-----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, hXbmFW5ytGgi/Wfd7FPE6aiJzGKWkiN+9GOYOOmv/6rXHJ7KwYBFi7GrS9NrjRG3 quWfAbAoPbgvhn+6r73scg== 0000076267-94-000015.txt : 19940728 0000076267-94-000015.hdr.sgml : 19940728 ACCESSION NUMBER: 0000076267-94-000015 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940227 FILED AS OF DATE: 19940718 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-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04415 FILM NUMBER: 94539132 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-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM 10-K/A AMENDMENT No.1 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended February 27, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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, New York 11042 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (516) 354-4100 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, $.10 par value New York Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [Not Applicable] State the aggregate market value of the voting stock held by non- affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. As of close Title of Class Aggregate market value of business on Common Stock, $149,213,259* May 9, 1994 $.10 par value [cover page 1 of 2 pages] Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Shares As of close Title of Class outstanding of business on Common Stock, 5,101,308 May 9, 1994 $.10 par value ===================================================================== *Included in such amount are 856,086 shares of common stock valued at $29.250 per share and held by Jerry Shore, the Registrant's Chief Executive Officer and Chairman of the Board and a member of the Registrant's Board of Directors. [cover page 2 of 2 pages] Item 8. Financial Statements and Supplementary Data. [The Company's Financial Statements begin on the next page.] REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders of Park Electrochemical Corp. Lake Success, New York We have audited the accompanying consolidated balance sheet of Park Electrochemical Corp. and subsidiaries as of February 27, 1994 and the related consolidated statements of earnings, stockholders' equity, and cash flows for the year then ended. Our audit also included the financial statement schedules listed in the Index at Item 14(a)(2). These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audit. The financial statements and financial statement schedules of Park Electrochemical Corp. for the two years in the period ended February 28, 1993, were audited by other auditors whose report dated May 7, 1993, except as to Note 16 as to which the date is October 8, 1993, expressed an unqualified opinion on those statements and schedules. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements for the year ended February 27, 1994 present fairly, in all material respects, the financial position of Park Electrochemical Corp. and subsidiaries as of February 27, 1994, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. ERNST & YOUNG New York, New York May 6, 1994 CERTAIN INFORMATION The financial statements and financial statement schedules for the fiscal year ended February 27, 1994 were audited by Ernst & Young, whose report dated May 6, 1994 appears in this Annual Report on Form 10-K, as amended by Amendment No. 1 thereto on Form 10-K/A. The financial statements and financial statement schedules for the two years in the period ended February 28, 1993 were audited by Deloitte & Touche, whose report dated May 7, 1993 except as to Note 16 as to which the date is October 8, 1993, expressed an unqualified opinion thereon and was previously filed with the Commission on October 12, 1993 with Amendment No. 1 on Form 10-K/A to the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993. The Company is presently in a fee dispute with Deloitte & Touche and, as a consequence, Deloitte & Touche has refused to reissue their report on the financial statements and financial statement schedules for the two years in the period ended February 28, 1993. Deloitte & Touche has so refused, notwithstanding the fact that (a) Deloitte & Touche has expressed absolutely no doubt or concern about the correctness of such unqualified opinion, (b) the Company has offered to pay Deloitte & Touche their fee relating to their services to be performed in connection with the reissuance of such report, and (c) such fee dispute relates to a past unrelated matter. If the fee dispute were resolved, no assurance can be given that Deloitte & Touche would reissue such report or as to the content of any such reissued report. PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Shares and Per Share Amounts)
February 27, February 28, 1994 1993 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 14,135 $ 9,006 Marketable securities (Note 2) 23,918 23,762 Accounts receivable, less allowance for doubtful accounts of $2,673 and $2,977, respectively 28,904 26,114 Inventories (Note 3) 16,144 14,233 Prepaid expenses and other current assets (Note 8) 2,738 1,853 Total current assets 85,839 74,968 PROPERTY, PLANT AND EQUIPMENT - At cost, less accumulated depreciation and amortization (Note 4) 51,398 50,478 OTHER ASSETS 3,513 3,563 TOTAL $140,750 $129,009 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Bank loans payable (Note 5) $ 78 $ 120 Accounts payable 24,443 19,226 Accrued liabilities (Note 6) 12,487 8,735 Income taxes payable 2,964 1,076 Total current liabilities 39,972 29,157 LONG-TERM DEBT (Note 7) 32,861 33,957 DEFERRED INCOME TAXES (Note 8) 4,772 4,395 DEFERRED PENSION LIABILITY (Note 11) 1,691 800 COMMITMENTS AND CONTINGENCIES (Notes 11 and 12) STOCKHOLDERS' EQUITY (Notes 9, 10 and 11): Preferred stock, $1 par value per share - authorized, 500,000 shares; issued, none - - Common stock, $.10 par value per share - authorized, 15,000,000 shares; issued, 5,203,825 and 5,177,451 shares, respectively 520 518 Additional paid-in capital 17,965 17,250 Retained earnings 57,098 50,312 Currency translation adjustments 177 109 Pension liability adjustment (1,148) (398) 74,612 67,791 Less treasury stock, at cost, 1,150,642 and 635,461 shares, respectively (13,158) (7,091) Total stockholders' equity 61,454 60,700 TOTAL $140,750 $129,009 See notes to consolidated financial statements
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (In Thousands, Except Per Share Amounts)
52 Weeks Ended February 27, February 28, March 1, 1994 1993 1992 NET SALES $208,410 $175,176 $165,287 COSTS AND EXPENSES: Cost of sales 168,175 149,145 141,717 Selling, general and administrative 25,930 22,865 21,250 Total costs and expenses 194,105 172,010 162,967 Operating profit 14,305 3,166 2,320 OTHER INCOME (EXPENSE): Interest expense (2,407) (2,058) (2,649) Other income, net (Notes 2 and 14) 947 1,967 2,252 Total other income (expense) (1,460) (91) (397) EARNINGS BEFORE INCOME TAXES 12,845 3,075 1,923 INCOME TAX PROVISION (Note 8) 4,783 810 608 NET EARNINGS $ 8,062 $ 2,265 $ 1,315 EARNINGS PER COMMON SHARE (Note 10): Primary $2.02 $ .50 $ .29 Fully diluted $1.69 $ .50 $ .29 See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In Thousands, Except Shares and Per Share Amounts)
