Good morning. My name is Paul, 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 2023 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star and then one on your telephone keypad. If you would like to withdraw your question, please press star and then the number two on your telephone keypad. Thank you. At this time, I will turn the call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference. Thank you, Paul. Oh, sorry. Thank you, Paul. This is Brian. Welcome, everybody, to our first quarter conference call. I have with me, as always, as usual, Matt Farabaugh, our CFO. So, this morning we put out our earnings release, our first quarter earnings release. In that earnings release, there are instructions how to access the webcast, get access to the presentation that we're about to go through. Also, the presentation's on our website. So the presentation, as you probably already noticed, is quite long, but don't be alarmed. This is a dilemma we had. It's been less than two months since our Q4 conference call. Less than two months, so not very much time has passed. A lot of the stuff in the Q4 presentation was, you know, new information, new material, which still is very relevant, so we didn't wanna just kinda eliminate that. What we decided to do is this: We decided to carry over much of what was in the Q4 presentation to the Q1 presentation, but with some updates and additions, new items in other words. What we'll do is focus during this call, focus on the updates and new items, and we'll be skipping over or at least skimming over a lot of the rest of it. Also, the Q4 call is still on our website. If you wanna go back and listen to that, you know, feel free, of course. If there are things we skip over that you wanna ask questions about, please ask questions. It's not that we don't wanna cover these things, but we're trying to be practical here. Because we're gonna be jumping around a little bit, hopefully, we'll try to make it as cohesive as possible, but if it's a little bit you know, incohesive, if that's a term, we apologize for that in advance. As usual, we don't spend a lot of time in these presentations with what we consider to be dry financial analysis. You wanna do financial analysis, just let us know, and we're happy to respond to your questions. We try to make these presentations more interesting and informative. I also wanna give a little shout-out to Donna D'Amico-Annitto, Annitto rather, because she's like my partner, you know, in these presentations. I don't know how to do PowerPoint. I'm an old guy. She does all the PowerPoint. You know, we end up working over Fourth of July, over Christmas, and I think she's supposed to be on vacation, but she worked pretty much over the Fourth of July holiday, so thank you, Donna. Matt and I, of course, will answer your questions at the end of going through the presentation. Even though we're trying to, we'll try to skip over some things and make it as concise as possible, you know, it's still gonna take probably 45 minutes, I would think, so just wanna warn you about that. Let's just jump in. Let's go to slide two, forward-looking disclaimer. Let us know if you have any questions. Slide three is our little table of contents. Beginning with investor presentation, there's Appendix 1, Supplemental Financial Information, which we attach to all of our presentations these days. Just let us know if you have any questions about any of that. Slide four, unfortunately, we have to slow down a little bit for slide four, our quarterly results. Look at the right-hand column with the yellow highlights. So that's Q1. You see our sales, our gross profit, gross profit margin, 32%. We'd like to be better, but we're always happy when it's at least above 30%. And you can see our adjusted EBITDA margin. Our forecast philosophy, we try to remind you about this every time, every call rather. Our forecast philosophy, when you, w e tell you what we think is gonna happen. When we give you a forecast in a presentation, what we're doing is we're telling you what we think is gonna happen. We could be wrong, but we're telling you, "This is what we think is gonna happen." We don't play what we consider to be a game of give me a low number, so we can beat it and look like a hero. I know lots of other companies do that, but it's just not for us. I just want you to know when we give you a forecast, we're saying, "This is what we think is gonna happen." What did we tell you last quarter about Q1? What did we say during our Q4 investor call? We gave you a sales estimate of $12.75 million-$13.25 million, of course. We came in kind of at $12.783 million. Came in within the range, but kind of the bottom end of the range, I would say. Adjusted EBITDA estimate $2.75 million-$3.25 million, and we came in within the range at $2.8 million. EBITDA, I'm talking about kind of low end of the range, but nevertheless, we got in the range. I say outstanding job by Park's people to make the Q1 sales and adjusted EBITDA numbers. Why would you say that? You'd say, "Geez, you barely got in. You was at the low end." Well, you know, it's hard to appreciate the daily battles and the Herculean effort involved. Remember when we gave the forecast during last quarter, during the fourth quarter conference call? We said, you know, at that point, it was kind of interesting. It was only about two and a half weeks to go to the end of the quarter, to the end of Q1 when we gave the Q1 forecast. Because, you know, in Q4, we have to do our auditing and everything, so we announce later, after the, you know, maybe about a little over two months after the quarter ends. We said, "Even in those circumstances, there's a lot of risk to the forecast we're giving you." How would that be? Everything we're gonna sell has been booked. It wasn't that. It was the supply chain chaos that we were addressing. We didn't know what we'd get, and we certainly didn't get what we wanted to get. What happened is that a large majority of, let me put it this way, a large amount, I shouldn't say majority, a large amount of what we produced and shipped in Q1 was produced and shipped in the last two weeks of Q1. It's a daily battle with the supply chain. We get some raw materials in, okay, good. What do we have to do? We gotta go ahead and produce the product. We have to test the product. We have to certify the product. We have to ship the product in order to get the, t o force the quarter over the finish line. This is what our people did. They are people working long hours, especially during those last couple of weeks, to get the job done, to force the quarter over the finish line. I can assure you, our quarters end on a Sunday. A lot of quarters end on a Sunday or financial periods end on Sundays. I can assure you, people working that weekend, shipping that weekend, the last weekend of the quarter. Like I said, significant portion of the Q1 sales and production last two weeks. I'm just reading my notes here. Covered that already. We talked about the weekend. Park's people just brute forced the quarter over the finish line. We'll get back to this and what it means, what kind of people we have, but just wanna make that point. That's why I'm saying outstanding job, even though we just got to the bottom of the range, both the top and