IBC Advanced Alloys Reports Financial Results for the Quarter Ended March 31, 2020

Highlights of the Quarter
(unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars)
Company Achieves Net Profitability on Higher Sales:  IBC recorded a comprehensive income of $171,000 in the quarter, or $0.00 per share, which compared to a loss of $639,000, or ($0.02) in the prior-year period.  Profitability was driven by higher revenue and stronger gross margins, with consolidated sales up 12% in the quarter and higher by 17% year-to-date over the comparable prior-year periods.Sales Improved Across Both Operating Divisions:  Copper Alloys sales improved by 10% in the quarter and by 16% in the year-to-date period, as compared to the corresponding periods of 2019. Engineered Materials division sales rose by 18% in the quarter, and were higher by 20% in the year-to-date period, as compared to the comparable prior-year periods.Stronger Gross Margins:  Comprehensive gross margin strengthened in the quarter to 20.4%, from 11.9% in the prior-year period, and rose to 15.9% on a year-to-date basis from 10.1% in the nine months ended March 31, 2019.Positive Adjusted EBITDA¹:  Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) for the quarter was $825,000, which compared to Adjusted EBITDA of ($167,000) for the prior-year period.  Adjusted EBITDA for the nine-month period ended March 31, 2020 was $891,000, as compared to ($891,000) in the comparable prior-year period.  Both operating divisions posted positive Adjusted EBITDA for the quarter and on a year-to-date basis.FRANKLIN, Ind., May 11, 2020 (GLOBE NEWSWIRE) — IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces its financial results for the quarter ended March 31, 2020. In the quarter, the Company recorded comprehensive income of $171,000, or $0.00 per share, which was driven by higher sales across the Copper Alloys and Engineered Materials operating divisions. Consolidated sales in the quarter of $5.9 million were 12.5% higher than the prior-year period, and year-to-date (“YTD”) sales of $16.2 million were higher by 17.3% as compared to first nine months of fiscal 2019.The Copper Alloys division posted sales of $4.0 million, a 10% increase over the prior-year period, and YTD sales of $11.4 million were 16.4% higher than the comparable period of fiscal 2019. The Engineered Materials division posted sales of $1.9 million in the quarter, an increase of 18% over the prior-year period.  Year-to-date sales of $4.0 million were 19.8% higher than in comparable prior-year period.Consolidated gross margin also improved in the quarter to 20.4%, from 11.9% in the prior-year period, and rose to 15.9% year-to-date, from 10.1% in the nine months ended March 31, 2019.Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) for the quarter totaled $825,000, which reversed an Adjusted EBITDA loss of $167,000 for the prior-year period.  Year-to-date Adjusted EBITDA totaled $891,000, as compared to ($891,000) in the prior-year period.  Both operating divisions posted positive Adjusted EBITDA for the quarter and on a year-to-date basis.“The Board and I are very pleased with the strong sales performance and gross margin improvements in the quarter across both our Engineered Materials and Copper Alloys divisions,” said Mark A. Smith, IBC Board Chairman.  “We were especially pleased to see the strong performance and profitable operations of our Engineered Materials division, which specializes in high-performance beryllium-aluminum alloys for both defense and commercial applications.”“The IBC team’s ability to achieve profitability in the midst of challenging and volatile market conditions highlights the potential of this team to continue improving operational efficiencies, increasing gross margins, expanding sales, and delivering improved shareholder value,” Mr. Smith added.EMC Division HighlightsThe Engineered Materials division posted comprehensive income of $265,000 in the quarter, which reversed a comprehensive loss of $96,000 in the prior-year period.Engineered Materials sales in the quarter of $1.9 million were 18% higher than sales of $1.6 million in the prior-year period.  Year to date, Engineered Materials sales grew to $4.8 million, a 20% increase over sales of $4.0 million in the prior year-to-date period.  This change was largely driven by increased demand for beryllium-aluminum (“BeAl”) products sold to semiconductor equipment manufacturers.Adjusted EBITDA for the division was $501,000 in the quarter, which compared favorably to Adjusted EBITDA of $15,000 in the prior-year period.  Year to date, Adjusted EBITDA for the division was $791,000, which compared to Adjusted EBITDA of ($206,000) in the prior year-to-date period.Demand for BeAl products used in defense applications remained steady in fiscal year 2020 but is expected to strengthen as rates of production for F-35 Lightning II aircraft begin to accelerate beyond Low Rates of Initial Production (“LRIP”).  For example, according to data released publicly by our customer Lockheed-Martin, the annual rate of production of the F-35 aircraft is expected to nearly double by 2022 from 2018 production levels.  IBC is continuing to pursue additional contracts for high-performance BeAl products in other defense-sector platforms.Copper Alloys Division HighlightsThe Copper Alloys division posted a net income of $98,000 in the quarter, which reversed a net loss of $96,000 in the prior-year period.  Sales of $4.0 million in the quarter were 10% higher than sales of $3.6 million in fiscal Q3 of 2019.  Year-to-date Copper Alloys sales were $11.4 million, a 16% increase over sales of $9.8 million in the prior year-to-date period.Average gross margin of 14.9% in the quarter compared to 14.1% in the prior-year period, largely as a result of fixed costs being spread over a larger production volume.Adjusted EBITDA for the division was $322,000 in the quarter, which compared favorably to Adjusted EBITDA of $91,000 in the prior-year period.  Year to date, Adjusted EBITDA was $502,000, which compared to Adjusted EBITDA of ($80,000) in the prior year-to-date period.Higher demand for copper alloy products has been driven primarily by strong demand in electronics, marine defense and power generation markets.  Growth has also accelerated due in part to the division’s ability to produce more value-added products as a result of several strategic capital equipment upgrades made in fiscal year 2019.FISCAL Q2 2020 SEGMENT AND CONSOLIDATED OPERATIONS RESULTSFollowing is a summary of the Company’s results of operations to Adjusted EBITDA for the third fiscal quarter of 2020, on a consolidated and segment-by-segment basis:NON-IFRS MEASURES
To supplement its consolidated financial statements, which are prepared and presented in accordance with IFRS, IBC uses “operating income (loss)” and “Adjusted EBITDA”, which are non-IFRS financial measures. IBC believes that operating income (loss) helps identify underlying trends in the business that could otherwise be distorted by the effect of certain income or expenses that the Company includes in loss for the period, and provides useful information about core operating results, enhances the overall understanding of past performance and future prospects, and allows for greater visibility with respect to key metrics used by management in financial and operational decision-making.The Company believes that Adjusted EBITDA is a useful indicator for cash flow generated by the business that is independent of IBC’s capital structure.Operating income (loss) and Adjusted EBITDA should not be considered in isolation or construed as an alternative to loss for the period or any other measure of performance or as an indicator of our operating performance. Operating income (loss) and Adjusted EBITDA presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to IBC’s data.Operating Income (Loss)Operating income (loss) represents loss for the period, excluding foreign exchange loss, interest expense, interest income, other income (expense) and income taxes that the Company does not believe are reflective of its core operating performance during the periods presented. A reconciliation of the third quarter income and the nine-month period ended March 31, 2020 loss to operating income follows:

