Highlights of the Quarter
(unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars)
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- Consolidated revenue jumps 60% QoQ
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- Engineered Materials (“EM”) division sales up 189% QoQ as semiconductor industry demand continues to grow
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- Company generates $208,000 in Adjusted EBITDA[1] for quarter
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- Consolidated gross margin continues to strengthen
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- New state-of-the-art Copper Alloy foundry nears completion
- Consolidated loss of ($0.01) for the quarter
FRANKLIN, Ind. (November 30, 2021) – IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces its financial results for the quarter ended September 30, 2021.
“Sales in the quarter continued to strengthen across both of our operating divisions, with Engineered Materials division sales jumping 189%, Copper Alloys division sales up 10%, and consolidated sales higher by 60%, all as compared to the prior-year quarter,” said IBC CEO and Chairman Mark A. Smith. “Strong demand from the semiconductor equipment manufacturing industry continues to drive higher sales for our beryllium-aluminum alloy products, and I have been very pleased to see our Engineered Materials team hitting all-time highs in terms of production output. Our product development team is also exploring new applications for high-performance beryllium alloys in both commercial and defense markets.
“I am also thrilled with the excellent work done by the Copper Alloy division team as it works to modernize and expand its production capacity at our Franklin, Indiana facility. In my view, Copper Alloys is poised for significant growth and higher gross margins as our new, state-of-the-art casting facility comes online as we expect in 2022.”
Following are highlights of the quarter ended September 30, 2021. Full results can be seen in the Company’s Financial Statements and Management’s Discussion and Analysis (“MD&A”), available at Sedar.ca and on the Company’s website at https://ibcadvancedalloys.com/investors-center/.
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- Consolidated gross margin improved in the quarter to 14.3% from 12.7% in the prior-year period. Gross margin for the EM division rose to 23.2%, from 22.1%. Copper Alloy gross margin decreased to 5.3% from 9.1%, mostly due to higher material costs.
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- Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) 1 was $208,000, which compared to a negative Adjusted EBITDA of $121,000 for the prior-year period. EM Adjusted EBITDA rose sharply by 292%, primarily due to higher sales, while Copper Alloys Adjusted EBITDA decreased, mostly due to higher material costs.
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- Much of the increase in EM division sales of cast beryllium-aluminum products continues to be driven by higher demand for semiconductor chips used in the ongoing build-out of 5G networks and in vehicles, data centers, appliances, and other components of the Internet of Things (“IOT”). EM makes specialized products that are used in the manufacturing of semiconductor chips.
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- Construction of the Copper Alloys division’s new casting facility is nearing completion. Once operational and ramped up, the facility is expected to increase the division’s production capacity, cut production costs, and potentially expand the division’s product line.
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- IBC recorded a comprehensive loss of $581,000 in the quarter, or ($0.01) per share, which compared to a loss of $954,000, or ($0.02), in the prior-year period.
| SELECTED RESULTS: Consolidated Operations ($000s)[1] | ||
| Quarter Ended 9-30-2021 |
Quarter Ended 9-30-2020 |
|
| Revenue | 7,090 | 4,427 |
| Operating Income (Loss) | (186) | (505) |
| Adjusted EBITDA | 208 | (121) |
| Income (loss) for the period | (581) | (954) |
| SELECTED RESULTS: Copper Alloys ($000s)[1] | ||
| Quarter Ended 9-30-2021 |
Quarter Ended 9-30-2020 |
|
| Revenue | 3,518 | 3,191 |
| Operating Income (Loss) | (337) | (128) |
| Adjusted EBITDA | (242) | 10 |
| Income (loss) for the period | (337) | (226) |
| SELECTED RESULTS: Engineered Materials ($000s)[1] | ||
| Quarter Ended 9-30-2021 |
Quarter Ended 9-30-2020 |
|
| Revenue | 3,572 | 1,236 |
| Operating Income (Loss) | 359 | (54) |
| Adjusted EBITDA | 619 | 158 |
| Income (loss) for the period | 301 | (82) |
NON-IFRS MEASURES
To supplement its consolidated financial statements, which are prepared and presented in accordance with IFRS, IBC uses “operating income (loss)” and “Adjusted EBITDA”, which are non-IFRS financial measures. IBC believes that operating income (loss) helps identify underlying trends in the business that could otherwise be distorted by the effect of certain income or expenses that the Company includes in loss for the period, and provides useful information about core operating results, enhances the overall understanding of past performance and future prospects, and allows for greater visibility with respect to key metrics used by management in financial and operational decision-making. The Company believes that Adjusted EBITDA is a useful indicator for cash flow generated by the business that is independent of IBC’s capital structure.
