Q1 2025 Park Aerospace Corp Earnings Call

Yeah.

Yeah.

Hello. Good afternoon, My name is Alicia and I'll be your conference operator today at this time I would like to welcome everyone to the park Aerospace first quarter fiscal year 2020, 2025 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 session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If you would like to withdraw your question Press Star two. Thank you at this time I will turn the call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore. You May you may begin.

Thank you Alicia this is Brian welcome to parks fiscal 'twenty five Q1 Investor Conference call. It's nice to have you onboard with me as usual nice to hear about our CFO also Marco Escobar all present us with C. L.

We issued our published earnings release show Me first quarter earnings release. After the close you wanted to take a look at that and it reached released their instructions as to how you can access the presentation you're about to go through it's also posted on our website. If you want to go that route.

The last Investor call. The Q4 Investor call. So only six weeks six weeks ago. So not normally three months timeframe into your cost. So we will do is focus on mostly new and updated information in this investor call try not to go over too many things to covers your Q4 call.

Of course at the end of the presentation, we'll be happy to take any questions. You might have let's go to slide two forward looking disclaimer do you have any questions about the forward looking disclaimer language, what snow slide three so we have a little table of contents. Your Q1 investor presentation after that supplementary financial information as usual.

We provide this to you, but we don't cover it still review with during the call, but did you have any questions about it little snow or featuring the James Webb space Telescope here as you know this.

James Webb was constructed with parks' proprietary silicon stretch.

And it's really quite an amazing thing.

Just recently I think maybe last couple of weeks to discover the most.

Most distant oldest galaxy's debt.

So far has been discovered.

290 million years after the Big Bang, which is very recent if the big banks Big banks supposedly was about 13 years ago and then the key point here is this is not supposed to happen.

These galaxy are supposed to do.

So really in the development of universe. So the James Webb is stewing the changed world.

Really most of our views about the universe in its origin or just couldnt being pulled out of the water.

Quite interesting, let's go on to slide four our quarterly results for fiscal 'twenty three 'twenty four 'twenty five.

Q1, so as you know from the news release, I guess sales 13 million a 970 gross profit a little over 4 million.

Gross margin of 29, 3% and EBITA adjusted EBITDA 2 million, a $2 6 million I just want to remind you. When you last quarter you went through a number of things that affect our our earnings.

Over the longwall, while longer haul leg to ramping up our business and deploy what we call the juggernaut and.

Setting up our new facility and one of the things. We mentioned we're not go through all those things again, but I just wanted to bring depreciation.

To your attention the new factory depreciation is about one 3 million per year and that equates to about two 3% of the gross margins you depreciation actually does affect gross margin abuse part of cost of goods sold it doesn't affect EBA dock worse, you know by definition, let's go on to slide five.

So slide five what do we say about Q1 during our Q4.

Investor call, which took place on May 36 weeks ago, we had a sales estimate of 15 and three quarters of 16.

One quarter 62, 5 million and it was that you said 14 million of sales so that you know.

Seems a little strange so is it adjusted EBITDA estimate three in quarter 3.75, and we had that was our estimate we have EBITDA to one 6 million so what's going on here.

Just to remind you. The Q1 sales estimate was that we provided during our Q4 call was based upon fully book sales in Q1, and the Q1 EBITDA estimate was based upon those fully booked sales so.

Obviously, you know when the bleeding to however, the language and polled in this language is in or we're just taking it from our Q.

For call. So it's a little Walker leisure things, we said here in Q4, it may seem a little bit strange, but however.

Our fiscal year 'twenty, five Q1 sales and EBITDA will be impacted by that by then no known amounts, but storm damage. The company's facilities, which were reported in May 22024 Company news release again. This is speaking.

On May 30 <unk>.

Although it was reported in a news release and then known unknown amount of Q1 sales will slip from Q2 into Q2 from Q1 into Q2 as a result of the storm damage we.

We do not expect or we did not expect to lose any sales of a business as a result of storm damage and we still don't expect all of them say, okay. Lets go on to slide six what about that storm, let's talk about the storm. The storm damage now we have more information about it on Sunday may 19th at approximately eight P. M local time.

