Park Aerospace Corp. (PKE) Earnings Call Transcript & Summary

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

Thank you, operator. This is Brian. Welcome all to the Park Aerospace Corp. Fiscal '26 Q1 Investor Conference Call. I have with me Mark Esquivel, our President and COO. We announced our first quarter earnings right after the close. If you look at the news release, you'll see there's a link information as to how to access the presentation that we're about to go through. The presentation also can be found on our website. You want to take a look at that in order to make this call more meaningful. Just a little quick comment before we get started. It's only been 2 months since our Q4 presentation. And as a result, some items are just carried over from the Q4 presentation for context and cohesiveness. But we may just skip over some of those items, at least skim over some of the items that we just covered 2 months ago just for purposes of keeping the presentation moving and brevity. If we do skip over something that you want to discuss in more detail, though, please just ask us questions about it at the end. So -- and we'll try to highlight also what's new. Even if there's a slide that has a lot of old stuff, maybe we'll just pick out one item that might be new. And you'll -- when we get there, you'll probably realize, but there are important new items towards the end of the presentation. When we're done, Mark and I will be happy to answer any questions you might have. So let me proceed. Why don't we go to Slide 2. That's our forward-looking disclaimer language. We're not going to go through it or read it for you, but if you have any questions about it, please let us know. Slide 3, our table of contents. Slide 1 starts our Q1 investor presentation. And then also within Appendix 1 at the back of the presentation, supplementary financial information. We're not going to review that during the call, but if you have any questions about it, please let us know. As has become our kind of pattern of late, we feature something about the James Webb Space Telescope in our table of contents slide. As you probably know, James Webb Space Telescope is produced with 18 of our Park proprietary SigmaStruts. We're very pleased and delighted about that. What we have here, we have a Bullet Cluster with dark matter, the Park dark matters in blue. This isn't enhanced because the dark matter, you can't see it, it's invisible. Just on the right-hand side, let's explain that dark matter is an invisible and hypothetical, kind of strange hypothetical form of matter. This is way beyond my pay scale to understand what that even means, which does not interact with light or other electromagnetic radiation. So you can't really see it. That's why they're in those pictures and enhanced with the blue. A dark matter is a mystery of the universe, which cannot be explained by Einstein's general relativity or anything else known to mankind. It's just incredible what the James Webb has discovered so far. It's just amazing. We're thinking about all the things that we thought we knew, we thought we understood about the universe, but maybe we don't. Some people say the universe is unfathomable and maybe they're right. Anyway, it's such a privilege and honor for us to be associated with the James Webb. Okay. Let's change gears and go to more mundane things, Slide 4 is our quarterly results. If you go to the right-hand column, Q1, which we just reported. Sales, $15.4 million and gross profit, $4,718,000. Gross margin, 30.6%. We're happy about that, not where we want to be likely higher, but it's just nice to be over 30%. And we'll explain how we got there. There's maybe 3 different factors that kind of affected our ability to get our gross margins up above 30%. Adjusted EBITDA, just a little tiny less than $3 million and our EBITDA margin, 19.2%. What did we say about Q1, our Q1 during our Q4 investor call? We had set our sales estimate. Estimate is $15 million to $16 million. So we came in kind of middle of that range. Adjusted EBITDA estimate, $2.5 million to $3 million. So we came in, I guess, pretty much at the top of that range. Last quarter, we talked about what these estimates mean, what they don't mean. And I don't want to go into it again unless you want me to. But basically, these are not guidance where we give you a number where we plan and kind of set ourselves up to beat the number. When we give you these estimates, we're saying to you, this is what we think is going to happen. Okay. Let's go on to Slide 5, so we don't belabor that too much. And what I'd like to do, if you don't mind, is let's go to Slide 6. We'll jump around here a little bit. The second bullet item on Slide 6, there's significant ongoing expenses related to operating our new manufacturing factories -- manufacturing facility, sorry. And that's why we're pleased to have our margins over 30% because this is a drag. This factory is underutilized and there's a significant cost that's going through our P&L that drags down our margins, including our gross margin. So that's one factor. I said you 3. Let's go back to Slide 5. ArianeGroup, we discussed this many times, our business partner agreement under which we are the exclusive distributor for RAYCARB C2B fabric that's used for ablative composite materials for advanced missile systems. But remember -- and so actually, the other 2 factors aren't positive, they're just lack of negatives in our -- couple of quarters ago, we had -- actually, last quarter, we had $4.4 million sales of fabric during that quarter, and that really brings our margin down a lot because we sell the fabric at a small markup. Ultimately, when we turn the fabric into composite material, that's where the margins really are powerful. Last quarter, in Q1, we had $1.1 million sales of the fabric and $480,000 of the materials made with the fabric. And that's kind of more of a normal ratio. So it isn't really a big drag on our -- that wasn't really much of a drag on our Q1 earnings. And then we'll get back to the Requal in a second. Why don't we skip over to Slide 6 again? Production versus sales. This is another factor that had negatively affected our margins a couple of quarters ago where our production was much lower than our sales, we call it SVP. But in Q1, they were relatively nicely matched, which is what we want. We want our production and sales to be relatively nicely matched. So it's not really a factor. So it's not that these 2 things were positive. It's just a lack of negatives in terms of the impact on Q1. And that's how we're able to, I guess, get our margins above the 30% number. But let's go back to Slide 5. Sorry about that. I'm probably making you a little dizzy here. Requal of -- Mark, maybe you could help us with that, one of Park's key customers of C2B fabric. We've talked about this quite a bit in the last couple of quarters. What's the status of the Requal, Mark?

