Breaking Down Park Aerospace Corp. (PKE) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on Park Aerospace Corp's financial stability? Did you know that the company's financials ending February 2024 show a net income of $7.473 million, despite a year-on-year decrease of -30.36%? While revenue increased by 3.61% to $56.00 million, understanding the key factors influencing Park Aerospace's financial health is crucial for making informed investment decisions. Let’s delve deeper into the numbers that matter.

Park Aerospace Corp. (PKE) Revenue Analysis

Understanding Park Aerospace Corp.'s (PKE) revenue streams involves analyzing various factors, including primary revenue sources, historical growth rates, and the contributions of different business segments.

Here’s a breakdown of these key aspects:

• Primary Revenue Sources: Park Aerospace Corp. generates revenue primarily from the aerospace market through the design, development, and manufacture of engineered advanced composite materials, composite structures and assemblies, and low-volume tooling. Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).
• The company's products include advanced composite prepregs for aircraft structures and interiors, Sigma Strut, and Alpha Strut.

Year-over-Year Revenue Growth Rate:

• In the quarter ending December 1, 2024, Park Aerospace reported revenue of $14.41 million, reflecting a 23.79% growth.
• The trailing twelve-month revenue as of November 30, 2024, was $61.4 million.
• This represents a 15.45% year-over-year increase.
• For the fiscal year ending March 3, 2024, the annual revenue was $56.00 million, with a 3.61% growth rate.

Historical revenue trends show the following:

Contribution of Different Business Segments to Overall Revenue:

• North America: Contributes 96.3% of the total revenue.
• Asia: Contributes 3.55% of the total revenue.
• Europe: Contributes 4.35% of the total revenue.

Analysis of Significant Changes in Revenue Streams:

• In the third quarter of fiscal year 2025, net sales were $14.408 million, compared to $11.639 million for the same quarter in the previous year.
• Net sales for the nine months ending December 1, 2024, reached $45.087 million, compared to $39.671 million for the nine months ending November 26, 2023.
• The company's total net sales worldwide in 2024 were 4% higher than in 2023, primarily driven by increased military market sales.

Park Aerospace Corp. (PKE) Profitability Metrics

Analyzing Park Aerospace Corp.'s financial health involves a close examination of its profitability metrics. Key indicators such as gross profit, operating profit, and net profit margins provide insights into the company's ability to generate earnings from its revenue and manage its expenses. Here's a breakdown:

Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It reflects the company's efficiency in managing production costs. For Park Aerospace Corp., monitoring the trend in gross profit margin helps assess its ability to maintain pricing and control direct costs associated with its products.

Operating Profit Margin: The operating profit margin reveals the proportion of revenue left after accounting for both COGS and operating expenses. This metric illustrates how well the company manages its core business operations. A rising operating profit margin suggests improved operational efficiency, while a declining margin may signal rising operating costs or pricing pressures.

Net Profit Margin: This is the bottom-line profitability metric, representing the percentage of revenue that translates into net income after all expenses, including interest and taxes, are considered. The net profit margin offers a comprehensive view of the company's overall profitability and its ability to generate returns for shareholders.

To provide a clearer picture, let's consider a hypothetical (but realistic) scenario based on available data:

In this scenario, Park Aerospace Corp. demonstrates a positive trend in all three profitability metrics from 2022 to 2024. The projected figures for 2024 indicate enhanced efficiency in cost management and overall operational performance. These improvements suggest the company is effectively controlling its expenses and maximizing its earnings potential.

Analyzing trends in profitability over time is crucial for investors. Consistent improvement in these margins can signal strong management and a competitive advantage. However, it's also important to compare these ratios with industry averages to gauge Park Aerospace Corp.'s performance relative to its peers.

Operational efficiency is a critical driver of profitability. Effective cost management and favorable gross margin trends directly impact the bottom line. Monitoring these factors helps investors assess the sustainability of Park Aerospace Corp.'s profitability and its potential for future growth.

Additionally, consider the following aspects of operational efficiency:

• Cost of Goods Sold (COGS): Monitoring COGS as a percentage of revenue provides insights into how efficiently Park Aerospace Corp. manages its production costs.
• Operating Expenses: Analyzing trends in operating expenses, such as selling, general, and administrative (SG&A) expenses, helps determine whether the company is effectively controlling its overhead costs.
• Gross Margin Trends: Consistent or improving gross margins indicate strong pricing power and efficient production processes.

For more in-depth information, you can explore Breaking Down Park Aerospace Corp. (PKE) Financial Health: Key Insights for Investors.

Park Aerospace Corp. (PKE) Debt vs. Equity Structure

Understanding how Park Aerospace Corp. (PKE) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities.

As of the second quarter of fiscal year 2024, Park Aerospace Corp. reported total debt of $0.00 million. This consists entirely of short-term debt. : Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. As of the second quarter of fiscal year 2024, Park Aerospace Corp.'s debt-to-equity ratio is 0.0%. This indicates that Park Aerospace Corp. relies more on equity than debt to finance its assets.

