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Park Electrochemical Corp. Reports Second Quarter Results

MELVILLE, N.Y., Oct. 03, 2017 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $29,836,000 for the 2018 fiscal year’s second quarter ended August 27, 2017 compared to net sales of $29,058,000 for last fiscal year’s second quarter ended August 28, 2016 and net sales of $27,417,000 for the 2018 fiscal year’s first quarter ended May 28, 2017. Park’s net sales for the six months ended August 27, 2017 were $57,253,000 compared to net sales of $60,548,000 for the six months ended August 28, 2016. Net earnings for the current year’s second quarter were $520,000 compared to $1,981,000 for last year’s second quarter and $1,394,000 for the current year’s first quarter. Net earnings were $1,914,000 for the current year’s six-month period compared to $4,931,000 for last year’s six-month period.

Park reported net earnings before special items of $2,343,000 for the current fiscal year’s second quarter compared to net earnings before special items of $1,995,000 for last year’s second quarter and net earnings before special items of $2,484,000 for the current year’s first quarter. Pre-tax earnings before special items were $2,882,000 for the current fiscal year’s second quarter compared to pre-tax earnings before special items of $2,159,000 for last year’s second quarter and pre-tax earnings before special items of $2,209,000 for the current year’s first quarter. In the current fiscal year’s second quarter, the Company recorded pre-tax restructuring charges of $2,902,000 related to the consolidation of its Nelco Products, Inc. electronics Business Unit located in Fullerton, California, and its Neltec Inc. electronics Business Unit located in Tempe, Arizona and the closure, in fiscal year 2009, of its New England Laminates Co., Inc. facility located in Newburgh, New York. In the 2017 fiscal year’s second quarter, the Company recorded pre-tax restructuring charges of $23,000 in connection with the Newburgh facility closure. In the current fiscal year’s first quarter, the Company recorded pre-tax restructuring charges of $1,361,000 in connection with the consolidation of its Nelco Products, Inc. and its Neltec Inc. electronics Business Units and the closure of the Newburgh facility and recorded a one-time pre-tax litigation expense of $375,000 included in selling, general and administrative expenses. Also in the current year’s first quarter, the Company recorded a $688,000 tax benefit for the reversal of a tax reserve for certain foreign tax deductions taken in prior years.

For the six-month period ended August 27, 2017, Park reported net earnings before special items of $4,827,000 compared to net earnings before special items of $4,988,000 for last fiscal year’s first six-month period. Pre-tax earnings before special items were $5,091,000 for the six-month period ended August 27, 2017 compared to pre-tax earnings before special items of $5,654,000 for last fiscal year’s first six-month period. The current year’s six-month period included pre-tax charges of $4,638,000 related to the consolidation, facility closure and one-time litigation expense mentioned above. Last year’s six-month period included pre-tax charges of $93,000 related to the Newburgh facility closure mentioned above.

Park reported basic and diluted earnings per share of $0.03 for the 2018 fiscal year’s second quarter compared to $0.10 for 2017 fiscal year’s second quarter and $0.07 for the 2018 fiscal year’s first quarter. Basic and diluted earnings per share before special items were $0.12 for the 2018 fiscal year’s second quarter compared to $0.10 for 2017 fiscal year’s second quarter and $0.12 for the 2018 fiscal year’s first quarter.

Park reported basic and diluted earnings per share of $0.09 for the 2018 fiscal year’s first six months compared to $0.24 for 2017 fiscal year’s six-month period and basic and diluted earnings per share before special items of $0.24 for the 2018 fiscal year’s first six months compared to $0.25 for 2017 fiscal 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 90196012.

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, October 9, 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 90196012 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 and one-time litigation expense. 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
August 27,
2017
August 28,
2016
May 28,
2017
August 27,
2017
August 28,
2016
Sales$ 29,836 $ 29,058 $ 27,417 $ 57,253 $ 60,548
Net Earnings before Special Items1$ 2,343 $ 1,995 $ 2,484 $ 4,827 $ 4,988
Special Items, net of Tax:
Restructuring Charges (1,823) (14) (855) (2,678) (57)
One-time Litigation Expense - - (235) (235) -
Net Earnings$ 520 $ 1,981 $ 1,394 $ 1,914 $ 4,931
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1$ 0.12 $ 0.10 $ 0.12 $ 0.24 $ 0.25
Special Items:
Restructuring Charges (0.09) - (0.04) (0.14) (0.01)
One-time Litigation Expense - - (0.01) (0.01) -
Basic Earnings (Loss) per Share$ 0.03 $ 0.10 $ 0.07 $ 0.09 $ 0.24
Diluted Earnings before Special Items1$ 0.12 $ 0.10 $ 0.12 $ 0.24 $ 0.25
Special Items:
Restructuring Charges (0.09) - (0.04) (0.14) (0.01)
One-time Litigation Expense - - (0.01) (0.01) -
Diluted Earnings (Loss) per Share$ 0.03 $ 0.10 $ 0.07 $ 0.09 $ 0.24
Weighted Average Shares Outstanding:
Basic 20,236 20,235 20,235 20,236 20,235
Diluted 20,250 20,235 20,244 20,247 20,235
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.

