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Park Electrochemical (PKE) Misses Q3 EPS by 7c, Repays Debt, Sets $3/Share Special Dividend

January 4, 2018 8:36 AM EST

Park Electrochemical (NYSE: PKE) reported Q3 EPS of $0.06, $0.07 worse than the analyst estimate of $0.13. Revenue for the quarter came in at $26.14 million versus the consensus estimate of $29.3 million.

REPAYMENT OF OUTSTANDING DEBT

Park announced the voluntary repayment of all outstanding debt under the Credit Agreement, dated as of January 15, 2016, between the Company and HSBC Bank USA, in the amount of approximately $69 million, including principal and accrued interest, effective January 3, 2018. The Company also announced the termination of the Credit Agreement.

The repayment of the outstanding debt was funded from the Company’s cash balances. The change in the U.S. tax code, as provided by the Tax Cuts and Jobs Act (“Act”), has allowed the Company to repatriate its foreign accumulated income at a lower effective tax rate. The Act, which was passed in December 2017, provides an incentive for United States companies to repatriate accumulated income earned in foreign jurisdictions at a reduced U.S. income tax expense. The estimated income tax expense and related liability associated with the repatriation is approximately $20 million compared to an estimated $60 million in income tax expense that the Company would have incurred if it had repatriated the accumulated foreign income before the effectiveness of the Act. The repatriation of accumulated foreign income will be reported in the fourth quarter of the 2018 fiscal year.

SPECIAL CASH DIVIDEND

Park announced that its Board of Directors has declared a special cash dividend of $3.00 per share payable February 13, 2018 to shareholders of record at the close of business on January 23, 2018. The special cash dividend will be funded from the Company’s cash balances.

This special dividend, together with the Company’s regular quarterly dividend of $0.10 per share payable February 6, 2018 to shareholders of record on January 2, 2018, brings the total amount of dividends paid to shareholders to $20.10 per share, a total of approximately $412 million, since the Company’s 2005 fiscal year.

For earnings history and earnings-related data on Park Electrochemical (PKE) click here.



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