Good morning. My name is Howard, and I will be your conference operator today. At this time, I would like to welcome everyone to Park Aerospace Corp. Fourth Quarter Fiscal Year '22 Earnings Release Conference Call and Investor Presentation. [Operator Instructions] Thank you. 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. Hello. This is Brian. Good morning to everybody. Welcome to our Q4 investor conference call. Nice to have you aboard.

So this morning, as you know, we announced our earnings, there was an earnings release, and you probably want to pick that up in the earnings released our instructions as to how to access the presentation we're about to go through, through the webcast, also on our website. So we always give you this little caveat. We can't cover everything.

We have a lot, but we try to focus on -- we don't go through real dry number analysis -- can we do that for you later, if you like, but we try to highlight some areas that we think might be interesting to you and might give you some interesting perspective. We'll skim over certain portions of the presentation is very long.

Some of it is just included for context. We're not going to cover every item in the presentation. We don't have time for that. And it could still take 45 minutes to go through this, and I just want to warn you about that. Matt and I will, of course, answer any questions you have at the -- when we're done going through the presentation. Okay.

So let's do it as they say. We go to Slide 2, forward-looking disclaimer. If you have any questions about our forward-looking disclaimer, just give us a call. Slide 3 is table of contents. Slide 1 is the presentation a to go through. Appendix 1, we have our normal supplemental financial information as appendix.

I want to go on to Slide 4, probably take a little more time on Slide 4 than the first 3 slides. So Slide 4, we have our Q4 results, which you probably are already aware of because they're also. So I won't spend a lot of time in the numbers. The numbers are there you see the top line is off from the prior quarters.

And -- but 1 thing we're happy about is that the gross margin is back over 30%. We don't like it, like last quarter for Q3 when it was under 30%.

That doesn't make us too happy and the adjusted EBITDA margin is also in the area we'd like to see -- we'd like to see better than that, but at least it's not like below 20%, which was a Q3 percentage as well. EBITDA -- adjusted EBITDA were $3 million. We're pleased about that. Okay.

What did we say about Q4 during our Q3 conference call, we said sales estimates were $12.75 million to $13.25 million. So we didn't make that number or under that number by $12.5 million. Adjusted EBITDA, $3 million to $3.5 million. So we came in within that range.

I would always remind you, I got to do that, that when we give you forecast, we don't call it guidance or estimates. We're telling you what we think is going to happen. We're not playing what we consider to be a low game that probably 90% of other corporations do, where they give you a low number so they can beat it to be heroes.

We think that's kind of silly and insulting. So we tell you what's going to -- what you think is going to happen. We're sometimes wrong, but we say we're telling you what we really believe is going to happen. Anyway, even though we came in under the top line. The bottom line was where we want it to be.

And I would say that was an outstanding job by Park's people to make the EBITDA number considering that the top line we did not make and considering all the other things we're about to talk about in terms of the day-to-day life of Park. Let's go on to Slide 5. Here we go, living the life of the Park Life in Q4, Q1 and beyond.

These things are not can surprise you if you listen to other conference calls or watch the business news these days, supply chain, supply chain, supply chain, wow -- this is really something. And I just want to note that we were told by people to know that this is going to end -- this problem going to end last year. Here's how there for that.

Of course, it didn't end. And as far as we're concerned, it's -- we never thought it is bad. Our freight, freight, yes, daily battle, severe staffing shortages. We'll get back to that later.

Total missed shipments in Q4 close to $1 million, mostly to supply chain issues close to $1 million of stuff we would have shipped -- could have shipped if we had the raw materials that we needed. Let's go to Slide 6. Okay. We're continuing on the -- what Park is living with stuff, inflation, inflation, inflation, raw material costs.

You get freight costs, utilities, supplies, pretty much everything. So again, you don't need us to tell you this. Everybody knows about this or the grocery store, gas station, you're hearing it, you're seeing it, you're feeling it. But transitory. We've got a double how that, remember, transitory. The people still saying that.

I wonder, this is not a last list of excuses, excuses, that's a dirty word of Park. We don't get into excuses. But as investors, we think you would like to know what we're living with every day at Park. So that's what we're telling you these things. Slide 7. More on the supply chain, yes, we never saw like this before.

It's become a free for all order in the supply chain just broken down. It's chaos pervades and in some cases, even good for POs are not being honored. So this is what I mean by things breaking down. The normal business, there's just kind of trust, good faith that is required for business to operate. We get a pricing quote for a supplier.

We have a PO, confirmed PO, we turn around and we have pricing to our customer. It is based upon our cost, of course, based upon the raw material costs, based upon the call we have from our supplier. Then it goes up and down to supply chain like that. This is always done. It's just done good faith. We don't get a law firm out every time.

We don't contact the law firm every time there's a PO or PO confirmation. This is how business operates. But right now, none of this really works anymore.

Not only are suppliers not able to meet their delivery commitments that we understand because maybe they're not getting their raw materials in time so that we understand or maybe they have staffing shortages.

But the other thing that's happening, which is disappointing to us, but not shocking is that in some cases, people, companies aren't even honoring the pricing that's in appeal. I confirm PO, we're not going to honor that pricing. So what position it puts us in is that, okay, we've assumed that price can we get pricing to our customer.