Comparative balance sheets (in thousands):

August 28,
2017
February 26,
2017
Assets(unaudited)
Current Assets
Cash and Marketable Securities $ 233,064 $ 238,590
Accounts Receivable, Net 21,182 17,238
Inventories 11,919 11,105
Prepaid Expenses and Other Current Assets 2,582 2,197
Total Current Assets 268,747 269,130
Fixed Assets, Net 17,616 18,638
Restricted Cash 10,000 10,000
Other Assets 11,781 10,810
Total Assets$ 308,144 $ 308,578
Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt$ 3,250 $ 3,500
Accounts Payable 5,444 4,183
Accrued Liabilities 7,062 3,417
Income Taxes Payable 1,891 3,023
Total Current Liabilities 17,647 14,123
Long-Term Debt 67,000 68,500
Deferred Income Taxes 42,089 42,088
Other Liabilities 301 1,041
Total Liabilities 127,037 125,752
Shareholders’ Equity 181,107 182,826
Total Liabilities and Shareholders' Equity$ 308,144 $ 308,578
Additional information
Equity per Share$ 8.95 $ 9.04
Total Cash, Restricted Cash and Marketable Securities$ 243,064 $ 248,590

Comparative statements of operations (in thousands – unaudited):

13 Weeks Ended 26 Weeks Ended
August 27,
2017
August 28,
2016
May 28,
2017
August 27,
2017
August 28,
2016
Net Sales$ 29,836 $ 29,058 $ 27,417 $ 57,253 $ 60,548
Cost of Sales 22,659 21,824 21,095 43,754 44,527
Gross Profit 7,177 7,234 6,322 13,499 16,021
% of net sales 24.1% 24.9% 23.1% 23.6% 26.5%
Selling, General & Administrative
Expenses
4,443 5,110 4,727 9,170 10,447
% of net sales 14.9% 17.6% 17.2% 16.0% 17.3%
Restructuring Charges 2,902 23 1,361 4,263 93
(Loss)/Earnings from Operations (168) 2,101 234 66 5,481
Interest:
Interest Income 751 369 749 1,500 747
Interest Expense 603 334 510 1,113 667
Net Interest Income 148 35 239 387 80
(Loss)/Earnings before Income Taxes (20) 2,136 473 453 5,561
Income Tax (Benefit)/Provision (540) 155 (921) (1,461) 630
Net Earnings$ 520 $ 1,981 $ 1,394 $ 1,914 $ 4,931

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

13 Weeks Ended
August 27, 2017
13 Weeks Ended
August 28, 2016
13 Weeks Ended
May 28, 2017
GAAP Specials Items Before Special Items GAAP Specials Items Before Special Items GAAP Specials Items Before Special Items
Selling, General & Administrative
Expenses
$ 4,443 $ - $ 4,443 $ 5,110 $ - $ 5,110 $ 4,727 $ (375) $ 4,352
% of net sales 14.9% 14.9% 17.6% 17.6% 17.2% 15.9%
Restructuring Charges 2,902 (2,902) - 23 (23) - 1,361 (1,361) -
% of net sales 9.7% 0.0% 0.1% 0.0% 5.0% 0.0%
(Loss)/Earnings from Operations (168) 2,902 2,734 2,101 23 2,124 234 1,736 1,970
% of net sales -0.6% 9.2% 7.2% 7.3% 0.9% 7.2%
(Loss)/Earnings before Income Taxes (20) 2,902 2,882 2,136 23 2,159 473 1,736 2,209
% of net sales -0.1% 9.7% 7.4% 7.4% 1.7% 8.1%
Income Tax (Benefit)/Provision (540) 1,079 539 155 9 164 (921) 646 (275)
Effective Tax Rate 2700.0% 18.7% 7.3% 7.6% -194.7% -12.4%
Net Earnings 520 1,823 2,343 1,981 14 1,995 1,394 1,090 2,484
% of net sales 1.7% 7.9% 6.8% 6.9% 5.1% 9.1%
26 Weeks Ended
August 27, 2017
26 Weeks Ended
August 28, 2016
GAAP Specials Items Before Special Items GAAP Specials Items Before Special Items
Selling, General & Administrative
Expenses
$ 9,170 $ (375) $ 8,795 $ 10,447 $ - $ 10,447
% of net sales 16.0% 15.4% 17.3% 17.3%
Restructuring Charge 4,263 (4,263) - 93 (93) -
% of net sales 7.4% 0.0% 0.2% 0.0%
Earnings from Operations 66 4,638 4,704 5,481 93 5,574
% of net sales 0.1% 8.2% 9.1% 9.2%
Earnings before Income Taxes 453 4,638 5,091 5,561 93 5,654
% of net sales 0.8% 8.9% 9.2% 9.3%
Income Tax (Benefit)/Provision (1,461) 1,725 264 630 36 666
Effective Tax Rate -322.5% 5.2% 11.3% 11.8%
Net Earnings 1,914 2,913 4,827 4,931 57 4,988
% of net sales 3.3% 8.4% 8.1% 8.2%

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

Source:Park Electrochemical Corp.