AirBoss of America Corp. Annual General Meeting€¦ · Statements containing forward-looking information are necessarily based upon a number of opinions, estimates and assumptions

1 | AirBoss of America Corp.

AirBoss of America Corp. Annual General Meeting May 10, 2018


Forward Looking Information

Certain statements contained or incorporated by reference herein, including those that express management’s expectations or estimates of future developments or AirBoss’ future performance, constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable securities laws, and can generally be identified by words such as “will”, “may”, “could” “expects”, “believes”, “anticipates”, “forecasts”, “plans”, “intends” or similar expressions. These statements are not historical facts but instead represent management’s expectations, estimates and projections regarding future events and performance.

Statements containing forward-looking information are necessarily based upon a number of opinions, estimates and assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies. AirBoss cautions that such forward-looking information involve known and unknown contingencies, uncertainties and other risks that may cause AirBoss’ actual financial results, performance or achievements to be materially different from its estimated future results, performance or achievements expressed or implied by the forward-looking information. Numerous factors could cause actual results to differ materially from those in the forward-looking information, including without limitation: impact of general economic conditions; dependence on key customers; cyclical trends in the tire and automotive, construction, mining and retail industries; sufficient availability of raw materials at economical costs; weather conditions affecting raw materials, production and sales; AirBoss’ ability to maintain existing customers or develop new customers in light of increased competition; AirBoss’ ability to successfully integrate acquisitions of other businesses and/or companies or to realize on the anticipated benefits thereof; changes in accounting policies and methods, including uncertainties associated with critical accounting assumptions and estimates; changes in the value of the Canadian dollar relative to the US dollar; changes in tax laws and potential litigation; ability to obtain financing on acceptable terms; environmental damage and non-compliance with environmental laws and regulations; potential product liability and warranty claims and equipment malfunction. This list is not exhaustive of the factors that may affect any of AirBoss’ forward-looking information.

All of the forward-looking information in this presentation is expressly qualified by these cautionary statements. Investors are cautioned not to put undue reliance on forward-looking information. All subsequent written and oral forward-looking information attributable to AirBoss or persons acting on its behalf are expressly qualified in their entirety by this notice. Forward-looking information contained herein is made as of the date of this presentation and, whether as a result of new information, future events or otherwise, AirBoss disclaims any intent or obligation to update publicly this forward-looking information except as required by applicable laws. Risks and uncertainties about AirBoss’s business are more fully discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2018 Annual Report to Shareholders under the heading “Risk Factors”.


Disclaimers

This presentation has been prepared by AirBoss of America Corp. (“AirBoss”) for the sole purpose of providing preliminary information regarding AirBoss and its subsidiaries, and is not intended to provide all available information about AirBoss. The material presented is not intended to modify, qualify, supplement or amend any information disclosed under corporate and securities legislation of any jurisdiction and should not be relied upon as a representation of any matter that a potential investor should consider in evaluating AirBoss or used for the purposes of making investment decisions concerning AirBoss Securities.

This presentation is not intended as and shall not constitute an offer, invitation, solicitation, or recommendation with respect to the purchase or sale of any securities of AirBoss in any jurisdiction.

Non -IFRS Financial Measures

Within this presentation, AirBoss may disclose financial measures such as EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS. These measures do not have any standardized meanings prescribed by IFRS. Such measures are neither required by, nor calculated in accordance with IFRS, and therefore are considered Non-IFRS financial measures. AirBoss discloses EBITDA and Adjusted EBITDA as financial measurements used by interested parties and investors to monitor the ability of an issuer to generate cash from operations for debt service, financing working capital and capital expenditures and paying dividends. They should not be considered as an alternative to, or more meaningful than, net income (or any other IFRS financial measure) as an indicator of the company’s performance. Because EBITDA excludes some, but not all, items that affect net income, the EBITDA and Adjusted EBITDA presented by the Company may not be comparable to similarly titled measures of other companies.

