Q3 2024 Park Aerospace Corp Earnings Call

You

Good afternoon, My name is Camille and I'll be your conference operator today.

Good afternoon. My name is Kamela and I'll be your conference operator today.

Kamela: At this time, I would like to welcome everyone to the Park Aerospace Corp 3rd quarter fiscal year 2024 earnings release conference call and investor presentation. All lines have been placed on mute.

At this time I would like to welcome everyone to the Park Aerospace Corp, third quarter fiscal year 'twenty 'twenty four earnings release conference call and Investor presentation.

All lines have been placed on mute to prevent any background noise.

Kamela: After the speakers are marked, there will be a question and answer session.

After the Speakers' remarks, there will be a question and answer session.

Kamela: If you would like to ask a question during this time, simply press star then the number one on your telephone.

You would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

Kamela: If you would like to withdraw your question, please press star then the number two. Thank you.

If you would like to withdraw your question. Please press Star then the number two.

Thank you.

Kamela: At this time, I will turn today's call over to Mr. Bryan Schor, Chairman and Chief Executive Officer. Mr. Schor?

At 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 E. Shore: Thank you, operator. This is Brian . Welcome, everybody, and I want to introduce Matt, of course. He's with us, our CFL as usual Matt Faraba, and also we'd like to take this opportunity to wish you and your families a very happy new year. Well, the best you in 2000 and 24 years, right? Yeah. We just announced our Q3 earnings. I guess maybe

Thank you operator this is Brian welcome everybody and I want to introduce Matt of course, you saw with us our CFO as usual Matt Farabaugh.

And also we'd like to take this opportunity to wish you and your families a very happy new year, all the best to you in 2000.

24 years right Yep.

We just announced our Q3 earnings or I guess, maybe about 45 minutes ago. So you want to pick that up and also in the earnings announcement. There is instructions as to how you would access the presentation or about to go through you want to do that as well. The presentation is pretty long sorry about that I I really was thinking I was going with this one.

Matt Faribault: about 45 minutes ago. So you want to pick that up. And also in the earnings announcement there's instructions as to how you would access the presentation. There were about to go through. You want to do that as well. The presentation is pretty long. Sorry about that. I really was thinking I was going to this one. So I'm going to make it shorter and end up being longer.

So I'm going to make it shorter it ended up being longer.

Matt Faribault: It's hard for us, or at least for me, because it just seems like sometimes there are important things to cover. We don't do the sound bites. You know, we don't hire IR firms to do a little clever, you know, kind of slick things. And I don't know why you'd want that anyway, because I would think you'd want to hear from management. So, we're not as polished. It takes a little bit longer. It would probably take about 45 minutes or so to go through the presentation, so just be advised. We might skim through some of the items, though, that we've gone through.

It's hard for us or at least for me because it just seems like sometimes you report things to cover we don't do the sound bites you know, we don't hire IR firm to do a little clever you know kind of slick things and I don't know why you'd want to it anyway, because I would think you'd want to hear from management. So we're not as polished it takes a little bit longer it probably.

About 45 minutes or so to go through the presentation. So I'll just be advised we might skim through some of the items that though that we've gone through.

Matt Faribault: Previously, there are some items in this presentation which were in the Q2 presentation as well, so that might help us a little bit. Before we get started, I just really want to give a shout out to Donna, because Q3 is a bear for us, because it just starts our holidays.

Previously there are some items in this presentation, which were in the Q2 presentation as well so that might help us a little bit before we get started I just really want to give a shot out to dawn up because these [laughter] Q3's, a bear for us because it just starts are holidays are kind of a mess up.

Matt Faribault: kind of a mess, not just a presentation, we're closing our financial also.

Not just the presentation, we're closing or financials, so Matt as well Madonna you know helps we do all the Powerpoint stuff I don't I'm I'm I'm, not even dangerous and Powerpoint They can't do it at all so every third quarter you know she's working on it through holidays before we get started note again, it's our 70, if you're in business.

Matt Faribault: Matt as well. But Donna, you know, helps me do all the PowerPoint stuff. I'm not even dangerous in PowerPoint, again, to it all. So every third quarter, you know, she's working through holidays. Before we get started, note again, it's our 70th year in business. That'll be

It'll be our 70 <unk> anniversary as March 31, So I guess what is that a couple of months off it'll be 70 years. If we can make it that far why don't we get going on slide two is our forward looking disclaimer language. So we're not going to go through it. Please call should you have any questions you're asking let us know if you have any questions slide three.

Matt Faribault: Our 70th anniversary is March 31, so I guess what is that a couple of months off? It'll be 70 years if we make it that far.

Matt Faribault: When we get going, slide two is our forward-looking disclaimer language, so we're not going to go through it. Please call us if you have any questions or let us know if you have any questions. Slide three, table of contents. First thing is the investor presentation, appendix one, supplementary financial info, which we're not going to go through either, but if you have any questions about it, please let us know. Let's go on to slide four, take a little bit longer. Let's go to Q3.

Tables contents first thing is the investor presentation Appendix, one supplementary financial info, which we're not going to go through either but if you have any questions about it. Please let us know, let's go on to slide four to take a little bit longer so Q3.

Matt Faribault: Let's go through it. Sales, $11 million. When we compare things to Q2, $11 million, $6.39. So that's a fairly low number in terms of sales, even lower than Q2, which was off. I think you probably have a good understanding of Q2, and we'll go through the explanation of Q3 as well. And look at the margins. I highlighted, we highlighted the margins, both the gross margins and EBITDA margins, so you can see the comparison.

Oh, let's go through each sales 11 million when we compare things for Q2 11 million to 639. So that's a fairly low number in terms of sales even lower than Q2, which was most often I think you'd probably have a good understand of Q2 and will go through the exploration of Q3 as well and look at the margins.

As I highlighted we highlighted the margins both gross margins and EBITDA margins. So you can see the.

Comparisons.

Matt Faribault: to Q2, which are not really favorable, but I think we tell you a lot. We don't like them when we share gross margins, both 30%, so there's certainly about 30% this quarter. And our EBITDA margins are not really that desirable for us anyway either.

Two Q2, which are not really favorable but I think we tell you what we don't like it when we share gross margins below 30%. So there's certainly below 30% this quarter and our EBITA margin and not really dead I, just horrible for us anyway, either observations and thoughts about our Q3, so what's going on here well the Emirates inventory.

Matt Faribault: Our observations and thoughts about our Q3, so what's going on here, well the MRAS inventory burned down.

We burn down, which we talked about at great length in our Q2 call that continue through Q3, and we predicted when we did our Q2 call. We told you what would you predict it that is that EM rash inventory burn down expected to continue into Q4, no. It's not it's it's over and we'll get into that in the presentation, but it's no more.

Matt Faribault: which we talked about at great length in our Q2 call. That continued through Q3. And we predicted, when we did our Q2 call, we told you, we predicted that. Is that MRAS inventory burndown expected to continue into Q4? No, it's not. It's over, and we'll get into that in the presentation. But there's no more burndown.

Burned down well.

Matt Faribault: Well, we will discuss the inverse inventory burn down in great detail under present us, right, the presentation. Let's go to slide five. Well, let's talk about the non-geavation sales. We have, we talk a lot about geavation. Non-geavation sales are only 7.5 million and Q3. And that compared to 9.4 million in both Q1 and Q2. So that was off as well.

Well, we are we will discuss the inventory burn down in greater detail in the president of threats presentation, Let's go to slide five well, let's talk about the non GE aviation sales. We are we do we talk a lot about GE aviation Nanci aviation sales were only some point 5 million in Q3 and that compared to nine 4 million in both Q1 and Q2, so that was off as well.

Matt Faribault: So although there are almost always will be some degree of quarter to quarter variability in our business, the trend is actually quite good for non-GA vision sales, so we're pretty encouraged about that. But what is the reason for, or are the reasons for the quarter to quarter variability? The numerous reasons, but for numerous reasons, the programs are on,

So, although they're almost always will be some degree of quarter to quarter variability in our business. The trend is actually quite good for Nanci aviation sales. So we're feeling pretty encouraged about that but what is the reason for or are the reasons for the quarter to quarter variability. There are numerous reasons, but for numerous reasons the programs we're on.

Matt Faribault: will be active in one quarter and may be inactive in another quarter, and we really have no control over that. There's very little we can do to control the timing of one program that we are on, will be active or inactive, and it would really be a waste of our time to even try to do that. It would exercise in fatalities, as we say here. But apart,

Who will be active in one quarter and me up and be inactive another quarter and we really have no control over that Oh, there's very little we can do to control the timing of when programs that we're on will be active or inactive and it would really be a waste of our time to even try to do that it would exercise in futility as we say here, but a park.

Matt Faribault: The key thing is we focus our energy and efforts on getting on new programs.

Thing as we focus our energy and efforts are getting on new programs, which we believe will be supportive of our long term objectives, rather attempting to try to control the timing of programs already on so let's keep going to slide six.

Matt Faribault: which we believe will be supportive of our long-term objectives rather than attempting to direct control the timing of programs already on. So let's keep going slide us.

Matt Faribault: But nevertheless, this quarter to quarter variability does come with less than optimal visibility often. And it does require us at part to be very agile and fast on her feet.

But nevertheless, this is quarter to quarter variability does come with a less than optimal Mr ability, often [laughter] and it does require us at park it'd be very agile and fast in her feet with their supply chain, whether inventory in our production management activities. So were there any new obstacles to completing sales in Q3, our yeah there were actually.

Matt Faribault: Well, there's apply chain, whether inventory and our production management activities. So, were there any new obstacles to completing sales in Q3? Yeah, there were actually, we'll get to that in a minute. But let's not talk about the bottom line. We'll talk about.

And we'll get to that in a minute.

Well, let's just talk about the bottom line. He can talk about the top line why where the March into Q3 lower than Q2, and we already show you the comparisons well, there's a few reasons to less favorable lingers, a less favorable sales mix in Q3 compared to Q to Q2, the sales mix actually was quite good in Q3, not quite as good but that's it.

Matt Faribault: Larger the margin to Q3 lower than Q2 and we already showed you the comparisons. Well, there's a few reasons to less favorable sales mixing Q3 compared to Q2. Q2, the sales mix actually was quite good. Q3 not quite as good, but as a point above, we have little to no control over which programs are active and which programs are inactive on a quarter to quarter basis. That's kind of rolled a dice a little bit if you look at a short term.