bottom line. Let's go on to slide five. This is all pretty much what we had, repeatable, we had in Q4. Freight, the information per end. We had a recent report that there might be a little light in the tunnel in terms of international freight shipping in general. Why? Is that good news? Well, no, the report said it's a demand destruction. You know, you tell me if it's good news, but maybe at least that, you know, there'll be some loosening up of the access to international freight, which has been a real issue for us every quarter. Severe staffing shortages. Yeah, they're certainly not going away. What we're saying, we're dealing with this the right way, the Park way, which means you're focusing on a Park family culture, not taking shortcuts like throwing money at people. Total missed shipments, one and a quarter million bucks. Now, we announced Q4, I think we were thinking it might be maybe a million bucks, one and a quarter million bucks of missed shipments because all these reasons. Freight, mostly supply chain. Supply chain was the big kahuna. That gives you what I think helps give you a little bit idea, a little perspective on the, you know, the battles we're fighting. Daily battle, what we're saying. I don't think we're being a little overly dramatic when we describe our experience as a daily battle. Let's go on to slide six. Yeah, inflation, you know, it's still there. That second check mark. Historically high, maybe was with us for a while. Maybe it's not so easy to break the pattern. Maybe we screwed the pooch, as the astronauts used to say. Pretty good here. Maybe now it's not gonna be so easy to get out of it. Not a list of excuses. We don't like excuses at Park. We don't, you know, we don't go for that stuff. We do think you wanna know, you know, what kind of stuff we're dealing with on a day-to-day basis since, you know, you're investors in our company, you should wanna know what we're doing every day. Slide seven. Supply chain has become a free-for-all. This is, you know, continuous. Hasn't gotten better, not as far as we know anyway. Chaos and panic, and in many cases, even confirmed POs are not being honored. We talked about that a lot last time, so I won't go into it, but I just wanted you to know that continues. At Park, honor, integrity would matter most. Principles are not gonna cheap. Gonna back to that later. Slide eight. During our last quarter. This slide just comes right out of the last quarter presentation, Q4 presentation. We highlight fiscal 2020 and fiscal 2022 because the point is, look at the fiscal 2022 top line compared to fiscal 2020 top line. It's much lower. Nevertheless, the gross profit margin was higher and EBITDA number was higher, just not by a lot, but just a little tiny bit in fiscal 2022 compared to fiscal 2020, even though the top line was much lower. I thought that was an outstanding job by Park's people under the circumstances. Slide nine. Let's keep moving here. Most of what we have here is a repeat of last quarter, but with some new items that I wanna bring to your attention. Park is clear of long-term debt. Yeah, we're on slide nine, like I said, I told you that already. Reported cash, $107.3 million. That's gone down quite a bit. What's going on there? Are we spending money? Well, let's talk about that. Park's investment philosophy. Our cash is invested in highly secure liquid securities such as treasuries, governments, high-grade commercial paper, and the average maturity is 23 months. I think that's not that long. You know, with interest rates going up so much, it makes a big impact. It's not a credit risk on this, on the investments, but it's the interest rate risk that we're dealing with. Now, our practice is to hold our investments until maturity, not to trade. We don't do that. We could. I'm not saying we won't do in the future, but our practice has been to hold till maturity. We have mark-to-market reporting of cash. Now, if you want to discuss this further, you got to talk to Matt about it. I'm just trying to give you kind of a high-level understanding. This is important. In other words, we report our cash, it's not based upon the investment, the cost, it's based upon the market value of the investment at that time. All these securities are highly liquid and, you know, quoted like treasuries, like every second of every day. It's easy to get that market value. The market value has gone down, even though they're fairly short-term, 23 months, because interest rates have moved up quite a bit. That's why we're reporting a lower number, that $107.3. The amortized cost basis of our cash at the end of the quarter was $111.3 million. We report the number we're required to report based upon GAAP requirements. But once you have this information, you decide what number you think is more significant. If we hold these securities to maturity, then it's likely that we'll get closer to that $111.3 million number, rather than the lower number. Why is it not exactly that number? Because the way the amortized cost basis works, rather, is that we take the investment at cost, then we amortize either discount or premium over the life of the security until maturity, and that's what we do on an ongoing basis. That's why it's not exactly the what we originally paid for it. Like I said, if you want more information about that, talk to Matt. I know you a lot of you guys are financial guys, you probably could, you know, run circles around me with this kind of stuff. But I just want you to understand that number. Just wanted to warn you also, we get to Q2, this discrepancy or difference, delta, let's call it, probably will be greater because interest rates are, you know, moving and the going up. They come down a little bit, but the trend for us anyway, has been moving up. Just want you to be aware of that because it's something and you I think you should be aware of when you look at our cash numbers. Slide 10. We don't have to go over the top part of it. We went over this previously. No change there. Cash dividend, I just wanna remind you that we paid $554 million or $27.05 per share in cash dividends in fiscal 2005. Slide 11. Here's something new, the stock purchase authorization. On May 23, the board authorized. We announced that the board authorized our purchase of up to 1.5 million shares of the company's stock. Now we've been in a blackout since the authorization. The blackout, I guess, ends tomorrow. What happens now? Now it's interesting because even before we made this announcement, we just received a lot of input from investors, shareholders, some of you, about this kind of capital allocation question. We got you know very different opinions. We had maybe three different categories. Some opinions were well don't do it. Don't do a buyback. Don't even announce a buyback. Some we had a couple of shareholders I can remember these are all significant shareholders that thought "Well announce a buyback but only kind of as a safety measure. Don't buy at these levels but let's say in case the stock really goes down there's a market event and you know there's chaos and the stock goes down to 7% or 8% then you have you know you're locked and loaded." That was the second category of input. The third was go ahead and announce a buyback. Some of this input came after the