AirBoss Reports 1st Quarter 2025 Results

Rhea-AI Summary

AirBoss of America (OTCQX: ABSSF) reported its Q1 2025 financial results, showing improved performance despite ongoing challenges. EBITDA increased by $3.7M to $8.0M compared to Q1 2024, while net loss decreased to $0.4M from $4.9M. The company's net sales grew 1.6% to $105.1M, driven by higher defense product sales. Notable developments include commencing shipments under an $82.3M contract for Molded AirBoss Lightweight Overboots (MALOs) and securing additional orders worth up to $15.6M from Swiss Defense Forces. The company declared a quarterly dividend of C$0.035 per share. However, AirBoss faces challenges from geopolitical uncertainty, recently-enacted tariffs, and economic headwinds affecting its cross-border operations. The Rubber Solutions segment saw decreased sales (-12.9%), while Manufactured Products segment sales increased (+26.6%).

Positive

• EBITDA improved significantly by 86.1% to $8.0M in Q1 2025 vs Q4 2024
• Net loss decreased substantially to $0.4M from $4.9M year-over-year
• Secured new defense contracts worth up to $15.6M from Swiss Defense Forces
• Commenced shipments under $82.3M MALO contract
• Manufactured Products segment sales increased 26.6% to $53.6M

Negative

• Rubber Solutions segment sales declined 12.9% to $57.0M
• Continued impact from tariffs and economic headwinds affecting automotive production
• Net debt remains high at $96.0M with a 3.75x leverage ratio
• Company still operating at a loss with -$0.02 EPS
• Reduced dividend from CAD$0.070 to CAD$0.035 per share

NEWMARKET, Ontario, May 07, 2025 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS) (OTCQX: ABSSF) (the “Company” or “AirBoss”) today announced its first quarter 2025 results. The Company's annual general meeting will be held on Thursday, May 8th at 9:30 am (EDT). Along with the formal portion of the meeting, management will provide a presentation including a discussion of Q1 2025 results. The meeting will be accessible in person, via live webcast or by dialing into the number provided later in this release. All dollar amounts are shown in thousands of United States dollars ("US $" or "$"), except per share amounts, unless otherwise noted.

Recent Highlights

• EBITDA in the first quarter of 2025 (“Q1 2025”) increased by $3.7 million to $8.0 million compared to $4.3 million in the first quarter of 2024 (“Q1 2024”) and loss decreased by $4.5 million to $0.4 million from $4.9 million in the same periods;
• Commenced shipments in the second quarter of 2025 under AirBoss Manufactured Products' ("AMP") defense business’ recently-announced contract, valued at up to $82.3 million, to provide its Molded AirBoss Lightweight Overboots (“MALOs”);
• AMP's defense business received an order from armasuisse, in support of Swiss Defense Forces personnel, for MALOs, and an order from a partner nation, for ADG Low Burden Masks (“LBM”), filters and related accessories. The combined value of these contract awards is expected to be worth up to US$15.6 million; and
• Declared a quarterly dividend of C$0.035 per common share.
  
  

"We are encouraged by the positive traction experienced by the Company in the first quarter of 2025 ("Q1 2025"), particularly following a challenging 2024. In particular, the recently announced awards for MALOs and LBMs, as well as the commencement of shipments under the previously announced $82.3 million MALO contract, demonstrate the continued recovery within AMP's defense business and the continued momentum for this division," said Chris Bitsakakis, President and Co-CEO of AirBoss. "Despite this optimism for growth, it is important to note that the current geopolitical climate and uncertainty, recently-enacted tariffs, potential for further escalating tariffs and other economic impacts remain a significant risk for the Company which could impact our sales and operations, given the cross-border nature of our business. We continue to actively evaluate and execute on contingency plans and are reviewing all available options to deal with these challenges in an effort to minimize their impact to the Company and our customers."

