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Lake Success, N.Y. -- Park Electrochemical Corp. has realigned its North American FR-4 business operations located in Newburgh, N.Y. and Fullerton, Calif. 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, N.Y. and Fullerton, Calif. and will be administered principally from Fullerton. As part of the realignment, the Newburgh operation will be scaled down to a smaller focused operation and the Fullerton 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 facility and its customers located in eastern North America from its Newburgh facility.
In addition, the company has arranged to supply all of the North American circuit board manufacturing locations of Sanmina-SCI Corp., the company's largest customer, with FR-4 product manufactured at Fullerton. The company expects to be the principal supplier of FR-4 products to all of Sanmina-SCI's North American circuit board manufacturing locations.
This North American realignment does not affect Neltec Inc., the company's business unit located in Tempe, Ariz., 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 facility and significant workforce increases at the company's Fullerton facility. The company hopes to be able to transfer some of the Newburgh employees to the Fullerton operation. After the Newburgh 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 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 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.
Park Electrochemical Corp. is a leading global designer and producer of electronic materials used to fabricate complex multilayer printed circuit boards and interconnection systems. For more information, visit www.parkelectro.com or www.parknelco.com.