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spk02: Good morning. My name is Michelle, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Park Aerospace Corp third quarter fiscal year 22 earnings release conference call and investor presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, Press the pound key. 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.
spk03: Thank you, Operator. This is Brian. Welcome, all. Happy New Year. Welcome to our Q3 Investor Conference Call. I have with me, as always, as usual, Matt Carabarra, our CFO. So we announced our earnings this morning. There was a news release. In the earnings release, there's instructions as to how to access a presentation, which we're about to go through. You want to get that presentation in front of you. It's also posted on our website. That's another avenue to get the presentation in front of you. But without actually doing the presentation, this call will be less meaningful, I think. As usual, what we try to do with these calls is mix it up a little bit, try to provide useful information. and interesting information to you, an interesting perspective if we can. We're not into just going through a dry analysis of numbers and data. We can always do that for you later if you want to call back. So we have this dilemma that keeps growing every quarter, which is there's stuff we cover every quarter, and do we go through it again? And the problem is the presentations get longer and longer. We just want to discuss new stuff as well. So we're going to skip over, at least skim over a couple of sections that we've talked On topics we've covered before multiple times in prior presentations and calls. So I guess that's it. Just want to warn you, I guess, just going through the presentation. It's a long presentation. We'll try to go through it as quickly as possible, but it could take up to 50 minutes, maybe a little bit more. That's 50915. And then after we're done with the presentation, to the extent you have any questions, Matt and I would be happy to answer them. So when do we get started? Slide number two is a forward-looking disclaimer information statement. If you have any questions about that, let us know. Slide three is our table of contents. And slide four, we can't go through slide four quite as quickly, so this is a little bit of a busier slide. So let's talk about Q3 results. Sales, $13 million. 864,000, gross profit 3,863,000, and EBITDA, just an EBITDA, 2,670,000. Kind of interesting look at the progressions from quarter to quarter. You can see that, at least in terms of bottom line, this is a down quarter from Q1 and Q2. Let's talk about what we said, what we predicted, if you will, not really predicted, what we forecast estimates that we provide you when we did our Q2 call regarding Q3. We said our estimate for sales was $13 million to $13.5 million, and adjusted EBITDA, $3 million to $3.4 million. So it's kind of a strange thing. We actually exceeded our sales estimate but didn't get to our EBITDA estimate, and that requires the explanation, which we're about to go into. But before I do that, let me just remind you what you always do, our forecast philosophy. When do you provide your forecasts? We are telling you what we think is going to happen to the best of our ability. Obviously, we're wrong sometimes, but we're saying at the time, this is what we think is going to happen. We don't play this kind of, we'll call it a game, where we give you a low number that we can beat and then be heroes. To us, that's not how we do it. We think that's kind of insulting, but other people, that's fine. That's just not how we do it. I think you know that by now. So let's go to the bottom of the slide here, the but. It's a big but. This is an important thing. It'll come up a couple times. or so during the presentation. There were $2.4 million of missile program essential component sales, which were expected in Q4, but occurred in Q3. Now, we did our Q2 call. We told you about this. We said that's going to be in Q4. That's what we expected. We now can call this product C2B. Until now, it's been kind of an anonymous product, but we just announced yesterday a deal with Arian, and we'll talk about that later. So we now can call this product C2B. It's a very specialized product. proprietary fabric that's used by us to produce a blade of product for missile and rocket programs. So we'll get into the product a little bit later. But anyway, let's just call it C2B for shorthand rather than saying what we call essential component sales, missile program essential component sales. It's kind of a mouthful. But anyway, this sale took place in Q3, not Q4. That wasn't really our doing. This is driven by the OEMs. Remember how this works? So this component, this is a critical component for these missile programs or sole source on these programs. It comes from, well, we've been saying a country that's an ally of the U.S. It's a French company. Arian's a huge company, huge company. But I guess some of the OEMs are a little nervous. These are companies that maybe do missiles and rocket programs. about making sure they have a secure supply of the C2B, so they ask us to go buy the product from them, sorry, from Arian. We have a relationship with Arian. We do that, and then we sell this C2B product to our customer, and we hold it for them. It's in our factory, although it's their inventory. They own it. And there's just a markup involved when we do that, so it's a very low margin sale as well. The good news is, and there is a lot of good news here, is that ultimately we plan to use that product to produce our ablated materials, and those materials, when we produce those materials, are very high margin. So net-net is very good, but the first part of the transaction could be restorative because it's a lot of revenue and very low margins. And it was supposed to be in Q4 and ended up being – sorry, it was supposed to be – yeah, Q4 ended up being Q3. So that kind of throws everything out of whack here a little bit. So let's just think about that. $13.9 million of sales in Q3, but let's just for the purpose of kind of getting some perspective here, let's subtract that $2.4 million. It was supposed to be Q3 anyway. That would say that it's more like $11.5 million without that C2B sale, $11.5 million. Now, $11.5 million compared to what we were predicting, $13.5 million, Well, that's a million and a half below the bottom of the range. So now you start to see what's going on here. Actually, understanding that, you say, geez, that EBITDA is pretty good, and it is pretty good considering these circumstances based on the top line. So let me see what else I have here. Just a little interesting point, maybe interesting to you. We currently have over $5 million worth of this C2B product in our factory. It's not owned by us. It's owned by our customers. But that's good because that means there's a lot of ablative sales that are coming. And it won't be next quarter. That's not how it works. They want to have a secure supply for a long time. Well, that's good because this is kind of money in the bank for PARC because ultimately the plan is that we would, when our customers tell us, we'll take that C2B product and with our proprietary resin systems, produce this ablative material, and that's where the sales, the margins end up being very good on those products. No sales. So I guess I think that covers that. Let's move on to slide five. And there are other factors which affected Q3 sales and margins, not just the C2 things. So let's talk about that. Supply chain challenges, daily battle. We spoke about this when we did Q2, but we didn't see this coming exactly. But they're actually, from our perspective, worse in Q3 and worse currently than they were when we announced Q2. So when people say it's getting better, you know, I hear reports about this, newspaper articles, Wall Street Journal. I don't know what world they're in. They're not in our world, that's for sure. Our world is not getting better. And under supply chain challenges, difficulty sourcing raw materials, international shipments, domestic shipments, freight issues, additional costs for expedited freight shipments. So altogether, when you look at the