So kind of an interesting dynamic, but that's why I say the supply chain is kind of chaos. Everything you want to count on for normal business, it's -- these are assumptions that we just could not take -- used to take or granted, we can't take it grant anymore.

But at Park, we don't panic, even though the panic creates we're saying and we live with the chaos. If chaos comes our way. So we'll deal with whatever comes our way.

It's very unfortunate that this is the world living in it because there's a lot of time and effort to deal with this stuff would be better to be dealing with other things, but we'll deal with whatever we have to deal with. That's how we do at park. At Park, honor integrity of what matter most.

At Park, principle do not once more on this later, but you probably get were going with this. We honor our commitments. We honor our commitments in terms of any kind of pricing we have on confirm PO. We don't go back and say, sorry. Our costs went up. Let's say we have a confirmed delivery so to be in 3 months.

We don't go back to the customer and say, "Sorry, our costs went up so we're not going to honor the pricing. We don't do that. That's not in the Park way anyway. Okay. Let's keep going. We'll get back to that later. Slide 8. Slide 8 is interesting, lease, that's the annual look at the annual fiscal year look at the Park history.

And we highlighted, as you can see, fiscal year '20 and fiscal year '22. We thought maybe we could focus on those 2 years for a second because we think the comparison is kind of interesting. Note, of course, that in fiscal year '22, the top line was off from fiscal year '20, partly some of the reasons we're talking about. But nevertheless, it was off.

But it is a very nice but here, look at the gross margins. The gross margins were better in '22 than in '20, even though in '20, the top line was much higher. '20 was a good year. Let's think about that. Our fiscal year ends end of February. So '20 was a pre COVID year right before COVID started. 22 was not a pre-COVID year.

Not at all, not a pre-COVID pre-economic crisis year. So even in the old second COVID year, our fiscal '22, the second economic crisis year, our gross margins were actually better.

And look at the adjusted EBITDA, not just the percentage, the actual number is better, $13 million in fiscal '20 to approximately $13.1 million, a little bit better, but we'll take it in '22. '22, we had COVID disruptions, supply chain, payoffs, inflation, staffing shortages.

These are the things we live with in '22, but nevertheless, look at what our people were able to achieve when the adjusted EBITDA margin also very nice. So I would say excellent, excellent outstanding job by Park's people under extremely difficult circumstances to deliver that kind of performance.

So if you ever want to send a thank you note on ever want to send thank you note to the Park's people, not me, I didn't do any of it. It's our people to do all of it. Let's go on to Slide 9. We'll just skip through this. This is something we do every quarter now, one of our really good investors, good ideas and we should cover this every quarter.

So sure, we do it.

The only thing that I'll cover the bottom on the slide, 9, the bottom arrow point, with interest rates rising fast and error of cheap and easy of money coming to an end, we hope, maybe Park's are harder in money will finally be worth something, frustrating having money and everybody else gets free money and we're trying to compete, let's say, on M&A and the prices go way through the roof because somebody else -- they're using other people's money.

We use our money. And the other people's money is cheap. So hopefully, there'll be a little bit of change there. Slide 10. The only thing we cover is the last item, just an update. We paid $554 million or $27.05 per share cash dividend since fiscal year 2005. By comment, I think you know what it is. That's a lot of the money for a small company like Park.

Slide 11, okay. A little more of our kind of fun stuff here, top 5 customers in Q4. There's a picture of Boeing 740 -- sorry, 787, that relates to GKN, that relates to the GEN-1 engine, which provide materials. Boeing beside a subs that's a that like Nordea, the Wiregroup.

And actually that -- because this subcharter uses the weather master radon, we produced the materials for that produces and Patriot, advanced capability packers system. This is the big one. We'll talk about this a few times during the presentation that it relates to a company called AAE.

We supply the materials for the third-party materials for the Rockies for the PAC-3. And Grambling, you probably guessed it away. That's a Kratos design and built a reman drone. We don't have a picture for Middle River, but we'll cover them later on. Okay, let's keep going. Slide 12.

Interesting comparison to fiscal '20 to '22, you see that the pie is kind of coming back more or less to fiscal '22 coming back to more or less would look like in '20, except military is a little down as compared to '21.

I'm going to '21 and -- our feeling with that is our military is really something we really feel good about, especially for the future, and we'll get that in a minute. But in fiscal '22, we think military was kind of held back because there were really big delays in approving the budget. The budget is now approved. So we'll see what happens with that.

Let's go on to Slide 13. Park loves niche military aerospace program. So we always do this for fun. This is a project that Dana and Elena work on every quarter coming up with some kind of fun stuff that parts involved with. Sometimes it's with all niche stuff, sometimes it's not big volume, sometimes it is.

So Boeing, RC-135 materials for structures, the MK-125 warhead for the SM6 missile that's materials for structures. That's on ablative actually, in that case, that structures. Collins-class submarine that's for the Australian Navy materials and materials for the Harrier. Let's keep going. We'll keep track of the time here. I'll have to cover Slide 14.

