Park Electrochemical Corporation reports 122% Net Income growth in 2018 while 7.0 pp EBITDA Margin decline from 11.8% to 4.8%
05/07/2018 • About Park Electrochemical Corporation (
$PKE) • By InTwits
Park Electrochemical Corporation reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Park Electrochemical Corporation is a company in decline: FY2018 revenue growth was -3.0%, 5 years revenue CAGR was -8.8%
- EBITDA Margin is quite volatile: 4.8% in FY2018, 11.8% in FY2017, 17.3% in FY2016, 17.1% in FY2015, 16.9% in FY2014
- Park Electrochemical Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is 1.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Park Electrochemical Corporation's Revenue decreased on 3.0%. Annual revenue decline showed slowdown in FY18Q4 - revenue increased slightly on 0.74%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 7.0 pp from 11.8% to 4.8% in FY2018. During FY2014-FY2018 EBITDA Margin topped in FY2016 at 17.3% and was declining since that time.
Gross Margin decreased on 2.4 pp from 26.2% to 23.8% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2015 at 30.2% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018. During FY2014-FY2018 SG&A as a % of Revenue bottomed in FY2016 at 14.5% and was growing since that time.
Net Income margin jumped on 10.4 pp from 8.1% to 18.5% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.80%. The company showed small growth in CAPEX/Revenue of 0.53 pp from 0.27% in FY2015 to 0.80% in FY2018. For the last three years the average CAPEX/Revenue was 0.43%.
Return on investment
The company operates at good ROE (12.9%) while ROIC is low (1.0%). ROIC decreased on 2.6 pp from 3.6% to 1.0% in FY2018. ROE increased on 7.8 pp from 5.1% to 12.9% in FY2018. During FY2014-FY2018 ROIC topped in FY2015 at 6.8% and was declining since that time.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash dropped on 82.2%.
Valuation and dividends
The company's trades at EV/EBITDA 56.0x and P/E 15.5x.
Management team
The company's CEO Brian E Shore is a founder and has spent 5 years with the company. P Matthew Farabaugh is a Park Electrochemical Corporation's CFO. P Matthew Farabaugh has spent 7 years at the company.
Financial and operational results
FY ended 02/25/2018
Park Electrochemical Corporation ($PKE) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 165.8 | 162.1 | 145.9 | 114.6 | 111.2 | -3.0% |
| Gross Profit | 48.1 | 49.0 | 42.8 | 30.0 | 26.5 | -11.9% |
| SG&A | 25.2 | 24.4 | 21.2 | 19.7 | 19.4 | -1.9% |
| EBITDA | 28.0 | 27.8 | 25.3 | 13.5 | 5.4 | -60.3% |
| Net Income | -42.3 | 20.0 | 18.0 | 9.3 | 20.6 | 121.9% |
Balance Sheet
|
|---|
| Cash | 133.2 | 141.5 | 97.8 | 102.4 | 18.3 | -82.2% |
| Short Term Debt | 10.0 | 10.0 | 3.0 | 3.5 | 0.0 | -100.0% |
| Long Term Debt | 94.0 | 84.0 | 72.0 | 68.5 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 1.1 | 0.4 | 0.4 | 0.2 | 0.9 | 266.1% |
Ratios
|
|---|
| Revenue growth | -6.0% | -2.2% | -10.0% | -21.4% | -3.0% | |
| EBITDA growth | 7.5% | -0.7% | -9.0% | -46.4% | -60.3% | |
|
|---|
| Gross Margin | 29.0% | 30.2% | 29.3% | 26.2% | 23.8% | -2.4% |
| EBITDA Margin | 16.9% | 17.1% | 17.3% | 11.8% | 4.8% | -7.0% |
| SG&A, % of revenue | 15.2% | 15.0% | 14.5% | 17.2% | 17.4% | 0.2% |
| Net Income Margin | -25.5% | 12.4% | 12.4% | 8.1% | 18.5% | 10.4% |
| CAPEX, % of revenue | 0.7% | 0.3% | 0.3% | 0.2% | 0.8% | 0.6% |
|
|---|
| ROIC | 6.3% | 6.8% | 6.7% | 3.6% | 1.0% | -2.6% |
| ROE | -16.9% | 10.5% | 9.9% | 5.1% | 12.9% | 7.8% |
| Net Debt/EBITDA | -1.0x | -1.7x | -0.9x | -2.2x | -3.4x | -1.1x |
Park Electrochemical Corporation ($PKE) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 27 | 11 | 26 | 28 | | -12.9% | -60.9% | -1.2% | 0.7% |
| EBITDA | 1 | 1 | 2 | 2 | | -75.0% | -62.7% | -40.3% | -40.8% |
| Net Income | 1 | 1 | 1 | 18 | | -52.7% | -73.8% | -61.8% | 625.3% |
Balance Sheet
|
|---|
| Cash | 47 | 30 | 31 | 18 | | -55.7% | -70.8% | -71.3% | -82.2% |
| Short Term Debt | 4 | 3 | 3 | 0 | | 16.7% | 8.3% | 0.0% | -100.0% |
| Long Term Debt | 68 | 67 | 66 | 0 | | -4.9% | -5.0% | -5.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 23.1% | 28.3% | 23.2% | 24.8% | | -4.8% | 3.4% | -1.8% | -2.0% |
| EBITDA Margin | 4.0% | 10.1% | 6.2% | 7.2% | | -9.8% | -0.5% | -4.1% | -5.1% |
| Net Income Margin | 5.1% | 4.6% | 2.7% | 64.6% | | -4.3% | -2.2% | -4.3% | 55.6% |
Peers in Electronic Manufacturing Servi
Below we provide Park Electrochemical Corporation benchmarking against other companies in Electronic Manufacturing Servi industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| IEC Electronics Corp. ($IEC) | | 5.1% | 0.0% | -24.1% | 21.2% |
| |
|---|
| Median (26 companies) | -24.3% | 2.8% | 1.7% | 3.0% | 8.4% |
|---|
| Park Electrochemical Corporation ($PKE) | | -2.2% | -10.0% | -21.4% | -3.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (26 companies) | 14.5% | 14.8% | 16.7% | 13.8% | 11.9% |
|---|
| Park Electrochemical Corporation ($PKE) | 29.0% | 30.2% | 29.3% | 26.2% | 23.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (26 companies) | 4.4% | 5.2% | 4.8% | 4.5% | 4.5% |
|---|
| Park Electrochemical Corporation ($PKE) | 16.9% | 17.1% | 17.3% | 11.8% | 4.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (26 companies) | 2.7% | 2.4% | 2.8% | 3.4% | 2.5% |
|---|
| Park Electrochemical Corporation ($PKE) | 0.7% | 0.3% | 0.3% | 0.2% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (28 companies) | 4.4% | 4.9% | 6.2% | 5.7% | 6.9% |
|---|
| Park Electrochemical Corporation ($PKE) | 6.3% | 6.8% | 6.7% | 3.6% | 1.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (21 companies) | 0.2x | -0.2x | 0.6x | 0.5x | 0.8x |
|---|
| Park Electrochemical Corporation ($PKE) | -1.0x | -1.7x | -0.9x | -2.2x | -3.4x |
