Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Q2 FY2025 Earnings Presentation
39 slides from Park Aerospace's earnings presentation, Oct 15, 2024
Slide 1: FY2025 Q2 Investor Conference Call
FY2025 Q2 Investor Conference Call October 15, 2024 ***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 Q2 Investor Presentation……………………………………...……………….Slide 1 Supplementary Financial Information……………………………………………..Appendix 1 Clearest Picture of Mercury Ever Taken Thank you, James Webb Space Telescope 101524 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 Sales $12,783 $13,875 $13,867 $13,530 $15,551 $12,481 $11,639 $16,333 $13,970 $16,709 Gross Profit $4,092 $4,086 $4,444 $3,851 $4,833 $4,079 $3,169 $4,45
Slide 5: Quarterly Results for FY2023, FY2024 and FY2025 (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) FY2025 Q2 Considerations: There was approximately $2.2 Million of ArianeGroup RAYCARB C2® B NG product sales during Q2 under Park’s Business Partner Agreement with ArianeGroup • By comparison, there was approximately $750 Thousand of ab
Slide 6: Quarterly Results for FY2023, FY2024 and FY2025 (Continued)
Quarterly Results for FY2023, FY2024 and FY2025 (Continued) Total Missed Shipments in FY2025 Q2; Approximately $600 Thousand Caused by international shipment issues, supply chain issues, customers on hold issues and other miscellaneous issues There was no impact on FY2025 Q2 sales or earnings
Slide 7: FY2025 Q2 Top Five Customers
FY2025 Q2 Top Five Customers (in Alphabetical Order) Aerojet Rocketdyne Aerospheres, Inc. GKN Aerospace Kratos Defense and Security Solutions Bombardier Middle River Aerostructure Systems Global 8000 (MRAS) and its subcontractors Business Jet Kratos BQM-177A Unmanned Aircraft Gulfstream G280 Busines
Slide 8: 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 6 Months FY2024 Revenues: $30.7 Million FY2023 Revenues: FY2024 Revenues: $54.1 Million $56.0 Million 101524 Slide 8
Slide 9: Park Loves "Niche" Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs Park’s Estimated FY2025 First 6 Months Military Revenues by Market Segment Mk30 Canisters for Raytheon Evolved SeaSparrow Missile David Clark Air Force Helmets Estimated FY2025 First 6 Months Photo credit: David Clark Military Revenues: $12.3 Million Lo
Slide 10: 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 11: GE Aerospace Jet Engine Programs (Continued)
GE Aerospace Jet Engine Programs (Continued) MRAS/Park LTA provides for an approximate 6.5% weighted average price increase effective January 1, 2025 for the products covered by the LTA Park Composite Materials are also Sole Source on primary structure component for Passport 20 Engines for Bomba
Slide 12: GE Aerospace Jet Engine Programs (Continued)
GE Aerospace Jet Engine Programs (Continued) MRAS/Park LTA was amended to include Three Park Film Adhesive Product Forms for composite bond and metal bond applications MRAS Qualification of Two Park Proprietary Film Adhesive Formulation Product Forms in progress Qualification of metal bond for
Slide 13: 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 7,253 Airplanes as of September 30, 2024 Airbus had been maintaining that it intende
Slide 14: 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 15: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Then, on June 24, 2024, Airbus announced it is pushing out its goal of achieving the 75 A320neo Aircraft Family monthly delivery rate from 2026 to 2027 • Not surprisingly, Airbus highlighted Supply Chain issues, especially engine availability
Slide 16: 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 • Park supplies into the A320neo Family Aircraft using the CFM
Slide 17: Update on GE Aerospace Jet Engine Programs (Continued)
Update on GE Aerospace Jet Engine Programs (Continued) Airbus A321XLR Aircraft Variant • Airbus opened an additional A321XLR production line on July 16, 2024 • The A321XLR powered by LEAP-1A engines received its EASA type certification on July 19, 2024 • The first A321XLR delivery is scheduled for
Slide 18: 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 achieve a production rate of 150 C919 Aircraft per year by 2028 Comac reported to have over 1,500 orders for the C919 Aircraft The C919 is now flying for Air China, China Eastern Airline
Slide 19: 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, Boeing grounded the B777X test flight fleet after detecting engine attachment defects • The test flight fleet remains grounded while Boeing continues to evaluate the problem On Oct
