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CST: 22/07/2019 03:50:27   

Park Electrochemical Corp. Reports First Quarter Results

10 Days ago

An investor presentation will be available on the Company's web site at
 
https://parkelectro.com/shareholders/investor-conference-calls/ .

MELVILLE, N.Y., July 11, 2019 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE-PKE) reported results for the 2020 fiscal year first quarter ended June 2, 2019. As previously reported, Park completed the sale of its Electronics Business to AGC Inc. on December 4, 2018. Therefore, the results of operations for the Electronics Business in the prior year are reported as discontinued operations. Continuing operations discussed below refer to Park’s Aerospace Business unless otherwise indicated, and prior periods in such discussion have been restated to reflect results excluding the Electronics Business.

A live audio webcast, along with the presentation materials, will be available at https://parkelectro.com/shareholders/investor-conference-calls/. An archive replay will also be available at the same link for one year. Presentation materials will also be available at approximately 9:00 A.M. EDT today at https://parkelectro.com/shareholders/investor-conference-calls/ and on the Company’s website at www.parkelectro.com under “Investor Conference Calls” on the “Shareholders” page.

Continuing Operations:

In reading the following results of continuing operations, please note that the first quarter ended June 2, 2019 and the first quarter ended May 27, 2018 were 13-week periods while the fourth quarter ended March 3, 2019 was a 14-week period.

Park reported net sales of $14,950,000 for the 2020 fiscal year first quarter ended June 2, 2019 compared to net sales of $10,393,000 for the 2019 fiscal year first quarter ended May 27, 2018 and net sales of $16,659,000 for the 2019 fiscal year fourth quarter ended March 3, 2019.  Net earnings from continuing operations for the 2020 fiscal year first quarter were $2,714,000 compared to $816,000 for the 2019 fiscal year first quarter and $1,588,000 for the 2019 fiscal year fourth quarter.

Park reported net earnings from continuing operations before special items of $2,858,000 for the 2020 fiscal year first quarter compared to net earnings from continuing operations before special items of $816,000 for the 2019 fiscal year first quarter and net earnings from continuing operations before special items of $3,944,000 for the 2019 fiscal year fourth quarter. EBITDA from continuing operations for the 2020 fiscal year first quarter was $3,372,000 compared to EBITDA from continuing operations of $1,386,000 for the 2019 fiscal year first quarter and EBITDA from continuing operations of $4,251,000 for the 2019 fiscal year fourth quarter.

In the 2020 fiscal year first quarter, the Company recorded a one-time tax charge of $144,000 for the write down of deferred tax assets for stock option expirations pertaining to employees who transferred to AGC Inc. in connection with the sale of the electronics business. In the 2019 fiscal year fourth quarter, the Company recorded a one-time tax charge of $788,000 related to the Tax Cuts and Jobs Act enacted in December 2017, a pre-tax loss on the sales of marketable securities of $1,498,000 and a pre-tax stock option modification charge of $528,000.

Park reported basic and diluted earnings per share from continuing operations of $0.13 for the 2020 fiscal year first quarter compared to basic and diluted earnings per share from continuing operations of $0.04 for the 2019 fiscal year first quarter and basic and diluted earnings per share from continuing operations of $0.08 for the 2019 fiscal year fourth quarter. Basic and diluted earnings per share from continuing operations before special items were $0.14 for the 2020 fiscal year first quarter compared to $0.04 for the 2019 fiscal year first quarter and $0.19 for the 2019 fiscal year 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 4366769.

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 Wednesday, July 17, 2019.  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 4366769 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, including the investor presentation, 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 charges, losses on sales of marketable securities, stock option modification charges, and EBITDA. Accordingly, in addition to disclosing its operating results determined in accordance with GAAP, Park discloses non-GAAP measures including EBITDA and 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 includes a reconciliation of the non-GAAP operating results before special items to earnings determined in accordance with GAAP and a reconciliation of GAAP pre-tax earnings to EBITDA. Such non-GAAP financial measures are provided to supplement the results provided in accordance with GAAP.

