Park Aerospace quarterly earnings rise 88.6% to $4.5M
Quarterly operating cash flow turned positive, and the Tulsa site plan carries an expected facility cost of approximately $65 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Park Aerospace Corp. (PKE) reported net sales of $20.8 million for the 13 weeks ended August 30, 2026, up 26.9% from $16.4 million in the 13 weeks ended August 31, 2025. Net earnings rose 88.6% to $4.5 million, and diluted earnings per share were $0.21 versus $0.12. Gross profit margin was 34.3%, compared with 31.2%; higher military and commercial sales and a more favorable product mix contributed to results.
For the 26 weeks ended August 30, sales increased 23.0% to $39.1 million and net earnings increased 79.9% to $8.1 million. Operating cash flow was a $1.3 million inflow, compared with a $0.5 million outflow in the comparable prior-year period. Cash and marketable securities totaled $114.7 million as of August 30, 2026.
Park completed its at-the-market sales program in June 2026, selling 869,852 shares for $27.2 million in gross proceeds and $26.3 million in net proceeds. It also plans a Tulsa composites manufacturing and development facility with an expected cost of approximately $65 million; the sublease starts September 1, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate point13-week net sales rose 26.9% to $20.8 million.
- Moderate point13-week net earnings rose 88.6% to $4.5 million.
- Moderate point26-week operating cash flow: $1.3 million inflow versus $0.5 million outflow.
Negative
- None.
Filing Explained
Park has a €36 million supplier-purchase commitment through December 2033, with a separate €1.376 million advance installment due in fiscal 2027’s third quarter.
This filing reports that Park’s supplier agreement with ArianeGroup remains active: Park commits to purchase the supplier’s product through
The separate
Park reported no share repurchases in the quarter ended
Key Figures
Key Terms
at the market offering financial
available-for-sale financial
treasury stock method financial
Black-Scholes option pricing model financial
weighted average remaining contractual term financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were PKE's quarterly sales and earnings?
How many shares did PKE sell through its at-the-market program?
What are the terms of Park Aerospace's Tulsa facility sublease?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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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
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
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share |
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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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ Accelerated Filer ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
PARK AEROSPACE CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
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PART I. |
FINANCIAL INFORMATION: |
Page Number |
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Item 1. |
Financial Statements |
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Condensed Consolidated Balance Sheets August 30, 2026 (Unaudited) and March 1, 2026 |
3 |
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Condensed Consolidated Statements of Operations 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (Unaudited) |
4 |
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Condensed Consolidated Statements of Comprehensive Earnings 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (Unaudited) |
5 |
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Condensed Consolidated Statements of Shareholders’ Equity August 30, 2026 and August 31, 2025 (Unaudited) |
6 |
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Condensed Consolidated Statements of Cash Flows 26 weeks ended August 30, 2026 and August 31, 2025 (Unaudited) |
8 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
9 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
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Factors That May Affect Future Results |
27 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
27 |
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Item 4. |
Controls and Procedures |
27 |
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PART II. |
OTHER INFORMATION: |
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Item 1. |
Legal Proceedings |
28 |
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Item 1A. |
Risk Factors |
28 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
28 |
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Item 3. |
Defaults Upon Senior Securities |
28 |
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Item 4. |
Mine Safety Disclosures |
28 |
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Item 5. |
Other Information |
29 |
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Item 6. |
Exhibits |
29 |
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EXHIBIT INDEX |
30 |
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SIGNATURES |
31 |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
PARK AEROSPACE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
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August 30, 2026 |
March 1, 2026* |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
$ | $ | ||||||
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Marketable securities (Note 3) |
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Accounts receivable, less allowance for credit losses of $ |
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Inventories (Note 4) |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating right-of-use assets (Note 5) |
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Goodwill and other intangible assets |
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Other assets |
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Total assets |
$ | $ | ||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
$ | $ | ||||||
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Operating lease liability (Note 5) |
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Accrued liabilities |
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Income taxes payable |
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Total current liabilities |
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Long-term operating lease liability (Note 5) |
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Deferred income taxes (Note 9) |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Shareholders' equity (Note 8) |
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Common stock |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Less treasury stock, at cost |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
$ | $ | ||||||
* The Condensed Consolidated Balance Sheet at March 1, 2026 has been derived from the audited Consolidated Financial Statements at that date.
See Notes to Condensed Consolidated Financial Statements (Unaudited).