Parks Newton, Kansas facilities were damaged by strong straight line winds reportedly reaching 100 miles an hour and not a tornado as far as you know well streamline wins could you actually be more damaging tornadoes in some cases there very good news is none of our people wrapped up facilities at the time and nobody was hurt or of lucky with the timing of a storm from that perspective.

Probably the only neither week, maybe Saturday, but every other night at eight P. M there'd be a lot of people in that facility and inside the facility there are.

Shelters storm shelters, but if people are outside you know going back and forth in the car cars at a time. That's one like this that that could have been very bad result.

Very lucky and fortunate that did not happen.

Unfortunately, though so that was the good news with the timing of the storm damage occurred at the very beginning of the last two weeks of Q1, that's the bad news with the timing as a result production was seriously disrupted during those last two weeks of the quarter and shipments meaning sales were significantly negatively impacted during those last week, two which the corner now we understand that.

Big discrepancy between what we estimated and what actually happens for Q1.

But parks people did incredible job recovery from the storm as storm damage and thanks to where people are facilities were fully operational with the appointment of certain temporary measures by June 324, and that's the first date of parts.

Our fiscal year 'twenty, five Q2, and that's just two weeks after Easter so a recurring so quite a remarkable job I believe in storm recovery by the park people slide seven what was damaged by the storm.

I keep getting questions about all this stuff. So maybe some issues all have for you. It's boring, but we haven't really provides us information so I'm going through it all now because I've had lots and lots of questions about these different different aspects of the story what was damaged the roofs in all three buildings or three buildings on our campus were damaged and likely will need to be replaced the rooster, we're very quickly.

Temporarily repaired and roofs are secure.

<unk> specialty HVAC units reither damaged or destroyed now needs to be repaired repairs are complete we'll replace a penny to replace this new your new units are what are temporary temperature and humidity controls put in place.

HVAC units are not just for people comfort that we're required to maintain certain temperature and humidity.

Limitations within certain aspects of the plant to labs and other actually production areas of the plant. So.

See where we are here company cars in the parking lot where damage yeah. They they were not where they never damage, but also they weren't where they were last year.

Moved.

You know two different parts of the parking area.

Minor additional damage until at least like the R&D don't get it's.

Roll up doors garage storage damaged.

What was not damaged by the storm. This is probably the more important question. The structures of just rebuilding is located at the campus other than they they were not damaged other than their roof damage, which you mentioned and production equipment. None of their production equipment was damaged obviously, good news production lab and production and R&D lab equipment not damaged by the storm.

So let's go on to.

Slide seven by the way. These should tell you. These HVAC units through the roof and some of them are officially ripped off the roof.

In the parking lot obviously wrecked.

They fell off the top of the building and a parking lot. We got arrived at the facility.

Question Slide eight.

We will take to complete all the repairs you could take up to six months I'm not sure, but oil production lab facilities. As we said had been fully operational and functional since June three and they continue to be fully operational and functional what about insurance and my question to keep we keep getting asked the company's property insurance policy contains a wind damage deductible provision of approximately.

2.5 million sulfur fire, it's much less but for wind damage deductibles quite high and we do that intentionally.

Because we could have a much lower deductible, but it's going to cost us.

It was our premium annual premium and so when we think about insurance for park in the way, we think about cash traffic was the smaller for parking and weight loss of 2 million. Two 5 million, we had the cash we'd rather ensure that ourselves because if we don't well we got it we buy insurance.

We're bidding at some banks or insurance companies always can be smarter than us when overtime. So we don't play that game. The company submitted a claim against this policy and the recovery of the country received for the policy will be accounted for at the time the recoveries, let's go on to slide nine and how we accounted for the storm the company recognized a one time charge this isn't our.

Q1 report in our Q1 of approximately $1 1 billion predominantly to account for the write down of the book value of the buildings, which were damaged and equipment, which was either damaged or destroyed discharge also include approximately $80000 of people costs incurred during those two weeks following the storm, but many park people were.

Working on the storm recovery and cleanup rather than a production test products in other words, they're normally making stuff that we sell there working with you're not producing anything so that was part of their charged and just you know you probably as you know park at all a dot you're shocked to hear in this our hourly people were fully paid during those two weeks.

