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IBC Advanced Alloys Reports Financial Results for the Quarter Ended December 31, 2020


IBC Advanced Alloys

iCrowdNewswire   Feb 18, 2021  2:43 PM ET

IBC Advanced Alloys Corp. announces its financial results for the quarter ended December 31, 2020.

SELECTED RESULTS: Consolidated Operations ($000s)
  Quarter Ended
12-31-2020
Quarter Ended
12-30-2019
Six Months Ended
12-31-2020
Six Months Ended
12-31-2019
Sales 4,929  5,358  9,356  10,274 
Operating Income (Loss)2 (214) (447) (719) (771)
Comprehensive Income (Loss) (304) (770) (1,259) (1,320)
Adjusted EBITDA 273  (52) 152  81 

Consolidated sales for the EM and Copper Alloy divisions were $4.9 million in the quarter ended Dec. 31, 2020, which compared to $5.4 million in the prior-year period. EM Division sales in the quarter of $2.1 million were higher by 12.8% over sales of $1.8 million in the prior-year quarter. This was driven primarily by increased demand for BeAl products by semiconductor equipment manufacturers. Copper Alloys sales in the quarter of $2.9 million compared to sales of $3.5 million in the quarter ended Dec. 31. 2019. The decline was primarily due to COVID-19-related economic slowness.

Consolidated gross margin improved to 17.0% from 15.2%, and to 15.0% from 12.8%, respectively, in the three- and six-month periods ended Dec. 31, 2020 as compared to the comparable prior-year periods.

Consolidated Adjusted EBITDA for the quarter was a $273,000, which reversed a negative Adjusted EBITDA of $52,000 for the prior-year period. Consolidated Adjusted EBITDA of $152,000 in the six-month period ended December 31, 2020 compared favorably to $81,000 in the comparable prior year period.

“I was very pleased to see the especially strong performance of the Engineered Materials Division in fiscal second quarter of 2021 and on a year-to-date basis,” said IBC CEO and Board Chairman Mark A. Smith. “Demand was particularly strong for our custom beryllium-aluminum products used in to manufacture semiconductor chips, and that industry continues to signal growth. Our beryllium-aluminum defense business is also experiencing strong demand, and we see those trends continuing.”

“We also are continuing to progress in our planned consolidation and modernization of our Copper Alloys production facilities,” Mr. Smith added. “When complete, we see that increasing our production capabilities while considerably reducing our unit cost of production.”

ENGINEERED MATERIALS DIVISION RESULTS

IBC’s EM division sales in the quarter were $2.1 million, a 12.8% increase from $1.8 million in the comparable prior-year period. This was driven largely by increased demand semiconductor chips used in the transition to 5G networks and in the increasingly rapid growth of the Internet of Things (“IoT”).

Gross margin for the EM Division climbed in the quarter to 26.0%, as compared to 24.0% in the prior-year period. In the six months ended Dec. 31, 2020, gross margin improved to 24.5% from 14.5% in the prior-year period.

Adjusted EBITDA in the quarter for the EM division increased to $395,000, from $304,000 in the prior-year period. In the six months ended Dec. 31, 2020, Adjusted EBITDA rose to $553,000 from $297,000 in the prior-year period.

SELECTED RESULTS: Engineered Materials ($000s)
  Quarter Ended
12-31-2020
Quarter Ended
12-31-2019
Six Months Ended
12-31-2020
Six Months Ended
12-31-2019
Sales 2,056 1,822 3,292 2,910 
Operating Income (Loss) 198 34 144 (187)
Comprehensive Income (Loss) 173 49 90 (209)
Adjusted EBITDA 395 304 553 297

The EM Division generated sharply higher comprehensive income of $173,000 in the quarter, a 253% increase over comprehensive income of $49,000 in the comparable prior-year period.

Also in the quarter, the EM Division was awarded new purchase orders totaling approximately $9.7 million from Lockheed Martin to produce two aerospace-qualified BeAl components for the F-35 Lightning II aircraft over 26 months. The contract expanded IBC’s work for the F-35 platform to include a second part for the F-35, which was previously made by a competitor.

COPPER ALLOYS DIVISION RESULTS

SELECTED RESULTS: Copper Alloys ($000s)
  Quarter Ended
12-31-2020
Quarter Ended
12-31-2019
Six Months Ended
12-31-2020
Six Months Ended
12-31-2019
Sales 2,873  3,536  6,064  7,364 
Operating Income (Loss) (202) (273) (330) (124)
Comprehensive Income (Loss) (280) (366) (506) (304)
Adjusted EBITDA (54) (120) (43) 185 

Copper Alloys sales of $2.9 and $6.1 million, respectively, in the three- and six-month periods ended December 31, 2020 compared to sales of $3.5 million and $7.4 million, respectively, in the comparable prior-year periods. Gross margin of 10.6% in the quarter remained unchanged from the prior-year period, and was 9.8% in the six-month period ended December 31, 2020, a decrease from 12.1% in the prior-year period. The decline was due to fixed costs being spread over a lower volume of sales.

Adjusted EBITDA for the quarter was ($54,000), an improvement of ($120,000) in the quarter ended Dec. 31. 2020. YTD Adjusted EBITDA of ($43,000) compared to $185,000 in the comparable prior-year period.

IBC’s Copper Alloys division posted a comprehensive loss of $506,000 in the six-month period ended December 31, 2020, compared to a comprehensive loss of $304,000 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.

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 December 31 2020   2019  
  ($000s)   ($000s)  
Loss for the period (304 ) (770 )
Foreign exchange (gain) loss (86 ) 57  
Interest expense 172   271  
Gain/Loss on disposal of assets    
Other income (19 ) (6 )
Income tax expense (recovery) 23   1  
Operating loss (214 ) (447 )

 

Six months ended December 31 2020   2019  
  ($000s)   ($000s)  
Loss for the period (1,259 ) (1,320 )
Foreign exchange (gain) loss (24 ) 1  
Interest expense 571   554  
Gain/Loss on disposal of assets (3 )  
Other income (24 ) (13 )
Income tax expense (recovery) 20   7  
Operating loss (719 ) (771 )

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 December 31, 2020 2020   2019  
  ($000s)   ($000s)  
Loss for the period (304 ) (770 )
Income tax expense (recovery) 23   1  
Interest expense 172   271  
Depreciation, amortization, & impairment 313   410  
Stock-based compensation expense (non-cash) 69   36  
Adjusted EBITDA 273   (52 )

 

Six months ended December 31, 2020 2020   2019  
  ($000s)   ($000s)  
Loss for the period (1,259 ) (1,320 )
Income tax expense (recovery) 20   7  
Interest expense 571   554  
Depreciation, amortization, & impairment 653   766  
Stock-based compensation expense (non-cash) 167   74  
Adjusted EBITDA 152   81  

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 Board
Jim Sims, Investor and Public Relations
IBC Advanced Alloys Corp.

+1 (303) 503-6203
Email: jim.sims@ibcadvancedalloys.com
Website: www.ibcadvancedalloys.com



Contact Information:

Mark A. Smith, Chairman of the Board
Jim Sims, Investor and Public Relations
IBC Advanced Alloys Corp.









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