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Operator: Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 Conference Call for AirBoss of America. [Operator Instructions] I would now like to turn the call over to Gren Schoch, Chairman and Co-CEO. Please go ahead.
Peter Schoch: Thank you, Eric. Good morning, everyone, and thank you for joining us for the AirBoss Third Quarter results conference call. My name is Gren Schoch. I'm the Chairman and Co-CEO of AirBoss. With me today are Chris Bitsakakis, our Chairman -- sorry, our President and Co-CEO; Frank Ientile, our CFO; and Chris Figel, our EVP and General Counsel. Our agenda today will start with a review of the operational highlights of the quarter, followed by a discussion of our financial results before we open the conference line to questions. Before we begin, I would like to remind listeners that our remarks today contain forward-looking statements, including our estimates of future developments. We invite listeners to review risk factors related to our business in our annual information form and our MD&A, both of which are available on SEDAR plus on our corporate website. Also, we discuss certain non-GAAP measures, including EBITDA. Reconciliations of these measures are available in our MD&A. And finally, please note that our reporting currency is U.S. dollars. References today will be in U.S. dollars unless we indicate otherwise. With that, I'll now turn the call over to Chris Bitsakakis for the operational review.
Chris Bitsakakis: Thank you, Gren, and good morning, everyone. AirBoss experienced some real positive traction in Q3 2025 compared to Q3 2024, mainly driven by significant increases in AirBoss Manufactured Products defense products business, partially offset by reduced volumes at AirBoss Rubber Solutions. During the quarter, AirBoss maintained its focus on risk mitigation plans, including further cost reductions and efficiency improvements to build both momentum at ARS and AMP while continuing to navigate obstacles related to economic and geopolitical challenges, including market softness, the U.S. government shutdown, tariffs, inflationary pressure and the potential for further escalating in retaliatory tariffs. Uncertainty is expected to persist in the short to midterm with volume recovery difficult to anticipate as any recovery could be impacted by further tariffs, duties, other restrictions or trade or geopolitical and economic challenges. The company commenced the relocation of its facility in Jessup, Maryland to Auburn Hills, Michigan, a key step in improving long-term efficiency at AirBoss Manufactured Products. This transition will consolidate operations and is expected to reduce fixed costs and better align AMP's defense production. Now given the cross-border nature of the company's operations, a significant portion of the products manufactured by the company in Canada are sold into the United States and may be subject to current or pending tariffs as well as additional tariffs, which could be enacted. Despite the fact that the majority of AirBoss products are covered under the USMCA, CUSMA, the company continues to evaluate and execute on contingency plans to deal with any future potential challenges that may present themselves as CUSMA gets renegotiated. Despite the increased economic uncertainty, disruption of trade flows and increased costs and strains on supply chains, management remains focused on the successful conversion of key opportunities to support future growth. ARS experienced continued softness in Q3 2025 compared to Q3 2024. Compared to last year, the segment experienced both revenue contraction and reduced margins, driven by overall softness in most customer sectors, primarily caused by the shifting tariff situation as customers in the United States continue to manage their exposure created by tariffs on global supply chains. ARS remains committed to executing on its strategy to deliver strong results by focusing on specialized products, expanded production of a broader array of compounds and enhanced flexibility in securing and launching new accounts. As a segment, ARS continued to invest in research and development during the quarter to support enhanced collaboration with customers while preparing to launch new products. AMP experienced notable improvement in Q3 2025 compared to Q3 2024, primarily due to the defense products business continuing deliveries on previously announced contracts and a focus on its footprint optimization to help support profitable growth. Despite the disruptions associated with the U.S. government shutdown, management at AMP maintained its focus on operational improvements during Q3 2025 with further initiatives focused on fixed cost reductions and continued work with key customers to leverage opportunities aligned with its growth initiatives. The defense products business continues to work closely with its suppliers and government partners to mitigate the previously announced delays to the Bandolier program with deliveries resuming in the final weeks of Q3 2025 and into Q4 2025 with completion expected in early 2026. The rubber molded products operations were impacted by continued volume softness related to the original equipment manufacturers, the OEMs, due to evolving impact of