Company Sets Several Financial Performance Records in FY 2024 as it Now Focuses on Expanding its Copper Alloys Business
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Highlights of the Quarter and Year Ended June 30, 2024
(Unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars)
For this period only, IBC is reporting the performance of “discontinued operations” at its Massachusetts facility, “continuing operations” at its Copper Alloy division, and a combination of continued and discontinued operations.1
- IBC combined sales1 increased 50.9% and 33.4% year-over-year (“Y/Y”) for the quarter and year, respectively, on higher product demand. Continuing operations1 at the Copper Alloys division generated $7.0 million in the quarter, a 28.7% Y/Y increase, and $25.7 million for the year, 19.3% Y/Y increase and a new sales record for the division.
- IBC combined operating income1 of $2.3 million and $5.6 million in the quarter and year, respectively, showed marked improvement over prior-year period figures.
- IBC combined adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”)1 of $2.9 million for the quarter and $7.4 million for the year, reversing comparative period losses.
- IBC combined gross margin1 of 33.9% in the quarter, and 29.0% for the year, also reflect stronger performance than the prior-year periods and a favorable inventory adjustment in the quarterly result.
- IBC combined net income1 of $559,000 ($0.01 per share), and $1.7 million ($0.02 per share), for the quarter and year, respectively.
- IBC’s working capital improved by $5.6 million in FY2024 over the prior year.
FRANKLIN, Ind. (October 28, 2024)– IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces its financial results for the quarter ended June 30, 2024. The Company will host a live investor webcast to discuss results on Monday, October 28 at 12 Noon Eastern. To register, go here.
Sales by IBC’s combined operations1 were$11.7 million and $38.1 million, respectively, for the quarter and year ended June 30, 2024, representing Y/Y increases of 50.9% and 33.4%, on higher product demand.
Continuing operations1 at the Copper Alloys division were $7.0 million and $25.7 million in the quarter and year, respectively, representing increases of 50.9% and 33.4% Y/Y for those periods. Copper Alloy sales for the year set a record for the division. Gross margin in the division rose both in the quarter and for the year to 29.3% and 24.3%, respectively.
IBC’s discontinued operations1 at the Massachusetts-based beryllium-aluminum division generated revenue of $4.1 million and $12.4 million, respectively, in the quarter and year ended June 30, 2024. Those operations were discontinued in June 2024 because of insufficient long-term demand for their products.
The Company’s combined adjusted EBITDA1 in the quarter and year ended June 30, 2024 was $2.9 million and $7.4 million, respectively, reversing losses over both prior-year periods.
IBC’s combined net income1 in the quarter of $559,000, or $0.01 per share, and $1.7 million for the year, or $0.02 per share. Both reversed losses in the prior-year periods.
The Company’s working capital improved by $5.6 million in FY2024, going from a working capital deficiency of $7.2 million, including cash of $83,000, as of June 30, 2023, to a working capital deficiency of $1,6 million, including cash of $1.4 million, as of June 30, 2024. The improvement largely reflects net refinancing of short-term debt with long-term debt and satisfaction of the obligation to produce beryllium-aluminum castings under a sales contract.
“I am very proud of the IBC team’s ability to perform under challenging economic and operational conditions and to set new performance records in doing so,” said Mark A. Smith, Chairman and CEO of IBC. “While we have discontinued our beryllium-aluminum operations, our continuing operations at Copper Alloys have performed very well and I’m excited about potential growth opportunities for IBC.”
IBC expects to incur a charge to operations in respect to the discontinuation of the Engineered Materials division’s operations and is negotiating the building landlord to minimize such costs.
| SELECTED RESULTS: Combined Continuing and Discontinued Operations ($000s) 1 Except as noted, all financial amounts are determined in accordance with IFRS. |
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| Quarter Ended 6-30-2024 | Quarter Ended 6-30-2023 | Year Ended 6-30-2024 | Year Ended 6-30-2023 | |
| Continuing Operations1 | ||||
| Revenue, continuing operations | $7,050 | $5,476 | $25,664 | $21,511 |
| Operating income from continuing operations | $493 | $317 | $2,118 | $991 |
| Income for the year from continuing operations | $18 | $1,303 | $56 | $450 |
| Adjusted EBITDA continuing operations | $831 | $1,931 | $3,106 | $3,242 |
| Discontinued Operations1 | ||||
| Revenue, discontinued operations | $4,067 | $1,893 | $12,411 | $7,036 |
| Operating income (loss) from discontinued operations | $1,864 | -$2,601 | $3,482 | -$4,413 |
| Income (loss) for the year from discontinued operations | $541 | -$4,316 | $1,642 | -$6,382 |
| Adjusted EBITDA discontinued operations | $2,097 | -$2,335 | $4,329 | -$3,331 |
| Combined Continuing and Discontinued Operations1 | ||||
| Revenue | $11,117 | $7,369 | $38,075 | $28,547 |
| Operating income (loss) | $2,357 | -$2,284 | $5,600 | -$3,422 |
| Income (loss) for the year | $559 | -$3,013 | $1,698 | -$5,932 |
| Adjusted EBITDA | $2,928 | -$404 | $7,435 | -$89 |
Full results can be seen in the Company’s financial statements and management’s discussion and analysis (“MD&A”), available at sedarplus.ca and on the Company’s website at https://ibcadvancedalloys.com/investors-center/.
