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Park Aerospace Corp. Reports Second Quarter Results

MELVILLE, N.Y., Oct. 10, 2019 (GLOBE NEWSWIRE) -- Park Aerospace Corp. (NYSE-PKE) reported results for the 2020 fiscal year second quarter ended September 1, 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 presentation materials, will be available at https://edge.media-server.com/mmc/p/ycr9hepo at 11:00 a.m. EDT on Thursday, October 10, 2019. The presentation materials will also be available at approximately 9:00 a.m. EDT on Thursday, October 10, 2019 at https://parkaerospace.com/shareholders/investor-conference-calls/ and on the Company’s website at www.parkaerospace.com under “Investor Conference Calls” on the “Shareholders” page.

Continuing Operations:

Park reported net sales of $13,723,000 for the 2020 fiscal year second quarter ended September 1, 2019 compared to $11,211,000 for the 2019 fiscal year second quarter ended August 26, 2018 and $14,950,000 for the 2020 fiscal year first quarter ended June 2, 2019. Park’s net sales from continuing operations for the six months ended September 1, 2019 were $28,673,000 compared to $21,604,000 for the six months ended August 26, 2018. Net earnings from continuing operations for the 2020 fiscal year second quarter were $2,052,000 compared to $1,824,000 for the 2019 fiscal year second quarter and $2,714,000 for the 2020 fiscal year first quarter. Net earnings from continuing operations were $4,766,000 for the current year’s first six months compared to $2,640,000 for last year’s first six months.

Park reported net earnings from continuing operations before special items of $2,052,000 for the 2020 fiscal year second quarter compared to $1,036,000 for the 2019 fiscal year second quarter and $2,858,000 for the 2020 fiscal year first quarter. In the 2019 fiscal year second quarter, the Company recorded a one-time tax benefit of $788,000 related to the Tax Cuts and Jobs Act enacted in December 2017. EBITDA from continuing operations for the 2020 fiscal year second quarter was $2,406,000 compared to $1,663,000 for the 2019 fiscal year second quarter and $3,372,000 for the 2020 fiscal year first quarter.

For the six months ended September 1, 2019, Park reported net earnings from continuing operations before special items of $4,910,000 compared to $1,852,000 for last fiscal year’s first six months. In the 2020 fiscal year’s first six months, 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. The 2019 fiscal year’s first six months included the one-time tax benefit of $788,000 mentioned above. EBITDA from continuing operations for the current year’s first six months was $5,779,000 compared to $3,045,000 for last year’s first six months.

Park reported basic and diluted earnings per share from continuing operations of $0.10 for the 2020 fiscal year second quarter compared to $0.09 for the 2019 fiscal year second quarter and $0.13 for the 2020 fiscal year first quarter. Basic and diluted earnings per share from continuing operations before special items were $0.10 for the 2020 fiscal year second quarter compared to $0.05 for the 2019 fiscal year second quarter and $0.14 for the 2020 fiscal year first quarter.

Park reported basic and diluted earnings per share from continuing operations of $0.23 for the 2020 fiscal year’s first six months compared to $0.13 for the 2019 fiscal year’s first six months. Basic and diluted earnings per share from continuing operations before special items were $0.24 for the 2020 fiscal year’s first six months compared to $0.09 for 2019 fiscal year’s first six months.

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 8780956.

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, October 16, 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 8780956 or on the Company's web site at www.parkaerospace.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.parkaerospace.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 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 Aerospace 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 proprietary 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.parkaerospace.com.

Performance table, including non-GAAP information (in thousands, except per share amounts – unaudited):

13 Weeks Ended

26 Weeks Ended

September 1, 2019

August 26, 2018

June 2, 2019

September 1, 2019

August 26, 2018

Sales

$

13,723

$

11,211

$

14,950

$

28,673

$

21,604

Net Earnings before Special Items1

$

2,052

$

1,036

$

2,858

$

4,910

$

1,852

Special Items, Net of Tax:

Tax Impact of Cancelled Stock Options

-

-

(144

)

(144

)

-

Tax Cuts and Jobs Act

-

788

-

-

788

Net Earnings from Continuing Operations

$

2,052

$

1,824

$

2,714

$

4,766

$

2,640

Earnings (Loss) from Discontinued Operations, Net of Tax

$

83

$

876

$

(127

)