Park Electrochemical Corp. is an Aerospace Company which develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets.  Park’s advanced composite materials include film adhesives (undergoing qualification) and lightning strike materials.  Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing applications.  Park’s advanced composite materials are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (UAVs commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft.  Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications.  As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low volume tooling for the aerospace industry.  Target markets for Park’s composite parts and structures (which include Park’s patented composite Sigma Strut and Alpha Strut product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft.  Park’s objective is to do what others are either unwilling or unable to do.  When nobody else wants to do it because it is too difficult, too small or too annoying, sign us up. 

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   14 Weeks
Ended
           
    June 2, 2019     May 27, 2018     March 3,
2019
  Sales $   14,950       $   10,393     $   16,659  
                 
  Net Earnings before Special Items1 $   2,858       $   816     $   3,944  
  Special Items, Net of Tax:              
    Tax Impact of Cancelled Stock Options     (144 )         -         -  
    Stock Option Modification     -           -         (408 )
    Loss on Sale of Marketable Securities     -           -         (1,160 )
    Tax Cut and Jobs Act     -           -         (788 )
    Net Earnings from Continuing Operations $   2,714       $   816     $   1,588  
                 
    (Loss) Earnings from Discontinued Operations, Net of Tax $   (127 )     $   2,352     $   102,398  
                 
  Net Earnings $   2,587       $   3,168     $   103,986  
                 
  Basic Earnings per Share:              
    Basic Earnings before Special Items1 $   0.14       $   0.04     $   0.19  
    Special Items:              
    Tax Impact of Cancelled Stock Options     (0.01 )         -          -   
    Stock Option Modification     -            -          (0.02 )
    Loss on Sale of Marketable Securities     -            -          (0.05 )
    Tax Cut and Jobs Act     -            -          (0.04 )
    Basic Earnings per Share from Continuing Operations $   0.13       $   0.04     $   0.08  
                 
    Basic Earnings per Share from Discontinued Operations     -            0.12         5.02  
                 
    Basic Earnings per Share $   0.13       $   0.16     $   5.10  
                 
                 
                 
    Diluted Earnings before Special Items1 $   0.14       $   0.04     $   0.19  
    Special Items:              
    Tax Impact of Cancelled Stock Options     (0.01 )         -          -   
    Stock Option Modification     -            -          (0.02 )
    Loss on Sale of Marketable Securities     -            -          (0.05 )
    Tax Cut and Jobs Act     -            -          (0.04 )
    Diluted Earnings per Share from Continuing Operations $   0.13       $   0.04     $   0.08  
                 
    Diluted Earnings per Share from Discontinued Operations     -            0.12         4.99  
                 
    Diluted Earnings per Share $   0.13       $   0.16     $   5.07  
                 
  Weighted Average Shares Outstanding:              
    Basic     20,492           20,242         20,370  
    Diluted     20,586           20,296         20,501  
                 
  1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.                        
                           


Comparative balance sheets (in thousands):

 
    June 2, 2019   March 3,
2019
  Assets (unaudited)    
  Current Assets      
    Cash and Marketable Securities  $   151,057   $   151,624
    Accounts Receivable, Net     8,919       9,352
    Inventories     5,240       5,267
    Prepaid Expenses and Other Current Assets     1,591       1,690
    Total Current Assets     166,807       167,933
         
  Fixed Assets, Net     12,284       10,791
  Operating Right-of-use Assets     462       - 
  Other Assets     10,122       10,127
    Total Assets $   189,675   $   188,851
         
  Liabilities and Shareholders' Equity      
  Current Liabilities      
    Accounts Payable $   1,971   $   3,169
    Accrued Liabilities     2,342       2,920
    Income Taxes Payable     6,026       5,066
    Operating Lease Liability     188       - 
    Total Current Liabilities     10,527       11,155
         
  Long-term Operating Lease Liability     274       - 
  Non-current Income Taxes Payable     17,669       17,669
  Deferred Income Taxes     81       - 
  Other Liabilities     1,034       1,016
    Total Liabilities     29,585       29,840
         
  Shareholders’ Equity     160,090       159,011
         
    Total Liabilities and Shareholders' Equity $   189,675   $   188,851
         
  Additional information      
  Equity per Share $     7.81   $     7.84
             


Comparative statements of operations (in thousands – unaudited):