tariffs in the automotive sector. This business continued its focus on managing costs and a commitment to drive efficiencies and best-in-class automation as well as diversification of its product lines into adjacent sectors. Despite the many ongoing challenges in the U.S. industrial economy, year-to-date, AirBoss consolidated performance has shown significant improvement year-over-year. EBITDA is up by $13 million. Adjusted EBITDA is up by $9 million. Cash from operating activities up $24 million. Net debt is down by $16 million from the beginning of 2025. And most importantly, net debt to trailing 12 months adjusted EBITDA has dropped from 4.67x at the end of Q3 2024 to 2.7x at the end of Q3 2025. These metrics are strong indicators that the efficiency improvements across the enterprise, along with successful launch and execution of new program awards are driving strong improvements year-over-year for AirBoss. While our short- and medium-term actions are driving measurable improvements, the company's long-term priorities continue to be the growth of the core rubber solutions by emphasizing rubber compounding as the core driver for sustainable growth and productivity, focusing on innovation and custom rubber compounding while aiming to expand market share through organic and inorganic means. At the same time, driving a growth strategy in AMP is critical for us as we focus on an expanded range of rubber molded products and making sure that we are well positioned to take advantage of increased defense spending globally. AirBoss continues to focus on these long-term priorities while investing in core areas of the business to expand a solid foundation that will support long-term growth on the foundation of the recently implemented efficiency improvements. I will now pass the call over to Frank for the financial review. Frank?
Frank Ientile: Thanks, Chris, and good morning, everyone. As a reminder, all dollar amounts presented today are in U.S. dollars, except for dividends per share, which are in Canadian dollars. Percentage changes compare Q3 of 2025 to Q3 of 2024, unless otherwise noted. To be respectful of your time today, I will aim to be brief in my summary of our Q3 2025 results. Starting from the top line, AirBoss' consolidated net sales for Q3 2025 were $100.4 million, an increase of 4.4% from the prior year. The increase was primarily due to higher volumes at manufactured products, partially offset by lower sales at Rubber Solutions. Consolidated gross profit for Q3 2025 increased by $0.4 million to $16.5 million compared with Q3 of 2024 and consolidated adjusted EBITDA for Q3 2025 increased to $7.3 million from a prior year of $6.4 million. In both cases, the increases were driven by improved volume and mix at manufactured products, partially offset by volume softness at Rubber Solutions. Turning now to our individual segments. Net sales in the AirBoss Rubber Solutions segment for Q3 2025 decreased by 5.5% to $51.5 million from $54.5 million in Q3 2024. Volume decreased by 7.9% with decreases in most sectors. Tolling volume was down 43.8%, while non-tolling volume was down 6.7%. Gross profit at AirBoss Rubber Solutions for Q3 2025 decreased by 23.9% to $6.3 million from $8.3 million in Q3 2024. Gross margin percentage decreased to 12.2% of net sales from 15.1% of net sales in Q3 2024. The decreases were due to unfavorable mix and lower volume driven by market softness, economic uncertainty, partially offset by managing controllable overhead costs and continuous improvement initiatives. Net sales at Manufactured Products for Q3 2025 increased by 27.7% to $58.1 million from $45.5 million in Q3 2024. The increase was mainly due to improved sales in the defense products business in addition to improved sales in the rubber molded products business. Gross profit at Manufactured Products for Q3 2025 increased to $10.2 million from $7.8 million in Q3 2024. Gross margin percentage increased to 17.5% of net sales from 17.1% of net sales in Q3 2024. This was primarily the result of improvements in the defense products business operational cost improvements and reduced overhead costs executed in the quarter, in addition to favorable volume and product mix in the rubber molded products business. Turning again to the consolidated results. Free cash flow for Q3 2025 was $4.9 million compared to negative $2.9 million in Q3 of 2024. During Q3 2025, the company invested $3.6 million in property, plant and equipment versus $1.6 million in Q3 of 2024. The capital expenditures were related to cost savings initiatives, growth initiatives and minor plant upgrades within ARS and AMP. By the end of Q3 2025, our net debt balance was $82.9 million versus $98.9 million at the end of 2024. We expect to fund the company's 2025 operating cash requirements, including required working capital investments, capital expenditures and scheduled debt repayments from cash on hand, cash flow from operations and committed borrowing capacity. The company has a revolving credit facility that provides for a maximum borrowing up to $125 million with a $25 million accordion. As of September 30, 2025, the total available borrowing capacity under this facility was $76.4 million with $41.3 million drawn. With that, I will now turn the call over to Chris. Chris?
