Thank you, operator. This is Brian.

Welcome, all, to Park Aerospace's fiscal 2027 second quarter investor call. I have with me, as usual, Mark Escobedo, our President and COO.

We just, I guess right after the close, published our second quarter earnings release, and in the earnings release, you'll you'll find instructions on as to how to access the presentation we're about to go through, either through a link, and there's also it's also on our website. Anyone you want to pull it up in order to make this the presentation and discussion more meaningful.

It's kind of a common theme for the last couple quarters. We have a lot of new investors.

I think last call we had about 170 people who participated in the call, and we have a lot of new investors. We have a lot of veteran investors, we have to find a balance between the old and the new, and we'll do the best we can to maybe find a middle ground or compromise.

Obviously, the legacy investors probably don't want to hear the same material being covered every time, but some of the new investors may find it more interesting and useful. We'll do the best we can with that.

After we're done with the presentation, we'll be happy to answer your questions. Why don't we get started?

Let's proceed on to slide 2, forward-looking disclaimer information. Let us know if you have any questions about the forward-looking disclaimer information.

Slide 3, our table of contents. Slide 1, sorry, the first item in the table of contents is the investor presentation, which we're about to get to.

There's also a supplementary financial financial information attached as Appendix 1 to the to the presentation. We're not going to go through that information, but let us know if you have any questions about it.

As usual, we feature the James Webb Space Telescope in our table of contents. James Webb Space Telescope recently identified a mysterious new class of cosmic object called black hole stars.

They look like gigantic stars, which shine up to 100 billion times brighter, so that sounds like a lot to me. Thank you, James Webb Space Telescope and Park.

James Webb was produced with with 18 Park proprietary Sigma Struts, as you probably all know. Let's go on to slide 4.

We go from the sublime to the mundane here. Here are the second quarter results.

Let's just go through to the right-hand column, second quarter, our current the quarter we're just announcing. Sales of $20,791,000; gross profit, $7,135,000; gross margin, 34.3%.

We like that. We like our gross margins to be into 30s.

Adjusted EBITDA, $5,285,000; adjusted EBITDA margin, 25.4%. What did we say about our Q2 during our Q1 investor call?

We said our sales estimate was $19.5 million to $21 million, we came in within the range, maybe kind of toward the upper end, but within the range. Adjusted EBITDA estimate, we said $4.3 million to $5.1 million, we came in a little bit above the range with our EBITDA number.

Significance of our forecast estimates, we have to remind you of this probably often, when we give these estimates, we're telling you what we think will happen. Sometimes we're wrong, sometimes we're not, but we're telling you what we think.

Mark and I usually spend a lot of time going through this to come up with the ranges for you. We don't pad the numbers.

I know a lot of other people do that. We don't give you a number, then subtract 10% from it so when we announce the number we can beat it.

That's just not what we do. We understand that pretty much everybody else does that, but we're not like everybody else, as you probably know.

That's actually a Kinks song if you want to check that out. Pretty good one.

Slide 5, quarterly results, we're continuing here. We're mixing things up a little bit.

I maybe should have explained at the beginning. We're we're changing the sequence of things, and we're changing the content a little bit just to try to make it a little more interesting for you.

I don't know if it will be successful, but that's the objective here. What we're doing with this slide here, slide 5 at the top, is we're talking about some key product lines that will circle back to in many cases.

C2B fabric, we cover that a lot, $1.5 million of sales. Ablative materials produced with C2B fabric, $1.8 million.

Often we discuss those two numbers because if they're really out of sync, out of alignment, they could distort the the quarterly P&L. Those numbers are fairly close, we're not going to get into that.

Just for information, we thought you'd like to know. Missile system programs, $5.7 million.

Obviously, we emphasize missile systems a lot, we thought you'd be interested in that number. Advanced composite materials for GE Aerospace jet engine programs, $8.3 million.

We'll circle back on that. We cover that every quarter.

Here's something a little interesting we thought we'd provide for you. Our second quarter sales value of production, we call SVP, was $21.1 million.

That's not inventory value. That's actually sales value.

That's a modern-day record, we think, post-sale of our electronics business. That's really a good thing.

We've got to give a lot of credit to our factory people, our floor people, for producing and getting out the door that much product. That's actually pretty nice accomplishment under maybe not ideal circumstances, but when are there ideal circumstances?

We wanted to acknowledge our production people in terms of how much product was produced during the quarter. One other thing we never cover in these investor calls is EPS.

We don't get into that. We just wanted to mention something to you.

This and it'll be discussed in more detail with our 10-Q, which I think will be filed on Tuesday. Monday's a holiday, you can look forward to it there.

You might have noticed already, and I just want to get ahead of this a little bit, that our tax rate for Q2 was quite low, it was 18.6%. That's not a normal tax rate.

There are significant benefits from stock option exercises which took place in Q2, a lot of stock option exercises in Q2, significant benefit. Our normal tax rate without that that that benefit, the stock option exercise benefit, if you will, the tax rate would be probably around 26.5%, something like that.

Just so if we if we had that more at least we'll say "normal" tax provision, or tax rate rather, of 26.5%, probably looking at 19 cents rather than 21 cents. Like I said, we're reluctant to get into the EPS stuff.

We don't normally cover that, but I thought it's such a, significant difference in our tax rate that you probably'd be interested to know have that information. If you want more information about that, you really should call and talk to Gus and Chris.