And I know some companies the salary people they get paid you send the hourly people home they get screwed.

Don't do that kind of southern park and the hourly people. They you know they were mostly working on the slow recovery and cleanup.

One replacement equipment will be accounted for that means capitalize at the time of their purchases and installations. Okay. And then let's go on to slide which is slide slide 10.

Total mis shipments in Q1, a doozy of a number of $2 5 million and what were the causes well. The first one is storm related mix shift, but it's $1.8 million and that's the big one of course.

And I think we estimated when we did our Q4 call I don't remember exactly maybe 2 million so something like that 1.8 million supply chain. The other issue is approximately 300000. This a little bit of explanation. Because we said we were going to manage our supply chain by carrying inventory providing longer lead times. This is actually a case for one of our major suppliers struggled a little.

But to meet one of our customer specs. So it's not that it wasn't effective planning are these things have to get worked out over time and they will always do ultimately do international shipments we talked about this quite a bit every quarter, we got worse in the middle East in Europe.

About 400000 question, what portion of the supply chain and international shipment issues could have been ameliorated for park people, we're not singularly focused on the storm recovery I mean, I don't know the answer to that question, but I. My guess is just wanted to zero and that was the focus on when we got to get up a factory back up and running their customers who need product.

Bottom line. These are very delighted that none of our people are hurt by the storm Oh, it's a good part of it but the timing of a storm was unfortunate as it relates to our Q1 luck with not on their side in that regard, let's go on to slide 11.

11.

Parks balance sheet cash and cash dividend history, I was once the cold or by one of our key investors. They recommended that we cover this every quarter.

A good recommendation so we too that we have a zero long term debt, we reported $74 4 million of cash and marketable securities at the end of Q1 I wish I can remind you, though there is still a $9 3 million of remaining tax transition installment payments payable from the end of Q1 through June of 'twenty five.

Hi.

This relates to repatriation I think.

So a payment of $4 2 million was made in June 24, but that's not reflected in Q1 June as in Q2.

So it's a total of $943 million based upon the Q1 report or cash.

But was there was about so let's see in 19 3 million, we paid $4 to $5 1 million to go and that's payable in June of next year, Alright, However, our parks cash dividend, we paid 39 consecutive years of uninterrupted regular cash.

Dividends without ever skipping a dividend, reducing do you have an amount.

In bold park has paid $594 million or $28 and 97.5 cents per share.

Cash dividends since the beginning of fiscal 'twenty five.

Comment as always that's a hell of a lot of money for a little company like Park, probably I'm, a big company 594 million.

Cash I would do.

That chunk of change as they say lets go on to slide 12, our fiscal.

Fiscal year 'twenty, five Q1s top five customers something we are one of our regular features.

Have you relates to the Vega launch or blade of materials, you're probably not surprised to see that our credo is obviously the credo expired yet unmanned aircraft structural materials materials for the aircraft structures.

Life Port relates to Sikorsky at doses materials for interiors Mras River, we usually have a lot of different aircrafts with a feature that can feature for EM rash, we chose the comex, Ajay 91 materials for yourselves and thrust reversers Nord and the Bombardier global.

7500 business jet.

That's materials for a G E passport 20 Prime restructures.

And you can push our primary structures for that issue.

So let's go on to Slide 13, we spent a lot of time on this our or charge my charts in your church.

The new ones in the middle of Q1, I guess, the only thing I'd point out is commercial a little lower and I think that's because as a ratio we lost because of the storm, we lost more mras business more commercial business than.

The noncommercial will cover that later on.

Let's go on to slide 14.

Park loves niche military aerospace programs is always latest project I should mention the top fives times project.

So let's see.

Are we talking about here are the programs themselves are the Astro 30 blade.

Blade material not surprisingly Boeing osprey.

Three aircraft structures.

Mcdonald Douglas a harrier to materials aircraft structures and this sky night, our system multi target short range Air Defense missile. This is interesting.

These are a blade of materials not surprising for a new program and we're making our first shipment. This month's Congress. That's good news the Pie chart itself as you always say radar with rocket nozzles drones those are niche markets for park military, but even for US aircraft structures, we consider to be a niche market as far as military is concerned.