The Requal, it's -- I think last time I said it would be soon on the last call 2 months ago, but it's still not done. But last week, I did reach out to my contacts at the customer, and they said it's imminent, which is better than it will be a few weeks out, I think. If I look at it, there's no guarantees, but I would say the approval will happen in this couple of weeks. And really, the reality is it must happen. We're a single source position on the program. And I think as Brian will talk later in the presentation, this program is going to grow significantly. All indications are it's going to grow significantly just based on all the information [indiscernible] the customer and the information held in the public. So like I said, Brian will cover that in the later slides.

Yes, there must be enormous pressure to get this done now. I mean it's no joke anymore, enormous pressure. And Mark and I were just talking about should we tell you about how many thousands of pounds of this C2B fabric that we're storing for customers. And we thought maybe we shouldn't, it's too sensitive, but it's a -- we're storing a lot of this product that we sold to customers already. So there's a lot of pent-up need for the prepreg material. I mean the customers can't do anything with the fabric. That's for us to produce the material with. Let's go back to Slide 6. Total missed shipments. We can tell you every quarter, $275,000. That's up a little bit from Q4, unfortunately, caused by surprise, surprise, international shipments, other miscellaneous issues, impact of tariffs and tariffs related costs on Q1, very minimal, less than a few thousand bucks, let's say. Later on in the presentation, we'll talk a little bit more about what we might expect from tariffs in the future. Let's go on to Slide 7. This is a slide we do every quarter, our top 5 customers in alphabetical order. These are just rounding up the usual suspects. I mean all these customers often show up in our top 5. So just to make it simple, the Patriot missile, so we'll be talking about that one. That's AAE this time. Kratos, obviously, is the -- Kratos Valkyrie, is obviously, Kratos. That's, I think, a photo of loyal wingman operation actually. 787 would be GKN, and that's all we really want to talk about. The Middle River Aerostructure, I think Donna decided that we featured so many GE Programs photos that we didn't need to provide you with a photo at this time. Let's go on to Slide 8, our pie charts. I always like these things, but you could see the '22, '23, '24, '25 and into '26, it's fairly consistent. '21 was quite different. That was a pandemic year where commercial aircraft was very severely impacted by the pandemic. Okay. Let's go on to Slide 9. Elena does this Park Loves Niche Military Aerospace Programs for us every quarter. And it's getting to be more and more difficult for us to provide much detailed information about these defense programs, it's so sensitive. The pie chart is interesting, though, radomes, rocket nozzles, drones, those are really niche kind of markets for us. But even for us, aircraft structures are niche. We don't really like commoditized stuff too much. And I guess the only thing maybe we can comment on, which is interesting is this AAM-N-4 Oriole Air-to-Air. That goes back to the 40s. It's one of the original air-to-air missile systems, but it's been repurposed for other purposes. So that's why it's on our list here of programs. These are all programs we're working on. We don't just [indiscernible] stuff that things are not working on. Finally, a little anecdote at least for me, this is produced by the Glenn Martin Company. Now what's very interesting about that is that we talk so much about MRAS, Middle River which used to be GE Aerospace. The factory that -- where MRAS is located in the Baltimore area is the old Glenn Martin factory. So I've been in that factory, I don't even know, maybe 50x. A lot of history there. I think, Mark, you've been there as well. I think that's all we'll probably say about Slide 9 right now. I want to go to Slide 10. So this is the first slide where we're just not really going to say very much because it was covered. We have it in every quarter. It was covered in our -- in Q4. Just for anybody new, just really quickly, the little secret here is that you say, well, what is -- why we own these GE Aviation programs or GE Aerospace programs. All these engines are GE Aerospace engines. And the secret there is that Middle River Aerostructure Systems was a sub of GE Aerospace for many, many years. And when we got on these programs, MRAS, we call it was a sub of GE Aerospace. And about 5 years ago, GE Aerospace sold MRAS to ST Engineering, which is a Singapore company, but these programs continue, these GE Aerospace programs continue if you're trying to figure out the mystery there. Slide 11. I think nothing is new here. So again, if you want us to go back and want to revisit any of these items, just ask questions or you can call us later if you want. But just for purposes of not kind of being totally repetitive, we're going to skip over things that we covered in Q4. Last item, Life of Program. We did cover this in Q4, but the update is still under negotiation. The ball is in their court. They have everything we need, as I think I mentioned, it's okay with us either way, whether we stay with our current LTA or go to Life of Program. This Life of Program was requested by MRAS and STE, something they want. And I don't know how to say this, but I think they very much want it, but MRAS is very consumed with other issues right now, and that's maybe preventing them from getting to this. Not all their suppliers get 100, 100, 100. [ When I'm getting at ], some of the suppliers are -- cause a lot of difficulty, and it's not funny. It's very challenging. So that's a little bit distracting for those folks right now. Let's go on to Slide 12. Update on GE Aerospace jet engine programs. Pretty much everything here was in Q4. I just want to mention that we often refer to Aero Engine News as our Bible. It used to be a monthly, but now it's quarterly. So there isn't even a Aero Engine News update since we announced Q4 on whatever that was, May 15. The only new item here is the first 6 months of '25, 39 per month. I wouldn't read too much into that because normally, the first half of the year, they will slow. My guess is probably no better than anybody else's, but I'm going to guess