Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Q3 FY2025 Earnings Presentation
42 slides from Park Aerospace's earnings presentation, Jan 14, 2025
Slide 1: FY2025 Q3 Investor Conference Call
FY2025 Q3 Investor Conference Call January 14, 2025 ***Celebrating Park’s 70th Anniversary***
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: Table of Contents
Table of Contents FY2025 Q3 Investor Presentation……………………………………...……………….Slide 1 Supplementary Financial Information……………………………………………..Appendix 1 The Missing Link? Thank you, James Webb Space Telescope 011425 Slide 3
Slide 4: Quarterly Results for FY2023, FY2024 and FY2025
Quarterly Results for FY2023, FY2024 and FY2025 (In Thousands)* FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4*** FY25 Q1 FY25 Q2 FY25 Q3 Sales $12,783 $13,875 $13,867 $13,530 $15,551 $12,481 $11,639 $16,333 $13,970 $16,709 $14,408 Gross Profit $4,092 $4,086 $4,444 $3,851 $4,833 $4,
Slide 5: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) FY2025 Q3 “Considerations”…why is Q3 EBITDA considerably below the forecast range considering Q3 sales exceeded the top of the forecast range? FY2025 Q3 sales were $14.4 Million, which exceeded the forecast range by $150 Thousand, BUT o
Slide 6: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) Ultimately, we expect the new lines to run 25% to 50% faster than the existing lines, depending on the product type, but we must go through the expected “learning curves” in order to achieve those results The new lines are designed with
Slide 7: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) o Ramping up the new lines now is part of our plan to be ready…but, for the time being, the new lines will run less efficiently until we get on the other side of the learning curves and until business levels ramp up Although Park is very
Slide 8: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) • Obviously, the increase in People count at least temporarily places additional pressure on our profitability • And, actually, since employee turnover is way down, we have been able to ramp up our workforce more quickly than anticipated…a
Slide 9: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) However, until this requalification is complete, Park is not able to produce ablative materials using C2B fabric for this customer o As a result, Park had no sales to this customer of ablative materials produced with C2B fabric during our
Slide 10: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) But why didn’t we expect the above “Considerations” to occur FY2025 Q3? Why didn’t we take these things into consideration in our Q3 EBITDA forecast? • Well, we actually did expect to produce and ship approximately $400 Thousand of ablati
Slide 11: Quarterly Results (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) However, there is a sense of optimism at Park about the coming year and the future, and our Park Family Members will receive good-will bonuses for the New Year…(but you will not pay for them) There were significant ongoing expenses in F
Slide 12: FY2025 Q3 Top Five Customers
FY2025 Q3 Top Five Customers (in Alphabetical Order) Aerojet Rocketdyne Aerospheres, Inc. Kratos Defense and Security Solutions Middle River Aerostructure Systems Comac C909 Regional Jet Gulfstream G280 Business Jet (MRAS) and its subcontractors (formerly the ARJ21) The Nordam Group Kratos XQ-58 Val
Slide 13: 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 FY2025 First 9 Months FY2024 Revenues: $45.1 Million FY2023 Revenues: FY2024 Revenues: $54.1 Million $56.0 Million 011425 Slide 13
Slide 14: Park Loves "Niche" Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs Park’s Estimated FY2025 First 9 Months Military Revenues by Market Segment MK56 Guided Missile Estimated FY2025 First 9 Months Vertical Launch System Military Revenues: $17.4 Million Long Range Precision Guided Anti Ship-Missile LRASM Lockheed Sunnyvale
Slide 15: GE Aerospace Jet Engine Programs
GE Aerospace 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…Factory is in production! Sole Source for Composite Materials for Engine Nacelles an