PARK AEROSPACE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
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13 Weeks Ended (Unaudited) |
26 Weeks Ended (Unaudited) |
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August 30, |
August 31, |
August 30, |
August 31, |
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2026 |
2025 |
2026 |
2025 |
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Net sales |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expenses |
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Earnings from operations |
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Interest and other income |
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Earnings from operations before income taxes |
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Income tax provision (Note 9) |
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Net earnings |
$ | $ | $ | $ | ||||||||||||
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Earnings per share (Note 7) |
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Basic: |
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Basic earnings per share |
$ | $ | $ | $ | ||||||||||||
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Basic weighted average shares |
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Diluted: |
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Diluted earnings per share |
$ | $ | $ | $ | ||||||||||||
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Diluted weighted average shares |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
PARK AEROSPACE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts in thousands)
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13 Weeks Ended (Unaudited) |
26 Weeks Ended (Unaudited) |
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August 30, |
August 31, |
August 30, |
August 31, |
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2026 |
2025 |
2026 |
2025 |
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Net earnings |
$ | $ | $ | $ | ||||||||||||
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Other comprehensive earnings, net of tax: |
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Unrealized gains on marketable securities: |
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Unrealized holding gains arising during the period |
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Unrealized losses on marketable securities: |
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Unrealized holding losses arising during the period |
( |
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Less: reclassification adjustment for losses included in net earnings |
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Other comprehensive earnings |
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Total comprehensive earnings |
$ | $ | $ | $ | ||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
PARK AEROSPACE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in thousands, except share and per share amounts)
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Accumulated |
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Additional |
Other |
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Common Stock |
Paid-in |
Accumulated |
Comprehensive |
Treasury Stock |
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Shares |
Amount |
Capital |
Deficit |
(Loss) Earnings |
Shares |
Amount |
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Balance, March 1, 2026 |
$ | $ | $ | ( |
) | $ | ( |
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Net earnings |
- | - | - | |||||||||||||||||||||||||
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Unrealized gain on marketable securities, net of tax |
- | - | ||||||||||||||||||||||||||
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Stock-based compensation |
- | - | ||||||||||||||||||||||||||
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Cash dividends ($ |
- | ( |
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Balance, May 31, 2026 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
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Net earnings |
- | - | ||||||||||||||||||||||||||
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Unrealized gain on marketable securities, net of tax |
- | - | ||||||||||||||||||||||||||
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Stock options exercised |
( |
) | ||||||||||||||||||||||||||
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Stock-based compensation |
- | - | ||||||||||||||||||||||||||
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Shares sold under At the Market Offering Program, net of issuance costs |
( |
) | ||||||||||||||||||||||||||
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Cash dividends ($ |
- | ( |
) | - | ||||||||||||||||||||||||
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Balance, August 30, 2026 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
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Accumulated |
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Additional |
Other |
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Common Stock |
Paid-in |
Accumulated |
Comprehensive |
Treasury Stock |
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Shares |
Amount |
Capital |
Deficit |
(Loss) Earnings |
Shares |
Amount |
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Balance, March 2, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
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Net earnings |
- | - | - | |||||||||||||||||||||||||
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Unrealized gain on marketable securities, net of tax |
- | - | ||||||||||||||||||||||||||
| Stock options exercised | ( |
) | ( |
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Stock-based compensation |
- | - | ||||||||||||||||||||||||||
| Repurchase of treasury shares | - | ( |
) | |||||||||||||||||||||||||
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Cash dividends ($ |
- | ( |
) | - | ||||||||||||||||||||||||
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Balance, June 1, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
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Net earnings |
- | - | ||||||||||||||||||||||||||
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Unrealized gain on marketable securities, net of tax |
- | - | ||||||||||||||||||||||||||
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Stock options exercised |
( |
) | ( |
) | ||||||||||||||||||||||||
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Stock-based compensation |
- | - | ||||||||||||||||||||||||||
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Cash dividends ($ |
- | ( |
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Balance, August 31, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
PARK AEROSPACE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
|
26 Weeks Ended (Unaudited) |
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August 30, |
August 31, |
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2026 |
2025 |
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Cash flows from operating activities: |
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Net earnings |
$ | $ | ||||||
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Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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Provision for credit losses |
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Deferred income taxes |
( |
) | ||||||
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Amortization of bond premium |
( |
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Loss on sale of marketable securities |
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Changes in operating assets and liabilities |
( |
) | ( |
) | ||||
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Net cash provided by (used in) operating activities |
( |
) | ||||||
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Cash flows from investing activities: |
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Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
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Purchases of marketable securities |
( |
) | ( |
) | ||||
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Proceeds from sales and maturities of marketable securities |
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Net cash (used in) provided by investing activities |
( |
) | ||||||
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Cash flows from financing activities: |
||||||||
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Dividends paid |
( |
) | ( |
) | ||||
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Proceeds from exercise of stock options |
||||||||
| Proceeds from issuance of stock, net of issuance costs | ||||||||
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Purchase of treasury stock |
( |
) | ||||||
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Net cash provided by (used in) financing activities |
( |
) | ||||||
|
Increase in cash and cash equivalents: |
||||||||
|
Cash and cash equivalents, beginning of period |
||||||||
|
Cash and cash equivalents, end of period |
$ | $ | ||||||
|
Supplemental cash flow information: |
||||||||
|
Cash paid during the period for income taxes, net of refunds |
$ | $ | ||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
PARK AEROSPACE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in thousands, except share (unless otherwise stated), per share and option amounts)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Shareholders’ Equity as of August 30, 2026, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025, and the Condensed Consolidated Statements of Cash Flows for the 26 weeks ended August 30, 2026 and August 31, 2025 have been prepared by Park Aerospace Corp. (the “Company”), without audit. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at August 30, 2026 and the results of operations and cash flows for all periods presented. The Condensed Consolidated Statements of Operations are not necessarily indicative of the results to be expected for the full fiscal year or any subsequent interim period.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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 1, 2026. There have been no significant changes to such accounting policies during the 26 weeks ended August 30, 2026.
2. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
Fair value measurements are broken down into three levels based on the reliability of inputs as follows:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.
Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to their short-term nature. Certain assets and liabilities of the Company are required to be recorded at fair value on either a recurring or non-recurring basis. On a recurring basis, the Company records its marketable securities at fair value using Level 1 or Level 2 inputs. (See Note 3)
The Company’s non-financial assets measured at fair value on a non-recurring basis include goodwill and any long-lived assets written down to fair value. To measure fair value of such assets, the Company uses Level 3 inputs consisting of techniques including an income approach and a market approach. The income approach is based on a discounted cash flow analysis and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the discounted cash flow analysis require the exercise of significant judgment, including judgment about appropriate discount rates, terminal values, growth rates and the amount and timing of expected future cash flows. With respect to goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that fair value is less than carrying value. If, based on that assessment, the Company believes it is more likely than not that fair value is less than carrying value, a goodwill impairment test is performed. There have been no changes in events or circumstances which required impairment charges to be recorded during the 13 weeks and 26 weeks ended August 30, 2026.
3. MARKETABLE SECURITIES
All marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses, net of tax, included in comprehensive earnings. Realized gains and losses, amortization of premiums and discounts, and interest and dividend income are included in interest and other income in the Condensed Consolidated Statements of Operations. The costs of securities sold are based on the specific identification method.
