Park Electrochemical Corp. Reports Second Quarter Results

Park Electrochemical Corp. (NYSE-PKE) reported net sales of $46,430,000 for the second quarter ended August 26, 2012 compared to net sales of $50,449,000 for the second quarter ended August 28, 2011. Park’s net sales for the six months ended August 26, 2012 were $92,476,000 compared to net sales of $102,266,000 for the six months ended August 28, 2011.

Park reported net earnings before special items of $5,771,000 for the second quarter ended August 26, 2012 compared to net earnings before special items of $6,615,000 for the second quarter of last year. In the second quarter ended August 26, 2012, the Company recorded a pre-tax charge of $2,525,000 in connection with the planned closure of its Nelco Technology (Zhuhai FTZ) Ltd. facility located in the Free Trade Zone in Zhuhai, China. During the last fiscal year’s second quarter, the Company recorded other pre-tax income of $1,598,000 relating to the settlement of certain lawsuits during the quarter. Accordingly, net earnings for the second quarter ended August 26, 2012 were $3,246,000 compared to net earnings of $7,670,000 for the second quarter of last year.

For the six-month period ended August 26, 2012, Park reported net earnings before special items of $10,711,000 compared to net earnings before special items of $13,857,000 for the last year’s first six-month period. The current year six-month period included pre-tax charges of $2,536,000 primarily related to the facility closure mentioned above. The first six-month period of the prior fiscal year included the other pre-tax income of $1,598,000 relating to the settlement of certain lawsuits mentioned above. Accordingly, net earnings were $8,179,000 for the six-month period ended August 26, 2012 compared to net earnings of $14,912,000 for the six-month period ended August 28, 2011.

Park reported basic and diluted earnings per share before special items of $0.28 for the second quarter ended August 26, 2012 compared to basic and diluted earnings per share before special items of $0.32 for last year’s second quarter. Basic and diluted earnings per share were $0.16 for the second quarter ended August 26, 2012 compared to $0.37 for last year’s second quarter.

For the six months ended August 26, 2012, Park reported basic and diluted earnings per share before special items of $0.52 and $0.51, respectively, compared to basic and diluted earnings per share before special items of $0.67 for the prior year’s first six months. Basic and diluted earnings per share were $0.39 for the six months ended August 26, 2012 compared to basic and diluted earnings per share of $0.72 for the prior year’s first six months.

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 (866) 730-5768 in the United States and Canada and (857) 350-1592 in other countries and the required passcode is 53235008.

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 Thursday, September 27, 2012. The conference call replay can be accessed by dialing (888) 286-8010 in the United States and Canada and (617) 801-6888 in other countries and entering passcode 43636417 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 closure and restructuring charges and the settlement of lawsuits. 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 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, Connecticut, 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         26 Weeks Ended
8/26/12       8/28/11 8/26/12       8/28/11
Sales $ 46,430 $ 50,449 $ 92,476 $ 102,266
 
Net Earnings before Special Items 1 $ 5,771 $ 6,615 $ 10,711 $ 13,857
Special Items net of Tax $ (2,525) $ 1,055 $ (2,532) $ 1,055
Net Earnings $ 3,246 $ 7,670 $ 8,179 $ 14,912
 
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items 1 $ 0.28 $ 0.32 $ 0.52 $ 0.67
Special Items $ (0.12) $ 0.05 $ (0.13) $ 0.05
Basic Earnings per Share $ 0.16 $ 0.37 $ 0.39 $ 0.72
 
Diluted Earnings before Special Items 1 $ 0.28 $ 0.32 $ 0.51 $ 0.67
Special Items $ (0.12) $ 0.05 $ (0.12) $ 0.05
Diluted Earnings per Share $ 0.16 $ 0.37 $ 0.39 $ 0.72
 
Weighted Average Shares Outstanding:
Basic 20,800 20,741 20,798 20,732
Diluted 20,819 20,776 20,834 20,798
1 Refer to "Detailed operating information" below for information regarding Special Items.
 

