BOS AirBoss of America Corp

AirBoss of America Corp. (TSX: BOS) (OTCQX:ABSSF) (the “Company” or “AirBoss”) today announced its third quarter performance as it moves forward into the remainder of the year and 2022 with very strong momentum. The Company will host a conference call and webcast to discuss the results on November 10th at 9 a.m. ET, the details of which are further below.

Recent Highlights

($US except where otherwise noted)

• Completed the acquisition of 100% ownership of Ace Elastomer, Inc. (“Ace”) for US$42.5 million in cash;
• Announced new credit facilities with increased revolving credit availability up to $250 million (from $150 million) with an accordion of $75 million (from $50 million);
• Received approval from the National Institute for Occupational Safety and Health (“NIOSH”) for its new AirBoss 100™ Half Mask Respirator; and
• Continued deliveries of nitrile patient examination gloves under the previously announced order for the Strategic National Stockpile (“SNS”) for the U.S. Department for Health and Human Services (“HHS") – Office of the Assistant Secretary for Preparedness and Response (ASPR) worth up to $288 million, anticipated to be completed in Q4 2021.

“I’m very pleased to report a strong quarter of progress for AirBoss, including the production and final commencement of shipments for the remaining portion of the 18 million boxes of nitrile patient examination gloves for the U.S. Strategic National Stockpile for HHS, the acquisition of Ace Elastomer which has propelled us into a market leading position in color and specialty rubber compounding and expanded our geographic penetration in the U.S., and the installation of new technology to improve automation and efficiencies at our engineered products facility,” said Chris Bitsakakis, President and COO of AirBoss. “Although Q3 financial performance was impacted by the shift to the right of $116 million of sales due to West Coast port backlogs and COVID-19 lockdowns, we are reiterating our 2021 outlook and expect record results in the fourth quarter.”

“Solid operational execution, including a combination of domestic sourcing, advanced buying tactics and the development of alternative sources, helped mitigate the impact of numerous global challenges including on-going global freight, labour and logistics challenges, raw material price escalations and constraints, and the continued impact of the COVID-19 pandemic,” added Mr. Bitsakakis. “While we expect such issues to continue through the remainder of 2021, we have solidified our position this year as a leading supplier of personal protective equipment (“PPE”) to the health care and survivability sectors while making investments to position our AirBoss Defense Group (“ADG”), Rubber Solutions (“ARS) and Engineered Products (“AEP”) segments for strong performance coming out of the pandemic as the economy stabilizes

“At ADG, with completion of the HHS nitrile glove order anticipated in Q4 2021, we will have executed successfully on more than a half a billion dollars of orders from the U.S. Government in 2020 and 2021, cementing our status as a trusted large-scale supplier of protective equipment for frontline healthcare, defense and law enforcement personnel, able to deliver high quality products during the most challenging of supply chain dynamics. We continue to pursue more large-scale PPE and other survivability equipment contracts in our record $1 billion-plus sales pipeline while preparing to market our recently approved AirBoss 100™ Half Mask Respirator, a more portable and lower price point alternative to our successful FlexAir powered air purifying respirator.”

“At ARS, we have seen increased top line growth momentum though margins were compressed by the rapid escalation of pandemic related raw material, freight and labor challenges while realizing a marked reduction of government subsidies. The addition of Ace Elastomer coupled with the scale up in utilization of our specialty and color compounding mixers, bolsters our strategy to expand our delivery of higher margin solutions to our customers.

At AEP, we expect to install our second fully automated robotic work cell in Q4 2021, which, along with our new injection presses and other investments, will result in the completion of the modernization of AEP’s asset base to the highest and most efficient standards, resulting in the ability to both increase our capability to produce more sophisticated, higher margin products but also lower our operating expenses, a critical requirement to increase our competitiveness with low-cost operations in other parts of the globe.”