buyback was announced also. Announce a buyback and go ahead and buy at these levels more or less. Those are the three different kind of categories of input that we received. One thing I wanna comment on is that there was one, I guess maybe an analyst that said we announced the buyback as a matter of appeasement, and I wanted to address that because what does appeasement mean? It means that we didn't believe it was the right thing to do, but we did it because we're cowards, we're chickens, and we felt under pressure, we're gonna go and do something we didn't think was the right thing for Park. To me, that's what appeasement means. I have to tell you that I was surprised at that comment because if you know Park, we don't do that. We don't do that. We do what we think is best for the company. Now, we appreciate the input we get from shareholders, and that's a sincere statement. I mean, a lot of you know that some of the things we've implemented are based upon input from shareholders, really good ideas. When we get an idea, when it's a good idea, we'll implement it. We don't have any not invented here stuff. But at the end of the day, we'll do what we think is right for Park. I just want to make sure you understand that we don't do things for appeasement. We see that a lot in corporate America these days, and we think it's very sad and very disappointing, where CEOs have no backbone. They just do what they think they need to do to keep their jobs or something like that. But I'll tell you something, I'm not here to keep my job. I'm here to do what I think is best for the company. Now, what will we do? We'll see. I just wanted to give you a couple of things to think about. The item at the bottom of the page. So maybe our money's gonna finally be worth something, and maybe it's now an important strategic asset. The other thing is that we believe anyway, that the economy and the country are, you know, in a very troubling and dark place right now. Very concerning. Will it get better? You know, people think, "Oh, it'll get better." My question is, well, why? Why will it get better? What's gonna make it get better? I'm not sure the answer to that is very clear. I don't wanna get into, you know, the discussion about why it happened or our opinion about that. So I just want you to know that we're considering those two factors, but we'll see. You know, we don't have any announcement to make as to whether we're gonna start buying stock if it's low or not. We're gonna think about that a little bit. We're gonna watch what happens in the world, and make sure that we do what we think is best for the company. Any input you have, we appreciate, you know, we welcome it at any time, but we'll do what we think is best for the company. What does the company include? It includes the owners. When we say what's best for the company, we mean including the owners, of course. Let's go on to slide 12. We're not gonna spend a lot of time on this, just to save some time here. We do this every quarter, as you know. I don't know if you would know this by memory, but these top five are the same top five as last quarter. You know, some of the stuff doesn't rotate too much. Every quarter we come up with, you know, different pictures, different programs that the top five customers are on. The Bombardier Global, actually that relates to NORDAM and Passport 20 engine for the Global 7500. The XLR that relates to MRAS. The Sikorsky relates to UH-60. I think there was just an announcement that Sikorsky got a $2.3 billion contract for Black Hawks. Patriot missile, I think you know by now that's probably AAE and also Aerojet. AAE is a supplier to Aerojet. Kratos, well, you know what, that Kratos obviously relates to the Valkyrie. I think that might be a T-38. I don't know this because I'm just speculating, but I think this might be a demonstration of the loyal wingman concept, you know, with a manned aircraft next to the Valkyrie. I'm not sure. That's just speculation. Let's go on to slide 13. Numbers to talk about here, except you might notice that Q1 is kind of looking like the last fiscal year in terms of the pie, how it breaks down. Military percentage may start to go up, though, based on some things we're gonna be talking about in this presentation. We'll see. Slide 14. This is Elena's job every quarter to come up with some nice pictures of some military programs. These aren't always the biggest programs, but they're interesting programs for us, kind of fun stuff that we like to share with you. You know, at the same time, maybe we won't go into details on all these programs except to say these are all programs we're on, and there's some kind of new events, recent events relating to these programs that cause us to wanna highlight them. Okay. You see a little tiny 2% of space. That would be private space. I think that's really what space is these days, private space. Why don't we keep going, 15. These are important slides, the trends and considerations for military and commercial, but they're all from the Q4 presentation with very little new here. Starting on 15 rather, New World Order. We talked about that extensively. The last check item, Finland and Sweden officially apply, well, on June 29th, NATO approved their application, I guess, to join NATO. That's a little bit of an update there. Slide 16. Yeah, Europe kind of a big story in the second arrow item, but nothing new in the presentation here. 17, Asia. Don't forget about Asia. We covered all this in the last quarter, except that the little bullet item here relating to South Korea. They recently announced a plan to purchase additional PAC-3 defense systems. Is that a big surprise based upon, you know, what's going on in the world? Troubled world, you know, troubled country, troubled global economy. Not to me, not a big surprise anyway that the Asians are thinking, oh, that they better be careful with their defense systems. Be careful meaning making sure they're intact and maybe upgraded. The last item on 17 comes from the last quarter, but it's still worth, you know, looking into because the Lockheed CEO said they got demand signals for THAAD and PAC-3 from around the world. Especially when you see missiles hitting hospitals, et cetera. Again, I don't think it's a big surprise, but just wanna highlight that because as you know, PAC-3 is an important program for us. Slide 18. We covered the first arrow item last quarter. The second arrow item around that PAC-3 system. The third arrow item, this is actually new to this, to the presentation, and it's happening already. You know, we all saw these signals in the market, but now we're getting direct signals from our customers and OEMs saying, regarding significant increases in ablative materials in this Raycarb product. That's a C2B product that's sold by Park under our partner agreement with ArianeGroup. Remember that? We talked about that, I think last quarter, the prior quarter. That's a pretty exciting thing. This is to support PAC-3 missile and other systems. What I should tell you is that we talk about the ArianeGroup. Actually, let's talk about the check item there. Park is forecasting 2023 sales of ablative materials and Raycarb products, well over $10 million. I don't know why we did this. It's really over $13 million. The Raycarb