Executive Summary

Q4 FY25 revenue was $16.94M, up vs Q3 ($14.41M) and slightly above Q4 FY24 ($16.33M); gross margin improved to 29.3% as production exceeded sales (SVP +$1.4M) and finished goods were rebuilt by ~$1M .
GAAP EPS was $0.06 (down YoY on tax items), while EPS before special items rose to $0.12; Adjusted EBITDA increased to $3.42M, within the company’s prior range and above Q3 ($2.42M) .
Management announced a major manufacturing expansion ($35M ±$5M) to add solution treater, hot-melt film/tape, and a hypersonic materials line; funded with cash, with management emphasizing “very significant” ROI and cash flow potential .
Defense mix advancing: $4.4M of C2B fabric sold in Q4 (FY25 total $7.5M) with requalification testing for a key customer expected to conclude around end-May; ablative sales using C2B resumed ($0.42M in Q4) with high incremental margins .
For Q1 FY26, management forecast sales of $15–$16M and EBITDA of $2.5–$3.0M, including ~$1.2M of low-margin C2B fabric; quarterly dividend of $0.125/share was declared for May 2, 2025 .

What Went Well and What Went Wrong

What Went Well

Production exceeded sales by ~$1.4M SVP, dropping “probably $350,000 or more” to the bottom line; finished goods inventory was rebuilt by about $1M vs Q3, supporting margin improvement to 29.3% .
C2B-related activity remained strong: $4.4M of fabric sales in Q4 and $0.42M of ablative materials using C2B fabric, with management noting the ablative margins are “significant and bold” .
Strategic momentum: announced a ~$35M expansion (solution treater, hot-melt film/tape, hypersonic line) with “very significant” ROI, and lightning strike protection certified for Passport 20 (≈$0.5M/yr run-rate later in 2025) .

What Went Wrong

GAAP net income fell YoY due to tax items: a $2.147M non-cash tax charge related to potential repatriation from Singapore, partly offset by a $0.957M tax benefit; GAAP EPS decreased to $0.06 from $0.13 .
Mix headwind from low‑margin C2B fabric sales persisted; management highlighted selling C2B fabric at a “small markup” burdens the P&L, even as demand remained high .
Ongoing external constraints: engine/supply chain issues (e.g., Airbus “gliders”) and tariff uncertainty; although Park has seen “no impact” to date, management is monitoring and passing through where needed .

Financial Results

P&L summary vs prior periods

Metric	Q4 FY24 (14 wks)	Q3 FY25 (13 wks)	Q4 FY25 (13 wks)
Revenue ($M)	$16.33	$14.41	$16.94
Gross Margin %	27.3%	26.6%	29.3%
Adjusted EBITDA ($M)	$3.20	$2.42	$3.42
Net Income ($M)	$2.67	$1.58	$1.25
GAAP EPS ($)	$0.13	$0.08	$0.06
EPS before special items ($)	$0.11	$0.08	$0.12

Company forecast vs actual (Q4 FY25)

Metric	Company Forecast (from Q3 call)	Actual Q4 FY25	Result
Revenue ($M)	$15.5–$16.3	$16.94	Beat high end
Adjusted EBITDA ($M)	$3.3–$3.9	$3.42	In range

Selected KPIs and operating items

KPI	Q4 FY25
C2B fabric sales ($M)	$4.40
Ablative materials using C2B sold ($M)	$0.42
Production vs. Sales (SVP delta)	+$1.4M (ex‑RAYCARB)
Finished goods inventory change vs Q3	+~$1M
Missed shipments	$175K (improved vs prior)
Tariff impact in quarter	None

Segment breakdown: not disclosed; Park reports and discusses at the company level .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sales ($M)	Q1 FY26	N/A	$15–$16	New company forecast
Adjusted EBITDA ($M)	Q1 FY26	N/A	$2.5–$3.0	New company forecast
C2B fabric included ($M)	Q1 FY26	N/A	~$1.2	New disclosure
Manufacturing expansion capex	Multi‑year	Prior slide noted $7.5M treater	Major expansion $35M ±$5M (solution treater, hot‑melt film/tape, hypersonic line)	Raised/expanded capacity plan
Dividend	May 2, 2025	Regular $0.125/qtr	$0.125/qtr declared	Maintained

Note: Management generally “does not do guidance,” but provides quarterly forecasts in presentations/calls; they emphasized integrity of forecasts vs “padding” .

