Atlas Engineered Products (AEP) Announces Expansion into Lower Mainland British Columbia

July 14, 2020

July 14, 2020 - Nanaimo, British Columbia / Atlas Engineered Products (“AEP” or the “Company”) (TSX-V: AEP; OTC Markets: APEUF) announced today that it has entered into an asset purchase agreement to acquire selected assets of a local truss manufacturer (the “Asset Acquisition”) as the Company expands its geographical footprint into the Lower Mainland region of British Columbia.

“The residential and commercial building market in BC has continued to perform well in 2020. AEP’s core market segment in the residential market showed a 3.5% increase in registrations to June 2020, when compared to 2019. This is incredibly impressive when taking into consideration BC had large parts of the economy shut down for several weeks battling the global COVID-19 pandemic. It is this buoyancy that encouraged us to fast track our plans for expansion in BC, firstly through establishing our new pre-fabricated wall factory expansion in Nanaimo, and now through this geographically smart expansion. There is a significant market demand for AEP’s products and services in Lower Mainland BC, and our other BC location is performing at record levels.,” says Dirk Maritz, AEP’s CEO & President. “A few months ago we identified an outstanding smaller player in the truss manufacturing market and have entered into an agreement to purchase some key assets. Once this acquisition is completed, we will continue upgrades to this facility and its equipment in order to expand and develop the Lower Mainland market through a full service business. Located in the Fraser Valley, this new operation will supply our pre-manufactured wall-panels, manufactured floor trusses, I-joists, LVL options, open web floors, roof trusses and other engineered wood products to the very large Lower Mainland BC market.”

The Asset Acquisition will be conducted through AEP’s newest established company, to be known as Novum Building Components Ltd. The selected assets will be purchased at a price of $350,000, payable in cash, with 50% of the purchase price to be paid on closing and the remaining 50% payable in equal monthly installments over 3 years. Completion of the Asset Acquisition is expected to occur in the latter half of July 2020. Closing is subject to, among other things, evidence of discharge of all encumbrances affecting the assets to be purchased, delivery of general conveyance documents, assignment of certain contracts and entry into a lease agreement for the facility site.

About Atlas Engineered Products Ltd.

AEP is a growth company that is acquiring and operating profitable, well-established operations in Canada’s truss and engineered products industry. We have a well-defined and disciplined acquisition and operating growth strategy enabling us to scale aggressively, giving us a unique opportunity to consolidate a fragmented industry of independent operators.

For further information please contact:
Atlas Engineered Products Ltd.
Phone: 1-250-754-1400
Email: [email protected]
Unit 102, 6551 Aulds Road
Nanaimo, BC V9S 5X9
www.atlasengineeredproducts.com

For investor relations please contact:
Brittany Ray-Wilks, Executive Vice President
Phone: 1-250-754-1400
Email: [email protected]
Atlas Engineered Products Ltd.
Unit 102, 6551 Aulds Road
Nanaimo, BC V9S 5X9
www.atlasengineeredproducts.com

Forward Looking Information

Information set forth in this news release contains forward-looking statements. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. Although AEP believes that the expectations reflected in the forward looking statements are reasonable, there is no assurance that such expectations will prove to be correct, or that such future events will occur in the disclosed time frames or at all. AEP cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond AEP’s control. Such factors include, among other things: Risks and uncertainties relating to AEP, including those to be described in the Management’s Discussion and Analysis (“MD&A”) for AEP’s year ended December 31, 2019. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, AEP undertakes no obligation to publicly update or revise forward-looking information.

Selected Financial Information

Except as noted below, the financial information provided in this news release is derived from AEP’s unaudited financial statements for the three months ended March 31, 2020 and March 31, 2019, and the related notes thereto as prepared in accordance with International Financial Reporting Standards (“IFRS”) and related IFRS Interpretations Committee (“IFRICs”) as issued by the International Accounting Standards Board (“IASB”). A copy of AEP’s unaudited financial statements for the three months ended March 31, 2020 and the related Management’s Discussion and Analysis is available on AEP’s website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.

Financial information for AEP’s acquisitions are included in AEP’s unaudited financial statements from the date of acquisition. Financial information for acquired businesses for periods prior to the date of acquisition were prepared by management and have not been reviewed or audited by independent auditors.

Non-GAAP / Non-IFRS Financial Measures

Certain financial measures in this news release do not have any standardized meaning under IFRS and, therefore are considered non-IFRS or non-GAAP measures. These non-IFRS measures are used by management to facilitate the analysis and comparison of period-to-period operating results for AEP and to assess whether AEP’s operations are generating sufficient operating cash flow to fund working capital needs and to fund capital expenditures. As these non-IFRS measures do not have any standardized meaning under IFRS, these measures may not be comparable to similar measures presented by other issuers. The non-IFRS measures used in this news release include “EBITDA”, “EBITDA margin”, “adjusted EBITDA”, “adjusted EBITDA margin”, “normalized EBITDA” and “normalized EBITDA margin”. “EBITDA” is calculated as revenue less operating expenses before interest expense, interest income, amortization and depletion, impairment charges, and income taxes. “EBITDA margin” is EBITDA expressed as a percentage of revenues. “Adjusted EBITDA” is EBITDA after adjusting for share-based payments, foreign exchange gains or losses and non-recurring items. “Adjusted EBITDA margin” is adjusted EBITDA expressed as a percentage of revenues. “Normalized EBITDA” is EBITDA adjusted for one-time items. “Normalized EBITDA margin” is normalized EBITDA expressed as a percentage of revenues.

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