PKE - Earnings call transcript Q3 2018

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Operator

Good morning. My name is Latoya, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Electrochemical Corp.

Third Quarter Fiscal Year 2018 Earnings Release Conference Call and Investor Presentation. [Operator Instructions] At this time, I will turn the call over to Mr. Chief and Chairman Shore, Executive Officer. Brian Mr. may you begin. Shore,

Brian Shore

me. Shore. Thank with Happy everybody. This officially me Brian you, is Good with not New Actually, Farabaugh, our morning, who's operator. Matt CFO. Year. I have

we're Our office is remote today because both storm, of locations. at the closed so

if like as we're So, connected would that usual, we reason. the seem be not as

So, closed. the office a is couple of housekeeping things Again, here.

is thing provided want her to our at you Her contact you'd best do financial as presentation, you the Martina. so would is as if website of So, e-mail that top a information. office, address right the release, on the supplemental e-mail be the a well way. news Also, contact can

through do financial going to Now we're not today the that cover. But as have know, will supplemental veterans you information. so to you because anyway, just we Matt much read normally

supplemental So, our you - a financial it's sec.gov. suppose take website. our can as the is the - you information it at financial that as the well information information, This information, also find also at I look presentation supplemental on there. can and

Okay.

why So, get is This Brian. we started? still don't

Let minutes go the third before to couple a to the me quarter. talk we about spend presentation just of

first. So, electronics, about let's talk electronics

about on process programs qualified line, we XG talked So, many times X.XG new product particular. the in and of getting with Meteorwave our

particular. a have done Mark, job, in Chris, Asia great guys really our think I and in Tony

wonderful job. doing we're I programs. a think many, you're And on many

XG infrastructure we does. and infrastructure. is to more it happen course, X.XG Now This the XG issue industry infrastructure, quickly is, can't force and that X.XG of for than equipment,

news. demo programs. is XG the ramping on really is the of line months, that couple up of our some prototyping, is just This maybe But and see production maybe So, we're product that some But at to key like to last we're this thing yet. movement units, And particular. don't X.XG Meteorwave some kind feel up, with we movement which in point, is good thing. starting

will that. it's ramp don't do - XG So, when that of yes, we and don't XG think up, doubts anybody happen. the and see benefit X.XG think X.XG will a matter I of I

it's a matter of I when. think

a to different talk people, opinions. can of lot different You

think Some of start of to we even that maybe people calendar X.XG year, end some this XG. the see should and ramp

way in quickly The hasn't start. It electronics off been bad other got to very We a our got We on is well. curve thing really about the talk to executed back. behind a restructuring. summer. crawling We're power

We under I to we're doing it better. seem control. have much think

was really the really in the - get and kind So we but it second of not didn't had because quarter - very a good in to so off good start quarter. third messy

restructuring. not well, So, I'm we'll it it's about but West do restructuring of I think Arizona did with unfortunate go out that and California, talking the okay, course.

things doing And big ablatives aerospace the difference probably Aerospace electronics So fine, QX in story with those we two are is The think. last time. well, QX. doing between QX ablatives. about I talked and in is

materials V of specialty And missiles. the nozzles. case, the business that the for go it's and ablatives the high-temperature In Our very is with Atlas on Patriot into is ablative which materials are generation latest PAC-X, kind rocket the also this lumpy.

quarter, So, third quarter. probably third actually the the then quarter. the than was And in quarter, the as second more million same $X.X it about fourth the

is the business, It's difference anything explains moving sign was not for not of QX the well in doing really rest right than that's ablatives. The unexpected. and not of XXX% I aerospace QX. of that So the between in that's a And and revenues other the nature - think, direction. the of

back we So, our posted it's website. presentation? Again, go on the to don't why

cover, not so give I'm looking just turn of my you screen. the to it at as at pages. access And get try computer can remember into the it. right also on You I actually There's printout pages heads-ups I'll it I to it. a of on will information the have sec.gov. I lot to a just

and discuss have And would us call. please give if And questions cautionary of to I you talk page to you the regarding want actually, you. you factors. factors So, you factors have I the them read risk the through presentation, any to third read a language Slide second our and There's them. our new when you risk Happy to aerospace. the on them or that's about factors encourage risk would chance. X, risk And for a encourage further,

Okay.

We at impact dividend law X, share. why is the declared like off the million That the Now Park, the we'd new dividend lot law, a of we've $XX.X at That's balance at we Slide remaining first that that item when million. But of passed was the been time. for while, tax do loan special a pay was paid take then if time law highlights? $XX.X So, a a we'd full. to financial was of And is tax for would and tax discuss don't which in for And the We'll and the didn't we yesterday. of go we $X do presentation. now, of also our the per up of the course. to word, shareholders. saying total we something loan our end keep to

a here, see you can dividend. As special that's

on and out overseas a the of law the this us a It's This that because of of prevented new So, dividend, from the element our dividend the wanted operation a return tax about possible. make of new it of little accumulated law, not We dividend. capital I'm dividend. the doing taxable. couple here, were return - to return profits, a but my make is to attributed operates, but therefore a not tax I'm capital it earnings which based not things way of capital earnings

a want past, profits, then to a from not and a earnings than comment. be goes in zero a dividend some not your of do minute. in it'd taxable Maybe kind process. be it. stock that a your dividend or restriction already. you buyback offer. is in this possible basis of the and the it program if we're not proper remember to saying time you capital a to would have to A the just is reduce to have we saying done this it of of market be for would current item. should for is have I'm accumulated open be not there us at return I an get you I'm because rather you just our a if not We'll that way As Park would along whether any process, tender restriction. buyback, buyback. be works Also, aware may - legal for But

