Q2 2026 Park Aerospace Corp Earnings Call

Speaker #3: Good afternoon. My name is Van, and I will be your conference operator for today. At this time, I would like to welcome everyone to the PARK AEROSPACE CORP second quarter fiscal year 2026 earnings release conference call and investor presentation.

Vaughn: Good afternoon. My name is Vaughn, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Park Aerospace Corp. Q2 FY 2026 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then number one on your telephone keypad. If you would like to withdraw your question, press star, then number two. Thank you. At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Speaker #3: 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 number one on your telephone keypad.

Speaker #3: If you would like to withdraw your question, press star then number two. Thank you. At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer.

Speaker #3: Mr. Shore, you may begin your conference.

Speaker #4: Thank you very much, Operator. This is Brian. Welcome, everybody, to the PARK AEROSPACE fiscal 26 second quarter investor conference call. I have with me, as usual, Mark Esquivel, our President and COO.

Brian Shore: Thank you very much, Operator. This is Brian. Welcome everybody to the Park Aerospace Q2 FY Q2 Investor Conference Call. I have with me, as usual, Mark Esquivel, our President and COO. We announced the earnings right after the close. In the earnings release, there are instructions as to how you can access the presentation we're about to go through, either via link, and you also can link information in the news release and also on our website. You want to pick that up because we're going to go through it. It'll be a lot more meaningful to listen to us if you have the presentation in front of you. We have quite a few new investors. In the last quarter, they've come on board. Out of consideration for them, I think we should go through some of the legacy items more carefully.

Speaker #4: We announced the earnings right after the close, and the earnings release, there are instructions as to how you can access the presentation we're about to go through, either via link, and you also can, link information in the, in the news release, and also, on our website.

Speaker #4: If you want to pick that up, because, we're going to go through it, it'll be a lot more meaningful to listen to it if you have the listen to us.

Speaker #4: If you have the presentation in front of you. So we have, quite a few new investors in the last, quarter. They've come on board.

Speaker #4: And out of consideration for them, I think we should go through some of the legacy items more carefully. I think in the past, the legacy items we just kind of skim over on the assumption that, most people have already, you know, are familiar with them.

Brian Shore: I think in the past, the legacy items we just kind of skimmed over on the assumption that most people have already got, you know, or are familiar with them. Veteran investors, just please be patient with that. Another item I want to cover with you is that on Tuesday, I had some unplanned oral surgery, and I'm not really feeling that great, so I hope you can bear with me. If I need Mark to take over, I'm sure he'll be very willing and able to do that. Questions at the end, after we're done with the presentation, we'll take questions, and please do ask them. We love questions. Actually, sometimes I think the questions are more meaningful than the presentation. We go through a presentation, we don't know whether you're liking it, not liking it, interested, disinterested, half asleep.

Speaker #4: veteran investors are just, please be patient with that. another item I want to cover with you is that, on Tuesday, I had some unplanned oral surgery, and, I'm not really feeling that great, so I hope you can, bear with me and if I need Mark to take over, I'm sure he'll be very, willing and able to do that.

Speaker #4: questions at the end after we're done with the presentation, we'll take questions, and please do ask them. We love questions. Actually, sometimes linked to questions are more meaningful than the presentation.

Speaker #4: We'll go through a presentation. We don't know, whether you're liking it, not liking it, interested, disinterested, half asleep, but, you know, the questions are always more, helpful because we then we know what people are really interested in, what they're thinking about.

Brian Shore: The questions are always more helpful because then we know what people are really interested in, what they're thinking about. Why don't we go ahead and get started with the presentation? Slide two is our forward-looking disclaimer language. We're not going to go through that, but if you have any questions about it, please let us know. Slide three, table of contents. Starting on slide one is our Q2 investor presentation, which we're about to go through now. In appendix one, we have supplementary financial information. We're not going to go through that during the call, but if you have any questions about it, please let us know. It's become our practice now, our pattern, I guess, to feature the James Webb Space Telescope in our table of contents.

Speaker #4: So why don't we go ahead and get started with the presentation? slide, two, is our forward-looking disclaimer language. We're not going to go through that, but if you have any questions about it, please let us know.

Speaker #4: Slide three, table of contents, starting on slide one is our Q2 investor presentation, which we're about to go through now. An appendix one, we have supplementary financial information.

Speaker #4: We're not going to go through that, but if you have any, during the call, but if you have any questions about it, please let us know.

Speaker #4: it's become our practice now, our pattern, I guess, to feature the James Webb-based telescope in our table of contents. so what we're talking about here, James Webb-based telescope discovered cosmic dust, which shouldn't exist outside its galaxy.

Brian Shore: What we're talking about here, the James Webb Space Telescope discovered cosmic dust, which shouldn't exist outside its galaxy, and it shouldn't exist in quotes. I think we're developing a common theme here. There's so much that we believed about the universe and its origin, which just isn't true. Sorry, folks, not true. James Webb is saying, you could believe whatever you want, but this is what's really going on. Here's another one of those. Thank you, James Webb Space Telescope. The James Webb Space Telescope was produced with 18 Park proprietary SigmaStruts. Let's go on to slide four. Kind of more nitty-gritty stuff here. Quarterly results. Let's look at the right-hand column, the second quarter that we just announced. Sales $16,381,000, gross profit $5,116,000, gross margin $3,122,000. We're happy about gross margins over 30%, or maybe we should say we're unhappy when they're not over 30%.

Speaker #4: And if it shouldn't exist in quotes, because I think we're developing a common theme here, is so much that we believed about the universe and its origin, which just isn't true.

Speaker #4: Sorry, folks, not true in James Webb saying, well, you could believe whatever you want, but these are this is what's really going on. And so here's another one of those.

Speaker #4: Thank you, James Webb-based telescope. The James Webb-based telescope was produced with 18 PARC proprietary Sigma struts. Let's go on to slide four—kind of more nitty-gritty stuff here.

Speaker #4: So quarterly results, let's look at, the right-hand column, a second quarter, that we just announced. Sales, 16 million, 381. Gross profit, 5 million, 116.

Speaker #4: Gross margin is 31.2, so we're happy about that. Gross margins over 30 are good, or maybe we should say we're unhappy when they're not over 30. It's good to throw over 30 because there are a couple of things we'll talk about in a second that drag down our margins.

Brian Shore: It's good that they're over 30% because there are a couple of things we'll talk about in a second that drag down our margins. Adjusted EBITDA $3,401,000 and adjusted EBITDA margin 20.8%. What do we say about Q2 during our Q1 call on July 15th? We said our sales estimate was $15 million to $16 million, so we came a little bit above that. EBITDA estimate $3 million to $3.4 million, so we came in kind of the top of the range of the EBITDA estimate. I just want to remind you, especially for some of our new investors, that this is not guidance. We don't do guidance. When we give an estimate, we're saying to you, this is what we think is going to happen. We could be wrong, but this is what we think. There's a, I don't know, let's call it practice.

Speaker #4: Justin E. Bedard, $3 million, $401,000. And Justin E. Bedard margin 20.8%. What do we say about Q2 during our Q1 call on July 15th?

Speaker #4: We said our sales estimate was $15 to $16 million, so we came in a little bit above that. E. Bedard estimated $3 million to $3.4 million, so we came in kind of at the top of the range of the estimate.

Speaker #4: Bedard estimate. I just want to remind you, especially for some of our new investors, that we don't, this is not guidance. We don't do guidance.

Speaker #4: When we give an estimate, we're saying to you, this is what we think is going to happen. Now, we could be wrong, but this is what we think. There's a, I don't know, let's call it a practice—we have different terms for it, but let's call it a practice, where everybody does it almost, where, let's say it's going to be 100; they think it's going to be 100.

Brian Shore: We have different terms for it, but let's call it practice where everybody does it almost, where let's say it's going to be 100. They think it's going to be 100. They go out with 90. That's their guidance. When they come back with 100, they come out with 100, then they're heroes. I don't know, we think that's not worthy of our time. When we give you an estimate, we're saying this is what we think is going to happen. We're not giving you a number in which we plan to be. Let's go on to slide five. Q2 considerations. We always talk, always in the last few quarters, about ArianeGroup. It has an impact on a lot of things, including the quarter. We entered into this business partner agreement with ArianeGroup. It's a very large aerospace company in France. Great company.

Speaker #4: They go, well, 90, you know, that's their guidance. So then when they come out, when they come back with 100, they come out with 100. Then they're their heroes.

Speaker #4: And I don't know, we think that's not worthy of our time. So, when we give you an estimate, we're saying this is what we think is going to happen.

Speaker #4: We're not giving you a number of which we plan to be, okay? Let's go on to slide five. Q2 considerations, we always talk—well, always in the last few quarters—about Airing Group.

Speaker #4: That has an impact on a lot of things, including the quarter. So we entered into this business partner agreement with Airing Group. It's a very large aerospace company in France, a great company, and they're a joint venture between Airbus and Safran, I believe.

Brian Shore: They're a JV between Airbus and Safran, I believe. In January 2022, we've actually been working with them for 20 years. They appointed us an exclusive distributor of their Raycarb C2B fabric. That fabric is used to produce a blend of composite materials for Xant's missile systems programs. We sold $1.65 million of that fabric in Q2. As we previously explained, we sell that fabric to our defense industry customers for a small markup. What's going on here is the defense industry customers are stockpiling the C2B. We're the exclusive distributor, though. They buy it from us. We buy it from ArianeGroup, and then we resell it, or sell it, I should say, to the OEM. It's kind of a strange thing because we keep the C2B fabric in our plant because the OEM eventually asks us to produce pre-preg with it.

Speaker #4: And in January 2022, we've actually been working with them for 20 years. They pointed us as the exclusive distributor of their Raycarb C2B fabric. That fabric's used to produce a blade of composite materials for advanced missile systems programs.

Speaker #4: Now, we sold $1.65 million of that fabric in Q2. As we've previously explained, we sell that fabric to our defense industry customers for a small markup.

Speaker #4: What’s going on here is the defense industry customers are stockpiling the C2B. We're the exclusive distributor, though, so they buy it from us. We buy it from— we're a distributor, not a rep. We buy it from Airing.

Speaker #4: And then we resell it, or sell it, I should say, to the OEM. But it's kind of a strange thing because we keep the C2B fabric in our plant because the OEM eventually will ask us to produce pre-print with it.

Speaker #4: So even though we sell to them, and they own the product, it’s kept in our plant. The markup is small, so when we have a significant amount of C2B fabric sales, that's going to push down our margins.

Brian Shore: Even though we sell it to them, and they own the product, it's kept in our plant. The markup is small. When we have a significant amount of C2B fabric sales, that's going to push down our margins. We sold $415,000 of ablative materials manufactured with C2B fabric in Q2. The margins on the ablative materials that we produce with those fabrics are very, very good, very good. That's the offset. It's still a ratio of sales of fabric to ablative materials manufactured with the C2B fabric. I still had a balance, right? Still more fabric than materials, pre-preg, let's call it. What's the reason? I already said it because the OEMs are stockpiling this product. A more normal kind of ratio would be 40-60. 40% would be the materials, and 60% would be the fabric.

Speaker #4: And we sold 415,000 blades of materials manufactured with C2B fabric in Q2. Now, the margins on the blades of materials that we produce, those fabrics, are very, very good.

Speaker #4: So that's the offset offset. But it's still a ratio of sales of fabric to a blade of materials manufactured with the C2B fabric. I still had a balance, all right?

Speaker #4: Still more fabric than materials, pre-print, let's call it. What's the reason? I already said it's because the OEMs are stockpiling this product. A more normal kind of ratio would be 40-60.

Speaker #4: So 40% would be the materials, and 60% would be the fabric. That's, you know, that's not always going to be exactly it, but just to give you a sense.

Brian Shore: That's not always going to be exactly it, but just to give you a sense. You see that the ratio is much more than 40-60 here. That's going to drive down our margins. Let's go on to slide six, rather. We're still on the topic of C2B fabric requalification. I want to parse key customers of C2B fabric. This has kind of been a big deal over the last few quarters. Mark, like we always give Mark the hard stuff to talk about. Can you help us? What's going on with that request?

Speaker #4: So, you see that the ratio is much more than 40-60 here. And that's going to drive down our margins. So, let's talk about, let's go on to slide six, rather.

Speaker #4: Oh, we're still on the topic of C2B fabric. Requalification by one of PARC's key customers, the C2B fabric. This is kind of a, it's been a big deal for the last few quarters.

Speaker #4: And Mark, I like how we always give Mark the hard stuff to talk about. Can you help us? What's going on with that?

Speaker #5: Yeah, so we actually do have an update this time. I think the last couple of calls, we said we were waiting for approval. So we do have approval.

