Good morning. My name is Justin, and I'll be the conference operator today. At this time, I would like to welcome everyone to Park Aerospace Corp. 4th Quarter Fiscal Year 2021 Earnings Release Conference Call and Investor Presentation. All lines have been placed on mute to prevent any background noise.
After the speakers' remarks, there will be a question and answer session. Thank you. At this time, I will turn today's call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr.
Shor, you may begin your conference call.
Thank you very much, operator. Welcome everybody to Parq's Q4 conference call. With me as usual, of course, Nai Tharbaugh, our CFO. We announced published our earnings release early this morning. So if you haven't checked it out, you want to do that.
In the earnings release, there are instructions as to how to, I guess access to presentation, we're about to go through a presentation you also can find on our website, but you really want to get that presentation In front of you in order to make this call more meaningful. Without the presentation from you, it might be a little confusing. Also, there's a supplemental financial information that's Attachs Appendix 1 to the presentation. Matt used to read that for us, but we these presentations are going on for so long that we don't anymore, but feel free to access it and ask any questions you like about it. We've mentioned this every now and then probably almost every call actually We're not able to cover everything.
These presentations are fairly lengthy as is. We need to kind of select what we think would be Of interest to you and helpful to you in understanding our company. We do the best we can with that. And then next part next call, maybe we'll cover something else. The call could go on for 45 minutes.
So you see we really can't it's not possible to cover everything. We'll try to keep the 45 minutes. When I say the call, I mean the presentation and we'll have as much time as you want for questions and answers. When we're done with the presentation, Then we'll turn it back over to you and you can ask any questions you want either about the presentation or anything about Parq generally that's not in the presentation. Okay.
So why don't we just go ahead and get started. When we turn to Slide 2, this is our forward looking disclaimer language. Any questions about this, just let us know. Slide 3, we will take a little bit longer on Slide 3 than Slide 2. Slide 3 is a lot of stuff going on here, very busy.
So Why don't we take a look start by looking at the top line for the quarters of the 21 fiscal year 1, 2, 3 and 4. You can obviously see what's going on based upon the significant downturn in commercial aerospace And also we talked about destocking at some point, come back a little bit in Q4. But I want to remind you right now, right we start About something we discussed, I think last quarter, maybe in the prior quarter, and that relates to the substantial component for Rockets for missile systems, this is our ablative product line. So remember how it works. There's an essential component that source overseas.
We have the relationship with the supplier. So the OEMs are Sorry about this. These are critical missile programs. They asked us to buy that component and then sell it to them Just to have a safe stockpile of that component. It's an essential component.
The product couldn't be made without it. So we do that. We buy this component. We sold back to I shouldn't say back. We sold to the OEMs or the customer.
They never owned it to begin with. It's their product and they can do with what they want, I guess, but the expectation is that we will use that component to produce The blade of materials, the composite of blade of materials for these rocket and missile programs. This is significant For a couple of reasons, it affects our top line also our bottom line. We sell it at a small markup, so the margins are Quite small, the neutral content for these sales are quite high. So I just want you to know that remember remind you of that for background, In Q2 sorry, in Q3, we had approximately $2,000,000 of those sales of the component.
And in Q4, We have $3,500,000 of sales and we predicted that I think when we did our Q3 calls, that shouldn't be a surprise to you. But I just want to remind you of that because it does kind of affect the numbers. So let's go through Q4, the current quarter, fiscal 2021 Q4, dollars 14,000,000 of 441 1,000 of sales, you can see the numbers moving up, but in that number, it's $3,500,000 of sales of that critical component With real low margins, gross profit, dollars 4,326 gross margin 30%, which is we'd like that. We don't like it. Well, let me put it We'll hike it was below 30%.
We're actually surprised about this because with that critical component, that central component, The margins are quite low, so we're surprised that the gross margins actually came in at exactly 30% actually. That's our first number. We don't do that. That's It came in 30.0 percent and the adjusted EBITDA of 3,257,000 So we're a little bit surprised about that. Let me remind you about our forecast philosophy before we go into the more discussion about the numbers.
So we give you a forecast. We're telling you what we think is going to happen based upon working very hard and everything we need to do to make it happen. But we're telling you what we think is going to happen. We don't give you a low number to beat it. We think that's kind of silly.
We know lots of other companies do that, large and small alike. We think it's kind of just I don't know, not wasting your time to do that. If we tell you something, we're telling you what we think is going to happen. We could be wrong, but we're telling you what we think is going to So, all right, so let's with that in mind, let's talk about what did happen in Q4. What do we say about Q4 during our Q3 conference call?
We said the sales estimate was 14% to 14.5%. Well, we came in within that range, okay, look up toward maybe to the higher end, but still within that range, no problem. We also said the adjusted EBITDA estimate was $2,300,000 to $2,800,000 but we came in at $3,257,000 So quite a bit above the top of the range. That's not what we thought was going to happen. And what happened was that we did not properly capture and or estimate for Q4 the margins on ablator products.
Now I'm not talking about the essential component. These are our sales of ablator materials for rockets and missile programs, Very good margin and we just didn't fully capture those margins. That's on us. This is not something we did to give you a low number, we could be 0. As I said, we just don't do that, not a way of doing things.
Let me see. Anything else to cover on the numbers? No, I don't think so. But there's another big item I kind of deal with on this page. This page is the close down.
Special items, Okay. You see at the bottom, it says before special items. Well, there was a big special item in Q4, dollars 1,570,000 That related to something we call used to call a Pioneer plant, which is a plant at Singapore we opened in 2,008. This is a composite material plant. This is just around time we were going into aerospace.
