Park Electrochemical Announces the Discontinuation of Financial Support of Its German Business

05-Feb-2004

Park Electrochemical Corp. announced that it was discontinuing its financial support of Dielektra GmbH, Park's wholly owned subsidiary located in Cologne, Germany, which supplies electronic materials to European circuit board manufacturers. The market in Europe has eroded to the point where Park believes it will not be possible, at any time in the foreseeable future, for the Dielektra business to be viable. Dielektra has required, and continues to require, substantial financial support from Park, and Park believes that its discontinuation of this support will result in the insolvency of Dielektra. Park also believes that the insolvency procedure in Germany will result in the eventual reorganization, sale or liquidation of Dielektra. Park intends to continue to service the higher technology aspects of the European digital and RF circuit board markets through its Nelco, SAS business located in Mirebeau, France, and its Neltec, SA business located in Lannemezan, France.

Park expects to record a pre-tax net charge of approximately $8 million in connection with this matter, which net charge is comprised of the write-off of assets and the recognition of certain expenses totaling approximately $25 million offset by a gain of approximately $17 million relating to the reversal of outstanding obligations of Dielektra. Park expects to incur the $25 million asset write-off and expense recognition in its 2004 fiscal year fourth quarter ending February 29, 2004. It is unclear in which period or periods the $17 million gain will be recorded. Park expects to incur cash costs of approximately $5 million in connection with the discontinuation of its financial support of the Dielektra business. After Park's discontinuation of its support of Dielektra and the recognition of this pre-tax net charge, the Dielektra business will have no further impact on the consolidated financial condition or results of operations of Park. Through the first ten months of Park's current fiscal year, Dielektra has incurred pre-tax operating losses of approximately $5.5 million. During that same ten-month period, Dielektra's sales were approximately $13.2 million. The company does not expect a significant portion of these Dielektra sales to be transferred to Nelco, SAS or Neltec, SA.

https://www.chemeurope.com/en/news/34850/park-electrochemical-announces-the-discontinuation-of-financial-support-of-its-german-business.html