UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~December~~June 1, ~~2024~~2025

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

For the transition period from ________ to__________

Commission file number 1-4415

PARK AEROSPACE CORP.

(Exact Name of Registrant as Specified in Its Charter)

New York

11-1734643

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

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

(631) 465-3600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

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

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

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 19,~~925~~855,~~243~~ 838 as of ~~January~~July 79, 2025.

PARK AEROSPACE CORP. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page Number
PART I.	FINANCIAL INFORMATION:	Page Number
PART I.	FINANCIAL INFORMATION:
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets December 1, 2024 (Unaudited) and March 3, 2024	3
	Condensed Consolidated Balance Sheets June 1, 2025 (Unaudited) and March 2, 2025	3
	Consolidated Statements of Operations 13 weeks and 39 weeks ended December 1, 2024 and November 26, 2023 (Unaudited)	4
	Condensed Consolidated Statements of Operations 13 weeks ended June 1, 2025 and June 2, 2024 (Unaudited)	4
	Consolidated Statements of Comprehensive Earnings 13 weeks and 39 weeks ended December 1, 2024 and November 26, 2023 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Earnings 13 weeks ended June 1, 2025 and June 2, 2024 (Unaudited)	5
	Consolidated Statements of Shareholders’ Equity December 1, 2024 and November 26, 2023 (Unaudited)	6
	Condensed Consolidated Statements of Shareholders’ Equity June 1, 2025 and June 2, 2024 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows 39 weeks ended December 1, 2024 and November 26, 2023 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows 13 weeks ended June 1, 2025 and June 2, 2024 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Factors That May Affect Future Results	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	2524
PART II.	OTHER INFORMATION:
Item 1.	Legal Proceedings	2625
Item 1A.	Risk Factors	2625
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2625
Item 3.	Defaults Upon Senior Securities	2625
Item 4.	Mine Safety Disclosures	2726
Item 5.	Other Information	2726
Item 6.	Exhibits	2726
EXHIBIT INDEX		2827
SIGNATURES		2928

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	December 1, 2024 (unaudited)			March 3, 2024*
	June 1, 2025 (unaudited)			March 2, 2025*
ASSETS
Current assets
Cash and cash equivalents	$	1220,~~754~~624		$	621,~~567~~621
Marketable securities (Note 3)		5744,~~288~~947			7047,~~644~~213
Accounts receivable, less allowance for credit losses of $140 and $128, respectively		9,687			12,381
Accounts receivable, less allowance for credit losses of $129 and $125, respectively		12,953			12,903
Inventories (Note 4)		106,~~592~~763			67,~~404~~213
Prepaid expenses and other current assets		2,~~243~~045			21,~~849~~344
Total current assets		9287,~~564~~332			9890,~~845~~294
Property, plant and equipment, net		21,~~479~~675			2321,~~499~~650
Operating right-of-use assets (Note 5)		~~320~~295			95308
Goodwill and other intangible assets		9,776			9,776
Other assets		831,640			9480
Total assets	$	~~124~~120,~~222~~718		$	~~132~~122,~~309~~108
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	51,~~532~~710		$	32,~~514~~513
Operating lease liability (Note 5)		3941			5340
Accrued liabilities		1,~~427~~613			1,~~986~~318
Income taxes payable		56,~~258~~764			45,~~105~~390
Total current liabilities		1210,~~256~~128			9,~~658~~261
Long-term operating lease liability (Note 5)		~~328~~307			82318
Non-current income taxes payable (Note 9)		-			5,259
Deferred income taxes (Note 9)		5,260			5,304
Deferred income taxes (Note 9)		3,034			3,222
Other liabilities		72			71
Other liabilities		1,246			1,174
Total liabilities		15,767			14,954
Total liabilities		16,864			19,395
Commitments and contingencies (Note 12)
Shareholders' equity (Note 8)
Common stock		2,096			2,096
Additional paid-in capital		170,~~731~~203			170,~~445~~265
Accumulated deficit		(4849,~~305~~969	)		(4549,~~374~~550	)
Accumulated other comprehensive loss		(~~965~~450	)		(~~2,271~~665	)
		123,557			124,896
		121,880			122,146
Less treasury stock, at cost		(16,~~199~~929	)		(1114,~~982~~992	)
Total shareholders' equity		~~107~~104,~~358~~951			~~112~~107,~~914~~154
Total liabilities and shareholders' equity	$	~~124~~120,~~222~~718		$	~~132~~122,~~309~~108

* The balance sheet at March 32, ~~2024~~2025 has been derived from the audited consolidated financial statements at that date.

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

13 Weeks Ended (Unaudited)

~~39 Weeks Ended (Unaudited)~~

December 1,

November 26,

December 1,

November 26,

June 1,

June 2,

2024

2023

2024

2023

2025

2024

Net sales

1415,~~408~~400

1113,~~639~~970

~~45,087~~

~~39,671~~

Cost of sales

10,~~580~~682

89,~~470~~871

~~32,403~~

~~27,590~~

Gross profit

34,~~828~~718

34,~~169~~099

~~12,684~~

~~12,081~~

Selling, general and administrative expenses

12,~~982~~299

12,~~804~~017

~~6,139~~

~~6,272~~

Earnings from operations

12,~~846~~419

12,~~365~~082

~~6,545~~

~~5,809~~

Storm damage charge (Note 11)

(1,098

)

Storm Damage Charge (Note 11)

(1,052

)

Interest and other income

~~290~~355

~~261~~339

~~874~~

~~724~~

Earnings from operations before income taxes

2,~~136~~774

1,~~626~~369

~~6,321~~

~~6,533~~

Income tax provision (Note 9)

~~559~~694

~~423~~376

~~1,685~~

~~1,730~~

Net earnings

12,~~577~~080

~~1,203~~993

~~4,636~~

~~4,803~~

Earnings per share (Note 7)

Basic:

Basic earnings per share

0.0810

0.0605

~~0.23~~

~~0.24~~

Basic weighted average shares

19,~~982~~919

20,~~250~~253

~~20,150~~

~~20,323~~

Diluted:

Diluted earnings per share

0.0810

0.0605

~~0.23~~

~~0.24~~

Diluted weighted average shares

2019,~~077~~968

20,~~355~~371

~~20,246~~

~~20,406~~

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Amounts in thousands)

	13 Weeks Ended (Unaudited)						~~39 Weeks Ended (Unaudited)~~
	December 1,			November 26,			December 1,			November 26,
	June 1,			June 2,
	2024			2023			2024			2023
	2025			2024
Net earnings	$	12,~~577~~080		$	~~1,203~~993		$	~~4,636~~		$	~~4,803~~
Other comprehensive earnings (loss), net of tax:
Other comprehensive earnings, net of tax:
Unrealized gains on marketable securities:
Unrealized holding gains arising during the period		~~295~~227			~~484~~258			~~1,311~~			~~1,186~~
Unrealized losses on marketable securities:
Unrealized holding losses arising during the period		(1112	)		(235	)		~~(46~~	)		~~(110~~	)
Less: reclassification adjustment for losses included in net earnings		1			8			41			239
Other comprehensive earnings		215			223
Other comprehensive earnings		285			490			1,306			1,315
Total comprehensive earnings	$	2,295		$	1,216
Total comprehensive earnings	$	1,862		$	1,693		$	5,942		$	6,118

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

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

											Accumulated
					Additional						Other
	Common Stock				Paid-in			Accumulated			Comprehensive			Treasury Stock
	Shares		Amount		Capital			Deficit			(Loss~~) Earnings~~			Shares			Amount
Balance, March 3, 2024		20,965,144	$	2,096	$	170,445		$	(45,374	)	$	(2,271	)		711,783		$	(11,982	)
Balance, March 2, 2025		20,965,144	$	2,096	$	170,265		$	(49,550	)	$	(665	)		962,476		$	(14,992	)
Net earnings		-		-		-			~~993~~2,080			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			~~223~~215			-			-
Stock-based compensation		-		-		89			-			-			-			-
Stock options exercised		-		-		(150	)		-			-			(15,000	)		228
Cash dividends ($0.125 per share)		-		-		-			(2,532	)		-			-			-
Stock-based compensation		-		-		88			-			-			-			-
Balance, June 2, 2024		20,965,144	$	2,096	$	170,534		$	(46,913	)	$	(2,048	)		711,783		$	(11,982	)
Repurchase of treasury shares		-		-		-			-			-			166,955			(2,165	)
Net earnings		-		-		-			2,066			-			-			-
Cash dividends ($0.125 per share)		-		-		-			(2,499	)		-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			798			-			-
Balance, June 1, 2025		20,965,144	$	2,096	$	170,203		$	(49,969	)	$	(450	)		1,114,431		$	(16,929	)
Stock options exercised		-		-		(9	)		-			-			(2,062	)		35
Stock-based compensation		-		-		101			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			149,633			(1,888	)
Cash dividends ($0.125 per share)		-		-		-			(2,532	)		-			-			-
Balance, September 1, 2024		20,965,144	$	2,096	$	170,626		$	(47,379	)	$	(1,250	)		859,354		$	(13,835	)
Net earnings		-		-		-			1,577			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			285			-			-
Stock-based compensation		-		-		105			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			180,547			(2,364	)
Cash dividends ($0.125 per share)		-		-		-			(2,503	)		-			-			-
Balance, December 1, 2024		20,965,144	$	2,096	$	170,731		$	(48,305	)	$	(965	)		1,039,901		$	(16,199	)

