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Park Electrochemical Corp. Reports Fourth Quarter and Fiscal Year Results

MELVILLE, N.Y., May 03, 2016 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE-PKE) reported net sales of $35,756,000 for the 2016 fiscal year’s fourth quarter ended February 28, 2016 compared to net sales of $36,241,000 for last fiscal year’s fourth quarter ended March 1, 2015 and net sales of $34,323,000 for the 2016 fiscal year’s third quarter ended November 29, 2015. Park’s net sales for the fiscal year ended February 28, 2016 were $145,855,000 compared to net sales of $162,086,000 for the fiscal year ended March 1, 2015.

Park reported net earnings before special items of $4,865,000 for the current year’s fourth quarter compared to net earnings before special items of $4,977,000 for last year’s fourth quarter and net earnings before special items of $4,209,000 for the current year’s third quarter. In the current year’s fourth quarter, the Company recorded pre-tax restructuring charges of $162,000 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 and pre-tax deferred financing costs of $292,000 related to the early termination of the PNC Bank credit agreement. As previously reported, the Company entered into a three-year revolving credit facility agreement with HSBC Bank USA in January 2016, which replaced the credit facility agreement that the Company entered into with PNC Bank in February 2014. In last year’s fourth quarter, the Company recorded a pre-tax charge of $206,000 related to a modification of previously issued employee stock options resulting from the special cash dividend paid by the Company in February 2015 and pre-tax restructuring charges of $193,000 in connection with the aforementioned facility closures. In the current year’s third quarter, the Company recorded pre-tax restructuring charges of $158,000 in connection with the aforementioned facility closures. Accordingly, net earnings for the current year’s fourth quarter were $4,574,000 compared to $4,841,000 for last year’s fourth quarter and $4,109,000 for the current year’s third quarter.

For the fiscal year ended February 28, 2016, Park reported net earnings before special items of $18,580,000 compared to net earnings before special items of $21,004,000 for the prior fiscal year. The current fiscal year included pre-tax restructuring charges of $535,000 related to the facility closures mentioned above and pre-tax deferred financing costs of $292,000 related to termination of the credit agreement mentioned above. The prior fiscal year included pre-tax charges of $1,645,000 related to a modification of previously issued employee stock options mentioned above, additional fees incurred in connection with the 2014 fiscal year-end audit, cost reduction initiatives in the United States and the facility closures mentioned above. Accordingly, net earnings for the fiscal year ended February 28, 2016 were $18,029,000 compared to net earnings for the fiscal year ended March 1, 2015 of $20,043,000.

Park reported basic and diluted earnings per share before special items of $0.24 for the current year’s fourth quarter compared to basic and diluted earnings per share before special items of $0.24 for last year’s fourth quarter and basic and diluted earnings per share before special items of $0.21 for the current year’s third quarter. Basic and diluted earnings per share were $0.23 for the current year’s fourth quarter compared to basic and diluted earnings per share of $0.23 for last year’s fourth quarter and basic and diluted earnings per share of $0.20 for the current year’s third quarter.

Park reported basic and diluted earnings per share before special items of $0.91 for the fiscal year ended February 28, 2016 compared to basic and diluted earnings per share before special items of $1.00 for the prior fiscal year. Basic and diluted earnings per share were $0.89 for the current fiscal year compared to basic and diluted earnings per share of $0.96 for the prior fiscal year.

The Company will conduct a conference call to discuss its financial results at 11:00 a.m. EDT 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 98843379.

For those unable to listen to the call live, a conference call replay will be available from approximately 2:00 p.m. EDT today through 11:59 p.m. EDT on Monday, May 9, 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 98843379 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 and deferred financing and stock option modification costs. 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 52 Weeks Ended
February 28, March 1, November 29, February 28, March 1,
2016 2015 2015 2016 2015
Sales$ 35,756 $ 36,241 $ 34,323 $ 145,855 $ 162,086
Net Earnings before Special Items1$ 4,865 $ 4,977 $ 4,209 $ 18,580 $ 21,004
Special Items, net of Tax:
Restructuring Charges (110) (139) (100) (370) (805)
Deferred Financing Costs (181) - - (181) -
Modification of Stock Options - 3 - - 3
Audit Fees - - - - (159)
Net Earnings$ 4,574 $ 4,841 $ 4,109 $ 18,029 $ 20,043
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1$ 0.24 $ 0.24 $ 0.21 $ 0.91 $ 1.00
Special Items:
Restructuring Charges - (0.01) (0.01) (0.01) (0.03)
Deferred Financing Costs (0.01) - - (0.01) -
Audit Fees - - - - (0.01)
Basic Earnings per Share$ 0.23 $ 0.23 $ 0.20 $ 0.89 $ 0.96
Diluted Earnings before Special Items1$ 0.24 $ 0.24 $ 0.21 $ 0.91 $ 1.00
Special Items:
Restructuring Charges - (0.01) (0.01) (0.01) (0.03)
Deferred Financing Costs (0.01) - - (0.01) -
Audit Fees - - - - (0.01)
Diluted Earnings per Share$ 0.23 $ 0.23 $ 0.20 $ 0.89 $ 0.96
Weighted Average Shares Outstanding:
Basic 20,251 20,896 20,253 20,347 20,912
Diluted 20,251 20,937 20,253 20,352 20,986
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.