Okay. So we're going to do something a little different here. We're going to talk about trends in the military markets and talk about trends in the commercial markets. We haven't done that in prior quarters. So we're trying to provide a little bit of a different perspective for you, which we think is timely.

Military markets, trends and considerations, the new world order, what's a new world order, a sea change in attitudes about the defense industry and spending based on ore in Europe. Almost overnight, happen almost overnight and what a difference a war makes.

The war is a horrible thing, of course, but it certainly has an impact -- has had an impact upon the global defense industry. It seems that way anyway. I just talked about the U.S. defense appropriations bill was signed into law.

So a defense industry is no longer in limbo and the 2023 defense budget includes additional spending increases, including for missile defense systems, and we'll talk about a lot of your missile defense systems, such as the PAC-3, we talked about that and a hypersonic missile systems such as SM3 missile, we're in that program as well.

Let's go on to Slide 15, continuing with military market trends. But Europe may be the real big defense spending store.

We talked about DOS and everything what about Europe, because these products may be made in the U.S., but where they're being used and purchased? Certain countries like Germany have already significantly increased their defense budgets and many others are considering we're in the process of considering increasing their budgets.

And not surprisingly, what you -- not surprisingly at all the circumstances, what's the emphasis on missle systems? Well, I guess we know why that is because nobody likes missiles getting shut at the. So that's a big thing. And I think that's kind of maybe a part at what do we call a sea change. We don't use that term paradigm shift to Park.

So we use -- we don't like that. And don't forget about Asia. That's on a happy place these days either with everything going on with China and Taiwan. So Taiwan recently contract of upgrades to its factory missile system.

Japan utilizes that packaging missile system, defense system as an essential part of the submission defense strategy, South Korea, and not surprisingly, realize the Park missile defense system to counter North Korea's ballistic missile capabilities. Let's go on to Slide 16, still military markets, some trends about the New World Order.

So Lockheed recently commented -- sorry, I'm resting a little bit commented that Russia's attack in Ukraine has boosted demand for their missile defense systems. Lockheed CEO stated, "we've got demand signals for SAD and PAC-3 from around the world to continue.

When you see missiles in hospitals and train stations in Ukraine, governments are now taking that might be worthwhile. It might be worthwhile to have an effective missile defense system. You think so. Next item, Aerojet, which is also a big contractor for the PAC-3 not significant increases in PAC-3 missile system activity just recently.

So -- and Park's, as we've already commented, supports the factory missile fence system with specialty ablative composite materials. So here we go. What's the conclusion here? The strong trend toward increased sorry, defense spending in North America, Europe and Asia undeniable as far as I'm concerned, anyway.

But -- and there's a but, supply chain issues can least temporarily limit the speed of the ramp-up of the spend spending. And that's a significant item because the supply chain may not be able to respond as quickly as some of these countries want to upgrade their defense systems and they take a little while for the supply chain to catch up.

That is always the case. So why do we going to Slide 17? We covered defense trends now commercial areas, base markets and trends in consideration. A little more complicated, so it will take a little bit more to go through it.

So let's start with Commercial aviation continues to recover, largely driven by continuing improvement in U.S., domestic and transatlantic. Single-aisle.

We talked about that a lot continues to lead the recovery of a wide-body single-aisle aircraft designed to service those domestic routes as well as a short-range international routes like TransAtlantic. U.S. domestic commercial aircraft will now running about 90% at pre-Covid levels. We've heard that's been reported in any way.

Even business travel, which lagged to personal air travel recovery appears to beginning to recover nicely. We're not have to go to a big jets. We're talking about business people traveling on commercial airlines. Analysts believe 2019 global aircraft levels be matched in 2023 surpassed in '24. Let's say about that. And then several U.S.

air carriers recently reported strong passenger demand and increased our revenue guidance. recently commented that they plan to pass along jet fuel costs. Let's talk about that a little bit later to the customers, and they expect their customers to pay the increased ticket prices.

I just saw a report this morning on one of the financial news programs that just last month, ticket prices went up 18%. And don't hold me to a news program. Sometimes they get this stuff on, but not surprising. So Slide 18, continuing with commercial aircraft -- sorry, aerospace trends. So all the signals seem to be quite positive.

Happy days are here again. We're going to celebrate. And generally, higher jet fuel prices provide airlines with extra motivation to more quickly replace less fuel-efficient legacy aircraft and more the fuel vision monitor aircraft such as the A320neo. As a general rule, higher jet fuel prices is a greater motivation.

So generally speaking, airlines don't want to replace the legacy airplanes early because the economics don't or against that. But once the jet fuel prices get so high, then there's economic shift and then there's motivation to replace the legacy airplanes with a more moderate airplane more quickly.

The Neo is much more efficient fuel efficient, I should say, than the legacy A320 as comparison. Then you come to but, okay, big but here, though. Is there a limit to how much additional cost the market will be willing to absorb? Nobody talking about this too much. But it's our job to think and not just listen to what people say.

Jet fuel is considered to be the largest piece of the operating cost pie for an airline. And that was the case even before the sharp increases in jet fuel prices. Jet fuel cost approximately twice what it cost a year ago, resulting in a very significant -- very significant reasons in airline operating costs.