Additional Currency Pension Common Stock Paid-in Retained Translation Liability Treasury Stock Shares Amount Capital Earnings Adjustments Adjustment Shares Amount BALANCE, MARCH 3, 1991 5,177,451 $518 $17,313 $49,632 $3,770 $ (336) 647,273 $ (7,221) Net earnings 1,315 Exchange rate changes (1,180) Change in pension liability adjustment (29) Cash dividends, $.32 per share (1,449) Purchase of treasury stock 5,062 (58) BALANCE, MARCH 1, 1992 5,177,451 518 17,313 49,498 2,590 (365) 652,335 (7,279) Net earnings 2,265 Exchange rate changes (2,481) Change in pension liability adjustment (33) Stock options exercised (63) (16,875) 188 Cash dividends, $.32 per share (1,451) Purchase of treasury stock 1 BALANCE, FEBRUARY 28, 1993 5,177,451 518 17,250 50,312 109 (398) 635,461 (7,091) Net earnings 8,062 Exchange rate changes 68 Change in pension liability adjustment (750) Stock options exercised 184 (43,625) 499 Conversion of debentures 26,374 2 531 Cash dividends, $.32 per share (1,276) Purchase of treasury stock 558,806 (6,566) BALANCE, FEBRUARY 27, 1994 5,203,825 $520 $17,965 $57,098 $ 177 $(1,148) 1,150,642 $(13,158) See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
52 Weeks Ended February 27, February 28, March 1, 1994 1993 1992 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 8,062 $ 2,265 $ 1,315 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 8,733 7,840 7,196 Provision for doubtful accounts receivable (3) 1,904 1,350 Gain on sale of marketable securities (61) (180) (157) Provision for deferred income taxes (52) (1,025) (294) Other, net 282 220 119 Changes in operating assets and liabilities: (Increase) in accounts receivable (2,773) (1,154) (3,700) (Increase) decrease in inventories (1,908) (1,100) 3,895 Decrease (increase) in prepaid expenses and other current assets 89 784 (371) Decrease (increase) in other assets 164 (2,138) (552) Increase (decrease) in accounts payable 5,265 544 (1,022) Increase in accrued liabilities 3,247 810 1,162 Increase in income taxes payable 1,007 633 364 Net cash provided by operating activities 22,052 9,403 9,305 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment, net (9,627) (10,307) (10,910) Purchases of marketable securities (200,404) (288,213) (376,800) Proceeds from sales of marketable securities 200,309 293,584 377,048 Cash acquired in acquisition, net of cash paid - 6 - Net cash used in investing activities (9,722) (4,930) (10,662) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of borrowings (64) (1,402) (2,741) Dividends paid (1,276) (1,451) (1,449) Proceeds from exercise of stock options 683 - - Purchase of treasury stock (6,566) - (58) Other - 3 (21) Net cash used in financing activities (7,223) (2,850) (4,269) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS BEFORE EFFECT OF EXCHANGE RATE CHANGES 5,107 1,623 ( 5,626) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 22 (544) (205) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,129 1,079 ( 5,831) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9,006 7,927 13,758 CASH AND CASH EQUIVALENTS, END OF YEAR $ 14,135 $ 9,006 $ 7,927 See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE YEARS ENDED FEBRUARY 27, 1994 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Principles of Consolidation - The consolidated financial statements include the accounts of Park Electrochemical Corp. ("Park") and its subsidiaries (collectively, the "Company"), substantially all of which are wholly owned. All significant intercompany balances and transactions have been eliminated. b. Accounting Period - The Company's fiscal year is the 52 or 53 week period ending the Sunday nearest to the last day of February. Fiscal years 1994, 1993 and 1992 ended on February 27, 1994, February 28, 1993 and March 1, 1992, respectively. Each fiscal year presented included 52 weeks. c. Marketable Securities - Marketable securities are stated at the lower of aggregate cost or market. d. Inventories - Inventories are stated at the lower of cost (first-in, first-out method) or market. e. Depreciation and Amortization - Depreciation and amortization are computed principally by the straight-line method over the estimated useful lives of the related assets or, with respect to leasehold improvements, the term of the lease, if shorter. f. Income Taxes - Deferred income taxes are provided for temporary differences in the reporting of certain items, primarily depreciation, for income tax purposes as compared to financial accounting purposes. United States ("U.S.") Federal income taxes have not been provided on the undistributed earnings (approximately $7,100,000 at February 27, 1994) of the Company's foreign subsidiaries, since it is management's practice and intent to reinvest such earnings in the operations of these subsidiaries. g. Foreign Currency Translation - Assets and liabilities of foreign subsidiaries using currencies other than the U.S. dollar as their functional currency are translated into U.S. dollars at year-end exchange rates and income and expense items are translated at average exchange rates for the period. Gains and losses resulting from translation are recorded as currency translation adjustments in stockholders' equity. h. Deferred Charges - Preoperating and start-up costs incurred in connection with new manufacturing facilities are deferred and included in other assets and amortized on a straight-line basis over five years. Costs incurred in connection with the issuance of debt financing are deferred and included in other assets and amortized on a straight-line basis over the respective debt repayment period. i. Consolidated Statements of Cash Flows - The Company considers all money market securities and investments with maturities at the date of purchase of 90 days or less to be cash equivalents. Supplemental cash flow information:
Fiscal Year 1994 1993 1992 Cash paid during the year for: Interest $2,352,000 $2,002,000 $2,592,000 Income taxes 3,960,000 1,072,000 899,000
j. Accounting for Certain Investments in Debt and Equity Securities - The Financial Accounting Standards Board ("FASB") has issued Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities". SFAS No. 115 will require investments in marketable equity securities and debt securities to be presented at fair value. Implementation of SFAS No. 115 will not be required until fiscal 1995. The impact, if any, of SFAS No. 115 on the consolidated financial statement is not expected to be significant. 2. MARKETABLE SECURITIES
February 27, February 28, 1994 1993 Certificates of deposit $ - $ 2,000,000 Floating rate and medium term notes 6,000,000 2,000,000 Deposit notes - 3,999,000 U.S. Treasury bills and other government securities 17,782,000 15,754,000 Other 136,000 9,000 $23,918,000 $23,762,000
Included in other income are realized gains on marketable securities transactions of $61,000, $180,000 and $157,000 for fiscal 1994, 1993 and 1992, respectively. 3. INVENTORIES
February 27, February 28, 1994 1993 Raw materials $ 4,727,000 $ 4,580,000 Work-in-process 3,479,000 2,331,000 Finished goods 7,581,000 6,835,000 Manufacturing supplies 357,000 487,000 $16,144,000 $14,233,000
4. PROPERTY, PLANT AND EQUIPMENT
February 27, February 28, 1994 1993 Land, buildings and improvements $17,460,000 $15,546,000 Machinery, equipment, furniture and fixtures 88,463,000 81,764,000 105,923,000 97,310,000 Less accumulated depreciation and amortization 54,525,000 46,832,000 $51,398,000 $50,478,000
