YTD Revenues Increased 24%, Net Income
Increased 112%
NANAIMO, BC, Aug. 22, 2022 /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 six months ended June 30,
2022. All amounts are presented in Canadian dollars.
"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."
Financial Highlights for Q2
2022:
- Revenue increased 17% to $16,836,329 for the three months ended
June 30, 2022 from $14,408,430 for the three months ended
June 30, 2021. Additionally, revenue
increased 24% to $29,270,743 for the
six months ended June 30, 2022 from
$23,538,063 for the six months ended
June 30, 2021. This increase now
represents the Company's best second quarter to date.
- Non-IFRS EBITDA for the three and six months ended June 30, 2022 was $3,581,190 and $6,463,031, respectively, with an EBITDA margin
of 21% and 22%, respectively. EBITDA for the three and six months
ended June 30, 2021 was $2,827,271 and $3,654,283, respectively, with an EBITDA margin
of 20% and 16%. EBITDA and EBITDA margin for the three and six
months ended June 30, 2022 increased
compared to the three and six months ended June 30, 2021 due to increased net income for the
period resulting from increased sales and improved gross
margins.
EBITDA
SUMMARY
|
Three Months
Ended
|
Six Months
Ended
|
June
2022
|
June
2021
|
June
2022
|
June
2021
|
EBITDA
|
$3,581,190
|
$2,827,271
|
$6,463,031
|
$3,654,283
|
Adjusted
EBITDA
|
3,665,814
|
2,866,434
|
6,623,260
|
3,722,108
|
Normalized
EBITDA
|
3,665,814
|
2,866,434
|
6,623,260
|
4,053,810
|
- Gross margin for the three and six months ended June 30, 2022 was 28% and 29%, which was up from
a gross margin of 26% and 23% for the three and six months ended
June 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.
- Net income after taxes was $2,044,118 and $3,607,419 for the three and six months ended
June 30, 2022 compared to net income
after taxes of $1,649,359 and
$1,700,567 for the three and six
months ended June 30, 2021. This
increase was primarily due to the increase in revenues,
improvements in gross margin, and the new acquisition of Hi-Tec
Industries Ltd. ("Hi-Tec").
SELECTED FINANCIAL
RESULTS
|
Three Months
Ended
|
Six Months
Ended
|
June
2022
|
June
2021
|
June
2022
|
June
2021
|
Revenue from the
Business
|
$16,836,329
|
$14,408,430
|
$29,270,743
|
$23,538,063
|
Cost of
Sales
|
12,092,488
|
10,614,204
|
20,640,545
|
18,015,114
|
Gross
Profit
|
4,743,841
|
3,794,226
|
8,630,198
|
5,522,949
|
Gross Margin
%
|
28 %
|
26 %
|
29 %
|
23 %
|
Operating
Expenses
|
1,841,872
|
1,603,062
|
3,476,056
|
3,132,966
|
Operating
Income
|
2,901,969
|
2,191,164
|
5,154,142
|
2,389,983
|
Net Income After
Adjustments and Taxes
|
2,044,118
|
1,649,359
|
3,607,419
|
1,700,567
|
Adjusted
EBITDA
|
3,665,814
|
2,866,434
|
6,623,260
|
3,722,108
|
Adjusted EBITDA Margin
%
|
22 %
|
20 %
|
23 %
|
16 %
|
Normalized
EBITDA
|
3,665,814
|
2,866,434
|
6,623,260
|
4,053,810
|
Normalized EBITDA
Margin %
|
22 %
|
20 %
|
23 %
|
17 %
|
Weighted Average Number
of Shares, Basic
|
59,245,049
|
57,725,730
|
58,914,880
|
57,725,730
|
Adjusted EBITDA per
Share ($ per share)
|
0.06
|
0.05
|
0.11
|
0.06
|
Income per Share, Basic
($ per share)
|
0.03
|
0.03
|
0.06
|
0.03
|
Income per Share, Fully
Diluted ($ per share)
|
0.03
|
0.02
|
0.06
|
0.02
|
|
|
|
|
|
Selected Financial
Information as at:
|
|
|
|
June
2022
|
Dec
2021
|
Total Assets
|
|
|
$49,207,292
|
$35,780,659
|
Total Non-Current
Liabilities
|
|
|
15,561,306
|
9,187,195
|
Expansion for 2022:
On February 28, 2022, the Company
acquired Hi-Tec ("Hi-Tec Acquisition"), located in Lantzville, BC on Vancouver Island. The shares
of Hi-Tec were acquired for $5.8
million in cash, with a working capital adjustment of
$454,981 that was finalized
subsequent to the three months ended March
31, 2022. The land and buildings of Hi-Tec were also
acquired by the Company for the appraised value of $3.25 million in cash. The Company financed the
Hi-Tec Acquisition with a term loan for $5.8
million and a mortgage for $2,437,500. During its last fiscal year ended
August 31, 2021, Hi-Tec earned
unaudited revenues of just over $5.0
million, net income before taxes of just over $1.0 million, and a normalized EBITDA of
$1.25 million, resulting in a
normalized EBITDA margin of 25%. (Financial information for
Hi-Tec for the year ended August 31,
2021 was unaudited and unreviewed.)
Since purchasing Hi-Tec Industries on February 28, 2022, this operation contributed
$2,227,555 in revenues and
approximately $667,827 in EBITDA for
the three months ended June 30, 2022
and $2,855,014 in revenues and
approximately $839,496 in EBITDA for
the six months ended June 30,
2022.
Normal Course Issuer Bid ("NCIB")
Update:
From the commencement of the NCIB on November 3, 2021, the Company has acquired
1,170,500 shares for cancellation. Once all shares are cancelled
that have been acquired the number of shares outstanding would be
58,713,049. The NCIB is ongoing until November 3, 2022 and the Company may purchase up
to 2,886,286 common shares of the Company. All purchases of common
shares will be made on the open market through the facilities of
the TSXV and will be purchased for cancellation.
AEP's board of directors continues to believe that the current
market price for the Company's common shares do not currently
reflect the underlying value of the Company. As a result, depending
on the 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.
Non-GAAP / Non-IFRS Financial
Measures
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 period ended March 31,
2022 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.
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 relating to AEP,
including those to be described in the Management's Discussion and
Analysis ("MD&A") for AEP's three and six months ended
June 30, 2022. 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 six months ended June 30, 2022 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 six months ended June 30,
2022 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.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Atlas Engineered Products Ltd.