Good day. My name is Claudia Avented, and I will be your conference operator today. At this time, I would like to welcome everyone to Park Aerospace Corp's fourth quarter FY 2025 earnings release conference call and investor presentation. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. Thank you. At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin the conference. Thank you, Operator. This is Brian. Welcome, everybody, to Park's fiscal 2025 fourth quarter investor conference call. I have with me Mark Esquivel, our President and COO. Right after the close, we announced our earnings. We did a news release announcing our earnings. You want to take a look at that. In the earnings release, there are instructions as to how you can access the presentation, either through a link or through a website. You want to take a look. You want to get that up in front of you before you go through the presentation. After we go through the presentation, which could take maybe 45-50 minutes, just want you to be aware of that. Mark and I will be happy to answer whatever questions you might have. Okay? Why don't we go ahead? Slide two, forward-looking disclaimer language. We're not going to go through that, but certainly let us know if you have any questions. Slide three, the James Webb Space Telescope. It seems like we're featuring this every quarter. There's so much news. As you probably know, the James Webb Space Telescope was built with, constructed with our SigmaStrut, which is our proprietary strut technology. What's the news this time? We got a little bit of a picture of the James Webb in the L2 Lagrange orbit, which is about 1 million mi from Earth. I believe it's pretty far away. 97%, sorry, 99.7%. That's a pretty high percentage. Pretty good odds. Chance of alien—listen to this. Alien life. This is no joke. On a Milky Way planet that's in our galaxy, I guess we call it, K2-18. That's the name of the planet. I'm sure you've heard plenty about that. It's only 124 light-years away from Earth. That's just right around the corner. It's in our own galaxy. Thank you, James Webb. So what the James Webb apparently did was it detected certain kinds of gases, which are only produced by biological processes. It's quite incredible. You know what's also kind of strange? Do you hear about this on the news every night? Like all day long, all night long? Life on another planet, 99.7% certainty. I don't. I hear nothing about it. I mean, I don't know what they cover in the news, but you would think this would be like 24/7 news, but it seems to not be. Anyway, table of contents or investor presentation, we're about to go through that. And then we are supplementary financial info at the back and the Pennex one. We don't go through that during the presentation, but certainly let us know if you have any questions about it. Okay. Let's go on to slide four. Quarterly results for 2023, 2024, and 2025, thousands. Let's go right into the right-hand, right over to the right-hand column, Q4, which is the quarter we just announced. Sales, $16,000,939. Important to mention that we get to that later again, but $4.4 million of those sales were C2B fabric. And then we have a gross margin of 29.3%, which considering—we'll go back to this—but the C2B fabric, we sold that. It sold at only for a small markup. Considering that, actually, I was surprised at how high our gross margin is. As you know, we do not like it when our gross margin is under 30%, but under circumstances, and also the startup cost that we will go through, I was surprised as myself as how high it was. I suspect the main reason was the fact that production was very strong, and it exceeded sales, which was our plan. We will talk about that in a second. What do we say about Q4 during our Q3 investor call? Sales estimate $15.5 million-$16.3 million. So we came a little bit ahead of that range. Adjusted EBITDA estimate $3.3 million and $3.9 million. So we came in within the EBITDA range. I got to stop and cover something, which we used to cover every quarter, and I figured, okay, fine, I have overdone it. But we had a couple of comments after our Q3 investor call to the effect that, well, we should pad our forecast numbers. We got to go back and remind you that we do not do that. We do not do guidance. We do not like that. It is kind of a strange game that, in other words, if we believe the quarter will be X, we are supposed to tell you X - 10%. That way we come out with X, we will be heroes or we beat our numbers. To us, it seems very strange. Other people, they do whatever they want. I know most everybody else does, but we do not do that. We give you a forecast. What we are telling you is this is what we think is going to happen, not what is going to happen - 10%. We do not do that. We just want you to be aware of that, and we do not feel like changing it. We also feel it'd be a little bit strange for us if we're telling you what we tell you that it's going to be X - 10%. That is not really honest, is it? We have a thing about integrity. I'm not saying other people do not. I'm just saying that is for us. When people say, "Oh, why do not you pad your numbers?" Understand we are not going to do that. When we tell you, give you a forecast, we are saying this is what we think will happen, and we will be wrong sometimes, and sometimes we clearly are. At the time we tell you that, we are saying this is what we think is going to happen. We just want to remind you that we used to discuss it every quarter. We have not in a while, but maybe we need to remind you again. Slide five. Considerations for Q4. Let's get right to it. Production versus sales. Remember in Q3, we explained that our Q3 sales value of production, we call it SVP. That's not inventory value. That's just sales value. $1.2 million less than our sales. At Park, production SVP absorbs a significant amount of costs into produced inventory. As a result, and we're just reviewing Q3 for perspective here, the Q3 production shortfall, in quotes, had a significant impact on our Q3 EBITDA. The Q3 production shortfall was on us. We said that during our Q3 call. In other words, we just missed a number. We had a production target. We didn't get it. That's on us. We missed our target. We also said we tended to reverse that in Q4. We did reverse it, and that is on us as well. We take responsibility for missing a target in Q3. Our people should get the credit, I think, for hitting the target, our target in Q4, and doing a very great job with that, actually. In Q4, our production exceeded our sales, adjusted for RAYCARB C2B fabric, which is not something we produce anyway. As you know, by $1.4 million, that was our target. That's really helpful. That drops a lot of dollars to the bottom line, probably $350,000 or more to the bottom line of the quarter. Just as we had