											Accumulated
					Additional						Other
	Common Stock				Paid-in			Accumulated			Comprehensive			Treasury Stock
	Shares		Amount		Capital			Deficit			(Loss~~) Earnings~~			Shares			Amount
Balance, February 26, 2023		20,965,144	$	2,096	$	169,932		$	(42,694	)	$	(4,244	)		493,934		$	(9,156	)
Balance, March 3, 2024		20,965,144	$	2,096	$	170,445		$	(45,374	)	$	(2,271	)		711,783		$	(11,982	)
Net earnings		-		-		-			~~1,854~~993			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			~~716~~223			-			-
Stock-based compensation		-		-		~~218~~89			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			129,654			(1,669	)
Cash dividends ($0.125 per share)		-		-		-			(2,559	)		-			-			-
Balance, May 28, 2023		20,965,144	$	2,096	$	170,150		$	(43,399	)	$	(3,528	)		623,588		$	(10,825	)
Net earnings		-		-		-			1,746			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			110			-			-
Stock-based compensation		-		-		104			-			-			-			-
Repurchase of treasury shares		-		-		-			-			-			91,445			(1,211	)
Cash dividends ($0.125 per share)		-		-		-			(2,531	)		-			-			-
Balance, August 27, 2023		20,965,144	$	2,096	$	170,254		$	(44,184	)	$	(3,418	)		715,033		$	(12,036	)
Net earnings		-		-		-			1,203			-			-			-
Unrealized gain on marketable securities, net of tax		-		-		-			-			490			-			-
Stock options exercised		-		-		(5	)		-			-			(875	)		14
Stock-based compensation		-		-		103			-			-			-			-
Cash dividends ($0.125 per share)		-		-		-			(2,532	)		-			-			-
Balance, November 26, 2023		20,965,144	$	2,096	$	170,352		$	(45,513	)	$	(2,928	)		714,158		$	(12,022	)
Balance, June 2, 2024		20,965,144	$	2,096	$	170,534		$	(46,913	)	$	(2,048	)		711,783		$	(11,982	)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	39 Weeks Ended (Unaudited)
	13 Weeks Ended (Unaudited)
	December 1,			November 26,
	June 1,			June 2,
	2024			2023
	2025			2024
Cash flows from operating activities:
Net earnings	$	42,~~636~~080		$	~~4,803~~993
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Non-cash storm damage charge		~~887~~-			-887
Depreciation and amortization		~~1,391~~456			~~984~~439
Stock-based compensation		~~295~~88			~~425~~89
Provision for credit losses		12			12
Allowance for credit losses		4			-
Deferred income taxes		(~~188~~44	)		~~(97~~18	)
Amortization of bond premium		~~115~~1			~~255~~49
Loss on sale of marketable securities		57			184
Changes in operating assets and liabilities		(995	)		(2,898	)
Changes in operating assets and liabilities		(3,457	)		(7,452	)
Net cash provided by (used in) operating activities		1,590			(423	)
Net cash provided by (used in) operating activities		3,748			(886	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(~~258~~481	)		(~~481~~12	)
Purchases of marketable securities		(72,~~772~~440	)		(62,~~702~~937	)
Proceeds from sales and maturities of marketable securities		224,~~262~~920			383,~~966~~418
Net cash provided by investing activities		141,~~232~~999			~~31,783~~469
Cash flows from financing activities:
Dividends paid		(72,~~567~~499	)		(282,~~093~~532	)
Proceeds from exercise of stock options		2678			12-
Purchase of treasury stock		(42,~~252~~165	)		~~(2,880~~-	)
Net cash used in financing activities		(114,~~793~~586	)		(302,~~961~~532	)
Increase (decrease) in cash and cash equivalents:		6,187			(64	)
Decrease in cash and cash equivalents		(997	)		(2,486	)
Cash and cash equivalents, beginning of period		621,~~567~~621			46,~~237~~567
Cash and cash equivalents, end of period	$	1220,~~754~~624		$	4,~~173~~081
Supplemental disclosure of non-cash activities:
Addition to operating right-of-use asset from new operating lease liability	$	267		$	-
Supplemental cash flow information:
Cash paid during the period for income taxes, net of refunds	$	~~5,748~~-		$	~~5,898~~-

See Notes to Condensed Consolidated Financial Statements (Unaudited).

PARK AEROSPACE CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

1. ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

The Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Shareholders’ Equity as of ~~December~~June 1, ~~2024~~2025, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024, and the Condensed Consolidated Statements of Cash Flows for the 3913-week ~~weeks~~periods then ended have been prepared by Park Aerospace Corp. (the “Company”), without audit. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at ~~December~~June 1, ~~2024~~2025 and the results of operations and cash flows for all periods presented. The Condensed Consolidated Statements of Operations are not necessarily indicative of the results to be expected for the full fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 32, ~~2024~~2025. There have been no significant changes to such accounting policies during the 3913 weeks ended ~~December~~June 1, ~~2024~~2025.

2.	FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

Fair value measurements are broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The fair value of the Company’s cash and cash equivalents, accounts receivable, and accounts payable ~~and accrued liabilities~~ approximate their carrying value due to their short-term nature. Certain assets and liabilities of the Company are required to be recorded at fair value on either a recurring or non-recurring basis. On a recurring basis, the Company records its marketable securities at fair value using Level 1 or Level 2 inputs. (See Note 3).

The Company’s non-financial assets measured at fair value on a non-recurring basis include goodwill and any long-lived assets written down to fair value. To measure fair value of such assets, the Company uses Level 3 inputs consisting of techniques including an income approach and a market approach. The income approach is based on a discounted cash flow analysis and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the discounted cash flow analysis require the exercise of significant judgment, including judgment about appropriate discount rates, terminal values, growth rates and the amount and timing of expected future cash flows. With respect to goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that fair value is less than carrying value. If, based on that assessment, the Company believes it is more likely than not that fair value is less than carrying value, a goodwill impairment test is performed. ~~There have been no changes in events or circumstances which required impairment charges to be recorded during the 13 weeks and 39 weeks ended December 1, 2024.~~

3.	MARKETABLE SECURITIES

All marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses, net of tax, included in comprehensive earnings. Realized gains and losses, amortization of premiums and discounts, and interest and dividend income are included in interest and other income in the Condensed Consolidated Statements of Operations. The costs of securities sold are based on the specific identification method.

The following is a summary of available-for-sale securities:

December 1, 2024

June 1, 2025

Total

Level 1

Level 2

Level 3

U.S. Treasury and other government securities

5744,~~288~~947

Total marketable securities

5744,~~288~~947

	March 3, 2024
	March 2, 2025
	Total		Level 1		Level 2		Level 3
U.S. Treasury and other government securities	$	6747,~~210~~213	$	6747,~~210~~213	$	-	$	-
U.S. corporate debt securities		3,434		3,434		-		-
Total marketable securities	$	47,213	$	47,213	$	-	$	-
Total marketable securities	$	70,644	$	70,644	$	-	$	-

The following table shows the amortized cost basis of, and gross unrealized gains and losses on, the Company’s available-for-sale securities:

	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses
December 1, 2024:
June 1, 2025:
U.S. Treasury and other government securities	$	5845,~~610~~564	$	2811	$	~~1,350~~628
Total marketable securities	$	5845,~~610~~564	$	2811	$	~~1,350~~628
March 3, 2024:
March 2, 2025:
U.S. Treasury and other government securities	$	7048,~~320~~124	$	-24	$	~~3,110~~935
U.S. corporate debt securities		3,435		-		1
Total marketable securities	$	48,124	$	24	$	935
Total marketable securities	$	73,755	$	-	$	3,111

The estimated fair values of such securities at ~~December~~June 1, ~~2024~~2025 by contractual maturity are shown below:

Due in one year or less	$	4436,~~584~~291
Due after one year through five years		128,~~704~~656
	$	5744,~~288~~947

4.	INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company writes down its inventory for estimated obsolescence or unmarketability based upon the age of the inventory and assumptions about future demand for the Company’s products and market conditions. Work-in-process and finished goods inventories cost valuations include direct material costs as well as a portion of the Company’s overhead expenses. The Company’s overhead expenses that are applied to its finished goods inventories are based on actual expenses related to the procurement, storage, shipment and production of the finished goods. Inventories consisted of the following:

	December 1,		March 3,
	June 1,		March 2,
	2024		2024
	2025		2025
Inventories:
Raw materials	$	84,~~985~~346	$	54,~~047~~768
Work-in-process		~~884~~786		~~397~~727
Finished goods		~~723~~1,631		~~960~~1,718
	$	106,~~592~~763	$	67,~~404~~213

5.	LEASES

The Company has operating leases related to land, office space, warehouse space and equipment. All of the Company’s leases have been assessed to be operating leases. Renewal options are included in the lease ~~term~~terms to the extent the Company is reasonably certain to exercise the ~~option~~options. The exercise of lease renewal options is at the Company’s sole discretion. The incremental borrowing rate represents the Company’s ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging from one year to ten years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing or exercise its available renewal options.