they'll be in the low 50s this year, somewhere between 50 and 55. That's a guess. I don't have any inside information at all. And I think I mentioned this to you last time, but the first 6 months, there were -- a lot of engines were going to aftermarket, but the last second 6 months of the year, for new airplanes. And they also have Airbus [ unfortunately, a lot of kites ] they built. The last item is the key one. Their Airbus is targeting 75 airplanes per month. Let's go on to Slide 13. Approved engines. This is all exactly -- this is from Q4 with no changes. Like I said, there's been no update to the Aero Engine News. So we talked about the market share of LEAP as compared to the Pratt and how many LEAP-1A engine orders. There are quite considerable, I would say. Slide 14. Update on the XLR -- sorry, the A321XLR. That's variant of the A320 family -- a neo family, which is what we've just been talking about. The new item, July 5, '25, Air Asia inked a $12.3 billion agreement for up to 70 A321XLR aircraft. That's a lot of money, a lot of airplanes, I would say. This is an important program because it has really a unique capability in terms of fuel economy, range and payload. So let's go on to Slide 15. The 919, the Comac airplanes, let's see what's new here. The second item, they plan to achieve Comac, a production rate of 200 919 aircraft per year. That's pretty good. It's not 900, which is the A320neo, 75 times 12 is in that 900. This is not nearly 900, but it's still pretty good. We'll take it. Trade issues, U.S. has reportedly lifted ban on GE Aerospace export license for the LEAP-1C engines, which are used on this airplane. Let's go on to Slide 16, I think it is. Comac. Still with the Comac family, the Comac 909 is their regional jet using a different kind of GE engine. And again, the new item is U.S. has reportedly lifted ban on GE Aerospace export license for that CF34-10A engine, which is used on this regional jet. 777X, what's new here? Okay. First item, we updated numbers, over 1,400 flights and 4,000 flight hours in the test program. This item, second item is new. According to Boeing, the 777X program is on track for certification this year, wow, and entry into service in '26. I think they're hedging their bets. And I just saw this recently, maybe the end of this year, maybe next year for certification. Now they're saying this year. So that's impressive, how much they've gotten to rack together. I mean, if they deliver on that, 541 orders, so that's nice too. Let's go on to Slide 17. Some of the numbers here, $6.2 million. Q1, these are GE Aerospace jet engine program sales history and forecast. Q1, $6.2 million. And we had forecasted in our Q4 presentation, $5.2 million to $5.6 million. So this came a little bit higher than that. Interesting thing to think about it, $24.7 million for all '25. We read ahead, you're probably familiar with it, the juggernaut $61 million. So that's quite a bit of incremental sales for GE engine programs. The forecast down in the bottom right here, our Q2 forecast, $6.7 million to $7.2 million. And we're sticking with the $28 million to $32 million number for our fiscal '26, even though we're -- if you look at Q1 and Q2, we're kind of getting off to a slow start. But as I mentioned, I'll remind you that the fiscal '26 forecast is based upon input we've received from the customer. Let's go on to Slide 18. Park's financial performance history and forecast estimates. The top half, we already recovered. The bottom half, let's go right to the forecast. Q2, we're estimating $15 million to $16 million of sales, $3 million to $3.4 million of EBITDA. And I think that pretty much covers that slide. Let's go on to Slide 19. This slide is exactly the slide that was in the Q4 presentation, historical fiscal year results. So we're not going to discuss it again. And any of these things we were skipping over, we're skimming over, if you want us to go back and discuss these again, let us know when we get to the question portion of the call or call us afterwards, and we'll be happy to go over these things with you. But we already covered this slide in our prior presentation slide. So again, I just want to explain, we're including these slides for context and cohesiveness so that the presentation holds together. But when we covered things before, we're just not going to go over it again, well before meeting in Q4 very recently just 2 months ago. Slide 20. General Park updates. Again, most of the stuff was already covered. We covered the ArianeGroup, the new agreement under which we're going to advance Ariane's EUR 4,587,000 against future purchases. And the last item is important because in our Q1, we advanced Ariane EUR 1,376,000. That's approximately $1.5 million based on the exchange rate at the time. So let's keep that $1.5 million number ahead. We'll get back to that. Slide 21. And the purchase agreement, we'll revisit this toward the end of the presentation, very important -- timing is very important. The purchase agreement to -- for the $5 million investment to help to Ariane increase their capacity for C2B fabric manufacturing. The next item, Lightning Strike, we covered that. So we don't want to cover that again. And the next item, the LTA with GE Aerospace, we covered that. So we don't go over that again. And last item, these discussions continue with 2 Asian industrial conglomerates relating to an Asian manufacturing joint venture with Park. I think our guys were supposed to be in Asia now actually, but things came up. So I think that trip is now going to be in September. But these people have been to visit us. We've been to visit them already. So these discussions are somewhat advanced at this point. Slide 22. More updates, current MRAS scorecard, 100, 100, 100. What does that MRAS love worth to Park? I don't know how to quantify it, but it's just worth a whole lot. That's really our objective is for customers to love us. And MRAS is not the only customer who loves us, that's for sure. And making customers love us is central to our Park's egg strategy. I think we talked a little bit about this. We never went into the details about it, but we mentioned our strategy, this egg strategy. Making customers love us is actually central to that strategy. Tariffs, international trade issues, what's the impact going forward? Okay, Mark, back to you. Can you help us get some understanding of where we're going with tariffs going forward?

