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($US except where otherwise noted)

Recent Highlights

  • Increased consolidated EBITDA by 12.1% to US$6.0 million in Q3 2019, compared to Q3 2018;
  • Grew basic and diluted earnings per common share by 16.7% to US$0.07 per common share, compared with US$0.06 in Q3 2018;
  • Invested US $13.0 million during the nine-month period ended September 30, 2019, on capital expenditures related to growth initiatives and equipment upgrades across the organization, in addition to a new research and development facility at the Kitchener, Ontario plant;
  • Paid a quarterly dividend of CAD $0.07 per common share;
  • Awarded an indefinite-delivery/indefinite-quantity contract by the U.S. Department of Defense to manufacture up to 600,000 pairs of molded CBRN lightweight overboots (‘MALO”) expected to be worth up to US$26.7 million; and
  • Received approval from the Committee on Foreign Investment in the United States (“CFIUS”) to proceed with the previously announced merger between AirBoss’ defense business and Critical Solutions International, Inc. (“CSI”), which is expected to close by January 1, 2020.
Three Months ended September 30 Nine Months ended September 30
(In thousands of US dollars, except share data) 2019 2018 2019 2018
Financial results:
Net Sales 77,173 77,773 242,364 240,119
Net income 1,525 1,347 7,762 7,205
Net income per share (US$)
-Basic 0.07 0.06 0.33 0.31
-Diluted 0.07 0.06 0.33 0.31
EBITDA(2) 5,995 5,350 23,249 19,943
Net cash provided by operating activities 12,555 4,565 12,033 6,101
Dividends declared per share (CAD $) 0.07 0.07 0.21 0.21
Capital additions 5,635 1,043 13,585 3,789
Financial position: September 30, 2019 December 31, 2018
Total assets 239,928 232,528
Term loan and other debt1 68,890 62,956
Shareholders’ equity 124,760 121,483
Outstanding shares (#)*

* at November 6, 2019

23,392,442 23,392,442


The Board of Directors of the Company has approved a quarterly dividend of C$0.07 per common share, to be paid on January 15, 2020 to shareholders of record at December 31, 2019.

Consolidated Results

Consolidated net sales for the year-to-date increased by 0.9% to $242,364, compared with the same period in 2018, as higher net sales in the Rubber Solutions segment were partly offset by softness in the anti-vibration business within the Engineered Products segment. For the quarter, volume in the Rubber Solutions segment continued to grow with a 5.5% increase in pounds shipped, although consolidated net sales decreased by 0.8% to $77,173, compared with the same period in 2018, as higher net sales in the Engineered Products segment were more than offset by decreased net sales in Rubber Solutions due to the increase in tolling vs non-tolling sales. Consolidated gross profit for the quarter and year-to-date increased from the same periods in 2019, with increases at both the Rubber Solutions and Engineered Products segments for the quarter and increases at Rubber Solutions being partly offset by decreases in the Engineered Products segment year-to-date. EBITDA for the three- and nine-month periods ended September 30, 2019 increased by 12.1% and 16.6%, respectively, compared with the same periods in 2018.

“Total volumes in the Rubber Solutions business were higher in the quarter and are further supportive of the significant investments we made in capacity and capabilities in 2019,” said Chris Bitsakakis, President and Chief Operating Officer of AirBoss. “We ended the third quarter on a positive note, securing a new MALO contract from the U.S. Department of Defense and adding to the pipeline of defense mandates we can deliver against through the balance of 2019 and beyond. In combination with the receipt of CFIUS approval we are now poised to complete the ADG transaction before the end of the year. Leveraging CSI’s embedded relationships with militaries globally will best position us to act on tender opportunities for both our existing suite of products as well as new ones developed or acquired in the future.”

With $8.9 million in cash and cash equivalents, $60 million in undrawn availability under its credit facilities and a net debt to TTM EBITDA ratio of 1.8x, the Company retains good financial flexibility.

