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AirBoss Q3 profit surges on more than doubling of revenues from COVID supplies

NEWMARKET, Ont. — AirBoss of America Corp. says its net profit surged in the third quarter on a more than doubling of revenues from supplying respirators and related products ordered by U.S. government agencies in response to COVID-19.

The Ontario-based company says its net income attributable to shareholders was US$11.6 million or 47 cents per diluted share, up from US$1.5 million or seven cents per share a year earlier.

AirBoss, which reports in U.S. dollars, says adjusted profit was $11.7 million or 47 cents per share, compared with $1.8 million or eight cents per share in the third quarter of 2019.

Revenues for the three months ended Sept. 30 rose to $162.7 million from $77.2 million in the prior year.

AirBoss was expected to report 33 cents per share in adjusted profits on $140.3 million of revenues, according to financial data firm Refinitiv.

The results prompted its shares to surge 7.1 per cent or $1.19 to $17.89 in Wednesday early afternoon trading on the Toronto Stock Exchange.

AirBoss Defence Group, which is 100 per cent owned by AirBoss, delivered 100,000 respirator systems to the U.S. Federal Emergency Management Agency (FEMA) under a US$96.4 million contract issued in March.

"It is unclear what impact COVID-19 will have on the economy and our customer base in the near term. However, we believe our diversification positions us well either for a hopeful return to a safe normalcy or to continue supplying front line workers with PPE if the pandemic continues or grows worse," stated president and chief operating officer Chris Bitsakakis.

"Over the long term, our focus remains unchanged and we will continue to pursue opportunities to supply PPE for front line health care workers and work with regional, provincial, state and federal governments as an ongoing part of future strategic pandemic planning, target traditional defence contracts, and grow and diversify our rubber solutions and engineered products segments."

The company told analysts Wednesday that it hasn't received any significant stockpiling orders for personal protective equipment since there hasn't been much of a lull between Phase 1 and 2 of the pandemic.

"And most of our customers are still panicking and trying to sort out the record hospitalizations that are happening now as a result of this current wave," chairman and CEO Peter Grenville Schoch said in a conference call.

Despite reports about PPE shortages, It doesn't anticipate big government orders until next May and August because of the government fiscal year-end, change in U.S. administration and 2021 budgets not yet being approved.

However, it is seeing more international interest and is beginning an online marketing program to target customers like the general public, dentists, massage therapists, physiotherapists and anybody that has to wear a mask all day.

"So over the next couple of months, we're going to roll out an aggressive online marketing program to non-government potential customers," said Grenville Schoch.

This report by The Canadian Press was first published Nov. 10, 2020.

Companies in this story: (TSX:BOS)

The Canadian Press

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