Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
May 28, 2023 | Jul. 03, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 28, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-4415 | |
Entity Registrant Name | PARK AEROSPACE CORP. | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 11-1734643 | |
Entity Address, Address Line One | 1400 Old Country Road | |
Entity Address, City or Town | Westbury | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11590 | |
City Area Code | 631 | |
Local Phone Number | 465-3600 | |
Title of 12(b) Security | Common Stock, par value $.10 per share | |
Trading Symbol | PKE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 20,250,211 | |
Entity Central Index Key | 0000076267 | |
Current Fiscal Year End Date | --02-26 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 5,836 | $ 4,237 | |
Marketable securities (Note 3) | 75,269 | 101,203 | |
Accounts receivable, less allowance for doubtful accounts of $124 and $120, respectively | 11,600 | 9,989 | |
Inventories (Note 4) | 7,911 | 6,768 | |
Prepaid expenses and other current assets | 2,691 | 2,844 | |
Total current assets | 103,307 | 125,041 | |
Property, plant and equipment, net | 24,112 | 24,251 | |
Operating right-of-use assets (Note 5) | 136 | 150 | |
Goodwill and other intangible assets | 9,783 | 9,783 | |
Other assets | 105 | 108 | |
Total assets | 137,443 | 159,333 | |
Current liabilities: | |||
Accounts payable | 3,859 | 4,545 | |
Operating lease liability (Note 5) | 53 | 53 | |
Accrued liabilities | 1,984 | 1,346 | |
Dividend Payable | 0 | 20,471 | |
Income taxes payable | 3,902 | 2,171 | |
Total current liabilities | 9,798 | 28,586 | |
Long-term operating lease liability (Note 5) | 118 | 129 | |
Non-current income taxes payable (Note 9) | 9,255 | 10,938 | |
Deferred income taxes (Note 9) | 1,996 | 1,995 | |
Other liabilities | 1,782 | 1,751 | |
Total liabilities | 22,949 | 43,399 | |
Shareholders' equity (Note 8) | |||
Common stock | 2,096 | 2,096 | |
Additional paid-in capital | 170,150 | 169,932 | |
Accumulated deficit | (43,399) | (42,694) | |
Accumulated other comprehensive loss | (3,528) | (4,244) | |
Stockholders' Equity, Including Treasury Stock | 125,319 | 125,090 | |
Less treasury stock, at cost | 10,825 | 9,156 | |
Total shareholders' equity | 114,494 | 115,934 | |
Total liabilities and shareholders' equity | $ 137,443 | $ 159,333 | |
[1]The balance sheet at February 26, 2023 has been derived from the audited consolidated financial statements at that date. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 |
Accounts receivable, allowance for doubtful accounts | $ 124 | $ 120 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Net sales | $ 15,551 | $ 12,783 |
Cost of sales | 10,718 | 8,691 |
Gross profit | 4,833 | 4,092 |
Selling, general and administrative expenses | 2,615 | 1,633 |
Earnings from operations | 2,218 | 2,459 |
Interest and other income | 324 | 133 |
Earnings from operations before income taxes | 2,542 | 2,592 |
Income tax provision (Note 9) | 688 | 682 |
Net earnings | $ 1,854 | $ 1,910 |
Basic: | ||
Basic earnings per share (in dollars per share) | $ 0.09 | $ 0.09 |
Basic weighted average shares (in shares) | 20,461 | 20,458 |
Diluted: | ||
Diluted earnings per share (in dollars per share) | $ 0.09 | $ 0.09 |
Diluted weighted average shares (in shares) | 20,526 | 20,504 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Net earnings | $ 1,854 | $ 1,910 |
Other comprehensive loss, net of tax: | ||
Other comprehensive earnings (loss) | 716 | (933) |
Total comprehensive earnings | 2,570 | 977 |
Gains on Marketable Securities [Member] | ||
Other comprehensive loss, net of tax: | ||
Unrealized holding gains arising during the period | 592 | 9 |
Less: reclassification adjustment for gains included in net earnings | 0 | (7) |
Losses on Marketable Securities [Member] | ||
Other comprehensive loss, net of tax: | ||
Unrealized holding gains arising during the period | 0 | (938) |
Less: reclassification adjustment for gains included in net earnings | $ 124 | $ 3 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Stock, Common [Member] | Total | |
Balance (in shares) at Feb. 27, 2022 | 20,965,144 | 506,934 | |||||
Balance at Feb. 27, 2022 | $ 2,096,000 | $ 169,665,000 | $ (24,767,000) | $ (1,965,000) | $ (9,397,000) | ||
Net earnings | 0 | 0 | 1,910,000 | 0 | 0 | $ 1,910,000 | |
Net earnings | 0 | 0 | 1,910,000 | 0 | 0 | 1,910,000 | |
Unrealized gain (loss) on marketable securities, net of tax | 0 | 0 | 0 | (933,000) | 0 | ||
Stock-based compensation | 0 | 85,000 | 0 | 0 | 0 | ||
