NANAIMO – Atlas Engineered Products announced its financial and operating results for the three and six months ended June 30, 2022. All amounts are presented in Canadian dollars.
“We are pleased with another successful quarter of organic growth, as well as the contribution from our latest acquisition, Hi-Tec Industries Ltd,” said Hadi Abassi, CEO & President, Founder. “In addition to the ongoing operational improvements and growth of our legacy facilities, we have seen an immediate improvement in both revenues and margins from Hi-Tec. Our order book for the remainder of 2022 continues to be strong and we anticipate another year of record results for the Company.”
Financial Highlights for Q2 2022:
Revenue increased 17 per cent to $16,836,329 for the three months ended June 30, 2022 from $14,408,430 for the three months ended June 30, 2021. Additionally, revenue increased 24 per cent to $29,270,743 for the six months ended June 30, 2022 from $23,538,063 for the six months ended June 30, 2021. This increase now represents the Company’s best second quarter to date.
Non-IFRS EBITDA for the three and six months ended June 30, 2022 was $3,581,190 and $6,463,031, respectively, with an EBITDA margin of 21 per cent and 22 per cent, respectively. EBITDA for the three and six months ended June 30, 2021 was $2,827,271 and $3,654,283, respectively, with an EBITDA margin of 20 per cent and 16 per cent. EBITDA and EBITDA margin for the three and six months ended June 30, 2022 increased compared to the three and six months ended June 30, 2021 due to increased net income for the period resulting from increased sales and improved gross margins.
Gross margin for the three and six months ended June 30, 2022 was 28 per cent and 29 per cent, which was up from a gross margin of 26 per cent and 23 per cent for the three and six months ended June 30, 2021. Gross margins increased due to pricing assessments and updates being completed at all locations due to the fluctuating costs of raw materials and labour. The Company has also focused on improving efficiencies on new product lines and acquisitions.
Net income after taxes was $2,044,118 and $3,607,419 for the three and six months ended June 30, 2022 compared to net income after taxes of $1,649,359 and $1,700,567 for the three and six months ended June 30, 2021. This increase was primarily due to the increase in revenues, improvements in gross margin, and the new acquisition of Hi-Tec Industries Ltd.
Expansion for 2022:
On February 28, 2022, the Company acquired Hi-Tec (“Hi-Tec Acquisition”), located in Lantzville, BC on Vancouver Island. The shares of Hi-Tec were acquired for $5.8 million in cash, with a working capital adjustment of $454,981 that was finalized subsequent to the three months ended March 31, 2022. The land and buildings of Hi-Tec were also acquired by the Company for the appraised value of $3.25 million in cash. The Company financed the Hi-Tec Acquisition with a term loan for $5.8 million and a mortgage for $2,437,500. During its last fiscal year ended August 31, 2021, Hi-Tec earned unaudited revenues of just over $5.0 million, net income before taxes of just over $1.0 million, and a normalized EBITDA of $1.25 million, resulting in a normalized EBITDA margin of 25 per cent. (Financial information for Hi-Tec for the year ended August 31, 2021 was unaudited and unreviewed.)
Since purchasing Hi-Tec Industries on February 28, 2022, this operation contributed $2,227,555 in revenues and approximately $667,827 in EBITDA for the three months ended June 30, 2022 and $2,855,014 in revenues and approximately $839,496 in EBITDA for the six months ended June 30, 2022.
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