NEWMARKET, Ontario, Oct. 31, 2022 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS)(OTCQX:ABSSF) (the “Company” or “AirBoss”) today released a corporate update and preview of results for the third quarter of 2022 (“Q3 2022”), including the Company’s decision to take a non-cash charge with respect to nitrile patient examination gloves held in inventory by AirBoss Defense Group (“ADG”).
Based on significant downward shifts in pricing in the nitrile glove market during 2022, the Company has determined that it is necessary to take a non-cash charge in respect of nitrile gloves held in ADG’s finished goods inventory. In addition, upon inspection, it was determined that a portion of the gloves no longer meet ADG’s safety standards, and arrangements have been made for disposal of the affected glove supply. As a result of these factors, a material portion of the gloves will be disposed of, and a corresponding non-cash, non-covenant-impacting write-down of inventory totaling US$57 million will be taken.
“We have seen pricing in the nitrile glove market drop by over 80% due to a massive influx of imported low-cost product. Given these shifts in the nitrile glove market and related considerations, we have taken the unfortunate decision to write off a material amount of the gloves we hold in inventory, despite continued pursuit of sale opportunities and a general expectation that pricing will eventually rebound and drive future sales,” expressed Gren Schoch, Chairman and CEO of AirBoss. “We have arranged for the safe, cost-effective disposal of a portion of the glove supply in question, and ongoing costs related to storage of this inventory will no longer be incurred.”
Mr. Schoch further noted, “We also want to take this opportunity to remind investors that ADG’s relationships with its customers remain very strong and that this division continues to pursue significant opportunities for its portfolio of personal protective equipment. In addition, the actions undertaken by the Engineered Products segment to address its key challenges continue to positively move forward and management is optimistic of results materializing in the near term.”
Q3 2022 Results Preview
Due to the continued challenges being experienced by the Company and the write-down noted above, the Company is providing anticipated results for Q3 2022 to provide visibility to investors. AirBoss anticipates recording the following for Q3 2022:
- Revenues in the range of US$102.0 to US$105.0 million
- Adjusted EBITDA¹ in the range of US$1.0 to US$1.4 million
- Adjusted EPS¹ in the range of ($0.44) to ($0.47)
Important information on risk factors related to this guidance are noted in the “AirBoss Forward Looking Information Disclaimer” later in this news release.
Q3 2022 Conference Call
The Company also reminds investors that it will release its third quarter results after market close on Tuesday November 8, 2022. The release will be followed by a conference call to discuss its financial results on Wednesday November 9, 2022 at 9:00 am ET.
Please connect approximately 10 minutes prior to the beginning of the call to ensure participation.