IBC Advanced Alloys Corp (IAALF)

[Beryllium]

My take on the CC for those interested:

There were a lot of points made and I am only going to highlight what was interesting to me. First of all, it was nice to hear from the General and about the new management. It does feel to me that the right people are in place to grow the company to the next level, which frankly for the last 4 years it was essentially in build out mode for the Lockheed Martin (LM) specifications and approval. Now that they have proven the technology, have raised capital, and new management…..they are ready for a greater level of production and with many other contractors.

They are negotiating with LM for LRIP lot 11 on the F-35 which will be the size of 9 & 10 combined. So I would guess soon there will be a $2-3M order. Right now LM is still in low rate production (LRIP) and full rate begins with Lot 13 which would then be a multi-year contract. I have no idea how far out it will take before they get to lot 13 but my guess is a year or two. But it does sound like both LM and IBC continue to have a good relationship with discussions on other business opportunities. IThe General later said that IBC has put on hold the Sniper ATP product for LM as they are focusing on other more profitable deals.

He flat out said they will be profitable in FY 17 (which I believe for IBC the FY stars that this Summer). So I take it that operating cash flow positive will be a couple of calendar quarters from now. This is still in line with previous comments made by management which is great.

IBC previously had to turn down orders/business because they simply did not have the capacity to take them. This recent financing gives them that capacity as it is all going on equipment and processes to expand their lines of business. The Copper Division has had an uptake in orders and they believe that the worse is behind them copper price and industry wise (oil/gas) and so there is increased demand now.

This new relationship with BAE sounds exactly like a new LM. IBC has already done and proven the specs with unnamed parts for BAE who is currently testing them. So it will likely start off in baby steps like with LM…an initial order, then once approved, more orders etc. But if feels like BAE could be big. There are 3 other aerospace companies that are in this position with IBC as well in the early contracting phase. So in my opinion this is the best news when it comes to pipeline. Previously IBC has been focused on just LM, but if we can get 2/3 more large aerospace/defense companies on board then that will not only increase revenue but help to smooth it out quarter after quarter (since right now the big chunks of revenue come from when they can realize the revenue from past LM LRIP orders etc.)

39% of the stock is now held with US investors, 30% Canada, and 30% International. I think I am off a little on remembering the exact percentages, but the point is that they have a very strong base now of shareholders. There is talk that when they get up to 50% US investors, they will have to (and would want to) look to up listing to a US exchange.

There was a lot of talk about developing new products with Scandium and the involvement of NioCorp as a supplier and partner in the development. They will be developing new applications and launching into this alloy business. All great talk and it opens up nice potential in other industries. In my opinion, this all sounds great but it will obviously be a couple to few years down the road before there is a material impact on the bottom line. There is nothing wrong with that as that is the nature of this company growing, but just like with LM, BAE, and others….things do move in baby steps.

So naturally the presentation has a very positive and bright outlook to it (pretty much all presentations for investors do) but I do believe that IBC is very much a different company than what we had just a year ago. A much stronger management that is directly involved in the products and aerospace, and finally with capital that is and will be used to expand growth so they can start filling orders. It feels like now that they are proven with LM and they are well capitalized and headed toward profitability that the monkey is off their back and they finally can spend money and energy growing the business.
Read more at http://www.stockhouse.com/companies/bullboard/v.ib/ibc-advanced-alloys-corp#zlb8hTJKm8htvSTM.99