Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Q3 FY2022 Earnings Presentation
41 slides from Park Aerospace's earnings presentation, Jan 6, 2022
Slide 1: FY2022 Q3 Investor Conference Call
FY2022 Q3 Investor Conference Call January 6, 2022
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 FY2022 Q3 Investor Presentation…………………………………………………….Slide 1 Supplemental Financial Information……………………………………………..Appendix 1 010622 Slide 3
Slide 4: Quarterly Results for FY2020, FY2021 and FY2022 Q1, Q2 and Q3
Quarterly Results for FY2020, FY2021 and FY2022 Q1, Q2 and Q3 (In Thousands)* FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 Sales $14,950 $13,723 $15,847 $15,494 $12,213 $9,250 $10,372 $14,441 $13,594 $13,618 $13,864 Gross Profit $4,804 $3,813 $5,022 $5,034
Slide 5: Quarterly Results (Continued): Supply Chain Challenges
Quarterly Results for FY2020, FY2021 and FY2022 Q1, Q2 and Q3 (In Thousands)* (Continued) Other factors which affected FY2022 Q3 Sales and Margins Supply Chain Challenges…a Daily Battle!!! • Difficulty sourcing key raw materials • International shipments difficulties • Domestic freight issues •
Slide 6: Quarterly Results (Continued): Inflation
Quarterly Results for FY2020, FY2021 and FY2022 Q1, Q2 and Q3 (In Thousands)* (Continued) Inflation • Raw materials costs • Freight costs • Supplies • Utilities • Pretty much everything How long can increased costs be passed on to customers? Not our list of excuses…just factors we thought you
Slide 7: Historical Fiscal Year Results
Historical Fiscal Year Results (In Thousands)* FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 First 9 Months Sales $31,837 $40,230 $51,116 $60,014 $46,276 $41,076 Gross Profit $8,299 $11,288 $16,184 $18,673 $13,191 $13,719 Gross Margin 26.7% 28.1% 31.7% 31.1% 28.5% 33.4% Adjusted EBITDA $1,055 $4,704** $
Slide 8: 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 had $110.0 Million of Cash and Marketable Securities as of end of FY2022 Q3 Spending to go to complete Major Expansion: $1.5 Million • Spending to date: $18.0 Million • Spending in FY2022 Q3: $800 Thousand
Slide 9: FY2022 Q3 Top Five Customers
FY2022 Q3 Top Five Customers (in Alphabetical Order) AAE Aerospace Aeromatrix Composites GKN Aerospace Kratos Defense and Security Solutions Middle River Aerostructure Systems (MRAS)* Sikorsky S-76 Commercial Helicopter and its subcontractors Raytheon SM-2™ Missile 747-8 Engine Nacelles Kratos XQ-58
Slide 10: Park's Estimated Revenues by Aerospace Market Segment
Park’s Estimated Revenues by Aerospace Market Segment FY2020 FY2021 FY2020 Revenues: FY2021 Revenues: $60.0 Million $46.3 Million FY2022 Q3 YTD FY2022 Q3 FY2022 Q3 YTD Revenues: FY2022 Q3 Revenues: $41.1 Million $13.9 Million 010622 Slide 10
Slide 11: Park Loves "Niche" Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs* Northrup Grumman E-8 Joint Surveillance Raytheon Evolved SeaSparrow RIM-161 Standard Missile 3 Target Attack Radar System (JSTARS) Missile (ESSM) (MK-72 Rocket) Park’s Estimated FY2022 Q3 YTD Military Revenues by Market Segment Estimated FY2022 Q3 YTD
Slide 12: Commercial Aerospace Industry Melt-down: a Quick Review
Commercial Aerospace Industry Melt-down… a Quick Review Commercial Airline Industry basically Collapsed toward the beginning of the Pandemic Airplanes and Airports were empty Thousands of Flights were cancelled Was the Commercial Airline Industry a thing of the past? As a result, the Comme
Slide 13: Commercial Aerospace Industry Melt-down: a Quick Review (Continued)
Commercial Aerospace Industry Melt-down… a Quick Review… (Continued) According to Commercial Aerospace and Aviation Analysts and Commentators, the “End of Days” was at hand And, as a result of all that, the Commercial Aerospace Supply Chain went into the survival mode…the “bunker” mode Product
Slide 14: Commercial Aerospace Industry Melt-down: a Quick Review (Continued)
Commercial Aerospace Industry Melt-down… a Quick Review… (Continued) AND, as a result, Commercial Airline Companies wanted to buy commercial airplanes again…lots of airplanes…and somebody needed to produce the thousands and thousands of components which go into these airplanes BUT, the Commercia
Slide 15: Commercial Aerospace Industry Melt-down: a Quick Review (Continued)
