Bullboard - Stock Discussion Forum AirBoss of America Corp ABSSF

Primary Symbol: T.BOS

Chemicals Basic Materials

AirBoss of America Corp. is a Canada-based company, which is a diversified developer, manufacturer and provider of survivability solutions, advanced custom rubber compounds and finished rubber products that are designed to outperform in the challenging environments. The Company operates through two segments: AirBoss Rubber Solutions and AirBoss Manufactured Products. The AirBoss Rubber... see more

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TSX:BOS - Post Discussion

AirBoss of America Corp > TD

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Post by retiredcf on Jul 06, 2023 7:55am

TD

Currently have a $10.50 target. GLTA

AirBoss of America Corp.

(BOS-T) C$6.96

AirBoss Awarded Two Contracts Valued at Up to $22.3 Million Event

Yesterday after market close, AirBoss announced that it has received an order from the Defense Logistics Agency (DLA) for the ADG AirBoss Molded Glove (AMG) and that ADG has been re-selected to supply its Bandolier multipurpose line charge system to an existing customer. The contracts are expected to provide revenue of up to $22.3 million over three years.

Impact: SLIGHTLY POSITIVE

We view the contracts positively due to the implied incremental revenue that we do not have explicitly included in our current 2023 and 2024 forecasts. In addition, we believe that securing the sale of traditional military equipment as opposed to equipment related to the pandemic should be reassuring to investors as an indicator of demand for AirBoss products that represent a more sustainable source of revenue, in our view. The resulting revenue and EBITDA are expected to further increase the spread between the company's financial ratios and related financial covenants. There has been a lack of new defense orders announced in recent quarters. As such, we believe that this news will begin to fulfill existing expectations for more order activity through the rest of 2023.

The order from the DLA is valued at $18.5 million over a three-year term, which equates to annual revenue of approximately $6.2 million, or 4.5% of our 2023 Defense segment revenue forecast. The contract award was a part of DLA's JB2GU CBRN glove program and ADG currently holds the single-source contract for this requirement.

The Bandolier order is valued at up to $3.8 million over a period of 12 months, which equates to approximately 2.7% of our 2023 Defense segment revenue forecast. The order is an extension of the customer's ongoing program of record for the Bandolier.

A lack of new orders for ADG, combined with economic headwinds for ARS, are the reasons for continuing caution in determining target valuation multiples. We believe that a forward-looking view that considers the much lower share price, dividend, and strong franchise value in the base business supports our expectation of upside over the next 12 months.

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