Park Aerospace - Q2 2025

Transcript

Operator (participant)

At this time, I'd like to turn the conference over to Mr. Brian Shore, Chairman and Chief Executive Officer. Thank you. You may begin.

Brian Shore (Chairman and CEO)

Thank you, operator. Hello, this is Brian. Welcome to our fiscal 2025 second quarter investor conference call. Nice to have you on board. With us today are Matt Farabaugh, our CFO, and also Mark Esquibel, President and CEO. Well, we announced our earnings through a news release right after the market close. If you don't have that, you want to get access to that, because in the earnings release, there's also instructions as to how you can access the presentation that we're about to go through. The presentation is also on our website. You want to have that up or the in order for the discussion to be more meaningful. After we're done, as the operator told you already, we'll go through the presentation. We'll be happy to answer your questions.

So why don't we go ahead and get started? Why don't we go to slide two, our forward-looking disclaimer info. Let us know if you have any questions about the forward-looking disclaimer language. Slide three, our table of contents. Beginning in slide one, we have our investor presentation. Then we also have supplementary financial information attached as appendix, one at the end of the presentation. We don't intend to discuss that at this time, but if you have any questions about the supplementary financial information, let us know. Here we have a picture, the clearest picture of Mercury ever taken. Quite a beautiful picture, in my opinion. Thank you, James Webb Space Telescope, obviously taken by the James Webb Space Telescope. As many as you know, our proprietary Sigma Struts are incorporated into the structure of the James Webb Space Telescope.

So that telescope has a special place in our hearts. Let's go on to slide four. The quarterly results. When we focus just on the right-hand column, Q2 $16,709,000 sales, $4,757,000 gross profit, $3,204,000 EBITDA. Quickly, what did we say about our Q2 during our Q1 investor call? We said the sales estimate, sorry, $15.9 million-$16.4 million. So we came in just a little tad above that. Adjusted EBITDA estimate, we gave you $3 million-$3.3 million, so we came in right within that range. Let's keep moving here. Slide five, please.

Continuing with quarterly results for some considerations for Q2, there was approximately $2.2 million of ArianeGroup Raycarb C2B-NG product sales during the Q2 under PARK's business partnership with ArianeGroup. We talk about this often. This is the fabric that we purchase from ArianeGroup for ablative programs, for missile programs, and we then sell it to the OEM customers. It's turned around pretty quickly, within a couple of weeks. Quite low margins. It's really a markup, but we always say, "Well, don't worry, because once, when we actually produce the product and make the ablative materials, that's where the margins are quite good." But by comparison, there was only $750,000 of ablative material sales during Q2, so you see the little bit of an imbalance there.

Much more emphasis on the low margin part of the equation, less emphasis on the higher margin. Eventually, it all comes through, of course. There were significant ongoing expenses in Q2 related to bringing PARC's new production facility fully online. You know all about this, including expenses for depreciation. Let's just stop there with the asterisk. $1,260,000 per year, a depreciation expense related to the new production facility. This obviously does not affect EBITDA by definition, but it's important. But it does affect gross profit and gross margin. Approximately 2% impact on the gross margin, just from the depreciation, just from depreciation. And if you look at the gross margin in Q2, what was it? I think 28.5%.

Was that the number? Let me quickly make sure I'm telling you the right story. At 28.5, we always say we don't like it under 30. Just the depreciation alone would bring it up above 30, but it's not just depreciation. There's all this other stuff, and this other stuff is also included in the EBITDA or affects the EBITDA. Facilities, maintenance, utilities, insurance, other overhead expenses and expenses related to additional PARC people, all related to the new facility. These additional expenses; it's not an accident or a problem. These are planned expenses. I just want you to understand that. Required to bring the new facility fully online in order to meet the needs of the coming juggernaut in quotes, which is described later on in the presentation.

So it's all part of the plan, but nevertheless, these items are going to hold down our P&L and our margins until that facility is ramped up. And right now it's very underutilized, but we're doing it intentionally because we need to get going with that facility so we can meet the needs of the juggernaut and get, not get behind the power curve. Slide six, total missed shipments in Q2, 600,000. That's not a great number. Was the international shipment issue, supply chain, customers on hold, other miscellaneous issues. Yeah, so, the aerospace industry, not really a happy place right now. A little more difficult, a little more challenging for us. We got wars as well that are a factor, especially when you talk about international shipments.

There was no impact, though, on Q2, the sales and earnings from the storm damage, except for the $64,000. Sorry, I got that like dyslexic thing there. $46,000 of expenses re-reported as a special item in our Q2 earnings release. So other than the $46,000, no impact from the storm damage on Q2 earnings and sales. All production lines were fully operational and functional throughout fiscal Q2. And that's quite remarkable because remember, the storm happened in the last two weeks of Q1. So for all lines to be fully operational throughout Q2 was quite remarkable, really a miracle. Quite an achievement by our people, I must say. Let's go on to slide seven. Top five. We do this every quarter. Top five customers, alphabetically.

