Park Electrochemical Corp. Reports Third Quarter Results

MELVILLE, N.Y., Jan. 07, 2016 (GLOBE NEWSWIRE) -- Park Electrochemical Corp. (NYSE:PKE) reported net sales of $34,323,000 for the 2016 fiscal year’s third quarter ended November 29, 2015 compared to net sales of $34,679,000 for last fiscal year’s third quarter ended November 30, 2014 and net sales of $37,947,000 for the 2016 fiscal year’s second quarter ended August 30, 2015. Park’s net sales for the nine months ended November 29, 2015 were $110,099,000 compared to net sales of $125,845,000 for the nine months ended November 30, 2014.

Park reported net earnings before special items of $4,209,000 for the current year’s third quarter compared to net earnings before special items of $2,433,000 for last year’s third quarter and net earnings before special items of $4,639,000 for the current year’s second quarter. In the current year’s third quarter, the Company recorded pre-tax restructuring charges of $158,000 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 third quarter, the Company recorded pre-tax restructuring charges of $496,000 in connection with cost reduction initiatives in the United States and $140,000 in connection with the aforementioned facility closures. In the current year’s second quarter, the Company recorded pre-tax restructuring charges of $91,000 in connection with the aforementioned facility closures. Accordingly, net earnings for the current year’s third quarter were $4,109,000 compared to $2,031,000 for last year’s third quarter and $4,569,000 for the current year’s second quarter.

For the nine-month period ended November 29, 2015, Park reported net earnings before special items of $13,715,000 compared to net earnings before special items of $16,027,000 for last fiscal year’s first nine-month period. The current year’s nine-month period included pre-tax restructuring charges of $373,000 related to the facility closures mentioned above. Last year’s nine-month period included pre-tax restructuring charges of $496,000 in connection with the cost reduction initiatives mentioned above and $490,000 related to the facility closures mentioned above. In addition, the Company recorded a pre-tax charge of $260,000 during the nine-month period ended November 30, 2014 for additional fees incurred in connection with the 2014 fiscal year-end audit. Accordingly, net earnings were $13,455,000 for the current year’s nine-month period compared to net earnings of $15,202,000 for last year’s nine-month period.

Park reported basic and diluted earnings per share before special items of $0.21 for the current year’s third quarter compared to basic and diluted earnings per share before special items of $0.12 for last year’s third quarter and basic and diluted earnings per share before special items of $0.23 for the current year’s second quarter. Basic and diluted earnings per share were $0.20 for the current year’s third quarter compared to basic and diluted earnings per share of $0.10 for last year’s third quarter and basic and diluted earnings per share of $0.23 for the current year’s second quarter.

Park reported basic and diluted earnings per share before special items of $0.67 for the current year’s first nine months compared to basic and diluted earnings per share before special items of $0.77 and $0.76, respectively, for last year’s nine-month period. Basic and diluted earnings per share were $0.66 for the current year’s first nine months compared to basic and diluted earnings per share of $0.73 and $0.72, respectively, for last year’s nine-month period.

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 11267339.

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 13, 2016. 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 11267339 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 and audit fee 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									39 Weeks Ended

	11/29/15			11/30/14			8/30/15			11/29/15			11/30/14
Sales	$	34,323		$	34,679		$	37,947		$	110,099		$	125,845

Net Earnings before Special Items¹	$	4,209		$	2,433		$	4,639		$	13,715		$	16,027
Special Items, net of Tax:
Restructuring Charges		(100	)		(402	)		(70	)		(260	)		(666	)
Audit Fees		-			-			-			-			(159	)
Net Earnings	$	4,109		$	2,031		$	4,569		$	13,455		$	15,202

Basic and Diluted Earnings per Share:
Basic Earnings before Special Items¹	$	0.21		$	0.12		$	0.23		$	0.67		$	0.77
Special Items:
Restructuring Charges		(0.01	)		(0.02	)		-			(0.01	)		(0.03	)
Audit Fees		-			-			-			-			(0.01	)
Basic Earnings per Share	$	0.20		$	0.10		$	0.23		$	0.66		$	0.73

Diluted Earnings before Special Items¹	$	0.21		$	0.12		$	0.23		$	0.67		$	0.76
Special Items:
Restructuring Charges		(0.01	)		(0.02	)		-			(0.01	)		(0.03	)
Audit Fees		-			-			-			-			(0.01	)
Diluted Earnings per Share	$	0.20		$	0.10		$	0.23		$	0.66		$	0.72

Weighted Average Shares Outstanding:
Basic		20,253			20,947			20,337			20,379			20,917
Diluted		20,253			20,989			20,340			20,386			21,002

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

Comparative balance sheets (in thousands):


	11/29/2015		3/1/2015
Assets	(unaudited)
Current Assets
Cash and Marketable Securities	$	229,643	$	272,133
Accounts Receivable, Net		20,093		21,431
Inventories		12,641		14,439
Prepaid Expenses and Other Current Assets		5,177		5,256
Total Current Assets		267,554		313,259

Fixed Assets, Net		22,257		26,537
Restricted Cash		25,000		-
Other Assets		11,113		10,886
Total Assets	$	325,924	$	350,682

Liabilities and Shareholders' Equity
Current Liabilities
Current Portion of Long-Term Debt	$	13,750	$	10,000
Accounts Payable		5,598		6,882
Accrued Liabilities		4,884		4,767
Income Taxes Payable		2,316		4,141
Current Deferred Income Taxes		362		3,934
Total Current Liabilities		26,910		29,724

