Thank you very much. I'm the Chairman, Co-CEO, one of the founders, and the largest individual shareholder of AirBoss of America. I won't read this, but you're welcome to peruse at your leisure later. AirBoss is in the rubber business. We are one of the largest rubber manufacturers in the U.S. We are the second-largest rubber compound manufacturer. We make rubber compounds, design rubber compounds that other rubber manufacturers use to make their products. Our second division is actually making rubber products, and we make over 500 different finished rubber-based products. It's split roughly 50/50 between defense products and anti-vibration solutions and other rubber-to-metal bonded solutions for industrial users. All the numbers that I used in this presentation, with the exception of the share price and dividend, are in U.S. dollars. We report in U.S. dollars. We trade on Toronto on the TSX, symbol BOSS.
We also trade over-the-counter on the QX in the U.S., symbol ABSSF. The market cap is approximately 100, I think this was as of last Friday, about CAD 190 million. You can see the shares outstanding, dividend. Management and insiders own about 35% of the company. At this moment, we're covered by two banks, TD Cowen and National Bank Financial, both based out of Canada. Turning to AirBoss Rubber Solutions, which is our compound manufacturing division. We're the second-largest rubber compounder in North America. The largest is a Swedish company, which is a company called Hexpol, which is quite a bit bigger than us. Our current annual production capacity is approximately half a billion turn pounds a year. We have in excess of 2,000 proprietary rubber compounds that we've developed over the years.
Last year, we had approximately $205 million net sales and about $27 million profit in this division. As you can see there, I'll go into a bit later, but we have state-of-the-art facilities in four different locations in North America. We have one of the most advanced rubber development laboratories dedicated to developing new formulations for our customers. Our focus for growth-- Historically, we have been a large supplier of black rubber for large industrial users, tire makers, conveyor belt users, retread compounds, et cetera. Our growth, and particularly margin growth, is focused on more specialty compounds for specialty users, aerospace, wiring cable, electrical, et cetera. Even though the volumes are a lot smaller in specialty rubber, the margins are substantially higher. We have multi-decade customer relationships. I think close to half of our customers have been with us for over 20 years.
These are just some examples of the industries that our customers are in, from defense to oil and gas to tires, to airplane components and tires, pipelines, et cetera. The main drivers for growth in this division, rubber consumption has historically tracked global economic growth. As the world GDP grows, typically rubber consumption grows. It's a product which is very difficult to replace, and it grows over many, many decades, very close to world growth. We focus on high-quality manufacturing. We have, as I mentioned, state-of-the-art, one of the most advanced development labs in North America, if not the world. Your key to success is your ability to develop new compounds to solve new problems that the customers have. Our manufactured products division takes the rubber compound manufactured by ARS and converts it into rubber products.
We make over 500 different rubber products for a whole host of industries. We serve customers in more than 60 different countries. Last year, net sales were $239 million U.S. Profit was $44 million U.S. This division is split roughly 50/50 between defense products and rubber molded products for industries such as you see on here. These are just some examples of a wide variety of products that we make. The main growth drivers for engineered products, we made the decision some years ago that instead of moving to Mexico, we were going to focus on being in the U.S. and continuing to service both U.S. and global customers from our facilities in Auburn Hills, Michigan, which are located very close to the big three U.S. manufacturers and many Japanese and other manufacturers have moved into the area.
If you're going to be in the U.S. as opposed to Mexico or China or somewhere else, you have to solve the labor problem. Labor is the big issue here. It's the cost of labor, and you're competing with much lower labor costs in other countries. We invested very heavily in robotics and automation, and we've turned the plant into probably one of the most efficient, highly automated rubber manufacturing plants in the U.S. We are now benefiting greatly from the onshoring Made in America initiatives that the current government has been pushing, and we probably have the biggest opportunity set of new business to bid on that we've had in the recent future anyway, or sorry, recent past. We've also diversified. When we first acquired this division in 2013, it was 100% automotive, and that's not a good place to have 100% of your business.
