CIBCHave a $16.00 target. GLTA
EQUITY RESEARCH
May 9, 2023 Flash Research
AIRBOSS OF AMERICA CORP.
Q1 First Pass: EBITDA In Line With Consensus
Key Takeaway: Neutral impact. The company posted resulted that were in
line with consensus expectations but a touch lighter than our estimates. BOS
is hosting a conference call tomorrow at 9:00 a.m. ET.
Q1 Recap: BOS reported total revenue of $117MM, down from $144MM the
year prior and versus our estimate and consensus of $112MM. Adjusted
EBITDA came in at $10MM, down from $20MM the year prior and versus our
estimate of $12MM (consensus $10MM). EPS were $0.06, down from $0.34
the year prior and versus our expectation of $0.13 (consensus $0.08). FCF
was $5MM, up from $(35)MM the year prior and versus our estimate of
$10MM. The biggest variance came from a NWC drag whereas we had
modeled a tailwind.
Divisional Results: Below is a summary of BOS’ divisional results.
• Rubber Solutions: Q1 revenue for ARS came in at $49MM, down from
$52MM the year prior and versus our estimate of $53MM. Volume was
down 24.1% with decreases across the vast majority of sectors due to
decreased momentum at most customers’ operations as a carryover from
softness in the prior quarter. Tolling volume was down 81.0% while non-
tolling was down 9.0%. Adj. EBITDA for the segment came in at $5.3MM,
down from $6.1MM last year and versus our estimate of $6.4MM
• Engineered Products: Q1 revenue for AEP came in at $40MM, compared
to $29MM the year prior and versus our estimate of $33MM. The increase
was due to higher volumes in SUV and light truck platforms despite
ongoing global electronic chip shortages and economic headwinds related
to ongoing freight, logistics and, to a lesser extent, raw material supply
challenges, which continue to impact production schedules across all
OEMs and Tier 1 suppliers. Adj. EBITDA for the segment came in at
$4.0MM, up from $(5.6)MM the year prior and versus our estimate of
$2.1MM. The adj. EBITDA includes an adjustment of $0.152MM in
professional fees related to negotiations.
• AirBoss Defense Group: Q1 revenue for ADG came in at $28MM, down
from $63MM the year prior and versus our estimate of $26MM. The
decrease was primarily the result of deliveries under the large HHS nitrile
patient examination glove contract in Q1 2022, partially offset by improved
volumes from defense products manufactured at Engineered Products.
Adj. EBITDA for the segment came in at $4.1MM, down from $19.7MM
the year before and versus our estimate of $5.4MM.
Financial Position: BOS ended Q1 with a net debt to EBITDA ratio of 2.99x
versus 2.43x at the end of 2022. The company has liquidity of ~$140MM,
which includes $17MM in cash and equivalents and ~$123MM in available
under credit facilities. Recall liquidity at the end of 2022 was ~$269MM.
Conference Call Details: The company is hosting a call tomorrow at 9:00
a.m. ET. Dial-in numbers are: 1-800-319-4610 or 1-416-915-3239 (access
code: 55506).