This plant was going to be our Asian aerospace for composite materials Our facility, but it was part of our Singapore company, our Singapore entity, our Singapore operation. Electronics, our Singapore facility was our largest facility, so it was part of that. It wasn't a separate entity. And the key thing was it was going to be operated and managed by our Singapore team, which is the electronics group at the time. I wouldn't say it was very successful in terms of marketing.
We never got very much we didn't get very much sales. But nevertheless, for whatever reason, that was it was not a I would not say it was great success, okay? As you know, we sold our electronics business in its entirety, ACG in December of 2018, That included the Singapore operation, of course, the Singapore entity. Now this Pioneer plant, as It wasn't a separate entity, it was part of the Singapore entity, but we separated it and dropped it into Another entity owned by Park. Why is that?
Because AGC did not want to buy the Pioneer plant. They didn't want it. So we said, okay, fine. We'll keep it. And we have kept it we had a mothball almost right away.
I think almost right away when we did the sale in 2018, because we didn't have without AGC, See, we didn't have or Singapore people, we didn't have the ability to operate this plant anymore. So we mothballed it. We didn't write it off right away, Because we had some hopes that we could be able we might be able to use it at some point. Why is that? Remember, we've been talking about working on an Asian JV For a while, nothing we discuss every quarter.
We've been talking about it for a while. And actually, we're still in discussions with an Asian, large Asian aerospace company about doing a JV in And our thought is that, well, maybe this plant would be using that JV. These discussions are high level, the executive level of this company. I would say they're serious, but also they're still preliminary. And COVID has not been our friend because we really need to get together.
We've had a lot of Phone discussions, correspondence back and forth, questions and answers. But to me, in order for this to get to the next level, Discussion, we need to get together and really their team needs to come to Kansas, spend a couple of days with us. And with the COVID travel restrictions, that just not been possible. They have not been able to do it. So it really sidetracked this whole thing.
We're still in active discussions. I mean, I don't want to tell you that I'm not telling you it's dormant at all. We're still in active discussions. I mean, like Probably on a weekly basis, emails or phone calls, that kind of thing. But I feel like until we're able to get together, it's kind of not going to get to the next level.
So why did we decide to write off this time? Because this thing has been on for a while. And even if we do a JV, it's Not clear that we'd use this facility in a JV. So we decided to write down the assets at this time. I think that's the right decision.
I think it was the right You know, prudent and thoughtful decision. Just in case you're interested, not much of an impact, if you know why is the The pre tax benefit now that you've written for facilities by $200,000 per year positive and the EBITDA benefit is only about $80,000 because some of the cost of depreciation. So just one to be aware of that, because I think in the news release, there is kind of a reference to this write down, but I wanted to know the background. It just kind of Wasn't I mean, we didn't have the ability to continue to operate this plant after we sold electronics to AGC because we just didn't have there's nobody to operate it for us. So maybe decision was kind of inevitable, but we made it and I think it was the right decision and the right timing.
Why don't we go on to Slide 4? Just a little more history here with our 2021 results. You can see the top line kind of nice growth, 'seventeen, 'nineteen, 'twenty and 'twenty one. But of course, no news flash here, that's the effects of the commercial aircraft industry downturn and that destocking we talk about sometimes. Okay, why don't we move on to Slide 5, Our top five customers, this is something we do in almost I think every presentation actually, it's kind of almost a fun thing sometimes.
We have a little picture for each customer. Aerospace, that's the MK425, the picture in the bottom left. And we supply material to this program for actually structural components, just not the rocketry, the structural components of the Warhead. Let's see CPI Radiant, that's Neck 1, that's over on the top right, the NMT Navy multi band terminal and we supply very little materials into that program. Kratos, we talked about Kratos quite a bit, If you're in the bottom middle of the Valkyrie, I think we've told you we believe we're the main material supplier, composite material Kratos for all their drone programs.
And this is a picture of the Kratos launching what they call a baby drone. That's a drone launching a drone. So how about that? I think Kratos actually said they expect the first production delivery The Valkyrie in a couple of months, I think that was their terminology. Little River Aircraft, that's the a company that was owned by Park GE Aviation.
Now it's part of ST Engineering Aerospace, you know all about them. And we have picture of this is 7478 on the top left. And Turkish Aerospace, not often in our top five, it's really nice to have them. We are a contractor for Skorsey Aerospace. We have a picture of a Skorsey helicopter On the bottom right, we provide materials for the structures for the Sikorsky helicopters.
Okay. Why don't we go on to Slide 6? These pie charts I find very interesting. Let's look at military in 2021, just as a math, dollars 60,000,000 in total revenues, 35% $21,000,000 Now, U. S.
Fiscal 2021, where the total revenue is a lot less, only 46,300,000 About 59% military and obviously the military percentage has grown quite a bit, but actually the absolute number is about $27,250,000 So it grew from 2020 to 2021, which is nice. You remember we decided about a year ago to focus on military. I'm not saying we're happy with the results We need to do better, but at least we've achieved some results. And just remember also that the $27,250,000 includes quite a bit of that Sale of the, what do we call that essential component for ABLADIS for rocket programs. So Keep that in mind.
Look at the commercial aerospace portion of the pie, it was $28,000,000 apparently, it looks like in fiscal 2020 16,000,000 And in 2021, just doing the math, that's all. So obviously quite a bit of a downturn in Commercial Aerospace. When we go on to Slide 7. This is our fun slide and Donna, Elena kind of do this every quarter. They put together, we could try to come up with Things that are fun and interesting.
This isn't necessarily the biggest programs, but we thought we want to make this a little bit entertaining for you. So We try to come up with some cool programs, military programs. Top left, there's a B-1B, but it's not the B-1B program, It's the LRASM, the long range anti ship missile that's being launched by the B-1B. And so we produce parts using Park Materials for that program. Avio Aster 30 air defense missile, those are rocket nozzle materials, ablative materials that are going to that program.
