Park Aerospace Q4 2026 Earnings Call Transcript

Park Aerospace (NYSE:PKE) held its fourth-quarter earnings conference call on Thursday. Below is the complete transcript from the call.

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The full earnings call is available at https://edge.media-server.com/mmc/p/gxy382c2/

Summary

Park Aerospace reported fourth-quarter sales of $24.187 million and a gross margin of 28.7%, slightly below their preference for margins over 30%. Adjusted EBITDA was $5.171 million.

The company emphasized its strategic partnership with Arian Group for the C2B fabric, critical for missile programs, and highlighted plans for significant expansion in manufacturing capacity in the US to support this demand.

Park Aerospace outlined a positive outlook with guidance for Q1 sales between $17.7 million and $18.4 million and EBITDA between $4.1 million and $4.6 million, despite anticipated challenges with supply chain and missed shipments.

Management expressed excitement about involvement in major aerospace programs like the A320neo and missile systems, highlighting the urgency to replenish depleted missile stockpiles and the potential to quadruple production of certain weapon systems.

The company discussed its cash position, recent stock buyback at $12.94 per share, and share sales at $24.21 per share, indicating financial prudence and strategic capital management.

Park Aerospace plans to build a new manufacturing plant to support both commercial aerospace and missile systems, indicating robust future demand and strategic growth initiatives.

Full Transcript

OPERATOR

Good afternoon, My name is Julian and I'll be your conference operator today. At this time I would like to welcome everyone to Park Aerospace Corp's Fiscal Year 26 Q4 Investor call and presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, please simply press Star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press star two. Thank you. this time, I will turn today's call over to Mr. Brian Shore, chairman and chief executive officer. Mr. Shore, you may begin your conference.

Brian Shore (Chairman and Chief Executive Officer)

Thank you, operator. This is Brian. Welcome all to Park Aerospace's Q4 investor conference call. Thank you for joining us with me as usual, Mark Esquivel, our President and COO. We published our fourth quarter earnings release just after the close. If you haven't accessed that, you probably want to do that in the earnings release. There are instructions as to how to access the presentation that we're about to go over. You can, there's a link that's provided also you can access that presentation on our website. You want to do that. So the call will be meaningful. So we'll review our presentation of course with you and then we'll be happy to answer questions. Just want to comment that we have a lot of new investors or potential investors at PARC. During our third quarter call in January, there were over 150 participants. That's a lot for us. I suspect that that interest might continue. So the point is that we have a lot of new potential investors or investors. Then we have the veteran investors. So we have to balance between covering the old stuff again and not covering it too much. I know sometimes when we do that the veteran investors get a little impatient that we're going over things that we went over. But out of respect for our new blood, new investors who want to go back and cover some of these things that we cover every quarter. So we'll do the best we can to find a middle ground and compromise. And that of course means that nobody's going to be happy. But anyway, we'll do our best. Of course, why don't we go ahead and proceed and we'll go right to slide two, which is our forward looking disclaimer language. We're not going to read this for you, but if you have any questions about it, please let us know. Let's go to Slide 3, Table of Contents, Slide 1. We start with our investor presentation and in Appendix 1, there's supplementary financial information. We don't normally cover that during our calls, but please let us know if you have any questions about it. Our practice has been our table of contents to feature something about the James Webb Space Telescope discovered these little red dots. A new class of object. You think about the new class of object. I didn't know what to make of that. Small, extremely red points of light that represent a potential seeding of early supermassive black holes challenging our understanding of galactic formation and evolution. Thank you, James Webb. And James Webb was produced with 18 proprietary Park Sigma struts. So this is not a high volume program for us and probably not an opportunity for many spares since the James Webb is in the orbit a million miles away, probably not going to send anybody up to replace any of the, any of the Sigma struts. But even though it's a small program in terms of revenue, we feature it every quarter now for the last, I don't know, a couple years. Because it's just such an incredible thing to be part of. It's just amazing. I mean it's hard to describe the words. Don't get, get it. Amazing doesn't really get it. Almost everything you hear that comes from James Webb says everything we believe the smartest people in the world believed about the universe was not true. Sorry, we gotta start all over again. So we're just, I don't know how to say it, we're just so thrilled to be part of that, the James Webb again. Even though from a business financial perspective it's, you know, not a big impact and like I said, probably no more revenue from the James Webb anytime soon. Let's go on to slide four. Going from the lofty to the I don't know if it's mundane, but a little different kind of level. Our own quarterly results important, but name it. Not quite important in terms of the, you know, I don't know, the history of the universe perspective, but nevertheless, we'll go over our quarterly results. Q4 sales 24,187,000, gross profit 6,000,935, gross margin 28.7, which as you know, we don't like that too much. We don't like when gross margins below 30%. When we get to next slide or two, we'll explain what's going on here. That relates to the significant shipment sales of C2B fabric adjusted EBITDA 5 million 171 and EBITDA margin 24.1%. What do we say about our Q4 during our January 13 Q3 investor call, we said our sales estimate is 23 and a half to 24 and a half. So we came in within the range, maybe kind of the top half, but still within the range. Adjusted EBITDA estimate four and a quarter. Four, sorry, four and three quarters to five and a quarter quarter million. And it seems like we came in within the range, near the top half of the range, which is good. I need to explain, especially for some of our new potential investors, investors, that when we give an estimate, we're telling you what we think is going to happen. We don't like this kind of thing that people do where they, you know, give a number, but it's, you know, they, they haircut it by 10%, you know, so they can beat the number and they have a beat. I can't. I don't like that term. And these analysts come up with this kind of stuff like it's some game. We're not playing a game here. It's. We don't like that makes us uncomfortable. We're not. We're not playing a game. But the whole concept, there's a beat. It's a beat. It's a beat we don't want to beat. When we give you a number, we're telling you what we think is going to happen. And if we're wrong, that means we didn't do a very good job. Now, sometimes we'll be wrong high, sometimes we'll be wrong low. But we're not trying to do that. We're not trying to give you a number that we can beat so we could be hero to us. That seems like such a child is waste of time. And I just want you to understand that. So when we say we were in the range, that's a good thing. That means our prediction was right. So I probably cover that every quarter because it's a little different with many other companies, how they do that kind of guidance thing. And it's not something we really have to spend time with. Let's go into slide 5. Okay. Talk about Q4 a little bit more. Aryan Group. Here we go. And now we're talking about that gross margin number. Arian Group business partner agreement. We talked about this every quarter because it's, you know, significant from many perspectives, but in terms of the quarterly P and L. So we entered into the business partner agreement with Arion in January 22, which Arian appointed Barca as their exclusive North American distributor for their Ray carb C2B fabric used to produce ablative composite materials. For advanced missile programs. Now, we had 7.1 million of C2B fabric sales in Q4. Well, that's a lot. I mean, 7.1 million. What was our number out of 24.1? So it's a very high percentage. As we previously explained, we sell C2B fabric to our defense industry customers for a small markup. You say, well, that's not so good. But wait a minute, that's not the whole story. Park sold 1.3 million of ablative materials manufactured with C2B fabric in Q4. And as we also previously explained, our margins producing and selling ablated materials manufactured with this fabric are significant. Now, what's going on here? When we sell the product, we buy it from Arion because we're exclusive. We have exclusive rights to buy it in North America, that we sell it to the OEMs, because when they're doing their stockpile on their product, where does it go? When they stockpile it in our factory, we don't even ship to them. We hold it for them in our factory. Why are we doing that? They're stockpiling it. Because obviously you're going to tell us at some point, please make this into your prepreg material. Please produce the material for us. So everything that we stockpile will end up being produced by PARCC as a blade of material, which is where those margins are very good. So stockpile is good. And they're doing it because they always. OEMs are doing it because they're concerned about the availability of this very critical C2B fabric. Let's go on to slide six missed shipments. Now, this is interesting because we started talking about this at the beginning of pandemic. The industry was not doing well. Supply chain, international shipments, one thing after another after another. And every quarter with a lot of miss shipments. You know, that calmed down quite a bit over the last couple years as things kind of got close to quote, unquote, normal based upon the post pandemic levels. All right, but what's going on here is this is now re emerging as a problem because now the industry is accelerating, recovering, and the program ramps are accelerating. So now the industry is kind of struggling once again with keeping up from a different perspective. But it's the same kind of phenomenon. It's just from a different perspective. So now we're talking once again about Ms. Shipment 715,000. Well, that's a lot. And we talk about Q1 or Q1 forecast, it's going to be even more so. It's something to think about. Ultimately all this product gets produced and shipped but the industry is now struggling and to keep up as the industry accelerates and ramps net impact of tariffs, tariff related costs. Mark, could you help us with a little perspective on tariffs and tariff related costs, please?