first three bullet items, $600,000 of sales that we didn't have in Q3 because of these things. Either we couldn't get someone to ship the product domestically or internationally, and difficulty sourcing raw materials. We couldn't get the raw materials to produce the product and ship them by the end of the quarter. So my feeling is our people are doing a really good job under very difficult circumstances, but we were not able to get all the raw materials we needed. for the quarter. So you take all those three things together, 600. We actually know exactly what the number is. It's like 593 or something like that. But we're not going to give you the breakdown. That's a little bit more information that is useful, we think. But we can compute that number. That's a hard number. So remember I said there's a $1.5 million gap in the top line? Well, there's 600,000 of it, but that's still a lot left. What happened to the rest of it? What happened to the other 900,000? Well, let's talk about that. supply chain issues impact the aerospace industry generally. So what does that mean? This is not our supply chain. It means we're not the only one. As far as we know, everybody's struggling with this. That really puts the brakes, you know, a drag on the whole industry, the whole aerospace industry, because if we can't get stuff, other people probably aren't getting stuff either. And if you're an OEM... Oh, Park, they're good. They're on time. They can get you what you want. Well, that's really nice, but, you know, I've got 25 other suppliers that are getting me the components that I need from them, so what's the point of making these extra airplanes or missiles or whatever if I can't get all the raw materials? So it kind of puts a drag on the whole industry. So now we're talking about our top line, not just the $600,000, which we could compute. Can't really compute this item. Hard to know, but it's there. It's very palpable as far as we're concerned. Another item, cost and efforts associated with bringing a new plant online and equipment trials. As far as hitting the P&L directly, these are minimal costs. As far as the effort is concerned, major effort, I should say. The next one is another important item, the supply chain issues impacting the aerospace industry and delays in approving defense budget. Those are two items which It may really explain why our market is soft right now and probably will be soft into Q4. This has nothing to do with GE, by the way. That's the one exception. GE is just going according to plan of GE programs. This is all other than GE. So for us, other than GE, a lot of it is going to be military programs. So you hear a lot, a lot, a lot about how the delay in approving the defense budgets has affected the defense and military industry. I just saw a report from a large company this morning announcing earnings that, yeah, they really didn't make their numbers because of the lack of approval of defense budgets. So the budget was recently approved. This is, you know, Washington stuff. I don't understand this stuff very well. But that was the defense authorization bill. That was, I guess, signed into law on December 27th. But then there's something else called Defense Appropriations Bill. That's not signed yet. I guess that's a big one because that means that's authorizing the actual spending of money. So this has left the defense industry in limbo, and I've seen lots and lots of reporting about this. So, you know, it's certainly not just our perspective. So let me just see what else. I'm looking at my notes here. Sorry about that. So the fact that the defense industry, sorry, the authorization bill has been signed, I hope that's a positive. I guess now people are saying, well, I need the appropriations bill to be signed as well. But hopefully that will be done, and then the defense industry will get back to business. Right now I think some programs are still kind of on hold. Maybe some of the OEMs are waiting to see what happens. So we'll get to that later. There's actually a little good news in the authorization bill. We'll talk about that later in the presentation. Let's go to slide six. Inflation, okay, hear a lot about inflation these days. Everything, raw materials, freight, supplies, utilities, pretty much everything. We do pass a lot of costs on. We re-quote businesses, I'm sorry, re-quote business to our customers, I mean. But, you know, the big question, I think, is in my mind anyway, is how long can these increased costs be passed to the customers? When you're talking about consumers, you're talking about other businesses, how long? Because, you know, it's almost just physics. There has to be a limit. And it's always the same thing. You don't know where that limit is. How far can you push it? How far can you push it? And the problem is sometimes with these things, nobody knows. They keep pushing and pushing and pushing. And it's like in one day, everything stops. We've had it. We're not paying these prices anymore. And that's usually, you know, often in the past anyway, it's been kind of a severe event. A lot of people that are smarter than me say it's not going to happen this time, so maybe they're right. I don't know. These are not our list of excuses. These are factors that we think you'd want to know about. We think you'd want to know about these kind of things we're struggling with, these difficulties. Not excuses, though, not excuses. I hope it's clear we're not apologizing for the quarter. Actually, I think our people did a pretty damn good job under the circumstances of how difficult things were. I think you know this, but maybe it's worth just taking a second to explain. For us, quarter-to-quarter top line, there is only a limited impact we can have on the quarter-to-quarter top line short term. It doesn't really work that way. Because we can't tell Airbus how many A320s to make. I can't call the CEO of Airbus and say, look, we're a little short on top line this quarter. Could you produce a couple more A320s or something? or call some airline. Could you order some more A320s or some missile program? Can you make a couple more missiles this quarter? Because, you know, we want to get our top line up. Obviously, I'm being a little facetious. That's ridiculous, but that's kind of the illustrative of the situation. So for us, we need to run our business real hard every quarter, really tight, really hard, and then make sure we're working on developing new opportunities and not getting into that bunker mode. Oh, things are tough. We're going to go hide somewhere. which we see a lot, I guess, in the world, maybe in our industry. But it's real important we don't do that, that we keep pushing, we keep looking for opportunities, because that's the key. We have little control about the top-line quarter-to-quarter piece. We can't tell the OEMs when to order stuff, when not to order stuff. We can't control the fact the defense industry is kind of down the dumps because Washington hasn't approved the defense budget. We can't really control this supply chain mess that's really seen to affect the whole industry. We really can't do that. And there's other, you know, program issues. You know, there may be a reason why a certain, you know, the OEM is going to wait until next quarter to produce more missiles. I mean, that's their prerogative, of course, and they may have their own reasons. Those are things we really can't control. What we can't control again is running our business really tight, really hard, and working hard to develop new opportunities and not letting ourselves get into that bunker mode. Oh, things are bad, so, you know, we'll emerge from the bunker whenever. You know, the problem is, in reality, people never emerge from the bunker. We'll talk about that later. Okay, why don't we keep going because, you know, we've got a long way to go here and not to cover. Page, sorry, slide seven. This is just the annual stuff. Just to put in perspective, you'll see in slide 25, but the forecast for the 22 fiscal year sales, 53.8 to 54.3 million, and EBITDA 13 to 13.5 million. So it's interesting. We don't get back to that fiscal 20 year in terms of top line, but it seems like we probably get around the EBITDA number for that fiscal 