パーク・エアロスペース（PKE）2027年度第2四半期決算説明会：ミサイル事業の成長とGEの見通し

主なポイント

• Park Aerospace Corp.は2027年度第2四半期（Q2）の売上高が2,079万1,000ドル、粗利益が713万5,000ドル、調整後EBITDAが528万5,000ドルになったと発表した。
• 粗利益率は34.3%、調整後EBITDA利益率は25.4%に達した。売上高は経営陣の予想である1,950万〜2,100万ドルの範囲内となり、調整後EBITDAは予想範囲の430万〜510万ドルを上回った。
• ミサイルシステムプログラムの売上高は570万ドルに達した。経営陣はこの水準が持続可能であると述べ、四半期ごとの変動は今後も続く可能性があるものの、ミサイルおよびGEエアロスペース向けプログラム全般で積極的な増産を見込んでいる。
• GEエアロスペース向けエンジンプログラムの売上高は830万ドルとなった。パーク社は、末端需要の低下ではなく、第4四半期におけるより現実的な増産ペースを反映し、これらのプログラムに関する2027年度通期予想を3,200万〜3,500万ドルに下方修正した。
• 経営陣は2027年度第3四半期の売上高を2,100万〜2,250万ドルと予想している。GEエアロスペース向けエンジンプログラムの売上高は800万〜850万ドルとなる見込み。
• タルサ工場およびアリアングループの米国C2Bファブリック工場への投資計画を控える中、パーク社の当四半期末時点の現金および有価証券残高は1億1,475万ドルで、長期有利子負債はゼロとなった。

主要財務データ

ストックオプションの行使に伴う税効果を反映し、パーク社の第2四半期の税率は第1四半期の1%から18.6%となった。経営陣は、より標準的な26.5%の税率を適用した場合、報告された0.21ドルではなく、EPSは約0.19ドルになっていたと試算している。

業績および事業状況

民間航空事業

A320neoファミリーは、引き続きパーク社にとってGEエアロスペース関連で最大の機会となっている。8月時点で、エアバスは4,741機を納入し、7,571機の確定受注を保有していた。パーク社が参画しているプラットフォームであるCFM LEAP-1Aエンジンは、6月30日時点でA320neoファミリーの確定エンジン受注の66.9%を占めた。

経営陣は、A320neoの増産、ボーイング777Xの型式証明取得と運航開始の予測、および中国商飛（COMAC）によるC919の増産計画が牽引役となり、民間航空機の増産が進行中であると述べた。パーク社は、777Xに使用されるGE9Xエンジンナセル向けAFP複合材料の独占サプライヤーである。

パーク社の長期的な民間航空シナリオでは、GEエンジンプログラムによる売上高の潜在規模を6,234万ドルと試算している。この数値はプログラムおよび生産に関する前提に基づくものであり、2027年度の業績予想ではない。

ミサイルシステム

第2四半期のミサイルシステムの売上高は計570万ドルとなった。パーク社は、PAC-3 MSEプログラム向けに独占供給資格を持つ材料を含め、固体ロケットモーター構造に使用される先端耐熱複合材料（アブレーティブ材料）を供給している。

ロッキード・マーティンは、米国国防総省との7年間の契約を発表し、PAC-3 MSE迎撃ミサイルの生産能力を年間600基から2,000基に引き上げる方針を示した。パーク社は、人員の追加と既存生産ラインの稼働率向上により、カンザス州ニュートンの既存工場で他のミサイルプログラムとともにこの生産ペースに対応できるとしている。ただし経営陣は、新たな生産能力が稼働するまでは業務負荷が高まると警告した。

C2Bファブリックの生産能力

パーク社とアリアングループは、米国内のC2Bファブリック製造工場に関する正式協定の締結に向けて交渉を進めている。同工場の全生産量は、PAC-3 MSEおよびその他のミサイルプログラム向けとしてパーク社に割り当てられる予定である。

パーク社は、将来のC2Bファブリック購入に対する前払金として2,500万ドルをコミットした。工場の建設スケジュールを6ヶ月前倒しすることで合意したのを受け、正式協定の締結を前提として、パーク社は2026年に2,000万ドル、2027年に500万ドルを支払う予定である。アリアングループの米国工場の完成には、現在約3年半かかると見込まれている。