Future minimum lease payments under non-cancellable operating leases as of ~~December~~June 1, ~~2024~~2025 are as follows:

Fiscal Year:
2025	$	14
2026	$	43
2026		57
2027		59
2028		61
2029		65
Thereafter		202
2030		59
Total undiscounted operating lease payments		458
Thereafter		143
Less imputed interest		(91	)
Total undiscounted operating lease payments		430
Present value of operating lease payments	$	367
Less imputed interest		(82	)
Present value of operating lease payments	$	348

The above payment schedule includes renewal options that the Company is reasonably likely to exercise. Leases with an initial term of 12 months or less are not recorded on the Company’s ~~Condensed~~condensed ~~Consolidated~~consolidated ~~Balance~~balance ~~Sheets~~sheet. The Company recognizes lease expense for these leases on a straight-line basis over the terms of the leases.

For the 13 weeks ~~and~~ended 39June ~~weeks~~1, ~~ended~~2025 ~~December~~and 1June 2, 2024, the Company’s operating lease expenses were $1617 and $4715, respectively. Cash payments for the 13 weeks ended June 1, 2025 and June 2, 2024 of $4014 and $13, respectively, pertaining to operating leases, are reflected in the ~~Condensed~~cash ~~Consolidated~~flow ~~Statements~~statement ~~of Cash Flows~~ under cash flows from operating activities.

The following table sets forth the right-of-use assets and operating lease liabilities as of ~~December~~June 1, ~~2024~~2025 and March 2, 2025:

Operating right-of-use assets	$	320
	June 1,		March 2,
Operating lease liabilities	$	39
	2025		2025
Long-term operating lease liabilities		328
Operating right-of-use assets	$	295	$	308
Total operating lease liabilities	$	367
Operating lease liabilities	$	41	$	40
Long-term operating lease liabilities		307		318
Total operating lease liabilities	$	348	$	358

The Company’s weighted average remaining lease term for its operating leases is 6.5 years.

In the second quarter of fiscal year 2025, the Company entered into an extension of an expiring lease. The extension resulted in an additional right-of-use asset and lease liability of $267. An incremental borrowing rate of 4.90% was used to determine the right-of-use asset and related liability.

At June 1, 2025 and March 2, 2025, the Company’s weighted average remaining lease terms for its operating leases were 6.14 years and 6.34 years, respectively, and the weighted average borrowing rates for its operating leases were 4.97% and 4.97%, respectively.

6.	STOCK-BASED COMPENSATION

As of ~~December~~June 1, ~~2024~~2025, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan. The 2018 Plan was adopted by the Board of Directors of the Company on May 8, 2018, approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018, and amended by the shareholders of the Company on July 18, 2024 and provides for the grant of options to purchase up to 1,550,000 shares of common stock of the Company. Prior to the 2018 Plan, the Company had the 2002 Stock Option Plan (the “2002 Plan”) which had been approved by the Company’s shareholders and provided for the grant of stock options to directors and key employees of the Company. All options granted under the 2018 Plan and 2002 Plan have exercise prices equal to the fair market value of the underlying common stock of the Company at the time of grant which, pursuant to the terms of such Plans, is the reported closing price of the common stock on the New York Stock Exchange on the date preceding the date the option is granted. Options granted under the Plans become exercisable 25% one year after the date of grant, with an additional 25% exercisable each succeeding anniversary of the date of grant, and expire 10 years after the date of grant. Upon termination of employment or service as a director, all options held by the optionee that have not previously become exercisable shall terminate and all other options held by such optionee may be exercised, to the extent exercisable on the date of such termination, for a limited time after such termination. Any shares of common stock subject to an option under the 2018 Plan, which expires or is terminated unexercised as to such shares, shall again become available for issuance under the 2018 Plan.

~~During the 39 weeks ended December 1, 2024, the Company granted options under the 2018 Plan to purchase a total of 135,100 shares of common stock to its directors and certain of its employees.~~ The future compensation expense to be recognized in earnings before income taxes isfor ~~$434~~options ~~and~~outstanding ~~will~~at beJune ~~recorded~~1, on2025 ~~a straight-line basis over the requisite service period. The weighted average fair value of the granted options~~ was $~~3.21~~596, ~~per~~which ~~share~~is ~~using~~expected ~~the~~to ~~Black-Scholes~~be ~~option~~recognized ~~pricing~~ratably ~~model~~over ~~with~~a ~~the~~weighted ~~following~~average ~~assumptions:~~vesting ~~risk-free~~period ~~interest rate~~ of ~~4.23%-4.24%; expected volatility factor of 28.7%-29.~~1~~%; expected dividend yield of 3~~.~~77%;~~18 ~~and estimated option term of 5.8-8.6~~ years.

The ~~risk-free~~following ~~interest~~is ~~rates~~a ~~were~~summary ~~based on U.S. Treasury rates at the date~~ of ~~grant~~option ~~with~~activity ~~maturity~~for ~~dates approximately equal to~~ the estimated terms of the options at the date of the grant. Volatility factors were based on historical volatility of the Company’s common stock. The expected dividend yields were based on the regular quarterly cash dividend per share most recently declared by the Company and on the exercise price of the options granted during the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024. The estimated term of the options was based on evaluations of the historical and expected future employee exercise behavior.~~2025:

During the 2024 fiscal year, the Company recorded non-cash charges of $109 related to the modification of previously granted employee stock options resulting from the $1.00 per share special cash dividend paid by the Company in April 2023.

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value

Balance, March 2, 2025		718,950		$	12.15
Granted		-			-
Exercised		(15,000	)		5.23
Terminated or expired		(5,574	)		12.74
Balance, June 1, 2025		698,376		$	12.30		6.35	$	1,003
Vested and exercisable, June 1, 2025		388,276		$	11.93		5.04	$	726

The future compensation expense to be recognized in earnings before income taxes for options outstanding at December 1, 2024 was $789, which is expected to be recognized ratably over a weighted average vesting period of 1.45 years.

The following is a summary of option activity for the 39 weeks ended December 1, 2024:

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance, March 3, 2024		708,325		$	11.53
Granted		135,100			13.26
Exercised		(2,062	)		11.97
Terminated or expired		(7,587	)		12.74
Balance, December 1, 2024		833,776		$	11.80		5.91	$	2,926
Vested and exercisable, December 1, 2024		518,369		$	11.22		4.34	$	2,119

7.	EARNINGS PER SHARE

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potentially dilutive securities outstanding during the period. Stock options are the Company’s only potentially dilutive securities; and the number of dilutive options is computed using the treasury stock method.

The following table sets forth the calculation of basic and diluted earnings per share:

13 Weeks Ended

~~39 Weeks Ended~~

December 1, 2024

November 26, 2023

December 1, 2024

November 26, 2023

June 1, 2025

June 2, 2024

Net earnings

12,~~577~~080

~~1,203~~993

~~4,636~~

~~4,803~~

Weighted average common shares outstanding for basic EPS

19,~~982~~919

20,~~250~~253

~~20,150~~

~~20,323~~

Net effect of dilutive options

9549

~~105~~118

Weighted average shares outstanding for diluted EPS

2019,~~077~~968

20,~~355~~371

~~20,246~~

~~20,406~~

Basic earnings per share

0.0810

0.0605

~~0.23~~

~~0.24~~

Diluted earnings per share

0.0810

0.0605

~~0.23~~

~~0.24~~

Potentially dilutive securities, which were not included in the computation of diluted earnings per share, because either the effect would have been anti-dilutive or the options’ exercise prices were greater than the average market price of the common stock, were 75335,~~000~~338 and ~~72,000~~0 for the 13 weeks ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023, respectively, and 53,000 and 126,000 for the 39 weeks ended December 1,~~ 2024 ~~and November 26~~, ~~2023,~~ respectively.

8.	SHAREHOLDERS’ EQUITY

On May 23, 2022, the Company announced that its Board of Directors authorized the Company’s purchase, on the open market and in privately negotiated transactions, of up to 1,500,000 additional shares of its common stock. This authorization ~~supersedes~~superseded any unused prior Board of Directors’ authorizations to purchase shares of the Company’s ~~common~~Common ~~stock~~Stock. The Company purchased ~~180~~166,~~547~~955 and 0 shares, ~~respectively, during the 13 weeks ended December 1, 2024 and November 26, 2023 and 330,180 and 221,099 shares, respectively,~~ of its common stock during the 3913 weeks ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024, respectively. As a result, the Company is authorized to purchase up to a total of ~~948~~781,~~721~~766 shares of its common stock, representing approximately 43.89% of the Company’s 19,~~925~~855,~~243~~ 838 total outstanding shares as of the close of business on ~~January~~July 79, 2025. There is no assurance the Company will purchase any shares pursuant to this Board of Directors’ authorization. Shares purchased by the Company, if any, will be retained as treasury stock and will be available for use under the Company’s stock option plan and for other corporate purposes.