Like I said, when we do our when we publish our 10-Q, there'd be a little bit more information about that that particular item. Let's not get too hung up on that, though.

Let's go on to slide 6, our top five customers for Q2 in alphabetical order. Let's see, let's tie the customers to the pictures.

The easy one is Kratos, the BQM-177A. That's a target unmanned aircraft.

That obviously ties to Kratos Defense and Security. Airbus A320neo with LEAP-1A engines, that ties to Middle River Aerostructure Systems, we call MRAS.

Let's see, the Patriot, we talk about that a lot, PAC-3 MSE defensive missile system, that's a two-for, two for the price of one, that ties to AAE Aerospace and L3Harris Missile Systems. That's nice and efficient.

The bottom right, Bombardier Global 8000 business aircraft, and that ties to the Nordam Group, okay? Let's go on to slide 7, our pie charts.

Nothing too remarkable here, pretty consistent. Let's not get let's not spend too much time on slide 7, just keep moving.

Let's go on to Of course, you have questions, let us know later, but we're going to move to slide 8. This is a little more interesting.

Park loves niche military aerospace programs. This is a slide we give you every quarter.

This is Elena's project. She always does a really nice job.

The pie chart is interesting, because look at the missile system percentage. It is growing.

Now, this is just one quarter, we'll see what happens quarter-to-quarter. These things change, of course.

We've been talking a lot about missile systems, and missile systems portion of the pie chart is growing. We won't go through a description of the the the photos, individual programs, except we always say that we don't provide photos of programs that we're not somehow involved with.

We used to give you more information. Right now, we we just at this point, we don't feel we can do that.

It just these are just too sensitive. We just don't know where the line is as to what we can say and what we can't, we don't want to push the envelope too much.

Let's go on to slide 9. GE Aerospace jet engine programs.

Like I said, we're changing things up in terms of sequence a little bit, try to make it a little more interesting. This slide is a little different than it was in the past.

Park's advanced composite materials are sole-source qualified on multiple engine nacelle and thrust reverser components of the following GE Aerospace and CFM engine programs. Quickly, there's the Boeing 747-8 with the GEnx-2B engine, those are for spares, that program is canceled; LEAP-1A engines for the A320neo aircraft family, that's the Big Kahuna; LEAP-1C, that's for the COMAC C919, that's Chinese single-aisle; CF34-10A, that's for COMAC ARJ21, that's Chinese regional jet; and the Passport 20, we already talked about that, Bombardier Global 8000 aircraft with the Passport 20 engine.

What's going on here? Park has an LTA requirements contract beginning in '29 for the above programs with MRAS, a sub of ST Engineering, Singapore.

Now, what's going on here? These look like they're all GE programs.

Got to read the little footnote. Footnote, MRAS is formerly a sub of GE Aerospace, so that's the connection.

When we got on all these programs, MRAS was part of GE Aerospace. Then I think maybe 2018 or '19, GE Aerospace sold MRAS to ST Engineering, which is a large Singapore aerospace company.

Park is also exclusive supplier AFP composite materials for the fan case for the GE9X engine for the Boeing 777X aircraft. Let's go on to slide 10.

Update on GE Aerospace jet engine programs. We're starting out with the Big Kahuna, the A320neo aircraft family.

We're not going to read the variants for you, but you can see them for yourself. As of August, Airbus had delivered 4,741 of these airplanes, and they have a backlog of firm orders, 7,571.

That's just a huge, huge, huge, huge program, probably the biggest ever for commercial aircraft. We're fortunate to be on that program.

Here's the history of the ramp-up. You can see what's going on.

They were ramping up the program until they hit the the skids with 2020, that's the pandemic year, and then clawing their way back. 2025, 607 airplanes were delivered.

And 2026 year-to-date, you don't want to annualize this number. That's not a good idea.

You can do it if you want. That's not how it works, because these aircraft companies, they make the years, if you will, in the last couple of months.

What's significant is that that number is quite a bit larger than the same period from '25, which was 333 deliveries in year year-to-date August in '25. That's good.

Means that GE is in a ramp-up, ramp-up. GE Aerospace, sorry, I'm a little tired.

GE GE Aerospace and Airbus are ramping up this program, which is a good news. Slide 11.

What are we doing here? Airbus is targeting A320 aircraft family delivery rate of 70 to 75 per month by the end of '27.

Remember the prior page, I think what did we say, '25 was like 51 per month, we still have a way to go here, and stabilizing at the rate of 27 thereafter. Approved engines, this is important, because there are two approved engines for the A320 aircraft neo aircraft family.

One is the CFM LEAP-1A engine, that's the program we're on. We're on the the A320neo aircraft family with the LEAP-1A engine, CFM.

We're not on the A320 aircraft neo aircraft family program with the Pratt engine. We covered that in the first and second bullet item.

Here's some interesting info, third bullet item. The CFM LEAP-1A market share of firm engine orders for the A320neo family of aircraft was 66.9% as of June 30.

The CFM LEAP-1A market share continues to grow very nicely. In prior quarters, we explained why that is, what's going on.

We're not going to go into it here, but if you have any in- questions about that, let us know. The key thing is that the LEAP-1A market share, that's the program we're on, continues to grow.

