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

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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. 

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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 Operations2,301  -  2,301   456  - 456   1,029  -  1,029 
    % of net sales17.9%   17.9%  4.5%   4.5%  9.2%   9.2%
                     
 Interest Income393  -  393   734  - 734   357  -  357 
    % of net sales3.1%   3.1%  7.2%   7.2%  3.2%   3.2%
                     
 Interest Expense-  -  -   689  - 689   -  -  - 
    % of net sales0.0%   0.0%  6.7%   6.7%  0.0%   0.0%
                     
 Net Interest and Other Income393  -  393   45  - 45   357  -  357 
    % of net sales3.1%   3.1%  0.4%   0.4%  3.2%   3.2%
                     
 Earnings before Income Taxes2,694  -  2,694   501  - 501   1,386  -  1,386 
    % of net sales21.0%   21.0%  4.9%   4.9%  12.4%   12.4%
                     
 Income Tax Provision/(Benefit)616    616   157  - 157   (438) 788  350 
    Effective Tax Rate22.9%   22.9%  31.3%   31.3%  -31.6%   25.3%
                     
 Net Earnings from continuing operations2,078  -  2,078   344  - 344   1,824  (788) 1,036 
    % of net sales16.2%   16.2%  3.4%   3.4%  16.3%   9.2%
                     
 Earnings from discontinued operations1,613  (1,565) 48   372  415 787   876  336  1,212 
    % of net sales12.5%   0.4%  3.6%   7.7%  7.8%   10.8%
                     
 Net Earnings3,691  (1,565) 2,126   716  415 1,131   2,700  (452) 2,248 
    % of net sales28.7%   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 Operations4,081  -  4,081   1,281  - 1,281        
    % of net sales11.8%   11.8%  4.2%   4.2%       
                     
 Interest Income1,090    1,090   2,234  - 2,234        
    % of net sales3.2%   3.2%  7.4%   7.4%       
                     
 Interest Expense-  -  -   1,802  - 1,802        
    % of net sales0.0%   0.0%  5.9%   5.9%       
                     
 Net Interest and Other Income1,090  -  1,090   432  - 432        
    % of net sales3.2%   3.2%  1.4%   1.4%       
                     
 Earnings before Income Taxes5,171  -  5,171   1,713  - 1,713        
    % of net sales15.0%   15.0%  5.7%   5.7%       
                     
 Income Tax Provision453  788  1,241   438  - 438        
    Effective Tax Rate8.8%   24.0%  25.6%   25.6%       
                     
 Net Earnings from continuing operations4,718  (788) 3,930   1,275  - 1,275        
    % of net sales13.7%   11.4%  4.2%   4.2%       
                     
 Earnings from discontinued operations4,841  (1,026) 3,815   1,355  3,328 4,683        
    % of net sales14.0%   11.1%  4.5%   15.5%       
                     
 Net Earnings9,559  (1,814) 7,745   2,630  3,328 5,958        
    % of net sales27.7%   22.5%  8.7%   19.7%       

 

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

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