20 year. Also interesting, look at the first nine months compared to fiscal 19, and you see that EBITDA is about the same in the first nine months compared to 19, but the top line there was 51 million compared to 41 million. So that means something. It probably means that our margins are better. Maybe our product mix is better. Maybe we're developing and introducing products at a higher margin. Maybe. Let's go on to slide eight and try to keep moving here. So we'll try to skim over this pretty quickly. We cover this every quarter, balance sheet cash, cash given history. You know, this $110 million, the second arrow item, kind of interesting because that C2B sale kind of distorted our cash as well because we had a sale of the cash. The sale of the cash, sorry, I'm rushing. The sale of the C2B occurred in Q3, but we didn't get paid for it until last month. until Q4. So the invoicing and the payment, you know, the end of Q3 straddled those two items. So really in a way that $110 million is short by a couple million dollars because that sale occurred in Q3, the payment of that big item, special item, didn't occur until Q4. But in any event, you know, you might want to do a little math and you could take that number and you subtract how much we have to spend on the expansion and the transition tax installment payments, you'd say, yeah, conceptually anyway, maybe we have about $96 million. That's a conceptual kind of discussion analysis. At the bottom of the page, your cash dividend history, we'll just go to the last check item, $550 million in cash dividends since the beginning of 2005. So I normally comment that's a lot of money for a small company like Park. Let me just cover the first check item. I should do that. While others were canceling their dividends or cutting their dividends during the crisis, the economic crisis, the pandemic, we did not do that. We maintained our regular dividend throughout. Let's go on to the next item. Slide 9 is our top five customers. We do that every quarter. Let's not get too hung up on this. Most of the names you're familiar with because, you know, you see them quarter after quarter. A, Aerospace, that's the Raytheon SM-2 missile company. Aeromatrix, we do multiple programs for them. GKN, that's the Skorsky Helicopter Program. Kratos, obviously, is the Valkyrie at the bottom left. And Middle River MRAS is the 747-8 Engine to Cell Program. So let's keep moving here. Slide 10, I think we have. Yeah, the interesting thing to me here, to give a little perspective, look at the bottom right pie chart. And you say, yeah, well, this is... The quarter, it's only a quarter, not year to date. So just Q3, $13.9 million was the revenue. And look at military, 41%. That's just about $5.7 million of military. So that's not too bad, except the $2.4 million, back to the C2B, that's the military part of the pie chart. So we weren't expecting that in Q3, but that in Q4, if we back out to $2.4, that's only $3.3 million. That's a pretty low number. Look at the history. It's a pretty low number, not just percentage-wise, but absolute-wise. So, again, it goes back to discussion. What's going on with the market? We're quite sure, quite sure we haven't lost any business, any markets here. That's not the story at all. We think we're getting opportunities, new programs. That's not the story at all. It's the end market itself that we believe is the driver here. Let's go on to slide 11. our niche military aerospace programs. Again, we do this kind of just for entertainment purposes almost, kind of the fun programs that we share with you. The JSTARS, that's parts we make with our material. The ESSM, blade of materials, that's for rocketry. And the Standard Missile 3, that's also blade of materials. And just so you know, a kind of fun fact, that is a Mach 16, a Mach 18 missile, that would be considered to be FAST. I know that's a technical term, but let's call it FAST. So military affected by supply chain, budget delays, and also the choppy nature of military, as we were talking about before. Some programs will be active this month, and then next month they won't be, or this quarter they'll be active, and next quarter they won't be. That's an indication of the program going up or down. That's just how, for us anyway, the military business is. There's an important footnote at the bottom. We still do love our military airspace programs. Slide 12. Okay, so what we're going to do here, this is one of the things we cover every quarter for the last several quarters, and it's slide 12 all the way to slide 16. We're going to skip over this. We're not going to go through each item. I'll just say this is a discussion as to how the aerospace industry, especially commercial aerospace industry, got into the predicament it's in now, you know, The whipsaw effect, we talk about it many times. I think that we try to lay it out pretty clearly in the slides themselves. So why don't we skip over it and just if you have any questions, let us know. At the end of this little group of slides, we do point out that this is what everybody else did. They got into the end of days mode, Armageddon mentality. Those terms I know are kind of cute terms, but I don't think I'm exaggerating. The industry just died. But not PARC. Not PARC. We never bought that end of days stuff. We never laid anybody off. We didn't let go of our people. We didn't stop our spending on our expansion budget. We didn't cut our dividend. We didn't do any of that stuff. And, of course, we didn't know if we were right at the time. You know, you run a company, you have to make decisions. But I think history will prove that we were right, and the rest of the world was probably not right. At least the rest of the world, we got into that Armageddon kind of mentality, which is most of it, the aerospace industry. Okay, so you can pat me on the back later for... for that, but I just wanted to mention that we didn't go that way. Let's go to slide 17. This is another topic we cover every quarter, so we'll kind of skip over this. This is basically saying that, yeah, domestic aviation is recovering more quickly than international aviation, commercial I'm talking about, commercial, commercial, and domestic translates to single aisle, international translates to wide body, so we think single aisle is where it's at for now, just for now, not for always, but for now, okay. That belongs to slide 18, GE Aviation Jet Engine Programs. We give you this slide every quarter because it's kind of, I know it's not new stuff, but it's good for context, for perspective. Maybe some people haven't done the call before. The top item, top left, Firm Pricing LTA through 2029 with Middle River Air Structure Systems, MRS. That's a subsidiary of SD Engineering. Let me stop for those of you who don't know. This was a subsidiary of GE Aviation for a long, long, long, long time until GE Aviation sold the sub to ST Engineering in Singapore a couple years ago. But the history is why all the programs you look at here are legacy GE programs, legacy GE programs. So redundant factory, we said, look, as soon as you sign this LTA, we'll build you a redundant factory. We did that. Next item, sole source. for composite materials for engine nacelles, thrust reversers, on multiple programs. I'm not going to go through all of them. The top five we call the A320neo family aircraft programs. We've got the 747 COMAC programs. We'll talk about that later, both the M919 and the regional jet, the Global 7500 top right. The top right just says this is a different kind of structure. The primary structure for this Passport 20 engine, and this is through GE, it's not through MRS. Item, sorry, slide 19. Let's go through some updates on what's going on with GE Aviation, the key programs. So the slide 19, this is actually something that was in the prior presentation, Q3 presentation, maybe even Q, sorry, Q2, maybe even Q1. This is a really important statement, and it came from The Airbus CEO kind of lays down his plan, lays down the law. This is what we want. This is what the supply chain is expected to do. So Airbus maintained. They're not going below 40 per month of H320 Neos throughout the pandemic. And there's all these doubters and analysts. Oh, they're