What changed in this filing

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Item 1. Financial Statements

2025-07-16 compared with 2025-01-15 · 72 added, 113 removed, 236 unchanged (44% of the section changed)

4 unchanged sentences

(Amounts in thousands)

December 1, 2024

March 2, 2025*

17 unchanged sentences

Long-term operating lease liability (Note 5)

Non-current income taxes payable (Note 9)

Deferred income taxes (Note 9)

13 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

13 Weeks Ended (Unaudited)

39 Weeks Ended (Unaudited)

Cost of sales

13 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Amounts in thousands)

13 Weeks Ended (Unaudited)

39 Weeks Ended (Unaudited)

Other comprehensive earnings (loss), net of tax:

Other comprehensive earnings, net of tax:

Unrealized gains on marketable securities:

2 unchanged sentences

Unrealized holding losses arising during the period

reclassification adjustment for losses included in net earnings

Other comprehensive earnings

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in thousands, except share and per share amounts)

1 unchanged sentence

Treasury Stock

(Loss) Earnings

Balance, March 2, 2025

Unrealized gain on marketable securities, net of tax

Stock-based compensation

Cash dividends ($ 0.125 per share)

Balance, June 2, 2024

Unrealized gain on marketable securities, net of tax

Stock options exercised

2 unchanged sentences

Cash dividends ($ 0.125 per share)

Balance, September 1, 2024

Unrealized gain on marketable securities, net of tax

Stock-based compensation

Repurchase of treasury shares

Cash dividends ($ 0.125 per share)

Balance, December 1, 2024

Balance, June 1, 2025

Comprehensive

Treasury Stock

(Loss) Earnings

Balance, February 26, 2023

Unrealized gain on marketable securities, net of tax

Stock-based compensation

Repurchase of treasury shares

Cash dividends ($ 0.125 per share)

Balance, May 28, 2023

Unrealized gain on marketable securities, net of tax

Stock-based compensation

Repurchase of treasury shares

Cash dividends ($ 0.125 per share)

Balance, August 27, 2023

Balance, March 3, 2024

Unrealized gain on marketable securities, net of tax

Stock options exercised

Stock-based compensation

Cash dividends ($ 0.125 per share)

Balance, November 26, 2023

Balance, June 2, 2024

See Notes to Condensed Consolidated Financial Statements (Unaudited).

9 unchanged sentences

Stock-based compensation

Provision for credit losses

Allowance for credit losses

Deferred income taxes

Amortization of bond premium

Loss on sale of marketable securities

Changes in operating assets and liabilities

10 unchanged sentences

Net cash used in financing activities

Increase (decrease) in cash and cash equivalents:

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental disclosure of non-cash activities:

Addition to operating right-of-use asset from new operating lease liability

Supplemental cash flow information:

5 unchanged sentences

(Amounts in thousands, except share (unless otherwise stated), per share and option amounts)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Condensed Consolidated Balance Sheet and the Consolidated Statement of Shareholders’ Equity as of December 1, 2024, the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Earnings for the 13 weeks and 39 weeks ended December 1, 2024 and November 26, 2023, and the Condensed Consolidated Statements of Cash Flows for the 39 weeks then ended have been prepared by Park Aerospace Corp.

CONSOLIDATED FINANCIAL STATEMENTS

The Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Shareholders’ Equity as of June 1, 2025, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks ended June 1, 2025 and June 2, 2024, and the Condensed Consolidated Statements of Cash Flows for the 13-week periods then ended 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 December 1, 2024 and the results of operations and cash flows for all periods presented.

The 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.

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 June 1, 2025 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.

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 2, 2025.

There have been no significant changes to such accounting policies during the 39 weeks ended December 1, 2024.

There have been no significant changes to such accounting policies during the 13 weeks ended June 1, 2025.

FAIR VALUE MEASUREMENTS

8 unchanged sentences

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.

The fair value of the Company’s cash and cash equivalents, accounts receivable, and accounts payable 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.

4 unchanged sentences

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 39 weeks ended December 1, 2024.

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 Consolidated Statements of Operations.