Comparative balance sheets (in thousands):

February 28, 2016 March 1, 2015
(unaudited)
Assets
Current Assets
Cash and Marketable Securities $ 237,425 $ 272,133
Accounts Receivable, Net 22,583 21,431
Inventories 10,214 14,439
Prepaid Expenses and Other Current Assets 1,963 5,256
Total Current Assets 272,185 313,259
Fixed Assets, Net 21,512 26,537
Restricted Cash 10,000 -
Other Assets 11,080 10,886
Total Assets$ 314,777 $ 350,682
Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt$ 3,000 $ 10,000
Accounts Payable 6,155 6,882
Accrued Liabilities 4,580 4,767
Income Taxes Payable 2,943 4,141
Current Deferred Income Taxes - 3,934
Total Current Liabilities 16,678 29,724
Long-Term Debt 72,000 84,000
Deferred Income Taxes 43,937 54,155
Other Liabilities 1,295 1,204
Total Liabilities 133,910 169,083
Shareholders’ Equity 180,867 181,599
Total Liabilities and Shareholders' Equity$ 314,777 $ 350,682
Additional information
Equity per Share$ 8.93 $ 8.69
Total Cash, Restricted Cash and Marketable Securities$ 247,425 $ 272,133

Comparative statements of operations (in thousands):

13 Weeks Ended (unaudited) 52 Weeks Ended
February 28,
February 28, March 1, November 29, 2016 March 1,
2016 2015 2015 (unaudited) 2015
Net Sales$ 35,756 $ 36,241 $ 34,323 $ 145,855 $ 162,086
Cost of Sales 25,029 24,986 24,026 103,103 113,133
Gross Profit 10,727 11,255 10,297 42,752 48,953
% of net sales 30.0% 31.1% 30.0% 29.3% 30.2%
Selling, General & Administrative
Expenses
5,137 5,771 5,264 21,211 24,373
Restructuring Charge 162 193 158 535 1,179
Earnings from Operations 5,428 5,291 4,875 21,006 23,401
Interest:
Interest Income 340 232 227 1,149 827
Interest Expense 577 364 355 1,657 1,438
Net Interest Expense (237) (132) (128) (508) (611)
Earnings before Income Taxes 5,191 5,159 4,747 20,498 22,790
Income Tax Provision 617 318 638 2,469 2,747
Net Earnings$ 4,574 $ 4,841 $ 4,109 $ 18,029 $ 20,043

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

13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
February 28, 2016 March 1, 2015 November 29, 2015
Before Before Before
Specials Special Specials Special Specials Special
GAAP Items Items GAAP Items Items GAAP Items Items
Selling, General & Administrative Expenses 5,137 - 5,137 5,771 (206) 5,565 5,264 - 5,264
% of net sales 14.4% 14.4% 15.9% 15.4% 15.3% 15.3%
Restructuring Charge 162 (162) - 193 (193) - 158 (158) -
% of net sales 0.5% 0.0% 0.5% 0.0% 0.5% 0.0%
Earnings from Operations 5,428 162 5,590 5,291 399 5,690 4,875 158 5,033
% of net sales 15.2% 15.6% 14.6% 15.7% 14.2% 14.7%
Net Interest (Expense) Income (237) 292 55 (132) - (132) (128) - (128)
% of net sales -0.7% 0.2% -0.4% -0.4% -0.4% -0.4%
Earnings before Income Taxes 5,191 454 5,645 5,159 399 5,558 4,747 158 4,905
% of net sales 14.5% 15.8% 14.2% 15.3% 13.8% 14.3%
Income Tax Provision 617 163 780 318 263 581 638 58 696
Effective Tax Rate 11.9% 13.8% 6.2% 10.5% 13.4% 14.2%
Net Earnings 4,574 291 4,865 4,841 136 4,977 4,109 100 4,209
% of net sales 12.8% 13.6% 13.4% 13.7% 12.0% 12.3%

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

52 Weeks Ended 52 Weeks Ended
February 28, 2016 March 1, 2015
Before Before
Specials Special Specials Special
GAAP Items Items GAAP Items Items
Selling, General & Administrative
Expenses
21,211 - 21,211 24,373 (466) 23,907
% of net sales 14.5% 14.5% 15.0% 14.7%
Restructuring Charge 535 (535) - 1,179 (1,179) -
% of net sales 0.4% 0.0% 0.7% 0.0%
Earnings from Operations 21,006 535 21,541 23,401 1,645 25,046
% of net sales 14.4% 14.8% 14.4% 15.5%
Net Interest (Expense) Income (508) 292 (216) (611) - (611)
% of net sales -0.3% -0.1% -0.4% -0.4%
Earnings before Income Taxes 20,498 827 21,325 22,790 1,645 24,435
% of net sales 14.1% 14.6% 14.1% 15.1%
Income Tax Provision 2,469 276 2,745 2,747 684 3,431
Effective Tax Rate 12.0% 12.9% 12.1% 14.0%
Net Earnings 18,029 551 18,580 20,043 961 21,004
% of net sales 12.4% 12.7% 12.4% 13.0%


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

Source:Park Electrochemical Corp.