Park Aerospace Corp. · NYSE:PKE

Park Aerospace — Investor Presentation (July 2020)

27 slides from Park Aerospace's investor presentation, Jul 9, 2020

1. Slide 1: Company Presentation July 9, 2020

   Company Presentation July 9, 2020

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. Slide 9: Quarterly Results for FY2019, FY2020 and FY2021 Q1

   Quarterly Results for FY2019, FY2020 and FY2021 Q1 (In Thousands)* FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4** FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 Sales $10,393 $11,211 $12,853 $16,659 $14,950 $13,723 $15,847 $15,494 $12,213 Gross Profit $2,852 $3,145 $4,284 $5,903 $4,804 $3,813 $5,022 $5,034 $3,674 Gross

10. 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 011218 slide 10 **Before

11. 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

12. 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

13. Slide 13: FY2021 Q1 Top Five Customers

    FY2021 Q1 Top Five Customers (in Alphabetical Order) AAE Aerospace AAR Corp. Kratos Defense and Security Solutions Middle River Aerostructure Systems (MRAS) and its subcontractors Nordam Group Lockheed Martin PAC-3 Missile System Comac C919 Kratos XQ-58 Valkyrie 011218 slide 13 071620 Slide 13

14. Slide 14: Estimated Revenues by Aerospace Market Segment

    Park’s Estimated FY2020 Revenues by Aerospace Market Segment FY2020 Revenues: $60.0 Million Park’s Estimated FY2021 Q1 Revenues by Aerospace Market Segment FY2021 Q1 Revenues: $12.2 Million 011218 slide 14 071620 Slide 14

15. Slide 15: Impact of COVID-19 on Global Aerospace Industry

    Impact of COVID-19 Pandemic and Resulting Global Economic Crisis on Global Aerospace Industry… Recovery Considerations Revisited  Military Aerospace Industry  Supply Chain disruptions  Park programs seem fairly strong and steady so far  Commercial Aircraft Industry  Jet Fuel Prices  Reopening

16. Slide 16: Impact of COVID-19 on Aerospace Industry (Continued)

    Impact of COVID-19 Pandemic and Resulting Global Economic Crisis on Global Aerospace Industry… Recovery Considerations Revisited (Continued)  Business Aircraft Industry Recovery Considerations  Jet Fuel Prices?  Reopening of Economy  Economic Recovery  Corporate Profits  Stock Market performan

17. Slide 17: 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 (not included in MR

18. Slide 18: 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…  Bombardier Global 7500 with Passport 20 Engines…  Boeing 747-8: No change to program rates; how long will Boeing produce the Queen of the Skies?  Comac C919 with LEAP-1C

19. Slide 19: Update on GE Aviation Jet Engine Programs (Continued)

    Update on GE Aviation Jet Engine Programs (Continued)  Boeing 777X with GE9X Engines: All POs for CY2020 cancelled; production schedule pushed further out; Boeing recently announced rate reduction for this program; Park was recently advised by GE that they currently do not have funding to continue

20. Slide 20: Park's Perspective on Commercial Aircraft Industry

    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-Aisle Aircra

21. Slide 21: Park's Strategy

    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

22. Slide 22: Park's Financial Forecasts

    Park’s Financial Forecasts  Park’s Long-Term Forecast was withdrawn during our FY2020 Q4 May 14, 2020 Investor Call Presentation  Our current thoughts about our Long-Term Forecast Park’s Estimated FY2020 Revenues by Aerospace Market Segment  Our thoughts about FY2021 by quarter: Sales EBITDA Q1 (

23. Slide 23: Updates on Park...How Are We Doing?

    Updates on Park…How Are We Doing?  Park continues to be fully operational throughout the Pandemic and Economic Crisis  NY Office is Open!  Kansas Manufacturing Facility continues to be fully operational  Customer Flexibility Program has been instrumental in helping Park effectively and quickly a

24. Slide 24: Updates on Park...How Are We Doing? (Continued)

    Updates on Park…How Are We Doing? (Continued)  We recently introduced our new E-752-MTS mid-toughened epoxy prepreg product • Intended for primary and secondary composite aircraft structures • Suitable for autoclave, oven and press cure • Designed for hand lay-up and automated processes, including

25. Slide 25: Updates on Park...How Are We Doing? (Continued)

    Updates on Park…How Are We Doing? (Continued)  Park’s Balance Sheet  As of May 31, 2020, Park had $121 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 which

26. Slide 26: Updates on Park...How Are We Doing? (Continued)

    Updates on Park…How Are We Doing? (Continued)  Potential Significant Opportunities for Park:  B-52 Re-engine  Comac 929 Twin-Aisle  JV in Asia  But we love the “small” opportunities as well  Nothing is too “small” for us  If you are being made to feel like you do not matter and you are not “e

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    011218 slide 27 071620 Slide 27

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