The following is a summary of available-for-sale securities:
|
August 30, 2026 |
||||||||||||||||
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Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
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U.S. Treasury and other government securities |
$ | $ | $ | $ | ||||||||||||
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Total marketable securities |
$ | $ | $ | $ | ||||||||||||
|
March 1, 2026 |
||||||||||||||||
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Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
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U.S. Treasury and other government securities |
$ | $ | $ | $ | ||||||||||||
|
Total marketable securities |
$ | $ | $ | $ | ||||||||||||
The following table shows the amortized cost basis of, and gross unrealized gains and losses on, the Company’s available-for-sale securities:
|
Amortized Cost Basis |
Gross Unrealized Gains |
Gross Unrealized Losses |
||||||||||
|
August 30, 2026: |
||||||||||||
|
U.S. Treasury and other government securities |
$ | $ | $ | |||||||||
|
Total marketable securities |
$ | $ | $ | |||||||||
|
March 1, 2026: |
||||||||||||
|
U.S. Treasury and other government securities |
$ | $ | $ | |||||||||
|
Total marketable securities |
$ | $ | $ | |||||||||
The estimated fair values of such securities at August 30, 2026 by contractual maturity are shown below:
|
Due in one year or less |
$ |
4. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company writes down its inventory for estimated obsolescence or unmarketability based upon the age of the inventory and assumptions about future demand for the Company’s products and market conditions. Work-in-process and finished goods inventories cost valuations include direct material costs as well as a portion of the Company’s overhead expenses. The Company’s overhead expenses that are applied to its finished goods inventories are based on actual expenses related to the procurement, storage, shipment and production of the finished goods. Inventories consisted of the following:
|
August 30, |
March 1, |
|||||||
|
2026 |
2026 |
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|
Inventories: |
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|
Raw materials |
$ | $ | ||||||
|
Work-in-process |
||||||||
|
Finished goods |
||||||||
| $ | $ | |||||||
5. LEASES
The Company has operating leases related to land, office space, warehouse space and equipment. All of the Company’s leases have been assessed to be operating leases. Renewal options are included in the lease term to the extent the Company is reasonably certain to exercise the option. The exercise of lease renewal options is at the Company’s sole discretion. The incremental borrowing rate represents the Company’s ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging from one year to ten years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing or exercise its available renewal options.
Future minimum lease payments under non-cancellable operating leases as of August 30, 2026 are as follows:
|
Fiscal Year: |
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|
2027 |
$ | |||
|
2028 |
||||
|
2029 |
||||
|
2030 |
||||
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2031 |
||||
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Thereafter |
||||
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Total undiscounted operating lease payments |
||||
|
Less imputed interest |
( |
) | ||
|
Present value of operating lease payments |
$ |
The above payment schedule includes renewal options that the Company is reasonably likely to exercise. Leases with an initial term of 12 months or less are not recorded on the Company’s Condensed Consolidated Balance Sheet. The Company recognizes lease expense for these leases on a straight-line basis over the terms of the leases.
For the 13 weeks and 26 weeks ended August 30, 2026, the Company’s operating lease expenses were $
The following table sets forth the right-of-use assets and operating lease liabilities as of August 30, 2026 and March 1, 2026:
|
August 30, 2026 |
March 1, 2026 |
|||||||
|
Operating right-of-use assets |
$ | $ | ||||||
|
Operating lease liabilities |
$ | $ | ||||||
|
Long-term operating lease liabilities |
||||||||
|
Total operating lease liabilities |
$ | $ | ||||||
At August 30, 2026 and March 1, 2026, the Company’s weighted average remaining lease terms for its operating leases were
In July 2026, the Company entered into a sublease agreement covering approximately
6. STOCK-BASED COMPENSATION
As of August 30, 2026, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan. The 2018 Plan was adopted by the Board of Directors of the Company on May 8, 2018, approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018, and amended by the shareholders of the Company on July 18, 2024 and provides for the grant of options to purchase up to
During the 13 weeks and 26 weeks ended August 30, 2026, the Company granted options to an officer under the 2018 Plan to purchase a total of
The risk-free interest rates were based on U.S. Treasury rates at the date of grant with maturity dates approximately equal to the estimated term of the options at the date of the grant. Volatility factors were based on historical volatility of the Company’s common stock. The expected dividend yields were based on the regular quarterly cash dividend per share most recently declared by the Company and on the exercise price of the options granted during the 13 weeks and 26 weeks ended August 30, 2026. The estimated term of the options was based on evaluations of the historical and expected future employee exercise behavior.
The future compensation expense to be recognized in earnings before income taxes for options outstanding at August 30, 2026 was $
The following is a summary of option activity for the 26 weeks ended August 30, 2026:
|
Outstanding Options |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term (in years) |
Aggregate Intrinsic Value |
|||||||||||||
|
Balance, March 1, 2026 |
$ | |||||||||||||||
|
Granted |
||||||||||||||||
|
Exercised |
( |
) | ||||||||||||||
|
Terminated or expired |
( |
) | ||||||||||||||
|
Balance, August 30, 2026 |
$ | $ | ||||||||||||||
|
Vested and exercisable, August 30, 2026 |
$ | $ | ||||||||||||||
7. EARNINGS PER SHARE
Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potentially dilutive securities outstanding during the period. Stock options are the only potentially dilutive securities; and the number of dilutive options is computed using the treasury stock method.
The following table sets forth the calculation of basic and diluted earnings per share:
|
13 Weeks Ended |
26 Weeks Ended |
|||||||||||||||
|
August 30, |
August 31, |
August 30, |
August 31, |
|||||||||||||
|
Net earnings |
$ | $ | $ | $ | ||||||||||||
|
Weighted average common shares outstanding for basic EPS |
||||||||||||||||
|
Net effect of dilutive options |
||||||||||||||||
|
Weighted average shares outstanding for diluted EPS |
||||||||||||||||
|
Basic earnings per share |
$ | $ | $ | $ | ||||||||||||
|
Diluted earnings per share |
$ | $ | $ | $ | ||||||||||||
Potentially dilutive securities, which were not included in the computation of diluted earnings per share, because either the effect would have been anti-dilutive or the options’ exercise prices were greater than the average market price of the common stock, were
8. SHAREHOLDERS’ EQUITY
On May 23, 2022, the Company announced that its Board of Directors authorized the Company’s purchase, on the open market and in privately negotiated transactions, of up to
On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) with respect to an at the market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $
9. INCOME TAXES
For the 13 weeks and 26 weeks ended August 30, 2026, the Company recorded income tax provisions from operations of $
The Company’s effective tax rates for the 13 weeks and 26 weeks ended August 30, 2026 were
10. GEOGRAPHIC REGIONS
The Company’s products are sold to customers in North America, Asia and Europe. The Company’s manufacturing facility is located in Kansas. Sales are attributed to geographic regions based upon the region in which the materials were delivered to the customer. All of the Company’s long-lived assets are located in North America.
