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Park Electrochemical Corp. Reports Third Quarter Results

MELVILLE, N.Y., Jan. 05, 2017 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $26,462,000 for the 2017 fiscal year’s third quarter ended November 27, 2016 compared to net sales of $34,323,000 for last fiscal year’s third quarter ended November 29, 2015 and net sales of $29,058,000 for the 2017 fiscal year’s second quarter ended August 28, 2016. Park’s net sales for the nine months ended November 27, 2016 were $87,010,000 compared to net sales of $110,099,000 for the nine months ended November 29, 2015. Net earnings for the current year’s third quarter were $1,875,000 compared to $4,109,000 for last year’s third quarter and $1,981,000 for the current year’s second quarter. Net earnings were $6,806,000 for the current year’s nine-month period compared to $13,455,000 for last year’s nine-month period.

Park reported net earnings before special items of $1,944,000 for the current year’s third quarter compared to net earnings before special items of $4,209,000 for last year’s third quarter and net earnings before special items of $1,995,000 for the current year’s second quarter. In the current year’s third quarter, the Company recorded pre-tax restructuring charges of $113,000 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 third quarter, the Company recorded pre-tax restructuring charges of $158,000 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 second quarter, the Company recorded pre-tax restructuring charges of $23,000 in connection with the 2009 closure of its New England Laminates Co., Inc. facility.

For the nine-month period ended November 27, 2016, Park reported net earnings before special items of $6,932,000 compared to net earnings before special items of $13,715,000 for last fiscal year’s first nine-month period. The current year’s nine-month period and last year’s nine-month period included pre-tax restructuring charges of $206,000 and $373,000, respectively, related to the facility closures mentioned above.

Park reported basic and diluted earnings per share of $0.09 for the current year’s third quarter compared to $0.20 for last year’s third quarter and $0.10 for the current year’s second quarter. Basic and diluted earnings per share before special items were $0.10 for the current year’s third quarter compared to $0.21 for last year’s third quarter and $0.10 for the current year’s second quarter.

Park reported basic and diluted earnings per share of $0.34 for the current year’s first nine months compared to $0.66 for last year’s nine-month period and basic and diluted earnings per share before special items of $0.34 for the current year’s first nine months compared to $0.67 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 46082544.

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 11, 2017. 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 46082544 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 operating 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 operating 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 39 Weeks Ended
11/27/16 11/29/15 8/28/16 11/27/16 11/29/15
Sales$ 26,462 $ 34,323 $ 29,058 $ 87,010 $ 110,099
Net Earnings before Special Items1$ 1,944 $ 4,209 $ 1,995 $ 6,932 $ 13,715
Special Items, net of Tax:
Restructuring Charges (69) (100) (14) (126) (260)
Net Earnings$ 1,875 $ 4,109 $ 1,981 $ 6,806 $ 13,455
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1$ 0.10 $ 0.21 $ 0.10 $ 0.34 $ 0.67
Special Items:
Restructuring Charges (0.01) (0.01) - - (0.01)
Basic Earnings (Loss) per Share$ 0.09 $ 0.20 $ 0.10 $ 0.34 $ 0.66
Diluted Earnings before Special Items1$ 0.10 $ 0.21 $ 0.10 $ 0.34 $ 0.67
Special Items:
Restructuring Charges (0.01) (0.01) - - (0.01)
Diluted Earnings (Loss) per Share$ 0.09 $ 0.20 $ 0.10 $ 0.34 $ 0.66
Weighted Average Shares Outstanding:
Basic 20,235 20,253 20,235 20,235 20,379
Diluted 20,235 20,253 20,235 20,235 20,386
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.

