AirBoss Reports 3rd Quarter 2024 Results
AirBoss of America reported Q3 2024 financial results showing consolidated net sales decreased by 5.9% to $96,204 compared to Q3 2023. The company experienced a net loss of $3,279 in Q3 2024, with Adjusted EBITDA decreasing by 11.4%. Notable developments include commencing shipments under a $45M Bandolier contract for a NATO partner and securing an increased HHS contract worth $69.3M for protective isolation gowns. The company faced challenges from ongoing industrial economic slowdown in North America, with decreased volumes across most sectors in Rubber Solutions and continued softness in Manufactured Products segment.
AirBoss of America ha riportato i risultati finanziari del terzo trimestre 2024, mostrando che le vendite nette consolidate sono diminuite del 5,9% a $96,204 rispetto al terzo trimestre 2023. L'azienda ha registrato una perdita netta di $3,279 nel terzo trimestre 2024, con un EBITDA rettificato in calo dell'11,4%. Sviluppi notevoli includono l'inizio delle spedizioni sotto un contratto da $45 milioni per un partner NATO e l'ottenimento di un contratto HHS aumentato del valore di $69,3 milioni per camici protettivi. L'azienda ha affrontato sfide a causa del prolungato rallentamento economico industriale in Nord America, con volumi in diminuzione in gran parte dei settori delle Soluzioni in gomma e una continua debolezza nel segmento dei Prodotti manifatturati.
AirBoss of America reportó los resultados financieros del tercer trimestre de 2024, mostrando que las ventas netas consolidadas disminuyeron un 5,9% a $96,204 en comparación con el tercer trimestre de 2023. La compañía experimentó una pérdida neta de $3,279 en el tercer trimestre de 2024, con un EBITDA ajustado en disminución del 11,4%. Los desarrollos notables incluyen el inicio de envíos bajo un contrato de $45 millones para un socio de la OTAN y la obtención de un contrato de HHS aumentado por un valor de $69,3 millones para batas de aislamiento protectoras. La compañía enfrentó desafíos debido a la continua desaceleración económica industrial en América del Norte, con volúmenes disminuyendo en la mayoría de los sectores de Soluciones de caucho y una suavidad continua en el segmento de Productos manufacturados.
AirBoss of America는 2024년 3분기 재무 결과를 보고하며, 2023년 3분기와 비교해 통합 순매출이 5.9% 감소한 $96,204를 기록했습니다. 이 회사는 2024년 3분기에 $3,279의 순손실을 경험했으며, 조정 EBITDA는 11.4% 감소했습니다. 주요 개발 사항으로는 NATO 파트너를 위한 $4500만 밴도리어 계약에 따라 선적을 시작했으며, 보호 격리 가운을 위한 값 $6930만 증가된 HHS 계약을 확보했습니다. 이 회사는 북미의 지속적인 산업 경제 둔화로 인해 고무 솔루션 부문의 대부분과 제조 제품 부문에서 물량 감소라는 도전에 직면했습니다.
AirBoss of America a publié les résultats financiers du troisième trimestre 2024, montrant que les ventes nettes consolidées ont diminué de 5,9 % à 96 204 $ par rapport au troisième trimestre 2023. L'entreprise a enregistré une perte nette de 3 279 $ au troisième trimestre 2024, avec un EBITDA ajusté en baisse de 11,4 %. Parmi les développements notables, on note le début des expéditions dans le cadre d'un contrat de 45 millions de dollars pour un partenaire de l'OTAN et l'obtention d'un contrat HHS accru d'une valeur de 69,3 millions de dollars pour des vêtements d'isolement protecteurs. L'entreprise a été confrontée à des défis en raison du ralentissement économique industriel continu en Amérique du Nord, avec une diminution des volumes dans la plupart des secteurs des Solutions en caoutchouc et une faiblesse persistante dans le segment des Produits manufacturés.
AirBoss of America hat die finanziellen Ergebnisse für das dritte Quartal 2024 veröffentlicht, wonach die konsolidierten Nettoumsätze im Vergleich zum dritten Quartal 2023 um 5,9% auf $96,204 gesunken sind. Das Unternehmen verzeichnete im dritten Quartal 2024 einen Nett verlust von $3,279, während das bereinigte EBITDA um 11,4% zurückging. Nennenswerte Entwicklungen umfassen den Beginn der Lieferungen im Rahmen eines $45 Millionen Vertrages mit einem NATO-Partner sowie die Sicherung eines erhöhten HHS-Vertrages im Wert von $69,3 Millionen für schützende Isolationsanzüge. Das Unternehmen sah sich aufgrund der anhaltenden industriellen wirtschaftlichen Verlangsamung in Nordamerika Herausforderungen gegenüber, da die Volumina in den meisten Sektoren der Gummilösungen zurückgingen und es in der Herstellungsprodukt-Sparte weiterhin zu einer Schwäche kam.
