PKE - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Michelle, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp First Quarter Fiscal Year ‘22 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there'll be a question-and-answer session. you. Thank Instructions] [Operator I today's time, Mr. over will this call turn to At Shore, Officer. Executive and Brian Chief Chairman Mr. Shore, begin you may your conference.

Brian Shore

with conference Thank Welcome, you, CFO. I investor Farabaugh, everybody. Brian. course, have call. Welcome all usual operator. to our our This Matt me, of is as QX

Park, at our this morning. earnings So early announced we

now. meaningful, want instructions really more that we're to the how access have presentation that go The You because front an is in call to want do website, on check presentation to this make to to earnings you presentation as in to In to go you. through going release, that want earnings release, order there are if of way. you it also our available the

that months not than we're you actually we'll not same. is make So, stuff. some it of was ago everything an things, the And interesting we there's so what's are two interesting a before, lot There give updates. talked new less this new that having to about some trying by call

the actually we to almost but the slides, of QX kind we felt them are of for perspective. include slides identical to Some had

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numbers, We about compare QX, an we QX important we remember, essential that start that $X.X So, And to component. of this, because QX programs. for a second, let's that the perspective, covered missile with included was But million just keep why don't QX $XX,XXX,XXX. sales for this talking is $XX,XXX,XXX.

a had involved. a and relationship a no there's but sell buy some markup, product, customers we that's this with involved, and the pass low we charge to we a overseas. basically, of where very and production supplier margins So to We it

So really, $XX.X. from if apples-to-apples, $X.X you subtract want million want about to you might get to

gross don't XX%. that don't I us to over below margins and it $XX.XXX. that's $X.XXX, which you and out gross Until for it's at So is seeing remember maybe -- to offering margin, XX% $X like million for for perspective, $XX ever normally million our quite good. something to gross just gross up want approximately look XX.X%, We QX, margin when profit QX compared go

long anything at how it. see don't don't like look been not I The XX% historical quarter. $X quite don't is we you quarters, history, close while a even ago a EBITDA going good, was anyway, had adjusted -- It's that EBITDA to of look the million. above $X.X $X,XXX,XXX. and the good. And million remember anything So above I you you're margin that. XX.X% at to can see also adjusted quite EBITDA in

set see, we $XX.X during what estimate we do let's QX about May say XX, it, was QX when million. say $XX.X investor to million So about XXXX our call, sales we our

want. that came we want in I in the mean million. right what by was That's a And So $X.X which we million in second. our explain good. range, is $X.X EBITDA to sales estimate what what I'll Adjusted

came but – by we at we're still the the range. top range, within into on the of well, we're just range say let's So the a top

to wrong, violates you a forecast could something, we're We're we consider can can of remind one tell to to that's give quarter believe this we but it. do for going be we this know, We of heroes. all But play we so you. tell be mistakes, game that, remember, companies going could our where not kind always going and we like that don't not something which end of or almost make we of us. we And is, so we And heroes. we numbers that tell you. know beat, can lot the ex, X% to to as silly, we're the probably principles, every but philosophy be do we believe Now our tell we you think it's if that's them you, we of you we minus know truth. it where is We plus, ex insulting

that. understand to you want just we So

estimate, margins prediction, So but going not $X.X heroes. like it essential that's mentioned QX, was we to wrong, to happen. of We're an in going look be in and shading to could this what we happen. sales QX our factors which think the component. that Certain sorry is QX there were a affected million sales – We give is think we is what you and

those actually of flip the million a side so other see be will into $X expectations. But coin, programs, approximately respects for product you the and used those Eventually, sales low of materials QX, Those some also only are story. there. of that’s and factors, margin, margins, margins, which very that's factors good mix equation, missile programs. was all In QX high the the very least in cost at other of For produced favorable the part markup. QX. and missile side favorable at And components other prepreg the just sold of for were essential the

for unusual unusual the – that mix, good we there sales special, all, of are extra line it materials just want GE just we to that QX. materials missile to had programs. those a with no or no of for later said, or back was And First Like we'll highlight, items ramp real bottom people. up steep the ablative there very nothing get call pushed we this

production and stuff QX, by that's somebody GE a or compared So X actually you it making mix our had happen. it to that, amounts, And low really happen. it's QX increase steep easy people it times QX, it people to but program your handled a to very, make And Also say, and well. like ramp. our good handled to waste, compared oh, significant very sales, it's XX, that's relatively with

give gross next EBITDA at possible. So for us those perspective margins of kind margins QX, couple what's least of we some see couple it quarters, and won't on does but

to we need side Now, people. hire cost

hard us. to successful go willing to when will one We haven't there, pandemic, presentation, travel still visit recover. see We But to T&E haven't, to as because not willing will but we hoping as they're the we're you'll that, well, the we from course see there. home, were of been hire nobody so, was all we planning increasing are people. not when we're on increase call customer customer, example, a to that we're with

going a which what increase we be in costs to there's go as good So want, thing. some we is forward,

just is Let's years, close margins, close go to those EBITDA good to during XX%, at called even gross Look to fiscal those nothing Slide so historical like nothing perspective. XXXX. X, margins and XX%, this

Matt's that Matt, us please Slide let's X, on go keep with Slide help Slide on so out ahead, enough to one, take So over X, moving. okay. going X.

