of the $1,059,000 charge for employment termination benefits related to the workforce reduction at Neltec Europe in the first quarter of the 2006 fiscal year. Accordingly, net earnings were $8,824,000 for the fourth quarter ended February 25, 2007 compared to net earnings of $5,745,000 for last year's fourth quarter. For the year ended February 25, 2007, Park reported net earnings before special items of $35,002,000 compared to net earnings before special items of $31,620,000 for the prior fiscal year. The Company believes it is important to highlight that, in evaluating the year to year net earnings comparisons, the income tax provision for the 2007 fiscal year was $10,456,000 compared to an income tax provision of $3,908,000 for the prior fiscal year. Similarly, the effective tax rate for the 2007 fiscal year was 23.0% compared to a tax rate of 11.0% for the prior fiscal year. During the 2007 fiscal year, the Company recorded the tax benefit of $715,000 relating to the recognition of tax credits in France mentioned above, recorded a pre- tax charge of $1,316,000 in connection with the termination of a life insurance agreement with Jerry Shore, Park's founder and former Chairman, and recognized a $499,000 tax benefit relating to the insurance termination charge. During the 2007 fiscal year, the Company also recognized tax benefits of $3,500,000 relating to the elimination of certain valuation allowances previously established related to deferred tax assets in the United States and of $1,391,000 relating to the elimination of reserves no longer required as the result of the completion of a tax audit. During the 2006 fiscal year, the Company recorded the $3,088,000 earnings repatriation tax charge, the $2,280,000 asset impairment charge and the $889,000 net employment termination benefits charge mentioned above and recognized a tax benefit of $1,512,000 relating to the elimination of certain valuation allowances previously established related to deferred tax assets in the United States. Accordingly, net earnings were $39,791,000 for the year ended February 25, 2007 compared to net earnings of $26,875,000 for the year ended February 26, 2006. Park reported diluted earnings per share before special items of $.40 for the fourth quarter ended February 25, 2007 compared to $.54 for last year's fourth quarter. Diluted earnings per share after special items were $0.44 for the quarter ended February 25, 2007 compared to $0.28 for the quarter ended February 26, 2006. Diluted earnings per share before special items were $1.72 for the year ended February 25, 2007 compared to $1.57 for the year ended February 26, 2006. Diluted earnings per share after special items were $1.96 for the year ended February 25, 2007 compared to $1.33 for the year ended February 26, 2006. The Company believes it is important, in evaluating quarter to quarter and year to year earnings per share comparisons, to consider the significant differences in income tax provisions and effective tax rates for the respective periods. Brian Shore, Park's President and CEO, said, "I will not comment at this time on our financial performance for the 2007 fiscal year. I will leave it to others to do that. However, I would like to state that, in my opinion, Park's people did an outstanding job for our shareholders in the 2007 fiscal year." 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 (888) 695-0609. 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 Saturday May 5, 2007. The conference call replay can be accessed by dialing (888) 203-1112 and entering passcode 9947120 or on the Company's website 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 tax benefits, the earnings repatriation tax charge, the asset impairment charge, the insurance arrangement termination charge and the employment termination benefits charge. 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 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 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 raw materials and 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. Additional corporate information is available on the Company's website at www.parkelectro.com. The performance table (in thousands, except per share amounts-unaudited): 13 weeks ended 52 weeks ended 2/25/07 2/26/06 2/25/07 2/26/06 Sales $59,826 $56,974 $257,377 $222,251 Net Earnings before Special Items $8,109 $10,943 $35,002 $31,620 Special Items 715 (5,198) 4,789 (4,745) Net Earnings $8,824 $5,745 $39,791 $26,875 Basic and Diluted Earnings per Share: Basic Earnings before Special Items $0.40 $0.54 $1.74 $1.58 Special Items 0.04 (0.25) 0.23 (0.24) Basic Earnings per Share $0.44 $0.29 $1.97 $1.34 Diluted Earnings before Special Items $0.40 $0.54 $1.72 $1.57 Special Items 0.04 (0.26) 0.24 (0.24) Diluted Earnings per Share $0.44 $0.28 $1.96 $1.33 Weighted Average Shares Outstanding Basic 20,194 20,109 20,175 20,047 Diluted 20,283 20,291 20,317 20,210 The comparative balance sheets (in thousands): 2/25/07 2/26/06 Assets Current Assets Cash and Marketable Securities $208,775 $199,652 Accounts Receivable, Net 39,418 35,964 Inventories 15,090 15,022 Other Current Assets 3,049 3,023 Total Current Assets 266,332 253,661 Fixed Assets, Net 49,895 54,370 Other Assets 5,695 3,281 Total Assets $321,922 $311,312 Liabilities and Stockholders'Equity Current Liabilities Accounts Payable $13,589 $13,259 Accrued Liabilities 13,058 14,651 Income Taxes Payable 5,918 10,817 Total Current Liabilities 32,565 38,727 Deferred Income Taxes 4,294 5,193 Restructuring Accruals-non-current 3,715 4,718 Liabilities from Dicontinued Operations 17,181 17,251 Total Liabilities 57,755 65,889 Stockholders' Equity 264,167 245,423 Total Liabilities and Stockholders Equity $321,922 $311,312 Equity Per Share $13.08 $12.20 Detailed operating information (in thousands-unaudited): 13 Weeks Ended 52 Weeks Ended 2/25/07 2/26/06 2/25/07 2/26/06 Net Sales $59,826 $56,974 $257,377 $222,251 Cost of Sales 45,367 41,290 193,270 167,650 % 75.8% 72.5% 75.1% 75.4% Gross Profit 14,459 15,684 64,107 54,601 % 24.2% 27.5% 24.9% 24.6% Selling, General and Administrative Expenses 6,341 6,815 26,682 25,129 % 10.6% 11.9% 10.4% 11.3% Profit from Operations 8,118 8,869 37,425 29,472 % 13.6% 15.6% 14.5% 13.3% Other Income 2,421 1,675 8,033 6,056 % 4.0% 2.9% 3.1% 2.7% Pre-Tax Operating Profit 10,539 10,544 45,458 35,528 % 17.6% 18.5% 17.7% 16.0% Income Tax Provision 2,430 (399) 10,456 3,908 Effective Tax Rate 23.1% -3.8% 23.0% 11.0% Net Earnings before Special Items 8,109 10,943 35,002 31,620 % 13.6% 19.2% 13.6% 14.2% Special Items: Impairment Charge - 2,280 - 2,280 % - 4.0% - 1.0% Employment Termination Benefits - (170) - 889 Charge % - -0.3% - 0.4% Insurance Arrangement Termination Charge - - 1,316 - % - - 0.5% - Income Tax Provision(Benefit) (715) - (6,105) (1,512) Effective Tax Rate -6.8% - -13.4% -4.3% Income Tax Charge on Repatriated Earnings - 3,088 - 3,088 Effective Tax Rate - 29.3% - 8.7% Total Special Items (715) 5,198 (4,789) 4,745 % -1.0% 9.1% -2.0% 2.1% After Special Items: Earnings before Income Taxes 10,539 8,434 44,142 32,359 % 17.6% 14.8% 17.2% 14.6% Income Tax Provision (Benefit) 1,715 2,689 4,351 5,484 Effective Tax Rate 16.3% 31.9% 9.9% 17.0% Net Earnings 8,824 5,745 39,791 26,875 % 14.7% 10.1% 15.5% 12.1% # # # # #