What changed in PARK AEROSPACE CORP's 2023 10-K compared to 2022?

Across the narrative sections we track, PARK AEROSPACE CORP (PKE) added 129 paragraphs, removed 155, and edited 101 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+60/−73), Item 1A. Risk Factors (+25/−36), Item 1. Business (+23/−31).

Did PARK AEROSPACE CORP add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 25 new/edited paragraphs and 36 removed paragraphs versus the 2022 10-K.

What changed in PARK AEROSPACE CORP's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 60 new/edited paragraphs and 73 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this PKE 10-K diff come from?

The source filings are PARK AEROSPACE CORP's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in PARK AEROSPACE CORP's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of PARK AEROSPACE CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+129 added−155 removedSource: 10-K (2023-05-12) vs 10-K (2022-05-12)

Top changes in PARK AEROSPACE CORP's 2023 10-K

129 paragraphs added · 155 removed · 101 edited across 7 sections

Item 7. Management's Discussion & Analysis+60 / −73 · 42 edited
Item 1A. Risk Factors+25 / −36 · 23 edited
Item 1. Business+23 / −31 · 22 edited
Item 5. Market for Registrant's Common Equity+8 / −6 · 6 edited
Item 2. Properties+5 / −3 · 2 edited

Item 1. Business

Business — how the company describes what it does

22 edited+1 added−9 removed55 unchanged

2022 filing

2023 filing

Biggest changeThe loss of a major customer or of a group of customers could have a material adverse effect on the Company’s business or its consolidated results of operations or financial position. 7 Manufacturing The Company’s manufacturing facilities for aerospace composite materials and for composite structures and assemblies are located in Newton, Kansas.

Biggest changeDuring the 2023, 2022 and 2021 fiscal years, sales to no other customer of the Company equaled or exceeded 10% of the Company’s total worldwide sales. The loss of a major customer or of a group of customers could have a material adverse effect on the Company’s business or its consolidated results of operations or financial position.

The Company makes available free of charge on its website, www.parkaerospace.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

The Company makes available free of charge on its website, www.parkaerospace.com, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

Many of the Company’s composite materials are used in the manufacture of aircraft certified by the Federal Aviation Administration (the “FAA”). Customers for the Company’s rocket motor materials include United States defense prime contractors and subcontractors. These customers fabricate rocket motors for heavy lift space launchers, strategic defense weapons, tactical motors and various other applications.

Many of the Company’s composite materials are used in the manufacture of aircraft certified by the Federal Aviation Administration (the “FAA”). 6 Customers for the Company’s rocket motor materials include United States defense prime contractors and subcontractors. These customers fabricate rocket motors for heavy lift space launchers, strategic defense weapons, tactical motors and various other applications.

Certain portions of this Report which do not relate to historical financial information may be deemed to constitute forward-looking statements that are subject to various factors which could cause actual results to differ materially from Park's expectations or from results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking statements. 11 Generally, forward-looking statements can be identified by the use of words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “goal,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions or the negative or other variations thereof.

Certain portions of this Report which do not relate to historical financial information may be deemed to constitute forward-looking statements that are subject to various factors which could cause actual results to differ materially from Park's expectations or from results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking statements. 10 Generally, forward-looking statements can be identified by the use of words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “goal,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions or the negative or other variations thereof.

The Company competes for business primarily on the basis of responsiveness, product performance and consistency, product qualification, FAA data base design allowables and innovative new product development. 9 Backlog The Company considers an item as backlog when it receives a purchase order specifying the number of units to be purchased, the purchase price, specifications and other customary terms and conditions.

The Company competes for business primarily on the basis of responsiveness, product performance and consistency, product qualification, FAA data base design allowables and innovative new product development. 8 Backlog The Company considers an item as backlog when it receives a purchase order specifying the number of units to be purchased, the purchase price, specifications and other customary terms and conditions.

Hot-melt prepreg manufacturing is achieved by mixing a resin formulation in a heated resin vessel, casting a thin film on a carrier paper, and laminating the reinforcement with the resin film. 8 The Company also completes additional processing services, such as slitting, sheeting, biasing, sewing and cutting, if needed by the customer.

Hot-melt prepreg manufacturing is achieved by mixing a resin formulation in a heated resin vessel, casting a thin film on a carrier paper, and laminating the reinforcement with the resin film. 7 The Company also completes additional processing services, such as slitting, sheeting, biasing, sewing and cutting, if needed by the customer.

This reduced fuel consumption creates economic savings for end-users of applicable aircraft, while also substantially reducing the carbon based emissions of such aircraft. 10 The Company is subject to stringent environmental regulation of its use, storage, treatment, disposal of hazardous materials and the release of emissions into the environment.

This reduced fuel consumption creates economic savings for end-users of applicable aircraft, while also substantially reducing the carbon based emissions of such aircraft. 9 The Company is subject to stringent environmental regulation of its use, storage, treatment, disposal of hazardous materials and the release of emissions into the environment.

Trademark applications for AEROADHERE™ and ELECTROVEIL™ are pending. 5 Operations The Company designs, develops and manufactures engineered, advanced composite materials and advanced composite structures and assemblies and low-volume tooling for the aerospace markets and prototype tooling for such structures and assemblies. The Company’s aerospace composite materials are designed, developed and manufactured at its facility located at the Newton, Kansas Airport.

Trademark applications for AEROADHERE™ and ELECTROVEIL™ are pending. 4 Operations The Company designs, develops and manufactures engineered, advanced composite materials and advanced composite structures and assemblies and low-volume tooling for the aerospace markets and prototype tooling for such structures and assemblies. The Company’s aerospace composite materials are designed, developed and manufactured at its facility located at the Newton, Kansas Airport.

After the structure has been cured, final finishing and trimming, and assembly of the structure, is performed by the fabricator or the Company. 6 Products The aerospace composite materials products manufactured by the Company are primarily thermoset curing prepregs.

After the structure has been cured, final finishing and trimming, and assembly of the structure, is performed by the fabricator or the Company. 5 Products The aerospace composite materials products manufactured by the Company are primarily thermoset curing prepregs.

Materials and Sources of Supply The Company designs and manufactures its aerospace composite materials to its own specifications and to the specifications of its customers. Product development efforts are focused on developing prepreg materials that meet the specifications of the customers.

Materials and Sources of Supply The Company designs and manufactures its aerospace composite materials and film adhesives to its own specifications and to the specifications of its customers. Product development efforts are focused on developing prepreg materials that meet the specifications of the customers.

During the Company’s 2022, 2021 and 2020 fiscal years, 49.5%, 27.9% and 48.2%, respectively, of the Company’s total worldwide net sales were to affiliate and non-affiliate subtier suppliers of General Electric Company, a leading manufacturer of aerospace engines. Sales to AAE Aerospace were 20.7% of the Company’s total worldwide sales in the 2021 fiscal year.

During the Company’s 2023, 2022 and 2021 fiscal years, 41.2%, 49.5% and 27.9%, respectively, of the Company’s total worldwide net sales were to affiliate and non-affiliate subtier suppliers of General Electric Company, a leading manufacturer of aerospace engines. Sales to AAE Aerospace were 20.7% of the Company’s total worldwide sales in the 2021 fiscal year.

Accordingly, the foregoing information may not be indicative of the Company’s results of operations for any period subsequent to the fiscal year ended February 27, 2022. Patents and Trademarks The Company holds several patents and trademarks or licenses thereto. In the Company’s opinion, some of these patents and trademarks are important to its products.

Accordingly, the foregoing information may not be indicative of the Company’s results of operations for any period subsequent to the fiscal year ended February 26, 2023. Patents and Trademarks The Company holds several patents and trademarks or licenses thereto. In the Company’s opinion, some of these patents and trademarks are important to its products.

Park’s advanced composite materials include film adhesives (undergoing qualification) and lightning strike materials. Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing applications.

Park’s advanced composite materials include film adhesives and lightning strike protection materials. Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing applications.

Generally, however, the Company does not believe that an inability to obtain new; or to defend existing, patents and trademarks would have a material adverse effect on the Company. The Company ’ s Workforce At February 27, 2022, the Company had 110 employees.

At April 25, 2022, the unfilled portion of all purchase orders received by the Company, and believed by it to be firm, was $25,895,809, compared to $21,326,751 at April 26, 2021. A major portion of the Company’s backlog consists of composite materials. Various factors contribute to the size of the Company’s backlog.

At April 24, 2023, the unfilled portion of all purchase orders received by the Company, and believed by it to be firm, was $29,035,974, compared to $25,895,809 at April 25, 2022. A major portion of the Company’s backlog consists of composite materials. Various factors contribute to the size of the Company’s backlog.

Park will continue to purchase RAYCARB C2®B NG for its own programs, and, through the Business Partner Agreement, Park is now taking on the new role of ArianeGroup’s exclusive North American distributor for its RAYCARB C2®B product.

The new facility was originally conceived of as a redundant manufacturing facility for Park’s major aerospace customer and the large aerospace OEMs it supports, but it will also support additional manufacturing capacity.

