MRO Magazine

Park Electrochemical Corp. Reports Second Quarter Results


October 7, 2015
By Business Wire News

MELVILLE, N.Y.

Park Electrochemical Corp. (NYSE-PKE) reported net sales of $37,947,000 for the 2016 fiscal year’s second quarter ended August 30, 2015 compared to net sales of $42,349,000 for last fiscal year’s second quarter ended August 31, 2014 and net sales of $37,829,000 for the 2016 fiscal year’s first quarter ended May 31, 2015. Park’s net sales for the six months ended August 30, 2015 were $75,776,000 compared to net sales of $91,166,000 for the six months ended August 31, 2014.

Park reported net earnings before special items of $4,639,000 for the current year’s second quarter compared to net earnings before special items of $5,015,000 for last year’s second quarter and net earnings before special items of $4,867,000 for the current year’s first quarter. In the current year’s second quarter, the Company recorded pre-tax restructuring charges of $91,000 related to the closure in fiscal year 2013 of the Company’s Nelco Technology (Zhuhai FTZ) Ltd. facility located in the Free Trade Zone in Zhuhai, China and the closure in fiscal year 2009 of its New England Laminates Co., Inc. facility located in Newburgh, New York. In last year’s second quarter, the Company recorded pre-tax restructuring charges of $83,000 in connection with the aforementioned facility closures. In the current year’s first quarter, the Company recorded pre-tax restructuring charges of $124,000 in connection with the aforementioned facility closures. Accordingly, net earnings for the current year’s second quarter were $4,569,000 compared to $4,955,000 for last year’s second quarter and $4,777,000 for the current year’s first quarter.

For the six-month period ended August 30, 2015, Park reported net earnings before special items of $9,506,000 compared to net earnings before special items of $13,594,000 for last fiscal year’s first six-month period. The current year’s six-month period included pre-tax restructuring charges of $215,000 related to the facility closures mentioned above. Last year’s six-month period included pre-tax restructuring charges of $350,000 related to the facility closures mentioned above. In addition, the Company recorded a pre-tax charge of $260,000 during last year’s six-month period for additional fees incurred in connection with the 2014 fiscal year-end audit. Accordingly, net earnings were $9,346,000 for the current year’s six-month period compared to net earnings of $13,171,000 for last year’s six-month period.

Park reported basic and diluted earnings per share before special items of $0.23 for the current year’s second quarter compared to basic and diluted earnings per share before special items of $0.24 for last year’s second quarter and basic and diluted earnings per share before special items of $0.24 for the current year’s first quarter. Basic and diluted earnings per share were $0.23 for the current year’s second quarter compared to basic and diluted earnings per share of $0.24 for last year’s second quarter and basic and diluted earnings per share of $0.23 for the current year’s first quarter.

Park reported basic and diluted earnings per share before special items of $0.47 for the current year’s first six months compared to basic and diluted earnings per share before special items of $0.65 for last year’s six-month period. Basic and diluted earnings per share were $0.46 for the current year’s first six months compared to basic and diluted earnings per share of $0.63 for last 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 52966253.

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 Tuesday, October 13, 2015. 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 52966253 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 and audit fee charges. 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 high-technology digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure and high-end computing markets and advanced composite materials, parts and assemblies and low-volume tooling for the aerospace markets. Park’s core capabilities are in the areas of polymer chemistry formulation and coating technology. The Company’s manufacturing facilities are located in Singapore, France, Kansas, 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       

                 
8/30/15 8/31/14 5/31/15 8/30/15 8/31/14
Sales $ 37,947 $ 42,349 $ 37,829 $ 75,776 $ 91,166
 
Net Earnings before Special Items1 $ 4,639 $ 5,015 $ 4,867 $ 9,506 $ 13,594
Special Items, net of Tax:
Restructuring Charges (70 ) (60 ) (90 ) (160 ) (264 )
Audit Fees                   (159 )
Net Earnings $ 4,569   $ 4,955   $ 4,777   $ 9,346   $ 13,171  
 
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1 $ 0.23 $ 0.24 $ 0.24 $ 0.47 $ 0.65
Special Items:
Restructuring Charges (0.01 ) (0.01 ) (0.01 )
Audit Fees                   (0.01 )
Basic Earnings (Loss) per Share $ 0.23   $ 0.24   $ 0.23   $ 0.46   $ 0.63  
 
Diluted Earnings before Special Items1 $ 0.23 $ 0.24 $ 0.24 $ 0.47 $ 0.65
Special Items:
Restructuring Charges (0.01 ) (0.01 ) (0.01 )
Audit Fees                   (0.01 )
Diluted Earnings (Loss) per Share $ 0.23   $ 0.24   $ 0.23   $ 0.46   $ 0.63  
 
Weighted Average Shares Outstanding:
Basic 20,337 20,925 20,546 20,442 20,902
Diluted 20,340 21,029 20,565 20,453 21,008
 

1 Refer to “Reconciliation of non-GAAP financial measures” below for information regarding Special Items.

 
 

Comparative balance sheets (in thousands):

