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DATE
Thursday, October 9, 2025 at 5 p.m. ET
CALL PARTICIPANTS
Chairman & Chief Executive Officer — Brian Shore
President & Chief Operating Officer — Mark Esquivel
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TAKEAWAYS
Sales — $16,003,810 in sales for fiscal Q2 2026, slightly above Park Aerospace (PKE 0.97%)‘s previous estimate of $15 million to $16 million.
Gross profit — $5,001,160 in gross profit for fiscal Q2 2026, with a gross margin of 31.2%, despite pressures from low-margin C2B fabric sales and ongoing new plant expenses.
Adjusted EBITDA — Adjusted EBITDA was $3,401,000, at the top end of Park Aerospace’s prior estimate of $3 million to $3.4 million, resulting in an adjusted EBITDA margin of 20.8%.
C2B fabric sales impact — $1.65 million in C2B fabric sold at a small markup weighed on gross margin; $415,000 in ablative materials manufactured with C2B fabric, which command much higher margins, partially offset this effect.
Production vs. sales — Sales closely matched production value during the quarter, resulting in no impact on the bottom line from inventory imbalances.
Customer requalification of C2B fabric — Requalification resumed normal production on 90% of specifications; the remaining 10% is under test, a process estimated to take another nine to twelve months.
Missed shipments — $510,000 attributed to customer certification, and testing delays.
Tariffs — Net tariff impact was minimal at $1,700, with costs passed through, and future exposure is expected to remain limited under current arrangements, as discussed on the fiscal Q2 2026 earnings call.
MRAS LTA price increase — 6.5% weighted average price hike became effective January 1 for the MRAS LTA as stipulated in the long-term agreement.
GE Aerospace sales forecast update — Park Aerospace now forecasts $27.5 million to $29 million in GE Aerospace program sales for fiscal 2026, down from a previous estimate of $28 million to $32 million, with current figures based on updated backlog and booking data.
Q3 outlook — Park Aerospace estimates sales of $16.5 million to $17.5 million for fiscal Q3 2026 and adjusted EBITDA of $3.7 million to $4.1 million.
Expansion capital budget increase — Estimated capital expenditure for new manufacturing facilities rose to $40 million to $45 million due to added line requirements.
Cash and balance sheet — $61.6 million in cash and marketable securities reported at quarter-end after a $4.9 million transition tax payment.
No share repurchases — No shares were bought back during the quarter or to date in fiscal Q3 under the current buyback authorization.
SUMMARY
Management disclosed that customer-driven stockpiling of C2B fabric continues to distort product mix, temporarily compressing margins but likely supporting future high-margin material sales as demand converts. Strategic clarity was provided around the critical role of Park Aerospace’s proprietary materials in missile defense and aerospace programs, including the company’s sole-source position on the Patriot missile system’s ablative materials. Park Aerospace signaled intent to further expand U.S. manufacturing capacity for C2B fabric, highlighting both existing and planned investments via partnerships and new plant expenditures. Unlike the previous year, management emphasized that industry OEMs are increasingly collaborating with suppliers and ramping up production to meet robust underlying demand. Long-term sales targets for fiscal 2026 were not formally issued, but management stated that total sales should exceed $70 million, driven by growth in both defense and commercial aerospace programs.
Mark Esquivel stated, “We have approval at about 90% of the specification,” regarding C2B customer requalification, with the remainder expected to take up to twelve more months to resolve.
CEO Shore asserted, “That represents very significant revenue with Park. We’re sole source qualified in that program,” citing sole-source qualification and sharply rising production requirements.
Management described the company’s operational approach as centered on flexibility, urgency, and responsiveness, emphasizing these as Park Aerospace’s core value drivers for customer relationships.
Park Aerospace’s expansion timetable was clarified, with objectives to have plans finalized and implementation underway by year-end to address surging defense and aerospace demand.
INDUSTRY GLOSSARY
C2B fabric: A specialized ablative composite material distributed exclusively by Park Aerospace in North America, primarily for missile defense applications such as the Patriot missile program.
MRAS LTA: Long-term agreement with Middle River Aerostructure Systems (MRAS), under which Park Aerospace is the sole-source provider of composite materials for a range of GE Aerospace jet engine programs.
AOG: Aircraft on Ground; an operational situation where an aircraft is grounded due to technical or maintenance issues, relevant for customer experience and supply chain urgency.
FAL: Final Assembly Line; a manufacturing line where the major components of an aircraft are brought together for assembly and delivery.
Full Conference Call Transcript
Brian Shore: Thank you very much, operator. This is Brian. Welcome everybody to the Park Aerospace Fiscal 2026 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. You want to pick that up because we’re gonna go through it. It’ll be a lot more meaningful to listen to us if you have the presentation in front of you. So we have quite a few new investors.
Last quarter, they’ve come on board. And out of consideration for them, I think we should go through some of the legacy items more carefully. I think in the past, legacy items, we just kind of skim over on the assumption that most people already know, are familiar with them. Veteran investors, just please be patient with that. Another item I want to cover with you is that on Tuesday, I had some unplanned oral surgery, and I’m not really feeling that great. So hope you can bear with me. And if I need Mark to take over, I’m sure he’ll be very 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 are more meaningful in the presentation. We go through a presentation. We don’t know whether you’re liking it, not liking it, interested, or half asleep. You know, the questions are always more helpful because we then know what people are really interested in, what they’re thinking about. So why don’t we go ahead and get started with the presentation? Slide two is our forward-looking disclaimer language. We’re not gonna go through that. But if you have any questions about it, please let us know. Slide three, table of contents.
Starting on slide one is our Q2 investor presentation, we’re about to go through now. In appendix one, we have supplementary financial information. We’re not gonna go through that 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 James 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 its galaxy. You know, but shouldn’t exist in quotes. Because I think we’re developing a common theme here. There’s 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 these are 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 18 prior Park proprietary Sigma stretch. Let’s go on slide four. Kind of more nitty-gritty stuff here. So quarterly results, let’s look at the right-hand column of the second quarter that we just announced. Sales, $16,003,810. Gross profit, $5,001,160. 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 over 30.
And it’s good that they’re over 30 because there are a couple of things we’ll talk about in a second that drag down our margins. Adjusted EBITDA, $3,401,000. And adjusted EBITDA margin, 20.8%. What do we say about Q2 during our Q1 call on July 15? Set our sales estimate was $15 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. I just want to remind you, especially for some of our new investors that we don’t this is not guidance. We don’t do guidance.
We give an estimate we’re saying to you, this is what we think is gonna happen. Now we could be wrong, but this is what we think. There’s I don’t know. Let’s call it practice. We have different terms for it, but let’s call it practice where everybody does it almost where, you know, let’s say it’s gonna be a hundred, they think it’s gonna be a 100. They go out with 90, you know, that’s their guidance. So then when they come out when they come back with a 100, they come out with a 100, then they’re heroes. And I don’t know. We think that’s not worthy of our time.
When we give you an estimate, we’re saying this is what we think is gonna happen. We’re not giving you a number which we plan to beat. Okay? Let’s go on to slide five. Q2 considerations. We always talk, well, always in the last few quarters, Erinn Group is as impact on a lot of things, including the quarter. So we entered into this business partner agreement with Aaron Group. It’s a very large aerospace company in France. Great company and they’re a JV between Airbus and Safran, I believe. And in January 22, we were we’ve been actually working for twenty years. They appointed us exclusive distributor of their Raycarb c two b fabric.
That fabric is used to produce ablative composite materials for XHANCE missile systems programs. Now, sold $1.65 million of that fabric in Q2. As we previously explained, we saw that fabric to our defense industry customers for a small markup. What’s going on here is the defense industry customers are stockpiling the c two b. We’re the exclusive distributor though, so they buy it from us. We buy it from we’re distributor, not a rep. We buy from area. And then we sell it or sell it, I should say, to the OEM.
But it’s of a strange thing because we keep the c two b fabric in our plant because the OEM eventually will ask us to produce prefabric with it. So even though we sell to them and it’s their product, it’s kept on the plan. The markup is small, so we have a significant amount of c two b fabric sales that’s gonna push down our margins. And we sold $415,000 with blade materials manufactured with c two b fabric in Q2. Now the margins on the later materials that we produce those fabric, very, very good. Very good. So that’s the offset.
But it’s still the ratio of sales of fabric to ablative materials manufactured with the CTB fabric are still at a balance. Right? So more fabric than materials, prefrac, let’s call it, What’s the reason? I already said it because the OEMs are stockpiling this product. A more normal kind of ratio would be forty sixty. So 40% would be the materials, and 60% would be the fabric. That’s not always gonna be exactly it, but just to give you a sense, So you see that the ratio is much more than forty sixty here, and that’s gonna drive down our margins. So let’s talk about let’s go on to Slide six rather.
Oh, we’re still on the topic of c two b fabric requalification by one of Park’s key customers of c two b fabric. This was kind of a it’s been a big deal for the last few quarters. Adam, Mark, I like, always give Mark the hard stuff to talk about. Can you help us with what’s going on with that recall?
Mark Esquivel: Yeah. So we actually do have an update this time. I think the last couple calls we said we’re waiting for approval. So do 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 you know, there’s a requirement within the spec that you have to lower and then 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, you know, 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 nine to twelve months. So, you know, we’ll continue to talk about know, when we get that approval. But as far as the program’s concerned, we’re back in business. We’re back running. You know, and we’re back to, I would say, you know, normal typical rates that we were running you know, prior to, you know, this I won’t say, issue coming up, but this recall coming up. So and we actually expect to see, you know, some upside, you know, in coming quarters, you know, and Brian will talk about some of that piece as well.
But I guess the story here, the message here is we’re pretty much back in business with, you know, running at our normal level.
Brian Shore: Okay. Thanks, Mark. Good news. Let’s keep moving here. Production versus sales. You bring this up because this has been an issue. Issue in prior quarters in terms of the impact on the bottom line. But in our Q2, our sales value production, we call it SCP, that’s not inventory value. That’s the value production. It’s a sales price. It was well matched with our sales. And that’s a good thing. That means it’s not that’s really very no meaningful, not no impact on bottom line. When our sales exceed our production, that is by a significant amount. That is a negative impact on the bottom line. But no impact in Q2.
And then last thing we’ll talk about in terms of bottom line impacts, significant ongoing expenses. This is something we had in our presentation for several quarters now. It’s not going away anytime soon. We’re operating our new manufacturing facility in Q2, including all these other expenses. And this act this is significant. So that’s why I was saying that the gross margin being over 31%, I think, that’s actually not bad because there’s two factors that hold it down. One is this the expenses related to new plant, the other is the let’s call, excess c two b fabric compared to the c two b material sales.
Total miss shipments, a little bit of surprise here. $510,000, that number is way up. But, you know, last few quarters, we keep talking about international shipping issues. That’s not the issue this time. This time, it’s something different. It’s customer certification, testing delays, a little bit of a new story here. It happens sometimes. You know, it just happens. Not it’s nothing we can do about it. It’s 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 seven, impact of tariffs and tariff split costs. You know what?
I should say net impact. I’m saying that to Mark earlier. It should say net impact the tariff and tariff related cost because we have tariffs. It’s just that 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 passed the tariff cost on. And then the future impacts, I think we’ll get back to that later Mark will talk through that later on in the presentation. Why don’t we go on to slide eight? So this is a slide we do every quarter, as you know.
Some of you veterans are probably tired of the top five, and it’s kinda usual suspects also. Like, alright. GKN, Kratos, MRAS, Tech. And. Tech is not well, you know, has it’s kind of a little bit of a new name for us, but the rest are usually suspects. The 7,500 that refers to Nordium, the h three two one n with XLR, that’s an that’s an MRAS program. Kratos, obviously, is Kratos, and the seven eight seven Dreamliner, that’s GKN. That’s for the Gen X one b engine. So it’s a it’s a g engine, but it’s not part of the MRAS LTA, which we’ll go into that later. Let’s go on slide nine.
So here we have our estimated revenues by air aerospace market segments. We call them our pie charts. I know about you, but I like to use it. Think they tell a bit of a story. Fiscal twenty one, that was the pandemic year where commercial aircraft was remember, there were airplanes, pictures of, like, seven thirty sevens not falling at all. Like, two people on them and they were, you know, basically, they were being parked. And then after that, the pie charts, you know, seem to be fairly stable.
Interesting what will be interesting is to see what will happen in the future because the commercial is gonna be accelerating because the program’s are on as those programs ramp up, but military will 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 Plus, niche military state programs. So we have a little pie chart here Radomes, 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 what, rocket nozzles, I think.
We changed the missile systems because the missile systems, we supply it to more than just the rock and nozzle other aspects of missiles that we supply it to. I think we used call unmanned aircraft drones, but I think more politically correct term is unmanned aircraft, but there’s no change in there. You know what? And other than nice pictures and you could see what the programs are, we really are not gonna talk about these programs anymore. It’s just not really appropriate. For us to say very much about the programs except understand, please, any picture we show you, that means it’s a program we’re 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 and 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 nineteen to twenty nine with MRAS Middle River Aerostructure Systems, a sub of ST Engineering Aerospace, You see we’re sole source for, you know, for composite materials. For all these programs, which are all GE programs. So what’s going on here? If you look at all the checked items below, they’re all GE engine programs.
And then what’s going on here is that even we got on these programs with GE Aviation, even before 2019 when Ameres was owned by GE Aviation. Now GE Aerospace. We got on these programs even before that. They were predecessor LTAs before this nineteen to twenty nine LTA. And then I think about five years ago, GE sold MRAS to ST Engineering, which is a large Singapore aerospace company. So that’s the explanation there. I’ve done a factory, you know about that. You know, when I guess around 02/2019, g said to us, look. You know, Park we’re gonna put we’ll give you this ten year agreement for sole solar source and all this stuff.
All these great programs, wonderful programs, but, you know, we really are concerned about redundancy. So would you please build on the factory? And we said, yes. We checked that box. That’s been done. I’m not gonna go through the individual program, maybe except to get didn’t know to talk about the first five are really all eight through 20 neo family aircraft programs. Alright. Do you have any questions about the specific programs? Just let us know. Let’s go on to slide 12 just to keep moving along here. Item the first item on slide 12, we’re just continuing here.
It’s this is a little bit of a nuance here because this is this program is was mentioned in the prior slide, but this is a different component. This and this also is part of our GE Aerospace LTA not necessarily the not the MRAS LTA. So I’m probably gonna hang only the technical, not necessary. Fan case is something we should talk about for a second. This is with g nine x engine triple seven x airplane. This is produced with our AFP material and other composite materials or the major fire replacement. That’s what the AFP stands for. It’s a robotic way, method for producing composite structures.
And this is planned to be included in the LIFER program, MRC life of program agreement. Next item. We had a 6.5% weighted average price increase in our MRASLTA effective January 1. That was that was already built in the s LTA, you know, a long time ago. And next item, park the LTA was park MRSA LTA was meant to include three proprietary formulation products and those are now going undergoing qualification Then life of program agreement have requested by MRAS and STE So we’re still negotiating this, I guess, and I think there’s 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 SDE and MRAS. It’s something they want. They want the stability 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. It I don’t wanna give you the wrong impression It’s all, like, actually negotiating. We it’s like we talk about it, then three months go by, and then, you know, so I think now we’re planning to have some get together in December to sorry, November to hopefully get through this. We’ll see. We’ll keep you posted.
Item page 13 rather, slide 13, So let’s talk an update on some of these GA change programs, age between a Neo family. That’s a wonderful, wonderful program that Park is on, sole source qualified. And let’s talk about that program. Everybody says a huge backlog of these airplanes, over 7,000 of them. That’s a lot of airplanes. A lot of airplanes. And let’s just talk about the well, whether the we can take a look at the aircraft, the A320neo family aircraft deliveries. We’re not gonna go through it here, but, you know, 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. They’d be at 75 per month. What’s be what’s holding them back is issues with supply chain. So this year, year to date, we’re at 44, but don’t get fooled by that because they usually, kinda make their year in the last three months. And if you look at September, you could see what’s going on here. They’re already the Airbus is already ramping up 59. We’re delivered in ’59 is your 20 neo family aircraft delivered in September. Let’s keep going. Slide 14, just continuing here. The importantly, the engine supply bottleneck.
Remember I said that one of big issue is supply chain restrictions That’s what’s preventing Airbus from ramping up. To their target of 75, which gives it a minute 75 per month. CFM, they have another engine. Let’s just talk about CFM, the LEAP one a engine. Reportedly improving that it’s getting better. And I think that’s a deliberate focus by g and SCFM, which is a very good thing because that’s probably the most significant restriction to Airbus’s ability to ramp up to that 75. They it’d be up there now, they upon how many orders they have. So that’s that’s very good news actually.
As we already alluded to, Airbus is targeting a delivery rate of 75, eight H320neo family per month you could see that, you know, they’re still at, you know, 50 to 55, so they still have a way to go, quite a way to go. Two engines approved for the a three twenty neo aircraft. We’re on the CFM LEAP one a engine. We’re not on the we have nothing no content on the Pratt and Whitney GTF engine. And so I guess that covers the second bullet item. We supply into the h three twenty family aircraft using the LEAP-1A engine.
According to the second quarter, 2025 edition of Aero Engine News, which is kinda like a bible, for us anyway. The CFM LEAP one a’s market share with you know, compared to the Pratt market share, aforementioned orders, A320neo family, 20 neo family aircraft per month, that’s 64.7% market share translates into 1,165 LEAP engines per year. That’s a real lot of engines and, you know, lots of revenue per park at that point. Slide 15, As of June 30, 2025, few months ago, were a little over 8,000 firm LEAP one a engine orders. These are not These are LEAP one a engine orders where we’re sole source qualified. Over 8,000.
If you wanna look at slide 29, you get a feel for what our revenue per unit is due to, you know, get your pocket calculator out and do the math. You could see what that 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 h three twenty one XLR, and this is a variant. We’re still talking a three twenty family. Okay? We’re not off to a different aircraft. This is part of the a 20 family. This is recently introduced, supposedly changed 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. Qantas is you know, very involved in the program, American Airlines, Iberia Airlines. The reason I highlight this is a lot of lot of airlines are buying this airplane. Why am I highlighting this They call it a game changer. But what’s really, I think, very impressive to me is that they say they claim they’ve had almost no AOGs that’s aircraft on grounds after almost a year. That’s really a big deal.
Because normally, the first year or two, there’s all kind of bugs you have to get out of a new airplane, a new design, and the airplane sits on the ground a lot. And it’s kind of you just expect it. It’s not good because, you know, when the air airplane’s sitting on the ground, the airlines aren’t making any money. And you kind of expect that if you get a, you know, an airplane that’s been recently certified and delivered. But here you go, they’re they’re saying almost no way AOGs. I’ve never heard of anything like that. That’s quite impressive. Boeing has no response. To this aircraft. Let’s go on to slide 16.
Mark Esquivel: So still on a three twenty here, folks.
Brian Shore: Airbus plans to open a new a three twenty aircraft family final assembly lines, FALs, in The US and China this month. Know, this couple weeks. So these two new FALs in combination with the existing FALs, FALs in Germany and France will provide Airbus with the manufacturing capability to achieve a 75 h 20 neo aircraft per month delivery goal in ’27. So, you know, this is nice because Airbus is they’re putting your money more than mouth this year. These FALs are they’re they’re a big deal. So that’s good news. And then breaking news, October 7 oh, this is the day in my oral surgery, I think. Yeah. There are two big things happened on October 7.
That’s just two days ago. The a three twenty aircraft family became the world’s most liver commercial jet ever. Of course, that means it beat out the seven thirty seven Not just a max. This is the seven thirty seven family versus the a three twenty family. pretty big news, I guess. COMC nine one nine that’s a Chinese made aircraft. Comac is targeting oh, this airplane is designed to compete single aisle with They’re targeting a thirty nine one nine aircraft delivered in 25. But recent and confirmed reports saying they’re probably for sure for sure that this target. I can’t tell you I’m very surprised.
I probably would’ve you know, to be just totally candid about it, I would be more surprised if they met the target. I’m not gonna go into why, but it but I’m not I’m not surprised or really disappointed. Malaysian Airlines, AirAsia, has confirmed its advanced talks to purchase these airplanes. Why is that important? Why am I on that? Because there are a lot of air airlines that are buying this airplane. But the reason I’m focusing on is this is a non Chinese airline. This airplane is certified by the Chinese FAA, I think, called CAAC or something like that. So the thought was originally this Comac airplanes would be China only airplanes.
Well, that’s not what Comac wants. They’re still the airplane outside of China for operations outside of China. The plan to achieve reduction rate of 200 airplanes But what’s interesting here, they’re they delivered it to same kind of topic really. Laos Airlines, Air Cambodia, signed up. Again, what’s what’s the theme here? Non Chinese airlines. So, originally, you’re thinking the China the Comac airplanes are gonna be China only, but that’s obviously not what Comac wants. Triple seven x, Boeing triple seven x, we have slowed down a little bit talk, but this one, this is a, you know, important program for 1,500 out flights and nearly 4,100 out flight hours. That’s a lot. That’s good.
This picture was taken by a friend of mine a couple of few years ago when the triple seven x was doing cold weather testing in Fairbanks, Good place to go for cold weather testing. So let’s talk let’s go on slide 18. Sorry. Boner poorly 565 open orders for the airplane. Boeing had previously announced that the airplane program was on track for certification late twenty five and entry into service. 26. The Boeing CEO recently stated the certification program is falling behind schedule. The CEO further stated the aircraft and the engine did Gen X engines, the nine x range, g nine x engine are really performing quite well.
And that the potential delay in certification was being caused by increasingly deliberate FPA scrutiny. Get the sense there’s some tension there Boeing and the FAA. You I do anyway. A key gating item for is the receipt of the called the type inspection authorization from the FAA. Because as the CEO explains, you know, they can fly these airplanes. They need to have five airplanes to use for certification program, but those flights don’t really count, you know, towards certification. Till they get to the TIA. There’s a lot of boxes that have to be checked for airplane to be certified. So they can go fly the airplane, which is good.
They can learn a lot more about the airplane, but they can’t check those boxes until they get their TIA from the FAA. Boeing hasn’t announced any new targets for the certification and EIS, but speculations that they’d be pushed into next year at ’26. Let’s go on to slide 19. So let’s talk about big picture GE aerospace jet engine sales history forecast estimates. The top is the sales history. One go control history accepted the site and q $27,500,000.0. But a little higher than we forecast. GE Aerospace program sale forecast, sales forecast estimates, Again, not guidance estimates.