a big drag in Q3, there's a big plus in Q4, which is what we wanted. Onto slide six, the excess production in Q4 had a significant positive impact on our Q4 EBITDA. This is important. The excess production also allowed us to build back our finished goods inventory to more acceptable levels by about $1 million compared to Q3. It was way too low at the beginning of Q3 because we were selling from our inventory rather than production. Now we built back our inventory to finished goods to levels we think are more acceptable. ArianeGroup, just reviewing here. As you know, we entered into this business partner agreement with them in 2022, under which they employed us as their exclusive North American distributor for the RAYCARB C2B fabric used to produce a blade of composite materials for advanced missile program systems. Now, we already covered this, but we sold $4.4 million of C2B fabric in Q4. That's actually $500,000 more than we predicted in our Q3 investor presentation. It ended up being more than that. Believe it or not, $7.5 million in all of 2025. That's a lot. That's a whole lot. It really burdens our P&L. As we previously explained, we sell C2B fabric to our defense customers for a small markup. They're buying a lot of the stuff for stockpiling, obviously. It doesn't take a rocket scientist to understand that even though this is rocket science, that's what they're doing. Slide seven. Park sold. This is the flip side. $420,000. It's not $4.4 million, but $420,000 of blade materials manufactured with C2B fabric in Q4, $2 million in 2025. That's really good because when we look at it incrementally, that contributes a significant amount to the bottom line, probably over $300,000. That helped the bottom line a lot as well. We said some C2B material sales, as we previously explained, our margin for producing and selling blade materials manufactured with C2B fabric are significant and bold. Recall. Recall by one of Park's key customers of C2B fabric. I got to stop for a second. You read those transcripts. You do it at your own risk because we have no responsibility for those transcripts. There's an automated computer, AI, I don't know what, but there are so many mistakes in those transcripts. Sometimes I'll go read a transcript. I don't even know what the hell I'm saying. What am I talking about here? I can't understand. There are so many mistakes in those things. We don't take any responsibility for them. The transcript, which was for Q3 call, talked about a recall of C2B, which is a real bad thing. There's no recall. We went back. There's no reference to any read. It was all recall, no recall, both in the presentation as well as our comments. But then it was picked up by articles who then talked about a recall of this product based upon the transcript was incorrect. I just want to warn you, if you read those transcripts, you do it at your own risk because we take no responsibility for them. Now, what's the status of recall? A lot of people have been asking me that. That's a hard question. I'm asking, we're going to ask Mark to help us figure that one out. Mark, can you tell us what the status of the recall is? Yeah. Hello, everybody. The status here is the specification has not been updated. What that means is it's still in the works. The testing is not in Park's hands. It's in our customer's hands, just so that's clear. We are being told it should be completed this month at the end of May. I say that with a little bit of caution because these things have slid in the past. I just want to throw that out there. We are looking to get an update at the end of the month. I can tell you there is some good news. All the testing that has been completed, which is the majority of it, is compliant to the specification. We are hoping that the very few tests that need to be done by the end of the month will fall in that same population. Essentially, we're anxiously awaiting, just like everybody else, to get the results. We're really hoping that they meet the target at the end of the month. Like I said, it's really out of our hands. It's in our customer's hands. We continue to communicate. We continue to check on the status. We'll do that again as it gets towards the end of the month, which is in two weeks. Hopefully, next time we talk, next time we have a call, we'll have an update for you all. Okay. Thanks. Yeah. So we're being transparent. All we can do is tell you what we are told by our customer. I think in our last call, we said March, but that's what we're being told. Obviously, that didn't happen. We will see what happens here. The next item, this is a repeat item for last three quarters. Just reminding you that we're ramping up this new factory, even though we don't need to for capacity reasons. We're ramping up to get the factory ready for the juggernaut, as we call it. That is costing. That is burning our P&L. Total missed shipments during the quarter, $175,000. Mostly, surprise, surprise, international shipment issues. That has actually improved. It's not great, but I think we had a couple of quarters that was over $1 million. I guess that's moving in the right direction, at least in that quarter. Slide eight, impact of tariffs and tariff-related costs on Q4. There were none. Future impacts. We'll get back to that later on the presentation when we talk about some updates. Okay. Let's go on to slide nine. Top five customers. This is kind of a tradition for us in alphabetical order. Donna is the one who does the slide. Yeah. You probably get some of the people in the audience could probably cover this better than I could. Aerojet Rocketdyne, that's the Patriot missile. Middle River, I guess we're using the A321XLR commercial aircraft. Kratos, obviously, the Firejet. Nothing for Textron, too confidential. NorDam, the Bombardier Global 7500. The aerial target aircraft, it's unmanned. They try to get men and women to fly the target aircraft, but they didn't get any volunteers. Okay. That's my attempt at humor. Let's go on to slide 10. I promise we won't do any more of that. Slide 10. This is our estimated revenues by aerospace market segment. You can see that we talk about this all. Twenty-one was a little different due to the pandemic. The 2022, 2023, 2024, and 2025, the pie chart looks pretty similar. Let's go on to slide 11. This is a [LANUS] project. Park lov es Niche Military Aerospace Programs. As we always comment, radon was rocket nozzles and drones are niche markets for us. For us, even aerospace structures are niche because that's our focus. This doesn't mean small. It means something special where we have something special to bring to the table, which means normally that the margins would be nice and attractive for us. We don't need to cover each one of these things. We're going to be a little bit less open about what our participation