-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D4udv0Va9nPHv9TI1h0OUVGsABgf9rELnsq5n8yphnjm1D1Cu3x13kV7IK941Bg9 aAo4IONCRVwrKXWEeh0KXA== 0000076267-97-000002.txt : 19970116 0000076267-97-000002.hdr.sgml : 19970116 ACCESSION NUMBER: 0000076267-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961201 FILED AS OF DATE: 19970115 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK ELECTROCHEMICAL CORP CENTRAL INDEX KEY: 0000076267 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [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: 97506013 BUSINESS ADDRESS: STREET 1: 5 DAKOTA DR CITY: LAKE SUCCESS STATE: NY ZIP: 11042 BUSINESS PHONE: 5163544100 MAIL ADDRESS: STREET 1: 5 DAKOTA DR CITY: LAKE SUCCESS STATE: NY ZIP: 11042 10-Q 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 December 1, 1996 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: 11,269,628 as of January 10, 1997. 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 December 1, 1996 (Unaudited) and March 3, 1996................................... 4 Consolidated Statements of Earnings 13 weeks and 39 weeks ended December 1, 1996 (Unaudited) and November 26, 1995 (Unaudited)... 5 Condensed Consolidated Statements of Cash Flows 39 weeks ended December 1, 1996 (Unaudited) and November 26, 1995 (Unaudited) .............. 6 Notes to Condensed Consolidated Financial Statements (Unaudited) ......................... 7 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 EXHIBIT INDEX ............................................... 13 -2- 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements The Company's Financial Statements begin on the next page. -3- 4 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
December 1, March 3, 1996 1996 ----------- -------- ASSETS (Unaudited) * Current assets: Cash and cash equivalents $ 62,631 $ 75,970 Marketable securities 80,677 67,243 Accounts receivable, net 48,222 42,821 Inventories (Note 2) 21,826 27,712 Prepaid expenses & other current assets 4,472 4,026 -------- ------- Total current assets 217,828 217,772 Property, plant and equipment, net 82,201 76,439 Other assets 4,406 4,764 -------- -------- $304,435 $298,975 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 37,133 $ 35,924 Accrued liabilities 16,247 16,941 Income taxes payable 3,379 3,942 -------- -------- Total current liabilities 56,759 56,807 Long-term debt 100,000 100,000 Deferred income taxes 7,158 6,324 Deferred pension liability 1,417 1,417 Stockholders' equity: Common stock 1,358 1,358 Other stockholders' equity 137,743 133,069 -------- -------- Total stockholders' equity 139,101 134,427 -------- -------- $304,435 $298,975 ======== ======== *The Balance Sheet at March 3, 1996 has been derived from the audited financial statements at that date.
-4- 5 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited - in thousands, except per share data)
13 Weeks Ended 39 Weeks Ended ------------------------ ------------------------ December 1, November 26, December 1, November 26, 1996 1995 1996 1995 ----------- ------------ ----------- ------------ Net sales $88,972 $81,866 $246,352 $227,215 Cost of sales 73,587 63,469 204,281 175,892 -------- -------- --------- --------- Gross profit 15,385 18,397 42,071 51,323 Selling, general and administrative expenses 8,810 9,312 24,986 25,799 -------- -------- --------- --------- Profit from operations 6,575 9,085 17,085 25,524 -------- -------- --------- --------- Other income (expense): Interest and other income, net 1,846 564 5,374 1,683 Interest expense 1,337 - 4,062 - -------- -------- --------- --------- Total other income 509 564 1,312 1,683 -------- -------- --------- --------- Earnings before income taxes 7,084 9,649 18,397 27,207 Income tax provision 2,196 3,182 5,703 9,350 -------- -------- --------- --------- Net earnings $ 4,888 $ 6,467 $ 12,694 $ 17,857 ======== ======== ========= ========= Earnings per share (Note 3): Primary $ .43 $ .55 $ 1.09 $ 1.52 Fully diluted $ .42 $ .55 $ 1.09 $ 1.51 Weighted average number of common and common equivalent shares outstanding: Primary 11,444 11,857 11,617 11,763 Fully diluted 13,835 11,857 11,617 11,801 Dividends per share $ .08 $ .08 $ .24 $ .20
-5- 6 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands)
39 Weeks Ended ------------------------- December 1, November 26, 1996 1995 ----------- ------------ Net cash provided by operating activities $ 22,530 $ 17,152 --------- --------- Cash flows from investing activities: Purchases of property, plant and equipment, net (13,826) (19,029) Purchases of marketable securities (82,708) (20,206) Proceeds from sales of marketable securities 69,319 13,094 --------- --------- Net cash used in investing activities (27,215) (26,141) --------- --------- Cash flows from financing activities: Purchase of treasury stock (6,293) - Dividends paid (2,746) (2,298) Proceeds from exercise of stock options 229 682 Other 1 (1) --------- --------- Net cash used in financing activities (8,809) (1,617) --------- --------- Decrease in cash and cash equivalents before effect of exchange rate changes (13,494) (10,606) Effect of exchange rate changes on cash and cash equivalents 155 (44) --------- --------- Decrease in cash and cash equivalents (13,339) (10,650) Cash and cash equivalents, beginning of period 75,970 30,803 --------- --------- Cash and cash equivalents, end of period $ 62,631 $ 20,153 ========= ========= Supplemental cash flow information: Cash paid during the period for: Interest $ 2,781 $ - Income taxes $ 5,238 $ 6,803