EBITDA represents earnings before interest income, interest expense, income taxes and depreciation and amortization.


Agenda

Chairman’s Welcome Official Business Business Updates • Operational Update • Update on Defense

President’s Address • Strategic Overview and Key 2018/2019 Initiatives • 2017 Results • 2018 Q1 Update

Chairman’s Closing Remarks Questions


Strong Leadership

Gren Schoch, Chairman and CEO

Chris Bitsakakis Chief Operating Officer Divisional President AirBoss Rubber Solutions

Lisa Swartzman, President

Bradley Berghouse President AirBoss Flexible Products

Thomas H. Ripley President AirBoss Defense

Daniel Gagnon Chief Financial Officer


Business Update - Operations

CHRIS BITSAKAKIS President, AirBoss Rubber Solutions Chief Operating Officer, AirBoss of America


AirBoss Operations: Areas of Key Focus

• Creation of a Safety Culture across all Operations

• Development of Organizational Talent

• Establishment of AirBoss Operating System

• Implementation of an ongoing growth strategy


Creating a Safety Culture

• The Internal Responsibility System (IRS): • An Employee-Supervisor-Employer partnership in ensuring a safe and healthy workplace • Everyone is responsible for their own and their colleagues safety

• An effective IRS does the following: • Establishes a system of shared responsibility. • Promotes safety culture and best practices across groups • Ensures compliance

• Immediate Changes • Establishment of monthly safety talks between supervisors and employees • Practice of beginning every meeting with a safety topic • Scheduling on one time safety stand down across company • Monthly Safety Metrics at MOR meetings and Quarterly cross company safety reviews

• Initial Results (Q4 17 to Q1 18): • 23% improvement in frequency rate • 8% improvement in severity rate • Much more work to do to establish the safety culture


• Director of Finance ARS – Craig Michael • 30 years finance and accounting experience • 20 years rubber compounding and processing

• Director of Human Resources, Health, Safety and Environment for ARS – Morris Eddy

• 25 years experience in HR, HSE • 12 years rubber processing experience

• Sr. Vice President Operations for ARS – Carl Champman • 30 years experience in Operations/Engineering • 22 years experience in Rubber Compounding, Rubber Processing, NVH

• Vice President Operations for AFP – Chris Laycoe • 25 years experience in Operations/Engineering • 18 years experience in Rubber Processing and NVH

• Director of Continuous Improvement for ARS – Michael Ciarroni • 6 Sigma Master Blackbelt • 10 years of Lean Enterprise Implementations, 7 years rubber processing

• Director of Continuous Improvement for ABD/AFP – Brian Renzi • B.S. in Mechanical Engineering • 5 years experience in applying technical solutions to Lean six sigma initiatives

Strengthening the Organization


AirBoss Operating System

Based on the Philosophy of the Toyota Way: Continuous Improvement Tied to a long-term vision, meeting challenges with focus and creativity to realize our goals. We improve our business operations continuously, always driving for innovation and evolution. Go to the Source to find the facts to make the correct decisions. Respect for People We respect others, make every effort to understand others opinions, take responsibility and build mutual trust. We stimulate personal and professional development, share the potential opportunities and maximize individual and team performance. Solving Root Problems and Drive Organizational Learning Go and see for yourself to understand the situation Make decisions slowly by consensus, considering all options Become a learning organization through relentless reflection.


