Park Aerospace Corp. (NYSE:PKE) Q1 2025 Earnings Conference Call July 16, 2024 5:00 PM ET Company Participants Brian Shore - Chairman and Chief Executive Officer Operator Hello. Good afternoon. My name is Alicia and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace First Quarter Fiscal Year 2025 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, ...

Financial Performance - Net sales for the 2025 fiscal year first quarter were $13,970,000, a decrease from $15,551,000 in the 2024 fiscal year first quarter and $16,333,000 in the 2024 fiscal year fourth quarter[4] - Net earnings for the 2025 fiscal year first quarter were $993,000, compared to $1,854,000 in the 2024 fiscal year first quarter and $2,670,000 in the 2024 fiscal year fourth quarter[4] - Adjusted EBITDA for the 2025 fiscal year first quarter was $2,610,000, down from $3,311,000 in the 2024 fiscal year first quarter and $3,201,000 in the 2024 fiscal year fourth quarter[5] - Basic earnings per share for the 2025 fiscal year first quarter were $0.05, down from $0.09 in the 2024 fiscal year first quarter and $0.13 in the 2024 fiscal year fourth quarter[2] - Adjusted EBITDA for Q1 2025 was $2.61 million, compared to $3.31 million in Q1 2024 and $3.20 million in Q4 2024[19] - Basic and diluted earnings per share for Q1 2025 were $0.05, compared to $0.09 in Q1 2024 and $0.13 in Q4 2024[20] - Net sales for Q1 2025 were $13.97 million, a decrease from $15.55 million in Q1 2024 and $16.33 million in Q4 2024[22] - Gross profit for Q1 2025 was $4.10 million, representing 29.3% of net sales, compared to 31.1% in Q1 2024 and 27.3% in Q4 2024[22] - Earnings from operations for Q1 2025 were $2.08 million, compared to $2.22 million in Q1 2024 and $2.57 million in Q4 2024[22] - Net earnings for Q1 2025 were $993,000, or 7.1% of net sales, compared to $1.85 million (11.9%) in Q1 2024 and $2.67 million (16.3%) in Q4 2024[22] Expenses and Charges - The company recorded a $1,052,000 pre-tax charge related to storm damage to its facilities in Newton, Kansas during the 2025 fiscal year[10] - In the 2024 fiscal year first quarter, the company recorded $570,000 of pre-tax activist shareholder defense costs and $109,000 for stock option modifications[10] - Selling, General & Administrative Expenses for Q1 2025 were $2.02 million, or 14.4% of net sales, compared to 16.8% in Q1 2024 and 11.5% in Q4 2024[22] - The company incurred a storm damage charge of $1.05 million in Q1 2025, which impacted earnings from operations[22] Tax and Interest - The company recognized a tax benefit of $657,000 in the 2024 fiscal year fourth quarter due to reductions in uncertain tax positions[10] - Interest income for Q1 2025 was $339,000, slightly higher than $324,000 in Q1 2024 and $329,000 in Q4 2024[22] - Income tax provision for Q1 2025 was $376,000, compared to $688,000 in Q1 2024 and $230,000 in Q4 2024[22] Balance Sheet - Total current assets as of June 2, 2024, were $97,296,000, slightly down from $98,845,000 as of March 3, 2024[7] - Total liabilities as of June 2, 2024, were $17,741,000, a decrease from $19,395,000 as of March 3, 2024[7] - Shareholders' equity as of June 2, 2024, was $111,687,000, compared to $112,914,000 as of March 3, 2024[7]

Core Viewpoint - Park Aerospace Corp. reported a decline in net sales and earnings for the first quarter of the 2025 fiscal year compared to the previous year, impacted by various special charges and operational challenges [1][4][17]. Financial Performance - Net sales for the first quarter of the 2025 fiscal year were $13,970,000, down from $15,551,000 in the first quarter of 2024 and $16,333,000 in the fourth quarter of 2024 [1][20]. - Net earnings for the first quarter of 2025 were $993,000, compared to $1,854,000 in the first quarter of 2024 and $2,670,000 in the fourth quarter of 2024 [1][16]. - Adjusted EBITDA for the first quarter of 2025 was $2,610,000, a decrease from $3,311,000 in the first quarter of 2024 and $3,201,000 in the fourth quarter of 2024 [5][19]. Special Charges and Adjustments - The company recorded a pre-tax charge of $1,052,000 related to storm damage during the first quarter of 2025 [2][10]. - In the first quarter of 2024, the company had pre-tax activist shareholder defense costs of $570,000 and other special charges totaling $184,000 [2][19]. - Net earnings before special items for the first quarter of 2025 were $1,781,000, down from $2,407,000 in the first quarter of 2024 [16][19]. Earnings Per Share - Basic and diluted earnings per share for the first quarter of 2025 were $0.05, compared to $0.09 in the first quarter of 2024 and $0.13 in the fourth quarter of 2024 [17][19]. - Basic and diluted earnings per share before special items were $0.09 for the first quarter of 2025, down from $0.12 in the first quarter of 2024 [17][19]. Operational Insights - The company develops and manufactures advanced composite materials for the aerospace industry, including film adhesives and lightning strike protection materials [8]. - Park Aerospace's products are utilized in various aircraft types, including military and civilian aircraft, as well as in rocket motors and nozzles [8].

