Mar 9, 2023

AirBoss Reports 4th Quarter and Full Year 2022 Results

AirBoss of America Corp. (TSX: BOS) (OTCQX:ABSSF) (the “Company” or “AirBoss”) today announced its unaudited fourth quarter and annual results. The Company will host a conference call and webcast to discuss the results today, March 9th at 10 a.m. ET, the details of which are further below. All dollar amounts are shown in thousands of United States dollars (“US $” or “$”), except per share amounts, unless otherwise noted.

Recent Highlights

  • Record sales and profitability for the Rubber Solutions segment;
  • AirBoss Defense Group supported initial delivery of COVID test kits to the US Government;
  • Adjusted EBITDA2 of $45.3 million (excluding the $57.0 million write-down of inventory) on Adjusted Profit2 of $12.6 million and a loss of $31.9 million;
  • Finished 2022 with a Net Debt to Adjusted EBITDA ratio2 of 2.43x; and
  • Declared a quarterly dividend of C$0.10 per common share.

“With our fourth quarter results, we are pleased to report improved performance in key areas of our business, bringing to a close what was otherwise a challenging year. Importantly, we believe we have positioned all three of our business segments well for growth in 2023”, said Chris Bitsakakis, President and COO of AirBoss. “Throughout 2022, the AirBoss team continued to navigate through unprecedented market issues related to supply chain and price inflation, impacting each of our business segments. We’re encouraged that we have started to see some moderation in the rate of price increases for raw materials in the latter part of the year along with a more cooperative environment with our customers as it relates to improved economics,” said Mr. Bitsakakis. “Our Rubber Solutions business segment delivered a record level of performance while the integration of Ace Elastomer was executed in a seamless manner.”

“The AirBoss team exited 2022 with momentum in some important areas, which is a testament to our strategic efforts to diversify our business,” stated Gren Schoch, Chairman and CEO of AirBoss, “Within AirBoss Defense Group, we’re encouraged by the contract wins secured in the fourth quarter. We have also taken important steps to develop and introduce innovative, in-demand products throughout AirBoss. And while the pace of contract activity, in particular for ADG, has been hard to predict, our ability to deliver on new sales agreements remains strong as we continue to pursue new opportunities to deliver healthcare and survivability solutions to our customers.”

Three Months ended December 31 Twelve Months ended December 31
(unaudited) (unaudited) (unaudited)
(In thousands of US dollars, except share data) 2022 2021 2022 2021
Financial results:
Net Sales 117,453 249,053 477,155 586,858
Profit (loss) 11,997 15,162 (31,892 ) 46,703
Adjusted Profit (loss) (2) 12,324 15,541 (12,558 ) 47,374
Earnings (loss) per share (US$)
-Basic 0.44 0.56 (1.18 ) 1.73
-Diluted 0.43 0.53 (1.18 ) 1.65
Adjusted earnings per share(2) (US$)
-Basic 0.45 0.58 0.46 1.76
-Diluted 0.45 0.55 0.45 1.67
EBITDA(2) 13,470 26,535 (12,769 ) 79,591
Adjusted EBITDA(2) 13,898 26,961 45,336 80,341
Net cash from operating activities 7,880 138,415 (30,775 ) 2,023
Free cash flow (2) 4,661 133,430 (40,964 ) (15,961 )
Dividends declared per share (CAD$) 0.10 0.10 0.40 0.37
Capital additions(2) 3,229 5,025 10,212 22,585
Financial position: December 31, 2022 December 31, 2021
Total assets 440,766 443,264
Term loan and other debt(1) 143,642 80,563
Net Debt 110,083 56,033
Shareholders’ equity 196,997 235,148
Outstanding shares* 27,092,041 26,993,181
*27,092,041 at March 9, 2023

Financial Results

Consolidated net sales in the three-month period ending December 31, 2022 (“Q4 2022”) decreased by 52.8% to $117,453 compared with the three-month period ended December 31, 2021 (“Q4 2021”), with a decrease from ADG partially offset by increases from the Rubber Solutions and Engineered Products segments. Consolidated net sales for the year decreased by 18.7% to $477,155 compared with 2021 primarily due to Airboss Defense Group’s (“ADG”) delivery of nitrile gloves to Department for Health and Human Services (“HHS”) in the prior year, partially offset by increased sales at Rubber Solutions across the majority of customer sectors and improved performance at the Engineered Products segment.