That may even more than twice now because it seems like every week is up more and more. In order to maintain their margins, airlines have significantly increased ticket prices. We're likely to increase them even more to keep up with those escalating jet fuel prices. Let's go to Slide 19.

So it is true that people point this out, a lot of pent-up demand for air travel as the world recovers from the pandemic. And also, a lot of people lose money in our pockets, so people want to get out and stopping lockdown, want travel. So there's no doubt about that.

But -- and then we go back to the but again, are the individual and vision traveler is going to continue to be willing to pay the greatly escalated ticket prices forever and ever with no end of sight? Does that make sense really? Is that the logit? I don't know. That's a device history Oh yes, it's a price history.

That's not how it's worked in the past. Does it defy gravity? Well, I don't know, maybe it does.

What about that dirty or word? What happens is their recession? Will people keep flying and paying the escalating ticket prices if the economy stalls out goes to reverse? So if you think about -- let's go on to Slide 20, still on commercial aerospace trends.

So it's something to think about while we're celebrating with exuberance, how great things are in commercial aviation. And of course, we have to ask if that's irrational. If people start flying less, will airlines be less on order to airplanes? Well, maybe something you consider anyway.

If that happens, will commercial aircraft manufacturers scale back their production rates? And here's an interesting thing. Some may and may not, something we consider. Now this is what may be where we get to this diverging duopoly things. Boeing is from what we call from their reports. They're focused on cash flow.

Airbus from their reports, now, they're focused on dominating the single-aisle world. So the reaction may be different or Boeing may say, yes, they got to pull things in. Understandably, in my criticizing Boeing, Airbus may go the opposite direction.

So we'll get back to that later, but it's a real interesting thing to watch, especially if the economy slows down and goes into reverse. Let's go on to Slide 21. Slide 21. This is a slide that's in every presentation. So this is just kind of a review.

We have that firm LTA requirements contract through 2029 with Middle River Aerostructure System, MRAS, which is a sub of ST Engineering. I always have to remind you that MRAS used to be sold of GE Aviation. That explains who on all these GE Aviation programs. So we've got these programs when MRAS is still a sub GE Aviation.

We built a redundant factory for them, a sole source for composite materials or engines -- sorry, and thrust reversers for the first 5. I checked items, we'll call the A320neo family of aircraft with LEAP-1A engines, 747, the 2 Comac airplanes and the Global 7500 aircraft. Let's keep moving. I always like to point out this picture.

That's -- those are Boeing 747 and -- look at the size of them compared to the guide background load that picture. Okay. Slide 22. So some new developments GE Aviation. This is kind of a nice Park's a new film heater product developed under a joint development MOU with agreement we called an MOU between MRAS and Park.

Development of this film easier product taking a long, long time, but is complete. And now our new film is a product is undergoing qualification with MRAS. It's very good news, very happy about that. It's a long process. Park's live strike protection LSV material, parts LSB material was also developed jointly with MRAS.

It's currently in use by MRAS on the A320neo aircraft family and the Comac 919 program. We're still sourcing those 2 programs. That's good. That's not news though. But here's the news to slip parts LSV materials now in the process of being approved for use on the Global 7500 program that has past 20 engines. That's very good news for Park also.

I show the timing on these things, if I have some confidence about them, I would tell you, but I don't know. That's one. Same case containment wrap for the GEnx engines for the 777X aircraft. Well, this is really good news until about a week ago, after being dormant for almost two years, the fan case containment wrap program has become active again.

There is still design risk. Remember, we told you about this that there could be a redesign of the fan case so that the containment wrap is not -- no longer necessary. But even if that happens, there's still a number of containment reps that need to be produced. So we're very pleased to be back on that program at least for the time being.

We actually were expecting POs like any day for this program, the very starting any day, then Boeing pulled the rug out from under rest. They think a lot of people by announcing they're pushing out the 777X entry into service until 2025. That's a 2-year delay. So that's obviously disappointing.

At this point, it's very unclear how that will impact the containment wrap program, but it obviously can lead to program delays. So that's a little bit of not a good news, but maybe some putting -- throwing some cold water on as well. Let's go on to Slide 24. All right.

So we spent a lot of time talking about the A320neo family with the LEAP-1A engines because it's so important to Park. This slide, we've had in, I think, 2 or 3 presentations already. This is where Airbus were kind of putting down the marker saying, this is what we're going to do. This was a year ago, May of last year.

This is what we're going to do, okay? As soon as they did that, the supply chain gets kind of freaked out and a lot of push back, a lot of goes too much, how can the supply chain support that. And so you got to be tension right away between our Airbus and supply chain. Let's go on to Slide 25.

Just some background here in Airbus delivered 40 average 40 Neo family aircraft per month in 2021. They said they wouldn't go below 40, they didn't even to be the pandemic said we can hold to 40, so many doubters, so many doubters, but they enter the word.

Next item, currently delivering A320neo family aircraft a rate of 49 per month, which I think is pretty much what they're planning. So they're ramping up already. And Airbus recently stated a plan and this is a big one, reached a rate of 65 A320neo family aircraft deliveries per month by the middle of next year, which is just 14 months from now.

