Atlas Engineered Products Reports Record Third Quarter Financial and Operating Results

NANAIMO, BC, Nov. 24, 2022 /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 three and nine months ended September 30, 2022. All amounts are presented in Canadian dollars.

Financial Highlights for Q3 2022:

• Revenue increased to $17,638,289 for the three months ended September 30, 2022 from $17,563,359 for the three months ended September 30, 2021. Additionally, revenue increased to $46,909,032 for the nine months ended September 30, 2022 from $41,101,422 for the nine months ended September 30, 2021. This increase now represents the Company's best third quarter to date.
  
  
• Non-IFRS EBITDA for the three and nine months ended September 30, 2022 was $5,098,287 and $11,561,318, with an EBITDA margin of 29% and 25%. EBITDA for the three and nine months ended September 30, 2021 was $4,555,705 and $8,209,988, with an EBITDA margin of 26% and 20%. EBITDA and EBITDA margin for the three and nine months ended September 30, 2022 increased compared to the three and nine months ended September 30, 2021 due to increased net income for the period resulting from increased sales and improved gross margins.

EBITDA SUMMARY	Three Months Ended		Nine Months Ended
	Sept 2022	Sept 2021	Sept 2022	Sept 2021
EBITDA	$5,098,287	$4,555,705	$11,561,318	$8,209,988
Adjusted EBITDA	5,155,651	4,580,899	11,778,911	8,303,007
Normalized EBITDA	5,155,651	4,580,899	11,778,911	8,634,709

• Gross margin for the three and nine months ended September 30, 2022 was 35% and 32%, which was up from a gross margin of 31% and 27% for the three and nine months ended September 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, including synergies between the new acquisition of Hi-Tec Industries Ltd. ("Hi-Tec") and Atlas Building Systems Ltd.
  
  
• Net income after taxes was $3,131,612 and $6,739,031 for the three and nine months ended September 30, 2022 compared to net income after taxes of $2,793,913 and $4,494,480 for the three and nine months ended September 30, 2021. This increase was primarily due to the increase in revenues, improvements in gross margin, and the new acquisition of Hi-Tec.

SELECTED FINANCIAL RESULTS	Three Months Ended		Nine Months Ended
	Sept 2022	Sept 2021	Sept 2022	Sept 2021
Revenue from the Business	$17,638,289	$17,563,359	$46,909,032	$41,101,422
Cost of Sales	11,473,688	12,113,355	32,114,233	30,128,469
Gross Profit	6,164,601	5,450,004	14,794,799	10,972,953
Gross Margin %	35 %	31 %	32 %	27 %
Operating Expenses	1,773,293	1,563,116	5,249,349	4,696,082
Operating Profit	4,391,308	3,886,888	9,545,450	6,276,871
Net Income After Adjustments and Taxes	3,131,612	2,793,913	6,739,031	4,494,480
Adjusted EBITDA	5,155,651	4,580,899	11,778,911	8,303,007
Adjusted EBITDA Margin %	29 %	26 %	25 %	20 %
Normalized EBITDA	5,155,651	4,580,899	11,778,911	8,634,709
Normalized EBITDA Margin %	29 %	26 %	25 %	21 %
Weighted Average Number of Shares, Basic	59,215,310	57,725,730	59,016,124	57,725,730
Adjusted EBITDA per Share ($ per share)	0.09	0.08	0.20	0.14
Income per Share, Basic ($ per share)	0.05	0.05	0.11	0.08
Income per Share, Fully Diluted ($ per share)	0.05	0.04	0.11	0.06
Selected Financial Information as at:
			Sept 2022	Dec 2021
Total Assets			$51,821,429	$35,780,659
Total Non-Current Liabilities			15,111,179	9,187,195

Expansion for 2022:

On February 28, 2022, the Company acquired Hi-Tec located in Lantzville, BC on Vancouver Island. Since purchasing Hi-Tec Industries on February 28, 2022, this operation contributed $1,586,956 in revenues and approximately $439,337 in EBITDA for the three months ended September 30, 2022 and $4,441,970 in revenues and approximately $1,278,833 in EBITDA for the nine months ended September 30, 2022. AEP has been working on integration of this location which has included a number of synergies with AEP's Atlas Building System location which include labour, shipping, and equipment. These results are starting to show in the results of the three and nine months ended September 30, 2022.

"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."

Normal Course Issuer Bid ("NCIB") Update:

Subsequent to the three and nine months ended September 30, 2022, the Company purchased and cancelled an additional 1,162,286 shares under the NCIB that ended on November 3, 2022. From the commencement of this NCIB on November 3, 2021 to the end on November 3, 2022, the Company purchased and cancelled a total of 2,886,286 common shares at a weighted average price of $0.553 per share.

AEP has received approval for the TSX Venture Exchange to renew its NCIB to be transacted through the facilities of the TSXV. The renewed NCIB will commence on December 1, 2022 and end on December 1, 2023 or such earlier date as AEP may complete its purchases as set forth in its notice filed with the TSXV. Under the renewed NCIB, AEP may purchase up to 4,732,015 common shares of the Company, representing up to 10% of the Company's Public Float as of November 2, 2022.

AEP's board of directors continues to believe that the current market price for the Company's common shares does not currently reflect the underlying value of the Company. As a result, depending on 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 September 30, 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.

www.atlasengineeredproducts.com

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 nine months ended September 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 nine months ended September 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 nine months ended September 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.

Atlas Engineered Products Ltd., Email: [email protected], PO Box 37036 Country Club PO, Nanaimo, BC V9T 6N4; For investor relations please contact: Jake Bouma, IR Consultant for AEP, Phone: [phone], Email: [email protected]