Source: Park Electrochemical Corporation
ET

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