So obviously, for everyone to get to that rate, the supply chain needs to ramp up really before that date and maybe even now. And in a recent speech, the Aviation Week raw material supply manufacturer supply, this is a conference where the Airbus people are talking to their suppliers. What do they say? He says, it's interesting.

You need -- we need you, I mean the suppliers and the audience to follow Airbus' rate increased indications and have phased in the rate increases indicated by Airbus. You also told the audience we kind of you not to second guess. So you see Airbus is getting a little bit impatient, a little bit now with the supply chain. That's my take on this anyway.

Like stop questioning what we're doing, just get on board. So there's attention there. Slide 26, GE Aviation. This is, I think, important recently stated publicly. We're experiencing an unprecedented ramp in lead production. And further stated, we're aligned with the. That means Airbus what we need to produce through 2023.

So this is potentially significant because GE was GE Aviation, 1 of those companies and supply chain that was probably questioning the aggressiveness of Airbus has indicated the rate increases. Okay, let's go to the next one. And it's been reported. This is a theme we keep going back to the current very high oil and jet fuel prices.

We're motivating many legacy A320 operators consider upgrading A320NEO aircraft more quickly. Again, no much more fuel efficient than the legacy A320s.

And then the last one, this is important kind of new, it's just very recent news, just on -- this was -- 1 year after the original indication, remember, May of last year, this I think was part of the Airbus Q1 earnings announcement. Looking beyond 2022, we see continuing strong growth in commercial aircraft demand driven by the A320 family.

As a result, we are now working with our industry partners to increase A320 family production rates to 75 aircraft a month in 2025. You see they're not backing down. We're actually doubling down. In the news release, they further stated Comac production of A320 family is progressing toward a monthly rate of 65 aircraft by summer 2030.

That's the other thing I've been saying 65 a middle next year, 75 by 2025, filing analysis. This is important of global customer demand as well as assessment of industrial ecosystem readiness at the really the supply chain. The company is now working with the suppliers and partners to enable monthly production rates of 75 in 2025.

During the conference call, Airbus also said they assessed a large number of suppliers, and they're coming back and saying, "Okay, we've heard all the questions about it. We work with our suppliers, we're doing this. That's at least my take on it. So Slide 27, let's keep going.

At the end of March 2022, the LEAP-1A, CFM and a 57.4% share of A320 family aircraft orders. So this is the biller in. The A321neo has 2 approved engines. One is a LEAP way. That's the 1 we're on through CFM and the other 1 is a Pratt engine, which we're not on. So that percentage is really important because we're only on the LEAP portion, 57.4%.

So assuming that 57.4% in which obviously goes up and down every month. But just let's use that number, that's the current number. The 75 A320neo aircraft family per month represents approximately $28.75 million per year revenue Park starting in 2025. Last item, the -- we talk about this every quarter kind of a big thing.

We don't have time, not so good. First slide expected this year, certification entry into service early 2024, very unique airplane for single aisle in terms of its seating capacity and range. 515 firm orders as of February 2022. And this is a big one, still no response from Boeing.

Boeing does not have a response for this airplane, and we're not hearing anything. So I don't know what to make of that, but it seems like Airbus is planning to own this space. less Boeing moves pretty quickly. Let's go on to Slide 28. Continuing on the GE Aviation jet engine program update, COMAC919.

So that's post that's an important program for Pratt, both to be entering into service at the end of this year, we'll see. And then the Global 7500, produced 39 last year and they also leverage their 100th aircraft recently. Let's go on to Slide 29. 747, we cover this every quarter.

Volumes terminated in production of the 747.I guess the last 1 was post to delivered in October. This is a real sad thing for us because we just love this airplane, a real important airplane. Also, this is the first airplane with the first GE Aviation engine program that we got on back in 2014. So it's sentimental for us as well. Slide 30.

So we won't go through the history, you can reduct yourself at the bottom of the page, our forecast, this is a GE Aviation program, sale history -- sales history, history, the forecast for Q1, $6 million or $6.5 million Q1 is over 2.5 weeks, but there's still a lot of risk in Q1. And you see that's down. Q4 was $6.7 million.

That's -- the reason it's down is 100% because of supply chain limitations, we believe. So let's go on to the next item, which is the forecast for a Park's financial performance history and forecast estimates. Again, the top part of history, what's our forecast for sales for Q1, $12.75 million to $13.25 million.

And the EBITDA, $2.75 million to $3.25 million. So we're talking about not great numbers. But we're number at the beginning of the presentation, we're talking about Q4. We said we missed about $1 million of sales because of supply chain issues mostly. Well, these numbers take into account we're probably going to miss another $1 million of sales in Q1.

In other words, if we had everything was great, the supply chain was there, we had everything we needed the sales would be a lot higher. So let's keep going. Let's talk about some comments to our forecast and our outlook.

First of all, forecasting is highly problematic and probably not even very meaningful in the current environment of supply chain chaos in this order. Predicting in the future in such an environment is somewhat of a guessing game probably more than someone forecasting for Park and GE Aviation programs is problematical even for Q1. Q1 ends in 2.5 weeks.

