Q4 2024 Park Aerospace Corp Earnings Call

Paul: Good afternoon. My name is Paul, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp. fourth quarter fiscal year 24 earnings release conference call and investor presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1.

Good afternoon, My name is Paul and I'll be your conference operator today at this time I would like to welcome everyone to the Park Aerospace Corp, fourth quarter fiscal year 24 earnings release conference call and Investor presentation.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer question. Okay.

If you'd like to ask a question. During this time simply press star one on your telephone keypad, if you'd like to withdraw your question. Please press star two.

Speaker Change: At this time I would like to 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. Welcome all to our fiscal 24 Q4 investor conference call. I have with me Matt Faribault, our Senior Vice President and CFO. You probably noticed in a news release that we announced Matt is retiring.

Speaker Change: Thank you operator, welcome all to our fiscal 'twenty four Q4 Investor Conference call with me Matt Farabaugh.

Matt Farabaugh: Senior Vice President and CFO.

Matt Farabaugh: You probably noticed in our news release.

Brian E. Shore: The original plan was at the end of this month, but Matt has agreed to stay with us through, I guess it would be sometime like mid-July, through our Q1 10-Q filing, so thank you for doing that, Matt. We, I think the earnings release across the wires may be about 4-15. You want to take a look at that because, in the release itself, it gives you instructions as to how to access the presentation that we're just about to go through.

Speaker Change: We know it's Matt is retiring our original plan was in this month, but I met has agreed to stay with us through I guess it'd be some time.

Speaker Change: July through Q1.

Speaker Change: Too far away.

Matt Farabaugh: We're doing that Matt.

Speaker Change: We are I think to your earnings release crossed the wire is maybe about four <unk>.

Speaker Change: You can look at that.

The release itself. It gives you instructions as to how to access the presentation that we're just about to go through after the presentation on that and I'll be happy to answer any questions you have.

Brian E. Shore: After the presentation, Matt and I will be happy to answer any questions you have. If you look at the bottom of the cover page of the presentation, you'll see that we're celebrating our 70th anniversary. Park was founded on March 31, 1954, and that was four years ago. Interesting, somebody recently asked me if I found the company. I was thinking, boy, I must look really old, but no, I actually did found the company. I was two years old at the time.

Speaker Change: You look at the bottom of the cover page of the presentation notes that we're celebrating our 72 the Bursaries Park was founded on.

Speaker Change: March 31.

Speaker Change: 1954 that was 40 years ago interesting somebody recently asked me if I founded the company in Singapore, I must look really all about no.

No I did actually found the company I was two years old at the time.

So let's go to slide two if you have any questions regarding forward looking disclaimer language Oh I should tell you I forgot to mention this to you.

Brian E. Shore: So, let's go on to slide two. If you have any questions regarding the forward-looking disclaimer language, I should tell you, I forgot to mention this to you. It may, you know, be obvious during the presentation. I say the flu, so, you know, the show must go on, we'll get through it. You know, I think a couple of years ago, I actually said COVID during one of these investor presentations. I don't get sick very much, but it seems like when I get sick, it's always during an investor presentation.

Speaker Change: It may be obvious during your presentation I showed the flu so show must one will get through it.

Speaker Change: I think a couple of years ago after COVID-19.

Speaker Change: One of these investor presentations, I don't get sick very much but it seems like when they get sick. It's always during the investor presentation. So I was just thinking of a horizontal psychologist listening into might want to make a connection from two two.

Brian E. Shore: So, I was just thinking, I hope there's no psychologists listening in that might want to make a connection. Anyway, on the forward-looking disclaimer, if you have any questions about the forward-looking disclaimer, let us know. Slide three. So, table of contents. We have our presentation, and we have the supplementary financial information. We're not going to go through it, but the supplementary financial information, but if you have any questions about it, just let us know.

Speaker Change: Anyway on forward looking disclaimer you have any questions about the fourth quarter, but a lot of snow.

Speaker Change: Slide three so table of contents are.

Speaker Change: We have our presentation that we have the supplementary financial information, we're not going to go through it but the supplementary financial information, but do you have any questions about it just let it snow.

Speaker Change: So.

Brian E. Shore: So, the original, well, it wasn't a factory, it was actually a garage, was in Woodside, Queens. And I mean, I'm not using poetic license, it was a garage, really a garage. And actually, it's still a garage. We did a Google map search, and that building is still there. It's still a garage. I mean, like for fixing cars and that kind of thing.

Speaker Change: The original fact, well wasn't factories actually a garage wasn't Woodside queens.

And I mean, I'm not using poetic license it was a garage wood garage and actually it's still a garage we did a Google map search.

Speaker Change: The building is still there it's little garage I mean like for fixing cars from that kind of thing.

Brian E. Shore: Maybe 2,000 square feet. A couple years later, I think, I don't know exactly when, the company moved to a real factory in Flushing, Queens, New York, which I think was maybe eight or 10,000 square feet. This picture is in it. The guy leaning forward to the left is Jerry Shore, my father. The guy on the right, that's Stone Chiesa. He's my father's partner, starting in Park. And, as I said, sometimes he was like a second father to me.

Speaker Change: 2000 square feet a couple of years later I think Jack Lee when the company moved to a real factory in Flushing, New York Flushing, Queens, New York, which I think was maybe eight or 10000 square feet. This picture is isn't that factory.

Speaker Change: The guy leaning forward going to the left that's Jerry shore My father, the Guy who I just don't chase.

Speaker Change: While this partner.

Speaker Change: And in park and as I said, sometimes just like a second father to me. These are power presses and original business was nameplates and decorative trim.

Brian E. Shore: These are power presses, and the original business was nameplates and decorative trim. So these presses would stamp out sheets of nail plate, and my father and Tony, they used to work the line, they worked the machines, they would repair the machines, they maintained the machines, they did engineering enhancements on the machines. So I think when you look at a dictionary hands-on, you see pictures. Anyway, you know, we've had a long history, as you know.

Speaker Change: So these pressures which students out.

Speaker Change: The sheets of.

Speaker Change: Of nameplates.

Speaker Change: And my father, and told me that he used to work the line they work to machines that would impair their machines.

Speaker Change: Maintain the machines.

Speaker Change: They did engineering enhancements on the machine so they win.

Speaker Change: Look in a dictionary hands on you see pictures of these guys.

Speaker Change: Any way that you know we've had a long history as you know we.

Speaker Change: Changing the name to park electrochemical and 1916.

Brian E. Shore: We changed our name to Park Electrochemical in 1960, and a lot of people thought that related to being an electronics business. That's not true. We didn't go electronic until 1961. 'Electronic' refers to the anodizing process that was used, which is still used, I guess, to make nameplates and decorative frames.

Speaker Change: A lot of people thought that related to big electronics business, that's not true when you get one electronics until 61 electrochemical refers to the energizing process that was you just still use I guess to make nameplates and decorative fruit.

Speaker Change: We ended up selling that business. Originally it was just an east warrants to general manager at the time and.

Speaker Change: But this goes way back problems picture way back to the <unk>.

Brian E. Shore: We ended up selling that business, the original business, in 1984. It was the general manager at the time, named Bill Hand, but this goes way back, probably this picture, way back to the mid-50s, I guess. We call this our founder's photo. I guess, you know, we did a nice little meeting with our employees when we went through a presentation and went through a lot of aspects of our history. We don't have time to go through all that now, but I thought I'd just touch on a couple things.

Speaker Change: <unk> I guess, we call this our founders photo.

Speaker Change: I guess you know.

Speaker Change: We did a nice a little meeting with our.

Speaker Change: Our employees, where we went through a presentation and went through all of our laws.

Speaker Change: Sort of aspects of our history, we don't kind of go through that now, but I thought I'd just touch on a couple of things.

Brian E. Shore: For the sake of time, we'll keep moving. Let's go on to slide four and talk about our Q4 numbers. So sales $16,333,000, not bad, but then you look at gross margin, 27.3%, and you think, well, that doesn't make a lot of sense. That number's low, especially considering that the sales were reasonable. And then the EBITDA margin is also low. We don't like gross margins to be generally under 30, and EBITDA margins under 20.

Speaker Change: Time will keep moving let's go on to slide four talk about.

Speaker Change: Our Q4 numbers.

Speaker Change: So sales 16 million a 333 are not bad.

Speaker Change: But then you look at gross margin towards some four 3% do you think with all that doesn't make a lot of sense at numbers long, especially considering that sales were reasonable and then leave it.

Speaker Change: The abdominal region also was law wheel like gross margins through June 30, and EBITA margin sooner than 'twenty, what do we say about our Q4, but about Q4 during our Q3 conference call. We gave you a sales estimate of 15 or 16 million. So we actually exceeded that that number a little bit north sails on EBA.

Brian E. Shore: What did we say about our Q4, about Q4 during our Q3 conference call? We gave you a sales estimate of 15 to 16 million, so we actually exceeded that number a little bit in our sales, but the EBITDA estimate was 3.2 to 4 million, and we just came in at the bottom of the range, so, you know, the obvious question is, well, why didn't the EBITDA look better, considering that the sales were actually above the top of the range? You know, you'd think that the dollar would be better.

Speaker Change: Dodge estimate was three two to 4 million and we just came in at the bottom of the range or no obvious question is well why did you what is the EBITDA look better considering that the sales work.

Speaker Change: Actually the top of the range.

Speaker Change: Do you think they're just the EBITDA will be better so let's talk about that first of all when we start going Miss shipments 565000, what was the main cause Ms shipments not turning over the next like to new oil gas you probably can.

Brian E. Shore: So let's talk about that. First of all, we always talk about misshipments, 565,000. Always the main cause of misshipments. Without turning over the next slide, can you all guess? I think you can.

Brian E. Shore: But let's go to the next slide so we don't leave anything to doubt. International freight disruptions caused by the wars in the Middle East and Europe. That number is not a good number, but it's a struggle with international freight right now. We don't like those numbers, but they are what they are. Let's put it that way.

Speaker Change: Well, let's go to the next slide so wouldn't leave anything the doubt international.

Speaker Change: International freight disruptions caused by the.

Speaker Change: The wars and the Middle East in Europe.

And that's that number is not a good number but its a struggle with these.

Speaker Change: International freight right now.

Speaker Change: We like those numbers what they are what they are lets put it that way I don't think the generations related to our Q4. So we're going to go through a few things here I just wanted to explain these are not excuses.

Brian E. Shore: Items and considerations related to our P4. So we're going to go through a few things here. I just want to explain.

Brian E. Shore: These are not excuses. We don't like that. We don't make excuses. If you have explanations as to what happened, you can, you know, choose to be interested in them or not.

Speaker Change: Like that we don't make excuses or explanations as to what happened.

Speaker Change: She used to be interested in them or not but somebody who might be interested. So is this the first one is important we never talk about production is normally our production levels match. Our sales you know pretty closely but our Q4 sales were $16 3 million whatever production, we call it sales value of production this year.

Brian E. Shore: But some of you might be interested. So this first one is important. We never talk about production because normally our production levels match our sales, you know, pretty closely. But in Q4 sales, there were $16.3 million, but our production, we call it the sales value of production. The sales value of our production was only $15.2 million, like a million dollars under our sales. And, you know, that's actually a big deal for P&L. So, and not surprisingly, where that sales cut came from came from selling on inventory by about a million dollars. That had a negative impact of $275,000 on our gross profit and about $250,000 in EBITDA. Why is that?

Speaker Change: <unk> value of our production was only $15 2 million like $1 million under our sales.

Speaker Change: And.

Speaker Change: That's actually a big deal for our P&L.

Speaker Change:

Speaker Change: And not surprisingly, we're dead wood sales country came from April.

Speaker Change: About a million a million dollars.

