Q2 2020 Earnings Call
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After the speaker's remarks, there will be a question answer session. If you like that's question. During this time simply press Star then the number one or your telephone keypad.
If you like to withdraw your question press the pound. Thank you at this time I will turn todays call over Mr., Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, You May begin your conference.
Thank you operator, welcome everybody to or second quarter called sheep, Brian with me as usual terrible our CFO . So we have a presentation. We prepared for you went for this call. It's been posted on our website and also there's a like that saw referred to in the earnings news release. So you probably want to get to Cogs in front of view.
Matt I will be going through the presentation. It's also saw most supplemental financial information that's attached approves presentation I think there's appendix one we're not go read through it but it's something you might want to take a look at some point, obviously you nor the news releases alky earnings releases out as it earlier this morning.
So there is a lot to cover and I'm going to try to cover some more complex topics to give you some perspective on a quarter. So please just try to bear with us, but what are we all get started so.
On slide two we have are forward looking disclaimer. We're not go read through that of course, because you have any questions about it. Please give us a cool thanks on that slide three I'm not once you picked up on slide three talking about the expansion spending and also top five customers.
Sure.
Thanks, Brian the just as a reminder, we had announced that we're doing a major expansion at our rod in Kansas facility.
And we made that announcement back in December and were just a this slide is really just give me a quick update on where we're at on the spending on not on the expansion. So a at our estimated budget for the expansion was 20.500 million.
Dollars so far through the end of Q2, we've spent a 3.900 million tell a little but well short of a 4 million on that and the remaining to be spent four.
That expansion is about 16.600 million that expansion is expected to be below the construction in the installation of all the equipment is expected to be completed by next summer so much the summer of 2020.
And see the.
Top five customers for the quarter or a aerospace hey, our core Kratos defense and security solutions and Meghan plc.
And of course, AMRAAM, including its subcontractors.
And just remind her that I'm Rouse is now a subsidiary of S.T. Engineering Aerospace.
Okay. Thanks model, all love to get back to I look well move to slide for everybody. Please oh. So here is a quarterly results would you well she presumably the oh sales for the quarter second quarter Im talking about 13 million 723.
Gross profit gross margin 20, 720%, obviously were down any of the dog a two month $406 and also down.
So let's talk about what we told you a would happen or we said we would happen during their first quarter conference call that was on July 11.
We gave you a sales estimate a 14 helped the $15 million, an EBITDA or something like 3.1 3.7 million flu shortfalls, both top and bottom line to sell shortfall is that to the lower end of the forecast range. Okay not to build of already is 777000 yeah.
Maybe talk shortfall $694 from so obviously, if we go to slide for the question is what happened awarded to shop, and what tick up in Q2.
So as I've already mentioned at the beginning a this explanation. The explanation is just complex. It's also multi faceted.
We're going to go in and some details or because I think would be helpful. For you to understand are good and get the perspective. These are things, we probably haven't discussed from somebody to pass. So just try to bear with me. Please but once we start with some backbone perspective and trying to paint a picture for you here.
But give either look back from my perspective, Okay. We've discussed this before but I just want to remind you that in a fit to fiscal 19 Q4 that was December of last year in January and February this year the sales to the for the G.N. Russ programs for three times three times.
Sales of the first quarter that same year. That's just nine months later, that's a very very steep ramp for very difficult demanding and challenging customer and challenging program to support.
So, but we did get to job done we did not disappoint them a in Q4 with the really huge ran up that they asked us to handle.
But we did it mostly with brute force a and that's really all we have to point, we didn't really have assistance in place to operate that level, especially for such a demand again to fool customer.
Oh, we I'm not.
I wanted to clear I'm, not saying, it's a bit as a bad way, we loved them right. So I love them Rush I'll say that anybody ever ask what they are.
A much more difficult customer like any other customer so the fact that they're the ones at around three times during the nine month period, well put a lot of pressuring stretching system, but we did not disappoint and I've got to tell you that I think were the exception on to rule because there's a lot lot up a suppliers.