The thing is it's back-end loaded a lot for production for us because we have difficult getting raw materials. So the thing is there's a lot of risk even in the forecast we gave you, the forecast we gave you, takes into account a lot of stuff that we're not going to be able to ship in Q1 because of the supply chain issues.

But there's further risk because in order to get to the numbers we forecasted, things have to go well. There's a hiccup, and we have more disappointments with supply chain even those numbers are at risk. So I know that same strange, I have 2.5 weeks to go, how could there be so much risk? Well, we're living in very unusual times.

Supply chain chaos disorder. So it's very hard to predict things in that environment. It's really hard to predict 1 week out. So we talk about long-term forecast. Well, that's kind of silly. And we gave you a forecast would have long-term forecast and just have very little value. We know what your time is something that is a little value.

However, and there's a big however. We believe we can provide meaningful just checking the time, it sits into our company outlook. So let's break it down between military and commercial.

Military first based upon the new world order goes by the war, we believe the outlook is quite promising for Park, particularly in the missile defense system area for reasons we discussed. We believe there's no new order dynamic is also not a temporary thing. Believe it is an emerging longer term and sustainable phenomena.

It's like the world kind of got a wake-up call here, and it's not going to go back to sleep. I mean, war is -- you can talk about is when you have a war. You see it on TV every day, what happens, it gets people's attention. Obviously, if on Europe, it even gets more of your attention because it's in your backyard.

People remember, well, I don't know, they're probably not on people so live, but that or 2, but they probably heard about it. About what could happen in Europe in other words, in the case of a war. All right. Slide 33, how our session impact the outlook for our military business.

We believe not much because there's too much at stake the country seeking to increase their rents budgets. There is, again, that little drag, which is the supply chain.

But if you're concerned about missiles coming your way, you've probably prioritize your missile in system older other stuff, maybe fixed your roads or whatever other -- what our country spend our money on. commercial Aircraft business outcome. This is a little more complicated, but let's go into it.

Why don't we break it down by program is I think when you look at the key programs that helps us understand. A320neo, obviously, we're starting with that one.

Airbus has aggressively attempting to aggressively push up the rates for this critical program, How would a recession impact this program? We believe Airbus is attempting to aggressively exploit what they believe as Boeing's perceived weakness in order to take as much single-aisle share as possible and to establish an irreversibly dominant position in single aisle.

As a result, we believe Airbus would at least could attempt to press your advantage more aggressively recessions that occur. This is kind of an important moment in time for commercial aircraft.

I mean if you're American, you may not like it that much, but I think they believe there's a window of opportunity Airbus for them to break the duopoly permanently and take dominant share single aisle. Single hour is where it's at. So there are very confound mindset between Boeing and Airbus from what I could tell. Airbus.

Airbus see to be really aggressive. There's a recession. My guess is they'll go even more aggressively. So that's my guess. I don't know I'm right, I'm just kind of thinking a lot with you folks. I'm not -- nobody bars tell me stuff. I'm just reading what you can read on public information. Slide 34. Let's talk about our Comac program.

The RJ is small oil proband that we're spending a lot of time. And to see 919 has significant upside potential for Park once the aircraft are certified.

How would a recession impact those programs? Difficult to say, but a key consideration is the aircraft are intended to be sold to the China market, a market controlled by a centralized China government. So 909 is an important prestige program for the Chinese government. They may press the program forward even a recession. Something think about.

Slide 35. Let's talk about that Global 7500 program. isn't yet, we're including in commercial just I guess, for simplicity in the presentation, clearly, a very key program for Bombardier.

It's actually -- we believe it's a mandatory success program from Bombardier, but good news is they have been successful so far, clearly placing a great emphasis on the program.

How do recession impact that program? Interesting to think about, not completely clear, but it's possible that the success driver of the program will stay in place even during a recession. In a recession, a typical buyer of $40,000 you may hesitate, but would a recession slow down the typical buyer, the $73 million airplane.

I don't know, but if they're going to buy with a different kind of mindset. Clearly, the guy wants to buy that nice Chevy a lot. Although actually, there are no shoves on a lot right now because of the -- I guess, the chip shortages and other supply chain issues.

But in theory, if there was a share a lot, the guy I could buy 1 400,000 you might hesitate. Based upon the above consideration, this is the punchline here.

Although there were serious concerns about the economy, inflation, workforce shortages and supply chain chaos, we believe the outlook for Park is actually quite positive based on what we just talked about. Okay. We're going to try to hustle a little bit here. Changing gears quickly. It's a major expansion.

We're not going to go through the numbers, except the second last item in qualifications in progress, but they haven't delayed as the supply chain issues, staffing limitations. And just you know, those lines are being run operating for the qualification by R&D and engineering people.

We do what we got to do, not what we prefer to do, but we do what we need to do. Everybody does what they need to do at Park. So just quickly, I don't want to spend a lot of time on this. But if you look at the top picture, that's the one of our new building -- well, it's actually the front of our existing building where we expanded the offices.