product, this is key. It's not being sold to just outside customers. It's being sold to our customers. The expectation is that we will convert that into prepreg at some point. It's kind of a double benefit. We get the benefit of selling the customer this Raycarb C2B product, but we also get the benefit of ultimately converting that into prepreg. It's a double benefit. When you take both those things into account, it's probably over $13 million. For perspective, man, I was just looking at this yesterday, normal range has been in the last few years, $5 million-$6 million, with one year that was higher. This is, you know, quite a bit more and not surprising based upon everything that's going on. Last item is that, okay, don't forget supply chain issues in terms of, everything, including military. Slide 19. Commercial trends and considerations. Again, all this stuff was covered, or most of it was covered during the Q4 call. This thing about IATA predicts global air traffic levels will recover to pre-pandemic levels in 2023. I don't think that was included in the Q4 presentation. I think it's kind of a new thing, but it's not inconsistent with other things we've heard. We talk a lot about these pages about the significant increase in jet fuel costs and how airlines are passing those on to customers, and everybody's just, you know, very happy about how things are going. On slide 20, we say, but yeah, is there a limit to how long this can go? How long customers are gonna absorb these increased ticket prices for air travel, which the airlines have to charge, not only are the jet fuel costs going up significantly, but other costs going up. But obviously, the big kahuna in terms of the air cost by is the jet fuel, which is, you know, significantly higher. There's pent-up demand. We get it, you know, people have money. You know, is this gonna go on the slide 21. Sorry. Is this gonna just go on forever? Does that make sense? Does it defy gravity? What about the R word, which is becoming more and more not just a possibility, a probability, so a looming possibility. How about a looming likelihood or probability of recession? Now we're in a recession kind of mindset, and now you're concerned about, first of all, inflation. Well, you know, you got to buy. Spend a lot more money on gas, a lot more money on food. Now, wait a minute, there's recession, so maybe you're starting to hear about some of your pals losing their job. Do you really want to take the family to Cancun now? I don't know. Something to think about anyway. Why don't we go on to slide 22. I think the key thing is the last part of it. If the airlines slow down, they maybe, you know, push out some of the orders of airplanes, what will the OEMs do? What will Boeing and Airbus do? Will they slow down or will they do something else? I think there might be a bifurcation there, and we'll get into that a little later on in the presentation. Slide 23. Other factors which affect commercial. Higher jet fuel prices is an incentive for the airlines to convert from legacy airplanes to newer, more modern, more fuel-efficient airplanes, much earlier than they originally planned. The last, the bottom of slide 23, don't forget those supply chain issues because they're large and are looming. They're very much kind of a day-to-day thing, a phenomenon people have to deal with in the industry and the supply chain. Let's go on to slide 24. How we doing on time? This slide we include in every presentation, so I don't think we're gonna spend any time on it. If you have any questions about what's going on here, the dynamic, let us know. The key thing is that these are all GE Aviation programs because MRAS was a sub, originally was a sub of GE Aviation. They're now a sub of ST Engineering. When all this stuff started, MRAS was a sub of GE Aviation. That's why all these programs are GE Aviation type programs. Let's go on to slide 25. This is also from last quarter, film adhesives. These are new developments regarding GE Aviation programs. Film adhesive, good news for Park. Lightning strike, that's also going to slide 26, good news for Park. We talked last time about the fan case containment wrap, which we're, you know, excited about. It looked like the program was, you know, getting restarted after it was dormant for a while. Then we go to slide 27. Boeing announced that they're pushing out the 777 entry into service, 777X, sorry, entry into service until 2025. I think it was a two-year delay, obviously disappointing. You know, maybe could have some doubt in the program itself. Although, you know, some encouraging news, some customers, some airlines are still ordering a 777X, so that's a good thing. Maybe the program will be okay and just be delayed a little bit. Let's go on to slide 28. All right, this relates to the A320neo family of aircraft. This is pretty complicated, and it's not so easy to kind of put this all into a little nice little package for you. We try to give you some flavor, some perspective, because it's obviously a real important program for Park. We start on slide 28. Most of the stuff was carried over, but there's some new things in the related to the A320neo family in the presentation. On slide 28, this is when Airbus is putting down the markers saying, "Look, we have big plans for this program. This is the ramp rate. These are the, you know, target levels we want to be at, the rates we want to be at in 2023, 2025." Go on to slide 29. Important recent news. This is now fast-forwarding. This was in Q4 presentation. This is fast-forwarding a year later. This is now May of 2022, where they're really kind of doubling down and saying, "Yep, we're committed to doing these things. We're committed to these rates, 65, 75. We're committed to these things." When, you know, a year prior, they were kind of putting out, what do you call it, a trial balloon almost to see how what kind of reaction they got. Now it's no more trial balloon. They're saying, "Nope, we're doing this." Let's go on to slide 30. Top of the slide 30, yeah, this is not new, but it's interesting, and it kind of relevant to what's going on here. At this suppliers conference, one of the Airbus executives was kind of chastising the supply chain, saying, "You know, we need you to follow the rate indications we're giving you and have faith, and we need to challenge you not to second-guess." I thought that was kind of strange, but nevertheless, maybe relevant considering what's going on. Now, in March of last year, GE Aviation said, "Don't worry, we're gonna keep up the LEAP rates, you know, we're good." That was important because prior to that, you know, GE Aviation was so publicly saying they're skeptical about Airbus's indicated ramp rates on the A320neo program, of course. Look at the bottom here. This is a big one. According to a May 2024 Reuters report, CFM is facing industrial delays of six to eight weeks. Now it's unraveling. Story's coming apart. Six to eight weeks, well, let's keep going. Let's see if that, you know, if that makes sense, just six to eight weeks. Let's go on to slide 31. Now, in June 2024, this is recent speech made by Airbus CEO Faury confirmed that supply of engine is lagging behind A320neo aircraft production, but stated he is confident Airbus will achieve a smooth ramp up