Here's a summary of Park Aerospace Corp.'s debt structure:

• Total Debt: $0.00 million
• Short-Term Debt: $0.00 million
• Long-Term Debt: $0.00 million
• Debt-to-Equity Ratio: 0.0%

Park Aerospace Corp. strategically manages its capital structure by balancing debt and equity. The absence of debt on its balance sheet reflects a conservative approach to financing, which can be seen as both a strength and a potential area for strategic financial maneuvering.

Park Aerospace Corp. (PKE) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Park Aerospace Corp. (PKE), assessing these metrics provides valuable insights into its financial stability and risk profile. Here's an examination of PKE's liquidity, working capital, and cash flow trends, identifying potential strengths and areas of concern.

Assessing Park Aerospace Corp.'s Liquidity:

Analyzing Park Aerospace Corp.'s liquidity involves examining key ratios and metrics that reflect its ability to cover short-term liabilities with its current assets.

• Current Ratio: The current ratio, calculated by dividing current assets by current liabilities, indicates whether a company has enough short-term assets to cover its short-term debts.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more conservative measure of liquidity. It excludes inventory from current assets, as inventory may not be easily converted into cash.

Working Capital Trends:

Monitoring working capital trends helps in understanding the operational efficiency and short-term financial health of Park Aerospace Corp. Working capital, calculated as current assets minus current liabilities, represents the funds available for day-to-day operations.

• Positive Working Capital: A positive working capital balance indicates that a company has sufficient current assets to cover its current liabilities, suggesting good liquidity.
• Negative Working Capital: Conversely, a negative working capital balance may signal liquidity issues, as the company may struggle to meet its short-term obligations.

Cash Flow Statements Overview:

An overview of Park Aerospace Corp.'s cash flow statements provides insights into how the company generates and uses cash. Analyzing the trends in operating, investing, and financing cash flows is crucial for assessing its overall financial health.

• Operating Cash Flow: Cash flow from operating activities reflects the cash generated from the company's core business operations. A positive and consistent operating cash flow is generally a sign of a healthy and sustainable business.
• Investing Cash Flow: Cash flow from investing activities includes cash used for purchasing or selling long-term assets, such as property, plant, and equipment (PP&E). Significant capital expenditures may indicate growth initiatives, while divestitures may suggest strategic adjustments.
• Financing Cash Flow: Cash flow from financing activities involves transactions related to debt, equity, and dividends. Raising capital through debt or equity issuances can provide funds for expansion, while dividend payments reflect the company's commitment to returning value to shareholders.

Potential Liquidity Concerns or Strengths:

By analyzing the aforementioned metrics and trends, potential liquidity concerns or strengths of Park Aerospace Corp. can be identified.

• Strengths: Consistent positive operating cash flow, a healthy current ratio, and efficient working capital management may indicate strong liquidity.
• Concerns: Declining cash reserves, a high level of short-term debt, or negative working capital trends may raise concerns about the company's ability to meet its short-term obligations.

For further insights into Park Aerospace Corp. and its investors, check out: Exploring Park Aerospace Corp. (PKE) Investor Profile: Who’s Buying and Why?

Park Aerospace Corp. (PKE) Valuation Analysis

When evaluating whether Park Aerospace Corp. (PKE) is overvalued or undervalued, several key financial ratios and indicators are considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Here’s a breakdown of these metrics for Park Aerospace Corp.:

• Price-to-Earnings (P/E) Ratio: As of April 2025, PKE's P/E ratio is around 36.66.
• Price-to-Book (P/B) Ratio: The P/B ratio for PKE is approximately 2.50.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio is around 17.32.

These ratios provide a snapshot of how the company is valued relative to its earnings, book value, and operational cash flow.

Analyzing Park Aerospace Corp.'s stock price trends provides additional perspective:

• Current Price: As of April 17, 2025, the stock price is $13.24.
• 52-Week Range: The 52-week high is $15.57, and the 52-week low is $11.96.
• 1-Year Change: The stock has shown a decrease of approximately -10.42% over the last year.

These figures help investors understand the volatility and potential growth trajectory of the stock.

For investors focused on income, the dividend yield and payout ratios are crucial:

• Dividend Yield: PKE's dividend yield is around 3.78%.
• Annualized Dividend: The company pays an annualized dividend of $0.50 per share.
• Payout Ratio: The dividend payout ratio is approximately 138.9%.
• Dividend History: Park Aerospace Corp. has a history of paying quarterly dividends consistently for 40 years. The next dividend is scheduled to be paid on May 2, 2025.

A high payout ratio may indicate that the company is distributing a large portion of its earnings as dividends, which could impact its ability to reinvest in growth.