Matt Farabaugh

Sure.

quarter similar fiscal $XXX cash were in invests investment the you high know of U.S. I’ll the yield, marketable liquid, securities let XXXX cash year-end Park cash very marketable approximately highly at treasuries, agencies corporate the our end rated securities. On bonds. million, to the just and and

treasuries rates and X.XX%, our as low. X.XX%. so just year, is three calendar this less the rates so decreasing portfolio until that on they as investments very recently, maturing, yielded than as QX, been years yielding long This reinvested, investments For reflecting our longer-term far get have and

not but XXXX, are rate at three year X.X% and one For a the way all yields through Highly year, for comparisons, between were bonds corporate all bit treasuries little the better, X.X%. January X, treasury much.

calendar you give our calendar perspective, -- year, year, last is investments to X.XX%. investments on earned earned average Just that our some last

will a we have dropped than steep a low a off. investment earned less mentioned see That's right percent. now XXth the interest For will for quarter, as earned trailing X.XX%, very of X.XX%, how short-term the first treasury I drop yield investments fiscal rates. remain they Net quarter, rates this that fast our first One recovery year before. off. income XX-months just ended, until in And

realized. tax feel our not moving than rate, tax we are assets that Singapore, This wrote be the normal going to rate was XX.X%. quarter first as was we higher deferred So tax some effective the to on for down in

comes each be fiscal Assuming year, should nothing the forward during tax year effective to the up the XX% forward, quarter. closer unusual going going rate the through rate for

lot about tax potentially all the Of of course, corporate in change rates change a there's the talk a tax bumping of could and rate. that, up been Federal Federal

as Moving of will the bring quarters year expansion. remaining online climb through to we depreciation our depreciation, the

year's the will of start $X.X fiscal grow the low year. throughout roughly to and it be year, will year, depreciation, similar the XXXX For throughout last full it’s million. the But, depreciation quarters

full it assets. unless expansion not our all to our running will Next depreciation increase significantly, year all of from will Brian, want somewhat online we me, as the a anything expansion there's and depreciation on year's up of depreciation for That's else add. have those of assets you

Brian Shore

great. that's No,

deal. Okay, thanks, Matt. All right, good

We Slide Let's moving to here. X. go keep

put just we've included said So slide our information. we'll shareholders of in. it just this missed before Actually they that back it this quarter, is we a last decided so one

history $XXX the think cash. another know long-term we debt million of fiscal we paid have XXXX then recovery I dividend you million going. zero keep $XXX since in So and And and story,

any customers for come about just in ask when too cover. get for alphabetical Slide can we of us one I a know, that's the a slide to lot so down, keep been top so don't bogged is questions moving, our let standard presentation, dividend our but guess we this order. history, You X,

of nice most customers. So with the associated pictures we have

into supply that to is Oriole NASA that picture Aerospace, program and First those program. AAE we right, top ablative are relates in materials

the top radomes programs what drone contractor for the is think of at one XXX XXX. structural and materials, the but GKN this for supply Nordam. to five for one full this drones, surprising, mentioned we the but the we the for supplier usually something actually, XXX GKN BQM materials and that for top in is master provide these customer we've their And many weather XXX These Next picture composite structures, and before, Park MAX. is that a this used believe for Aerospace, components GKN, look is are a to for And left we're drone main presentation the SSAT. Boeing materials pretty days, chose they're common we through of programs. Kratos, supplies. of are Boeing bottom I for programs right, little we radomes their

need also for a a just XXX of got And MAX River, a little select coverage We we Nordam. we'd change at for pace. we of Nordam MRAS, At picture Boeing plenty we through them, thought them sliding. don't so programs. multiple Nordam, supplied orientation for in here For the about bit multiple, of Middle a

big Let’s X, what's by charts, is But of interesting, interesting the to that are Park’s onto revenues segment. fiscal like go aerospace I which interesting, of QX looks Slide market pie estimated kind I these think are was looks think like like way starting of military But the XXXX. ‘XX of now returning to we're XXXX. down look is being being fiscal pattern up. Obviously, with commercial kind ’XX more difference to fiscal fiscal and

about. Don Park top few as just [ph]. well necessarily the the using programs think to XX. Program. They to Aerospace Slide as another is project, slide last These we're a select on Military that we programs of you and they're always small, move This Niche standard big would that Elaina have five and we presentations the in be just for interesting Let's as aren't programs talk interest. loves or

is November that planned is we're Telescope, I think XX MK Galaxy the supply Trek. has Shadow is helicopter aircraft military program to on. man ablative Lockheed has we'd announce XXXX. multiple be while. that's primary This more a supply with C-X -- in structures, been a components. teaser This materials And for really try XX. to interesting, thought Systems The as niche going for probably detailed while Park this no radomes, since little drones bit we where that to drone, this We quite Webb Slide pretty a going, Raytheon materials, of keep around our a James of for November here's been obviously, And which secondary Missile. for or just going into from and for a woman a the something areas we for Let's little in I to through when provide Guided a we’ve Textron you. is for of structural Airbus go for aircraft us, is That's Star a Like Space C-XXX on The don't Why XXXX. QX you. gone materials Launch pleased materials Apache said, a variants. make a maybe program this kind feel new program, and nozzle launch going just program for various materials we the James structures. interesting. before, business. We'll interiors. rocket be privileged really, for we of and Boeing And Webb of be to part we teaser consider we the do But discussion

to expected still the on why expansion major budget cover, spending on million, our a some on and are this of later spending So $XX.X Qualification the Manufacturing to-date based run don't math lot like Slide keep basically do month. this we to bric $X.X can just is million. to Kansas our coming going, we is The begin facility. complete. to of complete, September million, update XX, I but trials year. expansion Newton, $XX expansion in, said. brac go are the expected is begin in Total

last be this the couple materials. caveat to one we've Just there, chain but discussed our with little raw over quarters, challenged we supply continue