                 
    13 Weeks Ended   14 Weeks
Ended
                 
    June 2, 2019     May 27, 2018     March 3, 2019
                 
  Net Sales $   14,950       $   10,393       $   16,659  
                 
  Cost of Sales     10,146           7,541           10,756  
                 
  Gross Profit     4,804           2,852           5,903  
    % of net sales   32.1 %       27.4 %       35.4 %
                 
  Selling, General & Administrative Expenses     1,922           2,101           2,768  
    % of net sales   12.9 %       20.2 %       16.6 %
                 
  Earnings from Continuing Operations     2,882           751           3,135  
                 
  Interest and Other Income (Loss):              
    Interest Income     948           340           1,289  
                 
    Loss on Sale of Marketable Securities     -            -            (1,498 )
                 
  Net Interest and Other Income (Loss)     948           340           (209 )
                 
  Earnings from Continuing Operations before Income Taxes     3,830           1,091           2,926  
                 
  Income Tax Provision     1,116           275           1,338  
                 
  Net Earnings from Continuing Operations     2,714           816           1,588  
    % of net sales   18.2 %       7.9 %       9.5 %
                 
  (Loss) Earnings from Discontinued Operations, Net of Tax     (127 )         2,352           102,398  
                 
  Net Earnings $   2,587       $   3,168       $   103,986  
    % of net sales   17.3 %       30.5 %       624.2 %
                 


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

                                         
    13 Weeks Ended
June 2, 2019
    13 Weeks Ended
May 27, 2018
    14 Weeks Ended
March 3, 2019
    GAAP   Specials
Items
  Before
Special
Items
    GAAP   Specials
Items
  Before
Special
Items
    GAAP   Specials
Items
  Before
Special
Items
                                         
  Selling, General & Administrative
  Expenses
$   1,922     $   -      $   1,922       $   2,101     $   -    $   2,101       $   2,768     $   (528 )   $   2,240  
    % of net sales   12.9 %         12.9 %       20.2 %         20.2 %       16.6 %         13.4 %
                                         
  Earnings from Continuing Operations     2,882         -          2,882           751         -        751           3,135         528         3,663  
    % of net sales   19.3 %         19.3 %       7.2 %         7.2 %       18.8 %         22.0 %
                                         
  Interest Income     948         -          948           340         -        340           1,289         -          1,289  
    % of net sales   6.3 %         6.3 %       3.3 %         3.3 %       7.7 %         7.7 %
                                         
  Loss on Sale of Marketable Securities     -          -          -            -              -            (1,498 )       1,498         -   
    % of net sales   0.0 %         0.0 %       0.0 %         0.0 %       -9.0 %         0.0 %
                                         
  Net Interest and Other Income     948         -          948           340         -        340           (209 )       1,498         1,289  
    % of net sales   6.3 %         6.3 %       3.3 %         3.3 %       -1.3 %         7.7 %
                                         
  Earnings from Continuing Operations
  before Income Taxes
    3,830         -          3,830           1,091         -        1,091           2,926         2,026         4,952  
    % of net sales   25.6 %         25.6 %       10.5 %         10.5 %       17.6 %         29.7 %
                                         
  Income Tax Provision     1,116         (144 )       972           275         -        275           1,338         (330 )       1,008  
    Effective Tax Rate   29.1 %         25.4 %       25.2 %         25.2 %       45.7 %         20.4 %
                                         
  Net Earnings from Continuing Operations     2,714         144         2,858           816         -        816           1,588         2,356         3,944  
    % of net sales   18.2 %         19.1 %       7.9 %         7.9 %       9.5 %         23.7 %
                                         
  (Loss) Earnings from Discontinued Operations     (127 )           (127 )         2,352         205       2,557           102,398         (102,128 )       270  
    % of net sales   -0.8 %         -0.8 %       22.6 %         24.6 %       614.7 %         1.6 %
                                         
  Net Earnings     2,587         144         2,731           3,168         205       3,373           103,986         (99,772 )       4,214  
    % of net sales   17.3 %         18.3 %       30.5 %         32.5 %       624.2 %         25.3 %
                                         
                                         
  Earnings from Continuing Operations             2,882                   751                   3,663 1
  Addback non-cash expenses:                                      
    Depreciation             366                   434                   462  
    Stock Option Expense             124                   201                   126  
  EBITDA             3,372                   1,386                   4,251  
                                         
  1 Before special items                                      
                                         

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

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