9.	INCOME TAXES

For the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025, the Company recorded an income tax ~~provisions~~provision ~~from operations~~ of $~~559 and $1~~694,~~685,~~ ~~respectively,~~ which included a discrete income tax ~~provisions~~provision of $~~19 and $60, respectively~~(28). For the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024, the Company recorded an income tax ~~provisions~~provision ~~from operations~~ of $~~423 and $1~~376,~~730,~~ ~~respectively,~~ which included a discrete income tax ~~provisions~~provision of $~~25 and $78, respectively~~19.

The Company’s effective tax ~~rates~~rate for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 ~~were~~was ~~income tax provisions of 26~~25.20% ~~and 26.7%, respectively,~~ compared to ~~income tax provisions of 30~~27.75% ~~and 28.2%~~ in the comparable prior ~~periods~~year period. The effective tax ~~rates~~rate for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 ~~were~~was higher than the U.S. statutory rate of 21% primarily due to state and local taxes ~~and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits~~. The effective ~~rates~~tax rate for the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024 ~~were~~was higher than the U.S. statutory rate of 21% primarily due to state and local taxes and discrete income tax provisions for the accrual of interest related to unrecognized tax benefits.

~~Notwithstanding~~On July 4, 2025, President Trump signed into law the UOne Big Beautiful Bill Act ("OBBBA").S. ~~taxation~~The OBBBA makes permanent key elements of the ~~deemed~~Tax ~~repatriated~~Cuts ~~earnings~~and asJobs aAct, ~~result~~including of100% bonus deprecation, domestic research cost expensing, and the ~~mandatory~~business ~~one-time~~interest ~~transition~~expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on ~~the~~deferred ~~accumulated~~tax ~~untaxed~~balances ~~earnings~~to ofbe ~~foreign~~recognized ~~subsidiaries~~in ofthe Uperiod in which the legislation is enacted.S. ~~shareholders~~Consequently, ~~included~~as inof the ~~2017~~date ~~Tax~~of ~~Cuts~~enactment, and ~~Jobs~~during ~~Act~~the three months ended August 31, 2025, the Company ~~intends~~will toidentify ~~indefinitely~~any ~~invest~~changes ~~approximately~~required ~~$25~~to ~~million~~its offinancial ~~undistributed~~statements ~~earnings~~as ~~outside~~a result of the UOBBBA.S. IfThe ~~these~~Company ~~future~~is ~~earnings~~still ~~are~~evaluating ~~repatriated~~the toimpact of the ~~U.S.,~~OBBBA orand if the ~~Company~~results ~~determines~~of such ~~earnings~~evaluations will be ~~remitted~~reflected inon the ~~foreseeable future, the~~ Company's ~~may~~Form be10-K ~~required~~for tothe ~~accrue~~year ~~U.S.~~ended ~~deferred~~March ~~taxes~~1, ~~on such earnings~~2026.

10.

GEOGRAPHIC REGIONS

The Company’s products are sold to customers in North America, Asia and Europe. The Company’s manufacturing facility is located in Kansas. Sales are attributed to geographic regions based upon the region in which the materials were delivered to the customer. All of the Company’s long-lived assets are located in North America.

14Financial information regarding the Company’s operations by geographic region is as follows:

Financial information regarding the Company’s continuing operations by geographic region is as follows:

	13 Weeks Ended
	June 1, 2025		June 2, 2024

Net Sales:

North America	$	14,315	$	11,986
Asia		674		719
Europe		411		1,265
Total net sales	$	15,400	$	13,970

	13 Weeks Ended				39 Weeks Ended
	December 1, 2024		November 26, 2023		December 1, 2024		November 26, 2023
Sales:
North America	$	13,316	$	10,255	$	40,586	$	35,212
Asia		491		567		1,386		1,109
Europe		601		817		3,115		3,350
Total sales	$	14,408	$	11,639	$	45,087	$	39,671

11.

STORM DAMAGE CHARGE

The Company recorded a charge of $1,~~098~~052 for storm damage in the 3913 weeks ended ~~December~~June 12, 2024.

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transitioned the area. None of the Company’s manufacturing lines or equipment were damaged by the storm. Although the building structures ~~are~~were secure, the roofs on all three buildings in the Company’s Newton, Kansas campus ~~will~~were ~~ultimately~~damaged ~~need~~and torequired besignificant ~~replaced~~repairs. Also, multiple specialty HVAC units were damaged or destroyed. These specialty HVAC units are necessary to control the temperature and humidity in certain manufacturing areas, quality laboratories and R&D laboratories, which is required by certain specifications and certifications the Company is subject to. The Company’s isproduction ~~currently~~lines ~~working~~were ~~with~~returned ~~multiple~~to ~~contractors~~full onproduction ~~site~~within totwo ~~remediate~~weeks of the ~~damage~~storm.

~~Although~~The ~~the~~ Company isdid ~~still~~not inlose ~~the~~any ~~process~~sales offor ~~remediating~~ the ~~damage,~~2025 ~~the~~fiscal ~~Company’s~~year; however, ~~production~~$1.8 ~~lines~~million ~~were returned to full production within two weeks~~ of ~~the~~sales ~~storm.~~originally ~~The~~planned ~~Company is employing certain temporary measures in order~~ to ~~return~~be ~~its~~delivered ~~production~~could ~~lines~~not tobe ~~full~~delivered ~~service,~~before ~~including~~ the ~~use~~end of ~~temporary~~the ~~HVAC~~first ~~equipment,~~quarter ~~but~~ended itJune ~~will~~2, ~~take~~2024 ~~the~~due ~~Company several months~~ to ~~permanently~~storm ~~repair~~related ~~or replace all of the damaged facilities and infrastructure equipment~~delays.

The Company does not anticipate the loss of any sales for the 2025 fiscal year.

The Company paid its employees for the days immediately following the storm despite many not being able to work while others worked on the clean-up of the storm damage to the facilities. The Company incurred $78 of payroll and related costs for lost production time and employees working on clean-up.

The charge recorded by the Company ~~includes~~in fiscal 2025 included an asset damage charge, emergency services by outside contractors, rental of temporary HVAC units and the cost of employee downtime or time spent on the clean-up of the storm damage to the facilities. ~~Additional~~There ~~costs~~were ~~will~~no besuch ~~recorded~~charges in ~~future~~fiscal ~~periods as additional work is needed and performed~~2026.

The Company has insurance coverage for wind damage with a deductible of approximately $2.5 million. The cost of the repairs from the storm damage will be less than this deductible and, as such, the Company will not have an insurance recovery related to the damage.14

1512. COMMITMENTS AND CONTINGENCIES

12. CONTINGENCIES

Litigation

The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. 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. The Company believes that the ultimate disposition of such proceedings, lawsuits and claims will not have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or financial position of the Company.

Environmental Contingencies

The Company and certain of its subsidiaries have been named by the Environmental Protection Agency (the “EPA”) or a comparable state agency under the Comprehensive Environmental Response, Compensation and Liability Act (the “Superfund Act”) or similar state law as potentially responsible parties in connection with alleged releases of hazardous substances at three sites.

Under the Superfund Act and similar state laws, all parties who may have contributed any waste to a hazardous waste disposal site or contaminated area identified by the EPA or comparable state agency may be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of hazardous waste. In the case of the Company’s subsidiaries, generally the waste was removed from their manufacturing facilities and disposed at waste sites by various companies which contracted with the subsidiaries to provide waste disposal services. Neither the Company nor any of its subsidiaries have been accused of or charged with any wrongdoing or illegal acts in connection with any such sites. The Company believes it maintains an effective and comprehensive environmental compliance program.

The insurance carriers which provided general liability insurance coverage to the Company and its subsidiaries for the years during which the Company’s subsidiaries’ waste was disposed at these three sites have in the past reimbursed the Company and its subsidiaries for 100% of their legal defense and remediation costs associated with two of these sites.

The Company does not record environmental liabilities and related legal expenses for which the Company believes that it and its subsidiaries have general liability insurance coverage for the years during which the Company’s subsidiaries’ waste was disposed at two sites for which certain subsidiaries of the Company have been named as potentially responsible parties. Pursuant to such general liability insurance coverage, three insurance carriers reimburse the Company and its subsidiaries for 100% of the legal defense and remediation costs associated with the two sites.

Included in selling, general and administrative expenses are charges for actual expenditures and accruals, based on estimates, for certain environmental matters described above. The Company accrues estimated costs ~~asso‐ciated~~associated with known environmental matters when such costs can be reasonably estimated and when the outcome appears probable. The Company believes that the ultimate disposition of known environmental matters will not have a material adverse effect on the Company’s results of operations, cash flows or financial position.

Commitments

On March 27, 2025, Park and ArianeGroup SAS entered into an agreement under which Park would advance funds to ArianeGroup SAS against future purchases of C2®B product in the total amount of €4,587 payable in three installments in 2025, 2026, and 2027. The advance would be paid as follows: €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 to be paid in the first quarter of fiscal 2027 (approximately $2,200 based on July 3, 2025 exchange rates) and €1,376 to be paid in the first quarter of fiscal 2028 (approximately $1,600 based on July 3, 2025 exchange rates). These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup SAS, of additional manufacturing equipment for ArianeGroup SAS’ production of C2®B product. Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost of €36,000. The Company had a remaining advance of $1,564 recorded in Other Assets on the Condensed Consolidated Balance Sheet at June 1, 2025.

