Atlas Engineered Products Reports Record Third Quarter Financial and Operating Results
Atlas Engineered Products (“AEP” or the “Company”) is pleased to announce its financial and operating results for the three and nine months ended September 30, 2022. All amounts are presented in Canadian dollars.
Financial Highlights for Q3 2022
- Revenue increased to $17,638,289 for the three months ended September 30, 2022 from $17,563,359 for the three months ended September 30, 2021. Additionally, revenue increased to $46,909,032 for the nine months ended September 30, 2022 from $41,101,422 for the nine months ended September 30, 2021. This increase now represents the Company’s best third quarter to date.
- Non-IFRS EBITDA for the three and nine months ended September 30, 2022 was $5,098,287 and $11,561,318, with an EBITDA margin of 29% and 25%. EBITDA for the three and nine months ended September 30, 2021 was $4,555,705 and $8,209,988, with an EBITDA margin of 26% and 20%. EBITDA and EBITDA margin for the three and nine months ended September 30, 2022 increased compared to the three and nine months ended September 30, 2021 due to increased net income for the period resulting from increased sales and improved gross margins.
|EBITDA SUMMARY||Three Months Ended||Nine Months Ended|
|Sept 2022||Sept 2021||Sept 2022||Sept 2021|
- Gross margin for the three and nine months ended September 30, 2022 was 35% and 32%, which was up from a gross margin of 31% and 27% for the three and nine months ended September 30, 2021. Gross margins increased due to pricing assessments and updates being completed at all locations due to the fluctuating costs of raw materials and labour. The Company has also focused on improving efficiencies on new product lines and acquisitions, including synergies between the new acquisition of Hi-Tec Industries Ltd. (“Hi-Tec”) and Atlas Building Systems Ltd.
- Net income after taxes was $3,131,612 and $6,739,031 for the three and nine months ended September 30, 2022 compared to net income after taxes of $2,793,913 and $4,494,480 for the three and nine months ended September 30, 2021. This increase was primarily due to the increase in revenues, improvements in gross margin, and the new acquisition of Hi-Tec.
|SELECTED FINANCIAL RESULTS||Three Months Ended||Nine Months Ended|
|Sept 2022||Sept 2021||Sept 2022||Sept 2021|
|Revenue from the Business||$17,638,289||$17,563,359||$46,909,032||$41,101,422|
|Cost of Sales||11,473,688||12,113,355||32,114,233||30,128,469|
|Gross Margin %||35 %||31 %||32 %||27 %|
|Net Income After Adjustments and Taxes||3,131,612||2,793,913||6,739,031||4,494,480|
|Adjusted EBITDA Margin %||29 %||26 %||25 %||20 %|
|Normalized EBITDA Margin %||29 %||26 %||25 %||21 %|
|Weighted Average Number of Shares, Basic||59,215,310||57,725,730||59,016,124||57,725,730|
|Adjusted EBITDA per Share ($ per share)||0.09||0.08||0.20||0.14|
|Income per Share, Basic ($ per share)||0.05||0.05||0.11||0.08|
|Income per Share, Fully Diluted ($ per share)||0.05||0.04||0.11||0.06|
|Selected Financial Information as at:|
|Sept 2022||Dec 2021|
|Total Non-Current Liabilities||15,111,179||9,187,195|
Expansion for 2022
On February 28, 2022, the Company acquired Hi-Tec located in Lantzville, BC on Vancouver Island. Since purchasing Hi-Tec Industries on February 28, 2022, this operation contributed $1,586,956 in revenues and approximately $439,337 in EBITDA for the three months ended September 30, 2022 and $4,441,970 in revenues and approximately $1,278,833 in EBITDA for the nine months ended September 30, 2022. AEP has been working on integration of this location which has included a number of synergies with AEP’s Atlas Building System location which include labour, shipping, and equipment. These results are starting to show in the results of the three and nine months ended September 30, 2022.
“We are pleased with another successful quarter of organic growth, as well as, the contribution from our latest acquisition, Hi-Tec Industries Ltd,” said Hadi Abassi, CEO & President, Founder. “In addition to the ongoing operational improvements and growth of our legacy facilities, we have seen an immediate improvement in both revenues and margins from Hi-Tec. Our order book for the remainder of 2022 continues to be strong and we anticipate another year of record results for the Company.”
Normal Course Issuer Bid (“NCIB”) Update
Subsequent to the three and nine months ended September 30, 2022, the Company purchased and cancelled an additional 1,162,286 shares under the NCIB that ended on November 3, 2022. From the commencement of this NCIB on November 3, 2021 to the end on November 3, 2022, the Company purchased and cancelled a total of 2,886,286 common shares at a weighted average price of $0.553 per share.
AEP has received approval for the TSX Venture Exchange to renew its NCIB to be transacted through the facilities of the TSXV. The renewed NCIB will commence on December 1, 2022 and end on December 1, 2023 or such earlier date as AEP may complete its purchases as set forth in its notice filed with the TSXV. Under the renewed NCIB, AEP may purchase up to 4,732,015 common shares of the Company, representing up to 10% of the Company’s Public Float as of November 2, 2022.
AEP’s board of directors continues to believe that the current market price for the Company’s common shares does not currently reflect the underlying value of the Company. As a result, depending on future price movements and other factors, AEP’s board of directors believes that the purchase of the shares is an appropriate use of AEP’s funds and in the best interests of AEP’s shareholders.
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 and apply new technologies, giving us a unique opportunity to consolidate a fragmented industry of independent operators.
Source: Atlas Engineered Products Ltd.