AirBoss Reports 2nd Quarter 2025 Results

Executive Summary

• AirBoss of America Corp. reported second quarter 2025 financial results, showing a significant turnaround in profitability and cash flow compared to the same period in 2024, driven largely by strong performance in its AirBoss Manufactured Products (AMP) segment.
• The company secured new production awards for its rubber molded products business expected to generate up to $80.0 million in sales over the next five years, while also navigating ongoing economic headwinds, tariffs, and softness in the AirBoss Rubber Solutions (ARS) segment.
• The Board declared a quarterly dividend of C$0.035 per common share, and the company reduced its net debt to adjusted EBITDA ratio to 2.90x from 4.51x at year-end 2024.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Net sales increased 3.4% to $98,637 thousand (from $95,367 thousand).
  • Profit increased by $11.8 million to $2,265 thousand (from a loss of $9,568 thousand).
  • Adjusted EBITDA increased 68.7% to $10,242 thousand (from $6,072 thousand).
  • Cash provided by operating activities increased to $12,925 thousand (from $11,123 thousand).
  • Free cash flow was $11,154 thousand (from $7,274 thousand).
• Financial Performance (Six-Months Ended June 30, 2025 vs 2024):
  • Net sales increased 2.5% to $203,746 thousand (from $198,857 thousand).
  • Profit improved to $1,857 thousand (from a loss of $14,495 thousand).
  • Adjusted EBITDA increased 75.9% to $18,274 thousand (from $10,389 thousand).
• Segment Results:
  • AirBoss Manufactured Products (AMP): Net sales increased 35.2% to $54,995 thousand in Q2 2024, driven by improved defense products business volumes. Gross profit turned positive at $9,554 thousand (vs. loss of $1,806 thousand in Q2 2024), aided by a $6,049 inventory write-down in the prior year period.
  • AirBoss Rubber Solutions (ARS): Net sales decreased 13.7% to $50,930 thousand in Q2 2025. Volume decreased 15.9%, with tolling volume down 31.6%. Gross profit decreased 35.6% to $6,613 thousand due to unfavorable mix, lower volume, and market softness.
• New Business & Strategy:
  • AMP’s rubber molded products business secured new production awards from OEMs and Tier 1 manufacturers expected to generate up to $80.0 million in sales over the next five years.
  • Defense products business deliveries are expected to be completed in 2026 for the Bandolier program, following previously announced delays.
  • Management is focusing on cost containment, operational improvements, and diversification into adjacent sectors for rubber molded products.
• Financial Position & Capital Allocation:
  • Net debt decreased to $86,297 thousand from $98,888 thousand at December 31, 2024.
  • Net Debt to Adjusted EBITDA ratio improved to 2.90x (from 4.51x).
  • Borrowings under the revolving credit facility were reduced by $15.2 million.
  • Dividend declared: C$0.035 per common share, payable October 15, 2025, to shareholders of record at September 30, 2025.
• Outlook & Risks:
  • Company cites ongoing economic and geopolitical challenges, including market softness, tariffs, inflationary pressure, and potential retaliatory tariffs.
  • A significant portion of Canadian-manufactured products sold to the US may be subject to current or pending tariffs.
  • Management expects further uncertainty in coming quarters with volume recovery difficult to anticipate.

Notable Quotes

• "AirBoss Manufactured Products' rubber molded products business has experienced positive traction through the first half of 2025, securing a number of new production awards... 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.
• "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," added Gren Schoch, Chairman and Co-CEO.