Driving Growth – Rubber Solutions

• Focus on Organic Growth • Setting of growth targets by region • Identification of key conquest accounts • Monthly and Quarterly Reviews with Commercial Team

• Drive towards best in class conversion costs • Established industry baseline • New scrap reduction initiatives

• Raw Material testing prior to compounding • Statistical Process Control to identify trends • Formula design vs Customer specifications

• Increase capacity through cycle time reductions • Elimination of downstream bottlenecks

• R&D culture focused on solving problems • Use of nanotechnologies to create unique compounds • Partner with Universities to push the research envelope • Create a sustainability strategy with market demand


Driving Growth – Rubber Solutions

• Focused Customer relationships • Sales – Purchasing • Development – Engineering • Executive – Executive

• Using a flagship plant as a sales tool

• Enhance the customer experience • Reinforce technical capabilities • Create a professional atmosphere

that differentiates ARS from other custom compounders


Compound Operations


Driving Growth - Automotive

• Improve Operational Efficiencies • Drive costs out of the operation to improve

competitive ability • Aggressive improvements in labour efficiency • Elimination of all key variances by year end

• Drive Best in Class Quality and Delivery • GM Supplier of the year award 5 years running • Ford Delivery Scores in April best in AFP history • Honda continues to show confidence and has

awarded a 2021 program

• Develop Relationships with engineering teams • By creating trust between technical teams we can

drive product development

• Target non automotive customers • Tank tracks • Marine applications and Agricultural Equipment


Driving Growth - Automotive

• Drive Product Development upscale • Less risk of commoditization • Less competition from overseas suppliers • Greater opportunity for higher value add

products


Driving Growth – AirBoss Defense

• Key for continued profitability in Defense is execution • Inclusion of manufacturability analysis during stage gate

process • Development of more sophisticated capacity planning models • Development of supply chain options that allow for flexibility

during manufacturing ramp up or increased demand • Improvement in test methods that ensure compliance while

not becoming a bottleneck


New Growth Opportunities

• Review of core business expansion into underserved Geographies

• Review of product line extensions into more highly engineered products

• Target opportunities to increase scale or breadth in key businesses and drive synergy savings

• Investigate acquisition opportunities that could drive increased capacity utilization in all business units


BUSINESS UPDATE - DEFENSE

TOM RIPLEY President, AirBoss Defense


AirBoss Defense at a Glance

• We are a market-leading provider of mission critical Chemical, Biological, Radiological

and Nuclear (“CBRN”) solutions.

• We are one of only a few CBRN global protection equipment providers.

• For over 40 years we have maintained sole-source supplier or spec’d in positions of

protective overboots, gloves, respirators, filters, extreme cold weather boots, and

shelter systems to the US DOD, Canadian DND, and most western/NATO militaries.

• Our products are highly engineered, made with proprietary rubber formulations, and

developed by our in-house team of engineers.

• CBRN products are highly consumable in nature with identical products required for

both warfare and training.


AirBoss Defense – Global Defense Update

• Persistent and pervasive CBRN threat continues to drive our market.

• Geo-political instability drives force posturing. • US Marines stationed in Norway • US Military expansion on the Korean Peninsula • Syria CBRN events

• The threat environment remains extremely dynamic.

US Marines with MRF 17.2 conduct a ski movement during Exercise White Claymore in Bardufoss, Norway. 2/2/18. (Business Insider 4/16/18)

Courtesy CBRNe World Magazine, February 2018, pg. 4-5


AirBoss Defense Product Portfolio Overview

Masks & Filters

Respiratory protection systems and replacements for military and first responder use

Provide 24 hours of continuous protection against Chemical Warfare Agents and are impermeable to all biological agents

Made from durable molded materials and ballistic polycarbonate lenses, masks and respirators provide superior protection with minimum war fighter burden

40%

Wearables

Provides CBRN extremity protection, including gloves, overboots and extreme cold weather footwear protection

Provides the optimal combination of the highest degree of protection with ease of use and limited mobility restrictions

Provides 24 hours of protection against chemical warfare agent threats

Compatible with all CBRN suits

Collective Protection

Military-grade, rapidly deployable and corrosion-resistant decontamination shelters and camp systems serving both military and civilian customers

Fully outfitted with respiration, filtration, protection and patient isolation control


