Mr. Chris Bitsakakis reports

AIRBOSS ANNOUNCES 2ND QUARTER RESULTS AND CONTINUED STRENGTH IN ITS OPPORTUNITY PIPELINE

Airboss of America Corp. has released its second quarter results as it pursues new revenue opportunities through the remainder of 2022. The company will host a conference call and webcast to discuss the results on Aug. 5, 2022, at 9 a.m. ET, the details of which are outlined below. All dollar amounts are shown in thousands of U.S. dollars, except per-share amounts, unless otherwise noted.

Recent highlights:

• Generated EBITDA (earnings before interest, taxes, depreciation and amortization) of $10.46-million;
• Net debt to EBITDA ratio at June 30, 2022, was 1.29 times;
• Declared a quarterly dividend of 10 Canadian cents per common share;
• Maintained an opportunity pipeline in excess of $1.5-billion at Airboss Defense Group.

"Our results for the second quarter of 2022 showed the impacts of challenging market conditions and contract timing, beneficially offset by strong performance within our rubber solutions segment, supported by an expanded product lineup and enhanced production capabilities," stated Chris Bitsakakis, president and chief operating officer of Airboss. "The company continues to pursue strategies to mitigate the impacts of supply chain, input cost inflation and labour challenges on each of our business segments. Airboss has proven its ability to successfully deliver against large-scale supply agreements during challenging market conditions, and we believe this skill set, combined with our expanded and highly innovative product lineup, position us well to secure new sales from our strong pipeline of opportunities.

"The rubber solutions segment continued to optimize production and capitalize on elevated demand in Q2 2022, and this led to significant growth over the corresponding period in 2021. New, specialized products and capabilities we have developed both in-house and through acquisitions have equipped this segment with an expanded portfolio of compounds and better access to our end markets. Our team has strong opportunities to further build our customer base and the profitability within rubber solutions."

"For our Airboss Defense Group segment, we remain competitively positioned to secure and execute on large-scale sales opportunities, supported by innovative products such as our blast gauge system, which is focused on ensuring the safety of military personnel and increased military budgets worldwide, which are creating opportunities for our traditional defence products like the Husky, Bandolier and CBRN-E equipment," noted Gren Schoch, chairman and chief executive officer of Airboss. "The demand drivers for the products in our ADG portfolio remain strong and our opportunity pipeline across the business continues to sit at record levels."

Financial results

Consolidated net sales for Q2 2022 decreased by 6.7 per cent to $110,547 compared with the three-month period ended June 30, 2021. This decrease was primarily attributable to Airboss Defense Group's (ADG) delivery of powered air-purifying respirators (PAPRs) and nitrile gloves to the U.S. Department for Health and Human Services (HHS) in the prior year, further decreased by softening in the engineered products segment. These decreases were offset by the increased sales at rubber solutions across the majority of its customer sectors. Consolidated net sales for 2022 year to date increased by 13.0 per cent to $255,020, compared with 2021 year to date, driven by a 51.6-per-cent increase in sales at rubber solutions.

Consolidated gross profit for Q2 2022 decreased by $18,503 to $14,800, compared with Q2 2021, driven by lower volumes at ADG related to PAPR and nitrile glove deliveries recognized in the same period in 2021 and lower volume at engineered products, partially offset by a strong improvement at rubber solutions driven by higher volumes. Gross profit as a percentage of net sales was reduced to 13.4 per cent in Q2 2022, compared with 28.1 per cent for Q2 2021, primarily due to a change in product mix at ADG, raw material, freight and labour related challenges impacting each segment to varying degrees and no government-directed wage subsidies compared with last year, partially offset by improvements at rubber solutions. Consolidated gross profit for 2022 year to date decreased by $12,677 to $46,401 compared with 2021 year to date, driven by lower volume at ADG and margin compression at engineered products due to labour, freight and raw material increases, partially offset by significant improvements at rubber solutions. Gross profit as a percentage of net sales decreased to 18.2 per cent for 2022 year to date, compared with 26.2 per cent for 2021 year to date. These decreases were primarily a result of lower margin at the ADG and engineered products segments, including approximately $8,000 of government-directed wage subsidies recognized for the same period in 2021, partially offset by the continued improvement at rubber solutions.

Adjusted EBITDA for Q2 2022 decreased by 58.3 per cent compared with Q2 2021 and decreased by 23.6 per cent for the six-month period ended June 30, 2022 compared with the six-month period ended June 30, 2021.

Financial position

The company retains a $250-million credit facility and a net debt to trailing-12-month EBITDA ratio of 1.29.

Dividend

The board of directors of the company has approved a quarterly dividend of 10 cents per common share, to be paid on Oct. 17, 2022, to shareholders of record at Sept. 30, 2022.

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 defence 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;
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.

Conference call details and investor presentation

A conference call to discuss the quarterly results is scheduled for 9 a.m. ET on Friday, Aug. 5, 2022. Please dial in to the following numbers: 1-800-319-4610 or 416-915-3239 (passcode: 55506). Please connect approximately 10 minutes prior to 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 on the company's website.

About 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 defence, health care, 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 Toronto Stock Exchange under the symbol BOS and on the OTCQX under the symbol ABSSF.

We seek Safe Harbor.