-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kfUElb87b2qUpisxnaPs5dMMuTMVLYtpF7Ecuw3229u0/oqHQo1VP8k7fapgyGC0 Ht/xgw3PadkoHuKG4UjdnQ== 0000076267-94-000013.txt : 19940719 0000076267-94-000013.hdr.sgml : 19940719 ACCESSION NUMBER: 0000076267-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940529 FILED AS OF DATE: 19940713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK ELECTROCHEMICAL CORP CENTRAL INDEX KEY: 0000076267 STANDARD INDUSTRIAL CLASSIFICATION: 3672 IRS NUMBER: 111734643 STATE OF INCORPORATION: NY FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04415 FILM NUMBER: 94538672 BUSINESS ADDRESS: STREET 1: 5 DAKOTA DR CITY: LAKE SUCCESS STATE: NY ZIP: 11042 BUSINESS PHONE: 5163544100 MAIL ADDRESS: STREET 2: 5 DAKOTA DRIVE CITY: LAKE SUCCESS STATE: NY ZIP: 11042 10-Q 1 1ST QTR 10Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 29, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ___________________ Commission file number 1-4415 PARK ELECTROCHEMICAL CORP. ---------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 11-1734643 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5 Dakota Drive, Lake Success, N.Y. 11042 - - ------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (516) 354-4100 Not Applicable ----------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 5,665,439 as of July 2, 1994. 2 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES I N D E X Page Number ------ PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets May 29, 1994 (Unaudited) and February 27, 1994 .................................. 3 Consolidated Statements of Earnings 13 weeks ended May 29, 1994 and May 30, 1993 (Unaudited)............................ 4 Consolidated Statements of Cash Flows 13 weeks ended May 29, 1994 and May 30, 1993 (Unaudited)............................ 5 Notes to Condensed Consolidated Financial Statements (Unaudited) ............................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......................................... 8 PART II. OTHER INFORMATION: Item 1. Legal Proceedings ................................... 11 Item 6. Exhibits and Reports on Form 8-K .................... 11 SIGNATURES ..................................................... 12 -2- 3 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
May 29, February 27, 1994 1994 ASSETS (Unaudited) * Cash and cash equivalents $ 23,249 $ 14,135 Marketable securities 18,077 23,918 Accounts receivable, net 28,882 28,904 Inventories (Note 2) 17,568 16,144 Prepaid expenses & other current assets 3,288 2,738 -------- ------- TOTAL CURRENT ASSETS 91,064 85,839 Property, plant and equipment, net 53,043 51,398 Other assets 2,327 3,513 -------- -------- $146,434 $140,750 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Bank loans payable $ 22 $ 78 Accounts payable 26,316 24,443 Accrued liabilities 11,916 12,487 Income taxes payable 4,025 2,964 -------- -------- TOTAL CURRENT LIABILITIES 42,279 39,972 Long-term debt (Note 3) 26 32,861 Deferred income taxes 4,682 4,772 Deferred pension liability 1,691 1,691 Stockholders' Equity (Note 3): Common stock 679 520 Other stockholders' equity 97,077 60,934 -------- -------- TOTAL STOCKHOLDERS' EQUITY 97,756 61,454 -------- -------- $146,434 $140,750 ======== ======== *The Balance Sheet at February 27, 1994 has been taken from the audited financial statements at that date, and condensed.
