Atlas Engineered Products Reports Second Quarter 2024 Financial and Operating Results Including YOY Revenue Increases of 34% in Q2 and 16% YTD

NANAIMO, BC, Aug. 19, 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 six months ended June 30, 2024. All amounts are presented in Canadian dollars.

Highlights for the second quarter 2024 include:

• Revenue of $15.1M, representing an increase of 34% year-over-year
• Adjusted EBITDA of $3.1M, representing an increase of 50% year-over-year
• Closed a bought deal private placement on June 26, 2024 for $14.6M and ended the quarter with a strong cash position of $20.0M
• Strategic investments in robotics automation have commenced with capital allocated to locations in Ontario, New Brunswick, and British Columbia

Hadi Abassi, President and CEO of AEP, commented: "We expect lower interest rates and structural housing shortages in Canada to create a vibrant environment for activity in the future, however, there is transition period that continues to be challenging for the industry. Notwithstanding that, the Company generated healthy margins in the quarter and is managing expenses to produce strong bottom line results. We are very pleased with the contribution from LCF and see a compelling acquisition environment to further build out the platform that we have established in Canada. We continue to strategically balance the need for sales with the gross margin that is attainable in a more competitive market, all while preparing for an exciting future with robotics automation."

Financial Highlights for First Quarter 2024:

• Revenue for the three and six months ended June 30, 2024 was $15,087,138 and $24,208,197 compared to revenue of $11,217,336 and $20,846,704 for the three and six months ended June 30, 2023, representing a 34% and 16% increase.
  
  
• Gross profit for the three months ended June 30, 2024 was $4,442,892 compared to $3,398,287 for the three months ended June 30, 2023.
  
  
• Net income after taxes was $705,578 for the three months ended June 30, 2024 compared to net income after taxes of $786,236 for the three months ended June 30, 2023. This decrease was primarily due to the amortization related to the intangible assets of the LCF acquisition. The valuation of the intangible assets was recently finalized and amortization was recorded from the date of acquisition up to June 30, 2024. $584,206 was recorded for amortization related to the intangible assets for the three months ended June 30, 2024, moving forward amortization would be $170,225 each quarter for these intangible assets.
  
  
• Non-IFRS measure adjusted EBITDA for the three months ended June 30, 2024 was $3,086,768 compared to $2,051,169 in adjusted EBITDA for the three months ended June 30, 2023.

SELECTED FINANCIAL RESULTS	Three Months Ended		Six Months Ended
	June 2024	June 2023	June 2024	June 2023
Revenue from the Business	$15,087,138	$11,217,336	$24,208,197	$20,846,704
Cost of Sales	10,644,246	7,819,049	18,338,152	14,592,636
Gross Profit	4,442,892	3,398,287	5,870,045	6,254,068
Gross Margin %	29 %	30 %	24 %	30 %
Operating Expenses	3,011,443	2,281,058	5,259,523	4,306,728
Operating Profit	1,431,449	1,117,229	610,522	1,947,340
Net Income After Adjustments and Taxes	705,578	786,236	(287,858)	1,329,536
Adjusted EBITDA	3,086,768	2,051,169	3,334,506	3,791,143
Adjusted EBITDA Margin %	20 %	18 %	14 %	18 %
Normalized EBITDA	3,086,768	2,243,568	3,334,506	3,983,542
Normalized EBITDA Margin %	20 %	20 %	14 %	19 %
Weighted Average Number of Shares, Basic	59,921,148	57,447,751	59,594,399	57,589,181
Adjusted EBITDA per Share ($ per share)	0.05	0.01	0.06	0.02
Income per Share, Basic ($ per share)	0.01	0.01	0.00	0.02
Income per Share, Fully Diluted ($ per share)	0.01	0.01	0.00	0.02
Selected Financial Information as at:
			June 2024	Dec 2023
Total Assets			$87,583,920	$79,443,699
Total Non-Current Liabilities			30,011,099	37,089,753

Robotic Update 

On June 26, 2024, the Company closed a bought deal private placement and concurrent brokered private placement (the "Financing Raise") for aggregate gross proceeds of $14,562,855. The Company has already allocated funds from the Financing Raise towards the robotics expansion at locations in Ontario, New Brunswick, and British Columbia. The first deposits have been place and the Company is actively preparing for the arrival of the robots in 2025 & 2026. All areas from the sales team to the design team to the production teams are being bolstered throughout 2024 and in to 2025 to help prepare for the increased capacity at each of these locations. The Company intends to release more metrics and targets around the implementation of robotics during the third quarter of 2024, to highlight the benefits from operating and capital efficiencies, increased capacity and geographic expansion.

Conference Call 

AEP will host a conference call to discuss the results today, August 19, 2024 at 12:00pm EST (9:00am PST). The call will be hosted by Hadi Abassi, CEO & President, Founder, and Melissa MacRae, CFO. Details to join this conference call are below.

Date: Monday, August 19, 2024
Time: 12:00pm EST (9:00am PST)
Webinar Link: https://tinyurl.com/ycxdda7p
Meeting ID: 228 273 042 950
Passcode: oCKx7t

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 three months ended March 31, 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.

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 six months ended June 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 six months ended June 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 six months ended June 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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SOURCE Atlas Engineered Products Ltd.

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