Financial information regarding the Company’s continuing operations by geographic region is as follows:
|
13 Weeks Ended |
26 Weeks Ended |
|||||||||||||||
|
August 30, |
August 31, |
August 30, |
August 31, |
|||||||||||||
|
Sales: |
||||||||||||||||
|
North America |
$ | $ | $ | $ | ||||||||||||
|
Asia |
||||||||||||||||
|
Europe |
||||||||||||||||
| Total sales | $ | $ | $ | $ | ||||||||||||
11. CONTINGENCIES
Litigation
The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters. The Company believes that the ultimate disposition of such proceedings, lawsuits and claims will not have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or financial position of the Company.
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 similar state law as potentially responsible parties in connection with alleged releases of hazardous substances at three sites.
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 comparable state agency may be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of 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 an effective and comprehensive environmental compliance program.
The insurance carriers which provided general liability insurance coverage to the Company and its subsidiaries for the years dur‐ing which the Company’s subsidiaries’ waste was disposed at these three sites have in the past reimbursed the Company and its subsidiaries for
The Company does not record environmental liabilities and related legal expenses for which the Company believes that it and its subsidiaries have general liability insurance coverage for the years during which the Company’s subsidiaries’ waste was disposed at two sites for which certain subsidiaries of the Company have been named as potentially responsible parties. Pursuant to such general liability insurance coverage, three insurance carriers reimburse the Company and its subsidiaries for 100% of the legal defense and remediation costs associated with the two sites.
Included in selling, general and administrative expenses are charges for actual expenditures and accruals, based on estimates, for certain environmental matters described above. The Company accrues estimated costs asso‐ciated with known environmental matters when such costs can be reasonably estimated and when the outcome appears probable. The Company believes that the ultimate disposition of known environmental matters will not have a material adverse effect on the Company’s results of operations, cash flows or financial position.
Commitments
On March 27, 2025, Park and ArianeGroup SAS entered into an agreement under which Park would advance funds to ArianeGroup SAS against future purchases of C2®B product in the total amount of €
12. OPERATING SEGMENT
The Company operates in a single segment. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM assesses the performance of this reportable segment and allocates resources on a consolidated basis using the entity-wide revenues and expense information reported on the Condensed Consolidated Statements of Operations. The primary measure of segment profit is consolidated net income as reported on the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Condensed Consolidated Balance Sheets as total assets.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
General:
Park Aerospace Corp. (“Park” or the “Company”) develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets. Park’s advanced composite materials include film adhesives and lightning strike protection materials. Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (“AFP”) manufacturing applications. Park’s advanced composite materials are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (“UAV”s commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft. Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications. As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low volume tooling for the aerospace industry. Target markets for Park’s composite parts and structures (which include Park’s proprietary composite Sigma StrutTM and Alpha StrutTM product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft.
Financial Overview
The Company's net sales in the 13 weeks and 26 weeks ended August 30, 2026 were $20.8 million and $39.1 million, respectively, compared to $16.4 million and $31.8 million, respectively, in the 13 weeks and 26 weeks ended August 31, 2025. The increase for the 13-week period was primarily due to higher sales to military and commercial markets partially offset by lower sales to the general aviation market. The increase in sales for the 26 weeks ended August 30, 2026 was due to higher sales to military and commercial markets. Sales in the 13-week and 26-week periods ended August 30, 2026 were negatively impacted by $0.9 million due to refunds to customers during the periods for amounts charged for tariffs in fiscal year 2026. The Company refunded these tariffs to customers subsequent to receiving refunds for these tariffs, which were originally paid in fiscal year 2026, from U.S. Customs and Border Protection during the second quarter of fiscal year 2027.
The Company’s gross profit in the 13 weeks ended August 30, 2026 was higher than the gross profit in the prior year’s comparable period due to the increase in sales, a more favorable product mix partially offset by higher materials, labor and overhead costs. The Company’s gross profit in the 26 weeks ended August 30, 2026 was higher than the gross profit in the prior year’s comparable period due to the higher sales in the period and a more favorable sales mix partially offset by the higher costs noted above. While sales were negatively impacted by the tariff refunds to customers, the impact was wholly offset by a reduction of cost of goods sold due to tariff refunds received by the Company during the quarter.
The Company’s gross profit margins, measured as percentages of sales, were 34.3% and 34.6%, respectively, in the 13 weeks and 26 weeks ended August 30, 2026, compared to 31.2% and 30.9%, respectively, in the 13 weeks and 26 weeks ended August 31, 2025. The higher gross profit margins for the 13 and 26 weeks ended August 30, 2026 compared to the prior year’s comparable periods were primarily due to higher sales in those periods, which allowed for improved leverage of fixed overhead costs and a more favorable sales mix partially offset by higher labor costs.
The Company’s earnings before income taxes and net earnings increased 72.2% and 88.6%, respectively, in the 13 weeks ended August 30, 2026, compared to the 13 weeks ended August 31, 2025, primarily as a result of higher gross profit margins mentioned above and higher interest and other income partially offset by higher selling, general and administrative costs.
The Company’s earnings before income taxes and net earnings increased 72.6% and 79.9%, respectively, in the 26 weeks ended August 30, 2026, compared to the 26 weeks ended August 31, 2025, primarily due to the higher gross profit margins mentioned above and higher interest and other income partially offset by higher selling, general and administrative expenses.