is in these programs, except I'll comment on the Halcon Sky Knight. That's a UAE program. That's been in the news recently, UAE. I thought you'd be interested in that. We see two references to the Sentinel GBSD. That's the ground-based strategic defense. This is a replacement of the Minuteman program from the 1960s. We have on the top right the warhead, re-entry vehicle for the warhead, and then the missile itself, missile system itself. These are installed in silos around the country. Hundreds of them is what's intended. I think you know what these warheads carry. You can look it up if you want. It's not a very happy kind of thing to talk about. Let's go on. Having said that, maybe bring the audience down a little bit. Let's go on to slide 12. That's called MAD, Mutually Assured Deterrent, or something like that, right? Remember that from the 1960s? Anybody remember that? Slide 12, GE Aerospace. This slide we share with you every quarter, just kind of for background. Firm pricing LTA from 2019- 2029 with Middle River Aerostructure Systems, which is a sub of SDE Engineering. We explain this every time. We're done in the factory. We've had some reduction. You know that. You look at these programs. We're not going to go through them. The common theme is they're all related to GE Aerospace programs. What's the connection there? I think you know that. When we got these programs, Middle River Aerostructure Systems, MRAS, was a sub of GE Aerospace. Now it's a sub of SDE Engineering, which is a Singapore company. Let's go on to slide 13. Top of the slide, also sole source, primary structure component for the Passport 20 engine. That's through the GE Aerospace LTA, not the MRAS LTA. Fan Case Containment Wrap for the GE9X for 777X aircraft. That's produced with our AFP materials and other composite materials. This is intended to be included in the MRAS Life-of-Pr ogram agreement, not the LTA. This actually occurred after the LTA was entered into. Let's see. Park MRAS LTA. We covered this, provided a 6.5% weighted average price increase January 1. Also, it was amended to include three Park PhilMahesa formulation products recently. Life-of-P rogram requested by MRAS and SDE. We're still working on that. I think last time we spoke, I told you actually the ball's in our court. We're getting pricing to the extent we could, long-term pricing from our suppliers so we could provide pricing to LTA program pricing to MRAS and SDE. We've done that. The ball's kind of back in their court. We're happy either way. We're happy to stay with the LTA, the current LTA, or go to LTA program. This is something requested by MRAS and SDE. We're happy to do the LTA program as well. Either way, we're happy. Slide 14. Okay. We're talking about some of the programs. A320 Neo family. That's the big dog, as we say. Airbus has a huge backlog for the A320 Neo aircraft, 7,256. That's a lot of airplanes, I'm telling you. Then we have a little bit of history of their A320 deliveries year- over- year. You can see that it's gone back up to about 50 per month in 2024, a little over 600. What's holding it back is the supply chain issues that you know about. We talk about this almost every time. The bottom item, they're targeting a delivery rate of 75 A320 Airbus family aircraft per month at 2027. Why are they not there now? It's because of supply chain issues. They have over 7,000 orders. They'd be happy to be at 75 per month or 900 per year now. They haven't been able to get there yet. They're targeting 2027. They haven't been able to get there because supply chain is the limitation. Slide 15. With the approved engines for A320, you know about this. We got the Pratt engine, the CFM LEAP-1A engine. We're on the CFM LEAP-1A, not the Pratt. According to the AeroEngine News, first quarter AeroEngine News, the LEAP-1A market share of firm engine orders, these are thousands and thousands of orders, ladies and gentlemen, 65.2%. Now, that's a nice market share. When we get to the juggernaut slide at the end, we use a 60% market share, at least we're being conservative. It keeps moving up a little bit, it seems like. Maybe it'll move back down. I don't know. It moves from quarter to quarter, month to month. At the delivery rate of 75 airplanes per month, 65.2% LEAP-1A market share translates into 1,174 engines per year, LEAP-1A engines per year. If you look at the juggernaut, we're only assuming 1,080. It is a lot more than the juggernaut. As of March 31, 2025, this is again AeroEngine News stuff. There were 8,196 firm LEAP-1A engine orders. That's as of a couple of months ago. Now, of course, Airbus and CFM, they want to sell more airplanes and more engines. This is just what's on order, firm order now. Now, so these engines will be delivered, I think. What's that worth to Park? It's worth about $250,000,000 to Park. And that's not it. I mean, like I said, I'm sure Airbus wants to sell more airplanes, and CFM wants to sell more engines. Let's go on to slide 16. This is a variant of the A321X, sorry, A321 Neo family, the A321XLR. It's off of the races. So this airplane has been delivered. It's in operation. They're operating it on new routes, which have never been used by single aisle. This is a single aisle airplane. I guess I should have said that. The key thing here is that it has a range and payload capability of a wide body. This airplane has been used on what was previously a wide body route, like maybe a 787 route, but much less expensive to operate. This is why CNN, I am not normally spending a lot of time with CNN, but this time I liked them. A321XLR is changing the air map of the world. What that means is that these single aisles are operating on routes that used to be the exclusive purview of wide body airplanes, which are much more expensive to operate. That is a big, big deal. Boeing has no response and unplanned. That is an important program for Park. Slide 17. Let's switch over to China, the Chinese, Comac, the Chinese aircraft company, C919. That's a single aisle that they developed to compete against the A320 and 737. They're just ramping up now. They're targeting 30 deliveries in 2025. They're not going to get to 900, but we'll see how far they go. They plan to increase the production capacity to 50 airplanes this year. Plan to achieve a production rate of 150 aircraft by 2028. Report to have over 1,000 orders for these airplanes. Comac aiming for EASA certification 2025. That's significant because, see, EASA, that's like the European FAA, European Aviation Certification Agency. Because there was this belief in theory that these Chinese airplanes were going to be China-only airplanes that would just operate in the Chinese market. That's clearly not what Comac is thinking. The fact that they're saying they're going to get EASA certification is a big deal, certification