Speaker Change: The negative impact of $275000 and our gross profit and about $250000 in EBIDTA why is that if you just look at it this way if we actually produce that product rather than selling it from inventory, we get the additional absorption of labor and overhead that would go into creating the inventory. So it's significant.

Brian E. Shore: Because look at it this way, if we actually produce that, rather than sign a forbiddance, we get the additional absorption of labor and overhead that would go into creating the inventory. So, it's significant. This was not our plan. We didn't plan to do this.

Speaker Change: It's not our plan and we didn't want to do this we just came up short in terms of our production numbers, we plan to produce at the level of our sales, but we didn't we didn't get there.

Brian E. Shore: We just came up short in terms of our production numbers. We planned to produce at the level of our sales, but we didn't get there. And there are a lot of reasons for that.

Speaker Change: And there you know a lot of reasons for not excuses again, but which we have less experienced people are gaining experience leads.

Brian E. Shore: Not excuses again, but we have less experienced people. They're gaining experience. Leads. I'll just give you one little example of what we're talking about, or the Tape Line, which is basically our business. It's a continuous operation.

Speaker Change: To give you one little example, what we're talking about.

Speaker Change: Experienced lead will know what's acceptable, let's say in a treat aligner film one or.

Speaker Change: Or tape line.

Speaker Change: Which is basically our business.

Speaker Change: <unk> operations, so really important to keep those things running that's how it works.

Brian E. Shore: So really important to keep those things running. That's how it works. That experienced lead will know what's acceptable and what's not, so they'll make the decision, no, we need to stop, we need to get going. A less experienced lead won't know, so they'll stop the line when they go find somebody, maybe in the quarry, you know, come take a look at this and get a ruling as to whether we run or

Thanks, Bruce Lee will know, what's acceptable and what's not so they'll make a decision do we need to stop we need to get going unless expressly will notice will stop one when they go find somebody maybe inquiry you.

Take a look at this and to get a ruling as to whether we run or stop it sort of alumina run it the products not good abuse of just you know just just running scrap and that's.

Brian E. Shore: Certainly, when I run, if the product's not good, it'd be just scrap, and that's a bad idea, but that's an example as to why we're struggling in our fourth quarter to get to production where we want it to be. The good news is that in Q1, production levels were quite good until the storm hit, which we'll talk about later on. Then moving on, $474,000 in C2V fabric sales. We talked about that many times, but that's a product where we just buy it, we sell it to our customers at a small markup, so the margins are there, but the margins are going to be very light. Then the plant property tax, $212,000, and the property tax goes to the cost of goods sold.

Speaker Change: Bad idea, but that's you know example as to why.

Speaker Change: Where.

Speaker Change: We were struggling in our fourth quarter to get to production, where we want it to be.

Speaker Change: The good news is that in Q1 production was new levels were quite good until the storm hit which we'll talk about later on.

Then moving on to $474000 a seat to the fabric sales we've talked about many times, but that's a product where we just we buy it we sold to our customer in a small markup. So the margins, but sales are there, but the margins are going to be a very light.

Speaker Change: Unclaimed property tax 212000, the property tax goes through cost of goods sold and where that's not like a concession on the tax line. That's in cost of goods sold that affects [laughter].

Brian E. Shore: I don't know if you're aware of that, that's not a tax line; that's the cost of goods sold. That affects gross profit or EBITDA, of course, and we weren't planning on that. We had a little bit of a... I don't know. It's called a disagreement with the state of Kansas, and we ended up deciding to approve the amount and ultimately pay for it as well

Speaker Change: Gross profit or EBITDA of course, and we were planning on that we are a little bit of.

Speaker Change: I don't know what the school disagreement.

Speaker Change: The state of Kansas, and we ended up deciding to approve with your mountain and ultimately pay for it as well.

Speaker Change: Q4 was a 14 week quarter, which means that there's an extra week of fixed cost the sales mix in Q4 was a little less favorable.

Brian E. Shore: Q4 was a 14-week quarter, which means that there was an extra week of fixed costs. The sales mix in Q4 was a little less favorable. Let's go on to slide 6. Let's talk about the year-over-year results, the annual results comparison, which is probably more meaningful than the quarter-to-quarter comparisons. Fiscal year 24, $56 million in sales, 29.5% gross margin, and a 19.6% EBITDA margin. This, though, is a very different discussion than Q4, where there are certain incidents, certain instances, which we just reviewed, which had an impact on our Q4 margins. The longer-term picture, 24, is more about what we're doing intentionally to ramp up our business for what we call the juggernaut. So, let's talk about that.

Speaker Change: Let's go on to slide six let's talk about the year over year results annual results comparison, which promised more meaningful in the quarter to quarter comparisons of fiscal.

Fiscal year 'twenty for $56 million of sales, a 29, 5% EBITA sorry gross margin, that's not really very wonderful.

Speaker Change: And.

Speaker Change: 19.6% EBITA margin. This though is a very different discussion in Q4 were there certain incidents.

Speaker Change: Certain incidents incidences.

Speaker Change: Which we just reviewed which had an impact on our Q4 margins.

Speaker Change: The longer term picture 24, it's more about what we're doing intentionally to ramp up our business for it will be called a juggernaut.

Speaker Change: Let's talk about that I'll, let you want a slide seven but what is the story behind our year over year margin as I said, probably more meaningful question and then the same question related to a quarter over quarter quarter over quarter is always going to be items in each quarter that can affect the numbers, which makes it quarter to quarter comparisons less meaningful year over year, those combos silicon even out.

Brian E. Shore: Let's go on to slide 7. What is the story behind our year-over-year margins? I said it was probably a more meaningful question than the same question related to our quarter-over-quarter. Quarter-over-quarter, there are always going to be items in each quarter that affect the numbers, which make the quarter-over-quarter comparisons less meaningful.

Brian E. Shore: Year-over-year, those things kind of even out. So, the year-over-year comparisons become more meaningful. So, ramping up the juggernaut on slide 32. We talked about the juggernaut almost every quarter.

So the euro do your comparisons become more meaningful so ramping up in a juggernaut in slide 32, we talked with the Juggernaut, we talk about it almost every quarter going through the long term.

Brian E. Shore: At PARC, we don't run our business for the quarter, although you may be shocked by how dedicated PARC's people are to delivering outstanding results for you every quarter. I just want you to be aware of that. But let's face it; if we ran our business for the quarter, we never would have gone into aerospace to begin with. That was a long, that was a decision based on the very long term, not one year, not five years, not even 10 years.

Speaker Change: And pork, we don't run a business for the quarter. Although you may be shocked by how dedicated parts people are delivering outstanding results for you every quarter just wants you to be aware of that but let's face. It we're in a business the quarter never would've gone into aerospace to begin with I always a long.

Speaker Change: That was a decision based on very long term take care not one year not five years not even 10 years. So that's just an example of how park.

Brian E. Shore: So, that's just an example of how Park, you know, goes for the long term. And if we ran our business for the quarter, we wouldn't have gone ahead with our $20 million factory expansion either. Let's talk about that a little bit further on slide eight, I think. Yeah, if you consider the annual sales history, it's obvious we don't need the expansion to support our current business levels. Let's go back to slide six.

Speaker Change: Go to the long term and if we ran our business for the quarter. We wouldn't have gone ahead with our $20 million back we're experiencing either let's talk about a little bit further on top of slide eight I think yeah. If you consider the annual sales is to resolve these we don't need the expansion to support our credit visitor levels, Let's go back to the slide six looking at the.

Brian E. Shore: Look at the sales in 24, 56 million. Look at the sales in 20, 60 million. We certainly didn't have the expansion in 20, so we certainly didn't need the expansion to get to $56 million in sales.

Speaker Change: Sales and 24 6 million looking at sales in 2000 and $60 million. We certainly didn't have the expansion of 'twenty. So we certainly didn't need expansion it gets at $56 million in sales.

Brian E. Shore: We did $60 million in sales in 20. So, I'm saying with all sector costs, it isn't needed to support our business levels in 26. The extra cost is because we see what's coming, and we don't want to get caught behind the power curve. Going back to slide 8, we clearly need.

Speaker Change: We did $60 million Sheldon 20 students, saying, we've all sector costs. This is needed to support the business levels in 'twenty six the extra cost is because we see what's coming.

Speaker Change: We don't want to get caught behind the power curve.

Speaker Change: Going back to slide eight we clearly need it or the juggernaut two planets.

Speaker Change: The new plan. We're also we're staffing up our new factory expansion to prepare for when it's coming.

Speaker Change: A lot less efficiently efficiency, sorry will you staff up and ramp up of New factory now the good news is.

Brian E. Shore: The new factory lines are ultimately expected to run more productively, meaning faster and efficiently than the lines in our existing factory. It makes sense, you know, the original lines were designed back in, whatever it is, 2007. These lines are, you know, more We've used all our learning over the last 15 years to design these new lines much more efficient, much more productive. And that will have a really nice impact on the bottom line as we ramp up some factors, who are also carrying an additional $1.3 million per year depreciation costs related to the expansion.

Speaker Change: The new factory lines, ultimately expected to run more productively, meaning faster inefficiently than the lines that are existing factory makes sense. You know the original lines were designed back whenever it was 2007. These lines are you know more we will use all learning over the last 15 years to design these new lines.

Speaker Change: We're pushing much more productive and that will have a really nice impact on the bottom line as we ramp up some factory and we're also carrying one additional $1.3 million for your depreciation costs related to the expansion.

Brian E. Shore: Obviously, those costs don't affect EBITDA, but guess what? They don't impact EBITDA, but they do impact gross margins, and gross margins do include depreciation, and that's approximately 2.3% of gross margin based upon fiscal 24 sales.

Speaker Change: Obviously, those costs won't affect EBITDA, but guess, what they expect growth days sorry, they they don't impact our EBITDA.

Speaker Change: But they do impact gross margins.

Speaker Change: And cause.

Speaker Change: Mr Gross margins doing food depreciation and that's about that's approximately two 3% to the grocery gross margins based upon.

Speaker Change: 24 sales two 3% so.

Brian E. Shore: Let's see, how do we work that? If we go back to slide eight, and slide six again, 29.5 was the gross margin. We were saying we could just basically add 2.3%. That's not going away; that's what it means. That includes the additional people and some wage inflation as well, and we just approved another five people to staff the manufacturing lines in the new factory. And that's, you know, that's just for now. That's not the end. That's not the end game.

Speaker Change: Let's see how do we work that if we go back to slide eight slide six again 29 point fiber was the gross margin. When you were saying you could just basically you had two 3% of that.

Speaker Change: We didn't have the new factor adjusted depreciation alone.

Speaker Change: And then we're carrying other additional overhead costs related to the experience, which is obvious you know.

Speaker Change: So utilities insurance you name it.

Speaker Change: And those things are both effect.

Speaker Change: EBITDA and gross margins all related to the expansion that's going to slide nine ramping up our people costs or the juggernaut as well. We've just it's not just about equipment in factories and got people and these people are current people kind of is 126, our hourly people count tossed rather already up by approximately 11000.

Speaker Change: As per year compared to last time this year, that's not going away. That's a temporary thing that includes the additional people and some wage inflation as well.

Speaker Change: We've just approved another five people to stay off the manufacturing lines in the new factory and that's not just for now that's not that's not the end game, we need to hire a lot of people for the juggernaut.

Brian E. Shore: We need to hire a lot of people for the juggernaut. We increased our authorized staff count for now from 133 to 138. As we ramp up our staff costs and staff to bear for the juggernaut, our productivity, we measure that. Sales value of production, that's production divided by hours, hourly hours worked.

Speaker Change: Star Wars rise to people count for now for once or each grew to 138.