We the every continue day. to fight battle

do a start we have these dates. qualifications qualification, and enough production, we're feel raw that and So to have is starting going do to choice. would materials to we actually and to trial see if want in be then we trials, what not able don't the good for be Because not to produce

have the world did, what GE So when we with the Good Airbus redundant the do major we capital be originally this this. especially important, if based this don't many giving facility now, slashing upon think thing And last right I we've This that world AXXXneo point six though, Remember, Good for expansion, plan. hurt their in was a programs. the pushed we'll been see did. be expansion didn't hurt of item, is we our hadn't supposed done because were expansion right in doesn't That thing forward qualified our cover an happen. indications to happens. now, about this you months. going But later. to to we'll program, This because if we do we we'd a spending. is others of

our it So and in and this and did ahead was we falter flinch talk very expansion. in very guns which this to good good, completed went didn't

so welcoming come and complete. pictures, is kind us good. front bottom That's entrance, in picture on their in, right is opening the Some a with door saying Donna, and of expansion

were than now. and Motivation they of a Province, on right motivation. still pre-COVID recovered setback that And big aviation, they're that’s Full they full outbreak and European expected kind heard to to international were way level with U.S. although, at to for fuel-efficient airlines positive review you perspective, Slide expect much the actually fuel haven't some they're little we're slide cover during well a single-aisle I Like remember airlines report with at very single-aisle they move translates QX. prices slides I single to quickly. also end aircraft translates sales. of Let's or in a up on more aviation and to unless to concerns a that they we really approximately those year, up but domestic two, and family. modern just even not day or bit domestic it very there's with sign a I sales. up for read to this on of environmental little for go up. know This AXXXneo these such less to means efficient of Remember, and relates provide their Look up said go that down including aircraft XX prices airlines very this the recovery China aviation motivation, some and motivation, the Guangdong XX% less eye are recover, jet And at positive, quite now is going wide-body. so still replace to to pre-COVID. legacy said, of we for XXXX. extra doing it is covered single-aisle at single-aisle higher motivation more based by maybe I saying XX. recovery and so starting to these back domestic go, but replace prices, quickly fuel-efficient level, crude lockdown particular Slide that's fuel bit They go And of everything oh to crude domestic level, fuel-efficient airplanes up. airplanes. recently. for positive beginning motivation pandemic, with positive for the boy, in single-aisle. more they're single-aisle, to COVID don't has low,

all good not well. aviation, commercial commercially and in did news for in single-aisle now order. just Single-aisle MAX at That United place That's as to huge this the AXXXneo, that's indications. our read a that for was good only for probably opinion. You the was be aircraft least

Let's XX, go theme. on same the continuing to we're Slide

European resolved to items so look two their dispute Now these. and these Union let's and long are U.S. subsidies though, new Airbus. Boeing at XX-year trade involving

I “we that the of to a new I was read feel U.S. mentioned is thought interesting little But interesting. against then she together representative, the According the this and to Both were Okay, aircraft to trade a coming Airbus I all no threat”, next strange. kind about we me. are common is finally to develop Boeing that, AXXXXLR. hurry against single-aisle a China. those dubbed stated her. XX in And it comment from recently surprising one, a compete little the think.

circle those slide Aviation this the with as every okay. have pretty GE go Remember, Programs. requirements Jet have it's Remember, on we'll of points quarter. this contract River through we firm So – is if from throughout a XX, we XXXX, that's ST Aerospace. Engineering XXXX back Middle both Engine presentation pricing we Slide sub the Aerostructure to a LTA, Systems MRAS, much

you MRAS should of factory through me ST was which why aerospace nearing Aerospace, now really remind GE or Aviation, is programs in MRAS company Aviation complete, run major that all the a sold A sub basically to just MRAS that's GE based construction say Let ago, couple Redundant completion. years and a Singapore. Aviation programs. GE Engineering

entered a build because We're that Not right that. we was we'd agreed, that okay, of as for our We factory, went LTA, But deal. word that nacelles engine it's materials, that. redundancy, we for we're darn ahead that's we But hurt said, redundant reversers so source and we soul we're remember done Once multiple did we people and of So for go going into that it if on one. be but did on capacity. programs. to us, and our for just and I world now, composite good. thrust a MRAS from missed in pretty hadn't

five. The those are see first let's

and which Comac is Our Global XXX, XXX, Comac a AXXXneo XXXX. the regional Bombardier jet, family, ARJ-XX, Boeing the

Passport source source LTA. You can have sole well XXXX, are but these gives part components see Global XX the as lightning and structure and sole as things picture for thrust a picture primary that Park for see engine XXX strike for also the nacelles, you nacelles, terms Park right. love not some also problems legendary that's to composite you top with And of everything reversers we of the of this engine perspective materials MRAS is here it the the material I structure how can't inside are. because its you made stuff materials huge of these see. which Boeing in The

Let's go to Slide on XX.

