Mr. Duncan Heinz reports

IBC ADVANCED ALLOYS REPORTS FISCAL Q4 AND FULL YEAR 2017 RESULTS

IBC Advanced Alloys Corp. has released its fourth quarter fiscal 2017 and full-year 2017 financial results. (Amounts are in U.S. dollars unless otherwise indicated.)

Revenue for the quarter ended June 30, 2017, was $4.2-million, a 2.4-per-cent increase over revenues of $4.1-million in the quarter ended June 30, 2016. The company reported a loss in the quarter of $2.2-million, or seven cents per basic and diluted share, compared with a loss of $1.1-million in the quarter ended June 30, 2016, or six cents per basic and diluted share.

Year-end revenue for fiscal 2017 was reported at $15.7-million, a decline from fiscal 2016 revenue of $16.4-million. The company reported a fiscal 2017 loss of $5.4-million, representing a loss per share of 18 cents, as compared with a fiscal year 2016 loss of $3.9-million, representing a loss per share of 33 cents.

Sales in the engineered materials division rose 52 per cent in the quarter to $1.1-million, compared with sales in the prior-year period of $722,000. Copper alloys sales for the quarter were $3.1-million, compared with sales of $3.4-million in the quarter ended June 30, 2016.

In the quarter, the company completed the major components of its capital improvements program launched in 2016. In addition to installing a new beryllium-aluminum casting furnace in its Wilmington, Mass., facility in May, 2017, the company completed the installation in the quarter of additional equipment associated with that furnace, including digital radiography equipment, automated finished equipment, material-handling equipment and an upgrade to the co-ordinate measurement machine to accommodate aerospace inspection requirements. While the company is continuing to fine-tune the functionality of the automation controls of the furnace, IBC now has a fully integrated factory automation system controlling the furnace and cooling equipment.

Also in the quarter, the company completed the installation and commissioning of a new solution annealing furnace and quench tank at its Franklin, Ind., facility. This furnace features enhanced temperature uniformity throughout the furnace and an attached quench tank. The automated controls provide consistency throughout the heat treat and quenching cycles. These controls allow the company to certify its materials as conforming to AMS 2750 Rev E, which is required by customers in the aerospace, defence, and oil and gas sectors.

Corporate expenses in the quarter decreased to $32,000 from $230,000 in the quarter ended March 31, 2017, and as compared with $755,000 in the comparable prior-year period. Corporate expenses decreased $1.1-million for fiscal 2017, compared with expenses of $1.7-million in fiscal 2016.

As of June 30, 2017, the company reported a working capital deficiency of $1.6-million, including cash of $100,000, as compared with working capital of $4.3-million at June 30, 2016. However, the company estimates that its working capital position improved by $600,000 to a deficiency of $980,000 as of Sept. 30, 2017. This figure is a management estimate only and has not been audited. Further, the company booked $1.4-million in expenses in the quarter ended June 30, 2017, related to an arbitration award in favour of the former co-owner of Beralcast, which IBC purchased in 2010 and which now serves as the company's beryllium-aluminum alloys operating division. IBC vigorously disputes the allegations and has filed an appeal of the arbitrator award.

"While we succeeded in completing our capital improvements program in both of our operating divisions in our fiscal fourth quarter, we knew that production would be impacted as a result," said Major Gen. Duncan Heinz (USMC, retired), president, chief executive officer and director of IBC. "The arbitration award was unexpected as well, and we have filed an appeal and intend to vigorously contest that award. We are making progress in our fiscal first quarter of 2018, and orders are strong, which I am pleased to see. We are not yet where I want us to be in terms of execution, and execution is what it is about now for the IBC team."

The company's fiscal fourth quarter 2017 financial statements and management's discussion and analysis are available for review at SEDAR.

About IBC Advanced Alloys Corp.

IBC is a leading beryllium and copper advanced alloys company serving a variety of industries such as defence, aerospace, automotive, telecommunications, precision manufacturing and others. IBC's copper 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 defence, aerospace and other systems, including the F-35 Joint Strike Fighter. IBC's has production facilities in Indiana, Massachusetts, Pennsylvania and Missouri.

We seek Safe Harbor.