I think when we started these presentations, it was maybe less than 60%. I don't remember, but it's grown it's grown quite a bit, and it continues to grow.

There's a huge, huge backlog, there's a lot of ballast, if you will, on that market share. It's not easy to change the market share so much month-to-month or quarter-to-quarter.

Nevertheless, that's what's happening. At that delivery rate of 75 A320neo family aircraft per month, and at that 66.9% market share, that translates into 1,204 LEAP engines per year, which is a lot of damn engines, pardon my French.

Let's go on to slide 12. Still with the same program, as of June 30, there were 8,546 firm LEAP-1A engine orders.

That's a heck of a lot of engine orders. I think if you go to slide what is it, slide 16, you could kind of figure out what that's worth.

You can do your own math, because in slide 16, it tells you what our revenue per unit is. It's let me just say, it's a big number.

That's not it. That's just the firm engine orders.

That doesn't mean that's it. Obviously, they're going to take more orders as time goes on.

Let's go let's continue on slide 12, a new a different program, the COMAC C919. That's a Chinese aircraft with the LEAP engine.

It's a LEAP-1C engine. They reportedly have over 1,200 orders, and you can see the deliveries.

They're trying to ramp up. They haven't been doing, the I'm sure they're not achieving the rates that they want.

There, deliveries are expected to ramp to 59 in '28 and 93 by '30. Those are airplanes, not engines, by the way.

This is the single-aisle, the Chinese single-aisle airplane that's designed to compete against the 737 and the A320. Let's go on to slide 13.

The 777X with the GE9X engines, this is a very delayed program, but still a very important program for Park. The test programs have amassed over 1,700 flights, that's a lot, over 4,100 flight hours, that's a lot.

Reportedly, they have over 670 open orders for the aircraft. Boeing anticipates certification, entry into service, and first delivery next year.

This has been pushed back a lot, a lot of delays, but, just my opinion is I have some optimism that this will happen next year, which would be really important for Park, important program for Park. Let's nice picture of the 777X going undergoing cold weather testing in Fairbanks.

A friend of mine took that picture. Let's go on to slide 14.

GE engine program sales history and forecast estimates. We don't go through all the history.

No need to do that. What you might look at is look at fiscal '20, that was like the year before the pandemic, just about $29 million.

It took up to fiscal '26, if you look at the, right-hand side of the of the slide, kind of halfway down, '26 to get back to that $29 million number. We really had a setback with the pandemic, and it took us a while to even get back to the pre-pandemic numbers for these jet engine program sales.

In fiscal in our second quarter, $8.3 million of sales, and our forecast for Q3, this is GE engine program sales forecast, $8 million to $8.5 million. For fiscal '27, the whole year, we brought that number down to $32 million to $35 million.

It was a little higher. That number was based upon the input we have from our customer called the build plan, and we haven't gotten a revised build plan.

We're a little skeptical as to whether we'll achieve that build plan, because we have the first two quarters in the books, we've got a forecast for Q3, and we're trying to be a little more conservative in terms of where we're going to go with the fiscal year. We'll see what happens, all right?

Let's go on to slide 15. The GE programs outlook, what we call our juggernaut, Park's commercial aircraft juggernaut.

This is our first juggernaut. Remember, GE Aerospace jet engine programs.

What's the timing for the commercial aircraft juggernaut? For a long time, for years, we're saying, when is it going to happen, when is it going to happen?

We don't know. We'll see.

We're no longer saying that. We're saying that commercial aircraft juggernaut is here, because the programs are clearly ramping up.

Commercial aircraft juggernaut drivers, what are they? They're the A320neo aircraft family production as it ramps up toward that 75 airplanes per month, the expected certification, entry into service of the 777X, and COMAC's planned ramp-up of the C919 aircraft.

The two GE Aerospace programs, the the Global 8000 and the ARJ21, those programs are pretty much at rate, so that's good, but they're probably are not going to be key drivers in terms of the ramp-up of current rates, the current revenues, rather, to that aircraft juggernaut kind of revenue level. Let's continue.

Here's a slide, what is it, slide 16 we're on? Yep.

Continuing with the juggernaut. Here's kind of how we lay out the juggernaut.

We get to that $62,340,000 number. There are a couple of changes here, though, in the assumptions.

Slide 17 has a footnotes in terms of how we computed, how we arrived at the assumptions and how we did the math. We actually increased A320neo to this 1,200 units, because we decided we really should look at the current market share.

We're holding off using like a 60% market share, but we thought that that really isn't consenting anymore. We brought down the number for the C919 just because they seem to be struggling to get to that level.

Now, remember, these are engines, you've got to multiply the airplanes by two. So, 200 engines means 100 airplanes.

We do the math, and then we get to the $62.3 million or $4 million, like $62.3 million. That compares to about what, $30 million last year, something like that?

It's still a long way to go in terms of the ramp-up. 17, slide 17 rather, these are the footnotes I referred to.

We're not going to go through these. Any questions, let us know.

Slide 18. We're changing gears and probably have to pick up the pace a little bit.

Missile systems. Now, the good news about missile systems is there really, even though there's so much going on for us with missile systems, it's like, frenetic pace for us to keep up with, but there are not a lot of new developments that are being reported in the presentation as compared to Q1.

A lot of this is just review. It's our new juggernaut, next big thing, missile systems, Park missile systems niche, we call it.

