NEWMARKET, Ontario, Feb. 26, 2024 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS) (OTCQX:ABSSF) (the “Company” or “AirBoss”) today announced details of its new strategic transition, including a shift in reportable segments commencing with its results for the fourth quarter and year ended December 31, 2023. The Company has also provided a preview of its annual 2023 financial results along with details for the upcoming Q4 2023 results conference call.
Reportable Segments Update and Strategic Transition
Beginning with the fourth quarter and year ended December 31, 2023, AirBoss will report results under two reportable segments: (1) AirBoss Rubber Solutions (“ARS”), and (2) AirBoss Manufactured Products (“AMP”). The new Rubber Solutions segment will consist of the former rubber solutions segment and the rubber compounding operations at Acton Vale, Quebec previously included in the AirBoss Defense Group segment. The new Manufactured Products segment will consist of AirBoss Engineered Products, formerly a standalone segment, and AirBoss Defense Group, formerly a standalone segment (other than the rubber compounding operations at Acton Vale, Quebec).
AirBoss’ senior leadership team undertook an in-depth strategic review of the entire organization, which yielded a blueprint for a strategic transition related to the future growth of the Company. AirBoss’ strategic transition is reflected in these new reportable segments. This transition will consolidate all rubber compounding operations into one segment, emphasizing this segment’s ability to act as the core driver for sustainable growth and productivity. ARS will focus on innovation in custom rubber compounding, while aiming to expand market share through organic and inorganic means. The segment will strive to achieve enhanced diversification by a broadening of product breadth through technological advancements and investments in new specialty compounding assets. In addition, the Company will explore the mid-term monetization of its real estate holdings in an effort to build a state-of-the-art flagship rubber compounding facility while freeing up cash for inorganic growth.
The new AMP segment will consolidate all operations which manufacture or distribute finished products to a variety of target markets including automotive, non-automotive and defense. AMP will continue to drive its own growth strategy while in parallel the Company undertakes an in-depth strategic review of all individual product lines this segment currently manufactures and sells, in order to assess their overall alignment with the new strategic direction of AirBoss.
“Today’s announcement reflects how the leadership team intends to manage the enterprise while executing a realignment and a refocus on core competencies,” said Chris Bitsakakis, President and Co-CEO. “We have essentially combined all of our rubber compounding assets across the enterprise in order allow the natural synergies to better facilitate an accelerated growth trajectory in AirBoss’ historic core business. Similarly, we have combined AirBoss Defense Group and the former Engineered Products segments into the new AirBoss Manufactured Products segment, reflecting the finished product-focused nature of these operations and driving opportunities for additional synergies.”
“We believe this shift in strategic focus supported by these new reportable segments will help prioritize investments, drive long-term growth, and be accretive to the Company, going-forward,” added Gren Schoch, Chairman and Co-CEO. “Our goal is to transform AirBoss into a global market leader in the custom rubber compounding market and the other industries which it serves.”
The Company will include supplemental unaudited information containing 8 quarters of historical financial information (from the first quarter of 2022 through the fourth quarter of 2023) for the two new reportable segments in its upcoming annual results. The supplemental historical business segment information will not represent a restatement or reissuance of previously issued financial statements and will relate entirely to segment presentation with no effect on previously reported consolidated results.
2023 Annual Results Preview
The Company currently expects to release audited results, together with this supplemental unaudited information, on March 6th, and is providing the following anticipated annual 2023 results in order to give additional visibility to investors:
- Net Sales of US$420 to US$430 million (2022 – US$477 million)
- Adjusted EBITDA1 of US$23.0 to $29.0 million (2022 – US$45.3 million)
- Adjusted earnings per diluted share1 of US $(0.30) to $(0.20) (2022 – US$0.45)
1 See Non-IFRS and Other Financial Measures. The Company expects to incur an inventory write-down of $8.0 million and a goodwill impairment charge related to AMP’s defense operations. The results above exclude both these charges.
Going into 2024, the Company remains committed to its long-term priorities, which include growing the core Rubber Solutions segment, refocusing the range of products which Manufactured Products sells and investing in core areas of the business to support long-term growth.
Important information on risk factors related to this guidance and press release, are noted in the “AirBoss Forward Looking Information Disclaimer” later in this news release.
FOURTH QUARTER AND ANNUAL 2023 FINANCIAL RESULTS CONFERENCE CALL DETAILS:
| DATE: | Thursday, March 7, 2024 |
| TIME: | 9:00 am ET |
| DIAL-IN NUMBER: | 1-800-319-4610 or 416- 915-3239 |
| CONFERENCE ID: | 55506 |
| WEBCAST LINK: | https://www.gowebcasting.com/13160 |
Please connect approximately 10 minutes prior to the beginning of the call to ensure participation.
About AirBoss
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 top-tier 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 its AirBoss Defense operations. 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
1 The financial information in this press release is based on 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 measures 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, capital expenditures and 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 to EBITDA and Adjusted EBITDA is below.
| In thousands of US dollars | 2022 | |
| EBITDA: | ||
| Loss | (31,892 | ) |
| Finance costs | 5,738 | |
| Depreciation and amortization | 21,905 | |
| Income tax recovery | (8,520 | ) |
| EBITDA | (12,769 | ) |
| Professional fees related to AEP(1) | 1,104 | |
| Write-down of Inventory | 57,001 | |
| Adjusted EBITDA | 45,336 | |
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 operating results of the Company. A reconciliation of Profit to Adjusted profit and Adjusted earnings per share is below.
| In thousands of US dollars | 2022 | |
| Adjusted profit: | ||
| Loss | (31,892 | ) |
| Professional fees related to AEP(1) (after tax) | 844 | |
| Write-down of inventory | 43,606 | |
| Adjusted profit | 12,558 | |
| Basic weighted average number of shares outstanding | 27,071 | |
| Diluted weighted average number of shares outstanding | 28,109 | |
| Adjusted earnings per share (in US dollars): Basic | 0.46 | |
| Diluted | 0.45 | |
- In 2022, the Company negotiated improved arrangements with AEP’s key suppliers and customers to improve profitability. Professional fees related to these activities are included in General & Administrative Costs on the Statement of Profit and Loss.
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; 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 the implementation of the strategic plan discussed in this news release; 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 Interim Report 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.
Investor Contact: investor.relations@airboss.com Media Contact: media@airboss.com