Thanks. I get the easy one. Tariffs. So I think I mentioned last time -- yes, I mentioned last time, there's been a little or no impact to our business as far as tariffs. No, we did get ahead of it. We -- several months before they started coming in, we notified customers we would pass these costs along. But fortunately, for us, there's been little impact as far as even getting tariffs from customers. I'm not saying -- I'm sorry, suppliers. I'm not saying we're not seeing them, but the ones we have seen have either been not significant or they've been passed on to the customer. So from our perspective to our business, there's just really no impact. But if you watch the news like we all do, things are still dynamic. They're still talking about 30% tariffs in some countries. So we're watching that. But for now, and we think in the short term, near term, we don't see any issue with our business from a tariff perspective. Could something changed, I don't know. But I think we're pretty well covered at this point. So maybe by the next quarter, there'll be another update. Hopefully, the update is the same. So we're not seeing any impact to the business going forward. So...

Okay. Thanks, Mark. Yes, tariffs are a hot topic these days. Any questions about it, just let us know. Let's go on to Slide 23. Our share buyback. This is not really an update except for confirming that in Q1, we purchased $2,165,000 worth of stock. Let's put that number in our little memory, so we'll go back to that a little later on as well. We haven't purchased anything in Q2. And my guess is we probably won't be doing that. Let's go on to Slide 24. Oh, here we go. Okay, we can call these numbers. Park's balance sheet, cash and incredible cash dividend history. We have 0 long-term debt. We reported $65.6 million in cash and marketable securities at the end of Q1. Now at the end of Q4, it was $68.8 million. So that's a difference of $3.2 million, right? But there are 2 things we just talked about, which are unusual expenditures in Q1. One was about $1.5 million to Ariane. The other one was $2.2 million buyback, that's $3.7 million. So if you just -- those 2 things combined explain the difference, the drop in cash between Q4 and Q1. And one more thing I got to remind you about, remember we used to talk for many quarters about those transition tax installment payments. Well, the last installment, which is $4.9 million is Q2 -- actually it was already paid in June, but you'll see that show up in our Q2 cash, like $5 million out the window. That was our last installment tax payment that relates to repatriation. We talked about that many times, and we'll do that again. 40 years of dividends and over $600 million of dividends paid so far. Let's go on to Slide 25. Okay. This is no change. Financial outlook for GE Aerospace jet engine programs, the juggernaut. So these 3 slides, no change. And I don't think we're going to go through the details again. The timing, we don't know, but it's coming. It can't be stopped, better be ready. Slide 26. There's that $61 million number we were talking about. We've gone through the math many times. The math is straightforward as far as we're concerned. It's pretty transparent also because we were telling you what the revenue per unit is. We're giving you the unit assumptions and doing the math. We don't give the number for the 9X program here a little bit. That program hasn't been certified quite yet. So it was a little bit more confidential. We don't give that information away. Slide 27. Just the footnotes, which kind of explain all the math on Slide 26, I'm sure we're not going to go over those. Slide 28. Okay. This is where we're going to slow down. This is the new and big thing. War and peace? "Park's new juggernaut." This is the -- the first juggernaut is the GE Aviation programs, I guess GE Aerospace programs. This is our new juggernaut. Supplies of key missile defense systems are reportedly seriously depleted as a result of recent wars in the Mideast and Europe. There's an urgent need to replenish those systems. So I got to stop here and explain something. We're going to be talking about 3 different defense programs. There are many programs and the others, we're not able to talk about. But one thing I want you to be -- want you to understand is very important. We're not providing any inside information about these programs, nothing at all. Everything we're telling you about is just based upon stuff publicly reported in news and other reports. So I just want you to understand that we're not like giving away any inside information on these programs. The PAC-3 Patriot missile defense system. We've been talking about this for a while, but boy, it's become headline news. The largest deployment of PAC-3 Patriot missile defense systems in history occurred in response to Iran's ballistic missile strikes on that -- I can't pronounce it, let's just say that air base in Qatar. The Patriot missile battalion was reportedly moved to Qatar from South Korea and Japan in anticipation of Iran's ballistic missile strike in response to the U.S. strategic bombing of