While the Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses, the impact of this has been largely mitigated by the Company’s ability to adjust pricing for a large portion of its sales. The impact of global tariffs has been minimal and been largely mitigated by the Company’s ability to adjust pricing of its products.
Programs in which the Company participates as a supplier are, in some cases, experiencing supply chain issues from other suppliers to the programs that could result in delays in production for certain customers of the Company. The Company’s sales may be affected by supply chain challenges experienced by its customers as a result of delays involving other suppliers.
The Company has a number of long-term contracts pursuant to which certain of its customers, some of which represent a substantial portion of the Company’s revenue, place orders. Long-term contracts with the Company’s customers are primarily requirements-based and do not guarantee quantities. An order forecast is generally agreed concurrently with pricing for any applicable long-term contract. This order forecast is then typically updated periodically during the term of the contract. Purchase orders are generally received by the Company more than three months in advance of delivery.
Under a Business Partner Agreement with ArianeGroup SAS of Les Mureaux, France (“ArianeGroup”), Park is the exclusive North American distributor of ArianeGroup’s RAYCARB C2®B NG proprietary product. RAYCARB C2®B NG is used to produce ablative composite materials for critical rocket and missile systems. Park is a long-term customer of ArianeGroup and uses ArianeGroup’s RAYCARB C2®B NG product in the production of many of Park’s key ablative materials, which Park supplies into critical rocket and missile programs. On March 27, 2025, Park and ArianeGroup entered into an agreement under which Park would advance funds to ArianeGroup against future purchases of C2®B product in the total amount in Euros of €4,587,000 payable in three installments. These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup, of additional manufacturing equipment for ArianeGroup’s production of C2®B product.
In July 2026, the Company entered into a sublease agreement covering approximately 18 acres of total land in Tulsa, Oklahoma. The Company plans to build a new composites material manufacturing and development facility on the site. The facility will include full production lab facilities, office space, storage and freezer space and ancillary equipment necessary to support all planned manufacturing operations. The sublease commences on September 1, 2026, and has an initial term of 25 years with a renewal option for an additional 25 years. Annual rent under the sublease agreement for the initial five years of the sublease would be $269,469 with increases for each subsequent five-year period based upon the Consumer Price Index for All Urban Consumers, U.S., City Average All Items as published by the U.S. Bureau of Labor Statistics (“BLS”). The Company expects economic development incentives to offset a significant portion of the rent expense.
Results of Operations:
The following table sets forth the components of the Condensed Consolidated Statements of Operations:
|
13 Weeks Ended |
26 Weeks Ended |
|||||||||||||||||||||||
|
(Amounts in thousands, except per share |
August 30, |
August 31, |
% |
August 30, |
August 31, |
% |
||||||||||||||||||
| amounts) |
2026 |
2025 |
Change |
2026 |
2025 |
Change |
||||||||||||||||||
|
Net sales |
$ | 20,791 | $ | 16,381 | 26.9 | % | $ | 39,103 | $ | 31,781 | 23.0 | % | ||||||||||||
|
Cost of sales |
13,656 | 11,265 | 21.2 | % | 25,592 | 21,947 | 16.6 | % | ||||||||||||||||
|
Gross profit |
7,135 | 5,116 | 39.5 | % | 13,511 | 9,834 | 37.4 | % | ||||||||||||||||
|
Selling, general and administrative expenses |
2,403 | 2,271 | 5.8 | % | 4,764 | 4,570 | 4.2 | % | ||||||||||||||||
|
Earnings from operations |
4,732 | 2,845 | 66.3 | % | 8,747 | 5,264 | 66.2 | % | ||||||||||||||||
|
Interest and other income |
839 | 390 | 115.1 | % | 1,625 | 745 | 118.1 | % | ||||||||||||||||
|
Earnings from operations before income taxes |
5,571 | 3,235 | 72.2 | % | 10,372 | 6,009 | 72.6 | % | ||||||||||||||||
|
Income tax provision (Note 9) |
1,037 | 831 | 24.8 | % | 2,305 | 1,525 | 51.1 | % | ||||||||||||||||
|
Net earnings |
$ | 4,534 | $ | 2,404 | 88.6 | % | $ | 8,067 | $ | 4,484 | 79.9 | % | ||||||||||||
|
Earnings per share: |
||||||||||||||||||||||||
|
Basic: |
||||||||||||||||||||||||
|
Basic earnings per share |
$ | 0.21 | $ | 0.12 | 75.0 | % | $ | 0.38 | $ | 0.23 | 65.2 | % | ||||||||||||
|
Diluted: |
||||||||||||||||||||||||
|
Diluted earnings per share |
$ | 0.21 | $ | 0.12 | 75.0 | % | $ | 0.37 | $ | 0.22 | 68.2 | % | ||||||||||||
Net Sales
The Company's net sales in the 13 weeks and 26 weeks ended August 30, 2026, were $20.8 million and $39.1 million, respectively, compared to $16.4 million and $31.8 million, respectively, in the 13 weeks and 26 weeks ended August 31, 2025. Sales for the 13 weeks and 26 weeks ended August 30, 2026 were higher by 26.9% and 23.0%, respectively, primarily driven by higher sales in the military and commercial markets partially offset by lower sales in the general aviation market. Sales in the 13-week and 26-week periods ended August 30, 2026 were negatively impacted by $0.9 million due to refunds to customers during the periods for amounts charged for tariffs in fiscal year 2026. The Company refunded these tariffs to customers subsequent to receiving the refunds for these tariffs, which were originally paid in fiscal year 2026, from U.S. Customs and Border Protection during the second quarter of fiscal year 2027.
Gross Profit
The Company’s gross profits in the 13 weeks and 26 weeks ended August 30, 2026 were higher than the gross profits in the prior year’s comparable periods due to the higher sales mentioned above and a more favorable product mix partially offset by higher labor and overhead costs. The increased overhead costs were driven by higher salaries and fringe benefits, as well as increased utilities and shipping supplies.