Speaker Change: You ramp up our people costs and staff to bear for the Juggernaut, our productivity we measure that.

Speaker Change: Sales value of production is production divided by hours hourly hours worked I mean, it's all airlines, so indirect and direct.

Brian E. Shore: That means all hourly, so indirect, indirect. That will temporarily slip, that's just the way it is, but it will ultimately reverse very much to positive as we ramp up production. The bottom line though is if you want to be ready for the coming juggernaut, which we do, all these things are necessary. So this is, like I said, different than the analysis regarding Q4 where there's certain special items that affect us. When you look at the fiscal year numbers, it's more part of our plan. We plan to do what we intended to do. Let's go on to slide 10, Parks' Balance Sheet, Cash, and Cash Dividend History. We have zero long-term debt.

Speaker Change: That will temporarily slipped that's just the way it is but ultimately will reverse very much the positives as we ramp up production. The bottom line, though is we want to be ready for the coming juggernaut, which we do all these things are necessary. So this is like I say different than the analysis regarding Q4, where there's certain special items that affected Q4 Q.

Speaker Change: When you look at the fiscal year numbers, it's more part of our plan will be planned to do what we intended to do let's go on to slide 10 parts balance sheet cash and cash dividend history.

Speaker Change: We have zero long term debt, we reported $77 2 million in cashew marketable securities are tuned to the for some of them are your Q.

Brian E. Shore: We reported $77.2 million in cash and marketable securities at the end of the year, year Q4, this year 24 Q4. But don't forget there's 9.3 million remaining transition tax installment payments payable through June 25, and Matt just told me that 4.2 million of that is paid next month. So, when we get to our Q1 balance sheet, you'll see the impact on the cash. So, there are two more payments, one in June of this year, and the remaining payment is in June 25.

Speaker Change: Q4 is to your 2000 and for Q4, but don't forget there's nine 3 million remaining transition tax installment payments payable through June 25.

Matches: And matches told me that $4 2 million of that its pay next month. So when we get to our Q1 balance sheet, you'll see that impact on the cash.

Matches: So there's two more payments when June of this year one in the remaining payment as June of 'twenty five.

Brian E. Shore: So, I think you'd want to consider that. For our cash dividends, Park has paid 39 consecutive uninterrupted regular quarterly cash dividends without ever skipping a dividend or reducing the dividend amount. We're going for 40 years here. Park has paid $594 million, or $28.975 per share, and cash dividends since the beginning of this year, 2005.

Matches: So I think you'd want to consider that our.

Matches: Our cash dividends Parkers paid 39 consecutive years under uninterrupted regular quarterly cash dividends without ever skipping a dividend or reducing the dividend amount going for 40 years here.

Park has paid $594 million or $20 and 97.5 cents per share cash dividend since the beginning of fiscal year 2005.

Brian E. Shore: But $594 million for a little company like Park is a hell of a lot of money. I don't know, it's probably a lot of money for Microsoft. I don't know about Microsoft, but that's a hell of a lot of money for a small company like Park, I would say, on 511. We always give you or tell you about our top five customers in alphabetical order.

Speaker Change: 594 million for a little complex park, that's a hell of a lot of money I don't know, it's probably a lot of money from Microsoft I don't know about Microsoft, but that's a hell of a lot of money for ups will kind of like park I would say.

Speaker Change: Slide 11.

Speaker Change: We always give you have to tell you about a top five customers in alphabetical order.

Speaker Change: [laughter].

Brian E. Shore: Airspace that relates to the Lockheed Martin Patriot, I'll tie the names to the photos, Patriot Pax 3 missile, which we talk about often. Aerospheres that relate to the Gulfstream G-80. So, Aerospheres is a distributor for Israeli aircraft, a big Israeli company, and they produce some of the Gulfstream airplanes under contract for Gulfstream, like the 280. Kratos, we'll get back to him. I think that's on the next page. Middle River. So we could have, you know, done lots of examples, but we chose the COMAC 919.

Speaker Change: A aerospace that relates to the Lockheed Martin at Patriot.

Speaker Change: Tied to name some photos Patriot Pac three missile, which we talk about often.

Speaker Change: Erez fears that relates to the Gulfstream G. So aerospace eras fears as a rep distributor for Israeli aircraft I Big Israeli company and they produce these some of the Gulfstream airplanes under contract with Gulfstream liked at $2 80.

Credo, we'll get back to them and I think that's on the next page our Middle River. So we could have done lots of examples where we chose the commack time with nine and annuity and group. That's the Boeing 737, seven hundreds we're talking about here is a weather master radome.

Brian E. Shore: And the Norden Group, that's the Boeing 737-700. What we're talking about here is the Weathermaster Radome, which Norden produces with our materials. And we go on to slide 12. This is a big thank you for Kratos. They're one of the top five. But Kratos gave us this gift. You know, and I've never received a gift like this.

Speaker Change: Which don't even producers with our materials.

Speaker Change: And we go on to Slide 12. This is a big thank you for Credo SER one of the top five.

Speaker Change: But the cradles gave us a gift.

Speaker Change: No and I never seem to get like this I mean that.

Brian E. Shore: I mean, that's an aircraft. That's an aircraft that saw operations. They gave this to us to put on our display in our factory. It's a beautiful, beautiful aircraft, an unmanned aircraft. I mean, I'm just overwhelmed. I don't know what to say.

Speaker Change: It's an aircraft that's an aircraft that's operations. They they gave it to us to put in our display or factor, it's a beautiful beautiful aircraft unmanned aircraft.

Speaker Change: I mean, I'm just overwhelmed I know what to say, even though we don't want to say so we took a little picture and you know we took to think raynaud's, but now what we're doing publicly.

Brian E. Shore: You know, even now, I don't. So we took a little picture to thank Kratos, but now we're doing it publicly. So let's go on to the slide. This is an airplane, an aircraft used by the Air Force. So, let's go on to slide 13, our pie charts. Interesting, 24, 21 was the pandemic year, so you could see commercial aircraft were slammed, and that's why it's so low. The rest is about; the rest of the year is fairly consistent.

Speaker Change: So let's go on to slide this is an airplane aircrafts used by the Air Force.

Speaker Change: So let's go on to slide 13.

Speaker Change: Our pie charts.

Speaker Change: <unk> 24, 21, who was a pandemic yours. So you could see commercial aircraft was slammed and that's why it's so low the rest is about rest of yours really consistent I'm actually surprised that crucial aircraft held up in 'twenty for abuse.

Brian E. Shore: I'm actually surprised that commercial aircraft held up in 24 because, you know, in the second and third quarter, we had those big burndowns for MRAS, which you talked about, but I guess with other commercial aircraft sales, which allowed us to hold our own there. Let's go on to slide 14. This is Elena's project every quarter, just to come up with some interesting park-class niche military programs, military aerospace programs, some interesting military programs.

Speaker Change: And the second and third quarter, where those big burn downs for Emirates, which you've talked about.

Speaker Change: But I guess, we'd other.

Other commercial aircraft sales, which allowed us to hold our owner.

Speaker Change: Going to slide 14. This is our latest project every quarter or just to come up with some interesting harkless niche military programs and military Aerospace program. Some interesting military programs arrest of many 24 military revenues by market segment.

Brian E. Shore: Our estimate is $24 billion in military revenues by market segment. We consider radomes, rocket nozzles, and drones to be niche markets for us. Although even aircraft structure, for us, is a niche market; it might not be for others, but for us, it's a niche market. So what do we have here? Adreno's Next Generation Short Range Interceptor.

Speaker Change: We consider radon was rocket nozzles and drones to be niche markets for us, although even in aircraft structured for us as a niche market and it might not be for others, but for us in each market.

Speaker Change: So what do we got here.

Speaker Change:

Speaker Change: A dream knows next generation short range Interceptor I'm.

Brian E. Shore: This is a replacement for the Stinger missile. You've probably heard of the Stinger missile. The Boeing E-18 Growler, we supply radome materials for that program. Northrop Grumman, LGM, 35 Sentinel, they call it GBSD, ground-based strategic deterrent, that's an interesting term; used to be called an ICBM.

Speaker Change: Just a replacement for the Stinger missile, you've probably heard a single muscle.

Speaker Change: Boeing 18 growler.

Speaker Change: We supply you're right on with your old instead program.

Speaker Change: Hmm.

Speaker Change:

Speaker Change: Northrop Grumman L. G M thirty-five Sentinel.

Speaker Change: They called G. B S T grown based us re cheeked due to current.

Speaker Change: It's interesting term used to be called an ICBM, that's a replacement for the minimum three.

Brian E. Shore: This is a replacement for the Minutemen III. So we supply materials and parts for this program. So this is, well, you know what it's for, it's for nuclear warheads. I'm Donald Douglas, F-15 Eagle, and we supply rhodium, rhodium materials, and the Boeing P-8 Poseidon aircraft.

Speaker Change: So we supply materials into this materials and arch insurance program.

So this is.

Speaker Change: And it's for it's for nuclear warheads.

Speaker Change: Yeah.

Speaker Change: Douglas F 15, Eagle and we supply ROI Roman radar materials into that program and the Boeing P. Eight Poseidon aircraft. That's a replacement of the Ryan instruction materials into that program, but she going.

Brian E. Shore: That's a replacement of the Orion structural materials into that program. Let's keep going. Let's talk a little bit about supply chain challenges. Well, in the past, I keep hearing that. I've heard so many times that, oh, yeah, supply chain issues are behind us or about to be behind us. But whenever we hear that they're behind us, we find out they aren't. You know, I can't tell you how many times I read reports from other public companies' reports highlighting supply chain issues as the main reason why they're not making their numbers. But what are supply chain issues really all about, anyway? What is causing them?

Speaker Change: Let's talk a little bit about the fifth slide 15, sorry, let's talk a little bit about supply chain challenges well in the past I keep hearing that.

Speaker Change: I've heard so many times Oh, yeah supply chain issues are behind us or about to be minus whenever we hear that they are behind us we find out they are not.

Speaker Change: You know I can't tell you how many times have read reports from other public companies reports.

Speaker Change: We're using a highlighting supply chain issues as the main reason why they're not making their numbers you know.

Client issues supply chain issues really all about anyway, what is causing that why wouldn't they go away.

Brian E. Shore: Why won't they go away? Are supply chain issues fundamentally workforce issues? Have workforce issues been resolved? I mean, isn't that what it's about?

Speaker Change: Our supply chain issues fundamentally workforce issues of workforce issues been resolved.

Speaker Change: Isn't that what it's about if you don't have the workforce you can have all the machines old equipment, you're just not gonna be able produce today.

Brian E. Shore: If you don't have a workforce, you can have all the machines, all the equipment, and you're just not gonna be able to produce today the requirements you need to produce to if you don't have the people to do it. We hear unemployment is not that bad, so what's going on here? Well, one of the things to consider is that 7.2 million able-bodied men, just men between the ages of 25 and 54, have permanently left the workforce and are not even looking for work.

The requirements you need to produce to the people to do it.

Brian E. Shore: I guess a lot of them left during the pandemic. Even though there are help wanted signs everywhere, why is this happening? I heard this guy, Charles Payne, who's a financial news guy. He said he knows a guy who's 60 years old and has never worked.

Speaker Change: Your unemployment is not that bad so what's going on here well one of the things to consider it's widely reported $7 2 million.

Speaker Change: Body man just men between the ages of 25 and 54.

Speaker Change: We left the workforce or not even looking for work I guess, what I'm left during the pandemic.

Speaker Change: Even though their help wanted signs everywhere, what's just happening you know.

Brian E. Shore: A lot of people apparently haven't worked their whole life, so obviously the government's enabling that, I wonder why that's happening. But these lives, I mean, this is not funny, these lives are being destroyed. After a couple years, people sit on the couch eating potato chips, watching Oprah, whatever they do for two years. They try to come back to work, they can't. We've lost our edge.