Iran's nuclear weapon sites. So we [ had a recce, ] and obviously, we knew what the response is going to be. But how do you think South Korea and Japan feel about that? Do you think you're happy about it? It's a shell game here. What's going on. We don't have enough systems. That's the reason why we're doing this. We're robbing Peter to pay Paul, not funny. Israel's supply of Patriot missile systems has reportedly not -- this is no inside information, it's publicly reported, been seriously depleted as a result of the war with Iran. Ukraine's supply of Patriot missile systems, we know that they're begging for, they're begging for the Ukrainians, has reportedly been seriously depleted as a result of the war with Russia. Other countries have been promised Patriot missile system for years. They don't have them. We can't get them. War and peace continued on Slide 29. In a news conference. Do you see this new conference at the recent NATO Summit, President Trump stated in response to a Ukrainian reporter's question about providing additional Patriot missiles to Ukraine. It was kind of sad. I mean I almost thought he was about to cry. We're going to -- he said, President Trump, "we're going to see if we can make some available, but the U.S. is supplying to Israel, and they are very hard to get." This is what he said. And we, meaning the U.S., need them, too. So there's a problem. There's an urgent desperate need for these things, and we just don't have them. The U.S. reportedly has 25% of Patriot missiles needed for the Pentagon's military plans, 25%. It was recently reported that the U.S. has temporarily paused Patriot missile systems to Ukraine over concerns about an alarming, that's not my term. That's a term that's reported, depletion of U.S. stockpiles of the weapon systems. The pause was intended to allow U.S. to do an assessment of current stockpiles of -- and urgent needs for the weapon systems, and we're trying to figure out what we're doing. It's almost like we have steamrolled. Slide 30, continuing with Patriot, war and peace, new juggernaut. Then in a news conference at the White House yesterday with President Trump and NATO Secretary General Mark Rutte, I think. I don't know how you pronounce it. I think that's how you pronounce it. Do you see this one? President Trump announced that in response to Russia's continued military aggression, weapon system to Ukraine, including especially Patriot missile system shipments will be significantly increased. So so much for the pause. But here's the other thing. It was announced that 17 additional Patriot missile systems, it was not clear if that was referenced to batteries, launchers or missiles, will be immediately transferred from another unnamed country, I don't know which country, which does not need them as much. They don't need them as badly, okay? to Ukraine. So I wonder how that country feels about this. Are they pretty delighted? They're losing their Patriot systems. Again, it's what you call it shell game or robbing Peter to pay Paul. This is not funny. It's not funny. Patriot missile systems are planned to be incorporated into President Trump's Golden Dome missile defense system. So it's not just [ replenishing ] all these missile systems. We need a lot more of them. They're going to be in the Golden Dome. According to Sputnik News, that's the Russian news agency, I think, or a news agency in Russia. U.S. Army plans to boost its procurement of PAC-3 Patriot missile system by 4x. So we could be kind of smart Alex about Russian [indiscernible] information. But they're not the ones that came up with the story that Donald Trump was a Russian spy, Russian asset. They're not the ones that came up with the story that lapped up with Russian misinformation. So what is the expression? If you're in glass houses, you don't throw stones. Slide 31. It Is apparent from the reporting that the U.S. plans do much more than just replenish the depleted stockpile at Patriot missile systems, a lot more. Yes. Let's talk about our involvement with the PAC-3 Patriot missile system. Park supports the PAC-3 Patriot missile system with specialty ablative materials produced with that C2B fabric from ArianeGroup. And we're sole source qualified for specialty ablative materials on that program. We were recently asked to increase our expected output of specialty ablative materials for the program by significant orders of magnitude. We won't say how much because it's too confidential. We can't give it away. Of course, Park will support this request. At Park, we are Patriots. Park recently entered into that new agreement we talked about with ArianeGroup referred to above for the purpose of increasing C2B manufacturing capacity. Under the circumstances, timing is very fortuitous. But will that additional manufacturing capacity be enough? Probably not. Park recently received a proposed blanket purchase order from a key OEM for up to $40 million of C2B fabric. What's going on here? Next slide, 32. Ts and Cs of this agreement are being negotiated. When we processed that $40 million with the material, it will be a significant