Highlights of the Quarter
(unless other noted, all financial amounts in this news release are expressed in U.S. dollars)
- Consolidated Sales Higher: Consolidated sales of $5.2 million in the quarter ended March 31, 2019 were higher over sales of $5.1 million in the year-ago period but jumped by 33.3% as compared to the quarter ended December 31, 2018. Fiscal Q3 2019 sales in the Engineered Materials division were higher by 10.5% year over year (“YoY”) and jumped by 34.7% sequentially. Q3 2019 sales in the Copper Alloys business were 2.7% lower YoY but were 32.6% higher sequentially. These trends were driven by stronger demand for copper alloy products and higher beryllium-aluminum sales to the defense sector seen since January 2019.
- Financial Results for the Quarter: IBC incurred a comprehensive loss, net of tax, of $639,000 for the quarter, or ($0.02) per share, as compared to a loss of $62,000, or ($0.00) per share, in the prior-year period. Operating loss1 for the quarter was $380,000, which compares to an operating profit in the comparable quarter of fiscal 2018 of $122,000.
- Capital Improvements Have Expanded Addressable Markets: Capital improvements made in the Copper Alloys division are allowing IBC to machine larger products than previously possible, which has opened up new markets and sales growth opportunities. This capacity expansion is coinciding with higher demand now seen in the copper alloy sector.
- Commercial Production Launched of Beryllium Alloy Satellite Components: On May 14, 2019, IBC announced the launching of commercial-scale production of beryllium-aluminum alloy castings for a major global manufacturer of commercial satellite systems.
- Two Successful Investment Capital Raises: In calendar 2019, the Company has closed or is soon to close on two investment capital raises for gross proceeds of approximately C$1.295 million.
FRANKLIN, Ind., May 29, 2019 (GLOBE NEWSWIRE) -- IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) today announced its financial results for the quarter ended March 31, 2019.
1 IBC reports non-IFRS measures such as "operating income (loss).” Please see information on this and other non-IFRS measures in the "Non-IFRS Measures" section of this new release and in the Company’s Management Discussion and Analysis (“MD&A”), available on IBC’s website at www.ibcadvancedalloys.com and on SEDAR at www.sedar.com.
The Company will host a conference call and webcast on Thursday, May 30, 2019, at 12 noon Eastern to discuss IBC’s future growth strategies. The featured speaker is Mark A. Smith, IBC’s Board Chairman. Details on the conference call and webcast are listed below.
QUARTERLY RESULTS SUMMARY
“We have been pleased to see significantly higher demand for copper alloy products across our product lines since January of this year, which has reversed the industry-wide downtown in the copper sector that we saw in last quarter of calendar 2018,” said Mark A. Smith, IBC’s Board Chairman. “Moreover, we are also beginning to see tangible results from the capital improvements that we made in the Copper division, as those expanded capabilities are now generating new sales orders for products we could not previously manufacture.”
“Our beryllium-aluminum alloy business took an important step recently when it advanced from first article qualification to initial commercial production of beryllium-aluminum parts for the satellite manufacturing industry,” Mr. Smith said. “This rapidly growing sector has a significant need for components that must operate in the extreme environment of space, and the beryllium alloys parts that we make are uniquely manufactured to meet those very demanding specifications.”
“It is also very gratifying to see both existing and new investors increase their commitment to IBC’s long-term growth prospects, as demonstrated by the two successful investment capital raises we have completed or are about to close on since January of this year,” Mr. Smith added.
On a consolidated basis, sales of $5.2 million in the third fiscal quarter of 2019 were slightly higher than prior-year period sales of $5.1 million and were lower year-to-date (“YTD”) by 2.7% over the first nine months of fiscal 2018. However, consolidated sales grew by 33.3% as compared to the quarter ended December 31, 2018.
In the Copper Alloys division, Q3 2019 revenue of $3.6 million was lower by 2.7% over the prior-year period, and YTD sales of $9.8 million compared to $10 million in the comparable period of 2018. However, fiscal Q3 2019 sales jumped 32.6% sequentially over sales in the preceding quarter.
