pke20250831_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 1-4415

PARK AEROSPACE CORP.

(Exact Name of Registrant as Specified in Its Charter)

New York	11-1734643
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1400 Old Country Road, Westbury, N.Y.	11590
(Address of Principal Executive Offices)	(Zip Code)

(631) 465-3600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $.10 per share	PKE	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒ Smaller Reporting Company ☒ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 19,905,823 as of October 7, 2025.

PARK AEROSPACE CORP. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page Number
PART I.	FINANCIAL INFORMATION:

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets August 31, 2025 (Unaudited) and March 2, 2025	4

	Condensed Consolidated Statements of Operations 13 weeks and 26 weeks ended August 31, 2025 and September 1, 2024 (Unaudited)	5

	Condensed Consolidated Statements of Comprehensive Earnings 13 weeks and 26 weeks ended August 31, 2025 and September 1, 2024 (Unaudited)	6

	Condensed Consolidated Statements of Shareholders’ Equity August 31, 2025 and September 1, 2024 (Unaudited)	7

	Condensed Consolidated Statements of Cash Flows 26 weeks ended August 31, 2025 and September 1, 2024 (Unaudited)	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Factors That May Affect Future Results	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION:

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	28

Item 6.	Exhibits	28

EXHIBIT INDEX		29

SIGNATURES		30

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	August 31, 2025 (unaudited)			March 2, 2025*
ASSETS
Current assets
Cash and cash equivalents	$	29,543		$	21,621
Marketable securities (Note 3)		32,010			47,213
Accounts receivable, less allowance for credit losses of $73 and $125, respectively		12,640			12,903
Inventories (Note 4)		8,101			7,213
Prepaid expenses and other current assets		1,012			1,344
Total current assets		83,306			90,294

Property, plant and equipment, net		21,403			21,650
Operating right-of-use assets (Note 5)		282			308
Goodwill and other intangible assets		9,776			9,776
Other assets		1,681			80
Total assets	$	116,448		$	122,108

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	3,324		$	2,513
Operating lease liability (Note 5)		42			40
Accrued liabilities		1,250			1,318
Income taxes payable		125			5,390
Total current liabilities		4,741			9,261

Long-term operating lease liability (Note 5)		296			318
Deferred income taxes (Note 9)		5,541			5,304
Other liabilities		75			71
Total liabilities		10,653			14,954

Commitments and contingencies (Note 12)

Shareholders' equity (Note 8)
Common stock		2,096			2,096
Additional paid-in capital		170,053			170,265
Accumulated deficit		(50,047	)		(49,550	)
Accumulated other comprehensive loss		(215	)		(665	)
		121,887			122,146
Less treasury stock, at cost		(16,092	)		(14,992	)
Total shareholders' equity		105,795			107,154
Total liabilities and shareholders' equity	$	116,448		$	122,108

* 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).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

	13 Weeks Ended (Unaudited)					26 Weeks Ended (Unaudited)
	August 31,		September 1,			August 31,		September 1,
	2025		2024			2025		2024
Net sales	$	16,381	$	16,709		$	31,781	$	30,679
Cost of sales		11,265		11,952			21,947		21,823
Gross profit		5,116		4,757			9,834		8,856
Selling, general and administrative expenses		2,271		2,140			4,570		4,157
Earnings from operations		2,845		2,617			5,264		4,699
Storm damage charge (Note 11)		-		(46	)		-		(1,098	)
Interest and other income		390		245			745		584
Earnings from operations before income taxes		3,235		2,816			6,009		4,185
Income tax provision (Note 9)		831		750			1,525		1,126
Net earnings	$	2,404	$	2,066		$	4,484	$	3,059

Earnings per share (Note 7)
Basic:
Basic earnings per share	$	0.12	$	0.10		$	0.23	$	0.15
Basic weighted average shares		19,875		20,216			19,897		20,234

Diluted:
Diluted earnings per share	$	0.12	$	0.10		$	0.22	$	0.15
Diluted weighted average shares		19,986		20,291			19,977		20,331

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Amounts in thousands)

	13 Weeks Ended (Unaudited)					26 Weeks Ended (Unaudited)
	August 31,			September 1,		August 31,			September 1,
	2025			2024		2025			2024
Net earnings	$	2,404		$	2,066	$	4,484		$	3,059
Other comprehensive earnings, net of tax:
Unrealized gains on marketable securities:
Unrealized holding gains arising during the period		202			758		429			1,016
Unrealized losses on marketable securities:
Unrealized holding losses arising during the period		(3	)		-		(15	)		(35	)
Less: reclassification adjustment for losses included in net earnings		36			40		36			40
Other comprehensive earnings		235			798		450			1,021
Total comprehensive earnings	$	2,639		$	2,864	$	4,934		$	4,080

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in thousands, except share and per share amounts)

											Accumulated
											Other
	Common Stock				Additional Paid-in			Accumulated			Comprehensive (Loss)			Treasury Stock
	Shares		Amount		Capital			Deficit			Earnings			Shares			Amount
Balance, March 2, 2025		20,965,144	$	2,096	$	170,265		$	(49,550	)	$	(665	)		962,476		$	(14,992	)

Net earnings		-		-		-			2,080			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			215			-			-
Stock options exercised		-		-		(150	)		-			-			(15,000	)		228
Stock-based compensation		-		-		88			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			166,955			(2,165	)
Cash dividends ($0.125 per share)		-		-		-			(2,499	)		-			-			-
Balance, June 1, 2025		20,965,144	$	2,096	$	170,203		$	(49,969	)	$	(450	)		1,114,431		$	(16,929	)