$

(44

)

$

3,228

Net Earnings

$

2,135

$

2,700

$

2,587

$

4,722

$

5,868

Basic Earnings per Share:

Basic Earnings before Special Items1

$

0.10

$

0.05

$

0.14

$

0.24

$

0.09

Special Items:

Tax Impact of Cancelled Stock Options

-

-

(0.01

)

(0.01

)

-

Tax Cuts and Jobs Act

-

0.04

-

-

0.04

Basic Earnings per Share from Continuing Operations

$

0.10

$

0.09

$

0.13

$

0.23

$

0.13

Basic Earnings per Share from Discontinued Operations

-

0.04

-

-

0.16

Basic Earnings per Share

$

0.10

$

0.13

$

0.13

$

0.23

$

0.29

Diluted Earnings before Special Items1

$

0.10

$

0.05

$

0.14

$

0.24

$

0.09

Special Items:

Tax Impact of Cancelled Stock Options

-

-

(0.01

)

(0.01

)

-

Tax Cuts and Jobs Act

-

0.04

-

-

0.04

Diluted Earnings per Share from Continuing Operations

$

0.10

$

0.09

$

0.13

$

0.23

$

0.13

Diluted Earnings per Share from Discontinued Operations

-

0.04

-

-

0.16

Diluted Earnings per Share

$

0.10

$

0.13

$

0.13

$

0.23

$

0.29

Weighted Average Shares Outstanding:

Basic

20,499

20,253

20,492

20,495

20,248

Diluted

20,601

20,382

20,588

20,593

20,339

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

Comparative balance sheets (in thousands):

September 1, 2019

March 3, 2019

Assets

(unaudited)

Current Assets

Cash and Marketable Securities

$

145,355

$

151,624

Accounts Receivable, Net

8,855

9,352

Inventories

4,626

5,267

Prepaid Expenses and Other Current Assets

1,913

1,690

Total Current Assets

160,749

167,933

Fixed Assets, Net

12,311

10,791

Operating Right-of-use Assets

373

-

Other Assets

10,096

10,127

Total Assets

$

183,529

$

188,851

Liabilities and Shareholders' Equity

Current Liabilities

Accounts Payable

$

1,819

$

3,169

Accrued Liabilities

1,952

2,920

Income Taxes Payable

1,481

5,066

Operating Lease Liability

109

-

Total Current Liabilities

5,361

11,155

Long-term Operating Lease Liability

264

-

Non-current Income Taxes Payable

15,986

17,669

Deferred Income Taxes

65

-

Other Liabilities

1,050

1,016

Total Liabilities

22,726

29,840

Shareholders’ Equity

160,803

159,011

Total Liabilities and Shareholders' Equity

$

183,529

$

188,851

Additional information

Equity per Share

$

7.84

$

7.84

Comparative statements of operations (in thousands – unaudited):

13 Weeks Ended

26 Weeks Ended

September 1, 2019

August 26, 2018

June 2, 2019

September 1, 2019

August 26, 2018

Net Sales

$

13,723

$

11,211

$

14,950

$

28,673

$

21,604

Cost of Sales

9,910

8,066

10,146

20,056

15,607

Gross Profit

3,813

3,145

4,804

8,617

5,997

% of net sales

27.8

%

28.1

%

32.1

%

30.1

%

27.8

%

Selling, General & Administrative Expenses

1,914

2,116

1,922

3,836

4,217

% of net sales

13.9

%

18.9

%

12.9

%

13.4

%

19.5

%

Earnings from Continuing Operations

1,899

1,029

2,882

4,781

1,780

Interest and Other Income:

Interest Income

863

357

948

1,811

697

Earnings from Continuing Operations before Income Taxes

2,762

1,386

3,830

6,592

2,477

Income Tax Provision (Benefit)

710

(438

)

1,116

1,826

(163

)

Net Earnings from Continuing Operations

2,052

1,824

2,714

4,766

2,640

% of net sales

15.0

%

16.3

%

18.2

%

16.6

%

12.2

%

Earnings (Loss) from Discontinued Operations, Net of Tax

83

876

(127

)

(44

)

