Park Aerospace (NYSE:PKE) reported fiscal 2027 second-quarter sales of $20.8 million, adjusted EBITDA of $5.3 million and a 34.3% gross margin, with results landing near the upper end of its prior sales outlook and exceeding its adjusted EBITDA forecast range.
Chairman and CEO Brian Shore said the company generated $20.79 million in sales, $7.14 million in gross profit and a 25.4% adjusted EBITDA margin during the quarter. Park had previously forecast quarterly sales of $19.5 million to $21 million and adjusted EBITDA of $4.3 million to $5.1 million.
Park also noted that its second-quarter tax rate was 18.6%, below its typical level due to benefits associated with stock option exercises. Shore said the tax rate would have been approximately 26.5% without those benefits, and earnings per share would have been about $0.19 rather than $0.21.
Commercial aerospace program outlook
Advanced composite materials for Park’s GE Aerospace jet-engine programs contributed $8.3 million in second-quarter sales. The company forecast GE-engine-program sales of $8 million to $8.5 million for the fiscal third quarter and reduced its full-year forecast for those programs to $32 million to $35 million.
Shore said the revised annual forecast reflected a more realistic assessment after incorporating first-half results and the third-quarter forecast, rather than a negative shift in the end markets. During the question-and-answer session, he said Park expects commercial aerospace programs to continue ramping, though manufacturers’ ability to increase production remains a key consideration.
Park supplies materials for several GE Aerospace and CFM engine programs, including the LEAP-1A engine used on Airbus A320neo-family aircraft, the LEAP-1C for COMAC’s C919, the CF34-10A for the COMAC C909, and the Passport 20 on Bombardier’s Global 8000. It is also the exclusive supplier of AFP composite materials for the fan case of the GE9X engine on Boeing’s delayed 777X aircraft.
Management highlighted Airbus’ stated goal of reaching production of 70 to 75 A320-family aircraft per month by the end of 2027. Shore said the LEAP-1A held a 66.9% share of firm A320neo-family engine orders as of June 30. He also pointed to more than 8,500 firm LEAP-1A engine orders and Airbus’ large A320neo backlog.
Looking beyond the current year, Shore described commercial aircraft as a “juggernaut” opportunity for Park, driven by A320neo production, an expected Boeing 777X certification and entry into service next year, and planned production increases for the COMAC C919. The company estimated that its commercial aircraft program opportunity could reach approximately $62.3 million in annual revenue under the production assumptions presented.
Missile systems and C2B fabric capacity
Missile-system-program sales totaled $5.7 million in the second quarter. Park supplies advanced composite ablative materials used in solid rocket motor structures for missile programs, including the PAC-3 MSE Patriot interceptor system.
Shore said missile systems represented a growing share of Park’s sales mix and that the company expects current momentum to be sustainable. He added that the company’s Newton, Kansas, operations are expected to support increasing production requirements by adding staffing, although management expects the operation to be stretched until new capacity becomes available.
Park’s relationship with ArianeGroup remains central to its PAC-3 materials business. Ariane produces proprietary Raycarb C2B fabric used in Park’s ablative composite materials. Park is the exclusive North American distributor of the fabric and is sole-source qualified for specialty ablative materials produced with Ariane’s C2B fabric for the PAC-3 MSE solid rocket motor program.
The companies are working toward a definitive agreement for a U.S.-based C2B fabric manufacturing plant. Under a July term sheet, Park committed to make $25 million in advance payments that will be applied to future purchases of C2B fabric. Shore said the payments are now expected to consist of $20 million in 2026 and $5 million in 2027, accelerating the earlier payment schedule in return for Ariane’s agreement to shorten the plant’s expected timeline by six months.
Park said all output from the planned U.S. plant would be allocated to the company for use in PAC-3 and other missile programs. The plant’s capacity, combined with Park’s allocation from Ariane’s European operations, is expected to be more than adequate to support PAC-3 MSE production at a rate of 2,000 interceptors annually, as well as other missile programs.
Tulsa expansion and financial position
The company continues to develop a planned approximately 150,000-square-foot manufacturing facility near Tulsa International Airport. The facility is expected to cost $65 million, with cash outflows of $10 million in fiscal 2027, $45 million in fiscal 2028 and $10 million in fiscal 2029. Park said the facility remains expected to be completed in 2028, with production shipments commencing in fiscal 2029.
According to management, the Tulsa plant is designed to produce Park’s full product line. It is expected to approximately double the company’s hot-melt prepreg and film-adhesive capacity and triple its solution-treating capacity, supporting commercial aerospace and missile-program demand.
Park ended the quarter with $114.75 million in cash and marketable securities and no long-term debt. Shore noted that the company expects to invest in both the Tulsa facility and the Ariane-related advance payments, while also funding working capital and startup costs. Park has paid 41 consecutive years of uninterrupted quarterly cash dividends, he said.
For the fiscal third quarter, Park forecast sales of $21 million to $22.5 million and adjusted EBITDA of $5 million to $5.8 million.
About Park Aerospace (NYSE:PKE)
Park Aerospace Corp. (NYSE:PKE) is an aerospace manufacturing company that develops and produces advanced composite materials and composite structures. Its products are used in the manufacture of aircraft and other aerospace systems, where lightweight, high-strength materials are important for performance and fuel efficiency.
The company’s offerings include carbon fiber and other composite materials, prepregs, film adhesives, honeycomb and other core materials, and fabricated composite parts.