In the supply chain right now there has been real trouble, keeping up and our causing real challenges for supply chain managers in the aerospace industry, just because so if somebody programs are wrapping burst equally at this time.
Q1, this year the skier 20 to one or more brute force.
And then our Q2 or the current quarters or that we're reporting now.
Oh, we're in a process of transitioning from brute force to sustainability.
You can't do.
Do brute force Forever I guess at some point, which is kinda worst people out.
So important and painful progress is being made we're not there yet in terms of transitioning from brute force sustainability I think you know a maybe this is just my perspective, maybe we got a little burned out in Q2 from the brute force efforts in Q4 in Q1, maybe we'll let down a little bit maybe our disciplined slipped.
Little bit I don't know, which is my perspective, but if that's true or has your Bakken again now and that's.
That's quite obvious to me I think that's for sure.
Another thing I want to bring to your attention.
Is this a so on slide five this practice we've had in last few quarters.
Particularly Q4, and Q1 of making the quarter last few weeks I think we got complacent about it and we got rolled into a sense that well you know don't worry will make order last few weeks in other words fuel portola stops or the production will just oh, well push everything through and get every ship by the in the quarter.
What we got burned by that in Q2 abuse, we got behind and we couldn't catch up for reasons old explained in the next few slides and we didn't even see coming we didn't even see the sales and EBITDA shortfall coming in Q2 last few weeks for the quarter because again over the prior two quarters, we were used to make in the quarter last few weeks, it's a bad practice.
Change that we're not doing that anymore.
So I.
I guess, some things we learned the hard way and but I think go one good thing about us is that we do learn.
Even though sometimes it's a hardwood let's move to slide six pleased and this so like I said is gonna be complicated, but try to bear with me and obviously questions at the end we'll be fine. Okay. So this is a big thing that is not obvious to anybody. We obviously just report revenues and profits. We don't report production plans. So.
In Q2, or a plan, which produced $2.9 million more product that we actually produced in Q2.
So that's a huge huge difference I think we said we missed or for sales target. Let me go back to check myself I don't think that's on slide three by 777000.
We must start production, Oh objective or target by 2.9 million almost $3 million.
Now that production shortfall also had an impact on or sales because obviously you don't Bruce you can't sell it.
The.
First checked item under the first ROI them, so that the fiscal 20, Q2 s sales shortfall, obviously had a negative bottom line impact I'm, not just pretty straightforward, but what isn't obvious is a until now [laughter]. The large larger impact was form for the production shortfall because when you.
It was product it couldn't it.
Some of that crops. The bottom line when the product is converge inventory I should say a it's important distinction I forgot to mention in just 2.9 million. That's in sales values. That's the values of product when it's sold its not in inventory value, but anyway significant bottom line impact from the production shortfall.
And well next question is why that happened of course, you know how could that happen. So let's go to the next ROI them.
So why the significant production shortfall in Q2, what happened, Okay. Just said right and there were three discrete events unrelated and discrete events.
However, on a unexpected by us and that caused significant difficulty in.
Q2, and this is where I need to explain a little bit about you know some of our raw materials on our processes think we have discussed before normally we don't couldn't just kind of detail, but I think due to have real understanding as to what happened and for us to be transparent, which is our objective of course I think we need to go through this for somebody go polyurethane film.
But shoots in our process.
It's actually used by our customer as a manufacturing eight but it's applied to work freedom are prepared materials on her prepared surface. It stabilizes the product.
Customer applications operations rather.
Also prevent saw the product from <unk>, our product approved broadcom sticking to itself when it's rolled off in a role.
Because the sticky there other reasons or purposes for Paul the use of probably you are thinking film, but it's widely used in the industry anyway. So we do the change of the polyurethane film style and it's always emerus programs, Unfortunately, and a that cause whats called wrinkle in other words the film wasn't.
<unk> was a wasn't sticking.
To the product in a in a kind of flat way was wrinkled and this is not something we were able to pick up on it was a pick up by the customer and they cost and say you know this is wrinkling and we want to use it. So they said in the product back to us for Wesco rework now that the probably we call Polys applied in the original process.
