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Park Electrochemical Corp. Reports Second Quarter Results

MELVILLE, N.Y., Oct. 06, 2016 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $29,058,000 for the 2017 fiscal year’s second quarter ended August 28, 2016 compared to net sales of $37,947,000 for last fiscal year’s second quarter ended August 30, 2015 and net sales of $31,490,000 for the 2017 fiscal year’s first quarter ended May 29, 2016. Park’s net sales for the six months ended August 28, 2016 were $60,548,000 compared to net sales of $75,776,000 for the six months ended August 30, 2015. Net earnings for the current year’s second quarter were $1,981,000 compared to $4,569,000 for last year’s second quarter and $2,950,000 for the current year’s first quarter. Net earnings were $4,931,000 for the current year’s six-month period compared to $9,346,000 for last year’s six-month period.

Park reported net earnings before special items of $1,995,000 for the current year’s second quarter compared to net earnings before special items of $4,639,000 for last year’s second quarter and net earnings before special items of $2,993,000 for the current year’s first quarter. In the current year’s second quarter, the Company recorded pre-tax restructuring charges of $23,000 related to the closure in fiscal year 2009 of its New England Laminates Co., Inc. facility located in Newburgh, New York. In last year’s second quarter, the Company recorded pre-tax restructuring charges of $91,000 in connection with the aforementioned facility closure and the closure in fiscal year 2013 of the Company’s Nelco Technology (Zhuhai FTZ) Ltd. facility located in Zhuhai, China. In the current year’s first quarter, the Company recorded pre-tax restructuring charges of $70,000 in connection with the 2009 closure of its New England Laminates Co., Inc. facility.

For the six-month period ended August 28, 2016, Park reported net earnings before special items of $4,988,000 compared to net earnings before special items of $9,506,000 for last fiscal year’s first six-month period. The current year’s six-month period included pre-tax restructuring charges of $93,000 related to the facility closures mentioned above. Last year’s six-month period included pre-tax restructuring charges of $215,000 related to the facility closures mentioned above.

Park reported basic and diluted earnings per share of $0.10 for the current year’s second quarter compared to $0.23 for last year’s second quarter and $0.15 for the current year’s first quarter. Basic and diluted earnings per share before special items were also $0.10 for the current year’s second quarter compared to $0.23 for last year’s second quarter and $0.15 for the current year’s first quarter.

Park reported basic and diluted earnings per share of $0.25 for the current year’s first six months compared to $0.46 for last year’s six-month period and basic and diluted earnings per share before special items of $0.25 for the current year’s first six months compared to $0.47 for last year’s six-month period.

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 90084837.

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 Wednesday, October 12, 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 90084837 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 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 advanced composite materials, primary and secondary structures and assemblies and low-volume tooling for the aerospace markets and high-technology digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure, enterprise and military/aerospace markets. The Company’s manufacturing facilities are located in Kansas, Singapore, France, 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 26 Weeks Ended
8/28/16 8/30/15 5/29/16 8/28/16 8/30/15
Sales$ 29,058 $ 37,947 $ 31,490 60,548 $ 75,776
Net Earnings before Special Items1$ 1,995 $ 4,639 $ 2,993 4,988 $ 9,506
Special Items, net of Tax:
Restructuring Charges (14) (70) (43) (57) (160)
Net Earnings$ 1,981 $ 4,569 $ 2,950 4,931 $ 9,346
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1$ 0.10 $ 0.23 $ 0.15 0.25 $ 0.47
Special Items:
Restructuring Charges - - - (0.01) (0.01)
Basic Earnings (Loss) per Share$ 0.10 $ 0.23 $ 0.15 $ 0.24 $ 0.46
Diluted Earnings before Special Items1$ 0.10 $ 0.23 $ 0.15 0.25 $ 0.47
Special Items:
Restructuring Charges - - - (0.01) (0.01)
Diluted Earnings (Loss) per Share$ 0.10 $ 0.23 $ 0.15 $ 0.24 $ 0.46
Weighted Average Shares Outstanding:
Basic 20,235 20,337 20,235 20,235 20,442
Diluted 20,235 20,340 20,235 20,235 20,453
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.