The F-fifteen Eagle, 104 to 0, do you know what that means? The 104 this isn't in combat, 104 wins, 0 losses. So It's not even fair. We produced materials for radomes for the F-fifteen and we have JSTAR's parts for cover assembly using Park Materials. And we have the pie chart here kind of interesting.
You see rock and alsula are big, Structures are big, drones are big, radon is not as big, but still really important segment for us. Okay. Why don't we keep going? Got a lot to cover here, Slide Okay. So we talked about we love our military programs.
So just in fairness, We need to also say we love our commercial aircraft programs. We've got to give equal time to commercial. So we've covered this. This is kind of a review slide. So you know the If you've been listening to our call, single aisle versus wide body, a clear trend for single aisle.
It was actually before the pandemic, it was because people Want to fly direct, rather than going to the hub and spoke system, but now it's even more so because the domestic aviation has Carved is recovering, has recovered to some extent. International travel probably a ways off. Domestic, think of single aisle for domestic. For international, think of a wide body. So our view, if you want to be in commercial aircraft, at least now you want to be in single aisle, There are 3 major single aisle programs.
We're in 2 or 3. We think those are the 2 you want to be on. No offense to the MAX. We wish it well. Hopefully, we'll do really well in the future, but we're happy, very happy to be on the A320neo program and also the COMAC 9 19 program.
So we think we checked 2 to 3 boxes and we say if you want to be in the single aisle, which we do, those are 2 boxes we want to check. That's our opinion. And we think we're ideally positioned partly by luck in the commercial aircraft industry. I think we're kind of being nice to ourselves by Thank partly by luck. I would say mostly by luck that we're just very well positioned.
So Slide 9, Commercial Aviation emerging from the abyss and certainly wasn't abyss. Higher jet fuel prices and environmental concerns Provide extra motivation for airlines to move to more quickly replace the less fuel efficient legacy aircrafts, more fuel efficient modern aircraft Such is the Day 320 family. A year ago, fuel prices were down, we're saying that's kind of an impediment for the new aircraft, No more fuel efficient aircraft. Now fuel prices are not so good. They're very high.
It's a little concerning. The environmental Concerns are in place whether fuel prices are high or low, but the fuel prices, higher fuel prices provide extra Economic incentive for the airlines to go to the more efficient fuel efficient aircraft, of course. China domestic aviation domestic, domestic As recovered to pre COVID levels even greater depending who you ask, that's very positive for single aisle. U. S.
Domestic aviation recovered a lot 75% of pre COVID levels, expecting a full recovery 2022, very positive for single aisle. And just kind of an interesting little anecdote, there are 2 new I don't know if you saw this, 2 new U. S. Domestic airlines that recently announced they're launching. And I don't plan to buy, what they say, don't plan to buy airplanes from programs Parq is on, but still a very good sign of optimism about the U.
S. Domestic aviation market. Very good news for Sunrail. I think a year ago, people said that this is just not possible. Nobody's going to start an airline in the U.
S. Maybe ever, but That was the pessimism at the time. Let's go on to Slide 10. This is also a review slide. We provide the slide pretty much every quarter.
I think the first item, we have the LTA started in 2019 through 20 29. It's a requirements contract, Middle River Aircraft, our structure system, JEMRAS, that's a subsidiary of ST Engineering Aerospace. So what's the GE connection? Why don't we talk about GE Aviation? Why are all programs GE Aviation programs because Middle River, MRAS was a subsidiary of GE Aviation Toll about, I think, 2 years ago, We're sold to ST Engineering Aerospace.
So the GE Aviation legacy programs, the program GE Aviation programs used MRAS, which was Parq G Aviation for all the nacelle structures and thruster versus structures. So that's the connection there. We're done in the factory. We'll talk about that a little later. It's just about done.
But when we signed up that LTA with MRAS, we said, okay, well, we'll go ahead and now we'll build a redundant factory. Why are we doing that? Well, next item, Sole source for composite materials for engine nacelles and thrust reversers for multiple MRAS programs, the whole A320 Neo family of airplanes with those LEAP-1A engines, that's the first five items, the Boeing 747-eight, the COMAC 919, COMEC ARJ21, which is a regional jet for China and the Bombardier Global 7,500. Takes a long, long, long, long time to qualify a material composite material supplier. So you see the problem here is that if something happened to Our one plan, it's actually a major crisis almost immediately for all these aircraft programs.
So it was very proper and understandable that they asked us to build a redundant factory as part of our long part of our signing of LTA and we did that. It was actually, I think a handshake, but we are people of our word, whether it's right or not. Top right, I would just quickly, there's also a component we produce for those Passport 20 engines. That's not part of the MRS LTA, that's actually through GE Aviation still and we supply 1 of their contractors. A picture of the legendary Boeing 747-8 nacelles.
I love this picture because it gives you a perspective on These nacelles are huge. I mean, look at the kind of background there and these nacelles are all Park Materials, not only themselves, thruster versus structures And for Boeing, some internal fixed structures as well for the 747, I should say. Let's go on to Slide 11. We're doing time, Pushing you ahead here. Okay.
So let's do an update on these specific GE Aviation programs. So The A320 deal family, by the way, we added the A319 deal, that's part of the family, not talked about that much, There are some sales, so that's part of the family and that uses those LEAP-1A engines, meaning when they use those LEAP-1A engines, it's our program. Definitely ramp more than I would say, Airbus, just some information, Airbus delivered 57, Neil family of aircraft in March. Airbus, This is from Airbus. This is not industry gossip or analysts' opinions, that kind of stuff.