But we have little to no control over which programs are active and which programs are inactive on a quarter to quarter basis, that's kind of rolling the dice will little bit if you look at it short term.

Matt Faribault: you know, with a higher margin program is the active in a quarter or less active that we have almost no control over. Again, our objective is to get on more programs. You know, the ones that we think are good programs, the margin programs, better margin programs and the timing is up to, you know, the

You know with a higher margin programs the active in a quarter or less active that we have almost no control over again, our objective is to get them more programs. You know the ones that we think are good programs of the margin better margin programs and the timing is up to you know that the customer or guide or something outside of our control. The second item was lower sales.

Matt Faribault: customer or guide or something outside of our control. The second item was lower sales. We were talking about in Q2, set effects to our bottom line in Q2.

You talked about in Q2, so that affects our bottom line in Q.

Matt Faribault: low sales in Q3 compared to Q2, that affects our bottom line of course, and here's a big one. Even though we fully anticipated that Q3 sales were going to be like compared to Q2, we intentionally ramped up our cost in Q3 to meet the reduction requirements.

Low sales in Q3 compared to Q2 that affects our bottom line of course and here's the big one even though we fully anticipated that Q3 sales, we're going to be light compared to Q2, we intentionally ramped up our costs in Q3 to meet the production requirements of expected T program ramp up so that was something we decided that was intentional.

Matt Faribault: of a expected key program ramp up. So that was something we decided, that was intentional, and we'll talk about that number additional, again, throughout the presentations. So what do we go on to slide seven? Yeah, we saw that freight train coming out to the analogy we use in our Q2 presentation. The freight train coming, meaning the program ramp up,

I will talk about that a number of additional again throughout the presentation. So why don't we go on to slide seven yeah, we saw that freight train coming out to the analogy we use in our Q2 presentation. The freight train coming being the program ramp ups wanted to make sure we're ready although ramping up our cost took some conviction maybe some guts.

Matt Faribault: want to make sure we were ready. A little ramping upper cost took some conviction, maybe some guts.

Matt Faribault: a little bit anyway. You know, it's hard when you see, you know, it's not going to be a good sale, good quarter sales-wise to ramp up your costs. It turns out, um,

A little bit anyway.

It's hard when you see you know that's not going to be a good feel good quarter sales wise to ramp up your costs.

Turns out.

Matt Faribault: We don't know for sure, no guarantee, but we clearly were right with the benefit of hindsight to do what we did in ramping up our costs in Q3, and we'll explain that as we go through the presentation. So it was a good move on our part, I would say, to do what we did. Other considerations related to Q3?

No for sure no guarantee but we were clearly we're right with the benefit of hindsight to do what we did in ramping up our costs in Q3, and we'll explain that as we go through the presentation. So it was a good move on our part I would say to do what we did other considerations related to Q3.

Matt Faribault: Um, how things going with supply chain staffing, freight destruction, we talk about this a lot.

How things go on with supply chain staffing freight disruption, new we talked about this a lot and you might be tired of hearing about it but you know, we're sometimes tired of dealing with it supply chain staffing challenges to continue but they seem to be improving to some extent or maybe there's more that we have become more effective with dealing with them now I just wanted to point out we're not talking about <unk>.

Matt Faribault: You might be tired of hearing about it, but we're sometimes tired of dealing with it. Supply chain staffing challenges continue, but they seem to be improving to some extent. Or maybe it's more that we have become more effective with dealing with them. Now, I just want to point out, we're not talking about supply chain issues for the whole industry. We're talking about our supply chain. The whole industry we'll talk about later on, because that's probably more of a factor for us anyway, in terms of the,

Play chain issues for the whole industry, we're talking about our supply chain. The whole industry will talk about later on because that's probably more of a factor for our for US anyway in terms of the the the opportunity of new story and how they're affected by supply chain constraints.

Matt Faribault: the opportunity in history and how they're affected by supply chain constraints. International freight? Well, that's a little bit of a different story. There's a war in the Middle East.

International freight well, that's it a little bit of a different story.

There's a war in the middle East.

Matt Faribault: which occurred after the end of Q2, I guess during the first part of Q3, which we didn't see coming.

Which you know Curt after at the end of our.

After the end of Q2 at a I guess during the first part of Q3, which we didn't see coming but it's causing serious disruption challenges international freight.

Matt Faribault: but it's causing serious disruption and challenges for international freight.

Matt Faribault: disrupting, sorry, slide eight, disrupting shipments to customers in the Mideast and Asia. Yeah, we got customers in Turkey and Israel, important customers, so you can only imagine what kind of chaos that is. And then we also have customers in Asia where...

As for up to sorry, slide eight disrupting shipments to customers in the mid East and Asia, Yeah, We've got customers in Turkey, and Israel are important customers. So you can only imagine what kind of chaos that is and then we also have customers in Asia, where there is not a war in Asia, not yet anyway, hopefully hopefully will stay that way, but nevertheless, you know just the.

Matt Faribault: There's not a war in Asia, not yet anyway, hopefully it'll stay that way. But nevertheless, you know, the sea freight goes through those, through the middle, you know, it's supposed to go through the Mideast, I guess now it's going through the...

The sea freight goes through those through the middle of that so you know through the slot to go through the mid East I guess now it's going through the what is it the warn us of Africa, It's a way out of the way. So that's not a lot of fun I totally missed shipments in Q3 by 560000 I don't have in front of me, but I think it was only about 220 in Q2.

Matt Faribault: What is it, the Hornets of Africa? It's way out of the way. So that's not a lot of fun.

Matt Faribault: Total miss shipments in Q3, about 560,000. I don't have it in front of me, but I think it was only about 220 in Q2.

Matt Faribault: In other words, Q2 we're really getting much better, but we have a big setback.

The words Q2, when we really you know get much better, but we have a big setback in Q3, that's almost all related to international freight disruptions.

Matt Faribault: to three, and that's almost all related to international freight disruptions. So there you go. Our markets, also our markets, can be affected by inflation.

Oh, there you go our margins elsewhere marches skewed the affected by inflation.

Matt Faribault: I know inflation is supposed to be all gone, but we're not, I don't buy that. And of course, in cost-related operating, I recently commissioned a new plant in student Kansas. This is all planned and expected, but obviously you don't turn a plant on and you're at full capacity. It's not how it works. Let's go on to slide nine. Okay. This is our historical fiscal year results.

I know what replacement is supposed to be all gone well.

I don't buy that and the cost and cost related to operating our recently commissioned a new plant in student Kansas. This is all planned and expected, but obviously you don't turn a plant on and you're at full capacity you saw it how it works let's go on to slide nine. Okay. This is our historical fiscal year results.

Matt Faribault: Let's talk about it a minute, normally we don't spend much time on this one. Look at the sales in 17, 18, 19, 20, it kept going up like 10 million, 31, 40, 51, 60, really nice. Then what happened was this little thing called a pandemic.

And perspective, mostly [laughter], let's talk about in a minute normally don't spend much time, just one look at the sales and 17 18 1920 like it kept going up like 10 million 31, 40, 50, 160 really nice and then what happened was this all thank all of pandemic. So sales were really badly affected.

Matt Faribault: Sales were really badly affected in 21, and 22, 23, and 24, if you look at our forecast on slide 36.

'twenty, one and 'twenty two 'twenty three 'twenty four if you look at our forecast on Slide 36, 24 is gonna be or our forecast is something like 23 like 55 million top line 11, a half million dollar EBITDA. So we got you know three years, where we just have been able to breakout the pan.

Matt Faribault: 24 is going to be our forecast is something like 23, like 55 million top line, $11.5 million EBITDA. So we got, you know, three years where we just have been able to break out.

Matt Faribault: the pandemic, the disease part is, you know, mostly over, but boy, did we screw up, you know, the

That make the disease parties, you know mostly older but boy did we screw up you know the.

Matt Faribault: the global economy, supply chain, staffing. We have supposedly full employment, but so many people left the workforce. I don't know how that problem gets solved so easily. You probably know better than I do, but at least from my perspective, it seems like a problem that may not get totally solved so easily. But anyway, if you look at our top line numbers, you can kind of see the pattern there.

The global economies your supply chain staffing we.

We have supposedly full employment, but you know so many people left the workforce I dunno, how that problem gets solved so easily you'd probably know better than I do but you know at least from my perspective. It seems like a problem that may not get totally solved so easily but anyway. If you look at our top line numbers, you kind of see the pattern there.

Matt Faribault: Now we're hoping, and we have reason to hope, that we're going to start to have that growth dynamic kick in again starting in this fiscal year, you know, return to the growth dynamic. But let's go ahead and let's talk about, let's go on to slide 10. Okay, quickly in this one, we always cover our balance sheet.

Now, we're hoping and we have reason to hope that we're gonna start to move that Oh, we're going to start to have that growth dynamic kick in again, starting in this fiscal year, you know returned to the growth dynamic well, let's go ahead and let's talk about let's go on to slide 10, Okay quickly in this one we always cover our balance sheet you didn't.

Matt Faribault: Dividend stuff. So we got zero long-term debt, $74 million of cash re-reported.

Given and stuff. So we got a zero long term debt $74 million cash we reported but don't forget we there's nine point sorry, yeah, $9 3 million of remaining transition taxes tolmach payments payable through June 25 that relates to a repatriation tax I think it was it based upon the trumpf.

Matt Faribault: But don't forget, there's 9.3 million of remaining transition tax installment payments available through June 25. That relates to repatriation tax, I think it was based on the Trump tax law, which was very good for PARC, but nevertheless, we have some installment payments. So you can think about how you like, but we kind of think about that as almost like debt, like we owe that money. So when we think of our cash, we think, well, we still got to give $9.3 million.

Tax law, which was very good for park, but nevertheless, we have some installment payments. So you can think about how you like we kind of think about that as almost like that like we owe that money. So when we think of our cash we think well you know we still got a give $9.3 million of this these transition taxes to all the teams to the government. That's in addition to where a regular.

Matt Faribault: is these transition tax installment payments to the government. That's in addition to our regular tax payments, which we're not talking about. Dividend, yeah, you know about our dividend. We paid a lot of dividends. Paying for eight years, $588 million since

Tax payments, which were not talking about a dividend yeah, you know better dividend, we paid a lot of dividends paid for 838 years $588 million since.