going to have no issues going to drop. They're not going to be able to maintain it. And that was really not good because, you know, people read the analyst reports. They wouldn't believe Airbus. They believed analysts, and they wouldn't ramp up their business, you know. So it ended up making things worse from that perspective. But anyway, they never went below 40. Now they're saying, yeah, 45 by the end of last year. And then they go to 64 in 2023, 70 by 24, 75 by fiscal. Sorry, I keep saying fiscal. These are calendar years. I'm sorry, calendar 25. I'm rushing, so not being clear. Slide 20, let's just continue. We're still on the A320 topic. So as of the end of October 2021, CFM, that's the manufacturer of the LEAF-1A engine, had a 60% share of firm orders for the A320 family of aircraft. That's based upon Aeroengine News, which is kind of the Bible, a lot of really interesting and detailed data in the Aeroengine News. That's pretty good information. Now, just so you know, there's a lot of ballast in that percentage. This program is shared with Pratt, CFM Pratt. Why is that? Just over 10,000 firm orders, over 10,000. So in other words, if somebody gets an order of 50 up or down, it's not going to move that percentage that much. A lot of ballast, you know, big backlog for these engines and also for these airplanes. So assuming, bullet-eyed in the mirror, 60% CEFM market share, those 75 A320 aircraft family per month, that rate represents approximately $30 million per year of revenue to park starting in 2025 when they say they want to be at the 75 per month rate. We haven't given you this information before, kind of danced around it. We say it's like bigger than a bread box, that kind of stuff. We decided to give you this information today. because it's just got to be such a significant program for PARC that we thought the right thing to do would be to communicate that information to you. So continuing, there's some tension with Airbus suppliers. Some tension has developed over the aggressive Airbus A320 air freight family forecasted ramp-up, you know, kind of public stuff, which to me is kind of strange. You'd think they'd have these discussions, you know, behind closed doors somewhere. But Airbus continues to indicate it's not backing down, it's doubling down. They're being pretty firm about their intentions for the A320, and I think they're in the catbird seat here. I think they are, because of the fact they have two engines on the program. So they can leverage one off the other, and there's a lot of evidence they've been doing that as well. To see to it the supply chain supports them to get to that target of 75. Slide 21, we're still going on the A320 family, the A321XLR. So kind of the newsy here, they completed, Airbus completed the first assembly of the first test aircraft, final assembly rather. First flight expected this year. A certification entry into service next year. That's pretty fast. A321XLR is currently positioned as the only single aisle aircraft with 5,000 plus miles statute range, statute mile range at 225 plus seating capacity That's a big deal. Is it a game-changing aircraft? I don't know, but a lot of people think it is. Why is that? Because this aircraft has the ability to replace Y-bodies on certain missions. You know, that kind of range, that kind of seating capacity, replace Y-bodies, which are much more expensive on certain missions. And that's a big thing. At this point, Boeing doesn't have a response to this airplane. Whether they're working on one or not is, you know, not clear. People say they are. But the problem is that this airplane, the XLR, has come out in 2023. So it takes a long time to develop a new airplane. So I hope Boeing will get into the game. But even if they do, it's going to take many, many years for them to get an aircraft that would be in production and available for sale that could compete against the XLR. The A420neo aircraft family sold well in Dubai. Airbus recently received large A320neo aircraft family orders from KLM and Qantas. Those are traditional loyal Boeing customers. So that's kind of a big thing, you know, Airbus is peeling away to Boeing customers. Now, we all know, everybody knows that Boeing had trouble with the MAX, and we wish them well. We'd like to get on the MAX program. We're not on the program, so we have no problem with the MAX. my sense is that Airbus and their CEO are trying to capitalize on the opportunity in this window to gain market share and are being pretty aggressive. That's just my sense. I think it's maybe commonly believed that to be the case. So they're going after Boeing customers. There's nothing sacred, I guess. A320neo recently surpassed the A320 as the aircraft in the A320 and Neo family with the most firm orders. That's really interesting because the Airbus is really focusing on the A321, not that they're not focusing on the A320, but really focusing on the A321, Neil. I think they're setting up a new plant in Toulouse maybe just for the A321. So it's interesting that that's actually a more popular airplane than the A320 at this point. And the last item, here's a little concerning thing. Pratt recently announced an enhanced version of its GTF engine for the A320, Neil, family. Deliveries to begin in 2024. Now, this is the engine that the other engine option for the A320neo. So CFM shares a program with Pratt. So far, CFM shares 60%. But, you know, Pratt's coming out with an enhanced engine. Should CFM be concerned? I hope they are because, you know, I would take Pratt seriously. They're not asking me, but it's my opinion anyway. Sight 22. So let's go on to some other GE program updates here. COMAC 919. So COMAC, this is the Chinese aircraft company. The 919 is supposed to be a competitor to the A320, NEO, and the 737 MAX. Until very recently, until the beginning of December, COMAC was maintaining that they were going to get us airplane certified, in China anyway, and begin deliveries in China before the end of last year. And then, oops, just very late in – in the year, in December, the China FAA, let's call it that, announced that the COMAC 919 is not expected to complete certification until 2022. That's this year. The announcement indicated that as of early December 2021, the 919 prototypes had completed only 34 of 276 required certification flights. So that, you know, that's kind of good information because it's not just delayed a little bit. They have a long way to go in terms of certification. I just saw a report this morning, not from COMAC, not from the Chinese FAA, that, yeah, in fact, the program's delayed. They're not talking about when they, you know, they plan to get it certified, although the Chinese FAA is talking about this year. And COMAC, I think, talked about COVID delays, you know, a lot of serious lockdowns and, China as a reason, one of the reasons anyway, for the delay in the certification. Skipping over in this presentation, discussion of the Global 7500 and the ARJ21. It's not that they're not important, it's just there's not really many changes in those programs, and we're trying to move through the presentation here. Slide 23. Okay, the 747, we're going to include this until the end, you know, a discussion about the 747. Boeing has announced it will terminate production of the Queen of the Skies in 2022. The last 747 expected to be delivered in October 2022. That's around the corner. A sad day for one of the best, maybe the best, in my opinion, if it's up there, commercial aircraft ever built. Long live the Queen. So this is really a sentimental favorite for us. This is the first program we got on, GE Aviation Program we got on back in 2014. My favorite airplane. But I always want to remind you, Even though it's a sentimental favor, it's a little less than $2 million of revenue for us. There are two new photos on the left and right. So these are current photos of the 747 in Anchorage, Alaska. You see a lot of 747s in Anchorage. Those are for frame. Slide 24. Okay, this requires us to slow down a little bit. A lot of information here. So let's look at the top part of the slide for perspective. and what happened with, let's use this as almost a proxy for the commercial aerospace industry. So on fiscal 20, we had