Commercial Aerospace Industry Melt-down… a Quick Review… (Continued) BUT, at Park, as we explained many times in the recent past, we never really bought the “End of Days” story No bunker mode for us…we were never about survival…we were always about charging forward and making our mark We held
Slide 16: Commercial Aerospace Industry Melt-down: a Quick Review (Continued)
Commercial Aerospace Industry Melt-down… a Quick Review (Continued) As a proxy for the Commercial Aerospace Industry recovery, let’s look at the ramp-up of the GE Aviation Jet Engine Programs Park is on GE Aviation Program Sales for the following periods were: • FY2021 Q3: $1.8 Million • FY2021
Slide 17: Commercial Aviation Updates and Developments
Commercial Aviation... Updates and Developments…a Quick Review Higher Jet Fuel Prices and Environmental Concerns provide extra motivation for airlines to more quickly replace less fuel-efficient legacy single-aisle aircraft with more fuel-efficient modern single-aisle aircraft, such as the Airbus
Slide 18: GE Aviation Jet Engine Programs
GE Aviation Jet Engine Programs Firm Pricing LTA (Requirements Contract) from 2019 Park Composite Materials are Sole through 2029 with Middle River Aerostructure Systems Source on primary structure component (MRAS), a subsidiary of ST Engineering Aerospace for Passport 20 Engines for Bombardier
Slide 19: Update on GE Aviation Jet Engine Programs
Update on GE Aviation Jet Engine Programs Airbus A319neo/A320neo/A321neo/A321LR/A321XLR (A320neo Family of Aircraft) with LEAP-1A Engines…continues to ramp… In a May 27, 2021 news release, Airbus stated: “A320 Family: Airbus confirms an average A320 Family production rate of 45 aircraft per mont
Slide 20: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) As of the end of October 2021, CFM (meaning the LEAP-1A engine) had a 60.0% share of firm orders for the A320neo Family of Aircraft (Source: December 2021 edition of Aero Engine News) • Assuming a 60.0% CFM (LEAP-1A) market share, the 75 A320ne
Slide 21: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) A321XLR News • Airbus has completed Final Assembly of First Test Aircraft! • First Flight expected in 2022 • Certification and entry into service expected in 2023 • A321XLR is currently positioned as only single-aisle aircraft with 5,000+ statu
Slide 22: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Comac C919 with LEAP-1C Engines…Until very recently, Comac was continuing to maintain that they intended to certify and begin deliveries of the aircraft before the end of 2021 Update…Oops…Civil Aviation Administration of China (the “China FAA
Slide 23: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Boeing 747-8…Boeing has announced it will terminate production of the Queen of the Skies in 2022… Last Boeing 747 expected to be delivered in October 2022 Sad Day for one of the best (maybe the best) Commercial Aircraft ever built Long Li
Slide 24: GE Aviation Programs Sales History and Forecast Estimates
GE Aviation Programs Sales History and Forecast Estimates GE Aviation Programs sales history: FY2020 Total: $28.9 Million FY2021 Q1: $4.1 Million FY2021 Q2: $2.9 Million FY2021 Q3: $1.8 Million FY2021 Q4: $4.4 Million FY2021 Total: $13.2 Million FY2022 Q1: $7.0 Million FY2022 Q2: $
Slide 25: Park's Financial Performance History and Forecast Estimates
Park’s Financial Performance History and Forecast Estimates FY2021 Sales and Adjusted EBITDA history: Sales Adjusted EBITDA FY2021 Q1 $12.2 Million $2.4 Million FY2021 Q2 $9.3 Million $1.4 Million FY2021 Q3 $10.4 Million $1.4 Million FY2021 Q4 $14.4 Million $3.3 Million FY2021 Total $46.3 Million
Slide 26: Update on Major Expansion of Newton, Kansas Facilities
Update on Major Expansion of Newton, Kansas Facilities Total budget: approximately $19.5 Million Spending To date: approximately $18.0 Million To go: approximately $1.5 Million Expansion is complete Film line trials complete Tape line trials in progress Plan to begin Qualification Ja
Slide 27: Update on Park's People
Update on Park’s People Park’s current People count is 112! It continues to be very difficult to hire the people we want to hire Park’s People are facing many challenges…shorthanded • Major supply chain and freight challenges A daily battle Abrupt adjustments and changes to production plan
Slide 28: Update on Park's People (Continued)