The second floor in the middle, that's the most beautiful part of our expansion. It's a conference role. And we decided to do is dedicated died about 1.5 years ago to a very special employee of ours, a lot of hearts broker, which he died.

So we decided to call this route, Linda observation deck in overseas, the airport property and the runway is a very beautiful room. And we had a little dedication or family event. So I just wanted you to know about that. Let's go on to Slide 37, not a little bit departure here at James Webb Space Telescope, now about 1 million miles from earth.

And rally, when you think about it, this baseball scope has a lot of our Sigma stretch and corporate infrastructure of the -- which called a bus, I think.

And so those little -- those not little those stretch were made a little factory and putting a little and quotes compared to 1 million miles and Kansas and another $1 million floating and space or betting one million miles from the year to Munis only 0.25 mile on year for perspective.

And this , I guess it has to be extremely cold order for it to operate properly. So they have it in a real cold temperature, I just does kind of a final factor. Let's keep going site short of time, of course. Let's -- okay? And we are serving time. Park's people, I always talk about parts people. So yes, this is our staffing crisis here or challenge.

Maybe I shouldn't say crisis, but severe challenge. We only have 105 people, but we just added 7 people last week. So we were bumping along at 98, 99, 100 for a while there. Ideal people count for us would be 125, 128 minimum these are properly hot printed function 115.

So many other companies are drawing money of people you hear about everywhere no offering money to people to hire them. lots of money. Of course, it's a problem for us. It makes them more difficult to recruit people. They bid up people in short term and they are needed and short them for you investor people out there.

You know what that means, throw them on a garbage sheet and are not by commodities to be traded like work bellies, part, it's kind of heartbreaking to see that. We believe throwing money at people and paying them what they have not earned can be cool and hurtful to them. They can destroy their sense of dignity, sulfur spec, humanity and self-worth.

it's clearly more difficult and challenging for Park to recruit people in a world where others are throwing money at people to recruit them on where parks not willing to do that. But Park, we stick to our principles, a matter how difficult or inconvenient throwing money of people as if they were commodities. That's not for us.

Our people, they're not commodities, our people are precious or people at family. Slide 39, a park of people earn everything they get. We don't give giveaways -- we think our people are compensated properly, but they're in what they get. So they have some dignity. No giveaways, no free lunches.

We respected a mire of people too much to marginalize them, to moralize them, to humanize them by giving them stuff they haven't earned. -- that's mining to a person to do that. Tim the meaning what will happen if there's an economic downturn or a recession.

Well, those companies grow money at people, they're going to hold on to them, all the people they hire, what do you think? But Park, when we hire Park in a park or attitude is we hire life doesn't always lag. It doesn't always work out. They make -- maybe if they're not right for us, they won't stay. But that's our attitude anyway.

Throughout the depth of the pandemic and e-commerce, we kept all of our precious people, every last one of them. Remember that pandemic crisis where sales weren't kind of felt at a bed roughly, I don't know, just 1 off a cliff, I guess, you say. Slide 20.

Remember the pandemic uncertainty about whether world will even survive remember that 2 years ago, and we really didn't know what's going to happen. There's so much uncertainty, so much fear. What do we do? We do not let go of any of our people then. Would we like of any of our people if there's a recession, what do you tank.

Then let's keep on here's an interesting little one. culture strategy for practices term Peter Drucker made some of you know Peter Drucker as I can think of some of you folks out there listening, I'm sure know who he is. So how will we be able to make our Q4 EBITDA number was such a severely reduced workforce? Was it magic? And then I'll think so.

Our people work in very long hours, in some cases, 70-hour weeks, week in and week out. A dozen of our salaried people, including our VP and GM, worked a line during Q4, including the 3-day business weekend. That was Ps right before the end of Q4, and we had a lot of production really get out to make our numbers.

We'll be really asked our people to do it. They just did it. Understand how very fortunate and lucky we already have the wonderful people we have, understand why we love our people. That's a question. Item -- sorry, Slide 41 on a hustle here. People talk lots about strategies sometimes develop but fancy, I believe, consulting firms.

We've got nothing against fancy consulting firms, but that's often where the strategies come from. But this is the key thing that so many people miss some IV Leger's miss with a dedicated, motivated and inspired workforce, a company can move mountains. Without such a workforce, a company can move nothing. No matter how elegant their strategy might be.

They don't get a strong in strategy, too, but it's our wonderful people who make us powerful and whole. Updating our customer Flex program, we talk about this every quarter, so I won't read the numbers for you, except to say, critical program for Park. It'd be very difficult for us to really get done. We have to get done without that program.

We love that program. Let's go on to Slide 42. Closing thoughts. We'll get there. Will there be a recession the excess in the economy and our society seems so extreme to us and they're sustainable. Will people be willing to continue to pay highly elevated prices. We're almost everything.

When money supply is being tightened and the days are cheap and easy money are coming to an end. Good things to continue that way forever. Does that make sense? So I'm to think about we're not autonomous of cores that we believe recession is likely under these circumstances.

How do we feel about it? Well, we know it sounds harsh, but we hope there will be a recession because to us, that may be the only way some sense of balance, proprietary propriety, logic order and Sandy can be restored to the economy and our society. What will we do differently a recession? Probably not much. Slide 43.

