Atlas Engineered Products’ Sales Up 22% in Q4 2020
Originally published by: Proactive Investors — April 16, 2021
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The Canadian wood truss and engineering firm said the construction industry has “remained strong” through the start of 2021
Atlas Engineered Products Ltd posted fourth-quarter results that saw its revenue jump 22% year-over-year on the back of demand for its products and strength in the construction industry.
For the period ended December 31, 2020, the Canadian wood truss and engineering company, reported revenue of $11,057,939, compared to $9,027,723 in the fourth quarter of 2019. “This increase represents the company's best fourth quarter to date,” said Atlas.
Overall revenue for the year ended December 31, 2020 was $35,734,415, up 3%, compared to revenue of $34,763,527 for the year ended December 31, 2019, despite the coronavirus (COVID-19) pandemic.
Significantly, Atlas recorded a net income of $351,757 for the fourth quarter, compared to a net loss of $1,010,096 for the same period in 2019. The company chalked up the substantial improvement in income to “increased revenues, significantly reduced operating expenses, and a reduction in non-cash write-offs.”
During the quarter, Atlas highlighted that it had a “substantial drop” in operating expenses of $948,912, thanks to cost-cutting strategies. “The majority of these cost-cutting strategies are permanent and include contract cancellations for substantially completed projects, staffing restructuring, and bringing projects in house where staff had the skill and capacity,” said the company.
Additionally, net income was $228,986 for the year ended December 31, 2020, compared to a net loss of $755,147 for the year ended December 31, 2019.
In a statement accompanying the numbers, Atlas founder CEO Hadi Abassi said: "2020 presented many challenges for AEP brought on by the COVID-19 pandemic. Rapidly increasing material prices, shipping logistic difficulties, and social distancing were only some of the challenges faced in 2020 and ongoing to 2021.”
“Throughout this, the health of our employees and customers was always our main focus. Despite the obstacles of 2020, the entire company has worked hard to improve profitability and to position itself to take advantage of the strong demand for our products through organic growth and diversity."
In December, Atlas signed a new credit facility agreement with TD Canada Trust. “The new agreement has three facilities and updated covenants offering the company greater flexibility for M&A activities and equipment upgrades,” said the company. Excess funds were used to pay off debts and lease facilities during the refinancing, which “improved the company's balance sheet" and reduced interest costs.
Atlas noted that in July last year, with the start of the operations of Novum, it has entered the lower mainland market of British Columbia where there's opportunity for "significant growth."
Outlook for 2021
Atlas said the construction industry has “remained strong” through the beginning of 2021. “With this strong start to 2021, AEP expects to see this impact in the 1Q as the company has continued to focus on operational and technological improvements to take advantage of the strong construction industry,” said the company.
Atlas also said it “continues to assess M&A opportunities” that fit with its strategies. “This has been bolstered by the new financing and credit partnership with TD Canada Trust, giving the company access to more funding for acquisitive growth,” said the company.