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Park Electrochemical Corp. Reports First Quarter Results

/EIN News/ -- 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 %
                                         
                                         
                                         
                                         
                                         

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

                                                                                                                                                  



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