Aerojet Rocketdyne, these are kind of usual suspects. You know, you're probably bored of hearing these names. They're involved with the Patriot missile system. Aerospheres, they're a rep for IAI, Israeli Aerospace Industries, which is a very important customer of ours, and they produce the G280 for Gulfstream. GKN, that relates to the Boeing 777. That actually is not the airplane, it's the GEnx-1B engine that used to use on an airplane. Kratos, you know, when we talk every quarter, they're in the top five, I think, and we just select one of their aircraft. This time it's a BQM-177A. Quite an interesting airplane if you want to look it up on the internet. Middle River Aerostructures, yep, they're kind of the usual suspect.

MRAS, and we chose the Bombardier Global 8000 to represent them. Let's go on to slide eight. Estimated revenues by aerospace market segment, the pie charts. What's interesting to me is, look at 2022, 2023, 2024, 2025 year to date. The pie charts are really very, very similar, but the big difference is 2021, and that was the pandemic year, when particularly air commercial aerospace was, you know, very much, you know, I don't know how you say it, I mean, in jeopardy, almost looked like it might not make it. Let's go on to slide nine. This is the slide that Elena does for us. Elena is the head of customer service every quarter. She comes up with really interesting, cool programs to put in this little slide.

The pie chart, this is for the first six months. Radomes, rocket nozzles, drones, those we consider to be niche markets in military, but for us, even aerostructures is niche. Current programs, quickly, David Clark, you know, a huge customer, we love that customer. They make the helmets for the Air Force, and we supply materials. We also do kitting for them, which is nice. And then we got the MK-30 canisters for Raytheon ESSM system, that's ablatives. The MK-125 warhead for the SM-2, SM-6, those are hypersonic missiles, I think. And that's actually not ablatives in this case, it's one part of the structure. We can't say anything more about it.

MK 41 vertical launch system, that's actually parts that we produce with our materials. It seems like Elena was really focused on the missiles this quarter, so she must have maybe been having a lot of dreams of missiles, I guess. So let's go on to... But, nice selections. Thank you, Elena. Let's go on to slide 10. GE Aerospace jet engine program is another slide we give you every quarter. You have to understand, some of you complain about we go over things too much. There are new investors that dial in, you know, every quarter. We have to be fair to them, too. So we try to strike a balance here, you know. So yes, we include this slide every quarter. Firm pricing LTA.

It's a requirements contract from 1929 with MRAS, which is a sub of ST Engineering Aerospace, a large Singapore aerospace company. We built a redundant factory for GE, actually, in MRAS. That's in production, you know that. So what's going on here? We're sole source qualified for the composite materials for the nacelles, thrust reversers. On these programs, well, you notice they're all GE engine programs. So why is that? The reason is that when we entered into the LTA originally, MRAS was a sub of GE Aerospace, so we got all these GE aerospace programs at that point. And then, subsequent to that, GE sold MRAS to ST Engineering, but we continue on these programs. So let's go on to... And I'm not going to go through the programs.

You have any questions about them, let us know, please. Slide 11, continuing with GE Aerospace, MRAS PARC LTA provides for an approximate 6.5% weighted average price increase, effective January 1, 2025, for the products covered by the LTA. I've been asked about this a lot, and I said, "Well, everything you don't want to say, but now we're saying, you know, kind of in an investor presentation where it's appropriate." PARC composite materials. So, don't forget, we don't have to cover that one. We cover that every time. Let's go to the last one. Fan case containment wrap for GEnx engines for the Boeing 777 aircraft. That's produced with PARC's AFP and other composite materials. PARC recently received a PO for approximately $6.5 million for materials for this program.

So this program is ramping. Our customer received a large order for case wrap units. We're clearly not going to talk about numbers, but this was slowed down to us in terms of a PO, and there's more coming, I suspect a lot more. So this program is no longer just kind of development. It's really starting to ramp now. PARC materials for this program are expected to be included in the life of program. So they're not in the LTA because this came after the LTA, but the expectation is that we'll just put the GEnx, the GE9X, program into the life of program agreement, which we'll discuss in a second. Slide twelve. So just trying to watch the time.

MRAS PARC LTA was amended to include three film adhesive product forms for composite bond, metal bond. This is really outstanding because these film adhesive formulations were developed in a through a joint development agreement with MRAS and GE. And a lot of time and effort went into this, but it's outstanding because as soon as the development's done, then we go right into qualification. So that's really very wonderful and special. MRAS qualification of two proprietary film adhesive product forms in progress. Why not three? So this is the process. We go through a qualification with MRAS, and then MRAS needs to go through a certification process with their customers on selective programs. So the first program that MRAS intends to get us certified on does not use metal bonds.

