NANAIMO, British Columbia, Oct. 18, 2018 (GLOBE NEWSWIRE) -- ATLAS ENGINEERED PRODUCTS LTD.
(“Atlas” or the “Company”) (TSX-V:AEP) yesterday reported its financial results for the quarter
ended August 31, 2018. The financial statements and related management’s discussion and analysis (MD&A) can be viewed on SEDAR
at www.sedar.com.
Q1 Financial Results
Overall revenue for the three months ended August 31, 2018 was a record high of $5,083,058, up from $2,739,058
for the previous year, representing an overall growth in revenue of 85.6% from the prior year. Revenue for the three months
ended August 31, 2018 from the Company’s core business in Nanaimo, BC was $3,193,241, representing year-over-year organic growth of
17% from the three months ended August 31, 2017. Revenue from the Clinton, ON operations for the three months ended August 31, 2018
was $1,614,003 (2017 – $1,105,234 under operation by previous owners), representing year-over-year organic growth in the Clinton
operations of 46.0%. The balance of revenues during the three months were provided by the Truebeam and Satellite plants.
Adjusted EBITDA for the three months ended August 31, 2018 was $399,535, representing an Adjusted EBITDA Margin
of 8%, compared with $580,617 Adjusted EBITDA and 21% Adjusted EBITDA Margin for the prior period August 31, 2017 (See “Non-IFRS
Financial Measures”). This was primarily due to an increase in G&A costs from the previous year resulting from investments in
IT implementation, management, legal and accounting, real estate and equipment appraisal, and valuation services in connection with
the Company’s acquisition and integration activities.
Cost of sales for the three months ended August 31, 2018 was $3,703,037 compared to $1,999,026 for the three
months ended August 31, 2017. Gross margins remained stable at 27.1%.
The Company recorded a net loss of $56,411 ($0.00 per share) for the three months ended August 31, 2018.
Mr. Guy Champagne, President of Atlas stated that “We had a strong start to the year, with first quarter 2018
revenue at record levels and operating results that are ahead of plan. I’m confident we can expect adjusted EBITDA margins to
continue improving over the coming quarters as we execute on our M&A and integration strategy and the costs incurred to build
infrastructure are overtaken by growth in contribution margin from operations. Organic revenue growth continues to gain
momentum in both key regions we operate in, and our acquisition strategy is proving out.
Appointment of Dirk Maritz to the Position of President and Chief Executive Officer to Lead
Company Through Next Phase of Growth
The Board of Directors of Atlas Engineered Products is pleased to announce that following a diligent executive
recruitment process, Atlas has appointed Dirk Maritz as its President and Chief Executive Officer. Mr. Maritz will assume his
duties on November 5, 2018.
Dirk is a charismatic and visionary leader and change agent with over 15 years of proven experience as a CEO, VP
and Director in large, complex, multi-industry companies.
Dirk joins Atlas from SMS Equipment Inc. (Canada) where he served since 2012. His most recent role with SMS
Equipment in Canada demonstrates his ability to lead a highly complex and diverse multi-territory business, operate at the highest
levels and significantly impact markets through consolidation and disruption strategies, break into new accounts and markets, and
take advantage of technology and product innovation.
His previous roles as President & CEO with Tradelander & Fridgetech Services operating throughout Africa add
further credence to his strengths as a leader who drives growth while building high performance teams that deliver profits,
excellence in customer satisfaction, and operational excellence. In eight short years, he positioned these organizations to be
industry and market leaders in their markets, growing revenues exponentially while improving bottom-line from break-even to a
business rendering a 40%+ return on capital employed.
Don Hubbard (Atlas Board Chair), Hadi Abassi (Current CEO of Atlas) and Guy Champagne (Current President of
Atlas) are unanimous in their welcome of Dirk to the Atlas team and are thrilled at having been able to attract such strong talent
to lead the Company.
“As founder and CEO, I am tremendously proud of our entire Atlas family, the success of our Company to-date and
our growth and expansion throughout North America,” said Hadi Abassi. “Atlas has reached a milestone and our next phase of
growth demands having the right people in the right roles to capitalize on the significant opportunities that the Company is
pursuing. We are delighted to be working with Dirk and I’m confident we’ll be well positioned to meet our
objectives.”
Mr. Abassi concluded, “I will continue to be closely involved with our Company to support and drive the
priorities in line with sourcing and welcoming truss and engineered wood products company owners to the Atlas family as we maintain
our commitment to the communities we operate in, and bringing our construction industry partners unparalleled excellence in
service, product, and support.”
Mr. Champagne said, “Dirk brings a strong background to our team from his experience at other companies where he
was instrumental in providing leadership to help them achieve and sustain dramatic growth. He is an accomplished and proven
corporate leader adept at developing strategy, building teams, inspiring excellence and generating results. I look forward to the
impact he will bring to the performance and value of Atlas.”
Don Hubbard stated, “Our business building efforts of the last year are gathering steam, and there is no better
evidence of this than the talent we have been able to recruit to take Atlas to the next level.”
