Airboss of America reports strong third quarter

Newmarket, ONT – AirBoss of America Corp. announced its third quarter performance as it moves forward into the remainder of the year and 2022 with very strong momentum.

“I’m very pleased to report a strong quarter of progress for AirBoss, including the production and final commencement of shipments for the remaining portion of the 18 million boxes of nitrile patient examination gloves for the U.S. Strategic National Stockpile for HHS, the acquisition of Ace Elastomer which has propelled us into a market leading position in color and specialty rubber compounding and expanded our geographic penetration in the U.S., and the installation of new technology to improve automation and efficiencies at our engineered products facility,” said Chris Bitsakakis, President and COO of AirBoss. “Although Q3 financial performance was impacted by the shift to the right of $116 million of sales due to West Coast port backlogs and COVID-19 lockdowns, we are reiterating our 2021 outlook and expect record results in the fourth quarter.”

“Solid operational execution, including a combination of domestic sourcing, advanced buying tactics and the development of alternative sources, helped mitigate the impact of numerous global challenges including on-going global freight, labour and logistics challenges, raw material price escalations and constraints, and the continued impact of the COVID-19 pandemic,” added Mr. Bitsakakis. “While we expect such issues to continue through the remainder of 2021, we have solidified our position this year as a leading supplier of personal protective equipment (“PPE”) to the health care and survivability sectors while making investments to position our AirBoss Defense Group (“ADG”), Rubber Solutions (“ARS) and Engineered Products (“AEP”) segments for strong performance coming out of the pandemic as the economy stabilizes

“At ADG, with completion of the HHS nitrile glove order anticipated in Q4 2021, we will have executed successfully on more than a half a billion dollars of orders from the U.S. Government in 2020 and 2021, cementing our status as a trusted large-scale supplier of protective equipment for frontline healthcare, defense and law enforcement personnel, able to deliver high quality products during the most challenging of supply chain dynamics. We continue to pursue more large-scale PPE and other survivability equipment contracts in our record $1 billion-plus sales pipeline while preparing to market our recently approved AirBoss 100™ Half Mask Respirator, a more portable and lower price point alternative to our successful FlexAir powered air purifying respirator.”

“At ARS, we have seen increased top line growth momentum though margins were compressed by the rapid escalation of pandemic related raw material, freight and labor challenges while realizing a marked reduction of government subsidies. The addition of Ace Elastomer coupled with the scale up in utilization of our specialty and color compounding mixers, bolsters our strategy to expand our delivery of higher margin solutions to our customers.

At AEP, we expect to install our second fully automated robotic work cell in Q4 2021, which, along with our new injection presses and other investments, will result in the completion of the modernization of AEP’s asset base to the highest and most efficient standards, resulting in the ability to both increase our capability to produce more sophisticated, higher margin products but also lower our operating expenses, a critical requirement to increase our competitiveness with low-cost operations in other parts of the globe.”

“We are preparing to enter 2022 in an extremely strong financial position along with a record pipeline of opportunities that continues to grow. During Q3, we increased the size of our credit facilities and improved their terms, and were then able to use these more efficient facilities for the short term funding of working capital requirements related to the nitrile glove order for HHS. As the final nitrile glove shipments are completed we expect to rapidly de-lever while maintaining flexibility for further M&A to accelerate our growth strategy,” concluded Mr. Bitsakakis.”

With $12.4 million in cash and cash equivalents, $50.5 million in undrawn availability under its credit facilities, $200 million in inventories for delivery to customers, and a net debt to TTM EBITDA ratio of 2.17x, AirBoss enters the remainder of 2021 in strong financial condition.

The Board of Directors of the Company has approved a quarterly dividend of C$0.10 per common share, to be paid on January 17, 2022 to shareholders of record at December 31, 2021.