Highlights of the Quarter As Compared to the Prior-Year Period
(Unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars.)
- Consolidated sales strengthened by 5.2% and were higher sequentially by 26.4%.
- Copper Alloy division sales soared by 76.2%, its 5th consecutive quarter of rising sales.
- Engineered Materials division sales were lower in the quarter but improved by 17.1% sequentially.
- Operating income,[1] gross profit, and gross margin all strengthened for Copper Alloys and for the Company on a consolidated basis.
- Copper Alloys’ adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”)1 increased by 1,041.9% and 430.2%, respectively, in the quarter and year to date.
- IBC swung to a loss of $395,000, or (0.00) per share, from income of $344,000 ($0.00/share) from the quarter ended December 30, 2021.
FRANKLIN, Ind. (February 28, 2023) – IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces its financial results for the quarter ended December 30, 2022.
On a consolidated basis, IBC sales strengthened by 5.2% in the quarter over the prior-year period and were higher sequentially by 26.4% over the quarter ended September 30, 2022.
Copper Alloy division sales rose by 76.2% as compared to the prior-year period and were higher by 50% year-to-date over the comparable period of 2022. This marked the fifth consecutive quarter of rising sales for the division.
Engineered Materials division sales declined by 54% year-over-year (YoY), driven largely by lower demand for beryllium-aluminum products used to manufacture semiconductor chips. Sales of those products in prior-year periods were at historic highs. However, EM division sales in the quarter ended December 31, 2022, improved sequentially by 17% over the quarter ended September 30, 2022.
Operating income1 for Copper swung to a gain in the quarter over the prior year period, as did the Company on a consolidated basis.
Gross profit in the quarter soared in Copper by 508% over the prior-year period, and was higher by 27.5% sequentially over the quarter ended September 30, 2022.
Copper Alloys’ Adjusted EBITDA1 increased by 76.2% and 29.7%, respectively, in the quarter and year to date, but decreased in the Engineered Materials division for both periods, as did the Company on a consolidated basis.
IBC swung to a loss for the quarter of $395,000, or ($0.00) per share, as compared to income of $344,000, or $0.00 per share, in the quarter ended December 31, 2021, and a loss for the six-month period ended December 31, 2022 of $2.4 million, or ($0.03) per share, compared to a loss of $237,000, or ($0.00) per share, in the comparable prior-year period.
“I was pleased to see IBC sales improve in the quarter, despite the fact that it was another challenging quarter for our Engineered Materials division,” said Mark A. Smith, Chairman and CEO of IBC. “However, Engineered Materials is showing improvement now with yields strengthening, sequential sales rising, and sales leads growing.”
“Our Copper Alloys division continues on a very strong growth trajectory with strong product demand and continuing production capacity expansion,” added Mr. Smith. “We are really starting to see the benefits of the facility consolidation and expansion that we completed last year, and I see continued growth on our near- and long-term horizon for Copper.”
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/.
| SELECTED RESULTS: Consolidated Operations ($000s) | ||||
| Quarter Ended 12-31-2022 |
Quarter Ended 12-31-2021 |
Six Months Ended
12-31-2022 |
Six Months Ended 12-31-2021 | |
| Revenue | $7,495 | $7,124 | $13,423 | $14,214 |
| Operating income (loss)1 | $202 | $554 | $(1,214) | $368 |
| Adjusted EBITDA1 | $672 | $1,095 | $(264) | $1,303 |
| Income (loss) for the period | $(395) | $344 | $(2,403) | $(237) |
| SELECTED RESULTS: Copper Alloys Division ($000s) | ||||
| Quarter Ended 12-31-2022 |
Quarter Ended 12-31-2021 |
Six Months Ended
12-31-2022 |
Six Months Ended 12-31-2021 | |
| Revenue | $5,708 | $3,239 | $10,110 | $6,757 |
| Operating income (loss)1 | $1,077 | $(360) | $948 | $(697) |
| Adjusted EBITDA1 | $1,215 | $(129) | $1,225 | $(371) |
| Income (loss) for the period | $920 | $(164) | $696 | $(501) |
| SELECTED RESULTS: Engineered Materials Division ($000s) | ||||
| Quarter Ended 12-31-2022 |
Quarter Ended 12-31-2021 |
Six Months Ended
12-31-2022 |
Six Months Ended 12-31-2021 | |
| Revenue | $1,787 | $3,885 | $3,313 | $7,457 |
| Operating income (loss)1 | $(739) | $1,037 | $(1,907) | $1,396 |
| Adjusted EBITDA1 | $(469) | $1,299 | $(1,363) | $1,918 |
| Income (loss) for the period | $(813) | $981 | $(2,042) | $1,282 |
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, 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:
| Three months ended December 31 | 2022 | 2021 |
| ($000s) | ($000s) | |
| Income (loss) for the period | (395) | 344 |
| Foreign exchange loss | 2 | 3 |
| Interest expense | 613 | 270 |
| Loss on disposal of assets | – | 70 |
| (Gain) on revaluation of derivative | (29) | – |
| Other income | 4 | 7 |
| Income tax expense | 7 | – |
| Operating income | 202 | 554 |
| Six months ended December 31 | 2022 | 2021 |
| ($000s) | ($000s) | |
| Loss for the period | (2,403) | (237) |
| Foreign exchange loss | 7 | 2 |
| Interest expense | 1,233 | 598 |
| Loss on disposal of assets | – | 21 |
| (Gain) on revaluation of derivative | (59) | – |
| Other income | 5 | 2 |
| Income tax expense | 3 | 24 |
| Operating income (loss) | (1,214) | 368 |
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 and year-to-date loss to Adjusted EBITDA follows:
| Three months ended September 30 | 2022 | 2021 |
| ($000s) | ($000s) | |
| Income (loss) for the period | (395) | 344 |
| Income tax expense | 7 | – |
| Interest expense | 613 | 270 |
| (Gain) on revaluation of derivative | (29) | – |
| Depreciation, amortization, & impairment | 409 | 389 |
| Stock-based compensation expense (non-cash) | 67 | 92 |
| Adjusted EBITDA | 672 | 1,095 |
| Six months ended September 30 | 2022 | 2021 |
| ($000s) | ($000s) | |
| Loss for the period | (2,403) | (237) |
| Income tax expense | 3 | 24 |
| Interest expense | 1,233 | 598 |
| (Gain) on revaluation of derivative | (59) | – |
| Depreciation, amortization, & impairment | 819 | 781 |
| Stock-based compensation expense (non-cash) | 143 | 137 |
| Adjusted EBITDA | (264) | 1,303 |
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
___________________________________
[1] IBC reports non-IFRS measures such as “Adjusted EBITDA.” 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
# # #
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
@IBCAdvanced $IB $IAALF #copper #beryllium #F35
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.