Depreciation and amortization expense relating to property, plant and equipment amounted to $8,188,000, $7,148,000 and $6,842,000 for fiscal 1994, 1993 and 1992, respectively. Interest expense capitalized to property, plant and equipment amounted to $109,000, $508,000 and $206,000 for fiscal 1994, 1993 and 1992, respectively. 5. BANK LOANS PAYABLE Bank loans payable consist of $78,000 of unsecured demand loans relating to foreign subsidiaries. Related foreign lines of credit totalled $6,100,000 at February 27, 1994, of which $6,022,000 remains available to the subsidiaries. The weighted average interest rate applicable to such loans outstanding at February 27, 1994 approximated 8%. 6. ACCRUED LIABILITIES
February 27, February 28, 1994 1993 Payroll and commissions $ 3,112,000 $ 1,868,000 Taxes, other than income taxes 1,191,000 1,140,000 Other 8,184,000 5,727,000 $12,487,000 $ 8,735,000
7. LONG-TERM DEBT
February 27, February 28, 1994 1993 7.25% convertible subordinated debentures $32,852,000 $33,398,000 Other 71,000 572,000 32,923,000 33,970,000 Less current portion (included in accrued liabilities) 62,000 13,000 $32,861,000 $33,957,000
On June 12, 1986, the Company issued $35,000,000 of principal amount 7.25% convertible subordinated debentures which mature on June 15, 2006 with interest payable semiannually on June 15 and December 15 of each year. The debentures are unsecured, subordinated to bank loans payable (Note 5) and other long-term debt and are convertible at any time prior to maturity into shares of the Company's common stock at $20.70 per share. The Company may redeem the debentures at specified prices, plus accrued interest, currently at 102.175% of principal value and declining to 100% on June 15, 1996. Beginning June 15, 1996, and on each June 15 through 2005, the Company is required to redeem 7.5% of the original principal amount, adjusted for any earlier redemptions, conversions or open market purchases, to retire 75% of the debentures prior to maturity. The indenture contains a minimum net worth requirement and certain limitations regarding the payment of dividends and acquisitions of treasury shares. Underwriting discount and related costs incurred in connection with this financing amounted to $1,240,000. On April 5, 1994, the Company announced that it had elected to redeem the 7.25% convertible subordinated debentures on May 31, 1994. The redemption price will be $1,021.75, plus accrued interest through the redemption date, for each $1,000 principal amount. A $1,000 principal amount debenture is convertible into 48.31 shares of the Company's common stock at any time prior to the close of business on May 27, 1994. As of May 5, 1994, $21,917,000 of principal amount debentures were converted into 1,058,755 shares of the Company's common stock. The Company believes that a substantial portion of the $11,481,000 balance of debentures still outstanding as of May 5, 1994 will convert into the Company's common stock prior to May 31, 1994. If the conversion of substantially all the debentures had occurred as of the beginning of the 1994 fiscal year, the primary earnings per share for fiscal 1994 would have closely approximated the fully diluted earnings per share for fiscal 1994. 8. INCOME TAXES The income tax provision includes the following:
Fiscal Year 1994 1993 1992 Current: Federal $4,300,000 $1,650,000 $ 841,000 State and local 535,000 185,000 455,000 Foreign - - (394,000) 4,835,000 1,835,000 902,000 Deferred: Federal 396,000 (475,000) (10,000) State and local (145,000) (160,000) (5,000) Foreign (303,000) (390,000) (279,000) (52,000) (1,025,000) (294,000) $4,783,000 $ 810,000 $ 608,000
The Company's effective income tax rate differs from the statutory U.S. Federal income tax rate as a result of the following: Fiscal Year 1994 1993 1992 Statutory U.S. Federal tax rate 35.0% 34.0% 34.0% Tax accruals no longer required - (16.3) - Foreign net operating losses without tax benefit 4.6 34.1 5.2 Foreign tax rate differentials (.9) (21.9) (22.1) State and local taxes, net of Federal benefit 2.0 8.0 15.4 General business credits (2.8) (11.0) (6.4) Other, net (.7) (.6) 5.5 37.2% 26.3% 31.6% The Company adopted SFAS No. 109 effective March 1, 1993. SFAS No. 109 supersedes SFAS No. 96, "Accounting for Income Taxes" which the Company had adopted in fiscal 1989. The cumulative effect of the adoption of SFAS No. 109 was not significant. The Company has foreign net operating loss carryforwards of approximately $20,700,000, of which $16,700,000 was acquired through a business combination. Approximately, $11,700,000 of the foreign tax net operating loss carryforwards expire in varying amounts from 1995 through 1999; the remainder have an indefinite expiration. At February 27, 1994, a current deferred tax asset of $962,000, primarily attributable to reserves not currently deductible for tax purposes, is included in other current assets. A long-term deferred tax asset of $339,000, primarily attributable to foreign net operating loss carryforwards, is included in other assets. This long-term deferred tax asset is net of a valuation reserve of approximately $8,300,000. The majority of the valuation reserve relates to foreign net operating loss carryforwards acquired through a business combination. The deferred tax liabilities consist primarily of timing differences relating to depreciation. 9. STOCKHOLDERS' EQUITY a. Stock Options - Under the stock option plans approved by the Company's stockholders, key employees may be granted options to purchase shares of common stock exercisable at prices not less than the fair market value at the date of grant. Options become exercisable 25% one year from the date of grant, with an additional 25% exercisable each succeeding year. The options expire 10 years from the date of grant. On July 14, 1992, the Company's stockholders approved the adoption of a 1992 stock option plan (the "1992 Plan") pursuant to which options to acquire 300,000 shares of the Company's common stock are available for grant to key employees. The purchase price for common stock to be acquired, upon the exercise of options, will be no less than 100% of the fair market value of such stock at the date the options are granted. The 1992 Plan will expire in March 2002. Information with respect to the Company's stock option plans follows: Range of Outstanding Options Exercise Prices Granted Exercisable Balance, March 3, 1991 $ 7.41 - $17.75 138,825 101,862 Options becoming exercisable 12.00 - 17.75 - 15,964 Granted 11.00 - 12.10 83,900 - Cancelled 11.50 - 17.75 (32,800) (29,900) Balance, March 1, 1992 7.41 - 17.17 189,925 87,926 Options becoming exercisable 11.00 - 13.63 - 27,100 Granted 13.25 - 14.85 39,009 - Exercised 7.41 (16,875) (16,875) Cancelled 11.00 - 13.63 (1,350) (476) Balance, February 28, 1993 11.00 - 17.17 210,709 97,675 Options becoming exercisable 11.00 - 14.85 - 36,552 Granted 14.75 - 14.88 90,650 - Exercised 11.00 - 17.17 (43,625) (43,625) Cancelled 11.00 - 14.85 (12,000) (3,800) Balance, February 27, 1994 $11.00 - $17.17 245,734 86,802 At February 27, 1994, 192,341 stock options were available for future grant under the plans. On July 24, 1985, the Company's stockholders approved the grant of a nonqualified stock option to an officer of the Company to purchase 50,000 shares of the Company's common stock at an exercise price of $15 per share, the fair market value of the Company's common stock on November 27, 1984, the date of the grant. The option is exercisable in whole or in part through November 27, 1994. b. Dividends - During fiscal 1994, the Company declared and paid cash dividends of $.32 per share, aggregating $1,276,000. A cash dividend of $.08 per share was declared on March 18, 1994 payable on May 10, 1994 to stockholders of record on April 12, 1994. c. Treasury Stock - The Company repurchased six shares and one share of its common stock under authorizations of the Board of Directors during fiscal 1994 and 1993, respectively. On March 9, 1993, in a privately negotiated transaction with an unaffiliated third party, the Company repurchased 558,800 shares of its common stock for $6,566,000. The purchase was made outside the Company's stock repurchase program. d. Stockholders' Rights Plan - On February 2, 1989, the Company adopted a stockholders' rights plan designed to protect stockholder interests in the event the Company is confronted with coercive or unfair takeover tactics. Under the terms of the plan, each stockholder of record on February 15, 1989 received one right for each share of common stock owned at that date. In the event that a person has acquired, or has the right to acquire, 30% or more of the then outstanding common stock of the Company or tenders for 20% of more of the outstanding common stock of the Company (in either event, an "acquiring person"), such rights will become exercisable, unless the Board of Directors otherwise determines. Upon becoming exercisable as aforesaid, each right will entitle the holder thereof to purchase one one-hundredth of a share of Series A Preferred Stock for $60. In addition, each holder of an unexercised exercisable right, other than an acquiring person, shall have the right to purchase one share of the principal voting security of the acquiring person for each right held by such holder at a purchase price per share equal to 50% of the then market price per share of such acquiring person's securities. Under certain circumstances, each unexercised exercisable right may instead entitle the holder thereof to purchase one or fewer shares of the Company's common stock at a 50% discount of the then market price. The Company may redeem the rights for a nominal consideration at any time. Unless redeemed or exercised earlier, all rights expire on February 15, 1999. e. Reserved Common Shares - At February 27, 1994, 2,075,128 shares of common stock were reserved for issuance upon exercise of stock options and conversions of the 7.25% convertible subordinated debentures. 10. EARNINGS PER COMMON SHARE Primary earnings per common share are computed based on the weighted average number of common shares outstanding during the period. For fiscal years 1993 and 1992, the assumed conversion of the Company's 7.25% convertible subordinated debentures (after elimination of related interest expense and amortization of deferred debt issuance costs, net of income tax effect) was not considered in the calculation of the fully diluted earnings per share, as the effect was antidilutive. The weighted average number of common shares used to compute earnings per share are as follows: Fiscal Year 1994 1993 1992 Primary 3,993,000 4,534,000 4,528,000 Fully diluted 5,727,000 4,534,000 4,528,000 11. EMPLOYEE BENEFIT PLANS a. Profit Sharing Plan - Park and certain of its subsidiaries have a noncontributory profit sharing retirement plan covering their regular full-time employees. The plan may be modified or terminated at any time, but in no event may any portion of the contributions revert to the Company. The Company's contributions under the plan amounted to $1,513,000, $708,000 and $661,000 for fiscal 1994, 1993 and 1992, respectively. Contributions are discretionary and may not exceed the amount allowable as a tax deduction under the Internal Revenue Code. During fiscal 1992, the Board of Directors of the Company approved the incorporation of 401(k) retirement savings provisions into the existing profit sharing retirement plan. b. Pension Plans - A subsidiary of the Company has two pension plans covering its union employees. The pension plans are noncontributory defined benefit plans. The Company's funding policy is to contribute annually the amounts necessary to satisfy the Internal Revenue Service's funding standards. In accordance with SFAS No. 87, the Company records its unfunded pension liability related to its two defined benefit pension plans, which amounted to $1,691,000 and $800,000 at February 27, 1994 and February 28, 1993, respectively. The effect on the Company's consolidated financial statements in recording the liability is to recognize an asset (included in "Other Assets") of $543,000 and $402,000 representing the deferred unrecognized prior service costs of the plans at February 27, 1994 and February 28, 1993, respectively, and to record a reduction of stockholders' equity of $1,148,000 and $398,000 representing the excess of the liability over the unrecognized prior service cost at February 27, 1994 and February 28, 1993, respectively. Pension cost includes the following components:
Fiscal Year 1994 1993 1992 Service cost - benefits earned during the period $ 48,000 $ 41,000 $ 43,000 Interest cost on projected benefit obligation 276,000 247,000 242,000 Return on plan assets - actual (40,000) (94,000) (82,000) Net amortization and deferral (39,000) (5,000) (13,000) Net periodic pension cost $245,000 $189,000 $190,000
The funded status of the pension plan follows:
February 27, February 28, 1994 1993 Accumulated benefit obligation (including vested benefit obligation of $3,816,000 and $2,874,000, respectively) $3,816,000 $2,879,000 Projected benefit obligation $3,816,000 $2,879,000 Plan assets at fair value 1,983,000 1,974,000 Excess of projected benefit obligation over plan assets 1,833,000 905,000 Unrecognized net loss (1,152,000) (402,000) Unrecognized prior service cost (301,000) (130,000) Unrecognized net assets being amortized over 15 years (238,000) (268,000) Accrued pension liability $ 142,000 $ 105,000
The projected benefit obligation was determined using an assumed discount rate of 7% and 9% for fiscal years 1994 and 1993, respectively, and the assumed long-term rate of return on plan assets was 8% for both fiscal years. Projected wage increases are not applicable as benefits pursuant to the plans are based upon years of service without regard to levels of compensation. At February 27, 1994, plan assets were invested in U.S. government securities, discounted bank notes and equity securities. 