Speaker Change: Now if you have an opinion about Tyler heard you know this oh, Charles paying a MISO.

Hum.

Speaker Change: We call financial News Guy you said he knows a guy 60 years old and they're working a lot of people are apparently never worked their whole life.

Speaker Change: So obviously the garbage, enabling a wonder why that's happening.

Speaker Change: But these lives I mean this is not funny. These lives are being destroyed. After a couple of years, you know people sitting on the couch eating potato chips watching oprah whenever they do for two years, they try to come back to work there they cant.

Speaker Change: Foster edge.

Speaker Change: It's a real tragedy, you know and that's probably what you won't hear about with our new investor presentation, but every now and then I'll give you my thoughts about something like that.

Speaker Change: Let's go on to slide 16.

Brian E. Shore: [inaudible] What does this mean to PARC, the supply chain issues? So we've found ways to manage supply chain challenges with better planning, strategically carrying more inventory, and providing suppliers with longer lead times. But the issues continue to be a major challenge, and they consume a lot of our time and energy.

Speaker Change: What does this mean to park to supply chain issues. So we found ways to manage supply chain challenge, it's a better planning strategically carrying more inventory, we're finding suppliers of longer lead times, but these issues could either be a major major challenge to us, they're very consuming of our time and energy. So yeah. We're we're managing it but it's with a lot of effort.

Brian E. Shore: So yeah, we're managing it, but it's with a lot of effort. But what do the ongoing supply chain challenges mean for the aerospace industry generally? Maybe Park's is able to manage it with a lot of effort.

Speaker Change: But what did the ongoing supply chain challenges meet for the aerospace industry generally maybe parks able to manage a lot of effort with the aerospace industry continues to struggle with supply chain issues. These challenges are impacting program ramp ups of new program introductions demand is there, but the industry has just fallen short medium and a man.

Brian E. Shore: But the aerospace industry continues to struggle with supply chain challenges. These challenges are impacting program ramp-ups and new program introductions. The demand is there, but the industry is just falling short in meeting the demand. Where's this going? Is there a solution in sight? I don't know. Do you know what it is? If so, what is it?

Speaker Change: Where's this going is there a solution in sight.

Brian E. Shore: I don't know. Maybe you have some ideas. I'm serious. I don't know. I don't know what the solution is.

Speaker Change: I don't know you don't want is if so what is it I don't know if you have some ideas and I'm curious I don't know I don't know what the solution is going to slide 17, we won't cover this in great detail. The slide we show you every quarter a firm pricing GE aviation jet engine programs for pricing L. T. A requirements contract from 19 to 20.

Brian E. Shore: Go on to slide 17. We won't cover this in great detail. This is a slide we can show you firm pricing GE Aviation Jet Engine Programs, firm pricing LTA, requirements contract from 19 to 29 with Middle River Air Structure Systems, MRAS, which is a sub of SGE Engineering Aerospace. So we always have to explain this, and I'm going to do it because we have all these G, as a matter of fact, the title of this slide, GE Aviation Jet Engine Programs, all these programs So, what's the connection?

Speaker Change: Nine with Middle River Aerostructure systems, some risk, which is the sub of SG engineer aerospace. So we always have to explain you assume what I'm going to get it because.

Speaker Change: We have all these G matter of fact, the title of the slide GE aviation programs. All of these programs listed below our G aviation programs. What's the connection the connection is that we garnish programs Middle River was a sub a G aviation sold G. A sold.

Brian E. Shore: Well, the connection is that we got on these programs; Middle River was a sub of GE Aviation, sold, GEA sold, I guess they're called GE Aerospace now, sorry. GE sold MRAS to SG Engineering, which is a large Singaporean aerospace company, I don't know, about five years ago. Emerson Park continues to support those programs just as when it was when it was owned by GE Aviation. I won't go into these programs we talk about all the time, so I'll just point out a nice picture here.

Speaker Change: I think it's a called G. Aerospace now sorry G sold M rest of FC Engineering, which is a large Singapore Aerospace company I don't know about five years ago, but.

Speaker Change: And we've got some park continuous sports those program just as when it was.

Speaker Change: But when it was owned by G Aviation I won't go through these programs, we talk about a long time, so I'll just point out the nice picture here. Some 47 programs cancel abortions sold some on some.

Brian E. Shore: 747, the program was canceled, and we sold some spares. I really love this picture because, you know, you can see how big these miscells are compared to the sky standing back here, and those miscells are all park material.

Speaker Change: Some spares.

Speaker Change: You'll love. This picture abuse, you know you can see how big these themselves are going through the sky sitting back here.

Speaker Change: Those missiles are all park material.

Brian E. Shore: Let's go on to slide 18. Yeah, we don't have to cover the first check item. We cover that every quarter. Second check item, VanCase containment wrap for the GE9X, which produces our AFP composite materials. We talk about that almost every quarter now as well, but here's some relatively new stuff. MRAS qualification of three park proprietary film adhesive formulation product forms in progress.

Speaker Change: Let's go on to Slide 18, Yeah, we know of to cover the first check item.

Speaker Change: We cover that every quarter.

Speaker Change: Quarter second check item, a fan case containment wrap or the G NYNEX, which produced where F. P composite materials.

Talk about that.

Speaker Change: It almost every quarter now as well.

But here's some new relatively new stuff Amyris qualification of three park proprietary film adhesive formulation product forms and progress and then the next item of Amyris Park L. T E. C O two referred to in the prior Slide 29 was recently amended to include three parks film and ease of product forms.

Brian E. Shore: And then the next item, MRAS Park LTA, that's the LTA we referred to in slides 29 through 32, was recently amended to include three park film adhesive product forms for composite bond and metal bond. That's a really great deal because, you know, we developed this film adhesive product line. You've got to get in a program, so that could take 20 years. Like, not 20 years, 20 seconds between the time that our product is finished and it goes into qualification. That's a very special thing that we have with that customer. Life of program agreement is required by MRS and STE.

Speaker Change: Our composite bond in Melbourne, that's a really great deal because no. We develop we develop this film he's a product line.

Speaker Change: Under a.

Speaker Change: The joint development agreement with GE and EM rash.

Speaker Change: But it's really wonderful because you know when we developed a product and then immediately goes into qualification on really important programs.

Speaker Change: The dilemma as you develop a new product in R&D loves a great products and what it means like Sri Poles enforced nobody hears it.

Speaker Change: You Gotta get a program so it could take 20 years, but not 20 years twenty-second just between the time that our product is finished and it goes to the qualification. That's a very special thing that we have with that customer life of program agreement required glamorous. Mr. Yang agreement is being actively worked on we've talked about before.

Brian E. Shore: The agreement is being actively worked on. We've talked about this before. Was it worth the park?

Speaker Change: What is it worth the park I don't know, what it's a whole lot to.

Brian E. Shore: I don't know what the whole motto is. Let's talk, let's go to slide 19. Let's talk about some of the GE aviation jet engine programs. We'll start with the Big Kahuna, the A320neo. Everybody says there's a huge backlog of H-320 aircraft, 7,170. I don't know if you know, but that's such a huge number. And here's the problem for Airbus. Let's say they're currently producing at a rate of maybe 50 a month. Now, that's 600 a year, right?

Speaker Change: Let's talk let's go to slide 19, let's talk about some of the JV.

Brian E. Shore: Well, how many years of backlog is that? Now this is notwithstanding and all over and above all the restrictions and limitations of what supply chain supply chain. Let's go on to slide 20. They're doing pretty well, actually. I think they're doing pretty well.

Speaker Change: G Aviation jet engine programs, we'll start with the Big Kahuna acre 20, Neil.

Brian E. Shore: Airbus delivered the following number of H320 new family aircraft each year in the following calendar years. You can see the numbers ramping up. They get to 19.

Speaker Change: Airbus has a huge backlog.

Speaker Change: 820, aircrafts 7000 windows.

Speaker Change: Now if you know that that's such a huge number.

Speaker Change: And here's the problem for.

Speaker Change: Airbus, Let's say the currently producing at a rate of maybe 50, a month, that's 600, a year right well how many years of backlog is there.

It was like 12 years. So if you want to order a new one you've got to wait 12 years to get it that doesn't help they want to sell a lot more of these so they really need bring that the lead times down. So that's why they are pushing hard to get to 75 per month, which is what 900 per year right. So I do the math you know Dubai seven when southern one by 900 that's.

Speaker Change: Better its not like tomorrow, but it's a lot better that's their motivation and not my opinion. You know you can look at other people. They are different opinions I think Airbus is very determined to get to that 75 per month and during their writing or annual shareholder meeting.

Speaker Change: 25th and sorry at their April 10th.

Speaker Change: And our first quarter Investor call April 25th they again reaffirmed or planning to achieve a rate of 75.

Speaker Change: <unk> hundred 20 family of aircraft deliveries per month and 26, maybe at the end of 'twenty six I don't know, but in 'twenty six how are they doing so far with that ramp up you know this as well.

Speaker Change: Notwithstanding an all over and above all the restrictions and limitations of what supply chain apply chain, let's go on to slide 20.

Pretty well actually I think pretty well Airbus delivered the following number of HB 20, new people new aircraft each year. The fallen calendar years. So you can see the numbers ramping up you get to 19. The peak at 561 boomed hurt by the pandemic or slip back to look at twenty-three. So five seven who wanted to compare to five six.

Brian E. Shore: They peak at 561 and then, boom, they're hit by the pandemic, and they slip back. Look at 23. So 571 compared to 561, and so 23 actually exceeded for the first time pre-pandemic production levels. So, for the first time since the beginning of the pandemic, Airbus was able to return to A320 production and delivery rates to return to pre-pandemic rates.

He wanted to so 23, they actually exceeded the first time pre pandemic production levels. So in 'twenty three for the first time since the beginning of the pandemic.

Speaker Change: Airbus was able to return to our.

Speaker Change: <unk> hundred 20 production and delivery rates to pre returned to pre print them right. So that's a key milestone in a very good accomplishment for Airbus congratulation to them because you know it's over and above all the supply chain issues, just here, but all the time where notwithstanding the.

Brian E. Shore: That's a key milestone and a very good accomplishment for Airbus. Congratulations to them because, you know, it's over and above all the supply-chain issues that are here, or notwithstanding them. April 24, year-to-date, Airbus delivered 167 airplanes in those four months, but it also delivered 51 airplanes in both March and April of this year. So don't get too, don't get confused by the beginning of the year, always slow and, you know, kind of ramp up at the end of the year. This doesn't come from Airbus. If you want my opinion, it's just my opinion, I can't prove it, it's just my opinion. My guess is it'll probably be at 55 this year, on average.

Speaker Change: April 24 year to date Airbus delivered 167 airplanes are in those four months, but he also liver 51 airplanes.

Speaker Change: In both March and April 24.

Speaker Change: So don't get too don't get confused by the beginning of your always slow and you know kind of a ramp up in the end of the year.

Speaker Change: Got from Airbus. If you want my opinion, it's just my opinion.

Speaker Change: I cant prove it's my opinion my guess is it'll probably gets but probably at 55 this year average for the year.

Speaker Change: My guess and it's an Airbus is not saying, what they're going to do this year, what they're saying is the end of or 25, Youre, saying 26, we'll be at a.

Brian E. Shore: That's just my guess. Airbus isn't saying what they're going to do this year. What they're saying is the end of, or 25. They're saying by the end of 26, they'll be at a rate of 75. Let's go to slide 21, slide 21.

Speaker Change: A range of 75.

Speaker Change: Let's go to 'twenty, one and slide 21.

