Park Aerospace Corp Stock

Thank you. Good afternoon, my name is Cleo, and I will be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp Second Quarter Fiscal Year 2027 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. [Operator Instructions] 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, Operator. This is Brian. Welcome all to Park Aerospace's Fiscal Year '27 Second Quarter Investor Call. I have with me, as usual, Mark Esquival, our President and COO. We just, I guess, right after the close, published our second quarter earnings release. And in the earnings release, you'll find instructions as to how to access the presentation we're about to go through, either through a link, and there's also a toll-free number on our website. And you'll want to pull it up in order to make this presentation discussion more meaningful. It's kind of a common theme for the last couple of quarters.

We have a lot of new investors. I think last call we had about 170 people who participated in the call. And we have a lot of new investors. We have a lot of the veteran investors. We have to find a balance between the old and the new. We do the best we can to maybe find a middle ground or compromise. Obviously, the legacy investors probably don't want to hear the same material being covered every time, but some of the new investors may find it more interesting and useful. So we'll do the best we can with that.

And after we're done with the presentation, we'll be happy to answer questions. So why don't we get started? Let's proceed onto slide 2, for looking disclaimer information. Let us know if you have any questions about the forward-looking disclaimer information. Slide 3, our table of contents. First of all, slide 1, sorry, the first item in the table of contents is the investor presentation, which we're about to get to. And there's also a supplementary financial information attached as appendix 1 to the presentation. We're not going to go through that information, but let us know if you have any questions about it.

As usual, we feature the James Webb Space Telescope in our table of contents. James Webb Space Telescope recently identified a mysterious new class of cosmic objects called black hole stars. They look like gigantic stars which shine up to 100 billion times brighter. So that sounds like a lot to me. Thank you. Thank you, James Webb Space Telescope, and Park. James Webb was produced with 18 Park proprietary Sigma struts, as you probably all know. Let's go into slide 4. So we go from the sublime to the mundane here. These are the second quarter results.

So let's just go through right-hand column, second quarter, the quarter we're just announcing. Sales of $20,791,000. Gross profit, $7,135,000. Gross margin, 34.3%. We like that. We like our gross margins to be in the 30s. Adjusted EBITDA, $5,285,000. Adjusted EBITDA margin, 25.4%. What did we say about our Q2 during our Q1 investor call? We said our sales estimate was $19.5 million to $21 million. So we came in within the range, maybe kind of toward the upper end, but within the range.

Adjusted EBITDA estimate, we said $4.3 million to $5.1 million. So we came in a little bit above the range with our EBITDA number. Significance of our forecast estimates, we remind you of this. Probably often when we give these estimates, we're telling you what we think will happen. Sometimes we're wrong, sometimes we're not, but we're telling you what we think. Mark and I usually spend a lot of time going through this and come up with the ranges for you. We don't pad the numbers. I know a lot of other people do that.

We don't give you a number, then subtract 10% from it, so when we announce the number, we can beat it. That's just not what we do. We understand that pretty much everybody else does that, but we're not like everybody else, as you probably know. That's actually a Kinks song if you want to check that out. Pretty good one. Slide 5. So we're mixing things up a little bit. I maybe should have explained at the beginning. We're changing the sequence of things, and we're changing the content a little bit just to try to make it a little more interesting for you.

I don't know if it will be successful, but that's the objective here. So what we're doing with this slide here, slide 5, the top, as we're talking about some key product groups that we'll circle back to in many cases. C2B Fabric, we cover that a lot, $1.5 million of sales. Applied Materials produced with C2B Fabric, $1.8 million. Often we discuss those two numbers because if they're really out of sync, out of alignment, they could distort the product. And quarterly P&L, but those numbers are fairly close, so we're not going to get into that. But just for information, we'd always like to know. Missile system programs, so $5.7 million.

Obviously, we emphasize missile systems a lot, so we thought you'd be interested in that number. Advanced composite materials for GE Aerospace jet engine programs, $8.5 million. We'll circle back on that. We cover that every quarter. And here's something a little interesting with what we provide for you. Our second quarter Sales Value of Production, we called SVP, was $21.1 million. That's not inventory value. That's actually sales value. And that's a modern-day record, we think, post-sale of our electronics business.

And that's a really good thing, and we've got to give a lot of credit to our factory people or four people for producing and getting out the door that much product. That's actually a pretty nice accomplishment under maybe not ideal circumstances, but when are there ideal circumstances? So we wanted to acknowledge our production people in terms of how much product was produced during the quarter. One other thing we never cover in these investor calls is EPS. We don't get into that. But we just wanted to mention something to you. It will be discussed in more detail with our 10-Q, which I think will be filed on Tuesday, Monday is a holiday. So you can look forward to it there. But you might have noticed already, and I just want to get ahead of this a little bit, that our tax rate for Q1 is 1%.

Q2 is 18.6%. That's not a normal tax rate. There are significant benefits from stock option exercises which took place in Q2. There are a lot of stock option exercises in Q2, significant benefit. Our normal tax rate without that, that benefit the stock option exercise benefit, if you will, for the tax rate would be probably around 26.5%, something like that. And just so you know, if we had that more, let's say, quote-unquote normal tax provision or tax rate rather of 26.5%, probably looking at 19 cents rather than 21 cents. Like I said, we're reluctant to get into EPS stuff. We don't normally cover that, but I thought it's such a significant difference in a tax rate that you'd probably be interested to know how that information.

If you want more information about that, you really should call and talk to Gus and Chris. But like I said, when we publish our 10-Q, there will be a little bit more information about that particular item. Okay, let's not get too hung up on that. So let's go on to slide 6, our top five customers for Q2, in alphabetical order. Let's see, let's tie the customers to the pictures. Easy one is Kratos, the BQM-177A, that's a target unmanned aircraft that obviously ties to Kratos Defense & Security. Airbus A320neo with the LEAP 1A engines that ties to the Middle River Aerostructure Systems, we call it MRAS. And let's see, the Patriot, we talk about that a lot, PAC-3 MSE, Defense and Missile System, that's a two for the price of one, that ties to Lockheed Martin and L3Harris Missile Systems, that's nice and efficient. The bottom right, Bombardier Global 8000 business aircraft, and that ties to the Loring Group.

Okay, let's go on to slide 7, our pie charts. Nothing too remarkable here, you know, pretty consistent. So let's not spend too much time on slide 7. Just keep moving. Let's go on to this. Of course, you have questions, let us know later, but we're going to move to slide 8. This is a little more interesting. Park's niche military aerospace program. This is the slide we give you every quarter. This is a Landis project. She always does a real nice job.

So the pie chart is interesting. Just look at the missile systems percentage. It is growing. Now, this is just one quarter, so we'll see what happens quarter to quarter. These things change, of course. But we've been talking a lot about missile systems and missile systems' portion of the pie chart is growing. We won't go through a description of the individual programs, except we always say that we don't provide photos of programs that we're not somehow involved with. But we used to give you more information. Right now, at this point, we don't feel we can do that.

It's just too sensitive. We just don't know where the line is as to what we can say. We can't, so we don't want to push the envelope too much. Let's go on to slide 9. Okay, GE Aerospace jet engine programs. Like I said, we're changing things up in terms of sequence a little bit, trying to make it a little more interesting. And this slide's a little different than it was in the past. Park's advanced composite materials and sole source qualified and multiple engine cell and thrust reverser components are the following GE Aerospace and CFM engine programs.

So quickly, there's a Boeing 747-8 with a Gen X-2B engine. Those are for spares. Our program is canceled. LEAP 1A engines for the A320neo or family, that's the big kahuna. LEAP 1C, that's for the COMAC C919, that's Chinese single aisle. CF34-10A, that's for the COMAC C919, that's a Chinese regional jet, and the CRJ 200, we already talked about that, Bombardier Global 8000 aircraft. With the Parasport 20 engine. So what's going on here? Park has an LTA requirements contract, again, to 29 for the above programs with MRAS, a sub of ST Engineering Singapore. Now, what's going on here? These look like they're all GE programs.

You've got to read the little footnote. Footnote, MRAS is formally a sub of GE Aerospace. So that's the. When we got on to these programs, MRAS was part of the GE Aerospace, and then I think in maybe 2018 or 2019, GE Aerospace sold MRAS to ST Engineering, which is a large Singapore aerospace company. Park is also an exclusive supplier of AFP composite materials for the same case for the GE9X. Next engine for the Boeing Triple 7 aircraft. Let's go on to slide 10. Update on GE Aerospace Challenger Programs. We're starting out with the Big Kahuna, the A320neo aircraft family.

We're not going to read the variants for you, but you can see them for yourself. So as of August, Airbus had delivered 4,741 of these airplanes, and they have a backlog of firm orders, 7,571. That's just a huge, huge, huge, huge program, probably the biggest ever for commercial aircraft. So we're fortunate to be on that program. And here's the history of the ramp up. You can see what's going on. They were ramping up their program until they hit the skids with 2020.

That's the pandemic year. And then clawing their way back. 2021, 607 airplanes were delivered. And 2022 year to date, you don't want to analyze this number. That's not a good idea. You can do it if you want. That's not how it works because these aircraft companies, they make the years, if you will, in the last couple of months. But what's significant is that that number is quite a bit larger than the same period from 2025, which was 333 deliveries in year to date August of 2022. So that's good. It means that GE Aerospace and Airbus are ramping up this program, which is good news. So 511. Okay, what are we doing here? Airbus is targeting A320 aircraft family delivery rate of 70 to 75 per month by the end of '27.

Remember the prior page, I think, when we say 25, it was like 51 per month, so we still have a way to go here. Okay, and stabilizing to a rate of '27 thereafter. Approved engines, this is important, these are two approved engines for the A320 aircraft, NEO aircraft family. One is the CFM LEAP 1A engine. That's the program we're on. We're on the A320neo aircraft family with the LEAP 1A engine, CFM, and we're not on the A320 aircraft family program with the Pratt engine. So we covered that in the first and second bullet item. Here's some interesting info, third bullet item.

The CFM LEAP 1A market share of firm engine orders for the A320neo family of aircraft was 66.9% as of June 30. So the CFM LEAP 1A market share continues to grow very nicely. And in the prior quarters we explained why that is, what's going on. We're not going to go into it here, but if you have any questions about that, let us know. The key thing is that the LEAP 1A market share, that's the program we're on, continues to grow. I think when we started these presentations, it was maybe less than 60%. I don't remember, but it's grown quite a bit and it continues to grow.

And there's a huge backlog, so there's a lot of ballast, if you will, in that market share. You know, it's not easy to change the market share so much month to month or quarter in quarter. But nevertheless, that's what's happening. At that delivery rate of 75 A320neo family aircraft per month and at 66.9% market share, that translates into 1,204 LEAP engines per year, which is a lot of damn engines, pardon my French. Let's go on to slide 12. So...

Still with the same program as of June 30, there were 8,546 firm LEAP-1A engine orders. And that's a heck of a lot of engine orders. I think if you go to slide, what is it? Slide 16, you can kind of figure out what that's worth. You can do your own math. Because in slide 16 it tells you what a revenue per unit is. It's, let me just say it's a big number. And that's not it, that's just the firm engine orders. That doesn't mean that's it. Obviously it's going to take more orders as time goes on. So let's go, let's continue on slide 12. A new, a different program, the COMAC C919, that's the Chinese aircraft with the LEAP engine. It's a LEAP 1C engine. They reportedly have over 1,200 orders.

And you can see the deliveries, they're trying to ramp up. They haven't been doing, you know, I'm sure they're not achieving the rates that they want. Their deliveries are expected to ramp to 59, 28, and 93. Those are airplanes, not engines, by the way. This is the single aisle, the Chinese single aisle airplane that's designed to compete against the 737, the A320. Let's go on to slide 13. The 777X with the GE9X engines.

This is a very delayed program, but still a very important program for COMAC. The test program has amassed over 1,700 flights. That's a lot. Over 4,000 flight hours. That's a lot. Reportedly, they have over 670 open orders for the aircraft. And Boeing anticipates a certification entry to service and first delivery next year. This has been pushed back a lot, a lot of delays, but just my opinion is I have some optimism that this will happen next year, which will be really important for Park, an important program for Park. So let's get a nice picture of the 777X undergoing cold weather testing at Fairbanks.

A friend of mine took that picture. Let's go on to slide 14. Here we go. So, GE Engine Program Sales History and Forecast Estimates. We don't go through all the history, we don't need to do that. What you might look at is look at fiscal year '20. That was like the year before the pandemic, just about $29 million. It took up to fiscal year '26.

Look at the right end side of the slide kind of halfway down, '26 to get back to $29 million numbers. So, you know, we really had a setback with the pandemic. And it took us a while to even get back to the pre-pandemic numbers for these jet engine program sales. In fiscal, in our second quarter, $8.3 million of sales. Our forecast for Q3, this is GE Engine Program sales forecast, $8 million to $8.5 million. For fiscal year '27, the whole year, we brought that number down with 32 to 35. It was a little higher. That number was based upon the input we have from our customers called a bill plan. And we haven't gotten a revised bill plan, but, you know, we're a little skeptical as to whether we'll achieve that bill plan because we have our first two quarters in the books.

We've got a forecast of Q3. And we're trying to be a little more conservative in terms of where we're going to go with the fiscal year. We'll see what happens. All right, let's go on to slide 15. So the GE programs outlook that we call our Juggernaut part Commercial Aircraft Juggernaut. This is our first Juggernaut. Remember GE Aerospace Engines and Programs. What's the timing for the Commercial Aircraft Juggernaut? For a long time, for years we were saying, when's it going to happen, when's it going to happen? We don't know, we'll see. But we're no longer saying that.

We're saying that commercial aircraft juggernaut's here because the programs are clearly ramping up. Commercial aircraft juggernaut drivers, what are they? They're the A320neo aircraft family production as it ramps up to the 75 airplane for a month. The expected certification and free interservice of the Triple 7X and COMAC's plan. Ramp up the C919 aircraft. The other two, GE Aerospace programs, the Global 8000 and the C909, those programs are pretty much at rate, so that's good, but they're probably not going to be key drivers in terms of the ramp up of current rates, the current revenues rather to that aircraft juggernaut kind of revenue level. So let's continue. Slide, what is it, slide 16 we're on, yep, continuing with the juggernaut. So here is kind of how we lay out the juggernaut and get to that $62,340,000 number. There are a couple changes here though in the assumptions and slide 17 has footnotes in terms of how we computed, how we arrived at assumptions and how we did the math.

We actually increased A320neo to 1,200 units because we decided we really should look at the current market share. We're holding off using like 60% market share, but we thought that doesn't make any sense anymore. And we brought down the number for the C919 just because they seem to be struggling to get that level. Now, remember, these are engines, so we've got to multiply the airplanes by two, so 200 engines means 100 airplanes. So, and we do the math and we get to $62.3 million. Or $62.3 million. And that compares to about, what, $30 million last year or something like that. So it's still a long way to go in terms of the ramp up.

Yes. Slide 17, uh Slide 17 rather, these are the footnotes I referred to. We're not going to go through these. Any questions, let us know. Slide 18, okay, we're changing gears and we probably have to pick up the pace a little bit. Missile systems. Now, the good news about missile systems is they're really, even though there's so much going on for us with missile systems, it's like, you know, a frenetic pace for us to keep up with. But there's not a lot of new developments that are being reported in the presentation as compared to Q1. So a lot of this is just review. That's our new juggernaut. Next big thing, missile systems, Park missile systems, Niche we call it.

We specialize in design and manufacture advanced composite ablative materials used to produce solid rocket motor structures for critical missile systems, including the PAC-3 MSE Patriot missile system, which we talk about a lot. We also design and manufacture advanced composite material to produce other missile systems components. Depletion of the depleted, we covered this last time. It's well understood, widely known that the missile system stockpiles have been badly depleted by all these horrible wars that we've been involved with the last couple years, running empty, replenishing the depleted stockpiles. So there clearly is a highly urgent need to replenish the depleted stockpiles. But is that it? Does it end there? Maybe not. Let's go on to slide 19.

Okay, here we go. Quadrupling the production of the exquisite class of weapon systems. Quadrupling, that's quite a concept for our industry. The aerospace industry usually doesn't move that quickly in our experience. On March 6, beginning of the year 2006, President Trump met with the White House with seven top defense contractors. At the meeting, these contractors reported they agreed to a quadruple production of the exquisite class of weapon systems as rapidly as possible. That's really quite something, kind of shocking. And the PAC-3 missile system, of course, has a class of weapon systems, plus other things that other programs focus on.

Let's talk about PAC-3, the PAC-3 MSE Patriot Missile System. Park also has qualified Vansco composite ablative materials for solid rocket motors for the PAC-3 MSE missile system program. The PAC-3 missile system interceptors have been extensively and very effectively used by U.S. allies in the Mideast, including all these countries. And why are they using them? Because the bad people are shooting missiles at them. So they've been using the PAC-3 missile systems to intercept and destroy the incoming missiles, ballistic missiles that are being shot at their countries, launched toward their countries, and in particular, civilian population centers. Let's go on to slide 20. The Patriot MSE missile system. It's an extremely effective missile defense system, very high rates of successful intercepts and destruction of incoming ballistic missiles and other threats.

But the stockpiles of those factory MSE missile systems have reportedly been badly depleted by all these horrible wars. I don't think we're talking out of school. We're not talking about anything confidential, no website information here. Just it's been widely reported that these... the system stockpiles have been depleted by these horrible wars. And the thing is that the Patriot missiles, they don't do any good if not available, wonderful as they are. According to reports, there were dozens of people killed recently in Ukraine by Russian ballistic missiles. Incoming, which Ukraine was not able to intercept and shoot down because of a serious shortage, that's their terminology, of Patriot missile interceptors.

It's just heartbreaking. I mean, you know, these are people that died, right? It's not funny. It's heartbreaking. Heartbreaking. On January 6, 2026, this is now kind of falling on what are we doing about it? What's our government trying to do about it? Lockheed announced it reached a seven-year agreement with the Department of Defense, increased the PAC-3 MSE interceptor production capacity from 600 per year to 2,000. Well, that's, you know, quite an assignment. 600 to 2,000. Let's go on to slide 21, more activity by the government. January 13, like a week later, the Department of Defense announces investing $1 billion in L3Harris, the L3Harris solid rocket motor business, to boost solid rocket motor production for the PAC-3 MSE and other missile systems. This is all public stuff. We're not talking out of school here. ArianeGroup of France, let's talk about them for a while.

ArianeGroup is a joint venture between Airbus and Safran. Ariane is an iconic and legendary missile launch system development and manufacturing company with very deep legacy technology. Ariane's rocket and missile system programs include Ariane 6 heavy lift launcher used by the European Space Agency, M51s, submarine launch, ballistic, nuclear, different missiles. This is a very special company. Our relationship with them and its predecessors go back to the early 2000s. We're very proud and fortunate to be their partner.

Like I said, they're a very special company, very special people, wonderful people, actually. We just want to go on the record to make sure everybody knows how we feel. Feel about this wonderful company, how privileged we feel we are to be connected with them, and how privileged our country should feel to be connected with ArianeGroup. So let's go on to slide 22. They produce, ArianeGroup produces a proprietary fabric called Raycarb C2B, which is used to produce a plate of composite materials for advanced solid rocket missiles. Missile programs. We're sole source qualified on a solid rocket motor for the PAC-3 MSE missile program for for specialty-ablated materials produced with ArianeGroup's proprietary C2B fabric. So we're qualified with our pre-preg material, but it's also qualified with ArianeGroup's C2B fabric. Park entered into a business partner agreement, that's what they call it, with ArianeGroup in 2022, under which ArianeGroup appointed Park as its exclusive North American distributor of their C2B fabric.

I think formally we were doing that for a long time, but they wanted to formalize it. That was that came from them, not us. On March 27, 2025, we entered into what they call the new agreement with ArianeGroup under which Park agreed to advance ArianeGroup €4,587,000 against payments for future purchases by Park of C2B fabric. We paid the first installment in our fiscal year 2026, we'll be there second installment in our fiscal year 2027. Let's go on to slide 23. Our third installment is basically being paid now. And we actually accelerated that. It was supposed to be April next year.

It's now, I think, next month. And that was in exchange for ArianeGroup increasing the allocation and pulling in the allocation, you know, accelerating the allocation. And then also in exchange for at least our asking if they can even do more. We have a wonderful relationship with these people and it's worked very, very well. What's the purpose of this €4,587,000 advance payment to fund 50/50 with ArianeGroup construction of additional C2B fabric manufacturing capacity in France. This additional French manufacturing capacity expect to come online 2028. Approximately half of it is for us and half of it's for them because they need it for their own programs at ArianeGroup.

So, we went 50/50 on the I think on this additional additional capacity, we're 50-50 on the output. But unfortunately, this additional French capacity, manufacturing capacity, not the adequate support to ramp up the PAC-3 MSE program, not completely anyway, to that 2,000 interceptors per year rate. So now what do we do? Let's go on to slide 24. I'll try to pick up the pace a little bit here. Sorry, I'm taking too long. On July 18, this is all covered at our last uh our Q1 investor call. This all just, you know, happened right at that point. July 18, Park and ArianeGroup entered into a term sheet agreement leading to the construction establishment.

This is big. By ArianeGroup, of a U.S.-based C2B fabric manufacturing plant with expected capacity more than adequate to fully support the needs of the PAC-3 MSE missile program at that 2,000 interceptor per year rate. The term sheet agreement provides a definitive agreement, also will need to be entered into before the end of the year. But what's the significance of the signing of the term sheet? I mean before the definitive agreement is signed. Based on the term sheet signed by ArianeGroup and Park last July, ArianeGroup is proceeding with the construction and establishment of our U.S.-based C2B fabric manufacturing plant. That's really important. Let's go on to slide 25. And that's provided in the term sheet. 100% of the output of that U.S. plant, the U.S. plant will be allocated to Park, which will use the support to Patriot Three and other missile programs. That's really important because the capacity in France, we share that with ArianeGroup.

This capacity is all for us and our programs. Also, under the terms of the term sheet, committed to invest $25 million in ArianeGroup's U.S.-based manufacturing plant. Now, it's not equity or debt kind of investment. The $25 million investment will be made by Park in the form of advanced payments to be fully applied against future purchases by Park of C2B fabric. The $25 million advanced payments are expected to be made by Park in 2026 and 2027, and expect to be applied by Park against future C2B fabric purchased at the beginning of 2030. So why did we do that? It's kind of a strange thing to do, you think. Why did Park enter into the term sheet agreement with ArianeGroup, and why did we make the commitment to $25 million advance payment commitments? Because it was necessary to provide ArianeGroup with the green light to proceed with the construction of the U.S.-based C2B fabric manufacturing plant, and we at Park believe it is urgent that Park, that ArianeGroup rather, builds its U.S. plant as soon as possible.

So let's go on to slide, what is it, 26 here? Yes, slide 26. Although we're not at liberty to disclose a specific C2B fabric manufacturing capacity expected from ArianeGroup's U.S. plant, when a plant is completed online, its manufacturing capacity, together with the C2B fabric allocation from ArianeGroup's European operations, will be more than adequate to support the needs of the PAC-3 MSE program at the 2,000 interceptors per year rate and numerous other critical missile programs. So what's the timing of the ArianeGroup U.S. C2B, rather, fabric manufacturing plant in the U.S.? According to ArianeGroup, their plant was originally expected to take four years. That's a long time to be completed online. But ArianeGroup recently agreed with Park to accelerate the timeline for the completion and bringing online of the U.S. plant by six months in exchange for a Park's agreement to accelerate the $25 million advancement payment schedule, it's very good news because we want to get that plant up and running as soon as possible. As a result of this recent agreement, Park is now expected to make advance payments of $20 million this year and $5 million next year. That's all to be applied against future purchase by Park or C2B Fabric.

Now, this is all obviously dependent on us entering into that definitive agreement, which is expected to happen before the end of the calendar year. So let's go on to slide 27. Okay, so just for the record, I want to cover this, even though we are in business to make money for our shareholders, thank you very much, it would be obvious. It is not all dollars and cents for us, it's more to it for us. As we already alluded to, every time a Patriot missile is launched and successfully intercepts, destroys an incoming ballistic missile, it's likely that there are people who are alive and walking around on the Earth, or whether it would not be, you know, lives are being saved. This is reality. This is not, you know, theory. It's not a, you know, some interesting paper or some kind of, video game. That matters a lot to us.

Okay, that matters a lot to us, so that motivates us a lot. We don't like seeing people getting killed when they should be getting killed. But but let's talk dollars and cents for a minute anyway. Under the terms of the term sheet, Park is expected to purchase a significant amount of C2B fabric from ArianeGroup during the period of 2032-2036. So why is that a good thing? Well, it's also a good thing because Park will also be expected to sell all that fabric to which prearranged customers under prearranged arrangements with the customers with our decision. Distributors markup. But in addition to that, Park will be expected to manufacture and sell a blend of materials produced for that C2B fabric for those customers. So what kind of ROI do those sales of fabric and materials represent for Park? Well, we're not going to disclose that specifically, but let's just leave it at this.

It's a very, very good business deal for Park and you should be happy about it, you know, from a business perspective. Very good. Let's go on to slide 28. Okay, changing gears here, talking about a new plant. And again, this has all been covered pretty much, not too much news here. July 17, we entered into this lease agreement for land at the 18 acres at Tulsa International Airport. That's where our new site will be. There's also going to be land for, space for additional plant.

If need in the future, plant size, 150,000 square feet approximately, the budget, outflow, sorry, the capital budget, $65 million cash outflow, $10 million in '27, $45 million in '28, $10 million in '29. You probably noticed that this got pushed out a little bit. I think last quarter we said $25 million in fiscal year '27. It takes a little longer to work through all the incentive agreements with Tulsa and El. And they're wonderful people. That's not, they're not a problem. It's just more than we expected. But the good news is if you look at the last arrow item is that facilities still expect to be complete in '28 and production shipment is supposed to commence in '29.

So that's not pushed back. This will '29, I should say, paid, sorry, Slide 29, continuing here, plant designed to produce our full product line. Second arrow item, expected to, this is important, approximately double Park's current hot melt prepreg and film use of manufacturing capacity. That's used to support the aerospace programs and other commercial aircraft programs. But here's the key thing, by staffing up our existing hot melt prepregs, we're going to melt manufacturing lines in Newton, Kansas, in a Newton facility, we'll be able to support the ramp up of GE Aerospace programs and the other commercial aircraft programs and hot melt programs we support. We'll be able to do that, and people are asking about that, how are we going to bridge the gap until our new plant's online. We can do that with our plant in Newton by staffing up our lines. But the additional hot melt manufacturing capacity provided by our new Tulsa plant will be necessary to provide more properly and sustainably support those GE Aerospace programs and other commercial aircraft programs.

So we'll be able to get through the transition with our current plant, but it's really good our new plants come in online soon. And it's the same, really, almost the exact same story with the solution treating on slide 30, manufacturing capacity. We're tripling our solution treating manufacturing capacity with a new plant. That's used to support among others. One other thing, missile system programs, the solution treating manufacturing capacity. And the same story, by staffing up the existing solution treating lines in a Newton, Kansas facility, we'll be able to support the PAC-3 program at the 2,000 interceptors per year production rate. Because that, according to what our customers are indicating, we're not going to give you specifics, we're supposed to be at that rate well before our new plants online, but we can handle it.