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:

December 1, 2024

Treasury and other government securities

2 unchanged sentences

Treasury and other government securities

corporate debt 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

December 1, 2024:

Amortized Cost

June 1, 2025:

Treasury and other government securities

2 unchanged sentences

Treasury and other government securities

corporate debt securities

Total marketable securities

The estimated fair values of such securities at December 1, 2024 by contractual maturity are shown below:

The estimated fair values of such securities at June 1, 2025 by contractual maturity are shown below:

Due in one year or less

10 unchanged sentences

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.

Renewal options are included in the lease terms to the extent the Company is reasonably certain to exercise the options.

The exercise of lease renewal options is at the Company’s sole discretion.

3 unchanged sentences

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 December 1, 2024 are as follows:

Future minimum lease payments under non-cancellable operating leases as of June 1, 2025 are as follows:

Total undiscounted operating lease payments

2 unchanged sentences

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 Sheets.

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 39 weeks ended December 1, 2024, the Company’s operating lease expenses were $ 16 and $ 47 , respectively.

Cash payments of $ 40 , pertaining to operating leases, are reflected in the Condensed Consolidated Statements of Cash Flows under cash flows from operating activities.

The following table sets forth the right-of-use assets and operating lease liabilities as of December 1, 2024:

For the 13 weeks ended June 1, 2025 and June 2, 2024, the Company’s operating lease expenses were $ 17 and $ 15 , respectively.

Cash payments for the 13 weeks ended June 1, 2025 and June 2, 2024 of $ 14 and $ 13 , respectively, pertaining to operating leases, are reflected in the cash flow statement under cash flows from operating activities.

The following table sets forth the right-of-use assets and operating lease liabilities as of June 1, 2025 and March 2, 2025:

Operating right-of-use assets

2 unchanged sentences

Total operating lease liabilities

The Company’s weighted average remaining lease term for its operating leases is 6.5 years.

In the second quarter of fiscal year 2025, the Company entered into an extension of an expiring lease.

The extension resulted in an additional right-of-use asset and lease liability of $ 267 .

An incremental borrowing rate of 4.90 % was used to determine the right-of-use asset and related liability.

At June 1, 2025 and March 2, 2025, the Company’s weighted average remaining lease terms for its operating leases were 6.14 years and 6.34 years, respectively, and the weighted average borrowing rates for its operating leases were 4.97 % and 4.97 %, respectively.

STOCK-BASED COMPENSATION

As of December 1, 2024, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan.

As of June 1, 2025, 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 1,550,000 shares of common stock of the Company.

4 unchanged sentences

Any shares of common stock subject to an option under the 2018 Plan, which expires or is terminated unexercised as to such shares, shall again become available for issuance under the 2018 Plan.

During the 39 weeks ended December 1, 2024, the Company granted options under the 2018 Plan to purchase a total of 135,100 shares of common stock to its directors and certain of its employees.

The future compensation expense to be recognized in earnings before income taxes is $ 434 and will be recorded on a straight-line basis over the requisite service period.

The weighted average fair value of the granted options was $ 3.21 per share using the Black-Scholes option pricing model with the following assumptions:

risk-free interest rate of 4.23 %- 4.24 %;

expected volatility factor of 28.7 %- 29.1 %;

expected dividend yield of 3.77 %;

and estimated option term of 5.8 - 8.6 years.

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 terms 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 39 weeks ended December 1, 2024.

The estimated term of the options was based on evaluations of the historical and expected future employee exercise behavior.

During the 2024 fiscal year, the Company recorded non-cash charges of $ 109 related to the modification of previously granted employee stock options resulting from the $ 1.00 per share special cash dividend paid by the Company in April 2023.

The future compensation expense to be recognized in earnings before income taxes for options outstanding at December 1, 2024 was $ 789 , which is expected to be recognized ratably over a weighted average vesting period of 1.45 years.

The following is a summary of option activity for the 39 weeks ended December 1, 2024:

The future compensation expense to be recognized in earnings before income taxes for options outstanding at June 1, 2025 was $ 596 , which is expected to be recognized ratably over a weighted average vesting period of 1.18 years.