We specialize in design and manufacture of advanced composite ablative materials used to produce solid rocket motor structures for critical missile systems, including the PAC-3 MSE Patriot missile system, which we talk about a lot. We also design and manufacture advanced composite materials used to produce other missile systems components.

Depleted and depleted, we covered this last time. It's well-understood, widely known that the missile systems stockpiles have been badly depleted by all these horrible wars that we've been involved with last couple years.

Running on empty, replenishing the depleted stockpiles. There clearly is a high, highly urgent need to replenish depleted stockpiles.

Is that it? Does it end there?

Maybe not. Let's go on to slide 19.

Here we go, quadrupling the production of the exquisite class of weapons systems. Quadrupling, that's quite a concept for, for our in the aerospace industry.

Usually doesn't move that quickly in in our experience. On March 6th, beginning of the year, 2026, President Trump met with in the White House with seven top defense contractors.

At the meeting, these contractors reportedly agreed to quadruple production of the exquisite class of weapons systems as rapidly as possible. That's really quite something, kind of shocking.

The PAC-3 missile system, of course, is head of that class of the of the exquisite class of weapons systems, plus other things that other programs Park is on. Let's talk about PAC-3, the PAC-3 MSE Patriot missile system.

Park is sole-source qualified for advanced composite ablative materials for solid rocket motors for the PAC-3 MSE missile systems program. The PAC-3 missile system interceptors have been extensively and very effectively used by US allies in the Mid-East, including all these countries.

Why are they using them? Because the the bad people are shooting missiles at them.

They've been using the PAC-3 missile systems to intercept and destroy the incoming missiles, the ballistic missiles that are being shot at their countries, launched toward their countries, and in particular, civilian population centers. Let's go on to slide 20.

The Patriot PAC-3 MSE missile system, it's an extremely effective missile defense system, very high rates of successful intercepts and destruction of incoming ballistic missiles and other threats. The the stockpiles of those PAC-3 MSE missile systems have reportedly been badly depleted by all these horrible wars.

I don't think we're talking out of school. We're not talking about anything confidential, no inside information here, just it's been widely reported that these the system stockpiles have been badly depleted by these horrible wars.

The thing is that the Patriot missiles, they don't do any good if they're not available, as wonderful as they are. According to reports, there were dozens of people killed recently in Ukraine by Russian ballistic missiles incoming, which Ukraine was not able to intercept and shoot down because of a serious shortage, that's their terminology, of Patriot missile interceptors.

It's just heartbreaking. These are people that died.

This is not funny. It's it's heartbreaking, heartbreaking.

On January 6th, 2026, this is now kind of following on what have we kind of what are we doing about it, what's our government trying to do about it, Lockheed announced it reached a seven-year agreement with the Department of War to increase the PAC-3 MSE interceptor production capacity from 600 per year to 2,000. That's, quite an assignment, 600 to 2,000.

Let's go on to slide 21. More activity by the government.

January 13th, like a week later, the Department of War announced it's investing a billion dollars in L3Harris L3Harris solid rocket motor business to boost solid rocket motor production for the PAC-3 MSE and other missile systems. This is all public stuff.

We're not talking out of school here. ArianeGroup of France, let's talk about them for a while.

ArianeGroup is a joint venture between Airbus and Safran. Ariane is an iconic and legendary missile launch system development and manufacturing company with very deep legacy technology.

Ariane's rocket and missile system programs include Ariane 6 heavy-lift launcher used for the European by the European Space Agency, the M51 submarine-launched ballistic nuclear deterrent missiles. This is a very special company.

Our relationship with them and its predecessors go back to early 2000s. We're very proud and fortunate to be their partner.

Like I said, they're a very special company, very special people, wonderful people, actually. We just want to go on the record to make make sure everybody knows how we feel about this wonderful company, how privileged we feel we are to be connected with them, and how privileged our country should feel to be connected with Ariane.

Let's go on to slide 22. Ariane produces a proprietary fabric called Raycarb C2B, which is used to produce ablative composite materials for advanced solid rocket missile programs.

We're sole-source qualified on a solid rocket motor for the PAC-3 MSE missile program for specialty ablative materials produced with ArianeGroup's proprietary C2B fabric. We're qualified with our prepreg material, but it's also qualified with Ariane's C2B fabric.

Park entered into a a business partner agreement, that's what they call it, or Ariane calls it, with Ariane in 2022 under which Ariane appointed Park as its exclusive North American distributor of their C2B fabric. I think informally we were doing that for a long time, but they they wanted to formalize it.

That was that came from them, not us. On March 27, '25, we entered into what they call the new agreement with Ariane under which Park agreed to advance Ariane €4,587,000 against payments for future purchases by Park of C2B fabric.

We paid the first installment in our fiscal year '26 Q1, we paid our second installment in our fiscal '27 Q1. Let's go on to slide 23.

Our third installment is basically being paid now. We actually accelerated that.

It was supposed to be April next year, it's now, I think, next month. That was in exchange for Ariane increasing the allocation and and pulling in the allocation, accelerating the allocation, and in and also in exchange for at least our asking if they can even do more.

We have a wonderful relationship with these people, and it's worked very, very well. What's the purpose of this €4,587,000 advance payment?

To fund 50-50 with Ariane the construction of additional C2B fabric manufacturing capacity in France. This additional French manufacturing capacity is expected to come online in '28.