12. COMMITMENTS AND CONTINGENCIES a. Lease Commitments - The Company conducts certain of its operations from leased facilities which include several manufacturing plants, warehouses and offices, and a land lease. The leases on facilities are for terms of up to 10 years, the latest of which expires in 1998, and the land lease expires in 2011. Many of the leases contain renewal options for periods ranging from 1 to 15 years and require the Company to pay real estate taxes and other operating costs. These noncancelable operating leases have the following payment schedule: Fiscal Year Amount 1995 $1,815,000 1996 1,296,000 1997 909,000 1998 899,000 1999 307,000 Thereafter 645,000 $5,871,000 Rental expense, inclusive of real estate taxes and other costs, amounted to $2,142,000, $1,755,000 and $1,463,000 for fiscal 1994, 1993 and 1992, respectively. b. Environmental Contingencies - The Company and certain of its subsidiaries have been named by the Environmental Protection Agency (the "EPA") or a comparable state agency under the Comprehensive Environmental Response, Compensation and Liability Act (the "Superfund Act") or a similar state law as potentially responsible parties for a number of hazardous waste disposal sites or other potentially contaminated areas. Under the Superfund Act and similar state laws, all parties who may have contributed any waste to a hazardous waste disposal site or contaminated area identified by the EPA or a comparable state agency are jointly and severally liable for the cost of cleanup unless the EPA or such agency agrees otherwise. Generally, these sites are locations at which numerous persons dispose hazardous waste. In the case of the Company's subsidiaries, generally the waste was removed from their manufacturing facilities and disposed at waste sites by various companies which contracted with the subsidiaries to provide waste disposal services. Neither the Company nor any of its subsidiaries have been accused of or charged with any wrongdoing or illegal acts in connection with any such sites. The Company believes it maintains a very effective and comprehensive environmental compliance program. Included in cost of sales are charges for actual expenditures and accruals, based on estimates, for certain environmental matters described above. The Company accrues estimated costs associated with known environmental matters, when such costs can be estimated. Management believes the ultimate disposition of known environmental matters will not have a material adverse effect upon the liquidity, capital resources, business or consolidated financial position of the Company. However, one or more of such environmental matters could have a significant negative impact on the Company's consolidated financial results for a particular reporting period. 13. BUSINESS SEGMENTS The Company has three major business segments: electronics, plumbing hardware and industrial components. The Company's electronic materials and circuitry products are marketed primarily to large computer and electronics original equipment manufacturers ("OEMs") and to major independent printed circuit board manufacturers that are located throughout the United States, Canada, Europe and the Far East. The Company's plumbing hardware customers, substantially all of which are located in the United States, include OEMs, hardware and plumbing wholesalers and home improvement centers. The Company's industrial components customers, the majority of which are located in the United States, include OEMs, aerospace and defense manufacturers. Financial information concerning the Company's business segments follows (all amounts stated in thousands of dollars):
Fiscal Year 1994 1993 1992 Sales to unaffiliated customers: Electronics $182,559 $147,419 $137,707 Plumbing hardware 18,210 18,086 18,394 Industrial components 7,641 9,671 9,186 Net sales $208,410 $175,176 $165,287 Operating profit (1): Electronics $ 18,597 $ 6,292 $ 6,091 Plumbing hardware (442) (635) (919) Industrial components (802) 80 (511) Total operating profit 17,353 5,737 4,661 General corporate expense (3,048) (2,571) (2,341) Interest expense (2,407) (2,058) (2,649) Other income, net 947 1,967 2,252 Total other income (expense) (1,460) (91) (397) Earnings before income taxes $ 12,845 $ 3,075 $ 1,923 Identifiable assets (2): Electronics $ 91,786 $ 85,880 $ 81,498 Plumbing hardware 6,293 7,291 7,353 Industrial components 3,223 4,027 3,966 101,302 97,198 92,817 Corporate assets 39,448 31,811 37,917 Total assets $140,750 $129,009 $130,734 Depreciation and amortization: Electronics $ 7,910 $ 6,955 $ 6,306 Plumbing hardware 507 528 547 Industrial components 230 254 243 8,647 7,737 7,096 Corporate depreciation 86 103 100 Total depreciation and amortization $ 8,733 $ 7,840 $ 7,196 Capital expenditures: Electronics $ 9,193 $ 9,758 $ 10,138 Plumbing hardware 227 537 529 Industrial components 39 81 412 9,459 10,376 11,079 Corporate capital expenditures 23 17 24 Total capital expenditures $ 9,482 $ 10,393 $ 11,103
(1) Operating profit is comprised of total operating revenues, less costs and expenses other than interest expense, general corporate expense and income taxes. (2) Identifiable assets consist of those assets which are used by the segments. Corporate identifiable assets consist primarily of cash, cash equivalents and marketable securities. Sales to customers under common control, which were mostly attributed to the electronics segment, were 25.3%, 15.6% and 17.4% of the Company's consolidated sales for fiscal 1994, 1993 and 1992, respectively. Intersegment sales and sales between geographic areas were not significant. Financial information regarding the Company's foreign operations, which are conducted substantially in the United Kingdom, France and Singapore, follows: Fiscal Year 1994 1993 1992 Sales to unaffiliated customers $46,491 $46,347 $46,675 Sales to U.S. affiliates (1) - - 248 $46,491 $46,347 $46,923 Operating loss $(3,252) $(2,942) $(1,227) Loss before income taxes $(3,242) $(2,989) $(1,578) Identifiable assets $38,477 $37,031 $36,182 (1) Sales to U.S. affiliates are accounted for at cost and are eliminated in consolidation. 14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarter First Second Third Fourth (Amounts in Thousands, Except Per Share Amounts) Fiscal 1994: Net sales $49,229 $47,318 $54,063 $57,800 Gross profit 8,031 8,902 10,378 12,924 Net earnings 892 1,588 2,177 3,405 Earnings per common share: Primary $.22 $.40 $.55 $.85 Fully diluted $.22 $.35 $.45 $.66 Weighted average common shares outstanding: Primary 4,002 3,983 3,983 4,005 Fully diluted 4,002 5,728 5,728 5,728 Fiscal 1993: Net sales $43,093 $44,176 $43,801 $44,106 Gross profit 6,462 6,516 6,271 6,782 Net earnings 643 702 232 688 Earnings per common share: Primary and fully diluted $.14 $.16 $.05 $.15 Weighted average common shares outstanding: Primary and full diluted 4,525 4,526 4,542 4,542
Net earnings for the second quarter of fiscal 1993, includes $348,000 derived from currency exchange gains realized during such quarter, which are included in other income on the consolidated statement of earnings. Earnings per common share is computed separately for each quarter. Therefore, the sum of such quarterly per share amounts may differ from the total for the years. 15. ACQUISITION In April 1992, the Company acquired 100% of the capital stock of Metclad S.A. ("Metclad"), a French corporation located in Lannemezan, France, for $429,000 in cash, plus the assumption of liabilities in the amount of $1,421,000. This acquisition has been accounted for as a purchase and, accordingly, the purchase price has been allocated to the acquired assets and liabilities based on their estimated fair value at the date of acquisition. The operating results of this acquisition are included in the Company's consolidated statements of earnings from the date of acquisition. Pro forma consolidated results are not presented because Metclad was not an operating company at the time of acquisition. 