The following is a summary of option activity for the 13 weeks ended June 1, 2025:

Exercise Price

4 unchanged sentences

Terminated or expired

Balance, December 1, 2024

Vested and exercisable, December 1, 2024

Balance, June 1, 2025

Vested and exercisable, June 1, 2025

EARNINGS PER SHARE

1 unchanged sentence

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;

Stock options are the Company’s only potentially dilutive securities;

and the number of dilutive options is computed using the treasury stock method.

1 unchanged sentence

13 Weeks Ended

39 Weeks Ended

Weighted average common shares outstanding for basic EPS

3 unchanged sentences

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 75,000 and 72,000 for the 13 weeks ended December 1, 2024 and November 26, 2023, respectively, and 53,000 and 126,000 for the 39 weeks ended December 1, 2024 and November 26, 2023, respectively.

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 335,338 and 0 for the 13 weeks ended June 1, 2025 and June 2, 2024, respectively.

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 1,500,000 additional shares of its common stock.

This authorization supersedes any unused prior Board of Directors’ authorizations to purchase shares of the Company’s common stock.

The Company purchased 180,547 and 0 shares, respectively, during the 13 weeks ended December 1, 2024 and November 26, 2023 and 330,180 and 221,099 shares, respectively, of its common stock during the 39 weeks ended December 1, 2024 and November 26, 2023, respectively.

As a result, the Company is authorized to purchase up to a total of 948,721 shares of its common stock, representing approximately 4.8 % of the Company’s 19,925,243 total outstanding shares as of the close of business on January 7, 2025.

This authorization superseded any unused prior Board of Directors’ authorizations to purchase shares of the Company’s Common Stock.

The Company purchased 166,955 and 0 shares of its common stock during the 13 weeks ended June 1, 2025 and June 2, 2024, respectively.

As a result, the Company is authorized to purchase up to a total of 781,766 shares of its common stock, representing approximately 3.9 % of the Company’s 19,855,838 total outstanding shares as of the close of business on July 9, 2025.

There is no assurance the Company will purchase any shares pursuant to this Board of Directors’ authorization.

Shares purchased by the Company, if any, will be retained as treasury stock and will be available for use under the Company’s stock option plan and for other corporate purposes.

For the 13 weeks and 39 weeks ended December 1, 2024, the Company recorded income tax provisions from operations of $ 559 and $ 1,685 , respectively, which included discrete income tax provisions of $ 19 and $ 60 , respectively.

For the 13 weeks and 39 weeks ended November 26, 2023, the Company recorded income tax provisions from operations of $ 423 and $ 1,730 , respectively, which included discrete income tax provisions of $ 25 and $ 78 , respectively.

The Company’s effective tax rates for the 13 weeks and 39 weeks ended December 1, 2024 were income tax provisions of 26.2 % and 26.7 %, respectively, compared to income tax provisions of 30.7 % and 28.2 % in the comparable prior periods.

The effective tax rates for the 13 weeks and 39 weeks ended December 1, 2024 were higher than the U.S.

statutory rate of 21 % primarily due to state and local taxes and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits.

The effective rates for the 13 weeks and 39 weeks ended November 26, 2023 were higher than the U.S.

For the 13 weeks ended June 1, 2025, the Company recorded an income tax provision of $ 694 , which included a discrete income tax provision of $( 28 ).

For the 13 weeks ended June 2, 2024, the Company recorded an income tax provision of $ 376 , which included a discrete income tax provision of $ 19 .

The Company’s effective tax rate for the 13 weeks ended June 1, 2025 was 25.0 % compared to 27.5 % in the comparable prior year period.

The effective tax rate for the 13 weeks ended June 1, 2025 was higher than the U.S.

statutory rate of 21 % primarily due to state and local taxes.

The effective tax rate for the 13 weeks ended June 2, 2024 was higher than the U.S.

statutory rate of 21 % primarily due to state and local taxes and discrete income tax provisions for the accrual of interest related to unrecognized tax benefits.

Notwithstanding the U.S.

taxation of the deemed repatriated earnings as a result of the mandatory one-time transition tax on the accumulated untaxed earnings of foreign subsidiaries of U.S.

shareholders included in the 2017 Tax Cuts and Jobs Act, the Company intends to indefinitely invest approximately $ 25 million of undistributed earnings outside of the U.S.