“We are preparing to enter 2022 in an extremely strong financial position along with a record pipeline of opportunities that continues to grow. During Q3, we increased the size of our credit facilities and improved their terms, and were then able to use these more efficient facilities for the short term funding of working capital requirements related to the nitrile glove order for HHS. As the final nitrile glove shipments are completed we expect to rapidly de-lever while maintaining flexibility for further M&A to accelerate our growth strategy,” concluded Mr. Bitsakakis.”

	Three-months ended September 30				Nine-months ended September 30
In thousands of US dollars, except share data
(unaudited)	2021			2020	2021		2020
Financial results:
Net sales	112,027			162,745	337,805		369,392
Profit	6,902			21,160	31,541		36,330
Profit attributable to owners of the Company	6,902			11,646	31,541		17,801
Adjusted Profit attributable to owners of the Company2	7,040			11,681	31,833		20,164
Earnings per share (US$)
– Basic	0.26		$0.50		1.17		US$0.76
– Diluted	0.24		$0.47		1.11		US$0.74
Adjusted Earnings per share2 (US$)
– Basic	0.26		$0.50		1.18		US$0.86
– Diluted	0.25		$0.47		1.12		US$0.83
EBITDA2	13,752			37,335	53,056		70,400
Adjusted EBITDA2	13,922			37,370	53,380		72,763
Net cash provided by operating activities	(125,723	)		18,137	(136,392	)	47,869
Free cash flow2	(130,447	)		13,965	(149,400	)	38,479
Dividends declared per share (CAD$)	CAD$0.10		CAD$0.07		CAD$0.27		CAD$0.21
Capital additions	4,724			4,544	17,560		10,561
Financial position:	September 30, 2021				December 31, 2020
Total assets	546,889						367,369
Term loan and other debt1	216,516						90,734
Net Debt2	186,057						(9,718	)
Total equity	221,840						194,588
Outstanding shares (#) *	26,987,068						26,908,802
* at November 9, 2021

Financial Results

Consolidated net sales for the three- and nine-month periods ended September 30, 2021 decreased by 31.2% to $112,027 and by 8.6% to $337,805, respectively, compared with the same periods in 2020. In both cases, the decreases were primarily attributable to ADG's delivery of the FEMA and HHS PAPR contracts in the prior year, partially offset by increased sales at Rubber Solutions across the majority of customer sectors.

Consolidated gross profit for the three-month period ended September 30, 2021, decreased by $19,937 to $25,776, compared with the same period in 2020, driven by lower volumes at ADG related to the HHS PAPR contract recognized in the same period in the prior year, lower volume at Engineered Products and continued freight and raw material increases experienced across the organization. For the nine-month period ended September 30, 2021, consolidated gross profit decreased by $10,813 to $84,854, compared with the same period in 2020, driven by lower volume at ADG due to the FEMA and HHS PAPR contracts in the prior year and margin compression at Rubber Solutions and Engineered Products due to labor, freight and raw material increases. Gross profit as a percentage of net sales for the three-month period ended September 31, 2021 was reduced to 23.0% compared with 28.1% for Q3 2020 primarily due to a change in product mix at ADG, raw material, freight and labor-related challenges impacting each segment to varying degrees in addition to government-directed wage subsidies recognized in Q3 2020. Gross profit as a percentage of net sales decreased to 25.1% for 2021 year-to-date compared with 25.9% for 2020 year-to-date. These decreases were primarily as a result of lower margin in the Rubber Solutions and Engineered Products segments, partially due to higher government-directed wage subsidies recognized for the same period in the prior year partially offset by the continued management of controllable overhead costs in all segments.

Adjusted EBITDA for the three- and nine-month periods ended September 30, 2021 decreased by 62.7% and 26.7%, respectively, compared to the same periods in 2020, due primarily to the decreases in gross profit noted above as partially offset by continued management of controllable overhead costs in all segments.

Financial Position

With $12.4 million in cash and cash equivalents, $50.5 million in undrawn availability under its credit facilities, $200 million in inventories for delivery to customers, and a net debt to TTM EBITDA ratio of 2.17x, AirBoss enters the remainder of 2021 in strong financial condition.