Airbus plans to increase The A320 family of aircraft production rate were 40, which it currently is at per month to 43 per month in Q3, 45 per month in Q4. And just if you want to do some math, I don't know if I like doing this. Remember that the A320neo family of aircraft, they have Two engines, one is a LEAP-1A engine, that's the program we're on, also have a Pratt engine. Now each airplane has 2 engines, you got to remember that when you're doing the math. Just FYI, I'm not telling you what's going to happen in the future because I don't know.
But if you look at the May edition of AeroEngine News, It says that the LEAP-1A, which is CFM, CFM is a joint venture between GEB and Sarafran, LEAP-1A engines, That's about 61% market share of all of the firm orders for engines for an A320neo Family of aircraft, okay. So if you like doing math, that's the current situation. I'm not saying we'll have in the future because we don't know that, but it's about 61% of market share. So 2 engines, but 61 percent, think of it that way. Let's keep going.
Now this is really pretty important. During Airbus' Q1 investor call In April 29, 2021, the Airbus CEO, I'm not going to pronounce his name, try his first name, but I think it's Mr. Fiore And I'm probably not pronouncing that name correctly, sorry about that, a lot of French friends. State, there will be a steep ramp up. This is a quote, direct quote, a steep ramp up in 20222023 for the single aisle aircraft.
That means the A320 NIO family of aircraft. Steve ramp up that's his quote for 2022 and 2023. He also commented during the call The Airbus has provided scenarios to the supply chain to determine the fastest possible ramp up of single oil aircraft production, the Supply chain and reasonably support. You get what's going on here? So from my perspective, these guys are optimistic.
They're trying to push up the rate as much as possible to make 320neo. And now they're trying to figure out what the supply chain can support, really important thing to understand. Okay. So that's the A320neo story except on Slide 12 a little bit more. Still in the A320 Neal family, A320 XLR news.
This is part of that family using the LEAP-1A engine. 1st test flight nearing aircraft first test aircrafts are nearing final assembly, 1st flight expected in 2022, Certification entry into service in 2023, I mean, that's kind of around the corner. And aircraft Timeframes, electronics in the old days, that would be forever. 2 years of aircraft is like tomorrow. Now many expect this airplane to be a game changer, Very significant range, holds a lot of people and the theory is it will replace wide bodies for many missions, at least some missions.
And the key thing is Boeing does not have an answer for this aircraft. Boeing is reportedly considering the 5X, which would be an answer to the XLR. In my opinion, they really need to do it because they don't have an answer for it. But The problem, I guess, for Boeing a little bit is that this XLR is going to be in production and being sold in 2 years. And Boeing has even announced this It's a 5x jet.
So I have no idea what timeframe they'll be talking about, but it's going to be into the future. With The new airplane category is I mean, I think the general rule is it's always good to be first, maybe not always, but usually good to be first. Let's go on to anyway, so just on CL12, well, I think this could be a really important program for Parq, the XLR, part of the A320 family, but Real important program for Parq. Let's go to Slide 13, Global 7,500. I think they recently sold their 50th unit.
These airplanes are production Doing well in the ramp mode, ramping up, which is really good news for us. Palmac AirJ 21, This is a Chinese airplane made by Tomac. It's a regional jet. It's in production, mostly for the China market for now. They're ramping up, it's in production ramping up.
Slide 14, COMAC 919 with ALLETE-1C engines. So, COMAC has indicated they intend to certify and begin deliveries of this aircraft before the end of 2021. That's this year, so I guess we'll see what happens. I don't know whether it's correct or not. I haven't heard any updates on that.
But whether it's 2021 or Some other date after that, this is I think a very big potential program for Park. This is Airbus's attempt to be a real player And Commercial Aerospace. This is their answer to the 737 MAX and A320. This is their single aisle airplane And you see a picture right here. So I suspect it's going to be big.
I suspect originally you're going to sell inside China, Remember domestic aviation, single aisle, but eventually I believe they'd like to sell us outside China. Boeing 747-eight, Boeing announced it will terminate production in the Queen of Skies in 2022, 12 orders left to fill, long lived the Queen. As some of you know, I have Real fondness for the 747-eight. One of the things that makes it a real sentimental thing for us is the first Program we got on with GE Aviation was a 747-eight. Our first shipment for these programs was February 28, 2014, about 11 o'clock at night was kind of a pretty exciting day for Park actually.
So We have a special fondness for the 747. I personally knew this. I took this picture actually at the Anchorage airport. This airplane, you see the gears down and you've got to land. Slide 15.
So, commercial aerospace, you're in review. Armageddon Revisited. So you know about all the stuff, airplanes parked by the 1,000. Donna did a real nice job with his pictures. Airline terminals with ghost towns, yes.
If you weren't there, you heard about it. Airplanes flying almost empty. We've seen lots of pictures of like 2 people on an airplane. 1,000 of flights canceled. 1,000 and 1,000 employees were laid off throughout the commercial aircraft and commercial aviation industries.
That's Armageddon. Almost all news about commercial aircraft industry was negative, very negative. This again is the analysts and the commentators and the people that get interviewed on TV that I guess a lot of people listen to when it was maybe not a good thing Because that kind of becomes a self fulfilling prophecy. Aviation analysts and commoners predicted polar carbony will not come for many years Or may never come, maybe it's over, maybe the commercial aerospace industry is a thing in the past. There just won't be an industry anymore almost End of days, they're talking about.
Slide 16, but at Parq, we did not completely buy all that doom and gloom stuff. We do not buy that the end of days were at hand, but it doesn't really matter. Either way, we made our arrangements with MRAS to maintain Minimum monthly baseline critical mass production level to preserve Parq's ability to ramp up production when needed. We covered this, I think during the last couple of calls at least, so if you listened to our prior calls, you know about this. But it was very important for MRS and Parq that we did this.
