Park Aerospace Corp. · NYSE:PKE
Park Aerospace — Q1 FY2022 Earnings Presentation
40 slides from Park Aerospace's earnings presentation, Jul 8, 2021
Slide 1: FY2022 Q1 Investor Conference Call
FY2022 Q1 Investor Conference Call July 8, 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: Table of Contents
Table of Contents FY2022 Q1 Investor Presentation…………………………………………………….Slide 1 Supplemental Financial Information……………………………………………..Appendix 1 Environmental and Community Considerations……………….……………….Appendix 2 Diversity and Our Workforce……………………………………………………...Appendix 3 070621 Slide 3
Slide 4: Quarterly Results for FY2020, FY2021 and FY2022 Q1
Quarterly Results for FY2020, FY2021 and FY2022 Q1 (In Thousands)* FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY22 Q1 Sales $14,950 $13,723 $15,847 $15,494 $12,213 $9,250 $10,372 $14,441 $13,594 Gross Profit $4,804 $3,813 $5,022 $5,034 $3,674 $2,638 $2,553 $4,326 $5,472 Gross Ma
Slide 5: FY2017 to FY2021 Results
FY2017, FY2018, FY2019, FY2020 and FY2021 Results (In Thousands)* FY2017 FY2018 FY2019 FY2020 FY2021 Sales $31,837 $40,230 $51,116 $60,014 $46,276 Gross Profit $8,299 $11,288 $16,184 $18,673 $13,191 Gross Margin 26.7% 28.1% 31.7% 31.1% 28.5% Adjusted EBITDA $1,055 $4,704** $10,248** $13,012** $8,419
Slide 6: Perspective on Financial Factors not Affecting Adjusted EBITDA in FY2022
Perspective on Financial Factors not Affecting Adjusted EBITDA in FY2022 Cash Investment Yields Prevailing interest rates? The Fed? Tax Rate Is an increase in Federal Corporate tax rate coming? Depreciation 070621 Slide 6
Slide 7: 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 $117 Million of Cash and Marketable Securities as of end of FY2022 Q1 Park’s Cash Dividend Park has paid 36 consecutive years of uninterrupted regular quarterly cash dividends without ever skipping a d
Slide 8: FY2022 Q1 Top Five Customers
FY2022 Q1 Top Five Customers (in Alphabetical Order) AAE Aerospace GKN Aerospace Kratos Defense and Security Solutions Middle River Aerostructure Systems (MRAS)* Boeing 787 and its subcontractors Nordam Group NASA Talos-Terrier-Oriole Kratos BQM-177A SSAT Boeing 737 MAX *MRAS is a subsidiary of ST E
Slide 9: Park's Estimated Revenues by Aerospace Market Segment
Park’s Estimated Revenues by Aerospace Market Segment FY2020 FY2021 FY2020 Revenues: FY2022 Q1 FY2021 Revenues: $60.0 Million $46.3 Million FY2022 Q1 Revenues: $13.6 Million 070621 Slide 9
Slide 10: Park Loves Niche Military Aerospace Programs
Park Loves “Niche” Military Aerospace Programs Boeing AH-64 Apache Lockheed C-5 Galaxy Raytheon MK 56 Guided Missile Vertical Launching System Park’s Estimated FY2022 Q1 Textron Systems RQ-7 Shadow Military Revenues by Market Segment Estimated FY2022 Q1 Military Revenues: $5.1 Million Airbus C-295 0
Slide 11: James Webb Space Telescope Teaser
James Webb Space Telescope Teaser Launch planned for November 2021 “Going where no man (or woman) has gone before”… Fathoming the unfathomable Seeing the unseeable Knowing the unknowable 070621 Slide 11
Slide 12: Update on Major Expansion of Newton, Kansas Facilities
Update on Major Expansion of Newton, Kansas Facilities Total budget: approximately $19.0 Million Spending To date: approximately $16.5 Million To go: approximately $2.5 Million Expansion is basically complete Manufacturing trials expected to begin in July of 2021 (later this month) Qua
Slide 13: Commercial Aviation...Recovering from the Abyss
Commercial Aviation...Recovering from the Abyss…Updates and Developments 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 t
Slide 14: Commercial Aviation Updates and Developments (Continued)
Commercial Aviation...Recovering from the Abyss…Updates and Developments (Continued) U.S. and European Union resolve 17 year-long trade dispute involving subsidies to Boeing and Airbus… According to the U.S. trade representative, “We are finally coming together against a common threat”, mentioni
Slide 15: 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 16: 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…In the ramp mode… Airbus plans to increase A320 Family of Aircraft production rate from 40 to 43 per month in CY2021 Q3 and 45 per month in CY2021 Q4 During
Slide 17: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) As of the end of May, 2021, CFM (meaning the LEAP-1A engine) had a 60% share of firm orders for the A320neo family of aircraft (Source: July 2021 edition of Aero Engine News) On May 21, 2021 CFM and IndiGo, India’s largest airline, announced
Slide 18: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) A321XLR News • First Test Aircraft Nearing Final Assembly • First Flight expected in 2022 • Certification and entry into service expected in 2023 • Key question: Is the single-aisle, 5,000+ statute mile range, 225+ seating capacity market being
Slide 19: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Comac C919 with LEAP-1C Engines…Comac continues to maintain that they intend to certify and begin deliveries of the aircraft before the end of 2021 How will the recent “peace treaty” between Boeing and Airbus intended to deal with their “comm
Slide 20: Update on GE Aviation Jet Engine Programs (Continued)
Update on GE Aviation Jet Engine Programs (Continued) Bombardier Global 7500 with Passport 20 Engines…In the ramp mode…Park is now seeing the ramp in our order patterns Bombardier Global 7500 with Passport 20 Engines Comac ARJ-21 with CF34-10A Engines… In the ramp mode…Park is seeing early signs
Slide 21: 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…Long Live the Queen… Legendary Boeing 747…the Queen of the Skies in Real Life 070621 Slide 21