Slide 15, now we talked a lot about supply chain last quarter why are we doing again, because it's becoming more of an issue. We think is becoming recognized as more of an issue. So when you go back over it again it had some additional information supply chain challenges you just don't want to go away whenever we hear that they are behind us we find.

They're not behind US we didn't hear we do hear back in 'twenty, one that supply chain challenges would be all behind us in 'twenty. Two I think we did then we here in 'twenty two challenges would be things in the past the way three I think we heard that.

There are recent statements by aerospace industry leaders, including senior aerospace and Avalon that supply chain issues that persist the end of 'twenty five longer though that's just since our Q4.

Presentation earnings calls this is really new stope, another new item Safran is building a new turbine blade facility in order to increase turbine blade production said supply chain is just not making it.

What are the supply chain is just really all about what's causing them why wouldn't they go away are they fundamentally workforce issues have the workforce issues been resolved. So you can have all the great factories and all the equipment and everything else you get all that only people are trained people to operate the stuff you're not gonna be all produced a product you need to produce.

So they're going to supply their you know which lead to the supply chain issues. Let's go on to slide 16, where unemployment is not that bad but is that the full story not really some point 2 million.

Able bodied men are not working left to work force forever.

Why is that happening.

Plus here's a new thing there are new new in this presentation not no not new to the industry. The aerospace industry laid off millions of employees many of whom are highly experienced at the beginning of the pandemic with a benefit of hindsight that was not so brilliant.

As you know park laid off not one employee.

<unk> was apparently very loan alone in that regard.

Many of you experienced.

Employees laid off by the aerospace industry have not come back probably never come back.

It really is sad situation aerospace manufacturing as corky in AG enigmatic what.

What do you mean by that needs to be learned over many years 92, and if you had the smartest guy in town or gallon town, you put them in aerospace manufacturing.

Manufacturing, they're not going to figure it out just intuitively just quirky stuff you have to learn over a long period of time.

Was it like replacing employees of 25 years of aerospace experience. The 20th employs 25 days assign a rhetorical question.

Not such a good thing it's a bear it's very difficult because that's reality in some cases, let's go on to slide 17, How's that working out not so well see the problem, we see everyday in the industry did not pretty I was just talking to.

I guess she used ahead of injury in one of our customers who was meeting with an OEM and with his guys and you were talking about some basic.

Testing.

Procedures for composite materials, very very very basic very patient I'm not going to say what it was but.

They looked at him like what is that.

Shocked you know Lisa you don't know what that is I mean, it wasn't assaulting it just like Wow. These are probably smart people, but they just had no experience.

The people that left during the pandemic probably at 20 years of experience. So it was really kind of a I don't know what you call. It like a revealing that to have that discussion.

What do ongoing supply chain challenges mean for the aerospace industry.

These challenges are impacting program ramp ups of new program introductions as evidenced by the recent Airbus announcing which will discuss below.

What's an example of a defense program, how about Patriot missiles, maybe.

This recently that we the U S government user Forum realtor sales of U S. Government has approved and we're reallocating them.

Countries that were signed up for Patriot missiles was supposed to get them, we're taking away their patriot missiles to give to Ukraine.

Speaker Change: No. They are government said, we're not including Taiwan in Israel.

Okay, well, who are we including maybe Japan, maybe Korea lots of European countries why are we doing that.

Why don't we just produce more more of these missile system because everybody wants them well you know why are we not doing up because the supply chain restrictions and limitations of course that'll be the preference not to give dropping or pay Paul do you have to everybody wants them.

These are all approved countries youre not get Patriot missiles to enemies, but demand is there, but the industry falling short of meeting demand Where's. This going is there a solution side, yeah, there might be some thoughts about I'm not going to go through them now, but there might be a what does this mean to park at park, we've found ways to manage our supply chain challenges.

With better planning rich easily carrying more inventory and providing suppliers long lead times, but the supply chain issues. They through major challenge for us you've read consuming of our time and energy.

Importantly, and in some cases like the two examples we just mentioned.

