Q4 2025 Park Aerospace Corp Earnings Call
Good day my name is.
And I will be your cost.
Speaker Change: Thanks, operator today.
Speaker Change: At this time I would like to welcome everyone.
Speaker Change: Aerospace Corp fourth quarter.
Speaker Change: Earnings release Conference call.
Speaker Change: And patients.
Speaker Change: All lines have been placed on mute to prevent any background noise.
Speaker Change: After the Speakers' remarks, there will be a question and answer session.
Speaker Change: I would like to ask a question. During this time simply press Star then the number one on your telephone keypad.
Speaker Change: Would like to withdraw your question. Please press Star then the number two thank you.
Speaker Change: At this time I will turn today's call over to Mr. Brian Shore.
Speaker Change: Chairman and Chief Executive Officer, Mr. Shaw, you may begin the conference.
Thank you operator this is Brian welcome everybody to parks fiscal 'twenty, five fourth quarter Investor Conference call.
Speaker Change: With me, Marc Heska wall, our president and COO.
Speaker Change: Right. After the close we announced our earnings we did a news release announcing our earnings you want to take a look at that.
Speaker Change: Or are you just released or are instructions as to how you can access the presentation or the true.
Speaker Change: Lake or through our website you wanted to take a look I wanted to get tied up with point of view of risk where do you go through the presentation.
Speaker Change: And after we go through the presentation, which could take maybe 45 50 minutes just want you to would be where that market I'd be happy to answer whatever questions. You might have okay. So why don't we go ahead.
Speaker Change: <unk> forward looking disclaimer language, we're not going to go through that but certainly watchdog there'll be questions slide three the James Webb space telescope. It seems like we are featuring this every quarter. So much news I Shouldnt, probably know the James Webb space Telescope was built was constructed with our Sigma stretch what you saw.
Speaker Change: Proprietary.
Speaker Change: <unk> technology.
Speaker Change: And Oh.
Speaker Change: So what's the news this time, we've got a little bit of a picture of the James Webb and the L to eat range orbit, which is about a million miles from Bruce I believe it's pretty far away.
Speaker Change: 97, I'm, sorry, $99 seven that's a pretty high percentage you know pretty good odds Joseph Italy.
Speaker Change: Italy lights. This is no joke on a multi week planet.
Speaker Change: R R.
Speaker Change: Our Galaxy I guess, we call it okay to 18, that's the name of the plant I'm sure you've heard plenty about that it's only 120 424 light years away from that just right around the corner you know what's in our own galaxy. Thank you James Webb. So what did you change web apparently did what you detected certain times of gases, which are only produce.
Speaker Change: By biological processes. So.
Speaker Change: It's quite incredible.
Speaker Change: It's also kind of strange do you hear about us on the news every night like all day long all night long life, another planet 99, 7% certainty.
I know nothing about it you know what I mean.
Speaker Change: So what they cover the news, but you would think just you'd be like 24, seven news, but it seems to not be anyway table contents. Our investor presentation were about to go through that then we.
Speaker Change: We our supplementary financial and forward tobacco appendix one we don't go through that during your presentation, but certainly let us know Germany questions about okay. Let's go on to slide four.
Speaker Change: Quarterly results were 'twenty three 'twenty four 'twenty five thousands let's go right into the right hand, right over to the right hand column Q4, which is the quarter, we just announced sale of 60 million 939.
Speaker Change: Important to mention that if we get that later again by $4 4 million of those sales where it seems to be fabric and then we have a gross margin of 29, 3%, which considering well look I'll go back to this but to see to be fabric. You know we sold that is sold.
Speaker Change: Only for a small markup considered not.
Actually I was surprised at how high our gross margin is as you know we don't like it when your gross margins under 30%, but under the circumstances.
Speaker Change: And also the startup costs that will go through I was so surprised myself is so high it was I suspect. The main reason was the fact that production.
Speaker Change: Was very strong and it was exceeded sales, which was our plan, we'll talk about that and second what do we say about Q4 during our Q3 investor call sales to estimate 15 half to 64 3 million as we see them a little bit ahead of that range. Adjusted EBITDA estimate of three points raised $3 9 million as we change and what's in the ear.
Speaker Change: EBITDA range I got to stop in <unk>.
Speaker Change: Cover something which we used to cover every quarter and I figured okay fine of overdone it but.
Speaker Change: What we had a couple of comments you after our Q3 investor call.
Speaker Change: Two the fact that well we should pad our forecast numbers so.
Speaker Change: So we Gotta go back remind you that we don't do that you know we don't do guidance like that it's kind of a strange game that other words, if we believe the quarter will be X. We're supposed to tell you X minus 10%. So that when we come out with X will be heroes, and we beat our numbers and that's it.
Speaker Change: It's what's it seems very strange other people. They do whatever you want to know who's a real stars, but we don't do that we give you a forecast what we're telling you is this is what we think is going to happen not what's going to happen to minus 10%. We don't do that so we just want you to be aware of that and we don't feel like changing it. We also feel it would be a little bit strange for us if we're telling you what we.
Speaker Change: We can tell you that it's going to be X minus 10% well that's not really honest is it you know and we have Oh, you know think about integrity I'm not saying other people don't want to just saying thats for us. So when people say Oh why don't you paid your numbers understand we're not going to do that though when we tell you I'll.
Speaker Change: I'll give you a forecast we were saying this is what we think will happen and we'll be wrong, sometimes in some and sometimes you clearly are what their time would tell you that we're saying. This is what we think is going to happen. So we just want to remind you that we discussed at every quarter, we haven't in a while but maybe you need to remind you again slide five considerations for Q4.
Speaker Change: So, let's get right to it production versus sales I remember in Q3.
Speaker Change: We explained.
Speaker Change: Our QC Q3 sales value of production he called FCP, that's not inventory value. That's a sales value of $1 2 million western or sales at park production STP absorbs a significant amount of caution to produce inventory as a result of just review in Q3 for perspective here the Q3 production.
Speaker Change: Shortfall and coach had a significant impact on our Q3 EBITDA Q3 production shortfall was on US we said that during our Q3 call in other words, we just missed the number we had a production target we didn't get it that's on us.
Speaker Change: We missed our target, but we also said we tended to reverse that in Q4, well, we did reverse it and that is on us as well. So we take the responsibility for missing to target in Q3, our people. She got the credit I think clerks hitting the target our target in Q4 and did a very great job with that actually so in Q4 production.
Speaker Change: She did our sales adjusted for Ray Carb fabric, which is not something we produce any ways. You know my 1.4 million that was our target.