Mark Esquivel

Yeah, it's the same story as you know, the last few quarters. Very minimal impact for us. Again, we typically pass these on to our customers through pricing our pricing contracts or as we do pricing every few months with our regular business. So no impact for us, but maybe a few thousand dollars this quarter.

Brian Shore (Chairman and Chief Executive Officer)

All right, thanks Mark. So why don't we keep going? We can hustle through here. So slide 7. For some of you new folks. This is something do every quarter for, I don't know, as long as we've been doing presentations, I guess our top five customers for the quarter in alphabetical order. And we do a little picture that you know, ties into each of the customers. The top right. You know, you'll hear a lot about this. The PAC3 Patriot missile system, that's two for the price to one because that actually is a aerospace and upright Harris. So that's nice. We got one fixed for two. Kratos is obviously a Kratos bqm, that's a target drone, middle of air structure. We'll talk more about them. That's the Airbus A320 with the Leap on the engine and Nordam is the Boeing Strato tanker. So let's keep going. Pie charts. These have gotten a little boring, but they're becoming interesting again. So we wanted to take a look at this park. Estimated revenue by aerospace market segment C21. That was the fiscal 21. Remember our fiscal year ends in February. That was a pandemic year. Look what happened wasn't that military was so great, it's its commercial was almost nothing. Remember that? You saw the pictures of like the 737s with two people on them or probably more likely really parked that weren't flying at all. But commercial aerospace was terrible and the airlines weren't on. You see that happen in 21, in 22, 23, 24 and 25. It kind of normalized, quote unquote for the pandemic level, post pandemic level which was, you know, kind of anemic let's call it. But look at 26, something emerging there where the military is actually increasing more than it had been. And if we showed you Q4 of 26, it would be kind of shocking how strong, how significant military is. We're not going to do that because we don't want to get hung up on one quarter, but we think there might be a trend going on here. We look at 26, which you know, is in the. The bottom middle of the slide. And let's go on to slide nine. A little more pie chart stuff. This is another slide we include for every quarter. Park loves niche military airspace programs. The top five. That's done by Donna and this one's done by Elena. Elena's head of customer service at Park. This is her thing she does every quarter. Park loves niche military aerospace programs. So these are not necessarily the big programs. These are just. Some are big, but some may not be. These are programs of interest. We thought you'd be interested in them. I just want to be clear. Everything we show here, everything we show every quarter, those are programs we're involved with, we're supplying into. Involved with. We're not just, you know, showing you nice pictures of rockets and planes and cool stuff like that. So we just want you to be aware of it. We don't comment anymore on what we do with these programs. These just got to be too sensitive. But just understand these are all programs that we supply into. And the pie chart. Look at missile systems. You know, that's getting to be pretty big there. And that's not. I don't think that's an anomaly. We'll talk about missile systems as we proceed with the presentation. I'm trying to hustle through because the back end of the presentation, we get to missile systems. There's a lot to talk about. That's a lot of new stuff. Also slide 10G Aerospace jet engine programs. We provide a slide almost every quarter. Not almost every quarter. Very minor changes. I do need to explain for some of our new investors. Firm pricing LTA. It's a requirements contract from 1929 with Middle River Aerostructure Systems. Who are they? Don't know. They're a sub of SDA Engineering. Aerospace. Who are they? Don't know. We built a redundant factory that was part of the deal that we actually made with GE Aerospace. When we entered into the LTA through 29, we agreed to build a rhubund factory that was done a while ago. It's in production, sole source for composite materials for various engine of cell components. For multiple MREs programs. We have the H320neo family 747, the COMEC 919, the COMEC 909, the global 7500. And the next slide is the 777X. Well, what's going on here? These are all GE engines, aren't they? We didn't say anything about GE and also CFM which is, you know, partnership with GE. Yeah, so the thing is that when we entered into this contract, Middle River Mrs. Where they produce the cell and thruster versus structures for these engines was a sub of GE and I think in 19 or 20, I don't remember when GE sold this MRAS to ST Engineering which is a large Singapore aerospace company. That's the reason why all these programs are GE Aerospace, called GE Aerospace programs. So questions, let me know. Let's just keep moving here. Slide 11. Okay, we already talked about this 777X that's on those G9X, that's a GE engine of course. And in this LTA we also included some of them are new film, proprietary PARF film adhesive products and for composite bond and metal bond. And those products are undergoing qualification. We've been talking about a life of program agreement to kind of supersede a 10 year deal for you know, every quarter now for a while. And this, this was requested by MRAs and SDE, not by PARC. We're happy to do it. It's under negotiation. We actually made some progress recently, but we'll see. It's still a way to go to get the finish line. As we always say, we're happy either way. If we do the life program, that's wonderful. If not, we're okay too. Let's go on to slide 12. Keep moving along here. Stolen GE updated GE Aerospace jet engine program. So let's go through the programs a little more detail. First we start with the big Kahuna, which is the A320 aircraft family, includes all these different variants. As of March, Airbus has already delivered 4,553 of these airplanes and had a backlog of 7,412 these airplanes. So you had those two numbers together and that the total is a big number. This is a huge program and you know, could be the biggest commercial airspace program ever aircraft program ever. A320neo family aircraft deliveries, you see the pattern here, ramping up in 19 they got to 561 and the pandemic hit. Everything collapsed down to 431 kind of going away back to the, you know, that 561 level kind of got there in 23, 24, 25, you know, inching forward to 50amonth. 51 per month. But let's go to the next slide, slide 13. Well, one more item before we get to that punchline. 