about $29 million of sales. It's really about, let's call it 28, because there was a million dollars of sales on the 9X program, which is not an active program for us right now, dormant. So let's say 28 million. The reason I like 28 million divided by four, that's 7 million. That kind of works nicely. So 7 million per quarter. And you can see in 21, you know, now the pandemic is starting to affect us. One, two, the numbers are going down a lot. You know, we used $7 million as a starting point. By Q3, fiscal 21, Q3, $1.8 million. That's 25% of $7 million. It's a 75% drop. That's a pretty precipitous drop, I would say. But then look what happened. We go from Q3 of 21 to Q1 of 22. If you wanted this year, that's just two quarters. It goes up from $1.8 million to $7 million. That's a lot harder going up than going down. That's four times, 4X in two quarters. That's a big, big ramp up. And we handle it, obviously. Those are our sales. And we're kind of at that $6 million to $7 million per quarter right now. Good perspective. But what's interesting here, it's a little bit of a different story because we The Airbus never went below 48 or 20 units per month, and the 747 was flat during this period. The other programs were ramping up. So it wasn't really an in-market program issue. What was it? It was destocking. It was this kind of end-of-days Armageddon mentality where the supply chain shut everything down. Not only that, they wanted to get rid of all their inventory. They were selling off their inventories. And they're not only not producing, they're selling inventory, whatever they could sell. So that really, I think, is kind of the message behind our numbers. It wasn't almost so much the end market, the end program markets. It was the stocking that was just kind of widespread and rampant throughout the industry. And, of course, that puts the industry in a tough position because, you know, we go back to that part we skipped over. They're back on their heels. They laid off lots and lots and lots of people, not so easy to hire them back. And guess what? They have no inventory left to cushion the ramp up. So the supply chain got itself into a real predicament here. The Q2, let's go to the bottom. This is the top portion of the group of numbers. Fiscal 22 Q3, the quarter just ended, 6.2 million. Our forecast when we did our Q2 presentation, for Q3 was 6.25 to 7.25. So we're kind of at the bottom of the range. I wouldn't read anything into that. These numbers move up and down a little bit based upon, you know, if something shifts to being in the quarter, then the quarter, but I wouldn't read anything into that. Going down to the lower part of the page, our Q2 fiscal 2022 Q4 forecast, the current forecast, is 6.6 million to 7.1 million. In Q2, that was 6.25 to 7.25, so we're kind of tightening the range. We're not really changing it very much, tightening it because it's this quarter. We have more information about it. That makes the total forecast for the fiscal year 26.3 to 26.8 million. We go back to fiscal 20, 28.9 million, but maybe adjust it to 28 million. We're getting close. We're not quite there, but we're close. Certain factors that may affect the forecast, well, how about supply chains? How about COVID disruptions? So those are two. All those factors we talked about, discussed at the beginning of the presentation, flies five and six, they apply. But I would say supply chains and maybe COVID disruptions are the things that could have the most impact on the forecast. The orders for Q4, the orders are booked. So if those orders aren't shipped, that means something happened that prevented them from being shipped. So let's talk about... When I say orders are booked, I'm talking about for GE, not for everything with Q4 for PAR. Let's go to slide 25. A little more to discuss here. We've got to go back and talk about that $2.4 million of C2 sales. So let's go right down to Q4 at the bottom, fiscal year 22, Q4. Our forecast is $12.75 million to $13.75 million top line. So what's going on here? In Q2, we predicted $15.75 to $16.75. Now, if you subtract that, that $2.4 million, what it's supposed to be, that was supposed to be in Q4, that won't be in Q4, that still doesn't get us there. That would bring us to $13.35 to $14.35. Understand what I'm saying? Take what we gave you in terms of forecast for Q4 and Q2, served back at 2.4. It still gives us 13.3, let's say, to 14.3, which is higher than the 12.75 to 13.25. Why is that? These are things that affected Q3 we think are continuing into Q4. Now, you see it's not GE. It's all the other stuff, especially military. And then we talk about the bottom line. $3 million to $3.5 million, again, for Q4, for the current fiscal year Q4. In Q2, our prediction was $3.5 to $4.5, so we're bringing that number down, obviously driven by the top line. That's really the story, nothing but the bottom line, the top line. One piece of good news I want to share with you for Q4, we told you about this in Q2. We did a Q2 presentation. We still expect about $1 million in the blade of material sales That's not the C2B. That's our materials where the margins are quite good. So, okay, long-term forecast. Sorry, let me not skip over certain factors and risks which may affect the forecast. Those are similar to factors which affected Q3 listed in slide five and six. So, again, go back to those risk factors. Supply chain. And market for defense, non-G, COVID disruptions, those are things that, you know, I would probably highlight as the big risk items. Long-term forecast, people have asked us when are we going to reissue a long-term forecast. We'd like to do that, but at this point we just feel there's a little bit too much uncertainty in the market for us to do that. And we don't want to just give you something that's a guess. You know, we want to have some level of confidence that the forecast makes sense So it's possible, I'm not promising, but it's possible when you ask Q4, which is in May, maybe at that point, some of the dust will have cleared and we'll be able to give you some kind of longer-term forecast. Let's keep going here. We're running late. Slide 26, our expansion in Kansas. We could just skim through this stuff. The numbers speak for themselves. The film line trials are complete. That's a good thing. That's a big accomplishment. Tape line trials in progress. We plan to begin qualification in January. And just to make the point, while many others are slashing their capital spending or canceling their capital budgets altogether, we've pushed forward with a complete or major expansion. Good thing we did, because at this point, if we hadn't, we'd be in a world of hurt, especially if you look at things like that 75 per month prediction from Airbus. We'd be way behind PowerCorp. not just for redundancy, but for capacity. Updated parks people, slide 27. So our people count is 112. It was 114 when we did our Q2 presentation, so one down, not up. We're trying to push it up. So it continues to be very difficult to hire the people you want to hire. That's not a minor issue. It's a major issue. I know we're not the only one, but we're talking about parks, so we'll let you know about that. We know we're not the only one having difficulty hiring people. Parks people facing many challenges, and they're doing it shorthanded. Major supply chain, we're reviewing things that we discussed, but I just want to put it in the context of these are things that people have to deal with every day. Major supply chain freight challenges, a daily battle, a lot of work. And what does this lead to? It leads to abrupt adjustments and changes to production planning and scheduling required to accommodate supply chain issues. You know people who run a factory, they like to have some kind of predictability so they can plan the factories. maybe a couple months out or so. That's the ideal. That's not for us because, okay, we're planning to produce this product next week, but we didn't get the raw materials, so we're going to switch everything around. We're going to move people around. We're going to produce something else, but we have the raw materials. So it's a big challenge, a lot of extra work and effort that goes into managing a business under those