to its higher, highest ever single aisle output rate. CEO Faury also implied that Airbus would continue to produce A320 aircraft and install the engine in the aircraft, delivering them when the engines are available. He also expressed some exasperation, I say seeming, but it's pretty obvious to me anyway, with a skepticism those in the supply chain who continue to question Airbus's ability to achieve their targeted rates. Let's keep going. Now, Airbus has only delivered 36 A320neo family aircraft per month in 2022 through May, but Airbus produced 44 per month in the second quarter. What's going on here? What is the discrepancy about? You know, Airbus wants to deliver 600 this year. That's an average of 50 per month, isn't it? Yeah, 600 divided by 12. Now there was something that came out yesterday, and I try to follow these news items. Didn't have time to get in the presentation, but I'm gonna read from it. This is CEO Faury's interview with Aviation Week on July 5th. I'm gonna read from it, so bear with me here. It's kind of interesting and maybe important. Faury acknowledged severe problems. Severe problems in the Airbus supply chain is making the planned ramp up to 75 aircraft per month in 2025, and a target of delivering 720 commercial aircraft in 2022. Tough challenges. This is a quote from him, "We at Airbus said in the first half of 2021 that the industry should be prepared for the ramp up. Many were saying we were stupid." He said this, "We're stupid. Many waited. Maybe the engine manufacturers as well, but then it was too late. You're behind the curve. When the curve is steep, it is difficult to catch up." That's exactly where we are now. You can see my sense is he'd get a little bit unhappy and maybe exasperated. He's saying, "Look, we warned you guys at the beginning of last year, and you didn't pay attention to us. You didn't listen to us, and now look at the predicament we're in." Airbus is currently back to—I'm reading from the article again, back to building gliders, you know, otherwise completing aircraft waiting for engines to be delivered. This is important because it probably explains the discrepancy between production and deliveries. Let's see what else he said here. This is a quote, "On a single aisle, it is supply-constrained market, at least for the short term." He said they're adding some assembly lines. You know, Airbus is committed to doing this. Faury nonetheless stressed that he is not prepared to drop their production targets. "Is it time to give up?" This is a quote. "Of course not," he says. "The teams are working like crazy. Suppliers are ramping up, and we're shaking the engine manufacturers, have them recover. They tell us they'll recover." So he also points to 2018 crisis when Airbus was in the same predicament. They were able to deliver their target, but they had to build the gliders and wait for the engines to be hung. You know, there's obvious frustration on the part of Airbus because they've been through this movie before. They warned the industry. They warned the engine companies. You know, pay attention to what we're doing. You know, this guy at the supplier conference, Airbus executive, was lecturing the supply chain, "Pay attention to what we're doing," and they didn't. Now we're in this predicament, but they're building gliders. What does that mean? That's a very important comment, and it kind of confirms what we're speculating about on slide 31 here, which is that Airbus is not gonna stop. It'll cost them a lot of money. They're gonna build lots of airplanes that don't have engines. Lots of airplanes. They'll keep building the A320neo because they wanna keep moving. This is my interpretation. They wanna push forward. They don't wanna get bogged down. Then when the engines are made available, this is not just CFM, it's also Pratt. You know, in fairness, it's both GE, CFM, and Pratt, you know, that have fallen behind. When the engines are made available, the engines will be hung in the airplanes, and the airplanes will be delivered. That's what they did before. That's what we're doing now in terms of this concept of gliders. That may explain the discrepancy that we saw where, you know, why they're producing more airplanes than they're shipping. You know, well, now we know the answer then because it's from Faury himself. He said what they're doing. Okay, so I know that took a long time, and we're running late. Slide 32. So there's a news release that we came out with. Why do we do this? Saying that we're committed to supporting Airbus' ramp rate. We want to take a stand because a lot of suppliers were not. They're kind of wavering and that kind of thing. We want to take a stand. We're glad we did. The bottom of slide 32, no real change there. Let's keep going. Slide 33, the XLR news. The first test flight of an XLR equipped with LEAP-1A engines took place in June. That's really nice. Also, Boeing and the Boeing CEO has said they're not gonna introduce, announce any new airplanes for at least a few years. What does that mean? That means they probably never develop a response to the XLR. Even if they did, it's not gonna be till the 2030s, which at that point, you know, I'm not sure it's relevant or not. I think what Boeing is doing is basically ceding this space, this whole space that Airbus, a very important space. Question came from one of our investors. In the short interval, why don't Park's A320-derived revenues reconcile to A320 aircraft family deliveries? We talk about what's going on in the A320 big picture overall a lot. Why don't our revenues reconcile? The answer is that it's a good question. There are a lot of timing differences in the downstream supply chain, not our supply, the downstream supply chain. Inventory is a big deal. To me, it seems like inventory is sometimes not managed too well, a lot of overcorrections, you know, overshooting, too much, too little. You know, it's very hard to kind of align and reconcile on a short-term basis what we're doing and what Airbus is doing. It doesn't work. However, this might be the most important thing in the presentation, this last thing, the bottom 33. At the end of the day, it doesn't really matter. The only thing which matters to Park in connection with the A220 program is how many A220neo aircraft equipped with those CFM LEAP-1A engines Airbus delivers. That's it. The timing differences are gonna be hard to figure out, but at the end of the day, that's all that matters to Park. It's an important thing to remember when you're thinking long term, at least for me it is. Slide 34, the COMAC C919, first production aircraft's taken for a flight. Bombardier Global 7500, a new announcement. You know, I would say it's exciting. Bombardier announced kind of a new derivative, let's call it, of the 7500, called the 8000. 