Comparative balance sheets (in thousands) :
            8/26/12             2/26/12

Assets
(unaudited)
Current Assets
Cash and Marketable Securities $ 269,619 $ 268,785
Accounts Receivable, Net 27,975 23,533
Inventories 15,725 15,823
Other Current Assets   3,964   3,449
Total Current Assets 317,283 311,590
 
Fixed Assets, Net 33,445 38,695
Other Assets   16,041   15,703
Total Assets $ 366,769 $ 365,988
 

Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 6,543 $ 8,427
Accrued Liabilities 9,159 8,816
Income Taxes Payable   3,290   4,198
Total Current Liabilities 18,992 21,441
 
Deferred Income Taxes 1,011 1,062
Other Liabilities   274   274
Total Liabilities 20,277 22,777
 
Stockholders’ Equity   346,492   343,211
 
Total Liabilities and Stockholders' Equity $ 366,769 $ 365,988
 
Equity per Share $ 16.66 $ 16.50
 

Detailed operating information (in thousands – unaudited):
13 Weeks Ended

August 26, 2012
          13 Weeks Ended

August 28, 2011
GAAP    

SpecialsItems
   

BeforeSpecialItems
GAAP    

SpecialsItems
   

BeforeSpecialItems
Net Sales $ 46,430 $ 46,430 $ 50,449 $ 50,449
Cost of Sales 33,231 33,231 35,913 35,913

  %
71.6% 71.6% 71.2% 71.2%
 
Gross Profit 13,199 - 13,199 14,536 - 14,536

   %
28.4% 28.4% 28.8% 28.8%
 
Selling, General & Administrative

Expenses
6,591 6,591 6,902 6,902

  %
14.2% 14.2% 13.7% 13.7%
 
Restructuring Charge 2,525 (2,525) - - -

  %
5.4% 0.0% 0.0% 0.0%
 
Earnings from Operations 4,083 2,525 6,608 7,634 - 7,634

  %
8.8% 14.2% 15.1% 15.1%
 
Other Income 179 179 1,794 (1,598) 196

  %
0.4% 0.4% 3.6% 0.4%
 
Earnings before Income Taxes 4,262 2,525 6,787 9,428 (1,598) 7,830

  %
9.2% 14.6% 18.7% 15.5%
 
Income Tax Provision 1,016 - 1,016 1,758 (543) 1,215
Effective Tax Rate 23.8% 15.0% 18.6% 15.5%
 
Net Earnings 3,246 2,525 5,771 7,670 (1,055) 6,615

  %
7.0% 12.4% 15.2% 13.1%
 
 
26 Weeks Ended

August 26, 2012
26 Weeks Ended

August 28, 2011
GAAP

SpecialsItems

BeforeSpecialItems
GAAP

SpecialsItems

BeforeSpecialItems
Net Sales $ 92,476 $ 92,476 $ 102,266 $ 102,266
Cost of Sales 66,301 66,301 71,761 71,761

  %
71.7% 71.7% 70.2% 70.2%
 
Gross Profit 26,175 - 26,175 30,505 - 30,505

  %
28.3% 28.3% 29.8% 29.8%
 
Selling, General & Administrative

Expenses
13,647 13,647 14,452 14,452

  %
14.8% 14.8% 14.1% 14.1%
 
Restructuring Charge 2,536 (2,536) - - - -

  %
2.7% 0.0% 0.0% 0.0%
 
Earnings from Operations 9,992 2,536 12,528 16,053 - 16,053

  %
10.8% 13.5% 15.7% 15.7%
 
Other Income 377 377 2,015 (1,598) 417

  %
0.4% 0.4% 2.0% 0.4%
 
Earnings before Income Taxes 10,369 2,536 12,905 18,068 (1,598) 16,470

  %
11.2% 14.0% 17.7% 16.1%
 
Income Tax Provision 2,190 4 2,194 3,156 (543) 2,613
Effective Tax Rate 21.1% 17.0% 17.5% 15.9%
 
Net Earnings 8,179 2,532 10,711 14,912 (1,055) 13,857

  %
8.8% 11.6% 14.6% 13.5%

Copyright Business Wire 2010

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