The perspective third little item, you, for just maybe. a or history here

quarterly $X share dividend a also we per regular $X.XX this per December upon and on XX. declared dividend, based So, share

If you a million those will $XX.XX since $XXX in would per account dividends XXXX, share. into take that fiscal share. two and equal have That's cash dividends, fiscal XXXX, $XX.XX Park since paid just

prior a Now stock you is the that yesterday. as of to $XX.XX it that, was current I planning tell but was the close to price, share

be moved will will stock think the bit longer case. that I a up so no the little

Okay.

to Slide Let's X. go on

news news So, a of this course, big for a Park, is item item. very big

August & potential evaluation our and next the XXXX. of plan with of complete strategic no sale sale electronics. an evaluation investment assurance quarter which anything Greenhill June, timetable to else, July, strategic the strategic a year, evaluation second firm, a electronics help us And strategic of would has our during initiate the to that would which specific We happen, or includes decided the sale That as to quarter that of will result of And business, retained been that course, But set. business. is Co., months. no - be, banking anything of we possible the we evaluation. what, So, be a there's

networking; a enterprise, provider tests. [indiscernible] a market nice on which principally infrastructure to circuit means go Nelco. Slide and but printed infrastructure. Park's manufactures known like very high-technology is as - like iconic be test Internet Let's is What digital niche do? develops that This us, RF/microwave for semiconductor would electronics materials business, it it's sometimes the infrastructure; market. and for It does military/aerospace, service X. Semiconductor

the Slide so, many sure know with bear I'm me. but item things, of X. these you And next on

Our electronics business is global.

in $XXX,XXX innovation. And and We for said may you too father founded although docks [indiscernible], a have a I was Singapore in auspicious operations had in XXth business. California, my that's it was had our Chiesa our my Connecticut. much and bankrupt recall. bankruptcy. its Arizona. is said, found XXXX, for started - in electronics in business think Legend that had how The the as Very in or historical Park's we anniversary, paid like Arizona. and Nelco And R&D some - company of early XXXX. we of XXXX. back Park But money Singapore, France, this And lot stuff. Remember in we By wasn't I company a we our anniversary. think beginning father remember days. I paid way that Stamford, concern XXth much, electronics some in very I it, Tony

card, actually want rockets, for we ICBMs. out multi-layer multi-layer circuit understanding be My some calling that heavy-lift but boards to made. including ever boards think in did still People first is debate might it weight in the was first. the multi-layer was Sunnyvale. take innovation that I for done might circuit of XXXX. We was in believe whether can prove development board XXXX. So, And was I Lockheed of the first, circuit that I maybe the

magic of of business. Parks beginning X. lots at innovations, electronics many electronics So, Slide business, right the the

business, my that's no than kind with key and and We something with We We principles through overcome, mindset that didn't kind thin, we people. our die, electronics business, that? matter just to not need rocket problems, this. setbacks, hard. very means more value technology very are business. at nothing. stick This go do we special and me. our all business, school and perseverance keep we never of What do at products, one it, and what we stick - integrity for of science. to in going what We failures, going can Those amazing that obstacles lasting to accomplish. we is do, two go do never we humility. And How it's opinion, to that, principles. wonderful of work Park, a electronics our perseverance. wonderful just But and quit, and especially thick least So, going. from It's very our business build It's what wonderful with built of

Slide on go Let's to X.

business? electronics, would is Well, design. focused resources and limited consider with Park why company selling So our small we by electronics a

agile, and what not a big flexible, small we However, We that's want want. bureaucratic. to be to want don't We large and company. be

Now other They companies, they're large other have strengths. bureaucratic. and

as responsive Our be a to smaller company strength is flexible, and agile.

aerospace we that that. It not by organization. out technologies, a industry We're the quite are different markets. to That's the different, electronics they design. looking and different very and So, industry have want build larger turns

become for both very So, different we Park because job could of do justice and for it's difficult the two – not kind doing It's to company businesses. markets. different businesses just we're in best two as fair more small a to more not very the the

let's So, item. third to on bullet go the

Again, important We we a find to understand for that do to not if they're find the is we do. respect, to with that that for resources, the as committed for company capability That's the how not that business, financial, going our as we're equipped do full to has for deserves. a maybe be would business. company part has about, our and it new potential new the works. and we talking we process that that both But a business and enhance the provide way run looking not it aerospace. a our that future feel electronics need and owner we're electronics the human it which this really company, So, a company develop and dedicated electronics we're owner, and and that focus to small of to we principles of both electronics like

business. we'll quick. investors, that's our right electronics electronics of and We're people just for do everybody So, for concerned. the to want right the and business We're not interest here. transaction, business is best our look the something to something a looking for and in customers We looking do which OEMs our equation the electronics of

buyer such So, we will in and own again, business, a a fortunate company our my the business. very sell wonderful special if do opinion electronics to be