13.

OPERATING SEGMENT

The Company operates in a single segment. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM assesses the performance of this reportable segment and allocates resources on a consolidated basis using the entity-wide revenues and expense information reported on the Condensed Consolidated Statements of Operations. The primary measure of segment profit is consolidated net income as reported on the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Condensed Consolidated Balance Sheets as total assets.

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

General:

Park Aerospace Corp. (“Park” or the “Company”) 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 ~~(Aeroadhere®)~~ and lightning strike protection materials ~~(Electroglide®)~~. 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 are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (~~UAVs~~“UAV”s commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft. Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications. As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low volume tooling for the aerospace industry. Target markets for Park’s composite parts and structures (which include Park’s proprietary composite ~~SigmaStrutTM~~Sigma StrutTM and ~~AlphaStrutTM~~Alpha StrutTM product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft.

Financial Overview

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transitioned the area. None of the Company’s manufacturing lines or equipment were damaged by the storm. ~~Although~~The ~~the building structures are secure, the~~ roofs on ~~two~~all ~~of the~~ three buildings in the Company’s Newton, Kansas campus ~~will~~required ~~need significant~~ repairs ~~and~~or ~~the roof on one building will need to be replaced~~replacement. Also, multiple specialty HVAC units were damaged or destroyed. ~~These~~ The ~~specialty~~Company ~~HVAC~~recorded ~~units~~a ~~are~~charge ~~necessary~~of to$1.1 ~~control~~million ~~the temperature and humidity~~ in ~~certain~~the ~~manufacturing~~13 ~~areas,~~weeks ~~quality~~ended ~~laboratories~~June ~~and R&D laboratories~~2, as2024 ~~required~~related byto ~~certain~~the ~~specifications~~damage and ~~certifications~~related ~~the~~repair ~~Company~~and isdowntime ~~subject to~~costs. ~~The~~ ~~Company~~There iswere ~~currently~~no ~~working~~corresponding ~~with~~charges ~~multiple~~in ~~contractors~~the on13 ~~site~~weeks toended ~~remediate~~June ~~the~~1, ~~damage~~2025.

~~Although~~The ~~the~~ Company's istotal ~~still~~net sales in the ~~process~~13 ofweeks ~~remediating~~ended ~~the~~June ~~damage~~1, ~~the~~2025 ~~Company’s~~were ~~production~~$15.4 ~~lines~~million ~~are~~compared ~~all~~to ~~fully operational~~$14. ~~The~~0 ~~Company~~million ~~is employing certain temporary measures~~ in ~~order to keep its production lines operating at full service, including~~ the ~~use~~13 ofweeks ~~temporary~~ended ~~HVAC~~June ~~equipment~~2, ~~but~~2024. itThe ~~will~~increase ~~take~~in ~~the~~sales ~~Company~~was ~~several~~primarily ~~months~~due to ~~permanently~~the ~~repair~~impact oron ~~replace~~disruptions ~~all~~in ~~the~~production ~~damaged facilities~~ and ~~infrastructure~~shipping ~~equipment. The~~resulting ~~Company~~from ~~expects~~the ~~all~~storm ~~repairs~~damage tothat beoccurred ~~completed~~late in the first quarter of the 2025 fiscal year ~~2026~~. The Company ~~has~~expected ~~recorded~~to ahave ~~charge~~an ofadditional $1.18 million in sales in the 3913 weeks ended ~~December~~June 12, 2024 ~~related~~that did not ship due to the ~~damage~~disruption ~~and~~in ~~related~~operations ~~repair~~resulting ~~and~~from ~~downtime~~the ~~costs~~storm.

The Company'’s ~~net~~gross ~~sales~~profit inmargins, ~~the~~measured 13as ~~weeks~~percentages ~~and~~of 39sales, ~~weeks~~were ~~ended~~30.6% ~~December~~in 1,the ~~2024~~13 ~~were~~weeks ~~$14.4~~ended ~~million~~June ~~and $45.~~1 ~~million~~, ~~respectively,~~2025 compared to ~~$11~~29.63% ~~million and $39.7 million, respectively,~~ in the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024. ~~Sales~~The higher gross profit margin for the 13 weeks ended ~~December~~June 1, ~~2024~~2025 ~~were~~was ~~higher~~primarily ~~than in the comparable period of the prior fiscal year~~ due to higher sales tovolume in the ~~commercial~~13 ~~aerospace~~weeks ~~and~~ended ~~business~~June ~~aircraft~~1, ~~markets~~2025 ~~while~~noted ~~sales~~above ~~for~~and, ~~the~~to 39a ~~weeks~~lesser ~~ended~~extent, ~~December~~lower 1waste, ~~2024~~partially ~~were~~offset ~~higher~~by ~~than~~ the 39costs ~~weeks~~related ~~ended~~to ~~November~~bringing ~~23,~~up ~~2023~~new ~~due~~manufacturing lines to ~~higher~~ramp ~~sales~~up ~~from~~capacity ~~the~~in ~~commercial~~preparation ~~aerospace,~~for ~~business~~increases ~~aircraft~~in ~~and~~customer ~~military~~program ~~markets~~volumes.

The Company’s earnings from operations before income taxes and net earnings increased 102.6% and 109.5%, respectively, in the 13 weeks ended June 1, 2025 compared to the 13 weeks ended June 2, 2024, primarily as a result of the negative impact of the storm damage that occurred in the 13 weeks ended June 2, 2024. The 13 weeks ended June 1, 2025 were also negatively impacted by higher salaries, travel expenses, legal and professional fees and higher labor costs related to higher headcount.

The Company’s ~~gross~~continues ~~profit~~to inexperience ~~the~~inflation ~~13 weeks ended December 1, 2024 was higher than the gross profit~~ in ~~the~~costs ~~prior~~of ~~year’s~~raw ~~comparable~~materials ~~period~~and ~~due~~supplies, tofreight ~~higher~~costs ~~sales~~and ~~levels~~other incosts ~~the~~and 13expenses. ~~weeks~~In ~~ended December 1~~addition, ~~2024 compared to~~ the ~~comparable~~Company ~~period~~has inalso ~~the~~been ~~prior~~impacted ~~year partially offset~~ by athe ~~less~~increase ~~favorable~~in ~~product~~global ~~mix,~~tariffs. ~~higher~~The ~~labor~~impact ~~costs due to ramping up capacity ahead~~ of ~~customer~~inflation ~~program volume increases, higher depreciation~~ and ~~higher~~tariffs ~~costs~~on ~~for~~the ~~raw materials, supplies, and freight resulting from inflationary trends. The~~ Company’s ~~gross~~profits ~~profit~~has inbeen ~~the~~largely 39mitigated ~~weeks~~by ~~ended December 1, 2024 was higher than~~ the ~~gross profit in the prior year~~Company’s ~~comparable~~ability ~~period due~~ to ~~the~~adjust ~~higher~~pricing ~~sales~~for ~~levels~~a ~~partially~~large ~~offset~~portion byof aits ~~less favorable~~ sales ~~mix~~to ~~and~~pass the ~~higher~~impact ~~costs~~of ~~mentioned~~inflation ~~above~~through to its customers.

The Company’s gross profit margins, measured as percentages of sales, were 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024 compared to 27.2% and 30.5%, respectively, in the 13 weeks and 39 weeks ended November 26, 2023. The lower gross profit margins for the 13 and 39 weeks ended December 1, 2024 compared to the prior year’s comparable periods were primarily due to a less favorable sales mix, as well as the higher costs mentioned above.

The Company’s earnings before income taxes and net earnings increased 31.4% and 31.1%, respectively, in the 13 weeks ended December 1, 2024 compared to the 13 weeks ended November 26, 2023, primarily as a result of higher sales, partially offset by an unfavorable sales mix, the higher costs mentioned above as well as higher selling, general and administrative expenses.

The Company’s earnings before income taxes and net earnings for the 39 weeks ended December 1, 2024 decreased slightly compared to the 39 week period ended November 26, 2023. The increase from higher sales was offset by less favorable sales mix, the higher costs mentioned above as well as the additional expenses incurred due to the damage from the storm in the first quarter of the fiscal year.

The Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses. 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.

Programs in which the Company participates as a supplier are, in some cases, experiencing supply chain issues from other suppliers to the programs that could result in delays in production for certain customers of the Company. The Company’s sales may be impacted by these supply chain challenges its customers are experiencing from other suppliers.