Cash dividends | $ 0 | 0 | (2,046,000) | 0 | $ 0 | ||
Balance (in shares) at May. 29, 2022 | 20,965,144 | 506,934 | |||||
Balance at May. 29, 2022 | $ 2,096,000 | 169,750,000 | (24,903,000) | (2,898,000) | $ (9,397,000) | ||
Balance (in shares) at Feb. 26, 2023 | 20,965,144 | 493,934 | |||||
Balance at Feb. 26, 2023 | $ 2,096,000 | 169,932,000 | (42,694,000) | (4,244,000) | $ (9,156,000) | 115,934,000 | [1] |
Net earnings | 0 | 0 | 1,854,000 | 0 | 1,854,000 | ||
Net earnings | 0 | 0 | 1,854,000 | 0 | 1,854,000 | ||
Unrealized gain (loss) on marketable securities, net of tax | 0 | 0 | 0 | 716,000 | 0 | ||
Stock-based compensation | $ 0 | 218,000 | 0 | 0 | $ 0 | ||
Purchase of treasury stock (in shares) | 0 | 129,654 | |||||
Purchase of treasury stock | $ 0 | 0 | 0 | 0 | $ (1,669,000) | ||
Cash dividends | $ 0 | 0 | (2,559,000) | 0 | $ 0 | ||
Balance (in shares) at May. 28, 2023 | 20,965,144 | 623,588 | |||||
Balance at May. 28, 2023 | $ 2,096,000 | $ 170,150,000 | $ (43,399) | $ (3,528,000) | $ (10,825,000) | $ 114,494,000 | |
[1]The balance sheet at February 26, 2023 has been derived from the audited consolidated financial statements at that date. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Cash dividends, per share (in dollars per share) | $ 0.125 | $ 0.10 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,854 | $ 1,910 |
Depreciation and amortization | 305 | 260 |
Stock-based compensation | 218 | 85 |
Deferred income taxes | 2 | 107 |
Amortization of bond premium | 237 | 11 |
Loss (gain) on sale of marketable securities | 65 | 0 |
Changes in operating assets and liabilities | (2,564) | (2,329) |
Net cash provided by operating activities | 117 | 44 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (167) | (88) |
Purchases of marketable securities | 0 | (18,962) |
Proceeds from sales and maturities of marketable securities | 26,348 | 12,574 |
Net cash (used in) provided by investing activities | 26,181 | (6,476) |
Cash flows from financing activities: | ||
Dividends paid | (23,030) | (2,046) |
Purchase of treasury stock | (1,669) | 0 |
Net cash used in financing activities | (24,699) | (2,046) |
Increase (decrease) in cash and cash equivalents: | 1,599 | (8,478) |
Cash and cash equivalents, beginning of period | 4,237 | 12,811 |
Cash and cash equivalents, end of period | 5,836 | 4,333 |
Supplemental disclosure of non-cash activities: | ||
Cash paid during the period for income taxes, net of refunds | $ 608 | $ (5) |
Note 1 - Consolidated Financial
Note 1 - Consolidated Financial Statements | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. CONSOLIDATED FINANCIAL STATEMENTS The Condensed Consolidated Balance Sheet and the Consolidated Statement of Shareholders’ Equity as of May 28, 2023, the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Earnings for the 13 weeks ended May 28, 2023 and May 29, 2022, and the Condensed Consolidated Statements of Cash Flows for the 13 weeks 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 May 28, 2023 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 (“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 February 26, 2023. There have been no significant changes to such accounting policies during the 13 weeks ended May 28, 2023. |
Note 2 - Fair Value Measurement
Note 2 - Fair Value Measurements | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 2. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability ( i.e Fair value measurements are broken down into three levels based on the reliability of inputs as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability ( e.g. Level 3 inputs are unobservable inputs for the asset or liability. 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. 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. To measure fair value of such assets, the Company uses Level 3 inputs consisting of techniques including an income approach and a market approach. The income approach is based on a discounted cash flow analysis and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the discounted cash flow analysis require the exercise of significant judgment, including judgment about appropriate discount rates, terminal values, growth rates and the amount and timing of expected future cash flows. With respect to goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that fair value is less than carrying value. 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 ended May 28, 2023. |
Note 3 - Marketable Securities
