Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Q3 FY2021 Earnings Presentation
27 slides from Park Aerospace's earnings presentation, Jan 7, 2021
Slide 1: FY2021 Q3 Investor Conference Call
FY2021 Q3 Investor Conference Call January 7, 2021
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: Quarterly Results for FY2019, FY2020 and FY2021 Q1, Q2 and Q3
Quarterly Results for FY2019, FY2020 and FY2021 Q1, Q2 and Q3 (In Thousands)* FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4** FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 Sales $10,393 $11,211 $12,853 $16,659 $14,950 $13,723 $15,847 $15,494 $12,213 $9,250 $10,372 Gross Profit $2,852 $3,145 $4,284 $5,90
Slide 4: FY2021 Q3 Top Five Customers
FY2021 Q3 Top Five Customers (in Alphabetical Order) AAE Aerospace Aerojet Rocketdyne GKN plc Kratos Defense and Security Solutions Middle River Aerostructure Systems (MRAS)* and its subcontractors Boeing 747-8 PAC-3 Missile System Kratos XQ-58 Valkyrie Sikorsky SH-60 Seahawk *MRAS is a subsidiary o
Slide 5: Park's Estimated Revenues by Aerospace Market Segment
Park’s Estimated Revenues by Aerospace Market Segment FY2020 FY2020 Revenues: $60.0 Million FY2021 Q3 YTD FY2021 Q3 YTD Revenues: $31.8 Million 010721 Slide 5
Slide 6: Park Loves "Niche" Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs Raytheon RIM-161 Standard Missile 3 (Block IIA) Boeing KC-10 Extender Northrop Grumman E2-D Hawkeye Park’s Estimated FY2021 Q3 YTD Military Revenues by Market Segment Estimated FY2021 Q3 YTD Military Revenues: Approximately $18.5 Million General Atomics
Slide 7: Park Loves its Commercial Aircraft Programs
Park Loves its Commercial Aircraft Programs Single-Aisle Aircraft vs. Wide-Body Aircraft Trend already in place favoring Single-Aisle Aircraft before pandemic Will market for Single-Aisle Aircraft recover before Wide-Body Aircraft market? If you want to be in Commercial Aircraft, you want to
Slide 8: Park Loves its Commercial Aircraft Programs (Continued)
Park Loves its Commercial Aircraft Programs (Continued) Program Highlight…Airbus A321XLR Single Aisle Range…up to 5,400 statute miles Seating capacity…up to 244 Expected entry into service…2023 Will A321XLR be a game-changer? We believe Park is ideally positioned (maybe partly by luck)
Slide 9: 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 10: 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? Park recently received forecast from Customer indicating significant increase in units in CY2021 Bombardier Global 7500 with Passport 20 Engines…Park r
Slide 11: Update on GE Aviation Jet Engine Programs
Update on GE Aviation Jet Engine Programs Comac C919 with LEAP-1C Engines…Comac has indicated they intend to certify and begin deliveries of the aircraft before the end of 2021; Park’s Lightning Strike Protection materials now being used on program Boeing 747-8…Boeing has announced it will termi
Slide 12: GE Aviation Jet Engine Programs Review… How Did We Get Here?