Programs part supplies into are being negatively impacted by supply chain constraints and issues unrelated to our supply chain. These are just supply chain issues that these Oems that don't relate to our R. R specific supply chain and they negatively impact these programs.

Slide 18, let's change gears here, we always spend a lifetime in the slide because we recovered every every quarter I think we should just to give you that perspective G. Aerospace we've made changes to the G Aviation GE Aerospace jet engine programs, such an important part of parts business. So we carved every quarter just some basics firm pricing L T.

Speaker Change: A requirements contract from 19 to 29 with Middle River Aerostructure systems Mras is sub best you engineer Aerospace and we always explain this.

What is just about all these programs are G. Aerospace program just happened well, we garnish programs Mras was the Saba G E Aerospace and energy aerospace out on the three or four or five years ago, I remember sold Mras test engineering, but youre still D. G E programs.

By the way I think we mentioned in the past, but under the sell T. A R pricing goes up.

January one 2025.

So we've done the factory you know we built a redundant factory that's in production and we're sole source on composite materials for these programs were not going to go into the call Richard talk about every quarter.

Nice picture of the legendary Boeing 747 engineers. So love this picture because you get a perspective on the size of these yourselves do you see this this guy in the background. It was free school doesn't let's go on to Slide 19, we don't really need you cover the first item on the <unk>.

Second item containment wrap for G nine X engines.

It's something that could be an important program for park.

Using our anti materials, the third and fourth item relate to our.

So he's of product forms are in qualification and also that had been added to the LTA.

Life of program agreement requested by M. R. S. S. T E removes some progress was a life of program agreement to meet need to park, well it'd probably a lot although.

If you ask my personal opinion is that.

We're on each programs, we're going to be in these programs, whether we have an agreement or not although it is the intention of their morass in ft that we havent life of program agreement they are the ones who requested it.

And is still in progress I guess, that's all I'll say about it right now let's go to slide 20.

Update on GE Aerospace jet engine programs. The first one is <unk> hundred 20 aircraft family. That's the Big Kahuna I guess Airbus has a huge backlog rotating this number 700 sorry.

<unk> thousand one in 37, that's just a lot of airplanes. If you know aerospace commercial aerospace touches so many airplanes Airbus just maintaining this is a key point here that intended to achieve a rate of 75 Neo family aircraft deliveries per month and 26.

And they reiterated that double down on that intention during the recent annual meeting in their first quarter Investor call 75 per month 26, Oh, let's go on to Slide 21, and we don't have to go through or is it just a little history about the delivery rates I guess the point of interest is in 'twenty three.

Airbus Finally exceeded 19, which is a pre pandemic here and then in the.

First six months of 'twenty four is similar to the first six months of 'twenty, three a little bit more but not significantly.

Clearly based upon his huge huge backlog Airbus already would be at a rate of 75 per month, if not for our supply chain constraints and limitations.

Let's go on to slide 22.

There's a big news then on June 24, 22 times 24. It I mean this is just a few weeks ago right Airbus surprisingly announce that is pushing you on its goal of achieving 75 <unk> hundred 20 aircraft family.

That that rate from 26 to 27 75 aircraft family delivery rates through 'twenty six 'twenty seven not surprisingly what did Airbus highlight supply chain issues and limitations as the key reason for the pushout.

But what is surprising is Airbus highlighted engine availability related to both the Pratt and the CFM engines as the main supply chain culprit why is that surprising because that was the case Airbus to say now is the case the engines where the limitation.

Maybe a couple of years ago know the engines, where limitation and then maybe about a year ago. They said wait we're good with engines everything Joe with engine, the new limitation, which it was.

Castings, and forgings and materials electronics, like maybe semiconductors and I forgot one other thing I don't remember, but it wasn't anywhere not engines anymore.

Engines anymore.

So good we're going with engines that was wonderful, but what happens we're back to talk about engines is the main problem Airbus further further commented.

That engine availability.

They'll be significantly integrated in recent weeks in recent weeks.

Airbus will end up with gliders, you know what that means they're going to have these airplanes and even ramping the windsor the gliders to called gliders. Airbus also commented that the interest towards a new situation that we're not expecting so wow. This is really blindsided Airbus kind of shocking.