Note 3 - Marketable Securities | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 3. 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. The costs of securities sold are based on the specific identification method. The following is a summary of available-for-sale securities: May 28, 2023 Total Level 1 Level 2 Level 3 U.S. Treasury and other government securities $ 70,284 $ 70,284 $ - $ - U.S. corporate debt securities 4,985 4,985 - - Total marketable securities $ 75,269 $ 75,269 $ - $ - February 26, 2023 Total Level 1 Level 2 Level 3 U.S. Treasury and other government securities $ 83,859 $ 83,859 $ - $ - U.S. corporate debt securities 17,344 17,344 - - Total marketable securities $ 101,203 $ 101,203 $ - $ - 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 Gross Gross May 28, 2023: U.S. Treasury and other government securities $ 75,110 $ - $ 4,826 U.S. corporate debt securities 4,992 - 7 Total marketable securities $ 80,102 $ - $ 4,833 February 26, 2023: U.S. Treasury and other government securities $ 89,603 $ - $ 5,744 U.S. corporate debt securities 17,414 - 70 Total marketable securities $ 107,017 $ - $ 5,814 The estimated fair values of such securities at May 28, 2023 by contractual maturity are shown below: Due in one year or less $ 16,018 Due after one year through five years 59,251 $ 75,269 |
Note 4 - Inventories
Note 4 - Inventories | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 4. INVENTORIES Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company writes down its inventory for estimated obsolescence or unmarketability based upon the age of the inventory and assumptions about future demand for the Company’s products and market conditions. Work-in-process and finished goods inventories cost valuations include direct material costs as well as a portion of the Company’s overhead expenses. The Company’s overhead expenses that are applied to its finished goods inventories are based on actual expenses related to the procurement, storage, shipment and production of the finished goods. Inventories consisted of the following: May 28, February 26, 2023 2023 Inventories: Raw materials $ 6,533 $ 5,376 Work-in-process 455 536 Finished goods 923 856 $ 7,911 $ 6,768 |
Note 5 - Leases
Note 5 - Leases | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Lessee, Operating Leases [Text Block] | 5. LEASES The Company has operating leases related to land, office space, warehouse space and equipment. 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. The exercise of lease renewal options is at the Company’s sole discretion. The incremental borrowing rate represents the Company’s ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging from one ten Future minimum lease payments under non-cancellable operating leases as of May 28, 2023 are as follows: Fiscal Year: 2024 $ 40 2025 36 2026 - 2027 - 2028 - Thereafter 162 Total undiscounted operating lease payments 238 Less imputed interest (67 ) Present value of operating lease payments $ 171 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 sheet. The Company recognizes lease expense for these leases on a straight-line basis over the terms of the leases. For the 13 weeks ended May 28, 2023, the Company’s operating lease expenses were $15. Cash payments of $13, 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 May 28, 2023: Operating right-of-use assets $ 136 Operating lease liabilities $ 53 Long-term operating lease liabilities 118 Total operating lease liabilities $ 171 The Company’s weighted average remaining lease term for its operating leases is 7.8 years. In December 2018, the Company entered into a Development Agreement with the City of Newton, Kansas and the Board of County Commissioners of Harvey County, Kansas. Pursuant to this agreement, the Company agreed to construct and operate a redundant manufacturing facility of approximately 90,000 square feet for the design, development and manufacture of advanced composite materials and parts, structures and assemblies for aerospace. The Company further agreed to equip the facility through the purchase of machinery, equipment and furnishings and to create additional new full-time employment of specified levels during a five-year period. In exchange for these agreements, the City and the County agreed to lease to the Company three eight |
Note 6 - Stock-based Compensati