We made the decision that we were going to try to diversify the business, not by reducing the growth in automotive, but by expanding into other areas. We now have been quite successful at that. Last year, we were, I think, 51% defense products, 49% auto and related. We're also focusing on developing a whole slew of new opportunities for totally non-automotive or defense product related business even, sorry. The defense products, we are a recognized leader in rubber-based chem-bio protection wear for the military. We've been supplying Canada, the U.S., NATO, Australia for many, many years. We started this business in about 1996. I think we've been the sole supplier of chem-bio protective boots and gloves to the U.S. since the early 2000s. We're the sole supplier of boots, gloves, gas masks to Canada, Australia, several NATO countries.
We also make products such as extreme cold weather footwear. I would invite you to look at our website. There's a five-minute video on there which shows the big diversity of products we make and how they're used. I'm not going to go through all of these, but they're broken down by CBRN, which chem, bio, radiological, nuclear. We can add an E on that, explosive also. We make respiratory protection wearables and collective protection, things like decon shelters, ISO-POD. An ISO-POD is a stretcher with an enclosed tent over it that has filtered air going in and filtered air going out. If you have an Ebola patient, as an example, he can be transported without being contagious to the first responders transporting him, and doctors can do some procedures on him without exposing themselves. The Bandolier is a new product which we developed.
It is a product which is a replacement for C-4 explosives. It uses a different explosive material to C-4. The advantages of it are it's completely tailorable to whatever. You can see there are sort of individual pouches there. They can cut off whatever length they need and put a detonator in it and blow up a wall, a tree, a bridge, a door, whatever they're doing. The operator does not need specialized explosives training, which is a huge advantage over the C-4 alternative, and it does not need to be stored in a special environment. You don't need to be worried about humidity and heat and all that sort of thing. It's a much more versatile product. We first started marketing this a few years ago with some very small orders, $1 million or $3 million.
Last year, we got our first big order, which was a $45 million order from a European country. We still haven't sold this into the U.S. military yet. There is a big market opportunity ahead of us, and we're pretty excited about this product. It's also a relatively high-margin product for us. This is another completely different product, which I just wanted to talk about. It's a Blast Gauge. It's been well-documented that a lot of the problems that soldiers come back from the field with, like PTSD, Alzheimer's, suicide, et cetera, aren't really caused by the stress from working in the field. They're actually caused by micro concussions in the brain, which are a result of repeated exposure to blast wave pressure from mortars, even from firing a machine gun in the wrong way, obviously from IEDs and explosive events happening all around you.
We have developed an array. There's an array of three of these sensors that a soldier wears. It records all the exposure to blast waves and his commander. Well, he can tell, but also his commander can tell if he's been exposed to a dangerous level or if he's getting close to being exposed to a dangerous level, and he can be taken out of there. Obviously, after the fact, if there's a big attack, they can tell right away if people have been overexposed, and sometimes it takes months for this to actually show up without it. Knowing that, they can start treatment a lot earlier. Obviously, everybody knows what's going on in the defense world these days. A massive increase in spending. The U.S. has always been by far the biggest spender.
They have about $961 billion this year, and their request for next year is $500 b illion more. They're asking for $1.5 trillion for next year. Even Canada is spending more than they've ever spent before. Most NATO countries have dramatically increased their spending. Estimates for the global spending are $2.9 trillion, and that's probably only going one way from there. 51% of our manufactured products are defense products. 28% of our total sales last year were defense products. Obviously, defense is a good place to be right now as a manufacturer. The other advantage we have is we have got strategically located plants, mainly in Eastern North America, mostly in the U.S., but one very large plant in Kitchener, Ontario, which is 1 million sq ft on 15 acres that we own.
