Atlas Engineered Products Reports Record Q2 Revenue and Profits Q2 Revenues Increase 82%, Net Income Increased 650%

August 23, 2021

August 23rd, 2021 - Nanaimo, British Columbia / Atlas Engineered Products (“AEP” or the “Company”) (TSX-V: AEP; OTC Markets: APEUF) is pleased to announce its financial and operating results for the three and six months ended June 30, 2021. All amounts are presented in Canadian dollars.

“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,” said Hadi Abassi, CEO & President, Founder. “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.”

Financial Highlights for Q2 2021:

· Revenue increased by 82% to $14,408,430 for the three months ended June 30, 2021 compared to $7,900,805 for the three months ended June 30, 2020. This increase represents the Company’s best Q2 results to date. Revenue also increased 57% to $23,538,063 for the six months ended June 30, 2021 from $14,998,784 for the six months ended June 30, 2020.

· Non-IFRS measure normalized EBITDA increased to $2,866,434 and $4,053,810 for the three and six months ended June 30, 2021 from $1,077,046 and $1,179,088 for the three and six months ended June 30, 2020. This turnaround is due to increases in revenues and gross margin, and reduced operating expenses. Additionally, normalized EBITDA of $4,053,810 for the six months ended June 30, 2021 is an increase over the entire fiscal year ended December 31, 2020 of $4,045,232 after only half a year.

· Gross margin for the three months ended June 30, 2021 was 26%, up from gross margin of 24% for the three months ended June 30, 2020. Gross margins also increased to 23% for the six months ended June 30, 2021 from 20% for the six months ended June 30, 2020 due to the Company’s hard work navigating and controlling pricing during the rising raw material prices and shortages, while constantly focusing on improving efficiencies for new

· product lines and acquisitions. Additionally, the manufacturing equipment bought at the end of January 2021 also improved automation at one of AEP’s facilities, with the ability for improved efficiencies within our core product lines.

· The Company recorded a net income of $1,649,359 for the three months ended June 30, 2021 compared to a net income of $220,601 for the three months ended June 30, 2020. This 650% increase was driven by increased revenues, improved gross margins, and reduced operating expenses.

· “Continuing our strong organic growth in revenues while navigating the raw material shortages and high raw material costs have been a challenge, but one that the Company has tackled head-on,” said Melissa MacRae, Interim CFO. “The entire team at AEP continues to focus on satisfying our customer's needs while producing solid financial results as we push forward through the final month of our second quarter and into the remainder of our fiscal year which is typically the busiest time for our industry.”

· The Company’s focus continues to be on the raw material and labour challenges experienced by the construction industry, while also driving forward with further organic growth and production efficiency initiatives.

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]
PO Box 37036 Country Club PO
Nanaimo, BC V9T 6N4
www.atlasengineeredproducts.com

For investor relations please contact:

Paul Andreola, Director
Phone: 1-604-644-0072
Email: [email protected]
Atlas Engineered Products Ltd.
PO Box 37036 Country Club PO
Nanaimo, BC V9T 6N4
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 three months ended March 31, 2021. 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 the AEP’s unaudited financial statements for the three months ended March 31, 2021 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, 2021 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 may 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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