But the key part is the additional solution-treating manufacturing capacity provided by our new Tulsa plant will still be necessary to more properly and sustainably support the PAC-3 program and other critical missile programs in the future. Why are we building the plant? Pretty obvious, just because of our commercial aircraft juggernaut and missiles. Systems, generally they require it, and also to enable, facilitate, and promote Park's growth and development as a company for the future. Okay, so slide 31, here's where we're kind of mixing things up again. These slides are somewhere in the middle of the prior presentation. Park's for financial performance history and forecast estimates. We won't go through history, we just already did that. But Q2, so we already talked about Q2, $20.8 million sales, $5.3 million EBITDA, adjusted EBITDA, our forecast estimates for Q3, $21 million to $22.5 million of sales. To $5.8 million of EBITDA.

Let's go into 3.2. We show you this slide every quarter, except the new things, we're including the first six months, year, date, in the right-hand column. We'll continue that, you know, like next quarter will be the first nine months, just for information. So, why don't we continue? Let's go on to slide 33. Recent public offering. You know about this. There's no news about this. It was already complete when we did our first quarter investor call. All right. It was a $50 million at-the-market public offering, ATM, I guess they call it. And we sold 1,812,000 shares at an average or for proceeds of $49,996,000, average price of $27.58 per share.

And that at-the-market offering is complete. It was actually complete, I think, in June. Let's go on to slide 34. Our last slide, thankfully, I guess. Park's balance sheet, cash and cash dividend history, saving the best for last. Park has zero long-term debt. That's really important to us. I'm not saying we'll never have debt, but debt's kind of against our religion.

I hear these, sometimes watch financial news, all the small companies with all the debt, they're struggling. It's the big seven or whatever they call it, they're doing so great. Well, I don't know about that, but we're not big believers in debt either. Park reported $114.75 million in cash and marketable securities as of the end of 2017 second quarter. That's a lot of money, I agree. But remember, as we previously discussed, we plan to invest $65 million on our major new Tulsa manufacturing plant and $25 million in ArianeGroup's U.S. plant in the form of advanced payments. Now, $25 million eventually comes back to us, but that could take four or five years. So you had $25 million and $65 million, you know, you get some real numbers there. I just want to mention something we haven't mentioned before, which maybe is obvious to you, but the $65 million. So those were the capital assets, that's the equipment and the factory and everything else.

That's not the working capital. That's not the startup costs, which are going to be significant. That's over time, that's not just day 1, but just keep that in mind. So when you look at it that way, $114.75 million is a lot of cash, but maybe it's not all that. Park has paid 41 consecutive years of uninterrupted quarterly cash dividends. That's a nice thing for us. And saving maybe the very best for last, Park has paid $616.4 million, or $30.10 per share, in cash dividends since the beginning of fiscal year 2005. I always like to juxtapose that last comment to the picture of the Park founders back in the 1950s in a plant in 19, a plant in Flushing, New York, actually, not a first plant or second plant. These two guys, the founder and start of the company, was, you know, basically nothing.

I think a little money left over from the war duty. So I guess you could say Park has come a long way from those early days, but, you know, I'm going to spend a lot of time on this, but I still think it's important for all of us at Park to remember where we come from, you know, and because those beginning days were so important for us and really set an example for what kind of, um, the way we want to deal with things, deal with problems, deal with obstacles, deal with hurdles, roadblocks that come up every day today. So, okay, I think that ends our presentation. Yes, it does, operator. I'd be happy to answer questions to the extent there are any.

Thank you. We will now be conducting a question and answer session. [Operator Instructions] One moment while we poll for questions. Our first question comes from James Ricchiuti with Needham & Company LLC. Please proceed with your question.

Thank you. Good afternoon. First off, if my numbers are right, it looks like we had very strong growth in the missile systems, both sequential and year-over-year. So, you know, are these levels sustainable or are we going to, should we anticipate, you know, continued variability until we really see this missile ramp underway in earnest?

Hey, Jim, we're breaking up a little bit, but how are you doing? Fine, slide 32, a good question. I think it is sustainable. And the reason you want to look at slide 32, look at the sales, it's from '17, '18, '19, '20, we're growing pretty aggressively, $10 million a year more or less. Then we hit '21, Fiscal Year '21, the pandemic, and that really kind of slowed us down for several years it took us through, you know, to '25 to really get back to levels of '20. But I think we're back on that trajectory, and I think it's pretty aggressive, probably more aggressive than it was before. It's going to be our to keep up with the growth both in the missile programs as well as the GE programs. I think we talked about the juggernaut of $62 million for the GE programs. Last year was maybe, what, $31 million, something like that.

So there's a long way to go there and certainly a long way to go with the missile programs as well.

Brian, hopefully you can hear me clearly. I wanted to also go back to the commentary regarding your full year sales to and with the GE programs. I mean, you have Q2, I think versus expectations, and yet you're trimming the full year. It sounds like you're being conservative, but again, this is based on build plans that you get. So I'm just trying to understand that a little better and reconcile that.

Unfortunately, Jim, you're breaking up quite a bit. But I think you were asking about the GE programs of forecast. Let me see if I can actually pull it up for you. It was on, so the history, if I can't find it quickly, I won't. Slide 14. Okay, thank you. So you're asking if the growth is sustainable, whether it be conservative. I don't know. The forecast for fiscal year '27, $32 million to $35 million, I don't think that's what we're trying to be conservative there.

I do know there's a lot, what we can tell you. Mark and I can tell you there's a lot of energy toward ramping up these programs, especially the A320neo program. And then if the 777X gets certified next year, that program will have a lot of growth as well pretty quickly, I think. Got it. Like I said, you know, we have fiscal year '26. I would that was that the last fiscal year $29 million and the GE on of $62 million so long way to go to the GE programs.

Good. Thanks. Apologies. I'll come back in the queue.

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

Yeah, no, I'm sorry about the connection. I'll jump back in the queue. Thank you.

Okay. Thank you, Jim.

Your next question comes from Trevor Walsh with Citizens. Please proceed with your question.

Great. Hey, Brian and team, thanks for taking the questions. Maybe just to revisit that last question just to clarify. So, yes, we saw you took the full year GE number down, and I understand a lot of moving pieces, but are you seeing your Q2, Q3 number look kind of right on with what we were expecting, so it seems like it's maybe a little bit more uncertainty with Q4. Is that a fair statement? And then beyond that, are there any specific programs that are kind of creating that uncertainty, or is it more just kind of broad-based of just kind of what you're seeing, you know, within the group as a whole for you to...

Okay, I think we're misunderstanding this. No, just do the math. Look at Q1, Q2, and Q3, and then, you know, there would be a big jump in Q4 to get that number. The forecast that we provide was based on what's called a bill plan, right? And they're probably just ramping it up a little more slowly than they originally planned. But I think it would be a mistake to read anything other than a pretty aggressive ramp up from this information. We're just trying to be more realistic with Q4. There's nothing holding back Q4, but we're thinking well maybe Q4 will be similar to Q3 and Q2, in that range anyway. And we could be wrong, but we're just trying to be realistic.

Not trying to be conservative, realistic, but again, I want to emphasize, I think it would be a mistake to interpret this information in some kind of negative way that things are not going well, the programs aren't ramping up as quickly as possible. I think the key challenge, it's not us, it would be our customers, is their ability to keep up with the program ramps. You know, it's a challenge. It's a challenge. These are manufacturing companies, so it's a challenge for a manufacturing company to ramp up so quickly, but I would also say, just I don't want to beat a dead horse too much, that we're clearly out of that pandemic mode where everything was just kind of going sideways for so long and we just weren't seeing any growth at all. The growth is aggressive.

Yep. Okay. Fair enough. That makes sense, Brian. I appreciate the color. Maybe switching gears to missile systems a little bit. I appreciate the color around how the Newton facility can just generally support in this interim period before Tulsa gets up and running, both kind of the full extent of the GE. Ramp and then as well as the PAC-3 2,000 rate as well. But obviously there was just a big announcement with the Navy and Raytheon around SM-6, which I know you guys have some content on. PAC-3 is not the only game in town. So is it fair to say that as these other missile programs are ramp up as well that you can, that the Newton facility can also support those as well? Or do you kind of get to a point where you have to have to make some decisions about kind of what lines are doing and just maybe talk more broadly? I know there's sensitivities around it, but just how you, how comfortable you feel, like given the pace of the ramp that how, how Newton can kind of get us through to, to when Tulsa's up and running.

Yes, you know, we probably overemphasize the PAC-3 program. It's just we do that because there's so much visibility about it, so much knowing about it. We have companies publicly talking about the rates, you know, which is a little different than some other missile programs. So, and since we're sole source on the materials for the solid rocket motors, it's easy to kind of key in to the discussion about the PAC-3. But, you know, as I was going through just now, I was thinking, yes, we're really emphasizing PAC-3 maybe to the detriment of a lot of other programs that we're working on. PAC-3 is clearly the largest program that we have now, but but there are many, many other missile programs that we're working on. Mark and I were just talking about that.

Um and um it's a lot to keep up with. At this point, the answer is we plan to be able to handle everything with a new plant, but that will be by stretching, by staffing up the production lines quite aggressively. Um and uh but we plan to be able to get there with a PAC-3 as well as the other missile programs. I think we'll all be very relieved on the new capacity. And Tulsa comes online because we'll be stressed to get to that point.

Got it. Great. Super helpful. Maybe one more for me and then I'll hop back in the queue. Good to hear that ArianeGroup is able to kind of pull forward their timetable around the build out for their facility. It seemed like it just took an additional infusing of funding and commitment from you to do that. If things got really kind of dire from just everything requiring C2B, is there a scenario where that can be pulled forward even more with additional funding, whether it's from you or some other kind of third party to help move that along or is that kind of is what it is at this point.

That's a funny question because people keep asking that. I think the answer is no, about money. That's all it is. And what we did, we pulled forward our advance payments. We didn't increase our advance payments. We pulled them forward. We accelerated them in order to help them get their plant up and running more quickly. So is there an opportunity for us, for ArianeGroup to squeeze that timeframe, let's say four years, three and a half years, less than three and a half years? I don't know. I think it would be a challenge.

I think it would be difficult. I'm not saying it's not possible. And, you know, maybe a couple of months you were there. But significantly, um, my guess is probably not. It's not a matter of money either. That's not the issue. The reason I'm kind of laughing is because people have offered that. What would it take? It's not money.

Okay.

Yep, got it. Okay, perfect. Thanks, Brian. Appreciate that, the questions. Thank you.

Thank you. Thank you. Your next question comes from Fabio Wolfinger with Switzerland. Please proceed with your question. Good afternoon and thank you for the presentation. Hello.

Good afternoon and thanks for your presentation. I'm calling from Switzerland. As you told, you lowered your full year sales forecast for some of the programs. For any shipments that have been delayed, have customers confirmed new delivery dates or are you still assuming those sales will return? Looking into fiscal year 2028, do your latest customer schedule support faster sales growth than this year or should investors lower their growth expectations for that year as well? Um, I'm asking especially about the difference between confirmed orders and expect the demand. Could you give a rough breakdown of the reduction and tell us when you expect any delayed sales to be recovered?

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

No, I will listen about and I thought about some programs accounting for reduction approximately for these engine programs, right? The engine programs? So...

I don't know what to say about it, the engine programs. If you're talking about the fact that we broke down the full year forecast, maybe that's what you're referring to. Yes, I think now I understand. For the GE programs, I thought you were referring to a forecast for all Park. Yes, we broke that down but yeah, a couple million. Yes, yes. Like I said, I think the original forecast we provided was based upon the bill plan we received from our customer. And we weren't aggressive with it.

We didn't round up rates like that. And we're just saying now, based upon the fact we have two quarters in the books, and we have a forecast for Q3, that we want to bring the number down a little bit to be realistic. But the ramp, in our opinion, is going to happen. Whether it moves a couple of quarters here or there, I think, is not relevant. We started talking about the GE Aerospace juggernaut. I think our main point was we don't know exactly what the time frame is, but the key thing is it will get there, and we better be ready for it. So I think the second question about this, I think we're really over reading or overly focused on the fact that we brought that number down a little bit.

I don't think it really means anything in terms of long-term big picture. Those programs are still there and they're still ramping. I think, it's not a function like the, we talked about the COMAC program, the C919, so maybe that's what you're referring to. That program's a little delayed, but I don't think we had really big expectations for that this year at all. So it's not a function of the programs themselves. It's a function of how quickly our customers can ramp up their production. We can meet their requirements as Park is not the problem.

But I don't think it's the end market either. I don't think it's the programs or how many airplanes the OEMs are able to sell. I think it's just a function of how quickly the industry could ramp up. And that's really been a story for several years now as we're trying to emerge from the pandemic. Because you probably know this, but Airbus had this target of 75 airplanes a month for years ago. And they really were struggling to get, you know, even up to 50, maybe past 50. It wasn't that the market wasn't there.

Look at the backlog. They got so many airplanes sold. Yes. So it's a function of the industry ramping up production, not Park only, but the whole industry ramping up production to get to those rates. But I think I would say that maybe we're overthinking this annual forecast because clearly, the, I don't know, the vibes, if we look at it that way, we're getting is that there's an aggressive ramp-up going on. And if we talk to our customer, they're talking about very aggressively ramping up. I guess I would say maybe we're wrong. Maybe we're being too conservative. Maybe the original bill plan will end up coming true. We don't get revised bill plans every year from them. And say, what do you think about the bill plan? We're just trying to be a little bit more realistic based upon Q1, Q2, and Q3.

But I think if we're, we don't want to overthink that or read too much into it, let me put it that way. That's my opinion anyway. The GE Aerospace Juggernaut, as we call it, I think is very much intact and very exciting for Park.

Okay, thank you very much. No worries. What about the GE Aerospace outlooks in July? That's what I'm asking.

Yes. Thank you. I'm sorry I didn't understand your question at the beginning. It was just I was thinking. No worries. We'll see you in July. Yes. Thank you.

Okay, thank you. Thank you. This now concludes our question and answer session. I would like to turn the floor back over to Brian Shore for closing comments.

Okay, this is Brian again. Thank you all for listening in, and thank you for the questions. It's been very nice talking to you. Please give us a call if you have any follow-up questions. Happy to help you with that. Take care. Have a good day. Bye.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.

This live transcript is auto-generated without human intervention or review.

Hello and welcome to the Annual Meeting of Shareholders of Park Aerospace Corp. Please note that today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Mr. Brian Shore, Chief Executive Officer and Chairman of Park Aerospace. Mr. Shore, the floor is now yours.

Thank you, operator. Good morning, all. This is Brian Shore. As the operator already told you, I'm the CEO and Chairman of the Board of Park. Welcome to our sixth virtual Annual Meeting. This is probably our -- I don't know, like 46th Annual Meeting, but sixth virtual Annual Meeting of Shareholders of Park Aerospace Corp. We hope this virtual meeting will maximize the participation of shareholders regarding -- regardless of their location.

Gus Petropoulos, our Senior Vice President, Chief Legal and Capital Markets Officer, will act as Secretary of the meeting, and he'll help us through the process. So go ahead, Gus. Thank you.

Thanks, Brian. The 3 items of business on the agenda for this meeting are: one, the election of 6 directors to serve until the next Annual Meeting of Shareholders and until their successors are elected and qualified, subject to earlier resignation, retirement or other termination of service; two, the approval on an advisory nonbinding basis of the compensation of the named executive officers; and three, the ratification of the appointment of CohnReznick LLP as the company's independent registered public accounting firm for the fiscal year ending February 28, 2027.

The Board recommends that you vote for each nominee for director and for the other 2 proposals. The notice of this meeting was mailed on or about June 22, 2026, to all shareholders of record on June 1, 2026. And we have an affidavit to that effect from Computershare, our transfer agent. The certified list of shareholders of record entitled to vote at this meeting is available for you to access via link at the bottom of the screen. These materials will all be filed in the corporate records.

Martina Bar Kochva and I have been appointed as inspectors of election, and we have executed our oaths of office. Since the majority of the outstanding shares of common stock of the company is present in proxy or in person, we have a quorum and the meeting is now legally convened. The time is now 11:03 a.m., and the polls for all proposals are now open. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Any shareholder who has already voted and does not want to change his or her vote need not take any further action. The polls will close promptly after the presentation of the third and final agenda proposal.

If you have a question about one of the matters in the agenda to be voted on by the shareholders at this meeting, please submit your question by clicking on the message icon provided online at or before the time the matter is before the meeting for consideration. Holders of record of common stock at the close of business on June 1, 2026, the record date for this annual meeting, are entitled to cast 1 vote per share for each matter. There is no cumulative voting. Directors are elected by a majority of the votes cast at this meeting or by proxy. All other matters require the approval of the majority of the votes cast.

Proposal 1, the election of 6 directors is now in order. The following persons have been nominated to serve as directors until the next Annual Meeting of Shareholders and until their successors are elected and qualified: Emily Groehl, Yvonne Julian, Brian E. Shore, Carl W. Smith, D. Bradley Thress and Steven T. Warshaw. Information concerning the nominees is set forth in the proxy statement, and their names are deemed duly placed in nomination. Any other nominations were required to have been submitted in accordance with the company's bylaws. No such nominations were submitted and accordingly, nominations are closed.

Proposal 2, the approval of the advisory nonbinding resolution approving the compensation of the named executive officers is now in order. The Compensation Committee of the Board of Directors of the company approved the compensation of the named executive officers set forth in the proxy statement, and the Board of Directors has recommended that the shareholders approve the following resolution: Resolved that the shareholders approve the compensation of the named executive officers as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and other narrative executive compensation disclosures. Information concerning this resolution is set forth in the proxy statement.

Proposal 3, the ratification of the appointment of CohnReznick LLP as the company's independent registered public accounting firm for the fiscal year ending February 28, 2027, is now in order. The Audit Committee of the Board of Directors has appointed CohnReznick LLP as the company's independent registered public accounting firm for the current fiscal year, which ends February 28, 2027.

Information concerning the ratification of this appointment is set forth in the proxy statement. If you have any questions that relate specifically to the 3 proposals presented and have not already submitted them, you should submit them now by clicking on the dialogue icon in the upper right-hand corner of your screen. The polls will be closed in a moment following questions and answers on the proposals. We'll wait a minute or so for questions.

[Voting]

Seeing no questions submitted, the polls are now closed. The inspectors have determined that the preliminary voting results show that each of the nominees for election as a director has received a majority of the votes cast online at the meeting or by proxy, that the proposal to approve an advisory resolution approving the compensation of the named executive officers and the proposal to ratify the appointment of CohnReznick LLP as the company's independent registered public accounting firm has each received the affirmative vote of the holders of a majority of the votes cast online at the meeting or by proxy.

Accordingly, the persons nominated have been elected as directors to serve until the next Annual Meeting of the Shareholders and until their successors are elected and qualified. The proposal to approve the compensation of the named executive officers has been approved and the proposal to ratify the appointment of CohnReznick LLP as the company's independent registered public accounting firm for the fiscal year ending February 28, 2027, has also been approved.

Final vote tallies will be reported in a Form 8-K filing with the SEC within 4 business days. The formal business of this meeting having been completed, I declare this meeting adjourned. Brian?

Thank you very much, Gus. And thank you, ladies and gentlemen and others for attending our annual meeting. Nice to have you on board. And you have a nice summer. We'll talk to you soon. Thank you. Goodbye.

This concludes the meeting. You may now disconnect.

Good afternoon. 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 2027 Earnings Release Conference Call and Investor Presentation. [Operator Instructions]. At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Thank you very much, operator. Welcome all to -- this is Brian, of course, welcome all to Park Aerospace's Fiscal Year 2027 First Quarter Investor Call. I have with me, as usual, Mark Esquivel, our President and COO. So we published our Q1 earnings release just after the close. You want to -- if you haven't seen that, you want to take a look at that. because in the earnings release or instructions as to how you can access the investor presentation that we're about to go through. there's a link and also you can access that on our website. .

So a couple of preliminary comments here. It's only been 7 weeks since our Q4 investor call, it's just been summer. So I had a feeling would be just a Q1 call, it would be kind of a quiet call just little update and we move on. But I actually didn't work out that way. There are a lot of important developments that we need to we should go through with you, especially starting in the missile systems and then the new plant sections at the end. So what we'll probably try to do was go through the beginning portion of the front end, let's say, of the presentation a little more quickly, so we can get to the back end, if you will, more quickly again. I spend a little more time because that requires much more discussion, I think.

Unfortunately, we -- well, it's fortunate, but in this sense, it's unfortunate. We have a lot of new investors at Park. And I apologize for we're going to go through like the front end, if you will, of the presentation a little more quickly, just have time for the back end. But -- and for the retorinvestors from other problem, a lot of the stuff is we quarter.

But for new investors, if there's anything you want to talk to us about that we went over to quickly, sorry. Please give us a call and we'd be happy to go through those items in more detail with you. And I guess the only thing -- other thing I'll say is that we're happy to answer your questions, of course, after we're done with the presentation. So why don't we get into it. Slide 2 is our forward-looking disclaimer language. Let us know if you have any questions about that.

Slide 3, our table of context. Slide 1, we start with our investor presentation and appendix on supplementary financial information, we don't intend to go through that during the call, but if you have any questions about any of the supplementary financial info, please let us know. We've been featuring the James Webb space telescope while now in our table of contents. So we're not going to break the pattern here. The James Webb shattered our time line of the universe talking about some big stuff here, not just what we met differ the quarter by spotting in possible infant galaxies containing all stars and heavy elements, which should not be there.

It seems to be kind of a common theme with James Webb. We keep saying, yes, the thoughts will be that way. And then we believe or most of them just not really true. James Webb was produced 18 proprietary Park Sigma stretch. Let's go on to Slide 4, our quarterly results. Let's just go through this quickly, Q1 the right-hand side, right column, sales $18,312,000, gross profit $6,376,000, gross margin 34.8% and as you often say, we don't like it when it's below 30% like it was in Q4, so a little happier above 30%. Adjusted EBITDA of $4,576,000 adjusted EBITDA margin, 25%.

What do we say about our Q1 during our Q4 investor call, we gave you the kind of forecast estimate for Q1. We said sales estimates, $17.7 million to $18.4 million. So we came in the range, maybe kind of towards the top end, but still within adjusted EBITDA to a 4.1% to 4.6%. And again, we came in within the range, maybe at the high end of the range, but still within. I thought we didn't recover this any more and more, but maybe we do. What is the significance of our forecast estimate. So we've mentioned this many times is that we're not doing the guidance thing where we give you numbers to beat, we don't do that.

When we give you these numbers, we're telling you this is what we think is going to happen. Now some things are wrong, sometimes it's off, sometimes a little high, sometimes a little low. But we're not playing any game here. We're not giving you a number what we think my presents that we could beat it and be heroes and make the analysts happy that stuff. I know everybody I should a lot of other companies do that. We just don't. We were wondering, based upon the reaction to our Q4 call, whether everybody is listening to that, we think it's going to strange that investors would invest in our company on the buyer sell stock totally disregarding what management was saying consistently for years now, but that's -- everybody has the freedom in what they want.

Let's go on to Slide 5. Quarterly results, not too many comments about Q1 here considerations. I guess the main consideration is work back to talk on -- now we'll talk about Aaron Group in much more detail when we get into the missile systems section of the presentation. Just for now, the reason we bring it up, but it has an impact upon the quarterly bottom line. So we entered into this business partner agreement with Aaron Group in January 22, I know which they appointed us as their exclusive distributor what they call RayCarC2B fabric in the U.S. or actually North America, sorry.

So here's the thing. We had 0 C2B fabric sales in Q1 and -- that's actually a good thing or we were not because as we explained, we sell the fabric to our defense industry customers for relatively small markup. Now the -- I don't know, not the trick, but the key thing is that when we buy C2B fabric for a customer, will sell to the customer, but almost always restored in our plant, we stockpile order store for that customer in our plant. At some point, they're going to say to us, we want you to prepreg. We want you to make this -- take this fabric and making it to appropriate -- so we had $1.9 million of ablative material sales. That's a prices using the C2B fabric, and that's very good margin.

So that's the -- whether we sell -- to the extent we sold fabric, we we saw fruitage with the fabric that can affect our margins. That's why we bring it up in most quarters. Let's go on to Slide 6. Okay. This is something we do every quarter. This is done as a little specialty, the top 5 customers and [indiscernible] order. Let's see if we can grade who and what. -- aerospace, that's that paper missile on the top right-hand side of the page. GKN, I think that's the Boeing 787. Let's see, Kratos is obviously the Valkyrie Tatiana.

Now Middle River could be the Global 8000 or the A320 XLR. But I think what we are doing here is Northern relates to the Global 8000, and then AmRest relates to the Airbus Acreage 21 LR Okay.

Let's keep going. Slide 7, these are the pie charts, which we lecturing with every quarter. Nothing too remarkable about Q1. It seems to be more or less kind of aligned with the history there. We break it down actually -- sorry, obviously, eribusiness aircraft. Let's go on to Slide 8. Now this is Elena slide, the park buzz niche moves programs. And we don't talk anymore about the specific programs. They're just a little too sensitive, except to say that at every program that we show you is a program we're involved with not just showing you a general defense programs were involved with all these programs. The pie chart the missile systems a little bit less than we would normally expect. -- why is that used to Renault C2B fabric sales in Q1. And that would be in that missile systems part of the pie chart.

So pie charts, you have to look at it more long term. You look at them on quarter-over-quarter, it's hard to figure out what to what to extrapolate from the short-term quarterly par charts. Let's go on to Slide 9, okay? -- aerospace and engine programs for some of the new folks we cover this every quarter, visits a very significant portion of our business. We have a firm pricing LTA from '19 to '29 with middleware Bear structure Systems, which is a sub of engineer Aerospace to Singapore company. The key thing we need to explain to you every quarter is that if you look at these programs, all GE Aerospace were or CFM, which is the JV which aerospace programs.

So why is that? What does that do with MRS or ST Engineering. What it has to do with is that when we got these programs, MRS is owned by GE Aerospace. I think maybe in '19, I'm not sure exactly when GE sold MRS to engineer aerospace programs at the time. We built a redundant factory in Newton for GE. They asked us to do that to support their programs. And these are some of the GE programs that we're on through MRS. And we won't go through them. If you have any questions about them, let us know, but these are some of the key programs that we're on.

Again, this is for aerospace, it's engines, and this would be for engine cells and thrust reverser components. -- post components. Let's go on to Slide 10, still Aerospace. So additional program that's not listed in the prior page is the fan case containment wrap for the GE9X engine for the 777X airplane. That's an important program. part. Also the LTA was amended to include film lease products, which are now in qualification. And as we've told you many quarters now, the MRS and SCE did request a Life program agreement with us. And we haven't made a lot of progress late. It's finding the way with us, but MRS had some other priorities. So they have a little more bandwidth, I guess we'll continue with indications of the life-of-program agreement.

