Park Aerospace Corp. (PKE) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with increased sales and profitability. The company's strategic plans, including a major manufacturing expansion and sole-source qualifications for key aerospace and defense programs, are positive indicators for future growth. Despite risks like missed shipments and supply chain issues, Park Aerospace maintains a strong financial position with no long-term debt. The lack of Q&A suggests confidence in their report. The ongoing share buyback and consistent dividends further support a positive outlook. Overall, these factors suggest a positive stock price movement in the short term.
Key Financial Performance
Sales $17.333 million, with a year-over-year increase. The reasons for the increase include recovery from the pandemic and ramp-up in aerospace programs.
Gross Profit $5.903 million, with a gross margin of 34.1%. The margin reflects improved operational efficiencies and product mix.
Adjusted EBITDA $4.228 million, with an adjusted EBITDA margin of 24.4%. The increase is attributed to higher sales and better cost management.
Missed Shipments Approximately 740,000 units, up significantly due to international freight supply chain and customer specification and engineering issues. This reflects reemerging industry challenges as programs ramp up post-pandemic.
GE Aerospace Program Sales $7.5 million in Q3, with a forecast of $7.75 to $8.25 million for Q4. The increase is due to recovery in aerospace demand and ramp-up in engine programs.
C2B Fabric Sales $9.8 million forecasted for fiscal year 2026, mostly in Q4. These sales have very light margins, impacting overall EBITDA.
Cash and Cash Equivalents $63.6 million at the end of Q3, with no long-term debt. This reflects strong financial health and liquidity.
Capital Investment for New Plant $50 million planned for a new composite materials manufacturing plant to double manufacturing capacity. This investment is driven by increased demand in aerospace and defense programs.
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Operating Highlights
James Webb Space Telescope: Park Aerospace's proprietary Sigma struts were used in the James Webb Space Telescope, which is now orbiting about 1 million miles from Earth.
New Composite Materials Manufacturing Plant: Park is planning a major new composite materials manufacturing plant, which will double its current manufacturing capacity. The plant is expected to be operational by the second half of 2028, with an estimated capital budget of $50 million.
A320neo Aircraft Family Program: Park is heavily involved in the A320neo program, which has a backlog of 7,900 aircraft. Airbus is targeting a delivery rate of 75 aircraft per month by 2027, representing a 50% increase from current levels.
Patriot Missile System: Park supports the Patriot missile system with specialty ablative materials and is the sole source qualified for these materials. Lockheed Martin plans to increase production capacity for Patriot missiles from 600 to 2,000 annually over the next seven years.
Q3 Financial Performance: Park reported Q3 sales of $17.333 million, gross profit of $5.903 million, and an adjusted EBITDA of $4.228 million. Sales were within the estimated range, and adjusted EBITDA slightly exceeded expectations.
Supply Chain Challenges: Missed shipments in Q3 totaled approximately $740,000, primarily due to international freight and supply chain issues. These challenges are reemerging as the industry recovers and ramps up.
Public Offering: Park announced a $50 million at-the-market public offering to fund its new plant and ensure financial flexibility for future opportunities.
Partnership with Ariane Group: Park has a business partner agreement with Ariane Group for the exclusive North American distribution of C2B fabric, used in missile systems. Both companies are exploring the establishment of a C2B manufacturing facility in the U.S.
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Risk or Challenges
Missed Shipments: Approximately 740,000 missed shipments in Q3 due to international freight supply chain and customer specification and engineering issues. Industry challenges are reemerging as programs ramp up post-pandemic, causing supply chain delays.
Tariffs and Costs: Tariffs and tariff-related costs have minimal current impact but remain a potential future risk. The company passes these costs to customers, but changes in tariff policies could affect financials.
ArianeGroup Business Partner Agreement: Dependence on ArianeGroup for C2B fabric, with 0 sales of fabric in Q3. Timing of sales and production impacts quarterly margins, creating financial unpredictability.
Supply Chain Limitations: Supply chain constraints continue to affect the aerospace industry, delaying program ramp-ups and impacting sales recovery.
Patriot Missile System Production: Significant ramp-up in production required to meet Department of War demands. Park is sole-source qualified for specialty materials, but scaling up production to meet demand poses operational challenges.
New Plant Construction: $50 million investment in a new plant to double manufacturing capacity. Delays in approvals and construction timelines could impact the ability to meet future demand.
Economic and Regulatory Risks: Potential changes in economic conditions or regulatory policies could impact operations, particularly in relation to tariffs, defense budgets, and international trade.
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Guidance & Outlook
Q4 Sales and EBITDA Forecast: Sales forecasted at $23.5 million to $24.5 million, with EBITDA expected between $4.75 million and $5.25 million. The forecast includes approximately $7.2 million of C2B fabric sales, which have very light margins.