Financial Performance - Park Aerospace Corp. reported net sales of $13,970,000 for the first quarter of the 2025 fiscal year, a decrease from $15,551,000 in the same quarter of the 2024 fiscal year and $16,333,000 in the fourth quarter of the 2024 fiscal year [1] - Net earnings for the first quarter of the 2025 fiscal year were $993,000, down from $1,854,000 in the first quarter of the 2024 fiscal year and $2,670,000 in the fourth quarter of the 2024 fiscal year [1] - Basic and diluted earnings per share were $0.05 for the first quarter of the 2025 fiscal year, compared to $0.09 for the first quarter of the 2024 fiscal year and $0.13 for the fourth quarter of the 2024 fiscal year [2] Adjusted Earnings - Net earnings before special items for the first quarter of the 2025 fiscal year were $1,781,000, compared to $2,407,000 for the first quarter of the 2024 fiscal year and $2,308,000 for the fourth quarter of the 2024 fiscal year [8] - Adjusted EBITDA for the first quarter of the 2025 fiscal year was $2,610,000, down from $3,311,000 in the first quarter of the 2024 fiscal year and $3,201,000 in the fourth quarter of the 2024 fiscal year [21] Special Items - The company recorded a pre-tax charge of $1,052,000 related to storm damage during the first quarter of the 2025 fiscal year [15] - In the first quarter of the 2024 fiscal year, the company recorded $570,000 in pre-tax activist shareholder defense costs, $65,000 in losses on sales of investments, and $109,000 for the modification of previously granted stock options [15] Operational Insights - The gross profit margin for the first quarter of the 2025 fiscal year was 29.3%, compared to 31.1% in the first quarter of the 2024 fiscal year and 27.3% in the fourth quarter of the 2024 fiscal year [27] - Selling, general, and administrative expenses were $2,017,000, representing 14.4% of net sales for the first quarter of the 2025 fiscal year, compared to 16.8% in the first quarter of the 2024 fiscal year [27] Company Overview - Park Aerospace Corp. develops and manufactures advanced composite materials for the global aerospace markets, including film adhesives and lightning strike protection materials [23] - The company's products are used in various applications, including jet engines, military aircraft, and space vehicles, with a focus on challenging projects that others may avoid [23]

For those unable to listen to the call live, a conference call replay will be available from approximately 8:00 p.m. EDT on Tuesday, July 16, 2024 through approximately 11:59 p.m. EDT on Tuesday, July 23, 2024. The conference call replay can be accessed by dialing (844) 512-2921 in the United States and Canada and (412) 317-6671 in other countries and entering passcode 13747817 and will be available at https://edge.mediaserver.com/mmc/p/f7gkgg8i. NEWTON, Kan., July 12, 2024 (GLOBE NEWSWIRE) -- Park Aerospac ...

Company Overview - Park Aerospace Corp. develops and manufactures advanced composite materials for the global aerospace markets, including film adhesives and lightning strike protection materials [5] - The company's products are utilized in various applications such as jet engines, transport aircraft, military aircraft, UAVs, business jets, and rocket motors [5] - Park Aerospace aims to tackle projects that are considered too difficult or small by others in the industry [5] Financial Results Announcement - Park Aerospace plans to release its financial results for the first quarter of the 2025 fiscal year, which ended on June 2, 2024, after the NYSE closes on July 16, 2024 [1] - A conference call to discuss these results will take place at 5:00 p.m. EDT on the same day, with a dial-in number provided for participants [1] Conference Call Details - A live audio webcast and presentation materials will be available on the company's website at the time of the conference call [2] - For those unable to attend live, a replay of the conference call will be accessible from 8:00 p.m. EDT on July 16, 2024, until 11:59 p.m. EDT on July 23, 2024 [3] - Additional financial or statistical data disclosed during the call will also be available on the company's website [4]