outside of China. Trade conflicts. People ask about trade conflicts. Can Comac produce a 919 without U.S. suppliers? The answer is absolutely not. Absolutely not. Absolutely not. If U.S. suppliers were cut off from the program, in my opinion, and I am not the only one who has this opinion, that program would die forever immediately. It is such an important prestige program for the Chinese. They are not going to let that happen. It is a good thing that there is trade, where there is, what do you call it, a mutual interest dependency where we need each other. The Chinese will not let that happen. They are going to need to continue to source these key components from a U.S. supplier. That is my opinion anyway. Slide 18. Staying with the Chinese, Comac 909, that is the regional jet. It is a little smaller jet. Look what they are doing. They have it delivered to Lao Airlines in Vietjet, Laos in Vietnam. So they're not Chinese. So what's going on there? In other words, again, everybody was saying, "Oh, these are Chinese-only airplanes." I don't think Comac believes they are. The 777X with the GE9X engine. Test flight certification program reportedly progressing well. 777X test program amassed more than 1,300 flights. That's a lot on 3,800 flight hours. They're targeting 2026 for Boeing's certification first delivery. Let's knock on wood on that. Let's hope that happens. They reportedly have 521 open orders. That's as of about last week. Did you hear that Boeing, they hired this new high-powered sales guy? That guy, he just got an order for 30 airplanes from Qatar yesterday, I think, Qatar. I pronounce both ways. Did you hear about that? That new high-powered sales guy. They have to add that 30 to the 521. Slide 19. GE Aerospace program sale history. You're familiar with these numbers. Fiscal 2020, before the pandemic, we popped out at $29 million. We're kind of clawing, kind of claw our way back. $25 million, $24.7 million. Not quite there yet. The Q1 forecast, $5.2 million-$5.6 million. That's kind of a little bit anemic. I wouldn't read too much into it. Quarter to quarter, there's a lot of issues relating to inventory management and things like that to move the numbers up and down that aren't really indicative of longer-term trends. The forecast for 2026, we're going to stay with this, $28 million-$32 million. That's what we gave you last quarter. Although you can see we're starting out slow in Q1. That forecast is based upon the information provided by our customer. Our customer provided us three scenarios: low, middle, high. That is a low scenario. I do not know. Maybe we will have to adjust it down later on if we continue with this. Q2 looks similar to Q1. We will have to see. Like I said, we are getting off to a little bit of a slow start. We are staying with the forecast for now. Okay. Slide 20. Now we are talking about Park, so financial performance history and forecast estimates. The history, you know the history, so we will not spend a lot of time on that. We already talked about the quarter. We already talked about the fiscal year. Why do we not just go right to the forecast, our forecast for Q1. $15 million-$16 million sales, $2.5 million-$3 million of EBITDA. That is our forecast for Q1 for Park. We already talked about how the historical sales, how much C2B content was in historical sales for the last year and last quarter. If you look at the last footnote on the slide, we're also talking about $1.2 million C2B fabric sales expected in Q1. Of course, that affects our bottom line, holds our bottom line back a little bit. Let's go on to slide 21. Historical. Now we're looking at historical results with a fiscal year emphasis. We already pretty much covered most of this. $62 million. Oh, I know. This is a good slide to look at to get perspective about our using our new factory. If you look at 2025, our sales were $62 million, but about $7.5 million were C2B. That's not produced. That means equivalent to about $55 million. Go back to fiscal 2020, $60 million. The new factory did not exist at that time. All that $60 million was produced and sold with our existing factory. You see what is going on here? We used a new factory. We are bringing the factory online. We are ramping it up for the juggernaut, but it is holding our P&L down. There are a lot of extra costs involved with bringing a new factory online. This is a good illustration of that, I think. Let us see what else we have here. Important things, supply chain limitations. Yeah. Again, look at the top line. Sales, $31 million, $40 million, $51 million, $60 million. Really moving in the right direction. Look what happened. We got all caught up in a pandemic, and we are just trying to claw our way back now. Ramping up costs for the juggernaut. We talked about that. We talked also about how much of our fiscal 2025 sales were C2B fabric. Let's go on to the next one, slide 22. Some general updates. New agreement with Aerient. We talked about our existing agreement. The first check item, we already covered that, so we don't have to cover that again. Next check item. We entered into a new agreement just recently. Under this agreement, Park is advancing to Aerient for EUR 1,587,000. Why are we doing that? Those funds will be used by Aerient to help finance the purchase and installation of new manufacturing equipment for Aerient's production of C2B fabric. That amount is to be paid to Aerient in three installments, the first of which was paid in Q1. That's equivalent to about $1.5 million. Again, when we get to our Q1 balance sheet, you'll be looking for that $1.5 million expenditure. In other words, we reflect it in our cash. The purpose of this new agreement is to provide the additional C2B fabric and manufacturing capacity necessary to support the rapidly increasing demand for C2B in Europe and North America. Slide 23. More general updates. This is kind of a nice one. Maybe not a huge deal, but our Lightning Strike Protection Material was certified on the Passport 20- engine for the Global 7500 business jet. It's worth about $500,000 per year. That'll kick in later this year. We're very pleased about that because it was taken for so long. I never would say this to anybody, but in my own mind, in my little private moments, I was probably just giving up on whether it's ever going to happen at all. That was surprisingly good news. When someone called me and said, "Hey, this got certified." I said, "What? That must be a mistake." It wasn't. Park's a blade of composite materials, sole source qualified. We talked about this before. That is next generation Iron Dome. Park entered into an agreement with a major OEM, the Licensed Technologies, for hypersonic missile programs. We understand we're the only licensee. Phase two manufacturing trials and testing of the licensed technology