So that's why we're not qualifying metal bond at this point. That'll come later, right? Life of program agreement requested by MRAS and ST Engineering. Agreement is under negotiation, and Mark led a team of, I guess, three Park people to MRAS a couple weeks ago. We spent a couple days. They spent a couple of days working on the agreement with MRAS, so it's under negotiation. So we finally made some good progress on it. But just keep in mind, this is what they want. They requested it, they being MRAS and ST Engineering. We're happy to do it, but they, they're the ones who requested it, and for good reason. Okay, let's go on to thirteen, slide thirteen. Continuing with the, this is now a little different, updated GE Aerospace programs now. A320neo aircraft family includes all these variants.

I won't, you know, read them off. Airbus has a huge, and underline huge, backlog of A320neo aircraft. Firm orders is 7,253. That's just so many airplanes. Unbelievable number of airplanes. Airbus had been maintaining that intent to achieve a rate of 75 A320neo family aircraft deliveries per month in 2026. Let's go on to 2014. So this is just a little history here about the deliveries over the prior years of the A320neo aircraft. You can see that kind of peaked in 2019, and then that's what happened, pandemic, the numbers fell off. In 2023, they got back to the pre-pandemic rate, you know, 571 compared to 561. And year-to-date, through September, 396 deliveries compared to last year, year-to-date, 391.

Don't annualize that, that doesn't work, because aircraft industry for some, you know, funny reason, a lot of deliveries happen in the last quarter. But it's basically saying we're kind of tracking last year, which is a little disappointing. We were hoping that we would be able to show, you know, a little bit of improvement from last year. Last year was 48 airplanes per month, as you can see. Let's go on to slide 15. Then on June 24, 2024, Airbus announced it's pushing out its goal of achieving the 75 aircraft family monthly delivery rate from 2026 to 2027. Not surprisingly, Airbus highlighted supply chain issues. Oh, boy, supply chain issues, déjà vu all over again, especially engine availability issues as a key reason for the push out. You know what's funny about this?

Do you remember, what was it, a year or two ago, we were all clear with engines. You know, it was not just Airbus said it, the engine company said it. The engine is no longer an issue. Everything's great. Now we're back in the soup with engines. I don't know what to make of that, but, you know, now engines are front and center in terms of what the main supply chain issues are all about. You know, supposedly maybe castings and forging for the engines, but it's engines, that's the, the problem. Clearly, based upon their huge backlog, Airbus would already be at that 75 per month rate, you know. Why is that? How many air-- What did we say? How many airplanes are on order? 6,000 something. I got to go back. What was that number? No, 6,000. 7,200.

72, 70, 7,253. Okay. So let's say they're at 50 now, which maybe they're not, but let's say they are at 50 now. That's 600 per year. Well, how many years is that with over 7,000 orders? Well, the problem is, Airbus wants to sell more airplanes. So they, you know, you order an airplane, your delivery is, what, 13 years down the road? That's not a-- That's not very conducive to selling airplanes. So one of the reasons Airbus wants to push it up to 75, 75 equates to 900 per year. That's still not you order an airplane, and you get it next year, but it, it brings the lead time down a lot, which will allow Airbus to sell more airplanes, which is what they want to do. They want to sell a lot more airplanes.

So anyway, will Airbus achieve its goal of 75 deliveries per month? We certainly believe they will. Will they achieve it in 2027? We believe they will, but we're not sure it really matters very much whether that goal is achieved in 2027 or maybe 2028. Key thing for Park is that we need to be ready, and the key thing is they will get to that rate. All these orders will be filled. They'll take more orders, and we just need to be ready. You know, we're not sure what the timing of the ramp will be. I don't think anybody's sure. We just need to be ready, number one. Number two, those sales will be there, and they're incredible sales for Park. 16 approved engines for the A320 aircraft.

There's two approved engines for the A320neo. There's the CFM LEAP-1A, that's the engine program we're on. Then there's a Pratt, Pratt & Whitney, a PW1100G GTF engine. Not in that program, just on the CFM program. We spoke lots and lots about the durability issues, especially for the Pratt engine. Won't cover that here. So let's see. According to the September 2024 edition of Aeroengine News, CFM LEAP-1A's market share for engine orders is 64.4%. That's a nice market share. I don't remember, but I think last quarter was maybe 62. You know, it's been around that 62, 63, 64 range. Moved up last quarter, but that may not be sustainable. I don't know, but at least it's well over 60.

At a delivery rate of 75 A320neo aircraft per month, at 64.4% LEAP-1A market share translates into 1,159, just do the math, LEAP-1A engines per year. What's that worth to Park? Just go to slide 34. It'll give you, you know, an idea of what it's worth to Park each year. They're currently, this is just one of these huge numbers, 8,238 LEAP firm LEAP-1A engine orders. That's a lot of engines. What are those firm orders worth to Park? Well, I mean, go to slide 34. It tells you what we get per engine. I think it's about $250 million.