The 90,000 square feet expansion essentially doubled the size of the Company’s existing Newton, Kansas facilities. The new facility was originally conceived of as a redundant manufacturing facility for Park’s major aerospace customer and the large aerospace OEMs it supports, but it will also support additional manufacturing capacity.

The reinforcement is dipped in resin, passed through a drying oven which removes most of the solvent and advances (or partially cures) the resin. The prepreg material is interleafed with a carrier and cut to the roll lengths desired by the customer. The Company also manufactures prepreg using hot-melt impregnation methods which use no solvent.

The prepreg material is interleafed with a carrier and cut to the roll lengths desired by the customer. The Company also manufactures prepreg using hot-melt impregnation methods which use no solvent.

On August 19, 2019, the Company broke ground on the expansion of its facilities located in Newton, Kansas, which included the construction of a redundant manufacturing facility located adjacent to the existing facility. The 90,000 square feet expansion essentially doubled the size of the Company’s existing Newton, Kansas facilities.

Manufacturing The Company’s manufacturing facilities for aerospace composite materials and for composite structures and assemblies are located in Newton, Kansas. On August 19, 2019, the Company broke ground on the expansion of its facilities located in Newton, Kansas, which included the construction of a redundant manufacturing facility located adjacent to the existing facility.

The expansion includes enhanced and upgraded hot-melt film and tape lines and mixing and delivery systems, an expanded production lab, a new R&D lab, additional freezer and storage space and additional infrastructure to support the expanded operation. See Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report.

The expansion includes enhanced and upgraded hot-melt film and tape lines and mixing and delivery systems, an expanded production lab, a new R&D lab, additional freezer and storage space and additional infrastructure to support the expanded operation. The expansion includes space for additional machinery and equipment.

Prepreg is manufactured by the Company using either solvent (solution) coating methods on a treater or by hot-melt impregnation. A solution treater is a roll-to-roll continuous process machine which sequences reinforcement through tension controllers and combines solvated resin with the reinforcement.

The key steps used in the manufacturing process include resin mixing, resin film casting and reinforcement impregnation via hot-melt process or a solution process. Prepreg is manufactured by the Company using either solvent (solution) coating methods on a treater or by hot-melt impregnation.

See “Operations” elsewhere in this Report. The process for manufacturing composite materials, structures and assemblies is capital intensive and requires sophisticated equipment, significant technical know-how and very tight process controls. The key steps used in the manufacturing process include resin mixing, resin film casting and reinforcement impregnation via hot-melt process or a solution process.

See Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report. See “Operations” elsewhere in this Report. The process for manufacturing composite materials, structures and assemblies is capital intensive and requires sophisticated equipment, significant technical know-how and very tight process controls.

Removed

In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the United States (the “U.S.”), posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”).

Added

A solution treater is a roll-to-roll continuous process machine which sequences reinforcement through tension controllers and combines solvated resin with the reinforcement. The reinforcement is dipped in resin, passed through a drying oven which removes most of the solvent and advances (or partially cures) the resin.

Removed

The COVID-19 Pandemic poses a threat to the health and economic wellbeing of the Company’s employees, suppliers, customers and original equipment manufacturers (“OEMs”), as well as the end users of aircraft manufactured by OEMs served by the Company.

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Park’s manufacturing operations were deemed essential by the Federal Government of the United States and by the State of Kansas, and the Company continued to actively work with federal, state and local government officials to ensure that we continue to satisfy their requirements for continuing our manufacturing operations.

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The continued operation of the Company’s Kansas facility is critically dependent on maintaining the wellbeing of the employees that staff the facility. The Company provided all employees at its manufacturing facility with detailed health and safety literature on COVID-19.

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In addition, the Company’s procurement and safety teams updated and developed new safety-oriented guidelines to support daily operations, and the Company provides appropriate personal protection equipment to its employees. The COVID-19 Pandemic impacted Park financially. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of Part II of this Report.

Removed

The Company believes its balance sheet and financial condition to be very strong, and the Company believes it is well positioned to weather the impact of the Pandemic. As a result of the pandemic, global passenger air travel decreased dramatically, precipitating production rate cuts for many commercial aerospace programs and business jet/general aviation programs which the Company supports.

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The military aerospace end market has not experienced this same production rate decline but would also be at risk as it relates to uncertainty about suppliers and employee health. 4 The Company's manufacturing and research and development facilities are located in Kansas.

Removed

During the 2022, 2021 and 2020 fiscal years, sales to no other customer of the Company equaled or exceeded 10% of the Company’s total worldwide sales. In April 2019, Middle River Aircraft Systems, the General Electric Company subsidiary that used the Company’s products to manufacture aircraft nacelles, was sold to ST Engineering Aerospace.

Removed

The aircraft nacelles manufactured with the Company’s products continue to be sold by ST Engineering Aerospace to affiliates of General Electric Company.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

23 edited+2 added−13 removed26 unchanged

2022 filing

2023 filing

Biggest changeThe unauthorized use of the Company’s intellectual property and/or confidential or personal information or any material disruption in the systems that store such information could materially harm the Company’s competitive position, reduce the value of the Company’s investment in research and development (through the loss of trade secrets or other proprietary and competitively sensitive information) and other strategic initiatives, compromise personally identifiable information regarding customers or employees, delay the Company’s ability to access its information systems at critical times, cause operational disruptions and delays, jeopardize the security of the Company’s facilities or otherwise materially and adversely affect the Company’s business or financial results.

Biggest changeWhile Company personnel have been tasked to detect and investigate such incidents, cybersecurity attacks and other data security breaches can and are expected to occur in the future and the Company may be unable to implement adequate preventive or remediation measures, as breach and disruption techniques change frequently and are generally not detected until after an incident has occurred. 14 The unauthorized use of the Company’s intellectual property and/or confidential or personal information or any material disruption in the systems that store such information could materially harm the Company’s competitive position, reduce the value of the Company’s investment in research and development (through the loss of trade secrets or other proprietary and competitively sensitive information) and other strategic initiatives, compromise personally identifiable information regarding customers or employees, delay the Company’s ability to access its information systems at critical times, cause operational disruptions and delays, jeopardize the security of the Company’s facilities or otherwise materially and adversely affect the Company’s business or financial results.

Any delay or failure in qualifying any of its products with a customer may preclude or delay sales of those products to the customer, which may impede the Company’s growth and cause its business to suffer. 14 In addition, the Company engages in product development efforts with OEMs.

Any delay or failure in qualifying any of its products with a customer may preclude or delay sales of those products to the customer, which may impede the Company’s growth and cause its business to suffer. In addition, the Company engages in product development efforts with OEMs.

There can be no assurance that the Company will be able to make the technological advances necessary to maintain such competitive advantages or that the Company can recover major research and development expenses. 12 The industries in which the Company operates are very competitive.

There can be no assurance that the Company will be able to make the technological advances necessary to maintain such competitive advantages or that the Company can recover major research and development expenses. The industries in which the Company operates are very competitive.

A loss of one or more key customers could adversely affect the Company's profitability. The Company's customer base is concentrated, in part, because the Company's business strategy has been to develop long-term relationships with a select group of customers.

The Company's customer base is highly concentrated, and the loss of one or more customers could adversely affect the Company's business. A loss of one or more key customers could adversely affect the Company's profitability. The Company's customer base is concentrated, in part, because the Company's business strategy has been to develop long-term relationships with a select group of customers.

The Company's business could suffer if the Company is unable to develop new products on a timely basis. The Company's operating results could be negatively affected if the Company were unable to maintain and increase its technological and manufacturing capability and expertise to develop new products on a timely basis.

The Company's operating results could be negatively affected if the Company were unable to maintain and increase its technological and manufacturing capability and expertise to develop new products on a timely basis.

The market price of the Company’s securities can be subject to fluctuations in response to quarter-to-quarter variations in operating results, changes in analyst earnings estimates, market conditions in the aerospace composite materials and composite structures and assemblies industries, as well as general economic conditions and other factors external to the Company.

The Company ’ s securities may fluctuate in value. The market price of the Company’s securities can be subject to fluctuations in response to quarter-to-quarter variations in operating results, changes in analyst earnings estimates, market conditions in the aerospace composite materials and composite structures and assemblies industries, as well as general economic conditions and other factors external to the Company.

During the Company's fiscal years ended February 27, 2022, February 28, 2021 and March 1, 2020, the Company's ten largest customers accounted for approximately 77%, 71% and 76%, respectively, of net sales. The Company expects the sales to a relatively small number of customers will continue to account for a significant portion of its net sales for the foreseeable future.

During the Company's fiscal years ended February 26, 2023, February 27, 2022 and February 28, 2021, the Company's ten largest customers accounted for approximately 71%, 77% and 71%, respectively, of net sales. The Company expects sales to a relatively small number of customers will continue to account for a significant portion of its net sales for the foreseeable future.

The impact of inflation on the Company’s profits has been partially mitigated by the Company’s ability to adjust pricing for a large portion of its sales to pass the impact of inflation through to its customers.

