NANAIMO,
BC, April 20, 2023 /CNW/ - Atlas Engineered
Products ("AEP" or the "Company") (TSXV: AEP) (OTC Markets: APEUF)
is pleased to announce its financial and operating results for the
year ended December 31, 2022. All
amounts are presented in Canadian dollars.
"The AEP team continued to work hard to overcome all the
challenges that 2022 brought our way, which I believe shows in our
fiscal 2022 results. I am very proud of the team and these
results," said Hadi Abassi, CEO & President and Founder of AEP.
"We are looking forward to 2023 and all the opportunities that are
available through organic and potential acquisitive growth."
Financial Highlights for Fourth
Quarter and Fiscal 2022:
- Revenue increased 13% to $61,899,620 for the year ended December 31, 2022 from $54,997,862 for the year ended December 31, 2021. Overall revenue for the three
months ended December 31, 2022 was
$14,990,588, representing an 8%
improvement compared to revenue of $13,896,440 for the three months ended
December 31, 2021.
- Non-IFRS measure adjusted EBITDA margin for the year ended
December 31, 2022 was $15,725,608 with an adjusted EBITDA margin of
25%. Adjusted EBITDA for the year ended December 31, 2021 was $12,610,867 with an adjusted EBITDA margin of
23%. Adjusted EBITDA and adjusted EBITDA margin for the year ended
December 31, 2022 increased compared
to the year ended December 31, 2021
due to increased net income resulting from increased sales, organic
growth, the addition of Hi-Tec, and improved gross margins.
EBITDA
SUMMARY
|
Year
Ended
|
Year
Ended
|
Dec
2022
|
Dec
2021
|
Dec
2022
|
Dec
2021
|
EBITDA
|
25 %
|
22 %
|
$15,389,725
|
$12,336,327
|
Adjusted
EBITDA
|
25 %
|
23 %
|
15,725,608
|
12,610,867
|
Normalized
EBITDA
|
25 %
|
24 %
|
15,725,608
|
12,942,569
|
- Gross margin increased to 32% for the year ended December 31, 2022 compared to 29% for the year
ended December 31, 2021, an 9%
increase. Gross margin decreased to 34% for the three months ended
December 31, 2022 compared to 37% for
the three months ended December 31,
2021. Gross margins increased for the year ended due to
continued constant pricing assessments based on fluctuating raw
material costs, as well as, improving efficiencies on new product
lines and acquisitions. Gross margin decreased for the three months
ended December 31, 2022 due to rising
interest rates which have put downward pressure on the housing
market creating a more competitive market. As the market becomes
more competitive, the Company continues to assess its internal
pricing strategies to be competitive while still maintaining good
margins and furthering organic growth.
- The Company recorded net income after taxes of $8,830,337 for the year ended December 31, 2022 compared to net income after
taxes of $6,954,348 for the year
ended December 31, 2021. This
increase was primarily due to the increase in revenues,
improvements in gross margins, and the operations of Hi-Tec added
during the year ended December 31,
2022.
SELECTED FINANCIAL
RESULTS
|
Year
Ended
|
Dec
2022
|
Dec
2021
|
Revenue
|
$61,899,620
|
$54,997,862
|
Cost of
Sales
|
42,053,514
|
38,844,926
|
Gross
Profit
|
19,846,106
|
16,152,936
|
Gross Margin
%
|
32 %
|
29 %
|
Operating
Expenses
|
7,316,437
|
6,271,904
|
Operating
Income
|
12,529,669
|
9,881,032
|
Net Income After
Adjustments and Taxes
|
8,830,337
|
6,954,348
|
Adjusted
EBITDA
|
15,725,608
|
12,610,867
|
Adjusted EBITDA Margin
%
|
25 %
|
23 %
|
Normalized
EBITDA
|
15,725,608
|
12,942,569
|
Normalized EBITDA
Margin %
|
25 %
|
24 %
|
Weighted Average Number
of Shares
|
58,702,361
|
57,728,196
|
Adjusted EBITDA per
Share ($ per share)
|
0.27
|
0.22
|
Income per Share, Basic
($ per share)
|
0.15
|
0.12
|
Income per Share, Fully
Diluted ($ per share)
|
0.14
|
0.09
|
|
|
|
Selected Financial
Information as at:
|
|
Dec
2022
|
Dec
2021
|
Total Assets
|
$50,491,344
|
$35,780,659
|
Total Non-Current
Liabilities
|
14,757,079
|
9,187,195
|
Expansion during 2022:
On February 28, 2022, the Company
acquired Hi-Tec Industries Ltd. ("Hi-Tec") located in Lantzville, BC on Vancouver Island. Since
purchasing Hi-Tec Industries on February 28,
2022, this operation contributed $982,503 in revenues and approximately
$231,026 in EBITDA for the three
months ended December 31, 2022 and
$5,424,473 in revenues and
approximately $1,509,859 in EBITDA
for the year ended December 31, 2022.
AEP has been working on integration of this location which has
included a number of synergies with AEP's Atlas Building System
Ltd. location, which include labour, shipping, and equipment.
Normal Course Issuer Bid ("NCIB")
Update:
The Company commenced an NCIB on November
3, 2021 which ended on November 3,
2022, during which time the Company purchased and cancelled
a total of 2,886,286 common shares at a weighted average price of
$0.553 per share.
AEP received approval for the TSX Venture Exchange to renew its
NCIB to be transacted through the facilities of the TSXV. The
renewed NCIB commenced on December 1,
2022 and will 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. From December 1, 2022 up to this news release the
Company has purchased for cancellation a total of 718,000 common
shares at a weighted average price of approximately $0.760 per share.
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.
Outlook for 2023:
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 adding
new products and services to better serve our customers.
The Company expects to enter into a more competitive market for
2023 as interest rates have risen in order to slow inflation.,
which affects the housing market after the last few years of high
material prices and significant increases in housing starts. The
Company currently anticipates that increased interest rates will
have a minimal overall affect on the housing market given the
number of homes that are still needed to support Canada's continued population growth and
immigration. The Company will continue to monitor the effects of
interest rates on the housing market, and is prepared to manage
pricing and explore new markets in order to continue to drive
organic growth as much as possible in 2023.
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 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.
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.
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 year ended December 31, 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 year ended December 31,
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 year ended December 31, 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 audited 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.