Newmarket, ON, October 31, 2022 – AirBoss of America Corp. (TSX: BOS)(OTCQX:ABSSF) (the “Company” or “AirBoss”) today released a corporate update and preview of results for the third quarter of 2022 (“Q3 2022”), including the Company’s decision to take a non-cash charge with respect to nitrile patient examination gloves held in inventory by AirBoss Defense Group (“ADG”).
Based on significant downward shifts in pricing in the nitrile glove market during 2022, the Company has determined that it is necessary to take a non-cash charge in respect of nitrile gloves held in ADG’s finished goods inventory. In addition, upon inspection, it was determined that a portion of the gloves no longer meet ADG’s safety standards, and arrangements have been made for disposal of the affected glove supply. As a result of these factors, a material portion of the gloves will be disposed of, and a corresponding non-cash, non-covenant-impacting write-down of inventory totaling US$57 million will be taken.
“We have seen pricing in the nitrile glove market drop by over 80% due to a massive influx of imported low-cost product. Given these shifts in the nitrile glove market and related considerations, we have taken the unfortunate decision to write off a material amount of the gloves we hold in inventory, despite continued pursuit of sale opportunities and a general expectation that pricing will eventually rebound and drive future sales,” expressed Gren Schoch, Chairman and CEO of AirBoss. “We have arranged for the safe, cost-effective disposal of a portion of the glove supply in question, and ongoing costs related to storage of this inventory will no longer be incurred.”
Mr. Schoch further noted, “We also want to take this opportunity to remind investors that ADG’s relationships with its customers remain very strong and that this division continues to pursue significant opportunities for its portfolio of personal protective equipment. In addition, the actions undertaken by the Engineered Products segment to address its key challenges continue to positively move forward and management is optimistic of results materializing in the near term.”
Q3 2022 Results Preview
Due to the continued challenges being experienced by the Company and the write-down noted above, the Company is providing anticipated results for Q3 2022 to provide visibility to investors. AirBoss anticipates recording the following for Q3 2022:
- Revenues in the range of US$102.0 to US$105.0 million
- Adjusted EBITDA1 in the range of US$1.0 to US$1.4 million
- Adjusted EPS1 in the range of ($0.44) to ($0.47)
Important information on risk factors related to this guidance are noted in the “AirBoss Forward Looking Information Disclaimer” later in this news release.
Q3 2022 Conference Call
The Company also reminds investors that it will release its third quarter results after market close on Tuesday November 8, 2022. The release will be followed by a conference call to discuss its financial results on Wednesday November 9, 2022 at 9:00 am ET.
Date: Wednesday, November 9, 2022
Time: 9:00 am ET
Dial-in No.: 1-800-319-4610 or 416-915-3239
Conference ID: 55506
Webcast Link: https://www.gowebcasting.com/12233
Please connect approximately 10 minutes prior to the beginning of the call to ensure participation.
Investor Contact: Chris Bitsakakis, President or Gren Schoch, CEO at 905-751-1188.
Media Contact: email@example.com
AirBoss of America is a leading and diversified developer, manufacturer and provider of innovative 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 three divisions. AirBoss Defense Group is a global leader in personal and respiratory protective equipment and technology for the defense, healthcare, medical and first responder communities. AirBoss Rubber Solutions is a top-tier North American custom rubber compounder with 500 million turn pounds of annual capacity. AirBoss Engineered Products is a supplier of innovative anti-vibration solutions to the North American automotive market and other sectors. 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.
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, 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; 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; impact of global health situations; potential product liability and warranty claims and equipment malfunction. COVID-19 could also negatively impact the Company’s operations and financial results in future periods. There is increased uncertainty associated with future operating assumptions and expectations as compared to prior periods. As such, it is not possible to estimate the impacts COVID-19 will have on the Company’s financial position or results of operations in future periods. While the direct impacts of COVID-19 are not determinable at this time, the Company has a credit facility that can provide financing up to $250,000. 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.sedar.com.
1 This release contains non-IFRS Measures, including Adjusted EBITDA and Adjusted Earnings per diluted share. Adjusted EBITDA means net earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, impairment expenses and transaction-related costs and certain other items. AirBoss’ non-IFRS measures are directly derived from the Company’s consolidated financial statements but do not have a standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers. The Company discloses these terms for use in financial measurements made by interested parties and investors to monitor the ability of the Company to generate cash from operations for debt service, to finance working capital and capital expenditures and to pay dividends. 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. Reconciliations of these measures for prior periods are presented in the Company’s Management’s Discussion & Analysis (MD&As).