26 year to date, only 136 deliveries. That's not so good. Off to a slow start. Airbuses with a 320neo aircraft family. Why is that? What's going on? Well, Airbus have been targeting 75neos per month by 27 they've been very public about that. So look in the prior page we're kind of inching up to 51. We're no more close to 75. Airbus recently stated they expect to reach that Delivery rate of only 70, 75 speed backing off a little bit by the end of 27, stabilizing, that's their term to rate of 75 per month thereafter. So they're backing off a little bit. What's going on here? Why? What's the problem? Maybe we should consider the engine situation. So sorry, it's a little complicated but you know, we need to give you the perspective. I think there are two approved engines for the A220neo aircraft family. There's the CFM Leap One A engine. That's what we're on. And then there's the Pratt PW1100G engine. We're not on that program. So into the A320neo family aircraft using the Leap engine. But we don't any concept on the A320neo family aircraft using a Pratt engine. Important to know that. Let's go into Slide 14. Now according to the first quarter 2026 edition of AeroEngine News, that's our Bible, the CFM Leap One a market share firm engine orders for the A320 Neo with 66.2%. That's interesting. Like what the heck is that number about? You know, we cover this every quarter and you know the numbers have been like 60%, 61%, 60%, 66.2%. That's not. Or that's, that's not the historical number that that market share moved up. It's sustainable. Was a trend, we'll see. But at that delivery, at the delivery rate of 75 airplanes per month, 62.2% equals 1192 Leaf engines pure. Can you remember that number? We'll get back to it later. You know, interesting number the Pratt engine has. Now here's the, what we're in. Here's the kind of the, maybe the issue. The Pratt GTF engine is struggling with serious reliability issues. You probably read about this. You know, it's not, it's not, not a big secret. Reliability is a positive selling point for CFM Leaf 1A. They upgraded one of the components recently for Better reliability. And according to Airbus, this is recent. There is now a serious shortage of Pratt PW1100G engines. And Airbus indicated that's the main cause of their disappointing 2026 A320neo aircraft deliveries. They're kind of putting the blame on this Pratt engine, not only with the reliability issues now with shortages. Meanwhile, CFM has significantly ramped up production of their LEAP engine family, including the Leap 1A. So let's keep here, let's see if we can figure out what really is driving all this. Slide 15. Could these factors lead to an even greater C. Sorry, rushing CFM Leaf 1A engine market share for a 320? I don't know. Interesting question. Now we read recently something that surprised us, which is Airbus now saying, well you know, CFM is delayed on deliveries as well for the Leap 1A. So I don't know what that means. The focus had really been on the PRED engine. Now they're saying, well, you know, leave us behind as well. So not sure what to make of it. My guess is that if CFM can produce the engine, that they have an opportunity for more market share gains. But you know, that's their business, not mine. As of March 31, there were 8472 Leap One A engine orders. That's a lot of orders for engines. And if you look further later on in the presentation, we talk about our revenue per engine based upon current pricing. You can do your own math and figure it out, but you know, we're talking about some very large numbers here. A320neo aircraft family program could end up being the world's largest commercial aircraft program ever. So we're very happy to be on that program. A 320neo aircraft program could end up being part's largest non defense program ever. And that goes back a long, long time. We're talking electronics, you know, back in the 90s and everything else. So that's a big statement. Let's go on to another LEAP program which is the COMEC 919. That's a Chinese single aisle to compete with a 320 and Boeing 737. COMAC is increasing manufacturing capacity to achieve production rates of 150, 919 aircraft year by 27 and 200 by 29. And they reportedly have over 1200 orders for the 919 aircraft. Let's go on the slides, what do we got here? We're at slide 16. COMAC delivered two of these airplanes in 23, 14, 24 and 18 and 25 that's not a lot. COMAC was targeting 25. That's on the lap. 20, 25 and 25, but didn't get there. So there are reports that CFM may be favoring Boeing Airbus with LEAP engine availability. Now, these are different, three different engines. They're not interchangeable. But there's still a capacity question as to how many LEAP engines that CFM can produce. So, and the lack of availability of CFM Leap 1C engines may explain a short and may be emerging as more impactful to the maybe emerging as more impactful to the ramp of the 919 aircraft program than originally anticipated by COMAC. Now, will this change improve for CFM? Sorry for COMEC after CFM as a result of the recent summit present from President Xi, the answer may be yes. There are reports that there is some plan to increase CFM Leap 1C engine deliveries to COMAC as a result of that summit. So we'll see what happens with that. But you know, you get the theme here. It seems like the engines are often negating items on these programs. Interesting. Slide 17. Let's talk about the 777X program. That's the other third big program that we're dealing with with GE Aerospace engines. The 777X program of GE9X engines. The 777X text program is masked over 1500 flights, nearly 4400 flight hours. We have 652. Boeing has 652 open orders for the 777X. And the certification test program seems to be moving along reasonably. Boeing anticipates FA certification, entry into service and first delivery of the 777X next year. This program is very, very, very delayed. You know, delayed a long time. I happen to be at Everett Field and where Boeing makes these airplanes. I think the biggest building in the world, actually. And they're all over the field or everywhere. A lot of cases they don't have engines yet. Waiting for engines, obviously waiting for certification, they can't certification, they can't deliver, start delivering the airplane until they get the FAA certification. Let's go on to slide 18. So these points are kind of key. Our understanding is that Tac 919 aircraft and the Global 8000 aircraft are already being produced and delivered at or close to targeted rates. We covered that in that original slide where we broke down the different programs, but we didn't really deal with them in any detail. The point is that we're not expecting much upside for those programs. These are already being produced at their Targeted rates. Clearly, commercial aircraft juggernaut, as we call it, will be driven by the ramp up of the A320neo aircraft family, the Boeing 777X and the COMAC919 aircraft. Okay, let's go on to slide 19. We're still talking GE Aerospace. Just some numbers for you here. G Aerospace jet engine program sales history, forecast estimates. So in Q4, 8.1 million and in fiscal 26, 29.3 million. See what happened here? Look at 20, we're kind of almost at 29 million right before the pandemic. And wow, look what happened in 21. Just dropped off a cliff and we're clawing our way back in 26 to kind of get back to where we were in 20 right before the pandemic. So. And it's been a long five years for the special commercial aircraft and industry, that's for sure. So Our forecast for Q1 for GE Aerospace program sales, 6.8 to 7.4 million. Forecast for the year 34 to 38 million. It would be a mistake for you to take Q1 for anything, multiply by four and think that's what we're thinking about. It doesn't really work that way. The forecast for the year that's based upon input we have. We call a bill plan from our customer and we haircut a little bit. You know, the number of weeks from our customer is actually higher than the forecast we're providing you. We're trying to be more conservative here. Let's go on to slide 20. Okay, now let's talk about PARCC, PARCC numbers. PARCC Financial performance history and forecast estimates. Top is just history. Totals you already know about. The Q4 you know about. Totals you know about or you know about now anyway, Forecast estimate for Q1 17.7 18.4 million in sales 4.1 to 4.6 million EBITDA. Now remember we talked about miss shipments in Q1. We're expecting 1.3 approximately significant amount of missed shipments. We don't know yet. You know, Q1 ends on Sunday. We're so close to the end of the quarter that we can give you some perspective. Normally when we announce the miss Shipments normally really end up being a phenomenon in the last few weeks of the