Dividend

The Board of Directors of the Company has approved a quarterly dividend of C$0.10 per common share, to be paid on January 17, 2022 to shareholders of record at December 31, 2021.

Segment Results

In the Rubber Solutions segment, net sales in the quarter increased by 34.0% to $39,861 from the comparable period in 2020, with increases across the vast majority of sectors due to increased momentum at most customer’s operations despite continuing supply chain challenges related to raw material supply and elevated freight costs. Year-to-date, net sales increased by 36.1% to $118,937 from the comparable period in 2020, with increases across the majority of sectors and continued ramp up of most customer’s operations despite residual softness due to the COVID-19 pandemic. Tolling volume was down 23.1% in the quarter and up 15.6% year-to-date from the comparable periods in 2020. Non-tolling volume increased by 14.3% for the quarter and 24.6% year-to-date compared to the same periods in 2020.   Gross profit in the Rubber Solutions segment decreased by 12.1% to $4,268 for the quarter, from the comparable period in 2020, primarily due to increased raw material, labor and logistics costs and a decrease in government-directed subsidies, partially offset by an increase in non-tolling volumes and managing controllable overhead costs. Year-to-date, gross profit increased by 2.0% to $14,967 from the comparable period in 2020, primarily due to increased tolling and non-tolling volumes, managing and reducing the impact of COVID-related disruptions and managing controllable overhead costs, partially offset by higher raw material, labor and logistics costs and a decrease in government-directed subsidies.

At Engineered Products, net sales in the quarter decreased by 25.1% to $28,328 from the comparable period in 2020, due to lower volumes in the SUV, light truck and mini-van platforms related to global electronic chip shortages, combined with raw material shortages and freight and logistics bottlenecks, which continue to challenge production schedules across all OEMs and Tier 1 suppliers, partially offset by production of certain molded defense products. Year-to-date, net sales increased by 8.5% to $88,312, due to stronger volumes in the SUV, light truck and mini-van platforms, in addition to continued production of certain molded defense products. Compared to the same period of 2020, volume and sales improved earlier this year as the automotive sector continued to manage volume volatility given the challenges with the global electronic chip shortages combined with raw material shortages in addition to freight and logistics constraints. This softness is anticipated to continue in the foreseeable future. Gross profit in the Engineered Products segment decreased to $(1,319) for the quarter from $3,746 in Q3 2020, primarily a result of lower volumes in part due to the global electronic chip shortages in the automotive sector combined with raw material shortages in addition to freight and logistics constraints partially offset by a continued focus on controllable operational cost containment. Year-to-date, gross profit decreased by 78.8% to $1,053 from the comparable period in 2020, primarily a result of challenges associated with the global electronic chip shortages in the automotive sector combined with raw material shortages in addition to freight and logistics constraints, higher labor, material and logistics costs partially offset by a continued focus on controllable operational cost containment and managing overhead costs, supported by government-directed subsidies.

In the AirBoss Defense Group segment, net sales in the quarter decreased by 51.9% to $52,179, from the comparable period in 2020, primarily due to the large FEMA and HHS PAPR contracts in Q3 2020, which was partially offset by the continued deliver of the HHS nitrile patient examination gloves in Q3 2021. Year-to-date, net sales decreased by 31.7% to $154,026, from the comparable period in 2020, primarily due to the large PAPR contracts from FEMA and HHS delivered in the comparable period of 2020, partially offset by the continued deliveries under the new HHS nitrile examination glove order and other defense products. Gross profit at AirBoss Defense Group decreased by 38.5% to $22,827 for the quarter, from the comparable period in 2020, primarily due to the large contracts from FEMA and HHS for PAPRS and related accessories delivered in Q3 2020 and the reduction of government-directed wage subsidies compared to the same period in the prior year partially offset by favorable mix of certain other products in addition to the continued deliveries under the new HHS nitrile examination glove order. Year-to-date, gross profit decreased by 9.5% to $68,834 from the comparable period in 2020, primarily due to higher volume associated with awards from HHS in the same period in 2020 in addition to a decrease in government-directed wage subsidies offset by a continued focus on controllable operational cost containment and managing overhead costs.