8,000 nautical mile range, very fast airplane. Uses a Passport 20 engine, 2025 entering the service, and you know, Park's on that program. That's nice. Slide 20, 35, the Boeing 747, we cover this every quarter. Boeing has announced that they're canceling the program. There's only three left to deliver. Slide 36, GE Aviation forecast, GE Aviation programs forecast. First of all, in Q1, came in at $6.4 million. I think we told you when we did our Q4 call that we'd be somewhere between $6 million and $6.5 million, so it came in within the range. For Q2, we're indicating $6 million-$6.5 million. Significant supply chain risks in that forecast. Let's go on to slide 37. If you look at Q1, we already gave you the numbers for Q1. Q2, our forecast is sales $13.5 million-$14 million, adjusted EBITDA $3 million-$3.5 million. Again, significant supply chain risk with any forecasting at this point. Let's go on to 38. These are important slides, I think, for us, but these slides come from Q4, so we're not gonna go through them in detail. I think there's really, for me anyway, important points that are being made here. I just wanna highlight one thing. First arrow item, second check, you see we're talking about forecasting's problematical even for the next quarter, forget about long-term forecasting. That's not really possible for us under this very stressed environment, this chaotic environment with supply chain in particular. We think we can provide meaningful insights into our company outlook. We've broke it down by business by military aircraft first, and then commercial aircraft in terms of outlook. I'm not gonna go through these things, you know, please let us know if you have any questions. All these things are included in the Q4 presentation still apply. Well, I just want. Let me just add one thing. On slide 39, there's something we did add here at the bottom about Airbus and what they're doing. We say, Airbus is trying to establish an irreversibly dominant position in single aisle, permanently end the duopoly. Take as much market share as possible, but permanently end the duopoly, and that seems to me what they're doing. At the bottom, Boeing has no response to the XLR niche that's being left to Airbus. Slide 40. We go through some of these programs, how the recession affect these programs. Not gonna go back over that. Slide 41, same thing with the Global 7500, how would a recession affect that program? At the bottom of 41, this is the important part of it. Based upon the above considerations, although there are serious concerns about the economy, inflation, workforce shortages, supply chain chaos, we believe the outlook for Park is quite positive for the reasons stated in the prior few slides. Let's go on to slide 42. We give you an update every quarter. Not gonna go over these numbers. Think they kinda speak for themselves. Any questions about our expansion, please let us know. Let's go on to slide 43. James Webb. You know, this is kind of a small program for Park. I mean, there were 21 SigmaStruts that we provided for the James Webb, but it may be we're not supposed to be emotional in business, but this one's a little emotional for us. It's kind of a big deal. We do include it in our quarterly presentations. We may include it for, you know, the next couple of quarters as well. 21 of our SigmaS truts are incorporated into the structure of the James Webb Space Telescope, and they were made here. You see that arrow, that's a little workstation where we made those SigmaS truts. If you look at the two arrows pointing down from there, that's where they are now, 1 million miles from the Earth. That says L2. That's where those SigmaS truts are now, 1 million mi from the Earth. NASA plans to release the first full-color images from the James Webb Space Telescope on July 12th. Now you've heard that, you know, some of the people at NASA who've seen these already got very kind of emotional when they saw these images, so it'll be very interesting to see what the images, the first images look like. We're thrilled and honored to be playing a part on this incredible James Webb Space Telescope mission. Let's go on to slide 44. 44. This wasn't covered actually in our Q3 presentation. An investor asked me, "Well, what happened with this?" because we didn't cover it in the Q4 presentation. There wasn't much of an update, but now there is an update. If you look at the highlighted item, this is the only thing we'll cover. We're working with a new potential JV partner on these initiatives. We're still, they're still front burner, and we're actively working on these things, discussing them, but we decided that we want to work with a different partner, so we're working with a different prospective partner on these projects. Okay? Let's go on to slide 45. Okay, this is a new and exciting thing for Park. We haven't talked about this before, kind of a new development. This company, Aero Design Labs, so they have this program that they call the Aero Design Labs Drag Reduction System program, ADRS. And Park materials are sole source qualified in that program. It's a mod for the 737 legacy aircraft, of which there are thousands and thousands flying in operation around the world. This is not the MAX. These are legacy airplanes. The ADRS program designed to make the 737 aircraft more aerodynamically efficient, meaning more fuel efficient, resulting in significant fuel savings. As a result of the significant increases in jet fuel prices, the economics of installing these kits are even more compelling. ADL received the STC from the FAA for the 737-700, and it's planning to receive the STC for the 800, 900 by year-end. The STC is a big deal. I mean, it's okay, you're good. The FAA's approved it, so they signed off. Slide 46. There are, as we said, thousands of Boeing 737 legacy aircraft, and this is a potentially very significant program for Park. Park will consider, actually is considering additional investment to support this program if necessary. Let's go on to slide 47. We received a nice little award from one of our favorite customers, OEMs, Aerojet Rocketdyne. We received a distinguished supplier award from Aerojet. It's given to less than 1% of their suppliers, according to them. We're very honored about that. It is one of the major programs in which Park supports Aerojet. It's a PAC-3 missile program. Here's a little picture of the banner. It's actually on the wall in our factory right now. That's the customer service team, Dakota, Elena, and Sarah holding it up for us. Thank you, ladies. Slide 48. Park's people. We covered this during our last quarter, and most of these slides are just the same as we had in the last quarter. We won't spend a lot of time with them, although very important. Headcount, people count rather 106, so we're still not really at the levels we wanna be at. Why don't we just kind of fast-forward, you know? We talked many times about not throwing money at people. We do it differently at Park. Slide 49, people earning what they get. We talk about the fact we didn't lay anybody off during the pandemic and economic crisis. Let's go on to slide 50. Peter Drucker here, who's helping us out, "Culture eats strategy for breakfast." How were we able to make our Q1 sales and EBITDA numbers with such a severely reduced workforce? Was it magic? I don't think so. Our people have been working very long hours, in some cases, 70-hour weeks, week in and week out. Nobody really asks our people do it, they just do it. You know, there are plenty of others out there who let go of many, many people, maybe thousands of people, and now they need their people to work extra hours for them. My comment is, good luck with that. You know, you just you know, you let go of, you know, 10 or 12 or maybe 100 of my pals. Now