Mark Esquivel: Yeah, so we actually do have an update this time. I think the last couple of calls, we said we're waiting for approval. We do have approval. We don't have full approval. We have approval at about 90% of the specification. Not to get too technical, there's a requirement within the spec that it has a lower and an upper range. They were somewhere in the middle. They moved down closer to the commercial specification, as we call it, which gets us back into production at 90% plus of everything we have. What we're doing now is currently testing that last 10%, which will probably take another 9 to 12 months. We'll continue to talk about when we get that approval. As far as the program's concerned, we're back in business.

Speaker #5: We don't have full approval. We have approval at about 90% of the specification. I have to get too technical. There's a requirement within the spec that has a lower and an upper range.

Speaker #5: They were somewhere in the middle. They moved down closer to the commercial specification, as we call it, which gets us back into production at, you know, 90-plus percent of everything we have.

Speaker #5: So, what we're doing now is they're currently testing that last 10%, which will probably take another 9 to 12 months. So, you know, we'll continue to talk about when we get that approval.

Speaker #5: But as far as the program's concerned, we're back in business. We're back running, you know, and we're back to, I would say, you know, normal, typical rates that we were running, you know, prior to, you know, this, I won't say issue coming up, but this recall coming up.

Mark Esquivel: We're back running, and we're back to, I would say, normal, normal typical rates that we were running prior to this, I won't say issue coming up, but this recall coming up. We actually expect to see some upside in the coming quarters, and Brian will talk about some of that news as well. I guess the story here, the message here is we're pretty much back in business with running at our normal level.

Speaker #5: So, and we actually expect to see, you know, some upside, you know, in the coming quarters, you know, and Brian will talk about some of that news as well.

Speaker #5: But I guess the story here, the message here is we're pretty much back in business, running at our normal levels.

Speaker #4: Okay, thanks, Mark. Good news. Let's keep moving here. Production versus sales. You bring this up because this has been an issue in prior quarters in terms of the impact on the bottom line.

Brian Shore: Okay, thanks, Mark. Good news. Let's keep moving here. Production versus sales. We bring this up because this has been an issue in prior quarters in terms of the impact on the bottom line. In our Q2, our sales value of production, we call it SVP. That's not inventory value. That's a value of production. It's a sales price. It was well matched with our sales, and that's a good thing. That means it's not really very, no meaningful, not no impact on bottom line. When our sales exceed our production, that is by a significant amount, that is a negative impact on the bottom line. No impact in Q2. The last thing we'll talk about in terms of bottom line impact, significant ongoing expenses. This is something we had in our presentation for several quarters now. It's not going away anytime soon.

Speaker #4: But in our Q2, our sales value of production, which we call SVP, that's not the inventory value. That's a value of production, and that's a sales price.

Speaker #4: It was well matched with our sales, and that's a good thing. That means it's, that doesn't really have a very meaningful, or no impact on the bottom line.

Speaker #4: When our sales exceed our production, that is, by a significant amount, that is a negative impact on the bottom line. But there was no impact in Q2.

Speaker #4: And then last thing we'll talk about, in terms of bottom line impact, significant ongoing expenses. This is something we had in our presentation for several quarters now.

Speaker #4: It's not going away, right? Time soon. Operating our new manufacturing facility in Q2, including all these other expenses. And this act, this is significant.

Brian Shore: Operating our new manufacturing facility in Q2, including all these other expenses. This is significant. That's why I was saying that the gross margin being over 31% is actually not bad because there are two factors that hold it down. One is the expenses related to the new plant. The other is the, let's call it excess C2B fabric compared to the C2B material sales. Total missed shipments, a little bit of a surprise here. $510,000. That number is way up. The last few quarters, we keep talking about international shipment issues. That's not the issue this time. This time it's something different. It's customer certification and testing delays. It's a little bit of a new story here. It happens sometimes. It just happens. It's nothing we can do about it. It's not our fault or anything like that.

Speaker #4: So that's why I was saying that the gross margin being over 31%, I think that's actually not bad because there are two factors that hold it down.

Speaker #4: One is this: the expenses related to the new plant. The other is the, let's call it, excess C2B fabric compared to the C2B material sales.

Speaker #4: Total misshipments—a little bit of a surprise here: 510,000. That number's way up. But, you know, for the last few quarters, we keep talking about international shipment issues.

Speaker #4: That's not the issue this time. This time, it's something different: it's customer certification and testing delays. It's a little bit of a new story here.

Speaker #4: It happens sometimes, and it just happens. It's nothing we can do about it. It's not our fault or anything like that. But sometimes, it just delays insurance, certification, engineering work, and testing delays.

Brian Shore: Sometimes it just delays insurance and certification and engineering work and testing delays. That had a meaningful impact upon our shipments in Q2. Let's go on to slide seven, impact of tariffs and tariff-related costs. I should say net impact. I was saying that to Mark earlier. It should say net impact of tariff and tariff-related costs because we have tariffs. The net impact takes into account the pass-through. Very minimal in Q2. Hardly anything. That's the net impact. That's not the total tariff. That's a net impact because of the fact that we pass the tariff costs on. The future impacts, I think we'll get back to that later. Mark will help us talk through that later on in the presentation. Why don't we go on to slide eight? This is a slide we do every quarter, as you know. Some of you veterans are probably tired of it.

Speaker #4: So, that had a, you know, meaningful impact upon our shipments in Q2. So let's go on to slide seven: impact of tariffs and tariffs-related costs.

Speaker #4: You know what? I should say net impact. I said net to Mark earlier. It should say net impact of tariff and tariff-related costs because we have tariffs.

Speaker #4: It's just that the net impact takes into account the pass-through, so very minimal in Q2—hardly anything. But that's the net impact; that's not the total tariff.

Speaker #4: That's the net impact because of the fact that we pass the tariff costs on. And then, the future impacts, I think we'll get back to that later, and Mark will help talk through that later on in the presentation.

Speaker #4: Why don't we go on to slide eight? This is a slide we do every quarter, as you know. Some of you veterans are probably tired of it.

Speaker #4: Top five. And it's kind of the usual suspects also. It's like, all right: GKN, Kratos, MRAS, TechTech, and the TechTech is not, well, you know, is kind of a little bit of a new name for us, but the rest are usual suspects.

Brian Shore: Top five. It's kind of the usual suspects also. It's like, all right, GKN, Kratos, MRAS, TecTech, and Nordam. TecTech is not, well, you know, is kind of a little bit of a new name for us, but the rest are usual suspects. The Global 7500, that refers to Nordam. The 8321 XLR, that's an MRAS program. Kratos, obviously, is Kratos. The 787 Dreamliner, that's actually GKN. That's for the Gen X 1B engine. It's a G engine, but it's not part of the MRAS LTA, which we'll go into that later. Let's go on to slide nine. Here we have our estimated revenues by aerospace market segments. We call them our pie charts. I don't know about you, but I like these. I think they tell a little bit of a story.

Speaker #4: The global 7,500 refers to Nordam, the H321N with XLR. That's an MRAS program. Kratos, obviously, is Kratos, and the 787 Dreamliner—that's actually GKN.

Speaker #4: That's where the Gen X 1B engine is, so it's a G engine, but it's not part of the MRAS LTA, which we'll go into later.

Speaker #4: Let's go on slide nine. Here we have our estimated revenues by aerospace market segments. We call them our pie charts. I don't know about you, but I like to use these.

Speaker #4: I think they tell a little bit of a story. The fiscal year 2021, that was the pandemic year, where the commercial aircraft was a member of their airplanes. There were pictures of like 737s with like two people on them, and they were basically everything parked, not flown at all.

Brian Shore: Fiscal 2021, that was the pandemic year where the commercial aircraft was, remember, there were airplanes, pictures of like 737s with like two people on them, and they were, you know, basically everybody parked, not pulling at all. After that, the pie charts seem to be fairly stable. Interesting. It'll be interesting just to see what will happen in the future because the commercials are going to be accelerating because the programs are on as those programs ramp up, but military will be accelerating a lot. Business probably could go down as a percentage. We'll see about that. Let's go on to slide 10. Park Aerospace Corp. loves niche military aerospace programs. We have a little pie chart here. The radomes, missile systems, unmanned aircraft, all niche markets for us, some markets, but even aircraft structures are niche markets for us.

Speaker #4: And then after that, the pie charts, you know, seem to be fairly stable. Interesting. Well, it'll be interesting just to see what will happen in the future because the commercial is going to be accelerating.

Speaker #4: Because the programs are on, and as those programs ramp up, the military will be accelerating a lot. Business probably could go down as a percentage.

Speaker #4: We'll see about that. Let's go on to slide 10. PARC loves niche military aerospace programs, so we have a little pie chart here: the radomes, the missile systems, unmanned aircraft.

Speaker #4: All niche markets for us. Some markets, but even aircraft structures are niche markets for us. So we actually changed. We used to call it, what, rocket nozzles, I think.

Brian Shore: We actually changed, we used to call it, what, rocket nozzles, I think. We changed to missile systems because the missile systems, we supply into more than just the rocket nozzles. Other aspects of missiles that we supply into. I think we used to call unmanned aircraft drones, but I think the more politically correct term is unmanned aircraft, but there's no change in there. You know what? Other than nice pictures and you can see what the programs are, we really are not going to talk about these programs anymore. It's just not really appropriate for us to say very much about the programs, except understand, please, any picture we show you, that means it's a program we're on, not a program we like or a cool picture or something. Okay, you got it. Let's go on to slide 11. G aerospace and engine programs.

Speaker #4: We changed the missile systems because the missile systems we supply are more than just the rocket nozzles; there are other aspects of missiles that we supply into.

Speaker #4: I think we used to call unmanned aircraft drones, but I believe the more politically correct term is unmanned aircraft. However, there’s no change in there.

Speaker #4: You know what? Other than nice pictures and the ability to see what the programs are, we really are not going to talk about these programs anymore.

Speaker #4: It's just not really appropriate for us to say very much about the programs, except understand, please, any picture we show you means it's a program we're on, not a program we like or a cool picture or something.

Speaker #4: Okay? You got it. Let's go on to slide 11: G Aerospace and engine programs. Again, the slide, every quarter. But for the benefit of some of our new investors, let me try to explain quickly.

Brian Shore: Again, a slide every quarter. For the benefit of some of our new investors, let me try to explain quickly. We have a firm LTA. It's a requirements contract from 2019 to 2029 with MRAS, Middle River Aerostructure Systems. It's a sub of ST Engineering Aerospace. You see, we're a sole source for composite materials for all these programs, but they're all GE programs. If you look at all the checked items below, they're all GE engine programs. What's going on here is that we got on these programs with GE Aviation even before 2019, when MRAS was owned by GE Aviation, now GE Aerospace. We got on these programs even before that. There were predecessor LTAs before this 2019 to 2029 LTA. I think about five years ago, GE sold MRAS to ST Engineering, which is a large Singapore aerospace company. That's the explanation here.

Speaker #4: So we have a firm LTA, which requires a contract for 19 to 29 with MRAS, Middle River Air Structure Systems. It's a sub of ST Engineering Aerospace.

Speaker #4: You see we're the sole source for composite materials for all these programs, but they're all GE programs. So, what's going on here?

Speaker #4: If you look at all the checked items below, they're all GE engine programs. What's going on here is that even we got on these programs with GE Aviation, even before 2019, when MRAS was owned by GE Aviation, now GE Aerospace.

Speaker #4: So, we got on these programs. Even before that, there were predecessor LTAs before this 19 to 29 LTA. And then, I think about five years ago, GE sold MRAS to ST Engineering, which is a large Singapore aerospace company.

Speaker #4: So that's the explanation there. We've gone to the factory, you know, about that. I guess around 2019, GE said to us, "Look, you know, PARC, we're going to put, we're going to give you this 10-year agreement for sole source and all this stuff."

Brian Shore: Redundant factory, you know about that. Around 2019, GE said to us, "Look, you know, Park, we're going to give you this 10-year agreement for sole source and all this stuff, all these great programs, wonderful programs, but we really are concerned about redundancy. Would you please build another factory?" We said, "Yes." We checked that box. That's been done. I'm not going to go through the individual programs, maybe except to talk about the first five, which are really all A320neo family aircraft programs. If you have any questions about the specific programs, just let us know. Let's go on to slide 12 to keep moving along here. The first item on slide 12, we're just continuing here. This is a little bit of a nuance here because this program was mentioned in the prior slide, but this is a different component.

Speaker #4: All these great programs, wonderful programs, but, you know, we really are concerned about redundancy. So would you please build another factory? And we said yes, and we checked that box.

Speaker #4: That's been done. I'm not going to go through the individual program, maybe except to get, you know, to talk about the first five, which are really all H320, NEO family aircraft programs.

Speaker #4: All right. If you have any questions about this specific program, just let us know. Let's move on to slide 12, just to keep things progressing here.

Speaker #4: Item, the first item on slide 12, we're just continuing here. This is, I don't know, a little bit of a nuance here because this program was mentioned in the prior slide, but this is a different component.

