[Management View]
Park Aerospace reported Q1 FY2026 sales of $15.4 million, aligning with estimates. The company emphasized strategic priorities in defense materials, particularly for the PAC-3 Patriot missile, and highlighted a $40 million blanket purchase order from a key OEM. Management confirmed zero long-term debt and a commitment to capital discipline, with over $600 million in lifetime dividends.

[Outlook]
Park Aerospace provided Q2 FY2026 sales guidance of $15 million–$16 million and adjusted EBITDA forecast of $3 million–$3.4 million. The company plans significant manufacturing expansion to meet defense sector opportunities, targeting completion of plans by year-end and implementation over several years.

[Financial Performance]
Q1 FY2026 sales reached $15.4 million, with a gross profit of $4.718 million and a gross margin over 30%. Adjusted EBITDA was just under $3 million, within the estimated range. GE Aerospace Jet Engine Program sales exceeded forecasts at $6.2 million.

[Q&A Highlights]
Question 1: On slide 21, the recently entered into new LTA with GE Aerospace for 2025-2030. Is there anything different about this LTA than previous ones?
Answer: The new LTA with GE Aerospace involves different engine programs and materials compared to the MRAS LTA. Both GE Aerospace revenues from MRAS and GE LTA are included in historical sales and the juggernaut forecast.

Question 2: At what point would you feel comfortable filling in some of the question marks on your long-term forecast?
Answer: We have internal models but feel it's premature to share them publicly. We aim to complete the plan by year-end and may provide more information by the Q3 call. We appreciate shareholders' trust and aim to avoid imprudent investments.

[Sentiment Analysis]
Analysts expressed excitement about Park's strategic plans and trust in management's disciplined approach. Management maintained a cautious yet optimistic tone, emphasizing strategic expansion and prudent financial management.

[Quarterly Comparison]
| Metric | Q1 FY2026 | Q4 FY2025 |
|--------|-----------|-----------|
| Sales | $15.4M | $15M-$16M (estimate) |
| Gross Profit | $4.718M | Not specified |
| Gross Margin | >30% | Not specified |
| Adjusted EBITDA | ~$3M | $2.5M-$3M (estimate) |
| GE Aerospace Sales | $6.2M | $5.2M-$5.6M (forecast) |

[Risks and Concerns]
Management noted factory underutilization as a margin pressure and highlighted the need for several years to bring new capacity online. Tariff impacts were reported as minimal, but global trade dynamics remain a concern.

[Final Takeaway]
Park Aerospace's Q1 FY2026 results met expectations, with strong demand for defense materials driving growth. The company is strategically expanding its manufacturing capacity to capitalize on defense sector opportunities, while maintaining financial discipline. Management's cautious optimism and commitment to long-term planning reflect confidence in navigating industry challenges and seizing growth opportunities.