Brian E. Shore: Yeah, we already covered this. Based upon this huge backlog, Airbus would already be producing A320neo aircraft at the rate of 75 per month if not for supply chain constraints and limitations. Again, what was the story about supply chain problems behind this? I don't think so.

Speaker Change: Yeah, we already cleared cover this based upon the huge backlog Airbus would already be producing entry 20, new aircraft at the rate of 75 per month, if not for our supply chain constraints and limitations again, what was the story about supply chain problems are behind us.

Speaker Change: I don't think so what about Boeing how Boeing struggles and challenges with the Max impact <unk> hundred 20, Neo family aircraft prospects and also the sooner while market share I think my opinion is it depends on whether Airbus is willing to try to move that number up.

Brian E. Shore: What about Boeing? How will Boeing's struggles and challenges with the MAX impact the H320 Neo family aircraft's prospects and also the stimuli on market share? I think, in my opinion, it depends on whether Airbus is willing to try to move that number up. You know, from 75 to higher.

Speaker Change: Oh from 75, two hires a lot of reporting about are they thinking about it but they've not made any announcements.

Brian E. Shore: There's a lot of reporting about it. They're thinking about it, but they've not made any announcement yet. So what about the engines, though, for the A320 aircraft? That's an important question for Park. By way of review, the A320 NEO offers two approved engine options, namely the CFM LEAP 1A engine, which is the program PARC is on, and the PRADA engine, the PRADA PW1100G engine, which is the one PARC is not in that program.

Speaker Change: So what about the engine itself a day to 20 aircrafts.

Speaker Change: Important question for park by way of review.

Speaker Change: <unk> hundred 20 Neo offers two approved engine options, namely the CFM leap one engine, which is the program Park is on a Friday and your pet P. W. 11 energy engine, which is park none of that program.

Speaker Change: So yeah. The second we just covered the second bullet item the third item bullet item. According to the May 24, additional garage news, that's our by our Bible monthly edition.

Brian E. Shore: So, yeah, we just covered the second bullet item. The third bullet item, according to the May 24 edition of AeroEngine News, that's our buyable monthly edition, CFM LEAP 1A's market share, as of March 24. At the delivery, oh, sorry, slide 22, at the delivery rate of 75 H320 NEOs per month, the 63.1% LEAP market share translates into 1,136 LEAP engines per year. What's it worth to park?

Speaker Change: If M leap when as market share for new engine orders for the 20 Neo family of aircrafts or 63, 1%.

Speaker Change: As of March 24.

Speaker Change: [noise] deliberate Oh, sorry, slide 22 at delivery rate of 75.

Speaker Change: Through 'twenty news for months 63, 1% leap marketshare translates into 1136 leap engines per year.

Speaker Change: At worst a park well cover that and we could slide 32. There are currently 8132 firm leap when a engine orders that totaled honorably engines, where those firm orders where to park.

Brian E. Shore: We'll cover that when we get to slide 32. There are currently 8,132 firm LEAF-1A engine orders. That's a lot of engines. But were those firm orders worth the park? I don't know.

I don't know.

Brian E. Shore: You might refer to slide 32, but probably about a quarter billion dollars, I would think. That's not precise because, The slide 32 assumes pricing for 2025-2029, so note that pricing doesn't go into effect for 99 months. It also assumes Phil Mahes is on the screening program, not on it yet; we're in qualifying.

Speaker Change: You might refer to slide 32, but probably about a quarter billion dollars I would think.

So that's a precise because.

Speaker Change: Slide three to assume with the price of your 25 to 29.

Speaker Change: So note that pricing doesn't go into effect and unknown months also assumes film he uses on the crude and coker I'm not altogether and qualifying but what it went the other thing is that our.

Brian E. Shore: But the other thing is that our pricing after 2029 is clearly going to be higher, that's expected by MRAS and PARC, so we haven't taken that into account. And some of these engines will be delivered after 2029. And we don't have a contract after 2029, so I guess you'd say, well, maybe nothing after 2029. But my opinion is that it is highly, highly, highly, highly likely that we'll be supplying this program for a long time after 2029, and all the other MRAS programs. One of those firm wars with the PARC, we just talked about that, sorry. There are widely reported serious durability issues with the Pratt PW1100G engine; we talked about this before.

Speaker Change: Our pricing after 29 closing would be higher that's expected by Edmondson Park. So we haven't taken into account in some of these some of these changes will be delivered after 29.

Speaker Change: And we don't have a contract after 29, so I guess you could say well maybe it's nothing after 29.

Speaker Change: My opinion is that highly highly highly highly likely that we'll be supplying this program for a long time after 29 and all the other.

Speaker Change: Amyris programs.

Speaker Change: One of those are firm orders where to park, we just talked about that said there.

Speaker Change: There are widely reported series durability issues, which are Pratt P.

Speaker Change: P. W 1100, G and we talked about this before.

Brian E. Shore: So will these issues affect market share between the Pratt and LEAP engine? An interesting question; we don't know the answer. And maybe the answer is similar to the Boeing question regarding the Airbus A320 generally. Is LEAP willing to produce, or CFM, rather, willing to try to produce more LEAP engines? And I don't know the answer to that question.

Speaker Change: So all these issues in fact market share.

Speaker Change: Well between the crowd and leap engine interesting question, we don't know and maybe the answer is similar to the Boeing question regarding Airbus eight years, when generally can sleep wound or produce or CFM, rather want to try to produce more leap engines and I know the answer that question.

Brian E. Shore: So, meanwhile, CFM is already delivering new LEAP 1A engines with its new reverse bleed air system design to further improve durability. So you see that, you know, the dichotomy thing here, it's like Pratt's having pretty serious durability issues, and CFM is moving forward with improving durability. Okay, let's go on to slide 23. We have the H320XLR variant of the H320 family.

Speaker Change: So Meanwhile, CFM is already delivering new leap <unk> engines, which its new reverse bleed air system design or Florida durability. So you see that you know the dichotomy thing here, it's like perhaps having pretty serious durability issues and CFM is moving forward.

Third improving durability.

Speaker Change: Let's go on to slide 23.

Speaker Change: We got the <unk> hundred 20 extra lore variant of <unk> through 'twenty family. We covered this we covered every quarter inspecting and enters service June of 'twenty four.

Brian E. Shore: We covered this, we covered every quarter, and it's expected to enter service 10 to 24. Boeing's not planning a response. Airbus has 550 orders for the airplane, potentially an important program for the park. Let's focus on the 919 a little bit more, though. 919, this is a slide 23, with CFM, late 1C engines. 919, that's the only engine for the 919.

Speaker Change: Well, we've got plenty of response.

Speaker Change: Airbus, There's 550 orders for the airplane potentially important Colton Park, let's focus on the 919, a little bit more though 919. This is a slide 23 would.

Speaker Change: Would see CFM leap one senior engines by one nine that's the only engine from the nine one in Salt Lake the Patriot 20th gears two engines that are approved.

Brian E. Shore: It's not like the A320 where there are two engines that are approved. COMAC plans to achieve a production rate of 150 919 ai here. So look at our juggernaut slide. We're assuming less than that. COMAC has been reported to have 1,500 orders.

Speaker Change: Kumar.

Speaker Change: <unk> plans to achieve a production rate of 159, one on aircrafts within five years, you look at our juggernaut slide where some less than that.

Speaker Change: Commack has reported a 15 under orders, it's really hard to nail it down but it's one of the reports I saw.

Brian E. Shore: It's really hard to nail that down, but it's one of the reports I saw. China Southern just ordered another 100 airplanes. Going to slide 24.

Speaker Change: China, Southern just wonder another hundred airplanes.

Speaker Change: Slide 24.

Brian E. Shore: Comac just delivered its sixth unit. Comac is reportedly expanding its 919 production line, just important stuff. And look at this. It was recently reported that China's CAAC, that's like the Chinese FAA, is aiming for 2025. EASA, that's the European Certification Agency, for the 919 aircraft.

Speaker Change: Coal Mac just delivered six unit.

Speaker Change: Who magazine or poorly expanding its 919 production lines, it's important stuff and look at this recently reported that Chinese C. AAC, that's like the China phase aiming for 2025 Yasir, That's European certification agency.

Speaker Change: Hum.

Speaker Change: Non when an aircraft that's a really really big deal because the thought was just was going to be China only airplane.

Brian E. Shore: That's a really, really big deal because the thought was this was going to be a China-only airplane. But it's clear that China and Comac, that's not what they're thinking about at all. They want to take on Boeing and Airbus for a single aisle. This could be a big program, an important program, an important program for PARC. And like I said, they're expanding production lines. So these things,

Speaker Change: It's clear that China in Commack, that's not what they were thinking about at all they want to take on Boeing and Airbus for single aisle.

Speaker Change: This could be a big program important program.

Speaker Change: An important program for park.

Speaker Change: And like I said, they're expanding production lines. So that these things are to.

Speaker Change: To me means something the last item is the a R. J <unk> J 21 regional jet, who know spend we don't spend a lot of time on that well.

Brian E. Shore: The last item is the ARJ, Comac's ARJ-21 regional jet. We don't spend a lot of time on that, except that 35 aircraft were reportedly delivered in 22 and 23. We'll get back to that later.

Speaker Change: Well accepted a 35.

Aircraft reported reported newly delivered in 'twenty, two and 'twenty three get back to it later.

Brian E. Shore: And the rest of the program is going well, a good program for PARC. And continuing on slide 25. The 777X aircraft, the G9X engines, we've covered this for many quarters now, expecting certification in 2025. Some people are skeptical about that. N.C.

Speaker Change: And in the rest of the program's going well a good program for park and continuing to slide 25.

Speaker Change:

Speaker Change: Triple seven X aircraft the genomics engines.

We've covered this for many quarters now expecting certification and twenty-five some people are skeptical about that but we'll see I'm talking about the airplane.

Brian E. Shore: I'm talking about the airplane. We expect about $1.7 million from this program, and it's calendar year 24. And we'll see. There might be a little bit of a gap after we're done with the crew and production, just as there may be some... Almost a little bit of waiting for the program to start to really ramp up. This next check item, we've cut that many times.

Speaker Change: We expect about $1.7 million from this program in this calendar year 'twenty four.

And we'll see there might be a little bit of a gap. After we're done with the crude production Cheshire there may be some.

Speaker Change: Almost ludwig waiting for the program to start to really ramp up.

Speaker Change: Next check item, we carved out many times.

Brian E. Shore: And the next check item, Boeing S481, open orders for this airplane. Next check item, and the 777XE order is continuing to come in nicely, even though Boeing, notwithstanding Boeing's ongoing challenges. And this is also potentially a very significant program for Park Shore. We're hoping for the best for this program. Flight 26.

Speaker Change: And next check item Boeing is 480.

Speaker Change: One open orders for this airplane next check item and the Triple seven ex the orders continue to come in nicely.

Speaker Change: Even though Boeing notwithstanding boeing's ongoing challenges.

Speaker Change: This is also potentially very significant program for park shore or are hoping for the best for this program on slide 26.

Brian E. Shore: Okay, what are we talking about here? This is GE Aviation Jet Engine Program Sales History and Forecast Estimates. We're going to go through the whole history. Q4 of 2024, in the recent quarter, 7.6 million. I think we had estimated 7.5 million, so just about that number.

Speaker Change: Okay, what are we talking about here.

Speaker Change:

Speaker Change: This is G aviation jet engine programs sales history, and forecast estimates where does it go through the whole history of Q4 six.

Speaker Change: Of 24 recent quarter seven 6 billion I think we would estimate at some 0.5 months. So just about that number.

Brian E. Shore: A total for 24, even though we had a good Q4, is only $21.1 million. That's because we had those burndown quarters in Q2 and Q3. I'm talking about it for fiscal 24. So, 21 million, you know, that's a pretty low number, not a good number, compared to last year or the prior year, 23 or 22 million.