Let's Aviation of little a a bit program. update do GE on

new. is of some of Some just its review, this

the family, the Let's AXXXneo aircraft Oona anyway. big start that's for with [ph] the Park

also of currently Airbus’ couple year. confirmed April our April So ‘XX XX family. not first mentioned XX. a on probably to ramp the at Then, during the QX this is XX, by This last XXXX the covered from and call AXXX by rate -- just by [ph] And Airbus. is release of XX release. QX, a airplanes the sorry, single-aisle going for investor during steep call, from the May news news of we CEO He items XX ‘XX that in and in was with the end

a firm of rate of QX, QX, enable with the and Airbus the to calls family a on this by direct anticipation as XXXX. high easy one XX consistent by investigating per that's per future of Longer-term is So prior means rates XX an us, XXXX by for securing month AXXX rate continued suppliers, for by us of by QX Family: scenario confirms Airbus also of XX recovery. to in items, meaning Okay, XX month prepare suppliers production of an Airbus opportunities XXXX.” average asking “AXXX as is XXXX. aircraft is that just

that we to it peak in it of get in what higher explain And that number. understand than we're forecasts that represent both would XX% important kind of XX out, to go you very me significant pans let and the that because long-term units our how just That's item, dollars. is if next me XX XX% Let means, using. the

XX%. of actually aircraft. Slide of Next end meaning family had the AXXXneo CFM, item is It's for XX.X% about Engine orders of XX, share May XXXX, a engine source that think News. as firm LEAP-XA Aero The of the I continuing, on of

two AXXXneo, engine. the the Pratt on are AXXXneo, So engines and LEAP-XA

this smart we terms guy orders, to is thinks not So what's is in this firm is is firm of speculation, is knows who not this saying this happen. going some that XX% not of orders. forecasting, This

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XX that of translates in say a forecast engine. upon we prior our based to share the the page assuming a So XX% where XX% increase top for over the that's peaks, LEAP-XA it

of units. aircraft, by a little side had interesting know, And ever, of India's the going as airline to Okay, largest here Slide number May another IndiGo, some CFM recently. power note probably thing. announced XXXX, largest let's XX, on selected family interesting India's trouble AXXXneo an XXX, order additional keep CFM’s provide representing what's little that IndiGo On is and COVID, XX, LEAP-XA also with you

smart, people a its these been they are for commercial are it's So setback industry, aviation domestic so ahead. but going

by So in assembly, be ordering XXXX. the Toulouse operational that talking Park. it. Airbus, putting smart I mouth announced they're Why line all the with we're think significant? maybe they're say, and scheduled they're listen not yeah, aircraft. where the is work they talk, point and ahead it oh, assembly some airplanes Airbus, of for So on at last Airbus I'm resuming Airbus is. Slide money line their mean recently they're that these which saying item new this and on obviously end is to AXXXneo these is all people on for really a to Then tend good is engines, going announced talk, look people is maybe assembly about. back But last they're to XX I don't -- Airbus, not the XX,

example, XX%. commentators, are year, were not going below go to to of it's they to happen, Just we're oh, lots smart analysts going an not above And, saying XX%. go these going last and

paid when to and said went happen. attention they certainly XX%, we what's So Airbus we're to going going We below know not to XX%. they didn’t below never

AXXXneo on I nice you never just engine Slide of give XX. There we'll picture So LEAP-XA what a is see But perspective. to that happens, know. the you wanted with

to Slide AXXXXLR. go talk this Let's XX, about let's

So covered, it of of is we some this, new. some

test aircraft final assembly. First nearing

expected dog in into they've next entry backing the service, XXXX. like flight they're years, not and saying Certification commercial And like down. nothing. about this, aviation been two timeframe, that's years First year. That's tomorrow talking is

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is pretty range, has Boeing, But single-aisle So see. come in seating be is either a market way, this plus this any just don't Airbus XXX Boeing -- not just here's said, I track to by Boeing XXXX key any what know plane I a competitor. we'll think said. they're Airbus will said. you question, a to for feeling AXXXXLR up be plus statute what have I'm what my has mile Boeing. guy see that what said. capacity Boeing ceded being the in I'm a telling with inside and not going hurry I'm to means, you I’m I we'll just inside is bigger for this a does. of and is have just they Boeing Boeing, what And telling Park, telling

commented that's like have I surprised but a what nevertheless, previously, So that, I'm about said. they little

aircraft the year. and of XX, begin the AXXX. that's It's to continues The this Aviation against XXX this compete airplane certify Comac the programs. end to Slide a MAX a with before the maintain Engine to go Let's updated and designed is Comac Jet they on single-aisle. deliveries GE continuing intend to of

what happens. see we'll So

be will want to commercial they it be originally players aviation. think I but intend Chinese they Comac for the role Chinese, in market,

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good that's So news.