“As we navigate the potential challenges and uncertainties posed by the current economic and geopolitical climate, 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," added Gren Schoch, Chairman and Co-CEO of AirBoss.

In thousands of US dollars, except share data	Three-months ended March 31
(unaudited)	2025			2024
Financial results:
Net sales	105,109			103,490
Profit (loss)	(408	)		(4,927	)
Earnings (loss) per share (US$)
– Basic	(0.02	)		(0.18	)
– Diluted	(0.02	)		(0.18	)
EBITDA1	8,032			4,317
Net cash provided by (used in) operating activities	6,449			(5,567	)
Free cash flow1	4,384			(7,378	)
Dividends declared per share (CAD$)	0.035			0.070
Capital expenditures	2,065			1,815
Financial position:	March 31, 2025			December 31, 2024
Total assets	328,303			309,528
Debt2	119,031			117,390
Net Debt1	95,984			98,888
Shareholders' equity	125,063			126,010
Outstanding shares*	27,130,556			27,130,556
*27,149,224 at May 7, 2025

¹ See Non-IFRS and Other Financial Measures.
² Debt as at March 31, 2025 and December 31, 2024 included lease liabilities of $11,408 and $12,011, respectively.

Financial Results

Consolidated net sales for Q1 2025 increased by 1.6% to $105,109 compared with the first quarter of 2024 ("Q1 2024"). The increase was primarily due to higher sales at AMP's defense products business partially offset by lower sales in the rubber molded products business and lower volumes at AirBoss Rubber Solutions ("ARS").

Consolidated gross profit for Q1 2025 increased by $4,311 to $18,484, compared with Q1 2024, driven by 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 the majority of ARS customer sectors. Gross profit as a percentage of net sales increased to 17.6% in Q1 2025 compared with 13.7% for Q1 2024, primarily due to improvements at AMP's defense products business and rubber molded products operations partially offset by lower volume and product mix at ARS.

EBITDA for Q1 2025 increased by 86.1%, compared to the same period in 2024.

Financial Position

The Company retains a $125 million credit facility and a net debt to TTM Adjusted EBITDA ratio of 3.75x (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 July 15, 2025, to shareholders of record at June 30, 2025.

Segment Results

In the Rubber Solutions segment, net sales for Q1 2025 decreased by 12.9% to $57,037, from $65,469 in Q1 2024. For the quarter, volume decreased by 19.4% with decreases in most sectors. Tolling volume was down 76.3% while non-tolling volume was down 16.4%. Gross profit at Rubber Solutions for Q1 2025 decreased to $8,471 from $11,033 in Q1 2024 on lower volume partially driven by tariff-related volatility, and product mix partially offset by managing controllable overhead costs and continuous improvement initiatives.

At Manufactured Products, net sales for Q1 2025 increased by 26.6% to $53,623, from $42,341 in Q1 2024. The increase was mainly in the defense products business partially offset by lower sales 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 tariff related impacts affecting production schedules across certain OEMs and Tier 1 suppliers in the quarter. Gross profit at Manufactured Products for Q1 2025 increased to $10,013 from $3,140 in Q1 2024. The increase was primarily the result of 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 operations.

Overview

AirBoss experienced positive traction in Q1 2025 following a challenging year in 2024, despite pronounced headwinds which continued to impact each segment to varying degrees. The Company 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 AirBoss Rubber Solutions ("ARS") and AirBoss Manufactured Products ("AMP"). 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 aligned with its strategic plan. 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 the recently-enacted 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 reviewing 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.

ARS had improved results compared to the fourth quarter of 2024 ("Q4 2024"), with both revenue growth and margin expansion driven by an overall recovery in most customer sectors. However, there was volatility within Q1 2025 driven by the shifting tariff situation, as customers attempted to manage the potential exposure created by tariff headwinds. The segment 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 some positive traction compared to Q4 2024, specifically in the defense products business. Overall, AMP had a notable improvement compared to the first quarter of 2024 ("Q1 2024"), primarily due to the defense products business continuing deliveries on previously announced contracts and additional overhead reductions carried out earlier in 2024 to help mitigate volume softness. Management also maintained its focus on operational improvements during Q1 2025 and continued to work with key customers with a goal of leveraging opportunities aligned with its growth initiatives. The Company continues to work closely with its suppliers and government partners to mitigate the previously announced delays to its Bandolier program and will provide further updates 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. 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 Company’s long-term priorities consist of the following:

1. 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;
2. 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
3. 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.