quarter. So normally we announced. We can't give you any perspective on it, but we're so close to end the quarter. We give perspective. There's the same kind of thing, you know, supply chain things. We're not getting components as quickly as we need some shipping issue where if the freight forwarder doesn't pick it up, you know, international shipment, it's not a sale. You know, we don't have any sales cutoff issues at Park. You know, it's a sale when it leaves our dock. So you see, you know, we're kind of back in that mode now and the industry is struggling. Industry starting to restructure. Things are ramping up aggressively. Things were quiet and things were kind of normalized and the industry kind of caught up. But now we're back to maybe getting behind the power curve a little bit and we'll have to see how that pans out. But I mean, I don't know, it may take, I don't know, a couple years the industry to, you know, get back up to speed. Or maybe it'll always be behind because things are ramping so aggressively. You know, as soon as they catch up and they'll turn around, oh, we ramp more. We'll have to see about that. Slide 21. We're just, you know, trying to share the full perspective with you. Slide 21. Let's stop here for a second. I know we're kind of running late here, but our historical fiscal year results, because it tells a story that's kind of interesting, I think. Look at the sales. This is aerospace only. We sold electronics, I think, in 19. But this is aerospace only, you know, 31.8 going year over year. 40.2, 51.1, 60. So we're 17 to 20. We kind of were up $10 million per year in aerospace, which is a lot. Then look what happened 21. We just kind of fell off a cliff. There's a pandemic year and 22, 23, 24, maybe 25. We try to crawl our way back to the, you know, the 20, the pre pandemic fiscal year and maybe just got there in fiscal 25. But it has been a. It's been a difficult five years post pandemic for the industry, that's for sure. Now 26, it seems like we're breaking out a little bit with the sales of 73.3 million. But 26, a little bit of a maybe departure, which is a good thing. Important themes, supply chain limitations, industry malaise will affecting aerostates. Industry post pandemic. Yeah, yeah. The industry to us was kind of sleepwalking through those five years, you know, in a sense, stated malaise. And it was a long five years. Long five years for us, that's for sure. You know, I think a lot of people were. Didn't really believe in Us very much. We believed in ourselves, but we didn't. Not too many people. I think we were kind of forgotten company that we were kind of lost and we know what to do and we never thought that way. We always stayed focused. I think we worked very hard in our quarters. That's for sure. I know. I know that. Think it way to listen to people tell us to sell the company at 12 or $13 per share. You like that? That's the kind of crap way to listen to. It was a long five years and you know we're in the industry so there's not much we could do about it. But the industry was to us sleepwalking. Now we'll get to that in a little while, but I think that that's over. You know the industry has gotten a pretty serious wake up call, maybe shock treatment. We always want to remind you how many how much fabric were in this year because they do drive the top line numbers and the bottom line as well. So I hope you don't mind that commentary. But you know we thought. We're not complaining. We just thought you should know how we feel about things. You know, if you want to invest in parks, you know what we feel. Slide 22. Okay, so let's talk about this. This is interesting stuff. We are buyback authorization. Yeah. We purchased 718,000 shares of recommercial stock. $12.94 per share, 9.2, $9.3 million. We didn't buy any stock in our Q4 Q1. I'm not shocked to hear that. So you know, we used to comment that we really don't like buybacks too much and we don't comment our stock price and only ask me do that. Except this is one exception. We said when a price gets so stupid, we don't have a choice but to buy the stock. So we felt the price was goddamn stupid and we bought a lot of stock at $12.94. So let's go on to the next slide. We juxtaposed these two slides for, you know, intentionally. Our recently announced public offering. That's slide 23. We announced this during our last quarter call. We filed an industry registration statement and prospective supplement for $50 million at the market public offering with the purpose to replenish a portion of the 50 million million plus with that plus sign that we plan to invest in our major new manufacturing plant. We'll get back to that later. Other investments under serious consideration. We'll talk about that soon as well to ensure this is important one that Parc has the necessary funds to be in a position to take advantage of and exploit the key opportunities currently being presented to PARCC and the new key opportunities as they arise in the future. That's a little bit more of kind of an amorphous thing, but I think equally important. Now let's go to numbers. During our Q4 under this registration statement we sold 943 approximately shares of a common stock for proceeds of 22.8 million and a price of $24.21 per share. So we bought, let's see, we bought the stock at 12.94. We sold it at 2421. Now I'll tell you something. I don't have an MBA, I don't have a degree in economics. But we come from. That's a pretty good deal I think. So just wanted to mention those two numbers to you. Let's go on to slide 24 here. Still on the same kind of theme parks, balance sheet cash and very, very incredible cash dividend history in our opinion, of course we have zero long term debt. That's not our opinion. Park reported about 89.4 million in cash and market secur at the end of the quarter. And you say well that's a lot for park and actually it's not. It probably isn't even enough. We'll get to that later. In presentation we talk about the expansion plan and other potential investment that we're seriously negotiating. It's probably not enough money for Park. 41 consecutive years of dividends. Park has paid $613.7 million $29 29.975 per share since 2000. 2005. So our next dividend which we're announcing soon, that'll put us over $30 per share since 2005. We like to show the picture of our founders back in park was founded in 1954 and about 30,000 bucks a small wasn't a factory, it was a garage in Woodside, Queens. This actually is a step up. This is about three years later. This actually was a real factory in Flushing, New York which I think was about 10,000ft with our founders in the picture. Slide 25. I'll try to hustle. I know we're taking too much time here. Financial outlook for GE Aerospace, jet engine programs, the commercial aircraft juggernaut. So for those of you who have been listening to our presentations every quarter we say what we say the juggernaut is coming. It can't be stopped and we better be ready. We're not saying that anymore. We're saying the Juggernaut is here. Commercial aircraft. Juggernaut is now. So let's kind of go through this quickly. Slide was it? Slide 26. We show you this every quarter. I just want to remind you the H320neo engine assumptions per year. 1080, that's based upon a 60%. That's based on 75 airplanes per year and 60% market share. But that market share that the actual market share that gives us 1,192 engines, not 1080. We're still sticking with 1080. Be conservative here. That's millions of dollars of additional revenue. Just want you to be aware of that. And slide 27 goes through a lot of math as to how we computed the numbers on time. Slide 26. I spent time on slide 27. Slide 28. Okay, so here we go. Now we need to spend some serious time on this whole new