And that assumes that we're gonna, you know, continue to supply after 2029, which, whether we have a life of program or not, we're quite confident we will. And it does not assume, doesn't take into account there'll be price increases during that time frame. But you think about it conceptually, $250 million, does it really matter to us whether it's 2027, 2028, 2029? It's just a lot of, you know, a lot of revenue for Park. And those engines are gonna be sold, you know, those engines are gonna be produced and sold. Those are our engines. That's our program. So, you know, I think of people selling the stock at $13, I'm not sure what they're thinking. Let's go on to slide 17. Airbus. Okay, here's one of the variants, A321XLR.

Airbus opened additional XLR production line in July. The A321XLR, powered by a LEAP-1A engine, received its EASA type certification in July. That's really nice news. That's good, and the EASA is the European equivalent of the FAA. The first A321XLR delivery is scheduled for late this month to Iberia, and according to Airbus, has over 500 orders for this program. Important program for Park. Let's keep going. Slide 18. Okay, now let's go to COMAC. COMAC C919. That's the single-aisle airplane that COMAC developed to compete against the seven thirty-seven and A320. That has another kind of LEAP engine. This is called LEAP-1C. I don't know, maybe C stands for COMAC. But it's a, it's a variation of the same engine that's in the A320neo.

COMAC plans to achieve production rate of 150 C919 aircraft per year by 2028. I think that's credible, you know? They're investing huge amounts of money in production lines. I think they now have three final assembly lines. Reported to have over 1,500 orders for C919 aircraft. C919 is now flying for Air China, China Eastern and China Southern, all Chinese airlines. COMAC clearly has designs on getting out, you know, selling these airplanes outside of China, though. They've delivered nine so far, and they've logged over 10,000 flight hours. This is an important program for Park. We'll see what happens, but we believe, and our customer believes, a very important program with lots of upside opportunity. Let's talk about... Let's go to slide 19, rather.

777X aircraft with GE9X engines. In August 2019, Boeing grounded their 777X test flight fleet after detecting engine attachment issues. The fleet remains grounded while Boeing continues to evaluate the problem. These engines, they achieved a record 134,400 pounds of thrust. That's why those engine attachments are pretty important. They're certified for 110,000 pounds. To put in perspective, the LEAP-1A engine for the A320, about 32,000 lbs, you know, so big, big, big engine, lots of power. October 11, 2024, Boeing announces, pushing out its first delivery target to 2026 through 2025 because of development challenges, flight test pause in the work stoppage. Boeing says they, sorry, not Boeing.

According to data, Boeing has 481 orders for these airplanes. So, a little bit of setback, but I mean, the thing is, it's very, this is a clean sheet airplane, so it's not surprising that they'll have problems like the engine attachment problem. It's very, very important that this happened, that this was detected during the development and certification phase, not after this airplane is flying in the air at 38,000 ft with 400 people on it. So this is a real important program for PARK. We just the best wishes for Boeing. Obviously, they're not, you know, having a bad time now, but we hope that Boeing finds a way to, you know, to move ahead and make things better. Let's go on to slide 20.

We can quickly cover this. Pretty much everything here is provided for history, for context. In the bottom right here, fiscal 2025 Q2, $7.1 million of sales. This is... I'd like you to read the title. GE Aerospace Jet Engine Program Sales History and Forecast Estimates. $7.1 million in Q2. I think our estimate was a little lower than that, but kind of in the range, and our forecast for Q3 is $6.25 million-$7 million. That's our forecast for Q3. For the year, $23 million-$26 million. Now, we provide that forecast last quarter. We're just sticking with it for the year. Okay, let's go on to slide 21, Park's financial performance history and forecast estimates, so again, most of it is provided.

Most of the data here is provided for history and context. Fiscal 2025 Q2, you already have those numbers, $16.7, $3.2 million EBITDA. Our forecast for Q3, $13.5 million-$14.25 million in sales, $3 million-$3.3 million EBITDA. Note the footnote subject to supply chain risks and limitations. We'll discuss that even further in the next slide. So let's go on to slide 22. This slide is exactly the same slide we presented to you last quarter. Everything's historical other than the forecast estimates. We're not changing the forecast estimates. Sorry, forecast estimates for the year. Pretty big ranges, $60 million-$65 million sales, $13 million-$15 million EBITDA, and that's just what we provided last quarter. So I'm not changing it.

But look at the important things, supply chain limitations affecting the aerospace industry. So, I want to stop for a second. Yeah, the aerospace industry is not really a happy place right now. Not so much fun. You know, for perspective, the European Air Show is the big one, is Paris and we alternate every year. Last year was at Paris. Lots of exuberance, maybe irrational exuberance, with the benefit of hindsight, about all the orders they're taking, all the airplanes and engines being sold. Everybody's very excited about that. Wonderful, wonderful, wonderful. Okay, that's nice. Then we fast forward to Farnborough this year. Very different tone, very different mood. Kind of glum, because everything that is coming out of Farnborough, supply chain, supply chain, supply chain, supply chain, supply chain. The problem hasn't been solved.

You know, one comment, I guess, was a little sarcastic, was: Who cares how many engines, sorry, how many airplanes you can, orders you can take? If you can't make them, what difference does it make? Now, obviously, that's being sarcastic, but that was the recent mood. What's interesting, I guess, if you want to look at it that way, is we go through this kind of funny déjà vu all over again. How many times have we heard in the last three or four years? Supply chain issues almost over, about solved, about solved, everything's going to be fine, and then we're back in the soup. You know, why is that? I don't know. Maybe it's a psychological thing. My guess is they never were solved. It was just a wishful thinking, and wishful thinking is contagious.

One person says it, another person says it, okay, fine, but supply chain issues are clearly not resolved or have not gone away, and they have an impact upon the industry, so just keep that in mind with these forecasts that, you know, we have all the risks that we put in the 10-K, but supply chain issues are a key risk for these forecasts, so and of course, we also talk about ramping up the cost for Juggernaut, and that's not just a temporary thing, that's holding back our, not our top line, but our bottom line. Let's go on to slide 23. Try to hustle here a little bit, if we can. Oh, general Park updates. Yeah, I guess we're just covering a lot in this presentation, so it's maybe taking a little bit longer. Solution treater project.

We plan to purchase and install an additional solution treater. Why are we doing that? We'll take approximately three years to design the specified equipment, install it, and conduct qualification trials, qualify the equipment, for production with customers. Three years, so we're quite concerned when we look at the opportunities we have. We look at the programs we're on and the opportunities we have, we're concerned that we're going to run out of capacity, so we need to move now because it's a three-year timeframe. We can't wait three years. If we do that, we're, what's the term? Screwed, I think. The budget for the project is about $75 million. This is something we decided to do, and we're going to have the project. This will be placed in a new factory.

Remember we told you that there was a big area set aside for a new line? Well, this is where that line is going to go. Another item, these items are all unrelated. They're just updates. So major OEM supplier, Safran partner, partner, sorry, to partner in quotes with them, the purchase of an additional manufacturing line to support critical defense programs. This equipment is essential to these programs, so it's needed. This OEM is quite a bit larger than Park, but they want us to be partners, 50/50, $55 million each. And we're now negotiating the agreement, but we plan to do this. It has to be done. This additional line is essential for these military programs. So we're talking a little bit about money as well, because we want to get to that later on in terms of our cash.

Slide 24. We recently qualified an essential high-profile missile defense program. Park is potentially, sorry, this program is potentially larger for us than the PAC-3 missile program. Initial revenue is expected for Park next year, and program expected to ramp quickly from there. We probably need to make a $1 million capital investment to support this program. This is a, you know, important accomplishment for Park, let's put it that way. I can't. We can't talk, give you more details about the program, but you would have heard of it, that's for sure. Next item, Park recently entered into a license agreement with a major OEM to license technology used for hypersonic missile programs. We understand that Park is the only licensee of this technology. We're currently conducting manufacturing trials, significant potential opportunity for Park, underlying significant.

Park will need to make a capital investment of approximately $3 million. I just want to stop here because these are not certainties, and that's not the standard for us, you know, sharing things with you. I think you would want to know about important opportunities for Park, but if you just want to wait for these things to be locked, that's different, but I don't think that's really what you want to hear. So my point is that this may happen, it may not happen. A shareholder complained, you know, about, well, we talked about similar program a couple of years, didn't it go, didn't happen? Well, yeah, we talked about it because it was important, and it seemed serious. That wasn't a guarantee it's going to happen. So just keep that in mind, all right, please? Slide 25. A new LTA with GE Aerospace.

These are separate item in progress for calendar years 2025 to 2030, under which she's awarding two additional products for Park, and the incremental revenue from that is $3 million. This is not part of the Juggernaut, by the way. This is separate incremental revenue. This is not the MRAS LTA. This is a GE Aerospace LTA, separate LTA. Potential JV with major adhesive company related to adhesives for the aerospace industry. Those discussions and negotiations in progress. We've had numerous in-person meetings. I believe there's one next week, actually, at our facility, and a significant capital investment may be necessary to support the JV. We'll see. Another potential JV with a major Asian industrial conglomerate related to the manufacture, marketing, sale of certain of Park's commercial composite materials products in Asia.

So these discussions and negotiations in progress, as they sure are, because we have a team over in Asia right now, and we've had a number of meetings already. This could involve significant capital contribution from Park. This OEM is quite aggressive. You know, we're trying to slow it down a little bit. They definitely want to do this, so it's I think maybe a good possibility that actually happens. Slide 26. Totally different topic, but still in updates. MRAS Supplier Scorecard was just our card. Maybe I'm trying to cover too many things in this one presentation. All right, MRAS Supplier Scorecard. Park scores. You can see the scores. The first item was actually a mistake. It really should have been 100. What these scores mean, what is their significance?

We're told that MRAS has over 700 suppliers. Are these typical MRAS supplier scores? No, I don't think so. But we're told that most suppliers should be happy to get eighties. I've been told that numerous times, and a lot of them don't get eighties. Are these scores achieved by other suppliers ever? I don't think so. So, similar theme is Park, MRAS's best supplier, over 700. That's what I'm told. How does that happen? There's a boardroom thing or a boiler room thing. This is such a special situation for Park, you know, and I'm not sure whether it's fully appreciated, how special an achievement, accomplishment this is, and how special it is for Park to have this kind of relationship with a company like this. See, it's our strategy for customers to love us.

In order for that strategy to be implemented, that's more of the boiler room thing. That's really a culture thing, that it depends on Park having very dedicated employees. That's how we achieve these scores. That's how we become their best supplier and what we're told, anyway, their best supplier. So yeah, I mean, example, I'm sorry to take the time, but just one little example. You know, John Moon, I mean, we were told he has a house, but we would never know that because he never leaves the plant. If something has to be shipped, doesn't matter what time, he's not going anywhere. He's not going anywhere until that truck has left the dock, you know. And that kind of dedication, if you want your customers to love you, you need to have people like that.

The rest of strategy is nice, but in order to implement it, you need to have people that are very dedicated. So let's go on to slide 27. Questions about this is now a different topic. We got recent questions from investors. Okay, so a whole new section here that we haven't had previously. Let us know if you want us to continue with this, but we thought it'd be interesting to include some of the questions that we've received from investors. With questions about our film adhesive product line, we call it AeroAdhere. What advantages does Aero-Adhere have over competing products? Well, aero industry is a little strange. It looks for equivalency more than better. In other words, better is not really such a good thing.

When we developed a film adhesive, remember, we did that with a joint development project with GE and MRAS, with a lot of tweaking, a lot of fine-tuning for their needs. But generally speaking, we want equivalency because if it's not equivalent, if it's better, then the customer is going to have much more difficulty incorporating into their programs. Why would a customer then buy it from Park if it's just equivalent? Because it's, because of Park, more than the product itself. They're buying... Why are we, how are we selling? We're selling Park. We're selling the fact, flexibility, responsiveness, urgency. So people say, well, what is the expression? Oh, a customer says, Jump, and you say, How high? No, we don't do that. We say, How high, before they say, Jump. I'm not kidding, we say, How high, before they say, Jump.

That's what we're selling. Do we anticipate that Aero here is more- Aero-Adhere, sorry, tongue twister. Margins will be higher or lower than Park's average margin. This is a question from investor. Higher, and we're quite sure of that. Several years out, what sort of range of revenues are we targeting for Aero-Adhere? Well, we're not sure. The strategy, though, isn't really a revenue strategy. It is to broaden the product line we offer to customers which manufacture aerospace composite structures. That's why we love adhesives so much, because customers buy our product to make composite structures for aerospace. Obviously, you know, they need to buy composite materials to make composite structures, but they also use adhesives in their production of these composite structures.

Just for reference, though, since, you know, we're asking about revenues, the A320 program is the first program that MRAS intends to get our film adhesive certified on, and that's $3 million per year once the program ramps to 75 airplanes per month. So let's-- and obviously, that's not it. We got lots of other opportunities we're working on, not just with MRAS, but other companies as well. Slide 28, more questions. What about that a major new manufacturing project initiative we discussed in our Q2, sorry, Q4 investor presentation last year? What's the status? It has morphed into a larger product project. Why wasn't it discussed during our Q1 investor presentation?

Well, the customer, which initiated the project, now wants the project to be an aerospace composite structures manufacturing technology JV, a potentially larger, quite a bit larger project. This is JV, like with Newco, where, you know, two companies own it, I guess. What about our strategy? What is it? Somebody asked, actually asked, do we have a strategy? Yes, we have a strategy. We call it the Egg strategy. We're certainly not going to take the time to go into it now, but let us know if you want us to discuss our strategy. Probably take five minutes or, you know, in an upcoming presentation. It's a straightforward strategy. It's not like an elegant strategy. It's very straightforward. So nothing we tell you is going to surprise you, but we're happy to go over it with you if you'd like. Slide 29.