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review, This news. to doom at buy all didn't the were the completely days XX We Park, and hand. didn’t of is on go gloom at end Let's buy continued. we

but though to production even of where widespread be customers, discussed But our didn't in made levels don't lay that. into we a And item, a lay-offs And to for and MRAS. minimum won't MRAS I’d our many couldn't the would last just go world be critically to recover. we of production. anybody If then would important off. so with else hurt. critical allowed to do MRAS big be go in this I the know customers. about there we for have We Park were problems details. We we of pervasive, And hurt, just not would say world would mass this guess times, maintain we a didn't hurt, baseline happen, will be deal we the who in what world MRAS us, And MRAS’ and because

very it important We’re we people laid that off world very we'd was of also that about is happy real decision. And Park to in a be right hurt now.

on, off now. real hiring we'd people, a if You'll but in world trouble right hurt of we see having laid we're be later people

zero. do XX, GE significant didn't talked So review. from calls the the We end during this minimum at Slide math. destocking. below on. of was XXXX mass, mathematically about down allows baseline, mismatch We for dramatic numbers it inventory. the going inventory length And that. in came, all we're said was then don't destock with And programs I We programs. year unless good use four And this step that. market ended continuing divergence the there unsustainable and We just critical we don't thing some between least spoke at divergence in negative pure well think current requirements for app reckoning the was day to can’t come. has for and destocking

go Slide through. trying you're Let's to hustle to XX,

item first covered before. the this we So

The second interesting item, perspective.

last or programs up year, two folks, program four alluded we In $X in not big QX this just about of GE beginning. as QX that's think, $X.X million, these a about not facts. at to we million, somebody's right forecasting. This times that's a just is This year, That's the ramping talked just opinion. happened about did deal. sales I forecasting talking That's happen. increase that this of quarters, actually

XX. to Let's go on Slide

we're So same continuing theme. Slide XX,

forecast, we total if talked long-term updated year about as at the forecast. basically pre-COVID very received So look MRAS. forecasts this, we from through XXXX the numbers long-term you similar calendar And

may compete significant then be significant two their opinion this, up ramp the this statement be may to about of recent mentioned light the upside why? opportunities, by the an we have by aircraft Boeing's together sales of XX. especially to discussed an on that related we indication capture These maybe steep in referred develop XLR, Now, the aircraft production release, XX. that it to family a And some XLR potential hurry think AXXXneo and Slide Slide upside, May long-term XLR, though, forecast didn't was not Airbus their XLR significant Airbus the MRAS prior like may I in it fully optimism news the we're The to quarters, against in fully XX, in about that about not capturing XLR seem receiving in being mentioned is I from our opportunity.

that respond for I manufacturing our programs work. ramp important the like the GE responding MRAS but upside, up, already we've talk people up, how that there chain XX% question, consideration, to is, is received Park’s keep represents as on important count of still the lot Park An month, Slide well. of XXX, all we going consideration, what back point represents it about coming see XX, XX is mentioned not about a People significant Aviation and aerospace the the people? of to and is that that catch struggling forecast the nevertheless, mean more the This a XX, talking peak ramp. you're is to here. we heck paid So when steep a eventually though, supply this very getting per and is about over how the from supply chain to current commercial AXXXneo. a to short-term increase

now, We going you way, we QX, now do times do XXX that announced QX, that that? plan we up that to we was at do QX, time, by since how if down for we QX? the the presentation do difficult off. at QX. look So And ramp on low GE time XXX So to that for less important How lay didn’t said, four people. very with people, by programs we again, it's incredibly think we and less handle to anybody And very relatively XX-XX add had to been we it’s with people, what people, done, we've more happened? an didn’t hire waist steep with right people not

off, darkest It's days of continue in stepping significant. think are quarter. covered this Park’s That's difficult job the we not the It's talked I emphasize Thank done. us being job that the I every what be godsend. to about They're an we done. flexibility Park’s big exclusive very just how aerospace it'd Thank Armageddon already is anybody people Park Without for goodness ramping So get XX, get down, people think the our program, a here. deal. job aren't very gives people flexibility I up just Slide important We this, is commercial one let's done. for industries, customer can't not ramping us this do. deep. program. this a and did On even lay this the enough goodness up getting

only if know right You people laid what now off. have we XXX We people.

including Matt the has. just we quarter. during think Park able for get couldn't people, and I it Park have first to Thank know, it every job that point I say for that dedication and a their enough. right enough. say to great not fortunate we'd $XXX be you at is I and work where person outstanding blessed can't Brian done. people can't a so be bonus And done. would without even them receive Park’s fiscal goodness a get

forecast Aviation and busier go GE history let's little to estimates, on a of is million. of page QX, Slide bit the program top here. history $X sales So XX, the

QX think at we already to in I $X.X million, so just we $X call, range our predicted that. of we alluded million top our that And the during came prediction. of

the Now forecast. let's look at

So QX, $X The QX We'll unchanged, brought you down. we $X.X for forecasting numbers QX hadn't $XX that's those what those about in before. we fiscal it second. total to $XX that's and and that QX million, million, a million, The are so $X given gave for previously. to during programs ‘XX was QX $X.XX GE forecast new, QX, talk million we you previous million. forecast million are was

what before of inventory move happened nail down? because to also, bring about why always to things that difficult the QX, can in from talk MRAS I'd which numbers let's practices, quarter-to-quarter. short-term, So mentioned manage Short-term, And uses company inventory. a it's