As for early automatically on the machine, but when you have to rework. It's very manageable you have to take it out off and it's kind of a semi and manual process to re poly quote re poly rework, but this product.
In terms of you know mentioned, maybe we went down a little bit and.
Q2 gave an example that.
So we had used its other solid style poly for other applications that are worked very well. So we got some decided to use it for this emerus application and we Didnt do many trials now, which mistake and that was something on an example of maybe weren't disciplines weren't as good as they should have been maybe were worn out a little bit in Q2, and we were on top of.
Again, we should have done that we should have done trials, where we didn't do trials, we thought well look it's worked and other applications, let's just use a year or so we didn't do it and we got Burger because we get coal from the customer and we had done all enormous amount of product and they say we wrinkles you got to send all back. So okay. Now we're doing the rework next one on.
Related but also what Paul you were thin film different supplier. This is just a quality issue, we're pretty sure as quality issue.
From the the supplier with the polyurethane film and again, we didnt realize it and are on factory was our customers realize it wouldn't they received or product again, how to ship. It all back enormous amount of reworked is very time consuming takes a lot of labor.
And the thing is not only you want to pay for the labor to doing to rework guests what that labors not producing product to ship themselves or we get revenue from revenue generation, but we had a fixture we've got to make it right. We know choice a third item, which was on related as well is ah toward the ended the quarter.
Are there we notice that.
Some of the carbon fabric that we had received again for an M. rest program.
It was the stored and we couldn't use it so we had to send it back to the Weaver. So they could rework. It now there was an hourly work, but the problem is that we didn't didn't didn't have the carbon.
Fabric, we needed to produce and shift their product within the quarter. So that also caused us to be short term she production for that for the quarter. He's a three unrelated discrete events.
But they all kind of conspired against us to cause significant difficulty for third quarter. Let me explain why that is because of the plot ticket and next to check item carbon fiber availability limited amorous board and forecast in other words, our carbon fiber supplier. This is not the weaver the carbon fiber suppliers as well.
Okay, well supplied that forecast, we had to forecast, but not one pound extra that's all we got because there is a carbs barber shortage. So there are helping us to referring us well, we're not going to give us any extra so its hard we could call them up and say look we have a problem.
So this product can you just sent us more fiber there's no more fiber. So we hit so are in the case of the.
The the carbon we've put a distortion and I'd be reworked and the case of the poly I'd be rework because we did that the carbon fiber that we choose to make their pre break could not be replaced.
So that causes us to have almost no slacker leeway in our system and now we have so next check on it because of these carbon fiber supply limitations and manufacturing capacity limitations, which will discuss in a couple of slides a down we have very limited slack or leeway in system make you recall.
Every from issues like the above your shoes and major required rework not possible during the quarter and that's the key point. So wasn't just these problems happen in a normal quarter when you're wasn't so much stressing the system. These things might happen. They happen from time to time, you'll never hear about it but because there's so much trust and assist them both in terms of our capacity.
Also in terms of carbon fiber supply.
We didn't know leeway, we couldn't recover and therefore, we're telling you about it because ends up being a key point those two things together the events and the tightness and stressed in the system conspired in a way against us in Q3 and a the last item on the page if those limitations that exist as always saying, we probably but it's certainly been better positioned.
Recover and we might not be discussing your but all.
So.
Okay that is slide six let's go to slide seven could to this discussion.
On slide seven so the major or re work related to polyurethane film or just kind of review here a little bit resulted in significant expense. This is labor that again, we have to pay for.
I'd labor, that's not being used to produce product that we can sell and get revenue from so in our production workers require or quite consumers the rework and it was kinda like diverting the.
The intended purpose of our production workers to something had to be done.
Of course, the bigger impact wasn't just the cost to do the rework it's their production.
Value shortfall, which has a major impact to the bottom line, a 2.9, approximately $3 million or production shortfall major impact in the bottom line major impact. So I just wanted to be clear, we're not singling out or blamed or supplier. We think are suppliers are very good.
Generally speaking, we're pleased with our suppliers, we feel they support is very well.
