AirBoss of America Corp.

Thank you for standing by. This is the conference operator. Welcome to the Airbus of America second quarter 2021 investor conference call. I would now like to turn the conference over to Gren Schock, chairman and chief executive officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for the Airbus Q2 2021 results conference call. My name is Gren Schock. I'm the chairman and CEO of Airbus. With me today are Chris Bitsoukakis, our President and COO, Frank Contilli, our CFO, and Chris Fegel, our Executive VP and General Counsel. In terms of an agenda, we'll take a few minutes to review some operational highlights for the quarter, and then briefly review our financial results before opening the call to questions. Before we begin, I'd like to remind you that today's remarks include non-IFRS measures, Reconciliations between our IFRS and non-IFRS results can be found in our MD&A. Additionally, management's outlook for 21 and beyond, anticipated financial operating results, our plans and objectives, and our answers to your questions will contain forward-looking information within the meaning of the applicable securities laws. In particular, expectations around the impact of the COVID-19 pandemic Our business acquisitions, results of operations, and financial condition and that of our customer and partners are uncertain and subject to change. This forward-looking information represents our expectations as of today and accordingly is subject to change. Such information is based on current assumptions that may not materialize and is subject to a number of important risks and uncertainties. Actual results may differ materially and listeners are cautioned not to place undue reliance on the forward-looking information. A description of the risk that may affect future results is contained in Airbus' AIF and MD&A, which is available on our corporate website and in our filings with the Canadian Securities Administrators on the CDAR at www.cdar.com. With that, I'm going to turn it over to Chris Bitsakakis, our president, to give you a review.

Thank you, Grant, and good morning, everyone. I'm happy to report another record quarter of profitability in Q2 2021 and positive momentum as we enter the second half of 2021. The company continues to perform well, supporting our strategy of innovation and diversification, driving continued growth and profitability. Notably, we continue to to effectively manage our operations through the second quarter, despite many customers, including automakers, tire makers, and related suppliers, struggling with supply chain issues, including freight delays out of Asia driven by the lack of available containers, increased demands on raw materials as global economies recover, unprecedented increases on raw material pricing driven by supply constraints and availability, and electronic chip shortages. Our record profitability was driven primarily by an increase in sales, continued operational cost containment, and our prescient acquisition in late October of the 45% ownership of Airbus Defence Group that we did not already own for $20 million in cash and 3.5 million shares of Airbus at $17.87 Canadian per share. During the quarter, we also announced an increase to our dividend to $0.10 Canadian per quarter, a 43% increase from the prior dividend. This decision reflects the step change in our scale, capabilities, sales opportunities, and of course profits stemming from the realization of the strategy we have been driving for the last several years, which culminated in a record 2019, a record 2020, and another prolific year this year. As it relates to operations, in Q2, we saw significant year-over-year increases in sales in our rubber solutions and engineered product segments, which were significantly impacted by COVID in the second quarter of 2020, as customer volumes improved, though they continue to be impacted by ongoing global supply chain issues. During Q2, Airbus Defence Group successfully completed its contract to deliver powered air purifying respirators, or PAPRs, and related peripherals to the U.S. Department for Health and Human Services, or HHS, in April. While we have provided our products to the healthcare sector in the past, the completion of these PAPR contracts, which are critical to national healthcare, has widened the aperture of opportunity for ADG to include the healthcare sector on a much larger scale. Our ability to deliver on these PAPR contracts to FEMA and HHS on time and on budget and the sheer scale of our domestic production capacity has resulted in us becoming a trusted supplier to HHS, which is responsible for maintaining the national strategic stockpile of PPE. At the end of the first quarter, we received an award from HHS worth up to $288 million U.S. for the supply of patient examination nitrile rubber gloves. Near the end of Q2, we commenced initial deliveries of these gloves to HHS. The continued penetration into the healthcare sector has contributed to the ongoing customer sector diversification of our business, which has been a key strategy of ours to mitigate the impact of any economic or industry-specific cycles. As it relates to ADG, the segment continues to execute on its growth strategy, including expanding its proprietary products. ADG completed the acquisition of Black Box Biometrics, developer of the blast gauge system of lightweight wearable blast overpressure sensors, which we anticipate will be a future growth opportunity for this segment. This acquisition enabled us to protect B3's technology from competing interests, and we anticipate that it will help us improve our margin profile and cross-sell B3's products to other militaries. B3's technology and products also have applications to healthcare markets as its sensor systems monitor, record, and analyze blast and impact events to protect not only war fighters, but also first responders and athletes from traumatic brain injuries. As I noted, ADG has commenced initial deliveries of nitrile patient examination gloves to HHS. We expect the vast majority of this contract to be recorded as sales in the third and fourth quarter. Leveraging our decades of global supply chain management expertise and relationships, we believe we have established a competitive advantage through the following. Our expertise in rubber products, are exclusive relationships we have entered into with the global nitrile rubber glove suppliers and our trusted domestic supplier status with the U.S. as well as other governments. We believe these factors to position us well to win further nitrile glove contracts in the future. The strong demand for these gloves is anticipated to continue with an estimated global shortage of 215 billion nitrile gloves and a forecasted tripling of healthcare spend on PPE by 2027 according to the Health Industry Distributors Association. Further glove contracts are just one portion of the more than $1 billion in contract opportunities over the next 24 months that we are competing on, including other new large government healthcare PPE contracts, as well as domestic and international contracts for supply of CBRN wearables and potential orders for new Husky 2G vehicles and related vehicle sensors and equipment. We remain confident we will win a portion of these. As I noted previously, this pipeline excludes the potential competition for the supply of gas masks to the US military, which we are hopeful to compete for and win, as our industry leading low burden mask did in recent years in Canada and Australia. Such a contract could be worth upwards of a billion dollars of sales over an extended timeframe, potentially beginning in 2024. It also excludes large scale rollout of our