Good morning. My name is Shannon and I'm your conference operator today. I would like to welcome everyone to the Park Aerospace Corp. First Quarter Fiscal Year 2021 Earnings Release Conference Call and Investor Presentation. All lines have been muted to prevent background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I will now turn the call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin.

Thank you, operator. Welcome, everyone. This is Brian. I’m glad to have you all join us for our first quarter conference call. As usual, I have our CFO, Matt Farabaugh, with me. We announced our earnings this morning, and if you haven't already accessed the presentation, you can find the instructions in the earnings release on our website under Shareholders and presentations. It will help make the call more meaningful. There's supplemental information attached, along with financial details in Appendix 1 of the presentation. For those who participated in our fourth quarter conference call on May 14, we discussed the virus, the economic crisis, and their impacts on the aerospace industry and Park, but we won't revisit all of that today. Going over everything again would take too long, so we’ll do a brief review and then answer questions. Let’s get started. I'll be referring to the presentation as we go along, starting with Slide 2, which contains our forward-looking disclaimer information. If you have any questions about that, please feel free to reach out. Moving on to Slide 3, our quarterly results are here. You can see a history of the quarters for the last two fiscal years, with Q1 highlighted. Our revenue is at $12.213 million, which falls within our estimate range of $12 million to $12.5 million. Our EBITDA estimate was around $2 million, and we came in at $2.364 million, which aligns with our earlier discussions about the uncertainties in our business and the aerospace industry. Let’s proceed to Slide 4, where we highlight our top five customers for Q1. These are the same customers we've had in the past. AAE Aerospace continues to be significant, especially relating to the Patriot missile program. We received confirmation to remain operational from the Department of Defense, which suggests a consistent demand for our products, especially in military applications. Our revenue from military programs has actually increased despite the challenging market conditions, which is a testament to our efforts. Going to Slide 5, we updated our pie chart to clarify our focus areas. The military sector's share of our revenue increased significantly in Q1 compared to Q4 due to a decline in commercial and business aviation. Our military segment grew in dollar terms as well, not just percentage-wise. On Slide 6, we revisit the factors affecting recovery across various aerospace industry segments. Our military business remains stable. Regarding the commercial aircraft sector, we see some positive trends, but there are concerns over potential renewed shutdowns due to state-level quarantine measures. The situation is complicated, and we need to keep monitoring how this impacts travel and business aviation. Slide 7 focuses on the business aircraft sector. Recent conversations with industry executives indicate that smaller aircraft sales are recovering more quickly than those of larger jets. This contrasts with the traditional demand patterns we’ve observed previously. Social distancing's impact emphasizes the preference for business aviation, and we’ll continue to watch how that develops. Now moving to Slide 8, we’ll discuss GE Aviation. We’ve seen production cuts for several key programs, and forecasts for the A320 family have become complex, with various projections emerging. The Bombardier Global 7500 remains uncertain, and discussions continue regarding the 747-8 with steady production rates despite uncertainties. Slide 9 presents challenges concerning the 777X program. Funding issues have led us to adopt a more pessimistic outlook regarding this project. However, we’ve coordinated with MRAS to keep production at baseline levels to ensure we’re prepared for ramping up when necessary. On Slide 10, we discuss the recovery trajectory for commercial aviation. Our expectation remains that single-aisle aircraft will recover faster than wide-body jets, aligning with evolving travel demands. Slide 11 details our strategy moving forward. We are committed to strengthening our position in commercial aerospace and pursuing opportunities in niche military markets. On Slide 12, regarding our financial forecast, we’ve decided to withdraw long-term estimates due to ongoing uncertainties within the industry. Our Q1 results indicate a sales outlook for Q2 around $9 million, with similar numbers expected for Q3 and Q4, dependent on market conditions. In terms of our operational updates on Slide 13, we’re pleased to report that our offices are open, and we’re dedicated to maintaining our workforce without layoffs, focusing on developing our team despite the challenges. Finally, Slide 14 outlines a few significant opportunities for Park, emphasizing that while these projects are not guaranteed, we’re actively engaging with potential ventures that could yield substantial benefits. Thank you for your attention during this lengthy presentation. Operator, we’re ready for questions.

We have a question from Nick with NR Management. Your line is open.

Just had a question on the dividend policy. Is your intention to keep paying the $0.10 quarterly dividend? I know this is hard to forecast, but at what level do you think you'd need to be in a situation where you would burn cash rather than generate cash?

At this point, we're not thinking of changing our regular dividend. We discussed that last quarter. It’s something we're evaluating, but our position is to continue the regular dividend. Based on our forecasts, we probably will cover the dividend this year, although we might have limited positive cash flow to cover it. Nevertheless, we feel comfortable continuing the dividend. That’s our current perspective; it’s not a guarantee. Things could change, so does that answer your question, Nick, or is there anything else I can help you with?

No, that’s clear. One other thing—I’m looking at share repurchase as an option. I do believe cash is a good asset to have, especially in troubled times. Are you seeing potential acquisition opportunities? Is anything looking more appealing recently? If the stock were at $6 or $5, might that prompt share repurchase considerations?

Let's take those questions in reverse. Yes, I mean, the lower the stock price goes, the more attractive share repurchase becomes. Regarding acquisition possibilities, the advice we’re getting from bankers is to wait a couple of months, maybe until fall—around September or October. Some opportunities might materialize then. We’re somewhat frustrated with acquisitions recently; our cash is available, but valuations have not looked right to us. We anticipated this based on past discussions. These aren’t companies that cure cancer; they merely seem valuable, but we’ve been cautious about entering high multiple deals. What we seek are acquisitions that fit neatly into our operations—ones adding capabilities without leading us into competitors' territory. We’ve been looking constantly but unable to find a suitable match. As we wait, we remain optimistic that preferable opportunities will arise. We were informed by bankers that fall might bring some measurable activity. The landscape is changing; some businesses facing financial distress may seek alternatives. We’re prepared to approach valuable assets with interest. So Nick, does that address your question?

Thank you. Our next question comes from Chris Hillary with Roubaix Capital. Your line is open.

With all the disruption in the industry, do you see opportunities to bid on new business, or is everyone more focused on just managing their existing commitments as they recover?

It's a mixed situation, but unfortunately, many aerospace companies appear defensive, operating in survival mode, which can hinder progress. However, we continuously reach out to customers seeking opportunities and support. Military funding still seems robust, creating good prospects there. Of course, it can be frustrating. Many customers convey they’re stuck without available cash and can only handle urgent needs. But we remain persistent; we won’t back down. We keep looking for ways to help and to connect opportunities. There is a mix present; we’re moving toward military sectors where funding remains. Nonetheless, I caution that challenges exist; know that we're proactive and relentlessly pursuing opportunities.

Thank you. I’m showing no further questions at this time. I'd like to turn the call back over to Brian Shore for any closing remarks.

Thank you, operator, and thank you everybody for listening during the summer, when you probably have other things you might prefer to be doing. Even though the world continues to be a challenging place, I want to wish you a good summer. Hopefully you'll all get away a bit, enjoy some R&R, and we’ll talk again at least in terms of a quarterly call in a couple of months. In the meantime, feel free to reach out if you have any questions. Take care and have a great day. Goodbye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.