continues. We mentioned the same thing last quarter, so I appreciate Mark, if you can give us an update on how the trials are going. Sorry about that. I was on mute. Didn't want to have any background noise. The trials on this are going really well. Again, we licensed the product, so the formulation work was done ahead. What the phase II is, we're building laminates, we're making material, and we have a partner for that as well because this will require investment once we get to the point that we've industrialized the project or the product. We are building panels now. We're making material. I think we're getting to the place where we're going to start testing the materials because it takes a little bit of time to figure out these processes. This is an ox ox product. It's not a standard epoxy, which is the majority of our business. It's taken a little bit of time to figure out how to process these materials. It's a lot different than what we're used to. I feel like we're making really, really good progress with it. The next steps, maybe in a few months, maybe about six months, we'll have a better update where we're at once we kind of button up the processes and get some of the test data and potentially have a product where we could release a data sheet, meaning that we can go to the public with it. In the meantime, we are talking to a few customers, a few OEMs, a select few partners, just to kind of figure out what their needs are with this product. That helps us develop our test matrix and helps us decide what kind of panels we need to build. But again, we're being very selective who we're talking to because we don't want to go out to the market when we're still trying to work out the details of the product, the fine-tuning of it. Like I said, maybe about six months, we'll have a better update and give you guys a sense of where we're at with this project. We're definitely making progress with it. Okay. Thanks, Mark. I want to go on to slide 24. We covered this last quarter, expecting about $5 million per year from the new LTA with GE Aerospace, which is different than the MRAS LTA. We're in discussion with two large Asian industrial conglomerates related to Asian manufacturing joint ventures. This would be a joint venture to do what we do in Asia, produce prepreg for aerospace. They approached us. Both these companies were in active discussions with them. We're not intending to contribute any cash, so it would just be our IP. We'll see how it goes. Maybe it'll happen, maybe not, but I thought at least we'd mention it to you. Current MRAS Supply Score card, rather. Hundred, 100, 100. That's what we need. We need that 100, 100, 100. That's very unusual. I think we discussed that before, but that's kind of our mindset. That's our philosophy. We're not looking for 99s. We're not looking for 99.9s. We're looking for 100s. That's all that. If it's less than 100, we're unhappy. And we'll be talking to the customer about, "Okay, what happened? How do we fix it?" I'm not kidding. 99.9, we're going to talk to the customer. I've been told a lot of most suppliers be happy with 80s. Tariffs back to you, Mark. I'll hard once get rid of Mark. Tariffs, international trade conflicts, expected impact on Park's. We said in Q4 there was no impact, but let's talk about what we think going forward about tariffs. Okay. Tariffs, I guess just like everybody else, we're all learning and trying to sort this out. We feel like we did a pretty good job getting ahead of it when we saw it coming. I think it was like early March. We started updating our order confirmations, our quotes, putting a note on there telling customers that if any tariffs come our way, we're going to pass them along to them. And to date, we've been pretty fortunate. We haven't seen too many letters come from suppliers. We've had a few, but there has been no impact to our business. Essentially, I think there's been one, maybe two. We had to pass along to a customer. The rest, we were able to mitigate the tariffs with inventory on hand. Obviously, when you carry inventory, you do not have to pay a tariff because you have it there. We are able to get those orders processed and shipped out without buying new material. The next step was, now we have to update our cost if we have tariffs, which is, again, it is only a few materials right now. Our quotes are reflected of that moving forward. The customers will be paying the new price when they place orders. Essentially, we are just like everybody else. We are trying to figure this out. Again, I think we have done a good job getting ahead of it, and there has been no impact to the business. Again, there is more to come. This thing is still pretty dynamic. We're not sure how it's all going to shake out. We'll probably have to give you maybe another update on the next call as well to see if that has changed. Again, we feel like we're in pretty good shape with this, and we continue to talk to our suppliers, and we don't see anything else coming our way. I can't say that with 100% confidence, but we feel pretty good about where we're at today with this. I think that's the update. Okay. Thanks. Okay. Thank you. Let's move on. Slide 25. We covered this last quarter. We said we have a new emphasis on defense markets and programs. Why is that? There aren't any new commercial aircraft that we're even aware of. The 777X, we're on that. The 929, we'll never get on that. I'm not going to go into that now, but that won't happen. We see significant opportunities in the military defense markets, especially related to missile programs. What's our focus of Bladers and hypersonics? How is that emphasis working out for Park? Actually, remarkably well. We'll get back to that a little later on in the presentation. Slide 26. Recent questions from investors. We love questions. Often we think, well, three or four other people are probably thinking, or maybe 30 or 40 other people, the same question. They just do not want to ask it. Will a C2B fabric manufacturer manufacturing equipment funded by Park's advance to Aerient Group be located at Aerient's facility or Park's facility? That will be at Aerient's facility. Who will own and operate the new equipment? Aerient will. Next question. The Park MRAS LTA provided for a 6.5% weighted average price increase. Does the LTA provide for any further price increases through 2029? No, except for price increases related to increases in costs of certain raw materials Park uses to produce products for MRAS. What about the Life-of-P rogram agreement? With the Life-of-P rogram agreement, it is a little bit different because there are different price adjustments to the Life-of-P rogram agreement. If we enter into it, maybe we will, maybe we will not. Like I said, we are happy either way. We are happy with the Life-of-P rogram. We are