Speaker #4: This is, and this also is part of our GE Aerospace LTA, not necessarily the MRAS LTA. So I'm probably going to only tend to go not necessary.

Brian Shore: It's also as part of our GE Aerospace LTA, not necessarily the MRAS LTA. This is something we should talk about for a second. This is with GEnx engines for the 777X airplane. This is produced with our AFP material and other composite materials, automated fiber placement. That's what the AFP stands for. It's a robotic method for producing composite structures. This is planned to be included in the LIFRA program, MRAS LIFRA program agreement. Next item, we had a 6.5% weighted average price increase in our MRAS LTA effective January 1. That was, it was already built in the LTA, you know, a long time ago. Next item, PARC, the LTA was PARC MRAS LTA was amended to include three proprietary film adhesive formulation products. Those are now undergoing qualification. Then LIFRA program agreement requested by MRAS and STE. We're still negotiating this, I guess.

Speaker #4: This is something we should talk about for a second. This is with the GE9X engine for the 777X airplane. This is produced with our AFP material and other composite materials.

Speaker #4: Automated fiber placement, that's what the AFP stands for. It's a robotic method for producing composite structures. This is planned to be included in the LIFO program, MRAS LIFO program agreement.

Speaker #4: Next item, we had a 6.5% weighted average price increase in our MRAS LTA effective January 1. That was already built into the LTA, you know, a long time ago.

Speaker #4: And, next item, PARC. The LTA was PARC MRAS. The LTA was managed to include three proprietary film easer formulation products, and those are now undergoing qualification.

Speaker #4: The LIFO program agreement has been requested by MRAS and STE, so we're still negotiating this, I guess. There is a meeting being planned for next month.

Brian Shore: I think there's a meeting that's being planned for next month. We'll see what happens. As I said to you many times, we're okay either way. This is requested by STE and MRAS. That's something they want. They want the stability of long-term supply, but either we're okay either way. If we do it, that's fine. If not, we'll be fine as well. It's still under negotiation. I don't want to give you the wrong impression. It's not like we've been actively negotiating. It's like we talk about it, then three months go by, and then, you know, I think now we're planning to have some get-together in December, sorry, November, to hopefully get through this. We'll see. We'll keep you posted. Item, page 13, rather, slide 13. Let's talk about an update on some of these GE Aerospace engine programs, the A320neo family.

Speaker #4: We'll see what happens. I, as I said to you many times, we're okay either way. This, this is requested by STE and MRAS.

Speaker #4: It's something they want. They want this stability of long-term supply. But either way, we're okay. If we do it, that's fine. If not, we'll be fine as well.

Speaker #4: And it's still under negotiation. It, it, I don't want to give you the wrong impression. It's not like we've been actively negotiating. It's like we talk about it, then three months go by, and then, you know, so I think now we're planning to have some, get together in, in, December to, sorry, November, to hopefully get through this.

Speaker #4: We'll see. We'll keep you posted. Item, page 13, rather, slide 13. So let's talk about an update on some of these GE Aerospace engine programs, the H320 NEO family.

Speaker #4: That's a wonderful, wonderful program that PARC is on, sole source qualified. And let's talk about that program. Everybody says there's a huge backlog. These airplanes, over 7,000 of them, that's a lot of airplanes; a lot of airplanes.

Brian Shore: That's a wonderful, wonderful program that PARC is on, sole source qualified. Let's talk about that program. Airbus has a huge backlog of these airplanes, over 7,000 of them. That's a lot of airplanes. It's a lot of airplanes. Let's just talk about the, well, we can take a look at the aircraft, the A320neo family aircraft deliveries. We're not going to go through each year, but you know, you can see what's going on here. With the amount of orders that Airbus has, we'll get to in a second, they would be at a much higher rate than this. They'd be at 75 per month. What's holding them back is issues with supply chain. This year, year to date, an average of 44, but don't get fooled by that because they usually kind of make their year in the last three months.

Speaker #4: And let's just talk about the, well, the, we can take a look at the aircraft, the A320neo family aircraft deliveries. We're not going to go through each year, but you know, you can see what's going on here.

Speaker #4: With the amount of orders that Airbus has, we'll get to in a second, they would be at a much higher rate than this; they'd be at 75 per month.

Speaker #4: What's being, what's holding them back is issues with the supply chain. So this year, year to date, now we're at 44, but don't get fooled by that because they usually kind of make their year in the last three months.

Speaker #4: And if you look at, September, you can see what's going on here. They're already, the Airbus is already ramping up to 59. We're delivered in, 59 through 20 NEO family aircraft delivered in September.

Brian Shore: If you look at September, you can see what's going on here. Airbus is already ramping up to 59. We're delivered in, 59 A320neo family aircraft delivered in September. Let's keep going. Slide 14, just continuing here. Importantly, the engine supply bottleneck. Remember I said that one of the big issues is supply chain restrictions. That's what's preventing Airbus from ramping up to their target of 75. We'll get to that in a minute, 75 per month. CFM, they have another engine, but let's just talk about CFM, the LEAP 1A engine, reportedly improving that it's getting better. I think that's a deliberate focus by GE and CFM, which is a very good thing, because that's probably the most significant restriction to Airbus's ability to ramp up to that 75. Maybe if they're now, based upon how many orders they have. That's very good news, actually.

Speaker #4: Let's keep going, slide 14. Importantly, the engine supply bottleneck. Remember I said that one of the big issues is supply chain restrictions?

Speaker #4: That's what's preventing Airbus from ramping up to their target of 75 per month. We'll get to that in a minute—75 per month. CFM, they have another engine, but let's just talk about CFM, the LEAP-1A engine.

Speaker #4: Reportedly improving; it’s getting better. And I think that's a deliberate focus by GE and CFM, which is a very good thing. Because that's probably the most significant restriction to Airbus's ability to ramp up to that 75.

Speaker #4: They'd be up there now, based upon how many orders they have. So that's very good news, actually. As we already alluded to, Airbus is targeting a delivery rate of 75 A320 NEO family aircraft per month.

Brian Shore: As we already alluded to, Airbus is targeting a delivery rate of 75 A320neo family per month. You can see that they're still at 50 to 55, so there's still a way to go, quite a way to go. Two engines approved for the A320neo aircraft. We're on the CFM LEAP 1A engine. We're not on the, we have nothing, no content on the Pratt & Whitney GTF engine. I guess that covers the second bullet item. We supply into the A320 family aircraft using the LEAP 1A engine. According to the second quarter 2025 edition of Air Engine News, which is kind of like a Bible, for us anyway, the CFM LEAP 1A's market share, compared to the Pratt, market share of firm engine orders for A320neo family, was 64.7%. Those are firm orders. That's not speculation or hopes and dreams. Those are firm orders.

Speaker #4: And you can see that, you know, they're still at, you know, 50 to 55, so they still have quite a way to go.

Speaker #4: two engines approved for the H320 NEO aircraft. we're on the, the CFM Leap 1A engine. We're not on the, we have nothing no content on the Pratt & Whitney GTF engine.

Speaker #4: And, so I guess that covers the second bullet item. We supply into the H320 family aircraft using the Leap 1A engine. According to the second quarter 2025 edition of Air Engine News, which is kind of like a Bible for us anyway, the CFM Leap 1A's market share, compared to the Pratt market share of engine firm orders for the H320 NEO family, was 64.7%.

Speaker #4: And those are firm orders. That's not, you know, speculation or hopes and dreams. Those are firm orders. So you can see that, you know, that CFM has the large, large market, larger market share.

Brian Shore: You can see that the CFM has the large, the large market, larger market share of the engines for the A320neo aircraft. At the delivery rate of 75 A320neo family aircraft per month, that 64.7% market share translates into 1,165 LEAP engines per year. That's a real lot of engines and lots of revenue for Park Aerospace Corp. at that point. Slide 15. As of June 30, 2025, a few months ago, there were a little over 8,000 firm LEAP 1A engine orders. These are not airplanes. These are LEAP 1A engine orders where we're sole source qualified, over 8,000. If you want to look at slide 29, you can get a feel for what our revenue per unit is, do them, get your POC calculator out and do the math. You can see what that's worth to us.

Speaker #4: Of the engines for the H320 NEO aircraft, I have the delivery rate of 75 H320 NEO family aircraft per month. That's 64.7% market share, which translates into 1,165 Leap engines per year.

Speaker #4: That's a real lot of engines. And, you know, lots of revenue for PARC at that point. Slide 15. As of June 30, 2025, a few months ago, there were a little over 8,000 firm Leap 1A engine orders.

Speaker #4: These are not airplanes. These are Leap 1A engine orders where we're sole source qualified—over 8,000. If you want to look at slide 29, you get a feel for what our revenue per unit is. You know, get your pocket calculator out and do the math.

Speaker #4: You can see what that’s worth to us. Those are just the firm orders that are in the books now, so this is a big deal for PARC.

Brian Shore: Those are just the firm orders that are in the books now. This is a big deal for Park Aerospace Corp. The Airbus A321XLR, and this is a variant. We're still talking the A320 family, okay? We're not off to a different aircraft. This is part of the A321 family. This was recently introduced, supposedly changing the air map of the world. Why is that? Because the payload and range capability of this aircraft are very unusual for a single aisle. It allows a single aisle to compete against wide bodies, but obviously at much lower cost. That's why it's changing the air map of the world. Qantas is very involved in the program, American Airlines, Iberia Airlines. The reason I highlight this is because a lot of airlines are buying this airplane. Why am I highlighting this? They call it a game changer.

Speaker #4: The Airbus H321 XLR, and this is a variant. We're still talking H320 family, okay? We're not off to a different aircraft; this is part of the H321 family.

Speaker #4: This is recently introduced. Supposedly changed the air map of the world. Why is that? Because the payload and range capability of this aircraft, vary unusual for a single aisle.

Speaker #4: So, it allows a single aisle to compete against widebodies, but obviously at much lower cost. So, that's why it's changing the air map of the world.

Speaker #4: Qantas has, you know, been very involved in the program with American Airlines and Iberia Airlines. The reason I highlight this is because a lot of airlines are buying this airplane.

Speaker #4: Why am I highlighting this? They call it a game changer but what's really, I think, very impressive to me is that they say, they they claim they've had almost no AOGs as aircraft on grounds after almost a year.

Brian Shore: What's really, I think, very impressive to me is that they say they claim they've had almost no AOGs, that's aircraft on ground, after almost a year. That's really a big deal because normally, in the first year or two, there are all kinds of bugs you have to get out of a new airplane, a new design, and the airplane sits on the ground a lot. You just expect it. It's not good because, you know, when the airplane's sitting on the ground, the airlines aren't making any money. You kind of expect that if you get an airplane that's been recently certified and delivered. Here you go. They're saying almost no AOGs. I've never heard of anything like that. That's quite impressive. Boeing has no response to this aircraft. Let's go on to slide 16. Still on A320 here, folks.

Speaker #4: That's really a big deal because normally, for the first year or two, it's all kind of bugs you have to get out of a new airplane, a new design, and then the airplane sits on the ground a lot.

Speaker #4: And it's kind of, you just expect it. And it's not good because, you know, when the airplane's sitting on the ground, the airlines aren't making any money.

Speaker #4: And you kind of expect that if you get, you know, an airplane that's been recently certified and delivered. But here you go; they're saying almost no AOGs.

Speaker #4: I've never heard of anything like that. That's quite impressive. Boeing has no response to this aircraft. Let's go on to slide 16. So, still on H320 here, folks.

Speaker #4: Airbus plans to open new A320 aircraft family final assembly lines (FALs) in the U.S. and China this month, in the next couple of weeks.

Brian Shore: Airbus plans to open a new A320 aircraft family final assembly lines, FALs, in the U.S. and China this month, in the next couple of weeks. These two new FALs, in combination with the existing FALs in Germany and France, will provide Airbus with a manufacturing capability to achieve a 75 A320neo aircraft per month delivery goal in 2027. This is nice because Airbus is putting their money more in their mouth this year. These FALs are a big deal. That's good news. Breaking news, October 7th. Oh, this is the day of my oral surgery, I think. Yeah. There are two big things happening on October 7th. That's just two days ago. The A320 aircraft family became the world's most delivered commercial jet ever. Of course, that means that it beat out the 737. Not just the MAX.

Speaker #4: So, these two new FALs, in combination with the existing FALs in Germany and France, will provide Airbus with a manufacturing capability to achieve a 75 A320 NEO aircraft per month delivery goal in '27.

Speaker #4: So, you know, this is nice because Airbus is putting their money where their mouth is this year. These FALs are a big deal.

Speaker #4: So that's good news. And then breaking news: October 7. Oh, this is the day in my, we're all surgery, I think, yeah. So there are two big things happening on October 7.

Speaker #4: That's just two days ago. The H320 aircraft family became the world's most delivered commercial jet ever. And, of course, that means it beat out the 737.

