Atlas Engineered Products Reports Record 2021 Year End and Fourth Quarter Financial and Operating Results

Atlas Engineered Products (“AEP” or the “Company”) is pleased to announce its financial and operating results for the year ended December 31, 2021. All amounts are presented in Canadian dollars.

“2021 continued to present many challenges for AEP. Rapidly increasing material prices, supply chain shortages, material allotments, labour shortages, and shipping logistic difficulties were some of the major challenges faced during 2021 and continuing into 2022.   Throughout this, the team at AEP persevered to help produce record results for 2021,” said Hadi Abassi, CEO & President and Founder of AEP. “The AEP team continues to work hard on behalf of all stakeholders and is well prepared for another strong year in 2022.”

Financial Highlights for Fourth Quarter and Fiscal 2021:

• Fourth quarter results for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 resulted in the Company’s best fourth quarter to date. As shown in the following table, the Company achieved improvements in revenue, gross margin, and net income after adjustments and taxes while maintaining consistent operating expenses.

• Revenue increased 26% to $13,896,440 for the three months ended December 31, 2021 from $11,057,939 for the three months ended December 31, 2020. This increase now represents the Company’s best fourth quarter to date. Overall revenue for the year ended December 31, 2021 was $54,997,862, representing a 54% improvement compared to revenue of $35,734,415 for the year ended December 31, 2020.
• Gross margin increased to 37% for the three months ended December 31, 2021 compared to 20% for the three months ended December 31, 2020, an 85% increase. Gross margin has also increased to 29% for the year ended December 31, 2021 compared to 20% for the year ended December 31, 2020, a 45% increase. Gross margins increased due to some temporarily reduced raw material prices in the final quarter that helped increase margins on jobs that were set earlier in the year with higher raw material prices. This helped offset any reductions in gross margin when some jobs were set under lower prices while raw material prices were rising. Additionally, some automated equipment purchased earlier in the 2021 year helped improve efficiencies.
• The Company recorded net income of $2,459,868 for the three months ended December 31, 2021 compared to net income of $351,757 for the three months ended December 31, 2020. This substantial increase was driven by increased revenues and gross margins. Net income for the year ended December 31, 2021 was $6,954,348 compared to net income of $228,986 for the year ended December 31, 2020, another substantial improvement due to increased revenues, improved gross margins, and reduced operating expenses.
• Non-IFRS measure EBITDA margin increased to 22% for the year ended December 31, 2021 from 10% for the year ended December 31, 2020 due to increased gross margins and reduced operating expenses. Non-IFRS measure EBITDA increased to $12,336,327 for the year ended December 31, 2021 from $3,722,710 for the year ended December 31, 2020 due to a significant increase in revenues, improved gross margins, and reduced operating expenses for the year.

In January 2021, the Company acquired a significant amount of automated manufacturing equipment for $958,160 plus taxes which has been beneficial in upgrading some locations and improving operational efficiencies, especially during a severe labour shortage.

Subsequent to the year end, the Company announced the acquisition of Hi-Tec Industries Ltd. (“Hi-Tec”) on Vancouver Island, British Columbia. This new location will offer some unique synergies from labour to shipping to equipment and more with the Company’s Atlas Building Systems location which is also on Vancouver Island. For the year ending December 31, 2021, Hi-Tec earned unaudited revenues of just over $5-million, net income before taxes of just over $1-million and a normalized EBITDA of $1.25 million, resulting in a normalized EBITDA margin of 25 per cent. The Company will be working on integrating this location over the course of 2022.

AEP will continue to assess M&A opportunities that fit with the Company’s goals and strategies, while also working to bring the latest automation to improve operational efficiencies and, new products and services to better serve our customers.

The construction industry has remained strong through the beginning of 2022, but continues to present challenges from material availability to labour shortages to shipping logistical issues. The Company has effectively managed these challenges throughout 2021 and will continue to work through these challenges and mitigate their impacts on performance as much as possible in 2022.

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 year ended December 31, 2021 under “Non-IFRS / Non-GAAP Financial Measures”, available on AEP’s website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.

For the complete press release, click here.

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.

Source: Atlas Engineered Products Ltd.