-3- 4 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited - in thousands, except per share data)
13 Weeks Ended ------------------------- May 29, May 30, 1994 1993 Net sales $62,769 $49,229 -------- -------- Costs and expenses: Cost of sales 49,522 41,198 Selling, general and administrative 7,471 6,281 -------- -------- Total costs and expenses 56,993 47,479 -------- -------- Operating profit 5,776 1,750 -------- -------- Other income (expense): Interest expense (412) (599) Other income, net 462 249 -------- -------- Total other income (expense) 50 (350) -------- -------- Earnings before income tax provision 5,826 1,400 Income tax provision 2,156 508 -------- -------- NET EARNINGS $ 3,670 $ 892 ======== ======== Net earnings per common share: Primary $ .78 $ .22 Fully diluted $ .68 $ .22 Dividends per common share $ .08 $ .08 Weighted average number of common shares outstanding: Primary 4,708 4,002 Fully diluted 5,732 4,002
-4- 5 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands, except share amounts)
13 weeks ended ---------------------- May 29, May 30, 1994 1993 NET CASH PROVIDED BY OPERATING ACTIVITIES: $ 7,155 $ 6,001 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment, net (3,484) (1,499) Purchases of marketable securities (8,017) (39,102) Proceeds from sales of marketable securities 13,841 41,949 -------- -------- Net cash provided by investing activities 2,340 1,348 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net (payment) proceeds from short-term debt (57) 45 Dividends paid (406) (318) Purchase of treasury stock - (6,566) Proceeds from exercise of stock options 283 - Debt conversion costs and other (101) (5) -------- -------- Net cash used in financing activities (281) (6,844) -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS BEFORE EXCHANGE RATE CHANGES 9,214 505 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (100) (27) -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS 9,114 478 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 14,135 9,006 -------- -------- CASH AND CASH EQUIVALENTS END OF PERIOD $23,249 $ 9,484 ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 24 $ 6 Income taxes $ 1,132 $ 145 SUPPLEMENTAL DISCLOSURE OF NON CASH FINANCING ACTIVITIES: During the quarter ended May 29, 1994 the Company issued 1,586,184 shares of Common Stock upon the conversion of $32,835,000 principal amount of Debentures.
-5- 6 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated balance sheet as of May 29, 1994, the consolidated statements of earnings for the 13 weeks ended May 29, 1994 and May 30, 1993, and the consolidated statements of cash flows for the 13 week periods then ended have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at May 29, 1994, and the results of operations and cash flows for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's February 27, 1994 annual report to stockholders. 2. INVENTORIES Inventories consist of the following:
(In thousands) May 29, February 27, 1994 1994 ------- ------------ Raw materials $ 5,960 $ 4,727 Work-in-process 3,100 3,479 Finished goods 8,101 7,581 Manufacturing supplies 407 357 ------- ------- $17,568 $16,144 ======= =======
3. LONG-TERM DEBT
(In thousands) May 29, February 27, 1994 1994 ------- ------------ 7.25% convertible subordinated debentures $ 17 $32,852 Other 13 71 ---- ------- 30 32,923 Less current portion (included in accrued liabilities) 4 62 ---- ------- $ 26 $32,861
==== ======= -6- 7 On June 12, 1986, the Company issued $35,000,000 principal amount of 7.25% convertible subordinated debentures maturing on June 15, 2006 with interest payable semiannually on June 15 and December 15 of each year. The debentures were unsecured, subordinated to bank loans payable and other long-term debt and were convertible at any time prior to maturity, or earlier redemption, into shares of the Company's common stock at $20.70 per share. The Company had the option to redeem the debentures at specified prices, plus accrued interest. On April 5, 1994, the Company announced that it had elected to redeem the debentures on May 31, 1994. (Prior to that announcement, during the 1991 fiscal year, the Company had repurchased, in the open market, an aggregate of $1,602,000 principal amount of debentures.) The redemption price was $1,021.75, plus accrued interest through the redemption date, for each $1,000 principal amount. A $1,000 principal amount debenture was convertible into 48.31 shares of the Company's common stock at any time prior to the close of business on May 27, 1994. On or before May 27, 1994, $33,381,000 principal amount of debentures had been converted into 1,612,558 shares of the Company's common stock. The remaining $17,000 principal amount of debentures not converted into common stock were redeemed on May 31, 1994. The $720,000 unamortized balance of deferred issuance costs incurred in connection with this financing was transferred to additional paid-in capital. As a result of the conversion and redemption of the debentures, virtually all of the Company's long term debt and associated interest expense has been eliminated. Furthermore, $515,000 (net of taxes) of accrued interest expense and costs related to the conversion of these Debentures has been reclassified to additional paid-in capital during the current fiscal year's first quarter. 