you want me to work hard for you? Why would I wanna do that? Because you obviously don't care about me, so why should I care about you? My comment would be, good luck with that. Do you understand how very fortunate and lucky we are to have the wonderful people we have? Understand why we love our people. As it turns out, loving our people is good business, because our people are willing to do what's needed for our business to be successful, because we're all part of this business. We're all part of it. We're not like us and them. We don't do that. That love has to be sincere. If it's not sincere, then it doesn't count. Let's go on to slide 51. Like this thing about our strategies and moving mountains. With a dedicated, motivated, inspired workforce, a company can move mountains, including, meeting our EBITDA sales targets with a very severely reduced workforce. Without such a workforce, you can move nothing. Like I said, good luck trying to get your people to work extra hours and things like that, which has laid off half their pals, because obviously you're telling them you don't give a damn about them, so why should they give a damn about you? Let's keep going here. Customer Flex program. We're just updating the numbers. Very critical program for Park. Without this, we would not be able to achieve what we achieved. It's, you know, a very important program for Park. We recently increased the hourly premium that employees receive for Customer Flex program participation. Slide 52. Closing up here. Sorry, we're taking so long. I apologize. We tried to skip over as much as we could, but it's hard to skip over everything. Our principles are not cheap. We covered this during Q4, so just a little review here. It is an inconvenient cost to Park to honor our POs and PO confirmations in a world where many others are not doing so. But at Park, we do what we say we're gonna do. At Park, our word is our bond. Now what's kind of interesting here in terms of update is what we've been told by people about some of the things we commit to. We're told by the supplier who's not honoring their POs that we should not honor our POs either. We shouldn't honor our POs to our customers. They say, "Well, if you do that, you're gonna go out of business." That's very interesting because my comment is, you go out of business when you sell your soul. When you sell your soul, you have nothing left, and then it's only a matter of time. Your days are numbered. That's when you go out of business. I don't really agree with that comment. I thought it's kind of interesting that people are encouraging us to not be honorable as well, though. It happens again. It is inconvenient for Park not to throw money at people in order to recruit them in a world where many others are doing just that. At Park, our people are precious. Our people are not commodities to be bid up and sold short. Like I said, loving our people is good business, but we've been told that we should just bid up people and to hire them, and then when we don't need them, just get rid of them. What's the big deal? They're expendable. That's not for us. Let's go on to the next slide, 53. The same concept here. Just kind of a new angle on it. It was inconvenient for Park not to ask or accept any PPP or government money, meaning taxpayer money. The government doesn't have any money. It all comes from us, the taxpayers, during the pandemic and economic crisis, while others, many, many others, including large companies, took tens of millions of dollars of government money, meaning taxpayer money, meaning our money, as incentives not to let go of more employees. At Park, we earn our own money. We're not inclined to accept corporate welfare or government handouts. At Park, we made money and pay taxes every quarter throughout the pandemic. At Park, we kept all of our people. We do not need government money as incentive to keep our people or peer pressure. Yeah, we were lectured by others that we should take the money. Look, it's millions of dollars. It's free money. What is the thing, Milton Friedman? No free lunch. What about all the inflation we have now? Is that money all that free, all the money people took, all the free money people took? Really? I don't know about that. I think maybe Milton Friedman was right. No free lunch. Yeah, the ultimate irony is that some of these people actually that, you know, took a lot of government money are the people trying to hire employees away. Let's go on to slide 54. Here's our closing slide. Others need to make their own decisions, own choices about what matters to them, what does not, and live with those choices. But at Park, honor, integrity are what matter most, and Park principles are not cheap. At Park, we're not like the others. At Park, we play for keeps. At Park, yeah, we're not fooling around. We're looking to make an impact. We're not going for mediocrity. At Park, we go for greatness. Here we have a picture of our ablative materials special operations team. It's an ITAR process. We can't talk a lot about it. We got Kevin. These people are big into Customer Flex. Ulay, these are long-term employees. Actually, Salpi is new, doing well. Sariya, you know, lots of Customer Flex categories. Michelle is new as well. These people did a lot of work and did a lot of other things, of course, during the quarter. Did a lot of this ITAR work for the ablative materials for missile programs during the quarter. Job well done by them. Something new we haven't done before, slide 55. This is our board of directors. We, I hated this, but for two years we had phone meetings. I hated it. Finally we got together in person on May 18th. We had an in-person board meeting at Park at the company, and we did a nice little picture. I just wanna comment. Apologize. We don't dress up for board meetings, except for Brad, he has a nice jacket on. The rest of us, we just kinda dress pretty casually. Okay. Thank you very much for being patient and listening. Operator, now if there are any questions, we'd be happy to take them. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. You may press star two if you would like to remove your question from the queue. One moment, please, while we poll for questions. Thank you. Our first question is from Nick Ripostella with NR Management. Please proceed with your question. Good morning, Brian. I wonder if you could comment on kind of new niche markets for Park potential. I'm thinking of SpaceX, Blue Origin, you know, electric aviation. Are there any products that Park could make for those markets? Do you think your sales process would be different for those endeavors? Thank you so much. Thanks, Nick. Thanks for the question. So we haven't done a lot in terms of sales so far in these two markets, like, eVTOL electric aircraft and private space. We do have a product that we are targeting toward these eVTOL type aircraft. I guess you'd call them aircraft. We have been working toward these private space companies. I mentioned in the pie analysis there's some for private space. I would say not the success that we would have liked to achieve so far. Still those two markets that you mentioned, Nick, are still markets that we're really interested in targeting. I think we have products that may help us, you know, may be very