Park Electrochemical Corp. Thursday announced it is conducting a “strategic evaluation,” including a possible sale, of its core printed circuit materials business.
It also said it will repatriate its overseas cash and earnings, thanks to lower tax rates in the GOP tax overhaul passed last month.
Park’s circuit materials unit, which has production and research facilities in Singapore; Lannemezan, France; Fullerton and Anaheim, California, and Tempe, Arizona, and generates most of the company’s sales, has faced stiff competition from Far East competitors.
The company’s shares closed up 3.3 percent to $20.30. The stock is up about 9 percent over the past 12 months.
The company said in a news release that if a sale were completed it would retain its aerospace manufacturing units in Singapore and Newton, Kansas, and its headquarters in Melville.
The company’s aerospace unit sells composite materials used to produce antennas and heat shields, gas management devices and nozzle components used in rocket motors. That business generated $32.1 million, or 28 percent, of total net sales worldwide in fiscal 2017, according to a government filing. The company estimates the aerospace business will generate sales of $50 million to $54 million in fiscal 2019 if the electronics business is sold.
Its printed circuit materials accounted for $82.5 million, or 72 percent of total net sales worldwide in fiscal 2017. Those materials are used in digital devices and microwave applications.
The company has hired Manhattan investment bank Greenhill & Co. in connection with the possible sale, which is expected to be completed by March 3, 2019.
As of Feb. 26, Park had 426 employees, with 370 working in manufacturing and 56 in executive, sales and marketing, research and development and general administrative roles.
Park also announced a special dividend worth $60.7 million, or $3 per share, payable Feb. 13, 2018, and said it plans to repatriate its overseas cash and earnings. The company estimates it will pay about $20 million in taxes on the repatriated funds, about one third of the amount it would have paid before Congress passed a new tax law in December.
The company said it will have $90 million to $95 million in cash after accounting for payment of dividends, taxes and repayment of a $68.5 million bank loan on Jan. 3.
For the third quarter ended Nov. 26, the company reported net sales of $26.1 million compared to $26.5 million in the 2016 period. Net income fell to $716,000, or 4 cents per diluted share, versus $1.9 million, or 9 cents per diluted share in the 2016 quarter.