これとは別に、パーク社はフランスにおけるアリアングループの追加能力増強に向けて458万7,000ユーロを拠出している。この拡張分は2028年に稼働を開始する予定で、増加分の約半数がパーク社に割り当てられる。

タルサ工場の拡張

パーク社は、タルサ国際空港の18エーカーの敷地に約15万平方フィートの工場の建設を計画している。設備投資予算は6,500万ドルで、現金支出の予想は2027年度に1,000万ドル、2028年度に4,500万ドル、2029年度に1,000万ドルとなっている。

同施設は引き続き2028年度の完成を予定しており、製品の出荷は2029年度に開始される見込みである。これにより、パーク社のホットメルトプリプレグおよびフィルム接着剤の製造能力は約2倍、溶液処理能力は約3倍に拡大する設計となっている。

経営陣の見通し（ガイダンス）

経営陣は、GEプログラムの通期予想の下方修正について、顧客側の増産ペースによるものと説明した。同社によると、当初の試算は顧客の生産計画に基づいて作成されていたが、第1四半期および第2四半期の実績と第3四半期の予想を考慮すると、第4四半期も直近の四半期と同水準にとどまる可能性があるという。

リスクおよび注視事項

• GEエアロスペースの増産は、顧客および広範な製造サプライチェーンが航空機需要を満たすのに十分な速さで生産を拡大できるかどうかに依存している。
• ボーイング777Xプログラムの遅延は続いているものの、経営陣は来年の型式証明取得、運航開始、および初納入に対して楽観的な見方を示した。
• ニュートン工場は当面の航空宇宙およびミサイルの増産に対応可能であるが、タルサ工場の能力増強が稼働を開始するまでは、同工場に運用の負荷がかかると経営陣は見込んでいる。
• アリアングループの米国C2B工場については正式協定が必要である。また経営陣は、改定された建設スケジュールを大幅に前倒しすることは困難であり、それは主に資金面の問題ではないことも示唆した。
• パーク社の1億1,475万ドルの流動性残高は、6,500万ドルのタルサ・プロジェクト、2,500万ドルのC2B前払金、ならびに追加の運転資金および立ち上げコストを支える必要がある。

アナリストQ&Aの要点

アナリストからは、ミサイル売上高の持続可能性、パーク社がGEエアロスペース向けプログラムの見通しを引き下げた理由、そして既存の生産能力で複数のミサイル増産計画に対応できるかという点に質問が集中した。

経営陣は、ミサイル事業の成長は持続可能であり、PAC-3 MSEは開発または生産段階にある多くのミサイルプログラムの1つに過ぎないと述べた。ただし、タルサ工場が稼働するまでは、ニュートン工場で積極的な人員増強を行う必要があるとしている。

GEエアロスペース向け見通しの引き下げに関して、経営陣はプログラムの弱体化や最終市場での需要低下を示すものではないことを強調した。この調整は、特に第4四半期における顧客の生産増産のスピードに対する不確実性を反映したものである。経営陣は、民間航空事業の長期的な成長シナリオに変更はないと述べている。

アリアングループの米国C2B工場について、経営陣はスケジュールを6ヶ月短縮するために前払金を前倒しした（増額したのではない）と述べた。資金調達が主な制約ではないため、これ以上の大幅な前倒しは困難とみられる。

決算説明会（トランスクリプト）全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Thank you. Good afternoon, my name is Cleo, and I will be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp Second Quarter Fiscal Year 2027 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. [Operator Instructions] At this time, I will turn the call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Brian Shore

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Operator

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

質疑応答

James Ricchiuti

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

Brian Shore

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

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

James Ricchiuti

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

Brian Shore

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

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

James Ricchiuti

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

Brian Shore

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

James Ricchiuti

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

Brian Shore

Okay. Thank you, Jim.

Operator

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

Trevor Walsh

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

Brian Shore

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

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

Trevor Walsh

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

Brian Shore

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

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

Trevor Walsh

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

Brian Shore

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

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

Okay.

Trevor Walsh

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

Operator

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

Unknown Speaker

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

Brian Shore

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

Unknown Speaker

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

Brian Shore

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

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

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

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

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

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

Unknown Speaker

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

Brian Shore

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

Operator

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

Brian Shore

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

Operator

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

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