Adjusted EBITDAAdjusted EBITDA represents income (loss) for the period before interest, income taxes, depreciation, amortization and share-based compensation. A reconciliation of the Company’s third quarter income to Adjusted EBITDA follows:

For more information on IBC and its innovative alloy products, go here.On Behalf of the Board of Directors:“Mark A. Smith”
Mark A. Smith, Chairman of the BoardCONTACTS:

Mark A. Smith, Chairman of the Board
Jim Sims, Investor and Public Relations
IBC Advanced Alloys Corp.ABOUT IBC ADVANCED ALLOYS CORP.IBC is a leading beryllium and copper advanced alloys company serving a variety of industries such as defense, aerospace, automotive, telecommunications, precision manufacturing, and others. IBC’s Copper Alloys Division manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper, and aluminum bronze.  IBC’s Engineered Materials Division makes the Beralcast® family of alloys, which can be precision cast and are used in an increasing number of defense, aerospace, and other systems, including the F-35 Joint Strike Fighter. IBC’s has production facilities in Indiana, Massachusetts, Pennsylvania, and Missouri. The Company’s common shares are traded on the TSX Venture Exchange under the symbol “IB” and the OTCQB under the symbol “IAALF”.CAUTIONARY STATEMENTSNeither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  This disclosure contains a forward-looking statements.  Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting anticipated sales trends in fiscal 2020, expected demand for the Company’s products and expectations as to additional quantities to be sold under the Lockheed Martin contract. Although IBC believes that the expectations reflected in these forward-looking statement are reasonable, forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statement.  The forward looking statements made by the Company in this press release are based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.  As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements.  IBC makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as required by applicable law. Additional information identifying risks and uncertainties is contained in IBC’s filings, including its Annual Information Form for the fiscal year ended June 30, 2019, available at www.sedar.com.¹ We report non-IFRS measures such as “Adjusted EBITDA” and “Operating Income.”  Please see information on this and other non-IFRS measures in the “Non-IFRS Measures” section of the Company’s MD&A and in this news release.