Park Aerospace Corp. Reports Storm Damage to Its Newton, Kansas Manufacturing Facilities
On May 22, 2024, Park Aerospace Corp. (NYSE: PKE) announced that its Newton, Kansas manufacturing facilities sustained structural damage due to a storm on May 19, 2024.
No manufacturing lines or equipment were damaged, but the roofs of all three buildings likely need replacement, and multiple specialty HVAC units were damaged or destroyed. The company is assessing the damage and working with contractors for repairs.
Temporary measures will bring the manufacturing lines back online within weeks, but permanent repairs will take months. The company expects a shift in sales from FY2025 Q1 to FY2025 Q2 but does not anticipate losing business. Further details may be provided during the FY2024 Q4 investor call.
Importantly, no employees or their families were injured.
- No manufacturing lines or equipment were damaged.
- Operations at most manufacturing lines are expected to resume within weeks.
- The company does not expect to lose any business due to the storm.
- No employees or their families were injured.
- Roofs of all three buildings likely need replacement.
- Multiple specialty HVAC units necessary for controlled environments were damaged or destroyed.
- Permanent repairs will take several months.
- Some sales will shift from FY2025 Q1 to FY2025 Q2.
- The company currently has no estimate of the repair costs.
While the storm damage to Park Aerospace Corp's Newton, Kansas facilities is significant, it is encouraging to note that the manufacturing lines and equipment have not suffered any damage. The reported need to replace roofs and specialty HVAC units raises concerns about the longevity and durability of the infrastructure. However, the company’s immediate response with temporary measures shows a proactive approach that minimizes disruption. The use of temporary HVAC units will mitigate production delays, but exact costs for permanent fixes remain unknown. This could lead to financial unpredictability for the coming quarters. Investors should keep a close watch on the company's updates to fully understand the financial impact associated with these repairs.
From a financial perspective, the critical point is the potential shift in sales from FY2025 Q1 to Q2. While the company does not expect a loss in business or sales, the delay may impact short-term cash flows and quarterly financial results. The company's assertion that there won’t be any lost sales is a positive sign, but the exact quantification of the delayed sales is crucial. Investors should monitor the upcoming FY2024 Q4 investor call for detailed insight into the financial implications. It is also worth noting that the costs associated with the repairs are yet to be determined, introducing an element of risk regarding unexpected financial outlays.
NEWTON, Kan., May 22, 2024 (GLOBE NEWSWIRE) -- Park Aerospace Corp. (NYSE-PKE) reported that, on Sunday, May 19, at approximately 8:00 pm local time, the Company’s Newton, Kansas manufacturing facilities were damaged by a strong storm which transitioned the area. None of the Company’s manufacturing lines or equipment were damaged by the storm. Although the building structures are secure, it is likely that the roofs on all three buildings in the Company’s Newton, Kansas campus will ultimately need to be replaced. Also, multiple specialty HVAC units were damaged or destroyed. These specialty HVAC units are necessary to control the temperature and humidity in certain of the manufacturing rooms and the production and R&D laboratories, which is required by certain specifications and certifications the Company is subject to. The Company is currently working with multiple contractors on site in order to fully assess the damage and the remediation options.
Although the Company is still in the process of assessing the situation, the Company believes the film and tape lines located in the recently completed factory expansion will be brought back on line this week, the film and tape lines in the original factory will be brought back on line next week and the “solution” treater lines will be returned to service the following week, at which point all manufacturing lines will have fully returned to service. The Company plans to employ certain temporary measures in order to return its manufacturing lines to full service as soon as possible, including the use of temporary HVAC equipment, but it will take the Company a number of months to permanently repair or replace all of the damaged facilities and infrastructure equipment. At this time, the Company does not have an estimate of the costs of the repairs and final remediation.
The Company does not expect to lose any business or sales as a result of the storm damage, but an unknown amount of sales will slip from the Company’s FY2025 Q1 (which ends June 2, 2024) to the Company’s FY2025 Q2. The Company may be able to provide additional information about the amount of sales which will slip from FY2025 Q1 to FY2025 Q2 during the Company’s FY2024 Q4 investor call next week.
Brian Shore, Park’s Chairman and CEO, said, “For those of you who know Park and our People, you will not be surprised to hear that our People are doing an outstanding job of dealing with this unexpected challenge. No complaining. No whining. Just sucking it up and relentlessly attacking the challenges as our People always do. That is how our People do it. Also, the most important thing I am very pleased to tell you is that none of our Park employees or their family members were injured by the storm.”
Park Aerospace Corp. develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets. Park’s advanced composite materials include film adhesives (Aeroadhere®) and lightning strike protection materials (Electroglide®). Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing applications. Park’s advanced composite materials are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (UAVs commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft. Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications. As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low volume tooling for the aerospace industry. Target markets for Park’s composite parts and structures (which include Park’s proprietary composite SigmaStrut™ and AlphaStrut™ product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft. Park’s objective is to do what others are either unwilling or unable to do. When nobody else wants to do it because it is too difficult, too small or too annoying, sign us up.
Additional corporate information is available on the Company’s website at www.parkaerospace.com.
| Contact: Donna D’Amico-Annitto | 486 North Oliver Road, Bldg. Z |
| Newton, Kansas 67114 | |
| (316) 283-6500 |
FAQ
What damage did Park Aerospace Corp.'s Newton, Kansas facilities sustain?
When will Park Aerospace Corp. resume full manufacturing operations after the storm damage?
Will Park Aerospace Corp. lose any business due to the storm damage?
Were any employees injured in the storm at Park Aerospace Corp.'s facilities?
What is the estimated cost of the damage to Park Aerospace Corp.'s facilities?