happy with the current LTA. You mentioned that Park is a true blue American company. To Park's knowledge, only one of Park's competitors is an American company. Who is that? We believe Hexcel is an American public company. We are not aware of other Hexcel is a much larger company, but it is still a competitor. We are not aware of other competitors that are US-owned. Let's go on to slide 27. Park's share buyback. So history, we spent, let me just kind of go through this quickly so we don't get too bogged down. But this May 23, 2022 authorization, we spent $9,296,000 on it. We're spending some real dollars on this thing now. In Q1, it's not reflected in our Q4 report. In Q1, we spent $2.1 million, $2,165,000 just in Q1 alone. We'll see that again in our Q1 report when we talk about our Q1 cash. Just so you know, that $2,165,000 is included in that total $9,296,000. Okay. Should we continue to buy back stock? Let's revisit that. Park's incredible cash dividend history. Yeah. We'll cover this every quarter, I think. Four consecutive years, over $600 million in the last 20 years, $29.47 per share. It's quite incredible for a little company like Park. Here, the founders started the company in 1954 with, I think, $40,000 that they had left over from war duty. So that's a company that has paid over $600 million in cash dividends in the last 20 years. Let's go on to slide 29. Okay. Here's a big one. Yep. I would say it's a real big one. New manufacturing expansion of Park's manufacturing. Major new expansion, rather, of Park's manufacturing facilities. Park is planning a major new expansion of our manufacturing facilities. The planned expansion will include a plant, and it could be at our Newton Kansas campus or elsewhere. We have our road warriors out there now looking at other locations. Kansas versus remote. It'll be a very difficult decision to make because the economics of Kansas would be better, but there are other maybe non-quantifiable factors which would make remote better. We're going to have to figure that out, working on it now. Will it be a challenge to recruit additional employees? Oh, yeah. It'll be a challenge. That's one of the reasons we're looking at remote as well, because we think, well, maybe if we have two locations, it might be easier to staff up to the extent we need. The planned expansion will include the following new manufacturing lines: solution creating, hot melt film, hot melt tape, hypersonic materials manufacturing line, and support equipment. Mark was just talking about that. Let's go on to slide 30. Preliminary estimate capital for the estimated capital budget for the new manufacturing plant equipment: $35 million plus or minus $5 million. We're talking about some very, very big numbers here for Park. Very big numbers. Why are we doing this? Our long-term business forecast requires it. That's why. Significant new business opportunities for both hot melt and solution composite materials, defense, and missile programs are drivers. Remember a few slides ago where you asked, "How's that working out for us?" It is working out for us pretty well. Our focus is paying off big time. Why are we doing it again? Have the flexibility to be in a position to take advantage of new opportunities as they arise. We are not in a position to take advantage of the opportunities when they arise, or we will not get the opportunities. How does flexibility provide 100, 100, 100 support and service for the GE programs? Very important for us. We do not want 99.9. We need 100, 100, 100. We are feeling a little tight, actually, even on the GE program. That is one of the drivers of this decision to do this major expansion as well. We're thinking and planning for the long term. We're thinking and planning for our future. When you think about capacity, you got to think five years out. It takes three years to build a plant, and you got to do trials, get qualifications. Five years at least. Five years. Probably better to use 10 years. When we think that far out, we think, "Yeah, we need to do something here." It's very important. It's a great opportunity, but we don't want to miss it. Go on to slide 31. Interesting stuff. Others may do things differently. They may wait until the opportunities are mature enough and risk missing out on them as a result. As you know, at Park, we're not like the others. We're in control of our destiny. We have our own cash to do this with. We can do things for our future. I was talking to a business guy in our industry, Mark. You know him well. He was really upset because he was saying that his company is not investing in the future, and they've lost a lot of major opportunities because when these opportunities arose, it was too late. They had not made the investment, and they lost them. We are not that kind of company. We are in control of our destiny. We have our own cash, and we're taking advantage of it. Nobody can stop us from doing it, doing the right thing for our company and our future. We are not sharing our long-term business forecast. We are not going to give you the sales number at this time. We will get back to that. We have a lot of internal work done on this, so it is not that we do not have it. We are just not sharing it. A lot of different scenarios. Suffice to say for now, we're putting our money where our mouth is by making this major investment in our future. What about the ROI? Very significant. Very significant. We're using our own cash. ROI, very significant. Cash flow, very significant. Very significant. I think back, and I'm sorry that call's going on a little bit long here, but actually, I have a lot to cover. Over the last five, six, seven years, we received from bankers M&A opportunities, and it was aerospace. It's like, it was so superficial. Oh, aerospace, that means it's right for Park? Of course not. Just because it's aerospace doesn't mean it's right for Park. We saw businesses where they were sold for $120 million-$140 million. The sales were $20 million. It's really good we didn't go there because now we're talking about some real ROIs here. I don't know what the ROIs would have been for something with investments like that. These are some real ROIs, very significant. This major new investment change, are we thinking about our cash? Maybe. Maybe we'll get to that in a couple of slides. Buybacks, JVs. We already said those JVs. We told the JV partners, "We're not contributing cash. We'll contribute our IP, but not our cash." What about the high-level conceptual financial outlook included in our recent quarterly investor presentation? What happens to that? We'll take a look at that. Let's go on to slide 32. You see, when you look at this slide, this is the reason we felt we need to talk to you about this now. There are two slides in our prior presentations. This is one of them. You