Atlas Engineered Products scales up its business to meet construction demand from western Canada

Specializes in the manufacture and supply of roof trusses and wood products and is consolidating the industry in North America Uniquely positioned for growth, with expanding footprint in burgeoning industry Addressable Canadian market of C$2.5 billion for trusses, joists, engineered beams, prefabricated walls and floors What Atlas Engineered Products does: Atlas Engineered Products Ltd (CVE:AEP) (OTCMKTS:APEUF) is a growth company, which specializes in the manufacture and supply of roof trusses and wood products and is consolidating the industry in North America. The firm acquires profitable and well-established firms in the sector, and since listing as AEP in November 2017 with just one manufacturing plant of its own, has now bought five further companies. The acquisitive opportunity is large because many are ageing companies, whose owners are looking to monetize their considerable investment. Atlas aims to strengthen the finances of these smaller firms and protect the interest of the owners while providing career growth to loyal employees. For the uninitiated, trusses are pre-fabricated, triangular frameworks that support the roof of a house. The addressable market in Canada for trusses, joists and engineered beams is said to be $1 billion, while it is $2.5 billion for those products, together with prefabricated walls and floors. How is it doing: AEP is expanding its geographical footprint into British Columbia’s Lower Mainland region through the acquisition of assets from a local truss manufacturer. Located in the province’s Fraser Valley, the newly-acquired operation will supply Atlas’s engineered wood products like pre-manufactured wall panels and manufactured floor trusses to the Lower Mainland region. The move comes as the engineering company looks to fast-track its expansion plans in the province amidst “significant demand” for its products and services. Meanwhile, AEP’s second-quarter 2020 results showed a revenue jump of 11% compared to the first quarter driven by strength in the British Columbia and Manitoba markets. For the period ended June 30, 2020, the wood truss and engineering firm posted revenue of $7,900,805, compared to revenue of $9,067,334 for the same period a year earlier. However, the $7,900,805 second quarter revenue number was up 11%, compared to $7,097,979 in the first quarter of 2020. In a statement accompanying the results, the company said the quarter over quarter increase in total revenue was thanks to the “strong resilience of the British Columbia and Manitoba markets” despite the "ambiguity in the Ontario market at the time due to COVID-19 restrictions." Inflection points: Grow presence in Lower Mainland region of British Columbia by winning contracts and building team Bid and complete large-scale contracts and projects Further acquisitions to complement its nationwide lines of business What the boss says: "Although Q2 2020 resulted in lower revenues than in Q2 2019, I am pleased to report an 11% revenue increase in Q2 2020 over Q1 2020 amidst the most impacted months of the COVID-19 pandemic. Normalized EBITDA margin was at 14%, with positive operating profit and net income for Q2 2020,” AEP’s CEO Dirk Maritz said about the group's latest results.  “This was achieved through our comprehensive cost-saving and cash preservation strategy, implemented at the end Q1 2020, as well as disciplined sales activities, and an increased focus on improving operational efficiencies and margin expansion throughout Q1 and Q2 2020.” Contact Angela at angela@proactiveinvestors.com Follow her on Twitter @AHarmantas