Good and dedicated suppliers are normally respond issue to the best their abilities as they arise. So this is not about blaming the suppliers. It's about explaining to you what happened because as I said normally these things happen from time to time aside that they just happen in the.
Second quarter now more of them out in the second quarter, but we deal with them you never hear about them because they're the system allows us to recover.
Since it had a major impact in our Q2 performance I thought it was proper for us to kind of explain to dynamics and explain what happened in some detail and I hope wasn't too much detail.
I'd like to set however in this case like like the presentation reach since the issues had significant bottom line impact. We believe is appropriate to highlight them here. So we've done that continuing on the EBITDA story significant expense utilization of limited hot melt manufacturing capacity to support ongoing manufacturing trials of composite.
Rules for the butane wrapper GE NYNEX engines. This is more than we expected we didn't understand how much effort and extend the trials that we required for this program.
And as you know that that program is not a part of the.
We discussed this with you before Weve PEO, it's on that program for the end of next year.
With that program is not an m. rush programs at GE program, just not part of our long term agreement with them Roush soul of the Appeals go through the end next year and then we'll see what happens, but we're not sure we're going to EBITDA and how that program long term I guess that'll be term later on I just want to make make sure you remember that piece, it's not in the same.
Categories like danger 20 year Boeing 747 for instance.
Anyway last item on slide seven we failed to achieve our sales and production objectives in Q2.
Issues described above create obstacles to our achievement, our objectives, but execution was inadequate nevertheless.
So here you go I mean, we didnt through our job either.
That said, maybe we're not totally on top of or game, a good example, where.
We switch to.
Colleague styles poly or you are thinking filled styles. When we shouldn't go some trials no. It wasn't good but the good news is that I think your hedges grew back on straight again, if we did slip a little bit of I think we're back in the game or hedge it back in the game and I look I'm I'm not.
Tony It's okay are making excuses, but I think you've you think about the root force efforts in the first six months and probably not surprising that maybe if some of our people let down a little bit wouldn't be surprising that happened EBITDA issues, Let's review a major production or reduction in production larger rework and then to cost of NYNEX trials. So.
We're not the only things that impacted EBITDA, our bottom line, but those are some of the three during the three legs into more major things. Okay. Let's go onto another complex topic on slide eight.
Melt manufacturing capacity constrained you'd probably be surprised to hear this because until now we've been saying we felt we had enough capacity and we had available extra capacity of course, we said that we should we believed it.
What's going on here so let's start the 60 minutes 60 inch that's the with of the the web if you will and these machine wet capability. These machines Hot mill film and tape lines to make hot mill product in film and tape or two to two separate lines that were purchased what we did our original aerospace composite.
At the facility in new Kansas in 2008, we're not specifically designed for the production of ASP type materials Fps automated fiber placement, that's robotic methodology for making composite parts as compared to things like Ken lay ups. This is.
A more modern oh methodology, reducing composite parts and the trend is toward more F. B piece very expensive. So it's not going to be for every composite parts manufacturer, but for larger companies like everywhere else. It makes a lot of sense.
Three very important technology for the future as in the technology, we're embracing.
In any event those original machines were not really designed free of feed and I don't think we even new much body of be back in 2008.
And you know what we said this before we did a lot of alerting over the last two years, we've a lot of mistakes and.
The original design the factory in the equipment was not optimal would've been up in hindsight.
Anyway, but we made those these original lines work being easier 20 Neal program.
Much of the it's we're 20 Neal program Escreen can didnt converted from hand lay up to be I think we indicate in the past we did the predevelopment work with them or us.
So we got on the ground floor, there and that's worked very well.
But.
We have struggled though with the 60 inch lines for it be material the Gen. Janet UGI Nymex program.
The every materials different.
The Jeannine ex program, there's been more difficult for us so.
What we're doing is we're shifting the production of the prepared for the FP style preprint materials for the GE Nineish program to our 24 inch Hot mill film and tape lines and you may not even though we have these but you feel revenues and very much but just on lot but.
