Highlights of the Quarter
(Unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars.)
- Copper Alloy division sales improved by 25.1% as compared to the prior year period and rose sequentially by 21.6%. This marked the fourth consecutive quarter of rising sales for the division, as it continues to grow its business following the facility consolidation and expansion of its state-of-the-art copper alloy foundry facility in Franklin, Indiana.
- IBC consolidated sales declined 16.4% in the quarter, driven largely by lower demand for the Engineered Materials division’s beryllium-aluminum “BeAl” products used to manufacture semiconductor chips. Sales of these products in the prior-year period were at a historic high.
- Gross profit and gross margins in the quarter improved in the Copper Alloys Division over the prior-year period, but declined in the Engineered Materials division, due to lower sales to commercial markets and by lower yields.
- The Company reported a loss for the quarter of $2 million ($0.02 per share), as compared to a loss of $581,000 ($0.01) in the quarter ended September 30, 2021.
- IBC to host live investor webcast at 1 PM Eastern on Thursday, December 1, 2022 to discuss the Company’s recently issued financial results and its future growth plans. Participants can join the webcast here: https://zoom.us/j/97024063582?pwd=NWlOVXF2Um81dVRJTFhKSkZSZ3VzUT09
FRANKLIN, IN (November 29, 2022) — IBC Advanced Alloys Corp. (“IBC” or the “Company“) (TSXV:IB); (OTCQB:IAALF) announces its financial results for the quarter ended September 30, 2022.
Consolidated sales declined 16.4% over the prior-year period, driven largely by lower demand for the Engineered Materials division’s beryllium-aluminum “BeAl” products used to manufacture semiconductor chips as compared to the prior-year period, where demand was at a historic high. Copper Alloys division improved by 25.1% in the quarter and rose sequentially by 21.6%.
Gross profit and gross margins in the quarter improved in the Copper Alloys division to $432,000 and 9.8%, respectively, as compared to the prior year periods, but declined in the Engineered Materials division due to lower sales to commercial markets and by lower yields.
Consolidated Adjusted EBITDA1 for quarter was ($936,000), which compared to Adjusted EBITDA1 of $209,000 in the corresponding quarter of fiscal 2022. The Company reported a loss for the quarter of $2 million ($0.02 per share), as compared to a loss of $581,000 ($0.01) in the quarter ended September 30, 2021.
“It was a challenging quarter for our Engineered Materials division, but the Copper Alloys division continued on its growth trajectory since completing our consolidation and modernization of our Indiana foundry facility, with the Copper Alloys team booking their fourth consecutive quarter of higher sales,” said IBC CEO and Chairman Mark A. Smith. “In fact, Copper Alloys sales gains in the quarter were primarily due to the demand and availability of internally produced alloys from our vertically integrated Indiana foundry.”
“The Engineered Material division’s lower sales are largely due to lower demand for beryllium-aluminum products used to manufacture semiconductor chips as compared to the prior-year period, where demand was at a historic high,” Mr. Smith said. “Profitability in the Engineered Materials division was also impacted by a decline in yield, but it appears that the team has largely addressed this issue, as yields are showing considerable improvement so far in the current quarter. We continue to pursue many exciting new sales opportunities for beryllium-aluminum products in the defense sector, and I and the Board look forward to seeing more of those efforts begin to reach fruition in 2023,” Mr. Smith added.
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 9-30-2022 |
Quarter Ended 9-30-2021 |
|
| Revenue | $5,928 | $7,090 |
| Operating income (loss)1 | ($1,416) | $(186) |
| Adjusted EBITDA1 | $(936) | $209 |
| Income (loss) for the period | $(2,008) | $(581) |
| Income (loss) per share | $(0.02) | $(0.01) |
| SELECTED RESULTS: Copper Alloys ($000s) | ||
| Quarter Ended 9-30-2022 |
Quarter Ended 9-30-2021 |
|
| Revenue | $4,402 | $3,518 |
| Operating loss1 | $(130) | $(337) |
| Adjusted EBITDA1 | $10 | $(241) |
| Loss for the period | $(224) | $(336) |
| SELECTED RESULTS: Engineered Materials ($000s) | ||
| Quarter Ended 9-30-2022 |
Quarter Ended 9-30-2021 |
|
| Revenue | $1,526 | $3,572 |
| Operating Income (loss)1 | $(1,167) | $359 |
| Adjusted EBITDA1 | $(894) | $619 |
| Income (loss) for the period | $(1,228) | $301 |
LIVE INVESTOR WEBCAST
IBC will host a live investor webcast at 1 PM Eastern on Thursday, December 1, 2022 to discuss the Company’s recently issued financial results and its future growth plans. Participants can join the webcast here: https://zoom.us/j/97024063582?pwd=NWlOVXF2Um81dVRJTFhKSkZSZ3VzUT09
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 September 30 | 2022 | 2021 |
| ($000s) | ($000s) | |
| Loss for the period | (2,008) | (581) |
| Foreign exchange (gain) loss | 5 | (1) |
| Interest expense | 620 | 328 |
| Loss on disposal of assets | – | 49 |
| Gain on revaluation of derivative | (30) | – |
| Other income | 1 | (5) |
| Income tax expense (recovery) | (4) | 24 |
| Operating loss | (1,416) | (186) |
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) | |
| Loss for the period | (2,008) | (581) |
| Income tax expense (recovery) | (4) | 24 |
| Interest expense | 620 | 328 |
| Gain on revaluation of derivative | (30) | – |
| Depreciation, amortization, & impairment | 410 | 392 |
| Stock-based compensation expense (non-cash) | 76 | 45 |
| Adjusted EBITDA | (936) | 208 |
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” 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
# # #
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.
