<PAGE> 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 November 27, 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: 5,712,976 as of December 30,
1994.
<PAGE> 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
November 27, 1994 (Unaudited) and
February 27, 1994.............................. 3
Consolidated Statements of Earnings
13 weeks and 39 weeks ended November 27, 1994
(Unaudited) and November 28, 1993 (Unaudited).. 4
Consolidated Statements of Cash Flows
39 weeks ended November 27, 1994 (Unaudited)
and November 28, 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 .............................. 10
Item 6. Exhibits and Reports on Form 8-K ............... 10
SIGNATURES ................................................. 11
<PAGE> 3
<TABLE>
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
November 27, February 27,
1994 1994
<S> <C> <C>
ASSETS (Unaudited) *
Cash and cash equivalents $ 30,361 $ 14,135
Marketable securities 15,885 23,918
Accounts receivable, net 29,442 28,904
Inventories (Note 2) 18,693 16,144
Prepaid expenses & other current assets 3,248 2,738
-------- -------
TOTAL CURRENT ASSETS 97,629 85,839
Property, plant and equipment, net 56,616 51,398
Other assets (Note 3) 2,445 3,513
-------- --------
$156,690 $140,750
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank loans payable $ 10 $ 78
Accounts payable 26,644 24,443
Accrued liabilities 14,027 12,487
Income taxes payable 2,765 2,964
-------- --------
TOTAL CURRENT LIABILITIES 43,446 39,972
Long-term debt (Note 3) 9 32,861
Deferred income taxes 5,328 4,772
Deferred pension liability 1,691 1,691
Stockholders' Equity: (Note 3)
Common stock 679 520
Other stockholders' equity 105,537 60,934
-------- --------
TOTAL STOCKHOLDERS' EQUITY 106,216 61,454
-------- --------
$156,690 $140,750
======== ========
<FN>
*The Balance Sheet at February 27, 1994 has been taken from the
audited financial statements at that date, and condensed.
</TABLE>
<PAGE> 4
<TABLE>
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited - in thousands, except per share data)
<CAPTION>
13 weeks ended 39 weeks ended
November 27, November 28, November 27, November 28,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $64,834 $54,063 $186,398 $150,610
-------- -------- --------- ---------
Costs and expenses:
Cost of sales 50,060 43,685 145,857 123,299
Selling, general and
administrative 7,564 6,591 21,976 19,065
-------- -------- --------- ---------
Total costs and expenses 57,624 50,276 167,833 142,364
-------- -------- --------- ---------
Operating profit 7,210 3,787 18,565 8,246
-------- -------- --------- ---------
Other income (expense):
Interest expense (5) (606) (417) (1,846)
Other income, net 381 225 1,225 786
-------- -------- --------- ---------
Total other income (expense) 376 (381) 808 (1,060)
-------- -------- -------- --------
Earnings before income tax
provision 7,586 3,406 19,373 7,186
Income tax provision 2,807 1,229 7,168 2,529
-------- -------- -------- --------
NET EARNINGS $ 4,779 $ 2,177 $12,205 $ 4,657
======== ======== ======== ========
Net earnings per common share:
Primary $ .84 $ .55 $ 2.29 $ 1.17
Fully Diluted $ .82 $ .45 $ 2.16 $ 1.03
Dividends per common share $ .12 $ .08 $ .28 $ .24
Weighted average number of
common shares outstanding:
Primary 5,687 3,983 5,333 3,989
Fully Diluted 5,829 5,728 5,780 5,727
</TABLE>
<PAGE> 5
<TABLE>
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
39 weeks ended
November 27, November 28,
1994 1993
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES: $ 20,151 $ 15,699
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment, net (10,787) (5,462)
Purchases of marketable securities (11,018) (172,713)
Proceeds from sales of marketable
securities 19,034 174,547
--------- ---------
Net cash used in investing activities (2,771) (3,628)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of borrowings - 491
Repayment of bank loans (72) -
Repayments of long-term borrowing (21) (12)
Dividends paid (1,541) (956)
Purchase of treasury stock - (6,566)
Proceeds from exercise of stock options 638 -
Debt conversion costs (100) -
--------- ---------
Net cash used in financing activities (1,096) (7,043)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS
BEFORE EXCHANGE RATE CHANGES 16,284 5,028
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (58) 33
--------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 16,226 5,061
CASH AND CASH EQUIVALENTS BEGINNING OF
PERIOD 14,135 9,006
--------- ---------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 30,361 $ 14,067
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 28 $ 1,217
Income taxes $ 6,992 $ 1,984
</TABLE>
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.
<PAGE> 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 November 27, 1994, the
consolidated statements of earnings for the 13 weeks and 39 weeks ended
November 27, 1994 and November 28, 1993, and the 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 November 27, 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 Form 10-K/A Amendment No. 2 to its Annual Report on Form
10-K for the fiscal year ended February 27, 1994.