blast gauges, which are currently in field testing with the US Army and in competition for the U.S. Special Operations Command. The magnitude and continued increase in sales opportunities compared to previous years gives us significant optimism for continued growth at ADG in the coming years. Our longer-term priorities include capitalizing on ADG's enhanced scale and capabilities to pursue an array of growth and value creation opportunities in the broader survivability solution segment, serving both defense and first responder markets. While in the short to mid-term, ADG is anticipated to continue to be our primary driver of profits, we are also expecting improvements in our rubber solutions and engineered product segments, though there is still potential for COVID-19 related weakness, including ongoing supply chain challenges in the second half of this year on these segments. At Airbus Rubber Solutions, we are seeing the benefits of the sizable capital investments of approximately $16 million that we made in Airbus Rubber Solutions over the past 30 months. notably in upgraded equipment and growth initiatives, including increasing our compounding capacity in the southeastern United States and adding dedicated color and specialty compounding lines at our flagship facility in Kitchener, Ontario. ARS continues to focus on optimizing its equipment capacity, specifically in the Scotland Neck, North Carolina plant, while continuing to optimize the use of automated small ingredient weighment system in Kitchener, which is running at steady capacity. This segment recorded strong year-over-year increases in volumes, as well as progressive traction this quarter. However, continued significant raw material price increases, coupled with international freight constraints, proved challenging on the supply chain, which carried over from the previous quarter. This was further challenged by labor shortages, primarily driven by the pandemic, which are anticipated to continue into the third quarter. ARS's development and sales in niche products, including colored rubber, continues to grow in line with our margin expansion strategy with new customers. Additionally, ARS has continued to develop new compounds, proprietary compounds, and continuously improve existing compounds to maintain its leadership position as a supplier of custom rubber compounds and formulations. We are also taking advantage of our scale and global supply chain management expertise to onboard new customers seeking new suppliers in the current environment to drive volume and growth in our core markets. The continued focus on operational excellence supported production of a broader array of compounded products, black, white, and color, as well as providing enhanced flexibility in attracting and fulfilling new business. We have made further inroads in utilization of our small volume specialty mixer, which should support the production of increasingly specialized higher margin compounds, further diversifying our offering and enhancing penetration with both existing and new customers. In Kitchener, we have continued to invest in its R&D expertise and lab capital to support enhanced collaboration with customers and better reflect the company's focus on innovative R&D and proprietary technical solutions. Our longer-term priority for ARS remains to grow the segment by positioning it as a specialty supplier of choice in the consolidated North American market. with a growing focus on building defensible leadership positions in selected compounds. In engineered products, we have continued to focus on our operational improvement plan, including managing variable costs and focusing on sustaining a stable workforce while weathering the volume volatility in the automotive sector, and specifically on our products for SUV, light truck, and minivan platforms. During the second quarter, AEP continued its focus and commitment to drive efficiencies and best-in-class automation. as evidenced by the installation of a series of new injection molding presses, the latest in almost $14 million in capital investments we have made over the past 30 months, notably in growth and cost-saving initiatives to upgrade the segment's capital equipment to the latest standards with the aim of leveraging automation for high-volume, low-margin commoditized parts and enabling us to increase production of more technically sophisticated parts, which can generate higher margins. A second robotic work cell, in addition to the one that we put into production in Q3 of last year, is scheduled for installation later in 2021 and intended to be ready for production in early 2022. AEP generated significant year-over-year growth over Q2 2020 when COVID resulted in a temporary shutdown, but saw a sequential decline in sales as global supply chain challenges and shutdowns in Asia added to logistical challenges associated with the supply of certain molded products. Despite these near-term challenges, our longer-term priority remains to drive improved performance from AEP through a combination of disciplined cost containment, client relationship expansion, new product development, sector diversification, and a more aggressive stance on the renegotiation of low-margin contracts. Our continuing record results have placed us in a strong financial position and have given us the ability to be aggressive with opportunities that present themselves. While we have a clear strategy to grow organically, historically, we have also undertaken strategic M&A in order to acquire important parts of our supply chain, diversify our products and customer base, and penetrate new sectors. We continue to seek ways to leverage our balance sheet strength and accelerate our growth strategy through M&A as evidenced by our recent merger with CSI and acquisition of B3. At ADG, we are examining upstream and downstream M&A opportunities. This includes acquiring control of components used in our existing products or on-shoring certain aspects of our supply chain. We are also looking at potential complementary products for our medical, healthcare, and chem-bio products and our defense and survivability systems. Within our Airbus rubber solutions, we are reviewing potential M&A opportunities that will accelerate this segment's growth strategy, including reinforcing the investments we've already made in expanding from traditional black, high-volume product lines into lower volume but typically higher margin color and specialty markets, as well as expanding into select regions in the US to broaden our reach. Within Airbus engineered products, our M&A focus is on opportunities to expand our access to and product set for non-automotive sectors. As it relates to our outlook, our growth is not dependent on M&A. It is difficult to predict the continued normalization of the economy in the near term due to the impact of COVID-19, and global supply chain issues. But as I've stated previously, the outlook remains healthy over the medium term with industry estimates for approximately 4% top line growth over the next five years. We have obviously outperformed the industry over the past number of years, and our aim remains to continue expanding our market share while increasing our margins through a combination of product mix and operational efficiencies, complemented with strategic and disciplined M&A. Our focus remains to cultivate strong internal processes that lead to organic growth in excess of market growth, while assessing both tuck-in and transformational acquisitions as we look to leverage our strong balance sheet to accelerate our strategic growth targets. With that, I will now pass the call over to Frank Yantilli for the financial review. Frank?