IBC Advanced Alloys Corp. (“
IBC” or the
“
Company”) (
TSX-V: IB; OTCQB:
IAALF) announces its financial results for the quarter
ended September 30, 2020.
In the quarter, the Company recorded a comprehensive loss of
$954,000 in the quarter, or ($0.02) per share. That compared to a
loss of $550,000, or ($0.01) in the prior-year period. The loss was
driven by lower sales and softer market demand primarily due to the
COVID-19 pandemic.
Consolidated sales for the quarter were $4,427,000, which
compared to $4,916,000 in the prior-year period. EM sales of
$1,236,000 rose by 13.5% in the quarter as compared to the
comparable prior-year period, driven primarily by increased demand
for BeAl products in commercial markets.
Copper Alloys sales of $3,191,000 were lower by 17% as compared
to the prior-year period, primarily due to COVID-19-related
economic slowness.
SELECTED RESULTS: Consolidated Operations ($000s) |
|
Quarter Ended 9-30-2020 |
Quarter Ended9-30-2019 |
Sales |
|
$4,427 |
|
|
$4,916 |
|
Operating Income (Loss)2 |
|
($505 |
) |
|
($325 |
) |
Comprehensive Income (Loss) |
|
($954 |
) |
|
($550 |
) |
Adjusted EBITDA |
|
($121 |
) |
|
$133 |
|
Gross margin improved in the quarter to 12.7% from 10.2% in the
prior-year period. Gross margin for the EM division rose sharply to
22%, from a negative averaged adjusted gross margin of 1.6%.
Both operating divisions posted positive Adjusted EBITDA for the
quarter, with EM booking $158,000 and Copper Alloys booking
$10,000. On a consolidated basis, Adjusted EBITDA for the quarter
was ($121,000), which compared to a positive Adjusted EBITDA of
$133,000 for the prior-year period.
ENGINEERED MATERIALS DIVISION RESULTS
SELECTED RESULTS: Engineered Materials ($000s) |
|
Quarter Ended 9-30-2020 |
Quarter Ended9-30-2019 |
Sales |
|
$1,236 |
|
|
$1,089 |
|
Operating Income (Loss) |
|
($54 |
) |
|
($222 |
) |
Comprehensive Income (Loss) |
|
($82 |
) |
|
($258 |
) |
Adjusted EBITDA |
|
$158 |
|
|
($7 |
) |
IBC’s EM division, which produces aerospace-grade
beryllium-aluminum (“BeAl”) alloy products, posted
a comprehensive loss of $82,000 in the quarter, as compared to a
comprehensive loss of $258,000 in the prior-year period.
EM sales of $1.2 million were 17% higher than sales of $1.1
million in the prior-year period, driven largely by increased
demand for BeAl products in commercial markets.
Adjusted EBITDA for the EM division of $158,000 also swung to
the positive in the quarter, as compared to Adjusted EBITDA of
($7,000) in the prior-year period.
COPPER ALLOYS DIVISION RESULTS
IBC’s Copper Alloys division posted a comprehensive loss of
$226,000 in the quarter, compared to a comprehensive income of
$62,000 in the prior-year period. This was largely due to decreased
demand for the division’s products as a result of the COVID-19
pandemic.
SELECTED RESULTS: Copper Alloys ($000s) |
|
Quarter Ended 9-30-2020 |
Quarter Ended9-30-2019 |
Sales |
|
$3,191 |
|
|
$3,827 |
Operating Income (Loss) |
|
($128 |
) |
|
$149 |
Comprehensive Income (Loss) |
|
($226 |
) |
|
$62 |
Adjusted EBITDA |
|
$10 |
|
|
$305 |
Copper Alloys sales of $3.1 million in the quarter were 17%
lower than sales of $3.8 million in fiscal Q1 of 2020. Gross margin
of 9.1% in the quarter declined from a gross margin of 13.5% in the
prior-year period. The decline was due to fixed costs being spread
over a lower volume of sales.
Adjusted EBITDA for the division was $10,000 in the quarter,
which was down when compared to Adjusted EBITDA of $305,000 in the
prior-year period.
NON-IFRS
MEASURES
To supplement its consolidated financial statements, which are
prepared and presented in accordance with IFRS, IBC uses “operating
income (loss)” and “Adjusted EBITDA”, which are non-IFRS financial
measures. IBC believes that operating income (loss) helps identify
underlying trends in the business that could otherwise be distorted
by the effect of certain income or expenses that the Company
includes in loss for the period, and provides useful information
about core operating results, enhances the overall understanding of
past performance and future prospects, and allows for greater
visibility with respect to key metrics used by management in
financial and operational decision-making. The Company believes
that Adjusted EBITDA is a useful indicator for cash flow generated
by the business that is independent of IBC’s capital structure.
