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

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NEWTON, Kan., Jan. 09, 2020 (GLOBE NEWSWIRE) -- Park Aerospace Corp. (NYSE-PKE) reported results for the 2020 fiscal year third quarter ended December 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/qote4j37 at 11:00 a.m. EST on Thursday, January 9, 2020. The presentation materials will also be available at approximately 9:00 a.m. EST on Thursday, January 9, 2020 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 $15,847,000 for the 2020 fiscal year third quarter ended December 1, 2019 compared to $12,853,000 for the 2019 fiscal year third quarter ended November 25, 2018 and $13,723,000 for the 2020 fiscal year second quarter ended September 1, 2019.  Park's net sales from continuing operations for the nine months ended December 1, 2019 were $44,520,000 compared to $34,457,000 for the nine months ended November 25, 2018. Net earnings from continuing operations for the 2020 fiscal year third quarter were $2,806,000 compared to $2,078,000 for the 2019 fiscal year third quarter and $2,052,000 for the 2020 fiscal year second quarter. Net earnings from continuing operations were $7,572,000 for the current year's first nine months compared to $4,718,000 for last year's first nine months.

EBITDA from continuing operations for the 2020 fiscal year third quarter was $3,622,000 compared to $2,948,000 for the 2019 fiscal year third quarter and $2,406,000 for the 2020 fiscal year second quarter. EBITDA from continuing operations for the current year's first nine months was $9,400,000 compared to $5,997,000 for last year's first nine months.

For the nine months ended December 1, 2019, Park reported net earnings from continuing operations before special items of $7,716,000 compared to $3,930,000 for last fiscal year's first nine months.  In the 2020 fiscal year's first nine 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 nine months included the one-time tax benefit of $788,000 related to the Tax Cuts and Jobs Act enacted in December 2017.

Park reported basic and diluted earnings per share from continuing operations of $0.14 for the 2020 fiscal year third quarter compared to $0.10 for the 2019 fiscal year third quarter and $0.10 for the 2020 fiscal year second quarter. 

Park reported basic and diluted earnings per share from continuing operations of $0.37 for the 2020 fiscal year's first nine months compared to $0.23 for the 2019 fiscal year's first nine months. Basic earnings per share from continuing operations before special items were $0.38 for the 2020 fiscal year's first nine months compared to $0.19 for 2019 fiscal year's first nine months. Diluted earnings per share from continuing operations before special items were $0.37 for the 2020 fiscal year's first nine months compared to $0.19 for 2019 fiscal year's first nine months.  

SPECIAL CASH DIVIDEND

Park announced that its Board of Directors has declared a special cash dividend of $1.00 per share payable February 20, 2020 to shareholders of record at the close of business on January 21, 2020.  The total amount of this special dividend will be approximately $20.5 million.

Including this special dividend and the regular quarterly dividend of $0.10 per share payable February 4, 2020 to shareholders of record on January 2, 2020, the Company has paid a total of approximately $536 million, or $26.15 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.  The required passcode for attendance by phone is 1627957.

For those unable to listen to the call live, a conference call replay will be available from approximately 2:00 p.m. EST on Thursday, January 9, 2020 through 11:59 p.m. EST on Wednesday, January 15, 2020.  The conference call replay will be available at https://edge.media-server.com/mmc/p/qote4j37.  It can also be accessed by dialing 855-859-2056 in the United States and Canada, and 404-537-3406 in other countries. The required passcode for accessing the replay by phone is 1627957. 

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 https://parkaerospace.com/shareholders/investor-conference-calls/.

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. 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 SigmaStrut™ and AlphaStrut™ 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   39 Weeks Ended
               
  December 1, 2019     November 25, 2018     September 1, 2019   December 1, 2019     November 25, 2018  
Sales $ 15,847       $ 12,853     $ 13,723   $ 44,520       $ 34,457  
Net Earnings before Special Items1 $ 2,806       $ 2,078     $ 2,052   $ 7,716       $ 3,930  
Special Items, Net of Tax:                          
Tax Impact of Cancelled Stock Options   -         -       -     (144 )       -  
Tax Cut and Jobs Act   -         -       -     -         788  
Net Earnings from Continuing Operations $ 2,806       $ 2,078     $ 2,052   $ 7,572       $ 4,718  
                           
(Loss) Earnings from Discontinued Operations, Net of Tax $ (360 )     $ 1,613     $ 83   $ (404 )     $ 4,841  
                           