Slide 20: 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 21: Park's Financial Performance History and Forecast Estimates
Park’s Financial Performance History and Forecast Estimates* Quarterly Sales and Adjusted EBITDA history: Sales Adjusted EBITDA 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 22: 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 $60,000 to Sales $31,837 $40,230 $51,116 $60,014 $46,276 $53,578 $54,055 $56,004 $65,000 Gross Profit $8,299 $11,288 $16,184 $18,673 $13,1
Slide 23: General Park Updates
General Park Updates Solution Treater Project We plan to purchase and install an additional solution treater • Why? To be located in our new facility It will take approximately three years to design and specify the equipment, install it, conduct internal trials and qualify the equipment for
Slide 24: General Park Updates (Continued)
General Park Updates (Continued) Park was recently qualified on an essential high profile missile defense program Program is potentially larger for Park than the PAC-3 Missile program Initial revenues expected for Park next year and program is expected to ramp quickly from there Park will ne
Slide 25: General Park Updates (Continued)
General Park Updates (Continued) New LTA with GE Aerospace in progress for CYs 2025 through 2030 under which GE is awarding two additional products to Park Incremental revenue from the additional products is expected to be approximately $3.0 Million per year Potential JV with major adhesives c
Slide 26: General Park Updates (Continued)
General Park Updates (Continued) MRAS Supplier Scorecard… Park’s scores: • 12 Month Rolling Composite Score: 99.88* • 12 Month Rolling Acceptance Rate: 100.00 • 12 Month Rolling SU Rate: 100.00 What do these scores mean…what is their significance? We are told that MRAS has over 700 suppliers
Slide 27: Recent Questions from Investors
Recent Questions from Investors Questions about Aeroadhere®, Park’s new Film Adhesive product line: “What advantages does Aeroadhere have over competing products?” • Aero industry is a little strange. Looks for “equivalency” more than “better”. Why would a customer want to buy it from Park? •
Slide 28: Recent Questions from Investors (Continued)
Recent Questions from Investors (Continued) Questions about the Major New Manufacturing Project Initiative discussed in Park’s FY2024 Q4 Investor Presentation and Investor Conference Call What is status of it? • It has “morphed” into a larger project. Why wasn’t it discussed during our FY2025
Slide 29: Park's Share Buy-back Authorization and Activity
Park’s Share Buy-back Authorization and Activity 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 purchased a t
Slide 30: Park's Incredible Cash Dividend History
Park’s Incredible Cash Dividend History Park has paid 39 consecutive years of uninterrupted regular quarterly cash dividends without ever skipping a dividend or reducing the amount of the dividend Park has paid $596 Million, or $29.10 per share, in cash dividends since the beginning of FY2005!!!
Slide 31: Park's Balance Sheet and Cash
Park’s Balance Sheet and Cash Park has zero long term debt! Park reported $72.0 in Cash and Marketable Securities as of the end of FY2025 Q2 A $4.2 Million Transition Tax installment payment was made during FY2025 Q2 The final Transition Tax installment payment of $5.1 Million is payable in
Slide 32: Park's Balance Sheet and Cash (Continued)
Park’s Balance Sheet and Cash (Continued) Obviously, the $52 Million does not take into account, among many other things, expenditures for potential additional stock buy-backs, potential acquisitions of or investments in adhesive and other companies, the potential aerospace composite structures ma
Slide 33: Financial Outlooks for GE Aerospace Jet Engine Programs and for Park…the Juggernaut
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 101524 Slide 33
Slide 34: Revenue Outlook…the Juggernaut
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 ARJ21 72 $29,500 $2,125K 8 GE9
Slide 35: 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 36: 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 38: Appendix 1
Park Aerospace Corp. Appendix 1 October 15, 2024 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 39: Appendix 1 Continued
Appendix 1 Continued Before special items, earnings before income taxes for the 2025 fiscal year second quarter were $2.9 million, or 17.1% of sales, compared to $2.4 million, or 18.9% of sales, for the 2024 fiscal year second quarter and $2.4 million, or 17.3% of sales, for the 2025 fiscal year fir