Juggernaut Extreme, we call it. Let's just go through some basics. Parks Missile Systems Niche Parkes specializes in the design and manufacture advanced composite ablative materials used to produce solid rocker motor structures and heat shields for critical missile Systems. Including the PAC3 Patriot missile system. We talk about that a lot and we keep. We'll talk about a lot during the presentation. I just want to flag here before I forget that there are dozens of missile systems that we work on. It's just that the Patriot has, you know, so much known variety, so well known. So we tend to focus on that more. Just as an example. And the other programs you probably wouldn't want to talk about. You know, it's maybe not something for public consumption, but there are dozens of missile programs that run. Park also designs and manufactures composite structural materials used to produce other missile system components. Depletion of the depleted. Okay, here we go. It is well understood that critical missile system stockpiles are already badly depleted by the ongoing brutal war in Europe and last June's 12 day war in the Mid East. And now we have the war with Iran. The shell game. What's a shell game? That means moving the Patriot batteries from one country to another. One country to another. To try to be ready for the incomings. The shell game has been tried. The law of diminishing returns is in play. There's only so many times the shells can be moved before there are no shells left move. That's the problem, you know. That's really the problem. Slide 29. There is much reporting about how badly stockpiles are critical missile systems accruing their Patriot pact rain the other systems report have been depleted as a result of the war with Iran. We're not going to report or cover the reporting here. It could be irresponsible to do so. But you can check it out yourself. You could go find it yourself. We just don't want to go into that. Running empty. Yeah, running empty. Replenishing the depleted stockpiles. Well, that's obviously very urgent. There clearly is a highly urgent need to replenish the depleted missile system stockpiles. But is that enough? Does it end there? Maybe not. Quadrupling the production of exquisite class of weapon systems. What? Quadrupling? Are you kidding me? I don't know, maybe not. Let's go on the slide. What is it, 30 on March 29, 2026, I guess a couple months ago, President with the White House with six top defense contractors, including Lockheed and L3Harris Missile Solutions. Reason we mentioned those two is they're both, you know, very key for US on the PAC 3 missile system. the meeting, contracts reportedly agreed to quadruple production of exquisite class of weapon systems as rapidly as possible. Reportedly that was reported by President Trump. I think actually this is a new world order for the defense industry. A radical and likely lasting change of the defense industry. The old days are likely gone for the defense industry and that is a good thing in our opinion. So like I said, the industry generally had been sleepwalking for five years, defense and commercial. But there's now this wake up call. We have the nwa, we have the extreme depletion of the supply and then this quadrupling scenario, which is more than a wake up call, more than alarm clock, it's shock treatment. What does the NWO mean for parc? So this is really important for you to understand. Our experience is that the defend industry has entered into hypersonic mode. That's our personal park experience, not just what we hear. That's our experience, our day to day experience. In all years we have never seen anything like this. Particularly for ablative materials for solid rocket motors. Not even close. I've been to Parks since 1988. I've never seen anything like this, electronics or aerospace. The quoting activity, especially for ablative materials for solid rocket missile systems has been hyper and frenetic. Almost too much to bear really. It's something we've never seen before. It's hard to really describe and help you understand what we're experiencing. We're just trying to do the best we can here. And just in case it's not obvious, the PAC3 missile systems and many other missile systems, which PARC supports are very key members of that Quote unquote exquisite class of weapons system. So let's keep going here. Missile Systems on slide 31 we're not talking about specifically the PAC3 Patriot missile system. Park is sole source qualified for advanced composite of blade and materials for solid rocket motors for the PAC3 missile system program. The PAC3 missile system is considered by many to be the world's premier missile defense system. So you know a lot of discussion about maybe it's not great for shooting down low drones but for incoming ballistic missiles, yeah, that's a system everybody wants to have. Highly effective, highly effective. We have covered the PAC3 missile system extensively in recent quarterly investor presentations. We'll just hit the high points of new items here. Stockpiles of the PAC 3 missile system Interceptors were already badly depleted by the war in Europe. Europe and last June's 12 day Minish war. So we don't want to go into repeating reporting here. This may not be appropriate responsible to do so but suffice to say the current war with Iran is very badly depleted. The already depleted stockpile of Pact 3 and interceptors the Pact Free missile system interceptors have been extensively and very effectively, maybe too effectively meaning so effective that everybody in the world wants them used by US allies in the region, the Mideast region during this war including Saudi Arabia, uae, Kuwait, Qatar, Bahrain, Israel defending against incomings during this Iran war. Slide 32 just a little side note here. Israel you probably know also uses its own system called Arrow 3 and R4 for missile defense and park is qualified and so supports both those programs. Back to the PAC3 as previously reported on January 26th Lockheed announced it reached a seven year agreement with the Department of War to increase PAC3 MSC interceptor production from 600 to 2000. That's a lot. That's almost four, isn't it? 4X. What about us? What have we been told by our customer? We're not going to tell you. We're not liberty to. But we can tell you it's more than 2000 on June 13th, 2026. I think we covered this last time as well. Yeah, the Dow announced investing a billion dollars in the ultimately Harris solid rocket motor business to boost solid rocket motor production for PAC3 and other missile systems. That transactions were closed apparently. Slide 33 continuing with missile systems Arian Group. We got to talk about Arian Group. Now we talk about PAC3. Now I'm going to talk about Arian Group. So Aron Group is a joint venture. It's a large French company between Airbus and Safran. Our relationship With Arian Group and its predecessors goes back to early 2000s. We have very special relationship with Arion and we're proud to be their partner. And we don't take liberties to a partner. That's their term. We don't, you know, we don't do that. That's a term they use for us. I just want you to be aware of that. Arian Group produces a proprietary product called Ray Cars Cheat which is, sorry, a proprietary fabric ray carb C2B which is used to produce ablative composite materials for advanced solid rocket missile programs. So here's something highlighted. Parker Solsor qualified on a solid rocket motor for the PAC 3 missile program for specially bladed materials produced with air gross proprietary C2B fabric. So we're kind of double solar source quality were sole source but also Aryan group with the C2B fabric sole source. PARC entered into a Business Partner Agreement with Aryan in