The Company is experiencing inflation in raw material and other costs. The impact of inflation on the Company’s profits has been partially mitigated by the Company’s ability to adjust pricing for a large portion of its sales to pass the impact of inflation through to its customers.

Deterioration in the market for aerospace products has often reduced demand for, and prices of, advanced composite materials, structures and assemblies. A potential future reduction in demand and prices could have a negative impact on the Company’s business and operating results. In addition, the Company is subject to the effects of general regional and global economic and financial conditions.

Certain of the Company's principal competitors are substantially larger and have greater financial resources than the Company, and the Company's operating results will be affected by its ability to maintain its competitive positions in these industries. The aerospace composite materials and composite structures and assemblies industries are intensely competitive, and the Company competes worldwide in the markets for such products.

If, due to such impact, one or more of the Company’s suppliers is required to temporarily close manufacturing facilities, the Company’s ability to procure raw materials for its manufacturing processes may become limited and this could ultimately limit the Company’s ability to manufacture its products. 13 The Company's customer base is highly concentrated, and the loss of one or more customers could adversely affect the Company's business.

If one or more of the Company’s suppliers is required to temporarily close manufacturing facilities, the Company’s ability to procure raw materials for its manufacturing processes may become limited and this could ultimately limit the Company’s ability to manufacture its products.

In addition, implementation of acquisitions can result in large one-time charges and costs. A given acquisition, if consummated, may materially affect the Company's business, financial condition and results of operations. The Company ’ s securities may fluctuate in value.

The integration and management of an acquired company or business may strain the Company's management resources and technical, financial and operating systems. In addition, implementation of acquisitions can result in large one-time charges and costs. A given acquisition, if consummated, may materially affect the Company's business, financial condition and results of operations.

The Company may acquire businesses, product lines or technologies that expand or complement those of the Company. It may also enter into mergers, business combinations or joint ventures for similar purposes. The integration and management of an acquired company or business may strain the Company's management resources and technical, financial and operating systems.

Acquisitions, mergers, business combinations or joint ventures may entail certain operational and financial risks. The Company may acquire businesses, product lines or technologies that expand or complement those of the Company. It may also enter into mergers, business combinations or joint ventures for similar purposes.

The Company depends on information technology and computerized systems to communicate and operate effectively, some of which are connected to networks of third parties that are not under the Company’s direct control.

The Company ’ s business and operations may be adversely affected by cybersecurity breaches or other information technology system or network intrusions. The Company depends on information technology and computerized systems to communicate and operate effectively, some of which are connected to networks of third parties that are not under the Company’s direct control.

Each of the Company’s executive officers, key technical personnel and other employees could terminate his or her employment at any time. The loss of any member of the Company’s senior management team might significantly delay or prevent the achievement of the Company’s business objectives and could materially harm the Company’s business and customer relationships.

The loss of any member of the Company’s senior management team might significantly delay or prevent the achievement of the Company’s business objectives and could materially harm the Company’s business and customer relationships.

The Company's business is dependent on the aerospace industry, which is cyclical in nature. The aerospace industry is cyclical and has experienced downturns.

See “Customers and End Markets” in Item 1 of Part I of this Report. The Company's business is dependent on the aerospace industry, which is cyclical in nature. The aerospace industry is cyclical and has experienced downturns.

While there is potential for increasing the Company’s position with the combined customer, the Company’s revenues may decrease if the Company is not retained as a supplier. The COVID-19 Pandemic could result in further consolidation among the Company’s customers.

While there is potential for increasing the Company’s position with the combined customer, the Company’s revenues may decrease if the Company is not retained as a supplier. The Company is subject to a variety of environmental regulations.

The Company is vulnerable to an increase in inflation. Changes in the cost raw materials, supplies, labor, utilities or services could materially increase the Company's cost of operations. The Company is experiencing inflation in raw material and other costs.

The aerospace composite materials and composite structures and assemblies industries are intensely competitive, and the Company competes worldwide in the markets for such products. 11 The Company is vulnerable to an increase in inflation. Changes in the cost raw materials, supplies, labor, utilities or services could materially increase the Company's cost of operations.

Additionally, the Company may incur additional costs to comply with its customers’, including the U.S. Government’s, requirements for data security and increased cybersecurity protections and standards. The Company may be similarly harmed if any of the foregoing incidents occur at third parties that are connected to the Company’s networks and that are not under the Company’s direct control.

If these steps prove to be inadequate or are violated, the Company’s competitors might gain access to the Company’s trade secrets, and there may be no adequate remedy available to the Company.

If these steps prove to be inadequate or are violated, the Company’s competitors might gain access to the Company’s trade secrets, and there may be no adequate remedy available to the Company. 13 The Company depends upon the experience and expertise of its senior management team and key technical employees, and the loss of any key employee may impair the Company ’ s ability to operate effectively.

This situation is changing rapidly, and additional impacts may arise that the Company is not aware of currently. Geopolitical Events The Company's operating results could be negatively affected if the Company were unable to attain the raw materials required in its manufacturing process.

Geopolitical Events The Company's operating results could be negatively affected if the Company were unable to attain the raw materials required in its manufacturing process. The Company’s suppliers of raw material, supplies and equipment could be impacted by geopolitical events, such as the war in Ukraine, thus interrupting the Company’s supply chain.

The Company depends upon the experience and expertise of its senior management team and key technical employees, and the loss of any key employee may impair the Company ’ s ability to operate effectively. The Company’s success depends, to a certain extent, on the continued availability of its senior management team and key technical employees.

The Company’s success depends, to a certain extent, on the continued availability of its senior management team and key technical employees. Each of the Company’s executive officers, key technical personnel and other employees could terminate his or her employment at any time.

The Company’s suppliers of raw material, supplies and equipment could be impacted by geopolitical events, such as the war in Ukraine, thus interrupting the Company’s supply chain. Additionally, the Company’s customers may experience interruptions from other suppliers that could cause a customer to delay or cancel orders.

Additionally, the Company’s customers may experience interruptions from other suppliers that could cause a customer to delay or cancel orders. The Company's business could suffer if the Company is unable to develop new products on a timely basis.

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COVID-19 Pandemic The COVID-19 Pandemic continues to have an unprecedented impact on the U.S. economy. These impacts include, but are not limited to, the potential adverse effect of the COVID-19 Pandemic on the economy, the Company’s vendors, employees, customers and OEMs, as well as end-users of the Company’s products, including the commercial and business aircraft industries.

Added

In addition, the Company is subject to the effects of general regional and global economic and financial conditions. 12 The Company relies on short-term orders from its customers.

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The pandemic has adversely impacted global economic conditions, the Company’s business, results of operations and cash flows. Continued impacts of the pandemic may further adversely impact the same, and may require actions in response, including but not limited to expense reductions, in an effort to mitigate such impacts.

Added

The Company’s Stock is included in certain market indices. Funds that are based on the indices the Company’s stock is included in are required to own the Company’s stock. A change in any index the Company is included in could create sudden movement in the Company’s stock price.

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The extent of the impact of the COVID-19 Pandemic on the Company’s business and financial results continues to depend largely on future developments, including the duration of the spread of the outbreak, re-emergence of variants, the impact on capital and financial markets and the related impact on the financial circumstances of the Company’s customers and OEMs, as well as end-users of the Company’s products, including the commercial and business aviation industries, all of which are highly uncertain and cannot be predicted.

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The COVID-19 Pandemic and other factors have negatively impacted, and may continue to negatively impact, the Company’s suppliers.

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“Customers and End Markets” in Item 1 of Part I of this Report. The COVID-19 Pandemic has negatively impacted, and may continue to negatively impact, the Company’s customers. If one or more of the Company’s customers is further negatively impacted by the COVID-19 Pandemic the Company’s customer base could become more concentrated.

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The COVID-19 Pandemic has negatively impacted, and may continue to negatively impact, the aerospace industry, and the commercial aerospace industry in particular. Commercial airlines have instituted cost reduction initiatives including limiting capacity, reducing workforces, limiting discretionary operational expenditures and delaying capital expenditures.

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If commercial airlines continue to be negatively impacted by the COVID-19 Pandemic, including due to temporary or permanent reductions in commercial airline passenger traffic, orders for Company products could be negatively impacted. The Company relies on short-term orders from its customers.

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One or more of the Company’s customers could be acquired due to financial difficulty, distress or insolvency, fluctuations in the market price of its securities, or other factors resulting from the COVID-19 Pandemic. The Company is subject to a variety of environmental regulations.

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The COVID-19 Pandemic could place the continued availability of its senior management team and key employees at risk.

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Certain members of the Company’s senior management team and key employees do not reside near their place of work and rely heavily on commercial airline travel, which may be restricted. 15 The Company ’ s business and operations may be adversely affected by cybersecurity breaches or other information technology system or network intrusions.

Removed

While Company personnel have been tasked to detect and investigate such incidents, cybersecurity attacks and other data security breaches can and are expected to occur in the future and the Company may be unable to implement adequate preventive or remediation measures, as breach and disruption techniques change frequently and are generally not detected until after an incident has occurred.

