Park Electrochemical Corp. Reports Second Quarter Results

Park Electrochemical Corp. (NYSE:PKE) reported net sales of $44,497,000 for the second quarter ended September 1, 2013 compared to net sales of $46,430,000 for the second quarter ended August 26, 2012. Park's net sales for the six months ended September 1, 2013 were $87,935,000 compared to net sales of $92,476,000 for the six months ended August 26, 2012.

Park reported net earnings before special items of $5,983,000 for the second quarter ended September 1, 2013 compared to net earnings before special items of $5,771,000 for the second quarter of last fiscal year. During the second quarter ended September 1, 2013, the Company recorded a tax benefit of $2,181,000 in connection with a tax refund related to amended federal income tax returns and pre-tax restructuring charges of $119,000 related to the closure of its Nelco Technology (Zhuhai FTZ) Ltd. facility located in the Free Trade Zone in Zhuhai, China. In the second quarter of last fiscal year, the Company recorded pre-tax restructuring charges of $2,525,000 in connection with the closure of its Nelco Technology (Zhuhai FTZ) Ltd. facility. Accordingly, net earnings for the second quarter ended September 1, 2013 were $8,045,000 compared to net earnings of $3,246,000 for the second quarter ended August 26, 2012.

For the six-month period ended September 1, 2013, Park reported net earnings before special items of $11,112,000 compared to net earnings before special items of $10,711,000 for the last year’s first six-month period. The current year six-month period included the tax benefit of $2,181,000 mentioned above and pre-tax charges of $319,000 related to the facility closure mentioned above. Last year’s first six-month period included pre-tax charges of $2,536,000 related primarily to the facility closure mentioned above. Accordingly, net earnings were $12,974,000 for the six-month period ended September 1, 2013 compared to net earnings of $8,179,000 for the six-month period ended August 26, 2012.

Park reported basic and diluted earnings per share before special items of $0.29 for the second quarter ended September 1, 2013 compared to basic and diluted earnings per share before special items of $0.28 for last year’s second quarter. Basic and diluted earnings per share were $0.39 for the second quarter ended September 1, 2013 compared to basic and diluted earnings per share of $0.16 for last year’s second quarter.

For the six months ended September 1, 2013, Park reported basic and diluted earnings per share before special items of $0.53 compared to basic and diluted earnings per share before special items of $0.52 and $0.51, respectively, for the prior year’s first six months. Basic and diluted earnings per share were $0.62 for the six months ended September 1, 2013 compared to basic and diluted earnings per share of $0.39 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) 515-2909 in the United States and Canada and (617) 399-5123 in other countries and the required passcode is 79539706.

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 Sunday, October 6, 2013. 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 20567412 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 tax benefits and restructuring 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 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     26 Weeks Ended
     
9/1/13 8/26/12 6/2/13 9/1/13 8/26/12
Sales $ 44,497 $ 46,430 $ 43,438 $ 87,935 $ 92,476
 
Net Earnings before Special Items 1 $ 5,983 $ 5,771 $ 5,129 $ 11,112 $ 10,711
Special Items net of Tax $ 2,062 $ (2,525 ) $ (200 ) $ 1,862 $ (2,532 )
Net Earnings $ 8,045 $ 3,246   $ 4,929   $ 12,974 $ 8,179  
 
Basic and Diluted Earnings per Share:
Basic Earnings before Special Items 1 $ 0.29 $ 0.28 $ 0.25 $ 0.53 $ 0.52
Special Items $ 0.10 $ (0.12 ) $ (0.01 ) $ 0.09 $ (0.13 )
Basic Earnings per Share $ 0.39 $ 0.16   $ 0.24   $ 0.62 $ 0.39  
 
Diluted Earnings before Special Items 1 $ 0.29 $ 0.28 $ 0.25 $ 0.53 $ 0.51
Special Items $ 0.10 $ (0.12 ) $ (0.01 ) $ 0.09 $ (0.12 )
Diluted Earnings per Share $ 0.39 $ 0.16   $ 0.24   $ 0.62 $ 0.39  
 
Weighted Average Shares Outstanding:
Basic 20,836 20,800 20,828 20,832 20,798
Diluted 20,852 20,819 20,844 20,848 20,834
 

1 Refer to "Detailed operating information" below for information regarding Special Items.

Comparative balance sheets (in thousands) :
          9/1/2013     3/3/2013

Assets
(unaudited)
Current Assets
Cash and Marketable Securities $ 284,124 $ 275,216
Accounts Receivable, Net 25,532 25,878
Inventories 14,299 12,918
Other Current Assets   8,879   6,662
Total Current Assets 332,834 320,674
 
Fixed Assets, Net 30,821 32,187
Other Assets   16,849   16,797
Total Assets $ 380,504 $ 369,658
 

Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable $ 6,395 $ 6,485
Accrued Liabilities 6,578 6,016
Income Taxes Payable   4,790   4,177
Total Current Liabilities 17,763 16,678
 
Long-Term Debt 52,000 52,000
Deferred Income Taxes 761 812
Other Liabilities   246   246
Total Liabilities 70,770 69,736
 
Shareholders’ Equity   309,734   299,922
 
Total Liabilities and Shareholders' Equity $ 380,504 $ 369,658
 
Equity per Share $ 14.86 $ 14.40
 

Detailed operating information (in thousands – unaudited):
   

13 Weeks Ended

September 1, 2013
    13 Weeks Ended

August 26, 2012
    13 Weeks Ended

June 2, 2013
GAAP  

Specials

Items
 

Before

Special

Items
GAAP  

Specials

Items
 

Before

Special

Items
GAAP  

Specials

Items
 

Before

Special

Items
Net Sales $ 44,497 $ 44,497 $ 46,430 $ 46,430 $ 43,438 $ 43,438
Cost of Sales 30,876 30,876 33,231 33,231 30,447 30,447

  %
69.4% 69.4% 71.6% 71.6% 70.1% 70.1%
 
Gross Profit 13,621 13,621 13,199 13,199 12,991 12,991

  %
30.6% 30.6% 28.4% 28.4% 29.9% 29.9%
 
Selling, General & Administrative

Expenses
6,041 6,041 6,591 6,591 6,556 6,556

  %
13.6% 13.6% 14.2% 14.2% 15.1% 15.1%
 
Restructuring Charge 119 (119) - 2,525 (2,525) - 200 (200) -

  %
0.3% 0.0% 5.4% 0.0% 0.5% 0.0%
 
Earnings from Operations 7,461 119 7,580 4,083 2,525 6,608 6,235 200 6,435

  %
16.8% 17.0% 8.8% 14.2% 14.4% 14.8%
 
Interest Income 77 77 179 - 179 68 68

  %
0.2% 0.2% 0.4% 0.4% 0.2% 0.2%
 
Interest Expense 185 185 - - 171 171

  %
0.4% 0.4% 0.0% 0.0% 0.4% 0.4%
 
Net Interest (Expense) Income (108) (108) 179 179 (103) (103)

  %
-0.2% -0.2% 0.4% 0.4% -0.2% -0.2%
 
Earnings before Income Taxes 7,353 119 7,472 4,262 2,525 6,787 6,132 200 6,332

  %
16.5% 16.8% 9.2% 14.6% 14.1% 14.6%
 
Income Tax Provision (692) 2,181 1,489 1,016 - 1,016 1,203 - 1,203
Effective Tax Rate -9.4% 19.9% 23.8% 15.0% 19.6% 19.0%
 
Net Earnings 8,045 (2,062) 5,983 3,246 2,525 5,771 4,929 200 5,129

  %
18.1% 13.4% 7.0% 12.4% 11.3% 11.8%
 

Detailed operating information (in thousands – unaudited), continued:
    26 Weeks Ended

September 1, 2013
    26 Weeks Ended

August 26, 2012
GAAP  

Specials

Items
 

Before

Special

Items
GAAP  

Specials

Items
 

Before

Special

Items
Net Sales $ 87,935 $ 87,935 $ 92,476 $ 92,476
Cost of Sales 61,323 61,323 66,301 66,301

  %
69.7% 69.7% 71.7% 71.7%
 
Gross Profit 26,612 26,612 26,175 26,175

  %
30.3% 30.3% 28.3% 28.3%
 
Selling, General & Administrative

Expenses
12,597 12,597 13,647 13,647

  %
14.3% 14.3% 14.8% 14.8%
 
Restructuring Charge 319 (319) - 2,536 (2,536) -

  %
0.4% 0.0% 2.7% 0.0%
 
Earnings from Operations 13,696 319 14,015 9,992 2,536 12,528

  %
15.6% 15.9% 10.8% 13.5%
 
Interest Income 145 145 377 377

  %
0.2% 0.2% 0.4% 0.4%
 
Interest Expense 356 356 - -

  %
0.4% 0.4% 0.0% 0.0%
 
Net Interest (Expense) Income (211) (211) 377 377

  %
-0.2% -0.2% 0.4% 0.4%
 
Earnings before Income Taxes 13,485 319 13,804 10,369 2,536 12,905

  %
15.3% 15.7% 11.2% 14.0%
 
Income Tax Provision 511 2,181 2,692 2,190 4 2,194
Effective Tax Rate 3.8% 19.5% 21.1% 17.0%
 
Net Earnings 12,974 (1,862) 11,112 8,179 2,532 10,711

  %
14.8% 12.6% 8.8% 11.6%
 

Copyright Business Wire 2010

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