This push out of the 75 <unk> hundred 20 Neo per month target certainly is a setback and a disappointment like maybe a little embarrassment for Airbus was pushed out that target will provide Airbus with more leeway and runway to achieve its new target made me more realistic target, we believe Airbus will be more committed than ever.

To achieve this through target without additional delays or push outs. It's just our opinion I mean, I can't speak for Airbus, but I think they're a little embarrassed by they should probably very upset about it and my guess is they're going to be very very very committed to not push it out and push out the.

The five per month target any further let's go onto slide 23, what about the engines for nature 20, Neo aircrafts family. So as you know park is on the CFM leap one a engine we're not in the Pratt engine Pratt P. W Lemon or G engine, the supply into that second I'd.

We recover that and we have no content on the Pratt and the age from 20 Neo aircraft using the private engines.

Speaker Change: Third a bullet item. According to the July 24 edition of this this is late breaking news a very news the CFM leap when as market share from engine orders breakthrough 20, Neo family aircraft to 63, 5% as of May 31.

To deliver rate of 75, H 'twenty family aircraft per month, I mean, we believe.

Lots of confidence Airbus will get there we just don't know when at 63, 5% leap when a market share translates into 1143 leap <unk> engines per year once that work to park, where we have something called a juggernaut slide you can look at that later on.

Here's a doozy currently or listen to this 8156 firm leap one a engine orders that's according to your original such very current.

I'm just going to make all those engines you know there's no doubt about it they're going to get more orders as well, but they're going to make all those engines.

Speaker Change: So what does that mean the park I mean, not only have to estimate going back to that you'll get the juggernaut slide maybe quarter billion dollars.

So I don't know doesn't really matter so much whether it's 'twenty six 'twenty seven what the numbers will be 28. Those those are those engines we produced.

For our bar perspective, that's the key thing that's the thing that we feel so park is still fortunate about that we're sole source qualified on those engines those engines are hours.

Those engines will be producing so we can get really hung up on what quarter. It is and we just don't know we've been pretty open about that and we can't tell you something we don't know when guests a little bit but to watch. The key thing is that those engines will be produced and produced with park materials, Let's go on to slide 24.

The <unk> hundred 21 extra Laurie that's a variant of D. H 'twenty deal aircraft family.

Speaker Change: Expect our Airbus expects that to enter service for it in 'twenty four and then just.

Speaker Change: This is all an article today that certification is expected in quote commune days unquote that sounds pretty soon you know this is a.

Potentially very important program for park Commack time, when nine another really important potential program for <unk>.

Mark This is a leap engine, but a different kind of leap engine, Nicole deep when see made by CFM.

Speaker Change: <unk> plans to achieve a production rate of 150 919 aircraft per year or 28.

They've received over 1500 orders.

For the nine month nine aircraft according to coal Mac.

Ah Kumar reported expanding its nine month nine year for production lines within do get this 330000 square meter facility with Don in China, which is near Shanghai.

So.

Speaker Change: My I guess, one of the key executives that aircrafts, whom I worked with quite closely just visited that facility a couple of weeks ago and I met with him afterwards, you're very very impressed it's like what they do in China. I know if you have these screens to China. They build a city that's more of a major program. That's what they do and that's what you're doing and he was quite confident that they will get to.

This rate of 150 airplanes.

Per year, which is 300 engines of course and maybe more.

This guy is usually a little bit of a skeptic.

Not a pioneer sky type.

As you'll see when we get to the Juggernaut, we're changing the number 300 from 200 that's engines, obviously based upon her 50 airplanes.

That's a really this is a really big important potential program for park.

So one other item I mentioned to you it just always today, which.

It came after our press time Airbus just upgrade their 20 year forecast now expecting 42430 airplane deliveries over the next 20 years single aisle 33510 wide bodies 8120, maybe you're right, maybe not but I wonder how you slice it that's a whole lot of.

<unk> a lot of airplanes.

Speaker Change: C F M driving the Airbus <unk> hundred 20 aircraft family in Commack 919 aircraft buses.

What that means is that both these programs use that CFM.

If M leap engine, so it's really up to CFM to get their production rates up to support these two very exciting programs, let's hope they do that.