-6- 7 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated balance sheet as of December 1, 1996, the consolidated statements of earnings for the 13 weeks and 39 weeks ended December 1, 1996 and November 26, 1995, and the condensed consolidated statements of cash flows for the 39 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 December 1, 1996, 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 consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 1996. 2. INVENTORIES Inventories consist of the following:
(In thousands) December 1, March 3, 1996 1996 ----------- -------- Raw materials $ 9,166 $13,040 Work-in-process 4,531 4,280 Finished goods 7,213 9,674 Manufacturing supplies 916 718 ------- ------- $21,826 $27,712 ======= =======
3. EARNINGS PER SHARE Primary earnings per share are computed based on the weighted average number of common and common equivalent shares outstanding during the period. Fully diluted earnings per share reflect additional shares assumed to be outstanding based upon (i) the assumed exercise of stock options at the period-end market price of the Company's common stock if such price is higher than the average market price during the period, and (ii) the assumed conversion of the Company's 5.5% Convertible Subordinated Notes due 2006 (the "Notes"), if the effect would be dilutive. For the 39 weeks ended December 1, 1996, the effect of the assumed conversion of the Notes was antidilutive and, accordingly, the amount reported for fully diluted earnings per share was equal to the amount reported for primary earnings per share. -7- 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Park is a leading global designer and producer of advanced electronic materials used to fabricate complex multilayer printed circuit boards and other electronic interconnect systems, such as backplanes and semiconductor packaging systems. The Company's customers for its advanced printed circuit materials include leading independent circuit board fabricators and large electronic equipment manufacturers in the computer, telecommunications, transportation, aerospace and instrumentation indus- tries. The Company's electronic materials operations accounted for more than 86% of net sales worldwide and more than 92% of operating profit in each of the last two fiscal years and in the three-month and nine-month periods ended December 1, 1996. The Company's foreign electronic materials operations accounted for approximately 24% and 29% of net sales worldwide for the 1995 and 1996 fiscal years, respectively, and approximately 32% and 30%, respectively, for the three-month and nine- month periods ended December 1, 1996. Three and Nine Months Ended December 1, 1996 Compared with Three and Nine Months Ended November 26, 1995: The Company's electronic materials business was responsible for the deterioration in the Company's results of operations for the three-month and nine-month periods ended December 1, 1996. The United States and European markets for sophisticated printed circuit materials continued to experience weakness during the 1997 fiscal year third quarter which the Company believes was principally attributable to an industry- wide inventory correction that began in the first quarter. During the three-month and nine-month periods ended December 1, 1996, the Company's electronic materials business experienced inefficiencies caused by operating its facilities at levels lower than their designed manufacturing capacity and faced price pressure from its customers. These factors adversely affected the Company's margins in both the three-month and nine-month periods. The Company's performance in the third quarter of the 1997 fiscal year was also adversely affected by a significant disruption of the Company's business with its largest customer caused by the Canadian Auto Workers' and United Auto Workers' strikes against General Motors. The Company's plumbing and industrial components segment consists of the Company's specialty adhesive tape business, its advanced composite materials business and its plumbing hardware business, all of which operate as independent business units. The Company's specialty adhesive tape business performed very well in the current fiscal year's first three quarters. The Company's advanced composite materials business performed reasonably well in the third quarter. The Company continues to explore and pursue its options with respect to its plumbing hardware business. Results of Operations Sales for the three-month and nine-month periods ended December 1, 1996 were $89.0 million and $246.4 million, respectively, compared with $81.9 million and $227.2 million for