Let's go on to Slide 11. Let's talk about the GE Aerospace programs. biohun is always going to be the A-20neo aircraft family, including 1 variance, which I won't read off to you. And then look at the numbers, it's a huge, huge, huge program. They've already delivered 4,470 -- these are new airplanes. This is not A320. These are A320neo air plants, and they have a backlog, Airbus of $7,483. That's just a lot of airplanes for this program. the delivery history for any neo family, I'm not going to go through the numbers with you, except let's look at June, the first 6 months, 271 deliveries last year this time to -- so we're doing a little bit better this year. Airbus is trying to ramp up. We'll get to that in a second. What we don't do is take June and multiply it by 2. So that wouldn't work the back end load the deliveries.

I mean if you look at the 232 and multiply that by 2, it's not going to give you 607, you see what I mean for '25. So the key consideration is that that Airbus is way ahead of where they were last year at this time with A320neo deliveries. Let's go on to Slide 12. Okay, here's a punchline at top. Airbus is targeting an A320 aircraft family living rate of 70 to 75 airplanes per month by the end of 2017 and then stabilize in '27 thereafter. -- just if you have an experience with commercial aircraft, that's a huge, huge huge number. Those numbers are on her of really 75-year planes for a month.

Approved engines, we've got to talk about that. These are 2 approved engines for the a320 aircraft family. One is the engine we're on, which is the CFM LEAP 1A, that's CFM mentioned, there's another approved engine, which is a Pratt that's a GTF engine. We're only on the CFM LEAP-1A engine for the A320 aircraft family, and that's covered, I guess, in the next second little bullet item there. And then the third bold item, okay? According to Aero Engine News, which is the viable, the CFM leaping market share of firm engine orders from the [indiscernible] family of aircraft was 66.2%. That's a big number -- numbers just going up and up and up. That's a huge market share. So it's just creeping up here. I guess that's the 1 we described it.

At the delivery rate, of 75 airplanes per month, okay, 75 per month, the 66.2% market share translation into 1,192 LEAP 1A engines per year. that's just a whole lot of engines, a whole lot of engines that part supplies into. And we'll remember that number a little later on in the presentation when we get to that Jurgens I'll try to remember anyway. Let's go on to Slide 13. Okay. Still talking about those engines. The Pridengine, the competitive engine has struggled with serious reliability issues and reliability has been a positive selling point for the LEAP-1A according Airbus, there's now a series shortage. So we've got reliability issues, sort issues, other Predengine, Meanwhile, CFM has ramped up production of the LEAP engine. So just full disclosure, we've also read some things that there's some complaints every now and then about whether CFM and how greater job they're doing with supplying engines as well, just to be fair about it.

But could these factors lead to an even greater LEAP-1A market share maybe. It seems like it's already have an impact as those numbers have up the market share numbers have been moving up -- as of March 31, 26, okay, these are some huge numbers, 8,472-firm ELEP1Aengine orders. that's -- those are firm orders. That's just a huge amount of revenue for Park. If you look in the -- I think, in the what you call the Jargonslide, it kind of tells you what our revenue per unit is your own math, if you have a pocket calculator. So the aircraft family program could end up being the world's largest commercial aircraft program, that's probably given. And then aircraft program could also end up being parts largest nondefense program ever. All right. So let's keep going here.

With next Slide 14. Now this is the Chinese airplane COMAC 919. That's single-aisle competitor A320 and 737. That is another version of the LEAP engine. Maybe I see a fan. I wonder if stands for COMAC, and might stand for Airbus. I don't know Comex increasing manufacturing capacity to achieve production rates of 150. You could see their target rates here, and we'll go through detail, they reportedly of over 1,200 orders for the 919 aircraft, and they reportedly delivered only 2 in 23, 14, '24, 1825. So they've got a long, long way to go to ramp up, don't -- and I say that we heard the lack of availability of the engines has been reported to be eliminating the COMEX ability to ramp up. My sense is I should speak for Lee or CFM, I sense that they're giving a little more priority to Boeing and Airbus and a Comac, but I give you wrong about that. I'm just telling you what I'm kind of sensing.

Let's go on to Slide 15. The other big program big aerospace program is the 777X with those GE9X engines. So this player plan has been very, very, very delayed. But I feel that it's going well now that's on track. -- it's doing well in terms of certification. They have amassed lots of flights and lots of flight hours in the test program. They have over 650 open orders for this airplane. -- this is a much bigger but you're not going to get like the same number that you see for the A320, for instance. That's a lot of very nice orders.

The certification test program has moved into Phase Ib of the FA type certification testing program. That's an important milestone. Just approved recently. That's good. So I think they're progressing well. Boeing anticipate certification of the aircraft in early to mid-2017 and entry to service, first delivery in mid 27. So that's very good news. These pictures are interesting. This was that fair banks a few years ago, a friend of mine, I know I've got friends up Fairbanks, took this picture. It was up there for cold weather testing it. If you go to Fairbanks went through, that's a good bet if you look at cold water testing done. -- often 40-50 below.

Let's go into -- let's go to Slide 16. So here are some numbers. GE Aerospace entities and program sales history and forecast systems, okay. We won't go through all the numbers. That's probably not necessary. Maybe you just noticed that fiscal '20 just shy of $29 million, $28.9 million, and I took all the way to $26 million to get back to the number 29.2%. We saw, obviously, we're going through the pandemic. Look what happened in '21, we got, it just dropped like off a cliff or something like that. So our program sales forecast estimates of Q1, sorry, was $7.1 million. And Q2, we're estimating $7.5 million during the quarter. in total for the year, total 34, 38%. Now you could say it is our smart if you add Q1 and Q2, and you multiple that by 2, you're not going to get $34 million to $38 million. There's $34 million to $38 million, that comes from our customer. That's what we're told. We actually haircut a little bit to be a little conservative. And it looks like a stretch, but I just want to mention, last year at this time, we're in the same position where we're looking at -- we had a forecast for the year and then Q1 and Q2, it was much less than half the total. And we ended up making a number anyway. So we'll see what happens. We don't know what's going to happen. I'm just telling you where we get the number from, we'll see lot of variables in this world.

Let's go on to Slide 17. Okay. Now we're talking about Park itself, Park's financial performance history and forecast estimates. So we already know what Q1 was, you talked about that, bottom of the first box, 18.3% sales, 14.6% EBITDA -- adjusted EBITDA. Our estimate for Q2, $19.5 million to $21 million of sales of $4.3 billion to $5.1 million of EBITDA. And if you look at the footnotes, I just want to highlight something some of your risks described in Slide 2, we always include that, but in our -- in this slide, but you also see, including supply chain, international freight risk.

The reason we're highlighting that is we're a little concerned about some of these things short term and whether -- and to what extent that will impact Q2. So we're just going to flag that for you. Right now, we're saying, as I told you, this is what we think is going to happen. We also want to let you know that a little concern about supply to international fragrance. I also want to say, just my opinion that Park, we focused very intensely on the quarters. It's very important to us. We work very hard in our quarters. But I think the understanding of Park, it's really about the quarters that probably misses the point. And the point is probably for me anyway, more of the big picture. The quarters are always going to be quirky sometimes be high, sometimes be low because all kind of factors that might just affect that quarter that don't necessarily have big picture impact. It's just my opinion, your investors, you figured out yourself, that's my opinion.

Slide 18. You know what, we're not going to go through this. This is the same slide that we presented last quarter. So if you have any questions about it, just let us know. Slide 19. Okay, changing gears a little bit. When you talk about this every quarter a buyback authorization activity -- so under a buyback, we purchased 718,000 shares over common stock, average price $12.94 and -- so I just want to flag those numbers for you if you will circle back on them. If I'm not surprised to hear, we didn't buy any stock in Q1 or Q2.

But let's go on to Slide 20 because we check the poll buybacks and public offering for a reason. So we have -- we did a recent public offering at ATM at the market offering for $50 million and of Park common stock -- and during the Q4, we sold 943,000 approximately 943,000 shares of common stock for total proceeds of about $2.8 million or $4.21 per share that's before commissions. No sales in Q1, but we go on to Q2, which we're now just going to -- sorry, Slide 21, okay, in Q2, just in June, parts sold about 170,000 shares of common stock total proceeds, again, before commissions of $27,174,000 average price at $31.24 per share. I just want to tell you that you should know that we're very disciplined about -- we were very disciplined about this offering.

We A lot of the buying was on the block, and we turned them down what people to offer us. to buy blocks x dollars or dollars and sense we just say so many times you see really we're trying to protect the existing shareholders. And I think actually, made good parcels in back a little bit. I think we did a pretty good job for you with the ATM. You the next thing probably is the big -- this is the total, not breaking broken down by quarter. So we sold total of 1,812,601 shares for total proceeds before commissions, just under $50 million, $49.9 million at $27.58 per share, and the ATM offering is complete. But that $27.58 per share. I wanted to go back, and let's look at that, yes, back to Slide 19, the buyback sorry $12.4 -- we bought the stock for total. $0.94. We sold it for $27.58. So I think that's probably a pretty good deal for you. I would say, what's the expression, what is it? Like you buy cheap and soldier or something like that. Okay. Let's go on to Slide 22. Parts balance sheet, cash, incredible cash dividend history. We have 0 long-term debt. We reported $89.4 million in cash and marketable securities at the end of Q1, but you also should know that our cash and marketable securities, we're estimating to be approximately $114 million at the end of June Obviously, the big jump is because of the ATM activity in June. So that's a lot of cash, no doubt. But Remember, hold on, we're going to go into some more detail later in the presentation.

We plan to invest $65 million in a new plant, also $25 million in Aireon C2B fabric plant in the form of advanced payments, and we'll discuss both those things later, but you had $65 million, $25 million, I don't know, maybe get your calculator. I think that's about $90 million what I say, $65 million here, $25 million here before you know yes or no money, you review that No, no. I can't know I don't know where that comes from, but it's I don't know from a movie or something like that. So let's keep going. Park has faced 41 consecutive years of uninterrupted regular cash dividends. That's a good deal.

On Slide 23. Here we go, we paid 613 these numbers so big. I can't believe much so $13.7 million $0.975 per share in cash dividends since beginning of 2015. Now we declared another dividend when that $125 per share cash is paid on August 3. -- we will have paid over $30 per share in cash dividends since the beginning of 2005. Well, I think that's pretty incredible. I do say so myself. Here was a nice picture of our founders in Flushing, New York. This is not a regional plant actually. -- original plant was on which side wasn't a plan that was garage. This is a real plant, I think about 89,000 square feet back in IC50. The reason we like to show you this slide, we're talking about paying $613 million of dividends. This was -- this company started with nothing, nothing back in 1954. 2 guys that had some money left over from the war duty start with nothing.

So I'd like to think about that sometimes. Let's go on to Slide 24, changing gears a little bit financial outlook state program, the commercial aircraft jugging. So there's a first drug in commercial aircraft. What's the timing for the commercial aircraft, ag? We used to say -- the jargon is coming, you can't be stopped and we better be ready to remember that every quarter. Now we're saying, well, join on is here, at least it's beginning now in that sense. The drivers, as you jogged that A320 aggressive ramp-up 820NeO program. That's clearly a big one. Remember, 51 airplanes at 25, they're going to 75%, well, that sounds like about 50% increase in all that's pretty huge expected certification and entry into service of the 777X and COMAX planned ramp up. Those are the 3 big drivers of the commercial aircraft Juno. Let's go on to Slide 25, some numbers here. Let's talk about the A20 here, we mentioned this, that assumption in the first line, second com 1080. Well, that's based on 75 airplanes per month, but also placed upon a 60% market share for the LEAP-1A but we told you in the prior slide, it's over 66%, which translates to 1,000 -- we're not using that number using 1080, I just want to be where that made a little conservative. Now just as you know, in the past 20 and the 909, those programs are really at rate already. So see, they're not the drivers of the Javits A320, the 919 and the GE9X program that are drivers of the the commercial aircraft even. That's going to Slide 25.

We certainly will cover this. Here's just footnotes, which explain how we compute the numbers on the prior slide Slide 27. Okay. it's half hour into the presentation, and now we're getting into the new stuff. -- the important stuff. I shouldn't say it that way, but important new missile systems, parks new Jurgen and the next big thing part. So some of this is just going over some things we covered last quarter for a review and some of it is new. Parks Missile Systems niche we specialize and design and manufacture advanced composite of blade material use solid rock motive structures. Heat yields for critical missile systems, including the PAC-3 patron missile system. Now let me stop there because there's a rake this morning announced by Lockheed, if somebody called the pace ASC I just want to understand. We'll talk about that a little later, but everything we talk about in this presentation, when I say PAC-3 refers to PatMSC, that's the program we're on now. ASE is something new. -- and I don't want you to confuse those 2. Maybe we'll go back and talk about that later at the at the section on misses. But this just happens where trying to rewrite the presentation, sorry about that. But whenever it says in this presentation, PAC-3, what it means is Pare MSE, not the pacte ASC, okay? So let's go -- let's keep the completion of the depleting. We covered this last time. very bad depletion of missile systems based on ore in Europe, meaning Ukraine and last year's 12-day war. And now that we're in Iran, it's a pretty dire situation. I think Slide 28, much reporting about had barely the stockpiles of critical listen systems have been depleted. And we're not going to go into that now if you want to, you can look it up yourself. But running an upto question, maybe not not to you, but it's certainly concerning how badly the stockpiles have been depleted. -- replenishing the depleted stockpiles. Yes, clearly, highly urgent need to replenish their pleated missile system stockpiles. But is that it? Is that all we want to do? I don't think so, maybe not talking about quadrupling the production of exclusive class of weapon systems.

So just getting back to where we started from, no, getting it back to where we started timer is I think what we're really talking about here. It's really incredible, unprecedented you come up with your adjectives, I don't know. Slide 29. We reviewed this before, in March of this year, present front met with in White House in some 7 of the top defense contractors, including Lamar L3, why do we mention them because they're the big defense contractors on the PAC-3 MSC. And you need to quadruple their acquisitive class of weapon systems. So as possible. Clearly, the Pace [indiscernible] MSC missile system is a key member of the exquisite class of weapon systems. So in our experience, our experience rather is at the defense industry has entered into hypersonic hypersonic or [indiscernible] Netic, something like that you've come up with your actives. In the long years, we have never seen anything like this, particularly for blade materials, solid rocket missile systems. The quoting activity, especially for those ablative materials for solid rocket missile systems, hyper and frenetic, hypersonic infineticmaybe, the PAC-3 Patriot missile system. Again, -- this relates to the factory MSC. We did need to specify that because there wasn't a pack for AC.

There actually was a PE-free CRI, but I don't think they make that anymore. That was a prior generation of the PacriMSC, which is the most advanced version of the patron Missile System family. So -- these are big things park as sole-source qualified for advanced composite materials for solid roamers for the PAC-3 MSE missile system program. Slide 30 so stockpiles of these factory missile system and receptors. We already covered this just generally, but as it relates to the tax rate as well very badly pleated by the wars and then -- but now you're more depleted by the current war [indiscernible]. The bare missile system interceptors have been extensively and very effectively used by U.S. allies in the region, meaning the Middles region, including Saudi Arabia, UAE, Kuwait, Qatar, are Israel, and that's to defend against incoming ballistic missiles and other threats. -- the PAC-3 MSC distal system is an extremely effective missile defense system, very high success rate very high successful year should we had very high rates of special INTERCEPT and destruction of incoming plastic missile other threats. But this is a kicker Patriot missiles do know good if they're not available. Let's go on to Slide 31. Did you ease the report or read it on July 5 and a couple of weeks ago? -- dozens of people who are killed in Ukraine by Russian ballistic missiles which Ukraine was not able to intercept and shoot down because of serious shortages, nets and quotes from them, a patriot missile interceptors -- it makes me you want to cry and they know these people dying.

This is not a joke. As previously reported on just continuing here on January 6 of this year, [indiscernible] announced to reach a 7-year agreement with the Department of War [indiscernible] time I actually refer to and most advanced version of the Paramisile system interceptor production capacity from 600 per year 2000. That's just unheard of 600 or 2,000. That's incredible. What about us actually, our rates a little higher. We're not going to tell you what it is, but it's a little higher even than that.

On January -- so in January 2026, a lot of happening in January, I guess, 2026. The department we also announced is investing $1 billion in L3Harris, solid Rockmore business, formerly Aerojet, now called L3Harris Missile Systems. We're doing so Rocket production for the PAC-3 and other missile systems. You see the focus here on the focus, the focus. Let's talk about Aareon Group. That's we discuss ran group France. They're a joint venture between Airbus and Safran a significant company. Going to Slide 32. Our relationship with the Iran Group and his processors goes back to the early 2000s.

We're very proud to be their partner. And just you know, we're not being presumptuous we use the term partner -- that's what they call it that their term. So I just want you to understand that. You were not usually a presumptuous company. Aerion Group produces a proprietary fabric called RayCare C2B, which is used to produce ablative composed materials Revance, solid rocket missile programs.

There's a big one, Parkes sole-source qualified on a solid Rockmoter for the PAC-3 MSE missile program for specialty ablative materials produced with airing group proprietary C2B fabric. Park entered into a business partner agreement, that's what I call it, with Arion in January 22, under which are an appointed Parkes, their inclusive distributor for CTB and North America. On last year, March of 25, we entered into what they call a new agreement with Aireon under which Park agreed to advance Aireon $4,587,000, against future payments -- sorry, against payments for future purchase Park the C2B fabric. So when we buy C2B Fabric in the future rather than setting with check, we apply the advantage to understand how that works.

You can read the installment, it's unnecessary or read them for you on Slide 32 with the top of 33. We have 1 more installment to go, which is next April, I guess, something like that, it's Q1 of 28. What's the purpose of that advance at EUR 4,57,000 advance to fund 50-50 with Arion the construction of additional C2B fabric manufacturing capacity in France, the traditional French manufacturing capacity expected to come online and -- and approximately half of that is for us and happens for them. It kind of makes sense of went 50-50 on the project.

This additional manufacturing capacity will not even be close to adequate to support the ramp up of the PAC-3 MSC missile program. So now what do we do? Now what? Okay, let's go on to Slide 34. So continuing in Missile Systems. July '18, well, that's pretty recent. That was but looking at the calendar days ago -- 2 days ago. Aerion and Park entered into a term sheet agreement relating to the construction and established by area of a U.S.-based C2B fabric manufacturing plant with expected C2B fabric manufacturing capacity adequate to fully support the needs and the ramp-up of the factory missile program. Well, that's really good news. -- isn't it.

A parking area. We've been negotiating in terms of this agreement for several months. We haven't really talked about it because it wasn't really appropriate, but this is not something we just did last 2 days ago. The turnkey agreement provides that a definitive agreement consistent with the term sheet terms on our vision will be entered into before the end of the year, okay? So what's a big deal about the charge sheet and if it says that we're going to enter into a definitive agreement at the end of the year.

Well, what's the key significance to the signing by part and are in of the turn sheet agreement? There is. Based on the signing of the term sheet agreement by Ariane Park, Ariane will now not later on, now proceed with the construction and establishment of a U.S.-based C2B fabric management factoring plant, very, very important.

Let's go on to Slide 35. And as provided in the turn sheet agreement -- here we go 100%, 100% of the output of Aerion Group's U.S.-based C2B fabric manufacturing plant will be allocated to Park. That's for us. Also on July all recent stuff, and it was a week or 2 ago, we entered into a letter of agreement with a large defense contractor. This is a contract that we work with on the tax-free may missile program, lender agreement ties into relates to the turn sheet agreement. And there's only some which we can discuss about this, but it's a little complicated. This all ties together. -- all ties together. And let me just -- I guess, we'll leave at that.

Under terms of the term sheet agreement and coordination with this defense contractor customer, we've committed Parks committed to invest $25 million [indiscernible]. Base C2B fabric manufacturing plan. On that side of an equity investment, the $25 million we made by parking a form of advanced payments to be fully applied against future purchases of C2B fabric. The $25 million advanced payments are expected to be made by Park in 26 and 27 are expected to be applied by Parker's future C2B fabric purchases beginning in '30. So we're still working out the detail, but the full application of $25 million, I don't know, could take the 32, 33, we'll see. In other words, when the advance is fully utilized, fully applied to purchase of CTP in the future. Let's go on to why that are we doing this? $25 million, and that's a lot of money. Why are we making a $25 million advance payment commitment? -- because it's necessary in order for Arian to reproceedwith the construction of the U.S.-based C2M manufacturing plant, and we believe it is highly urgent that Aireon rebuilds its U.S.-based manufacturing plant as soon as possible. As explained above, Aireon's U.S. plant is necessary to support the ramp-up of the PAC-3 missile program.

So let's keep going. Why are we doing this? Just as you know, it's not all dials and Sense for Park, Almost every time the factory missile MSC, MSE missiles launched and successfully intercepts to an incoming listed missile, remember the success rate is very high, it's likely that there are people who are alive and walking around the earth otherwise, would be many parts scattered around. That's a hard way to describe it, but the reality is a lot more harsh, that's for sure. we're not falling around here. Let's go on to Slide 37. But let's talk about dollars and cents per minute shareholders. So we're interested in that, I guess. On the terms of the term sheet agreement, there's a minimum required purchase.

This is very key a C2B fabric from 30 to 36. We're not going to go into what that number is. This is not a forecast that's a minimum required purchase under the term sheet. What does that minimum amount translate into revenues for Park during that 30 to 36 period? Well, remember how we do this, we buy the fabric from area. We sell it to our customer, then we store it for them. We never deliver it to our customer.

They keep it in our plant because ultimately, 100% of the time, they're going to ask us to prepreg. So we look at the revenues, we have a look at the revenues from selling them the fabric and also some selling in the prepreg. And we're not going to give you a number, but it's hundreds of million dollars. So you think about that $25 million on investment and we get -- it comes back to is now just to cost some money, right? cost of money I don't know. You could figure it out better than I can. What's the cost of money? If we make the investment over the next couple of years, you don't get it fully paid back, let's say, 32%, 33%. There's a cost of money. I don't know what that is, but you could figure it out. ROI, it's a best you'll ever see.

So let's go back to talk about we're kind of done with the section, the PAC-3 ASC, was just announced by Lockheed. Did you read carefully between the lines, it looks like the PECS has been used for a lot of things. It's over till. It's very expensive overkill. For cruise missiles and drones and that kind of thing, it's over killed. -- not necessary. The tax-free MSCs really design for incoming long-range ballistic missiles, very effective. It gives us torso to know the things, but not really very effective. If you read the lines, it looks like the ASC is designed to fill that cap.

Now we've already spoken to our customer about this. And this is important. Everything I'm telling you about relates to the pace the PAC-3 ASC is gravy for Park. It doesn't eat into anything we're talking about with the MSC, it's gravy for [indiscernible]. Obviously, we're very interested and we were expressed or we're delighted to support that program. We'll see what happens. But I want you to understand, and that's not a negative part. It's a potential big positive part.

Okay? Let's go on to Slide 36, tolled topic here. Park's major new manufacturing plant on July 17. It's also pretty recent news here. Park entered into a long-term lease agreement for at least 18 acres of land at the Tulsa, Oklahoma International Airport. So a new manufacturing plan, we're talking about it for a while. We say we're looking at haven't made our site selection decision yet. Well, we have -- it's going to be the Tulsa International Airport. That will be the site of Park's major new manufacturing plant. The site will also provide space for an additional plant location in the future if and when needed. This is important -- so the existing -- the media plan, let's put it that way, probably needs about maybe 9, 10 acres. So it's another maybe 9 acres or so that will be available for another plant at some point in the future, which is important for us. It's a beautiful location at Tulsa International Airport, maybe it'll visit it someday. They will have a share meeting there someday.

Parks, a new plant size, about 150,000 square feet. The budget, $65 million outflow. This is a guess because sometimes the outflow will straddle the end of a fiscal year, so just a guess, but approximately $25 million of $275 million million 28 and $1.29 billion.

Let's go on to Slide 39, please. Time line for new plant, complete the facility about -- in fiscal '28, 2 years reduction in shipment to customers commenced in fiscal 2019. Our new plan designed to eventually do what we do now support complete composite materials product line clearly especially blade materials, et cetera, et cetera, et cetera. What else, that's a key question because this is not just to do what we're doing now. That's part of it. We're also looking at this as a major development opportunity for Park. So what else is an important question. We'll see about that.

Our new plan is expected to approximately double Park's current hot mill prepreg and fill is manufacturing capacity, principally used for the commercial aircraft programs like the GAV aerospace programs or approximately double the capacity. And then -- our new plant is expected to approximately triple our current solution free manufacturing capacity. And what's I used for? What's used for a lot of things, but among other things to support the Missile Systems program. So we're going to be tripling our solution trading capacity with a new plant. I mean, tripling over compared to our current capacity in Duke Kansas.

Let's go on to Slide 40. Why are you building our new manufacturing plant, well, pretty obvious. Our juggernauts required also to enable, facilitate inspire fire parts growth and development as a company in the future. So why do we choose Oklahoma, probably be a good question to ask, could be done a lot other place as well. We were very interested to understand -- so let me back up. The second largest industry in Oklahoma, now the first is oil and gas, is second largest aerospace A&D rather. -- we wanted to understand what did you mean by that? What's the culture of A&D in Oklahoma. Is it like big commercial aircraft companies, maybe more like what we have in which -- or is it something else?

And so we're very pleased that we kind of -- by spending a lot of time there doing due diligence. We think the A&D culture in Oklahoma is more a lot of start-ups, more about I wrote some notes down here, so I'm reading from the normally not right not innovation, creativity, imagination, risk taking more of a progressive kind of mindset, space and defense activity, start-ups that's very good for us. We think that will inspire us to be more creative and more innovative and our own thinking and our own development as a company.

So that's our thought behind Alcoa. We're really excited about actually. We've come a long way since we started a company in a little garage in Woodside cleans back in 54. And again, it arises not like what do you call it like a euphemism. I mean it was really a garage. I mean, with cars and stuff I don't know, maybe 2,000 square feet, something like that. But in my opinion, we're just getting started.

Okay, operator, we're done with the presentation. And to the extent there are any questions or any questions we'll be happy -- Mark and I be happy to answer them.

[Operator Instructions] Our first question is from James Ricchiuti with Needham & Company.

I'm wondering if you can tell us if there's any rate [indiscernible] C2B fabric sales that you're embedding in that fiscal Q2 outlook, just because it does have an impact on margins.

Yes. But it's -- we do mention it because it's more balanced between the fabric and the rope, -- at least that's what we're expecting -- we also mentioned a little concern about national freight, and so that could have an effect on it. It's not significant. If we expected something would have a significant impact on the bottom line, we would have brought that up.

Got it. And also, I'm wondering if we look at the revenue split, commercial aircraft, military in Q1, -- should we assume a similar type of profile in terms of the Q2? And I know you see looking at probably on a multi-quarter period.

Yes. That's hard for us to say. It's probably about the same. I think we would say longer term that the the military portion of the pie chart will start to become more prominent. And I think we'd also say, certainly, when you begin to break out of military, the second pie chart. -- that the missile systems portion of the pie chart grow as well.

Okay. And 1 final quick one, if I could. Just -- maybe just I apologize if this was in some of the materials you provided or maybe in the Q. Did you have a second 10% customer in the quarter?

Sorry -- what was the question for customers.

Sorry, was there a second percent customer in the quarter? Besides..

We don't disclose, yes. We only disclosed that for the year end, and we don't disclose 10% customers by quarter. So you have to look at our 10-K for the 10% customers for the year-end, but sorry, we don't do that. You're probably testing that MRAS is going to be MRS's 10% as a good guess, but we don't actually confirm that. .