Consolidated gross profit for Q4 2022 decreased to $24,767 from $51,444 compared with the same period in 2021, with decreases in the AirBoss Defense Group segment offset by increases in the Rubber Solutions and Engineered Products segments. For the year, consolidated gross profit was down by $112,167 to $24,131 and gross profit as a percentage of net sales decreased to 5.1% from 23.2%, compared to 2021. The decrease was driven by a $57.0 million non-cash write-down at ADG related to nitrile glove inventory and the delivery of nitrile gloves to HHS in 2021, partially offset by significant improvements at the Rubber Solutions and Engineered Products segments. Adjusted EBITDA for Q4 2022 decreased by 48.5%, compared to the same period in 2021 and decreased by 43.6% for 2022 compared to 2021.

In addition, on December 6, 2022, the Company renewed its normal course issuer bid for its common shares, pursuant to which the Company may re-purchase up to 500,000 of its common shares (representing approximately 2.86% of the Company’s public float of 17,460,712 common shares as of November 28, 2022).

Financial Position

The Company retains a $250 million credit facility and a net debt to TTM EBITDA ratio of 2.43x (from 0.70x at December 31, 2021).


The Board of Directors of the Company has approved a quarterly dividend of C$0.10 per common share, to be paid on April 17, 2023 to shareholders of record at March 31, 2023.

Segment Results

In the AirBoss Defense Group segment, net sales in the quarter decreased by 88.7% to $19,806 and by 59.6% to $133,160 year-to-date from the comparable periods in 2021. For the quarter, the decrease was primarily the result of delivery under the nitrile patient examination gloves contract from HHS, as part of the U.S. government’s response to the COVID-19 pandemic, in the prior year. For the year, the decrease was primarily due to ADG’s delivery of filters and nitrile gloves to HHS in 2021. Gross profit at AirBoss Defense Group decreased by 93.9% to $2,904 for the quarter and was $(10,970) for the year, down $127,628 from 2021. For the quarter, the decrease was primarily due to delivery of nitrile patient examination gloves to HHS in the prior year. For the year, the decrease was primarily the result of the $57.0 million inventory write-down, and deliveries to HHS in 2021, partially offset by favorable volume in ADG’s industrial products line.

In the Rubber Solutions segment, net sales in the quarter increased by 9.8% to $57,778 and increased by 37.7% to $236,149 year-to-date, from the comparable periods in 2021. The increase in net sales for Q4 2022 was primarily in the conveyor belt, OTR/retread, industrial and specialty products sectors. For the year, volume was up 3.3% with increases across the majority of sectors despite residual softness due to economic headwinds. Tolling volume was down 46.0% in the quarter and 11.9% year-to-date, from the comparable periods in 2021. Non-tolling volume was down 4.5% for the quarter and increased by 6.6% year-to-date, compared to the same periods in 2021. Gross profit in the Rubber Solutions segment increased by 17.8% to $6,915 for the quarter and by 58.8% to $33,084 year-to-date, from the comparable periods in 2021. For the quarter, the increase in gross profit was principally due to mix partially offset by a modest reduction in volume. For the year, the increase was primarily as a result of increased non-tolling volumes compared to the same period in 2021 and managing controllable overhead costs, partially offset by labor and logistics costs and the elimination of government-directed subsidies in the first half of 2021.

At Engineered Products, net sales in the quarter increased by 64.8% to $46,655 and increased by 13.6% to $132,512 year-to-date from the comparable periods in 2021. For the quarter, the increase was the result of improved volumes across several automotive product lines, in particular the muffler hangers, bushings, and spring insulator product lines in addition to improved arrangements with Engineered Products’ key suppliers and customers recognized in the quarter. For the year, the increase was due to increased volume and improved arrangements with key suppliers and customers in the SUV, light truck and mini-van platforms compared to the same period in the prior year. Gross profit in the Engineered Products segment increased by $17,197 to $14,948 for the quarter and by $3,213 to $2,017 for the year, from the comparable periods in 2021. For the quarter, the increase was primarily a result of price, mix, and volume in the automotive sector in addition to operational cost containment, and managing overhead costs. For the year, the increase was primarily the result of increased volume, improved arrangements with Engineered Products’ key suppliers and customers and a continued focus on controllable operational cost containment and managing overhead costs, partially offset by a government-directed wage subsidy in the first half of 2021, challenges associated with global electronic chip shortages in the automotive sector combined with some residual raw material cost escalations, freight and logistics costs earlier in the year.


2022 was a challenging year for AirBoss as the company focused on managing risks at the corporate level and in each segment, while continuing to execute our strategic plan to deliver strong operational and financial results. The Company navigated significant and extensive obstacles including supply chain and logistics challenges, while beginning to see some modest improvements from previous record raw material price increases. AirBoss also worked diligently to address and mitigate the impact of uncertain economic conditions on its business and that of its customers during Q4 2022, including risk mitigation plans within its supply chain and a focus on growth initiatives and key investments, while maintaining its focus on a safe work environment for its employees.