Speaker Change: Really helpful that drops a lot of dollars to the bottom line, probably 350000 award so the bottom line in the quarter. Just says if you've got the big drag in Q3 that was a big plus in Q4, which is what we wanted.
Speaker Change: Onto slide six the excess production in Q4 had a significant positive impact on our Q4 EBITDA and this importantly extra production also allowed us to build back our finished goods inventory to more acceptable levels by about $1 million compared to Q3 with way too low at Q3, you know, we're selling off or selling for marine.
Speaker Change: Inventory rather than production now we'd built back our inventory finished goods levels. We think are more acceptable airing group.
Just reviewing here as you know we entered into this business partner agreement with him in 'twenty, two under which they pointed us as their exclusive north American distributor for their rate Corp's ETP fabrics used to produce ablative composite materials for various missile programs systems.
Speaker Change: Now we already covered this but we sold $4 $4 million a seat to be fabric. In Q4 now it's actually 500000 more than we predicted in our Q3 investor presentation end up being more than that and believe it or not seven 5 million and all are about 25, that's a lot that's a whole wide it really burdens our P&L.
Speaker Change: As we've previously explained and sell what we sell C to be fabric to our defense customers for a small markup or buying a lot of the stuff you're stockpiling. It obviously you know.
No it doesn't.
Speaker Change: Take a rocket science to it you know to understand that even though this is rocket science, such what Youre doing.
Speaker Change: So what slide seven.
Speaker Change: Park sold so this is the flip side 420000, its not you know 4.4 million before related materials manufacturer with C to be fabric, and our Q4 $2 million or 25.
Speaker Change: So that's really good because when we look at it incrementally that contributes significant amount to the bottom line probably over 300000 Bucks. So that helped the bottom line a lot as well that we said some C to be material sales as we previously explained are margin producing showing plated materials manufacturer, we see to be fabric are significant.
Speaker Change: Bold.
Speaker Change: Recall recall, but when our parks customers as she took the fabric. So I've got a softer second you read the transcripts you did at your own risk because we have no responsibly, where those transcripts you know theres, a automated computer a or I don't know, what but theres. So many mistakes those transcripts, sometimes I'll go we just crashed script I don't know what the Hell I'm, saying I can't remember what am I talking.
Speaker Change: Right here I can understand you solely mistakes and those things. So we don't take any responsibility for them. So the transcript.
Speaker Change: Q2, Q3 are either call talked about a recall of C of C to be just a real bad thing, but no recall it when we went factors no reference to any REIT was all recall no recall a Boe.
Speaker Change: In the presentation as well as our comments, but then it was that was picked up by articles. So they talked about a recall of this product based upon the transcript was incorrect. So I just want to warn you. If you read the transcripts you do it at your own risk because we take no responsibility for them now what's the status of recall a lot of people asked me that.
Speaker Change: That's a hard question, so I'm asking will get us mark to help us.
Rick Wallace: Figure that one out so mark can you tell us whats the status there Rick Wallace.
Speaker Change: Hello, everybody.
Speaker Change: This is the specification has not been updated what that means is it still in the works.
Speaker Change: Where the testing is not in parks and it's in our customer so.
Speaker Change: So that's clear but.
Speaker Change: But we are being told it should be completed completed this month at the end of May.
Speaker Change: All I can say that with a little bit of caution Clinton thing.
Speaker Change: Led in the past so I just wanted to throw that out there.
Speaker Change: Looking to get an update at the end of the month.
Speaker Change: I can tell you there is some good news all the testing that has been completed which is the majority of it is compliant to the specification.
Speaker Change: So what we're we know we're hoping that the very few tests that need to be done by the end of the month will fall in that same population. So essentially where we are anxiously awaiting just like everybody else to get the result, and.
Speaker Change: Oh, Yeah, we're really hoping that they meet the target at the end of the month, but like I said, it's really out of our hands.
Speaker Change: But we continue to communicate we continue to check on the status and we'll do that again.
Speaker Change: Or is it gets towards the end of the month, which is in two weeks and hopefully next time. We talk next time, we have a call where we'll have an update for you all.
Speaker Change: Okay. Thanks, Yeah. So we're being transparent we're just all we can do is tell you. What we are told by our customer I think in our last call. We said March but that's what we're being told off so if that didn't happen. So what happens here.
Speaker Change: And then the next item.
This is a repeat.
Speaker Change: Pete item for last few quarters, just reminding you that where we're.
Speaker Change: We're ramping up this new factory, even though we don't need to have capacity reasons for ramping up to get the factory ready for the juggernaut as we call. It that's costing us holding that's burdening our P&L totally missed shipments during the quarter 175000 are mostly surprise surprise international shipment issues well, that's actually improve that's not great.
Speaker Change: But I think we had a couple of quarters. It was over a million Bucks. So I guess, that's moving in the right direction at least in that quarter.
Speaker Change: Slide eight our impact of tariffs and tariff related costs.
Speaker Change: Q4, German on future impacts, we'll get back to that later on the presentation.
Speaker Change: When we.
Speaker Change: Talk about some updates so let's go on to slide nine.
Speaker Change: Our top five customers, it's kind of a tradition for us in alphabetical order dano someone who does the slide.
Speaker Change: Yeah, you probably get.
Speaker Change: Some of the people in the audience could probably covered this better than I could aerojet rocketdyne, that's the Patriot.
Speaker Change: Patriot missile.
Speaker Change: Uh huh.
Speaker Change: The middle wherever I guess, we're using are the eight for 20 <unk> L. Our commercial aircraft credo, So obviously the fire jet.
Speaker Change: Nothing for Tech stack to confidential Nord in the Bombardier global seven to 500.
Speaker Change: M L.
Speaker Change: Aerial target aircraft's unmanned.
Speaker Change: Try to get our men and women to Florida.
Speaker Change: Florida, the target aircraft, but they didn't get any volunteers. Okay. That's my attempt at humour, let's go on to slide 10, I want to I promise I won't do anymore than that.
Speaker Change: So.
Speaker Change: 10, a we're just this is R. R.
Speaker Change: Our estimated revenue so aerospace market segment.
Speaker Change: And you can see that we talk with the Salt 21 was a little different views to pandemic.
Speaker Change: 'twenty two 'twenty three 'twenty four 'twenty five the Pie chart looks you know pretty similar let's go on to Slide 11. This is a lane as a project parclose niche military aerospace programs.
Speaker Change: And as always comment right on with rocket nozzles, and drawn to our niche markets for us, but for us even aerospace structures or niche because that's kind of that's our focus and this doesn't even small I mean, something special where we have something special to bring to the table, which means normally that the margins would be nice and attractive for us.
We don't need to cover each one of these things that we're gonna be a little bit.