Our next question is from Trevor Walsh with Citizens.

So maybe just also for backing on the margin question. So I think last quarter, you had mentioned that the CTV more direct sales, not the prefracaused some of the margin pressure in Q4, obviously, a nice recovery here in Q1. Was it really just that dynamic of the C2B sales? Or was there something else in the quarter that helped kind of gross margin pop back to that.

Yes. okay. Thanks for the question. So I think you know how it works. I mean every quarter, going to be lots of factors go up and down, but we're highlighting the big 1 here. And so I think that would be 1 of the more significant factors when you compare the gross margins and Q4 and Q1. In Q4, there was -- I don't remember the number, but quite significant, quite significant C2B sales. And fabric sales, I should say, in Q4. And that really pushed the gross margin down quite a bit. .

And unfortunately, the problem is that these things, they're kind of out of sync, so that's why we keep bringing it up because if you look at things long term, it's all fine because like I said, all -- 100% of the C2B fabric that we purchased ended up being produced in the prepreg, -- but the timing is, I think, so it can really skew our margins on a quarter-to-quarter basis.

Got it. Okay. That's helpful. And that was kind of leading to my follow-up. I guess, is it purely kind of customer-driven then in terms of when you -- whether you're -- in a given quarter, whether you're going to sell x amount of C2B versus prepreg and it's not necessarily you choosing do 1 or the other. It's more just what customer demand and kind of timing is dictating and it's more of that type. And then follow-up to that is how might that be changed or affected when you open up the new facility, both the Aireon specific facility and your new facility for in Oklahoma?

The answer to the first question is we don't do -- we don't decide anything. Our customers decide everything in terms of timing of the fabric purchases in terms of the timing of the pre purchases. The question about the Oklahoma plant, though, as I did not sure we followed that one. What was that question again? .

Just does the dynamic of the timing changed at all with either the new ability for CCB in the U.S.? Or if that really doesn't necessarily kind of move that dynamic in terms of like just again, the timing of of the fabrics, specifically the sales?

I don't know if it's going to change anytime soon, except maybe what way you might think about it is as these programs ramp, the numbers get larger and larger. And I think it might be more likely that they kind of are more aligned as programs ramp and get larger and larger. But we don't know. I mean, it's like I said, question. It's never our decision. It's always the customer's decision as to when they want to buy the fabric when they want to buy the proof and that's what we do here, and we do what customers ask us to do. We won't tell customers what they should do it. They tell us what we should do. That's a little bit -- I think -- I know that tons really strange. Well, that's probably a unique thing about Park, which is, yes, that we try to be responsive and flexible and do everything we can to help our customers not tell them what to do. They tell us what to do. I know that sounds strange, but I think maybe some of our competitors don't really think that way all the time. .

Got it. No, I think it makes sense. Maybe just 1 quick 1 as a final, Brian, if I can. Of the kind of the outline that you gave around the commercial-oriented juggernaut the GE programs, Obviously, A320 and LEAP is -- for that portion, at least, is the biggest contributor. But is there anything kind of in the next I don't know, 2, 3 quarters that you think are -- could be more of a surprise to that kind of your calculus there from the other programs, whether it's COMAC or with some of the Boeing. Is there anything that you think -- whether it's to the more negative or positive, but just something that could be -- maybe move that needle that's not necessarily, again, A320 specific.

So the -- as we said, we believe the Global 7500/8000 program and the COMAC program are really at rate already. So we don't expect much from them. I don't think we're going to see huge upside from the 919 program in the next few quarters because that's the issue would not that comic doesn't have the orders that says they have to find a way to ramp up, and that means they have to deal with supply chain issues and their own manufacturing ramp-up as well. So we talked about the fact that maybe they don't open up engines, and it's hard to make their planes with that engine. It's obviously being sarcastic.

And the Boeing program, Yes, the next few quarters, I don't know, maybe 3 or 4 quarters out. They've -- Boeing has already made a lot of these airplanes that are sitting there pain field in Washington. Some of engines and some don't. So -- but they already build a lot of airplanes in anticipation of the certification an entry into service. But once they get to that point next year or early next year, I think we could expect to see that program accelerate more. It's been a little bit sold out actually waiting for the the program to get -- waiting for the aircraft to get certified. But the A320 is going to be the big one, I think, you know what I mean, it's when you compare the 2 programs, it's -- A320 is a big driver, very dynamic and a lot of pressure from Airbus to ramp that program up as aggressively as possible. And they're struggling, of course, we talked about this many times with supply chain issues as well. It's Airbus, I mean.

Our next question is from Nick Ripostella with NR Management.

First of all, Brian, it's -- thank you for clarifying that with respect to that announcement on the missile program today. I was wondering about that. So

Yes. So Nick, I think the time is good because I think if the NASA came out tomorrow, we have all these people asking about it. Well, we really can't talk about it. So we're able to talk about today. So go ahead. Sorry, go ahead. .

And the second, I just wanted to say it's wonderful that we have great research coverage now after all these years and have a chance to look at that record as on [indiscernible] it's very thorough. And quite a feather in the cap to meet them die. That guy is great. I have followed them for many, many years. So this is good news. The only other question I have is, I mean, you've put out such a thorough presentation all the time, there really isn't much to ask. But just on Jugenat-t, Andrew has been working on missiles that are competitive reportedly with Patriot. And I was just wondering, do you know anything about those? And do those used materials? I guess another way of asking it and I may have referenced this the last time. Are there misprograms that like don't need the materials that you -- the type that you would supply? Or is that just a foolish question? And that's about it.

No, I don't think it is a good question. First of all, I love Andrew all we'd like to do as much with them as possible. But there are many other kind of materials other than C2B that are using other programs. And the issue is C2B availability and a patriot factory MSCs can have priority. So other customers may not want to get in line and back a line. So they are looking at other kind of materials. And we're happy to work with those as well. happy to work with those, and we do. And but we'd love to do more business with annual and we're working with them. So I don't know if that helps to answer your question, but... .

Okay. You say you are working with them right now?

Well, yes, yes, we are. I'm just saying we'd like to do more, but yes, we're definitely working with them.

Our next question is from Christopher Hillary with Roubaix Capital.

I wanted to ask on your longer-term EBITDA margins. Could you give any commentary with all this new business coming online? Do you feel like these are accretive or dilutive to your long-run EBITDA margins.

New business? Well, new business will definitely be positive. Now we're going to have some more cost to do as we bring that to plant, the timing on the costs will precede the revenues. But the new business and margins are quite good, quite special, I would think. .

And then 1 of the questions I wanted to ask is it does seem like there's an awful lot of new business activity. And while you're expanding substantially, are there other capacity expansions or certain capabilities that you are exploring adding to your current expansion plans? .

So the immediate expansion plan relates to expanding what we're doing now. But of course, we want to take the opportunity to make sure we're taking advantage of any kind of enhancement that would be would be appropriate for [indiscernible] to consider. And then we also mentioned that the -- this was just our specification, actually, we were dealing with a few different locations, a finalist, if you will. We were looking for 20 acres approximately 18 because we wanted to -- we knew that we only about half of that for the immune expansion plan. We wanted to have additional acreage to pace in all locations, other plant on our campus without having to go across town or something like that for other opportunities that we're working on that we are working on now and also in the future.

There are no further questions at this time. I'd like to hand the floor back over to Brian Shore for any closing comments.

Okay. Well, thank you, everybody, for tuning in. And sorry the call went as long as it did, but I wish nice to talk to you. If you have any follow-up questions, feel free to give us a call. Otherwise, please enjoy the rest of the summer, and we'll talk to you soon. Thanks. Bye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Good afternoon. My name is Julian, and I'll be your conference operator today. At this time, I would like to welcome everyone to Park Aerospace Corp.'s fiscal year '26 Q4 investor call and presentation. [Operator Instructions]

At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Thank you, operator. This is Brian. Welcome all to Park Aerospace's Q4 investor conference call. Thank you for joining us. With me, as usual, Mark Esquivel, our President and COO. We published our fourth quarter earnings release just after the close. If you haven't accessed that, you probably want to do that. In the earnings release, there are instructions as to how to access the presentation that we're about to go over. You can -- there's a link that's provided. Also, you can access that presentation on our website. You want to do that, so the call will be meaningful. So we'll review our presentation, of course, with you, and then we'll be happy to answer questions.

I just want to comment that we have a lot of new investors or potential investors at Park. During our third quarter call in January, there were over 150 participants. That's a lot for us. And I suspect that, that interest might continue. So the point is that we have a lot of new potential investors or investors and we have a veteran investors. So we have to balance between covering the old stuff again and not covering it too much. I know sometimes when we do that, the better investors get a little impatient that we're going over, things went over. But out of respect for our new blood, new investors who want to go back and cover some of these things that we cover every quarter. So we'll do the best we can to find a middle ground and compromise. And that, of course, means that nobody is going to be happy. But anyway, we'll do our best, of course.

Why don't we go ahead and proceed and we'll go right to Slide 2, which is our forward-looking disclaimer language. We're not going to read this for you. But if you have any questions about it, please let us know. Let's go to Slide 3, table of contents. Slide 1, we'll start with our investor presentation and in Appendix 1, your supplementary financial information. We don't normally cover that during our call, but please let us know if you have any questions about it.

Our practice has been on our table of contents to feature something about the James Webb space telescope, discovered these little red dots, a new class of object. You think about the new class of object. I didn't know what to make of that, small extremely red points of light that represent a potential seeding of early supermassive black holes, challenging our understanding of Galactic formation and evolution. Thank you, James Webb. And the James Webb was produced 18 proprietary Park Sigma Strut. So this is not a high-volume program for us and probably not an opportunity for many spares since the James Webb is in orbit 1 million miles away. We're probably not going to send anybody up to replace any of the Sigma Struts.

But even though it's a small program in terms of revenue, we feature it every quarter now for the last, I don't know, couple of years because it's just such an incredible thing to be part of. It's just amazing. I mean it's hard to describe. The words don't even get it amazing, doesn't really get it because we're -- almost everything you hear that comes from James Webb says everything we believe -- the smartest people in the world believe about the universe was not true. Sorry, we got to start all over again. So we're just -- I don't know how to say it, we're just so thrilled to be part of that -- the James Webb. Again, even though from a business financial perspective, it's not a big impact. And like I said, probably no more revenue from the James Webb anytime soon.

Let's go on to Slide 4, going from the -- I don't know the lofty to the -- I don't know if it's mundane, but a little different kind of level. Our own quarterly results, important, but maybe not quite in --important in terms of the -- I don't know the history of the universe perspective, but nevertheless, we'll go over our quarterly results.

Q4 sales, $24,187 million, gross profit, $6.935 million. Gross margin, 28.7%, which, as you know, we don't like that too much. We don't like gross margin below 30%. But when we get the next slide or 2, we'll explain what's going on here. That relates to the significant shipment sales of C2B fabric. Adjusted EBITDA, $5.171 million and EBITDA margin, 24.1% (sic) [ 21.4% ].

What did we say about our Q4 during our January 13 Q3 investor call. We said our sales estimates, $23.5 million to $24.5 million. So we came in within the range, maybe kind of the top half, but still within the range. Adjusted EBITDA estimate for quarter -- sorry, $4.75 million to $5.25 million. And it seems like we came in within the range, maybe the top half of the range, which is good. I need to explain, especially for some of our new potential investors, investors that -- when we give an estimate, we're telling you what we think is going to happen. We don't like this kind of thing that people do where they give a number. But it's -- they haircut it by 10%.

So they can beat the number and they have a beat, I can't -- I don't like that term these analysts come up with this sort of stuff. Like it's some game. We're not playing a game here. We don't like that makes us uncomfortable. We're not playing the game, but the whole concept, it's a beat, it's a beat, it's a beat. We don't want to beat. When we give you a number, we're telling you what we think is going to happen. And if we're wrong, that means we didn't do a very good job. Now sometimes we'll be wrong high, sometimes we'll be wrong low. But we're not trying to do that. We're not trying to give you a number that we can beat so we could be hero. To us, that seems like such a childless waste of time. And I just want you to understand that. So when we say we're in the range, that's a good thing. That means our prediction was right. So I probably cover that every quarter because it's a little different with many other companies how they do that kind of guidance thing and it's not something we really have to spend time with.

Let's go on to Slide 5, okay? Talk about Q4 a little bit more. ArianeGroup, here we go and now we're talking about that gross margin number. ArianeGroup business partner agreement, we talk about this every quarter, is significant from many perspectives. But in terms of the quarterly P&L -- so we entered into the business partner agreement with Ariane in January '22 under which Ariane appointed Park as their exclusive North American distributor for their Raycarb C2B fabric used to produce ablative composite materials for advanced missile programs.

Now, we had $7.1 million of C2B fabric sales in Q4. Well, that's a lot. I mean $7.1 million, what was our number, 24.1%. It's a very high percentage. As we previously explained, we sell C2B fabric to our defense industry customers for a small markup. That's not so good. But wait a minute, that's not the whole story. Park sold $1.3 million of ablative materials manufacturing with C2B fabric in Q4. And as we also previously explained, our margins producing and selling ablative materials manufactured with this fabric are significant.

Now what's going on here? When we sell the product, we buy it from Ariane because we're exclusive. We have exclusive rights to buy it in North America. So we sell it to the OEMs because when they're doing -- they're stockpile the product, where does it go in a stockpile? In our factory. We don't even ship to them. We hold it for them in our factory. Why are we doing that? They're stockpiling it because obviously, you're going to tell us at some point, "Please make this into your prepreg material. Please produce the material for us."

So everything that we stockpile will end up being produced by Park as ablative material, which is where those margins are very good. And so stockpile is good. And they're doing it because the OEMs are doing it because they're concerned about the availability of this very critical C2B fabric.

Let's go on to Slide 6. The shipments. Now this is interesting because we started talking about this at the beginning of the pandemic. The industry was not doing well, supply chain, international shipments, so one thing after another after another. And every quarter with a lot of missed shipments, that have come down quite a bit over the last couple of years as things kind of got close to "normal" based upon the post-pandemic levels, all right?

But what's going on here is this is now reemerging as a problem because now the industry is accelerating, recovering and the program ramps are accelerating. So now the industry is kind of struggling once again with keeping up from a different perspective, but it's the same kind of phenomenon. It's just from a different perspective. So now we're talking once again about missed shipments, 715,000. Well, that's a lot. And we talk about Q1 or Q1 forecast, it's going to be even more. So it's something to think about. Ultimately, all this product gets produced and shipped, but the industry is now struggling to keep up as the industry accelerates and ramps.

Net impact of tariffs, tariff-related costs. Mark, could you help us with a little perspective on tariffs and tariff-related costs, please?

Yes, it's the same story as the last few quarters, very minimal impact for us. Again, we typically passed these on to our customers through our pricing contracts or as we do pricing every few months with our regular business. So no impact for us, but maybe a few thousand dollars this quarter.

All right. Thanks, Mark. So why don't we keep going to hustle through here. So Slide 7 for some of the new folks. This is something we do every quarter for, I don't know, as long as we've been doing presentations, I guess, our top 5 customers for the quarter, an alphabetic order. And we do a little picture that ties into each of the customers. The top right, you'll hear a lot about this, the PAC-3 Patriot Missile System. That's 2 for the price of one because that actually is AAE Aerospace and L3Harris, so that's nice. We got one picture for 2. Kratos is obviously a Kratos BQM -- that's a target drone, middle of aerostructure, we'll talk more about them. That's the Airbus A320 with the LEAP-1A engine. And Nordam is the Boeing straddle tanker.

So let's keep going. Pie charts. These have gotten a little boring, but they're becoming interesting again. So when we take a look at this, Park estimated revenue by aerospace market segment. See in '21, that was -- fiscal '21 -- remember our fiscal year ends in February, that was a pandemic year. Look what happened. It wasn't that military was so great, its just commercial was almost nothing. Remember that the -- you saw the pictures of like the 737s with 2 people lined on them or probably more likely really Park that weren't flying at all.

But commercial aerospace was terrible and the airlines weren't ordering the airplanes. They were canceling many as they could. So you see that happened in '21. In '22, '23, '24 and '25, it kind of normalized "for the pandemic level, post-pandemic level", which was kind of anemic, let's call it.

But look at '26, there is something emerging there where the military is actually increasing more than it had been. And if we showed you Q4 of '26, it would be kind of shocking how strong, how significant military is. We're not going to do that because we don't want to get hung up on one quarter. But we think there might be a trend going on here when we look at '26 was in -- is in the bottom middle of the slide.

And let's go on to Slide 9, a little more pie chart stuff. This is another slide we include for every quarter, Park loves niche military aerospace programs. The top 5 is -- that's done by Donna and this one is done by Elena. Elena is Head of Customer Service at Park. This is her thing she does every quarter, Park loves niche military aerospace programs. So these are not necessarily the big programs. These are just -- some are big, but some may not be. These are programs of interest, we thought you'd be interested in them.

I just want to be clear, everything we show here -- everything we show every quarter, those are programs we're involved with. We're supplying into involved with. We're not just showing you nice pictures of rockets and planes and cool stuff like that. So we just want you to be aware of it. We don't comment anymore on what we do with these programs because they just got to be too sensitive, but just understand these are all programs that we supply into.

And the pie chart, look at Missile Systems, that's getting to be pretty big there. And that's not -- I don't think that's an anomaly. We'll talk about Missile Systems as we proceed with the presentation. I'm trying to hustle through because at the back end of the presentation, when we get to Missile Systems, there's a lot to talk about. That's a lot of new stuff also.

Slide 10, GE Aerospace jet engine programs. We provide this slide almost every -- almost every quarter, very minor changes. I do need to explain for some of our new investors. The Firm Pricing LTA is a Requirements Contract from '19 to '29 with Middle River Aerostructure Systems, where they know -- they're a sub of ST Engineering Aerospace, they don't know. We built a redundant factory. That was part of the deal that we actually made with GE Aerospace. When we entered into the LTA through '29, we agreed to build a redundant factory. That was done a while ago. It's in production.

Sole source for composite materials for various engine nacelles, thrust reverser components for multiple MRAS programs. We have the A320neo family, 747, the Comac 919, the Comac 909, the Global 7500. And the next slide is the 777X. Well, what's going on here? These are all GE engines, aren't they? We did say about GE and also CFM, which is a partnership with GE. Yes. So the thing is that when we entered into this contract, Middle River MRAS, where they produce the nacelle and thrust structures for these engines, was a sub of GE. And I think in '19 or '20, I don't remember when GE sold this MRAS to ST Engineering, which is a large Singapore aerospace company. That's the reason why all these programs are GE Aerospace, or GE Aerospace programs.

So questions let me know, let's just keep moving here on Slide 11. Okay. We already talked about this 777X, that's in those GE9X, that's a GE engine, of course. And in this LTA, we also included some of our new film -- proprietary Park film adhesive products and for composite bond and metal bond and all those products are under qualification. We've been talking about a Life of Program agreement to supersede the 10-year deal for every quarter now for a while. And this was requested by MRAS and STE, not by Park. We're happy to do what it's under negotiation. We actually made some progress recently, but we'll see. It's still a way to go to get to the finish line. As we always say, we're happy either way. If we do the Life of Program, that's wonderful. If not, we're okay too.

Let's go on to Slide 12, keep moving along here, still in GE. Updated GE Aerospace jet engine programs. So let's go through the programs in a little more detail. First, we start with the big kahuna, which is the A320 aircraft family, includes all these different variants. As of March, Airbus has already delivered 4,553 (sic) [ 4,453 ] of these airplanes and had a backlog of 7,412 of these airplanes. So you add those 2 numbers together and that -- the total is a big number. This is a huge program and could be the biggest commercial aerospace program ever -- aircraft program ever.

A320neo family aircraft deliveries, you see the pattern here, ramping up in '19, you got to 561 and the pandemic hit, everything collapsed to kind of 431, kind of going your way back to that 561 level, kind of got there in '23, '24, '25, inching forward the 50 a month, 51 per month.

But -- let's go to the next slide, Slide 13. Well, just one more item before we get to that punchline. '26 year-to-date, only 136 deliveries, that's not so good, off to a slow start Airbus is for the A320neo aircraft family. Why is that? What's going on? Well, Airbus have been targeting 75 neos per month by '27. They've been very public about that. So you look at the prior page, we're kind of inching up to 51. We're nowhere close to 75. Airbus recently stated they expect to reach that delivery rate only of 75 -- 70, 75, so we're backing off a little bit by the end of '27, stabilizing, that's the return to a rate of 75 per month thereafter.

So they're backing off a little bit. What's going on here? Why? What's the problem? Maybe we should consider the engine situation. So -- sorry, it's a little complicated, but we need to give you a perspective, I think, the 2 approved engines for the A320neo aircraft family. There's the CFM LEAP-1A engine, that's what we're on and then there's the Pratt PW1100G engine. We're not on that program. So we supply into the A320neo family aircraft using the LEAP engine. But we don't any content on the A320neo family aircraft using the Pratt engine. Important to know that.

Let's go to Slide 14. Now according to the first quarter 2026, edition of Aero Engine News, that's our bible. The CFM LEAP-1A market share firm engine orders for the A320neo was 66.2%. Now that's interesting, like what the heck is that number about? We cover this every quarter. And the number has been like 60%, 61%, 60%, 66.2%, that's not our -- that's not the historical number. That market share moved up. It's sustainable. What is the trend, we'll see. But at that -- at the delivery rate of 75 airplanes per month, 62.2% equals 1,192 LEAP engines. Can you remember that number? We'll get back to it later, interesting number.

The Pratt engine -- here's the kind of the issue. The Pratt GTF engine has struggled with serious reliability issues. You probably read about this. It's not a big secret. Reliability is a positive selling point for CFM LEAP-1A. They upgraded one of the components recently for better reliability.

And according to Airbus, this is recent. There is now a serious shortage of Pratt PW1100G engines. And Airbus indicated that's the main cause of their disappointing 2026 A320neo aircraft deliveries. They're kind of putting the blame on this Pratt engine, not only with the reliability issues now with shortages. Meanwhile, CFM has significantly ramped up production of their LEAP engine family, including the LEAP-1A.

So let's keep going here. Let's see if we can figure out what really is driving all this, Slide 15. Could these factors lead to an even greater [indiscernible] -- sorry, rushing CFM LEAP-1A engine market share for A320? I don't know. Interesting question. Now we sort of read recently something that surprised us, which is Airbus now saying, "Well, CFM is delayed on deliveries as well for the LEAP-1A." So I don't know what that means. The focus has really been on the Pratt engine now and say, well, LEAP is fine as well. So I'm not sure what to make of it. My guess is that the CFM can produce the engines that they have an opportunity for more market share gains, but that's their business, not mine.

As of March 31, there were 8,472 LEAP-1A engine orders. That's a lot of orders for engines. And if you look further later on in the presentation, we talk about our revenue per engine based upon current pricing. You can do your own math and figure it out, but we're talking about some very hard numbers here.

A320neo aircraft family program could end up being the world's largest commercial aircraft program ever. So we're very happy to be on that program. The A320neo aircraft program could end up being part's largest nondefense program ever. And that goes back a long, long time. We're talking electronics back in the '90s and everything else. So that's a big statement.

Let's go on to another LEAP program, which is the Comac 919. That's a Chinese single-aisle to compete with the A320 and Boeing 737. Comac is increasing manufacturing capacity to achieve production rates of 150, 919 aircraft a year by '27 and 200 by '29. And they reportedly have over 1,200 orders for the 919 aircraft.

Let's go on the slides we got here. We're at slide 16. COMAC delivering 2 of these airplanes in '23, 14 in '24 and 18 in '25. That's not a lot. Comac was targeting 25 -- that's not a lot -- 25 in '25, but can get there. So there are reports that CFM may be favoring Boeing Airbus with LEAP engine availability. Now these are different -- 3 different engines. They're not interchangeable, but there's still a capacity question as to how many LEAP engines that CFM can produce.

So -- and the lack of availability of CFM LEAP-1C engines may explain the shortfall and may be emerging as more impactful to -- emerging as more impactful to the ramp of the 919 aircraft program than originally anticipated by Comac. Now will this change improve for CFM -- sorry, for Comac, not for CFM, as a result of the recent summit between President Trump and President Xi? The answer may be yes. There are reports that there is some plan to increase CFM LEAP-1C engine deliveries to Comac as a result of that summit. So we'll see what happens with that. But you get the theme here, it seems like the engines are often the gating items on these programs, interesting.

Slide 17, let's talk about the 777X program. That's the other third big program that we're dealing with, with GE Aerospace engines. The 777X program, the GE9X engines, the 777X test program has masked over 1,500 flights, nearly 4,400 flight hours. We have 652 Boeing -- 652 open orders for the 777X and the certification test program seems to be moving along reasonably.

Boeing anticipates FAA certification entering into service and first delivery of the 777X next year. This program is very, very, very delayed a long time. I happen to be at Everett Field and -- where Boeing makes these airplanes, I think the biggest building in the world actually. And they're all over the field, everywhere. A lot of cases, they don't have engines waiting for engines and obviously waiting for certification. The can't -- certification -- can't start delivering the airplane until they get the FAA certification.

Now let's go on to Slide 18. So these points are kind of key. Our understanding is that the Comac 919 aircraft and the Global 8000 aircraft are already being produced and delivered at or close to targeted rates. We covered that in that original slide where we broke down the different programs, and we didn't really deal with them in any detail. The point is that we're not expecting much upside from those programs. These are already being produced at their targeted rates. Clearly, the Commercial Aircraft Juggernaut, as we call it, will be driven by the ramp-up of the A320neo aircraft family, the Boeing 777X and the Comac 919 aircraft.

Okay. Let's go on to Slide 19. We're still talking GE Aerospace. Just some numbers for you here, GE Aerospace and Engine program sales history forecast estimates. So in Q4, $8.1 million and in fiscal '26, $29.3 million. See what happens here. Look at '20 -- we're kind of almost at $29 million right before the pandemic and then wow, look what happened in '21, just dropped off a cliff. And we're clawing our way back in '26 to kind of get back to where we were in '20 right before the pandemic.

So -- and -- it's been long 5 years for the special commercial aircraft industry. That's for sure. So our forecast for Q1 for GE Aerospace program sales, $6.8 million to $7.4 million. Our forecast for the year, $34 million to $38 million. It would be a mistake for you to take Q1 for anything, multiply by 4 and think that's what we're thinking about. It doesn't really work that way. The forecast for the year, that's based upon what we have, we call it a build plan from our customer. And we haircut a little bit. The number we got from our customer is actually higher than the forecast we're providing you. We're trying to be more conservative here.

Let's go on to Slide 20. Okay. Now let's talk about Park numbers, Park financial performance history and forecast estimates. Too obvious is history, totals, you already know about, the Q4 you know about, totals you know about. We know about now anyway. Forecast estimate for Q1, $17.7 million to $18.4 million in sales, $4.1 million to $4.6 million EBITDA.