The Rubber Solutions and ADG segments experienced residual softness in Q4 2022, while the Engineered Products segment was able to work with its key suppliers and customers to strengthen its financial situation and management expects this segment to deliver improved financial results in 2023. The continued recovery in volumes in 2023 for each segment will remain subject to the ongoing management of the stable and sustained operations of businesses globally, which remains complex and volatile considering evolving and ongoing challenges such as continued inflation pressure and the ongoing war in Ukraine, and successful conversion of opportunities.

For the Rubber Solutions segment, 2022 was a record year from a sales and EBITDA perspective, with strong momentum during the first three quarters and some pronounced softness experienced at the end of Q4 2022 as sales were impacted by customers focused on reducing inventory levels. Despite these headwinds, the segment remains focused on executing on its strategy to deliver strong results with specialized products, expanded production of a broader array of compounds (white and color) and enhanced flexibility in attracting and fulfilling new business through identified synergies and margin expansion. As a segment, Rubber Solutions continued to invest in research and development to support enhanced collaboration with customers and remained focused on integrating Ace Elastomer’s (“Ace”) specialized products into its expanding range of solutions.

ADG remained focused on its survivability solutions platform while targeting traditional defense contracts in line with its long term strategy of expanding its product portfolio. In addition, ADG continued to work with its key customers to leverage opportunities aligned with its growth initiatives, subject to timing as delays in the conversion of these opportunities continued through the fourth quarter of 2022. In particular, execution of the previously announced awards for Husky 2G vehicles has been delayed due to ongoing global challenges, and management now anticipates execution of those orders to commence by the end of the second quarter of 2023. Management continues to believe that the future sourcing of Personal Protective Equipment (“PPE”) for first responders and healthcare professionals will remain a necessity and priority for front line workers, evidenced by the strong pipeline of PPE-related opportunities that ADG is currently pursuing.

Within the Engineered Products segment, 2022 finished strong despite being a challenging year given the continued impact of raw material price increases, supply chain challenges and production volatility by the original equipment manufacturers (OEMs). Engineered Products was able to work with its key suppliers and customers to strengthen its financial situation and management expects this segment to deliver improved financial results in 2023. Management also continued to focus on operational improvements including managing variable costs and sustaining a stable hourly workforce, while dealing with volume volatility in the automotive sector and specifically on AirBoss’ products for SUV, light truck and mini-van platforms. The segment also continued its focus and commitment to drive efficiencies and best-in-class automation, as well as diversification of its product lines into sectors adjacent to the automotive space.

In December 2022, a statement of claim was filed in the Ontario Superior Court of Justice against AirBoss and several named officers. The applicants under the proceeding seek an order for leave to proceed under the Securities Act (Ontario), certifying the proceeding as a class proceeding and appointing them as representative plaintiffs. The applicants seek, among other relief, a declaration that the Company made misrepresentations contrary to the Securities Act (Ontario) during a period extending from November 9,2021 to September 6, 2022, as well as unspecified damages. No provision for contingent losses has been recognized in the Company’s annual consolidated financial statements.

Despite the continued headwinds associated with economic and geopolitical issues, the Company’s longer-term priorities remain intact and include:

  1. Growing the core Rubber Solutions segment by positioning it as a specialty supplier of choice in the consolidating North American market, with a focus on building defensible leadership positions in selected compounds;
  2. Capitalizing on AirBoss Defense Group’s enhanced scale and capabilities to pursue an array of growth and value-creation opportunities in the broader survivability solutions segment serving both defense and first responder markets;
  3. Driving improved performance from Engineered Products through a combination of disciplined cost containment, client relationship expansion, new product development and sector diversification; and
  4. Targeting additional acquisition opportunities across the business with a focus on adding new compounds and products, technical capabilities, and geographic reach into selected North American and international markets.

AirBoss continues to generate meaningful returns to shareholders with 16 years of dividend payments growing at an average annual rate of 15%, while driving improved profitability and simultaneously 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 10:00 a.m. ET on Thursday, March 9, 2023. Please go to https://www.gowebcasting.com/12472 or dial in to the following numbers: 1-800-319-4610 or 416-915-3239, pass code: 55506. Please connect approximately 10 minutes prior to the beginning of 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.

Annual General Meeting

The Company’s Annual General Meeting for shareholders will occur May 10, 2023. Further details will be provided in the near future.

Tire and Rubber Association of Canada

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