Approximately half of it is for us and half of it is for them, because they need it for their own programs at Ariane. We went 50-50 on the on this additional capacity, we're 50-50 on the output.

Unfortunately, this additional French capacity manufacturing capacity not be adequate to support the ramp-up of the PAC-3 MSE program, not completely anyway, to that 2,000 interceptors per year rate. Now what do we do?

Let's go on to slide 24. We'll try to pick up the pace a little bit here.

Sorry, taking too long. On July 18, this was all covered at our last our Q Q1 investor call.

This all just, happened right at that point. July 18, Park and Ariane entered into a term sheet agreement relating to the construction and establishment, this is big, by Ariane of a US-based C2B fabric manufacturing plant with expected capacity more than adequate to fully support the needs of the PAC-3 MSE missile program at that 2,000 interceptor per year rate.

The term sheet agreement provides that a definitive agreement also will need to be entered into before the end of the year. What's the significance of the signing of the term sheet?

Before the definitive agreement is signed, based on the term sheet signed by Ariane and Park last July, Ariane is proceeding with the construction and establishment of a US-based C2B fabric manufacturing plant. That's really important.

Let's go on to slide 25. As provided in the term sheet, 100% of the output of that US plant, the US plant will be allocated to Park, which will use to support the PAC-3 and other missile programs.

That's really important, because the capacity in France, we we share that with Ariane. This capacity is all for us and our programs.

Also, under the terms of the term sheet, Park has committed to invest $25 million in ArianeGroup's US-based plant manufacturing plant. Now, it's not equity or debt kind of investment.

The $25 million investment will be made by Park in the form of advance payments to be fully applied against future purchases by Park of C2B fabric. The $25 million advance payments are expected to be made by Park in '26 and '27, and expected to be applied by Park against future C2B fabric purchase purchases beginning in 2030.

Why did we do that? It's kind of a strange thing to do, you might think.

Why did Park enter into the term sheet agreement with Ariane, and why did we make the commitment for $25 million advance payment commitment? Because it was necessary to provide Ariane with the green light to proceed with the construction of a US-based C2B fabric manufacturing plant.

We at Park believe it is urgent that Park that ArianeGroup, rather, builds its US plant as soon as possible. Let's go on to slide, what is it, 26 here?

Yep, slide 26. Top, although not at liberty to disclose the specific C2B fabric manufacturing capacity expected from Ariane's US plant, when the plant is complete and online, its manufacturing capacity, together with the C2B fabric allocation from Ariane's European operations, will be more than adequate to support the needs of the PAC-3 MSE program at the 2,000 interceptors per year rate and numerous other critical missile programs.

What's the timing of the Ariane US C2B, rather, fabric manufacturing plant in the US? According to Ariane, their plant was their US plant was originally expected to take four years, that's a long time, to complete to be complete and online.

Ariane recently agreed with Park to accelerate the timeline for the completion and bring online of their US plant by six months in exchange for Park's agreement to accelerate the $25 million advance payment schedule. That's very good news, because we want to get that plant up and running as soon as possible.

As a result of this recent agreement, Park is now expected to make advance payments of $20 million this year and 20 and $5 million next year. That's all to be applied against future purchases by Park of C2B fabric.

Now, this is all, obviously, dependent on us entering into that definitive agreement, which is expected to happen before the end of the before the end of the calendar year. Let's go on to slide 27.

For just for the record, want to cover this, even though we are in business to make money for our shareholders, thank you very much, should be obvious, it is not all dollars and cents for us. There's more to it for us.

As we've already alluded to, every time a PAC-3 missile is launched and successfully intercepts and destroys an incoming ballistic missile, it's likely that there are people who are alive and walking around on the Earth who otherwise would not be. Lives are being saved.

This is reality. This is not, theory.

It's not a, some interesting paper or some kind of video game. That matters a lot to us.

That matters a lot to us, so that motivates us a lot. We don't like seeing people getting killed when they shouldn't be getting killed.

Let's talk dollars and cents for a minute anyway. Under the terms of the term sheet, Park is expected to purchase a significant amount of C2B C2B fabric from Ariane during the period of 2030 to '36.

That's a good Why is that a good thing? It's also it's a good thing because Park will also be expected to sell all that fabric to its prearranged customers under prearranged arrangements with the customers with our distributor's markup.

In addition to that, Park will be expected to manufacture and sell ablative materials produced with that C2B fabric for those customers. What kind of ROI do those sales of fabric and materials represent for Park?

We're not going to disclose that specifically, but let's just leave it at this. It's a very, very good business deal for Park, and you should be happy about it, from a business perspective.

Very good. Let's go on to slide 28.

Changing gears here, talking about our new plant. Again, this has all been covered pretty much.

Not too much news here. July 17, we entered into this lease agreement for land at the 18 acres at the Tulsa International Airport, that's where our new site will be.

There's also going to be land for space for additional additional plant if needed in the future. Plant size, 150,000 square feet approximately; the budget, outflow, sorry, the capital budget, $65 million; cash outflow, $10 million in '27, $45 million in '28, $10 million in '29.

You probably noticed that this got pushed out a little bit. I think last quarter we said $25 million in fiscal '27.

It takes a little it's taking a little longer to work through all the incentive agreements with Tulsa and Oklahoma. It's not they're they're wonderful people, that's not they're not a problem, it's just longer than we expected.

