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Atlas Engineered Products Ltd
Symbol AEP
Shares Issued 59,245,049
Close 2022-04-20 C$ 0.64
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Atlas Engineered earns $6.95-million in 2021

2022-04-20 12:48 ET - News Release

Mr. Hadi Abassi reports

ATLAS ENGINEERED PRODUCTS REPORTS RECORD 2021 YEAR END AND FOURTH QUARTER FINANCIAL AND OPERATING RESULTS

Atlas Engineered Products Ltd. has released its financial and operating results for the year ended Dec. 31, 2021.

"Two thousand twenty-one 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, chief executive officer and president and founder of Atlas Engineered. "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 Dec. 31, 2021, compared with the three months ended Dec. 31, 2020, resulted in the company's best fourth quarter to date. As shown in an attached table, the company achieved improvements in revenue, gross margin, and net income after adjustments and taxes while maintaining consistent operating expenses.
  • Revenue increased 26 per cent to $13,896,440 for the three months ended Dec. 31, 2021, from $11,057,939 for the three months ended Dec. 31, 2020. This increase now represents the company's best fourth quarter to date. Overall revenue for the year ended Dec. 31, 2021, was $54,997,862, representing a 54-per-cent improvement compared with revenue of $35,734,415 for the year ended Dec. 31, 2020.
  • Gross margin increased to 37 per cent for the three months ended Dec. 31, 2021, compared with 20 per cent for the three months ended Dec. 31, 2020, an 85-per-cent increase. Gross margin has also increased to 29 per cent for the year ended Dec. 31, 2021, compared with 20 per cent for the year ended Dec. 31, 2020, a 45-per-cent 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 Dec. 31, 2021, compared with net income of $351,757 for the three months ended Dec. 31, 2020. This substantial increase was driven by increased revenues and gross margins. Net income for the year ended Dec. 31, 2021, was $6,954,348, compared with net income of $228,986 for the year ended Dec. 31, 2020, another substantial improvement due to increased revenues, improved gross margins and reduced operating expenses.
  • Non-IFRS (international financial reporting standard) measure EBITDA (earnings before interest, taxes, depreciation and amortization) margin increased to 22 per cent for the year ended Dec. 31, 2021, from 10 per cent for the year ended Dec. 31, 2020, due to increased gross margins and reduced operating expenses. Non-IFRS measure EBITDA increased to $12,336,327 for the year ended Dec. 31, 2021, from $3,722,710 for the year ended Dec. 31, 2020, due to a significant increase in revenues, improved gross margins and reduced operating expenses for the year.

Expansion and optimization for 2021

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.

Outlook for 2022

Subsequent to the year-end, the company announced the acquisition of Hi-Tec Industries Ltd. on Vancouver Island, B.C. 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 Dec. 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.

Atlas Engineered will continue to assess M&A (merger and acquisition) 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 its 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.

About Atlas Engineered Products Ltd.

Atlas Engineered is a growth company that is acquiring and operating profitable well-established operations in Canada's truss and engineered products industry. It has a well-defined and disciplined acquisition and operating growth strategy enabling it to scale aggressively and apply new technologies, giving it a unique opportunity to consolidate a fragmented industry of independent operators.

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