Overview

The Company has continued to focus on operational execution as well as growth initiatives and investments while mitigating the impact of on-going global freight, labor and logistics challenges, raw material price escalations and constraints and the continued impact of the COVID-19 pandemic. AirBoss continues to take advantage of ongoing opportunities supporting significant demand for PPE, which has offset the COVID-19-related impacts on the AEP and ARS segments. This quarter saw ongoing momentum at ADG as it continued the shipment of nitrile patient examination gloves to HHS pursuant to an order worth up to $288 million; the Company anticipates that delivery of this order will be primarily completed in the fourth quarter of 2021. New aggressive COVID-19 strains have prolonged global challenges even as countries reopened businesses and economies, with many regions again forced to shut down in an effort to manage outbreaks. AirBoss has continued to focus on its core segments despite these rapidly evolving global challenges, further solidifying its position in PPE, health care and survivability sectors and has remained focused on supporting its customers, employees and stakeholders during the pandemic, ensuring the highest standards for safety at all of its locations.

This was a solid quarter for AirBoss, despite numerous challenges. The COVID-19 pandemic resulted in government-mandated lockdowns which created 4-6 week production delays. Combined with global logistics difficulties, notably record backlogs at U.S. cargo ports, these delays resulted in a shift of revenue related to the nitrile patient examination gloves for the Strategic National Stockpile (SNS) for HHS into the fourth quarter. The continued recovery of volumes that have been impacted by COVID-19-related factors will be subject, in part, to the ongoing management of stable and sustained operations of businesses globally, which continues to be difficult to predict, especially in light of current COVID-19 impacts globally and across North America in particular, which remains a key market for the Company. Supply chain issues continue to present significant challenges due to global freight constraints, material availability and significant raw material price increases, as well as increasing demand outpacing traditional supply models. A combination of domestic sourcing, advanced buying tactics and the development of alternative sources have been utilized to attempt to mitigate the significant risks associated with these challenges. However, we expect and have anticipated further constraints on our supply chain throughout the remainder of 2021. Notwithstanding these challenges, the Company continues to believe that it is poised for continued success during the remainder of the year.

ADG continues to work on the significant opportunities in its sales pipeline, which are at record levels and are expected to help augment ADG’s traction and momentum and help offset possible further COVID-19 related challenges which may still impact ARS and AEP during the last quarter of 2021. Management believes that the future sourcing of PPE for first responders and healthcare professionals will continue to be a necessity, a priority and a requirement for front line workers in response to the COVID-19 pandemic; this is evidenced by the strong pipeline of PPE-related opportunities that ADG is currently pursuing. As a part of overall future emergency preparedness planning, management expects a more unified and streamlined approach to PPE acquisition aimed at reducing complexity, shortening acquisition times and building strategic stockpiles, compared to the fragmented and complex distributor relationship arrangements seen previously. This is expected to continue to be a future driver for the business and ADG is refining its business development approach accordingly. In October 2021, AirBoss also announced that it has received approval from NIOSH for its new AirBoss 100™ Half Mask Respirator. Beyond this, ADG continues to target traditional defense contracts, potentially valued at hundreds of millions of dollars globally over the next several years, for its broader portfolio of survivability solutions. This includes opportunities for its low-burden mask as well as next-generation products like the Blast Gauge™ blast overpressure solution, Bandolier and Rollover Detection Warning System (RDWS).

