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Park Electrochemical Corp. Reports Third Quarter Results and Declares Special Cash Dividend

THIRD QUARTER RESULTS

MELVILLE, N.Y., Jan. 03, 2019 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE-PKE) reported results for the 2019 fiscal year’s third quarter ended November 25, 2018. 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 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.

Continuing Operations:

Park reported net sales from continuing operations of $12,853,000 for the 2019 fiscal year third quarter ended November 25, 2018 compared to net sales from continuing operations of $10,229,000 for the 2018 fiscal year third quarter ended November 26, 2017 and net sales from continuing operations of $11,211,000 for the 2019 fiscal year second quarter ended August 26, 2018. Park’s net sales from continuing operations for the nine months ended November 25, 2018 were $34,457,000 compared to net sales from continuing operations of $30,310,000 for the nine months ended November 26, 2017. 

Net earnings from continuing operations for the 2019 fiscal year third quarter were $2,078,000 compared to $344,000 for the 2018 fiscal year third quarter and $1,824,000 for the 2019 fiscal year second quarter. The 2019 fiscal year second quarter net earnings included a one-time tax benefit of $788,000 related to the Tax Cuts and Jobs Act enacted in December 2017. Net earnings from continuing operations were $4,718,000 for the current year’s first nine months compared to $1,275,000 for last year’s first nine months. The current year’s first nine months net earnings included the $788,000 one-time tax benefit mentioned above.

Pre-tax earnings from continuing operations were $2,694,000 for the 2019 fiscal year third quarter compared to pre-tax earnings from continuing operations of $501,000 for the 2018 fiscal year third quarter and $1,386,000 for the 2019 fiscal year second quarter. Pre-tax earnings from continuing operations were $5,171,000 for the nine months ended November 25, 2018 compared to pre-tax earnings from continuing operations of $1,713,000 for last fiscal year’s first nine months.

Park reported basic and diluted earnings per share from continuing operations of $0.10 for the 2019 fiscal year third quarter compared to $0.02 for the 2018 fiscal year third quarter and $0.09 for the 2019 fiscal year second quarter. Basic and diluted earnings per share from continuing operations before special items were $0.10 for the 2019 fiscal year third quarter compared to $0.02 for the 2018 fiscal year third quarter and $0.05 for the 2019 fiscal year second quarter. 

Park reported basic and diluted earnings per share from continuing operations of $0.23 for the 2019 fiscal year’s first nine months compared to $0.06 for the 2018 fiscal year’s first nine months. Basic and diluted earnings per share from continuing operations before special items were $0.19 for the 2019 fiscal year’s first nine months compared to $0.06 for 2018 fiscal year’s first nine months.   

SPECIAL CASH DIVIDEND

Park announced that its Board of Directors has declared a special cash dividend of $4.25 per share payable February 26, 2019 to shareholders of record at the close of business on February 5, 2019.  The total amount of this special dividend will be approximately $86 million.

Including this special dividend and the regular quarterly dividend of $0.10 per share payable February 5, 2019 to shareholders of record on January 2, 2019, the Company has paid a total of approximately $506 million, or $24.75 per share, of cash dividends since the Company’s 2005 fiscal year.

***

The Company will conduct a conference call to discuss its financial results at 11:00 a.m. EST 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 6898105.

For those unable to listen to the call live, a conference call replay will be available from approximately 2:00 p.m. EST today through 11:59 p.m. EST on Wednesday, January 9, 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 6898105 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 and facility closure costs, and 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 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   39 Weeks Ended  
                   
    November 25,
2018
    November 26,
2017
    August 26,
2018
  November 25,
2018
    November 26,
2017
   
  Sales $   12,853     $   10,229     $   11,211   $   34,457     $   30,310    
                               
  Net Earnings before Special Items1 $   2,078     $   344     $   1,036   $   3,930     $   1,275    
  Special Items, Net of Tax:                            
    Tax Cuts and Jobs Act     -         -         788       788         -    
    Net Earnings from Continuing Operations $   2,078     $   344     $   1,824   $   4,718     $   1,275    
                               
    Earnings from Discontinued Operations, Net of Tax $   1,613     $   372     $   876   $   4,841     $   1,355    
                               