Speaker Change: Less open about what our participation is in these programs accept I'll comment on Hawk on the Sky now.
Speaker Change: UAE program. So that's been in the news recently UAE, So I thought you'd be interested in that and then we see two references to the Sentinel GPS D. That's a you know the.
Speaker Change: To judge ground based strategic defense.
Speaker Change: This is a replacement of a minuteman.
Speaker Change: Program from the sixties.
Speaker Change: We have on the top right the warhead, a reentry vehicle for the warhead than the missile itself missile system itself.
Speaker Change: And are these are.
Speaker Change: Installed in silos around the country are hundreds of them is what's intended.
Speaker Change: And I think you know what these warheads carry so you can look it up if you want.
Speaker Change: But I'm not.
Speaker Change: Very happy kind of thing to talk about.
Speaker Change: So let's go on having said that if you bring new one is down a little bit let's go on to slide 12, that's called a mad mutually assured deterrent or something like that.
Speaker Change: Right.
Speaker Change: Remember that from the sixties anybody remember that.
Speaker Change: Slide 12.
Speaker Change: G. Aerospace this slide we share with you every quarter just kind of a background.
Speaker Change: For pricing L T a from.
Speaker Change: From 19 to 29 with Middle River Aerostructure systems, which is a salvage SD engineer aerospace we explain this arbitrage retarding factor, but that's a reduction or that you look at these are programs, we're not going to go through with them but.
What the common theme is they're all related GE aerospace programs. So whats the connection here I think you know that when we garnish programs Middle River Aerostructure systems aircrafts was a sub of a G. E. Aerospace now at just some of S. T Engineering, which is Singapore company, let's go on to slide.
Speaker Change: 13 top of the slide.
Speaker Change: Slide also sole source or private structural component.
Speaker Change: For the passport 20 engine that's true the GE.
Speaker Change: <unk> aerospace LTA not the amorous LTA pant.
Speaker Change: Pancakes containment wrap through the G nine extra triple seven extra aircrafts as Purdue was produced with our AFP material to note other composite materials and this is intended to be included in our life with Emirates life of program agreement not yell Ta.
Speaker Change: Encourage you after the LTA, which entered into.
Speaker Change: Let's see park Mras LTA, we covered this provides a six 5% weighted average price increase January one.
Speaker Change: And also it was amended to include three Parkville my use of formulation products recently life of program requested by M. Resting hte. So we're still working on that I think the last time, we spoke I told you actions Baltimore Court, we're getting our pricing to the extent, we could long term pricing from our suppliers. So we could provide pricing too.
Speaker Change: On a life of program pricing EM rash and FTE, we've done that so the ball is kind of back in their court. This as some.
Speaker Change: We're happy either way, we're happy to stay with the L. T. A recorded LTA or go to life of program just something requested by M. Rescue nice to you, but we're happy to do the life of program as well either way. We're happy 14 Slide 14, Okay. If were talking about some of the programs age or 20 Neo family. That's the big dog as we say.
Speaker Change: Airbus has a huge backlog for a data rich when you do your aircrafts 7256, that's a lot of airplanes I'm telling you.
Speaker Change: We have a little bit of history of their acreage 20 deliveries, though year over year, you can see that it's gone back up to about 50 per month and 24, a little over 600, but what's holding you back is the supply chain issues that you know about we talk about it almost every time.
Speaker Change: The bottom.
Speaker Change: Right, they're targeting delivery rate of 75 acres 20, Airbus is a family aircraft one through 27, why they're not there now because of supply chain issues. They have over 7000 orders that they'd be happy to be <unk> 75 per.
Speaker Change: <unk> or nine under per year, now, but they haven't been able to get there yet they are targeting 20.
Speaker Change: 2027, and they haven't been able to get there up your supply chain is the limitation slide 15 would they proved engines for <unk> 'twenty you know about this we got to Friday, the CFM leap engine worrying to see CFM leap when a nut to crack.
Speaker Change: According to the Arrow is news first quarter news the leap when a market share of firm engine orders. These are thousands and thousands of orders a ladies and gentlemen.
Speaker Change: 65, 2%.
Speaker Change: Nice market share, but when we get to the juggernaut slide at the end, we use a 60% market share, which we're being conservative but it keeps it went up a little bit it seems like maybe it'll move back down on the oil moves from quarter to quarter to quarter month to month.
Speaker Change: That that delivery at the delivery rate is 75 airplanes per month 65, 2%.
Speaker Change: Leap one a market share translates into 1174 engines per year leap one of engine spirit. If you look at the the juggernaut Rolling assuming 10 80, so its a lot more than the juggernaut.
Speaker Change: As of March 31, 25. This is again Aero engine. He stopped there were 8196 leap a firm firm firm.
Speaker Change: When a engine orders.
Speaker Change: As of a couple of months ago, now of course, Airbus and CFM, they want to sell more airplanes and where more engines. This is just what's on order firm order now now. So these engines will be delivered I think what's that worth to park, it's worth about a $40 billion of park and.
Speaker Change: And that's that's not it I mean, they like I said I'm sure Airbus wants to sell more airplanes and Airbus.
And see if I'm watching somewhere engine. So let's go on to slide 16.
Speaker Change: This is a variant of day through 'twenty, one sorry, Ace III 21, Neo family acreage 41 extra Laura it's offered the races. So theres airplay airplanes delivered its an operations or operating in our new routes, which had never been used by single aisle. This is single aisle airplane I guess I should have said that and the key thing here is.
Speaker Change:
Speaker Change: It has a range and payload capability of a wide body. So this airplane. It's been used on what was previously a wide body route like.
Speaker Change: Maybe 787 route but much less expensive to operate. So this is why the C. N N I'm not don't normally when a lot of time with C. N N, but at this time I liked him if each one of these extra large changing air a map of the world and what that means that the single aisles are operating our routes it used to be the exclusive.
Speaker Change: Per view of a more of a wide body airplanes, which are much more expensive to operate that's a big big deal well I guess no response and unplanned. So that's an important program for park Slide 17, let's switch over to China, The Chinese coal Mac. The Chinese aircraft company see 919, that's the single aisle.
Speaker Change: All to compete against the age of 20, 737, or they're just ramping up now they're targeting 30 deliveries in 25, they're not going to get to 900, but well see how far they go they plan to increase our production capacity of 50 airplanes. This year plan to achieve a production rate of 150 aircraft by 28 report to have over 1000.
Speaker Change: Orders for these airplanes commack aiming for E. Austral certification 'twenty, sorry, that's significant because C.
Speaker Change: Oh, well, yeah, that's like the European F. A European Aviation certification agency.