information giving us us there's not and So for it’s through. see anybody's us, inconsistent information, complicated. or difficult layers, have leave us MRAS that We as that didn't just misleading it's you correct company. is multiple that get this And to sometimes

forecast not daily inputs get to The with sells, of that work So Comac the that many but which little only thing now. last bit. we're just, said, public I not we indications this. some do can quarter-to-quarter, battle OEMs, changing But as have directly at how on are some we what of It's that how we and But the for is already just XXXXs potentials we best all kind probably the guess to chain nothing statements. time Airbus that get matters? But that's how upside and We from And a sells, of the matters in the I'll Comac the we based risk do from Global We a the It's again, many many And it something do sales, there it we're what mentioned the quarter matters and real attention long-term OEMs. we AXXXneo it produces produces is be manage. forecasts. XXXs what of mention Ultimately, to believe pay are long-term mention that we can. every Bombardier lot some hard. and produces moved long-term that's that's will a getting supply we battle matters. that. that with year.

okay, far, So razor thin, okay. kind but, of

history Let's Slide more is and forecast XX, estimates now to here. Park’s performance involved little financial this go

just of top the perspective. history page the for is So

low we components already You QX, don’t essential million of that. Certain the all very in the materials That's approximately million of affected want component sales program missile QX we’ve the so missile sales those we factors spoken about history, QX. programs in that. $X sales, million QX, haven't lot the talked a in and in know to spend essential already of on which of $X for about margin. QX. $X.X time this But of

for that aware be QX. to you want just So

gave you to EBITDA for The million to passed to by did, $X, reduction we you forecast million. we to forecast million did to now $X.X now revenues, to kind the we sales $X.X a down was or in QX, down $XX that million, $X what worked you we brought it's $XX we you previously we just we $XX.XX $XX.XX. QX, the for asked the through. the reduction was Basically, for million forecast to the and of GE million what company to down QX, Now, top-line

So brilliant there, lot of straightforward. going on math pretty not a

Let's at have this see the the for fiscal not we point. though, changed year forecast

about We reason to to we’d that. have also no do here. But talk want see,

a one shipments are but risks again, talked So have international a the this about to we customers Park to become more and shipments are of risk overseas, challenging. little about want talk that's international bit, and transport shipments that QX. probably we for These shipments more

the But be might ship ready sale a we it, ready shipping something. to is do if to company So until ship. it's not not we

We have costs that are elevating or should say. escalating, I

them are locked costs some costs are through covered. in. We Some passed

the us. We and to about our weren't things concerned some unusual risks, T&E concerns low there's talked was pretty want so was earlier. GE with with just are agreements the T&E talked may will this and about able about about hire economy that, need also travel then to those Park. also to we to a risk our to inflation, respect because see to and and you and QX weren't We're long-term respect have very We're chain we in and we in cost people probably We there much about And go we we hiring the people have not still little up, that keep be to mind. with we that heads able suppliers, supply respect customers. to keep economy, our country.

pandemic, we lose carefully scenario scenario irrational just this either. our important happy that's we last and most we're let's think about the year buy last I days necessarily lose your end of he year, a by that. We're Park, attention And head said. not Was exuberance, And head what it something concerned for day really thing the As we here we paying the year. don't didn't carefully. say, Greenspan watching again but or that? like with are

get caught exuberance Let's stuff. irrational up the in not

few to us probably now. are of some QX. the to of there when our as you want I thing, think forecast, and think risk, are just look economy, there, put these just which we reasonable it in. reasonable we out really And there's raise that going there. you confidence and to as guaranteed, push a we in maybe country, Until the asked generally. out sense want long-term like we make numbers to give doesn't We you, that doing and about the they're guaranteed, think we not but but numbers there's long-term obviously, disservice numbers. I kind forecast, risks forecast and insulting give don't lot it's just are that numbers you Not for have more forecast you A have numbers of get QX, some feel likely reasonable. lot we numbers don't through, believe no is to a yeah, uncertainties. Maybe a you a Obviously, still but of went concerns a

forecasts. So XX, investment about we'll acquisitions, see. feeling That's update activity. other our Slide long-term strategic the on

Sorry, do are there's We're in aerospace that money which to want, the us we've participated be really try and we're backed not is companies, lot or through we hysteria. also, Park. I it's overpay The difficult. these cheap that's got even not more got second we Banker it we're but there. auctions, caught reason heads know, and out because what out. mob keep makes a one recently, this up and of and not it our against hustle they going going led more And money, we here. did the competing still round, something easy get say, we sense to often We not for enough, it's but to we'll long, mentality just one, makes about trying. cheap What easy has

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working So JV, opportunity happens, that what cases see are for some out time don't will keep even potential something Why open and Park still times, we strange us. and these out a programs. we strategic reached we that's investments in them, on are here? the key some discussion pursuing programs, we be and have take an our they patient. different number moving think Living and up aerospace of that's to we aircraft but and OEMs in to and reached I think interesting in slides. final to We

that's use you'd I So again, company, have able something money to really the Strange now time paid apologize because that's money. to work, for never not be be important free it are for fed and days, and to found us, self-respect, it think you into presentation. because or work now doors. the worked And forced anyway. your one a the And money. is work the self-reliance, very But cheap people were people getting long days It hard, hard out being day you earned Free company. was valued, was maybe you from it's but the easy honored not with the sacrificed, dignity, not. person the real matter just use your In gave a money a used doesn't frugal really value doesn’t something money old believe on system. that this that's money, that person