Slide 16: GE Aerospace Jet Engine Programs (Continued)
GE Aerospace 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 17: Update on GE Aerospace Jet Engine Programs
Update on GE Aerospace Jet Engine Programs A320neo Aircraft Family (includes A319neo, A320neo, A321neo, A321LR and A321XLR Aircraft Variants) Airbus has a huge backlog of A320neo Aircraft Family firm orders of 7,221 Airplanes as of November 30, 2024 (Source: January 2025 edition of Aero Engine N
Slide 18: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) 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 month • 2021: 45
Slide 19: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Will Airbus achieve its goal of 75 A320neo Aircraft Family deliveries per month? • If you ask us…Yup! • Will Airbus achieve that goal in 2027? After a very strong finish to 2024, at a January 9, 2025 briefing, Airbus’s Commercial Aircraft CE
Slide 20: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Approved Engines for the A320neo Aircraft Family • The A320neo Aircraft Family offers two approved engine options, namely the CFM LEAP-1A engine and the Pratt PW1100G (GTF) engine • On December 6, 2024, GE announced that the FAA and EASA have
Slide 21: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) • As of November 30, 2024, there were 8,148 firm LEAP-1A engine orders (Source: January 2025 edition of Aero Engine News) What are those firm orders worth to Park? Airbus A321XLR Aircraft Variant • First delivery (with LEAP-1A engines) to Ib
Slide 22: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Comac C919 with CFM LEAP-1C Engines Comac plans to deliver 54 C919 Aircraft in 2025, 84 in 2026, 110 in 2027 and 126 in 2028 Comac plans to achieve a production rate of 150 C919 Aircraft per year by 2028 Comac reported to have over 1,000
Slide 23: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Boeing 777X Aircraft with GE9X Engines On August 19, 2024, the FAA temporarily grounded the Boeing B777X test flight fleet after engine attachment defects were discovered On September 6, 2024, one of the B777X Boeing 777X undergoing test f
Slide 24: GE Aerospace Jet Engine Programs Sales History and Forecast Estimates
GE Aerospace Jet Engine Programs Sales History and Forecast Estimates GE Aerospace Programs sales history: FY2023 Q3: $5.0 Million FY2020 Total: $28.9 Million FY2023 Q4: $4.7 Million FY2021 Q1: $4.1 Million FY2023 Total: $22.3 Million FY2021 Q2: $2.9 Million FY2024 Q1: $6.2 Million
Slide 25: Park's Financial Performance History and Forecast Estimates
Park’s Financial Performance History and Forecast Estimates* Quarterly Sales and Adjusted Sales Adjusted EBITDA EBITDA history: FY2023 Q1 $12.8 Million $2.8 Million FY2023 Q2 $13.9 Million $2.7 Million FY2023 Q3 $13.9 Million $3.3 Million FY2023 Q4 $13.5 Million $2.6 Million FY2023 Total $54.1 Mil
Slide 26: Historical Fiscal Year Results and FY2025 Forecast Estimates
Historical Fiscal Year Results and FY2025 Forecast Estimates (In Thousands)* FY2025 Forecast FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024*** Estimates $60,500 to Sales $31,837 $40,230 $51,116 $60,014 $46,276 $53,578 $54,055 $56,004 $61,500 Gross Profit $8,299 $11,288 $16,184 $18,673 $13,1
Slide 27: General Park Updates
General Park Updates Solution Treater Project…an update Project still a “go” front burner project Project budget is approximately $7.5 Million Especially important for the new missile program opportunities Major OEM supplier has asked Park to “partner” with them on the purchase of an addit
Slide 28: General Park Updates (Continued)
General Park Updates (Continued) Essential large high profile Missile Defense Program…an update Park is Sole Source Qualified on this high-profile Missile Defense System Program Initial revenues expected for Park later this year and program is expected to ramp quickly from there What is the
Slide 29: General Park Updates (Continued)
General Park Updates (Continued) New LTA with GE Aerospace for CYs 2025 through 2030 under which GE awarded two additional products to Park… Incremental revenue from the additional products is expected to be approximately $3.0 Million per year LTA is complete and executed Potential JV with m
