Park Electrochemical Corp. Reports First Quarter Results

Westbury, New York, UNITED STATES


MELVILLE, N.Y., June 22, 2018 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $31,102,000 for the 2019 fiscal year’s first quarter ended May 27, 2018 compared to net sales of $27,417,000 for the 2018 fiscal year’s first quarter ended May 28, 2017 and net sales of $27,804,000 for the 2018 fiscal year’s fourth quarter ended February 25, 2018.  Net earnings for the 2019 fiscal year’s first quarter were $3,168,000 compared to $1,394,000 for the 2018 fiscal year’s first quarter and $17,965,000 for the 2018 fiscal year’s fourth quarter.

Park reported net earnings before special items of $3,373,000 for the 2019 fiscal year’s first quarter compared to net earnings before special items of $2,484,000 for the 2018 fiscal year’s first quarter and net earnings before special items of $1,972,000 for the 2018 fiscal year’s fourth quarter. In the 2019 fiscal year’s first quarter, the Company recorded pre-tax restructuring charges of $183,000 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 and pre-tax advisory fees of $120,000. In the 2018 fiscal year’s first quarter, the Company recorded pre-tax restructuring charges of $1,361,000 related to the consolidation of its electronics Business Units in California, and Arizona and the closure of the facility in Newburgh and recorded a one-time litigation expense of $375,000.  In the 2018 fiscal year’s fourth quarter, the Company recorded a one-time tax benefit of $17,802,000 related to the Tax Cuts and Jobs Act enacted in December 2017, pre-tax restructuring charges of $287,000, a pre-tax loss on the sales of marketable securities of $1,342,000, pre-tax deferred financing costs of $144,000 related to the early termination of the HSBC Bank Credit Agreement, a pre-tax stock option modification charge of $513,000 and pre-tax advisory fees of $162,000.

Park reported basic and diluted earnings per share of $0.16 for the 2019 fiscal year’s first quarter compared to basic and diluted earnings per share of  $0.07 for the 2018 fiscal year’s first quarter and basic earnings per share of $0.89 and diluted earnings per share of $0.88 for the 2018 fiscal year’s fourth quarter. Basic and diluted earnings per share before special items were $0.17 for the 2019 fiscal year’s first quarter compared to $0.12 for the 2018 fiscal year’s first quarter and $0.10 for the 2018 fiscal year’s fourth quarter. 

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 9843689.

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 Thursday, June 28, 2018.  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 9843689 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 one-time tax benefits, restructuring charges, losses on sales of marketable securities, deferred financing charges stock option modification charges, pre-tax litigation expenses and strategic evaluation advisory fees. 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  
        
  May 27, 2018  May 28, 2017  February 25, 2018  
 Sales$  31,102   $  27,417   $  27,804   
           
 Net Earnings before Special Items1$  3,373   $  2,484   $  1,972   
 Special Items, net of Tax:         
   One-time Litigation Expense   -      (235)     -   
   Strategic Evaluation Advisory Fees   (81)     -      (102)  
   Stock Option Modification   -      -      (322)  
   Restructuring Charges   (124)     (855)     (180)  
   Loss on Sale of Marketable Securities   -      -      (1,114)  
   Acceleration of Deferred Financing Costs   -      -      (91)  
   Tax Cut and Jobs Act   -      -      17,802   
   Net Earnings$  3,168   $  1,394   $  17,965   
           
 Basic Earnings per Share:         
   Basic Earnings before Special Items1$  0.17   $  0.12   $  0.10   
   Special Items:         
   One-time Litigation Expense   -       (0.01)     -    
   Strategic Evaluation Advisory Fees   -       -       (0.01)  
   Stock Option Modification   -       -       (0.02)  
   Restructuring Charges   (0.01)     (0.04)     (0.01)  
   Loss on Sale of Marketable Securities   -       -       (0.05)  
   Acceleration of Deferred Financing Costs   -       -       -    
   Tax Cut and Jobs Act   -       -       0.88   
   Basic Earnings per Share$  0.16   $  0.07   $  0.89   
           
   Diluted Earnings before Special Items1$  0.17   $  0.12   $  0.10   
   Special Items:         
   One-time Litigation Expense   -       (0.01)     -    
   Strategic Evaluation Advisory Fees   -       -       (0.01)  
   Stock Option Modification   -       -       (0.02)  
   Restructuring Charges   (0.01)     (0.04)     (0.02)  
   Loss on Sale of Marketable Securities   -       -       (0.05)  
   Acceleration of Deferred Financing Costs   -       -       -    
   Tax Cut and Jobs Act   -       -       0.88   
   Diluted Earnings per Share$  0.16   $  0.07   $  0.88   
           
 Weighted Average Shares Outstanding:         
   Basic   20,242      20,235      20,238   
   Diluted   20,296      20,244      20,311   
           
 1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items. 
  