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The Company may be similarly harmed if any of the foregoing incidents occur at third parties that are connected to the Company’s networks and that are not under the Company’s direct control. 16 Acquisitions, mergers, business combinations or joint ventures may entail certain operational and financial risks.

Removed

The COVID-19 Pandemic has exacerbated fluctuations in the market price of most securities, including aerospace companies.

Item 2. Properties

Properties — owned and leased real estate

2 edited+3 added−1 removed5 unchanged

2022 filing

2023 filing

Biggest changeThe City and County further agreed to provide financial and other assistance toward the construction of the additional facility as set forth in the Development Agreement. The total cost of the additional facility was approximately $19.8 million, and the expansion is complete. As of February 26, 2023, the Company had $99,000 in equipment purchase obligations related to the additional facility.

ITEM 2. PROPERTIES. Set forth below are the locations of the significant properties owned and leased by the Company, the business use of the properties and the size of each such property. The Newton, Kansas property is used principally as a manufacturing facility. The lease for our Newton, Kansas location is a ground lease.

Removed

The expansion construction is complete and is undergoing customer qualifications, which are expected to be completed in the second half of the calendar year 2022. As of February 27, 2022, the Company had $635,000 in equipment purchase obligations and $18.7 million of construction-in-progress related to the additional facility. 17

Added

Pursuant to the Development Agreement, the City provided a sales tax exemption for materials the Company purchased for the facility, subject to issuance of Industrial Revenue Bonds (“IRBs”).

Added

On June 7, 2022, the City issued IRB Series 2022, in an aggregate principal amount not to exceed $18,500,000, pursuant to a Trust Indenture between the City and Security Bank of Kansas City.

Added

The Company simultaneously entered into a Bond Purchase Agreement with the City, whereby the Company agreed to buy the IRBs at a purchase price equal to the par amount of the IRBs issued. The Company redeemed the IRBs in August 2022. Neither the purchase nor redemption of the IRBs had an impact on the Company’s Consolidated Statements of Operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

4 edited+2 added−0 removed6 unchanged

2022 filing

2023 filing

Biggest changeITEM 4. MINE SAFETY DISCLOSURES. None. EXECUTIVE OFFICERS OF THE REGISTRANT . Name Title Age Brian E. Shore Chief Executive Officer and Chairman of the Board of Directors 70 P. Matthew Farabaugh Senior Vice President and Chief Financial Officer 61 Mark A. Esquivel President and Chief Operating Officer 49 Mr.

Biggest changeITEM 4. MINE SAFETY DISCLOSURES. None. 16 EXECUTIVE OFFICERS OF THE REGISTRANT . Name Title Age Brian E. Shore Chief Executive Officer and Chairman of the Board of Directors 71 P. Matthew Farabaugh Senior Vice President and Chief Financial Officer 62 Mark A. Esquivel President and Chief Operating Officer 50 Cory Nickel Senior Vice President and General Manager 51 Mr.

Esquivel was Vice President and General Manager of the Company’s former Neltec, Inc. business unit located in Tempe, Arizona, and was responsible for the day-to-day operations of Neltec, Inc. since his appointment to that position in September 2008, having held various positions since he originally joined Neltec, Inc. in 1994.

Prior to joining Park in 1989, Mr. Farabaugh had been a senior accountant with KPMG. 18 Mr.

Prior to joining Park in 1989, Mr. Farabaugh had been a senior accountant with KPMG. Mr.

There are no family relationships between the directors or executive officers of the Company. Each executive officer of the Company serves at the pleasure of the Board of Directors of the Company. 19 PART II

Added

Nickel was elected Senior Vice President and General Manager of the Company on August 15, 2022. He was appointed as Vice President and General Manager of the Company in October 2020. Mr. Nickel originally joined Park Aerospace Corp. in 2011 as a Solution Treater Operator, an entry level position.

Added

He was promoted to Second Shift Production Supervisor in 2012, Production Manager in 2013, Materials Manufacturing Manager in 2014, Production Control Manager in 2015 and Operations Manager in 2017. Prior to joining Park, Mr. Nickel served as a local High School Science Teacher with a focus on chemistry, physics and manufacturing technology.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed3 unchanged

2022 filing

2023 filing

Biggest changeFor the Fiscal Year Ended Stock Price Dividends February 27, 2022 High Low Declared First Quarter $ 15.57 $ 13.03 $ 0.10 Second Quarter 16.20 14.40 0.10 Third Quarter 15.11 12.74 0.10 Fourth Quarter 13.74 12.73 0.10 For the Fiscal Year Ended Stock Price Dividends February 28, 2021 High Low Declared First Quarter $ 14.49 $ 9.14 $ 0.10 Second Quarter 13.78 10.51 0.10 Third Quarter 13.85 10.55 0.10 Fourth Quarter 15.01 12.63 0.10 As of May 4, 2022, there were 471 holders of record of Common Stock.

Biggest changeFor the Fiscal Year Ended Stock Price Dividends February 26, 2023 High Low Declared First Quarter $ 14.21 $ 11.27 $ 0.10 Second Quarter 13.19 11.40 0.10 Third Quarter 13.82 10.08 0.10 Fourth Quarter 16.54 10.80 1.10 (a) For the Fiscal Year Ended Stock Price Dividends February 27, 2022 High Low Declared First Quarter $ 15.57 $ 13.03 $ 0.10 Second Quarter 16.20 14.40 0.10 Third Quarter 15.11 12.74 0.10 Fourth Quarter 13.74 12.73 0.10 (a) On February 9, 2023, the Company’s Board of Directors declared a special dividend of $1.00 per share payable April 6, 2023 to shareholders of record at the close of business on March 9, 2023.

As previously announced by the Company, shares purchased by the Company will be retained as treasury stock and will be available for use under the Company’s stock option plan and for other corporate purposes. 21 Stock Performance Graph The graph set forth below compares the annual cumulative total return for the Company’s five fiscal years ended February 27, 2022 among the Company, the New York Stock Exchange Market Index (the “NYSE Index”), and the Nasdaq US Small Cap Aerospace and Defense Index (the “Nasdaq Index”).

As previously announced by the Company, shares purchased by the Company will be retained as treasury stock and will be available for use under the Company’s stock option plan and for other corporate purposes. 19 Stock Performance Graph The graph set forth below compares the annual cumulative total return for the Company’s five fiscal years ended February 26, 2023 among the Company, the New York Stock Exchange Market Index (the “NYSE Index”), and the Nasdaq US Small Cap Aerospace and Defense Index (the “Nasdaq Index”).

The Company expects, for the foreseeable future, to continue to pay regular cash dividends. 20 The following table provides information with respect to shares of the Company’s Common Stock acquired by the Company during each month included in the Company’s 2022 fiscal year fourth quarter ended February 27, 2022: Period Total Number of Shares (or Units) Purchased Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchased As Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs November 29 - December 27 0 $ - 0 December 28 - January 27 0 $ - 0 January 28 - February 27 0 $ - 0 Total 0 $ - 0 1,394,015 (a) (a) Aggregate number of shares available to be purchased by the Company pursuant to share purchase authorizations announced on January 8, 2015 and March 10, 2016.

The Company expects, for the foreseeable future, to continue to pay regular cash dividends. 18 The following table provides information with respect to shares of the Company’s Common Stock acquired by the Company during each month included in the Company’s 2023 fiscal year fourth quarter ended February 26, 2023: Period Total Number of Shares (or Units) Purchased Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchased As Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs November 28 - December 26 0 $ - 0 December 27 - January 26 0 $ - 0 January 27 - February 26 0 $ - 0 Total 0 $ - 0 1,500,000 (a) (a) Aggregate number of shares available to be purchased by the Company pursuant to a share purchase authorization announced on May 23, 2022.

Pursuant to such authorizations, the Company is authorized to purchase its shares from time to time on the open market or in privately negotiated transactions. In 2021, the Company purchased 137,397 shares at an aggregate purchase price of $1,644,000.

Pursuant to such authorization, the Company is authorized to purchase its shares from time to time on the open market or in privately negotiated transactions. On May 18, 2022, the Company’s Board of Directors authorized the Company’s purchase, on the open market and in privately negotiated transactions, of up to 1,500,000 shares of its Common Stock.

The graph has been prepared based on an assumed investment of $100 on February 26, 2017 and the reinvestment of dividends (where applicable). 2017 2018 2019 2020 2021 2022 Park Aerospace Corp. $ 100.00 $ 105.84 $ 135.36 $ 117.52 $ 121.37 $ 122.52 NYSE Index $ 100.00 $ 114.51 $ 116.08 $ 116.05 $ 144.05 $ 161.00 NASDAQ US Small Cap Aerospace and Defense Index $ 100.00 $ 118.00 $ 147.36 $ 144.17 $ 178.60 $ 171.52

The graph has been prepared based on an assumed investment of $100 on February 26, 2018 and the reinvestment of dividends (where applicable). 2018 2019 2020 2021 2022 2023 Park Aerospace Corp. $ 100.00 $ 127.88 $ 111.03 $ 114.66 $ 115.76 $ 140.61 NYSE Index $ 100.00 $ 101.37 $ 101.35 $ 125.80 $ 140.61 $ 135.31 NASDAQ US Small Cap Aerospace and Defense Index $ 100.00 $ 124.89 $ 122.18 $ 151.36 $ 145.36 $ 146.64

As a result of the authorizations announced on January 8, 2015 and March 10, 2016, the Company is authorized to purchase up to a total of 1,394,015 shares of its common stock, representing approximately 6.8% of the Company’s 20,458,210 total outstanding shares as of the close of business on February 27, 2022.