- Secured increased HHS contract from $59M to $69.3M for protective isolation gowns
- Commenced shipments under $45M Bandolier contract with NATO partner
- Gross profit margin improved to 16.7% in Q3 2024 from 13.5% in Q3 2023
- Maintained $150 million credit facility
- Net loss of $3,279 in Q3 2024
- Net sales decreased 5.9% to $96,204 in Q3 2024
- Adjusted EBITDA decreased by 11.4% compared to Q3 2023
- Net debt to TTM Adjusted EBITDA ratio increased to 4.67x from 3.30x
- Volume decreased by 17.5% in Rubber Solutions segment
- Tolling volume down 74.3% in Q3 2024
NEWMARKET, Ontario, Nov. 06, 2024 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS) (OTCQX: ABSSF) (the “Company” or “AirBoss”) today announced its third quarter 2024 results. The Company will host a conference call and webcast to discuss the results on November 7th at 9:00 a.m. (ET), the details of which are outlined below. All dollar amounts are shown in thousands of United States dollars ("US $" or "$"), except per share amounts, unless otherwise noted.
Recent Highlights
- Commenced shipments in the third quarter of 2024 ("Q3 2024") under AirBoss Manufactured Products' ("AMP") defense business’ recently announced contract, valued at up to
$45 million , to provide its Bandolier multipurpose energetic system to a NATO partner nation; - AMP's defense business was awarded a contract worth up to
$84 million by the U.S. Department of Health and Human Services ("HHS") for the supply of protective isolation gowns. HHS subsequently increased the funded portion of this award from$59M to$69.3M ; and - Declared a quarterly dividend of C
$0.03 5 per common share.
"The isolation gown award from HHS and the commencement of shipments under the previously announced Bandolier contract are both very encouraging signs for AMP's defense business. We believe that the increase in new contract awards and solicitations in the last few quarters point to a recovery from the ongoing softness experienced by the Company in the quarter and will have a positive impact for our defense products business, in the remainder of 2024 and into 2025 and beyond," said Chris Bitsakakis, President and Co-CEO of AirBoss. "The Company continued to feel the impact of the ongoing industrial economic slowdown occurring in North America during the quarter, and we remain focused on operational execution and cost management to mitigate the effect of these challenges. We also continued to focus on our strategy to broaden and grow ARS while refocusing on core product lines at AMP."
"We continue to focus on our strategic transition, which we believe will help prioritize investments, growth and drive long-term shareholder value," added Gren Schoch, Chairman and Co-CEO of AirBoss. “Our priorities remain growing the core Rubber Solutions segment, a renewed focus on core competencies in the Manufactured Products segment and a focus on adding new compounds and products, technical capabilities, and geographic reach into selected North American and international markets. We remain committed to our goal of growing AirBoss as a global market leader in the custom rubber compounding market and the industries which we serve."
| In thousands of US dollars, except share data | Three-months ended September 30 | Nine-months ended September 30 | |||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | |||||
| Financial results: | |||||||||
| Net sales | 96,204 | 102,195 | 295,061 | 333,329 | |||||
| Profit (loss) | (3,279 | ) | (4,633 | ) | (17,774 | ) | (5,791 | ) | |
| Adjusted Profit1 | (3,279 | ) | (2,592 | ) | (10,923 | ) | (3,634 | ) | |
| Earnings (loss) per share (US$) | |||||||||
| – Basic | (0.12 | ) | (0.17 | ) | (0.66 | ) | (0.21 | ) | |
| – Diluted | (0.12 | ) | (0.17 | ) | (0.66 | ) | (0.21 | ) | |
| Adjusted earnings per share1 (US$) | |||||||||
| – Basic | (0.12 | ) | (0.10 | ) | (0.40 | ) | (0.13 | ) | |
| – Diluted | (0.12 | ) | (0.10 | ) | (0.40 | ) | (0.13 | ) | |
| EBITDA1 | 6,420 | 4,490 | 9,958 | 19,825 | |||||
| Adjusted EBITDA1 | 6,420 | 7,248 | 16,809 | 22,735 | |||||
| Net cash provided by (used in) operating activities | (1,071 | ) | 8,727 | 4,485 | 31,626 | ||||
| Free cash flow1 | (2,897 | ) | 6,633 | (3,001 | ) | 26,354 | |||
| Dividends declared per share (CAD$) | 0.035 | 0.100 | 0.140 | 0.300 | |||||
| Capital additions | 1,889 | 2,214 | 9,660 | 5,729 | |||||
| Financial position: | September 30, 2024 | December 31, 2023 | |||||||
| Total assets | 327,974 | 356,656 | |||||||
| Debt2 | 123,061 | 131,092 | |||||||
| Net Debt1 | 97,227 | 88,213 | |||||||
| Shareholders' equity | 129,022 | 148,857 | |||||||
| Outstanding shares* | 27,130,556 | 27,130,556 | |||||||
| *27,130,556 at November 6, 2024 | |||||||||
| 1 See Non-IFRS and Other Financial Measures. | |||||||||
| 2 Debt as at September 30, 2024 and December 31, 2023 included lease liabilities of | |||||||||
Financial Results
