Atlas Engineered Products Reports First Quarter Financial and Operating Results

NANAIMO, BC, May 31, 2019 /CNW/ - Atlas Engineered Products ("AEP" or the "Company") (TSX-V: AEP; OTC Markets: APEUF) is pleased to announce its financial and operating results for the first quarter ended March 31, 2019. All amounts are presented in Canadian dollars.

CHANGE OF FISCAL YEAR-END

To better align its financial reporting with the calendar year and that of its industry peers, the Company changed its fiscal year-end to December 31, from May 31. The Company's transition year is the seven months ended December 31, 2018. Further, the Company's first quarter comparative period is the three months ended February 28, 2018. For additional information see the notice of change of year end filed on SEDAR on January 2, 2019.

FIRST QUARTER HIGHLIGHTS

	Mar 2019	Feb 2018
Revenue from the Business	$3,021,181	$2,041,965
Revenue from New Acquisitions	3,195,727	37,081
Total Revenue	6,216,908	2,079,046
Cost of Sales	5,056,491	1,589,243
Gross Profit	1,160,417	489,803
Gross Margin %	18.7%	23.6%
Operating Expenses	1,639,338	739,218
Operating (Loss) Income	(478,921)	(249,415)
Net (Loss) Income After Adjustments and Taxes	(439,637)	(295,757)
Adjusted EBITDA	198,963	321,579
Adjusted EBITDA Margin %	3.2%	15.5%
Normalized EBITDA	287,919	321,579
Normalized EBITDA Margin %	4.6%	15.5%
Weighted Average Number of Shares	45,324,263	30,730,405
Adjusted EBITDA per Share ($ per share)	0.00	0.01
Loss per Share, Basic and Fully Diluted ($ per share)	(0.01)	(0.01)

• Overall revenue for the three months ended March 31, 2019, was $6,216,908, up from $2,079,046 for the three months ended February 28, 2018, an increase of almost 200%.
• Increased revenues were attributable to organic growth of AEP's founding Nanaimo, BC operations and the completion of several acquisitions since the period ended February 28, 2018.
• Revenues for AEP's Nanaimo, BC operations were $3,021,181 for the three months ended March 31, 2019 as compared to $2,041,965 for the three months ended February 28, 2018, an increase of 48%. 
• Revenues during the three months ended March 31, 2019 from businesses acquired after February 28, 2019 (Satellite Building Systems Ltd., Coastal Windows Ltd., Tandelle Specialty Inc. and Pacer Building Components Inc., and South Central Building Systems) were $3,195,727.
• Adjusted EBITDA margin of 3.2% for the three months ended March 31, 2019 was down from 15.5% for the three months ended February 28, 2019 and normalized EBITDA margin of 4.6% for the three months ended March 31, 2019 was down from normalized EBITDA margin of 15.5% for the three months ended February 28, 2019.

Results for the three months ended March 31, 2019 are in line with AEP's overall strategy and are ahead of management's expectations, mainly due to AEP's accelerated progress on acquisition integration activities.  AEP's founding operations in Nanaimo, BC continue to serve as the Company's benchmark for operational and financial performance.  AEP's management expects that most acquired operations will initially be less efficient than its standard bearer Nanaimo, BC operations.  As these acquisitions are integrated with AEP's own operations, including AEP's lower cost group procurement plans, management expects that these operations will become more efficient and will produce higher margins.

AEP continues to invest in operational improvements and growth plans, including:

• Improved workflows to increase productivity and efficiencies.
• Automation activities – upgrading and improving equipment and technology applications.
• Equipment relocation and installation to maximize capacity and equipment usage.
• Product development to prepare for rapid sales growth through the busy construction season laying ahead.

"Our performance continues to align with our focus on growth and profitability. We are increasing cashflows and strengthening the balance sheet. We are realizing strong organic growth through market and customer expansion, product diversification and optimizing operations. And, over the past year, inclusive of our close of purchasing South Central, we have clearly demonstrated our ability to execute on acquisitions." says Dirk Maritz, President and CEO of AEP.

About Atlas Engineered Products Ltd.

AEP is a recently listed 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, 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. 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 Management's Discussion and Analysis ("MD&A") for the Company's fiscal quarter ended March 31, 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 three months ended March 31, 2019 and the comparable period ended February 28, 2018, 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 month period ended March 31, 2019  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 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

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", "normalized EBITDA" and "normalized 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. "Normalized EBITDA" is EBITDA adjusted for one-time items.  "Normalized EBITDA margin" is normalized 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, For investor relations please contact: Rob Gamley, Phone: [phone], Email: [email protected], Contact Financial Corp., 810 - 609 Granville St., Vancouver, BC V7Y 1G5