Atlas Engineered Products Delivers Another Profitable Quarter with Q3 2020 Financial and Operating Results
Atlas Engineered Products (“AEP” or the “Company”) is pleased to announce its financial and operating results for the third quarter ended September 30, 2020. All amounts are presented in Canadian dollars.
“Q3 2020 was a solid quarter for AEP as we delivered another increase in revenues and profitability, over both of the previous quarters in 2020, despite the ongoing global pandemic and skyrocketing lumber prices. This was achieved through targeted sales activities to ensure that the sales pipelines at all locations continue to grow, and a continuation of our comprehensive cost reduction and cash preservation strategies implemented at the end Q1 2020,”said AEP CEO & President Dirk Maritz.
Financial Highlights for Q3 2020
Revenue was $9,677,692 for the three months ended September 30, 2020 as compared to $7,900,805 for the three months ended June 30, 2020. This expansion through Q3 2020 represents a quarterly growth in revenue of 22%. The quarter over quarter increase in total revenues was driven by reslient markets in BC and Manitoba , paired with a rebound of the Ontario market after Covid-19-related permitting restrictions were lifted at the end of May. We anticipate strong sales volumes to continue in to Q4 2020, following a very active third quarter that saw strong quoting activity, increased housing starts, increased permitting, and low interest rates. We expect that this combination of factors will continue to push demand through Q4 2020.
Gross Margins decreased to 22% for the three months ended September 30, 2020, from 24% for the three months ended June 30, 2020, but still showcases a 6% increase from the three months ended March 31, 2020. This two percentage point decline in Q3 2020 was due to a number of competing factors including: a slightly depressed margin in some of our commercial and subdivision projects due to orders taken prior to lumber price increases; the successful launch of the new pre-manufactured wall line in Nanaimo which required additional production and design employee training and sales pipeline development; and startup costs, including sales pipeline development, associated with the new Novum Building Components acquisition.
Operating Expenses were $1,641,994 for the three months ended September 30, 2020 as compared to $1,909,014 for the three months ended September 30, 2019. This represents a 14% improvement from the same period in the prior year, and can be attributed to the continued cost reduction and cash preservation plan that was implemented at the end of the first quarter and has continued through to date.
Profitability has continued to improve during 2020. The Company had an operating profit of $482,818 in Q3 2020, $248,675 in Q2 2020, compared to an operating loss of ($866,084) in Q1 2020. In addition, the Company earned net income of $419,589 in Q3 2020, $220,601 in Q2 2020, compared to a net loss of ($762,961) in Q1 2020. AEP is pleased to report continued operating profit and net income for the three months ended September 30, 2020 as a result of increased revenues and implemented cost cutting and cash preservation strategies.
Mr. Maritz stated, “The AEP team has continued to deliver strong revenues and operating profits in Q3 2020, while remaining diligent in maintaining the safety and well being of all our staff during this global pandemic. I am proud of the team we have built at AEP. We all have a focus to expand product lines, increase revenues, and ensure that all locations contribute to a healthy sales pipeline and continued growth”.
For the full third quarter results, click here.
About Atlas Engineered Products Ltd.
AEP is a growth company that is acquiring and operating profitable, well-established operations in Canada’s truss and engineered products industry. We have a well-defined and disciplined acquisition and operating growth strategy enabling us to scale aggressively, giving us a unique opportunity to consolidate a fragmented industry of independent operators.
Source: Atlas Engineered Products Ltd.