4. SUPPLEMENTARY EARNINGS PER SHARE DATA During the quarter ended May 29, 1994, the Company issued 1,586,184 shares of common stock upon the conversion of $32,835,000 principal amount debentures. Supplementary earnings per share for the quarter ended May 29, 1994 of $.70 per share reflects the earnings per share that would have resulted if the conversion of these shares had occurred at the beginning of the period. -7- 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations During the Company's current fiscal year's first quarter ended May 29, 1994, sales increased 28% to $62,769,000 from $49,229,000 during last year's first quarter. In addition, operating profit increased 230% to $5,776,000 for the current fiscal year's first quarter from $1,750,000 for last year's first quarter. During the current fiscal year's first quarter, the Company's electronics segment accounted for $54,499,000 in sales or 87% of the Company's total sales worldwide. Electronics sales increased 31% during this fiscal year's first quarter from last year's first quarter electronics sales of $41,610,000. The Company's foreign operations, which are dedicated almost exclusively to the electronics segment, accounted for $14,525,000 in sales or 23% of total sales worldwide during the first quarter. Foreign sales during this fiscal year's first quarter increased 31% from last year's first quarter's foreign sales of $11,096,000. Due to the relative size of the Company's plumbing hardware segment and industrial components segment and the fact that these segments have been placed under common management, the Company has decided to combine these two segments into one business segment for financial reporting purposes effective at the beginning of the current fiscal year. This new combined business segment is called the plumbing and industrial component segment. The total sales of this combined segment during the current year's first quarter amounted to $8,270,000, or 13% of the Company's total worldwide sales, compared to $7,619,000, or 15% of total worldwide sales for the same period last year. The sales of the plumbing and industrial component segment increased 9% compared to the same period last year. The gross profit percentage for the Company's worldwide operations was 21.1% for the current fiscal year's first quarter, as compared to 16.3% for the prior year's first quarter. The Company's better overall performance for the first quarter was primarily attributable to the improvement in the Company's United States based electronics business. The Company's electronic segment continued to improve on the strength of the U.S. based operations. This group has been successful in offsetting the downward pricing pressure in the U.S. through increased volume and improved efficiency in the utilization of plant and equipment, materials and other resources. In contrast, the Company's foreign based electronic operations have not been able to alleviate the impact of similar pricing pressure on those operations. The Company is continuing its investment in the expansion of its manufacturing capacity and capabilities in the Far East, as well as the expansion of its Arizona and New York facilities. As mentioned above, the Company's non-electronic businesses have been combined into one segment for financial reporting purposes, namely the plumbing and industrial components segment. Prior to the current fiscal year, these businesses had been reported as two segments, each of which would currently represent less than 10% of the Company's sales, earnings and assets. These businesses have recently been placed under common, central management. This new combined plumbing and industrial components segment is comprised of the Company's plumbing hardware, advanced composite and industrial adhesive tape businesses. -8- 9 The Company's plumbing hardware business had disappointing results during the first quarter. Two significant long-term contracts were entered into by the plumbing hardware business during the first quarter, and these contracts have substantially increased this business' potential markets. However, the impact of these new contracts will not begin to be felt until the third quarter. A new management team has recently been put in place at the Company's advanced composite business, and this business is responding to the management change. The industrial adhesive tape business continued to perform well during the first quarter. Selling, general and administrative expenses, measured as a percentage of sales, were 11.9% during the current fiscal year's first quarter, as compared to 12.8% during the prior fiscal year's first quarter. Interest expense was $412,000 for the current fiscal year's first quarter, as compared to $599,000 during the prior fiscal year's first quarter. The Company elected to redeem it's 7 1/4% Convertible Debentures during the quarter. As a result, all but $17,000 principal amount of the Debentures outstanding at the beginning of the quarter were converted into the Company's common stock. The reduction in interest expense was the result of the reduction in the amount of Debentures outstanding during the quarter due to conversions. These conversions eliminated practically all of the Company's long-term debt. Investment income, which is included in other income, was $323,000 for the current quarter, compared to $249,000 in the prior year's first quarter. This 30% increase in investment income was primarily due to the increase in cash available for investment during the current quarter compared to the same period last year. Income of $139,000 arising from the