     

Comparative balance sheets (in thousands):

 

 
  May 27, 2018 February 25, 2018 
 Assets(unaudited)   
 Current Assets    
   Cash and Marketable Securities $  106,051 $  108,231 
   Accounts Receivable, Net   21,296    19,762 
   Inventories   12,639    11,156 
   Prepaid Expenses and Other Current Assets   2,417    2,119 
   Total Current Assets   142,403    141,268 
      
 Fixed Assets, Net   15,830    16,532 
 Other Assets   11,223    11,223 
   Total Assets$  169,456 $  169,023 
      
 Liabilities and Shareholders' Equity    
 Current Liabilities    
   Accounts Payable$  4,486 $  4,025 
   Accrued Liabilities   5,765    5,381 
   Income Taxes Payable   2,821    2,821 
   Total Current Liabilities   13,072    12,227 
      
 Noncurrent Income Taxes Payable   18,594    20,364 
 Deferred Income Taxes   628    628 
 Other Liabilities   543    543 
   Total Liabilities   32,837    33,762 
      
 Shareholders’ Equity   136,619    135,261 
      
   Total Liabilities and Shareholders' Equity$  169,456 $  169,023 
      
 Additional information    
 Equity per Share$   6.75  $   6.68  

 

Comparative statements of operations (in thousands – unaudited):

 

            
  13 Weeks Ended   
            
  May 27, 2018  May 28, 2017  February 25, 2018   
            
 Net Sales$  31,102   $  27,417   $  27,804    
            
 Cost of Sales   22,594      21,095      20,914    
            
 Gross Profit   8,508      6,322      6,890    
   % of net sales 27.4%   23.1%   24.8%   
            
 Selling, General & Administrative
  Expenses
   4,819      4,727      5,404    
   % of net sales 15.5%   17.2%   19.4%   
            
 Restructuring Charges   183      1,361      287    
            
 Earnings from Operations   3,506      234      1,199    
            
 Interest:          
   Interest Income   340      749      441    
            
   Loss on Sale of Marketable Securities   -       -       (1,342)   
            
   Interest Expense   -       510      467    
            
 Net Interest and Other Income/(Expense)   340      239      (1,368)   
            
 Earnings/(Loss) before Income Taxes   3,846      473      (169)   
            
 Income Tax Provision/(Benefit)   678      (921)     (18,134)   
            
 Net Earnings$  3,168   $  1,394   $  17,965    
            

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

 

                     
  13 Weeks Ended
May 27, 2018
  13 Weeks Ended
May 28, 2017
  13 Weeks Ended
February 25, 2018
  GAAP Specials Items Before Special Items  GAAP Specials Items Before Special Items  GAAP Specials Items Before Special Items
                     
 Selling, General & Administrative
  Expenses
$  4,819  $  (120) $  4,699   $  4,727  $  (375) $  4,352   $  5,404  $  (675) $  4,729 
   % of net sales 15.5%    15.1%   17.2%    15.9%   19.4%    17.0%
                     
 Restructuring Charges   183     (183)    -       1,361     (1,361)    -       287     (287)    -  
   % of net sales 0.6%    0.0%   5.0%    0.0%   1.0%    0.0%
                     
 Earnings from Operations   3,506     303     3,809      234     1,736     1,970      1,199     962     2,161 
   % of net sales 11.3%    12.2%   0.9%    7.2%   4.3%    7.8%
                     
 Interest Income   340     -      340      749     -      749      441     -      441 
   % of net sales 1.1%    1.1%   2.7%    2.7%   1.6%    1.6%
                     
 Loss on Sale of Marketable Securities   -      -      -       -        -       (1,342)    1,342     -  
   % of net sales 0.0%    0.0%   0.0%    0.0%   -4.8%    0.0%
                     
 Interest Expense   -      -      -       510     -      510      467     (144)    323 
   % of net sales 0.0%    0.0%   1.9%    1.9%   1.7%    1.2%
                     
 Net Interest and Other Income/(Expense)   340     -      340      239     -      239      (1,368)    1,486     118 
   % of net sales 1.1%    1.1%   0.9%    0.9%   -4.9%    0.4%
                     
 Earnings/(Loss) before Income Taxes   3,846     303     4,149      473     1,736     2,209      (169)    2,448     2,279 
   % of net sales 12.4%    13.3%   1.7%    8.1%   -0.6%    8.2%
                     
 Income Tax Provision/(Benefit)   678     98     776      (921)    646     (275)     (18,134)    18,441     307 
   Effective Tax Rate 17.6%    18.7%   -194.7%    -12.4%   10730.2%    13.5%
                     
 Net Earnings   3,168     205     3,373      1,394     1,090     2,484      17,965    (15,993)    1,972 
   % of net sales 10.2%    10.8%   5.1%    9.1%   64.6%    7.1%
                     
                     
                     
                     
                     

                                                                                                                                                  




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