Now remember, we talked about missed shipments in Q1, we're expecting $1.3 million approximately significant amount of missed shipments. We don't know yet. Q1 ends on Sunday, we're so close to the end of the quarter that we can give you some perspective. Normally, when we announce -- the missed shipments normally really end up being a phenomenon in the last few weeks of the quarter. So normally, we announced, we can't give you any perspective on it, but we're so close to the end of the quarter, we give a perspective. It's the same kind of thing, supply chain thing. We're not getting components as quickly as we need, some shipping issues where if the freight forwarder doesn't pick it up, international shipment is not a sale.

We normally sell cutoff issues at Park. It's a sale when it leaves our dock. So you see we're kind of back in that mode now When the industry is struggling because the industry is starting to struggle like, because things are ramping up aggressively. Things were quiet and things were kind of normalized and the industry kind of caught up, but now we're back to maybe getting behind the power curve a little bit. And let's see how that pans out, but it may -- I don't know. It may take, I don't know, a couple of years for the industry to get back up to speed or maybe it will always be behind because things are ramping so aggressively. As soon as they catch up and they'll turn around, we ramp more. We'll have to see about that.

Slide 21. We're just trying to share the full perspective with you. Slide 21, let's stop here for a second. I know we're kind of running late here, but our historical fiscal year, results because it tells a story that's kind of interesting, I think, look at the sales -- this is aerospace only. We sold electronics, I think, in '19, but this is aerospace only, $31.8 million going year-over-year, $40.2 million, $51.1 million, $60 million. So from '17 to '20, we kind of were going up $10 million per year in aerospace, which is a lot.

Then look what happened in '21. We're just kind of fell off a cliff. There's a pandemic year. And '22, '23, '24, maybe '25, we try to crawl our way back to the '20, the pre-pandemic fiscal year and maybe just got there in fiscal '25. But it has been a -- it's been a difficult 5 years post pandemic for the industry, that's for sure. Now '26, it seems like we're breaking out a little bit with the sales of $73.3 million, but '26 is a little bit of a maybe departure, which is a good thing.

Important thing, supply chain limitations and industry malaise affecting aerospace industry post pandemic. Yes, yes, the industry to us was kind of sleep walking through those 5 years with a state of malaise. And it was a long 5 years, long 5 years for us, that's for sure. I think a lot of people were -- didn't really believe in us very much. We believe in ourselves, but we didn't -- not too many people. I think we're kind of forgotten company that we're kind of lost and we know what to do, and we never felt that way. We always stayed focused.

I think we worked very hard in our quarters. That's for sure. I know that. I don't think it. We had to listen to people telling us to sell the company at $12 or $13 per share. You like that? That's the kind of crap to listen to. It was a long 5 years. And we're in the industry, so there's not much we can do about it, but the aero industry was to us sleep walking now. We'll get to that in a little while, but I think that that's over. The industry has gotten a pretty serious wake-up call, maybe shock treatment.

We always want to remind you how many -- how much fabric sales were in these years because they do drive top line numbers and the bottom line as well. So I hope you don't mind that commentary, but we thought -- we're not complaining. We just thought you should know how we feel about things. If you want to invest in Park, you should know what we feel.

Slide 22. Okay. So let's talk about this. This is interesting stuff. Our buyback authorization, yes, we purchased 718,000 shares of our common stock, $12.94 per share, $9.2 million, $9.3 million. We didn't buy any stock in our Q4, Q1. I -- probably I'm not shock to hear that. So we used to comment that we really don't like buybacks so much. And we don't comment on our stock price and only as can do that, except this is one exception. We said when the price gets so stupid, we don't have a choice but to buy the stock. So we thought the price was God damn stupid and we bought a lot of stock at $12.94.

So let's go on to the next slide. We just [ got ]these 2 slides for intentionally. Our recently announced public offering, that's Slide 23, we announced this during the last quarter call. We filed the necessary Registration Statement and Prospectus Supplement for $15 million at-the-market public offering. It was the purpose to replenish a portion of the $50 million plus, we've got plus sign, that we plan to invest in our major new manufacturing plant. We'll get back to that later.

Other investments under serious consideration, we'll talk about that soon as well to ensure -- this is an important one -- that Park has the necessary funds to be in a position to take advantage of and exploit the key opportunities currently being presented to Park and the new key opportunities as they arise in the future. That's a little bit more of kind of an amorphous thing, but I think equally important.

Now let's go to the numbers. During our Q4 under this Registration Statement, we sold 943 approximately shares of common stock before -- for proceeds of $22.8 million at a price of $24.21 per share. So we bought -- let's see. We bought the stock at $12.94. We sold it at $24.21. I'll tell you some -- I don't know the NBA, I don't know how to read economics, but where we come from, that's a pretty good deal, I think. So I just wanted to mention those 2 numbers to you.

Let's go on to Slide 24. Here, still the same kind of theme, Park's balance sheet cash and very incredible cash dividend history in our opinion, of course. We have 0 long-term debt. That's in our opinion. Park reported about $89.4 million in cash and marketable securities at the end of the quarter. And you say, well, that's a lot for Park. And actually, it's not. I mean probably it isn't even enough. We'll get to that later in the presentation.

We talk about the expansion plan and then other potential investments that we're seriously negotiating is probably not enough money for Park. 41 consecutive years of dividends. Park has paid $613.7 million, $29.975 per share since 2005. So our next dividend, which we're announcing soon, that will put us over $30 per share since 2005.

We'd like to show the picture of our founders back in -- Park was founded in 1954 with about $30,000, a small, wasn't a factory, was a garage in Woodside Queens. This actually is a step up. It is about 3 years later. It's actually the real factory in Westbury, New York, which I think was about 10,000 feet, with our founders in a picture.

Slide 25. I'll try to hustle. I know we're taking too much time here. Financial outlook for GE Aerospace engine programs, the Commercial Aircraft Juggernaut. So for those of you who have been listening to our presentations every quarter, we say what? We say the juggernaut is coming, it can't be stopped and we better be ready. We're not saying that anymore. We're saying that juggernaut is here. Commercial Aircraft Juggernaut is now.

So let's going to go through this quickly, slide -- this is Slide 26. We show you this every quarter. I just want to remind you, the A320neo engine assumptions per year 1,080, that's based upon a 60% -- that based on 75 airplanes per year and 60% market share. But that market share, the actual market share, that gives us 1,192 engines, not 1,080. We're still sticking with 1,080 being conservative here. That's millions of dollars of additional revenue. I just want you to be aware of that.

And Slide 27 goes through a lot of the math as to how we computed the numbers on Slide 26. So we won't spend time on Slide 27.

Slide 28. Okay. So here we go. And now we need to spend some serious time on this whole new juggernaut extreme, we call it. Let's just go through some basics, Park's Missile Systems niche. Park specializes in the design and manufacture of advanced composite ablative materials used to produce solid rocket motor structures and heat shields for critical missile systems, including the PAC-3 Patriot Missile System. We talk about that a lot, and we keep -- we'll talk about it a lot during the presentation.

I just want to flag here before I forget that there are dozens of missile systems that we work on. It's just the Patriot is so much known variety, so well known, so we tend to focus on that more just as an example. And the other programs are probably we want to talk about is it's maybe not something for public consumption, but there are dozens of missile programs that we're on.

Park also designs and manufactures advanced composite structure materials used to produce other missile system components. Depletion of the depleted, okay. Here we go. It's well understood that critical missile system stockpiles were already badly plated by the ongoing brutal war in Europe in last June's 12-day war in the Middle East. And now we have the war with Iran.

The shell game, what's a shell game. That means moving the Patriot battle -- batteries from one country to another, one country to another to try to be ready for the incomings. The shell game has been tried. The law of diminishing returns is in play. There's only so many times the shells can be moved before there are no shells left. That's the problem. That's really the problem.

Slide 29. There is much reporting about how badly stockpiles of critical missile systems are growing the Patriot PAC-3, and Other systems report have been depleted as a result of the war with Iran. We're not going to report -- the reporting here is going to be responsible to do so. But you can check it out yourself. You can go find yourself. We just don't want to go into that. Running empty, yes, running empty.

Replenishing the depleted stockpiles. Well, that's obviously very urgent. There clearly is a highly urgent need to replenish the depleted missile system stockpiles. Is that enough? Does it end there? Maybe not.

Quadrupling the production of exquisite class of weapon systems. What? Quadrupling? You kidding me? I don't know, maybe not.

Let's go on to Slide -- is it 30? March 29, 2026, I guess, a couple of months ago, President Trump met with the White House with 6 top defense contractors, including Lockheed and L3Harris Missile Solutions. The reason we mentioned those 2 is they're both very key for us on the PAC-3 missile system. After many contractors report agreed to quadruple production of exquisite class of weapon systems as rapidly as possible, importantly -- Now -- reported by President Trump, I think, actually. This is a new world order for the defense industry, a radical and likely lasting change of defense industry.

The old days are likely gone for the defense industry. And that is a good thing in our opinion. So like I said, the industry generally had been sleep walking for 5 years, defense and commercial, but there's now this wake-up call. We have the NWO. We have the extreme depletion of the supply and then this quadrupling scenario, which is more than a wake-up call, more than lock -- more than clock, I would say, it's shock treatment.

What does the NWO mean for Park? So this is really important for you to understand. Our experience is that the defense industry has entered into hypersonic mode. That's our personal Park experience. Not just what we hear, that's our experience, our day-to-day experience. All years we have never seen anything like this, particularly for ablative materials, for solid rocket motors, that enclosed. I've been at Park since 1988. I've never seen anything like this in electronics or aerospace.

The coating activity, especially for ablative materials for solid rocket missile systems, has been hyper and frenetic, almost too much to bear really. It's something we've never seen before. And it's hard to really describe and help you understand what we're experiencing. We're just trying to do the best we can here. And just in case it's not obvious, the PAC-3 missile systems and many other missile systems which Park supports are very key members of that "exquisite class of weapon systems."

So let's keep going here. Missile Systems on Slide 31. We're not talking about specifically the PAC-3 Patriot Missile System. Park is sole source qualified for advanced composite ablative materials for solid rocket motors for the PAC-3 Missile System program. The PAC-3 Missile System is considered by many to be the world's premier missile defense system. So a lot of discussion about maybe it's not great for shooting down little drones, but for incoming ballistic missiles, yes, that's the system every wants to have, highly effective, highly effective.

We have covered the PAC-3 Missile System extensively in recent quarterly investor presentation. So we'll just hit the high points and new items here. Stockpiles of the PAC-3 Missile System interceptors were already badly depleted by the war in Europe and last June's 12-day Middle East war. So we don't want to go into repeating reporting here because it may not be appropriate and responsible to do so. But suffice to say the current war, the rand is very badly depleted -- already completed stockpile of PAC-3 receptors.

The PAC-3 Missile System interceptors have been extensively and very effectively, maybe too effectively, meaning so effective that everybody in the world wants them, used by U.S. allies in the region, the Middle East region during this war, including Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, Israel, defending against incomings during this Iran war.

Slide 32, just a little side note here. Israel, you probably know this also uses its own system called Arrow 3 and Arrow 4 missile defense and Park is qualified and supports both those programs. Back to the PAC-3, as previously reported, on January 26, Lockheed announced it reached a 7-year agreement with the Department of War to increase PAC-3 MSE interceptor production, 600 to 2,000. That's a lot. That's almost 4, isn't it, 4x.

What about us? What have we been told by our customer, we're not going to tell you, we're not at liberty to, but we can tell you it's more than 2,000 in January 13, 2026. I think we covered this last time as well.

The DoW announced investing $1 billion in the L3Harris solid rocket motor business to boost solid rocket motor production for PAC-3 and other missile systems. That transaction is already closed apparently.

Slide 33, continuing with Missile Systems. ArianeGroup, we got to talk about ArianeGroup. We talked about PAC-3, now we talk about ArianeGroup. So ArianeGroup is a joint venture. It's a large French company between Airbus and Safran. Our relationship with ArianeGroup and its predecessors goes back to early 2000s. We have a very special relationship with Ariane and we're proud to be their partner. And we don't take liberty to a partner. That's their term. We don't do that.

That's the term they use for us. I just want you to be aware of that. ArianeGroup produces a proprietary product called Raycarb, which is -- sorry, proprietary fabric Raycarb C2B, which is used to produce ablative composite materials for solid rocket missile programs.

So here's something highlighted. Park is sole source qualified on the solid rocket motor for the PAC-3 Missile Programfor specialty ablative materials produced with ArianeGroup's proprietary C2B fabric. So we're kind of double sole source qualified. We're sole sourced, but also ArianeGroup with the C2B fabric is sole sourced.

Park entered into a business partner agreement with Ariane in January of '22, under which they appointed us as their exclusive North American distributor for C2B fabric. On March -- this is something worth noting, March of '25, we entered into, what they call the new agreement with Ariane under which Park agreed to advance Ariane EUR 4,587,000 to Ariane, that's about EUR 5 million, I guess, against payments for future purchases by Park C2B fabric.

Why do we do that? Slide 34. Yes, we paid the first installment in Q1 of '26. We paid a second installment in Q1 of '27. And third installment we paid last, I think, in Q1 of '28. What's the purpose of this big advance is approximately EUR 5 million to fund 50-50 with Ariane, the construction of additional C2B fabric manufacturing capacity in France. Will this capacity -- that capacity will be online and maybe, I think, in '28. Will this additional capacity be adequate to support the ramp-up of the -- just the Patriot missile programs. So when we talk about the other programs in which C2B is getting qualified or is qualified, the answer is no, not even close, not even close.

So what do we do now? Park has engaged in serious discussions with ArianeGroup relating to an agreement to significantly increase C2B manufacturing -- fabric manufacturing capacity in the U.S. to support critical Department of missile programs, including the PAC-3 missile programs. Agreement under negotiation contemplates this important Park making a significant investment in this C2B fabric manufacturing plant. I mentioned our own expansion and there is another investment here. We'll get to our own expansion in a minute. In our opinion, it's urgent that this C2B fabric manufacturing plant is built.

So the interest in C2B is hyper and phonetic. So there are a lot of companies, a lot of customers, a lot of OEMs looking to sign up for C2B on their programs. The obvious challenge is the supply, probably take about 4 years for this plant to be built. When we got going here, we got the NWO. We have the war where systems have been badly depleted and quadrupling. So that's driving a very, very, very hyper need for the C2B fabric, which is, like I said, considered, my understanding, the premier product for missile systems, for solid rocket motors for missile systems.

Let's go on to Slide 35. This will tie together a little bit as well. Our new manufacturing plant -- sorry, we're going so long here. An update, we talked about this for the last couple of quarters, but we're regrouping with our new manufacturing plant. Why is that? We're planning -- okay, let's go through it. Park is planning to build a major new manufacturing plant. New plant will include the following manufacturing lines. This is going to review solution treating, hot melt film, hot melt tape, what else. What else? Because we're always looking to expand and develop our business. We don't want to limit ourselves to all what we're doing now.

New plant is being designed to produce and support our complete composite materials product line, including specialty ablative materials, solid rocket motors, film adhesive materials and lighting strike protection materials. What else? Well, again, we're looking always to develop into new areas, I mean, new related areas, not looking to go into making Park Mary go rounds or something like that.

What has changed from the original plant design discussed just in our Q3 investor call in January? So hot mill, let's break it down. Is hot mill film and tape manufacturing capacity contemplated by the original plant adequate? Yes, it probably is actually.

Let's go on to Slide 36. The hot mill film and tape lines primarily support Park's commercial aircraft programs, Commercial Aircraft Juggernaut. So we think we're okay with the Commercial Aircraft Juggernaut. How about those solution -- how about the solution treating capacity though contemplated by the original plant design? Is it adequate? No, it's not adequate.

But the current plant design contemplates the current -- I'm not talking about the original plant design for 3 and 4 months ago, the current plant design, the one we're working with now contemplates additional solution capacity, but it still may not be enough. And we're evaluating increasing solution treating capacity even further.

Why is that? The solution treating lines support, among other things, Park's missile system programs, yes, the missile systems juggernaut. So you see the connection here. The original plant design contemplated a plant design of 120,000 square feet. Will that be enough? Probably not, because again, we're looking at increasing the solution treating capacity to support the missile systems juggernaut.

So 120,000 square feet may not be enough. This is all coming at us pretty recently. So like I said, we're regrouping. It's only -- we didn't know that there will be another war in Iran. We didn't know that President Trump would bring these guys in and say, "We got a new world order here, new [ sheriff ] in town you increase your missile production by 4 times." We didn't know that was coming. So we're trying to regroup and make the adjustments that are good for Park for the future.

How much land we're looking for? This is important. We're looking for 20 acres. And why is that? Because the original plant, even with, let's say, expanded footprint, let's say, it's a little bit more than 120,000, that would fit within 10 acres very nicely. But we're looking for 20 acres because we want to have the ability to add another plant of approximately the same size at some point in the future. It's important for us that the plants are in the same campus, in a second plant across town, it doesn't work too well for us. So we want to have that ability to expand. That's why we're -- our spec is approximately 20 acres, that's not exactly, but that's the concept anyway.

Slide 37. Will the new plant still approximately double Park's current composite materials manufacturing capacity? No, it will more than double Park's current solution treating manufacturing capacity. Will the capital budget for the new plant still be approximately $50 million? I don't think so. It should be more than that. And I should say something.

This is the capital budget. What about working capital and startup costs, significant. We're not even talking about that. Going back to that cash number of $90 million approximately, plus the amount we're seriously negotiating, investing with the plant in the U.S. When you add those 2 things together, you say, yes, we don't -- I don't have enough money, likely be more.

Where will the new plant site be located? In the U.S. Heartland at a location which is supportive of, conducive to and inspirational for Park's future development and growth as a company. So we're not just looking at it from a mundane perspective, we just need these many machines to make this much product. It's about our future. We're going to go for our future. The next -- we build a plant, we'll be there for 30 years. You got to think 30 years out.

Slide 38 -- sorry, it's taking so long folks. We're building this new manufacturing plant. Why? Why are we doing it? Because our commercial aircraft juggernauts and missile systems juggernauts require it. That's just basic math. We need the capacity to support those juggernauts. Also, though, to enable -- this is more futuristic thing to enable, to facilitate and inspire Park's holistic growth and development as a company for the future. After all, we're only 72 years young.

So thank you, everybody, for hanging in there. Operator, we're done with the presentation. We'll be happy to answer any questions that investors may have at this point.

[Operator Instructions] And our first question comes from the line of Nick Ripostella with NR Management.

Can you hear me?

Yes, we can hear you fine, Nick.

Okay. I just wanted to -- I've been thinking about this one for a while. On the C2B fabric, is there any alternative that's used in any missile programs that you know of? [indiscernible]

Okay. Let's deal with that. That's a concrete question. There are stockpiles of 2 different types of fabric, which are available, but they're not in production anymore and no plan to put back production. So interesting since you brought it up. This is my perspective on it, but not only mine. Until a couple of months ago, I think some of the defense contractors were kind of counting on using those stockpiles, and we got a long stockpile last for many, many years.

But when you take everything multiply by 4, they start to panic like these stockpiles are not going to last very long at all. And that probably is one of the reasons that there's kind of a hyper interest in C2B. Now there are always going to be efforts to develop new products that maybe would be, let's say, equivalent to C2B or could serve the same purpose that C2B serves.

But what's existing in the market now, there are -- that are at the level of C2B, there are other ablative products that are at the level of C2B in terms of capability. There are 2 products that are kind of close, but there are stockpiles that are being depleted and limited. So it's important. It's an interesting question and the answer is maybe a little more complicated.

Okay. So do you consider that a risk? I mean, necessity is the mother of invention.

Yes. But new products will be developed. Yes, sure, it's a risk. But of course, we would like to be involved. And that's our attitude. We don't -- I don't want to say too much more about it, actually, Nick. But yes, we're not sitting back passively and saying, okay, I mean, we want to be the driver of new products as well.

And at the same time, supporting everything we're doing with Ariane, our partner. We would never undermine them or do anything to hurt them that -- we would not do that.

Okay. So by the way, so all the manufacturing that Ariane -- they have plants in France. So is that where tariffs would hit if there were any like -- on a product like that? Or are you shielded from that somewhat?

Would tariffs apply to the product that's been shipped?

Yes. In other words -- yes.

Yes. Well, I think the answer would be yes. I mean, I think it's pretty obvious. The answer is yes. Now the tariff situation is changing, of course, and dynamic, but tariffs did apply to products that are being imported from France.

Well, it's just -- I find it interesting that the Department of War wants to kind of quadruple -- the material is important. And it would seem like they're shooting themselves in the foot by tariffing and something that...

Yes. That's -- Sorry, that's an interesting point. It's been brought up by us, I mean, to the Department of War.

Okay. So is it fair to say that the missile programs throughout the world that are using -- mostly using C2B? Or is that an incorrect statement?

Missile programs. Other programs?

Yes.

So as for other missile programs, there's many different kind of missiles and many different kind of ablative materials. C2B is considered to be my opinion, but not only my opinion, the premier material, ablative material fabric for stop rocket motors.

Okay. All right. Fair enough. Okay. I'm sorry, you can stop me if I'm going too much. But I've asked this before, and you already have a lot on your plate. But is there any content or work developing on anything with SpaceX or Blue Origin or others?

So we Mark, do you want to chime in that. I think we do a little bit of work with Blue Origin. My opinion is we'd love to do work with SpaceX. They're not solid rocket motor people. Solid rocket motors are for defense. They're one shot. You can't reuse solid rocket motor. So when you think about SpaceX, they're big into reusing their rocket systems. They have a whole different kind of psychology about it. My opinion, and we talk about, I love to build, work with SpaceX. I'm not sure we're doing very much. Mark, Blue Origin, I think we're doing a little bit Blue Origin, are we?

Yes, we're doing a little bit. I think most of that works in our parts business, Brian, our structure -- but we supply some material. But lately, it's been -- we've been building some parts for that.

Okay. Fair enough. One other thing. So are we expecting to do additional at-the-market stock sales, maybe you need to raise more capital?

Yes. So it was a $50 million ATM. I think we explained how much we raised so far. And it was only in our Q4 as we explained. We didn't -- we haven't raised any since the end of Q4. So the balance is still available and we'll see. I think we try to be very intelligent and very disciplined about the ATM. We said no a lot. In other words, on pricing. So no, it's not going to work for us. We're trying to protect our existing shareholders.

And I think we did quite an outstanding job with that, if you don't mind my saying so, Nick. We're quite disciplined and we get offers. No, no, that's not going to work for us. So we want to be careful about how we do it. And I think we're quite disciplined, like I said. And I think it worked out fine. I was very happy with the results. And yes, we'd like to raise more money, and we'll have to see what happens.

We'll update you every quarter, though. So go ahead. What were you about to say, Nick?

You know how I feel, you've done, yes, an excellent job of caring for shareholders. There's no question about that. And just one little other thing here. You've been in this business for a long time, as you said. So the new facilities you're building, are they much different? I know you highlighted some things in the call. But in terms of the technology -- because I don't know, at some point in the last couple of years, you've talked about automation and things like that.

I'm just curious because there is a lot going on in terms of extensive robotics and things like that. But maybe you're just not the type of process that could avail yourself of those things. But I'm just curious about your role?

Yes. So we want to use those things as tools intelligently. We don't want to go into automation because it's "cool", so we could show people in the factory, look how automated it is. Automation is complicated. And it's not -- it's probably multiple edge to that sort. We talked to this internally, but it's an important point. Often automation is really good if you want to do the same exact thing every time because machine you're going to not make the mistakes people make.

But if your kind of culture is about flexibility, responsiveness urgency, change things quickly, that's not really what automation is best at. That's what people are best at. So that's why I say, yes, we want to use automation, but we want to be intelligent about it. We want to think it through where would we like to use automation and where it can be helpful to us.

I hear you. I guess I'm just -- on one of those nodes where I watch too many videos of aircraft engines being built and autos, I find them fascinating. So I just thought things that are -- people don't realize how complex it is, particularly on aircraft engines. But, anyway. And I just have to say there's an old Bruce Springsteen tone, From Small Things Mama, big things one day come, and that is Park.

Thank you very much. I've looked that one up, I'm not familiar with that one, but I'll go check it out.

[Operator Instructions] That looks like there are no further questions at this time. So I'd like to turn the floor back to Brian Shore for closing remarks.

Thank you, operator, and thank all of you for listening and being patient with us. I know we went on really long. I appreciate you taking the time to listen. And so it's, I guess, the beginning of the summer, have a wonderful summer. We'll talk to you again pretty soon, I guess, kind of mid-July when we announce our Q1. And of course, if you have any questions, any follow-up questions, feel free to give us a call any time. Thanks. Have a great day. Take care. Bye.

Thank you. And with that, ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time. And have a wonderful rest of your day.

Good morning. My name is Shamali, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp. Third Quarter Fiscal Year 2026 Earnings Release Conference Call and Investor Presentation. [Operator Instructions] 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 your conference.

Thank you, operator. Welcome, everybody. Happy New Year. This is Brian and welcome to the Park Aerospace Corp. Fiscal Year 2026 Third Quarter Investor Conference Call. I have with me, as usual, Mark Esquivel, our President and CEO; Correction, COO. I gave you a promotion there, Mark, sorry. And just so a little housekeeping stuff. We announced -- released our third quarter earnings release or published our third quarter earnings release right after the close. You want to get a hold of that because in the release, there is a link information to access the presentation we're about to go through. Presentation is also posted on our website. So we have a lot to cover want to get started. We have our dilemma. We have a lot of new investors, a lot of veteran investors.

So how much do we cover the background stuff is always a little bit of an issue. We'll do the best we can. Also, I just want to mention that we did file an S-3 registration statement with the SEC after the close as well. So we're going to get started with the presentation. We have a lot to cover. Obviously, at the end of our presentation, we'll be happy to take any questions you might have. So let's plow ahead. Slide 2, forward-looking disclaimer. If you have any questions about this language, please let us know. Let's go on to Slide 3, table of contents. Fiscal year '26 Q3 investor presentation. We're about to go through that. And then the supplementary financial information in Appendix 1. We're not going to review that or cover it, but if you have any questions about it, please let us know.

As has become our practice in recent quarters, we're featuring the James Webb Space Telescope. Runaway super massive black hole, 10 million times the massive sun that sounds pretty big to me, being boosted from its Galaxy at 100 -- sorry, 1,000 kilometers per second, which is about 2 million miles an hour. Thank you, James Webb Space Telescope. The James Webb was produced with 18 PR proprietary Sigma struts. James Webb is now orbiting, I think it's called the Greams orbit about 1 million miles from Earth. Okay. Let's go on to Slide 4. our quarterly results. Let's just focus on Q3, where we just announced sales, $17.333 million; gross profit, $5,903,000; gross margin, 34.1%. Adjusted EBITDA, $4,228,000; adjusted EBITDA margin, 24.4%. We're not going to go over the history, but we provide that to you for perspective the prior quarters.

I mean, what do we say about Q3, about our Q3, the quarter we just announced during our October 9, 2025, Q2 investor call. Sales estimate was $16.5 million to $17.5 million, so we came in within that range. Adjusted EBITDA estimate was $3.7 million to $4.1 million. So we came in a little bit above that range. Just want to remind you that when we provide you with these estimates. We don't do what's called guidance that I guess everybody else does, almost everybody else does. When we tell you, we give you an estimate, we are telling you what Mark and I are telling you what we think will happen. We don't provide any fudge room so we can -- we reduced our -- what we think by 10%, so we can come in and beat the number and be heroes. We don't get involved in that kind of stuff. So I just want to always remind you when we talk about our estimates, what they mean, what they don't mean.

Okay. Let's go on to Slide 5. Good quarterly results continuing this, the Q3 considerations. All right. We always have to talk about the ArianeGroup and business partner agreement because it has an impact upon our quarters. I guess a little tedious, but I think we need to explain it. We entered into a business partner agreement with Ariane Group. They're a wonderful French company. We've known them for about 20 years. They're, I think, a JV between Safran and Airbus, a large company. That was in January of 2022, under which Ariane appointed Park as its exclusive North American distributor for their Raycarb C2®B fabric used to produce ablative composite materials for advanced missile programs. So this is -- a lot of people consider to be the Cadillac of this category of fabric that's used for [indiscernible] sometimes for missile programs.

So this is why we have to talk about it because let's just go into. We had 0 sales of the fabric [indiscernible] OEMs buy the fabric or stockpile the fabric as they're trying to protect their very critical missile programs, but they have to buy from us since we're the exclusive distributor in North America. The OEMs -- we buy the fabric from Ariane and our partner. And then we resell it or sell it rather to the OEMs for a small markup, right? And we don't even deliver it to the OEMs. We store the product, the fabric in our factory as a favor to them, I guess. Because ultimately, they don't need it. They're going to give us the releases at some point to go ahead and take that fabric and produce the pre material with it. So small markup, I probably shouldn't put this spin in here because it's not going to explain it. Even small as a presented considering tariffs.

This is because we pass through all the tariffs and they are significant, but you pass through Tesla on a dollar-for-dollar basis, they go through our sales line, but we don't provide a markup on the tariffs that would be kind of ridiculous. So that actually makes the markup even -- percentage even lower, if you follow I'm saying. We sold -- so we had 0 sales of fabric in Q3, and we had a little bit more than $1 million of sales of the materials manufactured with C2B product in Q3. So the -- when we produce the prepreg, that actually results in very good margins. So when we have significant sales of material, not too significant fabric, that's actually a plus for our bottom line. But the opposite often happens, and we'll talk about that when we talk about our Q4 forecast.

We have a lot of sales of fabric, not as much in materials that will drive down our margins. It's all good. It's all wonderful. because ultimately, everything that we -- all the fabric that we sell to the OEMs and they stockpile, we will end up producing. That's the reason we keep it in our factory. But the timing kind of to source our quarter sometimes, that's what we have to talk about, unfortunately. Let's go on to Slide 6. Total missed shipments in Q3, approximately 740,000. That number is up quite a bit. It was caused principally by international freight supply chain and customer spec and engineering issues. So what was going on here? Industry challenges are reemerging as industry recovers and program ramps accelerate. This is actually a good thing, good news. After the pandemic or when the pandemic started, it was a mess because the supply chain was so screwed up. And after a couple of years, we kind of got back to something that would be more acceptable, which is okay.

But now that the industry is recovering and the programs are ramping quickly. Now the supply chain, the industry is actually getting a little bit behind the power curve again. That's what's going on there. So actually, it's good news. The impact of tariffs and tariff-related costs and charges, maybe Mark can help us with this. Go ahead, Mark.

Yes. This is a very eventful update again, but -- which is, I think, a good thing. We have minimal impact on tariffs in our Q3 just as we've had previously. I think we talked about it, we price our materials on a short-term basis, most of our business. So we're able to pass them on if we do get them. The second bullet, possible future of impacts. Again, this has been quiet again for us the last few months or it seems to stabilize as far as what's coming our way. That doesn't mean there could be changes to that. But as far as the near term, I probably think the bullet would be pretty similar to the first one going forward in the next few quarters. But you just never know, but there's minimal impact for part at this point.

Okay. Thanks, Mark. Let's go on to Slide 7. We keep moving here. This is a slide that our veteran investors are familiar with every quarter, we share with you our top 5 customers, and we do a little picture of that's associated with each of these companies, the top 5 companies alphabetically. The 737 MAX, we've said in the past, we don't have much content on that. That's actually Nordam. That's a weather master radome that Nordam produces for the 737 product line. So we also want to talk about here. I guess maybe the Valkyrie. Yes. So we've talked about the Valkyrie quite a bit over the last few years. This is the Kratos program that we're on. But the recent news is the Marine Corps just selected a Valkyrie for its collaborative combat aircraft program, loyal [indiscernible] sometimes it's called. So that's very good news for Kratos and also for Park.

The PAC-3 that is an AAA item and the Airbus220, that's obviously Middle River, Sikorsky, Sikorsky and Nord, we already talked about which program is associated with Nordam. Let's go on to Slide 8, our pie charts here. So the comment is always that if you look at fiscal '21, which is really the pandemic year, the pie chart is quite different. The other year is kind of very similar year-over-year. People ask if the military piece of the pie chart will grow, and it might, but commercial is growing, too, we're not sure. My expectation would be that business aircraft as a percentage would maybe shrink over time. So let's go to Slide 9, Park [indiscernible niche military aerospace programs. This is a slide that we include every quarter as well. And these are not necessarily the biggest military programs we're on.

These are just things I want to share with you. As we mentioned in the last couple of quarters, we feel less comfortable giving many specifics about these programs, but these are all programs that Park is associated with. Let's see. The only thing that I would mention in terms of recent news is the Standard Missile SM-6 program. The Navy just awarded Raytheon contract to boost the SM-6 production. This is all public, so you can look at it yourself. I don't think we need to comment on any other programs here. Let's go on to -- sorry, Slide 10, Slide 10. This is another slide that we've included for probably, I don't know, a dozen presentations. So a lot of you are very familiar with it, no real change to it. GE Aerospace jet engine programs, major program opportunity for Park. Firm pricing LTA from '19 to '29 with Middle River Aerostructure Systems, MRAS, which is currently a sub of ST Engineering Aerospace, a Singapore aerospace company. But when we got all these programs, they were a sub of GE Aviation now GE Aerospace.

That's why these programs are all related to GE engines or CFM engines. We built a redundant factory for them in exchange for agreeing to give us the LTA through '29. What programs are we talking about? The first -- if you look at the bottom left side of the page, the first 5 are all A320neo aircraft family programs. They're all the same engine, LEAP-1A engine. which is a CFM engine. The 747-8, that airplane is no longer being produced, but there's still spares that were involved with COMAC 919. COMAC is a Chinese aircraft company with LEAP-1C engines. The 919 is COMAC's offering to compete a single aisle to compete with the 737 and the A320. On the right-hand side of the page, 909, that's also a COMAC aircraft, and that's a regional jet. And that also is a GE engine, of course, the Bombardier Global 7500 Passport 20 engine.

The picture here is the 747-8, as you can see, engine nacelles. We like this picture because it just gives you a perspective on the size of these nacelles and everything you see there is made with Park material. And a lot of what you don't see inside is also made with Park material as well on that 747 program. Let's go on to Slide 11. So more on GE Aerospace. We're continuing. Let's skip the first item, second item, the case containment wrap. This is for the 777X, GE9X engines for 777X. That's produced with our AFP material and other composite materials. And let's go into the third item, Amyris Park LTA, which you already mentioned, was amended to include 3 proprietary Park film adhesive formulation product forms. And the last item, Life of program agreement which was requested by MRAS and STE.

Remember, ST is the owner of MRAS now. And we've said agreement is under negotiation for a few quarters now. But this time, it's on us because the MRAS team wanted to get together with us in December, and we said, look, we're really going to focus on this expansion. And this expansion is for their benefit. So we say, can we delay the next meeting on the life of program a couple of months and they said, fine. So that one is on us. We can't blame anybody except us the fact that this is still an open item. As we said previously, we would love to have the life of program, but we're okay either way. Let's go on to Slide 12, continuing with the update on -- this is an update on GE Aerospace engine programs. So let's start with the A320neo aircraft family. That's the big dog of all the GE Aerospace programs that we're on. As of November 25, Airbus has already delivered 4,275 A320neo aircraft and Airbus has a huge backlog of these aircraft, 7,900 as of, I guess, September.

That's a total of over -- when you look at how much having to be delivered and what's in the backlog, a total of over 12,000 airplanes. That's huge. We look at the delivery history here at the bottom the bottom half of the slide. We won't go through the numbers. But you could kind of see what happened is that they were ramping up as the program was growing and then hit the pandemic and you kind of hit a brick wall and the ramp-up was slowed down a little bit. I think they're ramping up much more aggressively now. In December of '25, they delivered 97 airplanes, which is a lot, but they plan to deliver more. You're probably right about this, but the A320neo has issues with fuselage panels and also software that was caused by solar activities, which reduced the deliveries. Those issues have been resolved, but nevertheless, they probably held back the deliveries in '25.

Let's go on to Slide 13. This is the key thing. Airbus is targeting a delivery rate of 75. Remember, we're at 50, 51, 75 per month in 2027. So that's obviously doing the math, a 50% increase over we are now, which is a lot, considering it's a very large program, it's 50% of a lot. On October 7, '25, the A320 aircraft family became the world's most delivered commercial jet. That was surpassing the 737 and A320 aircraft family continues to rack up in orders. The game-changing A321XLR, we've spoken about this a lot in the last few quarters. Maybe I won't go through each item, but if you have questions about it, please let us know. This is a pretty exciting game-changing aircraft for Airbus. So this is part of the A320neo family. I just want you to understand that. What the approved engines for the A320neo aircraft family are 2 of them.

One is the CFM LEAP-1A engine. That's a program we're on. The other one is a Pratt & Whitney GTF engine, PW1100G engine. We're not involved in the Pratt program, only the program on Slide 14, we supply into the -- we just talked about the first item, the first bullet item, okay? Second bullet item. So basically, if you look at the market share of firm engine orders between the LEAP 1A and the Pratt engine. And this is for the A320 program, of course, the LEAP -- CFM LEAP engine has a 64.5% market share, much more than half. So -- and it has been that way for a while. The LEAP market share is much more than the Pratt market share, which is good for Park because we're on the LEAP program and not the Pratt program. At that delivery rate of 75 airplanes per month, that 64.5% market share translates into a lot of engines per 1,161.

Just to help you understand, this -- this 64.5% is based upon all orders, all backlog for both engines. We're talking about thousands and thousands and thousands of airplanes. So it's not a number that's easily distorted by kind of a small perspective, a short time frame perspective. Let's keep going. The Pratt engine, unfortunately, continues to struggle with serious reliability issues. I just read an article this morning that these reliability issues are expected to continue. Now for the LEAP engine, reliability has been a selling point. Reliability is a very, very key thing for an airline -- reliability relates to how much downtime an airplane has related to maintenance. So if these airplanes are down for maintenance or inspections for these engines, that's a real bad problem because when the airplanes are on the ground, they're not making money. And airlines, their margins aren't that great.

They cannot afford to have excess downtime. And that's why the reliability issue is a real serious problem. I don't know what's going to happen, but one might even speculate that because reliability continues to be a problem with Pratt and the CFM LEAP is doing well with reliability, that could drive the market share potentially even more to the LEAP side of the ledger. CFM has significantly ramped up production deliveries of LEAP engines, including LEAP-1A. That's really significant because we talked about supply chain restrictions holding back the market, holding back deliveries. There are a lot of different things, but what was often was mentioned most often were engines. So the fact that CFM is leaping up -- sorry, ramping up the LEAP engine is a good thing because that will help Airbus ramp up the A320neo program, which, of course, is what we want.

Slide 15. What are we doing here? As of September 30, '25, there were 7,900 firm LEAP-1A I'm talking about, these are a lot of engine orders, firm LEAP-1A engine orders. So we recently told that our customer was given an indication as to how many engine -- how many cells basically, that's what they produce the cells, they need to plan to produce for this program. And we can't disclose that number, but it is significantly more than 7,900, significantly more. The A320neo aircraft family program could end up being our largest program. We'll see. But over the long -- over the course of the program, it could be -- I don't know everybody has different opinion about this, but I'll give you my opinion, which is probably not worth much, but my opinion is that Airbus will be making these airplanes with these engines in 2040. We'll see if I'm wrong or right.

COMAC 919 is a Chinese aircraft, single aisle, we talked about that. It also has a LEAP engine, LEAP-1C. And this is the single aisle to compete against the 737 and the A320 COMAC is expected to fall short of its 2025 delivery target. Not surprising, Chinese companies. So sometimes they have historically had some trouble kind of getting their programs up and going. Target shortfall, they say it's caused by supply chain, whatever international production issues, international trade production issues. So I don't know, let's just go on to the next slide. I don't think we need to be -- let's go to the next slide. We're still on the 919. COMAC is increasing manufacturing capacity to achieve production rates of 115 in '27, 2029. Now if you look at that [indiscernible] slide further down the presentation, we're assuming a top set of 150, but COMAC is building capacity for 200 per year.

COMAC reportedly has over 1,200 orders for the 919. Now let's look at the 909. This is a regional jet and again, produced by COMAC with a GE engine, a different type of GE engine, of course. So according to the state run Global Times, 175 909s have been delivered. The 909 operating routes have expanded to 12 Asian countries, which is good because originally, these airplanes are thought to be China-only airplanes. That's obviously not happening. I mean COMAC doesn't want to happen anyway. 909 aircraft now carried over 30 million passengers. That's a lot of passengers in these small airplanes. approximately -- there were approximately 385 open orders. So here's a good thing to talk about because this aircraft has been at rate for a couple of years. So it took -- going back a while to get to rate, but they're at rate. They got there. That's the key thing.

So with the 919, maybe it will take a little bit longer for to get to rate, but my opinion anyway is they'll get to rate, and that will be very good for Park. These are starting from 0. So let's go to Slide 17. The Bombardier Global 8000 variant, the 7500 variant, it was just certified and first delivery last month, the fastest civilian aircraft since the Concord, 8,000 local mile range. The 777X with GE9X engines. The 777X TX program has amassed a lot of hours, a lot of flights. Boeing reportly has over 600 orders for the aircraft. The certification test program is moving into Phase 3 of the TIA, which is important. I mean [indiscernible] know what that means. I'm not expert anyway, but it's an important step along the way to getting the aircraft certified with the FAA. Slide 18, still on the 777X. Boeing now anticipates FAA certification entry into service and first delivery of 777X in '27.

This airplane is late, too. So we can't just say, well, the Chinese are sometimes late with their aircraft. The Boeing CEO has indicated that 777X aircraft and the engines are performing quite well, mentioned increased FAA scrutiny as a key factor in the certification delay. I think what's really getting at, I think what's nice about it is that the FAA is being a little stricter because of the issues with the MAX, the 737 MAX. Why don't we go on to Slide 19 -- here are some numbers, GE Aerospace programs. This is why we emphasize a lot because it's a big deal for Park, the GE Aerospace jet engine programs. We won't go into the sales history. You can see it here for your benefit. Q3 sales were $7.5 million. Our forecast for Q4, $7.75 to $8.25 million and for the year, $29 million to $29.5 million, just kind of adding down. And you could see that there's a recovery going on here in fiscal '20, almost $29 million that it's kind of fell off a cliff during the pandemic.

There's been a real struggle to get back to that level, and it's only now that we're at that level this fiscal year. And my feeling and sense is that this number is going to -- will move up quite aggressively over the next 2 or 3 years. Let's go on to Slide 20. Okay. This is now going to talking about Park, not just GE, this is all Park. Park's financial performance history and forecast estimates. So in the top part of the page, in yellow, fiscal year '26, Q3, we already gave you those numbers. And then we have estimates, forecast estimates we said these are not -- this is not guidance. This is what Mark and I think is going to happen for the rest of our building, sometimes are wrong, sometimes it's higher, sometimes it's lower, but we're telling you what we think is going to happen. Q4, $23.5 million to $24.5 million EBITDA of 4.75% of 5.25%.

Now a lot of smart people are thinking, what's going on here? Q3 sales were $17.3 million. Q4 sales, a lot more Q3 EBITDA of $4.2 million. So why isn't the forecast for Q4 EBITDA a lot more. We have a lot more sales. Well, you got to look at the footnote, 2 asterisks, forecasted to include approximately $7.2 million of C2B fabric sales. So that's a small market, very, very light margins. And that's what's going on there. That's what you need to understand. That's why with those kind of sales, we're not seeing much higher EBITDA numbers. And then while we're at it, let's look at the total forecast total for '26 is just adding down. take into account the Q4 forecast, $72.5 million to $73.5 million. And here's our EBITDA number. And again, you look at the footnote, the asterisks forecast to include approximately $9.8 million of C2 fabric sales, mostly in Q4 looks like, all right? Let's go on to Slide 21. So this is just some history with on the right-hand column, the '26 forecast estimate included, the estimate we just went over with you, so we won't go over that again.

I think what's interesting is to look at the top line of sales starting in '17, '18, '19, '20 went up $10 million approximately per year from '17 to '20, and then it fell off a cliff. There you have the pandemic and the supply chain issues and the industry chaos that resulted for a long time. And even last year in '25, we still had barely gotten back to that fiscal '20 number. Now we start to see in fiscal '26, we start to see some acceleration, getting out of that rut that the industry has been in for a long time, like 5 years. It's been a long 5 years, I would say. So it is what it is, but it's been a long 5 years. Let's look at the notes down here, supply chain limitations affecting the aerospace industry.

That's what we just discussed when we looked at the sales numbers, ramping up of cost for [indiscernible]. And again, reminding you that fiscal '25 sales include $7.5 million of C2B fabric and the '26 sales include $9.8 million of C2B fabric. Very important to understand those things, okay? And until now, I should just go back and say the OEMs have been stocked by lots and lots of C2B fabric much more than the -- what we're producing in terms of how that would translate into producing meaning producing prepreg with the C2B fabric. So let's go on to Slide 22, changing gears a little bit, our buyback authorization and activity, an update. Okay. So we announced in May '22, our Board authorized to purchase 1.5 million shares of our common stock. Under this authorization, Park has purchased total 718,000 shares of its common stock at an average price of $12.94.

So you have to say we're geniuses I mean considering the stock price is now. I mean, I don't know what you think, but we probably should be invited on CNBC or maybe to talk and be I guess, lecture at Ward and School of Economics. Let's keep going. We don't have to talk about -- well, except that we didn't buy any stock in Q2 or Q3, we haven't bought any stock so far in Q4. Let's go on to Slide 23, trying to rush here a little bit, sorry. Our balance sheet, cash and very incredible cash dividend history. We have 0 long-term debt, $63.6 million of cash at the end of Q3, 41 consecutive years of uninterrupted regular quarterly cash dividends. And we've now paid $608.6 million or $29.725 per share in cash dividends since the beginning of 2005. We're kind of speaking up on that $30 per share number. Park's founders always kind of like to include this photo with the cash dividend history because this is really at the beginning of Park when we really had almost nothing.

We started with basically nothing. Let's go on to Slide 24. A lot of money, a lot of dividends, I would say, for a company to start with basically nothing. Slide 24, financial outlook for GE Aerospace jet engine programs has been juggernaut. We have used that term for a while now. Timing, we're not sure that jug is coming as now with the capital NOW can't be stopped, better be ready. Let's go on to Slide 25. I'm rushing a little bit, but I just want to stop and say for a second. For some of you new shareholders, if you want a more detailed explanation of some of these things, please just call us. We're happy to go over these items in more detail. We're kind of rushing through them. We just want to get to some of the newer items toward the end of the presentation. Slide 25. So the -- we're talking about engines per year assumptions, and there is a footnote explaining how we came up with those assumptions.

Revenue per engine, that sorry, information is provided to us by our customer. the annual revenue per program, just multiplying across. And we end up with a total of $61.8 million at the outlook year. So a couple of notes here. Our revenue per engine unit estimates are updated. We've been given updated information from our customer. And here's something we haven't really touched on why the engine units per year assumptions may be conservative. Let's just try to explain this quickly. So A320neo, let's look at that one. We have 1,080 engines we're talking about per year. That's based upon 75 airplanes per month, 2 engines per airplane, a 60% market share for LEAP, just do the math, that's 180, all right? So that's based on how many LEAP -- how many A320 airplanes will be built with LEAP engines.

Do you think that every engine in cell structure that's produced will end up on those engines? That would be a really ideal situation, but something called scrap and fall out and things get rejected sometimes. We're not taking that into account at all. We're not taking spares into account either. So that's why this assumption about engine units per year might be a little conservative. I just want to touch on that, okay? Slide 26, we don't have to go over this. These are all footnotes related to the -- how we computed the numbers and did the math on Slide 25. Let's keep going. Okay. Now we're to changing gears completely, Warren Peace Park's new juggernaut. Actually, that term, the new juggernaut came from one of our investors, we liked it, so we decided to stick with it. Some of this is in review from last quarter, some of it's a little new. Unprecedented demand for missile systems.

Missile system stockpiles have been seriously depleted by the wars in Europe and Mid East. There's an urgent need to replenish those depleted missile system stockpiles. According to Wall Street Journal reporting, the Pentagon is pushing defense OEMs to double or even quadruple missile system production on a breakneck schedule. That's a direct quote, obviously. The list of Pentagon targeted missile systems include the Patriot missile system, the LRASM and the SM-6 Patriot probably being a particular priority. The Park actively participates in all of those missile systems. Review of an update on the Patriot missile defense system. That's the big one for us. Also, we focus on a piece that's public. We don't -- we're not providing any confidential inside information. Everything we're providing you is based upon public information. There's just lots and lots of public information about the Patriot missile system. President Trump talks about it sometimes.

The large deployment of PAC-3 Patriot missile defense systems -- largest, sorry, in history occurred in response to Iran missile strikes on our [Udeid] base in Qatar. That was, I guess, a few months ago after we bomb Iran bonded our nuclear sites on Slide 38. So what happened here is we moved the Patriot missile systems to Qatar in anticipation of this attack from South Korea and Japan, but I don't know if South Korea and Japan is so happy about that. The Department of War wants to very significantly increase patriot missile stockpiles in Asia. So we just took a lot of them out of Asia. So obviously, we had a problem on our hands in terms of Patriot missile systems availability. Israel's and Ukraine supplies of Patriot missile systems have been seriously competed. As a result of those wars. Recent news from U.S. defense OEMs, including RTX Boeing and Lockheed L3 indicating significant ramp-up of Patriot missile system production.

It's apparent that U.S. plants do much more than just replenish the depleted stockpiles. On September 3, '25, Lockheeds Missile and Fire Control division received its biggest contract in history, $9.8 billion with a B award from the U.S. Army. That's the branch that use the Patriot systems for about 2,000 -- just a little less than 2,000 Patriot missiles. It's a lot. Slide 29. Here's some big stuff, Slide 29, a little new. On January 6, 2006, was that about a week? Yes, about a week ago. Lockheed announced it reached a 7-year agreement. This is all being driven by the Department of War. With the U.S. Department of War to increase its Patriot PAC-3 missile segment enhancement, MSC Interceptor.

These are basically Patriot missiles, production to a capacity from 600 to 2,000, 600 to 2,000. You can see that number. The last 2 years, this is even more interesting in a way. Lockheed recorded increased production of Patriot PAC-3 interceptors by 60%. So do the math, if it was increased by 60% to get to 600, that means it was 375, 2 years ago. So we're going from -- I'm just doing the math, 375 to 2,000. You get those numbers. It's kind of unheard of. unheard of. The new 7-year agreement framework is designed to encourage Lockheed and its suppliers to make the capital investments necessary.

This is a theme again for Department of War. They want the Defense Department to making capital investments rather than paying dividends and buybacks and stuff like that, necessary to boost production capacity to levels needed to support to dramatically increase PAC-3 missile program requirements. Do we need encouragement? No. We don't need any encouragement. We're already building our factory. We'll get to that in a minute, are planning to build a factory to support this program. Lockheed support [indiscernible] -- supply, sorry, missile systems to the U.S. and 60 other countries. So a lot of countries that want this system and aren't getting it right now. Breaking news, this is this morning. U.S. Department of War is investing $1 billion in L3Harris solid rocket business, that's Aerojet to boost critical solid rocket production for Patriot and other missile systems.

This is a separate -- a new separate publicly traded company will be created in connection with this investment. This is a big deal, and it's a big deal for Park as well. But you see what's going on here, this is the Department of War driving all this stuff. This new world order, as we say, later on in the presentation. Let's go to Slide 30. The story continues. So what do we have to do with the Patriot Missile system. Park supports the factory Patriot missile system with specialty ablative materials produced with Ariane Group. There is an Ariane Group name again, their proprietary C2B fabric. This one probably should be em bold, but we're trying to be modest about it. Park is sole source qualified for specialty ablative materials on the PAC-3 missile system program.

You just think about that and think about all we just talked about, what we discussed regarding this program. Park has recently asked to increase our expected output of specialty ablative materials for the program by significant orders of magnitude. So how are we going to do that? We'll fully support this request with the additional manufacturing capacity provided by Park's major facilities expansion discussed below. We didn't need any incentive or encouragement. We're already there. Okay. Let's keep going. Now I'm going to go back and talk about Ariane Group a little bit more, not from the perspective of how it affects our quarters from a kind of bigger picture perspective. We have agreements with Ariane Group a really wonderful French aerospace company, JV between Airbus and Safran relating to their proprietary C2B fabric used by Park to produce ablative composite materials for the Patriot missile system and other missile systems.

Then we entered into a business partner agreement, that's what they call it, because they refer to us as their partner, very nice with Ariane in January '22, under which Ariane appointed Park as its exclusive North American distributor of their C2B fabric. Slide 31. On March 27, 25, we entered into what they call a new agreement with Ariane under which Park agreed to advance EUR 4,587,000 to Ariane against future purchases by Park of C2B fabric. That was a 50-50 deal. Park -- this advances to be used by Ariane to increase its C2B manufacturing capacity in Europe. So they kicked in the same amount. We went 50-50 on this investment to increase the capacity in Europe, and we already paid our first installment of that amount, sorry. Ariane Group and Park are partnering on a study to investigate the economic and other considerations relating to potential establishment of a major C2B fabric manufacturing facility in the U.S.

Park committed to contribute again, it's a 50-50 deal, EUR 350,000 to the study. We expect that amount to be expensed in our Q4. Originally, we said Q3 is probably in Q4. But that's another 50-50 deal. This is something we're partnering on this study. The bottom, Park is engaged in ongoing discussions with Ariane Group relating to potentially significantly increasing C2B fabric manufacturing capacity in the U.S. to support critical Department of War Missile programs, including the Patriot Missile System program. It's very important that we highlight this because there's a significant need for much more C2B fabric capacity.

So it's very important that this additional capacity to be installed to support these programs as they ramp up aggressively. Let's go on Slide 32. So we've referenced the Patriot missile [indiscernible] already explained this a little bit because it's a very high profile, well known, numerous other -- but there are -- sorry, there are numerous other critical missile programs currently in production or in development, which Park is actively supporting. Unfortunately, many of these programs are too confidential or sensitive for us to identify at this time. But please understand that certain of these programs represent very significant revenue opportunities for Park over long periods of time.

So last thing on World Peace. How about the U.S. defense industry's Newell World order? We already talked about this a little bit. President Trump wants to increase the U.S. defense budget to $1.5 trillion with a T in order to build our dream military. So this is a two edged sword for the [indiscernible] industry. It's being -- what is it, somebody give it and take it away. Here's the take it away. But according to President Trump, the defense industry needs to get us back together. So buybacks, dividends, no, why don't you invest in defense programs, CEO, even CEO pay limits. So there's been a real issue with the aerospace industry generally, programs getting being not on time and not on budget. And I think that the Department of [war] doesn't really like that very much.

They're asking the defense industry to kind of get its act together. What do we think about the new world order? We think it's great. Park thinks it's great. We think it's wonderful. Slide 33. Okay. Let's talk about our new plant. Sorry, it's going on so long. I'm rushing as you probably can hear through this as quickly as I can. Park's major new composite materials manufacturing plant. So now we're going to give you a little bit more information about this new plant. We're planning to build a major new composite material manufacturing plant. The new plant is being designed to be fully functioning and integrated -- a fully functioning, sorry, and integrated composite material manufacturing plant. will include the following manufacturing line solution training, hot mill film, hot mill tape, confidential manufacturing lines and support equipment.

The new plant will also include full production, lab facilities, office space storage and freezer and ancillary equipment necessary to support all plant manufacturing activities and operations. So it's like a fully integrated plant with everything that's needed. The new plant that is being designed to produce parts to produce and support Park's complete composite materials product line, including film adhesives and lighting strike materials. Slide 34, but the plant is not being designed currently anyway to produce our composite parts, structures and assemblies, okay? Plant size, it's getting pretty big, 120,000 square feet. This could change, but that's our current guesstimate on the plant size. When the plant is complete and operational and get this new plant will approximately double Park's current composite materials manufacturing capacity. So that's -- you can see why the plant is that big.

When will the new plant be completed? Well, we have some internal discussion about that, maybe debate. But let's just say for now, the second half of calendar '27 and when we'll be operational, what do you mean by operational, not fully ramped up, that means we're producing and selling some product, some product that's been qualified for production and sale. Maybe second half of, let's say, calendar year '28 would be a target for when the plant will be operational. Estimated capital budget for new plant, approximately $50 million. What's the timing of the capital spend on the plant again, this is planning in flux. At this point, fiscal year '27, that's the coming fiscal year, probably 60% of that money. fiscal year '28, maybe 30% of the money, fiscal year '29, maybe 10% of the money. That's how the money will be going out the door.

How will we fund the capital spend for the new plant? Well, with our cash, with our cash flow and to some extent from the offering that we just announced if that offering is successful. But is the new plant project dependent on the public offering discussed below? Absolutely not. We're doing this. There's no question about it. Nothing has to be decided. It's going to be done. We're just finishing the planning. It's not dependent on anything. It's something we're committed to doing for very good reasons for Park and for our investors. Okay. Let's go on to Slide 35. Still on the new plant, where will the new plant be located? We have a finalist location in the Midwest, but we're still waiting for approvals from local community, economic development. These things for us go much more slowly than we like.

Why are we building this new plant? Well, that's obviously the $64,000 question or maybe the $50 million question. Our juggernauts plural, both juggernauts, we've talked about require it. Our long-term business and sales outlooks require it. Significant additional composite materials manufacturing capacity is required to support our juggernauts and long-term business and sales outlooks. And we're doing this to ensure we continue to have the manufacturing capacity needed for Park to be Park. So we're doing this to ensure Park is able to continue to be the company of yes, the can-do company, the yes, we can company. So we're not looking to become a mill. We're not going to abandon how we got here, why we have the great, in my opinion, success we have, why we have more opportunities than we could ever handle. So it would be really foolish for us to abandon how we got here and become a mill company where we just run a factory like a mill and then somebody want -- a customer wants something, okay, we could help you out maybe a year from next month.

I'm not exaggerating. That's really what happened in this industry. That's not for us. Let's go on to Slide 36. What were our calling cards, flexibility, responsiveness and urgency. So we're doing this to ensure Parker is able to continue to do those things which got us here. It would be a very unfortunate mistake for us to abandon the things which got us here, a very bad mistake. So our new plant needs to be designed with being parked in mind, meaning being flexible, being responsive, having urgency saying, yes, we can. You need something, we're going to move everything around. We just talking yesterday, maybe Friday about one of our large customers, they want to move so many things around. It was any other supplier, we would say, well, sorry. We don't ever say sorry. Sure, we'll move everything around a lot. It requires us to juggle a lot. It requires production to juggle a lot, but that's what we do for a living, okay? And that's why we have the success that we have in my opinion.

When our new manufacturing plant is complete and fully operational, what will Park's total composite materials manufacturing capacity be? Well, it's a question that isn't so easy to answer. It depends on how do you define manufacturing capacity. Park being park manufacturing capacity, that means run the business the way we want to run it. So we have that maximum flexibility, responsiveness and urgency. If we run a factory like a mill, I just plant it 6 days a week, 24 hours a day, we could do that, but then our flexibility is almost nil. But parking park manufacturing capacity, maybe about $220 million parking park manufacturing capacity, but pushing it to some extent, still being parked, but pushing to some extent, about $260 million.

These are preliminary estimate numbers. We've been asked by a number of investors, please give us some help here, please give us some perspective on the manufacturing capacity. The maximum sustainable manufacturing capacity, this is what we don't want, would be about $315 million or $20 million. That's not what we want, okay? So when you ask and we haven't asked what the manufacturing capacity is, we have to say, well, it depends on what you mean by that. Let's go on to Slide 37. And I just want to say these are numbers we're working on. We're doing a massive amount of work, Mark and the guys on the expansion plan. So a lot of work has been done, but we're not quite finished with everything. And even after we're finished, things can move. Mix can change and things like that, which will affect capacity and sales.

Slide 37, Park's long-term sales outlook for composite materials, including film adhesive materials and lightning strike protection materials. So we got to say again, what does this mean? It's -- our number is approximately $200 million, okay? But how is this outlook computed? It's really important to understand what this means because it's not a forecast, it's an outlook. And this is how this outlook was computed with line items that are known items -- these are known sales, known programs and known customers. There's no other category. There's all line items of known opportunities, known customers, known programs. That's how it's computed. That's what that outlook includes. What does it not include? So do you think that in the next 3 or 4 years, will there be no other opportunities like 6 months from now or a year from now or tomorrow, we'll get a call from an OEM about a program they want us to work on.

My guess is it probably be tomorrow because we're getting so many opportunities. We're not including any of that, which we don't know what comes. So it's important you understand it's not a forecast, it's just an outlook, how -- with the methodology that we use. what are the high and low risk of the outlook. So I think we feel pretty confident about the line items in the forecast. But it's possible that will -- either we're on those programs or we'll get in those programs. Those programs will be ours. But it's possible those programs won't pan out to the level that we're being told by our customers. Maybe they won't be as strong, maybe it will take a longer to ramp up. I don't know it's possible. So there's risk on the low side.

What about the high side? The high side is all those things we just talked about, things we don't know yet that are definitely going to come. They're not -- there's no way -- we haven't -- we haven't provided an other category in our forecast or outlook rather, the way we computed it. just things we know about. What's the target year for the outlook? Well, that's another controversial question internally. I think we're saying fiscal year '31, and I'll tell you, I would say, the end of fiscal year '31, it sounds like a long time from now, but it starts 4 years from now. That means for us to be able to be at that level, everything had to be ramped up. The plant would have to be fully built and the new plant and qualified. All the programs have to be qualified. And we have hired all the people, all the staffing, and we're fully ramped up.

So to me, to do that in 4 years, that's a little aggressive. That's why I think what we should think about to be a little more conservative is the end of fiscal '21, which is more like 5 years from now. It doesn't mean we want to be sales, but to be ramped up at that level, probably I would think to be more conservative. We might want to think 5 years from now rather than 4 years from now. Thoughts about our ROI for parts investment in the new plant, $50 million. We're not going to go through what the bottom line impact is now, but you think about it, we have this year, what is $72 million of sales -- we're talking about $200 million of sales, $50 million investment. You could probably do the math a little bit on your own. We have some real smart investors. We're not going to go through that number now, but we think that the ROA will be extremely attractive that we wouldn't -- if we doubt any investor would ever have a problem with it. Let's go on to Slide 38.

Park's newly announced public offering, just touch on this quickly. Today -- sorry, it's going on so long. Today, we filed a Form S-3 registration statement and prospectus supplement with the SEC for a $50 million at-the-market public offering of Park's common stock. What's the purpose of this offering and financing? Well, first of all, to replenish a portion of the $50 million that we plan to invest in our new composite plant, composite materials plant, that's part of it. But very importantly, to ensure that Park has the necessary funds to be in a position to take advantage of and exploit key opportunities currently being presented to Park and new key opportunities as they arise in the future. The availability of funds necessary to exploit key opportunities has been a key strategic advantage for Park. So you're probably thinking, well, can you give me an example? Yes, I can give you an example.

We talked about GE Aerospace, how many hundreds of millions of dollars of business was represented. Well, remember what happened, GE said to us, it was GE at the time, not CE, yes, we'll give you the LTA through 2029. But Park, we're concerned because you're sole source qualified these programs, we want you to build a redundant factory. And then if you commit to doing that, we'll give it the LTA. And we said, sure, we'll do that. We didn't say sure, but we got to go see if we get the money or go to banks and it would have been terrible because GE if you're smart, would think, well, I don't know if Park is going to get the money, let's go talk to somebody else. That never happened because we said right there on the spot, yes, we'll do it, and we had the money to do it. It was about $20 million at a time. I think we believe if we had to do that plant now, it'd probably be twice as much based on the inflation.

We are quite sure it is in Park's and our investors' very best interest for Park to be able to continue to exploit such opportunities as they arise in the future. Just a little interesting information. footnote, where our last public offering was. It was -- well, Martinez found a tombstone in our office. It was March 6, 1996. 30 years ago, it was a $100 million convertible note offering that was converted all the equity -- almost all equity, I think 96 of it was converted to equity. Underwriters were Needham, Robin Stevens and Lehman, [indiscernible] happened to the last 2. Anyway, just a little interesting history. Sorry to go on for so long, everybody. But operator, we'd be happy to take any questions at this time to the extent there are any.

[Operator Instructions] And it looks like we have no questions at this time. Therefore, I will turn it before back over to Mr. Brian Shore for closing remarks.

Thank you, operator. Thank you, everybody, for listening. We apologize for the presentation going on so long as we had a lot to cover. Please feel free to give us a call if you have any follow-up questions, some of the items, I think we kind of skimmed over a little bit quickly. So feel free to give us a call. We're happy to help you out with any follow-up questions. Have a good day and once again, happy new year all the best to you and your family in 2026. Goodbye.

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Good afternoon. My name is Vaughn, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Park Aerospace Corp. Second Quarter Fiscal Year 2026 Earnings Release Conference Call and Investor Presentation. [Operator Instructions] At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Thank you very much, operator. This is Brian. Welcome, everybody, to the Park Aerospace Fiscal '26 Second Quarter Investor Conference Call. I have with me, as usual, Mark Esquivel, our President and COO. We announced our earnings right after the close in the earnings release, there are instructions as to how you can access the presentation we're about to go through, either via link and you also can link information in the news release and also on our website. If you want to pick that up because we're going to go through it will be a lot more meaningful list in if you have the listen to us. if you have the presentation in front of you.

So we have quite a few new investors the last quarter, they've come on board. Another consideration for them, I think we should go through some of the legacy items more carefully. I think in the past, legacy items in just kind of skim over on the assumption that most people have already are familiar with them. Veteran investors, just please be patient with that. Another item I will cover with you is that on Tuesday, I had some unplanned oral surgery. And I'm not really feeling that great. So I hope you can bear with me and if I need any more takeover. I'm sure he'll be sorry, willing and able to do that. Questions at the end after we're done with the presentation, we'll take questions. And please do ask them. We love questions. Actually, sometimes linked to questions and we're meaningful in the presentation. We'll go through a presentation, we don't know whether you're liking it, not liking an interest addition for have sleep, but the questions are always more helpful because we know what people are really interested in doing what they're thinking about.

So why don't we go ahead and get started with the presentation. Slide 2 is our forward-looking disclaimer language. We're not going to go through that. But if you have any questions about it, please let us know. Slide 3, table contents. Starting on Slide 1 is our Q2 investor presentation, which we're about to go through now. And Appendix 1, we have supplementary financial information -- we're not going to go through that if you have any during the call, but if you have any questions about it, please let us know. It's become our practice now or pattern, I guess, to feature the James Webb space telescope in our table of contents. So what we're talking about here, James Webb space telescope discovered, COSMIC dust, which shouldn't exist outside at Galaxy, it shouldn't exist in quotes because I think we're developing a common theme here is so much that we believed about the universe and its origin, which just isn't true. Sorry, folks, not true James Webb saying, well, you could believe whatever you want, but this is what's really going on. So here's another one of those. Thank you, James Webb space telescope. The James Webb space telescope was produced with a proprietary Sigma stretch.

Let's go on to Slide 4. I kind of more new great stuff here. So quarterly results, let's look at the right-hand column in the second quarter. We just announced sales, $16.381,000, gross profit, $5,116,000, gross margin, 31.2%. So we're happy about gross margins over 30% or maybe I should say we're unhappy when they're not. And it's good to throw over 30% because there are a couple of things we'll talk in a second to drag down our margins. Adjusted EBITDA, $3,401,000 and adjusted EBITDA margin, 20.8%. What do we say about during Q2 during our Q1 call on July 15. We set our sales estimate was $15 million to $16 million. So we came a little bit above that. EBITDA estimate, $3 million to $3.4 million. So we came in kind of the top of the range of the EBITDA estimate. I just want to remind you, especially for some of our new investors, that it's not guidance. We don't do guidance. When we give an estimate, we're saying to you, this is what we think is going to happen. Now we could be wrong, but just what we're saying there's I don't know let's call it practice. We have different terms for let's call it practice where everybody does it almost where, let's say, it's going to be 100. They think it's going to be 100. They go out with 90, that's their guidance. So then the -- when they come back with 100, they come out 100, then heroes and I don't know. We think that's not worthy of our time. So when we give you an estimate, we're saying, this is what we think is going to happen. We're not giving you a number which we plan to beat, okay?

Let's go on to Slide 5. Q2 considerations. We always talk -- well, always in the last few quarters, but ArianneGroup has an impact on a lot of things, including the quarter. So we entered into this business partner agreement with ArianneGroup. It's a very large aerospace company in France, great company, and they're a JV between Airbus and Safran, I believe. And January 22, we've actually working for 20 years. They appointed us exclusive distributor of their RAYCARB C2B fabric, that fabric suits to produce a pretty semblative composite materials for advanced missile systems programs. Now we sold $1.6 -- $1.65 million of that fabric in Q2. As we previously explained, we saw that fabric to our defense industry customers for a small market. What's going on here is the defense industry customers are stockpiling the C2B. We're the exclusive distributor, though, so they buy it from us, we buy it from or a distributor, not a rep. We buy from Arianne and then we resell it or sell it, I should say, to the OEM. But it's kind of a strange thing because we keep the C2B fabric in our plant because the only OEM eventually will ask us to produce preprint with it. So even though we sell to them and own the product, it's kept in the plant. The markup is small, so we have a significant amount of C2B fabric sales, that's going to push down our margins. And we sold 415,000 late materials manufactured will C2B fabric in Q2. Now the margins on the late materials that we produce those fabric, very, very good, very good. So that's the offset. I'll say. But it's still the ratio of sales of fabric to bladed materials manufactured with the C2B fabric, I still had a balance, right? So more fabric than materials pre fabric, let's call it. What's the reason? I already said because the OEMs are stockpiling this product. A more normal kind of ratio will be 40/60. So 40% would be the materials and 60% would be the fabric. That's not always going to be exactly it, but just to give you a sense. So you see that the ratio is much more than 40/60 here. And that's going to drive down our margins.

So let's talk about -- let's go into Slide 6, rather. We're still on the topic of C2B fabric or qualification on one of parks key customers a C2B. This was kind of -- been a big deal over the last few quarters. And Mark, I like we always can mark the hard stuff to talk about. Can you help us what's going on with that recap?

Yes. So we actually do have an upgrade at this time. I think the last couple of calls, we said we're waiting for approval. So we do have approval. We don't have full approval. We have approval at about 90% of the specification. I have to get too technical. There's a requirement within the spec that has a lower and the upper range. They were somewhere in the middle, they moved down closer to the commercial specification as we call it, which gets us back into production at 90-plus percent of everything we have. So what we're doing now is they're currently testing that last 10%, which will probably take another 9 to 12 months. So we'll continue to talk about when we get that approval. But as far as the program is concerned, we're back in business, we're back running and we're back to, I would say, normal typical rates that we were running prior to this, I want to say, issue coming up, but there's a recall coming up. So -- and we actually expect to see some upside in the coming quarters, and Brian will talk about some of that news as well. But I guess the story here, the message here is we're pretty much back in business with running at our normal level.

Okay. Thanks, Mark. Good news. Let's keep moving here. Production versus sales to bring this up because this has been an issue in prior quarters in terms of the impact in the bottom line. But in our sales, value production, we call it SVP, that's not inventory value, that's the value of production. It's at sales price. It was well matched with our sales. And that's a good thing. That means that's really very -- no meaningful, no impact on bottom line. When our sales exceed our production that is a significant amount that is a negative impact on the bottom line. But no impact and then last thing we'll talk about in terms of bottom line impact, giving an ongoing expenses. This is something we had in our presentation for several quarters now. It's not going away right anytime soon. Operating our new manufacturing facility in Q2, including all these other expenses. And this is significant. So that's why we're saying that the gross margin being over 31%, I'd say that's actually not bad because there's 2 factors that hold it down. One is this the expenses related to new plant, the other is the, let's call it, excess GTB fabric compared to the C2B material sales Total shipments a little bit of a surprise here. $510,000, that number is way up. But last few quarters, we keep talking about international shipment issues. That's not the issue at this time. This time, it's something different. It's customer certification and testing delays. It's a little bit of a new story here. it happens sometimes, it just happens. It's nothing we can do about not our fault or anything like that, but sometimes it just delays insurance and certification and engineering work and testing delays. So that had a meaningful impact upon our shipments in Q2.

So let's go on to Slide 7, impact of tariffs and tariff-related costs. You know what I should say, net impact. I was saying at the Mark earlier, it's a net impact of tariff and Terra cost because we have tariffs at just the net impact takes into account the pass-through. So very minimal in Q2, hardly anything. But that's the net impact. That's not the total tariff. That's a net impact because of the fact that we pass tariff cost on. And then the future impacts, I think we'll get back later and Mark will help work talk through that later on in the presentation.

Why don't we go on to Slide 8. So this is a slide we do every quarter. As you know, some new veterans, you probably [indiscernible] top 5. And it's kind of usual suspect also, it's like right. GT, Kratos, MRAS, Tech Tech and OTT is not -- is kind of a little bit a new name for us, but the rest are used those suspects. The Global 7500 that refers to Nordam, the A320 with XLR, that's an MRAS program. Kratos obviously is Kratos and the 787 Dreamliner, that's actually GKN. That's where the GenX 1B engine. So it's a G engine, but it's not part of the MRS LDA, which we'll go into that later.

Let's go on to Slide 9. So here we have our estimated revenues by aerospace market segments. We call them our pie charts. I do you, but I like to think colit of story, fiscal '21, that was the pandemic year where the commercial aircraft was member were airplanes pictures of like 737s with like 2 people on them, and they were basically they're being parked flown at all. And then after that, the pie charts seem to be fairly stable. Interesting -- what will be interesting is to see what will happen in the future because the Commercial is going to be accelerating use of programs are on as those programs ramp up, but military we'll be accelerating a lot. This is probably -- it could go down as a percentage. We'll see about that.

Let's go on to Slide 10, Park's niche military aerospace programs. So we have a little pie chart here rate homes, missile systems, unmanned aircraft, all niche markets for us some markets, but even aircraft structures are niche markets for us. So we actually changed. We used to call it recognizes, I think, we've changed the missile systems because the missile systems, we supply into more than just a rocket other aspects of missiles that we supply into. I think we used to call unmanned aircraft drones, but I think more quickly correct term is on manned aircraft, but there's no change in there. You know what? And other than nice pictures, and you can see what the programs are, we really are not going to talk to these programs anymore. It's just not appropriate for us to say very much a bunch of programs except understand, please. Any picture we show you. That means it's a program on, not a program we like or a cool picture or something.

Okay. You got it. Let's go on to Slide 11. GE aerospace an engine programs, again, a slide every quarter. But for the benefit of some of our new investors, let me try to explain quickly. So we have a firm LTA requirements contract for '19 to '29 with MRAS, Middle River Aerostructure Systems, a SubT Engineering Aerospace, you see we're sole source for composite materials for all these programs, but they're all program so what's going on here. If you look at all the check items below the all GE engine programs. And what's going on here is that even we got on these programs with GE Aviation, even before 2019 when AMRs is owned by GE Aviation now to aerospace, we've got on these programs and before that, they were a predecessor before this '19 to 29 LTA. And then I think about 5 years ago, GE sold AmRest, ST Engineering, which is a large Singapore aerospace company. So that's the explanation there. I've done in factory about that when I guess, around 2019, said to us, look, Park, we're going to give you this 10-year agreement for solar source and all the stuff. All these great programs, wonderful programs, but we really are concerned about redundancy. So would you please build 1 factory, and we said, yes, and we checked that box, that's been done. I'm not going to go through the individual program, maybe except to get to talk about the first 5 really all A320 NEO family aircraft programs. All right. Do you have any questions about the specific programs to let us know.

Let's go to Slide 12, just to keep moving along here. item. The first item on Slide 12, we're just continuing here. This is I don't know, a little bit of a nuance here because this is -- this program, as was mentioned in the prior slide, but this is a different component. And it's also as part of our GE Aerospace not necessarily the -- not the MRAS LTA. So I'm probably getting only tail, not necessary. Fan case is something we should talk about for a second. This is for GE9Xngine for the 777X airplane. This is produced with our AFP material and other composite materials, automated fiber placement. That's what AMP stands for. It's a robotic way method for producing composite structures. And this is planned to be included in the Life of Program, MRS Life of Program agreement we had a 6.5% weighted average price increase in our MRS LTA effective January 1, that was already built in the LTA a long time ago. And next item, part the LTA was Park Emiris LTA was amended to include 3 proprietary film lease formulation products. and those are now undergoing qualification. The Life of Program agreement questioned by MRS and STE. So we're still negotiating this, I guess. And I think there is a meeting that's being planned for next month. We'll see what happens, as I said to you many times, we're okay either way. This is requested by STE and MRAS is something they want. They want the ability of long-term supply -- but either we're okay either way. If we do it, that's fine, if not, we'll be fine as well. And it's still under negotiation. And I don't want to give you the wrong impression. It's all I can negotiate a it's like we talked about and 3 months go by it. So I think now we're planning to have some get together in December -- sorry, November to hopefully get through this. We'll see. We'll keep you posting.

Item -- Page 13, rather, Slide 13. So let's talk about an update on some of these aerospace change programs, as between NEO family. That's a wonderful program that Park is on solar qualified. And let's talk about that program. every has a huge backlog of these airplanes, over 7,000 of them and a lot of airplanes a lot of airplanes. And let's just talk about the -- we can take a look at the aircraft -- the A320neo aircraft deliveries. We're not going to go through each year, but you can see what's going on here. with the amount of orders that Airbus has -- we'll get to in a second, they would be at a much higher rate than this and maybe at $75 per month. what's holding it back is issues with supply chain. So this year, year-to-date, never to 44%, but don't get fooled by that because usually kind of make their year in the last 3 months. And if you look at September, you can see what's going on here. The already air price is already ramping up to 59 were delivered in through neo family aircraft delivered in September.

Let's keep on Slide 14, just continuing here -- the -- importantly, the engine supply bottleneck. Remember, I said that one of the big issues supply chain restrictions. That's what's preventing Airbus from ramping up to their target of 75. We'll get a minute 75 per month. CFM, they have another engine, but let's just talk about CFM, the LEAP-1A engine. We're partly improving, that is getting better. And I think that's a deliberate focus by GE and CFM, which is a very good thing. It's probably the most significant restriction to Airbus' ability to ramp up to that 75%. The if they're now based upon how many orders they have. So that's our good news actually. As we already alluded to, Airbus is targeting a delivery rate of 752 per month. And you could see that there's still at 50% to 55%, so they still a way to go, quite a way to go. Two engines approved for the ASIC funny neo aircraft. We're on the CFM LEAP-1A engine. We not on that. We have nothing no content on the Pratt & Whitney GTF engine. And so I guess that covers the second bullet item we supply into the A320 family aircraft using the LEAP-1A engine. According to the second quarter, 2025 addition of Aero Engine News, which is kind of like a viable for us anyway. The CFM LEAP-1A as market share with -- compared to the Pratt market share for mention orders A320neo family was 64.7%. And those are firm orders. That's not speculation or hopes and dreams. Those are firm orders. So you can see that CFM has a large larger market share of the engines for the A320neo aircraft. At the delivery rate of 75 A320neo family aircraft per month at 64.7% in market share translates into 1,165 LEAP engines per year. That's a real lot of engines and lots of revenue for Park at that point.

Slide 15, as of June 30, 25, a few months ago, there were a little over 8,000 firm LEAP-1A engine orders. These are not airplanes is a leaner where we're sole source qualified over $8,000. If you want to look at Slide 29, you get a feel for what our revenue per unit is the get your pocket calculator out and do the mats you could see what that's worth to us. Those are just the firm orders that are in the books now. So this is a big deal for Park. The Airbus A321 XLR and this is a variant, we're still talking A320 family, okay? We're not off to a different aircraft. This is part of the A320 family. This is recently introduced. Supposedly change the air map of the world. Why is that? Because the payload and range capability of this aircraft are very unusual for a single aisle, so it allows a single aisle to compete against wide-bodies, but obviously, at much lower cost. So that's why it's changing your map of the world. Quantas is very involved in the program American Airlines, Iberia Airlines. The reason highlight is a lot of airlines are buying this airplane why I'm highlighting this. They call it a game cane. But what's really, I think, very impressive to me is that they say they claim they've had almost no -- as that's aircraft on ground after almost a year. That's really a big deal because normally, for the first year or 2, it's all kind of both, you have to get out of a new airplane, a new design and the airplane sits in the ground a lot. And it's kind of just expected, and it's not good because when the AirPlus in ground, airlines aren't making any money. And you kind of expect that if you had an airplane that's been recently certified and delivered. But here you go, they're saying almost no AOGs. I've never heard of anything like that. It's quite impressive. Boeing has no response to this aircraft.

