Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Investor Presentation (January 2020)
27 slides from Park Aerospace's investor presentation, Jan 15, 2020
Slide 1: Company Presentation January 15, 2020
Company Presentation January 15, 2020
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 As a complement to our Advanced Composite Materials offering, Park Aerospace designs and fabricates Composite Parts, Structures
Slide 5: Park's Estimated FY2019 Revenues by Aerospace Market Segment
Park’s Estimated FY2019 Revenues by Aerospace Market Segment * *UAM stands for Urban Air Mobility. Urban Air Mobility vehicles are also referred to as Air Taxi or eVTOL (electric Vertical Take-Off and Landing) vehicles 011218 011520 Slide 5 slide 5
Slide 6: Park's 65th Anniversary
Park’s 65th Anniversary Park founded on March 31, 1954 by Jerry Shore and Tony Chiesa with ~ $60 Thousand Investment Company started in a small “factory” (garage?) in Woodside, Queens with 5 employees 1954 Results: Sales: $124,206.59 Park’s Founders Pretax Profit: $887.38 Taxes Paid: $22
Slide 7: Our History
Our History March 31, 1954 Park is Founded by Jerry Shore and Tony Chiesa with ~ $60 Thousand Investment 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 Cas
Slide 8: 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 (kind of!) February 28, 2014 (11:00 PM) Park makes first
Slide 9: Our History (Continued)
Our History (Continued) December 2018 Park enters into Firm Pricing Agreement with MRAS through 2029 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 Electroni
Slide 10: Our History (Continued)
Our History (Continued) December 1, 2019 Park has $144 million in cash (and marketable securities) and Zero Long- Term Debt January 8, 2020 Park declared a special dividend of $1.00 per share payable February 20, 2020 to shareholders of record on January 21, 2020 January 8, 2020 Including this speci
Slide 11: Major Jet Engine Company Programs
Major Jet Engine Company Programs Firm Pricing LTA through 2029 with Middle River Park Composite Materials are Sole Aerostructure Systems (MRAS), a subsidiary of ST Source on large primary structure Engineering Aerospace component for Passport 20 Engines (not included in MRAS LTA) Redundant Fa
Slide 12: Major Jet Engine Company Programs (Continued)
Major Jet Engine Company Programs (Continued) Joint Development and Collaboration projects with MRAS related to: AFP Manufacturing…Development complete and Park Material is qualified and in production Lightning Strike Protection Material…Development complete and Park Material is qualified and
Slide 13: Update on Major Jet Engine Company Programs
Update on Major Jet Engine Company Programs Boeing 747-8: Flat…How long will “Queen of the Skies” be produced? A320neo/A321neo/A321XLR with LEAP-1A Engines: Strong and still ramping Bombardier Global 7500 with Passport 20 Engines: Ramping nicely Comac ARJ21 with CF34-10A Engines: Ramping nic
Slide 14: Major Expansion of Newton, KS Facilities
Major Expansion of Newton, KS Facilities December 2018…Park announced Major Expansion of Newton, KS Aerospace Manufacturing and Development Facilities Redundant Plant for MRAS and its Aircraft OEM Customers; Park promised to build plant once firm pricing through CY2029 was agreed to Redundant
Slide 15: Major Expansion (Continued)
Major Expansion (Continued) Expansion includes: New 60” Hot-Melt Film and Tape Manufacturing Lines New Mixing and Delivery Systems New R & D Lab Expanded Production Lab Additional Slitting Capacity Additional Freezer and Storage Space Space to accommodate additional Hot-Melt Tape Lin
Slide 16: Estimated Manufacturing Capacity
Estimated Manufacturing Capacity* Hot-Melt Treated Composite Materials: 60” Film and Tape Lines: $45M 24” Film and Tape Lines: $ 8M** Solution Treated Composite Materials: $55M Composite Parts Fabrication and Assembly: ??? Estimated Total Composite Materials Manufacturing Capacity: $108M I
Slide 17: Estimated Manufacturing Capacity (Continued)
Estimated Manufacturing Capacity (Continued) As a result of short-term variability (peaks and valleys) of GE Programs business, it may be difficult to handle the peaks with $45M of Hot-Melt Materials Manufacturing Capacity Additional Hot-Melt Materials Manufacturing Capacity provided by expansio
Slide 18: FY2020 Q4 and FY2020 Forecast Estimates
FY2020 Q4 and FY2020 Forecast Estimates (Historical Data In Thousands)* FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4** FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY2020 Sales $10,393 $11,211 $12,853 $16,659 $14,950 $13,723 $15,847 $15.0M to $16.0M $59.5M to $60.5M EBITDA $1,386 $1,663 $2,948 $4,251 $3,372 $2,406 $3,622 $3.
