AirBoss heads into 2022 following record quarter, record year

NEWMARKET, Ontario—AirBoss of America Corp. reported the highest quarterly net sales in company history at $249.1 million for the last three months of 2021, as the rubber products company for the defense, health care, automotive and industrial markets moves into this year backed by "strong" full-year 2021 results as well.

AirBoss released its fourth quarter 2021 and full-year 2021 financial report March 9.

"Despite the extensive obstacles associated with the COVID-19 pandemic on the global economy, including unprecedented supply challenges and record raw material price increases, we continued to grow our business while making strategic investments in long-term growth, efficiency and innovation," Chris Bitsakakis, president and chief operating officer of AirBoss, said in a statement..

While the 88.4-percent spike in sales for the fourth quarter from the year-earlier quarter—AirBoss saw about $132.2 million in net sales in the fourth quarter for 2020—was record-breaking, so were the overall 2021 net sales of $586.9 million, a 17-percent jump over 2020 net sales of $501.6 million.

Adjusted net income for the fourth quarter was $15.5 million, down from $15.9 million in the final three months of 2020. For the full year, adjusted net profits rose 28.5 percent from 2020 to $47.4 million.

EBITDA stood at $26.5 million for the final quarter of 2021, against $32.8 million in the fourth quarter of 2020, and at $79.6 million for the full year 2021, against $103.2 million for full-year 2020.

As part of the March 9 report, AirBoss' Board of Directors approved a quarterly dividend of 10 cents per common share, to be paid on April 15, 2022, to shareholders of record at March 31, 2022.

AirBoss invested about $22.6 million in capital improvements in 2021, compared to $15.6 million in capital additions in 2020.

"2021 was also our 26th consecutive year of operating profitably during which time we have generated meaningful returns for investors and continued to succeed through multiple recessions," Bitsakakis said. "This reflects the benefits of our carefully cultivated strategy to rely on our culture of innovation and product diversification to mitigate the impact of economic and industry cycles."

AirBoss saw two key acquisitions in the last year, bringing on Blackbox Biometrics Inc. and Ace Elastomer L.L.C., "solidifying the medium- to longer-term scale of the business."

"We are entering 2022 in strong financial position," said Gren Schoch, AirBoss chairman and CEO. "Our balance sheet strength provides us with enhanced flexibility and positions us well to execute opportunistically on both organic and inorganic growth initiatives broadening our product lines and regional presence, particularly as potential acquisition targets may lack the balance sheet strength to weather prolonged supply chain challenges."

The excellent 2021 final quarters that AirBoss' defense and rubber solutions segments experienced helped offset losses in the engineered products sector, according to AirBoss. The decline for engineered products was driven primarily by mix and the microchip shortage in the automotive industry—for AirBoss, specifically in the muffler hanger, bushings and spring insulator product lines.

Net sales in engineered products for the final quarter of 2021 decreased by 14.6 percent to $28.3 million; and increased by 1.8 percent year-to-date to $116.6 million.

Though the final quarter of 2021 dropped in engineered products, the increase year-over-year was due to improved sales in the SUV, light truck and mini-van markets, according to AirBoss.

Offsetting results in the engineered products segment was the 129.1-percent increase quarter-over-quarter in the defense group segment ($178.9 million in sales for the fourth quarter of 2021) and the 65.8-percent quarter-over-quarter increase witnessed in AirBoss' rubber solutions business ($52.6 million in revenue for the fourth quarter of 2021).

For the year, defense pulled in $329.9 million in net sales in 2021, a 9.1 percent increase over full-year 2020; and rubber solutions garnered $171.6 million in net sales in 2021, a 44.1-percent increase over full-year 2020.

While AirBoss Defense predominantly attributes its increase to the continued delivery of nitrile gloves under the ongoing Health and Human Services contract, the rubber segment saw increases in the conveyor belt, mining, OTR/retread, and oil and gas sectors.

The engineered products segment saw a significant portion of the $16.9 million in capital improvements, as AirBoss installed 22 new injection presses within that division.

"In 2021, AirBoss continued to demonstrate its resilience in the face of the significant and extensive obstacles associated with COVID-19, including significant supply challenges and record raw material price increases," AirBoss said in its report. "Despite these ongoing challenges, AirBoss continued to take the necessary steps ... to strive to reduce potential impacts to its business and that of customers, by identifying alternative raw material sources both domestically and internationally while providing a safe work environment for its employees."

AirBoss enters 2022 in strong position, Schoch said, with a record pipeline of more than $1.5 billion.

"Despite ongoing challenges, we believe we are positioned for another strong performance this year," Schoch said. "We will continue to take necessary steps, including risk mitigation plans within our supply chain, to strive to reduce potential impacts on our business and that of our customers. Our continued focus will remain on supporting our customers, employees and stakeholders."