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Park Electrochemical Corp. Reports Third Quarter Results

MELVILLE, N.Y., Jan. 07, 2016 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $34,323,000 for the 2016 fiscal year’s third quarter ended November 29, 2015 compared to net sales of $34,679,000 for last fiscal year’s third quarter ended November 30, 2014 and net sales of $37,947,000 for the 2016 fiscal year’s second quarter ended August 30, 2015. Park’s net sales for the nine months ended November 29, 2015 were $110,099,000 compared to net sales of $125,845,000 for the nine months ended November 30, 2014.

Park reported net earnings before special items of $4,209,000 for the current year’s third quarter compared to net earnings before special items of $2,433,000 for last year’s third quarter and net earnings before special items of $4,639,000 for the current year’s second quarter. In the current year’s third quarter, the Company recorded pre-tax restructuring charges of $158,000 related to the closure in fiscal year 2013 of the Company’s Nelco Technology (Zhuhai FTZ) Ltd. facility located in the Free Trade Zone in Zhuhai, China and the closure in fiscal year 2009 of its New England Laminates Co., Inc. facility located in Newburgh, New York. In last year’s third quarter, the Company recorded pre-tax restructuring charges of $496,000 in connection with cost reduction initiatives in the United States and $140,000 in connection with the aforementioned facility closures. In the current year’s second quarter, the Company recorded pre-tax restructuring charges of $91,000 in connection with the aforementioned facility closures. Accordingly, net earnings for the current year’s third quarter were $4,109,000 compared to $2,031,000 for last year’s third quarter and $4,569,000 for the current year’s second quarter.

For the nine-month period ended November 29, 2015, Park reported net earnings before special items of $13,715,000 compared to net earnings before special items of $16,027,000 for last fiscal year’s first nine-month period. The current year’s nine-month period included pre-tax restructuring charges of $373,000 related to the facility closures mentioned above. Last year’s nine-month period included pre-tax restructuring charges of $496,000 in connection with the cost reduction initiatives mentioned above and $490,000 related to the facility closures mentioned above. In addition, the Company recorded a pre-tax charge of $260,000 during the nine-month period ended November 30, 2014 for additional fees incurred in connection with the 2014 fiscal year-end audit. Accordingly, net earnings were $13,455,000 for the current year’s nine-month period compared to net earnings of $15,202,000 for last year’s nine-month period.

Park reported basic and diluted earnings per share before special items of $0.21 for the current year’s third quarter compared to basic and diluted earnings per share before special items of $0.12 for last year’s third quarter and basic and diluted earnings per share before special items of $0.23 for the current year’s second quarter. Basic and diluted earnings per share were $0.20 for the current year’s third quarter compared to basic and diluted earnings per share of $0.10 for last year’s third quarter and basic and diluted earnings per share of $0.23 for the current year’s second quarter.

Park reported basic and diluted earnings per share before special items of $0.67 for the current year’s first nine months compared to basic and diluted earnings per share before special items of $0.77 and $0.76, respectively, for last year’s nine-month period. Basic and diluted earnings per share were $0.66 for the current year’s first nine months compared to basic and diluted earnings per share of $0.73 and $0.72, respectively, for last year’s nine-month period.

The Company will conduct a conference call to discuss its financial results at 11:00 a.m. EST today. Forward-looking and other material information may be discussed in this conference call. The conference call dial-in number is (844) 466-4114 in the United States and Canada and (765) 507-2654 in other countries and the required passcode is 11267339.

For those unable to listen to the call live, a conference call replay will be available from approximately 2:00 p.m. EST today through 11:59 p.m. EST on Wednesday, January 13, 2016. The conference call replay can be accessed by dialing (855) 859-2056 in the United States and Canada and (404) 537-3406 in other countries and entering passcode 11267339 or on the Company's web site at www.parkelectro.com/investor/investor.html.

Any additional material financial or statistical data disclosed in the conference call will also be available at the time of the conference call on the Company's web site at www.parkelectro.com/investor/investor.html.