Comparative balance sheets (in thousands):

August 28,
2016
February 28,
2016
Assets(unaudited)
Current Assets
Cash and Marketable Securities $ 239,706 $ 237,425
Accounts Receivable, Net 18,369 22,583
Inventories 11,749 10,214
Prepaid Expenses and Other Current Assets 2,292 1,963
Total Current Assets 272,116 272,185
Fixed Assets, Net 19,969 21,512
Restricted Cash 10,000 10,000
Other Assets 11,161 11,080
Total Assets$ 313,246 $ 314,777
Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt$ 3,000 $ 3,000
Accounts Payable 4,936 6,155
Accrued Liabilities 5,304 4,580
Income Taxes Payable 2,164 2,943
Total Current Liabilities 15,404 16,678
Long-Term Debt 70,500 72,000
Deferred Income Taxes 43,937 43,937
Other Liabilities 1,024 1,295
Total Liabilities 130,865 133,910
Shareholders’ Equity 182,381 180,867
Total Liabilities and Shareholders' Equity$ 313,246 $ 314,777
Additional information
Equity per Share$ 9.01 $ 8.94
Total Cash, Restricted Cash and Marketable Securities$ 249,706 $ 247,425

Comparative statements of operations (in thousands – unaudited):

13 Weeks Ended 26 Weeks Ended
August 28,
2016
August 30,
2015
May 29,
2016
August 28,
2016
August 30,
2015
Net Sales$ 29,058 $ 37,947 $ 31,490 $ 60,548 $ 75,776
Cost of Sales 21,824 27,586 22,703 44,527 54,048
Gross Profit 7,234 10,361 8,787 16,021 21,728
% of net sales 24.9% 27.3% 27.9% 26.5% 28.7%
Selling, General & Administrative
Expenses
5,110 5,009 5,337 10,447 10,810
% of net sales 17.6% 13.2% 16.9% 17.3% 14.3%
Restructuring Charge 23 91 70 93 215
Earnings from Operations 2,101 5,261 3,380 5,481 10,703
Interest:
Interest Income 369 317 378 747 582
Interest Expense 334 356 333 667 725
Net Interest Expense 35 (39) 45 80 (143)
Earnings before Income Taxes 2,136 5,222 3,425 5,561 10,560
Income Tax Provision 155 653 475 630 1,214
Net Earnings$ 1,981 $ 4,569 $ 2,950 $ 4,931 $ 9,346

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

13 Weeks Ended
August 28, 2016
13 Weeks Ended
August 30, 2015
13 Weeks Ended
May 29, 2016
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
Selling, General & Administrative
Expenses
$ 5,110 $ - $ 5,110 $ 5,009 $ - $ 5,009 $ 5,337 $ - $ 5,337
% of net sales 17.6% 17.6% 13.2% 13.2% 16.9% 16.9%
Restructuring Charge 23 (23) - 91 (91) - 70 (70) -
% of net sales 0.1% 0.0% 0.2% 0.0% 0.2% 0.0%
Earnings from Operations 2,101 23 2,124 5,261 91 5,352 3,380 70 3,450
% of net sales 7.2% 7.3% 13.9% 14.1% 10.7% 11.0%
Earnings before Income Taxes 2,136 23 2,159 5,222 91 5,313 3,425 70 3,495
% of net sales 7.4% 7.4% 13.8% 14.0% 10.9% 11.1%
Income Tax Provision 155 9 164 653 21 674 475 27 502
Effective Tax Rate 7.3% 7.6% 12.5% 12.7% 13.9% 14.4%
Net Earnings 1,981 14 1,995 4,569 70 4,639 2,950 43 2,993
% of net sales 6.8% 6.9% 12.0% 12.2% 9.4% 9.5%
26 Weeks Ended
August 28, 2016
26 Weeks Ended
August 30, 2015
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
Selling, General & Administrative
Expenses
$ 10,447 $ - $ 10,447 $ 10,810 $ - $ 10,810
% 17.3% 17.3% 14.3% 14.3%
Restructuring Charge 93 (93) - 215 (215) -
% 0.2% 0.0% 0.3% 0.0%
Earnings from Operations 5,481 93 5,574 10,703 215 10,918
% 9.1% 9.2% 14.1% 14.4%
Earnings before Income Taxes 5,561 93 5,654 10,560 215 10,775
% 9.2% 9.3% 13.9% 14.2%
Income Tax Provision 630 36 666 1,214 55 1,269
Effective Tax Rate 11.3% 11.8% 11.5% 11.8%
Net Earnings 4,931 57 4,988 9,346 160 9,506
% 8.1% 8.2% 12.3% 12.5%

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

Source:Park Electrochemical Corp.