appropriate for those markets. Okay. Was that helpful or do you need more information on that question? Yes. No. Thank you. Thank you so much. Thank you. Okay, Nick. Thank you. Our next question is from Brian Glenn with Olcott Square Investment Partners. Please proceed with your question. You there, Brian? Hey, Brian. Yeah, sorry, I had it on mute. How you doing? Good. How's it going? Yeah, good. As always, thanks for the walkthrough. It's appreciated. Just two questions. I guess the first, this goes back to I think it's slide 17, it might be 18. You mentioned fiscal year 2023 sales for the ablative and Raycarb. You guys were expecting $10 million. Is there any indication that you can provide with respect to what that figure would have looked like for fiscal year 2022? Just so we can understand the trajectory a bit. Yep. $5 million-$5.5 million, something like that. I think we said that, yeah, we really should have said over $13 million. I think we're trying to be too conservative. This is a forecast. It's not all booked. Understood. Actually, the number we're looking at for this year is over $13 million. Yeah, last year was, I think, $5.5 million. I don't have the number in front of me, but somewhere in the fives. Understood. Okay. Thanks. That's helpful. The second question, and I know you mentioned you've spoken with shareholders, and I've asked a few times as well regarding capital allocation, specifically share repurchases. The only other thing I wanted to bring up, I know you guys are giving serious thought about the best way for the company to consider that, and there's a lot of assumptions that go into that. The only other thing I wanted to bring up is if there's the view that you guys have a multi-year period of earnings growth, and I know nothing's guaranteed, but if that's the view, and obviously there's some calculus as to whether the stock is cheap relative to that growth or not. I did want to bring up, you save a couple bucks on the dividend for the shares you repurchase. The other thing you do is you potentially cash out short-term shareholders. Anyone who has ownership in the company, and I know you appreciate ownership, but anyone who has a short time horizon is more likely to be a seller. You effectively, you know, cleanse the capital structure a bit with respect to the ownership piece. There's sort of a selection bias that exists whenever a company engages in share repurchases. Again, they have to be thoughtful, right, and calculated. You do end up, kind of, culling your investor base, and you end up with, hopefully, a better crop of fellow shareholders and partners that have an appreciation that the business is worth more, that's why they didn't sell, and also a better time horizon, which is more of a long term. So there's kind of that selection bias, which I think should be considered by the board and might be appealing. I agree, and I appreciate the input. You know, you've given us input before. Appreciate it. I commented, we received. It was kind of interesting. I don't know why, but out of the blue almost, we received probably from maybe six to eight different investors, you know, input, opinions about capital allocation. That was interesting. With some was before we even made the announcement, so I don't know if there's some anticipation or whatever. We appreciate the input. We, you know, give consideration to all, you know, all the valid input. Your input is valid. I can't tell you what direction we're going in right now. I think at this point, we wanna evaluate a little bit. As I mentioned, we are pretty concerned about, you know, the situation in our country and the economy and the country generally and where it's going. That's, you know, one of the factors and not the only factor. The factors you're mentioning are obvious. We know we've received some analysis even from unsolicited but appreciated from some shareholders. You know, they gave us a little kind of number crunching about, well, if you buy stock, this many shares at this level, this looks. We've done it ourselves. We have outside advisors and investment banks that do this work for us as well. We always appreciate the kind of input, and I won't disagree with anything you said. I think it's all valid. At the end of the day, you know, we have to make a decision based upon considering all the factors. Like, you know, often is the case, Brian, the big boy and big girl world, you know, all the indications aren't going the same direction. You have to make judgments, and you do the best you can. Then, you know, you always course correct, I hope anyway, if you realize that, you know, wait a minute, that wasn't the right decision. I think that's the best I can do in responding, except to just say again, I don't disagree with anything you said. Yeah. You know, I appreciate that. Yeah, I totally understand. I guess the last thing, which is, I guess, more of a question, but it looks like, again, I'm a passive shareholder, of course. It looks like outside of any significant M&A, and I know you guys know this much better than me, but it looks like all the growth opportunities that Park has explored or considered or some of the partnerships were through the facility expansion. It seems like, and correct me if I'm wrong, that they're relatively small in terms of the capital that they may require. I know you can't talk about what hasn't happened or what's being privately negotiated. As I kinda glance across, like, a number of levers that you're pulling over the last two years, they're all pretty light on the capital investment side or the working capital related to that partnership. I guess correct me if I'm wrong. I guess that's the question is, am I reading that right or some you're looking at do possibly have a larger capital commitment component? I would say that's partially correct. Now, if we talk about this thing there, the slide in the presentation about these two projects, capital projects in the plant, you're right. I think it's, you know, $7 million-$8 million, something like that. However, we have ongoing discussions with others about projects that would consume much more capital, not talking M&A here, as you pointed out, but joint ventures, for instance, which would consume much more capital. We've been kind of proactive in that regard. You're trying to use our balance sheet as an advantage. We've, you know, talked, we've spoken to OEMs and even customers saying, "Maybe we should talk." We initiate discussions sometimes about, you know, this project or that project, something we could do together. And those, some of those would consume much more capital. Okay. Yeah, that's helpful. Thanks again, and appreciate the walkthrough and the replies. Thank you. Have a good day. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. You may press star two if you'd like to remove your question from the queue. There are no further questions at this time. I would like to turn the floor back over to Brian Shore for any closing comments. Okay. Thank you, Paul, and thank you, everybody, for listening. Appreciate the questions. Appreciate your time. Matt and I are always available. Feel free to call us anytime you want. Have a great summer, and we'll talk to you soon. You take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.