Earnings Call Themes & Trends

Topic	Q2 FY25 (prior)	Q3 FY25 (prior)	Q4 FY25 (current)	Trend
C2B fabric and ablatives	Not discussed in PR	Customer “recall” transcript error; requalification holding back ablative shipments; fabric stockpiling; high incremental margins on ablatives	Clarified “Requal,” not “recall”; testing largely compliant; completion expected around end‑May; $4.4M fabric and $0.42M ablatives in Q4	Improving path to ablative normalization
Juggernaut (A320neo ramp)	Not discussed in PR	Preparing capacity ahead of 75/mo target; supply chain still gating	Still positioning; MRAS scorecard 100/100/100; A321XLR, COMAC 919 updates	Long‑term intact; timing uncertain
Tariffs	Not discussed in PR	—	No Q4 impact; pass‑through measures; dynamic but managed	Neutral so far
Supply chain/engines	Not discussed in PR	Airbus “gliders” due to engines; LEAP durability kit progress	Still an issue; expectation that spares bias fades in 2H; watch engines flow to new builds	Gradual improvement expected
Capex/plant expansion	Not discussed in PR	Solution treater and OEM co‑investment being evaluated	Major $35M expansion announced; multi‑line additions incl. hypersonics	Step‑change higher
Defense/hypersonics	Not discussed in PR	Emphasis on defense; multiple high‑profile missile programs; license on hypersonic tech	Ox‑Ox trials progressing; select OEM dialogues; ~6 months to next update	Advancing pipeline

Management Commentary

“We don’t do guidance…when we give you a forecast, we’re saying this is what we think will happen” .
“In Q4, our production exceeded our sales…by $1.4 million…That drops a lot of dollars to the bottom line, probably $350,000 or more” .
“We sold $4.4 million of C2B fabric in Q4…$7.5 million in all of ’25…Park sold $420,000 of ablative materials manufactured with C2B fabric in Q4…Our margin…[on ablatives] are significant” .
“Park is planning a major new expansion…capital budget $35 million plus or minus $5 million…Our long‑term business forecast requires it…ROI, very significant” .
“Tariffs…there has been no impact to our business…we updated quotes to pass them along where needed” .

Q&A Highlights

Tariffs/macro: No direct impact so far; Park preemptively updated order confirmations/quotes to pass through where needed; inventory helped bridge near‑term inputs .
Engines/supply chain: Airbus has produced “gliders”; expectation that engine output shifts from spares to new aircraft in 2H, aiding deliveries; timing still uncertain .
Expansion rationale: Proceeding before Juggernaut fully materializes to avoid capacity shortfalls; planning 5–10 years out; confident opportunities justify capacity .

Estimates Context

Street consensus from S&P Global: Not available for EPS and revenue for Q4 FY25; the S&P dataset did not return consensus values for these metrics, so we benchmarked results vs company forecasts instead (company does not issue formal guidance) . Values retrieved from S&P Global*.
Company forecasts vs actual: Revenue beat the high end ($16.94M vs $15.5–$16.3M), and Adjusted EBITDA landed within the $3.3–$3.9M range .

Key Takeaways for Investors

Mix and execution improved: Production > sales and inventory rebuild drove a 290 bps QoQ gross margin lift to 29.3%; watch for further margin normalization as ablative shipments resume post‑Requal .
Defense optionality: C2B demand is robust (fabric stockpiling), and ablatives carry high incremental margins; successful requalification could be a step‑function tailwind .
Capacity as a differentiator: The $35M expansion positions Park for Juggernaut and defense growth; management signals “very significant” ROI funded with cash—an attractive capital deployment pivot .
Near‑term setup: Q1 FY26 forecast embeds ~$1.2M of low‑margin C2B fabric, holding back EBITDA; monitor conversion to high‑margin ablatives as testing completes .
External watch items: Engine supply cadence to Airbus/COMAC (potential for delivery acceleration) and tariff developments (mitigated so far) .
Capital returns intact: Regular $0.125 quarterly dividend maintained; buybacks have been active historically and remain a lever subject to cash priorities .

*Values retrieved from S&P Global.

Citations:

Q4 FY25 press release with detailed financials and reconciliations:
Q4 FY25 8‑K Item 2.02 and exhibit:
Q4 FY25 earnings call transcript (operations, strategy, forecasts):
Q3 FY25 press release/call (trend, prior forecast):
Q2 FY25 press release (trend):
Dividend declaration (Q4 FY25):

PARK AEROSPACE CORP (PKE)·Q4 2025 Earnings Summary