Two three, we’re estimating $7.5 to $8,000,000 And total for the year, got a slow down here a little bit, $27.5 to 29,000,000 Now in our prior presentation, we indicated that we’re looking at 28 to 32,000,000 for the year for fiscal twenty six. But as we explained to you, information called a bill plan from our customer. Wasn’t our forecast. It was their forecast. Now we have now the current forecast 27 and half to 29. That’s now part forecast based upon what? Based upon the backlog for Q3 and Q4. Q3 is already booked. Q4 is partially booked and what we expect, you know, based on lots of life experience to the additional bookings for Q4.
So now this is our number, 27 and a half 29,000,000. Let’s go on to Slide 20. Park’s financial performance history and forecast estimates. Estimate singular. So we just have the history up top. You already saw this just for perspective and context. Down below, our Q3 twenty six Q3 financial forecast estimates. Now plural Uh-oh. Sales of 16 and a half to 17 and a half million, Adjusted EBITDA, 3.7 to 4,100,000.0. That’s our estimate for Q3. 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.
We think it’s interesting just so you can see what’s going on here. Historically. You go from 17 to 20, like, every year. We increased by about 10,000,000, then we got stalled out. So we’re kind of at into fiscal twenty five, we’re pretty much where we were fiscal twenty. And, obviously, that’s because of the pandemic You know, the pandemic really had a very big impact on commercial aerospace. It wasn’t 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 twenty six this time.
But we believe that the number will be over 70,000,000 for fiscal twenty six. We’ll just give you that number. We’re not giving EBITDA, 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 my life of input we received. Different kind of attitude on the part of the OEM in terms of ramp up to meet demand and also working with suppliers and supply chain in a much more productive and you know, a more, I know, more collaborative way. Sorry. Coming up trying to come up that word collaborative way. So it’s not just a little thing. It’s a big thing.
It’s it’s very palpable in the industry. Happens. But to us, it seems like there’s something really going on here. And we’re not we’re not alone in that opinion. We’re not alone in that opinion. So let’s see what happens. You know, just so you know, we’re probably looking about a little over 70,000,000 for fiscal twenty five. Let’s go on to slide 22. Okay. General park updates. Agreements with Arian. Okay. We gotta slow down with Arian again. We entered in that business partner agreement in January 22, wondering which Arian ported up. Pointed us as exclusive North American distributor. We already covered that. Okay?
But then on March 27, ’25, just early this year, Park and Aaron entered part 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. It’s probably about 5,000,000 for million, €587,000 against future purchases by Park of c two b fabric. These funds will be used by Erie to help finance the purchase of additional installation of new manufacturing equipment for Aireon’s production of the p c two fabric in France. And that was that should be paid to area in three installments the first of which is already paid about, you know, $1,000,303,176,000 euro. That’s about $1,500,000.
So that would affect our cash when we reported Q1. Let’s move to Slide 23 rather. The purpose newest of this new agreement is to provide additional c two b fabric manufacturing capacity to support the rapidly increasing demand for c two b in c two b fabric in Europe and North America. Just so you know, one of the big programs that uses c two b fabric is the Patriot Missile Program. Ariane Group recently asked to partner to partner again with them on a study related to the potential significant increase of c two b fabric manufacturing capacity presumably in The US. The study expected cost about €700,000.
We split it $50.50, so that’s probably about $410,000 Park, and we’ll record that when our Q3 is a special item. Just want to be aware of that. We’ll get back to this later on the presentation on the area study. Just continuing with general updates, our lightning strike protection material certified on the Passport 20 engine. Using the using the Bombardier Global 7,508,000 Bisinjet. Its revenue is about approximately 500,000 per year expected on our LSB material. We’re very happy about this. Our LSB is already qualified, approved, and used on the a three twenty and the nine one nine, but have not just getting it approved now.
On the s four twenty engine and also thought to get approved on what’s called the 10 a engine for the back nine zero nine. 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. We signed we entered into an LTA with Aerospace. And for calendar years twenty five to thirty. Parked and then another update. Parked discussion with two Asian industrial conglomerates relating to Asian manufacturing. Do inventors continue? We’ve been talking about this for a while. John Jamieson’s in Asia now working on this project along with one of our other guys.
So we’ll see what happens. Seems interesting, but we’ll see what happens. Okay, Mark. Your turn. Tariff, international trade issues, what’s the expected impact of tariffs going forward, you think?
Mark Esquivel: I don’t think much. I know this quarter alone, we had about $1,700, which, you know, we don’t like to take on any additional cost. But that was mostly, you know, nonmaterial. Items. So going forward, again, as I mentioned before, we got ahead of this pretty early. You know, we’re, we put controls in place to manage it. We’re, passing the cost along to our customers, whether it’s through you know, contracts or, you know, stuff like our POs or stuff like that or order confirmation. So I don’t expect you know, 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 it’s very impact to our business.
Brian Shore: K. Thanks, Mark. So let’s keep going here. Current MRAS supplier core scorecard or scores. What happened? We don’t have all hundreds. Here. We don’t have all hundreds. Does MRS still love us? Yeah. I think they do. I think I mentioned to you in prior quarters that told that most suppliers would be happy to get eighties. And Emirates finds it a little bit humorous that we ask, well, what happened? And what we doing what do we need to do to fix these tissues? It’s called technical issue in terms of what how we recorded something. So we take it seriously. We’re we’re a 100 company. We’re not a 99.7 country, company rather. So we take it seriously.
And, like I said, MRC I think, finds it a little amusing that we spent so much time talking about why we’re not on a what not why we didn’t get a 100 on when we reached 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 parks egg strategy. How do we make our customers love us? With our calling 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 customers and say, what else can we do? What else can we do? What else can we do?
Before they even ask us for anything. Making customers love us is a boiler room thing, not a boardroom thing. You know, the board’s on board. With a strategy. You know? We’ve certainly reviewed it with the board. But the strategy happens on the factory floor, not on the boardroom. That’s where the rubber hits the road. It’s up to all our people to make the strategy work. It’s a boiler room thing. So first, for this strategy to work, all of our people need to be bought into it and feel passionate about it. Making customers love us is the secret to our success.
You know, it’s a hidden plain sight secret You know, sometimes the most brilliant ideas are the most obvious ones. With a benefit of hindsight and the well, why didn’t I think of that? I don’t know. Why didn’t you think of So the secret is kind of hidden plain sight, but it’s a secret to our success. Slide 26, buyback authorization. We don’t have to spend a lot of time on this. Let’s just go down to the last two check items We did not purchase any shares, and in fiscal in our second quarter, and we don’t we’ve not purchased any shares so far in our third quarter date.
I don’t think we’ll be my feeling, my opinion is we probably won’t be purchasing too many shares in the near future, but we’ll see about that. Slide 27, again, this is just gonna review Park’s balance sheet cash and incredible cash dividend history. Long term debt, we don’t have any. We had reported $61,600,000.0 of cash and marketable securities. At the end of Q2. But we also made a final transition tax installment payment of $4,900,000.0 in Q2. And Q1, we recorded cash in into q 1 of $656,000,000. So if you take that $4,900,000.0 subtracted from $65.6 million, it gets you to that $61,600,000.0 number more or less. It explains the difference.
Forty sec consecutive years of interrupted uninterrupted regular cash dividends, and we’ve now paid over $606,000,000 or going in $9 and cents per share in cash dividends since the beginning of fiscal two thousand five. This is our Park Founders. The run reason we placed a picture of our Park Founders here is because we started out with basically nothing. We’re two guys that started the company, I think, in 1954 with about $40,000 that they had saved from war duty. And, you know, here we are paying over $600,000,000 of cash dividends in last twenty years or so. Let’s go on to slide 28. Okay.
We can kind of skim through this because these three slides are exactly how the same slides that we showed you last quarter. I think the quarter before that. Financial outlooks for GE Aerospace change and Juggernaut, call it Juggernaut. It’s a timing. We’re not sure where to talk about yeah, the nine one nine is, you know, a little slow ramping up. And the triple seven x is having a little more difficult difficulty getting certified. So we don’t know. We don’t really spend a lot of time worrying about that. But the thing is that we say it’s a juggernaut. It’s coming. It can’t be stopped, and the key thing for us is we better be ready.
You go on to slide 29. There’s no change. Anything here that all the numbers are exactly the same. Like I said, the pre you know, relate to a previous slide, we feel that GE and CFM have kind of gotten a religion that they’re they’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 slides. We won’t go through those. If you have any questions, any of this, let us know. Okay. Let’s go on to slide 31, Warren Peace, Park Gingernaut. Peace for the Question War. These slides came from originated in the last quarter, although there’s some updates to them.
The first thing I wanna cover again though is we’re not providing any inside information on any of these programs. All every all this information in these slides is based upon publicly reported news and reports. We don’t give away inside information. Especially with defense programs. Unprecedented demand for missile systems. Missile systems stockpiles have been seriously depleted by the wars in Europe and Mideast 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 breakneck schedule quotes, partly in preparation for potential conflict with China.
List of Pentagon targeted missile systems, including PAC three missile system, the LRASM, and the s m six. The Patriot missile system is a particular priority. I think you should know the park is on all those programs, participates in all those programs, all three of them. Review and update of the PAC three Patriot missile system. The reason we spend more time talking about this is 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 PACS prepaid missile systems in history occurred in response to Iran’s ballistic missile strikes on our air base in Qatar. Going on to slide 32, What happened here, in anticipation of this, I guess we knew what’s gonna happen, We moved Patriot missile system to Qatar from South Korea and Japan knowing what was coming And we called it a shell game, you know, moving the systems 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 deplete their systems when the Department of War wants to significantly increase the patriot missile stockpiles in Asia. See the problem? So just public stuff. Israelis supply a patriot missile systems seriously depleted. Ukraine supply of patron missile systems. Seriously depleted. Other countries have been waiting for Patriot missile systems for years.
September 3225, Lockheed’s Missile and Fire Control division received its biggest contract in history, a $9.8 billion award from the US Army 1,970 Patriot missiles Patriot missiles According to the Wall Street Journal, the Department of War wants suppliers to ramp up to produce approximately 2,000 Patriot missiles per year which is almost four times the current production rate. Didn’t we say something about quadruple in the prior slide? We did. Four times production rate. So we’re talking about well, we’ll get to I’m gonna wait and wait. We’ll get to in a second because I thought you say park is all sorts qualified. We’ll get to that in a second. Let’s go on to slide 33.
Patriot missile systems are planned to be incorporated into the Golden Dome. As apparent from the reporting that The US plans to do much more than just replenish these depleted systems. So next hour item, parts ports, the patron missile system with specially ablated materials produced in areas of c two b fabric, And Parker sole source qualified for specially ablated materials on this program. So I was gonna say at the bottom of slide three two, there’s 2,000 missiles per year. That represents very significant revenue with Park. We’re sole source qualified in that program. Park, we’re back to slide 33. Sorry to bounce around on you here.
Parkers recently asked to increase our expected output of specially inflated materials for the program by significant orders of magnitude. We can’t really say how much but significant orders of magnitude, hopefully, that gives 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 area? With Arian for the purpose of increasing c two b 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 partnering with Aaron Group in a study related to potentially significantly increasing c two b fabric manufacturing capacity presumably in The US. This is a big deal. Let me just say this. Once we’re our we’re 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 gonna say anything more about it, but let me just say it’s a big deal. We covered the arrow three four missile systems last time, so we just kinda covered it again. Not too much here. Last item, updated parts involvement. Remember, we’re we were second source qualified in the r o three.
We weren’t really expecting orders. We got them. We already got them. Our four were sold source qualified on the hour four, which is expected to go into production, think relatively soon. Let’s go on to slide 35. This is really probably the most important slide this whole warrant piece section of the presentation. The above missile programs are just a small representation of critical missile programs parked is supporting or planning to support There are too many programs to iterate here, and many, probably most, are too confidential and sensitive to mention for national security or other reasons. But, you know, this is highlighted or bold whatever you an italics.
But please understand that certain of these programs represent very significant revenue for 36. Major expansions. So I’m just gonna give a quick update here. I know we’re running late, with time, but got a lot to cover here. And like I said, we got new investors, so we couldn’t just skim through things too much. A major new expansion, we talked about this in the of our manufacturing facility. We talked about this in the last February presentations, I believe. So we’re planning a major new expansion of our manufacturing facilities. It could be at Newton, or elsewhere. The plant expansion will include manufacture following lines elution treating, hot melt film, hot melt tape, hypersonic materials manufacturing.
A current estimated capital budget for new manufacturing plant equipment 40 to 45,000,000. That’s gone up. I mean, I forget what we said last quarter, maybe $30.35 to forty. Why’d it go up? Well, we know the line. That extra $5,000,000 is for another line because the requirements keep going up and up and up. It’s quite incredible, So new manufacturing slide three seven, just continuing new manufacturing, major new manufacturing major new expansion of parts manufacturing facilities. Why are we doing this? Are juggernauts required? We have a juggernaut for the aerospace. We have a juggernaut for defense and missile programs. Our long term business forecast requires it.
And the second bullet item under the that check item is that our forecast has increased since we talked to you on July 15. And also have manufacturing capacity needed for park to be parked. Or calling cards. Again, flexibility, responsiveness, urgency. We don’t run a business a mill, meaning that, okay, we campaign and you want something, well, we could figure when maybe a year from December. We don’t run our business that way. Urgency, responsiveness, flexibility. So it’d be really stupid for 38. We’re just continuing on the expansion We’re not sharing our long term business forecast this time. But opportunities for Park are significant. Timing is now.
We must take advantage of the opportunities We must not hesitate or we will squander the end quotes, once in a 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 used the term once in a lifetime our opportunities. And the board was really got thought, well, let’s come from Mark. This must be really big. You know? Because Mark is not a guy who’s given to hyperbole. You know? He’s usually a skeptical guy, which is good. You know, you want your president to be skeptical of things.
That was his quote, went to lifetime and the board’s thought, wow. This must be a big thing then. Our objective is to have our expansion plan in place by the end of the calendar year and to be moving into implementation. The implementation phase by or a plan by then. Slide 39. How are doing at Park? Let’s change gears a little bit. I’m sorry. It’s gonna take you so long, but like I said, we’re trying to cover a lot of things here. So what are parks objectives? This is How do we measure success? I think there’s a lot of misunderstanding about this. So let’s talk about it. We measure success.
Our objectives are getting qualified sole source qualified whenever possible on chosen special aerospace programs. These are programs you wanna be on. These are the special programs, the wonderful programs. That’s our success. Once we get qualified on our chosen special programs, our objectives have been achieved. We’re done. Once we’re qualified in those children programs, in italics, all we need to do is support those programs with what? Extreme urgency, flexibility, responsiveness. That’s it. Other than that, it’s up to the program OEMs to determine the side of quickly their programs will ramp. That is not something over which we have control, and it’s not even our concern. We’re in the program. We achieved our objective.
Our objectives has been achieved. Some guy wrote something about you know, we’re shifting blame or mitigation plans, and it’s just kind of a total misunderstanding of how a park and our objectives and how we operate. Once we got in these programs, sole source qualified, our objectives have been realized. And we let’s talk about it. How we done with our objectives? If you ask me, we have been incredibly successful. We’ve gotten on wonderful aerospace programs, a special program that you want to be on. Most of which we can’t mention. You know, you know some of them already, a three twenty,
Mark Esquivel: Wow. Patriot. Wow.
Brian Shore: A lot of them we can’t mention. Slide 40. And we were nobodies when we came into the aerospace industry. We came from nowhere. You know, we welcomed into the industry with open arms. With the entrenched competitors, I don’t think so. They didn’t want us. I mean, they were brought polite and respectful Well, they clearly didn’t want they did not welcome us. We achieved what we achieved against great odds, incredible success, by getting on these programs that are the envy of the industry. From nowhere, nothing. Went into an industry where there’s in aerospace, there’s a lot of entrenchment. People kinda programs, they get very complacent sometimes. That’s not us. We don’t do that. Are we lucky?
If you ask me, we earned everything we got. Are we an overnight success? I don’t think so. There’s been a long and difficult row much sacrifice along the way. It’s a road we chose. Let’s go on to slide 41. I think that’s our last slide. Almost there, folks. Very fortunately for all of us, Park has the courage and conviction. This should be involved because it’s important to stay the course with our principles that are simple but elegant. X strategy in the face of sometimes unrelenting doubts, negativity, and skepticism. Very fortunate of all of us meaning, you know, investors too. Very fortunate that we stood our ground and our knees didn’t buckle.
We did what we thought was right, under know, 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 in a life lifetime opportunities. Wouldn’t be. And we’d all be we’d all lose out. You know? We’ll lose out. So how are we doing at Park? We believe Park has done a remarkable job of positioning our company to capitalize our thank you, Mark, once in a lifetime opportunities we are now facing. These are unprecedented times. For Park. Okay, operator, so we’re done with our presentation, we have to take any questions at this time.
Operator: Thank you, Mr. Shore. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line has been You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset pressing the star keys. I see we have a question coming from Nick Ripostella from NR Management. Your line is now live. Please proceed with your question.
Nick Ripostella: Hey. Good afternoon. 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 and three to five years.