Operating income (loss) and Adjusted EBITDA should not be considered in isolation or construed as an alternative to loss for the period or any other measure of performance or as an indicator of our operating performance. Operating income (loss) and Adjusted EBITDA presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to IBC’s data.
Operating Income (Loss)
Operating income (loss) represents loss for the quarter, excluding foreign exchange loss, interest expense, interest income, other income (expense) and income taxes that the Company does not believe are reflective of its core operating performance during the periods presented. A reconciliation of the quarter loss to operating loss follows:
| Quarter Ended Sept. 30 | 2021 | 2020 |
| ($000s) | ($000s) | |
| Loss for the period | (581) | (954) |
| Foreign exchange (gain) loss | (1) | 61 |
| Interest expense | 328 | 399 |
| (Gain) loss on disposal of assets | 49 | (3) |
| Other income | (5) | (5) |
| Income tax expense (recovery) | 24 | (3) |
| Operating loss | (186) | (505) |
Adjusted EBITDA
Adjusted EBITDA represents our income (loss) for the period before interest, income taxes, depreciation, amortization, and share-based compensation. A reconciliation of the quarter’s loss to Adjusted EBITDA follows:
| Three months ended Sept. 30 | 2021 | 2020 |
| ($000s) | ($000s) | |
| Loss for the period | (581) | (954) |
| Income tax expense (recovery) | 24 | (3) |
| Interest expense | 328 | 399 |
| Depreciation, amortization, & impairment | 392 | 340 |
| Stock-based compensation expense (non-cash) | 45 | 97 |
| Adjusted EBITDA | 208 | (121) |
For more information on IBC and its innovative alloy products, go here.
On Behalf of the Board of Directors:
“Mark A. Smith”
Mark A. Smith, CEO & Chairman of the Board
# # #
CONTACTS:
Mark A. Smith, Chairman of the Board
Jim Sims, Investor and Public Relations
IBC Advanced Alloys Corp.
+1 (303) 503-6203
Email: [email protected]
Website: www.ibcadvancedalloys.com
@IBCAdvanced $IB $IAALF
ABOUT IBC ADVANCED ALLOYS CORP.
IBC is a leading beryllium and copper advanced alloys company serving a variety of industries such as defense, aerospace, automotive, telecommunications, precision manufacturing, and others. IBC’s Copper Alloys Division manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper, and aluminum bronze. IBC’s Engineered Materials Division makes the Beralcast® family of alloys, which can be precision cast and are used in an increasing number of defense, aerospace, and other systems, including the F-35 Joint Strike Fighter. IBC’s has production facilities in Indiana and Massachusetts. The Company’s common shares are traded on the TSX Venture Exchange under the symbol “IB” and the OTCQB under the symbol “IAALF”.
CAUTIONARY STATEMENTS
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information contained in this news release may be forward-looking information or forward-looking statements as defined under applicable securities laws. Forward-looking information and forward-looking statements are often, but not always identified by the use of words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “will”, “may” and “should” and similar expressions or words suggesting future outcomes. This news release includes forward-looking information and statements pertaining to, among other things, the Company’s expectation of further growth in revenue and market demand, and the ability of the Copper Alloy division to increase its production capacity, reduce unit costs of production, expand its product portfolio and expand into new markets. Forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control including: the impact of general economic conditions in the areas in which the Company or its customers operate, including the semiconductor manufacturing and oil and gas industries, risks associated with manufacturing activities, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, limited availability of raw materials, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. As a result of these risks and uncertainties, the Company’s future results, performance or achievements could differ materially from those expressed in these forward-looking statements. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.
Please see “Risks Factors” in our Annual Information Form available under the Company’s profile at www.sedar.com, for information on the risks and uncertainties associated with our business. Readers should not place undue reliance on forward-looking information and statements, which speak only as of the date made. The forward-looking information and statements contained in this release represent our expectations as of the date of this release. We disclaim any intention or obligation or undertaking to update or revise any forward-looking information or statements whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
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[1] IBC reports non-IFRS measures such as “Adjusted EBITDA” and “Operating Income.” Please see information on this and other non-IFRS measures in the “Non-IFRS Measures” section of this news release and in IBC’s MD&A, available on Sedar.com
