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IBC Advanced Alloys, a specialty alloys manufacturer with a market capitalization of $6.28 million, reported a significant decline in revenue for the six months ending December 2024, with figures falling to $7.1 million from $12 million in the same period the previous year. The company faced challenges such as non-recurring orders and softer market demand. Despite these setbacks, IBC is positioning itself for future growth, particularly in the U.S. Naval defense market. According to InvestingPro analysis, the company maintains a "GREAT" overall financial health score of 3.02, suggesting resilience despite current headwinds.
Key Takeaways
- Revenue decreased by $4.9 million due to non-recurring orders and lower demand.
- The company completed the closure of its Engineered Materials division.
- IBC is focusing on expanding its presence in the U.S. Naval defense market.
- Market volatility is influenced by the upcoming U.S. presidential election.
- Copper market expected to strengthen, potentially benefiting IBC.
Company Performance
IBC Advanced Alloys faced a challenging period with a decrease in revenue attributed to non-recurring orders and decreased market demand in the latter half of 2024. The company reported a consolidated year-to-date loss of $2.6 million, driven by costs associated with the closure of its Engineered Materials division, higher SG&A expenses, and debt service payments. Despite these challenges, the company is the only U.S. entity that simultaneously casts and forges copper alloy products, providing a competitive edge in the naval defense supply chain.
Financial Highlights
- Revenue: $7.1 million, down from $12 million in the prior period.
- Year-to-date loss: $2.6 million.
- Key cost factors: Engineered Materials division closure, increased SG&A expenses, debt service.
Outlook & Guidance
IBC is targeting growth in the U.S. Naval defense market and is seeking funding for a specialized vacuum cap furnace to expand its copper alloy production capabilities. The company expects market demand recovery and potential benefits from U.S. presidential trade actions on copper imports. Trading at $0.06 per share, IBC’s stock has shown resilience with a 41.67% price return over the past six months. For detailed analysis of IBC’s growth potential and comprehensive valuation metrics, investors can access the full Pro Research Report available exclusively on InvestingPro.
Executive Commentary
CEO Mark Smith expressed optimism about IBC’s future, stating, "As closing costs and our discontinued engineered and materials division wind down over the coming months and as market demand for copper strengthens in the coming year or so, I see us moving to a substantially stronger footing with significant opportunity for growth." Smith highlighted the competitive landscape, noting that "just one Chinese shipyard near Shanghai has more capacity than all of America’s shipyards combined."
Risks and Challenges
- Market volatility due to U.S. presidential election uncertainty.
- Dependence on copper market recovery.
- Challenges in securing federal funding for specialized equipment.
- Potential delays in expanding naval defense market presence.
- Impact of international competition on market share.
Q&A
During the earnings call, analysts inquired about the lease expiration for the Engineered Materials division, which is set for January 2026. The company confirmed that no employees from this division were transferred, and it is actively negotiating with Navy shipbuilders and exploring direct material sales opportunities. Additionally, discussions are underway regarding potential federal funding for specialized equipment.
Full transcript - Iniziative Bresciane Inbre (IB) Q2 2025:
Jim Sims, Director of Investor and Public Relations, IBC Advanced Alloys: Good day, everyone, and welcome to this IBC Advanced Alloys Investor Update webcast to discuss the company’s financial performance for the three and six months ended 12/31/2024, that constitutes IBC’s second fiscal quarter of twenty twenty five. I’m Jim Sims, Director of Investor and Public Relations with IBC. Now before we begin this morning’s webcast, just a couple of reminders. The slides from today’s presentation and the audio of this call are being broadcast live over the web. Recording of this broadcast is also being made and a replay will be available on the IBC website later today.
We are at www.ivcadvancedalloys.com. After our formal presentation, the company will take questions from webcast participants. Now during today’s presentation, we will be making forward looking statements and viewers are cautioned not to place undue reliance on such forward looking information and statements. Additional information identifying risks and uncertainties is contained in IVC’s public filings available on sedar.com and on our company website at ivcadvancedalloys.com. Joining us today is Mark Smith, who is CEO and Chairman of the Board of IBC.
Mark, take it off.
Mark Smith, CEO and Chairman of the Board, IBC Advanced Alloys: Very well. Thank you, Jim, and welcome, everybody. As always, I always like to take a few minutes because we sometimes have some new folks on these calls. So let me start by taking just start with a quick overview of the company and our operations. We are an Indiana based manufacturer specializing in copper alloy products for the defense and global commercial markets.
We are the only company in The United States that both casts and forges copper and copper alloy products as its primary business. We are known for the depth of our technical expertise and our ability to maintain the highest product quality by operating a vertically integrated copper alloy manufacturing facility. IBC makes a variety of specialty copper and copper alloy products for hundreds of customers across multiple industry sectors, including those shown here. There we go. Here is a representative sampling of some of our customers, both past and current, and you can see these are significant names.