If these future earnings are repatriated to the U.S., or if the Company determines such earnings will be remitted in the foreseeable future, the Company may be required to accrue U.S.

deferred taxes on such earnings.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA").

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus deprecation, domestic research cost expensing, and the business interest expense limitation.

ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

Consequently, as of the date of enactment, and during the three months ended August 31, 2025, the Company will identify any changes required to its financial statements as a result of the OBBBA.

The Company is still evaluating the impact of the OBBBA and the results of such evaluations will be reflected on the Company's Form 10-K for the year ended March 1, 2026.

GEOGRAPHIC REGIONS

3 unchanged sentences

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

Financial information regarding the Company’s operations by geographic region is as follows:

13 Weeks Ended

North America

Total net sales

STORM DAMAGE CHARGE

The Company recorded a charge of $ 1,098 for storm damage in the 39 weeks ended December 1, 2024.

The Company recorded a charge of $ 1,052 for storm damage in the 13 weeks ended June 2, 2024.

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transitioned the area.

None of the Company’s manufacturing lines or equipment were damaged by the storm.

Although the building structures are secure, the roofs on all three buildings in the Company’s Newton, Kansas campus will ultimately need to be replaced.

Although the building structures were secure, the roofs on all three buildings in the Company’s Newton, Kansas campus were damaged and required significant repairs.

Also, multiple specialty HVAC units were damaged or destroyed.

These specialty HVAC units are necessary to control the temperature and humidity in certain manufacturing areas, quality laboratories and R&D laboratories, which is required by certain specifications and certifications the Company is subject to.

The Company is currently working with multiple contractors on site to remediate the damage.

Although the Company is still in the process of remediating the damage, the Company’s production lines were returned to full production within two weeks of the storm.

The Company is employing certain temporary measures in order to return its production lines to full service, including the use of temporary HVAC equipment, but it will take the Company several months to permanently repair or replace all of the damaged facilities and infrastructure equipment.

The Company does not anticipate the loss of any sales for the 2025 fiscal year.

The Company’s production lines were returned to full production within two weeks of the storm.

The Company did not lose any sales for the 2025 fiscal year;

however, $ 1.8 million of sales originally planned to be delivered could not be delivered before the end of the first quarter ended June 2, 2024 due to storm related delays.

The Company paid its employees for the days immediately following the storm despite many not being able to work while others worked on the clean-up of the storm damage to the facilities.

The Company incurred $ 78 of payroll and related costs for lost production time and employees working on clean-up.

The charge recorded by the Company includes an asset damage charge, emergency services by outside contractors, rental of temporary HVAC units and the cost of employee downtime or time spent on the clean-up of the storm damage to the facilities.

Additional costs will be recorded in future periods as additional work is needed and performed.

The Company has insurance coverage for wind damage with a deductible of approximately $ 2.5 million.

The cost of the repairs from the storm damage will be less than this deductible and, as such, the Company will not have an insurance recovery related to the damage.

CONTINGENCIES

The charge recorded by the Company in fiscal 2025 included an asset damage charge, emergency services by outside contractors, rental of temporary HVAC units and the cost of employee downtime or time spent on the clean-up of the storm damage to the facilities.

There were no such charges in fiscal 2026.

COMMITMENTS AND CONTINGENCIES

The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters.

14 unchanged sentences

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 accrues estimated costs associated 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.

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 € 4,587 payable in three installments in 2025, 2026, and 2027.

The advance would be paid as follows:

€ 1,376 was paid in April 2025 (actual cost of $ 1,564 ), € 1,835 to be paid in the first quarter of fiscal 2027 (approximately $ 2,200 based on July 3, 2025 exchange rates) and € 1,376 to be paid in the first quarter of fiscal 2028 (approximately $ 1,600 based on July 3, 2025 exchange rates).

These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup SAS, of additional manufacturing equipment for ArianeGroup SAS’ production of C2®B product.

Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost of € 36,000 .

The Company had a remaining advance of $ 1,564 recorded in Other Assets on the Condensed Consolidated Balance Sheet at June 1, 2025.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements