PARK ELECTROCHEMICAL CORP.
NEWS RELEASE
Contact: Murray Stamer 5 Dakota Drive
Lake Success, NY 11042
(516) 354-4100
PARK ELECTROCHEMICAL ANNOUNCES REALIGNMENT OF
NORTH AMERICAN FR-4 BUSINESS OPERATIONS
Lake Success, New York, April 23, 2003.Park Electrochemical
Corp. (NYSE - PKE) announced the realignment of its North
American FR-4 business operations located in Newburgh, New
York and Fullerton, California and the establishment of a new
business unit called "Nelco/North America". Nelco/North
America will include the company's FR-4 manufacturing
operations located in Newburgh, New York and Fullerton,
California and will be administered principally from
Fullerton, California. As part of the realignment, the
Newburgh, New York operation will be scaled down to a smaller
focused operation and the Fullerton, California operation
will be significantly scaled up to a larger volume operation.
The company intends to supply its customers located in
central and western North America from its Fullerton,
California facility and its customers located in eastern
North America from its Newburgh, New York facility. In
addition, the company has arranged to supply all of the North
American circuit board manufacturing locations of Sanmina-SCI
Corporation, the company's largest customer, with FR-4
product manufactured at Fullerton, California. The company
expects to be the principal supplier of FR-4 products to all
of Sanmina-SCI Corporation's North American circuit board
manufacturing locations. This North American realignment
does not affect Neltec, Inc., the company's business unit
located in Tempe, Arizona, which specializes in high
performance and RF/microwave materials. Neltec will continue
to operate as a separate business unit of the company, and
Neltec will continue to supply these high performance and
RF/microwave materials directly to the company's customers in
North America.
As part of the North American realignment, there will be
significant workforce reductions at the company's Newburgh,
New York facility and significant workforce increases at the
company's Fullerton, California facility. The company hopes
to be able to transfer some of the Newburgh, New York
employees to the Fullerton, California operation. After the
Newburgh, New York operations have been scaled back, a large
portion of the facility will be mothballed. The company will
have the flexibility in the future to scale back up the
Newburgh, New York facility if the opportunity to do so
presents itself. As the result of this North American
realignment, the company expects to report an impairment
charge of approximately $50 million in the company's fourth
quarter ended March 2, 2003 and additional charges totaling
approximately $8 million to $10 million in the first and
second quarters of the company's current fiscal year.
The company also announced that John Jongebloed, who will
continue to serve as Senior Vice President of Global
Logistics for Park Electrochemical and to report directly to
Brian Shore, will take on the additional responsibility of
overseeing and supervising the Newburgh, New York facility
and operations. The company does not plan to make any
changes to its North American customer account management or
field technical service organizations as part of the
realignment. The realignment is designed to help the company
achieve improved operating and cost efficiencies in its North
American FR-4 business, but it is also designed to help the
company better service all of the company's existing North
American customers. The company does not contemplate losing
any North American customers as a result of the North
American realignment. The company has recently gained
significant amounts of market share with two of its major
customers in North America.
Brian Shore, Park's President and CEO, said, "Of course, we
are very pleased that we will be significantly scaling up and
increasing our workforce size at our Fullerton, California
facility. Unfortunately, our happiness about California only
tempers to some extent our sorrow regarding the human impact
of the scaling back of our Newburgh, New York operation and
the workforce reductions which will occur there. I hope that
a large number of our Newburgh, New York employees will soon
reemerge as Fullerton, California employees. I want everyone
to know that these decisions regarding the realignment of our
North American FR-4 operations have not been made lightly and
have been made only after very careful consideration. I also
want everyone to know that these decisions have been made in
no respect to serve any short-term interest or to improve our
company's financial performance over the next two or three
quarters. These decisions have been based exclusively upon
our long-term thinking and our long-term planning for the
future success of our business. We believe these decisions
are very much in the long-term interests of our business and
our customers in North America. There is no doubt in my mind
that this realignment of our North American business
operations will allow us to better serve our North American
customers in the future and will help ensure our long-term
success as a business in North America."
Brian Shore concluded, "Finally, to our Newburgh, New York
employees who will not remain with our company, I would like
to thank you for your dedication and commitment over the
years and to wish you the very best in the future. Good luck
to each of you. I will miss you very much."
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 other 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.
Park Electrochemical Corp. is a leading global designer and
producer of electronic materials used to fabricate complex
multilayer printed circuit boards and interconnection
systems. Park specializes in advanced materials for high
layer count circuit boards and high speed digital broadband
telecommunications, internet and networking applications.
Park's electronic materials business operates through fully
integrated business units in Asia, Europe and North America.
The Company's manufacturing facilities are located in
Singapore, China, Germany, France, Connecticut, New York,
Arizona and California. Park's electronic materials
business operates under the "Nelco" name.
Additional corporate information is available on the World
Wide Web at www.parkelectro.com and www.parknelco.com.
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