Let's to move X. on Slide

that that business, a talk more we do Park relevant we our will do we And or is let's little an when do become about So, business then for that - aerospace-only our electronics aerospace company. sell a important it way, while. that little bit becomes any

is let's the building X That's do? Newton, picture field aerospace right the our which bottom of The farm on look way, business does the we're facility Slide the in By what was picture on. a on building So, to left and on our XX we ago. page, Kansas, operations, of item our the the main at years go the a the on facility. right, first do have our City development Anyway, let's again, where to work. [indiscernible] small that's first aero item. manufacturing The Slide X, Tin design

develops hot-melt aerospace materials composite advanced manufactures industry. and solution So, our for and aerospace the business

It as concentration and business Kansas. a major also at operation field about recent January Newton, history secondary done Kansas. a field, We facility. I point, like new I history, similar sales town It remember also to that site our going aerospace seeing the aerospace. people speak industry, to the and in I R&D primary Park. then Wichita, design wheat first a assemblies, meeting. as and we the XXXX, farm, for local but this very design was global went found to is And meeting for it's cold manufacturer, at if farm and and cold, wintry like, was sorry, groundbreaking. Kansas, low-volume picture like And it. jet location in in just first major in we said, have farm is the development day, electronics. In GE in of fast production focus And economic Aviation. And quite little a XX, we program it's had the And for we the manufacturing January sales later, their August, a XX, Slide of Singapore. did area on Newton, wintry. that a on was we months In to more we're and all in in structures then, principal we in we I a XXXX, decided quite with a facility aerospace this and six second a in well, January remember and would it not major engine that. that forward field. was later, history A guess XXXX, be have XXXX, tooling aerospace what, years group to went into Newton, manufacture on the them and sure, located manufacturing they composite asked parts, in satellite could for And six It's our and here today, a which but - Northeast it's it

As some name to their writing, us discussing investor calls. with GE never but been of by put you they're know, our they on okay Aviation asked we've said in them

XXXX. long. the So, aerospace, this in in a in years, big was a And being one for is aerospace new deal kid six not that's very the block. groundbreaking Actually,

XXXX we think I business. opened when of kind for

engine unusual, jet a moving for Their So of. very We're a on big major very a in this was block. especially highly a deal, GE later, almost on kid we program. program, first years unheard Quite go actually would maybe manufacturer, on, unusual, the program. That was for production a new our qualified five legacy unusual, legacy Aviation.

we're very So, in very regard. fortunate, that lucky

The third XX. item Slide on

special business our from aerospace nothing. So, was very built

years ago, true very a humility, way. from true the nothing, I Staying XX field wheat our of hard. now business producing it's You there, lasting built but Same got something principles and nothing, built built with farm the to principles a from thing working integrity here. Park remember, value

has own. in little faced kind We new very lot failures. didn't an many been many you people know a of kind key. challenges. didn't aerospace. setbacks, anybody. outsider, we're our We and the guys? We're is are We're We're Of perseverance on of know on Who course, really Kansas. in too. a Aerospace of clicky, block. adversity, the kid the disappointments, Many We

hopeless. Some seemed days

matter no it's how we going and quit, difference Some when advocates. we is never - never days kept through never But many everything didn't pretty value me, even was going we or we have lonely too matter lived because and is the it it. no dark. up, gave what, seemed I was and built what, going - stopped, friends to

rubber boardroom that company the that flimsy, time not in building financial value engineering in enough as you're when lasting. over, hasn't the well. the financial sure what do common focused But is some is spending engineering. time a and on something value still If where really the engineering weak, things the very much problem So, financial I'm matter, you're have, company. there's too you're road, if same hits not very you the

we take that Fortunately, didn't route.

built So, I lasting value something have we value. with substantial and think

yet objective. investors. company. greatness. not to to we personally, it myself We doing did to speak do glad And right We did And done the was the I'm right XX thing was it this, felt haven't would because that the But as we business wanted go It we to have years greatness. so We is have this. opportunities. field an our it. achieved for than thing for with have But was been objective to worth the not XXXX, it farm that, then greatness. for it, was right? back ago Put because we need So, Park just in It it. I'll do wouldn't term didn't but if it significant it, something didn't special that easy it. our And didn't if less we a felt long look, been we fine do would or of It have for We're objective mediocrity we it. done going only wouldn't wasn't do greatness. have

interested. than greatness, less not Something

Okay.

go Slide XX. Let's to

of aerospace company. our little about regarding some a items the talk bit Let's high-level

writing, put Aviation. not company it major into GE jet a that's engine again, - So, to we're