16. RESTATEMENT On September 20, 1993, the Company announced that its internal accounting staff had recently uncovered financial and accounting errors and irregularities at FiberCote Industries, Inc. ("FiberCote"), its 80% owned advanced composites subsidiary. On the basis of the Company's investigation of such financial and accounting errors and irregularities, the Company had determined to restate the audited consolidated financial statements. The adjustments involved the write-off of certain improperly recorded receivables and the recognition of previously unrecorded liabilities at FiberCote. The consolidated financial statements have been restated to reverse the overstatements of net earnings in the following amounts: Fiscal Year 1993 1992 (Amounts in Thousands, Except Per Share Amounts) Earnings before income taxes, as previously reported $3,370 $2,513 Adjustments (295) (590) Earnings before income taxes, as restated $3,075 $1,923 Net earnings, as previously reported $2,460 $1,721 Adjustments (195) (406) Net earnings, as restated $2,265 $1,315 Earnings per common share primary and fully diluted, as previously reported $ 0.54 $ 0.38 Adjustments to earnings (0.04) (0.09) Earnings per common share primary and fully diluted, as restated $ 0.50 $ 0.29 ******* PART IV Item 14. Exhibits, Financial Statement Page Schedules, and Reports on Form 8-K. (a) Documents filed as a part of this report (1) Financial Statements: The following Consolidated Financial Statements of the Company are included in Part II, Item 8: Report of Ernst & Young, independent auditors 4 Certain information 5 Balance sheets 6 Statements of earnings 7 Statements of stockholders' equity 8 Statements of cash flows 9 Notes to consolidated financial statements (1-16) 10 (2) Financial Statement Schedules: Schedule I - Marketable securities 29 Schedule V - Property, plant and equipment 30 Schedule VI - Accumulated depreciation and amortization of property, plant and equipment 31 Schedule VIII - Valuation and qualifying accounts 32 Schedule IX - Short-term borrowings 33 Schedule X - Supplementary income statement information 34 All other schedules have been omitted because they are inapplicable or not required, or the information is included elsewhere in the financial statements or notes thereto. (3)Exhibits: Exhibit Number Description 3.01 Restated Certificate of Incorporation filed with the Secretary of State of the State of New York on April 10, 1989. (Reference is made to Exhibit 3.01(g) of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 1989, Commis- sion File No. 1-4415, which is incorporated herein by refer- ence.) 3.02 By-Laws of the Company, as amended to date. (Reference is made to Exhibit 3.02 of the Company's Annual Report on Form 10-K for the fiscal year ended March 1, 1992, Commission File No. 1-4415, which exhibit is incorporated herein by reference.) 4.01 Indenture dated as of June 15, 1986 by and between the Company and The Bank of New York, as Trustee, relating to the Company's 7-1/4% Convertible Subordinated Debentures due June 15, 2006. (Reference is made to Exhibit 4.01(a) of the Company's Registra- tion Statement on Form S-2, Commission File No. 33-6029, which exhibit is incorporated herein by reference.) Additional information concerning Registrant's long-term debt is set forth in Note 7 of the Notes to Consolidated Financial Statements included in Item 8 of this Report. Other than the Indenture referred to above, no instrument defining the rights of holders of such long-term debt relates to securities having an aggregate principal amount in excess of 10% of the consolidated assets of Registrant and its subsidiaries; therefore, in accordance with paragraph (iii) of Item 4 of Item 601(b) of Regulation S-K, the other instruments defining the rights of holders of long-term debt are not filed herewith. Registrant hereby agrees to furnish a copy of any such other instrument to the Securities and Exchange Commission upon request. 4.02 Summary of Rights to Purchase Series A Preferred Stock of the Company. (Reference is made to Exhibit 4.02 of the Company's Annual Report on Form 10-K for the fiscal year ended February 27, 1994, Commission File No. 1-4415, which exhibit is incorporated herein by reference.) 4.03 Rights Agreement, dated as of February 15, 1989, by and between the Company and Registrar and Transfer Company, relating to the Company's Preferred Stock Purchase Rights. (Reference is made to Exhibit 4.03 of the Company's Annual Report on Form 10-K for the fiscal year ended February 27, 1994, Commission File No. 1- 4415, which exhibit is incorporated herein by reference.) 10.01 Lease Agreement dated as of June 21, 1975, regarding real property located at 1100 East Kimberly Avenue, Anaheim, Califor- nia, between Nelco Products, Inc. and James and Velma Emmi and modification executed as of December 21, 1979. (Reference is made to Exhibit 10.01 of the Company's Annual Report on Form 10- K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference.) 10.01(a) Lease Agreement dated December 12, 1989 regarding real property located at 1100 East Kimberly Avenue, Anaheim, California between Nelco Products, Inc. and James Emmi. (Reference is made to Exhibit 10.01(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference.) Exhibit Number Description 10.02 Lease dated as of April 20, 1976, regarding real property located at 1107 East Kimberly Avenue, Anaheim, California, between Nelco Products, Inc. and James and Velma Emmi and modification executed as of December 21, 1979. (Reference is made to Exhibit 10.02 of the Company's Annual Report on Form 10- K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference.) 10.02(a) Lease Agreement dated December 12, 1989 regarding real property located at 1107 East Kimberly Avenue, Anaheim, California between Nelco Products, Inc. and James Emmi. (Reference is made to Exhibit 10.02(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference.) 10.03 Lease Agreement dated August 16, 1983 regarding real property located at 1411 E. Orangethorpe Avenue, Fullerton, California between Nelco Products, Inc. and TCLW/Fullerton. (Reference is made to Exhibit 10.04 of the Company's Annual Report on Form 10- K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference.) 10.03(a) Addendum dated January 26, 1987 between Nelco Products, Inc. and TCLW/Fullerton to Lease Agreement dated August 16, 1983 (see Exhibit 10.03 hereto) regarding real property located at 1421 E. Orangethorpe Avenue, Fullerton, California. (Reference is made to Exhibit 10.04(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 1989, Commission File No. 1-4415, which is incorporated herein by reference.) 10.03(b) Third and Fourth Addenda dated January 7, 1991 between Nelco Products, Inc. and TCLW/Fullerton to Lease Agreement dated August 16, 1983 (see Exhibit 10.03 hereto) regarding real property located at 1411, 1421 and 1431 E. Orangethorpe Avenue, Fullerton, California. (Reference is made to Exhibit 10.03(b) of the Company's Annual Report on Form 10-K for the fiscal year ended March 3,1991, Commission file No. 1-4415, which is incorporated herein by reference.) 10.04 Lease Agreement dated February 15, 1983 regarding real property located at 1130 West Geneva Drive, Tempe, Arizona between Nelco Products, Inc. and CMD Southwest, Inc. (Reference is made to Exhibit 10.05 of the Company's Annual Report on Form 10-K for the fiscal year ended February 25, 1990, Commission File No. 1- 4415, which is incorporated herein by reference.) 