Fiscal Year 2026 Total Forecast: Total sales forecasted at $72.5 million to $73.5 million, with EBITDA reflecting the inclusion of $9.8 million of C2B fabric sales, mostly in Q4.
GE Aerospace Jet Engine Programs: Q4 sales forecasted at $7.75 million to $8.25 million, with fiscal year 2026 sales expected to reach $29 million to $29.5 million. Anticipated aggressive growth in sales over the next 2-3 years.
A320neo Aircraft Family Program: Airbus targets a delivery rate of 75 aircraft per month by 2027, a 50% increase from current levels. The LEAP-1A engine, which Park supports, holds a 64.5% market share of firm engine orders for this program.
COMAC 919 Aircraft Program: COMAC aims to increase production capacity to 115 aircraft per year by 2027 and 150 by 2029, with plans to build capacity for 200 annually. Over 1,200 orders have been reported for the 919.
Patriot Missile System Production: Lockheed plans to increase production capacity of PAC-3 missiles from 600 to 2,000 annually under a new 7-year agreement with the U.S. Department of Defense. Park is the sole source qualified for specialty ablative materials for this program.
New Composite Materials Manufacturing Plant: Park plans to build a new 120,000 square foot plant, doubling its current manufacturing capacity. Estimated completion in the second half of 2027, with operations beginning in the second half of 2028. The project has a $50 million capital budget.
Long-Term Sales Outlook: Park's long-term sales outlook for composite materials is approximately $200 million, based on known programs and customers. Target year for achieving this outlook is fiscal year 2031.
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Shareholder Return Plan
Cash Dividend History: Park Aerospace Corp. has a history of 41 consecutive years of uninterrupted regular quarterly cash dividends. The company has paid a total of $608.6 million or $29.725 per share in cash dividends since 2005.
Share Buyback Program: In May 2022, Park Aerospace Corp.'s Board authorized the repurchase of 1.5 million shares of its common stock. To date, the company has purchased 718,000 shares at an average price of $12.94. No shares were repurchased in Q2, Q3, or so far in Q4 of fiscal year 2026.
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Key Q&A
Q:Were there any questions asked during the Q&A session?
A:No, there were no questions asked during the Q&A session.
Q:Review of Unclear Management Responses
A:There were no questions asked during the session, so management did not avoid answering any questions.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Airbus Park
America OEMs
Appendix question
CB product
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COO promotion
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Correction COO
Earth Slide
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Group year
Industry challenge
JV Safran
New Park
OEMs fabric
OEMs markup
OEMs reason
PR strut
Park Aerospace
Park distributor
Presentation website
President CEO
SEC presentation
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Slide result
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industry
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sale fabric
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supply chain
PKE Transcript
Park Aerospace Corp. (PKE) Q3 2026 Earnings Call Transcript
Positive1-13
The earnings call highlights strong financial performance with increased sales and profitability. The company's strategic plans, including a major manufacturing expansion and sole-source qualifications for key aerospace and defense programs, are positive indicators for future growth. Despite risks like missed shipments and supply chain issues, Park Aerospace maintains a strong financial position with no long-term debt. The lack of Q&A suggests confidence in their report. The ongoing share buyback and consistent dividends further support a positive outlook. Overall, these factors suggest a positive stock price movement in the short term.
Park Aerospace Corp. (PKE) Q2 2026 Earnings Call Transcript
Unknown10-9
The earnings call highlighted strong revenue from aerospace and defense programs, but concerns about reliance on key programs and reluctance to provide long-term forecasts tempered enthusiasm. The Q&A revealed skepticism about expanding sales teams and hesitance to share future projections, signaling uncertainty. Despite positive factors like record revenue and stable dividends, the lack of share buybacks and vague guidance weigh on sentiment. The stock price is likely to remain stable, with no significant catalysts for upward or downward movement in the near term.
Park Aerospace Corp. (PKE) Q1 2026 Earnings Call Transcript
Unknown7-16
The earnings call presents a mixed picture. While there are positives such as strong sales in the GE Aerospace program and improved margins, there are also challenges like underutilized facilities and missed shipments. The cautious approach to long-term forecasts and potential risks in defense programs add uncertainty. The Q&A highlights management's reluctance to provide specific guidance, which may concern investors. Despite some positive financial metrics, the lack of a clear forward-looking strategy tempers enthusiasm, resulting in a neutral sentiment.
Park Aerospace Corp. (NYSE:PKE) Q4 2025 Earnings Call Transcript
Unknown5-17
The earnings call shows mixed signals: strong financial performance with higher-than-expected sales and gross margin, but concerns about supply chain issues, competitive pressures, and regulatory challenges. The Q&A reveals management's uncertainty about tariffs and supply chain improvements. Although shareholder returns are positive, the planned capital expenditure and operational risks may weigh on the stock. Overall, the sentiment is neutral due to balanced positives and negatives, suggesting limited stock movement.
PKE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