The Rubber Solutions segment saw sustained demand that exceeded volumes for the same quarter in 2020, which was heavily impacted by COVID-19 disruptions. As stated previously, timing for a sustained and full recovery in volumes will be subject, at least in part, to the continued evolution of COVID-19 across North America, specifically in the U.S. which is seeing continued challenges including vaccination deployment. The segment continued to focus on optimizing its equipment capacity, specifically in Scotland Neck, NC, while focusing on the integration of the recent Ace acquisition. This new addition will increase ARS’ proprietary color and specialty rubber compounding capacity, complementing investments made by AirBoss in color and specialty compounding with the addition of two new dedicated lines in Kitchener, ON in 2019 and is expected to significantly accelerate ARS’ strategy to expand from traditional black, high volume product lines into lower volume, higher margin color and specialty markets. In addition, the acquisition expands ARS’ reach into the U.S. South and Mid-West with minimal overlap in customer-base and presents opportunities for revenue synergies. The segment saw progressive traction this quarter with a healthy backlog, despite continued significant raw material price increases coupled with international freight constraints which are still proving challenging on the supply chain and pandemic-driven labor challenges. The Company’s development and sales in niche products including colored rubber continued to grow in line with the Company’s margin expansion strategy with new customers now accelerated following the Ace acquisition. The Company continues to take advantage of its scale and global supply chain management expertise to onboard new customers seeking new suppliers in the current environment to drive volume and growth in its core markets, which will now be expanded into the U.S. South and Mid-West by leveraging Ace's geographic footprint. ARS remains focused on operational excellence and supporting production of a broader array of compounded products (white and color), as well as providing enhanced flexibility in attracting and fulfilling new business. In Kitchener, AirBoss continued to invest in its R&D expertise and lab capital to support enhanced collaboration with customers and better reflect the Company’s focus on innovative R&D and proprietary technical solutions.

The Engineered Products segment continued to be impacted by electronic chip shortages as original equipment manufacturers ("OEMs") continued to shutter production as auto vehicle inventories are at record lows while demand remains very strong. The segment continued to focus on its operational improvement plan including managing variable costs and focusing on sustaining a stable hourly workforce while dealing with the volume reductions in the automotive sector and specifically on AirBoss' products for SUV, light truck and mini-van platforms. Global supply chain challenges and shutdowns in Asia added to logistical challenges associated with the supply of certain molded products. Despite these challenges, the Company continued its focus and commitment to drive efficiencies and best-in-class automation including the installation of 22 injection presses in a multi-year investment in addition to a state of the art automated work cell with another one on order for delivery in November. The Engineered Products segment has also continued to sustain the production of certain molded defense products for ADG at its Auburn Hills, MI facility.

The Company remains in sound financial position. The strong performance of the business has continued to support increased balance sheet strength and will provide management enhanced flexibility to execute opportunistically on both organic and inorganic growth initiatives, particularly as potential acquisition targets may lack the balance sheet strength to weather a prolonged downturn. AirBoss believes it is well positioned to further leverage its significant recent investments in innovation, capacity expansion, and innovative solutions as industry conditions improve.

Despite the continued headwinds associated with COVID-19, the Company’s longer-term priorities remain intact and include:

1. Growing the core Rubber Solutions segment by positioning it as a specialty supplier of choice in the consolidating North American market, with a growing focus on building defensible leadership positions in selected compounds;
2. Capitalizing on ADG’s enhanced scale and capabilities to pursue an array of growth and value-creation opportunities in the broader survivability solutions segment serving both defense and first responder markets;
3. Driving improved performance from Engineered Products through a combination of disciplined cost containment, client relationship expansion, new product development and sector diversification; and
4. Targeting additional acquisition opportunities across the business with a focus on adding new compounds and products, technical capabilities, and geographic reach into selected North American and international markets.

As before, management remains dedicated to the creation of long-term value for all stakeholders through a combination of strategic initiatives that both drive organic growth and support possible transactions.

2021 Guidance

AirBoss reiterated its outlook for full-year 2021, as previously provided on August 19, 2021:

• Revenues in the range of $630 to $710 million, reflecting growth of approximately 25% – 41% over 2020
• Adjusted EBITDA2 margin in the range of 15.0% – 15.5%
• Adjusted Earnings per diluted share2 of $1.80 to $2.19, reflecting growth of approximately 24% – 51% over 2020

The Company’s Guidance is based on its current outlook and assumptions including that global logistics difficulties, notably record backlogs at U.S. cargo ports, will not delay the completion of delivery of nitrile patient examination gloves for the Strategic National Stockpile (SNS) for the U.S. Department for Health and Human Services beyond the Company’s anticipated completion timeline of the fourth quarter of 2021. For important information on risk factors related to 2021 Guidance, refer to “AirBoss Forward Looking Information Disclaimer” later in this news release.