10.04(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated February 15, 1983 regarding real property located at 1130 West Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and CMD Southwest Inc., and novation substituting Nelco Technology, Inc. for Nelco Products, Inc. (Reference is made to Exhibit 10.04(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) Exhibit Number Description 10.05 Lease Agreement, dated May 26, 1982 regarding real property located at 4 Gul Crescent, Jurong, Singapore between Nelco Products Pte. Ltd. (lease was originally entered into by Kiln Technique (Private) Limited, which subsequently assigned this lease to Nelco Products Pte. Ltd. and the Jurong Town Corporation. (Reference is made to Exhibit 10.05 of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.05(a) Deed of Assignment, dated April 17, 1986 between Nelco Products Pte. Ltd., Kiln Technique (Private) Limited and Paul Ma, Richard Law, and Michael Ng, all of Peat Marwick & Co., of the Lease Agreement dated May 26, 1982 between Kiln Technique (Private) Limited and the Jurong Town Corporation regarding real property located at 4 Gul Crescent, Jurong, Singapore. (Reference is made to Exhibit 10.05(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.06(a) 1974 Amended Stock Option Plan of the Company. (Reference is made to Exhibit 10.06 of the Company's Annual Report on Form 10- K for the fiscal year ended February 25, 1990, Commission File No. 1-4415, which is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) 10.06(b) Amended and Restated 1982 Stock Option Plan of the Company. (Reference is made to Exhibit 10.06(a) of the Company's Annual Report on Form 10-K for the fiscal year ended March 1, 1992, Commission File No. 1-4415, which exhibit is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) 10.06(c) 1992 Stock Option Plan of the Company. (Reference is made to Exhibit 10.06(b) of the Company's Annual Report on Form 10-K for the fiscal year ended March 1, 1992, Commission File No. 1-4415, which exhibit is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) 10.07(a) Employment Agreement dated December 12, 1984 between Park and Jerry Shore. (Reference is made to Exhibit 10.07(a) of the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1991, Commission File No. 1-4415, which is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) 10.07(b) Option Agreement dated November 27, 1984 between Park and Jerry Shore. (Reference is made to Exhibit 10.07(b) of the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1991, Commission File No. 1-4415, which is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) 10.07(c) Amended and Restated Employment Agreement dated February 28, 1994 between Park and Jerry Shore. (Reference is made to Exhibit 10.07(a) of the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1991, Commission File No. 1-4415, which is incorporated herein by reference. This exhibit is a management contract or compensatory plan or arrangement.) Exhibit Number Description 10.08 Lease Agreement dated April 15, 1988 regarding real property located at 172 East Aurora Street, Waterbury, Connecticut between FiberCote Industries, Inc. (lease was initially entered into by USP Composites, Inc., which subsequently changed its name to FiberCote Industries, Inc.) and Geoffrey Etherington, II. (Reference is made to Exhibit 10.09 of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 1989, Commission File No. 1-4415, which is incorporated herein by reference.) 10.08(a) Lease Amendment dated December 21, 1992 to Lease Agreement dated April 15, 1988 regarding real property located at 172 East Aurora Street, Waterbury, Connecticut between FiberCote Industries, Inc. and Geoffrey Etherington II. (Reference is made to Exhibit 10.08(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.09 Lease Agreement dated March 14, 1988 regarding real property located at 1117 West Fairmont, Tempe, Arizona between Nelco Products, Inc. and CMD Southwest One. (Reference is made to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 1989, Commission File No. 1- 4415, which is incorporated herein by reference.) 10.09(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated March 14, 1988 regarding real property located at 1117 West Fairmont, Tempe, Arizona between Nelco Technology, Inc. and CMD Southwest One, and novation substituting Nelco Technology, Inc. for Nelco Products, Inc. (Reference is made to Exhibit 10.09(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.10 Lease Agreement dated October 1, 1991 regarding real property located at 25 North Park, N.E., Comstock Park, Michigan between Zin-Plas Corporation and Philip L. Johnson d/b/a Johnson Development Company. (Reference is made to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.11 Lease Agreement dated August 31, 1989 regarding real property located at 1104 West Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and Cemanudi Associates. (Reference is made to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended February 25, 1990, Commission File No. 1- 4415, which is incorporated herein by reference.) 10.12 Lease Agreement dated October 12, 1990 between New England Laminates Co., Inc. and Adams/CRR Corp. regarding real property located in New Windsor, New York. (Reference is made to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1991, Commission File No. 1-4415, which is incorporated herein by reference.) Exhibit Number Description 10.12(a) Letter Amendment dated October 28, 1992 to Lease Agreement dated October 12, 1990 between New England Laminates Co., Inc. and Adams/CRR Corp. regarding real property located in New Windsor, New York. (Reference is made to Exhibit 10.12(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.13 Lease Agreement dated December 12, 1990 between Neltec, Inc. and NZ Properties, Inc. regarding real property located at 1420 W. 12th Place, Tempe, Arizona. (Reference is made to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1991, Commission File No. 1-4415, which is incorporated herein by reference.) 10.14 Indenture of Lease dated November 1, 1984 between Dielectric Polymers, Inc. and Holyoke Supply Company, Inc. regarding real property located at 218 Race Street, Holyoke, Massachusetts. (Reference is made to Exhibit 10.14 of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.14(a) Extension of Lease dated May 13, 1986 to Indenture of Lease dated November 1, 1984 between Dielectric Polymers, Inc. and Holyoke Supply Company, Inc. regarding real property located at 218 Race Street, Holyoke, Massachusetts. (Reference is made to Exhibit 10.14(a) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1- 4415, which is incorporated herein by reference.) 10.14(b) Second Extension of Lease dated May 30, 1991 to Indenture of Lease dated November 1, 1984 between Dielectric Polymers, Inc. and Holyoke Supply Company, Inc. regarding real property located at 218 Race Street, Holyoke, Massachusetts. (Reference is made to Exhibit 10.14(b) of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.14(c) Amendment to Second Extension of Lease dated May 19, 1994 to Indenture of Lease dated November 1, 1984 between Dielectric Polymers, Inc. and Holyoke Supply Company, Inc. regarding real property located at 218 Race Street, Holyoke, Massachusetts. (Reference is made to Exhibit 10.14(c) of the Company's Annual Report on Form 10-K for the fiscal year ended February 27, 1994, Commission File No. 1-4415, which is incorporated herein by reference.) 10.15 Lease Agreement dated January 8, 1992 between Nelco Technology, Inc. and CMD Southwest, Inc. regarding real property located at 1135 West Geneva Drive, Tempe, Arizona. (Reference is made to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended March 1, 1992, Commission File No. 1-4415, which exhibit is incorporated herein by reference.) 