What changed in this filing

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Item 1. Financial Statements

2025-10-14 compared with 2025-07-16 · 94 added, 56 removed, 252 unchanged (37% of the section changed)

4 unchanged sentences

(Amounts in thousands)

August 31, 2025

March 2, 2025*

28 unchanged sentences

Total liabilities and shareholders' equity

* The balance sheet at March 2, 2025 has been derived from the audited consolidated financial statements at that date.

* The Condensed Consolidated Balance Sheet at March 2, 2025 has been derived from the audited Consolidated Financial Statements at that date.

See Notes to Condensed Consolidated Financial Statements (Unaudited).

4 unchanged sentences

13 Weeks Ended (Unaudited)

26 Weeks Ended (Unaudited)

Cost of sales

16 unchanged sentences

13 Weeks Ended (Unaudited)

26 Weeks Ended (Unaudited)

Other comprehensive earnings, net of tax:

3 unchanged sentences

Unrealized holding losses arising during the period

reclassification adjustment for losses included in net earnings

Other comprehensive earnings

14 unchanged sentences

Balance, June 1, 2025

Unrealized gain on marketable securities, net of tax

Stock options exercised

Stock-based compensation

Cash dividends ($ 0.125 per share)

Balance, August 31, 2025

Comprehensive

5 unchanged sentences

Balance, June 2, 2024

Unrealized gain on marketable securities, net of tax

Stock options exercised

Stock-based compensation

Repurchase of treasury shares

Cash dividends ($ 0.125 per share)

Balance, September 1, 2024

See Notes to Condensed Consolidated Financial Statements (Unaudited).

5 unchanged sentences

Cash flows from operating activities:

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Non-cash storm damage charge

1 unchanged sentence

Stock-based compensation

Allowance for credit losses

Provision for credit losses

Deferred income taxes

Amortization of bond premium

Loss on sale of marketable securities

Changes in operating assets and liabilities

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

8 unchanged sentences

Net cash used in financing activities

Decrease in cash and cash equivalents

Increase 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)

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.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Shareholders’ Equity as of August 31, 2025, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks and 26 weeks ended August 31, 2025 and September 1, 2024, and the Condensed Consolidated Statements of Cash Flows for the 26 weeks ended August 31, 2025 and September 1, 2024 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 June 1, 2025 and the results of operations and cash flows for all periods presented.

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 31, 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.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US 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 2, 2025.

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

There have been no significant changes to such accounting policies during the 26 weeks ended August 31, 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, and accounts payable approximate their carrying value due to their short-term nature.

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.

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 26 weeks ended August 31, 2025.

MARKETABLE SECURITIES

3 unchanged sentences

The following is a summary of available-for-sale securities:

August 31, 2025

Treasury and other government securities

4 unchanged sentences

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

June 1, 2025:

Amortized Cost Basis

Gross Unrealized Gains

Gross Unrealized Losses

August 31, 2025:

Treasury and other government securities

3 unchanged sentences

Total marketable securities

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

The estimated fair values of such securities at August 31, 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 terms to the extent the Company is reasonably certain to exercise the options.

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.

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 June 1, 2025 are as follows:

Future minimum lease payments under non-cancellable operating leases as of August 31, 2025 are as follows:

Total undiscounted operating lease payments

4 unchanged sentences

The Company recognizes lease expense for these leases on a straight-line basis over the terms of the leases.

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:

For the 13 weeks and 26 weeks ended August 31, 2025, the Company’s operating lease expenses were $ 17 and $ 34 , respectively.

Cash payments of $ 28 , 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 August 31, 2025:

Operating right-of-use assets

2 unchanged sentences

Total operating lease liabilities

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.

The Company’s weighted average remaining lease term for its operating leases is 6.0 years.

STOCK-BASED COMPENSATION

As of June 1, 2025, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan.

As of August 31, 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.

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

Weighted Average

Remaining Contractual

Term (in years)

During the 26 weeks ended August 31, 2025, the Company granted options to its directors and certain of its employees under the 2018 Plan to purchase a total of 148,700 shares of common stock.

The future compensation expense to be recognized in earnings before income taxes is $476 and will be recorded on a straight-line basis over the requisite service period.

