AirBoss reports third quarter net income increase
AirBoss of America Corp. has announced financial results for the three and nine month periods ended Sept. 30.
Sales for the three-month period increased by 2.7% compared to 2005, while net income from continuing operations increased by $3.2 million.
Sales for the nine-month period increased by 1% compared to the same period in 2005 while pre-tax income from continuing operations increased by $6.4 million or 332% and net income from continuing
operations increased to $6.8 million from $1.4 million in the previous year.
The AirBoss Rubber Compounding segment had a net sales increase of 12% for the nine month period over the same period a year ago. This reflects the continued inflationary pressure of rising raw material prices, the company noted. During the third quarter, significant increases were experienced in both natural rubber and carbon black, the company said.
"Sales volumes were again led by strong demand for rubber compounds for products which service the energy generation and mining industries," the report noted. "Overall volumes for the year-to-date were flat as increases in this sector were offset by declines in the automotive and transportation industries.
"Margins, expressed as a percentage of sales, decreased slightly due to the higher material costs, however, efficiency gains experienced in the first half of the year as a result of operational improvements continued. Reduced manufacturing cycle times and limiting of overtime costs contributed to obtaining an improvement in the return on
"The volatility in world prices of certain raw materials continues to be a short-term concern," the company's financial report stated. "Natural rubber has increased by over 25% in the third quarter before most of these increases were reversed at the end of the period. Carbon black prices have not been affected by the recent decline in oil prices and synthetic rubber prices have spiked again for the fourth quarter due to an apparent shortage in butadiene, a key raw material. With the significant lowering of North
American demand in key rubber consuming industries such as automotive and pneumatic tires, these increases are difficult to explain in the short-term as they are tied to many interrelated factors including exchange rates, oil prices and speculative pressures."
Sales were affected by the higher Canadian dollar, the company reported. Profitability was favorably impacted by production efficiencies in the Rubber Compounding Division, a lower effective tax rate and other factors.