  Net Earnings $   3,691     $   716     $   2,700   $   9,559     $   2,630    
                               
  Basic Earnings per Share:                            
    Basic Earnings before Special Items1 $   0.10     $   0.02     $   0.05   $   0.19     $   0.06    
    Special Items:                            
    Tax Cuts and Jobs Act     -          -          0.04       0.04         -     
    Basic Earnings per Share from Continuing Operations $   0.10     $   0.02     $   0.09   $   0.23     $   0.06    
                               
    Basic Earnings per Share from Discontinued Operations     0.08         0.02         0.04       0.24         0.07    
                               
    Basic Earnings per Share $   0.18     $   0.04     $   0.13   $   0.47     $   0.13    
                               
                               
                               
    Diluted Earnings before Special Items1 $   0.10     $   0.02     $   0.05   $   0.19     $   0.06    
    Special Items:                            
    Tax Cuts and Jobs Act     -          -          0.04       0.04         -     
    Diluted Earnings per Share from Continuing Operations $   0.10     $   0.02     $   0.09   $   0.23     $   0.06    
                               
    Diluted Earnings per Share from Discontinued Operations     0.08         0.02         0.04       0.24         0.07    
                               
    Diluted Earnings per Share $   0.18     $   0.04     $   0.13   $   0.47     $   0.13    
                               
  Weighted Average Shares Outstanding:                            
    Basic     20,278         20,237         20,253       20,258         20,236    
    Diluted     20,352         20,261         20,382       20,343         20,252    
                           
  1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.    
     
                   


Comparative balance sheets
(in thousands):

 
    November 25,
2018
  February 25,
2018
 
  Assets (unaudited)   (Note 1)  
  Current Assets        
      Cash and Marketable Securities  $   112,386   $   108,231  
      Accounts Receivable, Net     5,864       6,961  
      Inventories     4,577       3,955  
      Prepaid Expenses and Other Current Assets     1,503       1,473  
      Current Assets - Discontinued Operations     23,110       20,648  
          Total Current Assets     147,440       141,268  
           
  Fixed Assets, Net     8,888       9,805  
  Other Assets     10,202       10,188  
  Non Current Assets - Discontinued Operations     11,409       11,799  
         Total Assets $   177,939   $   173,060  
           
  Liabilities and Shareholders' Equity        
  Current Liabilities        
      Accounts Payable $   1,709   $   1,825  
      Accrued Liabilities     1,461       1,022  
      Income Taxes Payable     1,539       1,456  
      Current Liabilities - Discontinued Operations     9,511       7,924  
         Total Current Liabilities     14,220       12,227  
           
  Noncurrent Income Taxes Payable     18,594       20,364  
  Deferred Income Taxes     3,107       4,047  
  Other Liabilities     1,060       314  
  Noncurrent Liabilities - Discontinued Operations     847       847  
         Total Liabilities     37,828       37,799  
           
  Shareholders’ Equity     140,111       135,261  
           
         Total Liabilities and Shareholders' Equity $   177,939   $   173,060  
           
  Additional information        
  Equity per Share $    6.91   $    6.68  
 
  (Note 1) - These amounts have not been audited and are based on the audited financial statements.
 


Comparative statements of operations
(in thousands – unaudited): 

                                 
    13 Weeks Ended     39 Weeks Ended  
                                 
    November 25,
2018
    November 26,
2017
    August 26,
2018
    November 25,
2018
    November 26,
2017
   
                                 
  Net Sales $   12,853       $   10,229       $   11,211       $   34,457       $   30,310      
                                 
  Cost of Sales     8,569           7,264           8,066           24,176           21,840      
                                 
  Gross Profit     4,284           2,965           3,145           10,281           8,470      
    % of net sales   33.3 %       29.0 %       28.1 %       29.8 %       27.9 %    
                                 
  Selling, General & Administrative
  Expenses
    1,983           2,509           2,116           6,200           7,189      
    % of net sales   15.4 %       24.5 %       18.9 %       18.0 %       23.7 %    
                                 
  Earnings from Operations     2,301           456           1,029           4,081           1,281      
                                 
  Interest:                              
    Interest Income     393           734           357           1,090           2,234      
                                 
    Interest Expense     -            689           -            -            1,802      
                                 
  Net Interest and Other Income     393           45           357           1,090           432      
                                 
  Earnings before Income Taxes     2,694           501           1,386           5,171           1,713      
                                 
  Income Tax Provision/(Benefit)     616           157           (438 )         453           438      
                                 