Revenue in the quarter of $1.6 million for the Engineered Materials division, which specializes in manufacturing beryllium-aluminum castings, was higher by 10.5% over the comparable period of 2018, due to increased sales in the defense sector. YTD sales of $4.0 million was 5.6% lower than the prior-year period, due to softening of the commercial (non-defense) markets that the Company serves. On a sequential basis, fiscal Q3 sales advanced by 34.7% over sales in the quarter ended December 31, 2018, due to increased sales in the defense sector.
Demand for copper alloys increased across all business sectors in the fiscal third quarter. Recent capital improvements have expanded IBC’s ability to machine larger components, which extends the Company’s capability and capacity to produce products used in both commercial and defense markets.
Demand in the quarter for commercial (non-defense) Beralcast™ beryllium-aluminum products continued to be lower than normal, which reflects the current trend of the semiconductor market following several consecutive record-breaking years by semiconductor equipment manufacturers. Demand for defense sector products remains steady, although our sales of these products in the fiscal fourth quarter historically are softer because of seasonal factors.
IBC incurred a comprehensive loss, net of tax, of $639,000 for the quarter, or ($0.02) per share, as compared to a loss of $62,000, or ($0.00) per share, in the prior-year period. This was driven largely by higher cost of sales, SG&A costs, and interest expense. Operating loss1 for the quarter was $380,000, which compares to an operating profit in the comparable quarter of fiscal 2018 of $122,000. On a year-to-date basis, comprehensive sales in fiscal 2019 were lower by 2.7% as compared to the first nine months of fiscal 2018.
IBC CONFERENCE CALL AND INVESTOR WEBCAST
Investors and others wishing to participate in the Company’s conference call and webcast on May 30, 2019 at 12 noon Eastern can register for the event and receive instructions on how to connect via the internet here: https://attendee.gotowebinar.com/register/1955502719749596429. A recording of the webcast will be made available on the IBC website following the event. Those wishing to participate via a listen-only phone line can use the following numbers and passcodes:
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FISCAL Q2-2019 SEGMENT AND CONSOLIDATED OPERATIONS RESULTS
A summary of IBC’s results of operations to loss before other items (“operating income (loss)”) in the quarter ended March 31, 2019 follows:
A summary of results of operations to operating loss for the nine months ended March 31, 2019 follows:
To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, IBC uses “operating income (loss)”, which is a non-IFRS financial measure. IBC believes that operating income (loss) helps identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in loss for the period. IBC further believes that operating income (loss) provides useful information about core operating results, enhances the overall understanding of our past performance and future prospects, and allows for greater visibility with respect to key metrics used by management in our financial and operational decision-making. Operating income (loss) 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 IBC’s operating performance. Operating income (loss) 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 our data.
Operating income (loss) represents loss for the period, excluding foreign exchange loss, interest expense, interest income, other income (expense) and income taxes that IBC does not believe are reflective of our core operating performance during the periods presented.
Operating income (loss)
A reconciliation of the income (loss) for the three and nine months ended March 31, 2019 and 2018 to operating income (loss) follows:
On behalf of the Board of Directors:
"Mark A. Smith”
Chairman, Board of Directors
Mark. A. Smith, Chairman, Board of Directors
Jim Sims, Investor and Public Relations
IBC Advanced Alloys Corp.
+1 (303) 503-6203
@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 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, Pennsylvania, and Missouri. The Company's common shares are traded on the TSX Venture Exchange under the symbol "IB" and the OTCQB under the symbol "IAALF".
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 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 anticipated seasonality in the next quarter or two that may impact sales trends, expectations as to further value and savings of waste stream inventory, expectations as to additional quantities to be sold under the Lockheed Martin contract, beliefs as to expanding production capacity as a result of the purchase of new capital equipment and inventory and the success and timing of the production of components under the commercial satellite systems contract. 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 for the quarter ended March 31 2019, and in its Annual Information Form for the fiscal year ended June 30, 2018, available at www.sedar.com.