This represents approximately 7% of the Company’s 20,458,210 total outstanding shares as of the close of business on May 18, 2022. This authorization supersedes any unused prior Board of Directors’ authorizations to purchase shares of the Company’s Common Stock.

Added

The total amount of this special dividend was approximately $20.5 million. As of May 5, 2023, there were 459 holders of record of Common Stock.

Added

As of February 26, 2023, the Company had not purchased any shares of the Company’s Common stock pursuant to the above authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

42 edited+18 added−31 removed35 unchanged

2022 filing

2023 filing

Biggest changeLiquidity and Capital Resources: (Amounts in thousands) February 27, February 28, Increase / 2022 2021 (Decrease) Cash and marketable securities $ 110,361 $ 116,542 $ (6,181 ) Working capital 120,147 124,348 (4,201 ) From continuing operations Fiscal Year Ended (Amounts in thousands) February 27, February 28, March 1, Increase / (Decrease) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Net cash provided by operating activities $ 8,201 $ 13,340 $ 5,871 $ (5,139 ) $ 7,469 Net cash (used in) provided by investing activities (29,556 ) 32,958 (42,511 ) (62,514 ) 75,469 Net cash used in financing activities (7,429 ) (9,785 ) (28,304 ) 2,356 18,519 Cash and Marketable Securities The Company believes it has sufficient liquidity to fund its operating activities for the 12 months from the date of the filing of this Form 10-K Annual Report and for the foreseeable future thereafter. 29 The change in cash and marketable securities at February 27, 2022 compared to February 28, 2021 was primarily the result of positive operating cash flow more than offset by capital expenditures and regular quarterly dividends paid by the Company to its shareholders during 2022 and a number of additional factors.

Biggest changeLiquidity and Capital Resources: (Amounts in thousands) February 26, February 27, Increase / 2023 2022 (Decrease) Cash and marketable securities $ 105,440 $ 110,361 $ (4,921 ) Working capital 96,455 120,147 (23,692 ) From continuing operations Fiscal Year Ended (Amounts in thousands) February 26, February 27, February 28, Increase / (Decrease) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net cash provided by operating activities $ 6,491 $ 8,201 $ 13,340 $ (1,710 ) $ (5,139 ) Net cash (used in) provided by investing activities (7,018 ) (29,556 ) 32,958 22,538 (62,514 ) Net cash used in financing activities (8,047 ) (7,429 ) (9,785 ) (618 ) 2,356 Cash and Marketable Securities The Company believes it has sufficient liquidity to fund its operating activities for the 12 months from the date of the filing of this Form 10-K Annual Report and for the foreseeable future thereafter.

The Company’s gross profit margin, measured as a percentage of sales, increased to 33.4% in 2022 from 28.5% in 2021. Higher sales and production levels combined with the fixed nature of certain overhead costs led to higher gross margins.

Gross Profit The Company’s gross profit margin, measured as a percentage of sales, increased to 33.4% in 2022 from 28.5% in 2021. Higher sales and production levels combined with the fixed nature of certain overhead costs led to higher gross margins.

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. Valuation of Long-Lived Assets The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.

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. 30 Valuation of Long-Lived Assets The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.

Selling, general and administrative expenses in 2022 included $285,000 of stock option expenses compared to $191,000 of such expenses in 2021. Restructuring Charges The Company recorded restructuring charges of $259,000 in 2022 compared to $1.6 million in 2021 related to the closure of the Company’s Park Aerospace Technologies Asia, Pte, Ltd. facility located in Singapore.

Selling, general and administrative expenses in 2022 included $285,000 of stock option expenses compared to $191,000 of such expenses in 2021. 25 Restructuring Charges The Company recorded restructuring charges of $259,000 in 2022 compared to $1.6 million in 2021 related to the closure of the Company’s Park Aerospace Technologies Asia, Pte, Ltd. facility located in Singapore.

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.

Unless otherwise indicated in this Discussion and Analysis, all references to years and quarters in this Discussion and Analysis are to the Company ’ s fiscal years and fiscal quarters and all annual and quarterly information in this Discussion and Analysis is for such fiscal years and quarters, respectively. 2022 Financial Overview In 2019, the Company announced the major expansion of its aerospace manufacturing, development and design facilities located at the Newton City-County Airport in Newton, Kansas.

Unless otherwise indicated in this Discussion and Analysis, all references to years and quarters in this Discussion and Analysis are to the Company ’ s fiscal years and fiscal quarters, and all annual and quarterly information in this Discussion and Analysis is for such fiscal years and quarters, respectively. 2023 Financial Overview In 2019, the Company announced the major expansion of its aerospace manufacturing, development and design facilities located at the Newton City-County Airport in Newton, Kansas.

The expansion includes new resin mixing and delivery systems, new hot-melt film and tape manufacturing lines, space to accommodate an additional hot-melt tape line or solution treating line, space to accommodate a confidential joint development project with a major aerospace customer, additional slitting capability, significant additional freezer and storage space, an expanded production lab, a new R&D lab and additional office space.

The expansion is complete and includes new resin mixing and delivery systems, new hot-melt film and tape manufacturing lines, space to accommodate an additional hot-melt tape line or solution treating line, space to accommodate a confidential joint development project with a major aerospace customer, additional slitting capability, significant additional freezer and storage space, an expanded production lab, a new R&D lab and additional office space.

Results of Operations: 2022 Compared to 2021 Year Ended February 27, February 28, (Amounts in thousands, except per share amounts) 2022 2021 Increase / (Decrease) Net sales $ 53,578 $ 46,276 $ 7,302 16 % Cost of sales 35,661 33,085 2,576 8 % Gross profit 17,917 13,191 4,726 36 % Selling, general and administrative expenses 6,249 6,113 136 2 % Restructuring charges 259 1,570 (1,311 ) -84 % Earnings from continuing operations 11,409 5,508 5,901 107 % Interest and other income 375 1,777 (1,402 ) -79 % Earnings from continuing operations before income taxes 11,784 7,285 4,499 62 % Income tax provision 3,320 2,093 1,227 59 % Net earnings from continuing operations 8,464 5,192 3,272 63 % Loss from discontinued operations, net of tax - (328 ) 328 -100 % Net earnings $ 8,464 $ 4,864 $ 3,600 74 % Earnings (loss) per share: Basic: Continuing operations $ 0.41 $ 0.25 $ 0.16 64 % Discontinued operations - (0.01 ) 0.01 -100 % Basic earnings per share $ 0.41 $ 0.24 $ 0.17 71 % Diluted: Continuing operations $ 0.41 $ 0.25 $ 0.16 64 % Discontinued operations - (0.01 ) 0.01 -100 % Diluted earnings per share $ 0.41 $ 0.24 $ 0.17 71 % Net Sales The Company's total net sales worldwide in 2022 were 16% higher than in 2021 due primarily to the higher sales to commercial aerospace and business aircraft customers resulting from the decreasing impacts of the Pandemic on those markets, partially offset by lower military sales during 2022.

The net impact of the items described above was to increase basic and diluted earnings per share by $0.13 in 2023 and decrease basic and diluted earnings per share by $0.01 in 2022. 24 2022 Compared to 2021 Year Ended February 27, February 28, (Amounts in thousands, except per share amounts) 2022 2021 Increase / (Decrease) Net sales $ 53,578 $ 46,276 $ 7,302 16 % Cost of sales 35,661 33,085 2,576 8 % Gross profit 17,917 13,191 4,726 36 % Selling, general and administrative expenses 6,249 6,113 136 2 % Restructuring charges 259 1,570 (1,311 ) -84 % Earnings from continuing operations 11,409 5,508 5,901 107 % Interest and other income 375 1,777 (1,402 ) -79 % Earnings from continuing operations before income taxes 11,784 7,285 4,499 62 % Income tax provision 3,320 2,093 1,227 59 % Net earnings from continuing operations 8,464 5,192 3,272 63 % Loss from discontinued operations, net of tax - (328 ) 328 -100 % Net earnings $ 8,464 $ 4,864 $ 3,600 74 % Earnings (loss) per share: Basic: Continuing operations $ 0.41 $ 0.25 $ 0.16 64 % Discontinued operations - (0.01 ) 0.01 -100 % Basic earnings per share $ 0.41 $ 0.24 $ 0.17 71 % Diluted: Continuing operations $ 0.41 $ 0.25 $ 0.16 64 % Discontinued operations - (0.01 ) 0.01 -100 % Diluted earnings per share $ 0.41 $ 0.24 $ 0.17 71 % Net Sales The Company's total net sales worldwide in 2022 were 16% higher than in 2021 due primarily to the higher sales to commercial aerospace and business aircraft customers resulting from the decreasing impacts of the Pandemic on those markets, partially offset by lower military sales during 2022.

ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. General: Park Aerospace Corp. (“Park” or the “Company”) is an aerospace company which develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets. Park’s advanced composite materials include film adhesives (undergoing qualification) and lightning strike materials.

The net impact of the items described above was to decrease basic and diluted earnings per share by $0.07 in 2021 and $0.01 in 2020.

The net impact of the items described above was to decrease basic and diluted earnings per share by $0.01 in 2022 and $0.07 in 2021.

In 2022, 2021 and 2020, the Company incurred approximately $13,000, $9,000 and $41,000, respectively, for remedial response and voluntary cleanup costs and related legal fees, and the Company received, or expects to receive, reimbursement pursuant to general liability insurance coverage for approximately $13,000, $9,000 and $38,000, respectively, of such amounts.

In 2023, 2022 and 2021, the Company incurred approximately $14,000, $13,000 and $9,000, respectively, for remedial response and voluntary cleanup costs and related legal fees, and the Company received, or expects to receive, reimbursement pursuant to general liability insurance coverage for approximately $14,000, $13,000 and $9,000, respectively, of such amounts.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

With the recovery of the aerospace markets, some companies in the aerospace supply chain may not be fully prepared to ramp up their production as quickly as needed, which may create a risk to the Company of not getting enough raw materials on a timely basis to fully support the Company’s customers’ demands.

With the recovery of the aerospace markets, some companies in the aerospace supply chain have not been fully prepared to ramp up their production as quickly as needed, which has created a risk to the Company of not getting enough raw materials on a timely basis to fully support the Company’s customers’ demands.

Decreases in cash and cash equivalents and marketable securities, decreases in inventories and decreases in prepaid expenses and other current assets were partially offset by increases in accounts receivable and decreases in accounts payable, accrued liabilities and income taxes payable.

Decreases in cash and cash equivalents and marketable securities and increases in accounts payable and dividends payable were partially offset by increases in accounts receivable, inventories and prepaid expenses and other current assets.

The 2022, 2021 and 2020 fiscal years ended on February 27, 2022, February 28, 2021 and March 1, 2020, respectively. The 2022, 2021 and 2020 fiscal years each consisted of 52 weeks.

The 2023, 2022 and 2021 fiscal years ended on February 26, 2023, February 27, 2022 and February 28, 2021, respectively. The 2023, 2022 and 2021 fiscal years each consisted of 52 weeks.

As a result of the Tax Act, the Company recorded tax payable to be paid in installments over eight years. The remaining balance of these installment payments, as of February 27, 2022, was approximately $14.3 million to be paid over the next four years.

As a result of the Tax Act, the Company recorded taxes payable to be paid in installments over eight years. The remaining balance of these installment payments, as of February 26, 2023, was approximately $12.6 million to be paid over the next four years.

Deferred income taxes are provided for temporary differences in the reporting of certain items, such as depreciation and undistributed earnings of foreign subsidiaries, for income tax purposes compared to financial accounting purposes.

These differences result in deferred tax assets and liabilities, which are included in the Company’s Consolidated Balance Sheets. Deferred income taxes are provided for temporary differences in the reporting of certain items, such as depreciation and undistributed earnings of foreign subsidiaries, for income tax purposes compared to financial accounting purposes.

The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $0.3 million to secure the Company's obligations under its workers’ compensation insurance program.

The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $0.1 million to secure the Company's obligations under its workers’ compensation insurance program. 28 Environmental Matters: The Company is subject to various Federal, state and local government and foreign government requirements relating to the protection of the environment.

Income Tax Provision The Company’s effective income tax rate of 28.7% for 2021 was due primarily to the U.S. Federal rate and state income taxes.

Income Tax Provision The Company’s effective income tax rate of 2.7% for 2023 was due primarily to the U.S.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its Consolidated Financial Statements. Recently Adopted Accounting Pronouncement See Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report for a discussion of the Company's recently adopted accounting pronouncements.

Recently Adopted Accounting Pronouncement See Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report for a discussion of the Company’s recently adopted accounting pronouncements.

During 2022, the Company expended $4.4 million for the purchase of property, plant and equipment compared to $7.5 million during 2021, the Company in 2021 paid $1.6 million for the repurchase of the Company’s stock, and the Company paid $8.2 million in cash dividends in 2022 and 2021. 30 Other Liquidity Factors On December 22, 2017, the U.S. government enacted comprehensive tax reform commonly referred to as the Tax Cuts and Jobs Act (“TCJA” or “Tax Act”) and significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, imposing a one-time transition tax on deemed repatriated earnings of non-U.S. subsidiaries, and implementing a territorial tax system.

Other Liquidity Factors On December 22, 2017, the U.S. government enacted comprehensive tax reform commonly referred to as the Tax Cuts and Jobs Act (“TCJA” or “Tax Act”) and significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, imposing a one-time transition tax on deemed repatriated earnings of non-U.S. subsidiaries, and implementing a territorial tax system.

Earnings from Continuing Operations For the reasons set forth above, the Company’s earnings from continuing operations were $5.5 million for 2021, including the pretax charges of $1.6 million for the closure of the facility located in Singapore.

Earnings from Operations For the reasons set forth above, the Company’s earnings from operations were $10.0 million for 2023. The Company’s earnings from continuing operations were $11.4 million for 2022, including the pretax charges of $259,000 for the closure of the facility located in Singapore.

Higher sales and production levels combined with the fixed nature of certain overhead costs led to higher gross margins. 25 Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $136,000, or 2%, during 2022 compared to 2021. Such expenses, measured as percentages of sales, were 11.7% and 13.2% during 2022 and 2021, respectively.

Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $136,000, or 2%, during 2022 compared to 2021. Such expenses, measured as percentages of sales, were 11.7% and 13.2% during 2022 and 2021, respectively.

At February 27, 2022 and February 28, 2021, there were no amounts recorded in accrued liabilities for environmental matters. 31 Management does not expect that environmental matters will have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or consolidated financial position of the Company.

Management does not expect that environmental matters will have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or consolidated financial position of the Company.

The Company’s loss from discontinued operations was lower in 2022 compared to 2021 primarily as a result of exiting the facility in Fullerton California, previously used in the electronics operations, at the beginning of the third fiscal quarter of 2021.

The Company’s loss from discontinued operations was lower in 2022 compared to 2021 primarily as a result of exiting the facility in Fullerton, California, previously used in the electronics operations, at the beginning of the third fiscal quarter of 2021. 26 Basic and Diluted Earnings Per Share Basic and diluted earnings per share from continuing operations for 2022 were $0.41, including the pretax charges for the closure of the facility located in Singapore, compared to basic and diluted earnings per share for 2021 of $0.25, including the pretax charges for the closure of the facility located in Singapore.

The significant changes in cash provided by operating activities were as follows: ● accounts receivable increased by 9% at February 27, 2022 compared to February 28, 2021 due primarily to the increase in total net sales in the last month of 2022; ● inventory decreased 3% due primarily to lower raw material purchases at the end of February 2022; ● prepaid expenses and other current assets decreased 9% due primarily to the decrease in income tax receivable; ● accounts payable decreased 23% due primarily to the lower raw material purchases and lower capital expenditures at the end of February 2022; ● accrued liabilities decreased 13% due primarily to the reduction of the restructuring accrual related to the closure of the facility in Singapore; ● income taxes payable decreased 25% at February 27, 2022 compared to February 28, 2021 due to the current tax provision in excess of the tax payments.

The significant changes in cash provided by operating activities were as follows: ● accounts receivable increased by 20% at February 26, 2023 compared to February 27, 2022 due primarily to the increase in total net sales in the last month of 2023; ● inventory increased 45% due primarily to higher raw material purchases at the end of February 2023, higher material costs and an increase of C2B material inventoried in support of the distributor agreement with ArianeGroup; ● prepaid expenses and other current assets decreased 8% due primarily to the decrease in income tax receivable; ● accounts payable increased 79% due primarily to the higher raw material purchases at the end of February 2023; 27 ● accrued liabilities decreased 10% due primarily to the reduction of payroll and services accruals; and ● income taxes payable decreased 12% at February 26, 2023 compared to February 27, 2022 due to the current tax provision in excess of the tax payments.

The timing of expenditures depends on a number of factors, including regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties.

The timing of expenditures depends on a number of factors, including regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. At February 26, 2023 and February 27, 2022, there were no amounts recorded in accrued liabilities for environmental matters.

The decrease from 2020 was due primarily to lower average invested cash during the period and lower weighted average interest rates. During 2021 and 2020, the Company earned interest income principally from its investments, which were primarily in short-term instruments and money market funds.

Interest and Other Income Interest and other income were $1.1 million and $375,000 for 2023 and 2022, respectively. The increase from 2022 was due primarily higher weighted average interest rates. During 2023 and 2022, the Company earned interest income principally from its investments, which were primarily in short-term instruments and money market funds.