last fiscal year's comparable periods. Sales of the electronic materials business for the three-month and nine-month periods ended December 1, 1996 were $78.2 million and $214.8 million, respectively, or 88% and 87% of total sales worldwide, compared with $72.6 million and $199.9 million, or 89% and 88% of total sales worldwide, for last fiscal year's comparable periods. Sales of the plumbing and industrial components business for the three- month and nine-month periods ended December 1, 1996 were $10.7 million and $31.5 million, respectively, compared with $9.3 million and $27.4 million for last fiscal year's comparable periods. -8- 9 The Company's foreign electronic materials operations accounted for $28.1 million and $73.6 million, respectively, or 32% and 30% of the Company's total sales worldwide, during the three-month and nine-month periods ended December 1, 1996 compared with $24.1 million and $68.0 million, respectively, of sales, or 29% and 30% of total sales worldwide, during last fiscal year's comparable periods. The gross margins for the Company's worldwide operations were 17.3% and 17.1%, respectively, during the three-month and nine-month periods ended December 1, 1996 compared with 22.5% and 22.6% for last fiscal year's comparable periods. The deterioration in the gross margins was attributable to inefficiencies caused by operating facilities at levels lower than their designed capacity, price pressure exerted by customers, and significant disruptions in the Company's business with its largest customer caused by the Canadian Auto Workers' and United Auto Workers' strikes against General Motors. Selling, general and administrative expenses, measured as a percentage of sales, were 9.9% and 10.1%, respectively, during the three- month and nine-month periods ended December 1, 1996 compared with 11.4% during last fiscal year's comparable periods. This reduction was a function of reduced general and administrative expenses resulting, in part, from lower employee bonus and profit sharing expenses due to lower operating profits. For the reasons set forth above, profit from operations for the three-month and nine-month periods ended December 1, 1996 decreased 28% to $6.6 million and 33% to $17.1 million, respectively, from $9.1 million and $25.5 million for last fiscal year's comparable periods. Interest and other income, principally investment income, increased 227% to $1.8 million and 219% to $5.4 million, respectively, for the three-month and nine-month periods ended December 1, 1996 from $0.6 million and $1.7 million for last fiscal year's comparable periods. The increase in investment income was attributable to the substantial increase in cash available for investment. The Company's investments were primarily short-term taxable instruments and government securities. Interest expense for the three-month and nine-month periods ended December 1, 1996 was $1.3 million and $4.1 million, respectively, compared with minimal amounts during last fiscal year's comparable periods. At the end of the 1996 fiscal year, the Company issued $100 million principal amount of 5.5% Convertible Subordinated Notes due 2006; as a result, such Notes were outstanding during the entire nine-month period ended December 1, 1996, which resulted in the associated interest expense and cash available for investment. The Company had no long-term debt outstanding during the first three quarters of the 1996 fiscal year. The Company's effective income tax rate for the three-month and nine-month periods ended December 1, 1996 was 31.0% compared with 33.0% and 34.4% for last fiscal year's comparable periods. This decrease in the effective tax rate was primarily the result of favorable foreign tax rate differentials. Net earnings for the three-month and nine-month periods ended December 1, 1996 decreased 24% to $4.9 million and 29% to $12.7 millon, respectively, from $6.5 million and $17.9 million for last fiscal year's comparable periods. Primary earnings per share decreased to $0.43 and $1.09 and fully diluted earnings per share decreased to $0.42 and $1.09 for the three-month and nine-month periods ended December 1, 1996 from primary earnings per share of $0.55 and $1.52 and fully diluted earnings per share of $0.55 and $1.51 for last fiscal year's comparable periods. These decreases in net earnings and earnings per share were attributable to the Company's lower operating results. -9- 10 Liquidity and Capital Resources: At December 1, 1996, the Company's cash and temporary investments were $143.3 million compared with $143.2 million at March 3, 1996, the end of the Company's 1996 fiscal year. The Company's working capital was $161.1 million at December 1, 1996 compared with $161.0 million at March 3, 1996. The slight increase at December 1, 1996 compared with March 3, 1996 was due to the increase in cash and temporary investments, with the large decrease in inventories offsetting the increases in accounts receivable and prepaid expenses and other expenses. The Company's current ratio (the ratio of current assets to current liabilities) was 