Consolidated net sales for Q3 2024 decreased by
Consolidated gross profit for Q3 2024 increased by
Adjusted EBITDA for Q3 2024 decreased by
Financial Position
The Company retains a
Dividend
The Board of Directors of the Company has approved a quarterly dividend of C
Segment Results
In the Rubber Solutions segment, net sales for Q3 2024 decreased by
At Manufactured Products, net sales for Q3 2024 decreased by
Overview
AirBoss continued to focus on operational execution and managing working capital in each of its segments during Q3 2024, despite ongoing economic headwinds that impacted each segment. The Company also continued its risk mitigation plans in response to these economic challenges, managing costs while focusing on continuous improvements to help offset some of the pronounced softness experienced in both AirBoss Rubber Solutions ("ARS") and in the rubber molded products business within AMP. Management expects volume recovery to commence in early 2025, subject to ongoing challenges related to inflationary pressure and the global geopolitical climate, as well as successful conversion of key opportunities.
Although ARS had a strong quarter in terms of margin expansion, relative to the third quarter of 2023 ("Q3 2023"), the segment experienced additional softness compared to the second quarter of 2024 (“Q2 2024") primarily driven by volume reductions across most sectors and saw reduced volumes compared to Q3 2023. Despite strong performance during the earlier part of 2024, there was pronounced softness carried over from Q2 2024 as sales were impacted by customers focused on reducing inventory levels. The segment remains committed to executing on its strategy to deliver strong results with specialized products, expanded production of a broader array of compounds (white and colour), and enhanced flexibility in attracting and fulfilling new business through identified synergies and margin expansion. As a segment, ARS continued to invest in research and development to support enhanced collaboration with customers.
AMP experienced continued softness in Q3 2024 in the rubber molded products business with some progress generated in the defense business. The rubber molded products operations were impacted by continued volume softness related to the original equipment manufacturers (OEMs) shuttering production to rebalance vehicle inventory levels which has been ongoing throughout 2024. The business continued its focus on managing costs and a commitment to drive efficiencies and best-in-class automation, as well as diversification of its product lines into adjacent sectors. The defense business experienced some positive traction during Q3 2024 which is expected to continue into next year, supported by the commencement of deliveries on some previously announced contracts and additional overhead reductions carried out earlier this year to help mitigate volume softness. Management also continued its focus on operational improvements during the quarter and continued to work with its key customers with a goal of leveraging opportunities aligned with its growth initiatives.
The Company’s long-term priorities consist of the following:
- Growing the core Rubber Solutions segment by emphasizing rubber compounding as the core driver for sustainable growth and productivity, focusing on innovation in custom rubber compounding while aiming to expand market share through organic and inorganic means, while striving to achieve enhanced diversification by a broadening of product breadth through technological advancements and investments in specialty compound niches;
- Manufactured Products' growth strategy will be focused on diversifying and expanding its range of rubber molded products while simultaneously narrowing the range of defense products through a renewed focus on core competencies; and
- Executing the strategic review of all product lines currently manufactured and sold by the Company in its Manufactured Products segment while targeting additional acquisition opportunities with a focus on adding new compounds and products, technical capabilities, and geographic reach into selected North American and international markets.
AirBoss continues to focus on these long-term priorities while investing in core areas of the business to expand a solid foundation that will support long-term growth.
Conference Call Details and Investor Presentation
A conference call to discuss the quarterly results is scheduled for 9:00 a.m. ET on Thursday, November 7, 2024. Please go to https://www.gowebcasting.com/13695 or dial in to the following numbers: 1-800-898-3989 or 416-406-0743, access code 3575261#. Please connect approximately 10 minutes prior to the call to ensure participation. A replay of the conference call as well as the Company’s updated investor presentation will also be made available at: https://airboss.com/investor-media-center.
AirBoss of America Corp.