The good news is, if you look at the last arrow item, is that facility is still expected to be complete in '28, and production shipment is supposed to commence in '29, so that's not pushed back, fiscal '29, I should say. Slide 29, continuing here.

Plant designed to produce our full product line. Second arrow item, expected to This is important, approximately double Park's current hot melt prepreg and film adhesive manufacturing capacity that's used to support GE Aerospace programs and other commercial aircraft programs.

Here's the key thing, by staffing up our existing hot melt manufacturing lines in Newton, Kansas, in our Newton facility, we'll be able to support the ramp-up of the GE Aerospace programs and the other commercial aircraft aircraft programs and hot melt programs we support. We'll be able to do that, and people are asking about that, how are we going to bridge the gap until our new plant is online?

We can do that with our our plant in Newton by staffing up our lines. The additional hot melt manufacturing capacity provided by our new Tulsa plant will be necessary to provide to more properly and sustainably support those GE Aerospace programs and other commercial aircraft programs.

We'll be able to get through the transition with our current plant, but it's really good our new plant's coming online soon. It's the same really, almost the exact same story with the solution treating on slide 30 manufacturing capacity.

We're tripling our solution treating manufacturing capacity with a new plant, that's used to support, among other things, missile system programs, the solution treating manufacturing capacity. The same story, by staffing up the existing solution treating lines in our Newton, Kansas facility, we'll be able to support the PAC-3 program at the 2,000 interceptors per year production rate, because that, according to what our, our customers are indicating, we're not giving you the specifics, we're supposed to be at that rate well before our new plant's online, but we can handle it.

The key but is the additional solution treating manufacturing capacity provided by our new Tulsa plant will still be necessary to more properly and sustainably support the PAC-3 program and other critical missile programs in the future. Why are we building a plant?

Pretty obvious, just because of our commercial aircraft juggernaut and missile systems juggernaut, they require it, and also to enable, facilitate, and promote Park's growth and development as a company for the future. Slide 31, here's where we kind of mix things up again.

These slides were somewhere embedded in the middle of the prior presentation. Park's financial performance history and forecast estimates.

We don't go through the history, we just we already did that. Q2, we already talked about Q2, $20.8 million, rather, sales, $5.3 million EBITDA, adjusted EBITDA; our forecast estimates for Q3, $21 million to $22.5 million of sales, $5 million to $5.8 million of EBITDA.

Let's go on to 32. We show you this slide every quarter, except the new things, we're including the first six months year-to-date in the right-hand column.

We'll continue that, like next quarter will be the first nine months, just for information. Why don't we continue?

Let's go on to slide 33, recent public offering. About this.

There's no news about this. It was already complete when we did our first quarter investor call.

It was a $50 million at-the-market public offering, ATM, I guess they call it. We sold 1,812,000 shares at an average for proceeds of $49,996,000, average price of $27.58 per share.

That at-the-market offering is complete, was actually complete, I think, in June. Let's go on to slide 34, our last slide, thankfully, I guess.

Park's balance sheet, cash, and cash dividend history, saving the best for last. Park has zero long-term debt, that's really important to us.

I'm not saying we'll never have debt, but debt's kind of against our religion. I hear these sometimes watch financial news, "Oh, the small companies with all the debt, they're struggling.

It's the the big seven or whatever they call, they're doing so great." I don't know about that, but, we're not a big believers in debt either.

Park reported $114.75 million of cash and marketable securities as of the end of the second quarter. That's a lot of money, I agree, but remember, as we previously discussed, we plan to invest $65 million on our major new Tulsa manufacturing plant, and $25 million in ArianeGroup's US plant in the form of advance payments.

Now, $25 million eventually comes back to us, but that could take, 4 or 5 years. You add 25 and 65, you get some, real numbers there.

I just want to mention something we haven't mentioned before, which maybe is obvious to you, but the $65 million, those are for the capital assets, that's the equipment and the factory and everything else, that's not the working capital and that's not the startup costs, which are, going to be significant. That's over time, that's not just, day one, but just keep that in mind.

When you look at it that way, $114.75 million is a lot of a lot of cash, but maybe it's not all that much, actually. Park has paid 41 consecutive years of uninterrupted quarterly cash dividends, that's a nice thing for us, and saving the maybe the very best for last, Park has paid $616.4 million, or $30.10 per share, in cash dividends since the beginning of fiscal year 2005.

We always like to juxtapose that last comment to the picture of the Park founders back in the 1950s in a plant in 19 a plant in Flushing, New York, actually, not a first plant, our second plant. These two guys, the founders, started the company with, basically nothing, I think a little money left over from the war duty.

I guess you could say Park has come a long way from those early days. I'm not going to spend a lot of time on this, but I still think it's important for all of us at Park to remember where we come from, that our and because those beginning days were so important for us and really set an example for what what kind of what we want to be, the the way we want to deal with things, deal with problems, deal with obstacles, deal with hurdles, roadblocks, that come up every day today.

That I think that ends our presentation. It does.

Operator, be happy to answer questions to the extent there are any.

Thank you. Good afternoon.

First off, just if my numbers are right, it looks like you had very strong growth in missile systems, both sequential and year-over-year. Are these levels sustainable or should we anticipate a continued variability until we really see this missile ramp underway in earnest?