3,228

Net Earnings

$

2,135

$

2,700

$

2,587

$

4,722

$

5,868

% of net sales

15.6

%

24.1

%

17.3

%

16.5

%

27.2

%

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

13 Weeks Ended
September 1, 2019

13 Weeks Ended
August 26, 2018

13 Weeks Ended
June 2, 2019

GAAP

Specials Items

Before Special Items

GAAP

Specials Items

Before Special Items

GAAP

Specials Items

Before Special Items

Selling, General & Administrative Expenses

$

1,914

$

-

$

1,914

$

2,116

$

-

$

2,116

$

1,922

$

-

$

1,922

% of net sales

13.9

%

13.9

%

18.9

%

18.9

%

12.9

%

12.9

%

Earnings from Continuing Operations

1,899

-

1,899

1,029

-

1,029

2,882

-

2,882

% of net sales

13.8

%

13.8

%

9.2

%

9.2

%

19.3

%

19.3

%

Interest Income

863

-

863

357

-

357

948

-

948

% of net sales

6.3

%

6.3

%

3.2

%

3.2

%

6.3

%

6.3

%

Net Interest and Other Income

863

-

863

357

-

357

948

-

948

% of net sales

6.3

%

6.3

%

3.2

%

3.2

%

6.3

%

6.3

%

Earnings from Continuing Operations before Income Taxes

2,762

-

2,762

1,386

-

1,386

3,830

-

3,830

% of net sales

20.1

%

20.1

%

12.4

%

12.4

%

25.6

%

25.6

%

Income Tax Provision

710

-

710

(438

)

788

350

1,116

(144

)

972

Effective Tax Rate

25.7

%

25.7

%

-31.6

%

25.3

%

29.1

%

25.4

%

Net Earnings from Continuing Operations

2,052

-

2,052

1,824

(788

)

1,036

2,714

144

2,858

% of net sales

15.0

%

15.0

%

16.3

%

9.2

%

18.2

%

19.1

%

Earnings (Loss) from Discontinued Operations

83

83

876

876

(127

)

-

(127

)

% of net sales

0.6

%

0.6

%

7.8

%

7.8

%

-0.8

%

-0.8

%

Net Earnings

2,135

-

2,135

2,700

(788

)

1,912

2,587

144

2,731

% of net sales

15.6

%

15.6

%

24.1

%

17.1

%

17.3

%

18.3

%

Earnings from Continuing Operations

1,899

1,029

2,882

Addback non-cash expenses:

Depreciation

366

435

366

Stock Option Expense

141

199

124

EBITDA

2,406

1,663

3,372

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

26 Weeks Ended
September 1, 2019

26 Weeks Ended
August 26, 2018

GAAP

Specials Items

Before Special Items

GAAP

Specials Items

Before Special Items

Earnings from Operations

4,781

-

4,781

1,780

-

1,780

% of net sales

16.7

%

16.7

%

8.2

%

8.2

%

Interest Income

1,811

1,811

697

-

697

% of net sales

6.3

%

6.3

%

3.2

%

3.2

%

Interest Expense

-

-

-

-

-

-

% of net sales

0.0

%

0.0

%

0.0

%

0.0

%

Net Interest and Other Income

1,811

-

1,811

697

-

697

% of net sales

6.3

%

6.3

%

3.2

%

3.2

%

Earnings before Income Taxes

6,592

-

6,592

2,477

-

2,477

% of net sales

23.0

%

23.0

%

11.5

%

11.5

%

Income Tax Provision (Benefit)

1,826

(144

)

1,682

(163

)

788

625

Effective Tax Rate

27.7

%

25.5

%

-6.6

%

25.2

%

Net Earnings from continuing operations

4,766

144

4,910

2,640

(788

)

1,852

% of net sales

16.6

%

17.1

%

12.2

%

8.6

%

(Loss) Earnings from discontinued operations

(44

)

-

(44

)

3,228

-

3,228

% of net sales

-0.2

%

-0.2

%

14.9

%

14.9

%

Net Earnings

4,722

144

4,866

5,868

(788

)

5,080

% of net sales

16.5

%

17.0

%

27.2

%

23.5

%

Earnings from Operations

4,781

1,780

Addback non-cash expenses:

Depreciation

733

865

Stock Option Expense

265

400

EBITDA

5,779

3,045


Contact:

Donna D'Amico-Annitto

486 North Oliver Road, Bldg. Z
Newton, Kansas 67114
(316) 283-6500