Important factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends and significant changes in the use of the Company’s assets or strategy of the overall business. 33 Income Taxes As part of the processes of preparing its consolidated financial statements, the Company is required to estimate the income taxes in each of the jurisdictions in which it operates.

In addition, the Company assesses the impairment of goodwill at least annually. Important factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends and significant changes in the use of the Company’s assets or strategy of the overall business.

In addition, the Company paid $8.2 million in cash dividends during 2022 and 2021. Working Capital Working capital at February 27, 2022 was lower compared to February 28, 2021.

In addition, the Company paid $8.2 million in cash dividends during 2023 and 2022. In February 2023, the Company declared a special dividend of $1.00 per share. The Company recorded a dividend payable of $20.5 million at the end of 2023. Working Capital Working capital at February 26, 2023 was lower compared to February 27, 2022.

The Company’s net earnings from continuing operations in 2022 were 63% higher than in 2021, primarily due to higher sales and lower restructuring charges, partially offset by lower interest income. The Company is experiencing inflation in raw material and other costs.

The Company’s net earnings from continuing operations in 2023 were 27% higher than in 2022, primarily due to higher interest income and a reduction in uncertain tax positions, partially offset by the cost and expense increases mentioned above. The Company is experiencing inflation in raw materials, supplies, freight costs and other costs and expenses.

Gross Profit The Company’s gross profit margin, measured as a percentage of sales, increased to 33.4% in 2022 from 28.5% in 2021.

Sales in 2023, to each of the markets the Company serves, were relatively even with the prior year sales levels. Gross Profit The Company’s gross profit margin, measured as a percentage of sales, decreased to 30.5% in 2023 from 33.4% in 2022.

Cash Flows During 2022, the Company's net earnings from continuing operations, before depreciation and amortization, stock-based compensation, amortization of bond premium, gain on sale of fixed assets and non-cash restructuring, were $11.8 million. Such earnings were decreased by changes in operating assets and liabilities of $3.6 million, resulting in $8.2 million of cash provided by operating activities from continuing operations.

The Company's current ratio (the ratio of current assets to current liabilities) was 4.4 to 1 at February 26, 2023 compared to 20.1 to 1 at February 27, 2022. Cash Flows During 2023, the Company's net earnings from continuing operations, before depreciation and amortization, stock-based compensation, amortization of bond premium and gain on sale of fixed assets, were $12.6 million.

Basic and Diluted Earnings Per Share Basic and diluted earnings per share from continuing operations for 2022 were $0.41, including the pretax charges for the closure of the facility located in Singapore, compared to basic and diluted earnings per share for 2021 of $0.25, including the pretax charges for the closure of the facility located in Singapore.

Basic and Diluted Earnings Per Share Basic and diluted earnings per share for 2023 were $0.52, including the additional tax due to tax deductions becoming unavailable as a result of stock options expiring unexercised and the reduction in uncertain tax positions, compared to basic and diluted earnings per share for 2022 of $0.41, including the pretax charges for the closure of the facility located in Singapore.

This process involves estimating the actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the Company’s Consolidated Balance Sheets.

Income Taxes As part of the processes of preparing its consolidated financial statements, the Company is required to estimate the income taxes in each of the jurisdictions in which it operates. This process involves estimating the actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes.

The Company further believes that its balance sheet and financial position to be very strong, and the Company believes it is well positioned to weather the impact of the Pandemic on its business.

The Company further believes that its consolidated balance sheet and financial position are very strong.

Programs that the Company supplies into may also be experiencing supply chain issues from other suppliers to the programs. The Company’s sales could be impacted by delays and reductions in its customer’s production schedules caused by other suppliers in the chain. The tight labor market has created challenges in hiring personnel.

The Company’s sales could be impacted by supply chain challenges its customers are experiencing from other suppliers. The tight labor market has created challenges in hiring personnel. Although the Company feels very positive about its workforce, staffing to proper levels continues to pose challenges for the Company.

The amounts of returns and allowances resulting from defective or damaged products have averaged approximately 1.0% of sales for the Company’s last three fiscal years. Accounts Receivable The Company’s accounts receivable are due from purchasers of the Company’s products. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required.

The majority of the Company’s shipping terms define the performance obligation to be satisfied upon shipment. Accounts Receivable The Company’s accounts receivable are due from purchasers of the Company’s products. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required.

The Company does not have any significant customers in Russia or Ukraine.

The Company does not have any significant customers in Russia or Ukraine. The Company has experienced some increases to raw material costs from overseas suppliers due to the impacts of the war in Ukraine.

The Company’s effective income tax rate was lower in 2020, due to favorable adjustments to valuation allowances on state tax credits and a lower state effective tax rate in 2020. 28 Net Earnings from Continuing Operations The Company’s net earnings from continuing operations for 2021 were $5.2 million, including the pretax charges of $1.6 million for the closure of the facility located in Singapore.

The Company’s net earnings from continuing operations for 2022 were $8.5 million, including the pretax charges of $259,000 for the closure of the facility located in Singapore.

Restructuring Charges The Company recorded restructuring charges of $1.6 million in the 2021 related to the closure of the Company’s Park Aerospace Technologies Asia, Pte, Ltd. facility located Singapore.

Selling, general and administrative expenses in 2023 included $369,000 of stock option expenses compared to $285,000 of such expenses in 2022. 23 Restructuring Charges Restructuring charges were nil in 2023 compared to $259,000 in 2022 related to the closure of the Company’s Park Aerospace Technologies Asia, Pte. Ltd. facility located in Singapore.

Additionally, the Company has a “Customer Flexibility Program” whereby employees can cross train on different equipment and processes to earn extra pay for attaining the added skills. The war in Ukraine has not had a material impact on the Company’s results of operations, and is not expected to have a material impact.

The Company’s cross-training “Customer Flexibility Program” continues to help the Company to deal with the staffing shortages. The war in Ukraine has not had a negative material impact on the Company’s results of operations, but the Company has a potential for an increase in future sales due to increases in spending worldwide on missile defense systems and other defense programs.

Removed

The total cost of the expansion will be approximately $19.5 million. The expansion construction is complete and is undergoing customer qualifications, which are expected to be complete in the second half of the 2022 fiscal year.

Added

The total cost of the expansion was approximately $19.8 million.

Removed

Through February 27, 2022, the Company had incurred $18.7 million of costs for the expansion.

Added

Through February 26, 2023, the Company had incurred $19.6 million of costs for the expansion. On February 9, 2023, the Company’s Board of Directors declared a special dividend of $1.00 per share payable April 6, 2023 to shareholders of record at the close of business on March 9, 2023.

Removed

In December 2019, a novel strain of coronavirus was reported in Wuhan, China and has since spread worldwide, including to the United States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). 23 The COVID-19 Pandemic and resultant global economic crisis had significant impacts on the Company’s results of operations and cash flow for 2021, and to a lesser degree for 2022.

Added

The total amount of this special dividend was approximately $20.5 million. 21 The Company's total net sales worldwide in 2023 were 1% higher than in 2022. Sales in 2023, to each of the markets the Company serves, were relatively even with the prior year sales levels.

Removed

The COVID-19 Pandemic and crisis had significant impacts on the markets the Company sells into, particularly the commercial and business aircraft markets. As a result, the Company has experienced a significant reduction in sales and backlog.

Added

The Company’s gross profit margin, measured as a percentage of sales, decreased to 30.5% in 2023 from 33.4% in 2022. Higher costs for raw materials, supplies, freight, utilities, costs related to the new equipment trials and qualifications and higher waste costs from increased change-over resulting from supply chain challenges and uncertainties led to the decrease in gross margins.

Removed

Even as the COVID-19 Pandemic subsides, the Company may continue to experience adverse impacts to its business as a result of the potential continuing impact of the economic crisis on the markets the Company serves.

Added

The Company’s earnings from operations in 2023 were 13% lower than in 2022, primarily as a result of higher costs for raw materials, supplies, freight, utilities, costs related to the new equipment trials and qualifications and higher waste costs from increased change-over resulting from supply chain challenges and uncertainties.

Removed

The Company's total net sales worldwide in 2022 were 16% higher than in 2021 due primarily to the higher sales to commercial aerospace and business aircraft customers due to the decreasing impacts of the Pandemic on those markets partially offset by lower military sales during 2022.

Added

Delays of shipments of raw materials have impacted the Company’s production level and have caused inefficiencies in the Company’s manufacturing operations. The Company continues to experience supply chain challenges. Programs that the Company supplies into are, in some cases, experiencing supply chain issues from other suppliers to the programs.

Removed

The Company recorded restructuring charges of $259,000 and $1.6 million in 2022 and 2021, respectively, related to the closure of the Company’s Park Aerospace Technologies Asia, Pte, Ltd. facility located in Singapore. The Company’s earnings from continuing operations in 2022 were 107% higher than in 2021, primarily as a result of the aforementioned increases in sales and gross profit.

