NEWMARKET, Ontario, Aug. 07, 2025 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS) (OTCQX: ABSSF) (the "Company" or "AirBoss") today announced its second quarter 2025 results. The Company will host a conference call and webcast to discuss the results on August 8th 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
- Adjusted EBITDA1 in the second quarter of 2025 ("Q2 2025") increased by $4.1 million to $10.2 million compared to $6.1 million in the second quarter of 2024 ("Q2 2024") and profit increased by $11.8 million to $2.3 million;
- Cash provided by operating activities increased by $1.8 million to $12.9 million in Q2 2025 compared to $11.1 million in Q2 2024;
- Reduced borrowings under our revolving credit facility by $15.2 million in Q2 2025, for a Net Debt to Adjusted EBITDA ratio1 of 2.90x (4.51x at December 31, 2024);
- AirBoss Manufactured Products' rubber molded products business secured new production awards from original equipment manufacturers ("OEM") and Tier 1 manufacturers which are expected to generate up to $80.0 million in sales over the next five years; and
- Declared a quarterly dividend of C$0.035 per common share.
"AirBoss Manufactured Products' rubber molded products business has experienced positive traction through the first half of 2025, securing a number of new production awards. In addition to these new awards, this business has also seen a significant increase in requests for quotes this year, which we believe to be related to the evolution of on-shoring strategies, as companies consider moving production to the United States. We are also encouraged by recent announcements of increased defense spending by NATO countries, which we believe could generate increased opportunities for AMP's defense business," said Chris Bitsakakis, President and Co-CEO of AirBoss. "Despite these positive indications, the Company continued to feel the impact of ongoing economic and geopolitical challenges, including varying degrees of market softness, tariffs, inflationary pressure and the potential for further escalating and retaliatory tariffs. As these challenges evolve, the Company remains focused on operational execution and cost management to mitigate the adverse effects related to this environment."
"AirBoss remains committed to our strategy to broaden and grow our AirBoss Rubber Solutions segment with a focus on adding new compounds and products, technical capabilities and geographic reach and a renewed emphasis on core competencies in our AirBoss Manufactured Products segment," added Gren Schoch, Chairman and Co-CEO of AirBoss. "Although the global economic situation remains uncertain and precarious, we are optimistic that our businesses are strategically located and well-positioned to respond to opportunities and address challenges which may present themselves. 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 June 30 | Six-months ended June 30 | ||