Update on Park’s People (Continued) • Dealing with and managing Park’s new projects and initiatives…Park does not sit still Major consuming projects our People are handling without reinforcements But, no matter, in FY2022 Q3, Park’s People once again stepped up…that is what Park’s People do… E
Slide 29: Update on Park's People (Continued)
Update on Park’s People (Continued) And, Most Importantly…Thank Goodness for Park’s Great People Park is fortunate and blessed to have the Great People it has While others laid off their employees by the thousands and thousands, Park held on to and kept all of our People throughout the pandemi
Slide 30: What's New at Park? James Webb Space Telescope
What’s New at Park? James Webb Space Telescope Launched from French Guiana on top of Ariane 5 Rocket on Christmas Day, 2021… Currently enroute to its Lagrange 2 (L2) Orbit Point located approximately One Million Miles from the Earth The Moon is approximately 239 Thousand Miles from the Earth T
Slide 31: What's New at Park? James Webb Space Telescope (Continued)
What’s New at Park? James Webb Space Telescope (Continued) If the JWST succeeds in its mission, where will it stand in the achievements of the human race? Top 50? Top 10? Top __? Park’s proprietary SigmaStruts™ are incorporated into the structure of the JWST Park is along for this ride o
Slide 32: What's New at Park? ArianeGroup Business Partner Agreement
What’s New at Park? ArianeGroup Business Partner Agreement _____________________________________________________________________________ NEWS RELEASE Contact: Donna D’Amico-Annitto 486 North Oliver Road, Bldg. Z Newton, Kansas 67114 (316) 283-6500 PARK AEROSPACE CORP. ANNOUNCES BUSINESS PARTNER AGRE
Slide 33: What's New at Park? Major Potential Project Initiatives in New Plant
What’s New at Park? Major Potential Project Initiatives in New Plant So, what the heck are we going to do with that Huge New Plant? Interesting question posed by an observant and smart person There is additional space in our new plant which is set aside for new project initiatives, including t
Slide 34: Major Potential Project Initiatives in New Plant (Continued)
What’s New at Park? Major Potential Project Initiatives in New Plant (Continued) There is no hard deadline for final decision making on these projects, but they are both front burner projects receiving priority attention…we will keep you posted Although these projects relate to the manufacture o
Slide 35: Informal Partnership with an Established Aerospace Manufacturing Company
What’s New at Park? Informal “Partnership” with an Established Aerospace Manufacturing Company Park believes this established Aerospace Manufacturing Company has important capabilities which are complementary to Park’s Park and this informal “Partner” have been collaborating on certain Defense P
Slide 36: Pressing Forward in Challenging Times
Pressing Forward in Challenging Times Some say the economy is doing great and that all is well with the world Maybe, but that is not the world we live in…Park’s world is full of challenges Major supply chain and transport challenges…some say supply chain issues are improving…but we do not see
Slide 37: Pressing Forward in Challenging Times (Continued)
Pressing Forward in Challenging Times (Continued) But, even in the face of the many challenges which our People confront and deal with every day, our People continue to press forward with major initiatives • Our new Business Partner Agreement with ArianeGroup • Two major initiatives and developmen
Slide 38: Pressing Forward in Challenging Times (Continued)
Pressing Forward in Challenging Times (Continued) At Park, even in a world full of challenges: • We press forward • We attack • We don’t stop This is all we know… At Park, we are swinging for the fences We are not like the others…at Park, we play for keeps… Park People Taking Responsibility
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Slide 40: Appendix 1
Appendix 1 Park Aerospace Corp. January 6, 2022 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 Commi
Slide 41: Appendix 1 Continued
Selling, general and administrative expenses, before special items, for the 2022 fiscal year third Appendix 1 quarter were $1.6 million, or 11.5% of sales, compared to $1.5 million, or 14.8% of sales, for the 2021 fiscal year third quarter and $1.5 million, or 10.9% of sales, for the 2022 fiscal yea