Recently upgraded the 24 inch film line for our film adhesive product line and it just a dumb luck like I said, but that was very fortunate because they.
Grades allow us to produce the.
After the material for the gene Onyx program much more effectively so we're in a process of transferring the.
The IP materials for the DG non next program from the 16 Swines Your original 60 and slides to the 24 inch launch.
That's a good thing.
I want to point out for you. So I don't want you get nervous that a new 60 and slides that are part of our expansion that matches talked about those were specifically designed.
To produce F. B type materials piece, not only a piece very very important very much on our radar screen, who were involved with that and we want to embrace that technology piece of technology for tomorrow, not just yesterday continuing on slide eight.
Now if the material requirements ramping aggressively and that's driven principally by Jason.
20, Neal program and we're still in a steep learning curve gardea the material manufacturing.
We're not operating yet with the optimal efficiency productivity.
And there were learning fast so that's kind of or you know a story normally use that what weve a challenge.
We attack it pretty aggressively.
But last item on slide eight.
The payment a hot melt sorry, Manny how belt manufacturing of a it be materials is generally a slower process and hot melt manufacturing for broad good materials and also requires significant additional a setup time in the tape line and we did not fully appreciate that when we.
Good or capacity analysis, so like I said, we're learning a little bit as we go.
And so some of our capacity concepts and thoughts have been adjusted as Weve.
Got to last few months going on slide nine so in order to relieve an open up the hot mill capacity, we've done a couple of things as.
Well, we implemented a fourth tape why manufacturing shift so basically the tape large running.
24, seven now the other operations to support a hot mill like a film mix or not required to go so 24, seven but we're at a 24 seven.
Shift structure at least and tape right now and that's also to support the did you not next program and also as I said when a process of France for energy NYNEX program to 24 inch film and take blind open up capacity. So obvious question. What is our current hot melt manufacturing capacity, we've previously indicated as $40 million.
Others that was based upon a five.
Good day work week with some overtime little overtime with the.
24, seven shift structure.
With the are under topline, we now believe our capacity is $45 million, but that does not include the capacity from the 24 inch line, so a $45 million plus the extra capacity for the full the from the 24 inch line and that's of course once we get Fuji nine ex transfer the 24 inch line.
And get to four ships settled and we believe $45 million are reasonable number plus what's a bit whatever's available from a 24 inch line.
So we feel.
Oh, sorry, I should say capacities kind of a tough thing is very very mix related more to be reduced capacity, let's say at the increased capacity in there was lot of other different factors in terms of product mix that we'll have an impact upon capacity.
So.
Obvious question here is the answer we believe we'll be fine we have enough capacity.
To sort of R&D serve them rest as needs and to take on other opportunities until the expansion comes on line as Matt said.
We plan had the expansion complete about a year next summer rather next summer I think there's still summertime XR and that's probably by the year from then to get the qualifications done for us.
Okay, let's move on to slide 10, thanks for bearing with many of those too complex issues about to factor for Q2 and also the capacity questions.
So a slight Ken.
Now we're talking to our forecast so let's discuss that Q3.
14, the last three quarters. This is revenue Q3 of this fiscal year fiscal 2000, 14.75 to 15.75 million revenue I believe that's the same goes and say numbers that we gave you.
For Q3, when we did our first quarter conference first quarter conference call.
We brought the bottom line EBITDA down to 3 million to 3.5 million, let's just talk about Q4 and forecast we're giving you for Q4 is the first time you see the Q4 forecast.
A few quarters since June quarter million revenue.
$3.25 million to $3.75 million, but.
Just to give your perspective on Q3.
We have about $14 million other shipped or book to be shipped in Q3 that means what we shipped so far and what we have an or books that is scheduled to and plan to ship in Q3 14.5 million that means we need to book another maybe million dollars right that's shippable within.
In the by the end of Q3, so our salespeople need to be after he didn't really hard.
They are challenged but that's okay that we'd like debt. That's are challenged so you didn't hitting at a very hard antibiotic you're getting orders and I'd also want to mention that we probably need a little bit more than that because there is funny thing that happens at the end of our quarters often is that we got calls from customers want to push things out a little bit or is a de booking or something like that.
