Exhibit 99.1
[Parlex Logo] One Parlex Place, Methuen, MA 01844, (978)946-2564
news. . .
CONTACT:
Jon Kosheff
Chief Financial Officer
(978)946-2591
NASDAQ SYMBOL "PRLX"
FOR IMMEDIATE RELEASE
Parlex Reports Financial Results for Third Quarter of FY 2005
Methuen MA, May 12, 2005 - Parlex Corporation (PRLX) today reported
financial results for the third quarter of fiscal year 2005. Revenues
increased 26% to $29.1 million compared with $23.2 million for the same
period in the previous year. Revenues for the third quarter decreased 4%
sequentially from $30.2 million for the prior quarter.
Operating loss was $1.5 million for the quarter compared to an operating
loss of $1.9 million for the same period in the prior year. Net loss for
the quarter, attributable to common stockholders, was $2.3 million or ($.36)
per diluted share versus $2.6 million or ($.40) per diluted share for the
third quarter of fiscal 2004. The net loss in the third quarter of 2005
includes cash and non-cash related interest expense associated with our re-
financing activities and minority interest associated with our partner in
China. No tax benefit was recorded on U.S. net operating losses in the
quarter.
Revenues for the first nine months of fiscal 2005 were $90.8 million versus
$66.4 million for the same period in fiscal 2004, an increase of 37%. The
net operating loss for the nine months of fiscal 2005 was $2.0 million
compared to $4.6 million in the prior year. Net losses attributable to
common shareholders totaled $4.7 million or ($0.73) per
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diluted share for the first nine months of fiscal 2005 versus $6.6 million
or ($1.04) for the same period last year.
Peter J. Murphy, President and Chief Executive Officer, stated "Third
quarter revenues were down sequentially due in part to projected seasonality
in the computer peripheral market. Sales were further impacted by delayed
orders from our major smart card customer due to a technical issue with
their product. This resulted in a virtual shutdown of our dedicated chip
substrate line for the entire quarter. Both of these products are
manufactured in Parlex facilities in China. In addition, our Chinese
operations were shutdown for one week in observance of the Chinese New Year.
Our new computer peripheral products are now shipping at full rate and the
smart card substrate line has returned to projected production levels. As a
result, we anticipate significant sequential growth this quarter.
Income for the third fiscal quarter was negatively impacted by the reduced
shipments in China, below forecast performance in our U.S. multilayer
operation, and higher than expected public company costs. For the current
fourth fiscal quarter, we fully expect a profit from operations.
Bookings, or sales orders, for the period were $33.6 million resulting in a
book-to-bill ratio of 1.15. Strength in bookings was evident in the
military sector with new business from Raytheon, General Dynamics and
Delphi. The automotive sector is building momentum as we garnered new
orders for three applications; infotainment, lighting systems and anti lock
brake sensors, to be produced in China. This is key to our strategy as we
develop the proper mix to offset third quarter seasonality that we have
experienced in markets currently serviced by our Asian operations. Our
medical business remains strong, particularly for a variety of nerve sensors
we produce for Neurometrics.
The Company continues to add capacity and capability to our China operations
where we expect to finish the year with sales topping $50 million and
operating income of approximately $5 million. This represents growth of
approximately 47% in revenues and
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85% in operating income. We believe we can replicate this revenue growth in
fiscal year 2006.
The European and North American operations will see revenues climb at a more
modest 15-20% in fiscal year 2005 with similar growth projected for fiscal
year 2006. While income in these regions is not yet at an acceptable level,
we expect sequential improvement in the fourth quarter and throughout the
next fiscal year."
Interested parties are invited to participate in Parlex's quarterly
teleconference, which will be held Friday, May 13, 2005 at 10:00 AM Eastern
Time. To participate in the conference, dial 800-657-1269 and ask for the
Parlex Quarterly Conference. This call is being webcast by CCBN and can
also be accessed at Parlex Corporation's web site at www.parlex.com by
clicking on "News and Events" on the home page.
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 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
inventory; (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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