Matt Faribault: In 2005, like I always like to say, that's a hell of a lot of money for a little company like Park. I want to slide 11. This is just kind of a reminder.

In 2005, and like always like to say, that's a hell of a lot of money for a little company like Park I'm going to slide 11. This is just kind of a reminder.

Matt Faribault: As you know, on May 23, 2022, the board authorized a buyback of 1.5 million shares.

And so you know on our May 23, 2022, or 2022 or the board authorized the buyback of one 5 million shares we purchased about 221000 shares so far it looks like we have about a what is it 1.279 million shares.

Matt Faribault: We've purchased about 221,000 shares so far.

Matt Faribault: It looks like we have about 1,279,000 shares still available to be purchased under the authorization. We're not saying we're going to buy stock or not, but we just want to remind you that the authorization is out there just so you remember that. Let's go on to slide 12.

They'll be purchased under your door through authorization, we're not saying, we're going to buy stock or not but we just want to remind you that the authorization is out there just you remember that this is going to slide 12, Okay. Every quarter. We tell you bought or top five this is a slide that Donald preparers, we do a nice picture of you know one of the.

Speaker Change: Okay, every quarter we tell you about our top five. This is a slide that Donna prepared as we...

Speaker Change: Do a little nice picture of one of the programs that these customers run, AE Aerospace. So they're a contractor for Airjet.

Programs that these customers Ron.

Aerospace so they're a contractor for aerojet.

Speaker Change: and the Aerojet relates to the PAK-3 missile, we talk about it a lot. Aerospheres, their contractor for Israeli aircraft, and that relates to the G280. So that's a Gulfstream airplane, but Gulfstream has some contract with Israeli aircraft under which Israeli aircraft produces the G280 airplane. Kratos, you know all about Kratos, we talk about it almost I think every quarter.

And the Aerojet relates to the Pac three missile, we talk up without a lot arris fears their contractor for Israeli aircraft and that relates to the G to 80, so that's a gulfstream airplane, but Gulfstream had some contract with Israeli aircraft under which Israeli aircraft produces the T. G 280 airplanes.

Credo as you know all about credo as we talk about it almost I think every quarter.

Speaker Change: featuring this Mako unmanned tactical drone.

Featuring this this mako are unmanned tactical drone Middle River, Yeah every quarter of course, some 47 eight that's a I mean, I think our favorite airplane and then nor down that's the global 7500, they they make some components for the engines for these.

Speaker Change: Middle River, every quarter of course, 747-8, that's I think our favorite airplane. And then Nordam, that's the Global 7500, they make...

Speaker Change: some components for the engines for the Global 7500 with our materials. Let's go on to the next slide, slide 13. My pie charts, I always like these. I don't know if they...

7500, with our materials, let's go onto the next slide Slide 13 my.

The pie charts I always liked these I don't know if they are useful to you, but I kind of think they tell you you know had messages and hum.

Speaker Change: are useful to you, but I kind of think that colleagues, you know, have messages in them.

Speaker Change: And if you look at the first nine months of this year, you'd say, yeah, commercial a little bit off as compared to the prior two years, and that would be based upon what? That would be that burndown that's causing commercial to be a little bit light in the fiscal 2024, first nine-month pie chart. Let's go on to slide 14, excuse me. So Park Love's Niche Military Aerospace Programs, this is Elena's project every quarter.

And if you look at the first nine months of this year. So you got a commercial a little bit off as compared to the prior two years and that would be based upon what I would be that burned out that's causing commercial to be a little bit like a in the in the Detroit fiscal 2024 first nine month Pie chart, let's go on to Slide 14 excuse me.

So parclose niche military aerospace programs. This is our latest project every quarter.

Speaker Change: to come up with some kind of fun, interesting, and cool examples of military programs to run. The pie chart's interesting. Let's talk about that for a second.

If you could come up with some kind of find interesting and cool examples of military programs run.

The pie charts interesting, let's talk about that for a second.

Speaker Change: rocket nozzles, drones, structures, and radomes. Those are niche markets for us, but even the structures we consider to be a niche market. Quickly, the SpaceX Falcon 9 launcher with Dragon spacecraft materials and ablatives. The Northrop Grumman E-2D, that's parts and materials, and both the Blackhawk and the Lockheed G-5, two very different kinds of aircraft, but those are multiple materials. And the Mk-56.

Rocket nozzles drones structures, those sorry, right all those are niche markets for us, but even the structures, we consider to be a niche market quickly the Spacex Falcon nine launch or with Dragon spacecraft.

Materials and ablative.

The Northrop Grumman E. Two D. That's parts and materials and voltage of Black Hawk in Milwaukee G. Five two at very different kind of aircraft, but those are multi materials and the M pay 56.

Speaker Change: Vertical launch system, that's for the Navy, and those are ablated materials. Let's go on to slide 15. So, let's talk a little bit about trends in the aerospace industry. Commercial aerospace markets, domestic air travel report fully recovered. That's good news for single aisle like the A320neo aircraft. International travel is reported to be approaching pre-pandemic levels. Also very good news for long-haul widebodies.

On system, that's for the Navy and those are our ablative materials, let's go on to slide 15, So let's talk a little bit about trends in the aerospace industry commercial aerospace markets are domestic air travel report that fully recovered and that's good news for single aisle like the 80 20.

Neo aircrafts international travel is reported to be approaching pre pandemic levels also very good news good news for long haul wide bodies like the Boeing Triple seven next see I'm, a little biased because I keep talking about programs. We're on are not surprisingly demand for commercial aircrafts as very high supply chain, a labor shortage challenges continue to be the biggest.

Speaker Change: like a Boeing 777XC, I'm a little biased because I keep talking about problems we're on. Not surprisingly, demand for commercial aircraft is very high.

Speaker Change: the Blightkain labor shortage challenges continue to be the biggest headwind for the commercial aircraft industry. But there are recent reports of supply chain stabilization and improvement, but I'll tell you what, we're not going to believe events. We'll see about that. You know, it seems like it's inconsistent. You know, some places may be better, some places may be not better.

Headwind for the commercial aircraft industry, but there are recent reports of supply chain stabilization and improvement.

Well I'll tell you what we're not complete events, we'll see about that you know it seems like it's inconsistent you know some places maybe better or some places maybe not better but.

Speaker Change: Now we're standing in his ongoing supply chain constraints.

Notwithstanding these ongoing supply chain constraints. Many now believe that 2024 will be the year of the commercial aircraft industry breaks out and ramped up production in earnest at the beginning of every year a calendar year is always the prognosticators in the grooves and stuff that however, biker reports, but I've read a number of them recently you know aerospace.

Speaker Change: Many now believe that 2024 will be the year the commercial aircraft industry breaks out and ramps up production in earnest. You know at the beginning of every year, county areas always the prognosticators and the grooves and stuff that have reflective reports. But I've read a number of them recently, you know aerospace analyst types are saying that you know this year or maybe the year

Analysts types that are saying that you know this year, maybe the year that are commercial aircraft through this you're really breaks out and it kind of gets past the supply chain constraints, we'll see about that but I think there might be some reason to be optimistic let's talk about that let's go to slide 16.

Speaker Change: of course, Lyra Crypto is your really breaks out and kind of gets past the supply chain constraints. We'll see about that, but I think there might be some reason to be optimistic, let's talk about that. Let's go to slide 16.

Speaker Change: The recent impressive ramp-up of A320neo family aircraft deliveries, now this is not prognostication, these are facts.

Recent impressive ramp up of <unk> hundred 20, Neo family aircraft deliveries and Theyre, just not prognostication use your facts are as well.

Speaker Change: and we'll get to that in slide 21 and 22 regarding that delivery ramp up, is supportive of that view. Now, she would use the A320 neo-family aircraft deliveries as a proxy for commercial aircraft industry. I don't know, but considering that that program is expected to be the largest commercial aircraft program in the history of the universe, you know, maybe we should consider using it as a proxy.

I'll get to that slide 21 to 'twenty two.

Now it's delivery ramp up is supportive of that view now should use dates or 20 Neo family aircraft deliveries as a proxy for our commercial aircraft industry.

But considering that that program is expected to be the largest commercial air car program in history universe.

Maybe we should consider using as a proxy now.

Our military markets.

Speaker Change: proxy for the industry, you know, breaking out, let's call it the commercial aircraft industry military markets. So the global demand for military defense hardware, including missile, missile defense systems, such as a factory missile. Again, we kind of bias, we talk about the problems around quite high and elevated by the wars.

Proxy for the for the industry, you know breaking out let's call. It the commercial aircraft industry military markets. So the global demand for military defense hardware, including missile missile defense system, such as a factory missile again, we kind of bias, we talked with the program is wrong quite high and elevated by the wars.

The screen tension in the globe, let's go on to Slide 17 also high level of interest in unmanned or potentially autonomous systems, such as the cradles Valkyrie.

Speaker Change: green tensions in the globe, looks like 17, also high level of interest in unmanned potentially autonomous systems such as the Crado's Valkyrie, you know, what's going on here? I'm not, I'm not an expert, but I'm just wondering, you know, you got missile, missile fence drones.

And what's going on here I'm, not I don't mind expert, but I'm. Just wondering you know you got missiles missile defense drones. You know maybe this is to avoid boots on the ground. So we could do our wars without you know getting people in the middle of them I know, it's kind of a cynical way to look at it but you probably have a more enlightened opinion I do the markets for military defense hardware also affected in some cases.

Speaker Change: You know, maybe this is to avoid boots on the ground so we could do our wars without, you know, getting people in the middle of them. I know that's kind of a cynical way to look at it, but you probably have a more lightened opinion I do. The markets for military defense hardware are also affected in some cases to constrain by

Constrained.

By International political and budgetary factors you know, we read about that stuff every day and in some cases supply chain or labor constraints continue to limit the ability of military defense Oems to meet the demand the market demand for the hardware a little picture of the Valkyrie here, which is nice and the last item on this slide we're on slide 17.

Speaker Change: international political and budgetary factors. We read about that stuff every day.

Speaker Change: And in some cases, supply chain and labor constraints continue to limit the ability of military defense OEMs to meet the demand.

