2019 Highlights
(unless other noted, all financial amounts in this news release are expressed in U.S. dollars)
- $18.7 million in revenue.
- Net loss of $4.0 million, or ($0.11 / share).
- Copper Alloy Division sales are trending higher from the low experienced in Q2 2019, with stronger demand and with capital equipment upgrades having expanded the Company’s ability to machine new and larger components in both commercial and defense markets.
- Beryllium-aluminum alloy sales are also poised to trend higher in both defense and commercial markets, particularly in the semiconductor equipment manufacturing, satellite, and aerospace sectors.
FRANKLIN, IN (October 28, 2019) – IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces its financial results for its fiscal fourth quarter and year ended June 30, 2019.
The Company generated revenue in fiscal year (“FY”) 2019 of $18.7 million, which compares to revenue of $19.4 million in FY 2018. IBC booked a comprehensive loss (net of tax) in FY 2019 of $4.0 million, or $0.11 per share, from a comprehensive loss of $700,000, or $0.02 per share, for FY 2018.
IBC’s loss in 2019 was largely driven by (1) lower-than-expected revenue in fiscal Q2 2019 in the Copper Alloys Division, caused by an industry-wide reduction in demand in copper alloy products in the quarter, and (2) lower-than-normal demand throughout most of 2019 for beryllium-aluminum (“BeAl”) alloy products used by semiconductor equipment manufacturers, which followed several consecutive record-breaking years of sales to that sector.
However, customer demand for copper alloy products returned to more normal levels in the third and fourth fiscal quarters of 2019, and demand and orders are trending higher so far in fiscal 2020. In the Company’s Engineered Materials Division, demand for BeAl products used in commercial applications also is strengthening from the lows of 2019, as underscored by the Company’s signing in October 2019 of a two-year supply agreement with a leading global manufacturer of semiconductor and electronics assembly equipment and by the fact that the Company has now moved to initial production of BeAl parts for a major satellite manufacturer.
Demand for BeAl products used in defense applications remained steady in 2019 but is expected to strengthen as rates of production for defense programs such as the F-35 Lightning II aircraft begin to accelerate beyond low rates of initial production. For example, according to Lockheed-Martin, the annual rate of production of the F-35 aircraft is expected to increase by 65% from 2018, when IBC signed a three-year supply agreement, to 2021.
“2019 was a challenging year for IBC, largely due to industry-wide downturns in both copper and beryllium-aluminum alloy markets,” said Mark A. Smith, Chairman of the IBC Board. “However, we have been pleased to see demand and orders rising in both operating divisions over the past several months and I expect to see those trends continuing into fiscal 2020, particularly as Lockheed Martin’s F-35 program starts to migrate to higher rates of annual production and we begin production of new components at our Engineered Materials division.”
FISCAL 2019 SEGMENT AND CONSOLIDATED OPERATIONS RESULTS
A summary of the Company’s results for FY 2019 and Q4 2019, on a consolidated and segment-by-segment basis, of operations to loss before other items (“operating income (loss)”) follows:
SELECTED ANNUAL INFORMATION
|
($000 except $ per share) |
June 30 |
||
|
|
2019 |
2018 |
2017 |
|
Revenue ($000) |
18,668 |
19,399 |
15,715 |
|
Profit / Loss ($000)(2) |
(4,043) |
(702) |
(5,362) |
|
Profit / Loss per share, basic and diluted ($ per share) |
(0.11) |
(0.02) |
(0.18) |
|
Total Assets |
17,814 |
20,295 |
14,897 |
|
Long-term Financial Liabilities |
1,847 |
1,769 |
213 |
EVENTS SUBSEQUENT TO JUNE 30, 2019
Following June 30, 2019, the Company reported these subsequent events:
- In October 2019, we secured a renewal of our existing line of credit and term loan facility with BMO. The renewal of both the BMO line of credit and term loan facility extends until September 30, 2020. Approximately $3 million is available to the Company under the line of credit, and the term loan has a maximum of approximately $1.2 million.
- In October 2019, we signed a two-year supply agreement with a leading global manufacturer of semiconductor and electronics assembly equipment under which IBC will supply Beralcast® 363 cast components in multiple design configurations over a two-year period.
- In August 2019, we received new orders of high-performance beryllium-aluminum alloy parts made from IBC’s proprietary Beralcast® material from a leading global manufacturer of semiconductor and electronics assembly equipment. Orders for calendar fourth quarter 2019, made under an existing exclusive supply agreement between IBC and the semiconductor assembly equipment manufacturer, were valued at approximately $400,000.
- On July 22, 2019, we issued 737,059 common shares to debentures holders with an issue-date value of C$161,000 in satisfaction of the June 30, 2019 interest payment in lieu of cash.
- On July 7, 2019, we issued 304,671 common shares for services to directors of the Company, 101,557 common shares for services to a consultant and 185,000 common shares for options exercised by a director of the Company.
NON-IFRS MEASURES
To supplement its consolidated financial statements, which are prepared and presented in accordance with IFRS, IBC uses “operating income (loss)” and “operating profit,” which are non-IFRS financial measures. IBC believes that operating income and operating profit help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that IBC includes in loss for the period. IBC recently achieved operating profitability for the first time in years and further believes that operating income (loss) and operating profit provide useful information about core operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by management in its financial and operational decision-making. Operating income (loss) and operating profit 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 IBC’s operating performance. Operating income (loss) and operating profit 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 our data.
Operating income (loss) represents loss for the period, excluding foreign exchange loss, interest expense, loss on disposal of assets, interest income, other income (expense), arbitration award liability and income taxes that IBC does not believe are reflective of the core operating performance during the periods presented.
Operating income (loss)
A reconciliation of the income (loss) for the three and twelve months ended June 30, 2019 and 2018 to operating income (loss) follows:
|
Period Ended June 30 |
2019 |
2018 |
|
|
$ |
$ |
|
Loss for the period |
(1,550) |
(240) |
|
Foreign exchange loss |
56 |
3 |
|
Interest expense |
217 |
110 |
|
Loss on disposal of assets |
– |
– |
|
Interest income |
– |
(1) |
|
Other income (expense) |
(10) |
(6) |
|
Income taxes |
(10) |
(1) |
|
Operating income (loss)1 |
(1,297) |
345 |
1Difference in operating loss for fourth quarter 2019 is due to rounding.
|
Year Ended June 30 |
2019 |
2018 |
|
|
$ |
$ |
|
Loss for the period |
(4,043) |
(702) |
|
Foreign exchange loss |
49 |
52 |
|
Interest expense |
925 |
286 |
|
Loss on disposal of assets |
20 |
– |
|
Interest income |
(7) |
(2) |
|
Other income (expense) |
(22) |
(14) |
|
Income taxes (recovery) expense |
(4) |
11 |
|
Operating loss |
(3,082) |
(369) |
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, 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 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, Massachusetts, Pennsylvania, and Missouri. 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
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. This disclosure contains a forward-looking statements. Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting anticipated sales trends in fiscal 2020, expected demand for the Company’s products and expectations as to additional quantities to be sold under the Lockheed Martin contract. Although IBC believes that the expectations reflected in these forward-looking statement are reasonable, forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statement. The forward looking statements made by the Company in this press release are based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. IBC makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as required by applicable law. Additional information identifying risks and uncertainties is contained in IBC’s filings, including its Annual Information Form for the fiscal year ended June 30, 2019, available at www.sedar.com.