January of 22 under which they appointed us as their exclusive North American distributor for C2B fabric. On March. This is something worth noting. March of 25th we entered into what they called the new agreement with Arion under which park agreed to advance Arion €4,587,000 to Arion. That's about 5 million I guess against payments for future purchases by Parker C2B Fabric. Why we do that? Slide 34 yeah, we paid the first installment, you know, in Q1 of 26. We paid a second installment in Q1 of 27 and the third installment we paid alternate last. I think in Q1 of. What's the purpose of this big advance is, you know, approximately 5 million to fund 5050 with Arion the construction of additional C2B fabric manufacturing capacity in France. Will this capacity. That capacity will be online and maybe I think in 28. Will this additional capacity be adequate to support the ramp up of the just the pack remissal programs. Let's not even talk about the other programs on which C2B is getting qual or is qualified. The answer is no. Not even close. Not even close. So what do we do now? PARC has engaged in serious discussions with Arian Group relating to an agreement to significantly increase C2B manufacturing fabric and manufacturing facility in the US to support critical Department of War missile programs, including the Pactre missile programs. The agreement under negotiation contemplates this important PARC making a significant investment in this C2B fabric manufacturing plant. Remember I mentioned our own expansion and there is another investment here. We'll get to our own expansion in a minute. In our opinion, it's urgent that this C2B fabric manufacturing plant is built. So the interest in C2B is hyperinfronetic. So there are a lot of companies, a lot of customers, a lot of OEMs looking to sign up for C2B on their programs. The obvious challenge is supply. You know, probably take about four years for this plant to be built. What do we got going here? We got the nwo. We have the war where systems have been badly depleted and quadruplings. That's driving in very, very, very hyper new need for the C2B fabric. Which is like I said, considered my understanding the premier product for missile systems. For solid rocket motors. For missile systems. Let's go on to slide 35. This will tie together a little bit as well our new manufacturing plant. Sorry we're going so long here. An update. We talked about this for the last couple quarters. But you know, we're regrouping with our new manufacturing plant. Why is that? We're planning. Okay, let's go through it. Clark is planning to build a major new manufacturing plant. New plant will include the following manufacturing lines. This is going to review solution, hot solution, treating hot melt film, hot melt tank. What else? What else? Because we're always looking to expand and develop our business. We don't want this limit ourselves always to what we're doing now. New plant is being designed to produce and support our complete composite materials product line. Including specially ablated materials, solid rocket motors, film adhesive materials and lightning strike protection materials. What else? Well, again, you know, we're looking always to develop into new areas. I mean new related areas. Not looking to go into making music park, you know, merry go rounds or something like that. What has changed from the original plant design discussed just in our Q3 infrastructure? Coal in January. So hot mill. Let's break into down. Is hot mill film and tape manufacturing capacity contemplated by the original plant adequately? Yeah, it probably is actually. Let's go into slide 36. The hot melt film and tape lines primarily support Parkes commercial aircraft programs. Commercial aircraft juggernaut. So we think we're okay with the commercial aircraft juggernaut. How about those solution. How about the solution treating capacity though contemplated by the original plant design? Is it adequate? No, it's not adequate. The current plant design contemplates the current. Now I'm not talking about the original plant design for three and four months ago. The current plan design, the one we're working with now contemplates additional solution reading capacity. But it still may not be enough. And we're evaluating increasing Solution treating capacity even further. Why is that the solution? Screen line support, among other things. Parkes missile system programs. Yep. The missile systems juggernaut. So you see the connection here. The original plant design constellating a plant design of 120,000 square feet. Will that be enough? Probably not, because again, we're looking at increasing the solution treating capacity, support the missile Systems geography. So 120,000 square feet may not be enough. This is all coming at us pretty recently. So like I said, we're regrouping. We didn't know that there'd be another war in Iran. We didn't know that President Trump would bring these guys in and say, you know, we got a new world order here, a new sheriff in town. You increase your missile production by four times. We didn't know that was coming. So we're trying to regroup and make the achievement adjustments that are good for park for the future. How much land are we looking for? This is important. Looking for 20 acres. And why is that? Because the original plant, even with, let's say expanded footprint, let's say it's a little bit more than 120,000. That would fit within 10 acres very nicely. But we're looking for 20 acres because we want to have the ability to add another plant of approximately the same size at some point in the future. It's important for us that the plants are in the same campus. We don't want a second plant across town work too well for us. So we want to have that ability to expand. That's why our spec is approximately 20 acres. Doesn't have the exact concept anyway. Slide 37. Will the new plant still approximately double Park's current composite materials manufacturing capacity? No, it will more than double Park's current solution treating manufacturing capacity. Will the capital budget for new plants still be approximately 50 million million? I don't think so. It should be more than that. And I should say something. You know, this is the capital budget. What about working capital? You know, startup cost? You know, it's just difficult. We're not even talking about that. Going back to that cash number of $90 million approximately. Plus the, the amount where, you know, seriously negotiating, investing with the. The area plant in the US you had those two things and gathering say yeah, we don't, we don't have enough problem, have enough money. Likely be more. Where will a new plant site be located in the US Heartland? At a location which is supportive of, conducive to and inspirational for Park's future development and growth as a company. So not Just looking at it from a mundane perspective, we just need this many machines and make this much product. You know, it's about our future, where we want to go for our future. The next we build a plant, we'll be there for 30 years. We've got to think 30 years. Out. Slide. Sorry it's taking so long, folks. We're building this new manufacturing plant. Why? Why are we doing it? Because our commercial aircraft juggernaut missile system Juggernaut extremely required. That's just basic math, you know. We need the capacity to support those juggernauts also though, to enable. This is more futuristic thinking. Enable, facilitate, inspire Parks holistic growth and development as a company for the future. After all, we're only 72 years young. So thank you everybody for hanging in there. Operator, we're done with the presentation. We'll be happy to answer any question that that investor may have at this point. Thank you.