AirBoss of America is a diversified developer, manufacturer and provider of survivability solutions, advanced custom rubber compounds and finished rubber products that are designed to outperform in the most challenging environments. Founded in 1989, the company operates through two divisions. AirBoss Rubber Solutions is a North American custom rubber compounder with 500 million turn pounds of annual capacity. AirBoss Manufactured Products is a supplier of anti-vibration and rubber molded solutions to the North American automotive market and other sectors, and also a global supplier of personal and respiratory protective equipment and technology for the defense, healthcare, medical and first responder communities, through AirBoss Defense Group. The Company’s shares trade on the TSX under the symbol BOS and on the OTCQX under the symbol ABSSF. Visit www.airboss.com for more information.
Non–IFRS and Other Financial Measures: This earnings release is based on consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and Non-IFRS Financial Measures. Management believes that these measures provide useful information to investors in measuring the financial performance of the Company. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. These terms are not a measure of performance under IFRS and should not be considered in isolation or as a substitute for net income under IFRS.
EBITDA and Adjusted EBITDA are non-IFRS measures used to measure the Company's ability to generate cash from operations for debt service, to finance working capital and capital expenditures, potential acquisitions and to pay dividends. EBITDA is defined as earnings before income taxes, finance costs, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA excluding impairment costs, acquisition costs, and non-recurring costs. A reconciliation of profit (loss) to EBITDA and Adjusted EBITDA is below.
| Three-months ended September 30 | Nine-months ended September 30 | |||||||
| (unaudited) | (unaudited) | |||||||
| In thousands of US dollars | 2024 | 2023 | 2024 | 2023 | ||||
| EBITDA: | ||||||||
| Profit (loss) | (3,279 | ) | (4,633 | ) | (17,774 | ) | (5,791 | ) |
| Finance costs | 3,767 | 2,637 | 9,619 | 7,979 | ||||
| Depreciation and amortization | 5,180 | 5,645 | 15,824 | 16,916 | ||||
| Income tax expense (recovery) | 752 | 841 | 2,289 | 721 | ||||
| EBITDA | 6,420 | 4,490 | 9,958 | 19,825 | ||||
| Professional fees related to AEP negotiations | — | — | — | 152 | ||||
| Write-down of inventory | — | — | 6,049 | — | ||||
| Restructuring costs | — | 2,758 | 802 | 2,758 | ||||
| Adjusted EBITDA | 6,420 | 7,248 | 16,809 | 22,735 | ||||
In the second quarter of 2024, the Company recorded a
In 2023 and the second quarter of 2024, the Company completed a series of staff reductions. Costs related to this restructuring activity are included in Other expenses on the Statement of Profit and Loss.
In late 2022, the Company negotiated improved arrangements with AMP's rubber molded products business' key suppliers and customers to improve profitability. Professional fees related to these activities are included in General and administrative expenses on the Statement of Profit and Loss.
Adjusted profit is a non-IFRS measure defined as profit before impairment costs, acquisition costs and non-recurring costs. This measure and Adjusted earnings per share are used to evaluate the operating results of the Company. A reconciliation of Profit to Adjusted profit and Adjusted earnings per share is below.
| Three-months ended September 30 | Nine-months ended September 30 | |||||||
| (unaudited) | (unaudited) | |||||||
| In thousands of US dollars | 2024 | 2023 | 2024 | 2023 | ||||
| Adjusted profit: | ||||||||
| Profit (loss) | (3,279 | ) | (4,633 | ) | (17,774 | ) | (5,791 | ) |
| Professional fees related to AEP negotiations (after tax) | — | — | — | 116 | ||||
| Write-down of inventory (after tax) | — | — | 6,049 | — | ||||
| Restructuring costs (after tax) | — | 2,041 | 802 | 2,041 | ||||
| Adjusted profit | (3,279 | ) | (2,592 | ) | (10,923 | ) | (3,634 | ) |
| Basic weighted average number of shares outstanding | 27,131 | 27,131 | 27,131 | 27,118 | ||||
| Diluted weighted average number of shares outstanding | 27,131 | 27,131 | 27,131 | 27,118 | ||||
| Adjusted earnings per share (in US dollars): | ||||||||
| Basic | (0.12 | ) | (0.10 | ) | (0.40 | ) | (0.13 | ) |
| Diluted | (0.12 | ) | (0.10 | ) | (0.40 | ) | (0.13 | ) |
Net Debt measures the financial indebtedness of the Company assuming that all cash on hand is used to repay a portion of the outstanding debt. A reconciliation of loans and borrowings to Net Debt is below.
