Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Investor Presentation (October 2020)
31 slides from Park Aerospace's investor presentation, Oct 8, 2020
Slide 1: Company Presentation October 8, 2020
Company Presentation October 8, 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: Our History
Our History 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: 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 (kind of!) February 28, 2014 (11:00 PM) Park makes first
Slide 8: 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 9: Quarterly Results for FY2019, FY2020 and FY2021 Q1 and Q2
Quarterly Results for FY2019, FY2020 and FY2021 Q1 and Q2 (In Thousands)* FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4** FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 Sales $10,393 $11,211 $12,853 $16,659 $14,950 $13,723 $15,847 $15,494 $12,213 $9,250 Gross Profit $2,852 $3,145 $4,284 $5,903 $4,804 $3,813 $5,0
Slide 10: FY2017, FY2018, FY2019 and FY2020 Results
FY2017, FY2018, FY2019 and FY2020 Results (In Thousands)* FY2017 FY2018 FY2019 FY2020 Sales $31,837 $40,230 $51,116 $60,014 Gross Profit $8,299 $11,288 $16,184 $18,673 Gross Margin 26.7% 28.1% 31.7% 31.1% EBITDA $1,055 $4,704** $10,248** $13,012** *From Continuing Operations **Before Special Items 1
Slide 11: 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 expects Redundant Plant will also ultimately be needed for Manufacturing Capacity
Slide 12: 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 Line
Slide 13: FY2021 Q2 Top Five Customers
FY2021 Q2 Top Five Customers (in Alphabetical Order) AAE Aerospace GKN plc Kratos Defense and Security Solutions Meggitt plc Middle River Aerostructure Systems (MRAS)* and its subcontractors Kratos BQM-167A PAC-3 Missile System Sikorsky UH-60 Black Hawk EA-18G Growler *MRAS is a subsidiary of ST Eng
Slide 14: Park's Estimated Revenues by Aerospace Market Segment
Park’s Estimated Revenues by Aerospace Market Segment FY2020 FY2020 Revenues: $60.0 Million FY2021 Q2 YTD FY2021 Q2 YTD Revenues: $21.5 Million Business Aircraft 100820 Slide 14
Slide 15: Park's Estimated FY2021 Q2 YTD Military Revenues by Market Segment
Park’s Estimated FY2021 Q2 YTD Military Revenues by Market Segment Estimated FY2021 Q2 YTD Military Revenues: Approximately $11.0 Million Park loves “niche” Military Programs V-22 Osprey E4-B Doomsday Aircraft RQ-4 Global Hawk 100820 Slide 15
Slide 16: Park's End Market Focus
Park’s End Market Focus Park’s Estimated FY2021 Q2 YTD Revenues by Aerospace Market Segment FY2021 Q2 Revenues: $21.5 Million Photo Courtesy of David Clark Company Military Aerospace Continue to focus on “niche” programs and opportunities Enhanced focus area for Park partly resulting from sign
Slide 17: Park's End Market Focus (Continued)
Park’s End Market Focus (Continued) Business Aircraft Continue to support GE Passport 20 Engine Program for Bombardier Global 7500 and other Business Aircraft Programs Park is qualified on Continue to Focus on developing new “niche” Business Aircraft opportunities Commercial Aircraft Almos
Slide 18: GE Aviation Jet Engine Programs
GE Aviation Jet Engine Programs Firm Pricing LTA (Requirements Contract) through Park Composite Materials are Sole 2029 with Middle River Aerostructure Systems Source on large primary structure (MRAS), a subsidiary of ST Engineering Aerospace component for Passport 20 Engines for Bombardier Glob
Slide 19: Update on GE Aviation Jet Engine Programs
Update on GE Aviation Jet Engine Programs A320neo/A321neo/A321LR/A321XLR (A320neo Family of Aircraft) with LEAP-1A Engines…What has Airbus said? Bombardier Global 7500 with Passport 20 Engines…Recent news is relatively positive; important program for Park; next GE Aviation program planned to qua
Slide 20: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Park has arrangement with MRAS to maintain monthly minimum baseline production levels to preserve Park’s ability to ramp up production when needed Important to Park and MRAS MRAS and Park agreed to defer September’s production to allow Park
Slide 21: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) FY2021 GE Aviation Programs revenue forecast estimates by quarter: Q1: $4.1 Million (actual) Q2: $2.9 Million (actual) Q3: ? Q4: ? Reflections on GE Aviation Programs forecast for FY2021 Q3 and Q4 and beyond Significant divergence f
Slide 22: Update on GE Aviation Jet Engine Programs and Commercial Aircraft Industry Generally
Update on GE Aviation Jet Engine Programs and Commercial Aircraft Industry Generally Abrupt and steep ramp-up by supply chain could be required when inventory destocking ends • Important to understand that this ramp-up would be a function of end of inventory destocking and is not dependent on, or
Slide 23: Commercial Aircraft Industry
Review of Park’s Perspective on Commercial Aircraft Industry Single-Aisle Aircraft vs. Wide-Body Aircraft Trend already in place favoring Single-Aisle Aircraft Industry experts and analysts believe market for Single-Aisle Aircraft will recover before Wide-Body Aircraft market Major Single-Ai
Slide 24: Park's Financial Forecasts
Park’s Financial Forecasts Our current thoughts about FY2021 by quarter: Sales EBITDA Q1 (Actual) $12.2 Million $2.4 Million Q2 (Actual) $9.3 Million $1.4 Million Q3 ? ? Q4 ? ? Park’s Long-Term Forecast was withdrawn during our FY2020 Q4 May 14, 2020 Investor Call Presentation Our current thou
Slide 25: Park's "Strategy" (What We Plan to do!)
Park’s “Strategy” (What We Plan to do!) Double down (or triple down) on Commercial Aerospace We believe the Commercial Aircraft Industry will be one of the World’s Great Industries for many years to come Park believes Single-Aisle Aircraft is place to be in the Commercial Aircraft Industry W
Slide 26: Updates on Park…How Are We Doing?
Updates on Park…How Are We Doing? We are working on projects and new initiatives we just could not get to in recent years because we were driving our operation so hard; we are taking advantage of the additional bandwidth we now have available as a result of reduced production rates R&D Efforts…w
Slide 27: Updates on Park…How Are We Doing? (Continued)
Updates on Park…How Are We Doing? (Continued) Park’s Cash Dividend Park has paid 35 consecutive years of uninterrupted regular, quarterly cash dividends, without ever skipping a dividend or reducing the dividend amount Park has paid $540 million in cash dividends, or $26.35 per share, since th
Slide 28: Updates on Park…How Are We Doing? (Continued)
Updates on Park…How Are We Doing? (Continued) Park’s Balance Sheet As of August 30, 2020, Park had $118.7 million in cash (and marketable securities) and Zero Long-Term Debt • Is that just good luck? • Is that an accident? Great opportunities for Park to potentially buy a company or companies
Slide 29: Updates on Park…How Are We Doing? (Continued)
Updates on Park…How Are We Doing? (Continued) Park continues to be fully operational throughout the Pandemic NY Office is Open Kansas Manufacturing Facility continues to be fully operational Customer Flexibility Program has been instrumental in helping Park effectively and quickly adjust to
Slide 30: Updates on Park…How Are We Doing? (Continued)
Updates on Park…How Are We Doing? (Continued) The world has been badly damaged and is a very troubled place at this time… But, at Park, we continue to go for it • We are not letting up • Others may falter, but we are not going anywhere Park is a strange and unusual company…we are not like the
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