The Company’s gross profit margins, measured as a percentage of sales, were 34.3% and 34.6%, respectively, in the 13 weeks and 26 weeks ended August 30, 2026, compared to 31.2% and 30.9%, respectively, in the 13 weeks and 26 weeks ended August 31, 2025. The higher gross profit margins for the 13 and 26 weeks ended August 30, 2026 compared to the prior year’s comparable periods, were primarily due to the higher sales volume in the 13-week and 26-week periods which allowed for improved leverage of fixed overhead costs and a more favorable product mix.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $132,000, or 5.8%, during the 13 weeks ended August 30, 2026 compared to the 13 weeks ended August 31, 2025, and these expenses, measured as percentages of sales, were 11.6% in the 13 weeks ended August 30, 2026 compared to 13.9% in the 13 weeks ended August 31, 2025. The increase in selling, general and administrative expenses during the 13 weeks ended August 30, 2026 was primarily due to higher freight costs, incentive compensation, information technology expenses, shareholder expenses, professional fees and trade show costs partially offset by lower legal expenses.
Selling, general and administrative expenses increased by $194,000, or 4.2%, during the 26 weeks ended August 30, 2026 compared to the 26 weeks ended August 31, 2025, and these expenses, measured as a percentage of sales, were 12.2% in the 26 weeks ended August 30, 2026 compared to 14.4% in the 26 weeks ended August 31, 2025. The increase in selling, general and administrative expenses during the 26 weeks ended August 30, 2026 was primarily due to the expenses noted above.
Selling, general and administrative expenses included stock option expenses of $84,000 and $176,000, respectively, for the 13 weeks and 26 weeks ended August 30, 2026, compared to stock option expenses of $101,000 and $189,000 for the 13 weeks and 26 weeks ended August 31, 2025.
Earnings from Operations
For the reasons set forth above, the Company’s earnings from operations were $4.7 million and $8.7 million, respectively, for the 13 weeks and 26 weeks ended August 30, 2026, compared to $2.8 million and $5.3 million, respectively, for the 13 weeks and 26 weeks ended August 31, 2025.
Interest and Other Income
Interest and other income were $839,000 and $1,625,000, respectively, for the 13 weeks and 26 weeks ended August 30, 2026, compared to $390,000 and $745,000, respectively, for the prior year's comparable periods. Interest income increased 115.1% and 118.1%, respectively, for the 13 weeks and 26 weeks ended August 30, 2026, primarily due to higher cash and investment balances primarily driven by the cash raised from the Company’s $50 million At The Market stock offering conducted in the fourth quarter of fiscal year 2026 and the second quarter of fiscal year 2027 as well as higher returns on cash and investments. These increases were partially offset by interest received in the prior year on tax refunds. During the 13 weeks and 26 weeks ended August 31, 2025, the Company earned interest income principally from its cash and investments, which consisted primarily of short-term instruments and money market funds.
Income Tax Provision
For the 13 weeks and 26 weeks ended August 30, 2026, the Company recorded income tax provisions of $1.0 million and $2.3 million, respectively, which included discrete income tax benefits of $430,000 and $430,000, respectively, for excess tax benefits from stock option exercises. For the 13 weeks and 26 weeks ended August 31, 2025, the Company recorded income tax provisions of $831,000 and $1.5 million, respectively, which included discrete income tax benefits of $10,000 and $38,000, respectively, for the excess tax benefits from stock option exercises offset by the accrual of interest related to unrecognized tax benefits.
The Company’s effective tax rates for the 13 weeks and 26 weeks ended August 30, 2026 were 18.6% and 22.2%, respectively, compared to 25.7% and 25.4%, respectively, in the prior year’s comparable periods. The effective tax rate for the 13 weeks ended August 30, 2026 was lower than the U.S. statutory rate of 21% due to the discrete tax benefits recorded in the period. Absent these benefits, the effective tax rate for the 13 weeks was higher than the U.S. statutory rate of 21% due to state and local taxes and liabilities. The effective rate for the 26 weeks ended August 30, 2026 was higher than the U.S. statutory rate of 21% primarily due to state and local taxes and liabilities, offset by excess tax benefits on stock option exercises. The effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and liabilities, and the accrual of interest related to unrecognized tax benefits offset by excess tax benefits on stock option exercises.
Net Earnings
For the reasons set forth above, the Company's net earnings for the 13 weeks and 26 weeks ended August 30, 2026 were $4.5 million and $8.1 million, respectively, compared to net earnings of $2.4 million and $4.5 million, respectively, for the 13 weeks and 26 weeks ended August 31, 2025.
Basic and Diluted Earnings Per Share
In the 13 weeks and 26 weeks ended August 30, 2026, basic earnings per share were $0.21 and $0.38, respectively, and diluted earnings per share were $0.21 and $0.37, respectively. In the 13 weeks and 26 weeks ended August 31, 2025, basic earnings per share were $0.12 and $0.23, respectively, and diluted earnings per share were $0.12 and $0.22, respectively.
Liquidity and Capital Resources
|
(Amounts in thousands) |
August 30, |
March 1, |
||||||||||
|
2026 |
2026 |
Change |
||||||||||
|
Cash and cash equivalents and marketable securities |
$ | 114,749 | $ | 89,368 | $ | 25,381 | ||||||
|
Working capital |
133,784 | 102,714 | 31,070 | |||||||||
|
26 Weeks Ended |
||||||||||||
|
(Amounts in thousands) |
August 30, |
August 31, |
||||||||||
|
2026 |
2025 |
Change |
||||||||||
|
Net cash provided by (used in) operating activities |
$ | 1,270 | $ | (527 | ) | $ | 1,797 | |||||
|
Net cash (used in) provided by investing activities |
(5,927 | ) | 14,931 | (20,858 | ) | |||||||
|
Net cash provided by (used in) financing activities |
24,489 | (6,482 | ) | 30,971 | ||||||||
On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) with respect to an “at the market offering” program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.10 per share, having an aggregate offering price of up to $50.0 million through Needham and Citizens as its sales agents. The Company is not obligated to sell any shares under the Distribution Agreement. Subject to the terms and conditions of the Distribution Agreement, Needham and Citizens will use commercially reasonable efforts, consistent with their normal trading and sales practices and applicable laws and regulations, to sell shares of the Company’s common stock from time to time based upon instructions received from the Company, including any price, time or size limits or other customary parameters or conditions specified, subject to certain limitations. Under the Distribution Agreement, Needham and Citizens may sell shares of the Company’s common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The issuance and sale, if any, of shares of the Company’s common stock under the Distribution Agreement are made pursuant to a registration statement on Form S-3 that the Company filed with the U.S. Securities and Exchange Commission (“SEC”) on January 13, 2026 and was declared effective on January 21, 2026. The offering is described in a prospectus filed as part of the registration statement. During the fiscal year ended March 1, 2026, the Company sold 942,749 shares under the Distribution Agreement at an average price of $24.21 per share. Gross proceeds of $22.8 million were reduced by commissions and other expenses of $1.1 million resulting in net proceeds of $21.7 million. During the quarter ended August 30, 2026, the Company completed sales under the program. During that period, the Company sold 869,852 shares at an average price of $31.24 per share. Gross proceeds of $27.2 million were reduced by commissions and other expenses of $0.9 million resulting in net proceeds of $26.3 million.