Speaker #4: Not just a max. This is the 737 family versus the A320 family going back to the beginning. That's pretty big news, I guess.

Brian Shore: This is the 737 family versus the A320 family going back to the beginning. That's pretty big news, I guess. A COMAC 919. That's a Chinese-made aircraft. Again, with a LEAP engine. This is a different variation of it. This is a LEAP 1C engine. COMAC is targeting. Oh, this airplane is designed to compete. It's a single aisle designed to compete against the 737, A320. They're targeting 30 919 aircraft deliveries in 2025. Recent and confirmed reports say they're probably for sure at this target. I can't tell you I'm very surprised. I probably would have, to be just totally candid about it, been more surprised if they met the target. I'm not going to go into why, but I'm not surprised or really disappointed. Malaysian Airlines, AirAsia, has confirmed in advanced talks to purchase these airplanes. Why is that important? Why am I focusing on that?

Speaker #4: COMAC 919. That’s a Chinese-made aircraft, again with a LEAP engine. This is a different variation of it, the LEAP 1C engine. COMAC is targeting... oh, this airplane is designed to compete in the single-aisle market, specifically against the 737 and A320.

Speaker #4: they're targeting, 3919 aircraft delivered in '25. but reached in a confirmed report saying they're probably for short of that, of this target. I can't tell you, I'm very surprised.

Speaker #4: I probably would have, you know, to be just totally candid about it, I would be more surprised if they met the target. I'm not going to go into why, but I'm not surprised or really disappointed.

Speaker #4: Malaysian Airlines and AirAsia have confirmed their advanced talks to purchase these airplanes. Why is that important? Why am I focusing on that? Because there are a lot of airlines that are buying this.

Brian Shore: There are a lot of airlines that are buying this airplane. The reason I'm focusing on it is this is a non-Chinese airline. This airplane is certified by the Chinese FAA, I think called CAAC or something like that. The thought was originally these COMAC airplanes would be China-only airplanes. That's not what COMAC wants. They're selling the airplane outside of China for operations outside of China, which will require certification by the FAA and EASA, the European Aviation Authority. That's why I highlighted this AirAsia thing. Let's go on to slide 17. They plan to achieve a production rate of 200 airplanes by 2029. COMAC claims to have over 1,000 orders for this airplane. This airplane does not have two engine options. It's all LEAP in terms of the engine that's certified for the airplane. COMAC C909. Again, COMAC, the Chinese company. This is a regional jet.

Speaker #4: This airplane. But the reason I'm focusing on it is that this is a non-Chinese airline. This airplane is certified by the Chinese FAA, I think it's called CAAC or something like that.

Speaker #4: So, the thought was originally that COMAC airplanes would be China-only airplanes. Well, that's not what COMAC wants. They're selling the airplanes outside of China, for operations outside of China, which will require certification by the FAA and EASA, you know, the European aviation authority.

Speaker #4: So, that's why I highlighted this AirAsia thing. Let's go on to slide 17. They plan to achieve a reduction rate of 200 airplanes by 2029.

Speaker #4: And, the COMAC claims to have over 1,000 orders for this airplane. This airplane does not have two engine options. It's all LEAP.

Speaker #4: In terms of the engine that's certified for the airplane, COMAC C919. Again, COMAC, the Chinese company. This is a regional jet. This airplane was introduced a while ago.

Brian Shore: This airplane was introduced a while ago. It's already pretty close to that rate. What's interesting here, they delivered it. Same kind of topic, really. Lao Airlines, VietJet, Air Cambodia signed up. Again, what's the theme here? Non-Chinese airlines. Originally, they're thinking the COMAC airplanes are going to be China only, but that's obviously not what COMAC wants. 777X, Boeing 777X. We have to slow down a little bit to talk about this one. This is an important program for Park Aerospace Corp. This program has advanced over 1,500 outflights and nearly 4,100 flight hours. That's a lot. That's good. This picture was taken by a friend of mine a couple of years ago when the 777X was doing cold weather testing in Fairbanks. Good place to go for cold weather testing. Let's go on to slide 18, sorry. Boeing reportedly has 565 open orders for the airplane.

Speaker #4: It's already pretty close to that rate, you know. But what's interesting here is that they delivered. It's all the same kind of topic, really. Lao Airlines, VietJet, and Air Cambodia signed up.

Speaker #4: Again, what's the theme here? Non-Chinese airlines. So originally, they were thinking the COMAC airplanes were going to be China-only, but that's obviously not what COMAC wants.

Speaker #4: 777X, Boeing 777X. We have slowed down a little bit to talk about this one. This is an important program for PARC. The test program has advanced with over 1,500 outflights and nearly 4,100 outflight hours.

Speaker #4: That's a lot. That's good. This picture was taken by a friend of mine a couple of years ago when the 777X was doing cold weather testing in Fairbanks.

Speaker #4: Good place to go for cold weather testing. So let's talk, let's go on slide 18. Sorry. Boeing reportedly has 565 open orders for the airplane.

Speaker #4: Boeing had previously announced that the airplane program was on track for certification in late 2025 and entry into service in 2026. However, the Boeing CEO recently stated that the certification program is falling behind schedule.

Brian Shore: Boeing had previously announced that the airplane program was on track for certification in late 2025 and entry into service in 2026, but the Boeing CEO recently stated the certification program is falling behind schedule. The CEO further stated the aircraft and the engine, the Gen X engines, the 9X, right, the 9X engine are really performing quite well and that the potential delay in certification was being caused by increasingly deliberate FAA scrutiny. You get the sense there's some tension there between Boeing and the FAA. I do anyway. A key gating item is the receipt of what's called the tight inspection authorization from the FAA because as the CEO explains, you know, they can fly these airplanes. At least they have five airplanes that are used for the certification program. Those flights don't really count, you know, towards certification until they get the TIA.

Speaker #4: the CEO further stated the aircraft and the, engine in Gen X engines feed 9X or T9X engine are really performing quite well. And that the potential delay in certification was being caused by increasingly deliberate FA scrutiny.

Speaker #4: You get the sense there's some tension there between Boeing and the FAA. I do, anyway. A key gating item for Boeing is the receipt of what's called the Type Inspection Authorization.

Speaker #4: From the FAA, because, as the CEO explains, you know, they can fly these airplanes. They need to fly their airplanes and use them for the certification program.

Speaker #4: But those flights don't really count, you know, towards certification, till they get the TIA. There's a lot of boxes that have to be checked for an airplane to be certified.

Brian Shore: There's a lot of boxes that have to be checked for an airplane to be certified. They can go fly the airplane, which is good. They can learn a lot more about the airplane, but they can't check those boxes until they get the TIA from the FAA. Boeing hasn't announced any new targets for the certification and EIS, but speculation is that they'll be pushed into next year at 2026. Let's go on to slide 19. Let's talk about big picture GE Aerospace Jet Engine Program sales history and forecast estimates. The top is the sales history. We won't go through all the history except this site in Q2, $7.5 million. I think we had forecasted in our Q1 presentation $6.7 to $7.2 million, a little higher. I wouldn't read anything into it. The numbers move around a little bit, but a little higher than we forecast.

Speaker #4: So they can go fly the airplane, which is good. They can learn a lot more about the airplane, but they can't check those boxes.

Speaker #4: Until they get the TIA from the FAA, Boeing hasn't announced any new targets for the certification and EIS. However, speculation is that they'd be pushed into next year or '26.

Speaker #4: Let's go on to slide 19. So let's talk about the big picture GE Aerospace jet engine program sales history and forecast estimates. The top is the sales history.

Speaker #4: We'll go through all the history except the site in Q2, $7.5 million. I think we had forecasted in our Q1 presentation, $6.7 to $7.2 million.

Speaker #4: A little higher. I wouldn't read anything into it. You know, the numbers move around a little bit, but it's a little higher than we forecast.

Speaker #4: GE Aerospace program sales forecast, sales forecast estimates. Again, not guidance estimates. Q3, we're estimating $7.5 to $8 million. And total for the year, I got to slow down here a little bit.

Brian Shore: GE Aerospace Program sales forecast estimates, again, not guidance estimates. Q3, we're estimating $7.5 to $8 million. Total for the year, I got to slow down here a little bit, $27.5 to $29 million. In our prior presentation, we indicated that we're looking at $28 to $32 million for the year for fiscal 2026. As we explained to you, that was based upon information called a build plan from our customer. It wasn't our forecast. It was their forecast. Now we have now the current forecast, $27.5 to $29 million. That's now Park's forecast based upon what? Based upon the backlog for Q3 and Q4. Q3 is already booked. Q4 is partially booked. What we expect, you know, based upon lots of experience, the additional bookings for Q4. Now this is our number, $27.5 to $29 million. Let's go on to slide 20.

Speaker #4: 27.5 to 29 million. Now, in our prior presentation, we indicated that we're looking at 28 to 32 million for the year for fiscal '26.

Speaker #4: But as we explained to you, that was based upon information called a bill plan from our customer. It wasn't our forecast; it was their forecast.

Speaker #4: Now we have the current forecast: 27.5 to 29. That's now PARC's forecast based upon what? Based upon the backlog for Q3 and Q4.

Speaker #4: Q3 is already booked. Q4 is partially booked. And what we expect, you know, based on lots and lots of experience, is the additional bookings for Q4.

Speaker #4: So now this is our number: 27.5 to 29 million. Let's go on to slide 20. PARC's financial performance history and forecast estimates.

Brian Shore: Park's financial performance history and forecast estimates, estimate singular. We just have the history up top. You already saw this just for perspective and context. Down below are Q3 2026 Q3 financial forecast estimates, now plural. Sales of $16.5 to $17.5 million, adjusted EBITDA $3.7 to $4.1 million. That's our estimate for Q3. You have any questions about that, just let us know. Let's go on to slide 21. This is just history, and we've showed you the slide for the last several quarters. We think it's interesting just so you can see what's going on here. Historically, you go from 2017 to 2020, and like every year, we increase by about $10 million. Then we got stalled out. We're kind of at fiscal 2025. We're pretty much where we were in fiscal 2020. Obviously, that's because of the pandemic.

Speaker #4: Estimate singular. So, we just have the history up top. You already saw this just for perspective and context. Down below, our Q3 2026 financial forecast estimates, now plural.

Speaker #4: Uh-oh. Sales of $16.5 to $17.5 million, adjusted EBITDA of $3.7 to $4.1 million. That's our estimate for Q3. Do you have any questions about that?

Speaker #4: Just let us know. So let's go on to Slide 21. This is just history, and we've shown you the slide for the last several quarters.

Speaker #4: We think it's interesting for you to see what's going on here. Historically, you go from 17 to 20, and like every year, we increase by about $10 million.

Speaker #4: Then we got stalled out. So we're kind of at, in Fiscal 25, we're pretty much where we were in Fiscal 20. And obviously, that's because of the pandemic. You know, the pandemic really had a very big impact on commercial aerospace.

Brian Shore: The pandemic really had a very big impact on commercial aerospace. It wasn't the pandemic so much. It's how we responded to it, how the industry responded to it, especially with respect to supply chain issues that held back commercial aerospace. Just one other thing. We're not giving you a forecast for fiscal 2026 this time, but we believe that the number will be over $70 million for fiscal 2026. We'll just give you that number. We're not giving the EBITDA. We're not giving details. I think what's going on here is the industry is getting religion. It's not just an opinion. This is based on lots of input we've received.

Speaker #4: It wasn't the pandemic so much; it's how we responded to it—how the industry responded to it, especially with respect to supply chain issues.

Speaker #4: That's held back commercial aerospace. So, just one other thing. We're not giving you a forecast for fiscal 2026 this time, but we believe that the number will be over $70 million for fiscal 2026.

Speaker #4: We'll just give you that number. We're not giving the EBITDA. We're not giving details. I think what's going on here, though, is the industry is getting religion.

Speaker #4: And it's not just an opinion. This is based on lots of input we've received: a different kind of attitude on the part of the OEMs in terms of ramping up to meet demand.

Brian Shore: A different kind of attitude on the part of the OEMs in terms of ramping up to meet demand and also working with suppliers and supply chain in a much more productive and, you know, in a more, I don't know, more collaborative way. Sorry, trying to come up with that word, collaborative way. It's not just a little thing. It's a big thing. It's very palpable in the industry. We'll see what happens. To us, it seems like there's something really going on here. We're not alone in that opinion. We're not alone in that opinion. Let's see what happens. Just so you know, we're probably looking at about a little over $70 million for fiscal 2025. Let's go on to slide 22. Okay, general Park Aerospace Corp. updates. Agreements with Aerial. We've got to slow down with Aerial again.

Speaker #4: And also working with suppliers and the supply chain in a much more productive and, you know, in a more collaborative way.

Speaker #4: Sorry, coming up, trying to come up with that word "collaborative" way. So it's not just a little thing; it's a big thing. It's very palpable in the industry.

