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Atlas Engineered Products sees 2019 revenue soar as diversification strategy pays off

The construction company saw its annual revenue increase by 160% to nearly C$35 million in 2019

Atlas Engineered Products Ltd. -
The firm grew its Canadian footprint in. 2019 to six operations in British Columbia, Manitoba and Ontario

Atlas Engineered Products Ltd (CVE:AEP) (OTCMKTS:APEUF) saw its annual revenue increase by 160% to nearly C$35 million in 2019 thanks to an aggressive focus on product diversification.

The Nanaimo-based construction company generated a positive adjusted EBITDA margin of 11% for the year ended December 31, 2019, a stark turnaround from the negative adjusted EBITDA of 5% it posted in the seven-month period ended December 2018.

AEP also improved its gross margins throughout fiscal 2019, growing from 19% in its first quarter to posting a gross margin of 24% in its fourth-quarter thanks to “incredibly hard work” optimizing workflows and productivity, according to the company.

READ: Atlas Engineered Products sees strong growth in sales across business despite pandemic

Dirk Maritz, CEO of AEP, noted that the year was all about integration and optimization.

"We took a pause on acquisitions to ensure our operations across Canada had strong revenues, standardized practices, effective workflow improvements and strategic implementation of new products,” Maritz said in the results statement. 

Since going public in November 2017, the firm has grown its Canadian footprint to six operations in British Columbia, Manitoba and Ontario. In spring 2019 the firm acquired SC Building Systems in Manitoba, entering the Canadian Prairies and expanding into new geographical markets. AEP also increased its operating footprint to include the North and South Vancouver Island markets and targeted areas in Ontario to secure a national footprint of product and service delivery.

Net loss for the year shrunk to C$755,147 or C$0.02 per share, compared to a loss of C$1.8 million or C$0.04 per share during the seven-month period ended December 2018.

Solid financial position

Melissa MacRae, the company’s CFO, told shareholders that the company is well-capitalized and fiscally disciplined headed into 2020.

“We accomplished an exceptional turn-around in 2019 that has set the foundation for us to start a new year in a solid financial position, backed by cash reserves that were strengthened by our oversubscribed private placement, as well as a growing order book,” MacRae said in the statement.

CEO Maritz added: “Month by month we continue to strengthen our financial and operational performance and execute on our overall growth strategy. This is an excellent first-year result for the newly formed AEP team, and we have only just started."

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: Atlas Engineered Products Ltd.

Price: 0.275 CAD

TSX-V:AEP
Market: TSX-V
Market Cap: $15.87 m
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