Park Aerospace Corp. (NYSE:PKE) Q2 2024 Earnings Call Transcript

So we’re being aggressive? C919? What I’d tell you, we’re – sorry, that yes, Comac said they’re going to be in 150 in five years, that means 300. These are – you got to convert two engines per airplane, okay? We’re just using 100 equivalent – 200 engines, 100. Now let’s talk about that. The A320, they’re predicting 900 airplanes per year, the 737 they’re just talk now, but if they go to 57 per month, that’s 684 airplanes per year. We’re talking only 100, which is 50 less than what Comac says? Is that aggressive? I don’t know. Again, the revenue per unit, those numbers we know. ARJ21, that’s the regional jet. 55 is lower, in the low end of the build plan range. There’s 2 numbers high and low. This is lower than the build plan range. Are we being aggressive?

GE9X, we’re not going to give the unit numbers, but I can assure you it’s conservative. Now the number – the total numbers went up. Why is that? Because the revenue per unit went up because we have new pricing and the price is – we’re taking into account the new pricing, that gives you the $77.5 million per year, pretty conservative number of units, I would say. So let’s talk a little bit about some of the footnotes here. Okay. So Item three, footnote three, A320neo aircraft. Park is using Film Adhesive materials – qualified and use this program? Is that aggressive? Well, I know, you tell me we’re qualifying and that’s a lot of money for MRAS as well, qualifying their Film Adhesive product with them. They’re hiring engineers. They can invest, why would they be doing that?

If they don’t plan to put the film adhesive on the programs. Is that aggressive? Well, I don’t think so. Let’s talk about some more. Item five, Passport 20, Item six, which relates to the 919 and Item seven, which relates to ARJ. We’re assuming that every one of the cases, our film adhesive is not used in the program. Why is that? Because I mean, clearly, MRAS once again, their Film Adhesive products were in all these programs. They don’t want to have to buy film adhesive for brand X and also for brand Y. Why are we doing it? Because we’re being conservative. Why are we assuming rather they’re not in the programs? We’re being conservative? So you tell me, the $22.5 million, is that an aggressive number? That an aggressive number? I don’t think so.

We’re just doing math here folks. Do people think that we’re kind of overdoing it or promoting or hyping. I don’t know where that – I don’t know where you see that. Let’s go on to Slide 35, okay. Park Aerospace Corp. financial outlook, principally based upon growth estimates of programs on which Park sole source qualified, an update. All right. This is pretty much very similar, although we’ve updated the you estimated GE Programs or incremental sales of 32.7%, that’s just doing the math again. And there are footnotes on the next slide, Slide 36, which explain the math here, which we pretty much know, there’s not too many changes. The $20 million for the ADL, Kratos, Valkyrie. Somebody said he saw [indiscernible] numbers high. It’s like, okay, I know where you get that – the information from.

To me, this number is conservative, quite conservative. But I guess we’ll see about that. Non-GE programs incremental sales, well, that’s interesting because remember, we’re using baseline of 2023, where there’s non-aviation sales were $32 million and $8 million brings it up to $40 million. That’s the assumption here. $32 million plus $8 million is $40million. That seems like what we say, 5% a year over five years, something like that. Where are we in Q1 and Q2? We’re $37.5 million. So $5.5 million of the $8 million has already been achieved. Now that’s Q1 and Q2. We could go down. I mean, I’m not saying that we’re going to – that number will move up now. But we still always does – based on timing of programs. That’s just how airspace works.