ANNUAL MEETING MAY 12, 2009 Demanding Conditions Products in Demand.

ANNUAL MEETING

MAY 12, 2009

Demanding ConditionsProducts in Demand

2008

ANNUAL MEETING 2008 RECAP

2008 2007

SALES 259.4$ 209.3$

MARGIN 30.3 18.6

EXPENSES 14.9 13.6

INCOME FROMCONTINUING OPERATIONS 15.4 5.0 300%

EBITDA 17.0 11.7 45%

* Read in conjunction with Annual Report

2008

Q1 2009

2009 2008SALES $53,085 $55,134

OPERATING INCOME 1,655 1,835

OTHER EXPENSE 471 (451) EBIT 1,184$ 2,286$

EPS $0.02 $0.04

* Read in conjunction with 1st Quarter Report

2008

Q1 2009

• Results were Defense Driven Sales Increase 35% Margin Increase 75% Mix, Volume and Exchange

• Rubber Compounding Sales down 16% better than industry average 2008 high priced inventory gone by April Volume improvements noticeable in April

* Read in Conjunction with 1st Quarter Report

2008

OTHER INCOME (EXPENSE)

2009 2008

EXCHANGE (LOSS) GAIN $(647) (1) $277

OTHER INCOME 176 174

$(471) $451

(1) Unrealized Loss

2008

EXCHANGE

FORWARD CONTRACTS

ARC INV HEDGE US $9 MILLION

DEFENSE NET RECEIPTS HEDGE $15 MILLION

TOTAL US $24 MILLION

AVG RATE $0.82

MARCH 0.80 Non-Cash Loss $431K

APRIL 0.85 Gain of $800 K

2008

BALANCE SHEET

MARCH DECEMBER2009 2008

NET WORKING CAPITAL 36.3$ 32.2$ 12%

WORKING CAPITAL RATIO 2.2 TO 1 1.6 TO 1

DEBT 39.3$ 45.8$ 14%

CASH PROVIDED BYOPERATIONS 4.8$ 1.5$ (1)

(1) March '08

2008

RUBBER COMPOUNDING DIVISION

2008

Customer Diversification 2005 vs. 2008

2005 2008

# of customers over $0.5 MM 29 35

Top 41 accounts as % of total 98.8% 99.1%

# Top accounts w/good growth 17

% US sales 55.0% 59.2%

% Canadian sales 44.9% 39.6%

% International sales 0.1% 1.2%

Lbs sold from SN facility 0 22.9 MM

2008

Market Segment shifts (2005 to 2008)

Focused growth Segments

• Defense total (Internal & External) Increased by 175%• Mining Increased by 32%

De-emphasized Segments

• Automotive Reduced by 12%• Tires Total Reduced by 38%

2008

New project activity

• 103 MM lbs of NPD opportunities - 23 MM lbs in 2009/early 2010.

• Kitchener trials to yield 13.8 MM lbs/year.

• Scotland Neck trials to yield 6.4 MM lbs/year.

2008

Employee’s

• In 2008 absenteeism was down 42.5% versus 2005.• In 2008 we saw the following Health and Safety improvements

versus 2005

# recordable injuries down by 42.5%

# of lost time days down 76.4%

# of light duty days down 44.4%

2008

ARC Operational Performance 2008 vs. 2005

• Throughput/hr has increased by 19.4%• Downtime has been reduced by 20.1%• % rework is down by 12.4%• PPM returns are down by 43.4%• On-time delivery has improved so much that’s its now a

significant competitive advantage.• We have maximized/optimized efficient equipment.• Kitchener’s break even point has been reduced by 20%.

2008

2005 to 2008 key initiatives implemented

• Developed a segmented sales approach and focus.• Targeted new markets/segments.• De-centralized operational functions.• Improved speed to market.• Reduced system wide waste with focus only on value added

activities• Global procurement enhancement.

2008

Conclusions and Outlook for ARC

• ARC’s customer base is more diversified than ever.

• ARC’s global footprint is a competitive advantage and expanding.

• ARC operationally is performing very well.

• ARC is now a better place to work for our associates and they continue to make ARC a great company.

• ARC has a healthy balance sheet and is solid financially

• As our addressable markets consolidate only the strong suppliers with survive – ARC is a strong supplier.

2008

What can you expect to see next?

• ARC will expand rapidly into traditionally non core segments/markets.• Stress in the markets will provide opportunities for those in a solid enough

position to take advantage of them - we will be there for the long haul.• We will continue to build on our US presence via our new Scotland Neck

facility.• We are a solid #2 in the America’s and heading for #1.

2008

AIRBOSS-DEFENSE

2008

DEFENSE 2009

SALES• 2007 $27 MILLION

• 2008 $38 MILLION 40%

• 2009 Another 30% to 40% possible

2008

AIRBOSS-DEFENSECBRN VOLUME FORECAST - OVERBOOTS

0

200000

400000

600000

800000

2008 2009 2010 2011

Overboots

Overboots

2008

AIRBOSS-DEFENSE CBRN VOLUME FORECASTS - GLOVE

0

200000

400000

600000

800000

1000000

2008 2009 2010 2011

Gloves

Gloves

2008

AIRBOSS-DEFENSE

2nd Quarter production changes to meet demand:

• Injection moulding 3 shifts, 7days/week• Overboot capacity increased• U.S. Expansion project

2008

AIRBOSS-DEFENSEU.S. EXPANSION

• Location announcement 30 days• In production 1st Quarter 2010• Injection Moulding

Gloves Next Generation Overboot

2008

AIRBOSS-DEFENSE 2009

• Volume increases, favorable product mix and exchange will positively impact profitability

• Most of net U.S. $ receipts locked in at $0.82 for 2009• 2010 will be even more exciting

2008

Chairman’s Closing Comments

• AirBoss has recorded operating profits since 1995

• We continue to see growth for the future

• Defense sales increases in 2009 and further expansion in 2010

• Rubber Compounding Division returning to normal profitability

• Exploring value added opportunities

2008

Chairman’s Closing Comments cont’d.

• Continuation of Dividend Policy Semi-annual dividend 2.5 cents payable to shareholders of record June 30, 2009 Issuer Bid to purchase up to 1.8 million Company shares

2008

THANK YOU!

CUSTOMERS

SHAREHOLDERS

DIRECTORS

EMPLOYEES

2008

FORWARD LOOKING STATEMENT DISCLAIMER

This report contains forward-looking statements, which reflect managements best judgment based on factors currently known but involve significant risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including but not limited to risks more fully described in the “Risk Factors” section of the Company’s Annual Report, and other risks detailed in filings with the Ontario Securities Commission. Forward-looking information provided pursuant to the safe harbor established by recent securities legislation should be evaluated in the context of these factors.

2008

Question and Answer Period

Thank-you