Mr. Hadi Abassi reports

ATLAS ENGINEERED PRODUCTS REPORTS SECOND QUARTER 2024 FINANCIAL AND OPERATING RESULTS INCLUDING YOY REVENUE INCREASES OF 34% IN Q2 AND 16% YTD

Atlas Engineered Products Ltd. has released its financial and operating results for the three and six months ended June 30, 2024.

Highlights for the second quarter of 2024 include:

• Revenue of $15.1-million, representing an increase of 34 per cent year over year;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $3.1-million, representing an increase of 50 per cent year over year;
• Closed a bought deal private placement on June 26, 2024, for $14.6-million and ended the quarter with a strong cash position of $20.0-million;
• Strategic investments in robotics automation have commenced with capital allocated to locations in Ontario, New Brunswick and British Columbia.

Hadi Abassi, president and chief executive officer of Atlas Engineered, commented: "We expect lower interest rates and structural housing shortages in Canada to create a vibrant environment for activity in the future, however, there is transition period that continues to be challenging for the industry. Notwithstanding that, the company generated healthy margins in the quarter and is managing expenses to produce strong bottom line results. We are very pleased with the contribution from LCF and see a compelling acquisition environment to further build out the platform that we have established in Canada. We continue to strategically balance the need for sales with the gross margin that is attainable in a more competitive market, all while preparing for an exciting future with robotics automation."

Financial highlights for the second quarter of 2024:

• Revenue for the three and six months ended June 30, 2024, was $15,087,138 and $24,208,197, compared with revenue of $11,217,336 and $20,846,704 for the three and six months ended June 30, 2023, representing a 34-per-cent and 16-per-cent increase.
• Gross profit for the three months ended June 30, 2024, was $4,442,892, compared with $3,398,287 for the three months ended June 30, 2023.
• Net income after taxes was $705,578 for the three months ended June 30, 2024, compared with a net income after taxes of $786,236 for the three months ended June 30, 2023. This decrease was primarily due to the amortization related to the intangible assets of the LCF acquisition. The valuation of the intangible assets was recently finalized and amortization was recorded from the date of acquisition up to June 30, 2024. The company recorded $584,206 for amortization related to the intangible assets for the three months ended June 30, 2024; moving forward, amortization would be $170,225 each quarter for these intangible assets.
• Non-IFRS (international financial reporting standards) adjusted EBITDA for the three months ended June 30, 2024, was $3,086,768, compared with $2,051,169 in adjusted EBITDA for the three months ended June 30, 2023.

Robotic update

On June 26, 2024, the company closed a bought deal private placement and concurrent brokered private placement for aggregate gross proceeds of $14,562,855. The company has already allocated funds from the financing raise toward the robotics expansion at locations in Ontario, New Brunswick and British Columbia. The first deposits have been place, and the company is actively preparing for the arrival of the robots in 2025 and 2026. All areas from the sales team to the design team to the production teams are being bolstered throughout 2024 and in to 2025 to help prepare for the increased capacity at each of these locations. The company intends to release more metrics and targets around the implementation of robotics during the third quarter of 2024, to highlight the benefits from operating and capital efficiencies, increased capacity, and geographic expansion.

Conference call

Atlas Engineered will host a conference call to discuss the results today, Aug. 19, 2024, at 12 p.m. EST (9 a.m. PST). The call will be hosted by Mr. Abassi and Melissa MacRae, chief financial officer. Details to join this conference call are below.

Date:  Monday, Aug. 19, 2024

Time:  12 p.m. EST (9 a.m. PST)

Meeting ID No.:  228273042950

Passcode:  oCKx7t

Non-GAAP (generally accepted accounting principles)/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 Atlas Engineered, and to assess whether the company's operations are generating sufficient operating cash flow to finance working capital needs and to finance capital expenditures. As these non-IFRS measures do not have any standardized meaning under IFRS, these measures may not be comparable with 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 Atlas Engineered's management's discussion and analysis for the three months ended March 31, 2024, under non-IFRS/non-GAAP financial measures, available on Atlas Engineered's website or on SEDAR+.

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. Atlas Engineered has a well-defined and disciplined acquisition and operating growth strategy, enabling the company to scale aggressively and apply new technologies, giving Atlas Engineered a unique opportunity to consolidate a fragmented industry of independent operators.

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