Speaker #4: We'll see what happens, but to us, it seems like there's something really going on here. And we're not alone in that opinion.

Speaker #4: We're not alone in that opinion. So let's see what happens. But, you know, just so you know, we're probably looking at about a little over $70 million for fiscal 2025.

Speaker #4: Let's move on to slide 22. Okay, general PARC updates. Agreements with Arian. Okay, we've got to slow down with Arian again. We entertained that business partner agreement in January '22, under which Arian partnered up and appointed us as exclusive North American distributor.

Brian Shore: We entered into that business partner agreement in January 2022, under which Aerial appointed us as an exclusive North American distributor. We already covered that, okay? Then on March 27, 2025, just earlier this year, Park Aerospace Corp. and Aerial entered. They're a great partner. They're a wonderful partner. We love them. They entered into a new agreement under which Park Aerospace Corp. will advance, I don't know, it's probably about €5 million, €4,587,000 against future purchases by Park Aerospace Corp. of C2B fabric. These funds will be used by ArianeGroup to help finance the purchase of additional installation of new manufacturing equipment for ArianeGroup's production of the C2B fabric in France. That should be paid to ArianeGroup in three installments, the first of which is already paid, about €1,376,000. That's about $1.5 million. That would affect our cash when we reported Q1. Let's move to slide 23, rather.

Speaker #4: We already covered that, okay? But then on March 27, '25, just earlier this year, PARC and Arian entered; they were a great partner. They're a wonderful partner.

Speaker #4: We love them. Entered into a new agreement under which PARC will advance, I don't know, it's probably about $5 million for millions to €587,000.

Speaker #4: against future purchases by PARC of C2B fabric. These funds will be used by Arian to help finance the purchase of additional installation of new manufacturing equipment for Arian's production of the C2B fabric in France.

Speaker #4: And that was, that's to be paid to Arian in installments. The first of which has already been paid, amounting to approximately €1,366,000, which is about $1.5 million.

Speaker #4: so that would affect our, our cash when we report at Q1. let's talk, let's move to slide 23 rather. So the purpose of new is of this new agreement is to provide additional C2B fabric manufacturing capacity to support the rapidly increasing demand for C2B, in, C2B fabric in Europe and North America.

Brian Shore: The purpose of this new agreement is to provide additional C2B fabric manufacturing capacity to support the rapidly increasing demand for C2B fabric in Europe and North America. Just so you know, one of the big programs that uses C2B fabric is the Patriot system. ArianeGroup recently asked a partner to partner again with them on a study related to the potential significant increase of C2B fabric manufacturing capacity, presumably in the U.S. The study is expected to cost about €700,000. We split it 50/50. That's probably about $410,000 for Park Aerospace Corp., and we'll record that. Our Q3 is a special item. Just want you to be aware of that. We'll get back to this later on in the presentation, the whole ArianeGroup study. Continuing with general updates, our lightning strike protection material is certified on the PES 420 engine used on a Bombardier Global 7500-8000 business jet.

Speaker #4: Just so you know, one of the big programs that uses C2B fabric is the Patriot missile program. Arian Group recently asked the partner to partner again with them on a study related to the potential significant increase of C2B fabric manufacturing capacity, presumably in the U.S.

Speaker #4: The study is expected to cost about €700,000. We split it 50/50, so that's probably about $410,000 for PARC. We'll record that in our Q3 as a special item.

Speaker #4: Just want you to be aware of that. We'll get back to this later on in the presentation. All Arian's study, just continuing with general updates.

Speaker #4: Our lightning strike protection material is certified on the Passport 20 engine, which is used on a Bombardier Global 7500 and 8000 business jet. That's expected to generate revenues of approximately $500,000 per year from our LSP material.

Brian Shore: This revenue is about approximately $500,000 per year expected on our LSP material. We're very happy about this. Our LSP is already qualified, approved, and used on the A320neo family and the 919, but we're just getting it approved now on the PES 420 engine and also still to get approved on what's called the 10A engine for the COMAC 909. We expect that these revenues will start to kick in fairly soon, let's say in a couple of months. Slide 24, still on updates. This is just something we covered already. We entered into an LTA with GE Aerospace for the calendar years 2025 to 2030. Another update, Park Aerospace Corp.'s discussion with two Asian industrial conglomerates relating to Asian manufacturing to investors continue. We've been talking about this for a while. John Jamison's in Asia now working on this project along with one of our other guys.

Speaker #4: We're very happy about this. Our LSP is already qualified, approved, and used on the H320 and the 919, but we are just getting it approved now on the Passport 20 engine and still need to get it approved on what's called the 10A engine for the 909.

Speaker #4: So, we expect that these revenues will start to kick in fairly soon, let's say in a couple of months. Slide 24, still on updates.

Speaker #4: this is just, something we covered already. We signed, we entered into an LTA which year of space. and, for calendar years, 25 through 30.

Speaker #4: PARC, and then another update: PARC's discussion with two Asian industrial conglomerates relating to Asian manufacturing to inventors. Continue. We've been talking about this for a while.

Speaker #4: John Jameson's in Asia now, working on this project along with one of our other guys. So we'll see what happens. Seems interesting, but we'll see what happens.

Brian Shore: It seems interesting, but we'll see what happens. Okay, Mark, your turn. Tariff, international trade issues. What's the expected impact of tariff going forward, you think?

Speaker #4: Okay, Mark. Your turn. Tariff, international trade issues. What's the expected impact of tariffs going forward, you think?

Speaker #5: I don't think much. I know this quarter alone, we had about $1,700, which, you know, we don't like to take on any additional costs. But that was mostly, you know, non-material items.

Mark Esquivel: I don't think much. I know this quarter alone, we had about $1,700, which, you know, we don't like to take on any additional costs, but that was mostly, you know, non-material items. Going forward, as I mentioned before, we got ahead of this pretty early. We put controls in place to manage it. We're passing the cost along to our customers, whether it's through contracts or stuff like our POs or order confirmations. I don't expect to see much. It's obviously a dynamic situation. I don't think all the tariffs are completely locked in. It's been a little quiet in the news lately. Where we're at today and what we've seen so far, it's very minimal impact to our business.

Speaker #5: So going forward, again, as I mentioned before, we got ahead of this pretty, pretty early. You know, we put controls in place. We manage it.

Speaker #5: We're passing the cost along to our customers, whether it's through, you know, contracts or, you know, stuff like our POs or stuff like that, or order confirmations.

Speaker #5: So I don't expect, you know, to see much. I mean, it's obviously a dynamic situation. You know, I don't think all the tariffs are completely locked in.

Speaker #5: It's been a little quiet in the news lately, but where we're at today and what we've seen so far is that it's had very minimal impact on our business.

Speaker #4: Okay, thanks, Mark. So let's keep going here. Current MRAS supplier scorecard: our scores. What happened? We don't have all hundreds here. Why not all our hundreds?

Brian Shore: Okay, thanks, Mark. Let's keep going here. Current MRAS supplier scorecard or scores. What happened? We don't have all hundreds here. We don't have all our hundreds. Does MRAS still love us? Yeah, I think they do. I think I mentioned to you in the prior quarters that we're told that most suppliers would be happy to get 80s, and MRAS finds it a little bit humorous that we ask, well, what happened and what do we do? What do we need to do to fix this? This was, let's call it a technical issue in terms of how we recorded something. We take it seriously. We're a 100 company. We're not a 99.87 company. We take it seriously.

Speaker #4: Does MRAS still love us? Yeah, I think they do. I think I mentioned to you in the prior quarters that we're told most suppliers would be happy to get 80s.

Speaker #4: And, MRAS finds it a little bit numerous that we ask, well, what happened and what are we doing? What do we need to do to fix this?

Speaker #4: This was, let's call it a technical issue in terms of what, how we recorded something. So, we take it seriously. We're a hundred percent company.

Speaker #4: We're not a 99.87 country; we're a company, so we take it seriously. And, like I said, MRAS, I think, finds it a little amusing that we spent so much time talking about why we're not on a, why we didn't get a hundred on one of these three scores.

Brian Shore: Like I said, MRAS, I think, finds it a little amusing that we spent so much time talking about why we're not on a, why we didn't get 100 on one of these three scores. Let's go on to slide 25. Making customers love us. This is still in our general updates. It's central to what we call Park's Egg Strategy. How do we make our customers love us with our calling cards of flexibility, urgency, and responsiveness? By asking how high before our customers say jump. We're not kidding about this. We'll go to the customer and say, what else can we do? What else can we do? What else can we do before they even ask us for anything? Making customers love us is a boiler room thing, not a board room thing. The board's on board with their strategy.

Speaker #4: Let's go on to slide 25. So, making customers love us is still part of our general updates. This is central to what we call PARC's egg strategy.

Speaker #4: How do we make our customers love us with our calling cards of flexibility, urgency, and responsiveness? By asking how high before our customers say jump.

Speaker #4: And we're not kidding about this. We'll go to a customer and say, "What else can we do? What else can we do? What else can we do?"

Speaker #4: Before they even ask us for anything, making customers love us is a boiler room thing and a boardroom thing. And the board's on board with their strategy. You know, we've certainly reviewed it with the board.

Brian Shore: We've certainly reviewed it with the board, but the strategy happens on the factory floor, not in the board room. That's where the rubber hits the road. It's up to all our people to make the strategy work. It's a boiler room thing. For this strategy to work, all of our people need to be bought into it and feel passionate about it. Making customers love us is the secret to our success. It's a hidden in plain sight secret. Sometimes the most brilliant ideas are the most obvious ones with the benefit of hindsight. They're like, well, why didn't I think of that? I don't know. Why didn't you think of it? The secret is kind of hidden in plain sight, but it's a secret to our success. Slide 26. Buyback authorization. We don't have to spend a lot of time on this.

Speaker #4: But the strategy happens on the factory floor, not in the boardroom. That's where the rubber meets the road. It's up to all our people to make the strategy work.

Speaker #4: It's a boiler room thing. So for us, for this strategy to work, all of our people need to be bought into it and feel passionate about it.

Speaker #4: Making customers love us is the secret to our success. You know, it's a hidden plain sight secret. Sometimes the most brilliant ideas, or the most obvious ones, with the benefit of hindsight, and the right, well, why didn't I think of that?

Speaker #4: I don't know. Why didn't you think of it? The secret is kind of hidden in plain sight, but it's a secret to our success.

Speaker #4: Slide 26: Buyback Authorization. We don't have to spend a lot of time on this. Let's just go down to the last two check items.

Brian Shore: Let's just go down to the last two check items. We did not purchase any shares in our second quarter, and we have not purchased any shares so far in our third quarter to date. I don't think we'll be, my feeling, my opinion is we probably won't be purchasing too many shares in the near future, but we'll see about that. Slide 27. Again, this is just going to review Park Aerospace Corp.'s balance sheet, cash, and incredible cash dividend history. Long-term debt, we don't have any. We had, we reported $61.6 million of cash and marketable securities at the end of Q2. We also made that final transition tax installment payment of $4.9 million in Q2. In Q1, we reported cash at the end of Q1 at $65.6 million.

Speaker #4: We did not purchase any shares in, in, fiscal, in our second quarter. And we, we don't, we, we've not purchased any shares so far in our, third quarter date.

Speaker #4: I don't think we'll be, my feeling, my opinion is we probably won't be purchasing too many shares in the near future, but we'll see about that.

Speaker #4: Slide 27. Again, this is just going to review PARC's balance sheet, cash, and incredible cash dividend history. Long-term debt? We don’t have any.

Speaker #4: We reported $61.6 million in cash and marketable securities at the end of Q2, but we also made the final transition tax installment payment of $4.9 million in Q2.

Speaker #4: In Q1, we reported cash of $65.6 million. So if you take that $4.9 million and subtract it from $65.6 million, it gets you to that $61.6 million number, more or less.

Brian Shore: If you take that $4.9 million subtracted from $65.6 million, it gets you to that $61.6 million number more or less. It explains the difference. Two consecutive years of uninterrupted regular cash dividends. We've now paid over $606 million or $109.60 per share in cash dividends since the beginning of fiscal 2005. This is our Park Aerospace Corp. founders. The reason we placed a picture of our Park Aerospace Corp. founders here is because we started out with basically nothing. We're two guys that started the company, I think, in 1954 with about $40,000 that they had saved from war duty. You know, here we are paying over $600 million of cash dividends in the last 20 years or so. Let's go on to slide 28.

Speaker #4: It explains the difference: 40 consecutive years of uninterrupted regular cash dividends. And we've now paid over $606 million, or to an end $9.60 per share in cash dividends since the beginning of fiscal 2005.

Speaker #4: This, PARC founders— the reason we placed a picture of our PARC founders here is because we started out with basically nothing. Two guys that started the company, I think, in 1954, with about $40,000 that they had saved from war duty.