So we have to be careful because I'm, telling you to whats been booked it doesn't mean, it's something we'll be pushed out we're going to call from a customer November no big deal. We just want to push a month well, okay, not a big deal to them, but that's for next quarter. So it happens it happens often I think it's happened for last couple of quarters. So we just have to be.
Onboard for that and we need to build ourselves a little bit of cushion if you'd want to be now why did you bring.
The EBITDA numbers down for Q3 was saying revenue numbers. We gave you in the prior forecast and that was a EBITDA numbers are little lower for Q4, as well and you haven't seen Q4, yet, but we've had an internal Q4 numbers, we brought them down so let's look at all factors that affect EBITDA no price.
For the ability for Q3 Q4 near their number of them.
So let's go through the mall outside testing costs related data development for new product. That's something you mentioned actually would suit, which in fact for Q2 as carrying over there has not been completed next once you GE United's program and factoring trials development expenses, that's big unless youre not done we're not done with that we discussed at a rate.
Our next one field when he's a manufacturing trials development expenses, that's carrying over I think we mentioned that as a factor when we did or Q1 call for Q2, not done with that carrying over the next one if you manufacturing ramp up additional costs.
Significant cost of operating the 24 inch Hot melt line for do you not ex that significant it's what's needed and what's right, but it's.
More expensive because the just simple math, if you're dealing with narrower web you're getting less.
Product out for a minute or per hour anyhow, you want to look at it.
Continuing rework related to polyurethane film so we're not done with the yet the differences, though there's no surprises so with our second quarter. All this all these issues the three issues we talked about.
Human ASCO were surprise to us we are not expected.
So we struggle to deal with them as we've discussed but the fact that we're still doing the rework, it's not surprising to us we know about it. So we can take into account in our planning and our forecasting it does have an impact on a bottom line just I'm surprised not unexpected.
So and then there's a continued push out of delivery schedule grew nine ex program, obviously, that's going on and that's a pushed out quite a bit for Q3 Q4 into Q1 in Q2 of next year. So that's going to a causes a revenue hole, but we've taken done done into account in our topline forecast.
Legacy costs expected continue.
Into Q4, those costs related to the company to prior company before we saw electronics those are tapering off but you're still something there. So there's a lot of factors here, which we took into account and trying to be a realistic in terms of EBITDA forecasting for Q3 Q4, Okay. Let's go on to slow.
Slide 11.
We talked about.
These factors in our last quarter call other important to remember and I think they're very.
Much on.
Very relevant to today's.
World, where it's less stress in the system.
So first of all all of a major jet engine company programs that stills Emerus GE programs.
Scepter, some 47 eight are ramping or in a developer in development.
Sorry.
Anyway.
The reason that's.
An issue is because there's much more risk when a program is ramping much more chances that will be moved to the right. You have some 47 steady as she goes and hopefully the Gulf forever, but not too many surprises when a program is ramping or setbacks in development, sorry development ramping or setbacks and goods.
Slowed down.
There are issues with supply chain. So there's lot of risk in the system because most of key programs were on for the GE ambition programs are arden development or ramping and.
One example, we talked about was the push out of the.
The.
Triple Sub next few my next program and prior page.
That really shouldn't be a shock and we're not talking at a school these things and publicly reported news both the Triple Sevenx program has had some pushouts and delays in the G Nymex program.
And reported delays as well this is all public information so I'm not talking a school, we don't do that US next item severe stress on the aerospace industry supply chain, we discussed at before it's very palpable and it has a real factor.
In terms of just kind of our day to day.
I guess.
Working in existence in the industry.
The last item is the new one, but we discussed previously in this presentation because of pipe manufacturing capacity and carbon fiber supply, there's very little slack and Lee will assist and making it difficult for us to recover from supply or production setbacks.
So.
We'll know, but anything happening this quarter, but there is at risk or there's some surprise it puts us back on the heels in terms of how to recover and deal with effectively and quickly. So it doesn't impact the quarter, let's go to slide 12.