~~While~~The ~~the~~Company ~~wars~~has ina ~~Ukraine~~number ~~and~~of ~~the~~long-term ~~Middle~~contracts ~~East~~pursuant ~~have~~to ~~had~~which acertain ~~negative~~of ~~impact~~its oncustomers, ~~the~~some ~~Company’s results~~ of ~~operations~~which ~~due~~represent toa ~~delayed~~substantial ~~shipments,~~portion of the Company’s ~~may~~revenue, ~~experience~~places anorders. ~~increase~~Long-term incontracts ~~future~~with ~~sales~~the ~~due~~Company’s tocustomers ~~increases~~are inprimarily ~~spending~~requirements-based ~~worldwide on missile defense systems~~ and ~~other~~do not ~~defense~~guarantee ~~programs~~quantities. ~~The~~An ~~Company~~order ~~does~~forecast ~~not~~is ~~have~~generally ~~any~~agreed ~~significant~~concurrently ~~customers~~with inpricing ~~Russia~~for orany ~~Ukraine~~applicable ~~but~~long-term ~~does~~contract. ~~have~~This ~~customers~~order inforecast ~~Israel.~~is ~~The~~then ~~Company~~typically ~~has~~updated ~~experienced~~periodically ~~some~~during ~~increases~~the interm ~~raw~~of ~~material~~the ~~costs~~contract. ~~from~~Purchase ~~overseas~~orders ~~suppliers~~are ~~due~~generally toreceived by the ~~impacts~~Company ofmore ~~the~~than ~~wars~~three months in ~~Ukraine~~advance ~~and~~of ~~the Middle East~~delivery.

~~The~~Under ~~Company has~~ a ~~long-term~~Business ~~contract~~Partner ~~pursuant~~Agreement towith ~~which~~ArianeGroup ~~one~~SAS of ~~its~~Les ~~customers~~Mureaux, ~~which~~France, ~~represents~~Park ais ~~substantial~~the ~~portion~~exclusive ofNorth ~~the~~American ~~Company~~distributor of ArianeGroup’s ~~revenue,~~RAYCARB ~~places~~C2®B ~~orders~~NG proprietary product. RAYCARB ~~The~~C2®B ~~long-term~~NG ~~contract~~is ~~with~~used ~~the~~to ~~customer~~produce isablative ~~requirements~~composite ~~based~~materials ~~and~~for ~~does~~critical ~~not~~rocketry ~~guarantee~~and ~~quantities~~missile systems. AnPark ~~order~~is ~~forecast~~a long-term customer of ArianeGroup and ~~pricing~~uses ~~were~~ArianeGroup’s ~~agreed~~RAYCARB ~~upon~~C2®B NG product in the ~~contract~~production of many of Park’s key ablative materials, which Park supplies into critical rocket and missile programs. ~~However~~On March 27, ~~this~~2025, ~~order~~Park ~~forecast~~and isArianeGroup ~~updated~~entered ~~periodically~~into ~~during~~an ~~the~~agreement ~~term~~under ofwhich ~~the~~Park ~~contract.~~would ~~Purchase~~advance ~~orders~~funds ~~generally~~to ~~are~~ArianeGroup ~~received~~against byfuture purchases of C2®B product in the ~~Company~~total amount in ~~excess~~Euros of €4,587,000 payable in three ~~months~~installments in ~~advance~~2025, of2026, ~~delivery~~and by2027. ~~the~~These ~~Company~~advanced funds are to be used to help fund the ~~customer~~purchase and installation, by ArianeGroup, of additional manufacturing equipment for ArianeGroup’s production of C2®B product.

Results of Operations:

The following table sets forth the components of the ~~Consolidated~~condensed consolidated ~~Statements~~statements of ~~Operations~~operations:

	13 Weeks Ended								~~39 Weeks Ended~~
(Amounts in thousands, except per share	~~December~~June 1,		~~November~~June 262,			%			~~December 1,~~			~~November 26,~~		%
amounts)	~~2024~~2025		~~2023~~2024			Change			~~2024~~			~~2023~~		~~Change~~
Net sales	$	1415,~~408~~400	$	1113,~~639~~970			2310.82	%	$	~~45,087~~		$	~~39,671~~		~~13.7~~	%
Cost of sales		10,~~580~~682		89,~~470~~871			248.92	%		~~32,403~~			~~27,590~~		~~17.4~~	%
Gross profit		34,~~828~~718		34,~~169~~099			2015.81	%		~~12,684~~			~~12,081~~		~~5.0~~	%
Selling, general and administrative expenses		12,~~982~~299		12,~~804~~017			914.90	%		~~6,139~~			~~6,272~~		~~(2.1~~	)%
Earnings from operations		12,~~846~~419		12,~~365~~082			3516.2	%		~~6,545~~			~~5,809~~		~~12.7~~	%
Storm damage charge		-		-(1,052	)		0(100.0	)%		~~(1,098~~	)		-		~~(100.0~~	)%
Interest and other income		~~290~~355		~~261~~339			114.17	%		~~874~~			~~724~~		~~20.7~~	%
Earnings from operations before income taxes		2,~~136~~774		1,~~626~~369			31102.46	%		~~6,321~~			~~6,533~~		~~(3.2~~	)%
Income tax provision		~~559~~694		~~423~~376			3284.26	%		~~1,685~~			~~1,730~~		~~(2.6~~	)%
Net earnings	$	12,~~577~~080	$	~~1,203~~993			31109.15	%	$	~~4,636~~		$	~~4,803~~		~~(3.5~~	)%
Earnings per share:
Basic:
Basic earnings per share	$	0.0810	$	0.0605			33100.30	%	$	~~0.23~~		$	~~0.24~~		~~(4.2~~	)%
Diluted:
Diluted earnings per share	$	0.0810	$	0.0605			33100.30	%	$	~~0.23~~		$	~~0.24~~		~~(4.2~~	)%

Net Sales

The Company's total net sales in the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024,~~2025 were $1415.4 million ~~and $45.1 million, respectively,~~ compared to $1114.60 million ~~and $39.7 million, respectively,~~ in the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024. ~~Sales~~The ~~for~~increase ~~the~~in 13sales ~~weeks~~was ~~ended~~primarily ~~December~~due 1,to ~~2024~~disruptions ~~were~~in ~~higher~~production ~~than~~and ~~the~~shipping ~~comparable~~resulting ~~period~~from of the ~~prior~~storm ~~year,~~damage ~~primarily~~that ~~due~~occurred tolate ~~higher~~in ~~sales to~~ the ~~commercial~~first ~~aerospace~~quarter ~~and~~of ~~business~~fiscal ~~aircraft~~year ~~markets~~2025. ~~Sales~~The ~~for~~Company ~~the~~expected 39to ~~weeks~~have ~~ended~~an ~~December~~additional $1,.8 ~~2024~~million ~~were~~in ~~higher~~sales ~~than~~in the ~~comparable~~13 ~~period~~weeks ofended ~~the~~June ~~prior~~2, ~~year~~2024 ~~due~~that todid ~~higher~~not ~~sales~~ship due to the ~~commercial~~disruption ~~aerospace,~~in ~~business~~operations ~~aircraft~~resulting ~~and~~from ~~military~~the ~~markets~~storm.

Gross Profit

The Company’s gross profit inmargins, ~~the~~measured 13as ~~weeks~~percentages ~~ended~~of ~~December 1~~sales, ~~2024~~were ~~was~~30.6% ~~higher~~in ~~than~~ the ~~gross~~13 ~~profit~~weeks inended ~~the~~June ~~prior~~1, ~~year’s~~2025 ~~comparable~~compared ~~period due~~ to ~~higher~~29.3% ~~sales levels~~ in the 13 weeks ended ~~December~~June 12, 2024,. ~~compared~~The tohigher ~~the~~gross ~~comparable~~profit ~~period~~margin infor the ~~prior~~13 ~~year~~weeks ~~partially~~ended ~~offset~~June ~~by a less favorable product mix~~1, ~~higher~~2025 ~~labor~~was ~~costs~~primarily due to ~~bringing up~~ the ~~new~~negative ~~manufacturing~~impact ~~lines to ramp up capacity~~ in ~~preparation~~the ~~for~~prior ~~increases~~fiscal inyear ~~customer~~resulting ~~program~~from ~~volumes~~the ,storm ~~higher~~damage ~~depreciation,~~mentioned ~~repairs~~above and ~~maintenance~~, ~~insurance~~to ~~costs~~a ~~and~~lesser ~~higher costs for raw materials~~extent, ~~supplies,~~lower ~~and~~waste ~~freight resulting from inflationary trends. Gross profit~~ in the 13current ~~weeks~~fiscal ~~ended December 1~~year, ~~2024~~which was ~~also~~partially ~~negatively~~offset ~~impacted~~ by ~~lower production in~~ the ~~period~~costs ~~due~~related to bringing up the new manufacturing lines. ~~The~~to ~~Company’s~~ramp ~~gross~~up ~~profit~~capacity in ~~the~~preparation 39for ~~weeks~~increases ~~ended December 1, 2024 was higher to the gross profit~~ in ~~the~~customer ~~prior~~program ~~year’s comparable period due to higher sales levels offset by a less favorable sales mix, and the higher costs mentioned above~~volumes.

The Company’s gross profit margins, measured as a percentage of sales, were 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024, compared to 27.2% and 30.5%, respectively, in the 13 weeks and 39 weeks ended November 26, 2023. The lower gross profit margins for the 13 and 39 weeks ended December 1, 2024, compared to the prior year’s comparable periods were primarily due to ramping up capacity ahead of customer program volume increases, a less favorable sales mix, higher depreciation, repairs and maintenance and insurance costs, and higher costs for raw materials, supplies, freight and labor resulting from inflationary trends, partially offset by higher sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased ~~by $178,000 during the 13 weeks ended December 1, 2024, and increased by 9.9%~~ compared to the prior year’s comparable period, and these expenses, measured as percentages of sales, were 1314.89% in the 13 weeks ended ~~December~~June 1, ~~2024~~2025 compared to 1514.54% in the 13 weeks ended ~~November~~June 262, ~~2023~~2024. The increase in selling, general and administrative expenses ~~during the 13 weeks ended December 1, 2024~~ was primarily due to higher salaries, ~~and~~travel ~~payroll related~~ expenses, and ~~higher~~ professional and legal fees. ~~The increase~~ in ~~salaries~~the ~~and~~13 ~~payroll~~weeks ~~related~~ended ~~expenses~~June is1, ~~due to increased headcount in connection with ramping up capacity in preparation of expected increases in customer program volumes~~2025.