OPERATOR

And with that, we will indeed be be conducting a question and answer session. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in question queue. You may press star two to remove yourself from the queue. And for any participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. And our first question comes from the line of Nick Ripostella with NR management. Please proceed with your question. Hey, can you hear me? Yeah, we can hear you fine. Nick. Yeah, how you doing?

Nick Ripostella (Analyst)

Great. Good afternoon. It's nice to hear you all and that everything's moving along. Okay. I just wanted. I've been thinking about this one for a while. On the C2B fabric, is there any alternative that's used in any missile programs that you know of?

Brian Shore (Chairman and Chief Executive Officer)

Okay, let's. Let's deal with that. That's a complex question. There are stockpiles of two different types of fabrics which are available, but they're not in production anymore. And there's no, no plan to put them back in production. So. Interesting. Since you brought up. This is my perspective on it, but not only mine. Until a couple months ago, I think some of the defense contractors were kind of counting on using those stockpiles. And. Oh, we got a long stockpile, lasts for many, many years. But when you take everything multiplied by four, they start to panic. Like these stockpiles are not going to last very long at all. And that probably is one of the reasons that there's kind of a hyper interest in. In C2B. Now, there always are going to be efforts to develop new products that would maybe be, you know, would be, let's say, equivalent to C2B or could serve the same purpose that C2B serves. But what's existing in the market now there are, that are at the level of C2B. There are other ablative products that are not at the level of C2B in terms of capability. There are two products that are kind of close, but they're stockpiles that are being depleted and limited. So it's important. It's an interesting question and the answer is maybe a little more complicated.

Nick Ripostella (Analyst)

Okay, so do you consider that a risk? I mean, you know, necessity is the mother of invention, you know.

Brian Shore (Chairman and Chief Executive Officer)

Yeah. New products will be the developed. Yeah, sure, it's a risk. But of course we would like to be involved. That's our attitude. We don't. I don't want to say too much more about it actually, Nick, but yeah, we're not sitting back passively and say, okay, so, I mean, we want to be the driver of new products as well and at the same time supporting everything we're doing with Arian, our partner, you know, we would never undermine them or do anything to hurt. Hurt them that we would not do that.

Nick Ripostella (Analyst)

Okay, so, by the way, so all the manufacturing, you know, that area, they have plants in France. So is that where tariffs would hit if there were any, you know, like, you know, on a product like that, or are you shielded from that somewhat?