amount. We're not going to say how much because again, it's too confidential. Let's go into another program, which is in news, maybe not quite as much as Patriot, but definitely in the news. Israel's Arrow 3 and Arrow 4 missile defense systems. The Arrow 3 system has reportedly been extensive -- seen extensive use in Israel's recent war with Iran. Israel's stockpile of these Arrow 3 weapon systems is reportedly seriously depleted. Again, just reading reports, no inside information from us. The Arrow 4 system, which is reportedly in the final stages of development, is designed to intercept hypersonic missiles in the space transition zone. That's pretty elegant, right? Germany is buying the Arrow 3 and Arrow 4 systems from Israel. So again, it's not just replacing what's depleted. There's a significant additional need for these systems. Israel may need to do much more than just replenish the depleted stockpile, I guess I just said that of these Arrow systems. What's our involvement? We're qualifying the Arrow 3. We're sole source qualifying the Arrow 4, and that's all what we talked about -- say about it. But on Slide 33, we're still -- sorry, still in Arrow. What are the signals Park receiving in the market about these weapon systems? Let's just say, acceleration. So let's change gears here a little bit. Is the U.S. planning to rely exclusively on missile defense systems in the future, the Golden Dome? Are we done with MAD? If you're old enough, you might remember MAD, mutually assured destruction from the Cold War days way, way back. Maybe not. What about the LGM-35A Sentinel missile system. That's certainly not a defensive system. That's ICBM's. ICBMs, you know what they are, right? Replacing the 450 Minuteman III ICBMs. Park's Minuteman history. So it's interesting if you -- I don't know -- well, interesting to me anyway. In 1972, when they first introduced the Minuteman, Lockheed, Sunnyvale asked Park to take weight out of the missile system. And we did that by developing multilayer circuit boards. Are you aware of that? The Park developed -- invented multilayer circuit boards. That's what we did. And -- so we may be coming full circle. That was the very beginning of the Minuteman program, and this is now to replace Minuteman III. 450 new missile silos. You know missile silos, all maybe you've seen them in videos and things like that. 659 missiles. Again, this is all stuff that's public. You look it up yourself, nothing we're giving away here. What's our involvement? We're not able to say. Slide 34. We kind of touched on this already. As a general matter, it is more difficult to discuss the defense programs we support as compared to commercial programs we support. Many of the defense programs are highly sensitive and confidential. But please understand something. There are several additional critical defense programs, which we are supporting or are planning to support and we're not able to discuss those things. In some cases, those programs represent significant revenue potential for Park. Now a little change gears here. Some people ask, what will happen to defense spending if real lasting peace breaks out, we sure hope it does? What if the Israelis and Persians and their wars? What if the Arab states sign up for those Abraham Accords? What happens if the Ukrainians and Russians, they settle their difference and put their arms down? Be all very nice and wonderful. Will this defense spending drop off precipitously as it did after War II. You know what happened after War II. Over 90%, I think, like 93%, I mean, basically fell off a cliff. Will we beat our swords into plowshares? You probably know that's from the Bible. We're betting against it at Park. We hope that peace breaks out. It's lasting peace, but we're betting against that our swords will be beaten into plowshares. Let's go on to Slide 35. So another -- we talked about this last time, so we're just going to update you a little bit. Our major new expansion of Park's manufacturing facilities, an update. So as you know, we're planning a major new expansion of our manufacturing facilities that will require a new plant that could be in Newton, Kansas or somewhere else. The planned expansion will include the following lines. This is all something we covered before, solution, hot-melt film, hot-melt tape, hypersonic material manufacturing. Preliminary estimated capital budget for new manufacturing plant and equipment, $35 million, plus or minus $5 million. I hate to tell you this, but that number maybe a little low. We may need additional solution treating that might be based upon things we just talked about, things we just covered. So I'll have to -- we'll keep you updated on that. I just want you to be aware. Let's go on to Slide 36. Why are we doing this? Our juggernauts require it, our new long-term business forecast requires it. Significant requirements and new business opportunities for both hot-melt and solution composite materials. Defense and missile programs are drivers. And our long-term forecast has moved higher just since May 15 since we last talked to you about it. Why are we