Let's go on to Slide 16. So still on A320 here, folks. Airbus plans to open a new A320 aircraft family final assembly lines, FALs in the U.S. and China this month, in the next couple of weeks. So these 2 new FALs in combination with the existing FALs in Germany and France will provide Airbus with a manufacturing capability to achieve a 75-tonne aircraft per month delivery goal in '27. So this is nice because Airbus is they're putting our money more in their mouth this year. These FALs they're a big deal. So that's good news. And then great news October 7. This is the day in my oral surgery, I think, yes. So 2 big things happened on October 7, just 2 days ago. The A320 aircraft family became the world's most delivered commercial jet ever. Of course, that means it beat out the 737. Not just the MAXs, the 737 family versus the A320 family going back to the beginning. So that's pretty big news, I guess. COMAC, this a Chinese-made aircraft. Again, with the LEAP engine, this is a different variation of it. This Is LEAP-1C engine. COMAC is targeting -- this airplane is designed to compete -- single design to compete against A320. They're targeting 3091 aircraft deliveries in '25, but recent and confirmed reports saying to probably short of this target. I can't tell you I'm very surprised. I probably would have to be just totally candid about it. I would be more surprised if they met the target. I'm not going to go into why, but I'm not surprised or really disappointed. Malaysian Airlines, AirAsia has confirmed as advanced talks to purchase these airplanes. Why is that important? Why am I focusing on that? Because there are a lot of airlines that this airplane. But the reason I'm focusing on is this is a non-Chinese airline just is certified by the Chinese FDA, I think called CAAC or something like that. So the thought was originally these COMAC airplanes would be China-only airplanes, but that's not what COMAC wants. They're still in the airplane outside of China for operations outside of China, which will require certification by the FA and [indiscernible] European aviation authority. So that's why I highlighted this Air Asia thing.

Let's go on to Slide 17. We plan to achieve a reduction rate of 200 airplanes by 2029, and COMAC claims to have over 1,000 orders for this airplane. This airplane is -- does not have to win in options. It's all LEAP in terms of the engine that's certified for the airplane. CO-MACC909, again, COMAC, the Chinese company. This is a regional jet. This airplane is -- was introduced a while ago. It's already pretty close to that rate. But what's interesting here, they delivered the same kind of topic really low airlines yet, our Cambodia signed up. Again, what's the theme here non-Chinese airlines. So originally, the thinking the China -- the COMAC airplanes are going to be China only, but that's obviously not what Coach. 777X n77, we have slowed down a little bit of talk, but this one, this is an important program for Park. Test program has advanced over 1,500 outfits and nearly 4,100 flight hours. That's a lot. That's -- this picture was taken by a friend of mine a couple a few years ago when the 777X were doing cold weather testing in Fairbanks, good place to golfer cold weather testing.

So let's talk -- let's go on Slide 18, sorry. Boeing poorly as 565 open orders for the airplane. Well, we have previously announced that the airplane program was on track for certification in late '25 and entry into service in '26 when the Boeing CEO recently stated the certification programs following bid schedule. The CEO further stayed the aircraft and engine to Genex engines deanoncs rights Unit engine are really performing quite well and that the potential delay in the certification was being caused by increasingly delivered FAA scrutiny. You get the sense there's some tension there between Boeing and the FA. I do anyway, gating item is the receipt of called the type inspection authorization from the FAA because as the CEO explains, they can fly these airplanes. They tend to have 5 airplanes in use for the certification program. but those sites don't really count towards certification until they get to TIA. There's a lot of boxes date to be checked for an airplane to be certified. So they can go fly the airplane, which is they learn a lot more about the airplane, but can those boxes until you get the TIA from the FAA. Boeing hasn't announced any new targets for the certification and EIS but speculations that to be pushed into next year '26.

Let's go on to Slide 19. So let's talk about big picture GE Aerospace et program sales history forecast estimates. The top is the sales history. We won't go through all history except the site in Q2, $7.5 million. And I think we had forecasted in our Q1 presentation, [ 6.7 ] to [ 7.2 ], a little higher. I would reattain to it, the numbers were around a little bit. but a little higher than we forecast. The aerospace program sales forecast, sales forecast estimates again, not guidance estimates. Q3, we're estimating $7.5 million to $8 million. And total for the year, I've got to slow down here a little bit, $27.5 million to $29 million. Now in our prior presentation, we indicated that we're looking at $28 million to $32 million for the year for fiscal '26. But as we explained to you, that was based upon information called a build plan from our customer, wasn't our forecast is their forecast. Now we have now the current forecast, $27.5 million to $29 million. That's now part forecast based upon what based upon the backlog for Q3 and Q4. Q3 is already booked. Q4 is partially booked on what we expect based on like-to-like experience to the additional bookings for Q4. So now this is our number, $27.5 million to $29 million.

Let's go on to Slide 20, a Park's Financial performance history and forecast estimates singular. So we just have the history up top. You already saw this just for perspective in context, down below our Q3 '26 Q3 financial forecast estimates now [indiscernible]. Sales of $16.5 million to $17.5 million, adjusted EBITDA of $3.7 million to $4.1 million. That's our estimate for Q3. Do you have any questions about that, just let us know.

So let's go on to Slide 21. This is just history, and we've showed you the slide for the last several quarters. I think it's interesting, just you can see what's going on here. Historically, you go from '17 to '20. And like every year, we increased by about $10 million, then we got stalled out, so we're kind of -- in fiscal '25, we're pretty much where we were in fiscal '20. And obviously, that's because of the pandemic, the pandemic really had a very big impact on commercial aerospace. And when the pandemic so much, it's how we responded to it, how the industry responded to it, especially with respect to supply chain issues, that's held back commercial aerospace.

So just one other thing. We're not giving you a forecast for fiscal '26 at this time, but we believe that the number will be over $70 million for fiscal '26. We'll just give you that number. We're not giving the EBITDA and not giving details. I think what's going on here though is the industry is getting religion, and it's not just an opinion. This is based on lots of input we received a different kind of attitude on the part of the OEMs in terms of ramping up to meet demand and also working with suppliers and supply chain in a much more productive. And in more, I don't know, more collaborative way, sorry, trying to come up that were a collaborative way. So it's not just a little thing. It's a big thing. It's very palpable in the industry. We'll see what happens, but to us, it seems like there's something really going on here. And we're not alone in that opinion. We're not long that opinion. So let's see what happens. But just as you know, we're probably looking at about a little over $70 million for fiscal '25.

Let's go on to Slide 22. Okay. General Park updates, agreements with Ariane. Okay, we got slowed down with Ariane again. We entertained that business partner agreement in January 22 under which Ariane appointed us as we said, North American distributor. We already covered that, okay? But then on March 27, '25, just earlier this year, park in the area. They're a great partner. They're a wonderful partner. We love them. I entered into a new agreement under which Park will advance I don't know, about $5 million -- $4 million -- EUR 587,000 against future purchases by park of C2B fabric. These funds will be used to Ariane to help finance the purchase of additional installation of new manufacturing equipment, are production of the C2B fabric in France. And that was -- that's to be paid Ariane through installments. So first of which is already paid about $1,376,00, that's about $1.5 million. So that would affect our cash when we report Q1.

Let's talk -- let's move to Slide 23, rather. So the purpose of this new agreement is to provide additional C2B fabric manufacturing capacity to support the rapidly increasing demand for 2 in C2B Fabric in Europe and North America. Just so you know, one of the big programs that use C2B fabric is the Patriot missile program. ArianeGroup recently asked a partner to partner again with them on a study related to the potential significant increase a C2B fabric manufacturing capacity, presumably in the U.S. The study expected to cost about EUR 700,000, we split it 50-50. So that's probably about $410,000 for Park, and we'll record that when our Q3 as a special item. I just want you to be aware of that. We'll get back to this later on in the presentational area study. Just continuing with general updates, our [indiscernible] protection material certified on the Passport 20 engine using the -- used on the Bombardier Global 7500 8,000 business jet. That's revenue is about approximately $500,000 per year expected under LSB material. We're very happy about this. Our LSB is already qualified approved and use on the A320 and the 919, but we have not -- just getting it approved now on the 20 engine and also felt get approved on call it the 10 engine for the back 909. So -- and we expect that these revenues will start to kick in fairly soon, let's say, in a couple of months.

Slide 24, still updates. This is just something we covered already. And we saw -- we entered into an LTA aerospace and the calendar year is '25 to '30. and then another update parks discussion with 2 Asian industrial conglomerates relating to Asia manufacturing to inventors continue. We've been talking about this for a while. John Jameson and Asia now working on this project along with one of our other guys. So we'll see what happens. It seems interesting, but we'll see what happens.

Okay, Mark, your tariff international trade issues. What's the expected impact of tariff going forward, you think?

I don't think much. I know this quarter alone, we had about $1,700, which we don't like to take on any additional costs, but that was mostly nonmaterial items. So going forward, again, as I mentioned before, we got ahead of this pretty early. Where we put controls in place to manage it. We're passing the cost on to our customers, whether it's through contracts or stuff like our POs or stuff like that or order confirmation. So I don't expect to see much. I mean it's obviously a dynamic situation. I don't think all the tariffs are completely locked in. It's been a little quiet in the news lately. But where we're at today and what we've seen so far, it's a very minimal impact to our business.

Okay. Thanks, Mark. So let's keep going here. Current MRAS supplier scorecard or scores, what happened. We have all 100s here, went at all or 100s. So does MRAS still love us? I think they do I think I mentioned to you in prior quarters that we're told that most payers will be happy to get 80s and MRAS finds a little bit humorous that we ask, well, what happened and what are we doing what we need is, let's call it, technical issue in terms of how we recorded something. So we take it seriously. We're 100 company. We're not a 99.87 company rather. So we take it seriously. And like I said, MRAS think finds a little amusing that we don't so much time talking about why we're -- why we didn't get [ 100 ] on 1 of these 3 scores.

Let's go on to Slide 25. So making customers love us. This is still in our general updates is central to what we call Park's egg strategy. How do we make our customers love us with our colon cards of flexibility, urgency and responsiveness by asking how high before our customers say jump, and we're not kidding about this. We'll go to a customer and say, "We can we do, what else can we do? What else can we do before they even ask it for anything." Customers love us is a boiler in thing on a boardroom the Board's on board with their strategy. We've certainly reviewed it with the Board. But the strategy happens on the factory floor, not in the board room. That's where the rub reached the road. It's up to all our people to make the strategy work. It's a boil room thing. So for this strategy to work, all our people need to be bought into it and feel passionate about it. Making customers love it is the secret to our success. It's a hidden plan side secret sometimes the most brilliant ideas are the most obvious ones with the benefit of hindsight and the right, well, why do you think of that? I don't know. Why didn't you think of it? So the secret is kind of hidden plain sight, but it's a secret to our success.

Slide 26, buyback authorization, we want spend a lot of time, and this let's just go down to the last 2 checkouts. We did not purchase any shares in fiscal -- in our second quarter. And we don't -- we've not purchased any shares so far in our third quarter to date. I don't think would be -- my feeling, my opinion is you probably won't be purchasing too many shares in the near future, we'll see about that.

Slide 27. Again, this is just going to review parts balance sheet cash and incredible cash dividend history. Long-term debt, we don't have any. We had -- we reported $61.6 million of cash and marketable securities at the end of Q2, but we also made that final trends in tax as to do to $4.9 million in Q2. And Q1 reported cash and into Q1 of $65.6 million. So if you take that $4.9 million substracted from $55.6 million, it gets you to that $61.6 million number more or less it explains the difference. Support consecutive years of interrupted uninterrupted regular cash dividends and we top paid over $606 million or $9.60 per share in cash dividends since the beginning of fiscal 2005. This is our Park founders. The one reason we placed a picture of our Park founders here is because we started out with basically nothing or 2 guys that are the company, I think, in 1954 with about $40,000 that they had saved from more duty. And here we are paying over $600 million of cash dividends in the next 20 years or so.

Let's go on to Slide 28. Okay, we can kind of skim through this because these 3 slides are exactly how the same slide that we showed you last quarter. I think the quarter before that, financial outlook for GE Aerospace change and programs, the juggernaut to timing. We're not sure. We talked about, yes, the 919 is a little slower ramping up. The 777X is having a little more difficulty getting certified. So we don't know. We don't really do a lot of time worrying about that. But the thing is that we say it's a juggernaut is coming. It can't be stopped. And the key thing for us better be ready.

If you go to Slide 29, there's no change anything here. All the numbers are exactly the same. Like I said, related to a previous slide, we feel that GE and CFM I've kind of gotten the religion that there you're really focused on ramping up production and working closely and collaboratively with the supply chain.

Slide 30 is just footnotes related to the prior slide, won't go through those. You have any questions this is no. Okay. Let's go on to Slide 31, Warren Peace, Park's new juggernaut and piece of the question were. These slides came from or originated in the last quarter, although there are some updates to them. The first thing I want to cover again though, is we're not providing any inside information. I mean these programs, all this information in these slides is based upon publicly reported news and reports. We don't give away inside information, especially with sense and defense programs. unprecedented demand for missile systems. Middle systems stockpiles have been seriously completed by the words in Europe and Middle East. There's an urgent need to replenish the depleted missile system stockpiles according to Wall Street Journal reporting, the Pentagon is pushing defense OEMs to double or even quadruple missile system production on a next schedule quotes, partly in preparation for a potential conflict with China. List of Pentagon targeted missile systems, including the PAC-3 missile system, the RASM and the SM6 the missile system is a particular priority. I just think you should know in the Park is on all those programs participates in all those programs, all 3 of them, review and update of the PAC-3 Patriot missile system. Reason we spend more time talking about this. There's a lot of public visibility and information about it. Some of the other programs we're on, it could be quite significant, but we're not able to even mention what they are. The largest deployment of PAC-3 paid or missile systems and history occurred in response to [indiscernible] missile strikes on our base in Qatar.

Going on to Slide 32. What happened here? In anticipation of this, I guess we knew what has happened. We moved patriot Missile Systems to Qatar from South Korea and Japan, knowing what was coming and we call it the Shell game, moving systems from one place to another. That's not sustainable. The Department of War wants to very significantly increase Patriot missile stockpiles in Asia to protect bases and allies in the Pacific region. So this is not working out very well at all. Is it we take missile systems out of South Korea and Japan because we have this issue with Iran, and now we depleted their systems when the Department of War wants to significantly increase the papered missile stockpiles in Asia to see the problem. So just public stuff, Israeli supply atomical seriously depleted, Ukraine supplier of paper missile systems, seriously completed. Other countries have been waiting for paid missile system for years. September 3, 2025, Lockheed's Missile and Fire Control division received its biggest content in history, a $9.8 billion award from the U.S. Army from 1,970 Patriot missiles. According to the Wall Street Journal, an Department of War wants suppliers to ramp up to produce approximately 2,000 Patriot missiles per year, which is almost 4x the current production rate. Didn't we say something about quadruple in the prior slide? We did. 4x more production rate. So we're talking about -- well, we'll get to -- don't we wait and we get to in a second thought to say Park is sole-source qualified. We'll get to it in a second.

Let's go on to Slide 33. Patriot Missile systems are planned to be incorporated into the Golden Dome as parent from reporting that the U.S. plants do much more than just replenish these to cleaned systems. So next item, Park supports the Patriot Missile System with especially bladed materials producer, Ariane's C2B fabric, and Park's source qualify for special plate materials on this program. So I was going to say, at the bottom of Slide 32, this 2,000 missiles per year, that represents a very significant revenue in the Park were sole-source qualified in that program. Park back to Slide 33, sorry to bounce around on to Europe. Park has recently asked to increase our expected output, especially in plated materials for the program by significant orders of magnitude. We can't really say how much but significant orders of magnitude. Hopefully, that gives you some kind of feel for what's going on here. And we will fully support this request, partly with the additional manufacturing capacity provided by our major facilities expansion, which we'll discuss below. Remember that Park recently entered into this new agreement going back to ovarian for the purpose of increasing C2B fabric manufacturing capacity.

Let's go on to Slide 34. But will that additional manufacturing capacity be enough considering what's going on with the Patriot missile. No. I don't think so. As discussed above, Park is partnering with ArianeGroup in a study related to potentially significantly increasing C2B fabric manufacturing capacity, presumably in the U.S., this is a big deal. Let me just say this, once our partnership when a study is done, that's not the end of the partnership. I don't think anyway. That's not what we're talking about. I'm not going to say anything more about it, but let me just say it's a big deal. We covered the Arrow 3 and 4 missile systems last time, so we just kind of cover again, not too much here, last item up to in parts involvement. Remember, we were second source qualifying the Arrow 3, we're really expecting orders. We got them we already got them. Arrow 4 were sole-source qualified on the Arrow 4, which you expected to going to production, I think, relatively some.

Let's go on to Slide 35. This is really probably the most important slide of this whole warrant piece section of the presentation. The above missile programs are just a small representation of the critical missile programs Park is supporting or planning to support. There are too many programs to generate here, and many probably most are 2 confidential and sensitive dimension for national security or other reasons. But this is highlighted or bold whatever and [indiscernible] but please understand that certain programs represent very significant revenue for Park over long periods of time. We're disappointed we're not able to discuss these programs with you but we can't.

Let's go onto Slide 36 major expansions. So just giving me a quick update here. I know we're running late time, but got a lot to cover here. And like I said, we had new investors, so we couldn't just kind things too much. a major new expansion. We talked about this in the of our manufacturing facility. We talked about this in the last 2 quarter presentations, I believe. So we're planning a major new expansion of our manufacturing facilities. It could be a Newton elsewhere the planned expansion will include manufacturer following lines, dilution treating, hot mill film, hot [indiscernible] patrols manufacturing. The current estimated capital budget for new manufacturing plant equipment, $40 million to $45 million, that's gone up. I forget what we said last quarter maybe $35 million to $40 million. Why it go up? Well, we didn't know the line. extra $5 million is for no aligned because the requirements keep going up and up and up. It's quite incredible actually.

So new manufacturing -- Slide 37, just continuing new manufacturing, major new expansion of Park's manufacturing facilities. Why are we doing this? The juggernauts required. We have a juggernaut for GE Aerospace, you have juggernaut for defense and missile programs. Our long-term business forecast requires to and second bold item under that check item is that our long-term forecast has increased since we talked to you on July 15. And we also have manufacturing capacity used for Park to be part corn cards, again, flexibility responsive to its urgency. We don't run a business a mill, meaning that, okay, we campaign and you want something well, we could fit you in maybe a year from December. We don't run our business that way. urgency, responsiveness flexibility. So it would be really stupid for Park to abandon those things because those are things that got us where we are today. all those opportunities. So it's important we have the manufacturing capacity in order to be parked for Park to be part the secret to our success. That's part of our theory or thinking with respect to the expansion. And last item went bold. This is not a close call, not even close to a close call. I mean the need for what we're talking about is a need for a major expansion of our manufacturing facilities.

Let's go on to Slide 38. We're just continuing on the expansion we're not sharing our long-term business forecast this time, but the opportunities for Park are significant. Timing is now, we must take advantage of the opportunities now we must not hesitate or we will squander "once in lifetime opportunities, we have sacrificed so much over many years to develop." So this is kind of interesting. There was a Board meeting last week and Mark was discussing with the Board some of these missile programs and use the term once-a-lifetime opportunities. And the Board was -- really got the thought, well, this come for Mark, this must be really big. Mark is not a guys given to hyperbole, it's usually a skeptical guy, which is good. You want your president to be skeptical old things. But that was "one-to-lifetime, and the Board's thought, wow, this must be a big thing then. Our objective is to have our tension plan in place by the end of the calendar year moving into implementing -- the implementation phase by our plan by then, Slide 39. How are we doing in park, let's change gears a little bit. I'm sorry, it's going to take it so long, but like I said, we're trying to cover a lot of things here. So what are our parks objectives. This is important. How do we measure success? I think there's a lot of misunderstanding about this.

So let's talk about it. We mention success. Our objectives are getting qualified and it's sole-source qualified whenever possible, on chosen special aerospace programs. These are programs we want to be on. These are the special programs. So wonder programs, that's our success. Once we get qualified on our chosen special programs, our objectives have been achieved. We're done, and once we are qualifying those children programs all in italics, all we need to do is support those programs with what extreme urgency flexibility to respond to this. That's it. Other than that, it's up to the program OEMs and determine decide how quickly their programs will ramp. That is not something over which we have control, and it's either our concern. We're in the program, we achieved our objective our objective has been achieved, but some guy wrote something about we're shifting blame or mitigation plans and it's just kind of a total understanding of how a park and our objectives and how we operate. Once we get in these programs, sole-source qualified our objectives have been realized. And we -- let's talk about how we've done with our objectives. If you ask me, we have been incredibly successful. We've gotten on wonderful aerospace programs, a special programs you want to be on, most of which we can mention, you know some of them are already in A320, Patriot, wow, a lot of we can't mention.

Slide 40, and we were nobody we came into the aerospace industry. We came from nowhere. We welcomed into the industry with open arms with the entrenched competitors. I don't think so. They don't want us. I mean they were brought to light, respectful, Well, they clearly didn't want the do welcome us. We see what we achieved against great eyes, incredible success by getting on these programs are the envy of the industry. from nowhere, nothing went into an industry where there's an aerospace, a lot of entrenchment, people kind of programs, they get very complacent sometimes, that's not us. We don't do that. Are we lucky? If you asked me, we earned everything we got. Are we now overnight success? I don't think so. There's been a long and difficult role with much sacrifice along the way, but it's a road we chose.

Let's go on to Slide 41. I think that's our last slide, almost their folks. Very fortunately, for all of us, Park has the courage and conviction and this should be involved. This is important to stay the course with our principles and are simple, but elegant strategy in the face of sometimes under relenting doubt, negativity and skepticism. Very fortunate of all of us, meaning investors, too, very fortunate that we stood our ground and our knees in buckle and we did what we saw was right under quite a bit of pressure. Because if we didn't do that, we wouldn't be where we are now. We wouldn't be looking at these once on lifetime opportunities. wouldn't be, and we'd all be all lose out lose out. So how are we doing a Park? We believe Park has done a remarkable job of positioning our company to capitalize on. Thank you, Mark. Once in lifetime opportunities we are now facing. These are unprecedented times for Park.

Okay, operator. So we're done with our presentation, and we're happy to take any questions at this time.

[Operator Instructions] I see we have a question coming from Nick Ripostella from NR Management.

Once again, nice presentation, nice quarter. And just a couple of easy questions. I've been thinking about Park and all the exciting things going on. How do you feel about the need for additional sales personnel or are you feel that everything you have there is adequate? You've got so much going on. I'm just wondering, are you covered in that area sufficiently. And the second thing is, I know you say you're not prepared at this time to share the long-term forecast. So do you think like sometime next calendar year, you can kind of give people a longer-term view of where this company could be in 3 to 5 years. There are so many things that are bottoming. You truly are a growth company. But -- and then the third thing is -- and I know this is not your primary function, obviously, but you must be on radars of firms out here to pick up research coverage. There's so much research out there now by niche firms, and you have such a good story. I was just wondering if anything is happening in that regard.

Thanks, Nick. Thanks for your questions. So let's take it one to order additional salespeople. I think Mark, you can chime in. We've learned a lot over the last 20 years. And I think our view on salespeople is a little bit skeptical for to have additional technical people, ensuring people in terms of getting more business. We -- you're right, Nick, we certainly have our hands full what we have already, but we're always interested in new opportunities, new opportunities. They're coming pretty fast and furious, but they're not coming because of salespeople. They're coming because it's a small industry, particularly in defense side, and we close ties with a lot of the OEMs and the military as well. So the word gets out pretty quickly. The important thing is we have engineering people to support those activities rather than salespeople that get those, the business. And I'm not sure that really works anyway. I don't think that market chime in. The typical OEMs really are that interest rate in the guy bringing donuts and slick salesman, they are more interested in what you can do, how you can help us. And that's going to be more of an engineering discussion or it could be a supply chain discussion, okay, how can you support us in terms of providing a product to us. But I don't know, I'm a little skeptical about whether additional salespeople are you want to talk about at this point. Why don't we -- Mark, why don't you chime in? I'll take the other 2 questions, but why don't you chime in if you have anything you want to add to that answer on that question. .

Yes, Brian, I think you're correct. I mean we work really close with the technical and engineering folks and kind of goes back to our strategy to the have priorities and maybe to get projects and we work directly with them and help them develop new programs and products. and that really helps us get business more so than the traditional, like you said, Brian, going to the supply chain people bringing donuts, but it's a little different in our industry. It's more technical, more engineering driven. And if you're satisfying those groups, how the business usually comes our way.

Yes. Good. I think a lot of times it comes to was rather than we go into it, but that is a real kind of small close-in industry and people know where to find us. Long-term forecast, I understand I understand why you're asking that. I think what you try to do in Q3 is provide some information. A little bit like a little reluctant because I think the number is going to be shocking to our investors, meaning...

[indiscernible].

Yes. Okay. Well, let's see we can do to give you more perspective, a quantitative perspective. when we announced Q3 okay. Would that be right? And we'll work on that. I'm not saying we'll give you a hard like 3-, 4-year forecast, but there's something that you could sink your teeth into a little bit more. And the research, we're here. I mean, where to find us, we'd be happy to be covered. Like you said, Nick, not really our principal focus, but would be happy to be covered. And if anybody is interested, happy to talk to them. I think we are seeing a lot more visibility in the last few months or so. So we'll see what happens. I don't believe there's anything imminent where somebody is about to pick us up right now, but we're very open to being covered. So hopefully, those...

When the revenue doubles from here, then they'll come around. That's the way it happens a lot, but...

Maybe yes, maybe you're right. Any other questions you have, Nick? Or is that covering?

No, thank you so much. And it's glad to see that all the hard work, the stock has caught lightning in the bottle after the last quarter. And it's good. It's a nice thing to see hard work appreciate and reflected in the value. It must make all the employees and everybody feel good and the investors, obviously, but so thank you.

It's a good thing. Thank you very much for input, Nick. Operator, do we have any questions?

Currently, there are no further questions at this time. I actually see one just popping in by Chris Showers, Private Investor.

Brian, just, I guess, 2 questions. You mentioned the C2B material being a 60-40 lower to higher margin mix when the Patriot missile gets ramped up, will that be constant? Or can you get a higher mix there with the higher revenue converted material?

So I'll answer that. So what's going on here is their stockpile and stockpiling. And that's why there's the ratio is not really balanced. Now at the end of the day, though, there will be of C2B certain amount of fabricates required to make the C2B material. But at the end of the day, it all has to kind of even out. Right now, the OEMs are stockpiling. Why? Because they're nervous, they want as much as they can get because they see where the future is going. And they're not stopping. They're going to keep stockpiling, I think. But eventually, their plan is not to just have that stuff sitting in our factory. Of course, it's for us to produce the material that's used to make the rockenized materials for the [indiscernible] structures for the Patriot missile system.

Okay. And is there a timing on that, where you think that might pick up this calendar year?

Yes. I think as Mark alluded to, we had this issue with the recall and that was slowing down a lot in our ability to produce the the materials, the C2B materials. The recall is pretty much complete now. So we think that's going to open things up quite a bit even in the next quarter. I mean even this quarter, I think. So we'll see. With the aerospace, probably most industries, though, Chris, the demand is there, but that the supply chain can't turn everything on a dime, we can, but there's a lot of other steps along in the supply chain in order to be able to ramp up like with the A320, we could support 75 million airplanes a month at this point if they needed it. But -- and Airbus would like to be a 75 airplane for a month. I'm quite sure of that. What's holding back as the supply chain is supply chain is not able to turn on a dime. .

Was there another question, Chris?

No.

Okay. Okay. Operator, or anything else right now?

There are no further questions at this time. I would like to turn the floor back over to Mr. Shore for any closing comments.

Okay. Well, Brian, again here. Thank you very much for listening in. Sorry, the call went so long. And if you have any other questions, you want to call us any time we're happy to talk to you. Have a great day. Thank you. Bye.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day.