2. INVENTORIES
<TABLE>
Inventories consist of the following:
<CAPTION>
(In thousands)
November 27, February 27,
1994 1994
------------ ------------
<S> <C> <C>
Raw materials $ 6,963 $ 4,727
Work-in-process 3,298 3,479
Finished goods 8,014 7,581
Manufacturing supplies 418 357
------- -------
$18,693 $16,144
</TABLE> ======= =======
3. LONG-TERM DEBT
<TABLE>
<CAPTION> (In thousands)
November 27, February 27,
1994 1994
------------ -------------
<S> <C> <C>
7.25% Convertible Subordinated
Debentures $ - $32,852
Other 10 71
---- -------
10 32,923
Less current portion (included
in accrued liabilities) 1 62
---- -------
$ 9 $32,861
</TABLE> ==== =======
<PAGE> 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.) Including conversions prior to the call for
redemption, $33,381,000 principal amount of Debentures were 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
from other assets 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 its common stock upon the conversion of $32,835,000 principal amount
Debentures. Supplementary earnings per share for the 13 weeks and 39
weeks ended November 27, 1994 of $0.84 and $2.20 per share, respectively,
reflect the earnings per share that would have resulted if the conversion
of these shares had occurred at the beginning of the fiscal year.
<PAGE> 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 third quarter ended
November 27, 1994, sales increased 20% to $64,834,000 from $54,063,000
during last year's third quarter. Sales for the nine month period
ended November 27, 1994 increased 24% to $186,398,000 from
$150,610,000 for last fiscal year's comparable period. Operating
profits increased 90% to $7,210,000 for the current fiscal year's
third quarter from $3,787,000 for last year's third quarter. During
the nine month period ended November 27, 1994, operating profit
increased 125% to $18,565,000 from $8,246,000 during last year's
comparable period. During the current year's third quarter, the
Company's electronics segment accounted for $55,855,000 in sales or
86% of the Company's total sales worldwide. The Company's foreign
operations, which are dedicated almost exclusively to the electronics
segment, accounted for $15,613,000 in sales or 24% of total sales
worldwide during this quarter. Foreign sales during this year's third
quarter increased 31% from last year's third quarter's foreign sales
of $11,927,000. Fiscal third quarter sales of the plumbing and
industrial component segment increased by 43% to $8,979,000 from
$6,299,000 during last year's third quarter.
The gross margin percentage for the Company's worldwide
operations was 22.8% during the current fiscal year's third quarter,
as compared to last year's third quarter gross margin percentage of
19.2%. The gross margin percentage for the current fiscal year's
first nine months was 21.7%, as compared to 18.1% for last year's
comparable period.
The improvement in the results for the third quarter was
principally attributable to the improvement in the operating
performance of the Company's electronics segment.
The Company's United States based electronics operations
performed well during the quarter due to increased volumes and market
share, improved manufacturing and operating efficiencies, and focused
product and technical innovation. The European sophisticated printed
circuit materials industry, which is served by the Company's European
electronics operations, has begun to show signs of improvement. As a
result of this improvement in the European market, the results of the
Company's European electronics operations have improved to a small
degree, but are still less than satisfactory. The Company's Far East
based electronics operation has recently installed additional capacity
in order to better serve that region, where electronic industry growth
is strong.
The performance of the Company's plumbing and industrial
component segment, which consists of the Company's plumbing hardware,
advanced composite and industrial adhesive tape businesses, improved
during the third quarter of the current year compared to the same
period last year. The Company's industrial adhesive tape business
performed reasonably well during the period. The plumbing hardware
and advanced composite businesses did improve during the third
quarter, but are still underperforming.
Selling, general and administrative expenses, measured as a
percentage of sales, were 11.7% during the current fiscal year's third
quarter, as compared to 12.2% during the prior year's third quarter.
Selling, general and administrative expenses were 11.8% during the
current year's first nine month period, as compared to 12.7% during
last year's comparable period.
<PAGE> 9
Interest expense for the current fiscal year's third quarter was
$5,000 as compared to $606,000 during the prior fiscal year's third
quarter. During the nine month period ended November 27, 1994,
interest expense decreased 77% to $417,000 from $1,846,000 during last
year's comparable period. During the first quarter of the current
year the Company elected to call its 7 1/4% Convertible Debentures for
redemption. As a result of this call for redemption, nearly all of
the Debentures outstanding at the beginning of the year were converted
into the Company's common stock during the first quarter. This
redemption eliminated practically all of the Company's long-term debt
and the interest expense associated with this debt. The prior year's
interest expense related primarily to the Convertible Debentures and,
to a lesser extent, to loans carried by certain of the Company's
foreign subsidiaries. Other income, principally investment income,
increased 69% to $381,000 for the current year's third quarter from
$225,000 for the prior year's third quarter. Other income during the
nine months ended November 27, 1994 increased by 56% to $1,225,000
from $786,000 during last year's comparable period. The increase in
other income is attributable to the increase in cash available for
investment during the quarter and nine month period ended November 27,
1994. The Company's cash reserves continued to be invested primarily
in short term taxable instruments and government securities.