Core Viewpoint - Park Aerospace has transitioned from outperforming the market to underperforming, primarily due to margin erosion and excess capacity issues, which have not been effectively addressed in their communications [1][2][14]. Financial Performance - For FY2023, Park Aerospace reported sales of $54.055 million, a slight increase from $53.578 million in FY2022, but adjusted EBITDA fell to $10.99 million, below the targeted range of $11 million to $11.8 million [3][15]. - The gross profit for FY2023 was $16.534 million, with a gross margin of 29.5%, down from 30.5% in FY2022 [3]. - The company experienced a significant impact from international freight disruptions, resulting in $0.565 million in missed sales during the quarter [3][10]. Market Dynamics - Park Aerospace's reliance on GE programs has made it vulnerable to production ramp-up challenges, particularly with the Airbus A320neo family, which has seen a cut in full-year delivery guidance [16]. - The company has revised its sales expectations downward for both GE and non-GE programs, with total revenues expected to decrease by 5% [5][12]. Operational Challenges - The company is facing inflated costs, including a 25% increase in SG&A expenses due to various factors such as activist shareholder defense costs and higher recruiting fees [10]. - There is a concern regarding the company's ability to utilize its excess capacity effectively, which could lead to increased labor and capacity costs without corresponding revenue [16][18]. Future Outlook - Despite current challenges, the long-term prospects for Park Aerospace remain positive, contingent on easing headwinds and improved production rates [18]. - The company has a net cash position that could support future growth, but clearer indications of overcoming existing challenges are needed to enhance its appeal [18].

NEWTON, Kan., June 10, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of Park Aerospace Corp. (NYSE – PKE) has declared a regular quarterly cash dividend of $0.125 per share payable August 2, 2024 to shareholders of record at the close of business on July 1, 2024. Park has paid 39 consecutive years of uninterrupted regular, quarterly cash dividends, without ever skipping a dividend payment or reducing the amount of the dividend. The Company has paid approximately $594 million in cash dividends, or $28.975 ...

Financial Data and Key Metrics Changes - Sales for Q4 were reported at $16.333 million, with a gross margin of 27.3% and an EBITDA margin under 20% [8][12][30] - For the fiscal year 2024, total sales were $56 million, with a gross margin of 29.5% and an EBITDA margin of 19.6% [13][29] - The company reported $77.2 million in cash and marketable securities at the end of Q4, with zero long-term debt [20][35] Business Line Data and Key Metrics Changes - CTP fabric sales amounted to $474,000, with low margins due to the nature of the product [11] - The company faced challenges in production levels, with Q4 production valued at $15.2 million, which was below sales [30] Market Data and Key Metrics Changes - The aerospace market continues to face supply chain challenges, impacting program ramp-ups and new introductions [40][41] - Airbus has a significant backlog of A320 aircraft, with 7,170 orders, and is currently producing at a rate of about 50 per month [43][62] Company Strategy and Development Direction - The company is focused on long-term growth, with plans for a $20 million factory expansion to support future demand [14][16] - The strategy includes ramping up production capabilities and staffing to prepare for anticipated increases in demand, referred to as the "juggernaut" [16][53] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q1 sales would be impacted by storm damage but expects to recover those sales in Q2 [52][91] - The company remains optimistic about future growth, citing strong demand in the aerospace sector despite current challenges [41][53] Other Important Information - The company has paid dividends for 39 consecutive years, totaling $594 million since fiscal year 2005 [35] - Management highlighted the importance of workforce issues as a significant factor in supply chain challenges [56] Q&A Session Summary Question: What is the outlook for the stock price? - Management believes the stock price does not reflect the company's value and expects the market to recognize its true worth as financial results improve [88] Question: Will the storm damage impact future sales? - Management confirmed that all sales lost in Q1 due to storm damage will be recovered in Q2, with no expected loss of business [91] Question: What is the expected revenue from the GE9X engine program? - Management anticipates approximately $1.7 million from the GE9X engine program in calendar year 2024, with potential gaps in production ramp-up [93]

NEWTON, Kan., May 30, 2024 (GLOBE NEWSWIRE) -- Park Aerospace Corp. (NYSE-PKE) reported results for the 2024 fiscal year fourth quarter and full fiscal year ended March 3, 2024. The Company will conduct a conference call to discuss its financial results and other matters at 5:00 p.m. EDT today. A live audio webcast of the event, along with presentation materials, will be available at https://edge.media-server.com/mmc/p/zyr8codr at 5:00 p.m. EDT today. The presentation materials will also be available at app ...