see where it says major new expansion project, $35 million. In the prior presentations, that was $7.5 million for a treater. We felt, well, that certainly would not, we could not present that slide to you again. That would be so wrong. Our other option was to delete the slide, but we thought if we did that, that would alarm investors and cause angst that we do not want to do that either. Here is this new slide. This is one of the reasons we felt, because of things we covered in our prior presentations, we really needed to tell you about this now, this major event now. Look at our cash. We had $68.8 million at the end of the quarter. The $5.1 million, you know about that. That is a payment that we make to the IRS in June. Buyback in our first quarter, $2.2 million. Advanced payments to Aerient, $5 million, about $1.5 million right in the first quarter. Then we have $35 million for this major expansion, give or take $5 million. That's a lot. It's $47 million, and we got $68 million. Just doing some simple high-level math here. That says after we spend all this money, we have $21.5 million left. That's good. We have no debt, but it's not like we have $200 million left anymore. The other thing I want to mention is that cash flow. We will be building back that number, especially after this expansion is done and we start to utilize it properly. The cash flow will be quite significant, as will the ROI. We'll start to build back the number. Let's go on to slide 33. All right. This is something that we cover every quarter. We're not going to go into great details. We call this financial outlook for GE Aerospace Jet Enter programs, the juggernaut. What's the timing for the juggernaut? We don't know. Not sure. It can't be stopped. We better be ready. We know it's coming. Let's go on to slide 34. This slide is almost the same as the prior slides relating to the numbers for the juggernaut. We just added something for consistency. Miscellaneous GE programs, 2,750. What we did was we wanted to make this slide consistent with the prior slide, which had the GE sales history, because GE sales history includes all GE program sales. This juggernaut slide did not include some of the GE Aerospace LTA sales. We're now including in this last item, miscellaneous GE programs. These are under the GE Aerospace LTA, not the MRAS LTA. It's a little confusing, but we just wanted to make it apples to apples. So the number is going to reconcile with the historical sales. We can go on to the next slide and just look at footnote 9, because footnote 9 describes this new item. Multiple Park composite materials products applied into the GE90, GEnx, and GE9X engine programs under the Park's LTA with GE Aerospace. Again, not MRAS, GE Aerospace. Let's go on to the next slide here. And this one, slide 36, this is something we presented in the last few quarters. This is, again, a reason why we felt we needed to talk to you about this major expansion. Because we have big question marks here now. We have non-GE programs and commercial sales. Question marks. If you look at the footnote, that number was $15 million in the prior quarterly investor presentations. That number is blown out the window. Blown out the window. We're not going to talk about what the number is, but that number is gone. So we could not provide the same slide to you. It would just be wrong to provide a slide which talks about $15 million in criminal sales. We're not giving you the number now. We want you to know that's something that's very different here. Obviously, the total will be very different as well. Right there. But it's simple math. Let's round GE programs up to $60 million. The non-GE programs has been maybe around $30 million, give or take, that's $90 million. Then $15 million criminal is $105 million. That number does not work anymore. We're not giving you a new number, but we're telling you that it doesn't work anymore. That ties into why we're communicating to you about this major expansion initiative. Actually, that's the end of the presentation. We're not going to go through the appendix. Thank you, everybody, for listening. Operator, Mark and I would be happy to take questions now if there are any. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Seems like there are no questions at this time. I'd just like to remind everyone, if you'd like to ask a question, please press star and then one. If you'd like to ask a question, please press star and then one. One moment, please, while we poll for questions. First question comes from Nick Ripostella from NR Management. Please proceed with your questions, Nick. You there, Nick? Nick, you may proceed with your questions. Your line may be muted. If you could please just unmute your line so that we can hear your questions. Hi, good afternoon. Can you hear me? We can hear you. Oh, great. Congratulations on a decent quarter. It's pretty exciting what you're suggesting there with this new expansion. I just have a couple of general questions with regard to tariffs. I know it's hard, but in the big picture, just your best guess at how it might play out in terms of the airlines and Airbus, for example. If you can comment on how you think it, I know it's hard to answer, but there's just so many different opinions on how it might work out. There's a lot of tough talk going around, but your best guess. Secondly, All right, go ahead. Sorry. Did you finish your question? That's the first question. The second question is, if you could just, there's been a lot of talk and a lot of sell-side research on supply chain still and engine components. Do you think that those issues have mostly resolved themselves at this point? I mean, GE has been pretty positive, but just your further thoughts on that. Do you think what would be your biggest worry in terms of delaying the juggernaut at this point? I know that's also a difficult question, but as Airbus, when they reported recently, I think we had an email back for it. They're not backing down. There is optimism there. Anyway, those are my questions. Thank you so much. Thanks, Nick. Okay. We'll try it together in reverse order. I think the last question is, what is the biggest obstacle to juggernaut occurring? I don't know. I think it's more really a question of when than if. That's my opinion. I don't see the juggernaut not happening. I don't see the scenario under which it doesn't happen. You could argue, and obviously, people do, about when it'll happen. Airbus, if we're talking about day for 20, they have their input. Other people want to be skeptical. You know what? Personally, I'll say I kind of got tired of listening to it because it's just so much noise and noise and noise. Like, who cares? From our perspective, we just have to be ready because we believe it'll happen. Every expert has an opinion. I get these