Jim, we're breaking up a little bit, but how are you doing? That's fine.

Slide 32, a good question. I think it is sustainable.

The reason you want to look at slide 32, look at the sales. From '17, '18, '19, '20, we were growing pretty aggressively, $10 million a year more or less, and then we hit '21, fiscal '21, the pandemic, and that really kind of slowed us down for several years.

It took us through to '25 to really get back to the levels of '20. I think we're back on that trajectory, and I think it's pretty aggressive, probably more aggressive than it was before.

It's going to be our challenge to keep up with the growth, both in the missile programs as well as the GE programs. I think we talked about the juggernaut of $62 million for the GE programs.

What, last year was maybe what, $30 million, $31 million, something like that? There's a long way to go there, and certainly a long way to go with the missile programs as well.

Brian, hopefully you can hear me clearly. I wanted to also go back to the commentary regarding your full-year sales with the GE programs.

You have a stronger Q2, I think, versus expectations, and yet you're trimming the full year. It sounds like you're being conservative, but again, is this based on build plans that you get?

I'm just trying to understand that a little better and reconcile that.

Unfortunately, Jim, you're breaking up quite a bit, but I think you're asking about the GE programs forecast. Let me see if I can actually pull it up for you.

The history, if I can't find it quickly, I won't bother you too much.

Slide 14,

Brian. Thank you for that.

Slide 14. Okay.

Thank you. You're asking if the growth is sustainable, whether we're being conservative.

I don't know. The forecast for fiscal '27, $32 million to $35 million, I don't think we're trying to be conservative there.

I do know what Mark and I could tell you is there's a lot of energy toward ramping up these programs, especially the A320neo program. Then if the 777X gets certified next year, that program will have a lot of growth as well pretty quickly, I think.

Got it. Thank you.

Like I said, we have fiscal '26, that was the full fiscal year, $29 million, and the juggernaut is $62 million, so long way to go with the GE programs.

Good. Thanks.

Apologies for the bad connection. I'll jump back in the queue.

Was there something else, Jim? We're having trouble hearing you.

Yeah. No, I'm sorry about the connection.

I'll jump back in the queue. Thank you.

Thank you, Jim.

Great. Hey, Brian and team.

Thanks for taking the questions. Maybe just to revisit that last question just to clarify.

We saw you took the full-year GE number down, and I understand a lot of moving pieces, but are you seeing your Q3 number looks kind of right on with what we were expecting, it seems like it's maybe a little bit more uncertainty with Q4. Is that a fair statement?

Then beyond that, are there any specific programs that are kind of creating that uncertainty, or is it more just kind of broad-based of just kind of what you're seeing within the group as a whole for GE?

I think we're misunderstanding this. No, just do the math.

Look at Q1, Q2, and Q3, and then there'll be a big jump in Q4 to get that number. The forecast that we provide was based on what's called a build plan, and they're probably just ramping it up a little more slowly than they originally planned.

I think it would be a mistake to read anything other than a pretty aggressive ramp-up from this information. We just want to be more realistic with Q4.

There's nothing holding back Q4, but we're thinking, well, maybe Q4 will be similar to Q3 and Q2, in that range anyway. We could be wrong,

but we're

just trying to be realistic, not trying to be conservative, realistic. Again, I want to emphasize, I think it would be a mistake to interpret this information in some kind of negative way that things are not going well, the programs aren't ramping up as quickly as possible.

What I think the key challenge, it's not us, would be our customers, is their ability to keep up with the program ramps. It's a challenge.

These are manufacturing companies, it's a challenge for a manufacturing company to ramp up so quickly. I would also say, I don't want to beat this horse to death too much, that we're clearly out of that pandemic mode where everything was just kind of going sideways for so long and we just weren't seeing any growth at all.

The growth is aggressive.

Yep. Okay.

Fair enough. That makes sense, Brian.

Appreciate the color. Maybe switching gears to missile systems a little bit.

I appreciate the color around how the Newton facility can just generally support in this interim period before Tulsa gets up and running, both kind of the full extent of the GE ramp, and then as well as the PAC-3 2,000 rate as well. Obviously, there was just a big announcement with the Navy and Raytheon around SM-6, which I know you guys have some content on.

PAC-3's not the only game in town, is it fair to say that as these other missile programs ramp up as well, that the Newton facility can also support those as well, or do you kind of get to a point where you'd have to make some decisions about kind of what lines are doing, and just maybe talk more broadly? I know there's sensitivities around it, but just how comfortable you feel like, given the pace of the ramp, that how Newton can kind of get us through to when Tulsa is up and running?

We probably overemphasize the PAC-3 program, and just we do that because there's so much visibility about it, so much known about it, when you have companies publicly talking about the rates, which is a little different than so many other missile programs. Since we're sole source on the materials for the solid rocket motors, it's easy to kind of key into the discussion about the PAC-3.

As I was going through just now, I was thinking, yeah, we're really emphasizing PAC-3 maybe to the detriment of a lot of other programs that we're working on. PAC-3 is clearly the largest program that we have now, but there are many, many other missile programs that we're working on.

Mark and I were just talking about that. It's a lot to keep up with.

At this point, the answer is we plan to be able to handle everything with the Newton plant, but that will be by stretching, by staffing up the solution treating lines quite aggressively. We plan to be able to get there with the PAC-3 as well as the other missile programs.