Comparative balance sheets (in thousands):

November 27, 2016 February 28, 2016
Assets(unaudited)
Current Assets
Cash and Marketable Securities $ 238,824 $ 237,425
Accounts Receivable, Net 16,013 22,583
Inventories 12,587 10,214
Prepaid Expenses and Other Current Assets 2,329 1,963
Total Current Assets 269,753 272,185
Fixed Assets, Net 19,333 21,512
Restricted Cash 10,000 10,000
Other Assets 10,958 11,080
Total Assets$ 310,044 $ 314,777
Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt$ 3,000 $ 3,000
Accounts Payable 4,692 6,155
Accrued Liabilities 4,645 4,580
Income Taxes Payable 1,276 2,943
Total Current Liabilities 13,613 16,678
Long-Term Debt 69,750 72,000
Deferred Income Taxes 43,938 43,937
Other Liabilities 586 1,295
Total Liabilities 127,887 133,910
Shareholders’ Equity 182,157 180,867
Total Liabilities and Shareholders' Equity$ 310,044 $ 314,777
Additional information
Equity per Share$ 9.00 $ 8.94
Total Cash, Restricted Cash and Marketable Securities$ 248,824 $ 247,425

Comparative statements of operations (in thousands – unaudited):

13 Weeks Ended 39 Weeks Ended
November 27,
2016
November 29,
2015
August 28,
2016
November 27,
2016
November 29,
2015
Net Sales$ 26,462 $ 34,323 $ 29,058 $ 87,010 $ 110,099
Cost of Sales 19,828 24,026 21,824 64,355 78,074
Gross Profit 6,634 10,297 7,234 22,655 32,025
% of net sales 25.1% 30.0% 24.9% 26.0% 29.1%
Selling, General & Administrative Expenses 4,604 5,264 5,110 15,051 16,074
% of net sales 17.4% 15.3% 17.6% 17.3% 14.6%
Restructuring Charge 113 158 23 206 373
Earnings from Operations 1,917 4,875 2,101 7,398 15,578
Interest:
Interest Income 430 227 369 1,177 809
Interest Expense 343 355 334 1,010 1,080
Net Interest Expense 87 (128) 35 167 (271)
Earnings before Income Taxes 2,004 4,747 2,136 7,565 15,307
Income Tax Provision 129 638 155 759 1,852
Net Earnings$ 1,875 $ 4,109 $ 1,981 $ 6,806 $ 13,455

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

13 Weeks Ended
November 27, 2016
13 Weeks Ended
November 29, 2015
13 Weeks Ended
August 28, 2016
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
Selling, General & Administrative Expenses$ 4,604 $ - $ 4,604 $ 5,264 $ - $ 5,264 $ 5,110 $ - $ 5,110
% of net sales 17.4% 17.4% 15.3% 15.3% 17.6% 17.6%
Restructuring Charge 113 (113) - 158 (158) - 23 (23) -
% of net sales 0.4% 0.0% 0.5% 0.0% 0.1% 0.0%
Earnings from Operations 1,917 113 2,030 4,875 158 5,033 2,101 23 2,124
% of net sales 7.2% 7.7% 14.2% 14.7% 7.2% 7.3%
Earnings before Income Taxes 2,004 113 2,117 4,747 158 4,905 2,136 23 2,159
% of net sales 7.6% 8.0% 13.8% 14.3% 7.4% 7.4%
Income Tax Provision 129 44 173 638 58 696 155 9 164
Effective Tax Rate 6.4% 8.2% 13.4% 14.2% 7.3% 7.6%
Net Earnings 1,875 69 1,944 4,109 100 4,209 1,981 14 1,995
% of net sales 7.1% 7.3% 12.0% 12.3% 6.8% 6.9%
39 Weeks Ended
November 27, 2016
39 Weeks Ended
November 29, 2015
GAAP Specials
Items
Before
Special
Items
GAAP Specials
Items
Before
Special
Items
Selling, General & Administrative Expenses$ 15,051 $ - $ 15,051 $ 16,074 $ - $ 16,074
% 17.3% 17.3% 14.6% 14.6%
Restructuring Charge 206 (206) - 373 (373) -
% 0.2% 0.0% 0.3% 0.0%
Earnings from Operations 7,398 206 7,604 15,578 373 15,951
% 8.5% 8.7% 14.1% 14.5%
Earnings before Income Taxes 7,565 206 7,771 15,307 373 15,680
% 8.7% 8.9% 13.9% 14.2%
Income Tax Provision 759 80 839 1,852 113 1,965
Effective Tax Rate 10.0% 10.8% 12.1% 12.5%
Net Earnings 6,806 126 6,932 13,455 260 13,715
% 7.8% 8.0% 12.2% 12.5%

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

Source:Park Electrochemical Corp.