We didn't want to allow Our production levels of the type of product we make for MRAS to go below the critical mass because we knew we didn't know. I guess we didn't know anything, nobody did. But we had a lot of we believe we're going to need to ramp back up one day. So it was ended up being approximately $700,000 to $900,000 Aman, the minimums were in terms of units because it was a production thing, not a sales thing, but it turns out it was approximately 700,000 to 9 100,000 come on, starting about July. And even though layoffs were widespread and pervasive through the commercial aircraft industry, We laid off nobody, none of our people through all the darkest and seemingly hopeless days of the commercial aerospace industry.
Listening to all these guys on TV talking about the end of days, it's over. Everybody we knew everybody we knew was letting people off. We did not do that. And it turns out that decision to not lay off people is critically important to Park because ramping back up, We have to go try to rehire these people and call them back, which I know a lot of other countries are doing. We never let them go to begin with.
A reason for not letting them go wasn't on that. It's because We don't like doing that kind of thing as we discussed many times in the past, Slide 17. Continuing the same thing, We spoke at length during our Q1, Q2 and Q3 investor calls last year about the significant divergence from and mismatch between The minimum monthly baseline critical mass production amounts agreed to with MRAS and then current end market requirements for GE programs with Parkinson. I'm not talking about now, I'm talking about then. Airbus always maintained that we're going to stay at 40, they weren't going to go under 40.
All the analysts, not all, I'm being unfair. A lot of the analysts accommodate, oh, they're going to have to another shoe is going to drop, alright, fine, didn't drop. And but we are producing with our minimum amount about half level of what was needed to support the then market, not the now market, the then market, Inventory destocking, this is what happened. Everybody was so intimidated, so frightened, so afraid. And like I said, the Analyst and Committees didn't help very much that People weren't willing to buy anything.
People weren't willing to build anything. They're just kind of selling inventory down because basically the world's coming to an end. What do we say? We said to you, we said inventory cannot be the stock to below 0. It's kind of you can't have a negative number unless you involve very creative accounting, I guess.
The diversions was mathematically unsustainable. I mean, how long can you sustain that kind of mismatch? We didn't know how long, but it was not going to be sustainable. Unless the aircraft end market took another dramatic step down, today a reckoning was coming. We told you that.
This was our opinion. Well, it came. Destocking has ended. All the GE Aviation programs that Parq is on are in a ramp mode except for the 747, whose rates are unchanged. Let's go to Slide 18.
And the ramp is looking steep. This is just an update from the slide we did last quarter. From perspective, GA aviation program sales for the following periods were. Now these are calendar year periods. I just want to mention that because normally we talk fiscal years, but calendar year 2019, 29,300,000 Calendar year 2020, oops, dollars 15,800,000 but the last 6 months of calendar year 2020, dollars 5,000,000 that's a $10,000,000 run rate.
When you think about it, dollars 700,000 to $900,000 that was a minimum, maybe $800,000 kind of in the middle of that range, dollars 800 Times 12 is about $10,000,000 So that kind of makes sense. So we're running at $10,000,000 rate during the Last half of calendar 2020. Okay, calendar year 2021. Calendar year still calendar year forecast For GE Aviation program sales based upon new forecast we recently received from customer $25,500,000 What happened? Last time we talked to you is $24,000,000 Well, it moved up.
Is it done moving up? I don't know. We'll have to see about that. What does it mean? This is not a forecast to you.
We're just telling you the forecast we received our forecast to you would be done on a fiscal year basis. And normally we're providing ranges and we'll give you But this is just to give you perspective on how steep the ramp is, dollars 10,000,000 rate to the $25,500,000 rate in a period of what, Like a month. So that's perspective. 19 Slide 19, continuing The ramp mode, we're in the ramp mode. In addition, this is really important.
In addition, we recently received an updated long term forecast For GE Aviation. This is not just a 2021 forecast. This is 2021 through 2019. The balance of the firm pricing in Remember that was 2019 to 29. Well, obviously, we won't talk in 2021 to 29 now in terms of the updated forecast that passed in the past.
So here's something really key. On an apples to apples basis, the total updated forecast GE Aviation program sales for that 21 The 2019 calendar year period, very similar to the total forecast at GE Aviation program sales from the pre COVID forecast for that same period. We're basically back to where we were pre COVID. That's the forecast we received. How is the updated forecast constructed?
Okay. I think we told you this before. We are given units. We know what materials you how much materials you use, what types of materials you use by unit. We know what the selling price is for the materials.
So we just Build it from there. We build a very detailed long term forecast, big spreadsheets, lots and lots of detail, but that's how we build it. Our opinion, the updated long term forecast that we're talking about now may not fully capture the steep ramp up of the A320neo Aircraft Family Production in 2023 predicted by the Airbus CEO just a couple of weeks ago. And we say that because we think that those comments came after we received the forecast. And then also, My opinion is that the forecast may not capture the XLR sales opportunities.
The reason I say that is because A lot of people think XLR is going to be a big deal. And in the long term forecast, we don't really see a bump, which would be tied to the introduction of the XLR. I mean, it's in there. I'm just saying We're just kind of wondering about it. But an important question, so there is some upside.
We think maybe the forecast didn't fully capture these two things. Well, the other side of the equation is how will the current aerospace manufacturing supply chain respond to the steep ramp? That's a big question. That's Remember, the Airbus CEO said they went out to supply chain to figure out what the supply chain can support. So there's 2 different things that are kind of pulling in different directions, I guess.
Slide 20, how we're responding to the ramp up. It's all about our people. Well, so Park's people count is generally 106. So what the heck happened here? Remember last quarter, it was 107 and we told you we plan to hire 15, 20 people.
So where are those people? We haven't increased our people. So, why? Well, maybe people are getting paid to stay home. So who is that helping?