Annual General Meeting and Q1 Results Earnings Webcast

The Company's Annual General Meeting for Shareholders will occur on May 8, 2025, at 9:30 am (EDT). In addition to the formal shareholders' meeting, management will provide a webcast presentation including a discussion of Q1 2025 results.

For webcast access, please go online at https://airboss.com/AnnualGeneralMeeting2025. If watching the meeting online, it is important to remain connected to the internet at all times during the meeting. It is each person’s responsibility to ensure connectivity for the duration of the meeting. The live webcast will include a facility for shareholders to enter questions for management.

For telephone access, please dial in at 1-833-821-0163. Callers should dial-in five (5) to ten (10) minutes before the meeting starts and ask to join the AirBoss of America call.

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 five hundred 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 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 is a non-IFRS measure 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. A reconciliation of profit (loss) to EBITDA is below.

	Three-months ended March 31
	(unaudited)
In thousands of US dollars	2025			2024
EBITDA:
Profit (loss)	(408	)		(4,927	)
Finance costs	2,767			2,909
Depreciation and amortization	5,100			5,379
Income tax expense	573			956
EBITDA	8,032			4,317

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.

	March 31, 2025		December 31, 2024
In thousands of US dollars	(unaudited)
Net debt:
Loans and borrowings - current	5,578			5,002
Loans and borrowings - non-current	113,453			112,388
Leases included in loans and borrowings	(11,408	)		(12,011	)
Cash and cash equivalents	(11,639	)		(6,491	)
Net debt	95,984			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 March 31
	(unaudited)
In thousands of US dollars	2025			2024
Free cash flow:
Net cash provided by (used in) operating activities	6,449			(5,567	)
Acquisition of property, plant and equipment	(1,876	)		(1,645	)
Acquisition of intangible assets	(189	)		(170	)
Proceeds from disposition	—			4
Free cash flow	4,384			(7,378	)
Basic weighted average number of shares outstanding	27,131			27,131
Diluted weighted average number of shares outstanding	27,347			27,131
Free cash flow per share (in US dollars):
Basic	0.16			(0.27	)
Diluted	0.16			(0.27	)

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.

Investor Contact: investor.relations@airboss.com
Media Contact: media@airboss.com

FAQ

What were AirBoss (ABSSF) key financial results for Q1 2025?

In Q1 2025, AirBoss reported net sales of $105.1M (+1.6% YoY), EBITDA of $8.0M (+86.1% YoY), and a net loss of $0.4M (improved from -$4.9M in Q1 2024). EPS was -$0.02 compared to -$0.18 in Q1 2024.

What new defense contracts did AirBoss secure in Q1 2025?

AirBoss secured contracts worth up to $15.6M from Swiss Defense Forces for MALOs and Low Burden Masks, and began shipments under a previously announced $82.3M MALO contract.

How did AirBoss's segments perform in Q1 2025?

The Manufactured Products segment saw sales increase 26.6% to $53.6M, while Rubber Solutions segment sales decreased 12.9% to $57.0M compared to Q1 2024.

What is AirBoss's current dividend policy?

AirBoss declared a quarterly dividend of C$0.035 per common share, payable on July 15, 2025, to shareholders of record at June 30, 2025.

What are the main challenges facing AirBoss in 2025?

AirBoss faces challenges from geopolitical uncertainty, recently-enacted tariffs, potential for escalating tariffs, and economic headwinds affecting its cross-border operations and automotive sector customers.