Segment Results

In the Rubber Solutions segment, net sales in the quarter decreased by 3.5% to $35,902 from the comparable period in 2018, due to decreased net sales in the track, conveyor belt and off the road (“OTR”) sectors, partly offset by increased demand in the mining and defense sectors. Year-to-date, net sales increased by 3.6% to $113,678 from the comparable period in 2018, principally due to a 7.9% increase in volume. Many of the sectors the Company serves supported the increase in sales year-to-date, in particular the mining, tolling, defense, OTR, and conveyor belt sectors. These increases year-to-date were partly offset by softness in the track and chemical sectors.

Tolling volume increased by 33.6% in the quarter and 18.3% year-to-date from the comparable periods in 2018. The increase in tolling volume for these periods was primarily in conventional tolling applications. Non-tolling volume decreased modestly by 1.8% for the quarter and increased by 4.8% year-to-date compared with the same periods in 2018.

Gross profit in the Rubber Solutions segment increased by 11.5% to $5,696 for the quarter and by 20.4% to $19,615 year-to-date, from the comparable periods in 2018. For both periods, the increases in gross profit were principally due to higher volume and improved labor efficiencies.

At Engineered Products, net sales in the quarter increased by 1.7% to $41,271, from the comparable period in 2018, due to increased net sales in the anti-vibration business which were partly offset by lower net sales in the defense business. The increased net sales in the anti-vibration business were in the bushings, grommet, boots and induction bonding product lines, partly offset by softness in the dampers and spring isolator product lines. The decreased net sales in the defense business were in the shelters, filters, and powered air-purifying respirators (“PAPRs”) product lines and were partly offset by an increase in the gloves and boots product lines. In addition, the decrease was also due to a shift of scheduled deliveries into the fourth quarter of 2019. Year-to-date, net sales decreased by 1.3% to $128,686, from the comparable period in 2018, as increased net sales in the defense business were more than offset by lower net sales in the anti-vibration business. The decreased net sales in the anti-vibration business were across a number of product lines, including dampers, spring isolators, and bushings, partly offset by increases in the grommet and induction bonding product lines. The increased net sales in the defense business were in the gloves and boots product lines, partly offset by lower demand in the shelters, filters, masks and PAPRs product lines.

Gross profit in the Engineered Products segment increased by 9.8% for the quarter, from the comparable period in 2018, due to higher net sales in the anti-vibration business, as gross profit in the defense business was broadly similar to Q3 2018. Gross profit decreased by 13.6%, year-to-date, from the comparable period in 2018, principally due to lower net sales in the anti-vibration business, which was partly offset by higher gross profit in the defense business as a result of increased net sales and a favorable product mix.


During the third quarter of 2019, AirBoss’ core Rubber Solutions segment continued to grow volumes with a 5.5% increase in pounds shipped, although net sales (in dollars) dropped slightly (3.5%) due to the increase in tolling vs non-tolling sales. The slight drop in net sales in Rubber Solutions was partially offset by a 1.7% increase in net sales in the Engineered Products segment. To support longer-term growth, AirBoss is investing in a series of key strategic initiatives across the business in 2019. Capital expenditures for 2019 are expected to fall in the range of $18 to $20 million dollars before decreasing to levels closer to depreciation in 2020. Capital expenditures through September 30, 2019, were $13.0 million.

For the Rubber Solutions segment, areas of investment include new mixing lines in Kitchener, ON and Scotland Neck, NC that, in addition to increasing annual capacity by 20 and 50 million pounds, respectively, will support production of a broader array of compounded products (white and color), as well as provide enhanced flexibility in attracting and fulfilling new business. The Company also recently acquired a new “tilt” mixer, which should support the production of increasingly specialized, higher margin compounds. In Kitchener, AirBoss has finished upgrading its office and laboratory facilities to support enhanced collaboration with customers and better reflect the Company’s focus on innovative R&D and proprietary technical solutions. In the Engineered Products segment, AirBoss is piloting new presses for the anti-vibration business that are intended to reduce cycle times and lower labor costs, which is expected to support improved margins. More broadly, the Company is also investing in developing new anti-noise, vibration and harshness products, as well as the next generation of the low-burden mask marketed by the defense business.