| (unaudited) | 2025 | 2024 | 2025 | 2024 |
| Financial results: | ||||
| Net sales | 98,637 | 95,367 | 203,746 | 198,857 |
| Profit (loss) | 2,265 | (9,568) | 1,857 | (14,495) |
| Adjusted Profit1 | 2,265 | (2,717) | 1,857 | (7,644) |
| Earnings (loss) per share (US$) | ||||
| - Basic | 0.08 | (0.35) | 0.07 | (0.53) |
| - Diluted | 0.08 | (0.35) | 0.07 | (0.53) |
| Adjusted earnings per share1 (US$) | ||||
| - Basic | 0.08 | (0.10) | 0.07 | (0.28) |
| - Diluted | 0.08 | (0.10) | 0.07 | (0.28) |
| EBITDA1 | 10,242 | (779) | 18,274 | 3,538 |
| Adjusted EBITDA1 | 10,242 | 6,072 | 18,274 | 10,389 |
| Net cash provided by operating activities | 12,925 | 11,123 | 19,374 | 5,556 |
| Free cash flow1 | 11,154 | 7,274 | 15,538 | (104) |
| Dividends declared per share (CAD$) | 0.035 | 0.035 | 0.070 | 0.105 |
| Capital expenditures | 1,771 | 3,854 | 3,836 | 5,669 |
| Financial position: | June 30, 2025 | December 31, 2024 | ||
| Total assets | 311,785 | 309,528 | ||
| Debt2 | 102,705 | 117,390 | ||
| Net Debt1 | 86,297 | 98,888 | ||
| Shareholders' equity | 126,971 | 126,010 | ||
| Outstanding shares* | 27,149,224 | 27,130,556 | ||
| *27,149,224 at August 7, 2025 | ||||
1 See Non-IFRS and Other Financial Measures.
2 Debt as at June 30, 2025 and December 31, 2024 included lease liabilities of $10,786 and $12,011, respectively.
Financial Results
Consolidated net sales for Q2 2025 increased by 3.4% to $98,637 compared with Q2 2024 and for 2025 year-to-date increased by 2.5% to $203,746 compared with 2024 year-to-date. The increases were primarily due to higher volumes at AMP partially offset by lower sales at Rubber Solutions.
Consolidated gross profit for Q2 2025 increased by $7,704 to $16,167, compared with Q2 2024, driven by a $6,049 inventory write-down from gowns and gloves in the comparative period and improved volume and mix at AMP, specifically in the defense business, partially offset by additional softness experienced at the rubber molded products operations along with softness across ARS customer sectors. Gross profit as a percentage of net sales increased to 16.4% in Q2 2025 compared with 8.9% for Q2 2024, primarily due to improvements at AMP's defense products business and rubber molded products business, partially offset by softness and unfavorable product mix at ARS. Consolidated gross profit for 2025 year-to-date increased by $12,015 to $34,651 compared with 2024 year-to-date, driven primarily by volume improvements at AMP along with the inventory write-down in the comparative period, partially offset by volume softness and unfavorable mix and ARS. Gross profit as a percentage of net sales increased to 17.0% for 2025 year-to-date compared with 11.4% for 2024 year-to-date. This increase was primarily driven by AMP's defense products business volume improvements partially offset by volume and mix at AMP's rubber molded products operations in addition to volume reductions and reduced margins due to mix at ARS.
Adjusted EBITDA for Q2 2025 increased by 68.7%, compared to the same period in 2024 and increased by 75.9% for 2025 year-to-date, compared with 2024 year-to-date.
Financial Position
The Company has a $125 million credit facility with a $25 million accordion and a net debt to TTM Adjusted EBITDA ratio of 2.90x (from 4.51x at December 31, 2024).
Dividend
The Board of Directors of the Company has approved a quarterly dividend of C$0.035 per common share, to be paid on October 15, 2025 to shareholders of record at September 30, 2025.
Segment Results
In the AirBoss Rubber Solutions ("ARS") segment, net sales for Q2 2025 decreased by 13.7% to $50,930, from $59,001 in Q2 2024 and decreased by 13.3% to $107,967 for 2025 year-to-date, from $124,470 for 2024 year-to-date. For the quarter, volume decreased by 15.9% with decreases in most sectors. Year-to-date, volume was down 18.1% with decreases across the majority of sectors and continued signs of softness with many customer's operations. For the quarter, tolling volume was down 31.6% while non-tolling volume was down 15.5%. Year-to-date, tolling volume was down 63.4% while non-tolling was down 16.3%. Gross profit at ARS for Q2 2025 decreased by 35.6% to $6,613, from $10,269 in Q2 2024 and for 2025 year-to-date decreased by 29.2% to $15,084 from $21,302 for 2024 year-to-date. For the quarter, the decrease was due to unfavorable mix and lower volume driven by market softness and economic uncertainty partially offset by managing controllable overhead costs and continuous improvement initiatives. Year-to-date, the decrease was primarily as a result of lower volumes and unfavorable product mix partially offset by managing controllable overhead costs.