Speaker Change: Because there was this belief in theory that these Chinese airplanes, we're gonna be China, only or a place that we operate in the Chinese market. That's clearly not what commack is thinking.
Speaker Change: So the fact that they're saying, they're going to get a Austin certification is a big deal.
Speaker Change: Certification outside of a China trade conflicts people asthma trade conflicts well.
Speaker Change: Commack produced at 919 without U S suppliers.
Speaker Change:
Speaker Change: The answer is absolutely not absolutely not absolutely not and if the.
Speaker Change: U S suppliers were cut off on the program.
Speaker Change: My opinion I'm not the only one has its opinion know that program with di Forever immediately and it's such an important prestige program for the Chinese youre, not let that happen and that's a good thing you know doctors.
Speaker Change: Trade, where it is you know what do you call it a mutual interest dependency or we need each other.
Speaker Change: So the Chinese will not does that happen, so theyre going to eat ticketing that source. These key components from a U S supplier. That's my opinion anyway US slide 18, staying with the Chinese come back 9909, that's the regional jets smaller jet.
Look what they're doing they have it delivered to low airlines in Viet yet violence in Vietnam.
Speaker Change: So they're not Chinese what's going on there in other words again, everybody was saying Oh. These are Chinese all the airplanes I don't think commack lease they are.
Speaker Change: The Triple seven X with a G and I next engine test flight certification program poorly progressing well.
Speaker Change: So the next test program amassed more than 13 or flights. That's a lot. You know 300 flight hours are they're targeting twenty-six for Boeing is for certification and first delivery, let's knock on wood or not let's hope that happens. They were poorly have a 521 open orders that's a about last week, but.
Speaker Change: Did you hear that Boeing the hardest new high powered sales guy and that Guy. He just got an order for 30 airplanes from guitar yesterday cutter.
Speaker Change: Both ways to hear about that the new high powered sales guy. So they have to add that 32 to 521 slide 19.
Speaker Change: She aerospace programs sale history, so you're familiar with these numbers at fiscal 'twenty before the pandemic, we popped out at $29 million or kind of clawing or clinical or way back 25, $24 7 million not quite here yet.
Speaker Change: The Q1 forecast 5.2 to 5.6, that's not those are looked at as kind of a little bit anemic I wouldn't read too much into it quarter to quarter. There's a lot of issues lately inventory management things like that to move the numbers up and down that aren't really indicative of longer term trends.
Speaker Change: The forecast for.
Speaker Change: 26, we're going to stay with this 28 to three 2 million. That's what we gave you.
Speaker Change: Last quarter below you can see we're starting out slow in Q1 that got forecast is based upon.
Speaker Change: The information provided by our customer actually a customer provided us recent era is low middle high that's low scenario I don't know maybe would you have to adjust it down you know later on if we continue with this like Q2 looks somewhere.
Speaker Change: Similar to Q1, we'll have to see just like I said, we're getting off to a little bit of a slow start, but we're staying with the forecast for now Okay. Slide 20, now we're talking about parks of financial performance history forecast estimates. The history, you know the history sort of once in a lot of time on that.
Speaker Change: We already talked about the quarter, we always talked about the fiscal year. So why don't we just go right to the forecast or our forecast for Q1 15 to 16 million sales two and a half to 3 million of EBITA, that's our forecast for Q1 for park.
Speaker Change: We already talked about how in the historical sales how much C to be content wasn't historical sales for last year and last quarter.
Speaker Change: But if you look at the last footnote on the slide we're also talking to $1.2 million seem to be fabric sales expected in Q1. So of course that affects our bottom line wholesale followed wind back a little bit let's go on to slide 21.
Speaker Change: Historical center and we're looking at historical results, but with a fiscal year emphasis and where you're already pretty much covered most of this.
Speaker Change: 62 million Oh I know this is a good slide to look at to get perspective about or using our new factory.
Speaker Change: Because if you look at 25 or sales were $62 million, but about $75 million or C to be that's not produce that means oh equivalent of about $55 million and go back to fiscal 'twenty 60 million, but the new factories didn't exist at that time, so well that $60 million was produced and sold with or existing factory you see what's going on here.
Speaker Change: We used a new factory or bring the factory online Beast ramping it up for the juggernaut, but it's holding our P&L down and there's a lot of extra cost involved with freedom to do factory online since you could illustration of that I think let's see what else. We got here Gordon to your supply chain limitations. Yeah, you can look at the top line.
Speaker Change: Sales $31 million and 40 million 50, 160 million really move in the right direction and look what happened and get all caught up in a pandemic and we're just trying to claw way back now are ramping up cost where the juggernaut, we talked about that and we've talked also about how much of our.
Speaker Change: Fiscal 'twenty five sales were C to be fabric, let's go onto the next one slide 22, some general updates.
Speaker Change: Our new agreement with area. So we talked about our existing agreement.
Speaker Change: The first check item, we you already covered that so we don't have to cover that again next check item. Then we entered into a new agreement just recently and unnecessary meant park will advance is advancing terrien 4.587 million Euro why are we doing on those funds.
Speaker Change: Will be used by area to help finance, the purchase and installation of new manufacturing equipment.
Speaker Change: Our areas of production of C to be fabric.
Speaker Change: It amounts to be paid to area and in three installments. The first of which was paid in Q1, that's equivalent about $145 million and so again, when we get to our Q1 balance sheet, you've been looking for that at 1.5 million expenditure.
Speaker Change: To me you know that we reflected in our cash the purposes, New agreement. This new agreements to provide the additional <unk> fabric can manufacturing capacity necessary to support the rapidly increasing demand for <unk> to be in Europe, and North America.
Speaker Change: Slide 23.
Speaker Change: More general updates I'm this.
Speaker Change: This is in kind of a nice one maybe not a huge deal, but a lighting strike protection material was certified on the passport 20 engine for the global 7500 business jet it's worth about 500000 Bucks per year that'll kick in later this year. We were pleased about that because it was second for so long I never.
We'd say this to anybody but in my own mind, my little private moments I was probably just giving up on you know whether it's ever going to happen at all so that was surprisingly good news you know when something called me and said Hey, you know this gets a virus and what that must be a mistake. It wasn't parks ablative composite material sole source qualified we talked about this before that's the next generation.
Speaker Change: Don and then park entered into an agreement with a major OEM licensed technologies for hypersonic missile programs.
Speaker Change: We understand where the only licensee phase two manufacturing trial testing of license technology continues.
Speaker Change: Mentioned the same thing last quarter. So I appreciate the markets you can give us an update of how the trials are going.
Speaker Change: Sorry about that I was I mean, it didn't want to have any background noise.