Note 6 - Stock-based Compensation | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | 6. STOCK-BASED COMPENSATION As of May 28, 2023, 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 and approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018 and provides for the grant of options to purchase up to 800,000 shares of common stock of the Company. Prior to the 2018 Plan, the Company had the 2002 Stock Option Plan (the “2002 Plan”) which had been approved by the Company’s shareholders and provided for the grant of stock options to directors and key employees of the Company. All options granted under the 2018 Plan and 2002 Plan have exercise prices equal to the fair market value of the underlying common stock of the Company at the time of grant which, pursuant to the terms of such Plans, is the reported closing price of the common stock on the New York Stock Exchange on the date preceding the date the option is granted. Options granted under the Plans become exercisable 25% one During the 13 weeks ended May 28, 2023, the Company granted options under the 2018 Plan to purchase a total of 133,300 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 $387 and will be recorded on a straight-line basis over the requisite service period. The weighted average fair value of the granted options was $3.01 per share using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 3.61%-3.85%; expected volatility factor of 28.5%-29.6%; expected dividend yield of 3.82%; and estimated option terms of 4.9-8.3 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 ended May 28, 2023. 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 following is a summary of option activity for the 13 weeks ended May 28, 2023: Outstanding Weighted Weighted Average Aggregate Balance, February 26, 2023 670,425 $ 11.80 $ 838 Granted 133,300 13.08 Exercised - - Terminated or expired (900 ) 11.81 Balance, May 28, 2023 802,825 $ 12.01 6.28 $ 835 Vested and exercisable, May 28, 2023 482,263 $ 11.81 4.49 $ 598 |
Note 7 - Earnings Per Share
Note 7 - Earnings Per Share | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 7. EARNINGS PER SHARE Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. 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; and the number of dilutive options is computed using the treasury stock method. The following table sets forth the calculation of basic and diluted earnings per share: 13 Weeks Ended May 28, 2023 May 29, 2022 Net earnings $ 1,854 $ 1,910 Weighted average common shares outstanding for basic EPS 20,461 20,458 Net effect of dilutive options 65 46 Weighted average shares outstanding for diluted EPS 20,526 20,504 Basic earnings per share $ 0.09 $ 0.09 Diluted earnings per share $ 0.09 $ 0.09 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 157,000 and 397,000 for the 13 weeks ended May 28, 2023 and May 29, 2022, respectively. |
Note 8 - Shareholders' Equity
Note 8 - Shareholders' Equity | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Equity [Text Block] | 8. 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 129,654 and 0 shares of its common stock during the 13 weeks ended May 28, 2023 and May 29, 2022, respectively. As a result, the Company is authorized to purchase up to a total of 1,279,001 shares of its common stock, representing approximately 6.3% of the Company’s 20,250,211 total outstanding shares as of the close of business on July 3, 2023. 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. |
Note 9 - Income Taxes
Note 9 - Income Taxes | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 9. INCOME TAXES For the 13 weeks ended May 28, 2023, the Company recorded an income tax provision of $688, which included a discrete income tax provisions of $37. For the 13 weeks ended May 29, 2022, the Company recorded an income tax provision of $682, which included a discrete income tax provision of $28. The Company’s effective tax rate for the 13 weeks ended May 28, 2023 was 27.1% compared to 26.3% in the comparable prior year period. The effective tax rate for the 13 weeks ended May 28, 2023 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. The effective rate for the 13 weeks ended May 29, 2022 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. |
Note 10 - Geographic Regions
Note 10 - Geographic Regions | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Geographic Regions [Text Block] | 10. GEOGRAPHIC REGIONS The Company’s products are sold to customers in North America, Asia and Europe. The Company’s manufacturing facility is located in Kansas. Sales are attributed to geographic regions based upon the region in which the materials were delivered to the customer. 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: 13 Weeks Ended May 28, 2023 May 29, 2022 Sales: North America $ 13,619 $ 12,149 Asia 130 124 Europe 1,802 510 Total sales $ 15,551 $ 12,783 |
Note 11 - Contingencies
Note 11 - Contingencies | 3 Months Ended |
May 28, 2023 | |