INVESTOR WEBCAST SCHEDULED FOR MONDAY, October 28, 2024 at 12 Noon Eastern
IBC will host a live investor webcast on Monday, October 28, 2024 at 12 noon Eastern featuring Mark A. Smith, CEO and Board Chairman, and Toni Wendel, Chief Financial Officer. They will discuss the Company’s financial results for the quarter and year ended June 30, 2024. Participants can register to participate by going here: https://events.gov.teams.microsoft.us/event/a5e9cd70-8218-4149-aa92-0c2f6fc9d099@a7c6e2dc-c188-46da-80af-dd3453bd7361
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 income or loss for the quarter, and year-to-date, 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 and year-to-date loss to operating income (loss) follows:
| Quarter ended June 30 | 2024 | 2023 |
| ($000s) | ($000s) | |
| Income (loss) for the period | 559 | (3,013) |
| Foreign exchange (gain) loss | (109) | (8) |
| Interest expense | 529 | 565 |
| Impairment loss | 1,191 | 1,575 |
| Loss on disposal of assets | (204) | — |
| (Gain) loss on revaluation of derivative | (2) | (3) |
| Other income | (1,798) | (729) |
| Income tax expense (recovery) | (21) | (5) |
| Operating income | 2,357 | (2,284) |
| Year ended June 30 | 2024 | 2023 |
| ($000s) | ($000s) | |
| Income (loss) for the period | 1,698 | (5,932) |
| Foreign exchange (gain) loss | (116) | (13) |
| Interest expense | 2,659 | 2,427 |
| Impairment loss | 1,191 | 1,575 |
| Loss on disposal of assets | (233) | — |
| (Gain) loss on revaluation of derivative | (1) | (72) |
| Other income | (3.486) | (1,408) |
| Income tax expense (recovery) | (14) | 1 |
| Operating income (loss) | 5,600 | (3,422) |
ADJUSTED EBITDA
Adjusted EBITDA represents the Company’s income (loss) for the period, and year-to-date, before interest, income taxes, depreciation, amortization, and share-based compensation. A reconciliation of the quarter and year-to-date loss to Adjusted EBITDA follows:
| Quarter ended June 30 | 2024 | 2023 |
| ($000s) | ($000s) | |
| Income (loss) for the period | 559 | (3,013) |
| Income tax expense (recovery) | (21) | (5) |
| Interest expense | 529 | 565 |
| (Gain) loss on revaluation of derivative | (2) | (3) |
| Impairment loss | 1191 | 1,575 |
| Depreciation, & amortization, | 380 | 416 |
| Stock-based compensation expense (non-cash) | 291 | 61 |
| Adjusted EBITDA | 2,928 | (404) |
| Year ended June 30 | 2024 | 2023 |
| ($000s) | ($000s) | |
| Income (loss) for the period | 1,698 | (5,932) |
| Income tax expense (recovery) | (14) | 1 |
| Interest expense | 2,659 | 2,427 |
| (Gain) loss on revaluation of derivative | (1) | (72) |
| Impairment loss | 1,191 | 1,575 |
| Depreciation, & amortization | 1,500 | 1,648 |
| Stock-based compensation expense (non-cash) | 402 | 264 |
| Adjusted EBITDA | 7,435 | (89) |
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
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CONTACTS:
Mark A. Smith, Chairman of the Board
Jim Sims, Director of Investor and Public Relations
+1 (303) 503-6203
Email: [email protected]
Website: www.ibcadvancedalloys.com
ABOUT IBC ADVANCED ALLOYS CORP.
IBC is a leading advanced copper alloys manufacturer serving a variety of industries such as defense, aerospace, automotive, telecommunications, precision manufacturing, and others. At its vertically integrated production facility in Franklin, Indiana, IBC manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper, and aluminum bronze. 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 REGARDING FORWARD LOOKING STATEMENTS
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, the closure of the Engineered Materials division and the expected charge to operations in connection therewith, and the completion of existing contracts by the Engineered Materials division. Forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control including: the risk that the Company may not be able to make sufficient payments to retire its debt, 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.sedarplus.ca, 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”, “Operating Income,” “Continuing Operations,” “Discontinued Operations” and “’Combined Continuing and Discontinued Operations.” 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 sedarplus.ca