Speaker Change: So the retiring that theyre going really well again, we licensed the product. So it would be the formulation work was done ahead. So what the phase two is were building laminates were making material and we have a partner for that as well because this will require.
Speaker Change: Require investment once we get to the point that leave industrialize the project or the caught up.
Speaker Change: So we are building panels now we're making material.
Speaker Change: We're getting to the place where we're gonna start testing no material because it takes a little bit of time to figure out. These processing now this is a not fox.
Speaker Change: Fox product, it's not standard of parts, which you know is the majority of our business. So it's taken a little bit of time to figure out how to processes materials. It's a lot different than what we're used to so I feel like we're making really really good progress with it and you know the next steps are you know maybe in a few months maybe about six months.
Speaker Change: I have a better update that you know where we're at once we kind of thought processes and get them the test data and.
Speaker Change: Potentially you know have a product where we can release the data sheet, meaning that you know we can go to the public with it in the meantime, we are talking to a few customers a few Oems select.
Speaker Change: Few partners just the you know.
Speaker Change: Kind of figure out what their needs are with this product and you know that helps us develop our tests matrix and helps US decide you know what kind of animals being to build.
Speaker Change: But again, we're being very selective who we're talking to you because we don't want to go out to the market when we're still trying to work out.
Speaker Change: The details on the product.
Speaker Change: The fine tuning of it so.
Speaker Change: Like I said, maybe about six months ago.
Speaker Change: A better update and give you guys the.
Speaker Change: That's down from where we're at with this project.
Speaker Change: We remain definitely making progress with it.
Speaker Change: Okay. Thanks, Mark when we go on to Slide 24, we covered this last quarter expecting about a $5 million per year from the new LTA, which aerospace which is different than DRAM Russell T. H.
Speaker Change: So we are in discussion with two Asian, large and Asian, industrial conglomerates Blades Asian manufacturing joint venture the joint venture to do what we do in Asia produce are prepared for aerospace they approached US. Both these companies were in active discussions with them, we're not intending to contribute any cash.
Speaker Change: So, we'll just be our IP with.
Speaker Change: We'll see how it goes on maybe what happened maybe not but I thought at least we've mentioned it to you.
Speaker Change: Its current MBS supply CT scorecard, rather [laughter] hundred hundred hundred that's our that's what we need we need at hundred hundred hundred that's very unusual I think we discussed that before but that's kind of our.
Speaker Change: Our mindset, that's our philosophy is we don't we're not looking for 90 nines.
Speaker Change: For 99.9, we're looking for are hundreds that's all that if it's less 100, we're unhappy.
Speaker Change: And we'll be talking to customer about okay. What happened how do we fix it I'm not kidding 90, 949, we're going to talk to the customer I've been told you know a lot of most suppliers' behalf with eighties.
Speaker Change: Terrorists are you back to your more cold hard ones get little more tariffs international trade conflicts expected impact on <unk>, sorry on parks.
Speaker Change: In Q4, there was no impact, but let's talk about what we see going forward about tariffs.
Speaker Change: Okay.
Speaker Change: So I guess, just like everybody else, we're all learning and trying to trying to sort. This out we feel like we've got a pretty good job of getting ahead of it when we saw it coming.
Speaker Change: I think it was like early March and started updating our order comprehended confirmations that quotes.
Speaker Change: A note on there telling customers that any tariffs come our way, we're going to pass them along to them.
Speaker Change: To date, we've been pretty fortunate we haven't seen too many lenders come from suppliers, we've had a few.
Speaker Change: But there has been no impact to our business essentially I think theres been one maybe two we had a pass along to a customer.
Speaker Change: The rest, we're able to mitigate tariffs with inventory on hand.
Speaker Change: Obviously, when you carry inventory you don't have to pay out there because you.
Speaker Change: You have it there so we're able to.
Speaker Change: Those orders processed and shipped out without buying new material.
Speaker Change: And then so the next step was well now we have to update our cost that we have.
Speaker Change: So it's again, it's only a few materials right now so our quotes are reflected of that moving forward. So the customers will be paying the new price.
Speaker Change: You know when they place the orders so.
Speaker Change: Essentially you know, we're just like everybody else, we're trying to figure this out but again, we I think we've done a good job getting ahead of it.
Speaker Change: But no impact to the business, but again.
Speaker Change: There's more to come.
Speaker Change: Things still pretty dynamic we're not sure how it's all going to shake out.
Speaker Change: So we'll probably have to give you maybe another update on the next call as well if that has changed but again, we feel like we're in pretty good shape with this and we continue to talk to our suppliers and.
Speaker Change: We don't see anything else coming our way, but I can't say that you know what the 100% confidence, but we felt pretty good.
Speaker Change: About where we're at today with that so.
Speaker Change: I think that'd be helpful.
Speaker Change: Thanks.
Speaker Change: Okay. Okay. Thank you.
Speaker Change: On slide 25, so we covered this last quarter. We said we have a new emphasis on defense markets on programs why is that while there was already a new commercial aircraft that were even aware of the triple seven ex Ron that the 91929 will never get on that I'm not going to go into that now, but it won't happen but.
Speaker Change: But we see significant opportunities in the military and defense markets, especially related to missile programs. What's your focus Blazers and hypersonic how is that emphasis working out for park, well actually remarkably well and we'll get back to that a little later on the presentation Slide 26, our recent questions from Investor We love questions you know.
Speaker Change: We think well three or four other people, probably chicken, where maybe 30 or 40. Other people. The same question. They just don't want to ask it.
Speaker Change: Well, let's see to be fabric manufacturer.
Speaker Change: Professional equipment funded part by parks advanced to a regroup you're located at Aaron's facility or parcel it it'll be adherence facility, who will own and operate a new equipment area and will next question Park, a park and myself he provided for six 5% weighted average price increase.
Speaker Change: Does the LTA provide for any further price increases through 29, no separate price increases relate to increases in certain.
Speaker Change: And cost of certain raw materials park users to produce products for them or us what about the life of program agreement well with a life of program Dream, a little bit different because there are different price adjustments in life of program agreement, if we enter into it maybe.
Speaker Change: Maybe it will maybe won't well like I say, we're happy either way, we're happy with life of program. We're happy with the current L. T. A you mentioned the park is a true Blue American company not to parks knowledge only one apart competitors as an American company who's that.
Speaker Change: We believe heck shell is a an American public company, we're not aware of other of other pixels are much larger.
Speaker Change: But slow competitor right, where other competitors that are owned by our U S owned.
Speaker Change: Go on to Slide 27 Park share buyback. So you know history. We spent a let me just kind of go through as quickly. So we don't get too bogged down but this.