Closing thoughts continue, principles are not cheap. So we're circling back principal to not cheap. The only count when it's in convened all true to them. You know what somebody has principles when it when they're holding true them when it's not going to be it's convenient, it doesn't matter.

It is inconvenient costly for to Neo confirmations in a world where many others are not doing so. But at Park, we do what we say we're going to do. a park, where does our bond? Doesn't matter how we convene is, how costly it is. Our word is our bond. We don't go against our word. It is -- and I'm talking about pricing and appeal.

I'm not talking about suppliers that are late. That's not their fault, lease their supply chain not supporting them. met pricing and a confirmed PO. And it's a convenient for Park, not to throw money at people know how to recruit them in a world where many others are doing just that. A Park or people are precious.

Our people are not commodities to be bid up or sold short depending on which way the wind is blowing. Others need to make their own choices about what matters to them and what does not. And we have to live with those choices. That's their business. but a part on our integrity of what matter most, at Park principles are not cheap.

Slide 44, what's extra part, really nothing new. Continue to press forward and continue to attack. We're not shy. We go after things aggressively. We continue to make money for our owners. That's something that we -- all our people understand is important. We make money for owners. We always do. And that's our objective, anyway.

And we keep doing it for the fences. We don't place more ball park. We're always swinging for the fences. And Park, we're not like the others. We're not pulling around here. We're looking to make an impact. We look to go for greatness, a park we play for keeps.

Last thing we always talk about is our picture, this is a little different because the people picture. This is not everybody. We tried to get everybody, but it was a storm and people couldn't make it, they have formed in Kansas. You've heard about that Wizard of us. And it's only about half our workforce.

But we still do a company picture because really, we want to recognize everybody in Q4, everybody did such a great job. And interestingly, that little thing above the that's a little above the folks. That's an actual Transco structure the day a through. So coppers stop, looking operating, Neoitdwas given to us as a.

that copper stuff looking stuff, that's the actual live strike material. So you can kind of get a perspective on the size of the size and Transall engine the cells. So I think that covers it, how we do with time, not so good, 50 minutes. So operator, if there are any questions, Matt and I we happen to answer them..

[Operator Instructions] We have a question or comment from the line Brian Glenn from Olcott Square Investment..

I know there was -- this goes back to the quarter ended May 2020. There was a small buyback. It was like 137,000 shares and the stock price is about the same. The outlook from me as an outsider, looks tremendously better and more certain even if there is a ton of uncertainty. Back in May of 2020, we had no vaccine, no timing.

Air travel was shut down globally. And now it looks like you're getting larger exposure on some existing programs like the film adhesive for the 7500, the A320s ramping up. Those statements are out. You had your comments around China's Comac and then the military spend. And the stock price is about the same.

So if it was cheap enough to buy back then what's changed in terms of any sort of repurchase, whether small or large now. ..

Okay. Yes. So that's a very good point. Right now, we're pretty much in a blackout. But it's something we need to consider. We haven't been real aggressive with buybacks, as I think you know our history is to use the return of capital cash more and actually use a special rather special dividends, more than buybacks.

But thanks for the input, something consider. I just want to comment. Yes, I agree with you. The short-term forecast we can't even give you 1 it's such difficulty in the market right now.

I agree with you that the outlook, and it's hard to time the outlook because of all those short-term factories, let's call temporary factors, but I believe you're right. The outlook is positive. So time for the input, something for us to think about.

I'm not going to be an answer, of course, but we'll discuss it -- we will discuss the next board meeting. So that's what I can tell you at this point..

Okay. Can you -- can you remind me of the A321, the SLR that you mentioned? Is that within that long-term agreement for MRAS? Or that's outside of it? I think you did mention it prior, and I just don't recall..

It's within the LTA. So yes, that's a LEAP-1A engine. So that's all within the LTA..

Understood. And then I guess, last 1 if I can sneak it in.

Any comments around the timing of actual workflow being done in the new facility and it might have even happened?.

The timing of work starting operating facility. Yes. Yes. So to the -- yes, go ahead, sorry..

Yes, yes..

We're still going through the qualification. And as I said, that's been delayed. We've had to actually choose between the qualification and production, and we chose production. We don't want to disappoint our customers. So the qualification was delay just because raw material shortages and staffing.

As I said, the people that are actually running the equipment are people from R&D and engineering, which is not what we want. We want operators to be over there. So at this point, we're not being presale hard at qualification complete, which is good. So it could take a little while longer.

But once we get the qualification complete, then we'll start producing in that factory for MRAS and other customers as well. But I don't have a hard timing for you on that. And it's kind of 1 of those things that's in flux based upon all the other supply chain issues that we're dealing with..

[Operator Instructions] I'm showing no additional questions in the queue at this time, sir..

Thank you very much, operator. Thanks, everybody, for listening, hanging in there. I apologize these calls keep getting longer and longer. We do our best to rush through them. So anyway, so have a good day. And you always can reach Matt and me if you want to have any follow-up questions, we're happy to always take your questions. Have a great day. Thanks.

Goodbye..

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day..