Park Aerospace Corp. · NYSE:PKE
Park Aerospace — 26th Annual Needham Growth Conference (January 2024)
35 slides from Park Aerospace's conference presentation, Jan 16, 2024
Slide 1: 26th Annual Needham Growth Conference
26th Annual Needham Growth Conference January 16, 2024 ***Park’s 70th Year in Business***
Slide 2: Forward Looking Disclaimer
Forward Looking Disclaimer This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operatin
Slide 3: Our Business
Our Business Park Aerospace Corp. develops and manufactures Solution and Hot-Melt Advanced Composite Materials used to produce composite structures for global aerospace markets: Wide array of prepreg materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing
Slide 4: Our Business (Continued)
Our Business (Continued) Park Aerospace also offers: Specialty Ablative materials for Rocket Motors and Nozzles Specially designed materials for Radome Applications (including RadarWave® materials) As a complement to our Advanced Composite Materials offering, Park Aerospace designs and fabri
Slide 5: Our History
Our History Park founded on March 31, 1954 by Jerry Shore and Tony Chiesa with ~ $50 Thousand Investment Company started in a small “factory” (garage?) in Woodside, Queens with 5 employees 1954 Results: Park’s Founders Sales: $124,206.59 Pretax Profit: $887.38 Taxes Paid: $226.21 First
Slide 6: Our History (Continued)
Our History (Continued) November 17, 1960 Park goes Public 1961 Park acquires New England Laminates Company (“Nelco”) in Stamford, CT for ~ $200 Thousand 1984 Park lists on NYSE 1985 Park commences regular Quarterly Cash Dividend Mid-1980’s Park had become global Electronics Business with other anci
Slide 7: Our History (Continued)
Our History (Continued) Jan 2007 Park commits to Aerospace as second major area of business focus Jan 17, 2008 Ground-breaking of Park’s New Aerospace Facility in an empty field in Newton, KS May 2009 Park’s Newton, KS Aerospace Facility opens February 28, 2014 (11:00 PM) Park makes first production
Slide 8: Our History (Continued)
Our History (Continued) December 2018 Park announces Major Expansion of Newton, KS Facility December 2018 Park sells its Electronics Business to AGC Inc. of Tokyo, Japan December 2018 Park’s transformation from an Electronics Company into an Aerospace Company is complete July 17, 2019 Park changes n
Slide 9: Major Expansion of Newton, KS Facilities
Major Expansion of Newton, KS Facilities December 2018…Park announces Major Expansion of Newton, KS Manufacturing and Development Facilities Redundant Plant for GE Aviation, MRAS and their Aircraft OEM Customers Park expects Redundant Plant will also be needed for Manufacturing Capacity Appr
Slide 10: Park's Balance Sheet, Cash and Cash Dividend History
Park’s Balance Sheet, Cash and Cash Dividend History Park has zero long-term debt! Park reported $74.0 Million in Cash and Marketable Securities as of the end of FY2024 Q3 Park’s Cash Dividend While others cut or cancelled their dividends, Park maintained its regular quarterly cash dividend
Slide 11: Historical Quarterly Results and Forecast Estimates for FY2024 Q4
Historical Quarterly Results and Forecast Estimates for FY2024 Q4 (In Thousands)* FY24 Q4 Forecast FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 Estimates*** $15,000 to Sales $13,594 $13,618 $13,864 $12,502 $12,783 $13,875 $13,867 $13,530 $15,551 $12,481 $11
Slide 12: Historical Fiscal Year Results and FY2024 Forecast Estimates
Historical Fiscal Year Results and FY2024 Forecast Estimates (In Thousands)* FY2024 Forecast FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Estimates*** $54,700 to Sales $31,837 $40,230 $51,116 $60,014 $46,276 $53,578 $54,055 $55,700 Gross Profit $8,299 $11,288 $16,184 $18,673 $13,191 $17,917 $16,
Slide 13: FY2024 Q3 Top Five Customers
FY2024 Q3 Top Five Customers (in Alphabetical Order) AAE Aerospace Bombardier Aerospheres, Inc. Global 7500 Kratos Defense and Security Solutions Middle River Aerostructure Systems (MRAS) and its subcontractors The Nordam Group Gulfstream G280 Patriot PAC-3 Missile Defense System Kratos UTAP-22 Mako
Slide 14: Park's Estimated Revenues by Aerospace Market Segment
Park’s Estimated Revenues by Aerospace Market Segment FY2021 FY2022 FY2021 Revenues: FY2022 Revenues: $46.3 Million $53.6 Million FY2023 FY2024 First 9 Months FY2023 Revenues: FY2024 First 9 Months Revenues: $54.1 Million $39.7 Million 011624 Slide 14
Slide 15: Park Loves "Niche" Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs Park’s Estimated FY2024 First 9 Months Military Revenues by Market Segment Northrop Grumman E-2D Estimated FY2024 First 9 Months Advanced Hawkeye SpaceX Falcon 9 Military Revenues: $16.6 Million Launcher with Dragon Spacecraft Mk-56 Vertical Launching S
Slide 16: The James Webb Space Telescope
The James Webb Space Telescope 21 of Park’s proprietary SigmaStruts are incorporated into the structure of the JWST The JWST (along with Park’s SigmaStruts produced in Newton, Kansas) is established at the Lagrange 2 (L2) Orbit Point located approximately One Million Miles from Earth The JWST
Slide 17: Aerospace Industry Trends and Considerations: A Brief Update
Aerospace Industry Trends and Considerations A Brief Update Commercial Aerospace Markets Domestic Air Travel is reported to have fully recovered from the Pandemic • Very good news for single aisle aircraft like the Airbus A320neo Aircraft Family International Air Travel is reported to be appro
Slide 18: Aerospace Industry Trends and Considerations (Continued)