XX-year two, can in in agreement, pricing the right after three reversers. long-term very give thrust picture and on on parts. are don't a structures, look Why you year year perspective nacelles a size. Seems see You eight. person those right? This you background year Huge white Those at is things? for So, the big XX? we're and big the the Slide

are if I'm So by usage is of a that's and blocker very transcowls. parts, But know nacelles materials produces at parts, materials speculating composite you for and thrust I don't sure biggest the the nacelles. would composite probably the because Aviation. but about a far that more little suspect based for those bit how there, can't see materials. very, bigger you thrust inside knowing these they're which company built. large that The and I'm good not the doors are about upon the reversers, very, a and the that reversers, just look GE I engines fact. engines this,

item in source on XX. programs which the some sole nacelle engine. and programs, COMACXXX engine the that's second And reverser that see XX including the what with LEAP XXXX the AXXXneo programs. of key XXX-X, on So, multiple and Passport are not the is the We're picture; with you Bombardier XXXX engine; engine; LEAP all with Those the thrust on. Global we're

Aviation. don't components up last the Sole on right to fixed we're for for number are Why reversers the new a source programs. for on engine item, internal sole program XX? for ramping GE item top, of now. Continuing fixed some we go thrust with engine top also structure structure internal other qualified, And Slide source, page, nacelles. the thrust on also materials for reverser, And the multiple we just and third a

They're XX-something developing key products, we multiple led and also to joint done qualified. in done of battle. percent development our getting have very for aerospace, the we've These - collaboration Park. So, And that's new but efforts. very, have

get You need qualified. to

qualified program, but is new like, a The forest, product, qualified and sound? it? complete of fiscal in these it to meaningful. as But working tree we complete GE falls products and that develop the does XXXX don't the in well. products A develop the beauty is can programs. is going what products not and qualification. major product their make get these you now product, a of into on with additional be new Who by two basically also development qualified this system, knows. a You as it's we The with if There's got we're expected in it's

second interesting. in So, last still military let's I although in part. something GE see, or large the quite Phase is This a This development, is else, is composite we're item. think X. We're again program, actually Phase Aviation. the This X a for

Park, and revenue been the before. has this there. potential is Redundant discussed factory, as much well funding for So, program Very if successful. interesting a we've opportunity

this I to we signed Newton, years, and would course. in deliver details Even we some is aerospace, the mentioned in is the is still an it Kansas. on commitment redundancy purpose capacity, the factory, redundant the Boeing haven't - presumably very Aviation. important the in forecast, over This when anyway we of to but redundancy. work customers, Redundancy if Based just that probably we've sign we a factory yet. the for factory that is the LTA, factory. stated Airbus, upon LTA, of made we think and particular, for with additional though our GE the on need additional a And Aviation of We GE need redundant for do instance.

moving, keep Slide XX. Let's

items through but little longer, a it's you taking I these want go to with Sorry, quickly.

company. U.S. we're is in specifications. currently in this qualification a important different aerospace is This So, company two the major And on a

to first complete We quarter the be in XXXX. expect fiscal of

in Our fiscal starts XXXX March.

soon March, April, words. other in May that's That's frame. time So

Textron's That's review. Slide tactical other just programs. spares military Scorpion a XXX. for favorite aircraft, is So, That just so know specifications that. parts airplane under multiple picture significant a quick picture my legacy a opportunities aircraft. for also, And XX, one. and you especially of

package lots our so responsive. for weeks, these two us tooling something in which than aircraft. part, parts we a guys than in two turn a to flexibility part we've drive less a Wichita pretty the There's done we this of assemblies for to we a tool. key could and make of also prototypes tool meaning less being was have in down a one all weeks. with data make in or We we of get So, unusual. That's factory into cars their The

keep Already going. will Park XX. explained talk electronics the future. The is that. future, become let's aerospace-only Park's an sold, So, business about Slide let's If company.

after Park's work perseverance. years item. significant aerospace hard in of very and XX Second opportunities are now

So, partly I the that been certainly lot was paid of think has It work but earned. think hasn't I easy, and perseverance hard a off.

a to able if business now our of needed Park resources, strategic electronics we'd advantage shame, including our I industry. So, focus think of do a something opportunities the aerospace the that's I we'd bandwidth be in positioned the as then of may so we sold, in be opportunities company, able about to industry. to opportunities status the we all is My I've saying - was take concern energy take be we advantage that want And our the significant on take just XXX% fairly advantage that, opportunities, business don't is Because we don't heard, well we'll like efforts, very The and have unique small earned of. as earlier, to our industry to aerospace attention, our next aerospace we our acquisition that of - of kind aerospace that. item. have the in

in of terms need and are there auction based here In believe special to financial every some of not acquisitions status we think Harry a being words, in have I'm I be, Tom, I our some opportunities with little there - So, I get are that but optimist thing. kind that the aerospace other just to status the - and upon Dick and in buyers industry. and some

of be but XX. it's opportunities earn And special Park. could work what upon on we again, status perseverance see to and have. think a item based that that lot we'll So, I happens, for these very hard Last Slide

the carefully our company. the the do become we cost event So, electronics business an aerospace-only is future, in we've from structure for our and sold bottom up, very redesigned

been So, it this I two the - an months. fundamentally we've for do cut the We're is show management because - changed. of detail, at the under going reinvented of of so why understand. going hours. something cost. that We put into out you rock, It's MBA from this It's you you not cost. structure model, we looking every not We to bank figure could next it And and you person, investment the has to We you. Hundreds just hours, every on we It's the up. hours, model. hundreds every or hours working this. think Hundreds showing bottom-up dare want It's Because cost page. on forward. that? is the thought, that look, we I'm start don't business been yourself ground would

not to because the Let's really for Park important be out, design the we didn't it. be to there's cost you that our than you fair that think way take adjust structure pretty it a current and go. that's for to for business for would cost figure this rather structure and We But could think didn't way any future.

