Release Date: March 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IBC Advanced Alloys Corp (IAALF, Financial) is the only company in the United States that both casts and forges copper and copper alloy products as its primary business, showcasing its unique market position.
- The company has completed a $5.7 million expansion and modernization of its Copper Alloys manufacturing facility, which has increased production capacity and positioned it for future growth.
- IBC Advanced Alloys Corp (IAALF) is an approved supplier to major US Navy submarine builders, Electric Boat and Newport News, and is in discussions to expand its supply of specialized alloys.
- The company is actively engaged in discussions with defense policy leaders and shipbuilders to potentially increase its role in the US Navy's shipbuilding plans, which could lead to significant growth opportunities.
- IBC Advanced Alloys Corp (IAALF) is involved in the Section 232 investigation initiated by President Trump, which aims to strengthen the competitiveness of US copper producers, potentially benefiting the company through tariffs and quotas on imports.
Negative Points
- IBC Advanced Alloys Corp (IAALF) reported a $2.6 million loss year to date, primarily due to lower revenue, closure costs of the Engineered Materials division, and higher-than-normal corporate SG&A costs.
- The company's revenue for the six months ended December 2024 was $7.1 million, a decline from the prior period sales of $12 million, partly due to non-recurring orders and softer market demand.
- The Engineered Materials division closure has resulted in ongoing lease costs, with the lease commitment extending until January 2026, impacting financial performance.
- There is uncertainty regarding the impact of potential tariffs and quotas from the Section 232 investigation, especially if IBC Advanced Alloys Corp (IAALF) relies on foreign imports of feedstock material.
- The company has experienced a dip in gross profit and gross margin in the past six months, despite previous upward trends following facility expansion.
Q & A Highlights
Q: What is the status of the Engineered Materials lease, and when does it complete?
A: The lease does not complete in April 2025; it actually completes in January 2026. We are paying the landlord through December 2024 and are in discussions to re-lease the facility to eliminate lease expenses until January 2026. This is the only remaining cost in the EMC shutdown category. - Mark Smith, CEO
Q: Have any EMC personnel moved to the Copper division, and are there still personnel at the closed EMC facility?
A: No employees remain at the EMC facility. One individual checks the facility weekly, but all employees have left. Although we hoped some would transfer to Indiana, they chose not to. - Mark Smith, CEO
Q: What is the status of IBC's plans to sell more to the Navy?
A: We are in multiple meetings with shipbuilders, the Navy, and the White House to expand our role in the Navy's shipbuilding plans. We are approved suppliers and are negotiating to sell directly to them, addressing concerns about reliance on imported copper alloys. - Mark Smith, CEO and Jim Sims, Director of Investor and Public Relations
Q: What are the company's plans regarding the reliance on imported copper alloys?
A: We are in discussions with Washington to seek funding for a specialized furnace to produce copper-nickel alloys domestically. This aligns with the President's Section 232 investigation to reduce reliance on foreign imports. - Jim Sims, Director of Investor and Public Relations
Q: How is IBC positioned in the context of the Section 232 investigation on copper imports?
A: As the only US company casting and forging copper alloy products, we are closely engaged in the process and seeking enhanced support for our operations. The investigation could lead to tariffs or quotas to strengthen US producers. - Mark Smith, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