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go Let's XX. to Slide on

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critical. of is ship the to part until just like been process, We tested. customers production manufacturing can't product As it's

approvals job the the sure. multiple But program, multiple stepped days all involving folks steps, very these and multiple for they category sometimes involving flex all customer under complicated, test up. is And are

great if are your somebody Park which As concludes these ready I shipped A to questions you these is people. shipped, Operator, it's people that great not Thank by it hopefully, And listening still presentation. dedicated said, you. tested, was very people. take and job to Thank we we -- everything. some much now. not

Operator

We Brad View. question with from Instructions] have a Hathaway [Operator Far

open. is line Your

Brad Hathaway

think the just quarter. I'm forecast? seeing good look, long-term versus kind directionally you're that of your you're line you if long-term another forecast? in I curious by prior on kind was I what congrats But increase appreciate Hi, just of compares your in guidance. kind to of specific, do very XX% business And you Airbus on not you previously of what commentary line, guess, I in thought kind curious most that kind of business of how giving

Brian Shore

referring that like segment what to? Brad, by mean You is you're

Brad Hathaway

business commercial mean [indiscernible]? I and maybe Yeah, military

Brad Hathaway

Got it.

dependent exactly. well, course this The drives around There supply of some on us the is I'm anything camp chain. problem for that the Airbus that make statements are although GE the these up. actually to doesn't of just dogs. dependent business very out moving big what with lose, the business. and other figure than news significant, chain other say, supply on when to well, Airbus aircrafts, in in programs is are for Aviation commercial commercial point thing doesn't commercial skeptics the those that ramped programs. probably materialize, -- It's So really are definitely have at are these else the up release. and hard very AXXXneo they not and There more that's programs was But to to want get program,

I think forecast the AXXX what listen happens. should difference we MRAS. how we'll see And, that they're a that dollar between we have what to out But, saying. our is multimillion difference in tops from

Our units. forecast with MRAS is based on

think explained that I I before.

unit. the units We have year. what content know the we is per So for

are. easy math figure what of and to it's the It's many out dollars millions difference. So do the revenues

So we'll The really and we're wait need little perspective. just rest, see. to just a say want to that just going

risks, And think people the we're And days not see little I a real and because believe doom gloom. to think Brad, a rake here and are well. we're of point in where We some presentation. there. quantitative on I it's new really Military, again, going. you the It's we throwing sure working hard programs, but and encouraged situation, keep just the on some think stuff then upside out us and middle still what to that's that a And that top-line. for working give are just of kind quarter, as on. terms this and interesting. happy in see we it'd new I numbers military we something new you or working we into be that it's things some of people some But, said, by of Every to feel new like we translate doing are got kind kind at just quarter, can but pictures weird not disservice maybe about judgment military.

washed opportunity for anyway. the it's Those others a the it's where really good of us, in think much margins areas trouble, to especially good want a bother lot are where not just don’t it. worth I niche are too

segments. third that into largely about don't business military. encouraged But that's XXXX. driven other three going big business in we're programs, to separate So dog on, aircraft we're if by Bombardier is that other relate are programs segment that go aircraft want That Aviation. let business GE off to there Global to But those aircraft, the be to you

Brad Hathaway

helpful. Got that's Great, it.

guess so kind these about number. real of XXXX talk see you waiting that? is to XX kind from Okay, a Airbus I in Can whether of it's

Brian Shore

Sorry.

Brad Hathaway

would thought [indiscernible]. you Apologies. I

Brian Shore

we'll what And entering Well, in these we’ll just what what follow lot When kind saying. be out engines LEAP the a wait got ordering from you're that's Airbus. -- come of IndiGo plus, to of airplanes you Right. Oh, an market. other happens just with yeah. -- We'll right. see watching wait comments loads

got to much watch attention pretty we everything. So, pay to and

Brad Hathaway

the I about Comac a that for mean, program you how big the potentially XXX? do what think you? And could long-term potential for be

Brian Shore

be the In significant engines, a My opinion potential. is soul, have be lot and it it significant content size potential. with but we on that it the could those has won't of AXXX,

for hope peace successful sure certifying certified We not that We rest now China. Airbus, we're they In production make it. what are of affects see Let's in getting the successful at they're what Boeing and of to happens. that treaty in least hope airplane and Comac. between world, the

we going have in Park. things to of lot judge, of are terms that opportunity even but XXX a So with hard memorize the to kind forecast, significant of on a to

Brad Hathaway

M&A the And then front. Great. on I guess, finally,

aircraft give it Can that the a I – aerospace about you what was So a you participated I the strategic investment color, little mean programs. actually more curious in like means? and deal, sounds

Brian Shore

other What in we're words, doing Brad?