Speaker Change: The total for a 24, even though we had a good Q4 is only 21 1 million that we had those burned down quarters in Q2, and Q3 and talking about it for fiscal 'twenty. Four so 21 million, that's a pretty low number a good number compared to last year. The prior year of 23 to 22 3 million.

Speaker Change: So we had forecasted a $6 3 million for Q1, and that's not even a great number you know you look at some point 6 million in Q4, but I guess, it's an okay number but it's a really important now read this footnote here carefully.

Brian E. Shore: We had forecasted $6.3 million for Q1, and that's not even a great number. You look at $7.6 million in Q4, but I guess it's an okay number. But it's really important that we now read this footnote carefully.

Brian E. Shore: That amount is fully booked for Q1. This is the forecast. But GE Aviation Programs will be impacted by an unknown amount of foreign damage to the company's facilities reported on May 22nd in the company news release.

Speaker Change: Amount is fully that that amount is fully booked for Q1.

Speaker Change: This is the forecast.

Speaker Change: But Q1 G aviation programs will be impacted by an unknown amount of storm damage. The company's facilities reported on may 22nd in the company, who lease will get back to this when we talk about forecasts for park generally so let's keep going for now.

Brian E. Shore: We'll get back to this as we talk about the forecast for Park General, so let's keep going for now. Slide 27, burndowns, aerospace industry, management, and the inevitable day of reckoning. So, we've been through inventory burndowns. You're probably tired of hearing about them.

Speaker Change: Slide 27 burn Downs aerospace industry management inevitable day of reckoning. So we've been through inventory burn downs, you're probably tired of hearing about the retirement certainly tired of talking about them.

Brian E. Shore: We're tired and certainly tired of talking about them. We have discussed at some length the very strange inventory management practices of the aerospace industry. I think I had a different term, not strange, but I decided to be a little nicer about it. In one of my early drafts, I mean, you're probably tired of hearing about those things, too, and we certainly are. And we at Lithium, though these burndowns of strange inventory practices certainly can cause serious and even extreme distortions and disruptions to business planning and expectations. But ultimately, the distortions and disruptions are a matter of inevitability, a temporary, and transitory nature.

Speaker Change: We have discussed at some length to very strange inventory management practices of the aerospace industry I, just got a different true much trees, but have decided to be a little nicer about it and my when my earlier address I mean, you're probably tired of hearing about those things too and we certainly arent and we have literally no. These burn downs a strange inventory practices.

Speaker Change: There's certainly can cause serious and even its screen distortions and disruptions the business plan and expectations.

Speaker Change: But ultimately the distortions in disruptions are as a matter of inevitability temporary transitory nature why is that because the end program demand you'll have to take over at some point I mean, it's inevitable. It's just pure math, let's go on to slide 28.

Brian E. Shore: Why is that? Because the end program demands have to take over at some point. I mean, it's inevitable. It's just pure math. Let's go on to slide 28. Sooner or later, the inevitable day of reckoning will come. Sooner or later, the demands of the aircraft end programs will take over and drive our business levels and activities. That has to happen.

Speaker Change: Sooner or later.

Speaker Change: The inevitable day of reckoning, we call will come sooner or later the demands of the aircrafts and programs will take over and drive our visitor levels and activities that has to happen, it's inevitable and here's a thing from what we're hearing now I mean really recently that day of reckoning use coming rather soon.

Brian E. Shore: It's inevitable. And here's the thing, from what we're hearing now, I mean really recently, that day of reckoning is coming rather soon, soon around later. We've heard just recently in 25, we're talking county years, pretty big jump for the A320 program, pretty big jump. We've been kind of languishing with burndowns and inventory adjustments, and we hear, oh, yeah, now there's our inventory has been burned down. We don't have any more. We don't, our inventory, I mean, the customers, the inventory they hold of our product is, you know, fairly low. They can't really burn it down anymore. But now we hear, oh, they have some finished structures, or they do what a customer does. So it's a little bit exasperating.

Speaker Change: Soon around later.

Speaker Change: We heard just recently and twenty-five we're talking calendar years.

Speaker Change: Pretty big jump for a day through 'twenty program pretty big jump, we even kind of languishing with burn downs in inventory adjustments and Oh, yeah and others.

Speaker Change: Our inventory has been burned down and we know them anymore, we don't what our inventory I mean, your customers' inventory they hold of them of our product. It's just you know fairly low they can't really burned down anymore now with your old. They have some finished structures inventory they do with a customer does.

Speaker Change: So it's a little bit exasperating.

Brian E. Shore: But, you know, our customers have been told to get ready for a pretty big jump in 2025. And they've also been told that in 2026, Airbus will be at that 75 airplanes per month rate. So I have a feeling that this Day of Reckoning is not far off. We'll see. But the good thing is that although we did not know when the Day of Reckoning would come, we knew it was coming. It's inevitable, as far as we are concerned. It cannot be stopped, like the locomotive that can't be stopped, the freight train.

Speaker Change: But you know our customers have been told to get ready for a pretty big jump in the 25 and they also been told that a 26 and 26 Airbus there'll be a debt 75 airplanes per month rate.

Speaker Change: So I have a feeling that this day of reckoning is not far off we'll.

Speaker Change: We will see.

Speaker Change: But the good thing is that although we did not know when the day of reckoning would come we knew was coming its inevitable as far who's weird concern cannot be stopped like a locomotive that keep you stop.

Speaker Change: Freight train good thing that park, we did not wait good thing that we are already ramping up for the day of reckoning ramping up for the coming juggernaut.

Brian E. Shore: Good thing that at Park, we did not wait. Good thing that we are already ramping up for the Day of Reckoning, ramping up for the coming juggernaut. Let's go on to slide 29. Okay, here we go. Park's financial history and our estimates. We won't go through the history because we've already kind of covered it.

Speaker Change: Let's go on to slide 29.

Speaker Change: Here we go.

Speaker Change: Park financial hit.

Speaker Change: History and are estimates, but we won't go through the history. These two where do you kind of covered it pistol year 'twenty for Q4 in total so we were talking about those numbers.

Brian E. Shore: You know, fiscal year 24, Q4 in totals. We already talked about those numbers. But let's talk about the forecast for Q1. This forecast was before the storm. You know, it's really a shame because Q1 was looking like a really nice quarter. Why is that?

But let's talk about the forecast for Q1.

Speaker Change: This forecast was before the storm.

Speaker Change: It's really a shame because Q1 was looking at a real nice quarter why is that mostly because all those kind of things that affected Q4, none of them were affected in Q1. The production level is planned to be at least at the sales level and actually you know I was thinking we'd be at the top end of the range for both sales and EBITDA in Q1.

Brian E. Shore: Mostly because all those kinds of things that affected Q4, none of them were affecting Q1. The production level is planned to be at least at the sales level. And actually, you know, I was thinking we'd be at the top of both sales and EBITDA in Q1. So the timing of this storm was very unfortunate because Q1 was looking like a nice quarter.

Speaker Change: So the timing of this storm was very unfortunate piece to one was looked like a nice quarter, but we better go ahead in the slide Dirty and read that big footnote. The twenty-five Q1 sales estimates based upon fully book sales for Q1.

Brian E. Shore: But we'd better go ahead and slide 30 and read that big footnote. The 25 Q1 sales estimate is based on fully booked sales for Q1. The 25Q1 Evodai estimate is based upon those Holubuk sales. However, the Q1 sales in Evodai will be impacted by unknown amounts of storm damage to the company's facility reported on May 22nd, 24, in a company news release.

Speaker Change: The 25 Q1 EBITDA estimate is based upon those slow lubuk sales. However, the Q1 sales and EBIT and EBITDA will be impacted by an unknown amounts, but a storm damage. The company's facility reported on May 22nd 24.

Speaker Change: And the company news releases.

Brian E. Shore: Although it was reported that an unknown amount of fiscal Q1 sales will slip into Q2 as a result of storm damage, the company is not expected to lose any sales or business as a result of storm damage. Let's talk about this a little bit more. So, it was a pretty big event for us, but our people have done a really fantastic job of getting the factory up and running, all the hot melt lines and all of the new factories are fully running, the tape lines, the film lines.

Speaker Change: Although it was reported unknown amount of AR pistol Q1 sales will slip into Q2 as a result of the storm damage. The company is not expected to lose any sales or business. As a result of storm damage, let's talk about just a little bit more so.

Speaker Change: It was a pretty big event for us.

Speaker Change: But our people done a really fantastic job of getting the factory up and running all the hot melt lines in both the old new factory or fully running the tape lines of home loans were about to restart the Susan treaters.

Brian E. Shore: We're about to restart the solution treaters. I'd say pretty incredible job on their part, pretty incredible job, but the number, I'll just guess at this point a little bit, but my guess is the top line is going to be in the 13th, not 16th, so major, major impact on the quarter. We typically produce a lot at the end of the quarter, ship a lot at the end of the quarter, and we don't have any inventory, so we only could sell what we produce, and we're not able to produce because we don't have a factory. It could produce less.

Speaker Change: Oh, I'd say pretty incredible job on their part pretty incredible job.

Speaker Change:

Speaker Change: [laughter].

Speaker Change: That were the number I just guess at this point a little bit, but my guess is the top line's going to be in the 13th not sixteens. So a major major impact on the quarter.

Speaker Change:

Speaker Change: We typically produce a lot at the end of the corner shipped a lot of the in the quarter and we don't have any inventory sold where we only sell what we produce and were not able to produce speech went on the factory can produce last week.

Brian E. Shore: The P&L looks pretty ugly because we hardly produced anything, but we had a full staff. Everybody got full pay last week. We had everybody come in to help clean up. But the recovery is going really well, except it's going to be a mess for Q1. Too bad these things happened. People did a great job, in my opinion. The key thing for me is that nobody was hurt.

Speaker Change: When P&L looked pretty ugly because.

Speaker Change: We hardly produced anything but we had full staff everybody that full payless, we take we have everybody come and help clean up and stuff like that.

But the recovery is going really well accepted.

Speaker Change: It's gonna be a mess for Q1.

Speaker Change: Too bad and these things happen our.

Speaker Change: People did a great job in my opinion the key thing for me is nobody was hurt.

Brian E. Shore: That was a key thing for me. So let's go on to slide 31. Park Financial Outlook, sorry, Financial Outlook for Park and Geoprograms and Update. We don't have to go through this in detail. We go through this pretty much every quarter.

Speaker Change: That was a key thing for me so let's go on to slide 31.

[noise] Park finish outlook, Oh, sorry Peninsula outlook for park and Chi programs and update we would have to go through this in detail because you've gone through this.

Speaker Change: Pretty much every quarter just wondering what's the timing for the outlooks, you're kind of already covered this not sure, but a juggernaut and has come in can be stop you better be ready I think maybe pretty soon maybe not this year calendar year, but I would think next year.

Brian E. Shore: Just one thing, what's the timing for the outlooks? We kind of already covered this. Not sure, but the juggernaut is coming. Can't be stopped. We better be ready. I think it might be pretty soon.

Brian E. Shore: Maybe not this year, calendar year, but I would think next year. So meeting calendar year 25. We'll see. So, let's go on to slide 32. This is the juggernaut slide, and we won't go into detail. Obviously, we have covered this three or four times already. A couple of points I want to make, A320, and NEO. We're assuming 1,080 units, and that assumes 75 airplanes per month, but also assumes a 60% market share for the LEAP engine. Remember we said it was about 63.2. I forget what the exact number was.

Speaker Change: So meeting calendar 'twenty five.

Speaker Change: We'll see so let's go to slide 32. This is a juggernaut slide and we won't go into detail, obviously recover there's three or four times ready a couple of points I want to make.