Notes to Financial Statements | |
Contingencies Disclosure [Text Block] | 11. CONTINGENCIES Litigation The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters. The Company believes that the ultimate disposition of such proceedings, lawsuits and claims will not have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or financial position of the Company. Environmental Contingencies The Company and certain of its subsidiaries have been named by the Environmental Protection Agency (the “EPA”) or a comparable state agency under the Comprehensive Environmental Response, Compensation and Liability Act (the “Superfund Act”) or similar state law as potentially responsible parties in connection with alleged releases of hazardous substances at three sites. Under the Superfund Act and similar state laws, all parties who may have contributed any waste to a hazardous waste disposal site or contaminated area identified by the EPA or comparable state agency may be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of hazardous waste. 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 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 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 The Company does not two three 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. |
Note 3 - Marketable Securities
Note 3 - Marketable Securities (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Debt Securities, Available-for-Sale [Table Text Block] | May 28, 2023 Total Level 1 Level 2 Level 3 U.S. Treasury and other government securities $ 70,284 $ 70,284 $ - $ - U.S. corporate debt securities 4,985 4,985 - - Total marketable securities $ 75,269 $ 75,269 $ - $ - February 26, 2023 Total Level 1 Level 2 Level 3 U.S. Treasury and other government securities $ 83,859 $ 83,859 $ - $ - U.S. corporate debt securities 17,344 17,344 - - Total marketable securities $ 101,203 $ 101,203 $ - $ - |
Schedule of Available-for-Sale Securities Reconciliation [Table Text Block] | Amortized Cost Gross Gross May 28, 2023: U.S. Treasury and other government securities $ 75,110 $ - $ 4,826 U.S. corporate debt securities 4,992 - 7 Total marketable securities $ 80,102 $ - $ 4,833 February 26, 2023: U.S. Treasury and other government securities $ 89,603 $ - $ 5,744 U.S. corporate debt securities 17,414 - 70 Total marketable securities $ 107,017 $ - $ 5,814 |
Investments Classified by Contractual Maturity Date [Table Text Block] | Due in one year or less $ 16,018 Due after one year through five years 59,251 $ 75,269 |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | May 28, February 26, 2023 2023 Inventories: Raw materials $ 6,533 $ 5,376 Work-in-process 455 536 Finished goods 923 856 $ 7,911 $ 6,768 |
Note 5 - Leases (Tables)
Note 5 - Leases (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Fiscal Year: 2024 $ 40 2025 36 2026 - 2027 - 2028 - Thereafter 162 Total undiscounted operating lease payments 238 Less imputed interest (67 ) Present value of operating lease payments $ 171 |
Schedule of Right-of-use Assets and Operating Lease Liabilities [Table Text Block] | Operating right-of-use assets $ 136 Operating lease liabilities $ 53 Long-term operating lease liabilities 118 Total operating lease liabilities $ 171 |
Note 6 - Stock-based Compensa_2
Note 6 - Stock-based Compensation (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Outstanding Weighted Weighted Average Aggregate Balance, February 26, 2023 670,425 $ 11.80 $ 838 Granted 133,300 13.08 Exercised - - Terminated or expired (900 ) 11.81 Balance, May 28, 2023 802,825 $ 12.01 6.28 $ 835 Vested and exercisable, May 28, 2023 482,263 $ 11.81 4.49 $ 598 |
Note 7 - Earnings Per Share (Ta
Note 7 - Earnings Per Share (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 13 Weeks Ended May 28, 2023 May 29, 2022 Net earnings $ 1,854 $ 1,910 Weighted average common shares outstanding for basic EPS 20,461 20,458 Net effect of dilutive options 65 46 Weighted average shares outstanding for diluted EPS 20,526 20,504 Basic earnings per share $ 0.09 $ 0.09 Diluted earnings per share $ 0.09 $ 0.09 |
Note 10 - Geographic Regions (T
Note 10 - Geographic Regions (Tables) | 3 Months Ended |
May 28, 2023 | |
Notes Tables | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | 13 Weeks Ended May 28, 2023 May 29, 2022 Sales: North America $ 13,619 $ 12,149 Asia 130 124 Europe 1,802 510 Total sales $ 15,551 $ 12,783 |
Note 3 - Marketable Securitie_2
Note 3 - Marketable Securities - Summary of Available-for-sale Securities (Details) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 |
Available-for-sale securities | $ 75,269 | $ 101,203 |
Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 75,269 | 101,203 |
Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | 0 | 0 |
US Treasury and Government [Member] | ||
Available-for-sale securities | 70,284 | 83,859 |
US Treasury and Government [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 70,284 | 83,859 |
US Treasury and Government [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | 0 | 0 |
US Treasury and Government [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | 0 | 0 |
Debt Security, Corporate, US [Member] | ||
Available-for-sale securities | 4,985 | 17,344 |
Debt Security, Corporate, US [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 4,985 | 17,344 |
Debt Security, Corporate, US [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | 0 | 0 |
Debt Security, Corporate, US [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | $ 0 | $ 0 |
Note 3 - Marketable Securitie_3
Note 3 - Marketable Securities - Summary of Unrealized Gains and Losses on Available-for-sale Securities (Details) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 |
Amortized cost basis | $ 80,102 | $ 107,017 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 4,833 | 5,814 |
US Treasury and Government [Member] | ||
Amortized cost basis | 75,110 | 89,603 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 4,826 | 5,744 |
Debt Security, Corporate, US [Member] | ||
Amortized cost basis | 4,992 | 17,414 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | $ 7 | $ 70 |
Note 3 - Marketable Securitie_4
Note 3 - Marketable Securities - Estimated Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 |
Due in one year or less | $ 16,018 | |
Due after one year through five years | 59,251 | |
Debt Securities, Available-for-Sale | $ 75,269 | $ 101,203 |
Note 4 - Inventories - Summary
Note 4 - Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 | |
Raw materials | $ 6,533 | $ 5,376 | |
Work-in-process | 455 | 536 | |
Finished goods | 923 | 856 | |
Inventory, Net | $ 7,911 | $ 6,768 | [1] |
[1]The balance sheet at February 26, 2023 has been derived from the audited consolidated financial statements at that date. |
Note 5 - Leases (Details Textua
Note 5 - Leases (Details Textual) $ in Thousands | 1 Months Ended | 3 Months Ended |
Dec. 31, 2018 USD ($) a ft² | May 28, 2023 USD ($) | |
Operating Lease, Expense | $ 15 | |
Operating Lease, Payments | $ 13 | |
Operating Lease, Weighted Average Remaining Lease Term (Year) | 7 years 9 months 18 days | |
Additional Lease Agreement with City and County for Land at Newton, Kansas Airport [Member] | ||
Area of Land | a | 3 | |
Lease Agreement with City and County for Land at Newton, Kansas Airport [Member] | ||
Area of Land | a | 8 | |
Additional Manufacturing Facility [Member] | ||
Area of Land | ft² | 90,000 | |
Construction in Progress Estimated Cost | $ 19,800 | |
Purchase Obligation | $ 42 | |
Minimum [Member] | ||
Lessee, Operating Lease, Renewal Term (Year) | 1 year | |
Maximum [Member] | ||
Lessee, Operating Lease, Renewal Term (Year) | 10 years |
Note 5 - Leases - Future Minimu
Note 5 - Leases - Future Minimum Lease Payments (Details) $ in Thousands | May 28, 2023 USD ($) |
Present value of operating lease payments | $ 171 |
Leases with Renewal Options [Member] | |
2024 | 40 |
2025 | 36 |
2026 | 0 |
2027 | 0 |
2028 | 0 |
Thereafter | 162 |
Total undiscounted operating lease payments | 238 |
Less imputed interest | (67) |
Present value of operating lease payments | $ 171 |
Note 5 - Leases - Schedule of R
Note 5 - Leases - Schedule of Right-of-use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Thousands | May 28, 2023 | Feb. 26, 2023 | [1] |
Operating right-of-use assets | $ 136 | $ 150 | |
Operating lease liabilities | 53 | 53 | |
Long-term operating lease liabilities | 118 | $ 129 | |
Total operating lease liabilities | $ 171 | ||
[1]The balance sheet at February 26, 2023 has been derived from the audited consolidated financial statements at that date. |
Note 6 - Stock-based Compensa_3
Note 6 - Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jul. 24, 2018 | Apr. 30, 2023 | May 28, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 133,300 | ||
Share-Based Payment Arrangement, Plan Modification, Incremental Cost | $ 109 | ||
Special Dividend [Member] | |||
Common Stock, Dividends, Per Share, Cash Paid | $ 1 | ||
The 2018 Stock Option Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 800,000 | ||
Percentage of Stock Options, Exercisable One Year From Date of Grant | 25% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 1 year | ||
