PKE Stock Rises 23% as Q1 Earnings Up Y/Y on Defense Demand Surge
Park Aerospace reported earnings per share (EPS) of 10 cents in the fiscal first quarter of 2026, up from 5 cents in the prior-year quarter.
Net sales of $15.4 million represented a 10.2% increase from $14 million in the year-ago period. Net earnings more than doubled to $2.1 million from $1 million in the same quarter last year.
Gross profit rose 15% to $4.7 million, with gross margin improving slightly to 30.6% from 29.3%. Adjusted EBITDA also improved, reaching $3 million compared to $2.6 million a year ago, marking a 13.5% year-over-year increase.
Park Aerospace Corp. Price, Consensus and EPS Surprise
Park Aerospace Corp. price-consensus-eps-surprise-chart | Park Aerospace Corp. Quote
Other Key Business Metrics
Park's operating performance showed solid execution, as evidenced by an increase in earnings from operations to $2.4 million, up 16.2% from $2.1 million a year ago. SG&A expenses increased marginally to $2.3 million from $2 million.
The balance sheet remained robust, with $65.6 million in cash and marketable securities as of June 1, 2025. The company's equity per share stood at $5.29, only slightly lower than $5.36 at the end of the previous quarter. Despite a sequential decline in inventories and total assets, Park Aerospace continued to maintain a strong liquidity position.
Management Commentary
During the earnings call, Chairman and CEO Brian Shore expressed satisfaction with the gross margin exceeding 30%, calling it 'nice to be over 30%' and attributing performance to consistent cost management and favorable sales mix. Shore emphasized transparency by breaking down margin estimates and cautioning investors not to overinterpret short-term variations.
President and COO Mark Esquivel added color to the supply chain and production environment, indicating that while production volumes were relatively flat, key customers are expected to ramp up significantly later in the fiscal year. The team also addressed ongoing pressure from tariff-related costs and international shipments, citing a modest $0.3 million impact from missed shipments in the quarter.
Factors Influencing Performance
Key drivers behind the strong performance included increased sales of fabric-based composite materials, particularly to defense and aerospace customers. Management noted that $1.1 million of the $15.4 million in quarterly revenue came from fabric sales, while $0.5 million came from materials made with the fabric, both areas with stronger margins.
On the downside, international logistics and tariff-related costs slightly weighed on the quarter, although they were not significant enough to impact broader earnings momentum. The decline in cash was attributed to discretionary expenditures including a $2.2 million share repurchase and a $1.5 million investment in Ariane to expand C2B fabric production capabilities.
Guidance and Outlook
Park Aerospace provided a forecast for the fiscal second quarter of 2026, anticipating net sales between $15 million and $16 million, and EBITDA between $3.1 million and $3.4 million. This implies sequential growth in both sales and profitability, driven by strong customer demand and production scheduling improvements.
Furthermore, management reiterated its confidence in a solid full-year outlook, underpinned by a $40 million proposed blanket purchase order and expanding defense-related opportunities, particularly in missile systems and engine components.
Other Developments
During the quarter, Park Aerospace continued construction of a new facility in Newton, Kansas, part of a long-term strategic plan to increase manufacturing flexibility and capacity. The company indicated that it aims to have the expansion plan finalized by the end of the calendar year, with implementation starting shortly thereafter.
Additionally, Park reported significant progress on a new long-term agreement (LTA) with GE Aerospace, spanning fiscal years 2025 through 2030, covering engine-related composite components. While management refrained from disclosing specific financial details, the LTA is expected to support long-term revenue stability and diversification.
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