GE Aviation Jet Engine Programs Review… How Did We Get Here? Significant Downturn in Commercial Aircraft Industry in early CY2020 as result of Pandemic and Global Economic Crisis Almost all news about Commercial Aircraft Industry has been negative…very negative We did not completely buy all th
Slide 13: How Did We Get Here? (Continued)
GE Aviation Jet Engine Programs Review… How Did We Get Here? (Continued) We spoke at some length, during our FY2021 Q1 and Q2 investor calls, about the significant divergence from and mismatch between our agreed to minimum monthly baseline production amounts and the then current end-market require
Slide 14: How Did We Get Here? (Continued)
GE Aviation Jet Engine Programs Review… How Did We Get Here? (Continued) And now, to compound the potential need for a steep and abrupt ramp-up of production, the forecasted unit rates for CY2021 for all GE Aviation Programs which Park is on, except for the 747-8, have gone up, and, in some cases,
Slide 15: The GE Aviation Jet Engine Programs Ramp is Upon Us
The GE Aviation Jet Engine Programs Ramp is Upon Us Destocking has ended in most of supply chain related to Park’s GE Aviation Programs Inventories taken too low in some cases (Park’s Opinion) As explained, Rates are being pushed up The ramp is looking steep! For perspective, GE Program Sale
Slide 16: The GE Aviation Jet Engine Programs Ramp is Upon Us (Continued)
The GE Aviation Jet Engine Programs Ramp is Upon Us (Continued) Risks to, and factors potentially affecting, CY2021 GE Aviation Program Sales Forecast: Inventory at sub-contractors Possible inventory build as result of ramp Possibility that Global Economic Recovery stalls • Pandemic risks •
Slide 17: The GE Aviation Jet Engine Programs Ramp is Upon Us (Continued)
The GE Aviation Jet Engine Programs Ramp is Upon Us (Continued) Possible set-backs or issues with specific GE Aviation Programs Park is on…Possibility that OEMs reduce or push out their forecasts Possibility that OEMs or Customer increases forecasted rates or requirements Possibility that Supp
Slide 18: How Will Park Respond to the GE Aviation Programs Ramp-up?
How Will Park Respond to the GE Aviation Programs Ramp-up?…It is All About Our People Park’s current People count is 107; we plan to add 15 to 20 people to accommodate the Ramp-up All new people will need to be trained • We did not lay off anybody (against our religion), so we have nobody to “ca
Slide 19: Park's Financial Forecast Estimates
Park’s Financial Forecast Estimates FY2021 Q4 GE Aviation Programs sales forecast estimate: FY2021 Q1: $4.1 Million (actual) FY2021 Q2: $2.9 Million (actual) FY2021 Q3: $1.8 Million (actual; two months of production) FY2021 Q4: $3.9 Million to $4.4 Million FY2021 Q4 and FY2021 forecast e
Slide 20: Park's Financial Forecast Estimates (Continued)
Park’s Financial Forecast Estimates (Continued) Park’s Long-Term Forecast was withdrawn during our FY2020 Q4 May 14, 2020 Investor Conference Call Presentation Our current thoughts about our Long-Term Forecast Park’s Estimated FY2020 Revenues Park’s Estimated FY2021 Q3 YTD Revenues by Aerospace
Slide 21: Update on Major Expansion of Newton, Kansas Facilities
Update on Major Expansion of Newton, Kansas Facilities Total budget: approximately $18 Million Spending As of end of FY2021 Q3: approximately $12.0 Million To go: approximately $6.0 Million Completion expected in first half of CY2021 010721 Slide 21
Slide 22: Park's Balance Sheet, Cash and Perspective about Acquisition Opportunities
Park’s Balance Sheet, Cash and Perspective about Acquisition Opportunities Park’s Cash Dividend Park has paid 36 consecutive years of uninterrupted regular quarterly cash dividends without ever skipping a dividend or reducing the dividend amount Park has paid $542 Million, or $26.45 per share,
Slide 23: Park's Balance Sheet, Cash and Perspective about Acquisition Opportunities (Continued)
Park’s Balance Sheet, Cash and Perspective about Acquisition Opportunities (Continued) Park’s perspective on Acquisition activities and opportunities Major opportunities to buy businesses at distressed values did not materialize in CY2020 • The Fed... Very limited number of businesses offered
Slide 24: Park's Reflections on a Troubled World
Park’s Reflections on a Troubled World The world has been badly damaged and is a troubled place at this time… And at Park, we have had our own share of heartbreak and tragedy But at Park, we do not quit, we do not give up and we do not relent We continue to grind and press forward…that is al
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Slide 26: APPENDIX I Supplementary Financial Information
APPENDIX I Park Aerospace Corp. January 7, 2021 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 27: APPENDIX I
APPENDIX I Net earnings for the 2021 fiscal year third quarter were $1.0 million, or 10.0% of sales, compared to $2.8 million, or 17.7% of sales, for the 2020 fiscal year third quarter and $1.2 million, or 12.4% of sales, for the 2021 fiscal year second quarter. Depreciation and amortization expense