NEWMARKET, Ontario—AirBoss of America Corp.'s defense products business has received its second big boost in the last nine months.
It has been awarded another contract for protective gloves by the U.S. Department of Defense. The firm's latest pact calls for the company to manufacture up to 555,000 pairs of chemical, biological, radiological and nuclear protective gloves and supply them to the U.S. military.
Consisting of a base year and two option years, the order could be worth up to $11.3 million.
An initial order that maximizes the base year quantity of 270,000 pairs of gloves has been received, AirBoss President Lisa Swartzman said, and is worth about $5.2 million.
While the $5 million figure isn't exceptionally large as far as U.S. DoD contracts go, for AirBoss' defense business it is significant because the defense products market has been slow in the last few years, she said.
Delivery of the pact's initial order likely will begin in the fourth quarter of 2015, Swartzman said. That part of the order is expected to be completed in the second quarter of 2016.
A global leader in the design, development and manufacture of CBRN personal protective equipment, AirBoss' defense products business has supplied military and first response forces globally for more than 40 years.
Part of the AirBoss Engineered Products division, the defense operation produces and supplies hand wear, footwear and respiratory protection products.
In September 2014, the Newmarket-based company was awarded an order for a little more than 400,000 pairs of CBRN over-boots. That pact's estimated value was about $15.3 million.
Deliveries of the boots began in the latter part of 2014 and will continue through December, Swartzman said. AirBoss also landed an order for 40,000 pairs of protective gloves and another for 30,000 pairs of boots from England in early 2014.
Awards that the defense operation received in 2014—especially the $15.3 million U.S. DoD order—were key reasons the engineered products division exited the first quarter with stronger financial results than the previous year.
For the remainder of 2015, the continuation of the over-boot contract combined with the new U.S. DoD glove award will benefit defense sales and earnings when compared to 2014, Swartzman and Gren Schoch, the firm's chairman and CEO, said in the company's quarterly report.
Overall, net sales for AirBoss rose 7.6 percent to $76.9 million for the quarter while net income increased 28 percent to almost $3.2 million from $2.4 million in last year's period.
In addition to engineered products, the firm gained momentum across all of divisions. Rubber compounding volumes, in terms of pounds, increased about 1.6 percent over the like period in 2014. The automotive business continued to perform well, benefiting from the strong automotive manufacturing environment as well as increased customer penetration, Schoch and Swartzman said.
They expect the automotive parts business to perform well for the remainder of 2015.