Brian Shore (Chairman and Chief Executive Officer)

Would tariffs apply to the product that's being shipped? Yeah. Another one. Yeah, yeah, yeah, yeah. Well, I think the answer would be yes. I mean, you know, I think it's pretty obvious the answer is yes. Now, the tariff situation is changing, of course, in dynamic, but, you know, tariffs did apply to products that were being imported from France.

Nick Ripostella (Analyst)

Well, it's just I find it interesting, you know, that the Department of War wants to, you know, quadruple, you know, the material is important and it would seem like, you know, they're shooting themselves in the foot by tariffing something that, you know.

Brian Shore (Chairman and Chief Executive Officer)

Yeah. Sorry to interrupt. That's an interesting point. It's been brought up by us. I mean, through the Department of War.

Nick Ripostella (Analyst)

Okay, so is it, is it fair to say that the missile programs in know throughout the world that, you know, are using mostly using C2B or is that an incorrect statement?

Brian Shore (Chairman and Chief Executive Officer)

Missile programs. Other programs. So asking other missile programs. Oh, there's. There's many different kind of missiles and many different kind of ablative materials. C2B is considered a, you know, my opinion, but not only my opinion, the premier material, ablative material fabric for stock rocket motors.

Nick Ripostella (Analyst)

Okay, all right, fair enough. Okay, I'm sorry, but if, you know, you can stop me if, if I'm going too much, but I, I've asked this before and you already have a lot on your plate, but is there any content or work developing on anything with SpaceX or Blue Origin or other.

Brian Shore (Chairman and Chief Executive Officer)

So we want to chime. That's fine. I think we do a little bit of work with Blue Origin. My opinion is we'd love to do work with SpaceX. They're not solid rocket motor people. Solid rocket motors are for defense. They're one shot, you know, you can't reuse a solid rocket motor. So when you think about SpaceX, they're big into reusing their or the rocket systems, you know, they have a whole different kind of psychology about it. My opinion, and we talk about this, I'd love to be able to, you know, work with SpaceX. I'm not sure we're doing very much, Mark. Blue Origin. I think we're doing a little bit Blue Origin, aren't we?

Mark Esquivel

Yeah, we're doing a little bit. I think most of that works in our parts business, Brian, our structures, but we do supply some material, but lately it's been, we've been building some parts for them.

Nick Ripostella (Analyst)

Good, okay, fair enough. And one other thing. So are we expecting to do additional, you know, aftermarket stock sales? You know, maybe you need to raise more capital.

Brian Shore (Chairman and Chief Executive Officer)

Yeah, so it's a $50 million ATM. I think we explained how much we raised so far and it was only in our Q4, you know, as we explained, we didn't, we haven't raised any since the end of Q4, so the balance is still available and we'll see. Well, I think we try to be very intelligent and very disciplined about the atm. We said no a lot. In other words, you know, on pricing. So, no, it's not going to work for us. We're trying to protect our existing shareholders and I think we did, you know, quite an outstanding job of that. If I don't, if you don't mind my saying so, Nick, we were quite disciplined and we've got offers. No, no, that's not going to work for, for us. So we want to be careful about how we do and I think we're quite disciplined, like I said. And I think it worked out fine and I was very happy the results and yeah, we'd like to raise some more money and we'll we'll have to see what happens. we'll update you every quarter, though. Just, you know, I don't want to, you know, so go ahead. What are you about to say, Nick, we know how, you know.

Nick Ripostella (Analyst)

You know how I feel. You've done, yes, an excellent job of caring for shareholders. There's no question about that. And just one little other thing here, you know, you've been in this business for a long time, as you said, so, you know, will the new facilities you're building, you know, are they much different? I know you highlighted some things in the call, but in terms of the technology, you know, because, I don't know, at some point in the last couple of years, you've talked about automation and things like that. I'm just curious because there is a lot going on in terms of, you know, extensive robotics and things like that, but maybe you're just not the type of process that, you know, could avail yourself of those things. But I'm just curious about your.

Brian Shore (Chairman and Chief Executive Officer)

Yeah, so we want to be. We want to use those things as tools intelligently. You know, we don't want to go into automation because it's quote, unquote, cool, you know, so we could show people in a factory, look how automated it is. Automation is complicated, you know, when it's not, it's probably multiple edge to that sword. We talked about this internally. But it's, you know, an important point. Often automation is really good if you want to do the same exact thing every time, because machine, you're going to not make the mistakes people make. But if your kind of culture is about flexibility, responsiveness, urgency, change things quickly, that's not really what automation is best at. That's what people are best at. So that's why I say we, yeah, we want to use automation, but want to be intelligent about it. When I think it through, where would we like to use automation? Where can it be helpful to us?

Nick Ripostella (Analyst)

I hear. Yeah, I guess I'm just. I'm one of those nerds that I watch too many videos of, you know, aircraft engines being built and autos, you know, I find them fascinating. So just thought I'd. The things that are, you know, people don't realize how complex it is, particularly on aircraft engines. But anyway. But all right, thank you for your time. And I just have to say, you know, there's an old Bruce Springsteen song from Small Things, Mama, Big Things One Day Come.

Brian Shore (Chairman and Chief Executive Officer)

And that is park, you know, thank you very much. I've looked that one up. All right. Not familiar with that. One, but I'll go check it out. But thank you very much.

Nick Ripostella (Analyst)

All right. Good night.

Brian Shore (Chairman and Chief Executive Officer)

Operator, do we need. Go ahead. Yeah, yeah.

OPERATOR

I was just gonna say as a reminder, if there are any more questions, you can just press star one to get yourself in queue. Okay, that looks like there are no further questions at this time. So I'd like to turn the floor back to Brian Schor for closing remarks.

Brian Shore (Chairman and Chief Executive Officer)

Thank you, operator, and thank all of you for listening and being patient with us. Now we went on really long. I appreciate you taking the time to listen. And so it's I guess the beginning of summer. Have a wonderful summer and we'll talk to you again pretty soon, I guess kind of mid July when we announce our Q1. And of course if you have any questions, any follow up questions, feel free to give us a call anytime. Thanks. Have a great day. Take care.

OPERATOR

Thank you. And with that, ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful rest of your day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.