AirBoss Defense Wearables Product Portfolio

Product Description

Ambidextrous, molded CBRN

protective glove

Molded CBRN protective overboot

Legacy extreme cold weather protective boot

Next-generation extreme cold weather warfare boot

Only manufacturer of rubber based Fire Boots in North America

AMG / JB2GU

MALO / AFS

Bunny Boot

ECWM

Fire Boots


AirBoss Defense Mask & Filter Product Portfolio

Product Description

Next-generation, lightweight, low-burden CBRN protective mask

Legacy CBRN protective mask

CBRN protection against a variety of dangerous chemical and biological agents

Military-grade, NIOSH-certified PAPR

Compact and lightweight PAPR for

medical and commercial use

LBM Mask

C4 Mask

Filters

C420 PAPR

FlexAir PAPR


AirBoss Defense Collective Protection Portfolio

Product Description

Rapidly deployable CBRN

protective shelters and tent systems

State-of-the-art mass

decontamination system

Rugged, leak-proof body bag

CBRN protective isolation and

transport chamber

Shelter Systems

Mass Casualty Decontamination Systems

Contaminated Human Remains Pouch

Isolated Contamination Transportation Patient (ISOPOD)


PRESIDENT’S ADDRESS

LISA SWARTZMAN President, AirBoss of America


Lisa Swartzman

President

President’s Address


President’s Address – Our Mission

Our Mission:

AirBoss is an integrated group of complementary businesses whose mission is to

leverage our polymer based technology and engineering expertise to create long term

value as a supplier, employer and investment of choice.

Our Commitment:

We are committed to the development and delivery of innovative solutions that

consistently outperform our peers, producing predictable, sustainable and

profitable growth for our shareholders. We are dedicated to maintaining our core

values and integrity in our dealings with our customers, our people and our supplier

partners.


Building on our Strengths for the Future


2017 YEAR IN REVIEW


2017 Summary Financials

2017 In USD$000’s except for EPS Rubber Solutions Engineered

Products Corporate Consolidated

Net Sales 125,413 164,442 289,855

Gross Profit 19,603 24,917 44,520

EBITDA 16,622 13,467 (2,436) 27,653

Net Income 12,632

EPS (f.d.) 0.54

Summary Statistics

2017 Gross Margin 15.6% 15.2% 15.4%

2017 EBITDA Margin 13.3% 8.2% 9.5%


2018


Q1 2018 Summary Financials

Q1 2018 In USD$000’s except for EPS Rubber Solutions Engineered

Products Corporate Consolidated

Net Sales 36,078 44,471 80,549

Gross Profit 5,431 7,234 12,665

EBITDA 4,723 4,262 (1,467) 7,518

Net Income 3,198

EPS (f.d.) 0.14

Summary Statistics

Q1 2018 Gross Margin 15.1% 16.3% 15.7%

Q1 2018 EBITDA Margin 13.1% 9.6% 9.3%

Q1 2017 Gross Margin 18.4% 13.9% 15.9%

Q1 2017 EBITDA Margin 16.4% 7.0% 10.0%


BUILDING AN EVEN STRONGER PLATFORM FOR GROWTH

PE

OP

LE

PR

OC

ES

S

SY

ST

EM

S

Data Driven Analytics &

Metrics

Integrated Systems

Leveraging Talent


THANK YOU

• Employees

• Shareholders

• Board of Directors

• Bankers

• Analysts


CEO’s Closing Comments


AirBoss Value Proposition

• Long Term Value Creator

• Outperforming TSX

• Strong dividend growth

• Insider = biggest single group of Shareholders

• Strong Balance Sheet

• Strong growth potential

• Management aligned with shareholders


AirBoss 12 Month Performance


AirBoss - 5 year Performance


2018 - $0.28

Dividend History

2008- $0.05

• Dividends up >550% in 10 years


Acknowledgements

Documents

AirBoss of America Corp. Annual General Meeting€¦ · Statements containing forward-looking information are necessarily based upon a number of opinions, estimates and assumptions