Brad Hathaway

Yeah, joint I you as venture. about strategic when mean, potential might do opposed investments, to the things like talk you these

Brian Shore

Oh, okay.

six a the What that participate So that the we equals think guess, could back a just are to we then a closely for I don't two out. to related second we months does. Jesus aerospace, of specific other from composite And equals we is to to than is this kind was But removed internal ago, I aerospace a round, it it's maybe we ago. one that got composite know, target aspect little actually The check, sense. don't out, had polymer no that's keep done, We because lot we I two structures materials, come lot just decided month one okay, gut one or -- other could and or two to doing have And do it decided mean, made perspective, anything about we into, are think not sorry, a want stretch. but figure I These used materials of call we there. Also, we it's what in a It's we're -- so way -- thought synergy, which did it's about really to we technically, I because It determined, there decided a a We to go now. synergy still too far, with auction, a you yes. has Park aerospace, of say, chemistry far based want aircraft. I but of meeting. confidential. whatever something to for produce more on that, in materials. we

came a and XX-XX we we did suspects usual was survey, narrowing thing. typical it we We did companies, of down. So kind started with up it the of

some talk more. reached I said, And let's okay, talk surprisingly, about well, let's of or and not them. eight XX maybe to think out some we've

individual a thought other in different very not And business very two different careful us guy, kind some approaches that more are And get look back I M&A contact individual. owned large into development of that's a maybe okay, of these or the in large well, let's of companies, we're would maybe company, about personal to are for got categories, back be getting much to independent the both. investment they would it we're a individual with thing. sub of companies, and division company, the delicate very their doing to and an of be by one respectful, kind sale, here, And owner, well, and say

unrealistic. we great have you're of So just that's like any them, put That sale. been to not oh, contacted because it's would for you it's because harder, call about up

believe, a work, more better it'll just aerospace, be very if often but is which that, for auctioned, take we're really participating than connect lot in but I could Park, successful, something a than porch little business doesn't well. other the it So that's in

Brad Hathaway

Okay, great. color. Thank you very much. Appreciate all the

Brian Shore

you. Nice Sure. to talking

Operator

Christopher Our next UBS. Instructions] question [Operator comes with from Hillard

open. Your line is

Christopher Hillard

Hi, it's to to good speak you all.

Brian Shore

Chris. Hi,

Christopher Hillard

there's without see embedded to greater guidance your with are need higher latest disruption, curious challenged, farther, maybe little this any example, whole maybe to where a the giving bit It's how you've about medium capture a because little expand gone to are capacity your thinking the to areas as you, other in or either margins or more through bit supply aspects you you're efficiencies production great se, you you out in the the term? your see for as carry where anticipate opportunity has technology, ask, in there ways chain the profitability there be Wanted inventories? developments the developed margins if look in I'm strong business outlook. per which maybe

Matt Farabaugh

efficiencies. I for significant manufacturing don't know we're like, that. I of don't I expecting know, expansion, think instance, anything in I'm efficiencies, terms about with So

pretty Actually. bit to But cost are I structure. think say, pretty our think do we pretty efficient. you low dangerous to a because of want already have that's for man little better. I lean I a thing -- opportunities think know, a I to always look

is term labor like require things on. some have where you deal it's a cases, costs, an it, utilities. we example, have we pretty costs you're agreements, increases, pass lean, on, them supplies to supplier think just structure. structure, I raw things factoring. some you that's In with low also And get pass low can we on, We But cost, increases, some often an not pass from pretty concern give long to pretty we appropriate us the which cost can't we know, material a where pass on. cost it's or

talk, just airline was So months we say, news more and than travel we six the lot it. I receive of a it should costs, mean, inflation, the hear ago. about is much

watch So some may of they'll other some and extent costs to not going for. are we these But have it's extent, be be. contained to And some something up.

we're having but not In terms inventory the able more because same concerns supply. that these forecast components maintaining to I maintain big to we inventories, of like about we're of have some cushion They said, have. we'd

inventories. pretty if battle I a are I inventories. more, much say and our would. we're like structure sheet, believe not much, cost not the very If a cost in just manage to don't in increase our want your we itself, inventory. our very our balance by structure that able maintain cushion it's they increasing in than to fact mentors, if to we could, it's we more, give we to So order to but I'm say, could say, be hairy, to I how day would more you would we We'd just guess, not would going you But give and forecast. every our sure it increase increase going

Christopher Hillard

any as domestic in come Okay, your then opportunities? you're to of products? way onshoring your have domestic maybe to production he existing military desire about it thinking Or particularly how one more more, maybe and with into play does given M&A manufacturer, portfolio your relates that business,

Brian Shore

not additional Yeah, to But I sure I'm M&A fact two the develop of business. military manufacturers one regard. that we are help domestic aerospace, part of us believe for about it more gives that in materials us wouldn't. of It that I it. does opportunities the composite

out certainly factor be There's a little would plays it's about a the that how think of see I at talk to have to lot it bit. we'll plus. So extent a all, a it. But

Christopher Hillard

thank your time you for Great, today.

Brian Shore

Sure, Chris. Thank for you your input.

Operator

no are There further questions.

for over back Shore Brian remarks. to call closing the any turn Let's

Brian Shore

Thank you in. This hanging terms was and of all thank the record done. in you ever for long probably calls

anyway, slides presentation needed getting QX the As of to said anytime. some include it. to Call just for from listening. perspective we felt at made I difficulties again really longer. the us took and we But -- thanks it little beginning, the appreciate the We for

a talk day. otherwise, we'll out and reach And you anytime summer can good want. a to You Matt or soon. you me have to Have great

Operator

the concludes does This program.

now You disconnect. may

Park Aerospace (PKE) 8 Jul 212022 Q1 Earnings call transcript