Cash and Marketable Securities
Of the $114.7 million of cash and cash equivalents and marketable securities at August 30, 2026, $32.8 million was owned by one of the Company’s wholly-owned foreign subsidiaries.
The change in cash and cash equivalents and marketable securities at August 30, 2026 compared to March 1, 2026 was the result of the $26.3 million of proceeds from the issuance of common stock under the “at the market offering” described above and improved earnings in the 26 weeks ended August 30, 2026. These increases were partially offset by capital expenditures, dividends paid to shareholders, and the payment of a supplier advance of $2.2 million paid in May 2026. The significant changes in cash provided by (used in) operating activities were as follows:
|
● |
accounts receivable increased by 35% at August 30, 2026 compared to March 1, 2026 primarily due to the timing of sales in the 13 weeks ended August 30, 2026 compared to the 13 weeks ended March 1, 2026; |
|
● |
inventories increased by 21% at August 30, 2026 compared to March 1, 2026 primarily due to higher raw materials and finished goods inventories to support expected growth in the remainder of fiscal 2027; |
|
● |
prepaid and other current assets increased by 51% at August 30, 2026 compared to March 1, 2026 primarily due to higher accrued interest income balances on cash and investments as well as higher prepaid insurance and information technology contracts; |
|
● |
other assets increased $2.1 million during the 26 weeks ended August 30, 2026 due to a long-term supplier advance paid in May 2026; |
|
● |
accounts payable decreased by 2% at August 30, 2026 compared to March 1, 2026 primarily due to timing of vendor payments; |
|
● |
accrued liabilities increased by 4% at August 30, 2026 compared to March 1, 2026 primarily due to increases in profit sharing and vacation and sick pay accruals partially offset by decreases in bonus, and property tax accruals; and |
|
● |
income taxes payable increased by 31% at August 30, 2026 compared to March 1, 2026 due to higher earnings in fiscal 2027. |
In addition, the Company paid $5.3 million in cash dividends in the 26-week period ended August 30, 2026 compared to $5.0 million in the 26-week period ended August 31, 2025. The Company received proceeds from stock option exercises of $3.6 million in the 26-week period ended August 30, 2026 compared to proceeds of $0.7 million from stock option exercises during the 26-week period ended August 31, 2025. While the Company did not repurchase shares in the 26 weeks ended August 30, 2026, the Company used cash of $2.2 million to repurchase shares during the 26 weeks ended August 31, 2025.
Working Capital
The increase in working capital at August 30, 2026 compared to March 1, 2026 was primarily due to higher cash and investment balances at August 30, 2026 for the reasons described above as well as higher accounts receivable and inventory balances.
The Company's current ratio (the ratio of current assets to current liabilities) was 22.7 to 1.0 at August 30, 2026, compared to 18.2 to 1.0 at March 1, 2026.
Cash Flows
During the 26 weeks ended August 30, 2026, the Company's net earnings, adjusted for depreciation and amortization, deferred income taxes, stock-based compensation, amortization of bond premium, provision for credit losses, loss on sale of marketable securities and changes in operating assets and liabilities, resulted in a $1.3 million operating cash inflow compared to a cash outflow of $0.5 million for the 26 weeks ended August 31, 2025. The increase was driven by increased earnings during the 26 weeks ended August 30, 2026. During the same 26-week period, the Company expended $469,000 for the purchase of property, plant and equipment compared with $664,000 during the 26 weeks ended August 31, 2025. The Company paid $5.3 million in cash dividends in the 26-week period ended August 30, 2026 compared to $5.0 million in the 26-week period ended August 31, 2025. The Company received proceeds from stock option exercises of $3.6 million during the 26 weeks ended August 30, 2026 compared to $0.7 million during the 26 weeks ended August 31, 2025. The Company purchased no treasury shares during the 26 weeks ended August 30, 2026 while it purchased $2.2 million in the 26-week period ended August 31, 2025.
Other Liquidity Factors
The Company believes its financial resources will be sufficient, through the 12 months following the filing of this Form 10-Q Quarterly Report and for the foreseeable future thereafter, to provide for continued investment in working capital and property, plant and equipment and for general corporate purposes, including the Company’s plans to build a new composites material manufacturing and development facility with an expected cost of approximately $65 million. The Company’s financial resources are also available for purchases of the Company's common stock, cash dividend payments, and appropriate acquisitions and other expansions of the Company's business.
The Company is not aware of any other circumstances or events that are reasonably likely to occur that could materially affect its liquidity. The Company further believes its balance sheet and financial position to be very strong.