Operating income (loss) and Adjusted EBITDA should not be
considered in isolation or construed as an alternative to loss for
the period or any other measure of performance or as an indicator
of our operating performance. Operating income (loss) and Adjusted
EBITDA presented here may not be comparable to similarly titled
measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to IBC’s data.
Operating Income (Loss)
Operating income (loss) represents loss for the period,
excluding foreign exchange loss, interest expense, interest income,
other income (expense) and income taxes that the Company does not
believe are reflective of its core operating performance during the
periods presented. A reconciliation of the first quarter loss to
operating loss follows:
Three months ended September 30 |
2020 |
2019 |
|
($000s) |
($000s) |
Loss for the period |
(954 |
) |
(550 |
) |
Foreign exchange (gain) loss |
61 |
|
(57 |
) |
Interest expense |
399 |
|
283 |
|
Gain/Loss on disposal of assets |
(3 |
) |
- |
|
Interest income |
- |
|
- |
|
Other income |
(5 |
) |
(7 |
) |
Arbitration award liability |
- |
|
- |
|
Income tax expense (recovery) |
(3 |
) |
6 |
|
Operating loss |
(505 |
) |
(325 |
) |
Adjusted EBITDA
Adjusted EBITDA represents our income (loss) for the period
before interest, income taxes, depreciation, amortization and
share-based compensation. A reconciliation of the first quarter
loss to Adjusted EBITDA follows:
Three months ended September 30 |
2020 |
2019 |
|
($000s) |
($000s) |
Loss for the period |
(954 |
) |
(550 |
) |
Income tax expense (recovery) |
(3 |
) |
6 |
|
Interest expense |
399 |
|
283 |
|
Depreciation, amortization, & impairment |
340 |
|
356 |
|
Stock-based compensation expense (non-cash) |
97 |
|
38 |
|
Adjusted EBITDA |
(121 |
) |
133 |
|
For more information on IBC and its innovative alloy products,
go here.
On Behalf of the Board of Directors:"Mark A. Smith”Mark A.
Smith, CEO & Chairman of the Board
CONTACTS:Mark A. Smith, Chairman of the
BoardJim Sims, Investor and Public RelationsIBC Advanced Alloys
Corp.+1 (303) 503-6203Email: jim.sims@ibcadvancedalloys.com
Website: www.ibcadvancedalloys.com@IBCAdvanced $IB $IAALF
ABOUT IBC ADVANCED ALLOYS CORP.
IBC is a leading beryllium and copper advanced alloys company
serving a variety of industries such as defense, aerospace,
automotive, telecommunications, precision manufacturing, and
others. IBC's Copper Alloys Division manufactures and distributes a
variety of copper alloys as castings and forgings, including
beryllium copper, chrome copper, and aluminum bronze. IBC's
Engineered Materials Division makes the Beralcast® family of
alloys, which can be precision cast and are used in an increasing
number of defense, aerospace, and other systems, including the F-35
Joint Strike Fighter. IBC's has production facilities in Indiana,
Massachusetts, and Pennsylvania. The Company's common shares are
traded on the TSX Venture Exchange under the symbol "IB" and the
OTCQB under the symbol "IAALF".
CAUTIONARY STATEMENTS
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This disclosure contains a
forward-looking statements. Forward-looking statements normally
contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’,
‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’,
‘ongoing’ and similar expressions, and within this news release
include any statements (express or implied) respecting improving
sales volumes and gross margins while lowering our operating costs
and increasing efficiencies across the enterprise. Although IBC
believes that the expectations reflected in these forward-looking
statement are reasonable, forward-looking statements, by their very
nature, are subject to inherent risks and uncertainties and are
based on assumptions, both general and specific, which give rise to
the possibility that actual results or events could differ
materially from our expectations expressed in or implied by such
forward-looking statement. The forward looking statements made by
the Company in this press release are based on its experience,
perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in the circumstances. As a result, we cannot guarantee that any
forward-looking statement will materialize and we caution you
against relying on any of these forward-looking statements. IBC
makes no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances after the
date any such statement is made, except as required by applicable
law. Additional information identifying risks and uncertainties is
contained in IBC’s filings, including its Annual Information Form
for the fiscal year ended June 30, 2019, available at
www.sedar.com.
1 We report non-IFRS measures such as "Adjusted EBITDA" and
“Operating Income”. Please see information on this and other
non-IFRS measures in the "Non-IFRS Measures" section of this
MD&A.2 IBC reports non-IFRS measures such as “Operating
Income.” Please see information on this and other non-IFRS measures
in the "Non-IFRS Measures" section of this news release and in
IBC’s MD&A, available on Sedar.com.
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