Different topic, our buyback authorization. We announced on May 23, 2022, that Park's board authorized the purchase of 1.5 million shares. Under this authorization, we've purchased as little as 551,729 shares, an average price of $12.94, total cost of $7.1 million. So we're spending some real money on this. Now, in highlights, though, recent buyback activity under the authorization since July 26, 2024, the significance of July 26, that's after the blackout, the Q1 blackout ended, was lifted. We purchased 331,180 shares of common stock, average price of $12.88, a total cost of $4.251 million. Like I said, we're spending some real money on this now. Why do we do that? Why do we do that?

Because we thought the price was stupid, ridiculous. You know, we-- it's not really our preference to buy stock. You know, we'd rather use our cash to take advantage of all the opportunities we have. But when the stock price is, we feel stupid and ridiculous, we don't think we have too much of a choice. Will we buy more? I don't know. We'll have to see. Maybe. So let's keep going. That's our buyback program. Slide 30. Credible cash dividend history, 39 consecutive years of dividends. We've paid $596 million or $29.10 per share since fiscal 2025. So a little bit of a thing here that we're developing, a concept anyway. So we have a regular dividend payable on November 5. That's not right.

That's should be paid on November 5, 2024. So sorry, that's a typo. I just noticed that. And we'll have paid $598.6 million at that point. And then looks like. Oh, there's another typo. The next regular dividend is planned to be declared by Park's board about January 9, 2025. Sorry about this, and paid about February 4, 2025, and that's well within the fiscal year. Somebody's not going to get paid this week for these mistakes. Unfortunately, I think that somebody's me because I'm the one who made the mistakes, so sorry about that.

But the concept is during this fiscal year, if you look at the highlighted language, we'll have paid by the end of this fiscal year, rather, $601.1 million in dividends since 2005 and also $29.35 per share since 2005. Do the math, 2005 to 2025, that's 21. So if you want to do the math, divide 601.1 by 20. Sorry, that's 21 years. So divide 601.1 by 21, that's $28.6 million per year. Just FYI, you're going to divide the 29.35 by 21. That's $1.40 per share per year of dividends paid since, on the average, paid since fiscal 2025, the beginning of 2025.

Let's go on to slide 31, our balance sheet. We have low, no long-term debt, $72 million of cash. We just talked about that. We have one more transition taxes, formal payment of $5.1 million in June of 2025. Thinking about our cash, so some known or likely cash expenditures of $5.1 million, that's not likely. That's known. That tax payment in June, we have to pay that. Share buyback in fiscal twenty... In fiscal, sorry, twenty-five two three in, in our current quarter. That $2.4 million, that's already been spent, so that's a known item. Solution three-year project, $7.5 million. That's an estimate. Contributions to the OAM partnership, approximately, well, $5 million. That's what we're talking about. So that gives us a round number of $20 million.

$72 million minus $20 million is $62 million. We go to slide 32. When we think about $52 million, well, that doesn't include a lot of other things that we've already discussed. A lot of items which we won't iterate here are these items that are listed. We've already discussed in this presentation for the most part. Some of these things will happen, some won't. We also likely have additional expenditures and new plant when you actually start a production, no matter how much time you spent with the trials and qualification. We start in production. You realize some other things that might be needed. There might be some additional investment that's required in new plant equipment investments. What do we think about our cash?

We think that, we don't have a limited cash, and we think we need to be real careful how we spend it. Let's go on to slide thirty-three, the Juggernaut. We've covered this the last three quarters, so we'll try to rush through it. Financial outlook for GE Aerospace jet engine programs and for Park, the Juggernaut. So what's the timing? We're not sure, but it's coming. Can't be stopped. We better be ready. Going on to slide thirty-four. The only change here, unfortunately, is the GE9X program. So we moved up that number. That's based on specific inputs we have from our customer. We've heard higher rates, but that's based on specific inputs, rate inputs we have from our customer. And, as we said, we're not going to provide any more detailed information because it really is not our business to...

It's more up to Boeing and GE to disclose how many airplanes they plan to make per year. Not, not for us to do that. Why don't we go on to the next slide, thirty-five. Park Aerospace Corp, high-level conceptual financial outlook. We start with a baseline year of fiscal 2024. The estimated GE programs, incremental sales, that's just math, you know, taking the number from the prior slide, subtracting the twenty-four sales, I think that was $21 million. Incremental sales, $37.6 million. Estimated non-GE programs, incremental sales, $15 million... So we tried to do something a little differently here. In the past, we were breaking it down between programs we're sole source qualified on, and other programs that we expect to get on, and other sales we expect to generate.

We just put it in one big, one bucket, $15 million. As indicated in the footnote, we believe that's a conservative number based upon all the opportunities that we're working on. The total here, you can see, $108.6 million. The contribution, EBITDA contribution from the incremental sales is $19.7 million. That's based upon a contribution rate, I believe, of 37.5%. The additional four million, we discussed that before. That relates to our base year, which is quite inefficient because we're operating well below efficiency of the new plant. And for, you know, many reasons we discussed in the past, which we won't go over here. Slide 36, just the footnotes to the slide we just read, so we won't go through those. And that concludes the presentation. Thanks for listening.

Operator, we're happy to take questions at this time.

Operator (participant)

Great. Thank you so much. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Once again, that's star one if you'd like to ask a question. First question here is from Nick Ripostella from NR Management. Please go ahead.

Nick Ripostella (Vice President and Equity Analyst)

Good afternoon, Brian. First, I just wanna say, on share repurchase, I'm very appreciative of how judicious you are in when we purchase. I come across so many smaller companies that they overpay for their stock, sometimes double where it's currently trading, and then put that in their press release, that return cash to shareholders, which actually they destroy value. So you've been very wise, and I'm appreciative of that. So you know, a couple of quarters ago, I think you were talking a little bit about automation, potentially in a new facility. So I've been reading a lot and watching a lot about, you know, the use of robots and other automation in factory settings. So can you just give me your perspective?

Do you feel at any point you'd be disadvantaged by not having automation in the facilities? Or, just I'd like to understand your perspective on that, and kudos to the workforce there. It just goes to show you, some places have a great culture and don't need a union. You know, you've built a great organization in that regard. Thank you.

Brian Shore (Chairman and CEO)

Thank you very much for those comments, Nick. Appreciate it. As far as automation is concerned, if you visited our facility, you would see that we're operating these lines that run continuously, with you know usually a staff of about four people. You don't, you know, look at it like an assembly line where you think, "Oh, boy, a lot of these procedures and processes could be automated. They reduce costs, maybe improve efficiency." One of the areas. So that doesn't mean we're not interested, but I think that the opportunities for a Park-type operation are maybe not quite as much the bang for the buck wise as other kind of operations would be.

But, you know, we talked also about automation with respect to that project, that manufacturing project that's now morphed into a potential technology JV, and that's an area where automation would be front and center, I think, you know. So that project still has to be initiated, you know. Like I said, it morphed, so it's a larger, different kind of project, but that project would involve quite a bit of automation, I believe.

Nick Ripostella (Vice President and Equity Analyst)

Okay, thank you. Can I ask one more?

Brian Shore (Chairman and CEO)

Sure.

Nick Ripostella (Vice President and Equity Analyst)

Just, I know this is a difficult thing to say, but where would you be disappointed in terms of Airbus's, say, ramp up of deliveries next calendar year? Where would it disappoint you? Fifty-two, you know, fifty-four, fifty. Where would it disappoint you?

Brian Shore (Chairman and CEO)

I'm not sure I understand your question. You're talking about in terms of our annual sales or?

Nick Ripostella (Vice President and Equity Analyst)

No, the delivery-

Brian Shore (Chairman and CEO)

Oh, A320. Oh, per month, you mean? Monthly, right?

Nick Ripostella (Vice President and Equity Analyst)

Yeah, correct.

Brian Shore (Chairman and CEO)

Is that what you... Oh, okay. Yeah, well, we're disappointed already, so maybe that's a, you know, hard question to answer. The supply chain is clearly, you know, become more of a, a known issue, probably zero along. My guess is that this year, maybe we'll get to 50, last year, 48. I've seen all kinds of different forecasts. I mean, obviously, we'd like them to be 75 so maybe that's not a proper answer. It would be nice if next year they're at 55. I don't know if that helps, but, but if they're not, you know, we'll, we're already disappointed, so, we're probably disappointed with any number that's under 72.

But the key thing is for us to hang in there and be ready for the ramp, because as far as we're concerned, there's no question they'll get to 75. Just with all the orders they have, it just doesn't make any sense they wouldn't get to 75. So, the key thing for us is to make sure we're ready for that, and that's really important. That means we need to ramp up the new facility, and that's why we're doing that now, but we're also kind of suffering through the additional cost burden of ramping up a facility that is still operating at a very low rate.

Nick Ripostella (Vice President and Equity Analyst)

Okay. Thank you. Yes, and as you've said before, this is a long-term proposition, and you know, I really loved your comment about the stock price, you know, stupid, and certainly got pretty stupid at one point. So I appreciate it. Thank you so much, Brian.

Brian Shore (Chairman and CEO)

Thank you, Nick. Very nice to hear from you.

Operator (participant)

Once again, if you'd like to ask a question, it is star one on your telephone keypad. If no further questions, I'd like to turn the floor back to Mr. Shore for any closing comments.

Brian Shore (Chairman and CEO)

Okay, well, thank you, operator. I just want to say I'm sorry that it took so long. I think what we did was we tried to cover too much during this presentation. I think everything we covered was meaningful and information that many of you would probably want to know about, but nevertheless, maybe we bit off more than we could chew, so I apologize for that. In any event, thank you very much for listening. We hope you have a very good day. We'll talk to you soon. Goodbye.

Operator (participant)

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