Speaker Change: the market demand for the hardware. A little picture of the Valkyrie here, which is nice. And the last item on this slide, we're on slide 17.

Speaker Change: December 17, 2023 was the 120th anniversary of the Wright Brothers' first powered flight.

December 17, 2023, whereas the 120 <unk> anniversary of the White Rice brothers first powered flight so happy anniversary aerospace industry.

Speaker Change: So happy anniversary, aerospace industry. Let's go on.

Let's go on to slide 18.

Speaker Change: Okay, you're familiar with this slide, if you've listened to other presentations. We go through this every quarter, and let's just kind of give you context, these GE aviation programs are really important, and we talk about them. This is just background. We're not going to go through the programs. We have a firm pricing LTA through 2029, with Middle River Aero Structure Systems, a sub of ST Engineering Aerospace. What is that? I don't get that. All these programs are GE aviation programs, so what's going on here? Well, what's going on here is...

Okay, you're familiar with this slide if you've listened to other presentations. We are this is as we go through this every quarter.

Quarter is it just kind of give you context to say Gee aviation programs are really important when we talk about them. This is just background, we're not going to go through the programs. We have a firm pricing L. T. A through 2029 with middleware ever Aerostructures systems of Salt, but that's T engineer aerospace or what is that I don't get that these all these programs are G aviation programs, so what's going on here.

Well, what's going on here is when we got on these programs Middle River, EM rash, which is old.

Speaker Change: When we got on these programs, Middle River, MRAS, which is old.

Speaker Change: martin uh... glenn martin company in balsamore you know they're lucky martin anyway they were part of gadation

Glenn Martin company in Baltimore that Lockheed Martin anyway, they were part of GE aviation. So when we go to these programs are part she aviation I don't know if I remember about four or five years ago I'm not sure I remember G aviation sold EM rash to S. T engineering aerospace, which is a large Singapore aerospace company, but we're still supplying it to those G.

Speaker Change: and we got these programs there part GAVation. I don't remember, but four or five years ago, I'm not sure I remember GAVation sold MRAFs to SDN gearing Aerospace, which is a large Singapore Aerospace company, but we're still supplying it to those GAVation programs. And actually the redundant factory, that was an agreement we reached with GAVation to build that redundant factory. They wanted the redundant CBS there

Aviation programs had actually that we're starting to factory that was the agreement we reached with GE aviation, a buildout or done factory. They wanted to we're starting to see abuse. There you know kind of betting the farm with us being sole sourced on these programs you know so I won't go through the programs are if you have any questions about them.

No let's go on to slide 19.

Speaker Change: first two items again programs you're not going to go through them just let us let me know or let us know if you have any questions third bullet arrow item

The first two items again programs, we're not going to go through them just let it let me know let US know if you have any questions third bullet arrow item Ameren qualify Osprey Park proprietary film adhesive formulation product forms in progress that's new that's interesting and pretty great for Park, a park mras LTA through 2012.

Speaker Change: Emerson Claw of the free park for priority film he's a formulation product forms in progress. That's new. That's interesting and pretty great for park

Speaker Change: MRAS LTA through 2029 recently amended to include the three park film adhesive product forms. So for composite bond and metal bond, that's really great for park. Life of program agreement requested by the MRAS.

Nine recently amended to include the three parks film adhesive product form Super composite bond and Melbourne, That's really great for park life of program agreement request somebody in Bras N. S. D. They both said yeah 29 is nice, but what do you need a commitment for a loan or that so their agreement is in progress what is that agreement worked upon.

Speaker Change: Yeah, NSD, they both said, yeah, 29 is nice, but we need a commitment for one or that. Should there be agreements in progress? What's that agreement worth to park? I don't know.

I don't know if you've taught me you might what is that to use the slide 38 that has to.

Speaker Change: You might, what is that? This is flight 38, it has to.

Speaker Change: Let me see if that's a slide. Yeah, 38 has the analysis of the revenues, annual revenues for the GAVation programs. I have a program. I don't know. You tell me, you know, in 2045, 2050 of these airplane programs, you're starting. So we're so lucky, so fortunate. The programs are on. Our new programs are going to go a long, long, long, long time.

Let me see if that's why I didn't know 30, Yeah 38 has the analysis of the revenues annual revenues for GE aviation programs.

Program I don't know you tell me you know 2045 2015 of these airplane programs, you're starting so we felt lucky so fortunate the program's Iran or new programs. So we're gonna go a long long long long time, a very lucky there's 747 that that program mandates. So that's sad, but the other programs right now.

Speaker Change: Very lucky, the 747 that program ended, so that's a sad, but the other programs are on now.

Speaker Change: I have a long way to run.

A long way to run slide 20.

Speaker Change: Okay, we're going to go through some of the programs. So try to skip through some of this or skim over it because we carve every quarter, let's cover the high points. First of all, A320 Neo, that's the big dog, that's the big one. That includes this whole A320 Neo family, huge backlog, huge, 6,750 rare points. That's a backlog. That doesn't include all the airplanes that are in ship.

Okay, we're going to go through some of their programs so try to skip through some notes or skim over it because we carve it every quarter. So lets cover the high points first of all <unk> hundred 20, Neo that's a big dog. That's the big one that includes just whole acre 20 Neo family huge backlog huge 6000, and 753 airplanes. That's the backlog that doesn't include that.

All the airplanes that are have been shipped Airbus continues to say, they're going to be at 75 per month of production and deliveries in 2026. So I can make it there let's go on to slide 21, let's think about that so how's everybody doing so far with your planned <unk> hundred 20, Neo family aircraft production ramp up efforts.

Speaker Change: Airbus continues to say they're going to be at 75 per month, our production and deliveries in 2026. They're going to make it there, let's go on to slide 21, let's think about that. So how's Airbus doing so far with their planned A320 Neal family aircraft production ramp up? That pretty well actually.

Well actually according to reports 73 deliveries in 'twenty in December well, that's a lot.

Speaker Change: According to reports, 73 deliveries in December . Well, that's a lot. An average of 57 per month in Q4 of 23. That's a lot. And 563 total in Q3, sorry, calendar year 23. That's a lot. That's an average of 47 per month in calendar year 23. Let's get some perspective. What's the history? 18, you can see what's going on here. They're ramping up in the pandemic.

Average of 57 per month in Q4 of 23, that's a lot and 563 total in two three and 'twenty sorry calendar year 'twenty three that's a lot. That's an average of 47 a month in calendar year 'twenty three that's got some perspective, what's the history a T D C. How what's going on here, they're ramping up.

And the pandemic.

Speaker Change: Let's talk about, when we talk about per month, so 18, 32 per month, 1947 per month, and then oops, so we got the pandemic 2036, 2138, and 2243. Everybody said they wanted to maintain 40 through the pandemic. They almost got there, a little bit light in 2021, but they did keep some production going, good for them.

Let's talk about when we talk about per months. So 18, 32, Vermont $19 47 per month, and then oops do we got to pandemic 2036, 21, 38, and 22 forty-three everybody said you wanted to maintain 14th through the pandemic. They almost got there a little bit light in 2021 what did they.

Did keep some production going good for them now, let's take a look at something else. So it was for 563 and 23 five years 61 was the big year before sorry, 19, with 561 was there a big year before the pandemic. So we just eat out in 'twenty three.

Speaker Change: Now let's take a look at something else. So it was 563 in 23. 561 was their big year before, sorry 19, with 561 was their big year before the pandemic. So we just eked out in 23, 561 which is a big year.

561, which is the big year that kind of says you know things are we're getting past the pandemic notwithstanding all supply chain stuff and everything else, that's holding things back and the other thing you want to look at it is that it wasn't level.

Speaker Change: that kind of says, you know, things are getting past the pandemic. Now we're seeing a little supply chain stuff and everything else that's holding things back. And the other thing you want to look at is that it wasn't leveled at

Speaker Change: at 47 per month through calendar 23.

At 47 per month through calendar 'twenty three.

Speaker Change: 73 in December , 57 in the last quarter, so I would say, yeah, during the year, things are moving up, you know, we'll have to see how things work out as we go forward. I think there's actually a comment about that. Let's go on to slide 22. So for the first in 23, counter 23, for the first time since the beginning of the pandemic, Airbus was able to return to those A320neo family aircraft production and delivery rates.

73, and December 57 of last quarters, I would say yeah. During the year things would move it up you know well have to see how things work out as we go forward I think there's a actually a comment about there let's go on to slide 22.

So for the first and twenty-three counter 'twenty three for the first time since the beginning of the pandemic Airbus was able to return to those <unk> hundred 20, Neo family aircraft production and delivery rates to those pre pandemic rates.

Speaker Change: to those pre-pandemic rates in what you call italics, I guess, a very key milestone and accomplishment for Airbus, good for them.

And what do you call like italics I guess, a very key milestone and accomplishment for Airbus good for them.

Speaker Change: Now, this is what I was thinking about, there could be monthly ups and downs, there will be monthly ups and downs for A320 and NEO aircraft family deliveries, but it's quite apparent, at least to me anyway, that ramp is real and not going away. I wouldn't be surprised in the first couple of months of the 24, I don't know, I don't have any information, I'm just speculating, it could be a little light, but that's how it often is, they push a lot of airplanes out at the end of the year. Probably based upon the huge backlog.

Now this is what I was thinking about you could be my monthly ups and downs, there will be months monthly ups and downs for <unk> hundred 20, Neo aircraft family deliveries, but it's quite apparent at least to me anyway that ramp is real knock went away.

I'd be surprised in the first couple of months of the 24.

I don't know anybody I don't use information I'm, just speculating it could be a little light, but that is how often is the state. They pushed a lot of airplanes out at the end of the year clearly based upon the huge backlog, though Airbus would be producing these aircraft at a rate of 75 per month already if not for supply chain constraints and by the way just FYI.

Speaker Change: uh... airbus would be producing these aircraft at a rate of seventy five per month already if not for supply chain constraints and by the way just fyi uh... according to reports airbus booked two hundred fifty seven new orders in December of twenty three that's a lot of new orders

Hi, coordinate reports Airbus booked 257, new orders in December of 'twenty, three that's a lot of new waters and booked an unheard of 1693, New <unk> hundred 20 family of aircraft orders in 'twenty three that's those aren't just incredible numbers and so forth to Nokia on that program.

