AirBoss Q1 2025 presentation slides: EBITDA jumps 86% as recovery takes shape

Introduction & Market Context

AirBoss of America Corp. (TSX:BOS) released its May 2025 investor presentation on May 8, highlighting early signs of a financial turnaround after several challenging years. The presentation reveals an 86% year-over-year increase in EBITDA for Q1 2025, suggesting that the company’s strategic initiatives may be gaining traction despite continued headwinds in certain business segments.

As North America’s second-largest custom rubber compounder, AirBoss has been navigating a complex market environment while implementing cost-cutting measures and focusing on higher-margin products. The company’s stock closed at C$3.91 on May 7, 2025, down 2.49% for the day, and remains well below its 52-week high of C$6.31.

Quarterly Performance Highlights

AirBoss reported Q1 2025 net sales of $105.1 million, representing a modest 2% increase from Q1 2024, primarily driven by higher sales from defense products. More significantly, EBITDA surged to $8.0 million, an 86% improvement from the $4.3 million reported in the same period last year.

As shown in the following quarterly financial highlights chart:

The company’s net loss narrowed substantially to $0.4 million in Q1 2025 from $4.9 million in Q1 2024, with earnings per share improving from -$0.18 to -$0.02. This marks a significant step toward profitability after consecutive annual losses in 2023 and 2024.

Performance varied considerably between AirBoss’s two main business segments. AirBoss Manufactured Products (AMP (OTC:AMLTF)) delivered strong results with net sales increasing 27% to $53.5 million and gross profit more than tripling to $10.0 million:

The company attributed this improvement to stronger performance in the defense products business, operational cost improvements, and reduced overhead costs, partially offset by unfavorable volume and product mix in the rubber molded products operations.

Conversely, AirBoss Rubber Solutions (ARS) experienced a 13% decline in net sales to $51.5 million and a corresponding decrease in gross profit to $8.5 million:

Management cited lower volume partially driven by tariff-related volatility and product mix as the primary factors behind the decline, though these were partially offset by efforts to manage controllable overhead costs and continuous improvement initiatives.

Historical Performance Context

The Q1 2025 results represent a potential inflection point following several years of declining performance. As illustrated in the company’s historical financial chart:

AirBoss experienced a consistent downward trend from 2022 through 2024, with external net sales falling from $477 million to $387 million, adjusted EBITDA declining from $45.3 million to $21.9 million, and profit to shareholders deteriorating from $12.6 million to a loss of $12.5 million.

This decline occurred despite the company’s demonstrated ability to navigate various economic cycles over its three-decade history. The following chart illustrates AirBoss’s long-term revenue trajectory through multiple economic challenges:

Strategic Initiatives

AirBoss’s presentation outlined several strategic initiatives aimed at sustaining the nascent recovery observed in Q1 2025. The company has been in operation for over 30 years and has grown through strategic acquisitions and product innovations:

Key strategic priorities include:

1. Transforming the rubber business through the 100% acquisition of Ace Elastomer, which provides access to higher-margin color and specialty compounding markets and increased proximity to key customers.

2. Expanding beyond the automotive sector, with a particular focus on defense and off-highway OEMs. The company highlighted a recent defense contract with the U.S. Military that benefited from AirBoss’s locally-sourced materials and rapid prototyping capabilities.

3. Strengthening the survivability platform by winning new government contracts, delivering on awarded contracts, and expanding PPE consumables. The presentation emphasized the potential of the Black Box Biometrics Blast Gauge System for deployment across the U.S. Department of Defense and other militaries.

4. Leveraging North American manufacturing capacity, which is strategically positioned to win U.S. government contracts and optimize shipping capabilities to domestic customers:

Forward-Looking Statements

Looking ahead, AirBoss expressed confidence in its ability to continue the positive momentum seen in Q1 2025. The company emphasized its focus on innovation in custom rubber compounding, expanding market share, enhancing compounding capabilities, and leveraging its scale to improve raw material buying power.

For the Manufactured Products segment, management highlighted its continued focus on efficiency and innovation, as well as expanding access to non-automotive sectors. The defense business, in particular, appears poised for growth as the company delivers on existing contracts and pursues new opportunities.

While the presentation maintains an optimistic outlook, investors should note that challenges persist, particularly in the Rubber Solutions segment where tariff-related volatility and volume pressures continue to impact performance. The divergent performance between the company’s two main business segments underscores both the risks and opportunities facing AirBoss as it works to sustain its recovery.

The company continues to pay a quarterly dividend of C$0.035, demonstrating a commitment to returning value to shareholders despite recent financial challenges. With 27,149,224 shares outstanding and signs of operational improvement, AirBoss’s May 2025 presentation suggests that the worst may be behind the company, though a full recovery will likely depend on continued execution of strategic initiatives and favorable market conditions.

Full presentation:

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