doing it? To have the manufacturing capacity and flexibility we need to take advantage of new opportunities as they arise. And last item, it's interesting, a little nuance to have the manufacturing capacity needed for Park to be Park. What does that mean? Well, calling cards are Park's flexibility, responsiveness, urgency. That's how we build the business we got. That's not normally how things are done in aerospace, but we're different. So we need a cushion manufacturing capacity. It's very important for Park. We don't -- we never want to abandon what has worked for us and what -- these are core principles for Park, flexibility, responsiveness, urgency. Let's go on to 37 -- Slide 37. We are thinking and planning for long term and back to why we're doing this expansion conceptually 5 years out. We'll get back to you on that. But it probably will take to the end of the year before we have our plans finalized. And then we have to design our factory. We have to design the equipment. It's not stuff you order off the shelf like a Walmart. All of this equipment is very specially designed and a lot of engineering work. To build a factory and equipment takes a long time. The factory has to be completed. The equipment has to be delivered. The suppliers have to sign up for the equipment. We have to do trials. We have to do qualification runs. We're talking years before we'd actually be able to ship qualified product from this new factory years. So it's very important to keep that in mind. That's what we need to look ahead. We're thinking and planning for our future. Conceptually, 5 years out. That's probably not a bad concept number, maybe a little less than that, but it's not 2 years, and it's probably not 3 years either between now and when we're able to ship product from this new factory. We're not sharing our long-term -- new long-term forecast at this time. But suffice to say for now that this is an exciting and challenging time for Park. The opportunities to Park are significant. Timing is now. We must take advantage of the opportunities now. We must not squander these very special opportunities. You could say once in a lifetime, I was going to say that I thought well, is that overly dramatic. So just very special opportunities. But we must not hesitate. In this case, he or she who hesitates, [ see what ] happens. So our objective is to have our expansion plan in place by the end of the calendar year and to be moving into implementation phase of our plan by then. After our last call, one of our investors, good investor asked, well, should we wait? Should we hold off? That's not how it works in aerospace. Wait until we get the business booked or it's in our backlog. It's kind of a circular thing. But if we waited, it would be too late, way too late, but we're not going to get in our backlog to begin with because no one is going to give us the business if we can't explain to them that we have the ability to handle the business or support the business with our manufacturing capacity. So timing is now. I would just comment, maybe this sounds a little defensive, I don't know, but I want you to think about something. Park has been around for 72 years. Why is that? Is it because we grab it the first shiny thing? I don't think so. We haven't taken shortcuts, no easy way out, very good discipline. No debt, cash, over $600 million of dividends paid. Are we given to doing wild and irresponsible things? No, think about our history. Think about that a little bit. I appreciate if you do that. So maybe for somebody else, it would make you nervous, oh, what are these people doing? Do you have any example of when we chase something we should have chased? Can you think about that a little bit? Like I said, maybe it sounds a little defensive, but I thought it's better to talk about it because somebody said, well, maybe you're being too aggressive. I don't think so. I don't think so. This is, like I said, maybe a once-in-lifetime opportunity and we would be really responsible apart would be just squandering the opportunity, and we're not going to do that. So that's it. Let's go on to Slide 38. Nothing here. This is exactly the same slide that we had in our Q4 presentation. All I'll say is that estimated non-GE Program incremental sales, that number is just so blown out the window. It's not even funny that we're not giving the number, but the number is quite significant. And the number is built up pretty conservatively also because we don't -- the line items include only things we know about and can quantify. There are a lot of things we know about that we can't quantify quite yet, and they're not even in our number. So actually, even the number is quite a high number, it's also, I think, a pretty conservative number. We spend a lot of time on this already. We're taking this project very seriously. A lot of due diligence being done by lots of different people at different levels. So we want to make sure we get it right. And that's it for us. Operator, we're done with the presentation. So Mark and I'd be happy to take any questions to the extent there are any at this time.