Within the Engineered Products segment, the defense business remains focused on fulfilling the key contracts secured in 2018 and 2019, including the recent MALO contract award from the U.S. Department of Defense. Management in the anti-vibration business is continuing to work to address key challenges directly, with the near-term focus remaining on driving margins through better cost management and improved pricing strategies. In addition, the recently strengthened sales and marketing team is working to both increase penetration with existing customers as well as target new ones, including major automakers and Tier I and II parts suppliers. Over the medium and longer-term, the team is focused on launching new products that diversify initially into opportunities adjacent to the automotive space, such as trucking, buses, construction and motorcycles/ATVs, but increasingly across a range of sectors where anti-noise, vibration and harshness solutions are required including, renewable energy, marine, rail and appliances.

In May 2019, AirBoss announced a transaction to create AirBoss Defense Group (“ADG”) through the merger of the AirBoss defense business with privately-owned Critical Solutions International. While management believes there are numerous synergies associated with transaction, most important is the creation of a strong platform with the scale, capabilities and flexibility to act on an array of growth opportunities, both organic and transactional. AirBoss’ defense business continues to identify and submit to tenders internationally, cumulatively valued at hundreds of millions of dollars. In the third quarter AirBoss received approval from the Committee on Foreign Investment in the United States to proceed with the transaction, which is expected to close by January 1, 2020.

As part of its go-forward strategy for the Company, management is focused on four core priorities:

Growing the core Rubber Solutions segment by positioning it as a specialty supplier of choice in the consolidating North American market;
Completing the ADG transaction and then leveraging the new entity’s enhanced scale and capabilities to pursue an array of growth and value-creation opportunities in the broader defense sector;
Driving improved performance from the anti-vibration business through a combination of disciplined cost containment, client relationship expansion, new product development and sector diversification; and
Targeting additional acquisition opportunities across the business with a focus on strategic fit at reasonable valuations.
AirBoss continues to generate meaningful returns to shareholders through a stable quarterly dividend while driving improved profitability and simultaneously investing in core areas of the business to expand a solid foundation that will support long-term growth.

Contact: Chris Bitsakakis, President or Gren Schoch, CEO at 905-751-1188.

AirBoss of America Corp. is a group of complementary businesses using compounding technology and engineering expertise to create value for its customers. With a capacity to process over 450 million turn pounds of rubber annually, AirBoss Rubber Solutions is one of North America’s largest custom rubber compounding companies and a leading supplier of essential calendered and extruded products for a broad range of applications. AirBoss Engineered Products is a world leader in the supply of life-saving products for the military and a leading supplier of innovative anti-vibration solutions to the North American automotive market. The Company’s shares trade on the TSX under the symbol BOS. Visit

Note (1): Term loan and other debt as at September 30, 2019, includes $8,295 of lease liabilities (see Significant Account Policies in the Company’s Q3 2019 MD&A.

Note (2): Non – IFRS Financial Measures: EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to a similar measure presented by other issuers. This measure is neither required by, nor calculated in accordance with IFRS, and therefore is considered a Non-IFRS Financial Measure. The Company discloses EBITDA, a financial measurement used by interested parties and investors to monitor the ability of an issuer to generate cash from operations for debt service, finance working capital and capital expenditures and pay dividends. It should not be considered as an alternative to, or more meaningful than net income (or any other IFRS financial measure) as an indicator of the Company’s performance. Because EBITDA excludes some, but not all, items that affect net income, the EBITDA presented by the Company may not be comparable to similarly titled measures of other companies. A reconciliation of EBITDA to net income is presented below.

Three Months ended September 30 Nine Months ended September 30
In thousands of US dollars 2019 2018 2019 2018
Net income 1,525 1,347 7,762 7,205
Finance costs 901 743 2,981 1,913
Depreciation, amortization and impairment 3,369 2,697 10,024 8,238
Income tax expense 200 563 2,482 2,587
EBITDA 5,995 5,350 23,249 19,943

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” 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; dependence on key customers; 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, 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 and potential litigation; ability to obtain financing on acceptable terms; environmental damage and non-compliance with environmental laws and regulations; potential product liability and warranty claims and equipment malfunction. 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 this 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