Park Electrochemical Corp. Friday reported fourth-quarter net sales of $38.2 million, a 10.6 percent decline from the year-earlier results, and a $64 million noncash charge that pushed earnings into the red.
The Melville-based company also announced that a board committee had dismissed Grant Thornton LLP as Park's auditor, effective immediately. In a filing, Grant Thornton said that Park management "has not maintained effective internal control over financial reporting as of March 2" in connection with "process and procedures over complex and non-routine transactions."
In a conference call, Park chief executive Brian Shore said sales through the first 10 weeks of the 13-week first quarter were brisk, running at a rate of $48.8 million for the entire quarter.
Shore cautioned the trend could be fleeting but added the company is seeing "some significant acceleration in infrastructure build-out, especially in developing and emerging markets."
After tumbling to $24.03 after trading opened Friday, shares of Park recovered to close at $27.20, a 1.41 percent decline.
Park, which makes printed circuit materials for the telecommunications and computing markets, reported a net loss of $60 million, or $2.88 per share for the quarter, that was attributed to the $64 million charge for accumulated U.S. income taxes on the undistributed earnings of Park's subsidiary in Singapore.
The charge included $34.4 million for U.S. income tax that would be payable if Park repatriated funds from the subsidiary in Singapore to repay an existing $104 million bank loan from PNC Bank, and $29.6 million to repatriate the rest of the Singapore subsidiary's earnings.
Park said it has "no current intention" of repatriating the undistributed earnings of its Singapore subsidiary.
When asked about the charge, Shore said that accounting rules regarding offshore cash are "complex," but declined to comment further.
Net income in the 2013 quarter was $4.1 million or 20 cents per diluted share.
Excluding special items, fourth-quarter net income would have been $4.4 million versus $4.5 million in the year-ago quarter.
In a news release, the company pointed out that the quarter ended March 2 was a 13-week period, while the 2013 period lasted 14 weeks.
Park, which closed its facilities in Zhuhai, China, and Waterbury, Conn., hired Bank of America Merrill Lynch to provide financial advice related to a $2.50 per share special dividend paid in February.
Park said that its audit committee will be seeking a successor accounting firm to replace Grant Thornton.