Park Electrochemical reports Q3 results
Dec 24, 2002
Park Electrochemical Corp. (NYSE: PKE - News) reported sales of $53,587,000 for the third quarter ended December 1, 2002 compared to $52,625,000 for the third quarter of last year. Park's sales for the first nine months were $167,049,000 compared to last year's first nine months' sales of $173,470,000. Park reported a net loss of $263,000 (before a non-recurring, pre-tax loss of $4,794,000 related to the closure of its Nelco U.K. facility and other non-recurring charges discussed below) for the third quarter compared to a net loss of $3,985,000 for last year's third quarter. For the nine months ended December 1, 2002, Park reported a net loss of $1,532,000 (before net non-recurring, pre-tax charges of $1,624,000), compared to a net loss of $10,904,000 for last year's first nine months (before non-recurring, pre-tax charges of $19,434,000). Before the non-recurring items, Park's basic and diluted losses per share were $.01 for the third quarter and $.08 for the nine months ended December 1, 2002, compared to losses per share, before non-recurring charges, of $.20 and $.56 basic and diluted, respectively, for the same periods last year.As previously reported on October 2, 2002, the Company was initiating steps to close its Nelco U.K. manufacturing facility located in Skelmersdale, England. The closure of the Nelco U.K. facility has now been completed, and the Company recorded a non-recurring, pre-tax charge of $4,674,000 for the cost of closing this facility. In addition, the Company recorded a non-recurring, pre-tax charge of $120,000 during the quarter for severance charges at a North American business unit.Brian Shore, Park's President and CEO, said, "Except for the devastating human loss and human impact which many of us (including me) will never really get over, our Nelco Singapore business is doing remarkably well under the circumstances. With the exception of the treating department, the facility has been in full operation for the last three weeks. One of the three remaining treaters at the Nelco Singapore facility has been back in full operation for over a week, and we expect to restart the second treater in the very near future. The third remaining treater sustained some damage to its control panel (the treater itself is not damaged), and it will take a little while longer to repair this damage and restart the third treater. In any event, based upon our current business levels in Asia, two treaters are sufficient to cover Nelco Singapore's current prepreg requirements. In the meantime, we will continue to supplement Nelco Singapore's prepreg requirements with prepreg produced in North America and Europe. I must tell you that our Nelco Singapore people are doing amazingly well under the circumstances. We have been back to work focusing on the investigation into the tragedy and focusing on running our business in Singapore every day. The investigation is essentially complete, and we are in the process of implementing changes to our treater operations around the world as a result of what we have learned. We have also offered to share what we have learned with our competitors in order to help them be more safe as well. As you recall, I previously informed you that two of our employees were seriously injured in the accident, and that one of these two employees died from his injuries. This tragic loss of life has changed our lives forever and many of us will never really recover deep down inside. The wonderful news is that the other seriously injured employee has recovered miraculously well and has been discharged from the hospital and now is resting at home. Perhaps some of your prayers were answered in the form of this miraculous recovery. In any event, the bottom line is that we are moving on with our lives, we are back to work and we are completely focused on the job at hand in Singapore."Commenting on the third quarter results, Brian Shore said, "The global electronics market continued to be very depressed during our third quarter, and the market may have even dipped a little bit during the period in North America. Our visibility into the short-term future continues to be essentially non-existent, and we do not have any conviction as to when and how the global electronics recovery will occur. As I have said over and over again, it does not really matter to us when the recovery occurs, because we are not sitting around waiting for it to happen. We are working our hardest every day to build the fundamental value of our company by making things better for our business one piece at a time. We are continuing to roll out new products, we are continuing to upgrade and refine our new manufacturing technology and, most importantly, we are continuing to do everything within our power to help our customers succeed."Brian Shore concluded, "There is a lot of talk in our industry now about who will survive and who will not. The attrition factor definitely seems to be at play at this time. We are not smart enough to offer any brilliant commentary on or insights into the global economic trends in the electronics industry. We cannot speak for other companies and what their intentions might be. What I can tell you is that we intend to be around for our customers for the long haul. We do not think in terms of survival. We think in terms of what we can do each and every day to make our business better and to help our customers succeed."The Company will host 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 (800) 231-9012.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 2:00 p.m. EST on Wednesday, December 25, 2002. The conference call replay can be accessed by dialing (888) 203-1112 and entering passcode 204070.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 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 March 3, 2002.