Speaker Change: On May 23, 2022 authorization, we spent 99.296 million Bucks on it were spent some real dollars on this thing now or and then in Q1.
Speaker Change: One is not reflected in our Q4 report in Q1. We spent we spent 2.1 million $2 million. When are 65000, just in Q1 alone we will see that again in our Q1 report when we talk about our Q1 cash.
Speaker Change: So and then just you know that two 2 million or 19 65000 included in their total INR 9 million to 90 6K should we continue to buyback our stock well, let's revisit that parts of incredible cash dividend history, yet and we cover this every quarter I think where he consecutive years over $600 million.
Speaker Change: So it's unless one years $29.
Speaker Change: 47 cents per share.
Speaker Change: Incredible for a little company like Park here are the founders started the company with 54 with I think 40000 Bucks that they had left over from war duty. So that's a company that is paid over $600 million in cash dividends in the last 20 years.
Speaker Change: Let's go on to slide 29, Okay, Here's a big one [laughter] yep.
Speaker Change: Yeah, I would say, it's a real big one a new manufacturing expansion of parts manufacturing.
Speaker Change: Major new expansion, rather parts of manufacturing facilities Park is planning a major expansion of our manufacturing facilities.
Speaker Change: The planned expansion will include a plant and it could be at our Newton, Kansas campus or elsewhere, we have a road warriors out there now looking at other locations of Kansas services remote it'll be very difficult decision to make because the economics of Kansas to be better, but there are other maybe non quantifiable factors, which would make.
Speaker Change: Both better so we're gonna have to figure that out working on it now will be a challenge to recruit additional employees Oh, yeah, it'll be a challenge that's one of the reasons. We're looking at it promoted as well because we think well maybe if we have two locations that might be easier to staff up to the extent need the plant expansion will include the following new manufacturing lines solution treating hotmail Phil.
Speaker Change: Hot melt tape, a hypersonic materials manufacturing line and support equipment, Mark which is talking about that let's go on to slide 30 preliminary estimated capital for the capital budget for the new manufacturing plant equipment $35 million, plus or minus $5 million. So we're talking about some very very big numbers here for park very big.
Speaker Change: So why are we doing this a long term.
Speaker Change: Our business forecast requires it that's why significant new business opportunities for both hot melted solution composite materials defense and missile programs our drivers nerve over a few slides ago are you asking how is that working out for us and it's working out for us pretty well. So our focus is paying off big time.
Speaker Change: Why are we doing and again have the flexibility to be in a position to take advantage of new opportunities as they arise, but we're not in a position to take advantage of the opportunities when he rides, where we're not going to get the opportunities and the flexibility to provide 100 to 100 100 support and service to for the G programs very important for US we don't want 99 point.
Speaker Change: We need 100 hundred hundred.
Speaker Change: And we're feeling a little tight actually even on the Chi program. So that's one of the drivers of this decision to do this major expansion as well, we're thinking you're planning for the long term, we're thinking and planning for future. When you think about capacity you got to think five years out you know it takes three years to build a plant and you Gotta do trials get qual.
Speaker Change: Suffocation five years at least five years, it's probably better to use 10 years. So we think that far out we think yeah. When you do something here, it's very important it's a great opportunity, but we don't want to Miss It go on to slide 31 interesting stuff others may do things differently. They may wait until the opportunities I'm sure and offered risking risk missing out on them as well.
Speaker Change: But as you know park a park, we're not like the others. So yeah. We're in control of our destiny, we ever own cash through this with we can do things for our future I was talking to our.
Speaker Change: Business Guy in our industry, Mark you know knows well and he was really upset because he was saying that.
Speaker Change: His company is not investing in the future and they've lost a lot of major opportunities piece when theres opportunities arose it was too late they know they're not made the investment they lost them.
Speaker Change: So we're not that kind of company, we are a control of our destiny, we ever own cash and we're taking advantage of it and nobody can stop us from doing it are doing the right thing for our company and our future.
Speaker Change: Not sharing our long term business forecast and we're not going to give you. The sales number at this time, we'll get back to that and we have a.
Speaker Change: A lot of internal work done on this so it's not we don't have of just not sharing it a lot of different scenarios, but suffice to say for now we're putting our money where our mouth is making a major investment in our future what about the ROI.
Speaker Change: Very significant very significant using your own cash ROI very significant cash flow very significant very significant you know I think back and I'm, sorry, the coals going on a little bit longer, but actually a lot to cover.
Speaker Change: Over the last 567 years, we receive from bankers you know M&A opportunities I know was aerospace looks like it was so superficial Oh aerospace that meets its right for park of course not.
Speaker Change: Just recent terrorist but it doesn't mean, it's right for park, but you know we saw businesses, where they were sold for 120, <unk> hundred and $340 million of sales were 20 million Bucks.
Speaker Change: So it's really good we didn't go there.
Speaker Change: Because now we can we're talking about some real rois here I don't know what the Rois would've been from something that feels like that these are some real rois very significant list of major new investment change you're thinking about our cash maybe.
Speaker Change: Maybe we'll get to that in a couple of slides of buybacks Jb's, where he said those jv's, we told the JV partner as well, we're not contributing cash will contributor I P, but not our cash what about the high level conceptual financial outlook, including our recent quarterly investor presentation. What happens is that we will take a look at that.
Speaker Change: So let's go onto slide 32, so you see when you look at this slide.
Speaker Change: This is the reason we felt we need to talk to you about this now because there are two slides in a prior presentation. This is one of them you see where it says major new expansion project $35 million in the prior presentations that was $7 5 million for the treater. So we felt well that certainly women we shouldn't we couldn't prevent that's why to you again.
Speaker Change: That would be so wrong.
Speaker Change: The other option was to delete the slide but we thought if we did that that would alarm investors and caused angst that we don't want to do that either.
Speaker Change: So here's this new slide and this is one of the reasons, we felt because if things are covered in our prior presentations, we really need to tell you about this now this major event now well look at our cash we had 68.8 at the end of the quarter. So it was a 5.1 you know about that that that's a payment to make the our restaurants you.
Speaker Change: Buyback in your first quarter 2.2 million, so advanced payments area and $5 million about $1 million right in your first quarter and then we have $35 million.
Speaker Change: For this a major expansion in give or take $5 million.
Speaker Change: That's a lot of 47 million and we got $6 million to $8 million just doing some simple high level math here that says you have to spend all this money what 'twenty, one and a half million dollars left so that's good we have no debt, but it felt like we had $200 million left anymore and I'm. The only thing I want to mention is that cash flow. So we will build it be building back that number no.
