Park Electrochemical Corp. Reports Fourth Quarter and Fiscal Year Results

Park Electrochemical Corp. (NYSE-PKE) reported sales of $60,581,000 for the fourth quarter ended March 2, 2008 compared to sales of $59,826,000 for the fourth quarter of last year. Park’s sales for the fiscal year ended March 2, 2008 were $241,852,000 compared to sales of $257,377,000 for the prior year. Park reported net earnings before special items of $9,193,000 for the fourth quarter ended March 2, 2008 compared to net earnings before special items of $8,109,000 for the fourth quarter of last year. In the fourth quarter ended March 2, 2008, the Company recorded a charge of $1,362,000 for the restructuring and workforce reduction at the Company’s Neltec Europe SAS electronic materials business unit located in Mirebeau, France and a tax benefit of $1,500,000 relating to the reduction of tax reserves. 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. Accordingly, net earnings were $9,331,000 for the fourth quarter ended March 2, 2008 compared to net earnings of $8,824,000 for last year’s fourth quarter. For the year ended March 2, 2008, Park reported net earnings before special items of $34,541,000 compared to net earnings before special items of $35,002,000 for the prior fiscal year. During the 2008 fiscal year, the Company recorded the charge of $1,362,000 for the restructuring and workforce reduction at the Company’s Neltec Europe SAS business unit mentioned above and the tax benefit of $1,500,000 from the reduction of tax reserves also mentioned above. During the 2007 fiscal year, the Company recorded a pre-tax charge of $1,316,000 in connection with the termination of an insurance arrangement and recognized a tax benefit of $499,000 relating to the insurance termination charge, a tax benefit of $3,500,000 relating to the elimination of valuation allowances, a tax benefit of $1,391,000 relating to the elimination of reserves no longer required and the tax benefit of $715,000 relating to the recognition of tax credits in France mentioned above. Accordingly, net earnings were $34,679,000 for the year ended March 2, 2008 compared to net earnings of $39,791,000 for year ended February 25, 2007. As previously reported, during the 2008 fiscal year third quarter, the Company incurred approximately $500,000 in out-of-pocket expenses relating to the Company’s due diligence efforts in preparation for its participation in the bidding for certain of the assets and business of Columbia Aircraft Manufacturing Corporation, and the Company subsequently discontinued its participation in such bidding. Park reported diluted earnings per share before special items of $0.45 and $1.70, respectively, for the fourth quarter and year ended March 2, 2008 compared to diluted earnings per share before special items of $0.40 and $1.72 for the fourth quarter and year end February 25, 2007. Diluted earnings per share after special items were $.46 and $1.70, respectively, for the fourth quarter and year ended March 2, 2008 compared to diluted earnings per share after special items of $0.44 and $1.96 for the fourth quarter and year end February 25, 2007. 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) 768-6544. 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 Monday, May 12, 2008. The conference call replay can be accessed by dialing (888) 203-1112 and entering passcode 9233794 or on the Company's web site at www.parkelectro.com/investor/investor.html. 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/investor/investor.html. 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 restructuring and workforce reduction charge and the insurance arrangement termination 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. Park Electrochemical Corp. is a global advanced materials company which develops and manufactures high-technology digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure and high-end computing markets and advanced composite materials, structures and components principally for the aerospace markets. Park’s core capabilities are in the areas of polymer chemistry formulation, coating technology and advanced composite structures and component design and fabrication. The Company’s manufacturing facilities are located in Singapore, China, France, Connecticut, New York, Kansas (under construction), Arizona, California and Washington. 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):         14 Weeks Ended 3/2/08 13 Weeks Ended 2/25/07 53 Weeks Ended 3/2/08 52 Weeks Ended 2/25/07   Sales $ 60,581 $ 59,826 $ 241,852 $ 257,377   Net Earnings before Special Items $ 9,193 $ 8,109 $ 34,541 $ 35,002 Special Items 138 715 138 4,789 Net Earnings $ 9,331 $ 8,824 $ 34,679 $ 39,791   Basic and Diluted Earnings per Share: Basic Earnings before Special items $ 0.45 $ 0.40 $ 1.70 $ 1.74 Special Items   .01   .04   .01   0.23 Basic Earnings per Share $ 0.46 $ 0.44 $ 1.71 $ 1.97   Diluted Earnings before Special Items $ 0.45 $ 0.40 $ 1.70 $ 1.72 Special Items   .01   .04   -   0.24 Diluted Earnings per Share $ 0.46 $ 0.44 $ 1.70 $ 1.96   Weighted Average Shares Outstanding: Basic 20,347 20,194 20,305 20,175 Diluted 20,362 20,283 20,364 20,317 The comparative balance sheets (in thousands):     3/2/08 2/25/07 Assets Current Assets Cash and Marketable Securities $ 213,978 $ 208,775 Accounts Receivable, Net 37,466 39,418 Inventories 14,049 15,090 Other Current Assets   5,546   3,049   Total Current Assets 271,039 266,332   Fixed Assets, Net 47,188 49,895 Other Assets   9,180   5,695   Total Assets $ 327,407 $ 321,922   Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $ 12,828 $ 13,589 Accrued Liabilities 13,314 13,058 Income Taxes Payable   5,837   2,354   Total Current Liabilities 31,979 29,001   Deferred Income Taxes 4,851 4,294 Other Liabilities 4,224 7,279 Liabilities from Discontinued Operations   17,181   17,181   Total Liabilities 58,235 57,755   Stockholders’ Equity   269,172   264,167   Total Liabilities and Stockholders' Equity $ 327,407 $ 321,922   Equity Per Share $ 13.23 $ 13.08 Detailed operating information (in thousands) - Unaudited         14 Weeks 13 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended 3/2/08 2/25/07 3/2/08 2/25/07   Net Sales $ 60,581 $ 59,826 $ 241,852 $ 257,377   Cost of Sales 44,747 45,367 179,398 193,270       % 73.9% 75.8% 74.2% 75.1%   Gross Profit 15,834 14,459 62,454 64,107       % 26.1% 24.2% 25.8% 24.9%   Selling, General and Administrative Expenses 7,356 6,341 27,159 26,682       % 12.1% 10.6% 11.2% 10.4%   Earnings from Operations 8,478 8,118 35,295 37,425       % 14.0% 13.6% 14.6% 14.5%   Other Income 2,381 2,421 9,361 8,033       % 3.9% 4.0% 3.9% 3.1%   Earnings Before Income Taxes 10,859 10,539 44,656 45,458       % 17.9% 17.6% 18.5% 17.7%   Income Tax Provision 1,666 2,430 10,115 10,456 Effective Tax Rate 15.3% 23.1% 22.7% 23.0%   Net Earnings before Special Items 9,193 ,109 34,541 35,002       % 15.2% 13.6% 14.3% 13.6%   Special Items:   Restructuring Charge 1,362 - 1,362 -       % 2.2% - 0.6% -   Insurance Arrangement Termination Charge - - - 1,316       % - - - 0.5%   Income Tax Provision (Benefit) (1,500) (715) (1,500) (6,105) Effective Tax Rate (13.8%) (6.8%) (3.4%) (13.4%)   After Special Items:   Earnings before Income Taxes 9,497 10,539 43,294 44,142       % 15.7% 17.6% 17.9% 17.2%   Income Tax Provision (Benefit) 166 1,715 8,615 4,351 Effective Tax Rate 1.8% 16.3% 19.9% 9.9%   Net Earnings 9,331 8,824 34,679 39,791       % 15.4% 14.7% 14.3% 15.5%