So, should out. thought you. help we we we We you should thought help

a that anyway. I remember Been never we've for before Something while. done this doing

estimates, baseline this electronic XX. forma sold. this XX, forecast Park's So, let's go Park's and - is these assumes to business Slide are pro Slide is

aerospace just Just So to for XXXX, guess I revenues it perspective, put for And the $XX million, fiscal for speak okay? at about you themselves. in probably the can perspective. they look numbers.

that growth go over If show X fiscal to X-year nice or some up XXXX, pretty with we period. you

just points the go me through of here. some Let

the Remember at in March. beginning months. Now the pro fiscal XXXX in year starts starts two that XXXX, It forma.

here, baseline. the that's the year important the really that's start, So

year, - take of here. the number year, Let's this of beginning the it things. of - the probably baseline by They're next let's business large now. from of sold following off. are beginning fiscal really costs One, have electronics going assumes number for day off year, tail - most pro have pro assumes the it was would to say, fiscal Because electronics call already sold months beginning years. costs all XX the and the two two forma are would a XXXX from forma costs XXXX This all That's by it's the if the business fiscal sell it is By ended off. It the the sold, that months legacy months if of forecast starts two, business years. of we one. majority The end - of And Fiscal gone X forma. legacy tail been XXXX, remember, XXXX. just electronics, the legacy to the have the now. assumes aren't XXXX, as legacy that sold, costs fiscal years tailed pro

here. forecast So, clearly, conservative

other organic forecast Second haven't source. products COMAC. will that There GE - growth forecast? everything opportunities Talking If we're fairly our airplanes how the we're sell, to forma are qualifications on sell it. line. We to we're opportunities many or assumes is going things the are we're dealing These What That's take which developed we upon forecast, item, Boeing those revenue, revenue GE the only, included from it the forecast many that forecast. and airplanes roll how I mentioned There's the of with we model. take in about will the earlier the forecast, no don't pro significant the and GE. other top products. Bombardier, It's two GE's that based take on are conservative. sole many the components not two acquisitions. Airbus additional GE

top back, aerospace year million as this modest it associated incremental miscellaneous a the would well talked both for includes, X And of this - we approximately other but of number. Again, with scenarios. doing hundreds a assumes also plug say, amount think slides a So, let's the modest of modeling, we don't a call few it have we major I that cost then hours revenue amount. XXX That it as company also And the line probably names about just business. from incremental it. a

So through assumptions in that the No this Like organic. used was model. that said, acquisitions. significant all many it revenue, build opportunities is we or I to opportunities

well, might conservative. You say, that's

maybe we XXXX. to and until that not year that fiscal new acquisitions. have out also course, top And want Of we forecast hope does opportunities note just GE will I

from forecast Aviation. GE upon based how we XXXX, - way So, that's received that not it's will it the have run the

And U.S. on there. XX% would company figured we million, have. down to XX% to mostly down guess, see or the assumes million page, you we to rate, math, net think is brought to a forward. cash so maybe talked want $XX next complete, you interest want there X% of on no state debt. - would We do X.X% assume tax are go rate about our to And EPS analysts, that it are for I electronics, This we approximately Now we new sell some to want tax things because if more we to EBIT. going $XX taxes. be these cash the probably probably all weren't this plus going after I whatever But we of assume income early has with stuff variables we

out figure Now Fed maybe than I would based more are that can guys perhaps regard. that's go is but the you on a out doing, what part in we

to net. down it modeling of the If you bring to do rest to down bring EPS it or want the

to financial go Slide commentary. Let's additional XX,

the the - million million. news. $XX and million. taxes our $XX it million. before pay the million. earnings based was going That's About adopted, of law here's enacted, law overseas cash, need new connection after-tax been in repatriate So, cash would with good If to have about $XX that tax new we $XX tax regarding upon $XX to That's our we're

off million. guess to it hang I us So, there $XX in deliver paid to for

Next item.

million paid that referred dividend, about was $XX Dividends, $XX $XX.X of dividend that, That taxes. declared, already So to the off here this. special it gone, loan. paid next - probably Remember, okay, it's as was the off. item regular million. is well The that money assumed That's we as here, says we we million. the

cash just that have cash off, as to remaining. take loans And the current have that position, our already after paid are loan anymore are taxes all or off, paid this So, we $XX a million is do we today, means paid math. - million of after done, of $XX we about don't stuff

question, what do obviously, we'll that number of see. we is A So, with cash? the Well, factors.