Conference Call Details and Investor Presentation

A conference call to discuss the quarterly results is scheduled for 9:00 a.m. ET on Wednesday, November 11, 2020. Please go to https://www.gowebcasting.com/11513 or dial in to the following numbers: 1-800-319-4610 or 416-915-3239, pass code: 55506. Please connect approximately 10 minutes prior to the beginning of the call to ensure participation. A replay of the conference call as well as the Company’s updated investor presentation will also be made available at: https://airboss.com/investor-media-center.

Contact: Chris Bitsakakis, President and COO or Gren Schoch, Chairman and CEO at 905-751-1188.

AirBoss of America Corp.

AirBoss of America is a leading and diversified developer, manufacturer and provider of innovative survivability solutions, advanced custom rubber compounds and finished rubber products that are designed to outperform in the most challenging environments. Founded in 1989, the company operates through three divisions. AirBoss Defense Group is a global leader in personal and respiratory protective equipment and technology for the defense, healthcare, medical and first responder communities. AirBoss Rubber Solutions is a top-tier North American custom rubber compounder with 500 million turn pounds of annual capacity. AirBoss Engineered Products is a supplier of innovative anti-vibration solutions to the North American automotive market and other sectors. The Company’s shares trade on the TSX under the symbol BOS and on the OTCQX under the symbol ABSSF. Visit www.airboss.com for more information.

Note (1): Term loan and other debt as at September 30, 2021 and December 31, 2020 include lease liabilities of $18,046 and $13,482, respectively.

Note (2): Non – IFRS Financial Measures: EBITDA, Adjusted EBITDA, Adjusted profit attributable to owners of the Company, Adjusted earnings per share, Free cash flow and Net debt are non-IFRS financial measures derived from the consolidated financial statements but do not have a standardized meaning prescribed by IFRS and are not necessarily comparable to similar measure presented by other issuers. The Company discloses these terms for use in financial measurements made by interested parties and investors to monitor the ability of the Company to generate cash from operations for debt service, to finance working capital and capital expenditures and to pay dividends. These terms are not a measure of performance under IFRS and should not be considered in isolation or as a substitute for net income under IFRS. Reconciliations of net income to EBITDA and Adjusted EBITDA, net income to Adjusted profit attributable to owners of the Company and Adjusted earnings per share, loans and borrowings to Net debt and net cash provided by (used in) operating activities to Free cash flow, are presented below.

Reconciliations of Non-IFRS Measures ($US except where otherwise noted)

	Three-months ended September 30		Nine-months ended September 30
	(unaudited)		(unaudited)
In thousands of US dollars	2021	2020	2021	2020
EBITDA:
Profit	6,902	21,160	31,541	36,330
Finance costs	1,740	723	3,421	2,694
Depreciation, amortization and impairment	4,885	8,387	14,378	16,635
Income tax expense	225	7,065	3,716	14,741
EBITDA	13,752	37,335	53,056	70,400
Acquisition fees	47	35	201	2,363
Prospectus fees	123	—	123	—
Adjusted EBITDA	13,922	37,370	53,380	72,763

	Three-months ended September 30		Nine-months ended September 30
	(unaudited)		(unaudited)
In thousands of US dollars	2021	2020	2021		2020
Adjusted profit attributable to owners of the Company:
Profit attributable to owners of the Company	6,902	11,646	31,541		17,801
Acquisition fees	47	35	201		2,363
Prospectus fees	91	—		91	—
Adjusted profit attributable to owners of the Company	7,040	11,681	31,833		20,164
Basic weighted average number of shares outstanding	26,985	23,401	26,964		23,398
Diluted weighted average number of shares outstanding	28,370	24,600	28,305		24,193
Adjusted net income per share (in US dollars):Basic	0.26	0.50	1.18		0.86
Diluted	0.25	0.47	1.12		0.83