Speaker Change: <unk> hundred 20, Neo we're assuming a 1080 units and.

Speaker Change: That assumes 75 airplanes per user per month and it also assumes a 60% market share for the leap engine remember we said, it's about 63.2 I forgot what the number was exactly so we're doing is we're bringing out as 60 and the reason we're doing that is one of them to changes every quarter because every quarter. The market share is going to change this way I will just use.

Brian E. Shore: So, what we're doing is we're bringing that to 60, and the reason we're doing that is we don't have to change this every quarter because every quarter, the market share is going to change. This way, we'll just use 60, which is a little bit lower number, 60%, but that way, we don't have to change the presentation every quarter. So, I don't know if that was a good decision or not, but that's what we did, and you can see this highlighted in footnote four.

Speaker Change: 60, which is a little bit lower number 60% without we don't have to change the presentation every quarter. So I thought that was a good decision or not but that's what we've done and you can see this highlighted in.

Speaker Change: Footnote for one of their change that was made as we update our J 21, 72, remember I said that they delivered 35 airplanes last year. The prior year, that's equivalent obviously, the two ones, but I started to 70 engines to Wednesday per airplane. All these programs are two engineered points.

Brian E. Shore: One other change that was made is we upped the ARJ21 to 72. Remember I said that they delivered 35 airplanes last year or prior. That's equivalent, obviously, to two engines. Sorry, to 70 engines, two engines per airplane. All these programs are two-engine airplanes.

Speaker Change:

Brian E. Shore: And, well, we think we need a couple more spares. That's probably still pretty conservative, and they're still trying to ramp it up to some extent.

Speaker Change: And well, we think we need a couple more for spares, that's probably still pretty conservative and there there's still try to ramp up to some extent a 919 member comex said, they're going to be a 150 units per year.

Brian E. Shore: 919, you know, remember, COMEX said they're going to be at 150 units per year, four or five years. Well, that's going to be 300 engines, not 200 engines. So, generally speaking, we think this is relatively conservative. The G9X assumption, we're not going to provide how many units we're talking about, but I think it's pretty conservative actually, in my opinion.

Speaker Change: Four or five years, well, that's going to 300 inches not 200 engines.

Speaker Change: So generally speaking we think is relatively conservative G. Nymex assumption, we're not going to provide how many use we're talking about but I think it's pretty conservative actually my opinion, so whether that's at the Juggernaut fly let's go on to slide 33.

Brian E. Shore: So, that's that. The juggernaut slide. Let's go on to slide 33. We'll go through this pretty quickly. We just updated the financial outlook based upon the growth estimates of programs which were sole source qualified.

Speaker Change: We'll go through this pretty quickly we just updated a slide financial outlook based upon the growth estimates of programs, which we're sole source qualified you can read the footnotes would kind of explain a math, but we start with our base case of.

Speaker Change: Fiscal 'twenty four and then we.

Speaker Change: The incremental program sales I mean, we only added about $21 million in fiscal 'twenty four so a lot of incremental G program sales of 15 million and we decided to remove the reference to specific programs.

Speaker Change: Programs, because we felt uncomfortable we felt we don't disclosure for customer or is it maybe they don't want that so we just lumping all one number 15 million incremental sales of $7 million last year and nine is for non G. Poland's last year 35 million approximately so I'm, assuming that a 20% increase over a course of whatever three or four years, we think.

Brian E. Shore: You can read the footnotes, we'll kind of explain the math, but we start with our base case, here, $35 million. So we're assuming a 20% increase over the course of whatever, three or four years. We think that's a pretty conservative assumption.

That's a pretty conservative assumption and the rest is math, except for $4 million of Britain went up that I think last time, we did just maybe two and a half million, but this is based upon 11 million EBITA, which is such a depressed number based upon the ramp up of our cost as we ramp up our factory and ramp up our cost to prepare for the juggernaut.

Brian E. Shore: And the rest is math. Except for the $4 million. I'll bring up that. I think last time we did this, maybe $2.5 million.

Brian E. Shore: But this is based on $11 million in the gob, which is such a depressed number based upon the ramp-up of our costs as we ramp up our factory and ramp up our costs to prepare for the juggernaut. So it gives us an approximate EBITDA estimate of $35 million. And slide 34 is all the footnotes. I won't go through them. It's just math, but if you have any questions, let us know.

Speaker Change: So it gives us an approximate EBITDA estimate outlook of $35 million and slide 30 fours all of footnotes I won't go through this is just math, but really do you have any questions. Let us know a slide 35 and 36. This these slides were in our Q3 presentation.

Brian E. Shore: Slide 35 and 36, these slides were in our Q3 presentation, and I think they exactly like this new, major new manufacturing project initiative. The only new item is the last item on 36, manufacturing project initiatives under active review and discussion with our customer. And the point we're making is that this is a pretty active project, and the customer is highly motivated. So we think there's a pretty good likelihood that this will actually happen.

Speaker Change: Exactly like this do a major new manufactured Crouch initiative really new item. There is the last item on 36.

Speaker Change: Manufactured project initiatives under active review and discussion with our customer no point, we're making is that this is a pretty active project and the customer is highly motivated. So we think there's a pretty good likelihood. This will actually happen. This is a major projects with park.

Brian E. Shore: This is a major project for Park, as we outlined in the, you know, these two slides. Let's go on to slide 37. As I said, we had a nice little event to celebrate our 70th anniversary in the factory. On the left, I'm doing a little presentation about Park for employees, discussions about how Park is a special company, and how we've done some really incredible things over the years. And my point to them is that even if they've only been with us for a week or a month, they're part of the Park family, and they share in all those accomplishments, all those incredible things, just like anybody else does.

Speaker Change: As we outlined in these two slides, let's go on to slide 37.

Speaker Change: Said, we had a nice little event to celebrate our 70 <unk> anniversary and factory top left do you have a presentation.

Brian E. Shore: Right, so after the presentation was over, I was doing the presentation, a number of employees came up to me and, you know, said some very nice things, and one guy told me, I don't remember exactly how he said it, but parks meant so much for him and his family. And thank me for that. And I tell you, you know, running any business isn't unusual. There's a lot of stuff, crap you got to deal with, but those kind of things make it all worthwhile for me.

Speaker Change: History about park.

Speaker Change: For employees discussions about a park is a special company and it'll be done some really incredible things over the years and my point to them is that even if they've only been with us a week or month or part of the park family and they share in all of those accomplishments was incredible things just like anybody else does.

Speaker Change: Top right. So after the presentation was I was telling the presentation a number of employees came up to me and.

Speaker Change: So it's a very nice things that one guy told them remember exactly how you said it but parks meant so much for him and his family.

Speaker Change: Thank me for that.

Speaker Change: And I'll tell you you know running any business parked on unusuals water stuff crap, you got to deal with but those kind of things make it all worthwhile for me.

Brian E. Shore: To the right, this young man came up to me and introduced himself, and my name's Javaris, and he said, I work as a treatment operator. I've been here for one week. I said, oh, he said, the newest employee. So I said, all right, Javaris, and you and I will cut the cake. We had a nice cake we had for the event, and we cut it together. So, then the bottom picture is obvious.

Speaker Change: This [laughter] Dr. Brightest young man came up to me and introduce themselves.

Drew: My name is drew of Rs, and he said I work treat or our prior I've been here for one week, they said Oh so.

Drew: Ah the numerous employees I said, alright, you have ours, and you and I will cut the cake, we had a nice cake we've had for the R&D that we put it together.

Drew: So and then the bottom picture is obvious that's I'm, just sort of a company phone of or employees at least the ones that are facing.

Brian E. Shore: That's just a company photo of all our employees, at least the ones that are based in Kansas. Unfortunately, Mark wasn't able to be there, but everybody else, you know, who you normally see in Kansas was there. I'm actually in the back row because the tallest people were, like, Corey organized the photo session. He said the tallest people needed to be in the back row.

Drew: Based in Kansas, Unfortunately, Mark was enable beater, but everybody else you know you'd normally see in Kansas was there I'm actually in the back royalties. The tolls people were Oh my.

Speaker Change: Corey organized so the photo session you said that the pulse people need to be in the back row. So if you could find me, let me know when the back left.

Brian E. Shore: So if you can find me, let me know in the back left. And operator, that concludes our presentation. So if there are any questions, we'd be happy to answer them. Thank you.

Speaker Change: And operator.

Speaker Change: That concludes our presentation. So if there are any questions we'd be happy to answer them.

Operator: Thank you. We'll 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 your line is in the question queue. You may press star 2 if you'd like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before crossing the park.

Speaker Change: Thank you well now they can do.

Speaker Change: A question and answer session.

Speaker Change: I'd like ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line into my question.

Speaker Change: Dark telling me like to remove your question. Thank you for.

Speaker Change: For participants using speaker equipment may be necessary to pick up your handset before pressing the correct.

Operator: One moment, please, while we pull for questions. Thank you. Our first question is from Nick Ripostella with NR Management. Please proceed with your question.

Speaker Change: My mom in place, while we poll for question.

Speaker Change: Yeah.

Speaker Change: Thank you our first question from Nick core Castella with an automatic then please proceed with your question.

Nick Ripostella: Good evening, and Brian, I'm glad, as you said, no one got hurt in the storm, and thank God it wasn't any worse. I just have kind of a big picture question, you know, given the programs you're on and the future, and the potential new opportunity. I'm just wondering, do you think Park will continue to be a debt-free company, or at some point, would you consider borrowing money? And the reason I asked this is, you know, if the stock weren't to reflect that, you could be more aggressive in repurchasing shares. And I'm not saying today, but, you know, if the stock does not reflect the bright future and stays where it is, or goes lower, you know, would you consider being more aggressive, and then maybe, Thank you.

Speaker Change: Good evening and.

Brian Moore: Brian Moore.

Speaker Change: Glad that as you said no one got hurt from the storm and.

Speaker Change: Thank god it wasn't any worse I just have kind of a big picture question, you know given the programs you're on.

Speaker Change: Sure.

Speaker Change: Potential new opportunities.

Speaker Change: I'm just wondering do you think park will continue to be.

Speaker Change: A debt free company or at some point.

Speaker Change: You know would you would you consider borrowing money.

Speaker Change: And the reason I ask this is you know if the stock went to it werent reflecting.

Speaker Change: The potential.

Speaker Change: Possibly.

Speaker Change: You know you can do more aggressive in repurchasing shares and I'm, not saying today, but you know it.

Speaker Change: Stock that does not reflect the bright future stays where it is it goes lower.

Speaker Change: As you consider being more aggressive and then maybe levering up.

Speaker Change: <unk>.

Brian E. Shore: Thanks, Nick, for the question. It's an interesting question.

Speaker Change: Thanks, Nick for the question.

Speaker Change: So interesting.

Brian E. Shore: Yeah, the stock price, I mean, I follow it, we follow it. I mean, it's hard to figure out why it might be going up or down. I agree with your conclusion that there is certainly a little echo there. Hello.

Speaker Change: Question, Yeah, the stock price I mean.

Speaker Change: And when we follow it.

Speaker Change: I mean, it's hard to figure out why it might be going up or down.

Speaker Change: Agree with your implications that.

Speaker Change: Certainly.

Speaker Change: Echo there.

Brian E. Shore: Okay, it went away. Operator, there's an echo on the line at this point. I don't know why. I'll continue talking; it looks very distracting. The stock price, I don't know why it goes up or down a little bit, but I certainly agree with the implications. That doesn't reflect the value of the company, and I guess my way of thinking about that is that, ultimately, you'll have to. And I think ultimately, as the numbers pan out, the numbers we're talking about, the world, the market will recognize the value of the company. Until then, I guess we'll just do the best we can to explain what we're doing, and some people will understand it; maybe some people won't agree, I don't know.