Earlier today, we issued our financial results for the three and six month periods ended 12/31/2024. We generated $7,100,000 in revenue in the six months ended December 2024, which compared to prior period sales of $12,000,000 However, $3,200,000 of that relative decline was driven by two large non recurring orders in the comparable period of fiscal year twenty twenty four with the balance simply due to softer market demand as we had seen in the second half of calendar year 2024. Many industries in The United States have actually had to navigate through greater volatility in markets over the past six to nine months given the uncertainty that resulted from this past year’s presidential elections. This is not unusual, although I think it is fair to say that we saw more uncertainty this time around. On a consolidated basis, IBC booked a $2,600,000 loss year to date.
In addition to lower revenue, this was primarily driven by three factors: continuing closing costs at our Engineered Materials division higher than normal corporate SG and A costs, which again were largely due to the Engineered Materials division closure and debt service payments. Given that we completed all Engineered Materials division closing activities in December 2024, we anticipate that closing costs and SG and A expenses will now decline going forward. As of January one of this year, the only ongoing Engineered Material Division costs relate to the premises lease commitment, and we are in ongoing negotiations now with the building landlord to minimize these costs. Here you can see more detail of our quarterly results split between our continuing operations at copper alloys and our discontinued operations at our Engineered Materials division. The main takeaway for me at this junction is this.
As closing costs and our discontinued engineered and materials division wind down over the coming months and as market demand for copper strengthens in the coming year or so, as I expect, I see us moving to a substantially stronger footing with significant opportunity for growth. In short, as we continue to pay down debt and strengthen our balance sheet through organic growth, I see a great deal of upside for the company going forward. Here, you can see revenue and adjusted EBITDA for copper over the past several years, including our trailing twelve month performance on the far right. As you can see here, copper had been on an upward trend in terms of gross profit and gross margin since we completed our $5,700,000 expansion and modernization of our copper alloys manufacturing facility in Franklin, Indiana in 2022 with the exception of the dip we’ve seen in the past six months. This vertically integrated facility has 32,000 square feet of new production space, which now totals 83,000 square feet on 12 acres of land.
It provides vertical integration of alloy casting, forging, which includes hammer press and ring rolling, heat treating and machining operations. It has helped to generate sales growth from about $13,700,000 to more than 25,000,000 a year. And it positions IVC to expand our business with additional capacity as market demand recovers as I believe it will. Here is IVC’s net income over the past several years. My goal and that of our entire team is to continue to build on the profitable performance we achieved in fiscal year twenty twenty four.
To that end, I see several growth opportunities ahead that I believe will help us achieve this goal. One area of potential growth I want to highlight is the U. S. Naval defense. It is widely recognized by both political parties in The United States that America has seriously fallen behind in terms of its competitive position vis a vis China in terms of surface and subsurface naval ships.
Some of you have heard me say this before, but it bears repeating. Just one Chinese shipyard near Shanghai has more capacity than all of America’s shipyards combined. The U. S. Navy’s shipbuilding plans for 2024 through 02/1930 is aggressive and understandably so.
Ultimately, the Navy wants to get to a fleet of over three eighty one ships and 134 large unmanned surface and underwater vehicles. That is from a forecast low of only two eighty five ships in 2026. A special emphasis will be on submarines, including the Columbia and Virginia class subs. IVC has supplied the Navy for a number of years with a variety of copper alloy products, including for Columbia and Virginia class submarines. We are an approved supplier to both Electric Boat and Newport News, which are the U.
S. Navy’s primary submarine builders. We are in discussions now with defense policy leaders in Washington, D. C. And with officials at both shipyards about potentially expanding our ability to provide them with the specialized alloys they need.
I hope to have more on this growth opportunity in the months ahead. Finally, let me make a note of an action by President Trump on February 25, just last week, to initiate a Section two thirty two imports of copper and copper alloys into The United States. His intent is to strengthen the competitiveness of U. S. Copper producers such as IBC and to encourage more investment in U.
S. Copper alloy supply chains. After the two thirty two investigation is completed, which is expected no later than December twenty two of this year, the President can take actions, including tariffs and quotas on imported goods, price supports for domestic producers and direct federal investment to strengthen U. S. Supply chains.
There are always concerns by current domestic producers about the impacts of tariffs and quotas, especially if they rely on foreign imports of feedstock material as we do. Fortunately, impacted U. S. Can and often are granted exemptions from two thirty two tariffs that may negatively impact them. After all, the goal of these two thirty two actions is to improve the competitiveness and viability of U.