The weighted average fair value of the granted options was $3.32 per share using the Black-Scholes option pricing model with the following assumptions:

risk-free interest rate of 4.10%-4.35%;

expected volatility factor of 24.0%-27.3%;

expected dividend yield of 3.57%;

and estimated option term of 5.9-9.2 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 26 weeks ended August 31, 2025.

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 31, 2025 was $ 970 , which is expected to be recognized ratably over a weighted average vesting period of 1.47 years.

The following is a summary of option activity for the 26 weeks ended August 31, 2025:

Outstanding Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (in years)

Aggregate Intrinsic Value

Balance, March 2, 2025

Terminated or expired

Balance, June 1, 2025

Vested and exercisable, June 1, 2025

Balance, August 31, 2025

Vested and exercisable, August 31, 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 Company’s only potentially dilutive securities;

Stock options are the only potentially dilutive securities;

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

1 unchanged sentence

13 Weeks Ended

26 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 335,338 and 0 for the 13 weeks ended June 1, 2025 and June 2, 2024, 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 147,000 and 84,000 for the 13 weeks ended August 31, 2025 and September 1, 2024, respectively, and 241,000 and 42,000 for the 26 weeks ended August 31, 2025 and September 1, 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 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.

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

The Company purchased 166,955 and 149,633 shares of its common stock during the 26 weeks ended August 31, 2025 and September 1, 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 19,905,823 total outstanding shares as of the close of business on October 7, 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 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.

For the 13 weeks and 26 weeks ended August 31, 2025, the Company recorded income tax provisions from operations of $ 831 and $ 1,525 , respectively, which included discrete income tax provisions of $( 10 ) and $( 38 ), respectively.

For the 13 weeks and 26 weeks ended September 1, 2024, the Company recorded income tax provisions from operations of $ 750 and $ 1,126 , respectively, which included discrete income tax provisions of $ 22 and $ 41 , respectively.

The Company’s effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were 25.7 % and 25.4 %, respectively, compared to 26.6 % and 26.9 % in the comparable prior periods.

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 a discrete income tax provision for the accrual of interest related to unrecognized tax benefits.

The effective rates for the 13 weeks and 26 weeks ended September 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.

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.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, 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.

The Company has completed its initial assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025.

OBBBA contained a number of U.S.

corporate tax provisions of which the Company elected to expense U.S.

incurred research or experimental expenditures immediately and full bonus depreciation for certain assets placed into service after January 19, 2025.

As a result of the Company's elections, it is expected that in 2025 U.S.

cash taxes will decrease with no material impact to its effective tax rate.

GEOGRAPHIC REGIONS

3 unchanged sentences

All of the Company’s long-lived assets are located in North America.

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

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

13 Weeks Ended

26 Weeks Ended

North America

Total net sales

STORM DAMAGE CHARGE

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.

The Company recorded a charge of $ 46 and $ 1,098 , respectively, for storm damage in the 13 weeks and 26 weeks ended September 1, 2024.

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

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

9 unchanged sentences

There were no such charges in fiscal 2026.

COMMITMENTS AND CONTINGENCIES

CONTINGENCIES

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

8 unchanged sentences

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.

Neither the Company nor any of its sub‐sidiaries 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 during which the Company’s subsidiaries’ waste was disposed at these three sites have in the past reimbursed the Company and its subsidiaries for 100 % of their legal defense and remediation costs associated with two of these sites.

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 100 % of their legal defense and remediation costs associated with two of these sites.

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 associated with known environmental matters when such costs can be reasonably estimated and when the outcome appears probable.

Included in selling, general and administrative expenses are charges for actual expenditures and accruals, based on estimates, for certain environmental mat‐ters 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.

1 unchanged sentence

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).

€ 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 $ 2,149 based on October 7, 2025 exchange rates) and € 1,376 to be paid in the first quarter of fiscal 2028 (approximately $ 1,611 based on October 7, 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.

The Company has a remaining advance of $ 1,608 in Other Assets on the Condensed Consolidated Balance Sheet at August 31, 2025.

OPERATING SEGMENT

5 unchanged sentences

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