[Operator Instructions] Our first question is from Nick Ripostella with NR Management.

A lot of exciting things going on there. I just have a simple question. Slide 21, we recently entered into new LTA. Is there anything different about this LTA than previous ones with GE Aerospace that you can discuss?

I didn't hear you exactly. What are you asking about the...

On Slide 21, you referenced...

Oh, Slide 21...

Yes. A new LTA with GE Aerospace for '25 through '30. And I'm just wondering is there anything different in that LTA than previous ones.

That's a good question, and that evidences that we're probably confusing everybody. So the LTA we've been talking about for years is an LTA with MRAS. It was not -- they're not GE Aviation. So by and large, those programs that we talk about are MRAS programs. That's a separate LTA that goes through 2029, '19 to 2029. This LTA -- this is something Mark negotiated with GE Aerospace. They're still engine programs, but they're different engine programs and different materials. So this is -- they feed into the GE Aviation programs and maybe we're confusing the matter too much, but it's a different LTA. But just so you know that the -- all of the GE Aerospace revenues are included in that -- in the history, in our sales history as well as the juggernaut. So we include the GE Aerospace revenues from the MRAS LTA and from the GE LTA in both the history -- historical sales to GE Aviation programs as well as the juggernaut slide.

Okay. Okay. And one other question. This may be a difficult one. But at what point do you think you would feel comfortable filling in some of the question marks on your long-term forecast? When you use terms like blowing out the water, it's very exciting. But if someone were to attempt to build a model out a few years, at what point would you feel comfortable giving us some information to build such a model for the longer-term picture?

Well, we have the models internally, and we've a lot of time reviewing them internally with the Board, of course. I think we feel it's a little premature to share this information with the public. And it might also be a little bit shocking too. So we're holding back a little bit. I think we want to get a little more confidence. And Nick, like I said, we're doing a lot of due diligence, a lot of internal discussions. I think we like to get a little more comfort, confidence in what we're doing in terms of the budget and everything else because that will be part of the equation, I guess. I don't have an answer, but like I said, we hope to have the plan to complete by the end of the calendar year and go into the implementation phase at that point. So I think by that time, we should feel we're in a position to provide that information. So I don't know about during our Q3 call, which would be, what, October. No, that's our Q2 call in October. But I hope that if not then, by the time of our Q3 call, which would be at the beginning of January. So I'm sorry about that, but I appreciate if you could just hang in there.

That's okay. And then just pat you all on the back. I think with respect to plans for investments, the team there has pretty much earned the trust of shareholders, I think. You've been wise and not buying stupid things. And certainly, with share repurchase, you've been judicious, and I've seen a lot of bad examples. So I just want to reflect that sentiment.

Thank you very much, Nick. This Charlie Munger guy. He passed away recently, but I'm probably going to get this wrong, but he said something about they're successful, not because they're always brilliant, but they're never stupid. And not being stupid, it means a lot, like don't do something stupid, don't like go for the gold shiny stuff when it's just [indiscernible] and just everybody is doing it, don't [indiscernible] that everybody else is doing it. So we try to be really disciplined over the years and not just because everybody else is doing it, not do those things and do what we think is right for the company.

Okay. So next week, we won't see a press release with an investment in bitcoin mining?

Maybe not. I don't know.

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

Okay. Well, thank you very much for everybody very much for listening in. It was nice to update you. And please feel free to call us if you have any follow-up questions, and have a good day. Thank you. Goodbye.

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