Chris Bitsakakis: Thank you, Frank. To wrap up, Q3 2025 demonstrates the resiliency and adaptability of the AirBoss team. We are executing against our strategic priorities, streamlining operations, investing in innovation and reinforcing our balance sheet to ensure sustainable growth and value creation. As we move into 2026, our focus remains clear: delivering consistent cash flow, advancing our defense programs and taking advantage of the recently announced increases in defense spending throughout the world, expanding specialty rubber solutions and continue to improve operational efficiency across all our businesses. Operator, at this point, we can open up the line for any Q&A.
Operator: [Operator Instructions] Your first question comes from the line of Ahmed Abdullah with National Bank Capital Markets.
Ahmed Abdullah: Just to start, for the AirBoss Rubber Solutions, how are volumes tracking early in Q4? Are you seeing any signs of a rebound, acknowledging what you mentioned in terms of macro uncertainty having an impact there?
Chris Bitsakakis: You'll notice that the Q3 revenue in ARS was actually a slight improvement over Q2. So we started to see a rebound already in Q3, even if it's fairly slight. And we've also been able to bring on new customers that are launching in Q4. So we feel that there is some room for optimism there. The only issue with that is quite often, December is a bit of a strange month, as you know, Ahmed, because of holidays and that sort of thing and the November holidays for Thanksgiving. So if you consider the net numbers in Q4, we're not prepared at this point to provide any guidance for that. But like I said, Q3 represented a slight rebound from -- if you would consider Q2 the trough, and we are launching new customers in Q4. So the other part of that is a lot of people are analyzing what's going on in the U.S. industrial base and quite a bit of the slowdown that we're seeing across all the customers that we have, including the big tire companies, truck tire sales are, as you probably know, way down so -- which is why the tolling business, not just for us, but all of our competitors has virtually disappeared. But as the supply chains get rebalanced from all these tariffs around the world and the customers no longer have the inventory that they need to build their products, we expect a rebound. We're just not sure exactly when we'll see that in any sort of material way. But like I said, if you look at the numbers, Q3 was a slight improvement over Q2.
Ahmed Abdullah: Yes, that's fair. I mean you're also entering the easier comps going forward. So we would hope a rebound would materialize at that point. On the defense business, how much of this quarter saw part of the Bandolier recommencing deliveries? Because you do mention that it started in the last few weeks of 3Q. So I'm just trying to gauge how much of the Bandolier has contributed here.
Chris Bitsakakis: Yes, it's very small. We were able to -- as we had announced a problem with the supply chain of a key raw material ingredient for the Bandolier, which we were able to solve that problem in conjunction with our customer and our suppliers during Q3. So we resumed shipments, but it's a fairly lengthy revenue recognition for those shipments. So we expect to see a fairly strong spike in Bandolier sales for Q4 based on the resumption of our shipments late Q3.
Ahmed Abdullah: Okay. And when you announced that contract, it was $45 million. And you had mentioned that $20 million was already shipped prior to that. Are you still expecting $25 million of that to still be shipped out in Q4 and into early 2026?
Chris Bitsakakis: Yes, that's right. As you can imagine, we're playing a little bit of catch-up from that little delay that we had to take to solve that issue. So we're trying to drive the revenue to the left as much as we can. But again, with the fact that it's a fairly lengthy delivery process, we're not exactly sure how much of that will be in Q4 versus Q1. But the numbers that we had reported on previously, we expect to fulfill in that same time frame.
Operator: There are no further questions at this time. I would now like to turn the call back over to Chris Bitsakakis for closing remarks. Please go ahead.
Chris Bitsakakis: Great. Thank you very much. I appreciate everybody's time this morning, and we look forward to speaking to you again after our year-end numbers are available in early 2026. Thank you.
Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.