Speaker Change: Hello, Okay.

Speaker Change: One way.

Speaker Change: Yeah.

Speaker Change: Operator, so there's an echo on the line at this point I don't know why.

Speaker Change: Oh, Oh, well continue talking looks very distracting.

So.

Speaker Change: The stock price I don't know why it goes up or down a little bit, but I certainly agree with the implication that doesn't reflect the value of the company.

Speaker Change: And I guess my way of thinking about that is that.

Speaker Change: Ultimately you'll have to and I think ultimately you know has then the numbers pan out the numbers, we're talking about that the the world the market will recognize the value of the company.

Until then I guess, we'll just do the best we can to explain what we're doing and some people will.

Speaker Change: Understand it maybe some people won't agree I don't know as far as going to that Nick I'm right now, we don't see a need to do that.

Brian E. Shore: As far as going into debt, Nick, right now, we don't see a need to do that. We completed our expansion, as you know, and we paid for it. And that itself will lead to that very significant uptick in revenues, as we call it, the juggernaut.

Speaker Change: We just we completed our expansion as you know we paid for it and that itself will lead to that.

A very significant uptick in revenues as we called it.

I should call it a juggernaut, there's other projects we're talking about.

Brian E. Shore: You know, so that could lead, I think we talked about maybe $6 to $10 million in capital, but what we didn't talk about is working capital. We talk about capital, we're talking about capital equipment and the plant and that kind of thing. But working capital could be a lot, could be like $15 million or something like that. So, that gives you a little additional perspective.

Speaker Change: So that could lead to I think we talked about maybe $6 million to $10 million of capital.

Speaker Change: Well, we didn't talk about is working capital we'd talk about cap, we're talking about capital equipment in the plant and that kind of thing, but the working capital could be a lot could be like $15 billion or something like that so.

Speaker Change: That gives you a little definitely additional perspective, where do we go into the dead I'm sure. We felt that it was a legitimate reason to do it and there is some opportunity that was important enough that required us to go into that so you know generally speaking we have not been a company that's had yet dead, it's not and you know our philosophy is to have.

Brian E. Shore: Would we go into debt? I'm sure we felt that it was a legitimate reason to do so. And there was some opportunity that was important enough that required us to go into debt. So, you know, generally speaking, we've not been a company that's been in debt. It's not been, you know, our philosophy is to have cash. We've always had cash, and we feel good about that. And, you know, you certainly feel good about it when you go into these, what do you call, black swan things like a pandemic. But we're not so philosophically opposed to debt that we wouldn't consider it if the circumstances we felt were compelling.

Chip Rui: Okay, thank you. Our next question is from Chip Rui with Rui Investments.

Speaker Change: Cash, we've always had cash and we feel good about that and you know you certainly feel good about it when you go into like these what do you call a black Swan things like a pandemic, but we're not philosophically opposed to that that we wouldnt consider it if the circumstances, we felt were compelling.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: One.

Speaker Change: We're not.

Tim: Thanks, Tim I'm not sure quite yet.

Speaker Change: Okay. Thank you.

Speaker Change: Our next question is from chip really with really investments. Please proceed with your question.

Chip Rui: Hi, thanks for taking the question. Can you talk a little bit more about the potential storm recovery aspect? You say you have extra staff. But how much of that can really be recovered, potentially, in your second and third quarter? And both from a revenue and a profit point of view. I imagine some of the profits are just burned because you have to hang on to your staff, which is understandable. And then secondly, on that extra opportunity that you talked about, is there any time frame for when you expect that to be bid on or potentially awarded? And thank you. Okay, thanks for the question.

Chip Really: Hi, Thanks for taking the question can you talk a little bit more about.

Speaker Change: The potential storm recovery aspect.

Speaker Change: You say you have extra staffing how much of that can really be recovered potentially in your second quarter and third quarter.

Speaker Change: And both from a revenue and a profit point I imagine some of the profits are just burn because you have to hang on to your staff yeah, Yeah understandable.

Speaker Change: And then secondly on that.

Speaker Change: Extra opportunity that you talked about a 10th of opportunity is there any timeframe for when.

Speaker Change: When you expect that to be a bad bid or potentially awarded and thank you.

Brian E. Shore: Okay, thanks for the question. We don't expect to lose any business, and all the business that we're supposed to do, all the sales would put it that way. They were lost in Q1, will be in Q2, and won't go to Q3. The profit story is a little different, you know. Let's say we, just hypothetically, let's say we end up at $13.5 million in Q1 when we think we should be over

Speaker Change: Okay. Thanks for the question.

Speaker Change: Oh, we don't expect to lose any business in all of business that we're supposed to do all the sales, let's put it that way. They were lost in Q1 will be in Q2 won't be it won't go into Q3.

Speaker Change: The profit story is a little different you know lets say, we just hypothetical lets say we ended up with $13 5 million.

Speaker Change: In Q1, when we were thinking would be over $16 million to.

Brian E. Shore: The bottom line will be a lot different than if we planned $13.5 million; it was kind of even across the quarter, then we're running towards $16 million, and then the last two weeks, everything goes, you know, down to zero. So there's some amount of profit which will not be recovered, even though all the sales, we won't lose any sales; all the sales that were lost in Q1 will be in Q2.

Bottomline will be different than if we planned $35 million was kind of even across the quarter than we're running for towards 16 million and then the last two weeks everything goes.

Speaker Change: Gone to zero.

Speaker Change: So there is some some amount of profit which will not be recovered even though all sales none of us we won't lose any sales.

Speaker Change: Well our sales over the last in Q1 will be in Q2.

Brian E. Shore: I don't know if that answers your question, but, and I don't, I can't quantify that, you know. I try to quantify the, well, maybe I didn't, if I didn't, I intended to, so let me do that now. We're thinking, sales-wise, that we're probably, you know, going to be in the 13s when we were planning on 16. So we're going to think about losing over $2 million in sales in Q1.

Speaker Change: Finish your question, but.

Speaker Change: I don't I can't quantify that you know I try to quantify the.

Speaker Change: No.

Speaker Change: Well, maybe it did and I, if I, if I didn't intend it to somebody with that now.

Speaker Change: We're thinking that.

Speaker Change: Shell's wise that we're probably going to be in the 13th.

Speaker Change: When we were planning on 16, so we're gonna thinking of losing over $2 million of sales in Q1, all of that would be translated into Q2.

Brian E. Shore: All that will be translated into Q2. The profit stuff is much more difficult for us to estimate at this point. Even though we're at the end of the quarter, it's still a bright, dynamic situation. As far as that new project is concerned, um, It's not a matter of a word. It's not like we're competing for it. I just want you to understand that.

Speaker Change: The profit stuff is much more difficult for us to.

Speaker Change: Our estimate at this point, even though we're at the end of the quarter is still a bright Dana dynamic situation as far as that new project is concerned.

Speaker Change:

It's not a matter of award or seller competing for it I just want you to understand that but the customers needs are for that project to be up and running by 'twenty six.

Brian E. Shore: But the customer's needs are for that project to be up and running by 26. So that's kind of a time frame that you might consider. Not, it's from their end, not from our end. That's not a lot of time, actually; there's a lot to be done to get there.

Speaker Change: So that's kind of a timeframe that you might consider.

Speaker Change: No not it's from near enough for more and that's.

Speaker Change: And that's not a lot of time actually abuse, a lot to be done to get there.

Brian E. Shore: Okay, just following up on that, if you're not competing for it, is it business that you think you can get or that you hope to be awarded, and if they want deliveries in 26, like when would you need to start allocating capital? Later this year or early next year. And on the storm insurance, was there, or on the storm, was there any insurance of any kind, either for capital or business interruption?

Speaker Change: Okay and just following up on that if you're not competing for it is that business that you think you can get or that you hope to be awarded in and if they want deliveries in 'twenty six like when would you need to start allocating capital later this year early next year and.

Speaker Change: On the storm insurance with her on the storm was there any insurance of any con either for capital or business interruption.

Brian E. Shore: Yes, we have insurance. The wind damage insurance, which comes under wind damage, our deductible is quite high, and we did that intentionally because when we think of insurance, we have cash, a good balance sheet, and we think of catastrophic loss. We don't want to bet against the banks.

Speaker Change: Yes, we have insurance to wind damage in insurance, which is it comes under window image, our deductibles quite high and then we did that intentionally because.

Speaker Change: When you think of insurance, we have cash a good balance sheet, we think of the catastrophic loss, we don't want to bet against our bags. So we set our deductibles are pretty high the theory that if we.

Brian E. Shore: We set our deductibles pretty high in the theory that if we set them lower, obviously, the premium will be much higher, and ultimately, the insurance company is going to win because they always win. So there's a pretty high deductible, but we still expect to have some insurance recovery, and there is business interruption insurance that's included, but we don't have amounts at this point because it's very difficult for us to quantify the loss, not only in terms of business interruption but for the repair of the facility. The roof itself is intact right now, and it's secure, but it will eventually need to be replaced.

Speaker Change: There were some lower obviously the premium would be much higher and ultimately insurance companies go to when you say you always win so there's a pretty high deductible, but we still expect to have some insurance recovery and there is business interruption insurance that's included.

Speaker Change: But we don't have amounts at this point, it's very difficult for us to quantify the you know the the loss not only in terms of business interruption, but to repair the facility you know Rupert salt.

Speaker Change: Is intact right now and it's secure but eventually you need to be replaced.

Brian E. Shore: So on that question about that project... It's a customer that we're very close to, and I'm not at liberty to describe which one. They were talking to us exclusively at great length about how this would be done. Their timing is 26. That's what, from their perspective, that's what they need. I've got to be careful. It's a very confidential project, so I don't want to say too much about it. I just don't want to give it away.

Speaker Change: So on.

Speaker Change: The question about that project.

Speaker Change: It's a customer that we're very close to and I'm not at Liberty to describe which one you were talking to us exclusively at great length about how this would be done.

Speaker Change: Their timing is twenty-six that's what from their perspective, that's what they need and I gotta be careful it's a very confidential projects I want to say too much about it there's always giving away.

Brian E. Shore: But, yeah, I mean, it's a good question. I would think that next year we would need to start ramping up the capital in order to meet that requirement, by maybe the beginning of next year. Sorry, I just want to say it still may not happen, but I think there's a high likelihood it'll happen because the customer is very motivated and they're not talking to anybody else about this.

Speaker Change: But yeah I mean, it's good good question I would think that.

Speaker Change: Next year, we would need to start ramping up the capital.

Speaker Change: Order to meet that requirement.

But maybe the beginning of next year.

Yeah.

Speaker Change: Great. Thanks, so much.

Speaker Change: Yeah, sorry, I just wanted to say is suddenly not happened, but I think there's a high likelihood will happen because the customer is very motivated and theyre not talking emails about this.

Operator: Thank you. There are no further questions at this time. I'd like to hand the floor back over to Mr. Brian Shore.

Speaker Change: Although there are no further questions Paul.

Speaker Change: Back over to Michael Brown.

Brian E. Shore: Thank you. This is Brian again, of course.

Brian E. Shore: Thank you very much for listening in. Have a good afternoon, and if you have any follow-up questions, please feel free to call us. We'd be happy to try to help you with them. Have a good afternoon, and we'll talk to you soon. Thank you.

Speaker Change: Thank you. This is Friday kind of course I. Thank you very much for listening in.

Speaker Change: Have a good afternoon, and if you have any follow up questions. Please feel free to call us we have to try to help you with them have a good afternoon, and we'll talk to you soon thank you.

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

Speaker Change: This concludes little problem when they book.

Speaker Change: Okay.

Speaker Change: Thank you for your participation.