Both Hadi Abassi and Guy Champagne will remain Directors of Atlas and continue to serve the Company as
advisors.
Amended Terms of $0.40 Private Placement Offering
Atlas also announces that it has amended the terms of its non-brokered private placement offering (the
“Offering”) previously announced on August 14, 2018. As amended, the Offering will now be for units (each a “Unit”)
consisting of one common share (a “Common Share”) and one-half of one (1/2) non-transferrable Common Share purchase warrant
(a “Warrant”). Each whole Warrant will entitle the holder to purchase one additional Common Share at a price of $0.60 per
share for a period of two years from the date of issuance. The Warrants will be subject to an acceleration right, which will
entitle Atlas to accelerate the expiration of the Warrants if its Common Shares trade at an average VWAP of $0.80 per share for 20
consecutive trading days. If the acceleration right is exercised, the Warrants will expire 30 calendar days after the
issuance of a news release announcing such exercise.
The Offering will consist of up to 12,500,000 Units at a price of $0.40 per Unit, for total gross proceeds of up
to $5 million, consistent with the previously announced Offering terms.
This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be
any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including
the United States of America. The securities being offered as part of the Offering have not been, and will not be, registered under
the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly may
not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and
any applicable state securities laws, or pursuant to available exemptions therefrom.
Shares Issued for Interest Component on Exchangeable Notes
Finally, Atlas is also announcing that on August 9, 2018, it issued a total of 33,805 Common Shares on account
of interest payable under the exchangeable notes (the “Exchangeable Notes”) issued by its predecessor Atlas Engineered Products
Ltd. (Atlas PrivateCo). Under the terms of the Exchangeable Notes, Atlas had the right to pay the interest due on the
Exchangeable Notes by the issuance of Common Shares at a conversion price equal to the closing price of the Common Shares on the
last trading day prior to maturity. As disclosed in Atlas’ filing statement filed on October 27, 2017, a total of 1,487,500
Common Shares were issuable on account of principal due on the Exchangeable Notes upon exercise of the exchange rights by the
noteholders. These shares were also issued on August 9, 2018.
About Atlas Engineered Products Ltd.
Atlas Engineered Products is a leading supplier of trusses and engineered wood products. Atlas was formed over
18 years ago and operates manufacturing and distribution facilities in British Columbia and Ontario to meet the needs of
residential and commercial builders. Atlas has expert design and engineering teams, multiple-shift state-of-the-art truss
manufacturing operations, and large inventories of engineered beam and flooring components. Atlas aims to grow its base of business
across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas will bring its
construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying
them with the full array of components and assemblies they might require for their projects – from design to lockup
For further information please contact:
Atlas Engineered Products Ltd.
Guy Champagne, President
Phone: 1-250-754-1400
Email: info@atlasep.ca
Unit 102, 6551 Aulds Road
Nanaimo, BC V9S 5X9
www.atlasengineeredproducts.com
For investor relations please contact:
Rob Gamley
Phone: 1-604-689-7422
Email: rob@contactfinancial.com
Contact Financial Corp.
810 – 609 Granville St.
Vancouver, BC V7Y 1G5
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. The Company
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 the Company’s control. Such factors include, among other things: risks and
uncertainties relating to the Company including those to be described in the Annual Information Form filed by the Company on June
1, 2018 and the Management’s Discussion and Analysis (“MD&A”) for the Company’s fiscal quarter ended August 31, 2018
filed by the Company on October 17 2018, both on www.sedar.com. 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, the Company undertakes no obligation to publicly update or
revise forward-looking information.
Forward-looking statements in this news release also include future-oriented financial information and
financial outlook information (“FOFI”) regarding the Company and its prospective results of operations, cash flows and components
thereof. The FOFI contained in this news release is subject to the same assumptions, risk factors, limitations and
qualifications set forth in the Company’s MD&A for the quarter ended August 31, 2018 relating to other forward-looking
statements. The FOFI contained in this news release is provided for the purpose of providing information regarding
management’s assessment of the Company’s anticipated business operations, and may not be appropriate for other purposes
Forward-looking statements, including FOFI, contained herein are made as of the date of this news release
and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future
events or results or otherwise except as required by securities law. There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements.
*NON-GAAP / NON-IFRS FINANCIAL MEASURES
Certain 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 the Company and to assess whether the Company’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 include “EBITDA”, “EBITDA Margin”, “adjusted EBITDA”, and “adjusted
EBITDA Margin”. “EBITDA” is calculated as revenue less operating expenses before interest expense, interest income,
amortization and depletion, impairment charges, and income taxes. “EBITDA Margin” is EBITDA expressed as a percentage of
revenues. “Adjusted EBITDA” is EBITDA after adjusting for share-based payments, foreign exchange gains or losses and
non-recurring items. “Adjusted EBITDA Margin” is Adjusted EBITDA expressed as a percentage of revenues.
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.