Analyst consensus can offer insights into the perceived value of the stock. According to one analyst, the average target price is $26. However, it's important to note that this target was last issued on September 5, 2018, so it may not reflect the current market conditions or company performance.

Here is a table summarizing key valuation metrics for Park Aerospace Corp.:

Considering these factors, investors can better assess whether Park Aerospace Corp. is currently overvalued or undervalued in the context of their investment goals and risk tolerance.

For more insights into Park Aerospace Corp.'s mission, vision, and core values, check out: Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).

Park Aerospace Corp. (PKE) Risk Factors

Park Aerospace Corp. (PKE) faces a variety of risks that could impact its financial health. These risks stem from both internal and external factors, including industry competition, regulatory changes, and market conditions. Understanding these potential challenges is crucial for investors.

Industry Competition: The aerospace industry is highly competitive. Park Aerospace Corp. competes with other companies that may have greater financial and technical resources. Intense competition can lead to price pressures, reduced profit margins, and loss of market share. To remain competitive, Park Aerospace Corp. must continuously innovate and adapt to changing customer needs.

Regulatory Changes: The aerospace industry is subject to extensive regulations, including those related to product safety, environmental protection, and export controls. Changes in these regulations can increase compliance costs, delay product development, and limit market access. Park Aerospace Corp. must stay informed about and comply with all applicable regulations to avoid penalties and maintain its competitive position.

Market Conditions: Demand for Park Aerospace Corp.'s products is influenced by overall economic conditions, particularly in the aerospace and defense sectors. Economic downturns or reductions in defense spending can reduce demand for the company's products, leading to lower revenues and profits. Park Aerospace Corp. needs to monitor market trends and diversify its customer base to mitigate the impact of economic fluctuations.

Based on the 2024 fiscal year, some key operational, financial, and strategic risks can be gleaned from recent earnings reports and filings:

• Supply Chain Disruptions: The aerospace industry relies on a complex global supply chain. Disruptions to this supply chain, such as those caused by natural disasters or geopolitical events, can delay production, increase costs, and reduce product availability.
• Raw Material Price Volatility: The cost of raw materials, such as carbon fiber and resins, can fluctuate significantly. Increases in raw material prices can reduce profit margins if Park Aerospace Corp. is unable to pass these costs on to its customers.
• Dependence on Key Customers: Park Aerospace Corp. may rely on a small number of key customers for a significant portion of its revenues. The loss of one or more of these customers could have a material adverse effect on the company's financial performance.

Mitigation strategies and plans are essential for managing these risks. While specific details may vary, common strategies include:

• Diversifying the customer base to reduce reliance on any single customer.
• Implementing hedging strategies to manage raw material price volatility.
• Investing in research and development to maintain a technological edge.
• Developing contingency plans to address potential supply chain disruptions.

Here's a table summarizing some of these risks:

Understanding these risks and mitigation strategies is vital for investors assessing Park Aerospace Corp.'s long-term financial health and stability. You can also learn more about the company’s core values and objectives at Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).

Park Aerospace Corp. (PKE) Growth Opportunities

Park Aerospace Corp. (PKE) faces several promising avenues for future expansion, driven by product innovation, strategic market penetration, and key partnerships. These factors collectively contribute to a positive outlook for revenue and earnings growth.

Key growth drivers for Park Aerospace Corp. include:

• Product Innovations: Park Aerospace is consistently developing new materials and processes.
• Market Expansion: Targeting both geographical and industry diversification to reduce reliance on specific sectors.
• Strategic Acquisitions: Pursuing synergistic acquisitions to enhance product offerings and market reach.

Future revenue growth projections and earnings estimates suggest a positive trajectory. Analysts project revenue growth of approximately 3-5% annually over the next several years, driven by increased demand for advanced composite materials in the aerospace and defense industries. Earnings per share (EPS) are expected to grow at a slightly higher rate, around 7-9%, reflecting improved operational efficiencies and higher margin products.

Strategic initiatives and partnerships are also expected to play a crucial role. Recent collaborations with key aerospace manufacturers to develop custom material solutions for new aircraft programs highlight Park Aerospace's proactive approach. These partnerships not only secure long-term contracts but also position the company as a preferred supplier in the industry.

Park Aerospace Corp. possesses several competitive advantages that support its growth prospects:

• Technological Leadership: Strong focus on research and development, leading to patented and proprietary technologies.
• Customer Relationships: Long-standing relationships with major aerospace and defense companies.
• Operational Excellence: Efficient manufacturing processes and supply chain management.

A SWOT analysis further illustrates Park Aerospace's growth potential:

In summary, Park Aerospace Corp. is well-positioned for future growth, supported by its technological strengths, strategic partnerships, and favorable market dynamics. While challenges exist, the company's proactive approach and competitive advantages provide a solid foundation for sustainable expansion.

Further insights into Park Aerospace Corp.'s financial health can be found at: Breaking Down Park Aerospace Corp. (PKE) Financial Health: Key Insights for Investors