Net Earnings $ 2,446       $ 3,691     $ 2,135   $ 7,168       $ 9,559  
                           
Basic Earnings per Share:                          
Basic Earnings before Special Items1 $ 0.14       $ 0.10     $ 0.10   $ 0.38       $ 0.19  
Special Items:                          
Tax Impact of Cancelled Stock Options   -         -       -     (0.01 )       -  
Tax Cut and Jobs Act   -         -       -     -         0.04  
Basic Earnings per Share from Continuing Operations $ 0.14       $ 0.10     $ 0.10   $ 0.37       $ 0.23  
                           
Basic (Loss) Earnings per Share from Discontinued Operations   (0.02 )       0.08       0.01     (0.02 )       0.24  
                           
Basic Earnings per Share $ 0.12       $ 0.18     $ 0.11   $ 0.35       $ 0.47  
                           
                           
                           
Diluted Earnings before Special Items1 $ 0.14       $ 0.10     $ 0.10   $ 0.37       $ 0.19  
Special Items:                          
Tax Impact of Cancelled Stock Options   -         -       -     -         -  
Tax Cut and Jobs Act   -         -       -     -         0.04  
Diluted Earnings per Share from Continuing Operations $ 0.14       $ 0.10     $ 0.10   $ 0.37       $ 0.23  
                           
Diluted (Loss) Earnings per Share from Discontinued Operations   (0.02 )       0.08       -     (0.02 )       0.24  
                           
Diluted Earnings per Share $ 0.12       $ 0.18     $ 0.10   $ 0.35       $ 0.47  
                           
Weighted Average Shares Outstanding:                          
Basic   20,518         20,278       20,499     20,503         20,258  
Diluted   20,617         20,352       20,601     20,601         20,343  
                           
1 Refer to "Reconciliation of non-GAAP financial measures" below for information regarding Special Items.  
 

Comparative balance sheets (in thousands):  

  December 1, 2019   March 3, 2019  
Assets (unaudited)      
Current Assets        
Cash and Marketable Securities $ 144,166   $ 151,624  
Accounts Receivable, Net   10,194     9,352  
Inventories   3,936     5,267  
Prepaid Expenses and Other Current Assets   1,703     1,690  
Total Current Assets   159,999     167,933  
         
Fixed Assets, Net   14,011     10,791  
Operating Right-of-use Assets   453     -  
Other Assets   10,095     10,127  
Total Assets $ 184,558   $ 188,851  
         
Liabilities and Shareholders' Equity        
Current Liabilities        
Accounts Payable $ 2,010   $ 3,169  
Accrued Liabilities   2,039     2,920  
Income Taxes Payable   1,737     5,066  
Operating Lease Liability   152     -  
Total Current Liabilities   5,938     11,155  
         
Long-term Operating Lease Liability   301     -  
Non-current Income Taxes Payable   15,986     17,669  
Deferred Income Taxes   103     -  
Other Liabilities   1,067     1,016  
Total Liabilities   23,395     29,840  
         
Shareholders' Equity   161,163     159,011  
         
Total Liabilities and Shareholders' Equity $ 184,558   $ 188,851  
         
Additional information        
Equity per Share $ 7.85   $ 7.84  

Comparative statements of operations (in thousands – unaudited):  

  13 Weeks Ended     39 Weeks Ended  
                             
  December 1, 2019     November 25, 2018     September 1, 2019     December 1, 2019     November 25, 2018  
                             
Net Sales $ 15,847       $ 12,853       $ 13,723       $ 44,520       $ 34,457    
                             
Cost of Sales   10,825         8,569         9,910         30,881         24,176    
                             
Gross Profit   5,022         4,284         3,813         13,639         10,281    
% of net sales   31.7 %       33.3 %       27.8 %       30.6 %       29.8 %  
                             
Selling, General & Administrative Expenses   1,949         1,983         1,914         5,785         6,200    
% of net sales   12.3 %       15.4 %       13.9 %       13.0 %       18.0 %  
                             
Earnings from Continuing Operations   3,073         2,301         1,899         7,854         4,081    
                             
Interest and Other Income:                            
Interest Income   802         393         863         2,613         1,090    
                             
Earnings from Continuing Operations before Income Taxes   3,875         2,694         2,762         10,467         5,171    
                             
Income Tax Provision   1,069         616         710         2,895         453    
                             
Net Earnings from Continuing Operations   2,806         2,078         2,052         7,572         4,718    
% of net sales   17.7 %       16.2 %       15.0 %       17.0 %       13.7 %  
                             
(Loss) Earnings from Discontinued Operations, Net of Tax   (360 )       1,613         83         (404 )       4,841    
                             
