Exhibit 99.1
CONTACT:
Jon Kosheff
Chief Financial Officer
(978)946-2591
NASDAQ SYMBOL "PRLX"
Parlex Corporation Reports Third Quarter Results
Methuen, Massachusetts (May 13, 2003). . . Parlex Corporation reported
revenues of $19.4 million in the quarter ended March 30, 2003 versus $21.3
million for the same period in the previous fiscal year, a 9% decrease.
Loss from operations was $5.7 million ($0.90 per share) versus $3.3 million
($0.52 per share) for the same period of the preceding year. No tax
benefit was recorded associated with U.S. operating losses and a full
valuation reserve has been established for all U.S. deferred tax assets.
As a result, the Company reported a net loss for the quarter of $5.9
million or $.94 per share versus $1.7 million or $0.26 per share for the
same period last year.
For the first three quarters of fiscal year 2003 revenues were $64.0
million versus $63.6 million in the corresponding fiscal 2002 period. The
net operating loss for the first three quarters was $10.4 million ($1.65
per share) compared to $9.7 million ($1.55 per share) in the prior year.
Peter J. Murphy, Parlex president and CEO stated, "Revenues for the period
were lower than the prior quarter as a result of shutting down domestic
PALFlex operations and seasonality associated with our China operation.
Additionally, a major computer program ended its product life cycle with
replacement computer products not yet commencing production. Revenues are
expected to recover in the current fourth quarter as the third quarter
backlog grew to over $22 million.
As previously reported, we shut down PALFlex, our domestic high volume
automotive line. The primary cause of the significant loss for the period
was the termination of this operation which resulted in an operational loss
of $3.2 million. The loss included an
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inventory write down, severance of 60 people and fixed asset impairment.
We have transferred PALFlex production to China where we expect to achieve
profitability while reducing our domestic losses by $4 million annually.
Bookings were approximately $21.0 million for the quarter including
strength in defense related electronics, computer peripherals and medical
products. Strong bookings were recorded in April with orders at $9.6
million.
We were unsuccessful in closing our sale leaseback transaction reported
last quarter due to a series of complex tax issues which could not be
resolved by the purchasing party. We have since signed a modified purchase
and sale agreement which we expect to close later this quarter. We also
have a commitment letter from a major domestic financial institution to
provide a $10,000,000 working capital line of credit that is subject to
closing the sale leaseback agreement. These actions will provide the
liquidity necessary to fund our operations as we transition back to
profitability.
Although we have commenced shipping, we were somewhat delayed in the volume
production launch of our Smart Card substrate project. High volume
production of this new product line is anticipated by the end of the
current quarter. This will likely delay our return to profitability but we
still expect a dramatic improvement in operating results including a
considerable increase in revenues and a reduction of our operating loss to
under $500,000."
About Parlex
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Parlex Corporation is a world leader in the design and manufacture of
flexible, interconnect products. Parlex produces custom flexible circuits
and laminated cables utilizing proprietary processes and patented
technologies, which are designed to satisfy the unique requirements of a
wide range of customers. Its manufacturing facilities are located in the
United States, China, Mexico and the United Kingdom.
Forward Looking Statements
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This release contains "forward-looking statements" as defined under the
Federal Securities Laws. Actual results could differ materially from those
projected in the forward-looking
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statements as a result of certain risk factors, including but not limited
to: (i) further adverse changes in general economic conditions; (ii)
further delays or reductions in the spending of the industry sectors we
serve; (iii) the Company's ability to effectively manage operating costs
and increase operating efficiencies; (iv) further declines in revenues; (v)
insufficient, excess or obsolete inventor; (vi) competitive factors,
including but not limited to pricing pressures, in the flexible
interconnect markets; (vii) component quality and availability; (viii)
rapid technological and market change and the transition to new products;
(ix) the relative and varying rates of product price and component cost
declines; (x) the effects of war or acts of terrorism, including the effect
on the economy generally, on particular industry segments, on
transportation and communication systems and on the Company's ability to
manage logistics in such an environment, including receipt of components
and distribution of products; (xi) the ability to attract and retain highly
qualified employees; (xii) the uneven pattern of quarterly sales; (xiii)
fluctuating currency exchange rates; (xiv) risks associated with strategic
investments and acquisitions; (xv) the Company's ability to execute on its
plans; and (xvi) other one-time events and other important factors
disclosed previously and from time to time in its filings with the U.S.
Securities and Exchange Commission.
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PARLEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
March 30, 2003 March 31, 2002 March 30, 2003 March 31, 2002
-------------- -------------- -------------- --------------
<s> <c> <c> <c> <c>
REVENUES $19,438,542 $21,278,286 $ 64,028,080 $63,598,256
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COSTS AND EXPENSES:
Cost of products sold 21,224,242 21,285,005 63,934,553 63,175,513
Selling, general and administrative expenses 3,886,742 3,252,309 10,480,675 10,170,700
----------- ----------- ------------ -----------
TOTAL COSTS AND EXPENSES 25,110,984 24,537,314 74,415,228 73,346,213
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OPERATING LOSS (5,672,442) (3,259,028) (10,387,148) (9,747,957)
OTHER INCOME, Net 6,213 8,879 (42,601) 231,368
INTEREST EXPENSE (242,932) (145,755) (670,353) (455,417)
----------- ----------- ------------ -----------
LOSS FROM OPERATIONS BEFORE BENEFIT FROM
INCOME TAXES AND MINORITY INTEREST (5,909,161) (3,395,904) (11,100,102) (9,972,006)
(PROVISION FOR) BENEFIT FROM INCOME TAXES (20,522) 1,715,852 (6,154,329) 3,988,802
----------- ----------- ------------ -----------
LOSS BEFORE MINORITY INTEREST (5,929,683) (1,680,052) (17,254,431) (5,983,204)
MINORITY INTEREST 656 12,604 34,244 472,728
----------- ----------- ------------ -----------
NET LOSS $(5,929,027) $(1,667,448) $(17,220,187) $(5,510,476)
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BASIC AND DILUTED LOSS PER SHARE ($0.94) ($0.26) ($2.73) ($0.87)
=========== =========== ============ ===========
WEIGHTED AVERAGE SHARES - BASIC AND DILUTED 6,312,216 6,303,216 6,307,337 6,303,216
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PARLEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 30, 2003 June 30, 2002
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<s> <c> <c>
ASSETS
Current Assets $34,981,256 $ 44,475,393
Property, Plant & Equipment, Net 52,281,752 55,981,835
Goodwill - Net and Other Assets 2,367,122 5,596,701
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Total Assets $89,630,130 $106,053,929
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $34,816,460 $ 21,717,809
Non-Current Liabilities 1,342,290 13,764,795
Minority Interest 395,961 430,204
Stockholders' Equity 53,075,419 70,141,121
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Total Liabilities & Stockholders' Equity $89,630,130 $106,053,929
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