You know, there’s so many things that are blossoming. You know? 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 the radars of, firms out here to pick up research coverage. You know? There’s so much research out there now by niche firms, and you have such a great story. I was just wondering if anything’s happening in that regard. Thank you so much.
Brian Shore: Thanks, Nick. Thanks for your questions. So let’s take them in order. Additional salespeople, you know, I think Mark, you can chime in. We’ve learned a lot over the last twenty years, and I think our view on salespeople is a little bit skeptical. I couldn’t refer to have additional technical people, engineering people, in terms of getting more business. We certainly have our hands full of 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 you know, it’s a small industry, particularly in the fence side, and we have close ties with a lot of the OEMs and the military as well. So the work gets out pretty quickly. The important thing is we have engineering people to support those activities rather than salespeople that go get those the business. And I’m not sure that really works anyway. I don’t think that I don’t know. Mark chime in. The typical OEMs really are that interested in you know, the guy bringing donuts and a slick salesman. More interested in what you can do, how you can help us.
And that’s gonna be more of an engineering discussion, or it could be a supply chain discussion. Okay. No. How can you support us in terms of providing a product to us? But the you know, I don’t know. I’m a little skeptical about whether additional salespeople are we wanna talk about at this point. Why don’t we Mark, why don’t you chime in? I’ll take the other two, questions, but why don’t you chime in if you have anything wanna add to that, my answer on that question.
Mark Esquivel: Yeah, Brian. I think you’re correct. I mean, we work really close with the technical and engineering folks and kinda goes back to our strategy too. They have priorities, and they need to get projects And, you know, we work directly with them and help them develop, you know, 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. A little different, you know, in our industry. It’s more technical, more engineering driven. And if you’re satisfying you know, those groups, you know, that’s how the business usually comes our way.
Brian Shore: Yeah. Good. Thank you. Yeah. I think a lot of times it come it comes to us rather than we go into it. You know? But, you know, is a real kinda small, close in industry, and people know where to find us. Long term forecast, I understand. Understand why you’re asking that. I think what we’ll try to do in Q3 is provide some information a little bit like, a little reluctant because I think the number is gonna be shocking. To our investors.
Nick Ripostella: I want some nice shopping.
Brian Shore: Yeah. Okay. Well, let’s see we can let’s see what we can do to give you more perspective, quantitative perspective. When we announce Q3. Okay? Would that be alright? And we’ll work on that. I’m not saying we’ll give you a hard, like, three or four year forecast, but there’s something that, you know, you could sink your teeth into a little bit more. And the research, you know, we’re here. I mean, they were know where to find us, so we’d be happy to be covered. Like I said, Nick, not really our principal focus, but we’d be happy to be covered. And, you know, if anybody’s interested, I’m 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’s about to pick us up right now. We’re very open to pick to being covered. So, hopefully, those that is when
Nick Ripostella: when the revenue doubles from here, then they’ll come around. You know? That’s that’s the way it happens a lot. But Maybe
Brian Shore: Yeah. Maybe you’re right. Any other questions you have, Nick, or does that cover it?
Nick Ripostella: No. Thank you so much. And you know, it’s it’s glad to see that all the hard work, you know, the stock has caught lightning in the bottle after the last quarter, and it’s good. It’s night it’s a nice thing to see hard work appreciated and reflected in the value. You know? It must make all the employees and everybody feel good and the investors, obviously. But so thank you. Sure.
Brian Shore: It’s a good thing. Thank you very much for input, Nick. Operator, do we have any other questions?
Operator: Currently, there are no further questions at this time. Oh, I actually see one just popping in by Chris Showers. Private investor. Chris, your line will be unmuted. Please proceed with your question.
Chris Showers: Hi. Thank you. Brian, just, I guess, two questions. You mentioned the c two b material being a sixty forty 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.
Brian Shore: So I’ll I’ll answer that. So what’s going on here is they’re stockpiling. Stockpiling. And that’s why there’s the ratio was not really balanced. At the end of the day, though, there will be a certain amount of c two b fab that’s required to make the c two b material. But at the end of the day, it all has kinda even out. You know? Right now, the OEMs are stockpiling Why? Because they’re nervous. They want as much as they can get. Because they see where the, you know, where the future is going, and they’re not stopping. You know. They’re gonna keep stockpiling, I think.
But eventually, you know, their plan is not to just have that stuff sitting in their factory, of course. It for us to produce the material that’s used to make the rockinized materials for the rock nozzle structures for the Patriot missile system.
Chris Showers: Okay. And is there timing on that where you think that might pick up? This calendar year?
Brian Shore: Yeah. I think as Mark alluded to, you know, we had this issue with the recall, and that was slowing down our a lot, you know, our ability to produce the materials, the c two b materials. The recall is pretty much complete now. So we think that’s gonna open things up quite a bit. Even in the next quarter. I mean I mean, even this quarter, I think. So we’ll see. We’ll see. You know, with aerospace, probably most industries, though, Chris, the demand is there, but you that the supply chain can’t turn everything on a dime.
We can, but there’s a lot of other, you know, steps along the way in the supply chain in order to be able to ramp up. Like with a three twenty, you know, we could support 75 airplanes a month at this point if they needed it, but and Airbus would like to be a 75 airplanes for a month. I’m quite sure of that. What’s holding you back is the supply chain. The supply chain is not able to turn on a dime.
Chris Showers: Okay. Thank you.
Brian Shore: Was there another question, Chris?
Chris Showers: No.
Brian Shore: Oh, good. Okay. Operator, anything else right now?
Operator: There are no further questions at this time. I would like to turn the floor back over to Mr. Shore for any closing comments.
Brian Shore: Okay. Well, Brian again here. Thank you very much for listening in. Sorry the call went so long. If you have any other questions, you wanna call us anytime. We’re happy to talk to you. Have a great day. Thank you. Bye.
Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. Please disconnect your lines, and have a wonderful day.