Slide 19: FY2017, FY2018 and FY2019 Results
FY2017, FY2018 and FY2019 Results* (In Thousands) FY2017 FY2018 FY2019 Sales $31,837 $40,230 $51,116 Gross Profit $8,299 $11,288 $16,184 Gross Margin 26.7% 28.1% 31.7% EBITDA $1,055 $4,704** $10,248 *From Continuing Operations 011218 011520 Slide 19 slide 19 **Before Special Items
Slide 20: Park's Long-Term Forecast Estimates
Park’s Long-Term Forecast Estimates FY20 FY21 FY22 FY23 FY24 Sales $59.5M to $60.5M $68M to $73M $78M to $84M $86M to $92M $94M to $100M EBITDA $12.5M to $13.0M $16.0M to $19.5M $19.0M to $22.5M $22.0M to $25.5M $24.5M to 28.0M EBIT $10.5M to $11.0M $14.0M to $17.5M $17.0M to $20.5M $19.5M to $23.0M
Slide 21: Factors Affecting Accuracy of Park's Short-Term and Long-Term Forecasts
Factors Affecting Accuracy of Park’s Short-Term and Long-Term Forecasts All Major Jet Engine Company Programs, except B747-8, are ramping or in development Severe stress on Aerospace Industry supply chain Because of tight manufacturing capacity, reduced carbon fiber and fabric raw material inv
Slide 22: FY20 Q3 Top Five Customers
FY20 Q3 Top Five Customers (in Alphabetical Order) • AAR Corp. • GKN Aerospace • Kratos Defense and Security Solutions • Lockheed Martin • Middle River Aerostructure Systems (MRAS), subsidiary of ST Engineering Aerospace 011218 011520 Slide 22 slide 22
Slide 23: Park Aerospace Unusual Programs of Interest
Park Aerospace Unusual Programs of Interest Northrop Grumman RQ-4 Global Hawk McDonnell Douglas DC-10 NASA’s James Webb Space Telescope Boeing E4-B Doomsday Aircraft Private Space Program 011218 011520 Slide 23 slide 23
Slide 24: Recent Developments
Recent Developments Ground-Breaking for Major Expansion of Newton, KS Facility on August, 15, 2019 Park Rang Closing Bell at NYSE on August 26, 2019 Park changed name from Park Electrochemical Corp. to Park Aerospace Corp. Kratos Defense & Security Solutions…Park’s products are qualified on
Slide 25: Recent Developments (Continued)
Recent Developments (Continued) DC-10/KC-10 Aircraft…In production of “niche” component using Park materials Northrop Grumman recently announced plans to increase production of Global Hawk/Triton UAVs; Park’s materials are qualified and in production on those programs December 20, 2019 WSJ Art
Slide 26: Recent Developments (Continued)
Recent Developments (Continued) Single Isle vs. Wide Body Aircraft…Paradigm Shift? Park seems to be well positioned on Single Isle Aircraft with A320neo family of Aircraft and Comac 919 Aircraft; Park has no content we are aware of on B737 MAX Aircraft Park still immersed in battling through cha
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