circumstances. COVID challenges, still living with them. It's been a difficult quarter for us with COVID. We're off to a rocky start at the beginning of the New Year's with COVID. I guess it's Omicron, quite contagious. So, you know, with two concerns. One, obviously, the most important is our people. Most of our people have done fine. I mean, they're okay. They're recovered. But it also causes pretty big disruption for our production. You know, we're dealing with these supply chain issues. We're going to move production around. Then people, you know, they have somebody at home test positive or they test positive. They may be okay. They may be fine, but they're out. They have to quarantine. And it's not like a vacation where you give somebody notice. It's like, yeah, somebody calls in. I just tested positive for COVID or I'm not feeling well. I'm getting tested. I have to wait for my test results. So that it's definitely in the category of a challenge. Stress and anxiety caused by vaccine mandates. So I know you hear a lot about this stuff, how wonderful it is. But for people who actually work for a living, it causes a lot of anxiety because they're thinking, what, am I going to lose my job now if I don't get vaccinated? I don't want to get vaccinated. Maybe they've already had COVID. I'm not going to get into a discussion about the merits of the vaccine. That's my area. But I am in a discussion about our people. We told our people, you're not getting fired if you're not getting vaccinated. And a lot of people spoke up and said they were very relieved because they thought they were going to get fired. They thought they were going to lose their jobs. Now, with this OSHA rule, you probably know this. If the Supreme Court doesn't strike it down, there's supposed to be a testing option, which is good. So, in other words, people may understand that people not vaccinated can test as an alternative. And we'll do it for them. We'll buy the test. We're not going to pay for the test. We'll bring them in, probably do whatever once a week, maybe on Monday. We'll have to figure that out. if we can get the tests. That's an if right now, so we'll see what happens with that. Bringing the new plant up and online, new equipment trials, this is a big, big, big deal. It's a major consuming project that our people are handling shorthanded, without reinforcements. Let's go on to slide 28 here. Still dealing with our people, dealing with managing parks' new projects and initiatives. We'll talk about some of them. That takes a lot of work, a lot of effort. to do that. That's what I was talking about before. A lot of times when companies feel pressed, they're stressed, they have a lot of challenges, they go into a bunker. We don't go into a bunker. We don't stop. We don't sit still. We keep going. We look for opportunities. We pursue opportunities. But it's a lot of extra work. Our people are handling that. Major consuming projects, our people are handling without reinforcements. Again, shorthanded. But no matter, in fiscal 22Q3, Parks people, once again, stepped up. That's what parks people do. Everything that could be produced and shipped, got produced and shipped, notwithstanding the many obstacles and roadblocks which our parks people had to overcome. And once again, thank goodness for Parks Customer Flexibility Program. I talk about this usually every quarter, so I'm not going to go into details, but it's really a godsend. It was a godsend when business was going down, a godsend when it was going back up. Slide 29. And most importantly, thank goodness for Park's great people. Park is very fortunate and blessed to have these great people. Others laid off their employees by the thousands and thousands. Park held on to and kept all of our people throughout the pandemic and economic crisis. We neither asked for nor took any government money for keeping our people. We don't need government money or government incentives to keep our people. We keep our people because we want to keep our people. Park's people are precious. Park's people are what makes Park, Park. This picture is from our holiday party every year. We have a paper airplane contest. These are the winners, day shift and night shift. It's actually taken pretty seriously. These guys are like, you know, kind of almost aeronautical engineers in how they design their paper airplanes. The contest is who can throw it the furthest. So those are the winners of our holiday airplane, paper airplane contest. Slide 30. So let's talk about some of what are we doing that's new, not being in a bunker. So we've got James Webb. This is just really an exciting thing, a launch on top of French Guiana on Christmas Day on top of that Ariane 5 rocket. That's that same company, by the way, that we have the distribution agreement with. It's currently en route to its Lagrange 2 warp point, located approximately 1 million miles from the Earth. The James Webb Space Telescope Just for perspective, the moon is about 239,000 miles from the Earth. The sun is about 93 million miles. Now, I don't know about you, but I never heard of Lagrange points until about two or three weeks ago. Now, I hear about them about 20 times a day because there's a lot of news about the James Webb. Actually, if you're on Facebook, there's a page on Facebook that you can go on to or you can join, I guess. where every day there's a lot of really interesting news about the James Webb. And there's a website where you can track its progress to the Lagrange 2 point, which is kind of, at least for us, it's fun and exciting. So James Webb Space Telescope mission is to look back to the beginning of time, the universe, existence. So this is kind of a big thing, you know. There's a lot of theoretical stuff. beliefs, scientific theories about how the universe began, but we've never actually been able to see how the universe began, how existence began. So, for instance, what did exist before the beginning of existence? Those are interesting questions, and this is maybe not, you know, the topic of an investor call. We talk about numbers and stuff like that, but nevertheless, for us, it's a very, you know, very big deal. a big deal, this James Webb Space Telescope, that we're participating in it, that we participate in the structure. Let's go on to slide 31. Sorry, I can't see the slide numbers at the bottom of my page. If the James Webb Space Telescope succeeds its mission, again, same kind of topic, where will it stand in the achievements of the human race? Well, that's a pretty big one, I would say, going back to the very beginning of time of the human race anyway. Pretty big achievement, if it's successful, to really see back to how life began, how the universe began, how existence began. It's a big deal. So you can fill in the blank here, but I would say it's up there. And at the bottom of the page, so our proprietary sigma struts are incorporated into the structure of the James Webb Space Telescope. The park is along for this ride of rides. They say the park is honored to play a part. This incredible mission of the James Webb would be the understatement of our lifetime. It's hard to describe how big a deal it is for us. This picture here is kind of interesting. That's a little diagram of these Lagrange points. The James Webb is going to be orbiting around this L2 point on the right side of it. of the little diagram there. Let's go on to slide 32. So there was a news release about this yesterday, so you might have seen it, about the business partner agreement that we entered into with Arian Group in France. So we purchased our C2B type product from this company for a long, long time. I've actually personally visited them in Bordeaux, I think, around 2005, so we've been working with them a long time. Love this company, great company, very special company. And they asked us if we could be their exclusive distributor for this product. We'll keep buying it for our own account, but they asked us if we could be their exclusive distributor for it in the U.S., and we're really honored to say yes, of course. So that's a really big deal. We're very happy about that. Let's go on to slide 33, I guess it is. So another what's new at PARC, a major potential project. An issue is