Speaker Change: book and unheard of 1,693 new A320 family aircraft orders in 23. Those are just incredible numbers. We're so fortunate to be on that program. Just luck really I guess. Slide 23.

Just look really I guess.

Slide 23.

Speaker Change: What about those engines, though, for the A320neo? Boy, we live a churned life, I'll tell you. So remember that there are two approved engines for the A320neo, the LEAP-01A and the Pratt 1100G GTF engine and we only supply into the LEAP-01A, not the Pratt.

What about those engines, though for the <unk> hundred 20, Neo boy, we really did try and life I'll tell Ya. So remember that your two approved engines for <unk> hundred 20, Neo the leap <unk> and the Pratt 1100 G. G. T F engine and we are the only supply into the leap one a not to Pratt. This as you know I was talking about lead a charmed life.

Speaker Change: you know, I was talking about, lead a charmed life, because the LEAP 1a market share has been hovering about 60% for the last, you know, couple of years. Let's go on to slide 24. Then what happened? It all changed. LEAP 1a has broken out.

Because the LIBOR at a market share it's been hovering about 60% for last couple of years, Let's go onto Slide 24, then what happened at all changed leap when they are broken out as a clear market share of winter through take your 'twenty. According to this December 'twenty. Three addition of <unk>.

Speaker Change: I'm also a market share winner for State through 20.

Speaker Change: According to this December 23 edition of AeroEngine News, that's our bible for a huge amount of data in this monthly publication, CFM, Leaf 1A, market share, firm orders.

And you know that's our Bible for you know huge amount of data in this multi use publication CFM leap when a market share of firm orders <unk> hundred 20, Neo aircraft family 65, 6% as of October 31, well, how the heck did that happen you know the thing is there's just so much palace and our market share.

Speaker Change: A320 new aircraft only 65.6% as of October 31. Well, how the heck did that happen? You know, the thing is there's just so much ballast in that market share with over 12,000 firm engine orders.

With over 12000 firm engine orders between the two engines. How you you know you were 60% how the heck do you get to 65, 6% in just a couple of months, it's incredible at the delivery rate of 75 basically Neil.

Speaker Change: between the two engines, and you were 60%, how the heck do you get to 65.6% in just a couple months?

Speaker Change: at the delivery rate of 75 H3Neo family aircraft a month.

Family Aircrafts a month.

Speaker Change: That 65.6% market share translates into 1,181 LEAP 1A engines per year. What does it worth to park? Well, we'll talk about it on slide 38, we'll get there.

That's 65, 6% market share translates into 1181 leap one eight inches per year, what's it worth to park well, we'll talk about it it's slide 38, we'll get there.

25.

Speaker Change: So, there are also currently 8,150 firm LEAP 1A engine orders. That's a lot of engines. What are those orders worth to park? Well.

So there are also currently $8 and 150 firm leap engine orders that's [laughter].

It's a lot of engines, what do those orders worth to park well.

Speaker Change: You know look at that slide 38, but you know you probably say about a quarter billion dollars now

You know looking at slide 38, but you know you probably say about a quarter billion dollars now.

Speaker Change: There's a couple of things that that's going to be deliveries past 2029, so that assumes that we're still in the program for that. You know, my guess is we will be, and I also guess that, you know, the pricing might go up a little bit after, you know, after 2030, so. But just kind of round ballpark numbers. Now, if you want to talk about live programs at 2045, 2050, you can do that math. I'm not even going to go there. So what happened? Why did the market share, affirm engine orders?

There's a couple of things that that's gonna be deliveries past 2029. So it assumes that we're still in a program. After that you know my guess is we will be and I'll also guests that are you know the pricing might go up a little bit. After you know after 2030, so but just kind of round ballpark numbers now if you want to talk about life of program for 2045 two.

<unk> thousand 50, <unk> you can do that math on the Navy to go there. So what happened why did the marketshare aforementioned orders shifts all properly and dramatically in favor of the leap when a engine. So we talked about this last time I won't dwell on it too much. There's all the news you read about yourself serious issues with the Pratt 1100 G engine.

Speaker Change: shifts so abruptly and dramatically in favor of the LEAP-1A engine. So we talked about this last time, we won't dwell on it too much. This is all in the news, you can read about it yourself. Serious issues with the Pratt 1100G engine.

Speaker Change: These have been extensively reported, so we're not going to cover them here again. So, why don't we just go on to slide 26.

You should have been extensively reported so we're not going to cover them here again.

Why don't we just go on to slide 26, the top item, there's actually new ones. So we'll talk about that FAA just published a new proposed rule in December 11th twenty-three required an inspection of additional Pratt 1100 key parts, which could be affected by the powder metal issues, that's kind of new news what are the full implications it's hard.

Speaker Change: The top item is actually a new one, so we'll talk about that. FAA just published a new proposed rule on December 11, 23 requiring inspection of additional Pratt 1100G parts which could be affected by the powder metal issues. That's kind of new news. One of the full implications, hard to say, will lead to further market share gains for LEAP-1A. I don't know. What do you think?

Sei will lead to a further market share gains for leap one eight I don't know what do you think Meanwhile, just Meanwhile, CFM is playing for induce upgraded components leap one a engine and you see what's going on here proud is really struggling I. You know you have to feel sorry for them with a really difficult problem you know and then the other hand.

Speaker Change: Meanwhile, just meanwhile, CFM is playing for induced upgraded components of LEAP 1A engine. You see what's going on here? Pride is really struggling. You know, you have to feel sorry for them with a really difficult problem, you know, and on the other hand, LEAP is kind of making improvements to their engine to actually improve durability. Let's go on the slide.

It's kind of making improvements to their engine to actually improve durability, let's go on to slide.

Speaker Change: 27, please. We're continuing here on the update. So this is still on that A320 family, the A320XLR variant. Supposed to be entered service second quarter of 2024. That's pretty much around the corner. That's really nice. That's exciting for PARC.

27, please we're continuing here in the update.

So this is still in that <unk> hundred 20 family. The <unk> hundred 20 extra Lar variant so to be entered service our second quarter of 2024, that's pretty much run a corner that's really nice that's exciting for park.

Speaker Change: That's good news, so COMAC 919. Let's just skip down to the last couple items. They recently made the first

That's good news so commack time, when nine let's just skip down to the last couple of items. They recently made its first.

Speaker Change: flight outside Mainland China and we've got to put them for rent in Hong Kong, so I'm not sure that's considered Mainland China, I think it might be, but anyway, it's news. These Comac airplanes are thought of as mostly for the Chinese domestic market. They recently unveiled a stretched and shortened variant of the airplane, at least plans to produce them, so that's really exciting.

Flight outside mainland China, and then we got to put in Parens Hong Kong, So I don't think.

Unless you had considered mainland China, I think it might be but but anyway. Its news because you know these comaker planes you had thought or is mostly for the Chinese domestic market. They recently unveiled.

A stretched and shorten variant of the airplane at least plants to produce them. So that's really exciting so comex not sitting still there doing more development work with this aircraft type let's go into 28, another commack Chinese commack aircrafts, which is a regional jet.

Speaker Change: So COMAC's not sitting still. They're doing more development work with this aircraft type. Let's go on to 28. Another COMAC, Chinese COMAC aircraft, which is a regional jet.

Speaker Change: And last check item, COMAC recently delivered its first two ARJ-21 converted freighter aircraft, which is nice.

And last check item coal Mac recently delivered first two a M E. R. A R. J 21 converted freighter aircrafts, which is nice and cool Mac held this as a solid step forward for China's aerospace sector.

Speaker Change: And COMEX hailed this as a solid step forward for China's aerospace sector.

Speaker Change: Any history buffs? Does that sound like anything to you? You ever hear of the Great Leap Forward? Do you think that's a coincidence? I don't know. I have no idea. When I read that, I thought, well, it kind of sounds like the Great Leap Forward. If you don't want to know about that, you might want to look it up. Let's go on to slide 29.

Any history Buffs, you know does that sound like anything to you do you ever hear of a great leap forward do you think that's a coincidence I dunno I have no idea just when I read that I thought well it kind of sounds like a great leap forward. If you don't know about that you might want to look it up let's go on to slide 29.

Speaker Change: So the 777X aircraft, yeah, this is an exciting program for PARC, and it's starting to actually happen. We expect to ship approximately 2 million materials for this program in calendar 24.

So cripples have an extra aircraft yeah. This is exciting.

An exciting program for park, and it's starting to actually happen.

We expect to ship approximately $2 million of material for this program in calendar 'twenty four.

Speaker Change: Boeing said that it'll be certified in 25. They're building ahead, of course.

But we said that it'll be certified and twenty-five they're building ahead of course.

Speaker Change: Uh, and you know, this is important with the cancellation of the 747-8380, this 777X occupies unique space in the long haul, high payload capacity, wide body aircraft market, will likely continue to do that for a long, long time. Why is that? Because nobody's planning anything to compete against it. It could be a significant program for PARC.

And you know this is important with the cancellation of the 747 80 380. This triple seven acts occupies a unique space in a long haul high payload capacity wide body aircraft market will likely continue to do that for a long long time why is that because nobody's planning anything to compete against it.

It would be a significant program for park.

Speaker Change: And then lastly, we always talk about the legendary Boeing 747, thank goodness for spares. Let's go on to slide 30, so we have a G-Aviation jet engine.

And then lastly, you always talk about the legendary Boeing 747, thank goodness for spares, let's go on to slide 30, So we have a GE aviation jet engine.

Speaker Change: Program sales history and the forecast estimate, so the sales history, you know, about, look at the right-hand column, you know, Q1, 6.2 million, Q2, 3.1, Q3, 4.15, so Q2 and Q3 were those burndown quarters.

Themselves history in our forecast estimate so these days to sales history and know about it look at it on the right hand column, you know Q1, and $6 2 million in Q2, 31234, 0.15, So Q2, and Q3 are where those burned down quarters.

Speaker Change: Q4, we got booked $7.5 million, so so much for that.

But Q4, we got booked some point $5 million.

So so much for the burn down I would say.

Speaker Change: $7.5 million. Go look through the quarters. Is there any $7.5 million quarters?

$7 5 million go look through the quarters, just any $745 million quarters.

Speaker Change: I think there were a couple before the pandemic that were at that level, maybe two-quarters, but you have to go back a little further in history. Goodbye, MRAS inventory.