During the current fiscal year's third quarter, the Company's
net earnings increased to $4,779,000 from $2,177,000 during the prior
year's third quarter. Primary and fully diluted earnings per share
increased to $.84 and $.82, respectively, for the current year's third
quarter from the prior year's third quarter earnings per share of $.55
primary and $.45 fully diluted. During the nine month period ended
November 27, 1994, the Company's net earnings increased to $12,205,000
from $4,657,000 during last year's first nine months. Primary and
fully diluted earnings per share increased to $2.29 and $2.16
respectively for the current year's first nine months from $1.17 and
$1.03 respectively, for primary and fully diluted earnings per share
during last year's first nine months. This increase in earnings is
primarily attributable to the increase in the operating profits.
Liquidity and Capital Resources
At November 27, 1994, the Company's cash and temporary
investments amounted to $46,246,000, 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 was
attributable to several factors, including cash generated from
operations. The Company's working capital position was $54,183,000 at
November 27, 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 November 27, 1994 as compared to 2.1 to
1 at February 27, 1994.
During the current fiscal year's first nine months, the Company
generated $20,151,000 of funds from operations and expended
$10,787,000 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.
<PAGE> 10
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
November 27, 1994.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
No. 11: Computation of Fully Diluted Earnings
Per Common Share.
No. 27: Financial Data Schedule - Filed only by
electronic transmission with EDGAR filing with
the Securities and Exchange Commission.
(b) During the fiscal quarter ended November 27,
1994, the Company filed no current report on Form
8-K.
<PAGE> 11
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 10, 1995 /s/Jerry Shore
---------------- -------------------------
Jerry Shore
Chairman of the Board and
President
Date: January 10, 1995 /s/Allen Levine
---------------- -------------------------
Allen Levine
Vice President and
Principal Financial Officer
<PAGE> 12
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
Quarterly Report on Form 10-Q
for the fiscal quarter ended November 27, 1994
Exhibit No. Name Page
11 Computation of fully diluted 13
earnings per common share
27 Financial Data Schedule - filed only by
electronic transmission with EDGAR filing
with the Securities and Exchange Commission
<PAGE> 13
EXHIBIT NO. 11
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED EARNINGS PER COMMON SHARE
(Unaudited - in thousands, except per share data)
<TABLE>
<CAPTION>
13 weeks ended 39 weeks ended
November 27, 1994 November 27, 1994
<S> <C> <C>
ADJUSTMENT OF NET EARNINGS:
Net earnings before adjustment $4,779 $12,205
Adjustments resulting from assumed
conversion of 7 1/4% convertible
subordinated debentures:
Reduction of interest expenses and
amortization of deferred debt
financing costs - 389
Related tax effect of above - (136)
------- ---------
Net earnings as adjusted $4,779 $12,458
======= =========
ADJUSTMENT OF WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
Weighted average number of common
shares outstanding 5,687 5,333
Additional shares assuming conversion of:
Convertible Subordinated Debentures - 336
Stock Options 142 111
------- ---------
Adjusted weighted average number of
common shares outstanding during
the period 5,829 5,780
======= =========
Earnings per share fully diluted $ .82 $ 2.16
======= =========
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
[DESCRIPTION] ART. 5 FDS FOR 3RD QUARTER 10-Q
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> FEB-26-1995
<PERIOD-END> NOV-27-1994
<CASH> 30,361
<SECURITIES> 15,885
<RECEIVABLES> 31,963
<ALLOWANCES> 2,521
<INVENTORY> 18,693
<CURRENT-ASSETS> 97,629
<PP&E> 118,000
<DEPRECIATION> 61,384
<TOTAL-ASSETS> 156,690
<CURRENT-LIABILITIES> 43,446
<BONDS> 9
<COMMON> 679
0
0
<OTHER-SE> 105,537
<TOTAL-LIABILITY-AND-EQUITY> 156,690
<SALES> 186,398
<TOTAL-REVENUES> 187,623
<CGS> 145,857
<TOTAL-COSTS> 167,833
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 417
<INCOME-PRETAX> 19,373
<INCOME-TAX> 7,168
<INCOME-CONTINUING> 12,205
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,205
<EPS-PRIMARY> $2.29
<EPS-DILUTED> $2.16
</TABLE>