10.16 Lease Assignation, dated April 18, 1991 between New England Laminates (UK) Limited and Tweedbank Circuit Supplies Limited, of the Lease Agreement dated October 20, 1986 between Tweedbank Circuit Supplies Limited and the Scottish Development Agency regarding real property located at Block 2 and Unit 2 of Block 8, Tweedbank Industrial Estate, Galashiels, Scotland. (Reference is made to Exhibit 10.16 of the Company's Annual Report on Form 10-K for the fiscal year ended March 1, 1992, Commission File No. 1-4415, which exhibit is incorporated herein by reference.) Exhibit Number Description 10.17 Sublease Agreement dated April 27, 1992 between New England Laminates (U.K.) Limited and Mill Book Company Limited regarding real property located at Bumpers Farm Industrial Estate, Brunel Way, Chippenham, England. (Reference is made to Exhibit 10.17 of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 10.18 Tenancy Agreement dated October 8, 1992 between Nelco Products Pte. Ltd. and Jurong Town Corporation regarding real property located at 36 Gul Lane, Jurong Town, Singapore. (Reference is made to Exhibit 10.18 of the Company's Annual Report on Form 10- K for the fiscal year ended February 28, 1993, Commission File No. 1-4415, which is incorporated herein by reference.) 11.01 Computation of fully-diluted earnings per common share. 22.01 Subsidiaries of the Company. 24.01 Consent of Ernst & Young. 24.02 Consent of Ernst & Young. (b) Reports on Form 8-K filed during the fiscal quarter ended February 27, 1994. (1) Current report on Form 8-K, dated January 18, 1994. (2) Amendment No. 1 on Form 8-K/A to the Company's current report on Form 8-K, dated January 18, 1994. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: July 15, 1994 PARK ELECTROCHEMICAL CORP. By: /s/ Brian E. Shore Brian E. Shore, Executive Vice President Schedule I PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE I - MARKETABLE SECURITIES
Column A Column B Column C Column D Column E Market Value Amount at Which Of Issue at Security Number of Cost of Balance Is Carried on the Name and Title of Issue Shares Issue Sheet Date Balance Sheet FEBRUARY 27, 1994: Common Stocks 35,047 $ 145,000 $ 136,000 $ 136,000 Floating rate and medium term notes: Canadian Imperial Bank of Commerce 1,000,000 1,000,000 1,000,000 Bayerische Landesbank 1,000,000 1,000,000 1,000,000 Merrill Lynch and Company, Inc. 2,000,000 2,000,000 2,000,000 Morgan Stanley 1,000,000 1,000,000 1,000,000 Student Loan Marketing Association 1,000,000 1,000,000 1,000,000 6,000,000 6,000,000 6,000,000 U.S. Treasury bills and other Government securities 17,880,000 17,782,000 17,782,000 TOTAL MARKETABLE SECURITIES $24,025,000 $23,918,000 $23,918,000 FEBRUARY 28, 1993: Common Stocks 359 $ 9,000 $ 9,000 $ 9,000 Certificates of deposit: Commerz Bank 2,000,000 2,000,000 2,000,000 Deposit notes: Swiss Bank 1,997,000 2,007,000 1,999,000 Morgan Guaranty Trust Company 2,000,000 2,000,000 2,000,000 3,997,000 4,007,000 3,999,000 Floating rate and medium term notes: Canadian Imperial Bank of Commerce 1,000,000 1,000,000 1,000,000 American Telephone and Telegraph 1,000,000 1,002,000 1,000,000 2,000,000 2,002,000 2,000,000 U.S. Treasury bills and other Government securities 15,786,000 15,941,000 15,754,000 TOTAL MARKETABLE SECURITIES $23,792,000 $23,959,000 $23,762,000
Schedule V PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F Balance at Balance at Beginning Additions End Description of Period at Cost Retirements Other of Period YEAR ENDED FEBRUARY 27, 1994: Land, buildings and improvements $15,546,000 $ 2,004,000 $ (70,000) $ (20,000) (A) $17,460,000 Machinery, equipment and fixtures 81,764,000 7,478,000 (733,000) (46,000) (A) 88,463,000 $97,310,000 $ 9,482,000 $ (803,000) $ (66,000) $105,923,000 YEAR ENDED FEBRUARY 28, 1993: $ 204,000 (B) Land, buildings and improvements $13,443,000 $ 2,290,000 $ (7,000) (384,000) (A) $15,546,000 856,000 (B) Machinery, equipment and fixtures 75,704,000 8,103,000 (1,317,000) (1,582,000) (A) 81,764,000 $89,147,000 $10,393,000 $(1,324,000) $ (906,000) $97,310,000 YEAR ENDED MARCH 1, 1992: Land, buildings and improvements $11,745,000 $ 2,123,000 $ (164,000) $ (261,000) (A) $13,443,000 Machinery, equipment and fixtures 68,633,000 8,980,000 (891,000) (1,018,000) (A) 75,704,000 $80,378,000 $11,103,000 $(1,055,000) $(1,279,000) $89,147,000 (A) Effect of foreign exchange rate changes (B) Assets acquired through acquisition
Schedule VI PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F Additions Balance at Charged to Balance at Beginning Costs and End Description of Period Expenses Retirements Other of Period YEAR ENDED FEBRUARY 27, 1994: Buildings and improvements $ 5,084,000 $1,046,000 $ (67,000) $ (9,000) (A) $ 6,054,000 Machinery, equipment and fixtures 41,748,000 7,142,000 (433,000) 14,000 (A) 48,471,000 $46,832,000 $8,188,000 $(500,000) $ 5,000 $54,525,000 YEAR ENDED FEBRUARY 28, 1993: Buildings and improvements $ 4,274,000 $ 884,000 $ (2,000) $ (72,000) (A) $ 5,084,000 Machinery, equipment and fixtures 37,127,000 6,264,000 (929,000) (714,000) (A) 41,748,000 $41,401,000 $7,148,000 $(931,000) $(786,000) $46,832,000 YEAR ENDED MARCH 1, 1992: $ (60,000) (A) Buildings and improvements $ 4,235,000 $ 796,000 $ (66,000) (631,000) (B) $ 4,274,000 631,000 (B) Machinery, equipment and fixtures 31,581,000 6,046,000 (722,000) (409,000) (A) 37,127,000 $35,816,000 $6,842,000 $(788,000) $(469,000) $41,401,000 (A) Effect of foreign exchange rate changes (B) Reclassification
Schedule VIII PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column F Balance at Charged to Other Balance at Beginning Cost and Accounts Translation End Description of Period Expenses Written Off Adjustment of Period (A) ALLOWANCE FOR DOUBTFUL ACCOUNTS: 52 weeks ended February 27, 1994 $2,977,000 $ (3,000) $ (317,000) $ 16,000 $2,673,000 52 weeks ended February 28, 1993 $1,645,000 $1,904,000 $ (451,000) $ (121,000) $2,977,000 52 weeks ended March 1, 1992 $ 908,000 $1,350,000 $ (597,000) $ (16,000) $1,645,000 (A) Uncollectible accounts, net of recoveries
Schedule IX PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE IX - SHORT-TERM BORROWINGS
Maximum Average Weighted Weighted Amount Amount Average Balance Average Outstanding Outstanding Interest Rate Category of Aggregate at End Interest During During During Short-term Borrowings of Period Rate the Period the Period the Period (A) (B) FEBRUARY 27, 1994: Loans payable to banks (foreign) $ 78,000 8.3% $ 508,000 $ 319,000 8.6% FEBRUARY 28, 1993: Loans payable to banks (foreign) $ 120,000 10.5% $1,496,000 $ 644,000 10.4% MARCH 1, 1992: Loans payable to banks (foreign) $1,495,000 11.3% $5,105,000 $2,976,000 12.3% (A)Average amount outstanding during the period is computed by dividing the total of monthly outstanding principal balances by the number of months in the period (B)Weighted average interest rate for the year is computed by dividing the actual short-term interest expense by the average short-term debt outstanding
Schedule X PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Column A Column B Charged to Costs and Expenses Fiscal Year Ended 1994 1993 1992 Item Maintenance and repairs $4,259,000 $3,645,000 $3,638,000 Amortization of intangible assets (A) (A) (A) Taxes, other than payroll and income taxes (A) (A) (A) Royalties (A) (A) (A) Advertising costs (A) (A) (A) (A) Amounts are not presented as such amounts are less than 1% of net sales
-----END PRIVACY-ENHANCED MESSAGE-----