Park Aerospace(PKE) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements For the 13 weeks ended June 1, 2025, Park Aerospace Corp. reported net sales of $15.4 million and net earnings of $2.1 million, with total assets at $120.7 million and positive operating cash flow of $1.6 million Condensed Consolidated Balance Sheets As of June 1, 2025, total assets decreased slightly to $120.7 million, driven by reductions in cash and marketable securities, while total liabilities increased and shareholders' equity decreased due to capital returns Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 1, 2025 (Unaudited) | March 2, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,624 | $21,621 | | Marketable securities | $44,947 | $47,213 | | Total current assets | $87,332 | $90,294 | | Total assets | $120,718 | $122,108 | | Total current liabilities | $10,128 | $9,261 | | Total liabilities | $15,767 | $14,954 | | Total shareholders' equity | $104,951 | $107,154 | Condensed Consolidated Statements of Operations Net sales increased 10.2% to $15.4 million for the 13 weeks ended June 1, 2025, with net earnings surging to $2.1 million, largely due to the absence of a prior-year storm damage charge Statement of Operations Summary (in thousands, except per share data) | Metric | 13 Weeks Ended June 1, 2025 | 13 Weeks Ended June 2, 2024 | | :--- | :--- | :--- | | Net sales | $15,400 | $13,970 | | Gross profit | $4,718 | $4,099 | | Earnings from operations | $2,419 | $2,082 | | Storm Damage Charge | $0 | $(1,052) | | Net earnings | $2,080 | $993 | | Diluted earnings per share | $0.10 | $0.05 | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities improved to $1.6 million for the 13 weeks ended June 1, 2025, while financing activities used $4.6 million, resulting in a $1.0 million net decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | 13 Weeks Ended June 1, 2025 | 13 Weeks Ended June 2, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,590 | $(423) | | Net cash provided by investing activities | $1,999 | $469 | | Net cash used in financing activities | $(4,586) | $(2,532) | | Decrease in cash and cash equivalents | $(997) | $(2,486) | - Key uses of cash in financing activities for the quarter were $2.5 million for dividends and $2.2 million for the purchase of treasury stock[20] Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, marketable securities composition, share repurchase program, a prior-year storm damage charge, and a new advance payment agreement with ArianeGroup SAS - The company's marketable securities, valued at $44.9 million, are all classified as available-for-sale and consist entirely of U.S. Treasury and other government securities, measured using Level 1 inputs[30][31] - During the 13 weeks ended June 1, 2025, the company repurchased 166,955 shares of its common stock, with authorization to purchase up to 781,766 additional shares as of July 9, 2025[44] - A storm damage charge of $1,052 thousand was recorded in the prior-year quarter due to damage at the Newton, Kansas facilities, with no such charge in the current fiscal year[50][51][54] - On March 27, 2025, the company agreed to advance €4,587 thousand to ArianeGroup SAS for future C2®B product purchases through December 2033, with an estimated total purchase cost of €36,000 thousand[61] Net Sales by Geographic Region (in thousands) | Region | 13 Weeks Ended June 1, 2025 | 13 Weeks Ended June 2, 2024 | | :--- | :--- | :--- | | North America | $14,315 | $11,986 | | Asia | $674 | $719 | | Europe | $411 | $1,265 | | Total net sales | $15,400 | $13,970 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q1 FY26 sales growth to recovery from prior-year storm disruptions, leading to improved gross margin and doubled net earnings, while maintaining strong liquidity despite capital returns and a supplier advance Results of Operations Net sales increased 10.2% to $15.4 million in Q1 FY26, with gross profit up 15.1% and net earnings surging 109.5% to $2.1 million, primarily due to recovery from prior-year storm disruptions and the absence of related charges Q1 FY2026 vs Q1 FY2025 Performance (in thousands) | Metric | Q1 2026 (13 wks ended June 1, 2025) | Q1 2025 (13 wks ended June 2, 2024) | % Change | | :--- | :--- | :--- | :--- | | Net sales | $15,400 | $13,970 | 10.2% | | Gross profit | $4,718 | $4,099 | 15.1% | | Net earnings | $2,080 | $993 | 109.5% | - The increase in sales was primarily due to recovery from prior-year storm damage disruptions, which had delayed an estimated $1.8 million in Q1 FY25 sales[65][75] - Gross profit margin increased to 30.6% from 29.3%, driven by higher sales volume and lower waste, despite costs for new manufacturing lines[66][76] - Selling, general and administrative (SG&A) expenses rose 14.0% to $2.3 million, mainly due to increased salaries, travel, and professional fees[78] Liquidity and Capital Resources The company maintains strong liquidity with $65.6 million in cash and marketable securities, despite a decrease in working capital to $77.2 million due to share repurchases, a supplier advance, and dividends, and believes resources are sufficient for the foreseeable future Key Liquidity Metrics (in thousands) | Metric | June 1, 2025 | March 2, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents and marketable securities | $65,571 | $68,834 | | Working capital | $77,204 | $81,033 | - The decrease in cash and marketable securities was primarily due to $2.2 million in treasury share repurchases, a $1.6 million supplier advance, and $2.5 million in dividend payments[93][94] - The company entered an advance payment agreement with ArianeGroup SAS, with €1,376 thousand paid in April 2025 and future payments due in fiscal 2027 and 2028[100] - The company believes its financial resources are sufficient for the next 12 months and the foreseeable future to fund operations, investments, share purchases, and dividends[98] Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure as of June 1, 2025, remains consistent with the types and amounts disclosed in its most recent Annual Report on Form 10-K - Market risk exposure at the end of the quarter is consistent with the exposure reported in the most recent Form 10-K[106] Controls and Procedures The CEO and Principal Financial Officer concluded that disclosure controls and procedures were effective as of June 1, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and Principal Financial Officer, concluded that disclosure controls and procedures were effective as of the end of the quarter[107] - No material changes to the company's internal control over financial reporting occurred during the fiscal quarter[107] PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings for the period - None[109] Risk Factors No material changes in risk factors were reported from those disclosed in the company's most recent Annual Report on Form 10-K - No material changes in risk factors were reported since the last annual report[110] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 FY26, the company repurchased 166,955 shares of common stock at an average price of $12.96 per share, with 781,766 shares remaining available for repurchase under existing authorization Common Stock Repurchases in Q1 FY2026 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 3 - April 1 | 9,033 | $13.22 | | April 2 - May 1 | 157,922 | $12.94 | | May 2 - June 1 | - | $- | | Total | 166,955 | $12.96 | - As of the end of the quarter, the company may still purchase 781,766 shares under its publicly announced repurchase program[111] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[113] Mine Safety Disclosures The company reported no mine safety disclosures - None[115] Other Information The company reported no other information - None[116] Exhibits This section lists exhibits filed with the Form 10-Q, including certifications by principal executive and financial officers and Interactive Data Files in iXBRL format - Filed exhibits include CEO and CFO certifications pursuant to Sarbanes-Oxley Act and iXBRL data files[119][121]