Speaker #4: And, you know, here we are paying over $600 million of cash dividends in the last 20 years or so. Let's go on to slide 28.

Speaker #4: Okay. We can kind of skim through this because these three slides are exactly the same as the slides that we showed you last quarter. I think the quarter before that, financial outlooks for GE Aerospace Jet Engine Programs, the juggernaut, we call it the juggernaut.

Brian Shore: Okay, we can kind of skim through this because these three slides are exactly the same slides that we showed you last quarter, I think the quarter before that. Financial outlooks for GE Aerospace Engine Programs, the juggernaut, we call it the juggernaut. It's a timing. We're not sure. We talked about, yeah, the 919 is, you know, a little slow ramping up. The 777X is having a little more difficulty getting certified. We don't know. We don't really spend a lot of time worrying about that. The thing is that we say it's a juggernaut. It's coming. It can't be stopped. The key thing for us is we better be ready. You go to slide 29. There's no change in anything here. All the numbers are exactly the same.

Speaker #4: It's a timing we're not sure about. We already talked about, yeah, the 919 is, you know, a little slower ramping up. And the 777X is having a little more difficulty getting certified.

Speaker #4: So we don't know. We don't really spend a lot of time worrying about that. But the thing is that we say it's a juggernaut.

Speaker #4: It's coming. It can't be stopped. And the key thing for us is we better be ready. You go on to slide 29. There's no change; anything here, all the numbers are exactly the same.

Speaker #4: like I said, in the, in a relate to a previous slide, we feel that, GE and CFM have kind of gotten a religion that they're, they're really focused on ramping up production and working closely and collaboratively with the supply chain.

Brian Shore: Like I said, in a relate to a previous slide, we feel that GE and CFM have kind of gotten a religion that they're really focused on ramping up production and working closely and collaboratively with the supply chain. Slide 30 is just footnotes related to the prior slides. We won't go through those. If you have any questions on any of this, let us know. Okay, let's go into slide 31. War and Peace, Park Aerospace Corp., new juggernaut, and peace with a question mark. These slides came from, originated in the last quarter, although there's some updates to them. The first thing I want to cover again, though, is we're not providing any inside information on any of these programs. All, everything, all this information in these slides is based upon publicly reported news and reports. We don't give away inside information, especially with sensitive defense programs.

Speaker #4: Slide 30 is just footnotes related to the prior slides. We won't go through those. If you have any questions about any of this, let us know. Okay, let's go on to Slide 31.

Speaker #4: War and peace. PARC's new juggernaut. And peace for the question mark. These slides came from, or originated in, the last quarter, with a little or some updates to them.

Speaker #4: The first thing I want to cover again, though, is we're not providing any inside information on any of these programs. All the information in these slides is based upon publicly reported news and reports.

Speaker #4: We don't give away inside information, especially with sensitive defense programs. There is unprecedented demand for missile systems. Missile systems stockpiles have been seriously depleted by the wars in Europe and the Middle East.

Brian Shore: Unprecedented demand for missile systems. Missile systems stockpiles have been seriously depleted by the wars in Europe and the Middle East. There's an urgent need to replenish the depleted missile system stockpiles. According to Wall Street Journal reporting, the Pentagon is pushing defense OEMs to double or even quadruple missile system production on a breakneck schedule, quotes, partly in preparation for a potential conflict with China. The list of Pentagon targeted missile systems includes the PAC-3 missile system, the LRASM, and the SM-6. The Patriot missile system is a particular priority. I think you should know that Park Aerospace Corp. is on all those programs, participates in all those programs, all three of them. Review and update of the PAC-3 Patriot missile system. The reason we spend more time talking about this is a lot of public visibility and information about it.

Speaker #4: There's an urgent need to replenish the depleted missile system stockpiles. According to Wall Street Journal reporting, the Pentagon is pushing defense OEMs to double or even quadruple missile system production on a breakneck schedule.

Speaker #4: Quotes, partly in preparation for a potential conflict with China. The list of Pentagon-targeted missile systems includes the PAC-3 missile system, the LRASM, and the SM-6.

Speaker #4: The Patriot missile system is a particular priority. I think you should know that PARC, on all those programs, participates in all three of them.

Speaker #4: Review and update of the PAC-3, Patriot missile system. The reason we spend more time talking about this is the lot of public visibility and information about it.

Speaker #4: Some of the other programs we're on could be quite significant, but we're not able to even mention what they are. The largest deployment of PAC-3 Patriot missile systems in history occurred in response to Iran's ballistic missile strikes on our air base in Qatar.

Brian Shore: Some of the other programs we're on, it could be quite significant, but we're not able to even mention what they are. The largest deployment of PAC-3 Patriot missile systems in history occurred in response to Iran's ballistic missile strikes on our air base in Qatar. Going on to slide 32. What happened here? In anticipation of this, I guess we knew it was going to happen. We moved Patriot missile systems to Qatar from South Korea and Japan, knowing what was coming. We called it a shell game. Moving the systems from one place to another, that's not sustainable. The Department of War wants to very significantly increase Patriot missile stockpiles in Asia to protect bases and allies in the Pacific region. This is not working out very well at all, is it?

Speaker #4: Going on to slide 32. What happened here? In anticipation of this, I guess we knew what was going to happen. We moved Patriot missile systems to Qatar from South Korea and Japan, knowing what was coming.

Speaker #4: And we called it a shell game. You know, moving the systems from one place to another. That's not sustainable. The Department of War wants to very significantly increase Patriot missile stockpiles in Asia to protect bases and allies in the Pacific region.

Speaker #4: So this is not working out very well at all, is it? We take missile systems out of South Korea and Japan because we have this issue with Iran, and now we depleted their systems when the Department of War wants to significantly increase the Patriot missile stockpiles in Asia.

Brian Shore: We take missile systems out of South Korea and Japan, because we had this issue with Iran, and now we depleted their systems when the Department of War wants to significantly increase the Patriot missile stockpiles in Asia. See the problem? Just public stuff. Israeli supply of Patriot missile systems seriously depleted. Ukraine supply of Patriot missile systems seriously depleted. Other countries have been waiting for Patriot missile systems for years. In September 3, 2025, Lockheed's Missile and Fire Control Division received its biggest contract in history, a $9.8 billion award from the U.S. Army for 1,970 Patriot missiles. According to the Wall Street Journal, the Department of War wants suppliers to ramp up to produce approximately 2,000 Patriot missiles per year, which is almost four times the current production rate. Didn't we say something about quadruple in the prior slide? We did. Four times the production rate.

Speaker #4: See the problem? Just public stuff. Israel's supply of Patriot missile systems is seriously depleted. Ukraine's supply of Patriot missile systems is seriously depleted.

Speaker #4: Other countries have been waiting for Patriot missile systems for years. On September 3, 2025, Lockheed's Missile and Fire Control division received its biggest contract in history.

Speaker #4: A $9.8 billion award from the U.S. Army for 1,9070 Patriot missiles. According to the Wall Street Journal, the Department of War wants suppliers to ramp up to produce approximately 2,000 Patriot missiles per year, which is almost four times the current production rate.

Speaker #4: Didn't we say something about quadruple in the prior slide? We did. Four times the production rate. So, we're talking about, well, we'll get to it.

Brian Shore: We're talking about, we'll get to it. I'm going to wait, and we'll get to it in a second. I thought to say Park is sole source qualified. We'll get to that in a second. Let's go on to slide 33. Patriot missile systems are planning to be incorporated into the Golden Dome. It's apparent from the reporting that the U.S. plans to do much more than just replenish these depleted systems. Next hour item, Park supports the Patriot missile system with specially blended materials produced with ArianeGroup's Raycarb C2B fabric. Park is sole source qualified for specially blended materials on this program. I was going to say at the bottom of slide 32, this 2,000 missiles per year, that represents very significant revenue for Park, we're sole source qualified in that program. Park went back to slide three,

Speaker #4: I'm going to wait. We'll get to it in a second because I thought to say PARC is sole source qualified. We'll get to that in a second.

Speaker #4: Let's move on to slide 33. Patriot missile systems are planned to be incorporated into the Golden Dome. As apparent from the reporting, the U.S. plans to do much more than just replenish these depleted systems.

Speaker #4: So, next hour item, PARC supports the Patriot missile system with specially bladed materials produced with Arian's C2B fabric. The PARC is sole source qualified for specially bladed materials on its program.

Speaker #4: So, I was going to say at the bottom of slide 32, this 2,000 missiles per year represents very significant revenue for PARK. We're sole source qualified.

Speaker #4: Now that program, PARC, went back to slide 33.

Speaker #1: Started bouncing around on you here. Park was recently asked to increase our expected output, especially for blades and materials, for the program by significant orders of magnitude.

Brian Shore: Sorry, sorry. I'm about to round on you here. Park has recently asked to increase our expected output of specially ablative materials for the program by significant orders of magnitude. We can't really say how much, but significant orders of magnitude. Hopefully, that gives you some kind of feel for what's going on here. We will fully support this request, partly with the additional manufacturing capacity provided by our major facilities expansion, which we'll discuss below. Remember that Park recently entered into this new agreement going back to ArianeGroup with ArianeGroup for the purpose of increasing C2B fabric manufacturing capacity. Let's go on to slide 34. Will that additional manufacturing capacity be enough considering what's going on with the Patriot missile? No, I don't think so. As discussed above, Park is partnering with ArianeGroup on a study related to potentially significantly increasing C2B fabric manufacturing capacity, presumably in the U.S.

Speaker #1: We can't really say how much, but significant orders of magnitude. Hopefully, that gives you some kind of feel for what's going on here. And we will fully support this request.

Speaker #1: Partly with the additional manufacturing capacity provided by our major facilities expansion, which we'll discuss below. Remember that PARK recently entered into this new agreement with ARIAN for the purpose of increasing C2B fabric manufacturing capacity.

Speaker #1: It's going to slide 34. But will that additional manufacturing capacity be enough? Considering what's going on with the Patriot missile, no. I don't think so.

Speaker #1: As discussed above, Park is partnering with ARIAN Group on a study related to potentially significantly increasing C2B fabric manufacturing capacity, presumably in the U.S.

Speaker #1: This is a big deal. Let me just say this: once our partnership on a study is done, that's not the end of the partnership.

Brian Shore: This is a big deal. Let me just say this. Once our partnership on a study is done, that's not the end of the partnership. I don't think anyway. That's not what we're talking about. I'm not going to say anything more about it, but let me just say it's a big deal. We covered the Arrow 3 and 4 missile systems last time, so we just kind of covered it again. Not too much here. Last item, updating Park's involvement. Remember we were second source qualified in the Arrow 3. We weren't really expecting orders. We got them. We already got them. Arrow 4, we're sole source qualified on the Arrow 4, which is expected to go into production, I think, relatively soon. Let's go on to slide 35. This is really probably the most important slide of this whole warrant piece, section of the presentation.

Speaker #1: I don't think anyway. That's not what we're talking about. I'm not going to say anything more about it, but let me just say it's a big deal.

Speaker #1: We covered the ARROW 3 and 4 missile systems last time, so we just kind of covered that again. Not too much here. Last item: update on Park's involvement.

Speaker #1: Remember, we were second source qualified in the ARROW 3. We weren't really expecting orders. We got them; we already got them. For ARROW 4, we were sole source qualified, which is expected to go into production, I think, relatively soon.

Speaker #1: Let's move on to slide 35. This is probably the most important slide of this whole warrant section of the presentation. The above missile programs are just a small representation of the critical missile programs Park is supporting.

Brian Shore: The above missile programs are just a small representation of the critical missile programs Park is supporting or planning to support. There are too many programs to iterate here, and many, probably most, are too confidential and sensitive to mention for national security or other reasons. This is highlighted or bold, whatever, and italics. Please understand that certain of these programs represent very significant revenue for Park over long periods of time. We're disappointed we're not able to discuss these programs with you, but we can't. Let's go on to slide 36. Major expansion. We're just going to be a quick update here. I know we're running late with time, but we've got a lot to cover here. Like I said, we got new investors, so we couldn't just skim through things too much. A major new expansion. We talked about this in the, of our manufacturing facility.

Speaker #1: We're planning to support. There are too many programs to iterate here, and many, probably most, are too confidential and sensitive to mention for national security or other reasons.

Speaker #1: But, you know, this is highlighted or bold, whatever you and I tell us. But please understand that certain of these programs represent very significant revenue for Park over long periods of time.

Speaker #1: We're disappointed that we're not able to discuss these programs with you, but we can't. Let's move on to slide 36, major expansions. We're just going to give you a quick update here.

Speaker #1: I know we're running late with time, but we have a lot to cover here. And like I said, we have new investors, so we couldn't just skim through things—too much.

Speaker #1: major new expansion, we, we, talked about this in the, of our manufacturing facility, talked about this in the last two quarters, presentations, I believe, so we're planning a major new expansion of our manufacturing facilities.