We hear a lot on the financial news, news about all these companies that Can't really reopen, can't ramp up, we used to can't hire people, it's really terrible, the government's paying to stay home. But don't hear too much about the people, Is this helping those people? So you might want to think about that a little bit. These are people. Some of them now haven't worked for a year.
They're home getting fat, their minds turning to mush maybe, losing their edge. Some of these people are wasted people now. They don't may not have the ability to go back to work again Maybe ever. Look, if you're off for a few weeks, fine. A year?
A year? So maybe some of these souls are broken souls. What about them? They're people too. Their lives are being destroyed, at least some of them.
But it's funny, That's not part of discussion. It's always about the businesses which can reopen. And I appreciate that. I think that's a very good point. But why don't Why is nobody thinking about those people?
Are they being helped by this? I have an opinion about who's being helped and it's not them. But Don't you worry about us. We'll take care of it. As usual, Park's people stepping up, getting the job done.
Corey has done a magnificent job of kind of organizing Our workforce, so that we're able to meet the ramp up. We don't talk about disappointing customers. That's not in our vocabulary. One way or another, we'll get the job done. Slide 21.
So how are we responding? Thank goodness for our customer flexibility program. We talked about this a lot, a little more detail. Total current participation 80%. We got of 80%, 2 job categories, 47%, 3%, 30%, 4%, 18%, 5 job categories, 5%.
Without this customer flexibility program, It would just be very, very difficult to get the job done. This customer flexibility program is just been a it's just a godsend. It opens so much during the downturn, To keep things going, not letting people off and it's helping us incredibly now with incredible flexibility to respond as we do. Thank goodness we didn't lay anybody off in the darkest days in the commercial aircraft industry, because we didn't have to hire anybody back. They're all there.
Our team is there. That's not the reason. The only reason, the other reason is we just don't believe in letting people go. We just thought how we think about things, those people And thank goodness for Park's great people. Without them, we'd not be able to get the job done.
Park is very fortunate and blessed to have the great people it has. Let's go on to Slide 22, GE Aviation Program. How are we doing on time? Oh, boy, maybe more than 45 minutes. GE Aviation Program sales History and forecast estimates.
So the top part of it is the history, which you're familiar with. Q4 was $4,400,000 I think that's pretty much what we predicted during our Q3 call, a total 13,200,000 And look, that's less for 2021, sorry, fiscal 2021. It looks like it's less than half of fiscal 2020, which is not a big shock, I don't think to anybody. Our forecast Q1, dollars 6,500,000 to $7,000,000 that's pretty much booked. Q2, dollars 6,500,000 to 7,000,000 for the fiscal year $26,000,000 to $28,000,000 Is that right?
Well, I don't know, it could be. I guess, it depends on what happens in part with A220 and what Mr. Fiore said, this Airbus CEO that we just talked about. And then the other side of the equation is always, can the supply chain I mean to ramp up. I'm not talking about us, but if any part of the supply chain not able to support the ramp up, that means the ramp up itself maybe slowed down a little bit.
So again, a picture of the 747-eight departing Anchorage. So you see a lot of pictures of 747-eight. As a CEO, I get picture authority and I love the 7478. So even though it's not our biggest program, I like I just love the airplane. I love putting pictures of the airplane In the presentation, but somebody asked about this, it's actually less than $2,000,000 of revenue for us per year.
So even though it As a very sentimental value for us, it's not one of the bigger programs for GE Aviation. So I just want you to be aware of it, because the program is being ended. Slide 23, we have a little forecast here for you. First, the top box is history. So just for perspective, the history, you all we covered the history in an earlier slide.
Just to remind you, so Kind of broken record stuff here, the essential component for missile programs. This is last year, 2021 Q3, about $2,000,000 Q4, about $3,500,000 Keep that in mind. Now let's go to our forecast. We haven't given a forecast for a while. Well, we gave an ish forecast, like 3 ish or 4 ish.
We're back to trying to give you a forecast. We think there's still a lot of uncertainty, but we feel a little bit better. So we're providing you with a forecast. Q1 sales $13,300,000 that's less than Q4 as you can see, but again, we don't in Q1, we don't have those The sales that is central proponent $3,600,000 to $4,100,000 of EBITDA. So We're getting back up there.
Just you know, Q1, this is something we're not sure about. We have forecast, forecast, Forecast, we do P and Ls every week and we cast our forecast. But the gross margin in Q1 We're predicting quite a bit over 35%. I'm not saying that's sustainable. If you look at Q2, it's interesting, it's saying the revenues are going up, But we're looking at the adjusted EBITDA down a little bit.
First of all, sorry for this broken record stuff, but there's $1,000,000 of eccentric opponent sales in Q2, remember very low margins. But quarter to quarter, the mix changes. Since we're doing a lot more military, we're going to have quarter to quarter mix changes and that's going to affect our bottom line. With the GE Aviation business, there's really no mix change. It is what it is.
Military, a lot of programs and 1 quarter will be more of this, 1 quarter will be more of that, and that's going to up and down our EBITDA from quarter to quarter. For the year, looking at $55,000,000 to $62,000,000 revenue, dollars 13,500,000 to $16,500,000 EBITDA. I think Fiscal 2020, it's in the prior part of the presentation, with $60,000,000 of revenue and $13,000,000 EBITDA. So we're saying, yes, we're Back there, maybe a little bit better than that. So just a couple of things I want to mention.
These are taken into account when we do our forecast and we could be wrong, but like I told you earlier, we've covered this many times, give you a forecast we're saying, This is what we think is going to happen based upon, of course, working hard. This is not a walk in the park thing or anything like that. We're working very hard doing our jobs. But we're still looking to hire people. We haven't given up.