Let's go on to slide 25.

Speaker Change: Boeing triples have an X with a G nine exchanges.

But we expect that to be certified next year here.

Here's something brand new the second check item Boeing just receive a T I a type inspection authorization.

For the triples have next from the FAA, that's a really that's a big deal and just conducted its first certification test flight.

Triple seven acts lest Friday, that's breaking news, it's really encouraging because some people are concerned that with Boeing you know has a serious issues that could bogged down to triple seven X. We sure hope it doesn't because it's such an important program potential program for park.

Speaker Change: To me you know.

If I'm following I'm not you know I'm thinking I really want to do everything I can get into.

Our focus on this program because this is their opportunity to be a leader for a long long long time.

Speaker Change: Even if they sort out the problems with the Macs Theres still no leader they're following your bus. This is a program with a leader is nothing like it.

Terms of payload and range capability and those are the two key criteria for Bluelinx, there's nothing like it and nobody seemed to try and develop anything like it. So Boeing has a chance to be a real leader for a long long long time.

Speaker Change: With this aircraft.

And it's a wonderful program for park if it goes forward, let's go on to Slide 26, Okay. We see this slide every quarter, what's new only $5 million of G.

Aerospace jet engine program sales in Q1.

Speaker Change: So and we had told you we did our Q4 forecast that before this.

The storm our number was $6 three why was that he was just fully booked.

Speaker Change: So we had six points for each booked when we shipped 5 million. It's a $1 3 million was booked did not get shipped because the storm.

Are you forecasting for Q2, six in a quarter to six and three quarter million.

And basically booked so that doesn't mean it'll happen I'm, just telling you it's booked whenever they need them where sales to get to those numbers, we're doing something a little new here, giving you a forecast for the year, we haven't done this in quite a while.

You know Mark and I agonized over this over the weekend and trying to figure out what to tell you well. We wanted to give you something for the year was 23 million $26 million, we felt and when we do this you know remember we do forecast, we're not giving you a low number that we can either be heroes. We don't do that we're saying to you. This is what we think will happen.

The best of our ability. This is when we think a lot of the issues a lot of risks.

Certainties without.

Doing the best we can tell you what we think will happen, let's go on to slide 27. So what are you talking about in Q2 or for Q2.

Speaker Change: And what are you talking about Q1, so we didn't go through that a Q2.

We're forecasting $15 nine to 16 4 million, we've got about 16.8 book, but remember at the end of quarter, we always lose some at the end of quarter, because it doesn't ship or you know international shipment issues supply chain that kind of stuff.

And.

EBITDA and the forecast of 3.3 million 3.3 little low.

I just wanted you to know that $2 5 million of C to be fabric sales are in Q2.

Sales $2 5 million remember, that's where for a large Oems we are by this this fabric and we sell to them pretty quickly.

Markup.

So very low margin now we actually when we actually use our product to make the material for them then the margins are quite.

Quite attractive.

So this is another thing mark and I kind of agonized over the weekend and let's go on to Slide 28 again, we're doing something you haven't done. This recently is giving you an annual forecast, let's look at the sales history first because I think it's pretty interesting.

You just start 17 go into 'twenty, it looks like almost $10 million per year. You know 31, eight whatever 40, 50, 160, a $10 million per year, and investor, which we've talked to you last week I'm asking an interesting question and I, it's funny nobody ever estimate for what do you think where do you think me now but not for the pandemic.

Very interesting question, because I said, well I don't know it looks like where we are growing $10 million per year I don't know what would stop that so we'd probably be at 90 or $200 million in conjunction with where I guess, if you just extrapolate we never know where it's hypothetical and can't go back and rewrite history, but then you could see in 'twenty, one to pandemic year and 'twenty two 'twenty three 'twenty four.

Sure.

We're still not getting out of the pandemic malaise, it dependent but it's over but we screwed it up so badly with all the people we hired crazy sorry.

Speaker Change: Sorry, all the people, we fired or do you not park the industry fired laid off that goal.

So we're really struggling to recover because it will be supply chain issues that we created.

By maybe not.