Contractual Obligations:
The Company’s contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist primarily of operating lease commitments, commitments to purchase raw materials and remaining advance payable to ArianeGroup SAS. In March 2025, the Company entered into an agreement with a supplier, ArianeGroup SAS, under which the Company would advance funds against future purchases. The agreement requires payments of €4,587,000 in three installments, of which €1,376,000 was paid in April 2025 (actual cost of $1,564,000), €1,835,000 was paid in May 2026 (actual cost of $2,156,000) and €1,376,000 (approximately $1,549,000 based on October 5, 2026 exchange rates) that will be paid in the third quarter of fiscal 2027. Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost of €36,000,000. The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $140,000, to secure the Company’s obligations under its workers’ compensation insurance program. In July 2026, the Company entered into a sublease agreement covering approximately 18 acres of total land in Tulsa, Oklahoma. The Company plans to build a new composites material manufacturing and development facility on the site. The facility will include full production lab facilities, office space, storage and freezer space and ancillary equipment necessary to support all planned manufacturing operations. The sublease commences on September 1, 2026, and has an initial term of 25 years with a renewal option for an additional 25 years. Annual rent under the sublease agreement for the initial five years of the sublease would be $269,469 with increases for each subsequent five-year period based upon the Consumer Price Index for All Urban Consumers, U.S., City Average All Items as published by the U.S. Bureau of Labor Statistics (“BLS”). The Company expects economic development incentives to offset a significant portion of the rent expense.
Off-Balance Sheet Arrangements:
The Company’s liquidity is not dependent on the use of, and the Company is not engaged in, any off-balance sheet financing arrangements, such as securitization of receivables or obtaining access to assets through special purpose entities.
Critical Accounting Policies and Estimates:
The foregoing Discussion and Analysis of Financial Condition and Results of Operations is based upon the Company’s Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Condensed Consolidated Financial Statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to sales allowances, allowances for credit losses, inventories, valuation of long-lived assets, income taxes, contingencies and litigation, and employee benefit programs. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company’s critical accounting policies that are important to the Condensed Consolidated Financial Statements and that entail, to a significant extent, the use of estimates and assumptions and the application of management’s judgment are described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 1, 2026. There have been no significant changes to such accounting policies during the 2027 fiscal year second quarter.
Contingencies:
The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters.
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 the Company’s expectations or from results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking statements. Such factors include, but are not limited to, general conditions in the aerospace industry, the Company’s competitive position, the status of the Company’s relationships with its customers, economic conditions in international markets, the cost and availability of raw materials, transportation and utilities, and the various factors set forth under the caption “Factors That May Affect Future Results” in Item 1 and in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended March 1, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company’s market risk exposure at August 30, 2026 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 1, 2026.
Item 4. Controls and Procedures.
(a) Disclosure Controls and Procedures.
The Company’s management, with the participation of the Company’s Chief Executive Officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of August 30, 2026, the end of the quarterly fiscal period covered by this quarterly report. Based on such evaluation, the Company’s Chief Executive Officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting.
There has not been any change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
|
Item 1. |
Legal Proceedings. |
None.
|
Item 1A. |
Risk Factors. |
There have been no material changes in the risk factors as previously disclosed in the Company’s Form 10-K Annual Report for the fiscal year ended March 1, 2026.
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
The following table provides information with respect to shares of the Company’s common stock acquired by the Company during each month included in the Company’s 2027 fiscal year second quarter ended August 30, 2026.
|
Period |
Total Number of Shares (or Units) Purchased |
Average Price Paid Per Share (or Unit) |
Total Number of Shares (or Units) Purchased As Part of Publicly Announced Plans or Programs |
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
|
June 1 - July 1 |
- | $ | - | - | ||||||||||||
|
July 2 - August 2 |
- | $ | - | - | ||||||||||||
|
August 3 - August 30 |
- | $ | - | - | ||||||||||||
|
Total |
- | $ | - | - | 781,766 | (a) | ||||||||||
|
(a) |
Aggregate number of shares available to be purchased by the Company pursuant to a share purchase authorization announced on May 23, 2022. Pursuant to such authorization, the Company is authorized to purchase its shares from time to time on the open market or in privately negotiated transactions. |
||||||||
|
Item 3. |
Defaults Upon Senior Securities. |
None.
|
Item 4. |
Mine Safety Disclosures. |
None.
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Item 5. |
Other Information. |
None.
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Item 6. |
Exhibits. |
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31.1 |
Certification of principal executive officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a). |
|
31.2 |
Certification of principal financial officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a). |
|
32.1 |
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
32.2 |
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
101 |
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at August 30, 2026 (unaudited) and March 1, 2026; (ii) Condensed Consolidated Statements of Operations for the 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited); (iii) Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited); (iv) Condensed Consolidated Statements of Shareholders’ Equity at August 30, 2026 and August 31, 2025 (unaudited); and (v) Condensed Consolidated Statements of Cash Flows for the 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited). * + |
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
* |
Filed electronically herewith. |
|
| Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
EXHIBIT INDEX
|
Exhibit No. ----------- |
Name ---- |
|
|
31.1 |
Certification of principal executive officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a). |
|
|
31.2 |
Certification of principal financial officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a). |
|
|
32.1 |
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2 |
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
101 |
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at August 30, 2026 (unaudited) and March 1, 2026; (ii) Condensed Consolidated Statements of Operations for the 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited); (iii) Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks and 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited); (iv) Condensed Consolidated Statements of Shareholders’ Equity at August 30, 2026 and August 31, 2025 (unaudited); and (v) Condensed Consolidated Statements of Cash Flows for the 26 weeks ended August 30, 2026 and August 31, 2025 (unaudited). * + |
|
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
|
* |
Filed electronically herewith. |
|
| Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
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 Aerospace Corp. |
|
|
| (Registrant) | |||
|
Date: October 13, 2026 |
/s/ Brian E. Shore |
|
| Brian E. Shore | ||
|
|
Chairman of the Board and |
|
|
|
Chief Executive Officer |
|
| (principal executive officer) | ||
| Date: October 13, 2026 | /s/ Constantine Petropoulos | |
| Constantine Petropoulos | ||
|
Senior Vice President and Chief Financial Officer |
||
| (principal financial officer) | ||
| Date: October 13, 2026 | /s/ Christopher Goldner | |
| Christopher Goldner | ||
|
Vice-President – Finance (principal accounting officer) |