Now this is really the same long term forecast that we gave you in January and our practices to update a long term forecast only once a year or so we probably will update this forecast is coming January through the reason that we're including it don't his presentation is for fiscal 20, we've done.
Rather than just kind of using the prior forecast we have first quarter first quarter in second quarter fiscal 20 actuals. We just gave you the forecast for Q3 Q4, we figured we should add them up the bulk of sales and EBITDA numbers. So you have something that's more current other than that there's there's no change to.
The long term for cash.
And let's site stick on this page two long you have any questions about let us know, let's go to slide 13 kind of a change of pace. Your because now we're talking about some more interesting or I.
I should say interesting, but maybe more.
What fund are exciting things.
So recent developments.
First of all just wanted to know that we have a company presentation on our website now I think we put in our website in may be August and it's something you might want to check out the quarterly presentations really focus mostly on what happened during the quarter and are kind of myopic in that respect. The company presentation gives you more broad perspective from a company.
Where products are.
Who our customers are what kind of technology, we're involved with.
The market segments. So I'm history. The company. So if you have some time you want to check that out it's on our website.
Let's see so other interesting recent developments, we had a groundbreaking for a major expansion new in Kansas and August 15, or is a picture of some people shovels I think we did a news release about it but it was a pretty nice an exciting day, we had a lot of people come for local community.
As a quite a few people so for the local people, it's a big thing as well obviously for US it's a big thing.
Next item was park.
Rang the closing Bell to New York Stock Exchange in August 26, Theres, a picture of us doing that.
Okay.
I was little skeptical about doing is and the New York stock exchange that has to do is for little while in.
I just was I didn't know if we wanted to do it.
But when you finally, okay fine, we'll do it and I was curious given you're going to go.
So Brian you have to go so I did and I was really glad I did because the New York stock exchange. They did a wonderful job. They made a so special and I can't say enough about how wonderful job. They did and I just made it a real special day for park and a very I feel very grateful to New York sections for doing.
Good I'm glad Meuler told me, but our goal.
Also it just a coincidence or wasn't the reason we did it but just so happens that.
Our issuers are thirtyth anniversary of listing or New York stock change back into.
94, you might know well if you go to our company presentation, you'll learn history. We went public in 1960 original and American exchanged in New York sections on 19.
Before I believe Oh, one little item, we changed our game, we're no longer park like for chemical is the first quarter I think first quarterly conference call. We're we're park Aerospace Corp.
We are there was so.
Actually put up to shareholder vote in July the shoulder approved and of course.
Our names now Park Aerospace Corp.
Parkland chemical core for a long long long time, so just thinking 60 companies founded in 1954, but since 1960 Wynn Park like become going our Parker space Park as one company. We also mentioned there is that we're going to do it last quarter call. We had two entities to principal entities. One was kind of a corporate density in New York below one was.
Property entity in Kansas, where we merged the two so it's not just one company.
We mentioned his last call major private space company, we received additional peos and lets us becoming a significant now and has slowed quite exciting for US. This company is very clear they don't want us it saying anything about who they are with the program is so obviously, we're expecting that respecting that.
But it is an exciting program like I said, it's becoming significant I mean in dollars actually.
Just a little update on our dividends, we paid $511 million, so far to $24.95 per share and cash you have been since 2005. So I guess went to next dividend it will be over $25 a share.
So maybe we should talk what the next quarter.
Next item parkers immersed in ramps of difficult and challenging programs.
Things we've been discussing.
During the first part of this so this call and presentation, but lots of growing pains, which are worth it.
Park, we just don't choose easy path, it's just on our way.
We.
Look for challenges and we embrace challenges, sometimes we're going to fail, but a park, we say failures on an option that doesn't mean, we don't feel that means we don't accept failure.
So when we feel we get or get right back in to gain and find a way to fix it and make things right long term prospects for park in my opinion unchanged. So lets you will we can do let's see we can do we're not deterred.
Let's see what we can do.
Okay. So that's the end the presentation, operator, if anybody stole a call sorry, when so long everybody we're ready for.