Speaker Change: Actually after the this expansion is done and we start to utilize it properly the cash flow will be a quite significant as will the rois. So we'll start to build back the number let's go on to slide 33, Alright. So this is something that we cover every quarter, we're not going to go into great details with Polish financial outlook for GE Aerospace jet engine.
Speaker Change: Programs, the juggernaut whats the timing for the Juggernaut, we don't know.
Speaker Change: I'm not sure, but it can't be stopped we better be ready we know what's coming let's go onto slide 34. This slide it's almost the same as the prior slides are.
Speaker Change: Related to the numbers for the Juggernaut, we just added something for consistency.
Speaker Change: Miscellaneous Chi programs.
Speaker Change: 2 million southern or 50.
Speaker Change: So we did what we wanted to make this slide consistent with the prior slide which had the G sales history because junior sales history includes all G program sales. This juggernaut slide did not did not include.
Speaker Change: Some of the Chi program Ge's, Archie Aerospace a L. T O sales. So we're now including in this last item miscellaneous G. Programs. These are under the G E Aerospace LTA not P. M. S. L T a little confusing, but we just wanted to make it apples to apples so the numbers kind of reconcile with.
Speaker Change: The historical sales we can go onto the next slide I just look at footnote nine because footnote and I described this new item multiple part composite materials products supply to do other G 90, Genex Jeannine exchange of programs under the park.
Speaker Change: L T a with Chi aerospace again, not I'm Rashid aerospace, let's go on to the next slide here.
Speaker Change: And this one slide 36 is something we presented in the last few quarters. This is again the reason why we felt we needed to talk to you about this major expansion.
Speaker Change: We have big question marks here now you know.
Speaker Change: We have none in GE programs incremental sales question works you can look at the to footnote that number was $15 million in the prior quarterly investor presentations that numbers blown out the window.
Speaker Change: Blown out the window, we're not going to talk about the number is but that number has gone.
Speaker Change: And so so we couldn't.
Speaker Change: We couldn't provide the the same slide to you would just be wrong to provide a slide which talks about $15 million incremental sale not gave you a number now we want you to know that something very different here and obviously, the total would be very different as well right.
Speaker Change: Alright, there, but it's a simple math you know, let's round G programs up to 60 million.
Speaker Change: The non G programs, it's been maybe around 30 million give or take just $90 million and 15 million incremental $105 million well that number doesn't work anymore.
Speaker Change: That gave me a new number but we're telling you that it doesn't work anymore and that ties into why we're communicating to you about the this major expansion initiatives and actually that's the end of the presentation well, we're not going to go through the appendix. So thank you everybody for listening operator, or mark and I'd be happy.
Speaker Change: Take questions now if there are any.
Speaker Change: We will now be conducting a question and answer the question.
Speaker Change: If you would like to ask a question. Please press star.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: A question.
Speaker Change: You May proceed.
Speaker Change: A question from the queue.
Speaker Change: For participants.
Speaker Change: Yeah.
Speaker Change: For you to pick up your handset before.
Speaker Change: One moment please.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: No questions at this time.
Speaker Change: <unk>.
Speaker Change: Like to ask a question.
Tom.
Speaker Change: If you'd like to ask.
Speaker Change: Don.
Speaker Change: One moment please.
Speaker Change: Yes.
Speaker Change: This question comes from.
Speaker Change: Christina.
Speaker Change: Please proceed with your question.
Speaker Change: If you're a Nick.
Speaker Change: Proceed with your question.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Christina.
Speaker Change: Hi, Good afternoon can you hear me.
Speaker Change: We can hear you well.
Speaker Change: Oh great.
Speaker Change: Congratulations on that.
Speaker Change: Water and.
Speaker Change: Pretty exciting what you're suggesting there.
Speaker Change: With this new expansion.
Speaker Change: So I just have a couple of general questions.
Speaker Change: With regard to tariffs I know, it's hard but in the big picture.
Speaker Change: You bet.
Speaker Change: So how it might play out.
Speaker Change: Now in terms of the.
Speaker Change: Airlines.
Speaker Change: Airbus for example.
Speaker Change: So that he can comment on how you're thinking I know, it's hard to answer that.
Speaker Change: There's just so much different opinions on how.
Speaker Change: Yeah.
Speaker Change: And Theres a lot of.
Speaker Change: Tough talk going around but yeah.
Speaker Change: Yeah your basketball.
Speaker Change: But or.
Speaker Change: Go ahead, sorry did you finish your question.
Speaker Change: That's the first question. The second question is on if you can.
Bob: Just Bob there's been a lot of talk and a lot of sell side research.
Speaker Change: Tom.
Speaker Change: Supply chain stall.
Speaker Change: Engine components do you think that both of them.
Speaker Change: Issues have also resolve themselves at this point.
Speaker Change: I mean gee.
Speaker Change: It has been pretty positive.
Speaker Change: But so just further thoughts on that.
Speaker Change: John.
Speaker Change: And then.
Speaker Change: Do you think.
Speaker Change: You know what what would be your biggest worry in terms of.
Speaker Change: You know delaying the juggernaut at this point I know that's also a difficult question.
Speaker Change: Hum.
Speaker Change: Airbus when they reported recently.
Speaker Change: We had I.
But they're not backing down south.
There is optimism so anyway those are my questions. Thank you so much.
Speaker Change: Thanks, Nick Okay, I'll try to we'll try to go in reverse order Oh.
Speaker Change: You were I think the last question is what is the biggest obstacles juggernaut occurring.
Speaker Change: So I don't know I mean, I think it's where it will really a question of when and that's my opinion.
Speaker Change: I don't see the juggernaut, not happening I don't see the scenario under which it doesn't happen, but you could argue and obviously people do about when it'll happen Airbus says if we're talking about doing for 'twenty. They have their input other people or it wont be skeptical and you know what I'm.
Speaker Change: Personally I'll say I kind of got tired of listening to it because it's just so much noise and noise the noise like who cares and we just had for our perspective, we just have to be ready because we believe it will happen and every extra has an opinion.
Speaker Change: I kept these email services you know with all these aviation experts I dunno pays them, because I mean, I don't know what your opinions worse, but but my opinion much on the supply chain stuff. Yeah, you probably heard that Airbus is building gliders can I think it's 17 glide.
Speaker Change: I'm not sure I think that's a number that they have produced this year gliders being that the PUC airplanes and allegiance and thanks to you know, whom you know who rather that did all the engines for <unk> through 'twenty now what I'm told is there a little bit of.
Speaker Change: Bright news is that in the first half were engines have been going to.
Speaker Change: To the.
Speaker Change: To.
Speaker Change: The just to supporting existing.