Added

The Company has a number of long-term contracts pursuant to which certain of its customers, some of which represent a substantial portion of the Company’s revenue, place orders. Long-term contracts with the Company’s customers are primarily requirements based and do not guarantee quantities. An order forecast is generally agreed concurrently with pricing for any applicable long-term contract.

Removed

Additionally, some shipments from overseas suppliers are experiencing transportation delays due to a lack of available containers and a backlog at incoming ports of entry. Delays of overseas shipments of raw materials are having an impact on the Company’s production levels. Delays in raw material shipments continue to represent a risk to the Company.

Added

This order forecast is then typically updated periodically during the term of the underlying contract.

Removed

Although the Company feels very positive about its workforce, high wage inflation creates challenges in hiring to add to the Company’s employee base. The Company is making adjustments to pay levels and benefits to stay competitive with the labor market.

Added

Purchase orders are generally received in excess of three months in advance of delivery. 22 Results of Operations: 2023 Compared to 2022 Year Ended February 26, February 27, (Amounts in thousands, except per share amounts) 2023 2022 Increase / (Decrease) Net sales $ 54,055 $ 53,578 $ 477 1 % Cost of sales 37,582 35,661 1,921 5 % Gross profit 16,473 17,917 (1,444 ) -8 % Selling, general and administrative expenses 6,519 6,249 270 4 % Restructuring charges - 259 (259 ) -100 % Earnings from operations 9,954 11,409 (1,455 ) -13 % Interest and other income 1,078 375 703 187 % Earnings before income taxes 11,032 11,784 (752 ) -6 % Income tax provision 301 3,320 (3,019 ) -91 % Net earnings $ 10,731 $ 8,464 $ 2,267 27 % Earnings per share: Basic earnings per share $ 0.52 $ 0.41 $ 0.11 27 % Diluted earnings per share $ 0.52 $ 0.41 $ 0.11 27 % Net Sales The Company’s total net sales worldwide in 2023 were 1% higher than in 2022.

Removed

The Company continues to evaluate the impact the war in Ukraine may have on the Company’s customers and on the Company’s supply chain. 24 The war in Ukraine has not had a material impact on the Company’s results of operations, and is not expected to have a material impact.

Added

Higher costs for raw materials, supplies, freight, utilities, costs related to the new equipment trials and qualifications and higher waste costs from increased change-over resulting from supply chain challenges and uncertainties led to a decrease in gross margins. Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $270,000, or 4%, during 2023 compared to 2022.

Removed

The Company does not have any significant customers in Russia or Ukraine. The Company continues to evaluate the impact the war in Ukraine may have on the Company’s customers and on the Company’s supply chain.

Added

Such expenses, measured as percentages of sales, were 12.1% and 11.7% during 2023 and 2022, respectively.

Removed

See Note 12, “Discontinued Operations”, of the Notes to Consolidated Financial Statements elsewhere in this Report for additional information on the sale. 26 The operating results of the Electronics Business are classified, together with certain costs related to the sale, as discontinued operations, net of tax, in the Consolidated Statements of Operations.

Added

Federal rate and state income taxes, including $214,000 of additional tax due to tax deductions becoming unavailable related to stock options expiring unexercised in the 2023 fiscal year, offset by a reduction in uncertain tax positions related to the expiring statute of limitations of tax positions taken in prior years regarding the taxability of funds repatriated from the Company’s subsidiary in Singapore of $2.8 million.

Removed

The net impact of the items described above was to decrease basic and diluted earnings per share by $0.01 in 2022 and $0.07 in 2021. 2021 Compared to 2020 Year Ended February 28, March 1, (Amounts in thousands, except per share amounts) 2021 2020 Increase / (Decrease) Net sales $ 46,276 $ 60,014 $ (13,738 ) -23 % Cost of sales 33,085 41,341 (8,256 ) -20 % Gross profit 13,191 18,673 (5,482 ) -29 % Selling, general and administrative expenses 6,113 7,932 (1,819 ) -23 % Earnings from continuing operations 5,508 10,741 (5,233 ) -49 % Interest and other income 1,777 3,330 (1,553 ) -47 % Earnings from continuing operations before income taxes 7,285 14,071 (6,786 ) -48 % Income tax provision 2,093 3,866 (1,773 ) -46 % Net earnings from continuing operations 5,192 10,205 (5,013 ) -49 % Loss from discontinued operations, net of tax (328 ) (653 ) 325 -50 % Net earnings $ 4,864 $ 9,552 $ (4,688 ) -49 % Earnings per share: Basic: Continuing operations $ 0.25 $ 0.50 $ (0.25 ) -50 % Discontinued operations (0.01 ) (0.03 ) 0.02 -67 % Basic earnings per share $ 0.24 $ 0.47 $ (0.23 ) -49 % Diluted: Continuing operations $ 0.25 $ 0.50 $ (0.25 ) -50 % Discontinued operations (0.01 ) (0.03 ) 0.02 -67 % Diluted earnings per share $ 0.24 $ 0.47 $ (0.23 ) -49 % Net Sales The Company's total net sales worldwide in 2021 were 23% lower than in 2020 due primarily to the lower sales to commercial aerospace and business aircraft customers as a result of the inverse impact of the COVID-19 Pandemic on those markets, partially offset by higher military sales during 2021. 27 Gross Profit The Company’s gross profit margin, measured as a percentage of sales, decreased to 28.5% in 2021 from 31.1% in 2020.

Added

The Company’s effective income tax rate of 28.2% was higher in 2022, due to the lack of the uncertain tax position reduction as occurred in 2023.

Removed

Lower sales and production levels combined with the fixed nature of certain overhead costs lead to lower gross margins. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased by $1.8 million, or 23%, during 2021 compared to 2020. Such expenses, measured as percentages of sales, were 13.2% during both the 2021 and 2020 fiscal years.

Added

Net Earnings from Operations The Company’s net earnings from continuing operations for 2023 were $10.7 million, including the reduction in uncertain tax positions of $2.8 million and $214,000 of additional tax due to tax deductions becoming unavailable as a result of stock options expiring unexercised.

Removed

The decrease in such expenses in 2021 was due primarily to decreased travel and entertainment, salaries and lower stock option expenses, excluding stock option modification charges in 2020.

Added

The change in cash and marketable securities at February 26, 2023 compared to February 27, 2022 was primarily the result of positive operating cash flow more than offset by capital expenditures and regular quarterly dividends paid by the Company to its shareholders during 2023 and a number of additional factors.

Removed

Selling, general and administrative expenses in 2021 included $0.2 million of stock option expenses compared to $0.7 million of such expenses in 2020, including $0.2 million due to the modification of previously granted stock options.

Added

Such earnings were decreased by changes in operating assets and liabilities of $6.1 million, resulting in $6.5 million of cash provided by operating activities from continuing operations.

Removed

The Company’s earnings from continuing operations were $10.7 million in 2020, including a pre-tax stock option modification charge of $0.2 million resulting from the special dividend of $1.00 per share paid in February 2020. Interest and Other Income Interest and other income were $1.8 million and $3.3 million for 2021 and 2020, respectively.

Added

During 2023, the Company expended $1.0 million for the purchase of property, plant and equipment compared to $4.4 million during 2022 and the Company paid $8.2 million in cash dividends in 2023 and 2022.

Removed

The Company’s net earnings from continuing operations for 2020 were $10.2 million, including the stock option modification pre-tax charge of $0.2 million in connection with the special dividend of $1.00 per share paid in February 2020.

Added

Actual results may differ from these estimates under different assumptions or conditions. 29 The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its Consolidated Financial Statements.

Removed

Discontinued Operations On December 4, 2018, Park completed the previously announced sale of its Electronics Business, including manufacturing facilities in Singapore, France, California and Arizona and R&D facilities in Singapore and Arizona, to AGC Inc. for an aggregate purchase price of $145 million in cash, subject to post-closing adjustments for changes in working capital compared to the target net working capital, excluding cash in certain acquired subsidiaries and certain accrued and unpaid taxes of certain acquired subsidiaries.

Removed

The Company’s loss from discontinued operations was lower in 2021 compared to 2020 primarily as a result of exiting the facility in Fullerton California, previously used in the electronics operations, at the beginning of the Company’s third fiscal quarter of 2021.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed3 unchanged

2022 filing

2023 filing

Biggest changeThe Company generally passes changes in the costs of its raw material costs through to its customers. The Company currently does not use hedging strategies to minimize the risk of price fluctuations on commodity-based raw materials; however, the Company regularly reviews such strategies on an ongoing basis. See “Materials and Sources of Supply” in Item 1 of this Report. 35

Based on the average anticipated maturity of the investment portfolio at the end of the 2022 fiscal year, the Company does not believe that a hypothetical 10% fluctuation in short-term interest rates would have had a material impact on the consolidated results of operations or financial position of the Company.

Based on the average anticipated maturity of the investment portfolio at the end of the 2023 fiscal year, the Company does not believe that a hypothetical 10% fluctuation in short-term interest rates would have had a material impact on the consolidated results of operations or financial position of the Company.

Top changes in PARK AEROSPACE CORP's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other PKE 10-K year-over-year comparisons