the We tax of sold, the unique Unfortunately, I of developed launches tell think will advantage acquisition any I And or mentioned, can't obviously, is more business. but was if be seriously. would business, after-tax the months. definitely possible those potential sale little I over We pursue those proceeds. to happens to, if is, But opportunities. proceeds understanding did the best sale quickly, a I there see you of the of electronics want few move bit deeper to you business of what would about law. one say, a new So, let's next as our with And or that is able this. reasonable take investor want

last per regular consideration comment are $X.XX thing but it. we But, parts, to there's more probably there That's years of that course, I what possibility lot well. happen So remember our XX ago a will quarter. for increased be on to a shareholders, say also here. as because would I variables when from of dividend, can't cash lot different don't a moving we returning want The a is $X.XX. of

our XX paid We dividends. it. I we intend share quarterly dividend to time. at quarter quarterly per for it. per this $X.XX regular intend change since to think to We regular years keep dividends now, of tend - continue don't We the

That's maybe we Okay. to this to about you be presentation we'll presentation, but that on news to there And through everybody's probably the noon, that conference I so a the is XX:XX intend webcast, mention is we're Needham Slide thing will XX. I attend a at we'll go it. send want XXth our expanded and a release slide. And of conference. last you doing believe thank And that version that. an welcome.

about Park. an So, feel everything update that on webcast dial free for into to

and That this we're our questions. happy at remarks. take operator. point, comments introductory concludes And to Okay,

Operator

from Sean you. come Company. And first will & Thank Needham Hannan Instructions] of [Operator the question

is open. Your line

Sean Hannan

Thanks Happy hear my me folks you here, Year. good Yes. taking Can morning New for and question okay?

Brian Shore

We can hear Year fine. Sean. you Happy New

Sean Hannan

Is can of context So aerospace consider business, bit that the electronics Can up evaluate your talk bang today ultimately way a the in little give Looking making viewpoints you here potentially here, material the profitability announcement a business cash? could you of at you you've sale? certainly net you if Pretty potentially of perhaps you're and the certainly estimates? a around electronics Brian. there us - starting evaluation some general business. with off laid out you're your with that you're the assumptions looking terms bit of to as of a little in your some have about end that where and

Brian Shore

Obviously, invite them to No, not signing NDAs. based want people into upon going And potential send NDAs. think going and then we'd buyers We're to I the don't process. to We good be that. the we'll would company. the this we're we're feel them good at sign information everybody of going top to to we'll asking select or company, company line bottom is to time. profitability reputation, we At a business send the honorable But line, not information comment on that the point, electronics them. do

numbers is other think - this your serious not it reasons. I I'll reasons, question, a important, is strategic would that that and my the lot The would reasons. obviously comment this many will feeling great for but be buyers potential of numbers to be be find of anyway, interest but

Sean Hannan

well? business and us point? Brian, green indication we the last perhaps, if at quarter the reported way, a in are least, this be least in indication, there Is we would the within just Okay. helpful. least an was are the the or profitable you electronics Some quarter had as At at give at could you red

Brian Shore

question. aerospace. answer red. we're We're the segment would not to in red. I the not There's don't no hard and But electronics that just in say remember, we

That we buyers. to again, a be business probably on potential the will confidential present basis. So the will electronics

that they the the proper in more I will see and buyer well. fine. as I be numbers think it's the red. will see strategic even the think beyond numbers value also look But that But not

Sean Hannan

believe business, of laid you side true want is that. have where just examples with engine company Brian, that platforms as aircraft make switching presence single just XX different Slide gears then engines to those an And I helpful. know and on validate assumption That’s you’ve you want that have places one for been it I Okay. to has on out got accurately to I the I that the and sure jet you aerospace platforms, that

Brian Shore

relate for to XX Slide Slide, correct. - XX Aviation. think, just sure, Slide and check GE slide That's let I me

have on these slides second through XX, GE GE So, everything on Aviation. These to Aviation Slide all relate programs are item. we

Sean Hannan

Okay. something that way. the right one to very revenues into be excluded? inherently the And components. fixed internal be are forecast understand that that which Would organic to would for indicating hand see, here. and Whereas the that factored only is grow? thought that the you're then you out, bullet, the it's programs are trying helpful in would for qualified was these laid context into of that be upper Or would slide, given that Just structure factored qualified, the the by process

Brian Shore

answer qualified Good is in be which at included not generally question. are The the arrived items on that would we forecast.

Sean Hannan

or for the of leads numbers, that Can me opportunities just prior Okay. the here the last either and of you question the then or kind some of way. that in additive referenced factor in some us an for could not of those be qualitatively in that trajectory you've And a give calls how and sized outline out then us to page? sizable today the revenue of outline key some Can overall, opportunities some get would then as I'll not that outlined one a you as that in numbers us here? you've those forecasts the estimates, on been of what's potential perspective be to somehow