In the AirBoss Manufactured Products ("AMP") segment, net sales for Q2 2025 increased by 35.2% to $54,995, from $40,680 in Q2 2024 and by 30.8% to $108,618 for 2025 year to date, from $83,021 for 2024 year-to-date. For the quarter, the increase was mainly due to improved sales in the defense products business partially offset by softness in the rubber molded products business. Specifically, the rubber molded products business had lower volumes in SUV and light truck platforms driven by economic headwinds and increased vehicle inventories which impacted production schedules across certain OEMs and Tier 1 suppliers in the quarter. Year-to-date, the increase was due to improved volumes in the defense products business, partially offset by weaker volumes in the rubber molded products business, specifically in the SUV and light truck platforms. Gross profit at AMP for Q2 2025 increased to $9,554 from $(1,806) in Q2 2024 and increased to $19,567 for 2025 year-to-date from $1,334 for 2024 year-to-date. For the quarter, the increase was primarily the result of a $6,049 inventory write-down from gowns and gloves in the comparative period, and improvements in the defense products business, operational cost improvements and reduced overhead costs, partially offset by unfavorable volume and product mix in the rubber molded products business. The year-to-date increase was primarily a result of favorable volume and product mix in the defense products business in addition to the inventory write-down in Q2 2024. In addition, there was pronounced softness in the rubber molded products operations as the OEMs continue to manage automobile inventory levels resulting in lower vehicle production, partially offset by a continued focus on controllable operational cost containment and overhead cost reductions.
Overview
AirBoss experienced positive traction in Q2 2025 compared to Q2 2024, mainly driven by significant increases in AirBoss Manufactured Products' ("AMP") defense products business partially offset by reduced volumes at AirBoss Rubber Solutions ("ARS"). However, the Company experienced softness in Q2 2025 compared to Q1 2025, as continued and pronounced economic headwinds impacted each segment to varying degrees. AirBoss continued to navigate obstacles related to economic and geopolitical challenges, including market softness, tariffs, inflationary pressure and the potential for further escalating and retaliatory tariffs, while maintaining focus on risk mitigation plans, including managing costs and targeting continuous improvements to build momentum at both ARS and AMP. The Company expects further uncertainty to persist in the coming quarters with volume recovery difficult to anticipate, as any recovery could be impacted by the imposition of further tariffs, duties or other restrictions on trade. A significant portion of the products manufactured by the Company in Canada are sold into the United States and may be subject to current or pending tariffs, as well as additional tariffs which could be enacted, given the cross-border nature of the Company's business operations. The Company continues to evaluate and execute on contingency plans and is carefully executing on all available options to deal with these challenges, including rebalancing production and sales activities between the U.S. and Canada, in order to minimize the impacts to the Company and its customers. Despite the increased economic uncertainty, disruption of trade flows and increased costs and strains on supply chains resulting from these challenges, management remains focused on the successful conversion of key opportunities to support future growth.
ARS had pronounced softness in Q2 2025 compared to Q2 2024. The segment experienced both revenue contraction and reduced margins driven by overall softness in most customer sectors primarily caused by the shifting tariff situation, as customers continued to manage the potential exposure created by tariff headwinds. ARS remains committed to executing on its strategy to deliver strong results by focusing on specialized products, expanded production of a broader array of compounds (white and color), and enhanced flexibility in attracting and fulfilling new business. As a segment, ARS continued to invest in research and development to support enhanced collaboration with customers.
