NANAIMO, BC, Nov. 25, 2024 /CNW/ - Atlas Engineered Products ("AEP" or the "Company") (TSXV: AEP) (OTC Markets: APEUF) is pleased to announce its financial and operating results for the three and nine months ended September 30, 2024. All amounts are presented in Canadian dollars.
Highlights for Third Quarter 2024:
Revenue of $16.5M, representing an increase of 15% year-over-year
Wall Panel revenue increased by 120% year-over-year
Engineered Wood Products revenue increased by 48% year-over-year
Adjusted EBITDA of $3.05M, representing an increase of 3% year-over-year, despite costs of $0.2M associated with automation and expansion of the sales team
Sales team has expanded by 63% year-to-date and expect to see significant contributions to revenue growth and profitability in 2025
Hadi Abassi, President and CEO of AEP, commented: "We anticipated the market to continue to be slow and more competitive until the interest rate cut cycle inspired builders to increase activity. The team worked diligently to take market share, and successfully increase sales in other products lines like walls panels and engineered wood products. The Company has recently seen an increase in market activity for the upcoming quarter and see a building order book and funnel for 2025, which we see as a key inflection year for the Company. Ultimately, we continue to strategically balance the need for incremental sales resources heading into a busy 2025, with management around market share gains and gross margins. We see a deep pipeline of M&A opportunities at attractive multiples and are preparing for an exciting future with robotics automation. The Company has instituted a renewal to the NCIB, as we see these levels as attractive for deployment of capital back into our shares through accretive repurchases".
Revenue for the three and nine months ended September 30, 2024 was $16,550,911 and $40,759,108 compared to revenue of $14,369,546 and $35,216,250 for the three and nine months ended September 30, 2023, representing a 15% and 16% increase. The acquisition of LCF added significant wall panel production to the Company and knowledge for the entire group. Overall wall panel revenues have increased 120% and 368%, respectively, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023. At our Ontario and BC locations, the Company has seen a 272% and 800% increase in wall panel revenues for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023.
Gross profit for the three months ended September 30, 2024 was $4,084,663 compared to $4,258,301 for the three months ended September 30, 2023. Gross profits declined due to a more competitive market for sales. Due to this more competitive market the Company has had to adjust its internal strategy to allow for lower margin work in order to gain revenues and market share. The Company has also invested in increasing the number of sales staff, training, and management in order to gain revenues and market share and prepare for future robotic expansion. This has impacted the Company's gross profits and income in the short term. The Company expects this to normalize in the fourth quarter of 2024 and into 2025.
Net income after taxes was $914,458 for the three months ended September 30, 2024 compared to net income after taxes of $1,300,751 for the three months ended September 30, 2023. This decrease was primarily due to a more competitive market for sales that resulted in lower margins, as well as, increased costs related to future sales and robotics plans that will require significant expansion in sales teams, management, and support staff.
Non-IFRS measure adjusted EBITDA for the three months ended September 30, 2024 was $3,046,469 compared to $2,950,340 in adjusted EBITDA for the three months ended September 30, 2023, representing a 3% increase. This does not include any adjustment for costs associated with future automation and expansion of the sales team of $0.2M.
SELECTED FINANCIAL RESULTS
Three Months Ended
Nine Months Ended
Sept 2024
Sept 2023
Sept 2024
Sept 2023
Revenue from the Business
$16,550,911
$14,369,546
$40,759,108
$35,216,250
Cost of Sales
12,466,248
10,111,245
30,804,400
24,703,881
Gross Profit
4,084,663
4,258,301
9,954,708
10,512,369
Gross Margin %
25 %
30 %
24 %
30 %
Operating Expenses
2,487,764
2,208,058
7,747,287
6,514,786
Operating Profit
1,596,899
2,050,243
2,207,421
3,997,583
Net Income After Adjustments and Taxes
914,458
1,300,751
626,600
2,630,287
Adjusted EBITDA
3,046,469
2,950,340
6,280,975
6,741,483
Adjusted EBITDA Margin %
18 %
21 %
15 %
19 %
Normalized EBITDA
3,051,187
3,164,306
6,285,693
7,136,847
Normalized EBITDA Margin %
20 %
22 %
15 %
20 %
Weighted Average Number of Shares, Basic
70,385,477
58,087,214
63,217,680
57,757,016
Adjusted EBITDA per Share ($ per share)
0.04
0.05
0.10
0.12
Income per Share, Basic ($ per share)
0.01
0.02
0.01
0.05
Income per Share, Fully Diluted ($ per share)
0.01
0.02
0.01
0.04
Selected Financial Information as at:
Sept 2024
Dec 2023
Total Assets
$83,745,294
$79,443,699
Total Non-Current Liabilities
25,935,123
37,089,753
Conference Call
AEP will host a conference call to discuss the results today, November 25, 2024 at 11:00am EST (8:00am PST). The call will be hosted by Hadi Abassi, CEO & President, Founder, and Melissa MacRae, CFO. Details to join this conference call are below.
Certain financial measures in this news release do not have any standardized meaning under IFRS and, therefore are considered non-IFRS or non-GAAP measures. These non-IFRS measures are used by management to facilitate the analysis and comparison of period-to-period operating results for AEP and to assess whether AEP's operations are generating sufficient operating cash flow to fund working capital needs and to fund capital expenditures. As these non-IFRS measures do not have any standardized meaning under IFRS, these measures may not be comparable to similar measures presented by other issuers. The non-IFRS measures used in this news release may include "EBITDA", "EBITDA margin", "adjusted EBITDA", "adjusted EBITDA margin", "normalized EBITDA" and "normalized EBITDA margin". For a description of the composition of these measures, please refer to AEP's Management's Discussion and Analysis for the three and nine months ended September 30, 2024 under "Non-IFRS / Non-GAAP Financial Measures", available on AEP's website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.
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.
Company contact details: Hadi Abassi, CEO & President, Founder Atlas Engineered Products Ltd. Email: info@atlasep.ca 250-754-1400 PO Box 37036 Country Club PO Nanaimo, BC V9T 6N4 www.atlasengineeredproducts.com
FORWARD LOOKING INFORMATION
Information set forth in this news release contains forward-looking statements. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. Although AEP believes that the expectations reflected in the forward looking statements are reasonable, there is no assurance that such expectations will prove to be correct, or that such future events will occur in the disclosed time frames or at all. AEP cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond AEP's control. Such factors include, among other things: risks and uncertainties related to the housing market, changes in interest rates and other risks and uncertainties relating to AEP, including those described in the Management's Discussion and Analysis ("MD&A") for AEP's three and nine months ended September 30, 2024. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, AEP undertakes no obligation to publicly update or revise forward-looking information.
SELECTED FINANCIAL INFORMATION
Except as noted below, the financial information provided in this news release is derived from the AEP's audited financial statements for the three and nine months ended September 30, 2024 and the related notes thereto as prepared in accordance with International Financial Reporting Standards ("IFRS") and related IFRS Interpretations Committee ("IFRICs") as issued by the International Accounting Standards Board ("IASB"). A copy of AEP's financial statements for the three and nine months ended September 30, 2024 and the related Management's Discussion and Analysis is available on AEP's website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.
Financial information for AEP's acquisitions are included in AEP's unaudited financial statements from the date of acquisition. Financial information for acquired businesses for periods prior to the date of acquisition were prepared by management and have not been reviewed or audited by independent auditors.
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