Brian Shore: We talked about this in the last two quarter presentations, I believe. We're planning a major new expansion of our manufacturing facilities. It could be at Newton or elsewhere. The planned expansion will include the following lines: elution treating, hot melt film, hot melt tape, hypersonic materials manufacturing. The current estimated capital budget for new manufacturing plant equipment is $40 million to $45 million. That's gone up. I forget what we said last quarter, maybe $30 million, $35 million to $40 million. Why did it go up? We need another line. Extra $5 million is for another line because the requirements keep going up and up and up. It's quite incredible, actually. New manufacturing, slide 37, just continuing new manufacturing, major new manufacturing, major new expansion of Park Aerospace Corp.'s manufacturing facilities. Why are we doing this? Our juggernauts require it. We have a juggernaut for GE Aerospace.

Speaker #1: It could be at Newton, or it's elsewhere. The planned expansion will include the following lines: a Lucian treating, hot melt film, hot melt tape, and fiber sonic materials manufacturing.

Speaker #1: The current estimated capital budget for new manufacturing planned equipment is $40 to $45 million. That's gone up. I mean, I forget what we said last quarter, maybe $30, $35 to $40.

Speaker #1: Why'd it go up? Well, we need another line. That extra $5 million is for another line because the requirements keep going up and up and up.

Speaker #1: It's quite incredible, actually. So, new manufacturing—slide 37—just continuing new manufacturing, major new manufacturing, major new expansion of Park's manufacturing facilities. Why are we doing this?

Speaker #1: Our juggernauts require it. We have a juggernaut. We're GE Aerospace. We have a juggernaut for defense and missile programs. A long-term business forecast requires it.

Brian Shore: We have a juggernaut for defense and missile programs. Our long-term business forecast requires it. The second bullet item under that check it item is that our long-term forecast has increased since we talked to you on July 15. We also have manufacturing capacity needed for Park to be Park. Our calling cards, again, flexibility, responsiveness, urgency. We don't run a business a mill, meaning that, okay, we campaign and you want something, well, we can fit you in maybe a year from December. We don't run our business that way. Urgency, responsiveness, flexibility. It would be really stupid for Park to abandon those things because those are the things that got us where we are today, all those opportunities. It's important we have the manufacturing capacity in order to be Park, for Park to be Park, the secret to our success.

Speaker #1: And the second bold item under that checkered item is that our long-term forecast has increased since we talked to you on July 15th.

Speaker #1: And I also have manufacturing capacity needs for park to be parked. Our coin cards, again, flexibility, responsiveness, urgency. We don't run a business as a mill.

Speaker #1: Meaning that, okay, we campaign, and you want something, well, we can fit you in, maybe a year from December. We don't run our business that way.

Speaker #1: Urgency, responsiveness, flexibility. So, it would be really stupid for Park to abandon those things because those are the factors that got us where we are today.

Speaker #1: All those opportunities. So, it's important we have the manufacturing capacity in order to be parked for Park to be parked. The secret to our success.

Speaker #1: That's part of our theory or our thinking with respect to the expansion. And last item in bold: this is not a close call. Not even, not even close to a close call.

Brian Shore: That's part of our theory or thinking with respect to the expansion. Last item in bold, this is not a close call, not even a close to a close call. I mean, a need for what we're talking about is a need for a major expansion of our manufacturing facilities. Let's go on to slide 38. We're just continuing on the expansion. We're not sharing our long-term business forecast at this time, but opportunities for Park are significant. Timing is now. We must take advantage of the opportunities now. We must not hesitate or we will squander. The end quotes, once-in-a-lifetime opportunities. We have sacrificed so much over many years to develop. This is kind of interesting. There was a board meeting last week, and Mark was discussing with the board some of these missile programs and used the term once-in-a-lifetime opportunities.

Speaker #1: I mean, the need for what we're talking about is the need for a major expansion of our manufacturing facilities. Let's go on to slide 38.

Speaker #1: Oh, we're just continuing on the expansion. We're not sharing our long-term business forecast this time, but opportunities for Park are significant. The timing is now.

Speaker #1: We must take advantage of the opportunities now. We must not hesitate or we will squander, in quotes, "once in a lifetime opportunities." We have sacrificed so much over many years to develop.

Speaker #1: So this is kind of interesting. There was a board meeting last week, and Mark was discussing with the board some of these missile programs. He used the term "once in a lifetime opportunities," and the board really got the thought, well, that's coming from Mark.

Brian Shore: The board really got the thought, well, this comes from Mark. This must be really big. You know, because Mark is not a guy who's given to hyperbole. He's usually a skeptical guy, which is good. You want your President to be skeptical of things. That was his quote, once in a lifetime. The board thought, wow, this must be a big thing then. Our objective is to have our expansion plan in place by the end of the calendar year and to be moving into the implementation phase by, or planned by then. Slide 39. How are we doing with PARK? Let's change gears for a little bit. I'm sorry it's going to take us so long, but like I said, we're trying to cover a lot of things here. What are PARK's objectives? This is important. How do we measure success?

Speaker #1: This must be really big. You know, because Mark is not a guy who's given to hyperbole. He's usually a skeptical guy, which is good.

Speaker #1: You know, you want your president to be skeptical of things. That was his quote, "once in a lifetime." And the board thought, wow, this must be a big thing then.

Speaker #1: Our objective is to have our expansion plan in place by the end of the calendar year and to be moving into the implementation phase of our plan by then.

Speaker #1: Slide 39. How are we doing with Park? Let's change gears for a little bit. I'm sorry it's going to take us so long, but, like I said, we're trying to cover a lot of things here.

Speaker #1: So, what are Park's objectives? This is important. How do we measure success? I think there's a lot of misunderstanding about this. So, let's talk about it.

Brian Shore: I think there's a lot of misunderstanding about this. Let's talk about it. We measure success. Our objectives are getting qualified and sole source qualified whenever possible on chosen special aerospace programs. These are programs we want to be on. These are the special programs, the wonderful programs. That's our success. Once we get qualified on our chosen special programs, our objectives have been achieved. We're done. Once we're qualified in those chosen programs, all in italics, all we need to do is support those programs with what? Extreme urgency, flexibility, and responsiveness. That's it. Other than that, it's up to the program OEMs to determine and decide how quickly their programs will ramp. That is not something over which we have control. It's not even our concern. We're on the program. We have achieved our objective. Our objective has been achieved.

Speaker #1: We measure success. Our objectives are getting qualified and sole source qualified whenever possible on chosen special aerospace programs. These are programs we want to be on.

Speaker #1: These are the special programs, the wonderful programs. That's our success. Once we get qualified on our chosen special programs, our objectives have been achieved.

Speaker #1: We're done. And once we're qualified in those chosen programs, all we need to do is support those programs with what? Extreme urgency, flexibility, and responsiveness.

Speaker #1: That's it. Other than that, it's up to the program OEMs to determine and decide how quickly their programs will ramp. That is not something over which we have control.

Speaker #1: And it's not even our concern. We're on the program. We have achieved our objective. Our objective has been achieved. There's some guy who wrote something about, you know, we're shifting blame or mitigation plans, and it's just kind of a total misunderstanding.

Brian Shore: Some guy wrote something about, you know, we're shifting blame or mitigation plans, and it's just kind of a total misunderstanding of how PARK and our objectives and how we operate. Once we get in these programs, sole source qualified, our objectives have been realized. Let's talk about it. How have we done with our objectives? If you ask me, we have been incredibly successful. We have gotten on wonderful aerospace programs, the special programs you want to be on, most of which we can't mention. You know some of them already, A320neo, wow, Patriot, wow. A lot of them we can't mention. Slide 40. We were nobodies when we came into the aerospace industry. We came from nowhere. We were welcomed into the industry with open arms, with the entrenched competitors. I don't think so. They didn't want us.

Speaker #1: Of how a park and our objectives and how we operate. Once we get in these programs, sole source qualified, our objectives have been realized.

Speaker #1: And we, well, let's talk about it. How have we done with our objectives? If you ask me, we have been incredibly successful. We have gotten on wonderful aerospace programs—the special programs you want to be on.

Speaker #1: Most of which we can't mention. You know some of them already: A320, wow, Patriot, wow. A lot of them we can't mention.

Speaker #1: Slide 40. And we were nobodies when we came into the aerospace industry. We came from nowhere. You know, we were welcomed into the industry with open arms, along with the entrenched competitors.

Speaker #1: I don't think so. They didn't want us. I mean, they were probably polite, respectful. Well, they clearly didn't want us; they were not welcoming us.

Brian Shore: I mean, they were probably polite and respectful, but they clearly didn't want, they did not welcome us. We achieved what we achieved against great odds, incredible success by getting on these programs that are the envy of the industry. From nowhere, nothing. Went into an industry where there's in aerospace, a lot of entrenchment. People get into programs. They get very complacent sometimes. That's not us. We don't do that. Are we lucky? If you ask me, we earned everything we got. Are we an overnight success? I don't think so. It's been a long and difficult road with much sacrifice along the way, but it's a road we chose. Let's go on to slide 41. I think that's our last slide. Almost there, folks. Very fortunately for all of us, PARK had the courage and conviction. This should be in bold, but this is important.

Speaker #1: We achieved what we achieved against great odds—incredible success—by getting on these programs that are the envy of the industry. From nowhere, nothing.

Speaker #1: Went into an industry where there's, in aerospace, there's a lot of entrenchment. You know, people are going to programs; they get very complacent sometimes.

Speaker #1: That's not us. We don't do that. Are we lucky? If you ask me, we earned everything we got. Are we an overnight success? I don't think so.

Speaker #1: There's been a long and difficult road, with much sacrificed along the way. But it's a road we chose. Let's go on to slide 41.

Speaker #1: I think that's our last slide. Almost, almost there, folks. Very fortunately for all of us, Park had the courage and conviction. This should be in bold because this is important.

Speaker #1: To stay the course with our principles and our simple, but elegant, strategy in the face of sometimes unrelenting doubts, negativity, and skepticism. We are very fortunate as all of us, meaning, you know, investors too.

Brian Shore: To stay the course with our principles that are simple but elegant, extra edgy in the face of sometimes unrelenting doubts, negativity, and skepticism. Very fortunate for all of us, meaning, you know, investors too, very fortunate that we stood our ground and our knees didn't buckle and we did what we thought was right under quite a bit of pressure. If we didn't do that, we wouldn't be where we are now. We wouldn't be looking at these once-in-a-lifetime opportunities. We wouldn't be. We'd all lose out. We'd all lose out. How are we doing at PARK? We believe PARK has done a remarkable job of positioning our company to capitalize on, thank you, Mark, once-in-a-lifetime opportunities we are now facing. These are unprecedented times for PARK. Okay, operator, we're done with our presentation, and we're happy to take any questions at this time.

Speaker #1: Very fortunate that we stood our ground, and our knees didn't buckle. And we did what we thought was right under, you know, quite a bit of pressure.

Speaker #1: Because if we didn't do that, we wouldn't be where we are now. We wouldn't be looking at these once-in-a-lifetime opportunities. We wouldn't be. And we'd all be, we'd all lose out.

Speaker #1: You know, we'd all lose out. So how are we doing at Park? We believe Park has done a remarkable job of positioning our company to capitalize on, thank you, Mark, once-in-a-lifetime opportunities we are now facing.

Speaker #1: These are unprecedented times for Park. Okay, operator, so we're done with our presentation, and we have to take any questions at this time.

Speaker #2: Thank you, Mr. Shore. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line has been placed in the question queue.

Operator: Thank you, Mr. Shore. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line has been placed in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. I see we have a question coming from Nick Ripostella from NR Management. Your line is now live. Please proceed with your question.

Speaker #2: You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: I see we have a question coming from Nick Ripostella from NR Management. Your line is now live. Please proceed with your question.

Speaker #3: Hey, good afternoon. Once again, nice presentation, nice quarter. And just a couple of easy questions. I've been thinking about PARK and all the exciting things going on.

Nick Ripostella: Hey, good afternoon. Once again, nice presentation, nice quarter. Just a couple of easy questions. I've been thinking about Park Aerospace Corp. and all the exciting things going on. How do you feel about the need for additional sales personnel? Do you feel that everything you have there is adequate? You've got so much going on. I'm just wondering, are you covered in that area sufficiently? The second thing is, I know you say you're not prepared at this time to share the long-term forecast. Do you think sometime next calendar year you can kind of give people a longer-term view of where this company could be in three to five years? There are so many things that are blossoming. You truly are a growth company.

Speaker #3: How do you feel about the need for additional sales personnel? Or do you feel that everything you have there is adequate? You've got so much going on.

Speaker #3: I'm just wondering, are you covered in that area? Sufficiently? And the second thing is, I know you say you're not prepared at this time to share the long term.