Aerospace Industry Trends and Considerations A Brief Update (Continued) • The recent impressive ramp-up of A320neo Family Aircraft deliveries discussed below certainly is supportive of that view Should the ramp-up of A320neo Family Aircraft deliveries be considered to be a proxy for the Commercial
Slide 19: Aerospace Industry Trends and Considerations (Continued)
Aerospace Industry Trends and Considerations A Brief Update (Continued) • There also is a high level of interest in unmanned and potentially autonomous systems, such as the Kratos XQ-58 Valkyrie Unmanned Combat Aerial System But the markets for Military and Defense hardware are also affected, and
Slide 20: GE Aviation Jet Engine Programs
GE Aviation Jet Engine Programs Firm Pricing LTA (Requirements Contract) from 2019 through 2029 with Middle River Aerostructure Systems (MRAS), a subsidiary of ST Engineering Aerospace (STE) Redundant Factory…Construction is complete and factory is in production! Sole Source for Composite Mate
Slide 21: GE Aviation Jet Engine Programs (Continued)
GE Aviation Jet Engine Programs (Continued) Park Composite Materials are also Sole Source on primary structure component for Passport 20 Engines for Bombardier Global 7500/8000 (not included in MRAS LTA) Fan Case Containment Wrap for GE9X Engines for Boeing 777X Aircraft* Produced with Park’s
Slide 22: Update on GE Aviation Jet Engine Programs
Update on GE Aviation Jet Engine Programs A320neo Aircraft Family with CFM LEAP-1A Engines (includes A319neo, A320neo, A321neo, A321LR and A321XLR Aircraft Variants) Airbus has a huge backlog of A320neo Aircraft Family firm orders of 6,753 Airplanes as of October 31, 2023 (Source: December 2023
Slide 23: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) For perspective, Airbus delivered the following number of A320neo Family Aircraft for each of the following calendar years: 2018: 386 or an average of 32 per month 2019: 561 or an average of 47 per month 2020: 431 or an average of 36 per
Slide 24: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) And, by the way, according to reports, Airbus booked 587 new A320neo Family Aircraft orders in December 2023, and booked an unheard of 1,835 new A320neo Family Aircraft orders in CY2023!!! But what about the engines for the A320neo Aircraft F
Slide 25: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) • According to the December 2023 edition of Aero Engine News, the CFM LEAP-1A market share of firm orders for the A320neo Aircraft Family is 65.6% as of October 31, 2023 • At the delivery rate of 75 A320neo Family Aircraft per month, the 65.6% LE
Slide 26: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Airbus A321XLR Aircraft Variant • Airbus recently confirmed that it expects the A321XLR to enter into service in the second quarter of 2024!!! • Boeing does not have a response to the A321XLR aircraft • Potentially very important program for Pa
Slide 27: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Comac ARJ21 Regional Jet with GE CF34-10A Engines…according to Comac: 112 ARJ21 Aircraft have been delivered and are in service There are 775 open orders for the Aircraft Comac ARJ21 with GE CF34-10A Engine 011624 Slide 27
Slide 28: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Boeing 777X Aircraft with GE9X Engines According to a recent Boeing announcement, the B777X Aircraft will be certified by the FAA and EASA in 2025 Park expects approximately $2 million of B777X Program revenues in CY2024 Boeing 777X undergo
Slide 29: GE Aviation Jet Engine Programs Sales History and Forecast Estimates
GE Aviation Jet Engine Programs Sales History and Forecast Estimates GE Aviation Programs sales history: FY2020 Total: $28.9 Million FY2023 Q1: $6.4 Million FY2021 Q1: $4.1 Million FY2023 Q2: $6.1 Million FY2021 Q2: $2.9 Million FY2023 Q3: $5.0 Million FY2021 Q3: $1.8 Million FY202
Slide 30: Financial Outlook for Park and GE Programs: An Update
Financial Outlook for Park and GE Programs An Update The following is our updated revenue Outlook for GE Aviation Jet Engine Programs and financial Outlook for Park generally Although we did provide quarterly forecast estimates for GE Aviation Programs and Park above, we believe the GE Aviation
Slide 31: Updated GE Aviation Jet Engine Programs Revenue Outlook
Updated GE Aviation Jet Engine Programs Revenue Outlook…the “Juggernaut” Engine Units per Year Revenue per Engine Annual Revenues per Program Assumptions¹ Unit Estimates² Program Estimates 4 A320neo³ 1181 $30,500 $36,025K 5 PP20 90 $49,000 $4,410K 6 C919 200 $26,500 $5,300K 7 ARJ21 60 $29,500 $1,770
Slide 32: Park Aerospace Corp. Financial Outlook
Park Aerospace Corp. Financial Outlook principally based upon growth estimates of Programs on which Park is Sole-source Qualified…An Update 6 Sales EBITDA FY23 Base Year $54.1M* $11.5M Estimated GE Programs Incremental Sales¹ $32.7M Estimated incremental sales for ADL ADRS, Kratos Valkyrie Unmanned
Slide 33: Park Aerospace Corp. Financial Outlook (Continued)
Park Aerospace Corp. Financial Outlook principally based upon growth estimates of Programs on which Park is Sole-source Qualified…An Update 6 (Continued) ¹ GE Programs Outlook Sales of $55.0M minus FY23 GE Programs Sales of $22.3M equals $32.7M. ² Park is sole-source qualified on these three program
Slide 34: Park Family Holiday Party Celebrated in Our Beautiful Factory
Park Family Holiday Party Celebrated in Our Beautiful Factory Cory Thanking our Park People Ugly Sweater Contest Winners for Their Dedication and Service to Our Company Annual Paper Airplane Throwing Contest Winners 011624 Slide 34
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