We have desire to hire maybe 8 or 9 people Now maybe some additional later on. So there's real cost involved with people, entry level people, they're expensive, Over $50,000 was soaking wet per person. New plant start up, there's going to be some costs involved, new Startup. Our raw material costs are going up. I mean, inflation is quite a concern.
So with the LTA with GE Aviation, those raw materials were locked in. We couldn't have done an LTA with GE Aviation if we didn't have an LTA from our Suppliers. But most of the other customers, not LTAs, so we quote quite often. What we do is we Unfortunately, our raise our prices to take into account the raw material cost increases, That's what we do. It's not good and we know where that ends when prices keep going up and up and up.
It's not a good thing. Things like utilities are going up, supplies going up, Shipping going up, we normally have that covered as either part of our selling price or our raw material purchase price. And there's also, I would say, law speak to myself, serious concerns about the economy, what's going on, how it's being managed, inflation, Interest rates and things like that. And we don't really spend a lot of time thinking about it, but we can't deny we're still living in the world out there. We still we do what we need to do every day, but I don't think it would be proper for us to say we're immune from what goes on in the outside world.
Okay. Why don't we go to Slide 24, updating our expansion. Our budget is now $19,000,000 It was $18,000,000 last time we spoke to what happened. We started with 20.5%, I think we pulled it down to 18% on theory that business is very slow. So let's kind of hold back a couple of things, see what happens So we can make the decisions later on, but with the ramp up and everything, it's increased to $19,000,000 Spending to date about $15,000,000 I guess, do the math, about $4,000,000 to go.
The completion is basically next month. Little things will be I worked on for a while, but the completion is basically next month. We start the manufacturing trials for the major equipment, which are pictured below in the top bottom left in my corners, July of 2021, the qualification runs with for MRAS in September of 2021 is what's planned. These two items of equipment, we're not really they're huge and it's hard to give you a perspective on how big they are because Some of the stuff we don't want our competitors to see, and they're able to see our presentation So we kind of took a funny perspective on this equipment, the tape line and film line. Top right picture of our Our new offices, and we you could see the office is open.
My office is at top right of the picture. And then you see at the bottom middle, it's a nice picture because you could see that on the left is a new facility and the right is existing facility except with the new offices. And kind of toward the back between the 2 of them is that's the passageway off to the right of the existing facility, there's also the warehouse, but that's not captured in this picture. So that is The story for expansion, I want to try to wrap it up here, Slide 25. Park's reflections on its 2021 fiscal year was our finest hour.
Well, let's talk about that. Park had its share of tragedy and heartbreak during the year, The kind of heartbreak that does not go away. But at Parq, we don't quit, we don't give up, we don't back down. That's just not what we do. It's not our nature.
We keep going. We've pushed forward with our major expansion when some others slashed through capital spending. We stayed true to our principles when maybe some others didn't. We did not sell out, but maybe some others We did not lay off anybody when so many others did by the 1,000 and 1,000. Park's people are precious.
The Park family stuck together and saw through the darkest days together. At Park, we're a family, we have each other's backs. Slide 26. Park is a strange and unusual company filled with wonderful and special people. We're very fortunate when it comes to our people.
We're not like the others at Parq, we play for Chiefs. We're not fooling around, we're looking to make an impact here. So Parq's 2021 fiscal year may have been Parq's best year ever. I've been with the company since 1988. I can't speak to before then, maybe in the 50s, the early days in Woodside, Queens, maybe there are some great years in right at the beginning, way before my time.
But I can't tell you without hesitation that In my opinion, the 2021 fiscal year was the best Park's best year since 1988 when I joined the company. I'd say that without hesitation. I can't take another year where I compare that we compare, I think our best year ever. That's my opinion anyway. Yes, our finest hour.
So we will save the glass for a picture of 1 of our crews, which we love to do. The top row, That's Guadalupe and Juan. The bottom row, Jose with who's the lead, Joshua and Sarafin. Now what's interesting is, It says Parq 2nd shift solution treater and fill line crew. Wait a minute, those are 2 different things.
Well, what's going on here? This is the customer flexibility program. Each one of these 5 guys has been approved to operate both lines and that's a big deal. You don't Put somebody in one of these lines with, okay, here you go, just hire them. No, it doesn't work that way.
So CL works with customer flexibility. These guys are able to move back and forth between those 2 major lines and that was so important to us during the downturn And so important to us now, I want to try to ramp up. So that's how it works. So I think we're at the end of the presentation. Slide 27 is our thank you slide.
Operator, so we're happy to take questions to the extent that we
And our first question comes from Brad Hathaway from Fairview. Your line is now open.
Thank you very much and congrats Brian Getting through such a tough year really, really impressive. I appreciate your willingness to give us a 2022 forecast and all the commentary about kind of the ramp up that you're seeing. Given the things seem to be getting better and you kind of have previously commented on kind of prior forecast just Shifting over to the right. I was curious if you had any thoughts on kind of the those prior forecasts and also you kind of when you will feel comfortable perhaps giving us a long term
Yes, Ian. So, as we just commented, we're forecasting for the current fiscal year, it looks Kind of like the 2020 fiscal year before the calamity occurred for the world and the industry. Our Forecast maybe a little bit better, particularly EBITDA kind of right on that range for top line. I don't know how to answer that question except maybe one way to look at it is that's kind of our restarting point. Obviously, before we go out with a new long term forecast, we can't just kind of take our forecast and kind of roll it out or push it back to the right by 2 years, that really wouldn't be right.
We have to take into account everything we know now and all the updates and all the new developments and there are significant Development. So I think most of which are positive actually. When we'll be ready for that? I don't know. I don't really feel like it'll be next quarter.