S. Producers. This was done for U. S. Steel and aluminum producers in recent years as tariffs were leveled on those products.
As America’s only company that both casts and forges copper alloy products as our primary business. We will be very closely engaged in this process with the administration and we will be seeking enhanced support for our operations on a number of levels. With that, Jim, finished with the presentation and happy to take any questions.
Jim Sims, Director of Investor and Public Relations, IBC Advanced Alloys: Thanks, Mark. That was very helpful. Let’s take some questions from our audience. For those participating in the webcast today, you can pose your question by simply typing in that question into the chat thread on your screen. You can also send those questions to me at my email at jim.
Simsibcadvancedalloys dot com or you can text me at (303) 503-6203. We got a couple of questions, Mark, that have come in this morning since the press release has come out. What is the status of the Engineered Materials lease? If we are still paying on the lease, does the lease complete in April 2025?
Mark Smith, CEO and Chairman of the Board, IBC Advanced Alloys: First of all, let me answer the latter part first. It does not complete in April of twenty twenty five. It actually completes in January of twenty twenty six. We are anticipating paying the landlord up and through the December 2024 and we’re hoping to continue our discussions with the landlord on ways for the landlord to release the facility and to eliminate our need to pay for the lease expenses between now and the end of next January. So ongoing process and that is, as I mentioned earlier, that is the only item that is left for us in the EMC (NYSE:EMC_old) cost category in terms of shutdown.
Jim Sims, Director of Investor and Public Relations, IBC Advanced Alloys: Okay. I think I think you’ve answered this next question, Mark. Have any EMC personnel moved to copper? Are there still two personnel at the closed EMC facility?
Mark Smith, CEO and Chairman of the Board, IBC Advanced Alloys: No, we there are no employees remaining at the facility. We do still have one individual that stops by once a week just to check the facility and make sure that everything is okay. But all the employees are now gone from EMC. And although we had hoped that one or two would transfer to our Indiana facility, they chose not to do that. So everything is done with EMC.
Jim Sims, Director of Investor and Public Relations, IBC Advanced Alloys: Okay. Here’s another question. Your plans with the Navy sound pretty exciting, particularly given the pace of their shipbuilding construction plans. What is the status of IBC’s plans to sell the work to the Navy?
Mark Smith, CEO and Chairman of the Board, IBC Advanced Alloys: Yes. This is a great question and really glad that it was asked because this is an exciting part about our business right now. And we’ve had multiple meetings with the shipbuilders and with the Navy and with the White House about ways that IVC can participate in this effort to revamp the U. S. Navy and number of ships and submarines that we have.
So this is an exciting time and actually knowing about these multiple meetings, Jim, you’ve actually participated in all of those meetings to date. So why don’t I pass the baton to you just for a moment and have you update the participants today with the activities that we’re undertaking.
Jim Sims, Director of Investor and Public Relations, IBC Advanced Alloys: Yes. I’d be happy to, Mark. The company is in negotiations and ongoing discussions now with the Navy’s two primary boatbuilders. We are already approved suppliers to those boat builders, but we don’t sell anything directly to them because of their large distribution networks. That’s pretty much how they normally acquire their various materials.
They have indicated to us now, just recently, they want to do business directly with us, which is good. That provides us with more avenues for potentially selling them more of the materials that we currently make today. But they also have some concerns going forward about their reliance and I would say The United States’ reliance heavily on imported copper alloys, such as copper nickel, for example. I think the companies are about 90% -plus dependent on foreign supplies for copper nickel. So that’s why on a second and parallel track, we’ve been in very intense discussions with folks in Washington, both the administration and on Capitol Hill, to seek potential funding from the Congress to enable IVC to purchase a specialized furnace, called vacuum cap furnace, that would allow us to make these more specialized copper nickel alloys, both in ingot form and also in cast form and then, of course, in forging form, which we currently do now.
There’s a lot of interest in this. I think the President’s recent signing or initiation of the two thirty two order will put an even brighter spotlight on America’s reliance on foreign imports for copper and copper alloys. That kind of puts IBC right in the middle of this effort as well. That’s a good thing. So we’re going to continue that process going forward, and we’re looking forward to good outcomes.
Mark, that’s the last of the questions we have. So let me move to close things down. I will say that we appreciate everyone joining us this morning. It’s a good crowd this morning, so we appreciate that. For those of you that do have questions but didn’t quite get a chance to put them in, please go ahead and send those to me at jim.
Simsibcalloys dot com, and I’ll be I’ll work to turn that around as quickly as I can. Thank you all for joining us today. We look forward to talking to you next quarter. And again, any questions or thoughts, give us a call. We’d be happy to help you.
Thank you all for joining us today. Have a great day. Bye bye.
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