a new plant. Yeah, sorry we can't give you much more detail about it. We're just on a position to do that now. But these are big things we're working on. So at least we want you to be aware of them. So somebody asked, what the heck, somebody visited our plant. What the heck are you doing with that huge new plant? It was an interesting question posed by an observer and a smart person. Because this person saw the huge plant and some of it, you know, was spoken for. We have our new lines, new tape line, new film line. We have freezer space. We have slitting. We have a warehouse, but there's still a lot of space in there. And there's also a space, remember we talked about this before, for another hot melt tape line or solution line. That would be to add to our current capacity. But that's for something we're currently doing. So another line, a hot melt line or solution line, that would be another line that would be added to our capacity. our equipment inventory to increase our capacity, but that would be something we're already doing. We talked about that before. That's not what this page is about. There's additional space in our new plant which is set aside for new project initiatives, including two potential project initiatives we're currently working actively on. Both of these projects involve the purchase and installation of major new equipment lines which would bring new capabilities and market offerings to part. One relates to a joint development project with an important customer, another project something we would do on our own. And we're currently reviewing both projects with equipment suppliers. And just for perspective, we went forward with these projects at probably about $69 million purchase of equipment and installation costs. Let's go on to the next slide. That's slide 34, I believe. Continuing on the same topic, there's no hard deadline for final decision-making on these projects, but they're both front-burner projects, and we'll keep you posted. Although these projects relate to the manufacturer of composite structures, so it's not a big departure into something totally different, they both would bring new capabilities and market offerings for PARCC. These are things we currently do not do. Let's go on to slide 35. Still on the what's new at PARCC topic, the formal partnership with an established aerospace manufacturing company, partnership in quote, because it's not a formal partnership, it's not a formal agreement, it's a collaboration kind of arrangement. Again, sorry, we can't say much about this one either. We can't give you details because it's a little preliminary. But I want to tell you about some important things we're working on, so we're going to tell you about this. Park believes this established aerospace manufacturing company has important capabilities which are complementary to Park. So they do things that we don't do. We do things they don't do. That often could be the formula for a great, quote, unquote, partnership or collaboration anyway. Park and its informed partner have been collaborating on certain projects Defense programs. This is about defense. This collaboration has already led to an important new defense program award for our partner and us, and our partner and us, PARC, are currently collaborating on a partner, and we are currently collaborating on an RFP for another significant defense program. Hopefully we'll get it. We'll see. We'll keep it posted. We believe this informal partnership has the potential to open up significant new opportunities for PARCC and our informal partner. So let's go on to slide 36. These are the kind of last slides, so sorry we're taking so long. As you can tell, I'm rushing and probably stumbling over some of it by rushing by going too fast. So let's just start with the top here. Some say the economy is doing great and that all is well with the world. And, you know, we hear this a lot. I read about it a lot, you know, in the press, the financial press. And all we could say is that's not our world. You know, maybe it's somebody else's world. Maybe it's the world of Wall Street investors, but not the world for us, you know, the Main Street world. That's not the world we live in. The parks world is full of challenges. I'm going to review some of the challenges just for perspective here. Major supply chain and transport challenges. Some say these are improving. We don't see it. Not yet anyway. Daily battle. and abrupt adjustments in production planning and scheduling, very difficult to hire the people we need, still living with COVID and its many challenges, vaccine mandates, we talked about that, bringing new plant online, new equipment trials, major effort, major effort. And our people are facing these challenges shorthanded. We can't hire people. Let's go on to the next slide, which is 37. But here's the key thing. Even in the face of these many challenges which our people confront and deal with every day, Our people continue to press forward with major initiatives. That's the key point here. We've got a lot going on, a lot of challenges, a lot of difficulty. It's just how it is. We're not complaining about it. It's just our world. We want you to know about it. But that doesn't mean we go into a bunker and hide until things get better. We keep pressing forward. That's what we do. That's what our people do. Our new business partner agreement, these are some examples we just spoke about with Aaron Group, the two major initiatives and development projects we're pursuing in our new plan. major new opportunities we're pursuing through collaborations with our informal aerospace manufacturing company, quote-unquote partners, numerous other initiatives. The point here is all these new things take a lot of effort, a lot of dedication, a lot of time. So we could say, yeah, we're really tied up with all these difficulties and all the challenges we're facing. We'll do this some other time. But we don't believe in that. That's not who we are. To us, the other time never comes. So we do it now. We press forward. We keep developing opportunities. That's what we do in the face of challenges and difficulties. Other may seek shelter in the bunker and wait for things to get better. But at PARCC, we do not do bunkers. You do not wait. For us, the bunker is where you go to die. I guess the last slide is 38. At PARCC, even though we're all full of challenges, we press forward. We attack. We don't stop. This is all we know. This is what we do. At PARCC, we're swinging for the fences. We're not like the others at PARC. We play for Keefs. Now, at the end of every presentation, I'll show you a little picture of one of our departments or groups or teams. This is a little unusual. This is a bunch of different departments. These are people taking responsibility for equipment trials and bringing new plants online. This is a major, major effort. And these people are from R&D, engineering facilities, production. There's about four others that didn't make the photo op. I don't think they were in the wrong shift or something like that. But I'm going to read the names to you. Back row, Christian, Dexter, David, front row, Phillip, there's Devaka, Kelly, Dave, there's Dave, Wei, Mo, Martine, Leo. Like I said, several people didn't make the photo. But what's going on here? These are not new people. These people all worked for us a long time. So four months ago, there was no new plant to bring online. There were no trials. These people didn't have a lot of free time than I can remember. So these people are the people that are doing this major project of the trials and bringing a new plant online. even though they have a day job. And it's not one department. It's not like, okay, we try to hire people. We can hire people. So our existing people are dealing with it and dealing with it very effectively, very aggressively. As I said, the film line trials are complete. We're in the tape line trials now, the qualification, a lot of other aspects of bringing new plant online. So that's just kind of an example we're talking about. All right, that concludes our presentations. Again, I apologize. It took a whole hour. So operator, if anybody has any questions, Matt and I would be happy to answer them at this time.