Speaker Change: Airplanes with spares and that kind of thing and that that's not supposed to happen.
Speaker Change: That's that's supposed to go away in the second half so that that way. The engines that are being produced will go into newer airplanes are not the spirit of just what I'm told anyway, but you know it's like it's not really wonderful news to hear that Airbus has built 17 gliders April 20th gliders.
Speaker Change: Because they just can't cause the engines.
Speaker Change: So yeah, it's all of the supply chains.
Speaker Change: The company is still obviously an issue.
Speaker Change: And I just hope they figure out a way to get their act together.
Speaker Change: And not just for Airbus, but for obviously for coal Mac and Boeing as well.
Speaker Change: So I don't know if that's a good answer but you know that's the best answer I can provide.
Speaker Change: We'll have to see I think they'll have to get their act together at some point, but I don't know one maybe that's a simple answer to answer the first question supply chain, you're you're asking now not our specific supply chain issues are sorry Terry.
Speaker Change: Tariff issues [laughter] tariff issue talking about how tariffs I think that's a question will affect the industry generally.
Speaker Change: Again like like you kind of and Tomatoes implied everybody has an opinion you turned up to news on <unk>.
Speaker Change: Writing about how tariffs will affect the world over the next whatever years and I don't I don't.
Speaker Change: Maybe months weeks.
Speaker Change: I don't have a I mean, I I have nothing that I could add to all that because there's so much somewhat so many opinions out there as you know D. D. G aviation programs or were on except for the Triple Seven X.
Speaker Change: Late two airplanes that are made by foreign companies Canadian European and Chinese. So there are some tariff questions that could and should be asked about how the terrorists will affect the sales airplanes, but and and just why have the equipment into those are those airplanes, but.
Speaker Change: I don't know my.
Speaker Change: I guess.
Speaker Change: Whatever with my two sense opinion is I would say that my I feel like these things will be sorted out at some point because theres.
Speaker Change: Do you have any economic global icon economic need is such that it will be necessary to support these problems out or another but I could be wrong, just my opinion or do you want to add anything about tariffs.
Speaker Change: No I mean, everybody we talk to I know the Boston.
Speaker Change: The airlines and aircraft companies, but.
Speaker Change: I think we're all looking for answers.
Speaker Change: Hey.
Speaker Change:
Speaker Change: No.
Speaker Change: Yeah, I don't think anybody wants to stick our neck out and say this is what's going to happen. So I think we're all just kind of sitting back and waiting for the dogs, who are kind of net itself out and hopefully sooner rather than later.
Speaker Change: That's all I really got on them.
Speaker Change: Okay.
Speaker Change: So you see Nick.
Speaker Change: Our combined DAU input as you know not so much were brilliant.
Speaker Change: Sure.
Speaker Change: Whose program these days, but oh, Okay can you still hear me.
Speaker Change: Guess what.
Speaker Change: Oh, one other thing so and you used the word.
Speaker Change: With regard to a little tight with regard to your current manufacturing footprint.
Speaker Change: So is it fair.
Speaker Change: For me, though.
Speaker Change: To think that.
Speaker Change: You have a high level of confidence.
Speaker Change: Of what Youre doing.
Speaker Change: In terms of a major expansion even before.
Speaker Change:
Speaker Change: The the Juggernaut has really come to play you know we're not it.
Speaker Change: It might be more might be on that might be two years before they get to 75 months, but it's certainly not inhibiting park in any way.
Speaker Change: Do you ever going to go forward with more investments because you see the opportunity right now.
Speaker Change: Is that safe to say.
Speaker Change: Yeah, it's exactly right.
Speaker Change: We're okay now we're not we're having trouble keeping up now, but we have to plan for the future and when you're talking about factoring capacity, especially in aerospace to archive business, you've got to think five years, yet I think well how much capacity manufacturing capacity, who needed to talent 31.
Speaker Change: 2026, 27 28.
Speaker Change: Doesn't matter, because we need to be ready for 2003, one and if we don't get ready for 2021 now we will be in trouble and we will miss out on things and we could end up being too tight and disappointing customers and that's just not our way of doing business, you know well right, but all all while you're thinking forward.
Speaker Change: Shareholder.
Speaker Change: Reasonable to assume you'll have higher sales you know in the next couple of years.
Speaker Change: And in any case, you know absent some kind of Oh calamity wood.
Speaker Change: The company will be growing.
Wildfire along for four or five years is that.
Neither the Bolton so.
Speaker Change: So the question.
Speaker Change: I think the answer is yes.
Speaker Change: But the question is this you take our you know the capacity. We think we did in 2030 30 31, okay. So we're building towards that number is you're a straight line between where we are now.
Speaker Change: To that point or is it kind of a squiggly line you know.
And we don't know.
Speaker Change: You know Nick maybe look at it doesn't really matter because we have to think five years out capacity wise, we feel we don't have enough that we feel we definitely do not have enough we need to deal with it so that we get to that point, we'll be where we want to be not only to be able to handle the programs, we know about but what about new.
Speaker Change: New opportunities that come our way like I said, our friend is so upset with this company because they didn't they didn't invest for the future. So when programs came came around he they were lost them well, we don't Wanna be enough as it went up be in a position where the new opportunities wherever they may be we can take advantage of then if we want to.
Speaker Change: We feel the right path.
Speaker Change: Alright, well.
Speaker Change: My suggestion is all those folks in Washington.
Speaker Change: About American longer fought for them.
They ought to be.
Speaker Change: Talking to the guys at Park, you know because you have to open up the food for with American jobs, well, it's a beautiful thing.
Speaker Change: Well. Thank you very much for saying that you know I doubt anybody from them.
Speaker Change: They call me anytime soon but but I'll, let stay now.
Speaker Change: But you are exactly what they know exactly what they're trying to make a point.
Speaker Change: That's true.
Speaker Change: Oh I agree.
Bob: Okay, well. Thank you so much for all the questions Bob.
Speaker Change: Good evening.
Nick: Thank you very much Nick we appreciate your questions is really helpful.
Speaker Change: Alright.
Speaker Change: Thank you.
Speaker Change: No further questions.
Speaker Change: I would like to hand the call.
Speaker Change: Sure.
Speaker Change: Thank you Sir.
Speaker Change: Thank you very much operator, and thank you everybody for listening. Thank you for hanging in there at the extent, you're still lot or actually a little over an hour have a good day have any follow up questions feel free to give us a call. Thank you goodbye.
Speaker Change: Yeah.
Speaker Change: Thank you, ladies and gentlemen that does conclude today's conference. Thank you very much for joining us.
Speaker Change: Yeah.
Speaker Change: [music].