Questions from the shareholder audience.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please stand by low compiled acuity roster.
Our first question comes from Christopher Hailing this robust capital your line is open.
Hi, good morning.
Good morning.
Great I just wanted to ask you said in your comments that we could ask you about your long term forecasts.
Just wanted to ask if you give us more insight into what you may or may not have included in some of those longer term forecasts.
So the long term forecasts.
Weve I think we've assessed as before so we start with the lower crew forecast we have from memory. So nothing.
On the T. programs, we haircut that.
To some extent just to be a little bit conservative the GE Dionex program, we hear from a lot.
So thats kind of or baseline and then there's 100 line items that are considered terms of how we get to topline.
Bottom line is just doing the math in terms of once we have the topline figure out where costs are coming up with a bottom line or EBITDA estimate.
The there's nothing unusual or extraordinary included the topline there's nothing from acquisitions it relates to its based on an organic growth.
So I.
I don't know is there anything else that it can help you with in that regard.
Other.
Does that answer your question.
Yes, I've answered my question I'm, just trying to get a sense of.
I think in your call today you discussed.
That you.
I might have preferred to give yourself a little bit extra space.
In the forecasting and I was essentially asking how you height without a mind, how you characterize the longer term forecasts.
Extra space and the topline and bottom line.
One or so we're getting.
I think whichever way you think is more accurate to describe it.
Well, we're not going to update our long term forecast now as I said, we're going to do that once a year and when we do the forecast.
What we're telling you is this what we think is going to happen.
As we've commented we don't do forecasts or other short term a long term.
Which are we created so we can beat it didnt be hero and that kind of thing. We give you forecast. We tell you. This is what we think will happen based upon all the assumptions were making and based upon the fact that we're going to work very hard to achieve these things.
So we're not a client to give you a conservative forecast. So we can be heroes in every quarter. So wonderful.
I know a lot of companies will do that hold me to be sarcastic about it but it's just not what we would do.
I think in the third quarter, sorry, the second quarter rather.
These three events, which were unexpected and up but they don't have impacts on a long term, though I don't think those are short term things when you get the quarterly forecasting.
Chris is quite different and long term forecasting Houston, you really have to do you really have to focus on what bucket. This is going to fall into is going to be this quarter next quarter, but long term forecast things a little different you should not solely dependent upon the kind of nuances and.
Subtle changes from month to month, let's say.
Okay, and then one more just a follow up and I'll pass.
Obviously, you have a material cash balance in previous calls youve.
I think expressed some confidence that theres some.
Acquisition opportunities, particularly.
Certain ones that perhaps.
Customers of yours or supply chain members have suggested that you consider is there any updated car you might share on the progress on that front.
Not really very much.
What we've said before still applies.
It's a little bit tedious process because.
What we're trying to avoid it's just kind of getting involved in.
Auctions are run by investment bankers, because we feel often goes overpriced and they're not really what we want.
Often are not really kind of did she there you know because nichey things aren't really appealing often to kind of financial buyers and other buyers.
So we've identified a number of companies in three or four different product categories, and we reached out to them but.
The reason it it's.
Little bit more challenging use that these are not companies that have been put out for sale. These are companies that may not be per sale.
So it's an effort we have to stay stay at stay with and.
I guess, what answers, we'll we'll see what happens.
But there really isn't any significant change from I guess, when we talk about this maybe the last quarter.
Okay, I think that the great approach I appreciate your time.
Thank you. Thank you thanks for your questions.
Thank you once again, ladies gentlemen, if you wish to ask a question at this time. Please press Star then one are you touched on telephone.
And I'm currently showing no further questions at this time I turn the call back over to Brian shore for any closing remarks.
Okay, well. Thank you very much operator. Thank you also listen today again I. Appreciate you hanging in there are no as are fairly long discussion around a little bit complex and involved but again, we thought it would be necessary for perspective were leased helpful perspective, let's say that way. So have a good day give us a call. If you have any additional questions all were available costs.
Thank you again goodbye.
Ladies and gentlemen, just close today's conference call. Thank you for participating you may now disconnect.
No.