In thousands of US dollars (unaudited)	September 30, 2021		December 31, 2020
Net debt:
Loans and borrowings - current	3,023		27,083
Loans and borrowings - non-current	213,493		63,651
Leases included in loans and borrowings	(18,046	)	(13,482	)
Cash and cash equivalents	(12,413	)	(86,970	)
Net debt	186,057		(9,718	)

	Three-months ended September 30						Nine-months ended September 30
	(unaudited)						(unaudited)
In thousands of US dollars	2021			2020			2021			2020
Free cash flow:
Net cash provided by (used in) operating activities	(125,723		)	18,137			(136,392		)	47,869
Acquisition of property, plant and equipment	(4,559		)	(4,065		)	(12,302		)	(9,174		)
Acquisition of intangible assets	(165		)	(107		)	(706		)	(716		)
Proceeds from government grant	—			—			—			500
Free cash flow	(130,447		)	13,965			(149,400		)	38,479
Basic weighted average number of shares outstanding	26,985			23,401			26,964			23,398
Diluted weighted average number of shares outstanding	26,985			24,600			26,964			24,193
Free cash flow per share (in US dollars):Basic	(4.83		)	0.60			(5.54		)	1.64
Diluted	(4.83		)	0.57			(5.54		)	1.59

AIRBOSS FORWARD LOOKING INFORMATION DISCLAIMER

Certain statements contained or incorporated by reference herein, including those that express management’s expectations or estimates of future developments or AirBoss’ future performance, constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable securities laws, and can generally be identified by words such as “will”, “may”, “could” “expects”, “believes”, “anticipates”, “forecasts”, “plans”, “intends” or similar expressions. These statements are not historical facts but instead represent management’s expectations, estimates and projections regarding future events and performance.

Statements containing forward-looking information are necessarily based upon a number of opinions, estimates and assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies. AirBoss cautions that such forward-looking information involves known and unknown contingencies, uncertainties and other risks that may cause AirBoss’ actual financial results, performance or achievements to be materially different from its estimated future results, performance or achievements expressed or implied by the forward-looking information. Numerous factors could cause actual results to differ materially from those in the forward-looking information, including without limitation: impact of general economic conditions; dependence on key customers; cyclical trends in the tire and automotive, construction, mining and retail industries; sufficient availability of raw materials at economical costs; weather conditions affecting raw materials, production and sales; AirBoss’ ability to maintain existing customers or develop new customers in light of increased competition; AirBoss’ ability to successfully integrate acquisitions of other businesses and/or companies or to realize on the anticipated benefits thereof; changes in accounting policies and methods, including uncertainties associated with critical accounting assumptions and estimates; changes in the value of the Canadian dollar relative to the US dollar; changes in tax laws and potential litigation; ability to obtain financing on acceptable terms; environmental damage and non-compliance with environmental laws and regulations; impact of global health situations; potential product liability and warranty claims and equipment malfunction. COVID-19 could also negatively impact the Company’s operations and financial results in future periods. There is increased uncertainty associated with future operating assumptions and expectations as compared to prior periods. As such, it is not possible to estimate the impacts COVID-19 will have on the Company’s financial position or results of operations in future periods. While the direct impacts of COVID-19 are not determinable at this time, the Company has a credit facility that can provide financing up to $250,000. This list is not exhaustive of the factors that may affect any of AirBoss’ forward-looking information.

All of the forward-looking information in this press release is expressly qualified by these cautionary statements. Investors are cautioned not to put undue reliance on forward-looking information. All subsequent written and oral forward-looking information attributable to AirBoss or persons acting on its behalf are expressly qualified in their entirety by this notice. Forward-looking information contained herein is made as of the date of this press release and, whether as a result of new information, future events or otherwise, AirBoss disclaims any intent or obligation to update publicly this forward-looking information except as required by applicable laws. Risks and uncertainties about AirBoss’ business are more fully discussed under the heading “Risk Factors” in our most recent Annual Information Form and are otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR at www.sedar.com.