Atlas Engineered Products Reports 2nd Consecutive Quarter of Record Revenue and Net Income for Q3 2019

NANAIMO, BC, Nov. 8, 2019 /CNW/ - Atlas Engineered Products Ltd. ("AEP" or the "Company") (TSX-V: AEP; OTC Markets: APEUF) announces its financial and operating results for the three and nine months ended September 30, 2019. All amounts are presented in Canadian dollars.

"I am pleased to report a second consecutive quarter with positive net income, significant year-over-year revenue growth, and for the first time since going public in November 2017, positive net income year-to-date results for the nine months ended September 30, 2019," said AEP CEO & President Dirk Maritz.

Financial Highlights

• Overall revenue for the three and nine months ended September 30, 2019 was $10,451,562 and $25,735,804 respectively, up from $5,083,058 and $11,149,553 for the three and nine months ended August 31, 2018, representing overall growth in revenue from the prior comparative period of 106% and 131%, respectively. The Company also experienced a 15.3% revenue growth from the three months ending June 30, 2019 to the three months ending September 30, 2019. This performance aligns with overall Company strategy, taking into account the seasonality and acquisition growth of the business.
  
  
• Compared to the financial year ended December 31, 2018 (-4.9%), the Company has generated a positive adjusted EBITDA margin of 12.7% for the nine months ended September 30, 2019.
  
  
• Continuing the trend begun in the Company's June 30, 2019 fiscal quarter, operating income has continued to be positive at $735,763 and $1,038,855 for the three and nine months ended September 30, 2019, compared to operating losses of $(8,050) and $(801,040) for the three and nine months ended August 31, 2018.
  
  
• The Company also repeated the trend begun in the fiscal quarter ended June 30, 2019, reporting net income of $531,710 for the three months ended September 30, 2019, and $254,949 for the nine months ended September 30, 2019. This is the first time that the Company has reported positive net income for the year to date results since going public in November 2017.

"Taking seasonality into account, we believe the acquisitions we have completed, the addition of new product lines and sales staff, and the focus on improved costs put us on track to achieve our objective of full year EBITDA margin in the 10 – 15% range," explained Mr. Maritz. "We're realizing greater economies of scale through integration activities such as consolidated raw material supply, improved manufacturing efficiency and productivity gains, and lower cost of sales."

SELECTED FINANCIAL RESULTS	Three Months Ended		Nine Months Ended
	Sept 2019	Aug 2018	Sept 2019	Aug 2018
Revenue from the Business	$4,416,465	$3,193,241	$11,860,872	$8,111,322
Revenue from New Acquisitions	6,035,097	1,889,817	13,874,932	3,038,231
Total Revenue	10,451,562	5,083,058	25,735,804	11,149,553
Cost of Sales	7,806,785	3,703,033	19,424,868	8,433,656
Gross Profit	2,644,777	1,380,025	6,310,936	2,715,897
Gross Margin %	25.3%	27.1%	24.5%	24.4%
Operating Expenses	1,909,014	1,388,075	5,272,081	3,516,937
Operating Income (Loss)	735,763	(8,050)	1,038,855	(801,040)
Net Income (Loss) After Adjustments and Taxes	531,710	(56,411)	254,949	(837,485)
Adjusted EBITDA	1,537,787	399,535	3,275,860	590,457
Adjusted EBITDA Margin %	14.7%	7.9%	12.7%	5.3%
Normalized EBITDA	1,669,774	514,239	3,531,306	751,210
Normalized EBITDA Margin %	16.0%	10.1%	13.7%	6.7%
Weighted Average Number of Shares	45,990,930	31,110,731	45,771,150	30,971,139
Adjusted EBITDA per Share ($ per share)	0.03	0.01	0.07	0.02
Income (Loss) per Share, Basic and Fully Diluted ($ per share)	0.01	(0.00)	0.01	(0.03)
Selected Financial Information as at September 30, 2019 and December 31, 2018
			Sept 2019	Dec 2018
Total Assets			$28,249,558	$26,061,954
Total Non-Current Liabilities			11,887,929	5,012,861

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.  AEP has a well-defined and disciplined acquisition and operating strategy enabling it to scale aggressively and giving AEP 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. 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 nine months ended September 30, 2019.  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.

Selected Financial Information

Except as noted below, the financial information provided in this news release is derived from the Company's unaudited financial statements for the three and nine months ended September 30, 2019 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 the Company's unaudited financial statements for the three and nine months ended September 30, 2018  and the related Management's Discussion and Analysis is available on the Company's website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.

Financial information for the Company's acquisitions are included in the Company's audited 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.

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 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.

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.

Atlas Engineered Products Ltd., Dirk Maritz, CEO & President, Phone: [phone], Email: [email protected], Unit 102, 6551 Aulds Road, Nanaimo, BC V9S 5X9, www.atlasengineeredproducts.com; Melissa MacRae, Interim Chief Financial Officer, Phone: [phone], Email: [email protected], Unit 102, 6551 Aulds Road, Nanaimo, BC V9S 5X9, www.atlasengineeredproducts.com; For investor relations please contact: Rob Gamley, Phone: [phone], Email: [email protected], Contact Financial Corp., 810 - 609 Granville St., Vancouver, BC V7Y 1G5