But let me just say, I would hope that before the end of the year, this current year, we'll be able to roll out the forecast For more than just 1 year. There are even the 1 year forecast, as I said, there are uncertainties that we're still dealing with. It's not like kind of a stable world right now. We felt good enough that we're able to provide something to you. I don't know how to answer that second question.
I would just say, again, I hope that by the end of the year, because what's happening is we feel like we're getting a lot more useful information. And what we're doing is we're really listening to what Airbus says, what Bombardier says, what COMAC says, What Boeing says for commercial, I'm talking about and kind of not kind of tuning out all the analysts and everything and the commentators, Your statements really have not been helpful and have been kind of wrong. But it's really great like for the A320 to be in that program because Remember what everybody else says. How about the Airbus CEO? It's so helpful to be able to tie what we're doing to what Airbus says and we can do it.
We can do it with a Pretty good precision once we know what they're talking about. So I don't know that sorry, not give you a better answer, but I think that's Well, I can take it right now.
No, but anyway, it's good to see everything after a tough year moving kind of All the programs seem to be moving pretty positively, so that's great. In terms of M and A, is there anything you can kind of update on What you've seen there?
Yes. So I think last quarter we talked about a little bit and we thought that last year we We'll get some distressed sales that didn't materialize. Our advisors sold us that's because the Fed made it possible people hang on. We're pretty active in 2 areas. We're actually putting a preliminary bid in 1 company, I think later this week, we're still looking we're trying to find initiatives.
We're trying to find things that everybody and their brother and all Financial buyers are not piling on because it just drives the price up so much. But the other thing is that we are We've identified a certain product area that's very closely related to composite structures and composite materials. And we're doing some pretty good research, I would say in that area and we've actually reached out to several companies that do have operations in that area. I guess at this point, we won't Right. But it's something that'll be used by company producing composite structures in addition to the composite materials.
So we think it's really good tie in. Some of our customers have actually helped us in that regard as well. So we're optimistic. We're talking about optimistic, that's probably not Right. We would say it these days, M and A is more difficult.
But we feel better about that than just going into the auctions, let me put it that way. These are companies some are private, some are divisions or large companies are probably not going to be for sale. So we're trying to initiate the discussions and We'll see how those go. And then the other area I just want to mention is there are projects we work on, we know about the joint venture discussion In Asia, but there are other projects that we work on with some of our large customers that wouldn't be really M and A, but would involve a significant investment of capital. So I guess I would talk about those maybe three things.
We certainly haven't given up or let down all Even though we have this concern about these companies being bid up right now with, I guess, M and A inflation, I don't know, maybe it won't last, maybe that will reverse. We'll see. So obviously, we'll let you know as soon as we have something to report and We don't have anything to report by now. But I guess the message I would send is that we're still working on it. We haven't given up or just decide to take a year off or anything like that or We'll wait the valuations come back down.
Understood. And in your mind, I mean, obviously, if things Continue to improve, one would think that the M and A environment might become harder in the future unless you can find one of these deals that are kind of pushed to you or Really niche. Is there a point at which you decide that the cash on the balance sheet is Not going to be usable for some kind of investments and you consider other alternatives?
Sure. There's a point. I don't know what that point is. But yes, sure. That's a point.
So that's kind of an open question for us. I understand exactly what you're getting at least I think I do. I don't have a I can't give a date, but it's something in the back of our minds, absolutely.
No, I mean, obviously, my preference would be that you find an excellent bolt on acquisitions. So if you can do that, that would be fantastic. Well, thank you very much.
Yes, thank you. And just so you know, we feel the same way about it. Thanks for the comment. Go ahead, sorry.
No, I just was going to say thank you very much. I appreciate all your efforts to generate the results you did in a year like The pandemic year like last year is pretty incredible. So thank you very much for the effort.
Thanks for your comments.
Thank you. And our next question comes from Leonard Cooper, Private Investor. Your line is now open.
Hi, Brian. Sounds like you're busy bees. Yes. Hi, Len.
How are you doing? I haven't heard from you in a little while.
We're doing okay. We're hanging on. Okay, good. I just noticed a story Saying that we're going to go the U. S.
Is going to have a wind turbine farm. I think it will be the first authorized by the government. Are we involved in that or Can we be involved in that?
We're not. We don't want to be. Wind turbines are not a market area for us. It's actually if you look at companies that are involved, it's not really a very happy story. Those are low margin programs.
It's we're aerospace and that's pretty much it. We decided to go in aerospace. We realized Right from the start that we didn't know what tech we're doing. You don't know what you don't know. Aerospace is such a huge complex field that we felt small company.
We don't have a pen what to get involved in other areas, boats or wind turbines or skateboards or whatever, composite choose, obviously, A lot of things. We're an aerospace company. That's it. No wind turbines for us.
Okay. It's just there's a lot of aerodynamics In those
plays. Yes, you're right. And I think they're getting more sophisticated. I'm not an expert on it, but I think we're getting more sophisticated from an aerodynamic perspective as well.
Okay. Thank you very much. That was very interesting conversation. All the best.
Okay. Well, thanks for checking in, Len. Nice to hear from you. So hopefully, we'll see you soon.
Thank you. And I'm showing no further questions. I would now like to turn the call back to Brian Shore for closing remarks.
Okay. Thanks, operator. Thanks everybody for listening. I'm sorry, I said 45 minutes. I think we went past 45 minutes.
I try to rush through it, but there are always a lot of things you want to cover to help with So thanks again for listening in. Have a great day and feel free to call us. Matt and I are available anytime I want to talk. So we'll be talking fairly soon because our Q1 is actually just a couple of weeks. So I think probably early July, we will be doing our Q1 announcement.
Okay. Take care. Have a great day. Goodbye now.
This concludes today's conference call. Thank you for participating. You may now disconnect.