AirBoss Reports 1st Quarter 2025 Results

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.

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.

Source: AirBoss