| September 30, 2024 | December 31, 2023 | |||
| In thousands of US dollars | (unaudited) | |||
| Net debt: | ||||
| Loans and borrowings - current | 2,570 | 2,437 | ||
| Loans and borrowings - non-current | 120,491 | 128,655 | ||
| Leases included in loans and borrowings | (12,560 | ) | (13,890 | ) |
| Cash and cash equivalents | (13,274 | ) | (28,989 | ) |
| Net debt | 97,227 | 88,213 | ||
Free cash flow is a non-IFRS measure used to evaluate cash flow after investing in the maintenance or expansion of the Company's business. It is defined as cash provided by operating activities, less cash expenditures on long-term assets. A reconciliation of cash from operating activities to free cash flow is below.
| Three-months ended September 30 | Nine-months ended September 30 | |||||||
| (unaudited) | (unaudited) | |||||||
| In thousands of US dollars | 2024 | 2023 | 2024 | 2023 | ||||
| Free cash flow: | ||||||||
| Net cash provided by (used in) operating activities | (1,071 | ) | 8,727 | 4,485 | 31,626 | |||
| Acquisition of property, plant and equipment | (1,565 | ) | (1,452 | ) | (6,825 | ) | (4,054 | ) |
| Acquisition of intangible assets | (266 | ) | (651 | ) | (675 | ) | (1,227 | ) |
| Proceeds from disposition | 5 | 9 | 14 | 9 | ||||
| Free cash flow | (2,897 | ) | 6,633 | (3,001 | ) | 26,354 | ||
| Basic weighted average number of shares outstanding | 27,131 | 27,131 | 27,131 | 27,118 | ||||
| Diluted weighted average number of shares outstanding | 27,131 | 27,287 | 27,131 | 27,528 | ||||
| Free cash flow per share (in US dollars): | ||||||||
| Basic | (0.11 | ) | 0.24 | (0.11 | ) | 0.97 | ||
| Diluted | (0.11 | ) | 0.24 | (0.11 | ) | 0.96 | ||
AIRBOSS FORWARD-LOOKING INFORMATION DISCLAIMER
Certain statements contained or incorporated by reference herein, including those that express management’s expectations or estimates of future developments or AirBoss’ future performance, constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable securities laws, and can generally be identified by words such as “will”, “may”, “could”, “expects”, “believes”, “anticipates”, “forecasts”, “plans”, “intends”, “should” or similar expressions. These statements are not historical facts but instead represent management’s expectations, estimates and projections regarding future events and performance.
Statements containing forward-looking information are necessarily based upon a number of opinions, estimates and assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies. AirBoss cautions that such forward-looking information involves known and unknown contingencies, uncertainties and other risks that may cause AirBoss’ actual financial results, performance or achievements to be materially different from its estimated future results, performance or achievements expressed or implied by the forward-looking information. Numerous factors could cause actual results to differ materially from those in the forward-looking information, including without limitation: impact of general economic conditions, notably including its impact on demand for rubber solutions and products; dependence on key customers; global defense budgets, notably in the Company’s target markets, and success of the Company in obtaining new or extended defense contracts; cyclical trends in the tire and automotive, construction, mining and retail industries; sufficient availability of raw materials at economical costs; weather conditions affecting raw materials, production and sales; global political uncertainty; AirBoss’ ability to maintain existing customers or develop new customers in light of increased competition; AirBoss’ ability to successfully integrate acquisitions of other businesses and/or companies or to realize on the anticipated benefits thereof; AirBoss’ ability to successfully develop and execute effective business strategies including, without limitation, the recently announced strategic transition; changes in accounting policies and methods, including uncertainties associated with critical accounting assumptions and estimates; changes in the value of the Canadian dollar relative to the US dollar; changes in tax laws; current and future litigation; ability to obtain financing on acceptable terms and ability to satisfy the covenants set forth in such financing arrangements; environmental damage and non-compliance with environmental laws and regulations; impact of global health situations; potential product liability and warranty claims and equipment malfunction. There is increased uncertainty associated with future operating assumptions and expectations as compared to prior periods. This list is not exhaustive of the factors that may affect any of AirBoss’ forward-looking information.
All of the forward-looking information in this press release is expressly qualified by these cautionary statements. Investors are cautioned not to put undue reliance on forward-looking information. All subsequent written and oral forward-looking information attributable to AirBoss or persons acting on its behalf are expressly qualified in their entirety by this notice. Forward-looking information contained herein is made as of the date of this press release and, whether as a result of new information, future events or otherwise, AirBoss disclaims any intent or obligation to update publicly the forward-looking information except as required by applicable laws. Risks and uncertainties about AirBoss’ business are more fully discussed under the heading “Risk Factors” in our most recent Annual Information Form and are otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR+ at www.sedarplus.com.
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