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
• 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.

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.

Atlas acquires profitable and well-established firms in the sector, and since listing in November 2017 with just one manufacturing plant of its own, has bought a number of other companies.

The acquisitive opportunity is large because many are ageing firms, whose owners are looking to monetize their considerable investment.

The company aims to strengthen the finances of these smaller firms and protect the interest of the owners while providing career growth to loyal employees..

How is it doing:

Atlas continues to post record financial results throughout 2021.

In August, the company announced second-quarter 2021 revenue of C$14,408,430, an 82% year-over-year increase.

Atlas also saw its net income for the period surge 650% year-over-year to C$1,649,359, driven by increased revenues, improved gross margins, and reduced operating expenses. 

The company said its gross margin for the three months ending June 30, 2021 edged up to 26% from 24% a year earlier, amidst rising raw material prices and shortages.

Atlas noted in June that its focus continues to be on the raw material and labor challenges experienced by the construction industry, while also driving forward with further organic growth and production efficiency initiatives.

Earlier in June, the company provided an update on the organic growth initiatives at its newest acquisition, Novum Building Components location, in Abbotsford, British Columbia (BC).

Atlas said it has been working hard to continue its integration at Novum and is excited to move forward with its growth initiatives by adding Engineered Wood Products (EWP) to the products available at the location. EWP includes i-joists, laminated beams, architectural glulams, and numerous other products.

The company noted this product expansion allows Novum to satisfy a wider range of construction needs for customers without requiring them to shop around for multiple different suppliers. In addition to supplying these products, Novum can help design and engineer these products for its customers' construction projects in the most cost-effective way.

Inflection points:

• Strategy news from newly-returned CEO
• Further strong product demand
• Ongoing expansion moves

What the boss says:

Commenting on the company’s record 2Q 2021 financial results, Atlas Engineered Products CEO Hadi Abassi said in a statement: “These results are a culmination of hard work, perseverance, and focus by the entire AEP team to deal with all the recent challenges that have been out of our control and need to be handled every hour of the day.” 

Abassi added: “All of us at AEP are focusing on the day-to-day and looking to the future to the opportunities that arise through successful operational and financial results like these.”

Contact Sean at [email protected]