I don't I think there were a couple you know before the pandemic you know that we're at that level, maybe two quarters, but you have to go back a little further history. So goodbye.

EM rash inventory burn down.

Speaker Change: I would say that's relatively good news for Park. And we predicted this, but we'll get to that in a minute, I guess. Slide 31.

I would say that's relatively good news for park and then when he predicted this but we'll get to that in a minute I guess slide 31.

Speaker Change: The sharp drop-offs in Q2 and Q3, GE Aviation jet engine program sales, it's all about that burn down. The MRAS calendar year 23 bill plan, that's their bill plan, not ours, translated into about $23 million of power of GE Aviation program sales. We talked about this last time.

Yep.

The sharp drop off in Q2, Q3, GE aviation jet engine programs sales, it's all about that burned down the.

Embarassed calendar year 'twenty three build plan that's their build plan on hours translate into about $23 million of park JV. She program sales we covered this last time.

Speaker Change: So what happened, you know, why were our sales less than that, you know, in Q3, Q2 and Q3? Well, we already told you the answer. That's a highlight at the bottom, the burndown, explains the whole thing. Let's go on to slide.

So what happened you know why where our sales less than that you know what Q3, Q Q2, and Q3, well where I told you that the answer that's and it highlights at the bottom the burn down explains the whole thing let's go on to.

Slide 32.

Speaker Change: So will this kind of disruptive inventory burn down happen again? Oh, I think so. It likely will a time before it will happen again. There may be some, likely will be some degree of quarter-quarter volatility in our GE program sales because of inventory management challenges. Maybe somewhat of a rollercoaster ride from time to time. So we talked about this at some length in Q2, just talked about the aerospace industry in general. How it has this propensity to have...

Well, just kind of disruptive inventory burn down happen again, Oh, I think so it likely will attempt before having to go up and again.

There may be some likely will be some degree of quarter to quarter volatility in energy program sales because of inventory management challenges, maybe somewhat of a roller coaster ride from time to time. So we talked about this at some length in Q2, just talked about the aerospace industry in general how it has just for temp propensity to.

Have inventory management challenges you know.

Speaker Change: Inventory management challenges, you know, and we can't do anything about that. You know, if we decide to be a supplier to that industry, we have to work with it. And, you know, we can complain about all we want, but it's a total waste of time. We're happy to ride the quarter-to-quarter GE program sales roller coaster and face the challenges presented by it, because to us,

And we can't do anything about that you know, we decided to be a supplier to that industry. We have to work with it and you know we can complain about all we want but total waste of time, we're happy to ride at quarter quarter G program sales roller coaster and face the challenges presented by it because to us the over riding Ley important.

Speaker Change: Overridingly important consideration is the long-term outlook for the GE program sales as explained on slide 38.

This is the long term outlook for the Chi program sales.

Planed on a slide in slide 38.

Speaker Change: But the roller coaster ride, this volatility, does place additional pressure on us at PARC to be agile, nimble, and fast on our feet with our supply chain inventory and production management activities. We've got to be able to respond quickly. That's kind of our calling card at PARC. That's what we like to do. Slide 33. We're still on the burndown. Sorry. It's such a big deal. I spend a lot of time on it. Where are we going with the burndown?

But the roller coaster ride it does.

This volatility does place additional pressure on us at park to be agile and nimble and fast on our feet with their supply chain inventory and production management activities. You know, we've got to be able to respond quickly.

And that's kind of our calling card at park, that's what we'd like to do slide 33.

[noise] told them, we're still in the burnt I'm, sorry, it's such a big deal and we spend a lot of time on it but what are we going with it burned down.

Speaker Change: Well, in our Q2 presentation, we predicted that the burndown would likely be completed in Q3 and that the park inventory carried by MRAS would be normalized by the end of Q3. Based upon our looking for Q4, that prediction was obviously correct.

Well in our Q2 presentation, we predicted that the burn down will likely be completed in Q3.

That the park inventory carried by Emirates, we normalize by the end of Q3.

Based upon our bookings for Q4, our prediction was obviously correct.

Speaker Change: So, we guessed right on that one. One more consideration regarding inventory management.

So we guessed right in that one.

One more consideration regarding inventory management.

Speaker Change: As a general matter, it's very important to avoid over-correcting and overshooting of doing so to create additional volatility with increasing sine wave amplitude and inventory swings.

As a general matter is very important to avoid over correcting an overshooting is doing so okay great.

Additional volatility with increasing sine wave ample to be inventory swings.

Speaker Change: Now in our Q2 presentation, we indicated this was a concern of ours.

Now in our Q2 presentation. We indicated this was a concern of ours and if a concern.

Speaker Change: proved to be well-founded, it could result in a significant spike in demand in Q4 and into fiscal 25. We told you that in our Q2 report.

Proved to be well founded it could result in a significant spike in demand in Q4 and into Q2.

Fiscal 'twenty five we told you that.

And our Q2 call.

Speaker Change: top of let's go to 34, that based upon our GA program booking for Q4, that concern was obviously well found.

Let's go to 34 that based upon our G. HN program bookings for Q4 that concern was obviously well founded our decision to ramp up our costs in Q3 in order to be fair for Q4 Spike in demand. So obviously the right decision for park.

Speaker Change: Our decision to ramp up our costs in Q3 in order to be prepared for Q4 and spike in demand was obviously the right decision for PARC.

You know.

Speaker Change: Funny, I remember a few months ago Mark said to me that he's getting nervous and I said, what do you mean? He said, well, you know, we try to track the inventory and it seemed like the inventory has burned down a lot and these programs are ramping and he said, boy, you know, he's concerned there's going to be this spike and we could get...

Funny I remember a few months ago, Mark said to me that he's got nervous scenarios. What do you mean, he said well you know we try to track the inventory and it seemed like the inventories.

We're down a lot and these programs are ramping and you say boy you know he's concerned there's going to be the spike and we could get.

Speaker Change: We get overrun, and he was right, and obviously we decided not to get overrun by staffing up and building up our costs in Q3, so we can be ready for Q4.

You know, we get overrun and he was right and obviously, we decided not to get overrun by increasing our staffing up and building are up our costs in Q3, so it can be ready for Q4.

So what do we think about all this.

Speaker Change: I know it sounds a little bit, you know, kind of more allokey, but we think it's mostly just.

I know it sounds a little bit you know kind of mortality.

Well, we think it's mostly just noises static.

Speaker Change: We think the freight train, the juggernaut has come down the tracks at us 100 miles per hour. It can't be stopped.

I think the freight train a juggernaut has come down tracks at up to 100 mph.

Can't be stopped.

So we'll talk about on slide 38.

Speaker Change: We better be ready or we will be overrun, just like Mark was saying to me. Slide.

Better be ready are we will be overrun just like Mark was saying to me.

Slide 35.

Speaker Change: Just FYI, the 24 MRES bill plan, the Air is Not Ours, translates into $28 million of 24 PAR-G aviation jet engine program sales. That bill plan is a year old, so I think they'll probably update that bill plan soon. Let's see what happens. Maybe it'll be higher, I don't know. Let's go on to slide 36.

That's why the 24 M Rust belt plan, there's not ours translates into $28 million or 24, Parkey aviation jet engine programs sales.

Oh, that's a [laughter] that build plan is a year old so I I think that probably update that build plans soon let's see what happens maybe it'll be higher I don't know, let's go on to slide 36.

Speaker Change: So, now let's talk about park as a whole. We have the history just for.

So now let's talk about parked as a whole.

We have the history just for.

Speaker Change: For perspective, you could see Q1, Q2, Q3, and you see how weak Q2 and Q3 were because of the burndown and other factors we described at the beginning of the presentation.

For perspective, and you could see a Q1 Q2 Q3 Hum.

And you know you see a weak Q2, and Q3 were because the burn down.

And.

And other factors, we described at the beginning of the presentation.

Speaker Change: We're looking for, well, about $15 to $16 million, remember $7.5 million for GE aviation programs. That would be about $7.5 to $8.5 for non-GE aviation.

What are you looking for Q4, well about 15 to 16 million remember 75 million for GE Aviation program. So that would be about suddenly have to even have a donkey aviation talking to sales and EBITA $3.2 million to $4 million. That's just doing the math really a lot of variability in EBITDA based upon which programs are.

Speaker Change: Talking sales and EBITDA 3.2 to 4 million, that's just doing the math really. A lot of variability in EBITDA based upon which programs are active, that kind of thing, and the timing of when additional costs get legged in, but that's the best guess we can give you. And then we talk about the total for the year and that's just kind of adding up.

Active that kind of thing and the timing of or when.

When additional costs got legged in well that's our you know the best cost. We can give you and then we talk about the total for the year and that just kind of adding up.

Speaker Change: the first three quarters plus the forecasted Q4, so nothing but just doing the math there.

The first three quarters plus the forecast for Q4, so nothing but just doing the math here I'm.

Looking at the.

Speaker Change: 24 total compared to 23 total, the top line is about like 23 and the bottom line forecast about like 23. So, 24, we're kind of stuck in the mud as compared to 23, but looking for that breakout that we were talking about going forward. Slide 37.

Sorry, 24 total compared to 23 total.

As the top lines about like twenty-three and our bottom line forecast about like 23. So 24, we're kind of stuck in the mud as compared to 23, but looking for that breakout we're talking about.

Going forward slide 37.

Speaker Change: following this are updated. Okay, we won't spend a lot of time with the preamble, preliminaries here, because we went through this for the last two quarters. This is our outlook, very important stuff, very critical stuff for both GE aviation programs, the park generally.

Following is our updated okay, we won't spend a lot of time with the preamble you preliminary here between we went through this for last two quarters. This is our outlook very important stuff very critical stuff for both GE aviation programs departure in Italy.

And so we think that the outlook is actually more important in a meaningful and a quarterly forecast. We gave you even though we did give you a quarterly forecast what's the timing for the outlook people as you asked that we don't know we said the freight train is coming can't be stopped that'd be ready I mean, Airbus. He always says they're going to be a 20.

Speaker Change: So we think that the outlook is actually more important and meaningful than the quarterly forecast we gave you, even though we did give you a quarterly forecast. What's the timing for the outlook, people always ask that. We don't know. We said the freight train is coming, can't be stopped, better be ready. I mean the Airbus CEO said there's going to be a

Section 2026, so I don't know I mean, it's not.