Selling, general and administrative expenses ~~decreased~~included bystock option expenses of $~~133~~88,000 ~~during~~for the 3913 weeks ended ~~December~~June 1, ~~2024~~2025, ~~and decreased by 2.1%~~ compared to ~~the~~stock ~~prior~~option ~~year’s comparable period, and these~~ expenses, ~~measured as a percentage~~ of ~~sales~~$89,000 ~~were 13.6%~~ in the 3913 weeks ended ~~December~~June 12, 2024 ~~compared to 15~~.8% in the 39 weeks ended November 26, 2023. The decrease in selling, general and administrative expenses during the 39 weeks ended December 1, 2024 was primarily due to $570,000 of activist shareholder defense costs in the prior year comparable period offset by higher salaries and payroll related expenses as well as higher professional fees.

Selling, general and administrative expenses included stock option expenses of $105,000 and $295,000, respectively, for the 13 weeks and 39 weeks ended December 1, 2024, compared to stock option expenses of $103,000 and $425,000, including $109,000 due to the modification of previously granted stock options, respectively, for the 13 weeks and 39 weeks ended November 26, 2023.

Earnings from Operations

For the reasons set forth above, the Company’s earnings from operations were $12.84 million ~~and $6.5 million, respectively,~~ for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024,~~2025 compared to $12.41 million ~~and $5.8 million, respectively,~~ for the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024.

Storm Damage

The Company recorded a charge of $1.1 million for storm damage in the 13 weeks ended June 2, 2024.

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transited the area. None of the Company’s manufacturing lines or equipment were damaged by the storm. The roofs on all three buildings in the Company’s Newton, Kansas campus required repairs. Also, multiple specialty HVAC units were damaged or destroyed. These specialty HVAC units are necessary to control the temperature and humidity in certain manufacturing areas, quality laboratories and R&D laboratories, as required by certain specifications and certifications the Company is subject to.

The Company did not lose any sales for the 2025 fiscal year; however, $1.8 million of sales could not be delivered before the end of the first quarter ended June 2, 2024 due to storm related delays.

The Company paid its employees for the days immediately following the storm despite many not being able to work while others worked on the clean-up of the storm damage to the facilities. The Company incurred $78,000 of payroll and related costs for lost production time and employees working on the clean-up.

The $1.1 million charge recorded by the Company included an asset damage charge, emergency services by outside contractors, rental of temporary HVAC units and the cost of employee downtime or time spent on the clean-up of the storm damage to the facilities. There were no corresponding charges in fiscal 2026.

Interest and Other Income

Interest and other income ~~were~~was $~~290~~355,000 ~~and $874,000, respectively,~~ for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025, compared to $~~261~~339,000 ~~and $724,000, respectively,~~ for the prior year'’s comparable ~~periods~~period. Interest income increased 114.~~1% and 20.~~7%, ~~respectively,~~ for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024,~~2025 ~~primarily~~due asto ~~a result of~~ higher ~~weighted~~returns ~~average~~partially ~~interest~~offset ~~rates~~by ~~and~~ lower ~~losses~~invested ~~on the sales of marketable securities, compared to the prior year's comparable periods~~balances. During the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025, the Company earned interest income principally from its investments, which consisted primarily of short-term instruments and money market funds.

Income Tax Provision

For the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025, the Company recorded an income tax ~~provisions~~provision of $~~559~~694,000 ~~and $1.7 million~~, ~~respectively,~~ which included a discrete income tax ~~provisions~~benefit of $19(28,000) ~~and~~for ~~$60,000,~~the ~~respectively~~excess tax benefits of stock option exercises in the 13 weeks ended June 1, ~~primarily~~2025 ~~for~~partially offset by the accrual of interest related to unrecognized tax benefits. For the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024, the Company recorded an income tax ~~provisions~~provision of $~~423~~376,000 ~~and $1.7 million~~, ~~respectively,~~ which included a discrete income tax ~~provisions~~provision of $2519,000 ~~and $78,000, respectively,~~ for the accrual of interest related to unrecognized tax benefits.

The Company’s effective tax ~~rates~~rate for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 ~~were~~was 2625.20% ~~and 26.7%, respectively,~~ compared to 2627.~~0% and 26.~~5%, ~~respectively,~~ in the prior year’s comparable ~~periods~~period. The effective tax ~~rates~~rate for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 ~~were~~was higher than the U.S. statutory rate of 21% primarily due to state and local taxes ~~and liabilities and the accrual of interest related to unrecognized tax benefits~~. The effective ~~rates~~rate for the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024 ~~were~~was higher than the U.S. statutory rate of 21% primarily due to state and local taxes and the accrual of interest related to unrecognized tax benefits.

Net Earnings

For the reasons set forth above, the Company'’s net earnings for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 were $12.61 million ~~and $4.6 million, respectively,~~ compared to net earnings of $1.20 million ~~and $4.8 million, respectively,~~ for the 13 weeks ~~and 39 weeks~~ ended ~~November~~June 262, ~~2023~~2024.

Basic and Diluted Earnings Per Share

In the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025, basic and diluted earnings per share were $0.0810 ~~and $0.23, respectively,~~ compared to basic and diluted earnings per share of $0.0605 ~~and $0.24, respectively,~~ in the 13 weeks ~~and~~ended 39June ~~weeks~~2, ~~ended~~2024, ~~November~~including ~~26,~~the ~~2023~~storm damage charge of $1.1 million.

Liquidity and Capital Resources ~~- Continuing Operations~~:

(Amounts in thousands)	~~December~~June 1,		March 32,
	2024		2024		Change
	2025		2022		Change
Cash and cash equivalents and marketable securities	$	7065,~~042~~571	$	7768,~~211~~834	$	(73,~~169~~263	)
Working capital		8077,~~308~~204		8981,~~187~~033		(83,~~879~~829	)

	13 Weeks Ended
(Amounts in thousands)	June 1,			June 2,
	2025			2024			Change

Net cash provided by (used in) operating activities	$	1,590		$	(423	)	$	2,013
Net cash provided by investing activities		1,999			469			1,530
Net cash used in financing activities		(4,586	)		(2,532	)		(2,054	)

	39 Weeks Ended
(Amounts in thousands)	December 1,			November 26,
	2024			2023			Change
Net cash provided by (used in) operating activities	$	3,748		$	(886	)	$	4,634
Net cash provided by investing activities		14,232			31,783			(17,551	)
Net cash used in financing activities		(11,793	)		(30,961	)		19,168

Cash and Marketable Securities

Of the $7065.06 million of cash and cash equivalents and marketable securities at ~~December~~June 1, ~~2024~~2025, $3031.84 million was owned by one of the Company’s wholly-owned foreign subsidiaries.

The change in cash and cash equivalents and marketable securities at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 was the result of ~~the~~repurchases ~~purchase~~ of treasury shares of $2.2 million in the 13 weeks ended June 1, 2025, a supplier advance of $1.6 million paid in April 2025 and dividends paid to shareholders, ~~the~~partially ~~Company’s~~offset ~~transition~~by ~~tax~~cash ~~installment~~provided ~~payment,~~by ~~capital~~operating ~~expenditures~~activities and a number of additional factors. The significant changes in cash provided by ~~(used in)~~ operating activities ~~was~~were as follows:

● ~~accounts~~inventories ~~receivable~~ decreased by 226% at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 primarily due to the timing of ~~sales~~raw material purchases;

● ~~inventories~~prepaid expenses and other current assets increased by 6552% at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 primarily due to higher ~~in-transit~~prepaid ~~shipments~~taxes;

● ~~prepaid~~other ~~and~~assets ~~other~~increased ~~current~~$1.6 ~~assets~~million ~~decreased~~during bythe ~~21%~~13 atweeks ~~December~~ended June 1, ~~2024~~2025 ~~compared~~due to ~~March~~a 3,long-term ~~2024~~supplier ~~primarily~~advance ~~due~~paid toduring ~~lower~~the ~~prepaid tax balances~~quarter;

● accounts payable ~~increased~~decreased by 5732% at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 primarily due to ~~increase~~lower in inventory ~~and timing of vendor payments~~;

● accrued liabilities ~~decreased~~increased by 2822% at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 primarily due to ~~decreases~~higher inprofessional ~~bonus,~~fees ~~profit sharing,~~ and ~~property~~other ~~tax accruals~~expenses; and

● income taxes payable ~~decreased~~increased ~~by 44~~25% at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 primarily due ~~the~~to ~~payment~~earnings ofin athe ~~$4.2~~13 ~~million~~weeks ~~transition~~ended ~~tax installment payment in~~ June ~~2024~~1, 2025.