Percentage of Stock Options Exercisable On Each Succeeding Year from Date of Grant | 25% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | ||
The 2018 Stock Option Plan [Member] | Directors and Certain of Employees [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 133,300 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 387 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 3.01 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 3.82% | ||
The 2018 Stock Option Plan [Member] | Directors and Certain of Employees [Member] | Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.61% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.50% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 4 years 10 months 24 days | ||
The 2018 Stock Option Plan [Member] | Directors and Certain of Employees [Member] | Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.85% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 29.60% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 8 years 3 months 18 days |
Note 6 - Stock-based Compensa_4
Note 6 - Stock-based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
May 28, 2023 | Feb. 26, 2023 | |
Outstanding options (in shares) | 670,425 | |
Balance, weighted average exercise price (in dollars per share) | $ 11.80 | |
Outstanding aggregate intrinsic value | $ 835 | $ 838 |
Outstanding options, granted (in shares) | 133,300 | |
Granted, weighted average exercise price (in dollars per share) | $ 13.08 | |
Outstanding options, exercised (in shares) | 0 | |
Exercised, weighted average exercise price (in dollars per share) | $ 0 | |
Outstanding options, terminated or expired (in shares) | (900) | |
Terminated or expired, weighted average exercise price (in dollars per share) | $ 11.81 | |
Outstanding options (in shares) | 802,825 | |
Balance, weighted average exercise price (in dollars per share) | $ 12.01 | |
Balance, weighted average remaining contractual term (Year) | 6 years 3 months 10 days | |
Vested and exercisable (in shares) | 482,263 | |
Vested and exercisable, weighted average exercise price (in dollars per share) | $ 11.81 | |
Vested and exercisable, weighted average remaining contractual term (Year) | 4 years 5 months 26 days | |
Vested and exercisable, aggregate intrinsic value | $ 598 |
Note 7 - Earnings Per Share (De
Note 7 - Earnings Per Share (Details Textual) - shares | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 157,000 | 397,000 |
Note 7 - Earnings Per Share - B
Note 7 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Net earnings | $ 1,854 | $ 1,910 |
Weighted average common shares outstanding for basic EPS (in shares) | 20,461 | 20,458 |
Net effect of dilutive options (in shares) | 65 | 46 |
Weighted average shares outstanding for diluted EPS (in shares) | 20,526 | 20,504 |
Basic earnings per share (in dollars per share) | $ 0.09 | $ 0.09 |
Diluted earnings per share (in dollars per share) | $ 0.09 | $ 0.09 |
Note 8 - Shareholders' Equity (
Note 8 - Shareholders' Equity (Details Textual) - shares | 3 Months Ended | |||
May 28, 2023 | May 29, 2022 | Jul. 03, 2023 | May 23, 2022 | |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 1,500,000 | |||
Stock Repurchased During Period, Shares | 129,654 | 0 | ||
Subsequent Event [Member] | ||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 1,279,001 | |||
Stock Repurchase Program, Percentage of Outstanding Shares Authorized to be Repurchased | 6.30% | |||
Common Stock, Shares, Outstanding | 20,250,211 |
Note 9 - Income Taxes (Details
Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Income Tax Expense (Benefit), Total | $ 688 | $ 682 |
Income Tax Expense (Benefit), Discrete Amount | $ 37 | $ 28 |
Effective Income Tax Rate Reconciliation, Percent, Total | 27.10% | 26.30% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | 21% |
Undistributed Earnings, Basic, Total | $ 25,000 |
Note 10 - Geographic Regions -
Note 10 - Geographic Regions - Financial Information by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 28, 2023 | May 29, 2022 | |
Sales | $ 15,551 | $ 12,783 |
North America [Member] | ||
Sales | 13,619 | 12,149 |
Asia [Member] | ||
Sales | 130 | 124 |
Europe [Member] | ||
Sales | $ 1,802 | $ 510 |
Note 11 - Contingencies (Detail
Note 11 - Contingencies (Details Textual) $ in Thousands | 3 Months Ended |
May 28, 2023 USD ($) | |
Percentage of Legal Defense and Remediation Costs Associated with Sites Reimbursed by Insurance Carriers | 100% |
Number of Units Covered Under General Liability Insurance Coverage | 2 |
Accrual for Environmental Loss Contingencies | $ 0 |
Number of Insurance Carriers | 3 |