 
            8/30/2015       3/1/2015

Assets

(unaudited)
Current Assets
Cash and Marketable Securities $ 229,463 $ 272,133
Accounts Receivable, Net 21,921 21,431
Inventories 14,050 14,439
Prepaid Expenses and Other Current Assets   5,472   5,256
Total Current Assets 270,906 313,259
 
Fixed Assets, Net 23,030 26,537
Restricted Cash 25,000
Other Assets   11,210   10,886
Total Assets $ 330,146 $ 350,682
 

Liabilities and Shareholders’ Equity

Current Liabilities
Current Portion of Long-Term Debt $ 12,500 $ 10,000
Accounts Payable 8,315 6,882
Accrued Liabilities 5,284 4,767
Income Taxes Payable 3,289 4,141
Current Deferred Income Taxes   65   3,934
Total Current Liabilities 29,453 29,724
 
Long-Term Debt 76,500 84,000
Deferred Income Taxes 47,164 54,155
Other Liabilities   1,204   1,204
Total Liabilities 154,321 169,083
 
Shareholders’ Equity   175,825   181,599
 
Total Liabilities and Shareholders’ Equity $ 330,146 $ 350,682
 

Additional information

Equity per Share$8.60$8.69
Total Cash, Restricted Cash and Marketable Securities$254,463$272,133
 
 

Comparative statements of operations (in thousands – unaudited):

 
        13 Weeks Ended     26 Weeks Ended
 

August 30,

2015

   

August 31,

2014

   

May 31,

2015

August 30,

2015

   

August 31,

2014

 
Net Sales $ 37,947 $ 42,349 $ 37,829 $ 75,776 $ 91,166
 
Cost of Sales   27,586     30,178     26,462     54,048     62,066  
 
Gross Profit 10,361 12,171 11,367 21,728 29,100
% of net sales 27.3 % 28.7 % 30.0 % 28.7 % 31.9 %
 

Selling, General & Administrative

  Expenses

5,009 6,252 5,801 10,810 12,848
% of net sales 13.2 % 14.8 % 15.3 % 14.3 % 14.1 %
 
Restructuring Charge   91     83     124     215     350  
 
Earnings from Operations 5,261 5,836 5,442 10,703 15,902
 
Interest:
Interest Income 317 226 265 582 373
 
Interest Expense   356     360     369     725     713  
 
Net Interest Expense   (39 )   (134 )   (104 )   (143 )   (340 )
 
Earnings before Income Taxes 5,222 5,702 5,338 10,560 15,562
 
Income Tax Provision 653 747 561 1,214 2,391
         
Net Earnings $ 4,569   $ 4,955   $ 4,777   $ 9,346   $ 13,171  
 
 

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

 
        13 Weeks Ended

August 30, 2015

    13 Weeks Ended

August 31, 2014

    13 Weeks Ended

May 31, 2015

GAAP    

Specials

Items

   

Before

Special

Items

GAAP      

Specials

Items

   

Before

Special

Items

GAAP    

Specials

Items

   

Before

Special

Items

   

Selling, General & Administrative

  Expenses

5,009 5,009 6,252 6,252 5,801 5,801
% of net sales 13.2% 13.2% 14.8% 14.8% 15.3% 15.3%
 
Restructuring Charge 91 (91) 83 (83) 124 (124)
% of net sales 0.2% 0.0% 0.2% 0.0% 0.3% 0.0%
 
Earnings from Operations 5,261 91 5,352 5,836 83 5,919 5,442 124 5,566
% of net sales 13.9% 14.1% 13.8% 14.0% 14.4% 14.7%
 
Earnings before Income Taxes 5,222 91 5,313 5,702 83 5,785 5,338 124 5,462
% of net sales 13.8% 14.0% 13.5% 13.7% 14.1% 14.4%
 
Income Tax Provision 653 21 674 747 23 770 561 34 595
Effective Tax Rate 12.5% 12.7% 13.1% 13.3% 10.5% 10.9%
 
Net Earnings 4,569 70 4,639 4,955 60 5,015 4,777 90 4,867
% of net sales 12.0% 12.2% 11.7% 11.8% 12.6% 12.9%
 
        26 Weeks Ended

August 30, 2015

    26 Weeks Ended

August 31, 2014

GAAP      

Specials

Items

   

Before

Special

Items

GAAP      

Specials

Items

   

Before

Special

Items

Selling, General & Administrative

  Expenses

10,810 10,810   12,848 (260) 12,588

   %

14.3% 14.3% 14.1% 13.8%
 
Restructuring Charge 215 (215) 350 (350)

   %

0.3% 0.0% 0.4% 0.0%
 
Earnings from Operations 10,703 215 10,918 15,902 610 16,512

   %

14.1% 14.4% 17.4% 18.1%
 
Earnings before Income Taxes 10,560 215 10,775 15,562 610 16,172

   %

13.9% 14.2% 17.1% 17.7%
 
Income Tax Provision 1,214 55 1,269 2,391 187 2,578
Effective Tax Rate 11.5% 11.8% 15.4% 15.9%
 
Net Earnings 9,346 160 9,506 13,171 423 13,594

   %

12.3% 12.5% 14.4% 14.9%
 

Park Electrochemical Corp.
Martina Bar Kochva , 631-465-3600