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Atlas Engineered Products shares bulk up as financial results beat expectations

Revenue for the full year to end May was around C$11.6mln - up from C$8.076mln in the previous year
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Atlas shares gained ground in Toronto

Shares in Atlas Engineered Products Ltd (CVE:AEP), a supplier of trusses, engineered wood products and building components, bulked up in Toronto as it said it had registered record quarterly and annual revenues.

Revenue for the three months to May 31 was around C$3.9mln - 93.3% higher than in the same period last year, and recognizing the full impact of the Clinton acquisition.

Based on this, Atlas said it expects annualized revenues of approximately US$18.1mln combined for the Atlas and Clinton operations.

Meanwhile, revenue for the full year to end May was around C$11.6mln - up from C$8.076mln for the previous year, representing an overall growth in revenue from the prior year of 43.6%.

"We are very pleased that our growth and financial results to date have met or exceeded our 2018 stated objectives, which are right on plan," Guy Champagne, the president of Atlas, told investors.

"The annualized revenue and adjusted EBITDA margin targets we have been communicating to the investment community are $50 million and 15%, respectively.

"We consider these very achievable and expect to enter 2019 at that annualized revenue threshold as we continue to make accretive acquisitions of good companies whose revenues we can grow organically as well."

Revenue from acquisitions for the year were was C$1.25mln - representing 10.8% the Company's revenues for the year.

The cost of sales for the year was higher at C$8.7mln versus C$5.9mln, due to increased sales and an increase in raw material costs, while gross margins slipped slightly from 25.9% to 24.8%, notwithstanding a significant increase in lumber costs.

The net loss of the year was around C$4.9ln, versus a net loss of $793,043 ($731.73 per share) for the twelve months ended May 31, 2017.   The increase was mainly the result of listing expenses recognized as a result of the reverse takeover (RTO) with Archer Petroleum.

Atlas Engineered shares added 7.32% to C$0.44.

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