We also have a joint venture in Kuala Lumpur, and we've recently opened an office in Germany. We're well-positioned to take advantage of the Buy America edicts that are currently in place. I won't go through all of these, but we are not serial acquirers. Most of our growth has come from growing internally, organically. But along the way, we've acquired various small businesses that have fit or enhanced our growth strategy. And you can see we've had pretty consistent growth through 30 some odd years. The big anomaly you see in 2020 to 2022, that was a big spike in growth that we had as a result of COVID. And a lot of the military respiratory protective wear that we made was used by healthcare professionals. We were one of the largest suppliers of powered air-purifying respirators to HHS.
We supplied gowns, gloves, and a lot of different COVID-related products. Just a quick summary page of some recent financial data. If we look at the company as a whole, we grew sales from 2024 to 2025, even though we had a significant drop in sales in the Rubber Solutions business, primarily as a result of the economic uncertainty and slowdown from tariffs and some of the disruptions that were happening in the supply chain. Gross profit was up dramatically, 2024 over 2025. And adjusted EBITDA was up close to 50%, actually maybe more than 50%. And that trend is continuing in Q1 of 2026. You see the comparative numbers of 2026 over 2025. We've also finally got back into a profit situation. We have a driven and dedicated management team, most of whom have been with us for a long time and have had great experience in similar industries.
Just a slight valuation consideration. We have never been a serial issuer of equity. We raised CAD 1 million in 1989, this is CAD 1 million, and less than CAD 9 million in 1998, and those are the only two public equity issues that we've done. All the growth has been funded by internally generated cash flow and debt. We're involved in businesses which are critical to the U.S. and world economy. Can't survive without rubber. It appears you can't survive without defense products these days. Both of our key business units are in a good spot to grow. We have significant North American manufacturing footprint, meaningful inside ownership. And we are relatively underfollowed, and we believe there's lots of room for growth. Thank you. I'll take any questions if there are any.
Just on the defense side, just on a total revenue, if you look at AMP and ARS, I see about 30% linked to defense across the whole company, total revenue.
Yeah.
Is that right, 30%?
Yeah.
Yeah.
I think I said 28. I don't know. The number could be wrong.
What do you think just with Bandolier and Blast, if you get into the U.S. military to use products, what's the potential upside for some of those products?
Well, for Bandolier, I don't have recent numbers. The last time I looked at it, the U.S. spent over $100 million a year on C-4 explosives. Obviously, they would never replace it all with Bandolier. It's a big number. The Blast Gauge, theoretically, every active person in the U.S. military should have one. Even inactive people, like the people that were in the embassy in Iraq that got bombed, that were just civilian workers, I don't know if they all got, there was a very high incidence of PTSD and brain damage from that. There's over 1 million people in the U.S. military. It's a big number.
Can the Bandolier product capture not just a spend on C-4 directly, but also training savings?
Oh, yeah. There are also a lot of potential non-military applications, but certainly training. We're currently selling to three different European countries. The large order we got was donated to Ukraine. Most of the NATO forces that are in and around the Ukraine have seen it. We've been doing a lot of live demonstrations over the last few months, and we will be doing more over the summer. There are several other countries that have expressed interest. It was one contract. It was slightly over a year. I think it was about 16 months or so. It was as fast as you can make it. We were limited by capacity at the time.
Would they be willing to fund your capacity expansion [audio distortion]
Funding's not an issue for it.
What's your utilization rate? I'm sure it's different across [audio distortion]
You're talking capacity utilization? The Rubber Solutions business is probably under 70% right now. The manufacturing is a lot higher, but it can be expanded rapidly. It's just adding presses and adding molds.
[audio distortion]
We have, yeah.
How fractionated is the compounding market below you? You're one of the top ones, right?
We're the second largest. There are two other companies that are probably a 1/2 to 2/3 of our size, and then below that, it's highly fractionated, like a lot of small players. They have trouble competing because they don't have the ability to buy internationally, and they don't have the scale to get good raw material prices, et cetera. They may have a specialty operation right next to a user. The bulk of the market is probably six or eight. I think my time is up, but we have the booth here if you'd like to [audio distortion]