Responding and reacting to the pandemic and the best way no. It's not a criticism because the time the pandemic was sulfide. So scary that you know we can't really blame people for reacting the way they did but would've been up HIFU and I'm, saying it was probably not the best reaction.

So we.

Speaker Change: We actually were looking to provide you with a three year forecast.

We are now in this presentation, but with the push out of the of the Airbus.

The Airbus target of 75 airplanes for months and also supply chain issues being elevated.

Check it out on that and we decided.

That gives you a <unk>.

Forecast for 25, 60 to 65 million, a $13 million to $15 million EBITDA and again, we're taking some riskier because there's so much uncertainty, but again, what we're doing is doing the best we can to tell you. What we think will happen not giving you a low number that we could be to be heroes and wonderful everything else important things at the bottom supply.

Limitations affecting irritation industry. Yeah. We just talk about are we looking at topline progression next one ramping up cost for the juggernaut that cycle. The fact topline, but it affects bottomline, we ramp up the cost before the sales and obviously that makes our our.

Our company was profitable on a temporary basis, let's go on to slide 29.

Okay. Your key aerospace jet engine programs revenue outlook. The juggernaut, we've been talking about this for several quarters, what's the timing for the outlook, we're not sure, but a juggernaut is still coming it can't be stopped and we better be ready.

So you know we just spent a lot of time talking about what quarter its going to hit and we just don't know, but I will tell you one thing in my opinion Park is so so so so fortunate to be sole source qualified in these wonderful co brands. These wonderful programs. So when will they go to the Moon, we don't know.

But these programs are very these are the programs you Wanna beyond them resolved very fortunate and lucky to be on these programs. So maybe maybe not in other programs that we wont mention but you probably know what I'm talking about let's go on to slide 30, Here's the juggernaut, just a couple of changes here that well a couple of things that one of the highlights first of all acreage 20 neo.

So you were look at using that 10, 80 number that means that using 60%.

Market share for leap engine 75 airplanes per month, just do the math you can do when you look you can do in your head that was at 900 airplanes for your times two inches. That's a one point 1800 price 0.6, that's a C, meaning 60% market share. That's your 10 80.

Now earlier in the presentation, we said well, it's really not 60% 63, 5% and that translates to 11 43, well we're going to use 10, Eddie just that we don't have to update and revise this page or slide every time, we do a presentation because every month that percentage that market share percentage is going to change somebody made a.

Comment that I was trying to be conservative no not really it's just that we didn't want to go through this process every.

Every corner, having update changed the the assumptions lie because every every month.

Market share that we get for marriage of news can be different.

Notice also the C 919, we.

We had 200 units now 300 units in the air J 'twenty, one that we didn't change the sent me too, but I just want to point out that we.

We saw a recent report that that Commack delivered 35 airplanes per year and about 22 and 23, that's obviously what.

What 70 engines and it doesn't include spares. So we may move that number up at some point, we're not doing that now.

Speaker Change: Okay and then if we go on to slide 31.

Our park maintenance crew. Thank you park maintenance grew for leading this storm recovery effort and clean up effort.

Great guys.

Probably figure it out, but just looking at him, but I also say it is not totally representative because as we mentioned earlier, it's really all of the early people that worked on the.

Storm recovery and cleanup.

Okay. Operator that concludes the review of the presentation. If there are any questions we'd be happy to take them.

Thank you.

Conducting a question.

If you would like to ask a question. Please press star one on your part.

Hum.

Yeah.

Sorry.

Speaker Change: A question from the queue.

All participants using speaker equipment.

To be necessary to pick up your handset.

Perfect.

One moment.

Yeah.

Any questions.

Right.

Back over to Brian shore for closing.

Speaker Change: In Congo.

Okay. Thank you operator, and thank all of you for listening to our Q1 investor call and go through the presentation with US you all have a great day. If you have any follow up questions. Please give us call. Thank you take care.

Yeah.

Thank you.

Speaker Change: Todays teleconference. You may disconnect your lines.

Thank you for your participation.

Okay.

Okay.

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Yeah.

Speaker Change: Uh huh.

Uh huh.

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Hum.

Speaker Change: Uh huh.

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Okay.

Speaker Change: [music].

Uh huh.

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