Park believes that an evaluation of its ongoing operations would be difficult if the disclosure of its financial results were limited to accounting principles generally accepted in the United States of America (“GAAP”) financial measures, which include special items, such as restructuring and audit fee charges. Accordingly, in addition to disclosing its financial results determined in accordance with GAAP, Park discloses non-GAAP operating results that exclude special items in order to assist its shareholders and other readers in assessing the Company’s operating performance, since the Company’s on-going, normal business operations do not include such special items. The detailed operating information presented below reconciles the non-GAAP operating results before special items to earnings determined in accordance with GAAP. Such non-GAAP financial measures are provided to supplement the results provided in accordance with GAAP.

Park Electrochemical Corp. is a global advanced materials company which develops and manufactures high-technology digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure and high-end computing markets and advanced composite materials, parts and assemblies and low-volume tooling for the aerospace markets. Park’s core capabilities are in the areas of polymer chemistry formulation and coating technology. The Company’s manufacturing facilities are located in Singapore, France, Kansas, Arizona and California. The Company also maintains R&D facilities in Arizona, Kansas and Singapore.

Additional corporate information is available on the Company’s web site at www.parkelectro.com

Performance table, including non-GAAP information (in thousands, except per share amounts –unaudited):

13 Weeks Ended 39 Weeks Ended
11/29/15 11/30/14 8/30/15 11/29/15 11/30/14
Sales$ 34,323 $ 34,679 $ 37,947 $ 110,099 $ 125,845
Net Earnings before Special Items1$ 4,209 $ 2,433 $ 4,639 $ 13,715 $ 16,027
Special Items, net of Tax:
Restructuring Charges (100) (402) (70) (260) (666)
Audit Fees - - - - (159)
Net Earnings$ 4,109 $ 2,031 $ 4,569 $ 13,455 $ 15,202
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1$ 0.21 $ 0.12 $ 0.23 $ 0.67 $ 0.77
Special Items:
Restructuring Charges (0.01) (0.02) - (0.01) (0.03)
Audit Fees - - - - (0.01)
Basic Earnings per Share$ 0.20 $ 0.10 $ 0.23 $ 0.66 $ 0.73
Diluted Earnings before Special Items1$ 0.21 $ 0.12 $ 0.23 $ 0.67 $ 0.76
Special Items:
Restructuring Charges (0.01) (0.02) - (0.01) (0.03)
Audit Fees - - - - (0.01)
Diluted Earnings per Share$ 0.20 $ 0.10 $ 0.23 $ 0.66 $ 0.72
Weighted Average Shares Outstanding:
Basic 20,253 20,947 20,337 20,379 20,917
Diluted 20,253 20,989 20,340 20,386 21,002
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.

Comparative balance sheets (in thousands):

11/29/2015 3/1/2015
Assets(unaudited)
Current Assets
Cash and Marketable Securities $ 229,643 $ 272,133
Accounts Receivable, Net 20,093 21,431
Inventories 12,641 14,439
Prepaid Expenses and Other Current Assets 5,177 5,256
Total Current Assets 267,554 313,259
Fixed Assets, Net 22,257 26,537
Restricted Cash 25,000 -
Other Assets 11,113 10,886
Total Assets$ 325,924 $ 350,682
Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt$ 13,750 $ 10,000
Accounts Payable 5,598 6,882
Accrued Liabilities 4,884 4,767
Income Taxes Payable 2,316 4,141
Current Deferred Income Taxes 362 3,934
Total Current Liabilities 26,910 29,724
Long-Term Debt 72,750 84,000
Deferred Income Taxes 47,053 54,155
Other Liabilities 1,095 1,204
Total Liabilities 147,808 169,083
Shareholders’ Equity 178,116 181,599
Total Liabilities and Shareholders' Equity$ 325,924 $ 350,682
Additional information
Equity per Share$ 8.79 $ 8.69
Total Cash, Restricted Cash and Marketable Securities$ 254,643 $ 272,133

Comparative statements of operations (in thousands – unaudited):