Slide 30: New Park Emphasis on Military/Defense Markets
New Park Emphasis on Military/Defense Markets New Park emphasis on Military/Defense Markets and Programs Why this new emphasis? • How many new commercial aircraft programs are in the works? The Boeing 777X The Comac C929 And? • Significant opportunities materializing for Park in the Milita
Slide 31: New Park Emphasis on Military/Defense Markets (Continued)
New Park Emphasis on Military/Defense Markets (Continued) • Unfortunately, these programs are highly sensitive and confidential programs on which we are not able to provide specific information at this time We will provide more information on these programs when appropriate For now, let’s just s
Slide 32: Recent Question from Investor
Recent Question from Investor Question about the Fan Case Containment Wrap for GE9X Engines for Boeing 777X Aircraft: In prior presentations, Park mentioned the fan case redesign risk potentially resulting in the elimination of the Fan Case Containment Wrap. Why is Park no longer highlighting th
Slide 33: Park's Share Buy-back Authorization and Activity
Park’s Share Buy-back Authorization and Activity…an Update As announced on May 23, 2022, Park’s Board of Directors authorized Park’s purchase of up to 1,500,000 shares of the Company’s Common Stock on the open market and in privately negotiated transactions Under this authorization, Park has pur
Slide 34: Park's Incredible Cash Dividend History
Park’s Incredible Cash Dividend History Park has paid 40 consecutive years of uninterrupted regular quarterly cash dividends without ever skipping a dividend or reducing the amount of the dividend Park has paid $599 Million, or $29.225 per share, in cash dividends since the beginning of FY2005!
Slide 35: Park's Balance Sheet and Cash
Park’s Balance Sheet and Cash Park has zero long term debt! Park reported $70.0 in Cash and Marketable Securities as of the end of FY2025 Q3 The final Transition Tax installment payment of $5.1 Million is payable in June 2025 Thinking about our Cash Known or likely cash expenditures: • Jun
Slide 36: Financial Outlooks for GE Aerospace Jet Engine Programs and for Park
Financial Outlooks for GE Aerospace Jet Engine Programs and for Park…the “Juggernaut” What is the “timing” for the Financial Outlooks? We are not sure, but the Juggernaut is coming, it can’t be stopped and we better be ready! Airbus A321neo with LEAP-1A Engine 011425 Slide 36
Slide 37: GE Aerospace Jet Engine Programs Revenue Outlook
GE Aerospace 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 1080 $30,500 $32,940K 5 PP20 90 $49,000 $4,410K 6 C919 300 $26,500 $7,950K 7 C909 72 $29,500 $2,125K 8 GE9X
Slide 38: Park Aerospace Corp. High-level Conceptual Financial Outlook
Park Aerospace Corp. High-level Conceptual Financial Outlook Sales EBITDA FY2024 Baseline Year $56.0M* $11.0M Estimated GE Programs Incremental Sales¹ $37.6M Estimated Non-GE Programs Incremental Sales² $15.0M Estimated Revenue Outlook $108.6M Estimated EBITDA contribution from incremental sales3 $1
Slide 39: High-level Conceptual Financial Outlook (Continued)
Park Aerospace Corp. High-level Conceptual Financial Outlook (Continued) ¹ GE Programs Outlook Sales of $58.7M minus FY2024 GE Programs Sales of $21.1M equals $37.6M. ² FY2024 Non-GE Programs Sales are $34.9M (FY24 total sales of $56.0M minus FY24 GE Programs Sales of $21.1M equals $34.9M). The Comp
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Slide 41: Appendix 1
Appendix 1 Park Aerospace Corp. January 14, 2025 Investor Conference Call – Supplementary Financial Information The financial and other data contained herein (the “Supplementary Data”) is being provided pursuant to the requirements of Regulation G promulgated by the U.S. Securities and Exchange Comm
Slide 42: Appendix 1 Continued
Before special items, selling, general and administrative expenses for the 2025 fiscal year third Appendix 1 quarter were $2.0 million, or 13.8% of sales, compared to $1.8 million, or 15.5% of sales, for the Continued 2024 fiscal year third quarter and $2.1 million, or 12.8% of sales, for the 2025 f