In addition, the Company paid $72.65 million in cash dividends in both the 3913-week ~~weeks~~period ended ~~December~~June 1, ~~2024~~2025 ~~compared~~and ~~to $28.1 million in~~ the 3913-week ~~weeks~~period ended ~~November~~June 262, 2023. The amount paid during the 39 weeks ended November 26, 2023 included a $20.5 million special cash dividend. The Company purchased treasury stock of $4.3 million during the 39 weeks ended December 1, 2024 ~~compared to $2~~.~~9 million in the 39 weeks ended November 26, 2023.~~

Working Capital

The decrease in working capital at ~~December~~June 1, ~~2024~~2025 compared to March 32, ~~2024~~2025 was due principally to the ~~decreases~~repurchases of treasury shares of $2.2 million in ~~marketable~~the ~~securities,~~13 ~~accounts~~weeks ~~receivable~~ended ~~and~~June ~~prepaid~~1, ~~and~~2025, ~~other~~the ~~current~~payment ~~assets~~of ~~and~~a ~~increased~~long-term ~~income~~advance ~~taxes~~to ~~payable,~~a ~~partially~~supplier ~~offset~~of by$1.6 anmillion ~~increase~~during inthe ~~inventories~~period and ~~decreases~~lower ininventories ~~accrued~~offset by lower current liabilities at June 1, 2025.

The Company's current ratio (the ratio of current assets to current liabilities) was 78.6 to 1.0 at ~~December~~June 1, ~~2024,~~2025 compared to 109.27 to 1.0 at March 32, ~~2024~~2025.

Cash Flows

During the 3913 weeks ended ~~December~~June 1, ~~2024~~2025, the Company's ~~net~~had ~~earnings,~~operating ~~adjusted~~cash ~~for~~flows ~~depreciation and amortization, deferred income taxes, stock-based compensation, amortization~~ of ~~bond premium and changes in operating assets and liabilities, resulted in a~~ $31.76 million ~~operating cash inflow~~. During the same 3913-week period, the Company expended $~~258~~481,000 for the purchase of property, plant and equipment, compared with $~~481~~12,000 during the 3913 weeks ended ~~November~~June 262, ~~2023~~2024. The Company paid $72.65 million in cash dividends in the 3913-week period ended ~~December~~June 1, ~~2024, compared to $28~~2025.1 million in the 39-week period ended November 26, 2023. The Company purchased treasury shares of $4.3 million in the 39-week period ended December 1, 2024 compared to $2.9 million in the 39-week period ended November 26, 2023.

Other Liquidity Factors

The Company believes its financial resources will be sufficient, through the 12 months following the filing of this Form 10-Q Quarterly Report and for the foreseeable future thereafter, to provide for continued investment in working capital and property, plant and equipment and for general corporate purposes. The Company’s financial resources are also available for purchases of the Company's common stock, cash dividend payments, ~~and~~ appropriate acquisitions and other expansions of the Company's business.

The Company is not aware of any circumstances or events that are reasonably likely to occur that could materially affect its liquidity. The Company further believes its balance sheet and financial position to be very strong.

Contractual Obligations:

The Company’s contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist only of (i) operating lease commitments and (ii) commitments to purchase raw materials. In March 2025, the Company entered into an agreement with a supplier, ArianeGroup SAS, under which the Company would advance funds against future purchases. The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,834 (approximately $2,127 based on June 24, 2025 exchange rates) is due in the first quarter of fiscal 2027 and €1,376 (approximately $1,596 based on June 24, 2025 exchange rates) is due in the first quarter of fiscal 2028. Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost of €36,000. 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 $140,000, to secure the Company’s obligations under its workers’ compensation insurance program.

Off-Balance Sheet Arrangements:

The Company’s liquidity is not dependent on the use of, and the Company is not engaged in, any off-balance sheet financing arrangements, such as securitization of receivables or obtaining access to assets through special purpose entities.

Critical Accounting Policies and Estimates:

The foregoing Discussion and Analysis of Financial Condition and Results of Operations is based upon the Company’s Condensed Consolidated Financial Statements, which have been prepared in accordance with US GAAP. The preparation of these Condensed Consolidated Financial Statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to sales allowances, allowances for ~~credit~~doubtful ~~losses~~accounts, inventories, valuation of long-lived assets, income taxes, contingencies and litigation, and employee benefit programs. 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.

The Company’s critical accounting policies that are important to the Condensed Consolidated Financial Statements and that entail, to a significant extent, the use of estimates and assumptions and the application of management’s judgment, are described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in the Company’s Annual Report on Form 10-K for the fiscal year ended March 32, ~~2024~~2025. There have been no significant changes to such accounting policies during the ~~2025~~2026 fiscal year ~~third~~first quarter.

Contingencies:

The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of ~~reserves~~accrual required, if any, for these contingencies is made after careful analysis of each individual issue. The required ~~reserves~~accrual 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.

Factors That May Affect Future Results.

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 the Company’s expectations or from results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking statements. Such factors include, but are not limited to, general conditions in the aerospace industry, the Company’s competitive position, the status of the Company’s relationships with its customers, economic conditions in international markets, the cost and availability of raw materials, transportation and utilities, and the various factors set forth under the caption “Factors That May Affect Future Results” in Item 1 and in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended March 32, ~~2024~~2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company’s market risk exposure at ~~December~~June 1, ~~2024~~2025 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 32, ~~2024~~2025.

Item 4. Controls and Procedures.

(a) Disclosure Controls and Procedures.

The Company’s management, with the participation of the Company’s Chief Executive Officer and ~~Vice~~Principal ~~President~~Financial ~~- Finance~~Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of ~~December~~June 1, ~~2024~~2025, the end of the quarterly fiscal period covered by this quarterly report. Based on such evaluation, the Company’s Chief Executive Officer and ~~Vice~~Principal ~~President~~Financial -Officer ~~Finance~~ have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and ~~Vice~~Principal ~~President~~Financial ~~– Finance~~Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting.

There has not been any change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.

Legal Proceedings.

None.

Item 1A.

Risk Factors.

There have been no material changes in the risk factors as previously disclosed in the Company’s Form 10-K Annual Report for the fiscal year ended March 32, ~~2024~~2025.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

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 ~~2025~~2026 fiscal year ~~third~~first quarter ended ~~December~~June 1, ~~2024.~~2025:

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
September 2 - October 1		97,748	$	13.12		97,748
March 3 - April 1		9,033	$	13.22		9,033
October 2 - November 1		82,799	$	13.05		82,799
April 2 - May 1		157,922	$	12.94		157,922
November 2 - December 1		0	$	-		0
May 2 - June 1		-	$	-		-
Total		~~180~~166,~~547~~955	$	1312.0996		~~180~~166,~~547~~955	~~948~~781,~~721~~766 (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 authorization, the Company is authorized to purchase its shares from time to time on the open market or in privately negotiated transactions.

Item 3.

Defaults Upon Senior Securities.

None.

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Item 4.

Mine Safety Disclosures.

None.

Item 5.

Other Information.

None.

Item 6.

Exhibits.

31.1

Certification of principal executive officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

31.2

Certification of principal financial officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

32.1

Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~June 1, ~~2024~~2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at ~~December~~June 1, ~~2024~~2025 (unaudited) and March 32, ~~2024~~2025; (ii) Condensed Consolidated Statements of Operations for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited); (iii) Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited); (iv) Condensed Consolidated Statements of Shareholders’ Equity at ~~December~~June 1, ~~2024~~2025 (unaudited) and ~~November~~June 262, ~~2023~~2024; and (v) Condensed Consolidated Statements of Cash Flows for the 3913 weeks ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited). * +

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed electronically herewith.

+ Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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EXHIBIT INDEX

Exhibit No. -----------	Name ----
31.1	Certification of principal executive officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
31.2	Certification of principal financial officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
32.1	Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~June 1, ~~2024~~2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at ~~December~~June 1, ~~2024~~2025 (unaudited) and March 32, ~~2024~~2025; (ii) Condensed Consolidated Statements of Operations for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited); (iii) Condensed Consolidated Statements of Comprehensive Earnings for the 13 weeks ~~and 39 weeks~~ ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited); (iv) Condensed Consolidated Statements of Shareholders’ Equity at ~~December~~June 1, ~~2024~~2025 (unaudited) and ~~November~~June 262, ~~2023~~2024; and (v) Condensed Consolidated Statements of Cash Flows for the 3913 weeks ended ~~December~~June 1, ~~2024~~2025 and ~~November~~June 262, ~~2023~~2024 (unaudited). * +
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*	Filed electronically herewith.
+	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

2827

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Park Aerospace Corp.
	(Registrant)
Date: January 15, 2025	/s/ Brian E. Shore
Date: July 16, 2025	/s/ Brian E. Shore
	Brian E. Shore Chief Executive Officer (principal executive officer)
	/s/ Christopher Goldner
Date: July 16, 2025	/s/ Christopher Goldner
Date: January 15, 2025	Christopher Goldner
	Christopher Goldner Vice President – Finance (principal financial officer) (principal accounting officer)
	Vice President – Finance
	(principal financial officer)
	(principal accounting officer)

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