spk02: As a reminder, to ask a question, please press star then 1. If your question hasn't answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Brad Hathaway with Fairview. Your line is open.
spk01: Hey, Brian. Thank you for the detailed presentation. Especially appreciated the commentary on what the MRAS program could look like with A320 in 2025. That was really incremental and helpful, so thank you for that. One quick question for you and then one longer one. The quick one is, can you give us any kind of thought on the materiality of the area and space, I guess, sales relationship that was announced yesterday?
spk03: So we can't quantify it. I guess we'll answer this way. First of all, we already buy a lot of this product. So from our perspective, it's a big deal already. In terms of being a distributor and selling this product to others, we're just really getting started. We'll have to see. It's hard to predict. These are the very critical component, this fabric, the C2 fabric that's used in a lot of missile programs. So If other companies want to get involved with these missile programs, they're going to need this material, and they'd have to get it through. So Lisa knows America. But I can't really quantify it. Yesterday, I think, the news released, I think we signed this agreement with them just about a month ago, so maybe not even a month ago, sometime mid-December. So I'll have to get back to you on that. We'll have to update you as we go. I wouldn't expect, though, because the way the nature of how aerospace works, and particularly defense, that next quarter we're going to tell you we've got $5 million of sales of this product. I think it's kind of more of a long-term effort to develop this business.
spk01: Got it. Understood. Any future detail you can give on the materiality over the long term would be greatly appreciated. Thank you. The second question is on capital. We've discussed it many times. In this presentation, you talked about, I guess, you know, a project that could use six to nine million of capital. But you still have, you know, even with a conservative calculation, you know, basically close to 100 million of capital on the balance sheet. You know, how do you think about, I guess, your alternatives to use that capital going forward? And what are you seeing in terms of things you're excited about or things you're less excited about compared to where we were, you know, six months ago?
spk03: So we certainly don't need that amount of money to run our business on a day-to-day basis. I mean, normally we generate cash. We like to be conservative, so we want to have some working capital available. So that's our opportunity money, really. I know it's $69 million. I mean, for some companies that would be a lot. For us, it's probably not that much. I mean, it's important money because we had to earn that money. Nobody gave it to us. That's kind of our mindset and our money you know that we don't spend it casually But to your point it doesn't make a huge dent in the cash position now and you know this is a probably a little bit of a maybe frustrating discussion for For you and some other shareholders because all we can do is say we're working on things a number of things, but we really can't identify or quantify what those things are including acquisitions and And I know we've been talking about that for a long time, so I wouldn't blame some shareholders being a little skeptical of that. I wouldn't blame them at all. Our standard is a little different. We're not looking to just buy something to buy something. We cover that probably a dozen times. But let me just go back to what I said. To us, this is our opportunity money for the future. And whether we do something other, we've done a lot of dividends in the past. We tend to pay a regular dividend. That's something that obviously we always consider. But my hope would be that we still are able to use a good portion of cash to develop opportunities for Park for the future.
spk01: No, and to be clear, my preference is always that if you can find a high return use of that capital, whether it's an acquisition or whether it's a joint venture or whether it's an investment in another factory because the returns of that new factory look like they're going to be incredible, that would be my preference. But just to push a little bit more – As you say, the aerospace industry was dead a year ago and is now recovering. So I guess if you couldn't find a deal that worked for Park in the last 18 months, at what point do you say, you know what, it's going to be actually even harder to find a 50-year valuation criteria going forward and say that you're not going to be able to put this cash to work?
spk03: Good question. So you're right. We thought that when the market collapsed that there would be a lot of great opportunities, maybe companies that were good-quality companies but had too much debt or that kind of thing, and the valuation would be really good. But that didn't happen. I'm not the expert in that topic, Greg, but I understand that there's just so much free money, so much Fed money around that people were able to hang on. rather than selling at these kind of distressed levels, bargain-based levels, hang on and get through the difficult times, which is, I think, what a lot of people did. And you're quite correct that the valuation never went down to as much as we would have liked, but they certainly are very high right now. Everything is high, any asset, cars, houses, boats, planes, and businesses. And that's obviously not our friend. That's not good for us. Maybe with interest rates going up... Nobody wants interest rates to go up except us because we're the ones who have the cash. Maybe that will help us a little bit. It seems like the tenure is up a little bit again, so that might actually be good news for us. But the more direct answer is that we have to keep adjusting our focus and looking other ways and other things, which is what we've done and what we're doing. Because, you know, you're right. I mean, what does Einstein say? Keep doing the same thing, expect the end result. That's a definition of being insane. So just to keep at it and saying, oh, we're still doing the same thing, there's not much logic to it when your point is correct. I mean, we have not had that success. So what we do is we keep adjusting our focus and refocusing, retuning, looking from other perspectives, and we're pretty actively doing that actually right now. And, you know, the frustration with M&A stuff is obviously there's only so much I can say We can't really give any specifics. I'm sure you understand that. It's not something that's possible. So I don't know what to say except, you know, I'm hoping that you'll see some interesting things in the future on the M&A side. But we're continuing to work at it. But, you know, very good point, not just continuing to beat our head against the wall doing the same thing, adjusting our focus as we go so that we have a better chance of being successful.
spk01: Great. Excellent. Well, thank you very much for your efforts and for the efforts of all of our team. Happy New Year, Brian.
spk02: Again, to ask a question, please press star then 1. I'm not showing any additional questions. I'd like to turn the call back over to Brian Shore for any closing remarks.
spk03: This is Brian again, of course. So Happy New Year to all. Thank you very much for listening to our very long presentation. Every time I want to make it shorter, it gets longer. But Matt and I wish you a Happy New Year and all the best. And feel free to call us if you have any follow-up questions. Always happy to talk to you. Thanks and goodbye.
spk02: This concludes the program. You may now disconnect. Everyone, have a great day.
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