Speaker Change: 2026 so I don't know I mean it's not I'm not in a position to second-guess him why would I do that let's go on to slide 30 what is it 30 38 38

I'm not in a position to go to second guess him why would I do that let's go on to slide 30, what does it sit.

38 38.

So here, it's a juggernaut C. G aviation jet engine programs revenue outlook I'm not going to go through it because we went through it now there's hardly any meaningful there's no meaningful change just a little kind of fine tuning, but from Q2.

Speaker Change: So here's a juggernaut, this is a G-Aviation jet engine program driven to Outlook. I'm not going to go through it because we went through it. There's hardly any meaningful, there's no meaningful change, just a little kind of fine-tuning from Q2.

Speaker Change: The main thing we covered in Q2, I think, went through each program in detail.

The main thing we covered in Q2 I think went through this each program in detail.

Speaker Change: do your Q2 call. So if you want, you can go back and listen to that. But the main thing we're trying to convey is that these forecasts are not aggressive.

During our Q2 call. So if you want you can go back and listen to that but the main thing. We're trying to convey is that this is these forecasts not aggressive. These are conservative we went through each item each program. The revenue per unit, we know that information we have that from a customer. So that's the only question is what do we assume in terms of engine units and we went through the <unk>.

Speaker Change: These are conservative. We went through each item, each program. The revenue per unit, we know that information. We have that from our customer. The only question is what do we assume in terms of NG units? We went through the explanation of that in Q2. Like I said, we think they're pretty conservative.

Explanation of that in Q2, and like I said, we think they're pretty conservative I ended up at $55 million based upon the the assumptions that are listed below which we will knock over but you know you can read them. They can be questions about them, let us know.

Speaker Change: ends up at $55 million, based upon the assumptions that are listed below, which we will not go over. But you can read them. If you have any questions about them, let us know. Slide 39. This is the...

Slide 39 now this is the.

Speaker Change: I look for Ola Park, not just G-Aviation. Sorry, it's running long, but we're almost there.

I'll look for all the park not just G aviation.

Sorry, It's you know we're running long, but we're almost there.

And this is identical to the slide that we provided to you in Q2, we just really important so I wanted to provide again, although there's no change and I'm not you know the math is all explained in the footnotes. If you have any questions about it just let us know, but we're saying the outlook is 100 about $150 million sales and <unk>.

Speaker Change: And this is identical to the slide that we provided to you in Q2, which is really important. So we wanted to provide it again, although there's no change.

Speaker Change: And, you know, the math is all explained in the footnotes. If you have any questions about it, just let us know. But we're saying the outlook is about $150 million.

Speaker Change: 36 or 37 million dollars each dollar, but this is an outlook as we say it's not a forecast because this does not include anything other than

36, or $37 million EBITDA, but just as an outlook as we say, it's not a forecast.

This does not include anything other than the programs that we're sole source qualified on and assumption of a small increase in our non G aviation sales baseline, which is $32 million and.

Speaker Change: the programs that were sole source qualified on and assumption of

Speaker Change: a small increase in our non-GAAviation sales baseline, which is $32 million.

Speaker Change: and official 23, so we assume that'll go up to 40 million over the outlook period, which we think is actually kind of a walk in the park. I hope that doesn't sound arrogant, but that's how we look at it. So let's go on to slide, so yeah, slide 40 is just the footnotes for explaining the math, how we did it, pretty straightforward. Slide 41, so these are examples of programs that are not taken into account in the outlook. Like I said, not a forecast, an outlook.

An additional 23, so we assumed out of golf to $40 million over the outlook period, which we think is actually kind of a walk in the park I hope that doesn't sound arrogant, but that's how we look at it so let's go on to slide towards Yeah. It's slide 40 is just the footnotes for explaining the math, how we did it pretty.

Slide 41. So these are examples of programs are not taken into account in the outlook like I said, not a forecast and outlook.

Speaker Change: Some of these programs will hit, some probably won't, but...

Some of these programs will hit some probably won't.

But.

Speaker Change: Some will, I think, we just can't tell you which ones, but I do want to highlight, we're not going to go through them all because they're really the same as we covered in our future presentation, except there's a new one.

Some will I think we just can't tell you, which ones, but I do want to highlight we're not going to go through them all because they're really the same they say that we covered in our Q2 presentation, except there's a new one.

Speaker Change: Major new manufacturing project assess the following slide. So, let's go to this one. This is actually a big deal, you know. Just recently came up, major new manufacturing project initiated for PARC requested by a highly motivated long-term large customer. We believe the project has a high degree of likelihood to proceed. Why is that? Because there's a motivated customer that wants it to proceed.

Major new manufacturer project assessed in the following slides so let's go to this one this is actually a big deal you know [laughter]. Just recently came up major new manufacturing project issue for park requested by a highly motivated long term large customer and we believe the project has a high degree of likelihood to proceed well.

Is that because theres, a motivated customer that wants it to proceed.

Speaker Change: It's extremely confidential, so I wanted to tell you about it. We wanted to tell you about it because it's a big deal, but we can't tell you anything about it, anything about it, details. But just to give your perspective, in order to do this, we need to build a new or purchase a new factory for the project size 350,000, probably close to 50,000 square feet.

It's extremely confidential so I wanted to tell you about it we wanted to tell you about it because it's a big deal, but we can't tell you anything about it anything about any details, but just to give you a perspective in order to do this we need to build a new or purchase a new factory.

For the project.

<unk> 30, or 50000, probably close to a 50000 square feet.

Speaker Change: a capital estimated $6 to $10 million estimate, for the large workforce, that's the hardest part for us. You know, I won't give you the number, but it's a lot of people. Now, we're looking seriously at automation to reduce the size of the workforce, but that would increase the capital spending automation.

Capital estimated $6 million to $10 million estimate.

Or at a large workforce that's the hardest part for US you know I won't give you the number but it's a lot of people now were looking seriously at automation to reduce the size of the workforce, but that would increase the capital spending and automation.

Slide 43.

Speaker Change: a preliminary estimate of revenues for the project, $20 to $30 million per year range. This is not, we're not talking speculation. I wish I could tell you more about it, I can't. We're not talking speculation about the revenue opportunity. There's lots and lots and lots of detail behind that. And it's probably more than 10 years, probably life a program, you know, again, you know, whatever, 20 years, 25 years. So it's a big thing for Park.

Eliminate the estimate of revenues for the project $20 million to $30 million per year range. This is not we're not.

Talk and speculation I wish I could tell you more but I can't we're not talking speculation about the revenue opportunity.

There's lots and lots and lots of detail behind that and it's probably more than 10 years, probably life of program. You know again, you know whatever 20 years 25 years.

So it's a it's a big thing for park hyper.

Speaker Change: high-priority, potentially very important project, report in our customer. Let's go on to slide 44, a little bit of a change of pace here. We haven't talked about the up-do, James Webb Space Telescope for a little while. Revelations for the ages. Reminder here, 21 of parts for proprietary sigma stripes are incorporated into the James Webb structure.

High priority high priority potentially very important project for park and a customer that's going to slide 40 for a little bit of a change of pace here, we haven't talked about the up the James Webb space telescope, a little while revelations for the Ages reminder, here 21 of Parks' proprietary Sigma stripes are incorporate didn't see.

James Webb structure.

Speaker Change: James Webb, along with our signal struts, are established at the Lagrange II orbit point located about 1 million miles from Earth. It's pretty far away.

James Webb, along with our second stretch our established at the La Grange to orbit point located about 1 million miles from Earth, it's pretty far away.

Speaker Change: I don't know. I didn't look it up, but I think light travels at 186,000 miles per second. Maybe you could look that up. I think that's it. But if you do the math, that's about five light seconds away. Your light year is about five light seconds away. In other words, it would take about five seconds for the electromagnetic signals and stuff like that, radio signals, to come back from our James Webb to the Earth. The James Webb recently spotted...

I don't know I look it up but I think light.

Travels with 186000 miles per second maybe you could look that up I think that's it but if you do the math that's about five seconds five light seconds away, you're light years about five seconds away in other words, it would take about five seconds for the electro magnetic signals and stuff like that radio signals to come back from a J.

Web to the Earth.

James will have recently spotted this is just amazing stuff I, you know I kind of get chills, even thinking about it it's probably the oldest black hole ever seen mentioned black hole with a massive 1.6 million SUNS from 13 billion years ago.

Speaker Change: This is just amazing stuff. I, you know, I kind of get chills even thinking about it. It's probably the oldest black hole ever seen, an ancient black hole with a mass of 1.6 million suns from 13 billion years ago.

Speaker Change: James Webb spotted this black hole in the center of the infant galaxy.

James website up this black hole in the center of the infant Challenge C. G [laughter].

Speaker Change: I hope this is not supposed to be a cute thing, these astronomers are sometimes clever, I hope that's not supposed to be Gen Z, you know, maybe it is, it's a galaxy, G-N-Z-11.

I hope, it's not supposed to be acute thing. These are astronomers are they somebody cleverer, that's not to be Gen. Z you know maybe it is.

Galaxy Jed G N Z 11.

Speaker Change: That's only 440 million years after the birth of the universe.

That's only 440 million years after the birth of the universe.

But here's something in bold beats.

Speaker Change: It's a big, big, big thing. Black holes of this magnitude are not supposed to have existed until much, much later in the development of the universe. So what's that about? Is the universe really 13.7...

It's a big Big Big thing Black holes. This magnitude not supposed to have existed until much much later in the development of universe, So what's that about.

As the universe really $13 7 billion years old.

Speaker Change: or is it much older than that? 13.7, I'm no scientist. I don't know anything about this stuff, but I think scientists measure the age of the universe by expansion and extrapolating back, you know, how many years it took to get started.

Or is it much older than that $13 seven I'm no scientist I don't know anything about this stuff, but I think scientists measure at the age of the universe by expansion in extrapolating back you know how many years to talk to you get started.

Speaker Change: But let's go on the next one, slide 45.

But let's go onto the next one slide 45.

Speaker Change: Are our theories about star and galaxy formation correct or fundamentally flawed?

Our our theories about star <unk> Galaxy formation correct.

Italy, Florida.