3.8 to 1 at December 1, 1996 and March 3, 1996. During the nine-months ended December 1, 1996, cash provided by net earnings before depreciation and amortization of $21.4 million was increased by a net decrease in working capital items (other than cash and marketable securities) and an increase in deferred income taxes, resulting in $22.5 million of cash provided from operating activities. The Company expended $13.8 million for the purchase of property, plant and equipment and $6.3 million for repurchases of the Company's Common Stock. Expenditures for property, plant and equipment were $24.5 million and $17.5 million in the 1996 and 1995 fiscal years, respectively. The Company currently expects the level of capital expenditures in the 1997 fiscal year to be lower than in the 1996 fiscal year. The Company is continuing to consider further expansions of its electronic materials operations, particularly in the United States and Asia. At December 1, 1996, the Company's only long-term debt was the Notes. 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 would also be available for appropriate acquisitions and other expansions of the Company's business. Factors That May Affect Future Results Certain portions of this Report which do not relate to historical financial information may be deemed to constitute forward- looking statements that are subject to various factors which could cause actual results to differ materially from Park's expectations or from results which might be projected, forecast, estimated or budgeted by the Company in forward-looking statements. Such factors include, but are not limited to, general conditions in the electronics industry, Park's competitive position, the status of customer orders, and the various factors set forth under the caption "Factors That May Affect Future Results" in Item 7 of Park's Annual Report on Form 10-K for the fiscal year ended March 3, 1996. -10- 11 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 December 1, 1996. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit Number 11.01 Computation of fully diluted earnings per share 27.01 Financial Data Schedule (b) No reports on Form 8-K have been filed during the fiscal quarter ended December 1, 1996. -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: January 13, 1997 /s/Brian E. Shore ---------------- ------------------------- Brian E. Shore President and Chief Executive Officer Date: January 13, 1997 /s/Murray O. Stamer ---------------- ------------------------- Murray O. Stamer Chief Accounting Officer -12- 13 EXHIBIT INDEX Exhibit No. Name Page 11.01 Computation of fully diluted earnings per share........................... 14 27.01 Financial Data Schedule (filed only by electronic transmission with EDGAR filing with the Securities and Exchange Commission).......... - -13- EX-11 2 14 EXHIBIT NO. 11.01 PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE (Unaudited--in thousands, except per share data)
13 Weeks Ended 39 Weeks Ended ------------------------ ------------------------ December 1, November 26, December 1, November 26, 1996 1995 1996 1995 ---------- ----------- ---------- ----------- ADJUSTMENT OF NET EARNINGS: Net earnings $ 4,888 $ 6,467 $12,694 $17,857 Adjustments resulting from assumed conversion of 5.5% Convertible Subordinated Notes ("Notes"): Reduction of interest expense and amortization of deferred debt financing costs 1,337 - 4,062 - Related tax effect on above (468) - (1,422) - -------- -------- -------- -------- Net earnings, as adjusted $ 5,757 $ 6,467 $15,334 $17,857 ======== ======== ======== ======== ADJUSTMENT OF WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: Weighted average number of common and common equivalent shares outstanding 11,444 11,857 11,617 11,763 Add weighted average shares assumed to be issued upon: Conversion of Notes 2,370 - 2,370 - Exercise of stock options at period-end market price if higher than average market price for period 21 - - 38 -------- -------- -------- -------- Weighted average number of common and common equivalent shares outstanding, as adjusted 13,835 11,857 13,987 11,801 ======== ======== ======== ======== Fully diluted earnings per share-- as computed $ .42 $ .55 $ 1.10* $ 1.51 ======== ======== ======== ======== Fully diluted earnings per share-- as reported $ .42 $ .55 $ 1.09 $ 1.51 ======== ======== ======== ======== *The results of the above computation for the 39 weeks ended December 1, 1996 is antidilutive; accordingly, the reported fully diluted earnings per share is equal to the reported primary earnings per share of $1.09 per share.
-14- EX-27 3
5 This schedule contains summary financial information extracted from the financial statements of Park Electrochemical Corp. and is qualified in its entirety by reference to such financial statements. 1000 9-MOS MAR-02-1997 DEC-01-1996 62,631 80,677 48,222 0 21,826 217,828 163,040 80,839 304,435 56,759 100,000 0 0 1,358 137,743 304,435 246,352 251,726 204,281 229,267 0 0 4,062 18,397 5,703 12,694 0 0 0 12,694 $1.09 $1.09
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