I think we'll all be very relieved when the new capacity in Tulsa comes online, because we'll be stressed until we get to that point.

Got it. Great.

Super helpful. Maybe one more for me and then I'll hop back in the queue.

Good to hear that Ariane is able to kind of pull forward their timetable around the buildout for their facility. It seemed like it just took an additional infusing of funding and commitment from you to do that.

If things got really kind of dire from just everything requiring C2B, is there a scenario where that can be pulled forward even more with additional funding, whether it's from you or some other kind of third party to help, again, move that along, or is that kind of what it is at this point? That's

that's a funny question, because, people keep asking that. I think the answer is not about money.

That's not what it is. What we did, we pulled forward the the our advance payments.

We didn't increase our advance payments. We pulled them forward.

We accelerated them in order to help them get their plant up and running more quickly. Is there an opportunity for us for for Ariane to squeeze that time frame, let's say four years, 3.5 years, less than 3.5 years?

I don't know. I think it would be a challenge.

I think it would be difficult. I'm not saying it's not possible, and, maybe a couple months here or there, but significantly, I my guess is probably not.

That's not a matter of money either. That's not the that's not the issue, so.

Reason I'm

kind of

laughing is because because people have offered that, what will it take, and it's not it's not money.

Yep. Got it.

Okay. Perfect.

Thanks, Brian. Appreciate the questions.

Thank you.

Thank you.

Hello. Good afternoon and thanks for the presentation.

I'm calling from Zurich. As you told, you lowered your full-year sales forecast for some of the programs.

For any shipments that have been delayed, have customers confirmed new delivery dates, or is it still assuming those sales will return? Looking into fiscal year 2028, do your latest customer schedules support faster sales growth than this year, or should investors lower their growth expectations for that year as well?

I'm asking especially about the difference between confirmed orders and expected demand. Could you give a rough breakdown of the reduction and tell us when you expect any delayed sales to be recovered?

I'm not sure I know what you're referring to in terms of reduction and delays. We haven't provided a forecast for this fiscal year or next fiscal year, but I'm not sure I understand what you're getting at in terms of these delays or reductions you're referring to.

I'm sorry. Maybe you could clarify or, yeah?

No, I was listening about and I thought about some programs accounting for reduction approximately for this engine programs, right?

The engine programs? I I don't know what to say about it, the engine programs.

If you're talking about the fact that we brought down the the the full-year forecast, maybe that's what you're referring to. I now I think I understand for the GE programs.

I thought you're referring to forecast for all of Park. We brought that down a couple million.

Yeah. Like I said, I I think the original forecast we provided was based upon the build plan we received from our customer, and we weren't aggressive with it, we didn't round up or anything like that.

We're just saying now based upon the fact we have two quarters in the books and we have a forecast for Q3, that we wanted to bring the number down a little bit to be realistic. The, the the ramp, in our opinion, is going to happen, whether it, moves a couple of quarters here or there, I think is not relevant.

When we start talking about the the GE Aerospace juggernaut, I think our main point was we don't know exactly what the time frame is, but the key thing is it'll get there and we better be ready for it. I think second question about this, I think we're really overreading or over- overly focused on the fact that we brought that number down a little bit.

I don't think it really means anything in terms of the long-term big picture. Those programs are still there, and they're still ramping.

The I think it's not a function like that We talked about the COMAC program, the 91- C919, maybe that's what you're referring to. That program's a little delayed, but I don't think we had really big expectations for that this year at all.

It's not a function of the programs themselves, it's a function of how quickly our customers can ramp up their production. We can meet their requirements.

It's not Park is not the problem. I don't think it's the end market either.

I don't think it's the programs or how many airplanes the the OEMs are able to sell. I think it's just a function of how quickly the the industry can ramp up.

That's really been the story for several years now as we're trying to emerge from the pandemic, because I you probably know this, but Airbus had their target of 75 airplanes a month for years ago, years ago, and they really were struggling to get, even up to 50, maybe past 50. It wasn't that the market wasn't there.

Look at the backlogs. My god, there's so many airplanes sold.

It's a function of the industry ramping up production, not not Park only, but the whole industry ramping up production to get to those rates. I I think I would say that maybe we're overthinking this this this annual forecast, because clearly the the I don't know, the vibes, if you look at that way, we're getting is that there's an aggressive ramp-up going on.

If we we talk to our customer, they're talking about very aggressively ramping up. I guess I would say, maybe we're wrong, maybe we're being too conservative, maybe their original build plan will end up coming through.

We haven't We don't get revised build plans every year from them, we haven't gone back to them and say, "What do you think about the build plan?" We're just trying to, be a little bit more realistic based upon Q1, Q2, and Q3.

I think if we're We don't want to overthink that or read too much into it. Let me put it that way.

That's my opinion anyway. The GE Aerospace juggernaut, as we call it, I think is very much intact and very exciting for Park.

Thank you very much.

Yeah. Thank you.

I'm sorry I didn't understand your question at the beginning. It's just I was thinking different things.

No worries.

Was

about the GE Aerospace outlook since July.

That's

what I'm asking.

Yes. Got it.

Thank you.

Thank you.

This is Brian again. Thank you, all, for listening in, and thank you for the questions.

It's been very nice talking to you. Please give us a call if you have any follow-up questions.

Happy to help you with that. Take care.

Have a good day. Bye.