Speaker Change: Our modern cosmological theories about the universe and its origins correct are fundamentally flawed. And there's nothing more important than this, you know, a universe how to get started.

Our modern cosmological theories about the universe and its origins correct are fundamentally flawed and there's nothing more important to this you know our universe how to get started.

Speaker Change: data and images, sorry, you know, facts are facts from the James Webb, occurring modern cosmological science upside down and inside out.

Data and images sorry, you know the facts are facts from the James Webb, our Kearny modern cosmological science upside down and inside out we thought we understood. So much about the universe of its origins, but James Webb is telling us we know so very little our theories are just not holding up.

Speaker Change: We thought we understood so much about the universe and its origins, but James Webb is telling us we know so very little. Our theories are just not holding up.

Speaker Change: It is just beyond words and description what it means for us to be a very small part of the James Webb and its revelations for the age.

It is just beyond words description what it means for us at park to be a very small part of the James Webb and its revelations for the ages, let's go on to the last slide just quickly there's little photos from our park family Holiday Party celebration.

Speaker Change: Let's go on to their last slide just quickly. There's these little folders from our park family holiday party celebration. I think I want to tell you about this. This is actually this is not like a meeting hall something. This is our factory. You know, it's a factory floor. If we didn't have all these tables here, or for lesser stuff, we go through there to the floor.

I wanted to tell you about is this is actually this is not like a meeting hall something just their factory.

Factory floor, if we didn't have all these tables here.

Let's just stop and go through their cede the floor.

Speaker Change: This is the original factory. This is the 15 years old. It's not no factory. Therefore, we don't clean the floor up for parties. It's the most beautiful factory I've ever been in.

Is your original factory. This is 15 years old its a new factory, yes, we're we don't clean of Florida for parties. It's the most beautiful factory I've ever been in.

It's very special.

Speaker Change: So if you're ever in town, you want to come take a look, just let us know, we'll be happy to show you around. Okay, that covers our presentation, operator. So if there are any questions, we'd be happy to take.

If you're ever in town you want to come take a look just let us know happy to show you around.

Okay that covers our presentation operator, so if there are any questions we'd be happy to take them.

Thank you.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2 if you'd like to remove.

We will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate that your line is in the question Kent.

And you May press star two if you'd like to move your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment.

For participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.

One moment, please pull for questions.

Speaker Change: Thank you. Our first question comes from the line of Nick Ripostella with NR Management. Please proceed with your question.

Thank you. Our first question comes from the line of Nick <unk> with my stellar with NR management.

Please proceed with your question.

Nick Ripostella: Good evening, and Happy New Year, Brian , and to the whole team there. I know you can't get into specifics of this potential new program.

Oh, good evening, Rong, and happy new year volume and to the whole team there.

I know you can't get into specifics.

Potential new program.

Right.

Nick Ripostella: might you be able just to say something about the math behind it in terms of, you know, the kind of rate of return profile that something like that would have or, you know, can we just assume it would be similar to, you know, the existing profile?

Might you be able just to say something about the more behind it in terms of ball.

And all the kind of rate of return profile that something like what harmful.

We just assume it would be similar.

Oh, yeah and profile.

Hum.

Speaker Change: Yeah, do the best you can. You know, look, when you say, talk about the company, and you use the word conservative...

But what do the best you can you know.

When you say.

Talk about the company and we use the word conservative.

Speaker Change: I trust you. I can take that to the bank, so you can be conservative, but the second question is

I talked to you I can take that to the bank. So you could be conservative.

Oh, the second question is.

Nick Ripostella: uh... you know obviously park has a very bright

You know, obviously park has a very bright future.

Nick Ripostella: And as you said in the past, you paid your dues.

Hum.

In the past you pay your dues.

Nick Ripostella: So concerning how much cash do you think the company really wants to keep on the balance sheet?

Concerning how much cost do you think the company wants to keep on the balance sheet.

Nick Ripostella: going forward. What do you think? What's your view?

You know going forward, what do you think Paul what's your viewpoint.

Nick Ripostella: That's a tougher one. The first one, yeah, the margins are quite good on this new project, quite good, and

That's a tougher one the first one yeah. The margins are quite good on just a new project quite good.

And.

Nick Ripostella: maybe better than our existing margins, you know, certainly not worse, maybe better than our existing margins, so quite good.

And maybe better than our existing margins you know I'm surely not worse, maybe better than our existing margins so quite good.

And by the way happy happy New year no. Thank you for your questions.

Speaker Change: And by the way, happy new year, Nick. Thank you for your questions. So hopefully that gives you a little perspective.

So I hopefully that gives you a little perspective.

Speaker Change: We there's a lot of information this is not just kind of like starting we have lots of

We there's a lot of information. This is not just kind of like starting we have lots of information a lot of numbers have been crunched. So we know a lot about this project.

Speaker Change: a lot of numbers that have been crunched, so we know a lot about this project. When I say the margins look quite good, that's not just kind of off the top of my head stuff. How much cash do we want to keep? Well, that's why I mentioned we've got the $9.3 million that we still have to pay the IRS for that, you know, that Patriots and stuff.

When I say the margins look quite good that's not just you know kind of walked up my head stuff, how much cash we want to keep them well.

Well, that's why I mentioned, we got the $9 3 million Bucks that we still got to pay the IRS for that you know the Patriots and stuff.

Hum.

Well.

Speaker Change: I don't know. I mean, good question. It's something we think about. The board talks about it all the time. It's really nice to have cash so that if we want to do this project, we send six to ten million, but let's say we spend more money on automation, let's say it's more than that. You know, it's nice to be able to say, yes, we'll do it, rather than, okay, where do we get the money for it, you know?

I don't know I mean, good question, it's something we think about the board talks about all the time its really nice to have cash so that if we wanted to do this project, we say six to 10 million, but let's say we spend more money in automation, let's say, it's more than that you know, it's nice to have that nice to be able to say, yes, we'll do it rather than okay, where do we get the money for you now and.

Speaker Change: And the customer that approached us, they know that, too. We're a public company, so they know that if we both agree to do it, that we're not going to come back and say, oh, sorry, we don't have the money, you know.

The customer that.

That approach us they know without too we're a public company. So they know that if we both agree to do it that we're not going to come back and say Oh, sorry, we don't have the money you know so I don't know if that's a good question, Nick I mean, I'm not really going to say Oh, we got way too much cash more cash than we like to have when we.

Speaker Change: So, I don't know, that's a good question, Nick. I mean, I'm not really going to say, oh, we've got way too much cash, more cash than we'd like to have. When we had $150 million or so, I would have said that. But at this point, yeah, I mean, it's really nice to have the cash we have. But I wouldn't say, oh, my God, we have so much excess cash.

We had 150 million or so I always said that but at this point yeah. I mean, it's really nice to have the cash we have but I wouldn't say Oh my God, we have so much excess cash.

No.

I don't know if that helps but that's kind of an off top my head off the cuff answer it is something we talked about at the board level quite a bit though.

Speaker Change: I don't know if that helps, but that's kind of an off-top of my head, off-the-cuff answer. It is something we talk about at the board level quite a bit, though. Okay. Well, can I just ask another question?

Okay.

Can I just ask another.

Austin.

Sure.

Just you know I mean, obviously.

Speaker Change: With what's going on there, you're going to start generating cash hopefully in the next couple of years. But even after you pay the taxes and things like that, I mean, it's just...

With what's going on more now we're gonna start generating cash.

Hopefully the next couple of years or so.

Even after you pay the taxes and things like that.

Yeah.

Speaker Change: Obviously, this is nice. We like that you run the company very conservative like that, but with programs like this, I'm just trying to feel it out.

Yeah.

And obviously we.

We like that you want the company very conservative.

Oh, yeah with programs like this all yeah I guess.

Trying to fill it out a little bit, but I understand where you're coming from.

Speaker Change: It's not a static number, we expect to generate cash so it's something that really we have to evaluate on an ongoing basis.

Yeah, Yeah. Good point, it's not a static number we you know you're right would you expect to generate cash. So it's something that really we have to evaluate it.

Basis, Nick I think it's just it's nice to.

Speaker Change: to have something so that when opportunities present themselves, we can go after them. We never thought of buying back stock as our biggest priority, but we'll do that as well if the price is right and the opportunity presents itself, so it's nice to have cash available for that as well.

You know they have some things so that when the opportunities present themselves. We can go after them.

We never thought of pick or buying stock buying back stock is our biggest priority, but we'll do that as well if the you know if the prices right and the opportunity presents itself. So it's nice to have cash available for that as well.

Speaker Change: There are companies that will borrow money to buy back stock and that's an interesting way of doing business, but it's not our way of doing business. We plan to be around a long time, we're not playing for a couple of years and playing games with our financial engineering stuff.

[laughter] companies they have to go borrow money to buy back stock is like Okay. That's interesting way of doing business, but it's not our way of doing business. So we plan to be around a long time, we're not planning for a couple of years in playing games with our you know what do you call financial engineering stuff, but.

Speaker Change: Does that help or any other follow-up questions? Thank you so much. Best of luck for the rest of the year and next year. Thank you very much, Nick. Happy New Year.

Okay does that help are you any other questions.

Thank you so much.

Best of luck for the rest of World next year.

Thank you very much Nick happy new year to you and your family.

Thanks.

Thank you.

Speaker Change: There are no further questions at this time, and I would like to turn the floor back over to Mr. Brian Schor for closing comments.

No further questions at this time I would like to turn the floor back over to Mr. Brian Shore for closing comments.

Brian E. Shore: Thank you, operator, and thank you, everybody, for listening in. It was really nice to be able to share, you know, what's going on at park with you. Again, wish you and your family a happy new year. That comes from both Matt and me, and Martina, Donna, all of us.

Thank you operator, and thank you everybody for listening in who has a really nice to be able to share you know what's going on at park with you all again and wish you and your family a happy new year that comes from both Matt and me and Martina.

All of us.

Brian E. Shore: And we'll be around if you have any questions, feel free to give us a call, we'll have to talk to you. So you have a good day and we'll talk to you soon, goodbye.

And we'll be around if you have any questions feel free to give us a call happy to talk to you.

You have a good day and we'll talk to you soon goodbye.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Brian E. Shore: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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Brian Schor: .

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Brian Schor: Thanks for watching!

Yeah.