Net earnings		-		-		-			2,404			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			235			-			-
Stock options exercised		-		-		(251	)		-			-			(55,110	)		837
Stock-based compensation		-		-		101			-			-			-			-
Cash dividends ($0.125 per share)		-		-		-			(2,482	)		-			-			-
Balance, August 31, 2025		20,965,144	$	2,096	$	170,053		$	(50,047	)	$	(215	)		1,059,321		$	(16,092	)

											Accumulated
											Other
	Common Stock				Additional Paid-in			Accumulated			Comprehensive (Loss)			Treasury Stock
	Shares		Amount		Capital			Deficit			Earnings			Shares			Amount

Balance, March 3, 2024		20,965,144	$	2,096	$	170,445		$	(45,374	)	$	(2,271	)		711,783		$	(11,982	)

Net earnings		-		-		-			993			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			223			-			-
Stock-based compensation		-		-		89			-			-			-			-
Cash dividends ($0.125 per share)		-		-		-			(2,532	)		-			-			-
Balance, June 2, 2024		20,965,144	$	2,096	$	170,534		$	(46,913	)	$	(2,048	)		711,783		$	(11,982	)

Net earnings		-		-		-			2,066			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			798			-			-
Stock options exercised		-		-		(9	)		-			-			(2,062	)		35
Stock-based compensation		-		-		101			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			149,633			(1,888	)
Cash dividends ($0.125 per share)		-		-		-			(2,532	)		-			-			-
Balance, September 1, 2024		20,965,144	$	2,096	$	170,626		$	(47,379	)	$	(1,250	)		859,354		$	(13,835	)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	26 Weeks Ended (Unaudited)
	August 31,			September 1,
	2025			2024
Cash flows from operating activities:
Net earnings	$	4,484		$	3,059
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Non-cash storm damage charge		-			887
Depreciation and amortization		911			927
Stock-based compensation		189			190
Provision for credit losses		8			8
Deferred income taxes		237			(135	)
Amortization of bond premium		8			84
Loss on sale of marketable securities		50			55
Changes in operating assets and liabilities		(6,414	)		(4,052	)
Net cash (used in) provided by operating activities		(527	)		1,023

Cash flows from investing activities:
Purchase of property, plant and equipment		(664	)		(206	)
Purchases of marketable securities		(2,440	)		(7,772	)
Proceeds from sales and maturities of marketable securities		18,035			15,467
Net cash provided by investing activities		14,931			7,489

Cash flows from financing activities:
Dividends paid		(4,981	)		(5,064	)
Proceeds from exercise of stock options		664			26
Purchase of treasury stock		(2,165	)		(1,888	)
Net cash used in financing activities		(6,482	)		(6,926	)

Increase in cash and cash equivalents:		7,922			1,586
Cash and cash equivalents, beginning of period		21,621			6,567
Cash and cash equivalents, end of period	$	29,543		$	8,153


Supplemental disclosure of non-cash activities:
Addition to operating right-of-use asset from new operating lease liability	$	-		$	267

Supplemental cash flow information:
Cash paid during the period for income taxes, net of refunds	$	6,183		$	5,199

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Amounts in thousands, except share (unless otherwise stated), per share and option amounts)

1.	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 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 (“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 26 weeks ended August 31, 2025.

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., the “exit price”) in an orderly transaction between market participants at the measurement date.

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., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

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 and 26 weeks ended August 31, 2025.

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 Condensed 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:

	August 31, 2025
	Total		Level 1		Level 2		Level 3
U.S. Treasury and other government securities	$	32,010	$	32,010	$	-	$	-
Total marketable securities	$	32,010	$	32,010	$	-	$	-

	March 2, 2025
	Total		Level 1		Level 2		Level 3
U.S. Treasury and other government securities	$	47,213	$	47,213	$	-	$	-
Total marketable securities	$	47,213	$	47,213	$	-	$	-

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 Basis		Gross Unrealized Gains		Gross Unrealized Losses
August 31, 2025:
U.S. Treasury and other government securities	$	32,304	$	9	$	303
Total marketable securities	$	32,304	$	9	$	303

March 2, 2025:
U.S. Treasury and other government securities	$	48,124	$	24	$	935
Total marketable securities	$	48,124	$	24	$	935

The estimated fair values of such securities at August 31, 2025 by contractual maturity are shown below:

Due in one year or less	$	28,132
Due after one year through five years		3,878
	$	32,010

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:

	August 31,		March 2,
	2025		2025
Inventories:
Raw materials	$	5,553	$	4,768
Work-in-process		1,099		727
Finished goods		1,449		1,718
	$	8,101	$	7,213

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 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. 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 year to ten years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. 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 August 31, 2025 are as follows:

Fiscal Year:
2026	$	29
2027		59
2028		61
2029		65
2030		59
Thereafter		143
Total undiscounted operating lease payments		416
Less imputed interest		(78	)
Present value of operating lease payments	$	338

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 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	$	282

Operating lease liabilities	$	42
Long-term operating lease liabilities		296
Total operating lease liabilities	$	338

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

6.	STOCK-BASED COMPENSATION

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. 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 year after the date of grant, with an additional 25% exercisable each succeeding anniversary of the date of grant, and expire 10 years after the date of grant. Upon termination of employment or service as a director, all options held by the optionee that have not previously become exercisable shall terminate and all other options held by such optionee may be exercised, to the extent exercisable on the date of such termination, for a limited time after such termination. 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.

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

SEC Form 10-Q filed by Park Aerospace Corp.