AMP experienced notable improvement in Q2 2025 compared to Q2 2024, primarily due to the defense products business continuing deliveries on previously announced contracts and additional overhead reductions carried out earlier in the prior year to help support profitable growth. Management at AMP also maintained its focus on operational improvements during Q2 2025 and continued to work with key customers with a goal of leveraging opportunities aligned with its growth initiatives. The defense products business continues to work closely with its suppliers and government partners to mitigate the previously announced delays to its Bandolier program and it is now expected that deliveries under this program will be completed in 2026. Further updates will be provided as more information becomes available. The rubber molded products operations were impacted by continued volume softness related to the original equipment manufacturers ("OEMs") shuttering production due to the evolving impact of tariffs in the automotive sector. This 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 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 Friday, August 8, 2025. Please go to https://www.gowebcasting.com/14105 or dial in to the following numbers: 1-833-821-0163 or 1-647-846-2293 and ask to join the AirBoss of America call. 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 segments. AirBoss Rubber Solutions (ARS) is a North American custom rubber compounder with 500 million turn pounds of annual capacity and over 2,000 proprietary compounds. AirBoss Manufactured Products (AMP) 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 in Canada on the TSX under the symbol BOS and in the United States 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 financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") and uses 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 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 June 30 | Six-months ended June 30 | |||
| (unaudited) | (unaudited) | |||
| In thousands of US dollars | 2025 | 2024 | 2025 | 2024 |
| EBITDA: | ||||
| Profit (loss) | 2,265 | (9,568) | 1,857 | (14,495) |
| Finance costs | 2,678 | 2,943 | 5,445 | 5,852 |
| Depreciation and amortization | 5,051 | 5,265 | 10,151 | 10,644 |
| Income tax expense | 248 | 581 | 821 | 1,537 |
| EBITDA | 10,242 | (779) | 18,274 | 3,538 |
| Write-down of inventory | - | 6,049 | - | 6,049 |
| Restructuring costs | - | 802 | - | 802 |
| Adjusted EBITDA | 10,242 | 6,072 | 18,274 | 10,389 |
In the second quarter of 2024, the Company recorded a $6,049 inventory provision related to its inventory of nitrile gloves and medical gowns due to significant downward shifts in pricing. Costs related to this provision are included in Cost of Sales on the Statement of Profit and Loss.
In 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.
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 June 30 | Six-months ended June 30 | |||
| (unaudited) | (unaudited) | |||
| In thousands of US dollars | 2025 | 2024 | 2025 | 2024 |
| Adjusted profit: | ||||
| Profit (loss) | 2,265 | (9,568) | 1,857 | (14,495) |
| Write-down of inventory (after tax) | - | 6,049 | - | 6,049 |
| Restructuring costs (after tax) | - | 802 | - | 802 |
| Adjusted profit | 2,265 | (2,717) | 1,857 | (7,644) |
| Basic weighted average number of shares outstanding | 27,148 | 27,131 | 27,139 | 27,131 |
| Diluted weighted average number of shares outstanding | 27,515 | 27,131 | 27,414 | 27,131 |
| Adjusted earnings per share (in US dollars): | ||||
| Basic | 0.08 | (0.10) | 0.07 | (0.28) |
| Diluted | 0.08 | (0.10) | 0.07 | (0.28) |
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.
| June 30, 2025 | December 31, 2024 | |
| In thousands of US dollars | (unaudited) | |
| Net debt: | ||
| Loans and borrowings - current | 5,461 | 5,002 |
| Loans and borrowings - non-current | 97,244 | 112,388 |
| Leases included in loans and borrowings | (10,786) | (12,011) |
| Cash and cash equivalents | (5,622) | (6,491) |
| Net debt | 86,297 | 98,888 |
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 June 30 | Six-months ended June 30 | |||
| (unaudited) | (unaudited) | |||
| In thousands of US dollars | 2025 | 2024 | 2025 | 2024 |
| Free cash flow: | ||||
| Net cash provided by operating activities | 12,925 | 11,123 | 19,374 | 5,556 |
| Acquisition of property, plant and equipment | (1,434) | (3,615) | (3,310) | (5,260) |
| Acquisition of intangible assets | (337) | (239) | (526) | (409) |
| Proceeds from disposition | - | 5 | - | 9 |
| Free cash flow | 11,154 | 7,274 | 15,538 | (104) |
| Basic weighted average number of shares outstanding | 27,148 | 27,131 | 27,139 | 27,131 |
| Diluted weighted average number of shares outstanding | 27,515 | 27,421 | 27,414 | 27,131 |
| Free cash flow per share (in US dollars): | ||||
| Basic | 0.41 | 0.27 | 0.57 | - |
| Diluted | 0.41 | 0.27 | 0.57 | - |
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; contract-related risks; 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 and policy change; 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; changes in trade policies or the imposition of new tariffs, duties or other similar restrictions which could influence the cost and flow of goods and services across borders; 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; IT/cybersecurity risks; 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.