mandatory revaluation of marketable securities was included in other income during the quarter. This resulted from the adoption of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", during this quarter. The Company's cash reserves continue to be invested primarily in short term taxable instruments and government securities. The Company's effective income tax rate for the current fiscal year's first quarter was 37%, compared to 36% for the prior fiscal year's first quarter. During the current fiscal year's first quarter, the Company's net earnings increased 311% to $3,670,000 from $892,000 during the prior fiscal year's first quarter. Primary earnings per share increased 255% to $.78 for the current year's first quarter from $.22 for the prior year's first quarter. Fully diluted earnings per share increased 209% for the current year's first quarter to $.68 from $.22 for the prior year's first quarter. This increase in net earnings is primarily attributable to the improved operating profit of the United States electronics operations. As a result of the call for redemption mentioned above, $32,835,000 of the Company's Debentures were converted into 1,586,184 shares of the Company's common stock during the first quarter. The remaining $17,000 of Debentures were repaid. Liquidity and Capital Resources At May 29, 1994, the Company's cash and temporary investments amounted to $41,326,000, as compared to $38,053,000 at February 27, 1994, the end of the Company's last fiscal year. The increase in the Company's cash and investment position is attributable to several factors, including cash generated from operations. The Company's working capital position was $48,785,000 at May 29, 1994, as compared to $45,867,000 at February 27, 1994. The Company's current ratio, or the ratio of current assets to current liabilities, was 2.2 to 1 at May 29, 1994, compared to 2.1 to 1 at February 27, 1994. -9- 10 On April 5, 1994, the Company announced that it had elected to redeem its 7 1/4% Convertible Subordinated Debentures on May 31, 1994. The redemption price was $1,021.75, plus accrued interest through the redemption date, for each $1,000 principal amount. A $1,000 principal amount Debenture was convertible into 48.31 shares of the Company's common stock at any time prior to the close of business on May 27, 1994. $33,381,000 principal amount of Debentures were converted into 1,612,558 shares of the Company's common stock on or before May 27, 1994. The remaining $17,000 of Debentures were repaid on May 31, 1994, the redemption date. As a result, virtually all of the Company's long-term debt was eliminated, along with the debt service costs associated therewith. During the current fiscal year's first quarter, the Company generated $7,155,000 of funds from operations and expended $3,484,000 for the purchase of property, plant and equipment. The Company believes its financial resources will be sufficient, for the foreseeable future, to provide for continued investment in property, plant and equipment and for general corporate purposes. Such resources are also available for appropriate acquisitions and other expansions of the Company's business. -10- 11 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings. (a) There are no material pending legal proceedings to which the Company is a party or to which any of its properties is subject. (b) No material pending legal proceeding was terminated during the fiscal quarter ended May 29, 1994. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: No. 11: Computation of Fully Diluted Earnings Per Common Share. (b) There were no reports on Form 8-K filed during the fiscal quarter ended May 29, 1994. -11- 12 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Park Electrochemical Corp. --------------------------- (Registrant) Date: July 12, 1994 /s/Jerry Shore ------------- --------------------------- Jerry Shore Chairman of the Board and President Date: July 12, 1994 /s/Allen Levine ------------- --------------------------- Allen Levine Vice President and Principal Financial Officer -12- 13 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES Quarterly Report on Form 10-Q for the fiscal quarter ended May 29, 1994 Exhibit No. Name Page 11 Computation of fully diluted 14 earnings per common share -13- 14 EXHIBIT NO. 11 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES COMPUTATION OF FULLY DILUTED EARNINGS PER COMMON SHARE (Unaudited - in thousands, except per share data)
13 weeks ended May 29, 1994 -------------- ADJUSTMENT OF NET EARNINGS: Net earnings before adjustment $ 3,670 Adjustments resulting from assumed conversion of 7 1/4% convertible subordinated debentures: Reduction of interest expenses and amortization of deferred debt financing costs 388 Related tax effect of above (136) -------- Net earnings as adjusted $ 3,922 ======== ADJUSTMENT OF WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Weighted average number of common shares outstanding 4,708 Additional shares assuming conversion of: Convertible Subordinated Debentures 931 Stock options 93 -------- Adjusted weighted average number of common shares outstanding during the period 5,732 ======== Earnings per share fully diluted $ .68* ======== *Calculation of fully diluted earnings per share for the 13 weeks ended May 29, 1994 assumes conversion of the Convertible Subordinated Debentures and Stock Options occurred at the beginning of the period.
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