Net Earnings $ 2,446       $ 3,691       $ 2,135       $ 7,168       $ 9,559    
% of net sales   15.4 %       28.7 %       15.6 %       16.1 %       27.7 %  

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

                                         
  13 Weeks Ended December 1, 2019     13 Weeks Ended November 25, 2018     13 Weeks Ended September 1, 2019  
  GAAP   Specials Items   Before Special Items     GAAP   Specials Items   Before Special Items     GAAP   Specials Items   Before Special Items  
                                         
Selling, General & Administrative Expenses $ 1,949     $ -     $ 1,949       $ 1,983     $ -     $ 1,983       $ 1,914     $ -   $ 1,914    
% of net sales   12.3 %         12.3 %       15.4 %         15.4 %       13.9 %         13.9 %  
                                         
Earnings from Continuing Operations   3,073       -       3,073         2,301       -       2,301         1,899       -     1,899    
% of net sales   19.4 %         19.4 %       17.9 %         17.9 %       13.8 %         13.8 %  
                                         
Net Interest and Other Income   802       -       802         393       -       393         863       -     863    
% of net sales   5.1 %         5.1 %       3.1 %         3.1 %       6.3 %         6.3 %  
                                         
Earnings from Continuing Operations before Income Taxes   3,875       -       3,875         2,694       -       2,694         2,762       -     2,762    
% of net sales   24.5 %         24.5 %       21.0 %         21.0 %       20.1 %         20.1 %  
                                         
Income Tax Provision   1,069       -       1,069         616       -       616         710       -     710    
Effective Tax Rate   27.6 %         27.6 %       22.9 %         22.9 %       25.7 %         25.7 %  
                                         
Net Earnings from Continuing Operations   2,806       -       2,806         2,078       -       2,078         2,052       -     2,052    
% of net sales   17.7 %         17.7 %       16.2 %         16.2 %       15.0 %         15.0 %  
                                         
(Loss) Earnings from Discontinued Operations, Net of Tax   (360 )         (360 )       1,613       (1,565 )     48         83       -     83    
% of net sales   -2.3 %         -2.3 %       12.5 %         0.4 %       0.6 %         0.6 %  
                                         
Net Earnings   2,446       -       2,446         3,691       (1,565 )     2,126         2,135       -     2,135    
% of net sales   15.4 %         15.4 %       28.7 %         16.5 %       15.6 %         15.6 %  
                                         
                                         
Earnings from Continuing Operations           3,073                 2,301                 1,899    
Addback non-cash expenses:                                        
Depreciation           410                 453                 366    
Stock Option Expense           139                 194                 141    
EBITDA           3,622                 2,948                 2,406    

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

  39 Weeks Ended December 1, 2019     39 Weeks Ended November 25, 2018  
  GAAP   Specials Items   Before Special Items     GAAP   Specials Items   Before Special Items  
Earnings from Continuing Operations $ 7,854     $ -     $ 7,854       $ 4,081     $ -     $ 4,081    
% of net sales   17.6 %         17.6 %       11.8 %         11.8 %  
                           
Net Interest and Other Income   2,613       -       2,613         1,090       -       1,090    
% of net sales   5.9 %         5.9 %       3.2 %         3.2 %  
                           
Earnings from Continuing Operations before Income Taxes   10,467       -       10,467         5,171       -       5,171    
% of net sales   23.5 %         23.5 %       15.0 %         15.0 %  
                           
Income Tax Provision (Benefit)   2,895       (144 )     2,751         453       788       1,241    
Effective Tax Rate   27.7 %         26.3 %       8.8 %         24.0 %  
                           
Net Earnings from Continuing Operations   7,572       144       7,716         4,718       (788 )     3,930    
% of net sales   17.0 %         17.3 %       13.7 %         11.4 %  
                           
(Loss) Earnings from Discontinued Operations, Net of Tax   (404 )     -       (404 )       4,841       (1,026 )     3,815    
% of net sales   -0.9 %         -0.9 %       14.0 %         11.1 %  
                           
Net Earnings   7,168       144       7,312         9,559       (1,814 )     7,745    
% of net sales   16.1 %         16.4 %       27.7 %         22.5 %  
                           
                           
Earnings from Operations           7,854                 4,081    
Addback non-cash expenses:                          
Depreciation           1,142                 1,322    
Stock Option Expense           404                 594    
EBITDA           9,400                 5,997    

Contact:
Donna D'Amico-Annitto 
486 North Oliver Road, Bldg. Z
Newton, Kansas 67114 
(316) 283-6500

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