Speaker #3: Forecast. So, do you think, like, sometime next calendar year, you can kind of give people a longer-term view of where this company could be in three to five years?

Speaker #3: You know, there are so many things that are blossoming. You truly are a growth company. And then the third thing is, and I know this is not your primary function, obviously, but you must be on the radars of firms out here to pick up research coverage, you know?

Nick Ripostella: The third thing is, I know this is not your primary function, obviously, but you must be on the radars of firms out here to pick up research coverage. There is so much research out there now by niche firms, and you have such a great story. I was just wondering if anything's happening in that regard. Thank you so much.

Speaker #3: There's so much research out there now by niche firms, and you have such a great story. I was just wondering if anything's happening in that regard.

Speaker #3: Thank you so much.

Speaker #1: Thanks, Dick. Thanks for your questions. So let's take one order: additional salespeople. You know, I think, Mark, you can chime in. We've learned a lot over the last 20 years, and I think our view on salespeople is a little bit skeptical.

Brian Shore: Thanks, Dick. Thanks for your questions. Let's take them in order. Additional salespeople. I think, Mark, you can chime in. We've learned a lot over the last 20 years, and I think our view on salespeople is a little bit skeptical. We prefer to have additional technical people, engineering people in terms of getting more business. You're right, Nick. We certainly have our hands full with what we have already, but we're always interested in new opportunities. They're coming pretty fast and furious, but they're not coming because of salespeople. They're coming because it's a small industry, particularly in the defense side, and we have close ties with a lot of the OEMs and the military as well. The word gets out pretty quickly. The important thing is we have engineering people to support those activities rather than salespeople that go get the business.

Speaker #1: We, I think we prefer to have additional technical people, engineering people, in terms of, getting more business. we, we, you're, you're right, Nick. We certainly have our hands full with what we have already, but we're always interested in new opportunities, new opportunities.

Speaker #1: They're coming pretty fast and furious, but they're not coming because of salespeople. They're coming because you know it's a small industry, particularly in the defense side, and we have close ties with a lot of the OEMs and the military as well.

Speaker #1: So the word gets out pretty quickly. The important thing is we have engineering people to support those activities rather than salespeople that go get the business.

Speaker #1: And I'm not sure that really works anyway. I don't think that, I don't know, Mark could chime in. That's typical OEMs really are that interested in, you know, the guy bringing donuts and a slick salesman.

Brian Shore: I'm not sure that really works anyway. I don't think that, I don't know, Mark, you chime in, that typical OEMs really are that interested in the guy bringing donuts and a slick salesman. They're more interested in what you can do, how you can help us. That's going to be more of an engineering discussion. It could be a supply chain discussion. How can you support us in terms of providing a product to us? I'm a little skeptical about whether additional salespeople are what we want to talk about at this point. Mark, why don't you chime in? I'll take the other two questions, but why don't you chime in if you have anything you want to add to my answer on that question?

Speaker #1: They're more interested in what you can do and how you can help us. And that's going to be more of an engineering discussion, or it could be a supply chain discussion, okay?

Speaker #1: You know, how can you support us in terms of providing a product to us? But, you know, I don't know. I'm a little skeptical about whether additional salespeople are what we want to talk about.

Speaker #1: At this point, why don't we—Mark, why don't you chime in? I'll take the other two questions, but why don't you chime in if you have anything you want to add to my answer on that question?

Speaker #4: Yeah, Brian, I think you're correct. I mean, we work really closely with the technical and engineering folks, and it kind of goes back to our strategy too.

Mark Esquivel: Yeah, Brian, I think you're correct. I mean, we work really close with the technical and engineering folks, and it kind of goes back to our strategy too. They have priorities and they need to get projects done. We work directly with them and help them develop new programs, new products, and that really helps us get business more so than the traditional, like you said, Brian, going to the supply chain people bringing donuts. It's a little different in our industry. It's more technical, more engineering-driven. If you're satisfying those groups, that's how the business usually comes our way.

Speaker #4: They have priorities and they need to get projects done. And, you know, we work directly with them, you know, and help them develop, you know, new programs and products.

Speaker #4: And that really helps us get business more so than the traditional, like you said, Brian, going to the supply chain people and bringing donuts. It's a little different, you know, in our industry.

Speaker #4: It's more technical, more engineering-driven. And if you're satisfying, you know, those groups, you know, that's how the business usually comes our way.

Speaker #1: Yeah, good. Thank you. Yeah, I think a lot of times it comes to us rather than we go into it, you know?

Brian Shore: Yeah, good. Thank you. I think a lot of times it comes to us rather than we go into it, you know, but like you said, it's a real kind of small, close-knit industry, and people know where to find us. Long-term forecast, I understand. I understand why you're asking that. I think what we'll try to do in Q3 is provide some information. I'm a little bit, like, a little reluctant because I think the number is going to be shocking to our investors.

Speaker #1: But, you know, that is a real kind of small, close to an industry, and people know where to find us. Long-term forecast, I understand.

Speaker #1: I understand why you're asking that. I think what we'll try to do in Q3 is provide some information, a little bit like a little reluctant because, I think the numbers are going to be shocking.

Speaker #1: to, to, our investors. meaning.

Speaker #4: Yeah, shocking.

Speaker #1: Yeah, okay. Well, let's see if we can, let's see what we can do to give you more perspective, quantitative perspective. When we announce Q3, okay?

Mark Esquivel: Shocking?

Brian Shore: Okay. Let's see what we can do to give you more perspective, quantitative perspective, when we announce Q3, okay? Would that be all right? We'll work on that. I'm not saying we'll give you a hard like three, four-year forecast, but there's something that you know, you could sink your teeth into a little bit more. The research, you know, we're here. I mean, they know where to find us. We'd be happy to be covered. Like you said, Nick, not really our principal focus, but we'd be happy to be covered. You know, if anybody's interested, I'm happy to talk to them. I think we are seeing a lot more visibility in the last few months or so. We'll see what happens. I don't believe there's anything imminent where somebody's about to pick us up right now, but we're very open to being covered. Hopefully those answers.

Speaker #1: Would that be all right? And we'll work on that. I'm not saying we'll give you a hard, like, three- or four-year forecast, but there's something that, you know, you could sink your teeth into a little bit more.

Speaker #1: And the research, you know, we're here. I mean, they know where to find us. We'd be happy to be covered. Like I said, Nick, not really our principal focus, but we'd be happy to be covered.

Speaker #1: And, you know, if anybody's interested, I'm happy to talk to them. I think we are seeing a lot more visibility in the last few months or so.

Speaker #1: So, we'll see what happens. I don't believe there's anything imminent where somebody's about to pick us up right now, but we're very open to being covered.

Speaker #1: So, hopefully those, that answer.

Speaker #4: Probably when the revenue doubles from here, then they'll come around, you know? That's the way it happens a lot. But.

Nick Ripostella: Probably when the revenue doubles from here, they'll come around. That's the way it happens a lot.

Speaker #1: Maybe it, yeah, maybe you're right. Any other questions you have, Nick, or is that covered?

Brian Shore: Maybe you're right. Any other questions you have, Nick, or is that covered?

Speaker #4: No, thank you so much. And, you know, it's glad to see that all the hard work, you know, the stock has caught lightning in a bottle after the last quarter.

Nick Ripostella: Thank you so much. It's glad to see that all the hard work, the stock has caught lightning in a bottle after the last quarter, and it's good. It's a nice thing to see hard work appreciated and reflected in the value, you know? It must make all the employees and everybody feel good, and the investors, obviously. Thank you.

Speaker #4: And it's good. It's nice; it's a nice thing to see hard work appreciated and reflected in the value, you know? It must make all the employees and everybody feel good, and the investors, obviously.

Speaker #4: But, so thank you.

Speaker #1: Sure, it's a good thing. Thank you very much for your input, Nick. Operator, do we have any other questions?

Brian Shore: Sure. It's a good thing. Thank you very much for your input, Nick. Operator, do we have any other questions?

Speaker #5: Hello?

Speaker #2: Currently, there are no further questions at this time. Oh, I actually see one just popping in by Chris Showers, private investor. Chris, your line will be unmuted.

Operator: Currently, there are no further questions at this time. Oh, I actually see one just popping in by Chris Showers, a private investor. Chris, your line will be unmuted. Please proceed with your question.

Speaker #2: Please proceed with your question.

Speaker #6: Hey, thank you. Brian, just, I guess, two questions. You mentioned the C2B material being a 60/40 lower to higher margin mix. When the Patriot Missile gets ramped up, will that be constant, or can you get a higher mix there with the higher revenue-converted material?

Vaughn: Hi. Thank you. Brian, just I guess two questions. You mentioned the C2B material being a 60/40 lower to higher margin mix. When the Patriot missile gets ramped up, will that be constant, or can you get a higher mix there with the higher revenue converted material?

Speaker #1: So, I'll answer that. What's going on here is there's stockpiling, stockpiling, stockpiling. And that's why the ratio is not really balanced.

Brian Shore: I'll answer that. What's going on here is there's stockpiling, stockpiling, stockpiling. That's why the ratio is not really balanced. At the end of the day, though, there will be a certain amount of C2B fabric that's required to make the C2B material. At the end of the day, it all has to kind of even out, you know? Right now, the OEMs are stockpiling. Why? Because they're nervous. They want as much as they can get because they see where the future is going. They're not stopping. They're going to keep stockpiling, I think. Eventually, their plan is not to just have that stuff sitting in our factory, of course. It's for us to produce the material that's used to make the rocket nozzle materials for the rocket nozzle structures for the Patriot missile system.

Speaker #1: No, at the end of the day, though, there'll be a certain amount of C2B fabric that's required to make the C2B material. So at the end of the day, it all has to kind of even out, you know?

Speaker #1: right now, the OEMs are, are stockpiling. Why? Because they're nervous. They want as much as they can get. because they see where the, you know, where the future's going.

Speaker #1: And they're not stopping, you know? They're going to keep stockpiling, I think. But eventually, you know, their plan is not to just have that stuff sitting in their factory, of course.

Speaker #1: It's for us to produce the material that's used to make the, the, rocket nozle materials for the, the, the, the, the rocket nozzle structures for the, Patriot missile system.

Speaker #6: Okay. And is there timing on that? Where do you think that might pick up? Just calendar year?

Vaughn: Is there timing on that where you think that might pick up this calendar year?

Speaker #1: yeah, I think as Mark alluded to, you know, we had this issue with the recoil and that was slowing down our, a lot, you know, our ability to produce the, the materials, the, C2B materials.

Brian Shore: Yeah, I think as Mark alluded to, we had this issue with the requal, and that was slowing down a lot, our ability to produce the materials, the C2B materials. The requal is pretty much complete now. We think that's going to open things up quite a bit, even in the next quarter. I mean, even this quarter, I think. We'll see. You know, with aerospace, probably most industries, though, Chris, the demand is there, but the supply chain can't turn everything on at a time. We can, but there's a lot of other steps along the way in the supply chain in order to be able to ramp up. Like with the A320neo, we could support 75 airplanes a month at this point if they needed it. Airbus would like to be at 75 airplanes a month, I'm quite sure of that.

Speaker #1: The recoil is pretty much complete now, so we think that's going to open things up quite a bit, even in the next quarter. I mean, even this quarter, I think.

Speaker #1: So we'll see. We'll see. You know, with the aerospace, probably most industries, though, Chris, the demand is there, but the supply chain can't turn everything on in a dime.

Speaker #1: We can, but there's a lot of other, you know, steps along the way in the supply chain in order to be able to ramp up, like with the A320, you know?

Speaker #1: We could support 75 airplanes a month at this point if they needed it. But Airbus would like to be at 75 airplanes per month.

Speaker #1: I'm quite sure of that. What's holding them back is the supply chain. The supply chain is not able to turn on a dime.

Brian Shore: What's holding them back is the supply chain. The supply chain is not able to turn on a dime.

Speaker #6: Okay. Thank you.

Vaughn: Okay, thank you.

Speaker #1: Was there another question, Chris?

Brian Shore: Was there another question, Chris?

Speaker #6: No.

Vaughn: No.

Speaker #1: Oh, good. Okay. Operator, anything else right now?

Brian Shore: Oh, good. Okay. Operator, anything else right now?

Speaker #2: There are no further questions at this time. I would like to turn the floor back over to Mr. Shore for any closing comments.

Operator: There are no further questions at this time. I would like to turn the floor back over to Mr. Shore for any closing comments.

Speaker #1: Okay. Well, Brian again here. Thank you very much for listening in. Sorry about the call went so long. If you have any other questions, you want to call us anytime, we're happy to talk to you.

Brian Shore: Okay. Brian again here, thank you very much for listening in. Sorry the call went so long. If you have any other questions, you want to call us anytime, we're happy to talk to you. Have a great day. Thank you. Bye.

Speaker #1: Have a great day. Thank you. Bye.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.