Long-Term Debt		72,750		84,000
Deferred Income Taxes		47,053		54,155
Other Liabilities		1,095		1,204
Total Liabilities		147,808		169,083

Shareholders’ Equity		178,116		181,599

Total Liabilities and Shareholders' Equity	$	325,924	$	350,682

Additional information
Equity per Share	$	8.79	$	8.69
Total Cash, Restricted Cash and Marketable Securities	$	254,643	$	272,133

Comparative statements of operations (in thousands – unaudited):


	13 Weeks Ended									39 Weeks Ended

	November 29,			November 30,			August 30,			November 29,			November 30,
	2015			2014			2015			2015			2014

Net Sales	$	34,323		$	34,679		$	37,947		$	110,099		$	125,845

Cost of Sales		24,026			26,081			27,586			78,074			88,147
% of net sales		70.0	%		75.2	%		72.7	%		70.9	%		70.0	%

Gross Profit		10,297			8,598			10,361			32,025			37,698
% of net sales		30.0	%		24.8	%		27.3	%		29.1	%		30.0	%

Selling, General & Administrative Expenses		5,264			5,754			5,009			16,074			18,602
% of net sales		15.3	%		16.6	%		13.2	%		14.6	%		14.8	%

Restructuring Charge		158			636			91			373			986
% of net sales		0.5	%		1.8	%		0.2	%		0.3	%		0.8	%

Earnings from Operations		4,875			2,208			5,261			15,578			18,110
% of net sales		14.2	%		6.4	%		13.9	%		14.1	%		14.4	%

Interest:
Interest Income		227			222			317			809			595
% of net sales		0.7	%		0.6	%		0.8	%		0.7	%		0.5	%

Interest Expense		355			361			356			1,080			1,074
% of net sales		1.0	%		1.0	%		0.9	%		1.0	%		0.9	%

Net Interest Expense		(128	)		(139	)		(39	)		(271	)		(479	)
% of net sales		-0.4	%		-0.4	%		-0.1	%		-0.2	%		-0.4	%

Earnings before Income Taxes		4,747			2,069			5,222			15,307			17,631
% of net sales		13.8	%		6.0	%		13.8	%		13.9	%		14.0	%

Income Tax Provision		638			38			653			1,852			2,429
Effective Tax Rate		13.4	%		1.8	%		12.5	%		12.1	%		13.8	%

Net Earnings	$	4,109		$	2,031		$	4,569		$	13,455		$	15,202
% of net sales		12.0	%		5.9	%		12.0	%		12.2	%		12.1	%

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


	13 Weeks Ended November 29, 2015									13 Weeks Ended November 30, 2014									13 Weeks Ended August 30, 2015
							Before									Before									Before
				Specials			Special						Specials			Special						Specials			Special
	GAAP			Items			Items			GAAP			Items			Items			GAAP			Items			Items

Selling, General & Administrative Expenses		5,264			-			5,264			5,754			-			5,754			5,009			-			5,009
% of net sales		15.3	%					15.3	%		16.6	%					16.6	%		13.2	%					13.2	%

Restructuring Charge		158			(158	)		-			636			(636	)		-			91			(91	)		-
% of net sales		0.5	%					0.0	%		1.8	%					0.0	%		0.2	%					0.0	%

Earnings from Operations		4,875			158			5,033			2,208			636			2,844			5,261			91			5,352
% of net sales		14.2	%					14.7	%		6.4	%					8.2	%		13.9	%					14.1	%

Earnings before Income Taxes		4,747			158			4,905			2,069			636			2,705			5,222			91			5,313
% of net sales		13.8	%					14.3	%		6.0	%					7.8	%		13.8	%					14.0	%

Income Tax Provision		638			58			696			38			234			272			653			21			674
Effective Tax Rate		13.4	%					14.2	%		1.8	%					10.1	%		12.5	%					12.7	%

Net Earnings		4,109			100			4,209			2,031			402			2,433			4,569			70			4,639
% of net sales		12.0	%					12.3	%		5.9	%					7.0	%		12.0	%					12.2	%


	39 Weeks Ended November 29, 2015									39 Weeks Ended November 30, 2014
							Before									Before
				Specials			Special						Specials			Special
	GAAP			Items			Items			GAAP			Items			Items
Selling, General & Administrative Expenses		16,074			-			16,074			18,602			(260	)		18,342
% of net sales		14.6	%					14.6	%		14.8	%					14.6	%

Restructuring Charge		373			(373	)		-			986			(986	)		-
% of net sales		0.3	%					0.0	%		0.8	%					0.0	%

Earnings from Operations		15,578			373			15,951			18,110			1,246			19,356
% of net sales		14.1	%					14.5	%		14.4	%					15.4	%

Earnings before Income Taxes		15,307			373			15,680			17,631			1,246			18,877
% of net sales		13.9	%					14.2	%		14.0	%					15.0	%

Income Tax Provision		1,852			113			1,965			2,429			421			2,850
Effective Tax Rate		12.1	%					12.5	%		13.8	%					15.1	%

Net Earnings		13,455			260			13,715			15,202			825			16,027
% of net sales		12.2	%					12.5	%		12.1	%					12.7	%

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

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Park Electrochemical Corp. Reports Third Quarter Results

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