Brian Shore

to, what the Okay, to include is, it try does way well some look maybe at to limited as the down try forecast things. break I we

the I so some in companies opportunities from there different So, the company approach GE with how not aerospace know what is not it in Aviation, I I other are the obviously even but large to the even with mean there is do that does world. of spoke many many universe aerospace rest mean this directions. and opportunities so about, include is I

worked more developed lend being products they where GE and develop get opportunities. So, qualified. also products Aviation, with The on, those new we us help are which

be guy product to you And Just on so just to on? you in to so and to major spent first the you are you hard be to it's amount try much Why program. want of that's required you don't first you're I out. money a the the and have there's what aerospace thing - aerospace comprehend customer, qualify you say, to you the is go business a They you a want to that? know, new they're to ask is, programs going when sell

So, quantity. in not if they won't do proven you're that

yes, we fact Aviation the that said, just GE we programs. are So, on

lot That's of it's benefit, Aviation GE discussion credibility. It's with. good qualified a end get of to it or to good. to difficult. is their But because pretty a Okay. company that mean, be the difficult I is known

what I'm sell So, nice qualified to are you want. GE and has program, getting products can Aviation's anybody products Aviation in at those been GE They those said, very us. you well, that GE is getting to help Aviation's with developed we've

those AFP, Aviation. It's that's talked going GE So, to Aviation, promoting an material of that sell we're other just robotic producing with Placement. that to on getting a composite companies. now started AFP we and production sell newer We And products we've aircraft for we're other and Fiber about with with with kind material. small. can to before, Aviation, parts. that this selling we're technology developed GE the Automated the technology, companies, programs products products - large developed where Remember, GE qualified trying we the to

Sean Hannan

that’s follow-up Okay. see the I I Thanks folks. can if will here around this. All helpful. for right, taking questions

Brian Shore

Sure. Good day, Happy New Year.

Operator

Scher Scott is next you. question of from Capital. Thank LMJ The

Your line is open.

Scott Scher

are to not who's the own? taken with to any transactions that can you years that familiar comparable someone or over that last two that three us place business point have company, your the For you

Brian Shore

you I'm not following getting what you're Transactions? at. or

You mean…

Scott Scher

to able with that I'm to you're business not want what familiar be sell I company. to going quite for electrochemical. your guess

going of So, how book and if that's companies pitch a together is they things. an comparable and investment do transactions, put to banker comparable

say real to, that who's That sold quickly, revenue. sold you year Thank for x, sold you. up to this maybe for someone ramp for Any revenue. Xx That fantastic. me that ago point just sold y. trying a Xx company would can sold for for be direction So, one

Brian Shore

Yes. bought industry, but quite thinking but There that's of in of aware so. not really but kind transaction in in no a obviously direct are few the don't electronics any are different pure are terms of Arlon, a really There no comparable. loud, just out I companies of comparables this business. there for comparables Rogers lots think I'm I'm years.

with look that's there familiar it's about, can do. a talking stretch think to you're good what And well, aren't of what to at course, You Yes, - really discussion, I'm comparables. find investment of But anything. transaction. the really that bankers

Scott Scher

So, if I could follow then. up

if lower, How business? the the made And you you would And to part understanding in than it's this. what the think, you decision far a. the that's be? along materially what are to sell not comes is, So, you perceive b part possibly back value sell you reverse different value and and course

Brian Shore

to sell commit to sell to to going going And not the the business right Park. We're for wrong it's either. we're unless not business the party

it Park. to has be for right So,

amount to, that given thought So, consideration. deep we've something enormous is this of

But sense good do we're Obviously, that's in to that. for not value have going something the is. disappointing, disclose for a feeling, control. We're just we're in to to do some process not ends something going reason what if it. the We

be don't interest, number, have not strategic that a a this be is It we would than this a special necessarily started an business in little really there'll a is business. right the of right more niche to going strategic from it's a throughout serious kind business, the electronics It's it's very, very right for happen. world. very say a was an that I'm known iconic have buyers. our buyer, and kind business, which financial that access really coveted. has market, talk the don't not different buyer, this Asian well financial XXXX, optimistic to This company are U.S. I I would don't for larger So, believe buyer. market. companies. very in We and But largely to we The things we be But technology, think the These are special the is the wouldn't competitors, of opportunity presence opportunity I has would think good that U.S. buyer. the

Scott Scher

I company. management familiar question, follow-up entity correct? I separate am is business one a by And then The your with aerospace apologize not separate again and run

Brian Shore

using Electrochemical people to see Well, are people that They're term but it covering problem. are the both. that extent, let's And corporate we like don't both. there's some then covering Park call the corporate, but that's

a where problem, we and real So that's that's really spread thin. get

to So focus able do both do resources, justice businesses. - both assets those to and high-level don't aren't

Scott Scher

and I you those of issue. that, you'll years, Obviously, on capital I have been guess amount is enormous that's in mean, aerospace. the I sitting now mean, said make compelled for acquisitions. make an to to acquisitions you obviously, didn't feel So, opportunity the you've

have to the able It that have business that make you have to because thought do capital, wasn't bandwidth you the acquisitions to too that it didn't was that? and you obviously So, you intellectual the have which or the access could of. rate intellectual be to grow didn't level you at much bandwidth didn't the you

Brian Shore

if know put don't it I I that would way.

of First based now, upon XX developing hard all, opportunities years are but the of work.

we were significant have prepared I'm to ago, X years we acquisition to X or or So, the sure ago. status the acquisitions opportunities do not probably really or X special years X or hadn't X X earned but for

the acquisition. or acquisitions. couple you're people, would had enough to have X So, partly X business of acquisitions, to could that, able We a saying, I if what we or special be well, be it's think years the I agree X with ago. not kind do more to of we would done probably impress just wouldn't That the have but

Scott Scher

you. Thank it. Got

Brian Shore

Year. Thank you. Thanks for the New Happy questions.

