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Park Electrochemical Corp. Reports First Quarter Results

Posted: June 24, 2015 4:05 am (UTC)

Park Electrochemical Corp. Reports First Quarter Results

MELVILLE, N.Y.

Park Electrochemical Corp. (NYSE-PKE) reported net sales of $37,829,000 for the 2016 fiscal year’s first quarter ended May 31, 2015 compared to net sales of $48,817,000 for last fiscal year’s first quarter ended June 1, 2014 and net sales of $36,241,000 for last fiscal year’s fourth quarter ended March 1, 2015.

Park reported net earnings before special items of $4,867,000 for the current year’s first quarter compared to net earnings before special items of $8,579,000 for last year’s first quarter and net earnings before special items of $4,977,000 for last year’s fourth quarter. In the current year’s first quarter, the Company recorded pre-tax restructuring charges of $124,000 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 first quarter, the Company recorded pre-tax restructuring charges of $267,000 in connection with the aforementioned facility closures. In addition, the Company recorded a pre-tax charge of $260,000 in last year’s first quarter for additional fees incurred in connection with the 2014 fiscal year-end audit. In last year’s fourth quarter, the Company recorded pre-tax restructuring charges of $193,000 in connection with the aforementioned facility closures. In addition, the Company recorded a pre-tax charge of $206,000 in last year’s fourth quarter related to a modification of previously issued employee stock options resulting from the special cash dividend paid by the Company in February 2015. Accordingly, net earnings for the current year’s first quarter were $4,777,000 compared to $8,216,000 for last year’s first quarter and $4,841,000 for last year’s fourth quarter.

Park reported basic and diluted earnings per share before special items of $0.24 for the current year’s first quarter compared to basic and diluted earnings per share before special items of $0.41 for last year’s first quarter and basic and diluted earnings per share before special items of $0.24 for last year’s fourth quarter. Basic and diluted earnings per share were $0.23 for the current year’s first quarter compared to basic and diluted earnings per share of $0.39 for last year’s first quarter and basic and diluted earnings per share of $0.23 for last 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 69761608.

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 Monday, June 29, 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 69761608 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, audit fee and stock option modification 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
       
5/31/15 6/1/14 3/1/15
Sales $ 37,829 $ 48,817 $ 36,241
 
Net Earnings before Special Items1 $ 4,867 $ 8,579 $ 4,977
Special Items, net of Tax:
Restructuring Charges (90 ) (204 ) (139 )
Modification of Stock Options 3
Audit Fees       (159 )    
Net Earnings $ 4,777   $ 8,216   $ 4,841  
 
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items1 $ 0.24 $ 0.41 $ 0.24
Special Items:
Restructuring Charges (0.01 ) (0.01 ) (0.01 )
Modification of Stock Options
Audit Fees       (0.01 )    
Basic Earnings (Loss) per Share $ 0.23   $ 0.39   $ 0.23  
 
Diluted Earnings before Special Items1 $ 0.24 $ 0.41 $ 0.24
Special Items:
Restructuring Charges (0.01 ) (0.01 ) (0.01 )
Modification of Stock Options
Audit Fees       (0.01 )    
Diluted Earnings (Loss) per Share $ 0.23   $ 0.39   $ 0.23  
 
Weighted Average Shares Outstanding:
Basic 20,546 20,880 20,896
Diluted 20,565 20,988 20,937
 

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

 

Comparative balance sheets (in thousands):

 
      5/31/2015     3/1/2015

Assets

Current Assets
Cash and Marketable Securities $ 229,018 $ 272,133
Accounts Receivable, Net 21,523 21,431
Inventories 14,533 14,439
Prepaid Expenses and Other Current Assets   6,126   5,256
Total Current Assets 271,200 313,259
 
Fixed Assets, Net 23,821 26,537
Restricted Cash 25,000
Other Assets   10,786   10,886
Total Assets $ 330,807 $ 350,682
 

Liabilities and Shareholders’ Equity

Current Liabilities
Current Portion of Long-Term Debt $ 11,250 $ 10,000
Accounts Payable 5,904 6,882
Accrued Liabilities 5,330 4,767
Income Taxes Payable 4,220 4,141
Current Deferred Income Taxes   65   3,934
Total Current Liabilities 26,769 29,724
 
Long-Term Debt 80,250 84,000
Deferred Income Taxes 47,164 54,155
Other Liabilities   1,204   1,204
Total Liabilities 155,387 169,083
 
Shareholders’ Equity   175,420   181,599
 
Total Liabilities and Shareholders’ Equity $ 330,807 $ 350,682
 

Additional information

Equity per Share $ 8.54 $ 8.69
Total Cash, Restricted Cash and Marketable Securities $ 254,018 $ 272,133
 
 

Comparative statements of operations (in thousands):

 
      13 Weeks Ended (unaudited)
 

May 31,
2015

   

June 1,
2014

   

March 1,
2015

 
Net Sales $ 37,829 $ 48,817 $ 36,241
 
Cost of Sales   26,462     31,888     24,986  
 
Gross Profit 11,367 16,929 11,255
% of net sales 30.0 % 34.7 % 31.1 %
 

Selling, General & Administrative

Expenses

5,801 6,596 5,771
 
Restructuring Charge   124     267     193  
 
Earnings from Operations 5,442 10,066 5,291
 
Interest:
Interest Income 265 147 232
 
Interest Expense   369     353     364  
 
Net Interest Expense   (104 )   (206 )   (132 )
 
Earnings before Income Taxes 5,338 9,860 5,159
 
Income Tax Provision 561 1,644 318
     
Net Earnings $ 4,777   $ 8,216   $ 4,841  
 
 

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

 
 

13 Weeks Ended
May 31, 2015

   

13 Weeks Ended
June 1, 2014

   

13 Weeks Ended
March 1, 2015

GAAP  

Specials
Items

 

Before
Special
Items

GAAP  

Specials
Items

 

Before
Special
Items

GAAP  

Specials
Items

 

Before
Special
Items

 
Selling, General & Administrative

Expenses

5,801 5,801 6,596 (260) 6,336 5,771 (206) 5,565
% of net sales 15.3% 15.3% 13.5% 13.0% 15.9% 15.4%
 
Restructuring Charge 124 (124) 267 (267) 193 (193)
% of net sales 0.3% 0.0% 0.5% 0.0% 0.5% 0.0%
 
Earnings from Operations 5,442 124 5,566 10,066 527 10,593 5,291 399 5,690
% of net sales 14.4% 14.7% 20.6% 21.7% 14.6% 15.7%
 
Earnings before Income Taxes 5,338 124 5,462 9,860 527 10,387 5,159 399 5,558
% of net sales 14.1% 14.4% 20.2% 21.3% 14.2% 15.3%
 
Income Tax Provision 561 34 595 1,644 164 1,808 318 263 581
Effective Tax Rate 10.5% 10.9% 16.7% 17.4% 6.2% 10.5%
 
Net Earnings 4,777 90 4,867 8,216 363 8,579 4,841 136 4,977
% of net sales 12.6% 12.9% 16.8% 17.6% 13.4% 13.7%
 

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