  Net Earnings from continuing operations     2,078           344           1,824           4,718           1,275      
    % of net sales   16.2 %       3.4 %       16.3 %       13.7 %       4.2 %    
                                 
  Earnings from discontinued operations, net of tax     1,613           372           876           4,841           1,355      
                                 
  Net Earnings $   3,691       $   716       $   2,700       $   9,559       $   2,630      
    % of net sales   28.7 %       7.0 %       24.1 %       27.7 %       8.7 %    
                                 


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

                                         
    13 Weeks Ended
November 25, 2018
    13 Weeks Ended
November 26, 2017
    13 Weeks Ended
August 26, 2018
    GAAP   Specials
Items
  Before
Special
Items
    GAAP   Specials
Items
  Before
Special
Items
    GAAP   Specials
Items
  Before
Special
Items
                                         
  Earnings from Operations 2,301     -     2,301       456     -   456       1,029     -     1,029  
     % of net sales 17.9 %       17.9 %     4.5 %       4.5 %     9.2 %       9.2 %
                                         
  Interest Income 393     -     393       734     -   734       357     -     357  
     % of net sales 3.1 %       3.1 %     7.2 %       7.2 %     3.2 %       3.2 %
                                         
  Interest Expense -     -     -       689     -   689       -     -     -  
     % of net sales 0.0 %       0.0 %     6.7 %       6.7 %     0.0 %       0.0 %
                                         
  Net Interest and Other Income 393     -     393       45     -   45       357     -     357  
     % of net sales 3.1 %       3.1 %     0.4 %       0.4 %     3.2 %       3.2 %
                                         
  Earnings before Income Taxes 2,694     -     2,694       501     -   501       1,386     -     1,386  
     % of net sales 21.0 %       21.0 %     4.9 %       4.9 %     12.4 %       12.4 %
                                         
  Income Tax Provision/(Benefit) 616         616       157     -   157       (438 )   788     350  
     Effective Tax Rate 22.9 %       22.9 %     31.3 %       31.3 %     -31.6 %       25.3 %
                                         
  Net Earnings from continuing operations 2,078     -     2,078       344     -   344       1,824     (788 )   1,036  
     % of net sales 16.2 %       16.2 %     3.4 %       3.4 %     16.3 %       9.2 %
                                         
  Earnings from discontinued operations 1,613     (1,565 )   48       372     415   787       876     336     1,212  
     % of net sales 12.5 %       0.4 %     3.6 %       7.7 %     7.8 %       10.8 %
                                         
  Net Earnings 3,691     (1,565 )   2,126       716     415   1,131       2,700     (452 )   2,248  
     % of net sales 28.7 %       16.5 %     7.0 %       11.1 %     24.1 %       20.1 %
                                         
                                         
    39 Weeks Ended
November 25, 2018
    39 Weeks Ended
November 26, 2017
             
    GAAP   Specials Items   Before Special Items     GAAP   Specials Items   Before Special Items              
  Earnings from Operations 4,081     -     4,081       1,281     -   1,281                
     % of net sales 11.8 %       11.8 %     4.2 %       4.2 %              
                                         
  Interest Income 1,090         1,090       2,234     -   2,234                
     % of net sales 3.2 %       3.2 %     7.4 %       7.4 %              
                                         
  Interest Expense -     -     -       1,802     -   1,802                
     % of net sales 0.0 %       0.0 %     5.9 %       5.9 %              
                                         
  Net Interest and Other Income 1,090     -     1,090       432     -   432                
     % of net sales 3.2 %       3.2 %     1.4 %       1.4 %              
                                         
  Earnings before Income Taxes 5,171     -     5,171       1,713     -   1,713                
     % of net sales 15.0 %       15.0 %     5.7 %       5.7 %              
                                         
  Income Tax Provision 453     788     1,241       438     -   438                
     Effective Tax Rate 8.8 %       24.0 %     25.6 %       25.6 %              
                                         
  Net Earnings from continuing operations 4,718     (788 )   3,930       1,275     -   1,275                
     % of net sales 13.7 %       11.4 %     4.2 %       4.2 %              
                                         
  Earnings from discontinued operations 4,841     (1,026 )   3,815       1,355     3,328   4,683                
     % of net sales 14.0 %       11.1 %     4.5 %       15.5 %              
                                         
  Net Earnings 9,559     (1,814 )   7,745       2,630     3,328   5,958                
     % of net sales 27.7 %       22.5 %     8.7 %       19.7 %              

 

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