Operator

The from of is Eric Tudor. question you. Thank next Harwood

Your line is open.

Eric Harwood

Should we way the flow change that structure just stand-alone -- slide aerospace from I indication should guess, made up. today? projection of bottoms of in cash couple of on came kind the the the built you expect spend, financial looks through. profile and quick expect an on a the follow-ups a model we this that the just excluding Hi, acquisition new in of you business terms questions the from cost

Brian Shore

we Yes. I be but I positive. flow mean, think the information, cash haven't flow would cash given you

cash can numbers, you under mean, EBIT/EBITDA at If those flow I look translate I fairly you think easily.

think So, be I positive, that will flow cash the would be will good.

Eric Harwood

I Got one. it. And just guess then

XX suppliers the focus a is business the profile financial not bread-and-butter it very electronics, like - which as Why not been been has in years? possibly on higher quite Why The electronics that perhaps aerospace at time. aerospace and business. years, sounds business not your for you've attractive So, of as that XX for this are long trading multiples. business sell

Brian Shore

at point. dues. paid we with not I electronics. We're getting achieved want, dues. We We of there, dues, And I more what the think where think, paid is that we're that it's not not started results we're off aerospace. advantage kind buyer. really now be just, to going we're we pay that that But owner, this of a take very, aerospace are point. lot different to objective, owned of but just to positioned that of hard years would At We sell we this right in of very didn't it. think electronics has all a think We our so that's labor at XX been in aerospace that's potential with and better away company back by right we the to least that at the put not now find realized much not

think build something because I the I XX years company to put would it it put going to for wouldn't I I in to and now. in it. the sell mean, have we're sell just and our we're going years lasting be weird for to want XX for the future meaningful if investors. our very

Eric Harwood

few in you from And competitors in-bounds had the mind, of that you not going specifically, to say like acquirers but sponsors in potential strategic the then it. on a our past? I’m ask to who, you it Got or have electronics, have business sounds specifically

Brian Shore

many. too Not

in it have list. you who quickly you the it long. be. this doesn't the but the too list. long going being It's it take would minutes? as think the have strategic interest banker come course, business do not But we not two talk up I in past, the would we're Because well, I suspects was as close probably opinion, we we in imply, up like, commonly many. to mean, a name situation, to usual strategic that to have to long names, for of so yes, with the as here's And the buyers known our is doesn't as likely like so my take pretty an

Eric Harwood

there last then one with I Have decision that And ultimately the one. Okay. sensitivity around you customers guess top discussed them? any is sale possible the you have quick and the and agreements the, with

Brian Shore

or aerospace electronics? about talking You’re

Eric Harwood

Either, yes.

Brian Shore

Yes.

critical one Not two very could we to. now. given or going really one go it's Maybe or matter, into many. very trust that because maybe notice not confidential customers process two advance a many. So communication we've We're obviously that an to

that is a it, can focus we will it, for guys OEMs electronic our be side. is our this enhance the as are thing. the I for the positive resources. not and to customers do thing find dumping think OEMs owner the a the better of we're them, better some our already business. should customers, want of to message more with on just particularly thing, not this have reassure be well, because a talking course, This We negative And for to and going business it, business contest, want in this to a

parties customers. investors, and and to OEMs, at aerospace, all all make a concerned, our the this thing of for Our intention our positive who electronics, is work customers concerned; then, course, parties people Park,

Eric Harwood

Okay.

before early about assume fair working Or models. you to same the been spending bankers board the evaluating and two the also time in that transaction? months the relatively, you've spent you with said of on process? guess, You I are that amount Is it

Brian Shore

time implied just aspects a as potential fair [Indiscernible] that's your a No. spend Not think all of transaction, in different assume. I this you We No, new different topic. of to in all levels, question. lot

Eric Harwood

I Thank appreciate you. it.

Brian Shore

Happy Year. thank New Yes, you.

Eric Harwood

too. You

Operator

further call no turn remarks. the closing Shore over you. for [Operator to queue. are back questions There Instructions] like Brian to of in Thank the would I

Brian Shore

our Thank business. Okay. you in. nice you and talking you, thank operator, nice you, very to updating Very listening on for all

our unfortunately, the is of storm. closed office because so And

the families hopefully, at that, wish e-mail And If other your of new of best Her do soon. the e-mail to I of the to said, I very thing you is and send the an us, is Have top you want XXXX. good we'll you to And all Goodbye. Martina. you contact to best release. address talk to than in like day. just want a everything right

Operator

you. today's Ladies concludes gentlemen, and Thank conference. this

You disconnect. Good everyone. may now day

Park Aerospace (PKE) 4 Jan 182018 Q3 Earnings call transcript