13 Weeks Ended 39 Weeks Ended
November 29, November 30, August 30, November 29, November 30,
2015 2014 2015 2015 2014
Net Sales$ 34,323 $ 34,679 $ 37,947 $ 110,099 $ 125,845
Cost of Sales 24,026 26,081 27,586 78,074 88,147
% of net sales 70.0% 75.2% 72.7% 70.9% 70.0%
Gross Profit 10,297 8,598 10,361 32,025 37,698
% of net sales 30.0% 24.8% 27.3% 29.1% 30.0%
Selling, General & Administrative
Expenses
5,264 5,754 5,009 16,074 18,602
% of net sales 15.3% 16.6% 13.2% 14.6% 14.8%
Restructuring Charge 158 636 91 373 986
% of net sales 0.5% 1.8% 0.2% 0.3% 0.8%
Earnings from Operations 4,875 2,208 5,261 15,578 18,110
% of net sales 14.2% 6.4% 13.9% 14.1% 14.4%
Interest:
Interest Income 227 222 317 809 595
% of net sales 0.7% 0.6% 0.8% 0.7% 0.5%
Interest Expense 355 361 356 1,080 1,074
% of net sales 1.0% 1.0% 0.9% 1.0% 0.9%
Net Interest Expense (128) (139) (39) (271) (479)
% of net sales -0.4% -0.4% -0.1% -0.2% -0.4%
Earnings before Income Taxes 4,747 2,069 5,222 15,307 17,631
% of net sales 13.8% 6.0% 13.8% 13.9% 14.0%
Income Tax Provision 638 38 653 1,852 2,429
Effective Tax Rate 13.4% 1.8% 12.5% 12.1% 13.8%
Net Earnings$ 4,109 $ 2,031 $ 4,569 $ 13,455 $ 15,202
% of net sales 12.0% 5.9% 12.0% 12.2% 12.1%

Reconciliation of non-GAAP financial measures (in thousands – unaudited):

13 Weeks Ended
November 29, 2015
13 Weeks Ended
November 30, 2014
13 Weeks Ended
August 30, 2015
Before Before Before
Specials Special Specials Special Specials Special
GAAP Items Items GAAP Items Items GAAP Items Items
Selling, General & Administrative
Expenses
5,264 - 5,264 5,754 - 5,754 5,009 - 5,009
% of net sales 15.3% 15.3% 16.6% 16.6% 13.2% 13.2%
Restructuring Charge 158 (158) - 636 (636) - 91 (91) -
% of net sales 0.5% 0.0% 1.8% 0.0% 0.2% 0.0%
Earnings from Operations 4,875 158 5,033 2,208 636 2,844 5,261 91 5,352
% of net sales 14.2% 14.7% 6.4% 8.2% 13.9% 14.1%
Earnings before Income Taxes 4,747 158 4,905 2,069 636 2,705 5,222 91 5,313
% of net sales 13.8% 14.3% 6.0% 7.8% 13.8% 14.0%
Income Tax Provision 638 58 696 38 234 272 653 21 674
Effective Tax Rate 13.4% 14.2% 1.8% 10.1% 12.5% 12.7%
Net Earnings 4,109 100 4,209 2,031 402 2,433 4,569 70 4,639
% of net sales 12.0% 12.3% 5.9% 7.0% 12.0% 12.2%
39 Weeks Ended
November 29, 2015
39 Weeks Ended
November 30, 2014
Before Before
Specials Special Specials Special
GAAP Items Items GAAP Items Items
Selling, General & Administrative
Expenses
16,074 - 16,074 18,602 (260) 18,342
% of net sales 14.6% 14.6% 14.8% 14.6%
Restructuring Charge 373 (373) - 986 (986) -
% of net sales 0.3% 0.0% 0.8% 0.0%
Earnings from Operations 15,578 373 15,951 18,110 1,246 19,356
% of net sales 14.1% 14.5% 14.4% 15.4%
Earnings before Income Taxes 15,307 373 15,680 17,631 1,246 18,877
% of net sales 13.9% 14.2% 14.0% 15.0%
Income Tax Provision 1,852 113 1,965 2,429 421 2,850
Effective Tax Rate 12.1% 12.5% 13.8% 15.1%
Net Earnings 13,455 260 13,715 15,202 825 16,027
% of net sales 12.2% 12.5% 12.1% 12.7%

Contact: Martina Bar Kochva 48 South Service Road Melville, NY 11747 (631) 465-3600

Source:Park Electrochemical Corp.