Reports Year Over Year Revenue Growth of 43.6% to $11.6 Million
September 21, 2018 – Nanaimo, British Columbia. ATLAS ENGINEERED PRODUCTS LTD. (“Atlas” or the “Company”) (TSX-V: AEP) today reports its record financial results for the year ended May 31, 2018. The financial statements and related management’s discussion and analysis (MD&A) can be viewed on SEDAR at www.sedar.com.
Revenue for the year ended May 31, 2018 was $11,597,176, up from $8,076,027 for the previous year, representing an overall growth in revenue from the prior year of 43.6%. Revenue for the year ended May 31, 2018 from the Company’s business in Nanaimo, BC was $10,340,571, representing year-over-year organic growth of 28% from the year ended May 31, 2017. Revenue from acquisitions for the year ended May 31, 2018 was $1,256,605 (2017 – nil), representing 10.8% the Company’s revenues for the year.
Revenue for the quarter ended May 31, 2018 was $3,987,449, which is 93.3% higher than for the same quarter in the previous fiscal year. Revenue achieved during the quarter ended May 31, 2018 recognizes the full impact of the Clinton acquisition. Based on these quarterly results, management anticipates annualized revenues of approximately $18.1 million combined for the Atlas and Clinton operations.
Adjusted EBITDA for the year ended May 31, 2018 was $1,413,140, representing a 12% Adjusted EBITDA Margin, compared with $1,790,954 Adjusted EBITDA and 22% Adjusted EBITA Margin for the prior year. (See “Non-IFRS Financial Measures”).
During the year ended May 31, 2018, the Company absorbed $966,886 in new costs for filing and transfer agent fees, management and professional fees, shareholder communication, and travel. Most of these expenditures were incurred in connection with the Company’s acquisition and integration activities and for corporate costs.
The cost of sales for the twelve months ended May 31, 2018 was $8,725,350 compared to $5,987,828 for the twelve months ended May 31, 2017 due to increased sales and an increase in raw material costs. Gross margins slipped slightly from 25.9% to 24.8%, notwithstanding a significant increase in lumber costs. The Company was successful in passing on most of these increased costs through price increases.
The Company recorded a net loss of $4,954,765 ($0.16 per share) for the twelve months ended May 31, 2018 compared to a net loss of $793,043 ($731.73 per share) for the twelve months ended May 31, 2017. The increase in net loss is mainly the result of listing expenses of $4,864,786 recognized as a result of the Reverse Takeover (“RTO”) with Archer Petroleum, which is a one-time accounting entry and is not reflective of the Company’s ongoing operations.
Mr. Guy Champagne, President of Atlas explains that “We are very pleased that our growth and financial results to date have met or exceeded our 2018 stated objectives, which are right on plan. The Annualized Revenue and Adjusted EBITDA margin targets we have been communicating to the investment community are $50 million and 15%, respectively. We consider these very achievable and expect to enter 2019 at that annualized revenue threshold as we continue to make accretive acquisitions of good companies whose revenues we can grow organically as well.”
About Atlas Engineered Products Ltd.
Atlas Engineered Products is a leading supplier of trusses and engineered wood products. Atlas was formed over 18 years ago and operates manufacturing and distribution facilities in British Columbia and Ontario to meet the needs of residential and commercial builders. Atlas has expert design and engineering teams, multiple-shift state-of-the-art truss manufacturing operations, and large inventories of engineered beam and flooring components. Atlas aims to grow its base of business across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas will bring its construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying them with the full array of components and assemblies they might require for their projects – from design to lockup
For further information please contact:
Atlas Engineered Products Ltd.
Guy Champagne, President
Email: [email protected]
Unit 102, 6551 Aulds Road
Nanaimo, BC V9S 5X9
For investor relations please contact:
Email: [email protected]
Contact Financial Corp.
810 – 609 Granville St.
Vancouver, BC V7Y 1G5
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. The Company 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 the Company’s control. Such factors include, among other things: risks and uncertainties relating to the Company including those to be described in the Annual Information Form filed by the Company on June 1, 2018 and the Management’s Discussion and Analysis (“MD&A”) for the Company’s fiscal year ended May 31, 2018 filed by the Company on September 20, 2018, both on www.sedar.com. 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, the Company undertakes no obligation to publicly update or revise forward-looking information.
Forward-looking statements in this news release also include future-oriented financial information and financial outlook information (“FOFI”) regarding the Company and its prospective results of operations, cash flows and components thereof. The FOFI contained in this news release is subject to the same assumptions, risk factors, limitations and qualifications set forth in the Company’s MD&A for the year ended May 31, 2018 relating to other forward-looking statements. The FOFI contained in this news release is provided for the purpose of providing information regarding management’s assessment of the Company’s anticipated business operations, and may not be appropriate for other purposes
Forward-looking statements, including FOFI, contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise except as required by securities law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
*NON-GAAP / NON-IFRS FINANCIAL MEASURES
Certain 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 the Company and to assess whether the Company’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 include “EBITDA”, “EBITDA Margin”, “adjusted EBITDA”, and “adjusted EBITDA Margin”. “EBITDA” is calculated as revenue less operating expenses before interest expense, interest income, amortization and depletion, impairment charges, and income taxes. “EBITDA Margin” is EBITDA expressed as a percentage of revenues. “Adjusted EBITDA” is EBITDA after adjusting for share-based payments, foreign exchange gains or losses and non-recurring items. “Adjusted EBITDA Margin” is Adjusted EBITDA expressed as a percentage of revenues.
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