Slide 22: Commercial Aerospace Year in Review... Armageddon Revisited...Again
Commercial Aerospace Year in Review… Armageddon Revisited…Again Airplanes Parked by the Thousands Airline Terminals were Ghost Towns Airplanes Flying Almost Empty Thousands of Flights Cancelled Thousands and thousands of employees were laid off throughout the Commercial Aircraft and Commer
Slide 23: Commercial Aerospace Year in Review (Continued)
Commercial Aerospace Year in Review… Armageddon Revisited…Again (Continued) But, at Park, we did not completely buy all the doom and gloom news…we did not buy that the “End of Days” were at hand So, we made arrangements with MRAS to maintain minimum monthly baseline (critical mass) production le
Slide 24: Commercial Aerospace Year in Review (Continued)
Commercial Aerospace Year in Review… Armageddon Revisited…Again (Continued) We spoke at length, during our FY2021 investor calls, about the significant divergence from and mismatch between the minimum monthly baseline (critical mass) production amounts agreed to with MRAS and the then current end-
Slide 25: The GE Aviation Jet Engine Programs Park is on are in the Ramp Mode
The GE Aviation Jet Engine Programs Park is on are in the Ramp Mode The GE Aviation Jet Engine Programs Park is on are in the Ramp Mode (except the 747-8, whose rates are unchanged)…and the Ramp is looking Steep! For perspective, GE Aviation Program Sales for the following periods were: FY2021
Slide 26: GE Aviation Programs in the Ramp Mode (Continued)
The GE Aviation Jet Engine Programs Park is on are in the Ramp Mode (Continued) In addition, we recently received an updated Long-Term Forecast for GE Aviation Program Sales for CY2021 through CY2029 (the balance of the Firm Pricing LTA period), and… On an apples to apples basis, total updated f
Slide 27: How is Park Responding to the GE Aviation Programs Ramp-up?
How is Park Responding to the GE Aviation Programs Ramp-up?…It is All About Our People Park’s current People count is 105!!! People still getting paid not to work… But, Park’s People are stepping up and getting the job done…that is what Park’s People do… And Thank Goodness for Park’s Custome
Slide 28: How is Park Responding to the Ramp-up? (Continued)
How is Park Responding to the GE Aviation Programs Ramp-up?…It is All About Our People (Continued) And Thank Goodness we did not lay anybody off even in the darkest days of the Commercial Aerospace Industry’s Armageddon And Thank Goodness for Park’s Great People Without them, we would not be a
Slide 29: 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 Cathay Pacifi
Slide 30: 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 31: Update on Acquisition and Other Strategic Investment Activities
Update on Acquisition and Other Strategic Investment Activities Acquisitions Banker led auctions of Aerospace Companies Strategic targeting of Aerospace industry market segments and product lines JVs Potential Strategic investments in key Aerospace and Aircraft programs 070621 Slide 31
Slide 32: Living in Strange Times
Living in Strange Times “Strange Days Have Found Us”… People getting paid not to work “Free” money being force fed into the system The world seems upside down and backwards to us… What was supposed to matter…doesn’t What was not supposed to matter…does But, at Park we are not philosoph
Slide 33: Living in Strange Times (Continued)
Living in Strange Times (Continued) Our Park family sticks together and we take care of each other… We honor the One we lost who we will not forget…ever Park is a strange and unusual company filled with wonderful and special People We are very fortunate when it comes to our People We are n
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Slide 35: Appendix I: Supplementary Financial Information
APPENDIX I Park Aerospace Corp. July 8, 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 Commissi
Slide 36: Appendix I: Net Earnings and Adjusted EBITDA
APPENDIX I Before special items, net earnings for the 2022 fiscal year first quarter were $2.8 million, or 20.3% of sales, compared to $2.0 million, or 16.1% of sales, for the 2021 fiscal year first quarter and $2.3 million, or 16.2% of sales, for the 2021 fiscal year fourth quarter. Depreciation an
Slide 37: Environmental and Community Considerations
APPENDIX 2 Park Aerospace Corp. Environmental and Community Considerations Park Aerospace Corp. is a designer and manufacturer of composite materials and structures for aircraft and other aerospace applications. (Composite structures are structures which are produced from composite materials.) One o
Slide 38: Environmental and Community Considerations (Continued)
APPENDIX 2 35 at the Newton City-County Airport in Newton, Kansas. The first thing people likely see upon landing at the Newton City-County Airport are Park’s beautiful facilities, which we hope make a very positive first impression to visitors of Newton, Kansas. It is also very important to Park th
Slide 39: Diversity and Our Workforce
APPENDIX 3 Park Aerospace Corp. Diversity and Our Workforce • Park has a very diverse workforce, which Park is very pleased about • At Park, all of our People are equal and all of our People are treated equally • At Park, all of our People are Special, but nobody receives special treatment • At Park
Slide 40: Diversity and Our Workforce (Continued)
APPENDIX 3 • At Park, we want our People to understand that, with hard work and sacrifice, they can make it all the way to the top, just like Park’s President and COO and Park’s VP and General Manager, both of whom started as entry level production employees • At Park, our People are precious and th