email services with all these aviation experts. I don't know who pays them because, I mean, I don't know what their opinion is worth, but my opinion is too much. On the supply chain stuff, yeah, you probably heard that Airbus is building gliders again. I think it's 17 gliders. I'm not sure. I think that's the number that they produced this year. Gliders mean that they're producing airplanes and no engines, thanks to whom, you know who rather, that they don't have the engines for day for 20. Now, what I'm told is there's a little bit of bright news is that in the first half, more engines have been going to just supporting existing airplanes with spares and that kind of thing. That's not supposed to happen. That's supposed to go away in the second half. That way, the engines that are being produced will go into new airplanes, not the spares. That's what I'm told anyway. It's not really wonderful news to hear that Airbus has built 17 gliders, A320 Neo gliders, because they just can't get the engines. The supply chains with the engine company is still obviously an issue. I just hope they figure out a way to get their act together. Not just for Airbus, but obviously for Comac and Boeing as well. I don't know if that's a good answer, but that's the best answer I can provide. We'll have to see. I think they'll have to get their act together at some point, but I don't know when. Maybe that's a similar answer to the answer to the first question. Supply chain, you're asking now not our specific supply chain issues. Sorry, the tariff issues. Tariff issues, talking about how tariffs, I think that's the question, will affect the industry generally. Again, like you kind of intimated and implied, everybody has an opinion. You turn the news on, fighting about how tariffs will affect the world over the next whatever years, or maybe months, weeks. I don't have a—I mean, I have nothing that I could add to all that because there's so many opinions out there. As you know, the GE aviation programs that we're on, except for the 777X, relate to airplanes that are made by foreign companies, Canadian, European, and Chinese. There are some tariff questions that could and should be asked about how the tariffs will affect the sales of airplanes and the supply of the equipment into those airplanes. I don't know. I guess whatever my two cents opinion is, I would say that I feel like these things will be sorted out at some point because the global economic need is such that it will be necessary to sort these problems out one way or another. I could be wrong. Just my opinion. Mark, you want to add anything about tariffs? No, I mean, everybody we talked to, I know he's asked the airlines and the aircraft companies, but I think we're all looking for answers. I think there's really no—yeah, I don't think anybody wants to stick their neck out and say, "This is what's going to happen." I think we're all just kind of sitting back and just waiting for this all to kind of vet itself out. Hopefully, it's sooner rather than later. That's all I really got on that. Okay. You see, Nick, our combined input is not so much more brilliant than we could hear in the news program these days, but. Oh, okay. Can you still hear me? Yes. Yeah. One other thing. I mean, you used the word tight with regard to a little tight with regard to your current manufacturing footprint. Is it safe for me to think that you have a high level of confidence of what you're doing in terms of a major expansion, even before the juggernaut has really come to play? We're not at—it might be a year, it might be a year and a half, it might be two years before they get to 75 months. It is certainly not inhibiting Park in any way. You're going to go forward with your investments because you see the opportunity right now. Is that safe to say? Yeah. It's exactly right. We're okay now. We're not having trouble keeping up now, but we have to plan for the future. When you're talking about manufacturing capacity, especially in aerospace for our kind of business, you got to think five years. You got to think, "How much capacity, manufacturing capacity will we need in 2031?" 2026, 2027, 2028 does not matter because we need to be ready for 2031. If we do not get ready for 2031 now, we will be in trouble and we will miss out on things. We could end up being too tight and disappointing customers. That is just not our way of doing business. Right. Right. All while you are thinking forward, as a shareholder, it is reasonable to assume you will have higher sales in the next couple of years in any case, absent some kind of, I do not know, calamity we cannot think of. The company will be growing while planning for four or five years. Is that reasonable to assume? I think the answer is yes. The question is this: you take the capacity we think we need in 2030, 2031. Okay. We're building toward that number. Is there a straight line between where we are now to that point, or is it kind of a squiggly line? We don't know. Nick, the way we look at it, it doesn't really matter because we have to think five years out capacity-wise. If we feel we don't have enough, and we feel we definitely do not have enough, we need to deal with it so that when we get to that point, we'll be where we want to be. Not only to be able to handle the programs we know about, but what about new programs, new opportunities that come our way? Like I said, our friend is so upset with this company because they didn't invest for the future. When programs came around, they lost them. We don't want to be in that position. We want to be in a position where the new opportunities, whatever they may be, we can take advantage of them if we want to, if we feel the right part. All right. My suggestion is those folks in Washington that care about American manufacturing, they ought to be talking to the guys at Park because you're thinking of the future with American jobs. Yeah, it's a beautiful thing. Thank you very much for saying that. I doubt anybody from Washington will be calling me anytime soon, but nevertheless. You're exactly what they're trying to make a point of. T hat's true. I agree. Thank you so much for answering the questions, and have a good evening. Thank you very much, Nick. We appreciate your questions. Really helpful. All right. Thank you. At this time, there are no further questions in the queue. I would like to hand the call over to Mr. Shore for closing remarks. Thank you, sir. Thank you very much, operator. Thank you, everybody, for listening. Thank you for hanging in there to the extent you're still on, or actually a little over an hour. Have a good day. If you have any follow-up questions, feel free to give us a call. Thank you. Goodbye. Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you very much for joining us. You may now disconnect your line.