Atlas Engineered Products Reports Fourth Quarter and Year Ended 2024 Financial and Operating Results

Atlas Engineered Products (“AEP” or the “Company”) is pleased to announce its financial and operating results for the fourth quarter and year ended December 31, 2024. All amounts are presented in Canadian dollars.

Financial and Operating Highlights

· Revenue of $55.8M, representing an increase of 13% year-over-year

· Wall Panel revenue increased by 159% year-over-year

· Engineered Wood Products revenue increased by 21% year-over-year

· Adjusted EBITDA of $8.5M, despite costs of $645K associated with automation and expansion of the management and sales team

· Strong balance sheet with cash of $13M, long-term debt of $21M, and real estate net carrying value of $15M, without recent appraisals.

Hadi Abassi, President and CEO of AEP, commented: “I am proud of the effort and results that the team at AEP has accomplished. Total housing starts in Ontario and BC, two key markets for the Company, declined by double digit percentages, 2024 over 2023. Despite the housing start statistics, the Company has produced a 15% adjusted EBITDA margin and worked diligently to drive organic growth in wall panels and engineered wood products. I am encouraged by the start of 2025 to continue our organic growth efforts across Canada and strategic acquisitions that will further strengthen our geographical footprint.”

Revenue for the three and twelve months ended December 31, 2024 was $15,069,615 and $55,828,723 compared to revenue of $14,197,425 and $49,413,675 for the three and twelve months ended December 31, 2023, representing a 6% and 13% increase, respectively. Revenue has increased due to acquisitive growth and organic growth – two key strategies of the Company. The year ended December 31, 2024 was the first full year that included results from LCF, a strategic acquisition that closed on August 23, 2023. LCF increased revenues for fiscal 2024 by almost 45% in addition to adding significant wall panel production to the Company and knowledge for the entire group. Organic growth in wall panels was 27% and 159% for the three and twelve months ended December 31, 2024, respectively, compared to the three months ended December 31, 2023, these results included LCF in full for both periods.

Gross profit for the three and twelve months ended December 31, 2024 was $3,591,777 and $4,084,663 compared to $3,046,448 and $4,258,301 for the three and twelve months ended December 31, 2023, representing an 18% increase and 0.1% decrease, respectively. Gross profits increased for the three months ended December 31, 2024 due to an increase in sales and an improvement in gross margin of 3% over the prior period.

Net loss after taxes was $212,128 for the year ended December 31, 2024 compared to net income after taxes of $3,149,838 for the year ended December 31, 2023. This decrease was primarily due to a more competitive market for sales that resulted in lower margins, as well as, increased costs related to future sales and robotics plans that will require significant expansion in sales teams, management, and support staff. Additionally, the Company recognized an impairment loss of $1,484,952 due to the write off of the vendor deposit as required under IFRS.

Non-IFRS measure adjusted EBITDA for the year ended December 31, 2024 was $8,499,458 compared to $9,298,310 in adjusted EBITDA for the year ended December 31, 2023. This does not include any adjustment for costs associated with future automation and expansion of the management and sales team of $645,000.

Selected Financial Results

Outlook for 2025

The Company is continuing to see strong quoting volumes in comparison to 2024. For the first three months of 2025, the Company saw a 25% increase in quoting volume and a 4% increase in orders compared to the same period last year. The Company anticipates higher quote to order conversion as winter comes to an end and the typically busier building season commences. The Company does continue to actively monitor economic policy developments related to the long-standing Canada and U.S. trade relationship and if those developments are anticipated to impact the Company in 2025. The Company reiterates that in the past four years, 1% or less of its revenues have come from sales outside of Canada.

AEP continues to work at delivering organic growth through increased wall panel manufacturing and supply of engineered wood products. This organic growth would help insulate the Company to potential effects of a recession by allowing for increased sales volume potential per order. While industry volumes are largely driven by macroeconomic and political factors beyond the Company’s control, AEP will continue to leverage its scale, agility and strong balance sheet to further gain market share.

In addition to the Company’s organic growth strategies, the Company continues to assess acquisition opportunities across North America. In September, the Company announced due diligence completion for a future acquisition in Western Canada which was anticipated to close in early Spring of 2025. This closing is still anticipated for Spring of 2025. The Company is also assessing additional opportunities to enhance its geographical footprint, manufacturing capabilities, and industry knowledge. AEP has a robust pipeline of very attractive deals, now that the industry has normalized from the high lumber prices and demand during the Covid-19 pandemic. This provides an opportunity for significant value creation for shareholders over the medium to long-term.

AEP believes that the future of the industry will be in robotic manufacturing and the new facility in Ontario is continuing with the completion of excavation and foundation work and the start of the steel framing for the facility. The building is anticipated to be completed later in 2025.

To view the full results, click here.

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.

Contact:

Jake Bouma – Representative for AEP – jake.bouma@atlasaep.ca – (604) 317-3936

Source: Atlas Engineered Products Ltd.