Atlas Engineered Products Reports Year Over Year Q1 Revenue Growth of 85.6% to a Record $5.08 Million and Announces Appointment of Dirk Martiz As Chief Executive Officer

October 18, 2018

Atlas Also Announces Update to Terms of Private Placement Offering and Issuance of Shares for Interest on Exchangeable Notes.

Nanaimo, British Columbia. ATLAS ENGINEERED PRODUCTS LTD. (“Atlas” or the “Company”) (TSX-V: AEP) yesterday reported its financial results for the quarter ended August 31, 2018. The financial statements and related management’s discussion and analysis (MD&A) can be viewed on SEDAR at

Q1 Financial Results

Overall revenue for the three months ended August 31, 2018 was a record high of $5,083,058, up from $2,739,058 for the previous year, representing an overall growth in revenue of 85.6% from the prior year. Revenue for the three months ended August 31, 2018 from the Company’s core business in Nanaimo, BC was $3,193,241, representing year-over-year organic growth of 17% from the three months ended August 31, 2017. Revenue from the Clinton, ON operations for the three months ended August 31, 2018 was $1,614,003 (2017 – $1,105,234 under operation by previous owners), representing year-over-year organic growth in the Clinton operations of 46.0%. The balance of revenues during the three months were provided by the Truebeam and Satellite plants.

Adjusted EBITDA for the three months ended August 31, 2018 was $399,535, representing an Adjusted EBITDA Margin of 8%, compared with $580,617 Adjusted EBITDA and 21% Adjusted EBITDA Margin for the prior period August 31, 2017 (See “Non-IFRS Financial Measures”). This was primarily due to an increase in G&A costs from the previous year resulting from investments in IT implementation, management, legal and accounting, real estate and equipment appraisal, and valuation services in connection with the Company’s acquisition and integration activities.

Cost of sales for the three months ended August 31, 2018 was $3,703,037 compared to $1,999,026 for the three months ended August 31, 2017. Gross margins remained stable at 27.1%. The Company recorded a net loss of $56,411 ($0.00 per share) for the three months ended August 31, 2018.

Mr. Guy Champagne, President of Atlas stated that “We had a strong start to the year, with first quarter 2018 revenue at record levels and operating results that are ahead of plan. I’m confident we can expect adjusted EBITDA margins to continue improving over the coming quarters as we execute on our M&A and integration strategy and the costs incurred to build infrastructure are overtaken by growth in contribution margin from operations. Organic revenue growth continues to gain momentum in both key regions we operate in, and our acquisition strategy is proving out.

Appointment of Dirk Maritz to the Position of President and Chief Executive Officer to Lead Company Through Next Phase of Growth

The Board of Directors of Atlas Engineered Products is pleased to announce that following a diligent executive recruitment process, Atlas has appointed Dirk Maritz as its President and Chief Executive Officer. Mr. Maritz will assume his duties on November 5, 2018.

Dirk is a charismatic and visionary leader and change agent with over 15 years of proven experience as a CEO, VP and Director in large, complex, multi-industry companies.

Dirk joins Atlas from SMS Equipment Inc. (Canada) where he served since 2012. His most recent role with SMS Equipment in Canada demonstrates his ability to lead a highly complex and diverse multi-territory business, operate at the highest levels and significantly impact markets through consolidation and disruption strategies, break into new accounts and markets, and take advantage of technology and product innovation.

His previous roles as President & CEO with Tradelander & Fridgetech Services operating throughout Africa add further credence to his strengths as a leader who drives growth while building high performance teams that deliver profits, excellence in customer satisfaction, and operational excellence. In eight short years, he positioned these organizations to be industry and market leaders in their markets, growing revenues exponentially while improving bottom-line from break-even to a business rendering a 40%+ return on capital employed.

Don Hubbard (Atlas Board Chair), Hadi Abassi (Current CEO of Atlas) and Guy Champagne (Current President of Atlas) are unanimous in their welcome of Dirk to the Atlas team and are thrilled at having been able to attract such strong talent to lead the Company.

“As founder and CEO, I am tremendously proud of our entire Atlas family, the success of our Company to-date and our growth and expansion throughout North America,” said Hadi Abassi. “Atlas has reached a milestone and our next phase of growth demands having the right people in the right roles to capitalize on the significant opportunities that the Company is pursuing. We are delighted to be working with Dirk and I’m confident we’ll be well positioned to meet our objectives.”

Mr. Abassi concluded, “I will continue to be closely involved with our Company to support and drive the priorities in line with sourcing and welcoming truss and engineered wood products company owners to the Atlas family as we maintain our commitment to the communities we operate in, and bringing our construction industry partners unparalleled excellence in service, product, and support.”

Mr. Champagne said, “Dirk brings a strong background to our team from his experience at other companies where he was instrumental in providing leadership to help them achieve and sustain dramatic growth. He is an accomplished and proven corporate leader adept at developing strategy, building teams, inspiring excellence and generating results. I look forward to the impact he will bring to the performance and value of Atlas.”

Don Hubbard stated, “Our business building efforts of the last year are gathering steam, and there is no better evidence of this than the talent we have been able to recruit to take Atlas to the next level.”

Both Hadi Abassi and Guy Champagne will remain Directors of Atlas and continue to serve the Company as advisors.

Amended Terms of $0.40 Private Placement Offering

Atlas also announces that it has amended the terms of its non-brokered private placement offering (the “Offering”) previously announced on August 14, 2018. As amended, the Offering will now be for units (each a “Unit”) consisting of one common share (a “Common Share”) and one-half of one (1/2) non-transferrable Common Share purchase warrant (a “Warrant”). Each whole Warrant will entitle the holder to purchase one additional Common Share at a price of $0.60 per share for a period of two years from the date of issuance. The Warrants will be subject to an acceleration right, which will entitle Atlas to accelerate the expiration of the Warrants if its Common Shares trade at an average VWAP of $0.80 per share for 20 consecutive trading days. If the acceleration right is exercised, the Warrants will expire 30 calendar days after the issuance of a news release announcing such exercise.

The Offering will consist of up to 12,500,000 Units at a price of $0.40 per Unit, for total gross proceeds of up to $5 million, consistent with the previously announced Offering terms.

This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including the United States of America. The securities being offered as part of the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and any applicable state securities laws, or pursuant to available exemptions therefrom.

Shares Issued for Interest Component on Exchangeable Notes

Finally, Atlas is also announcing that on August 9, 2018, it issued a total of 33,805 Common Shares on account of interest payable under the exchangeable notes (the “Exchangeable Notes”) issued by its predecessor Atlas Engineered Products Ltd. (Atlas PrivateCo). Under the terms of the Exchangeable Notes, Atlas had the right to pay the interest due on the Exchangeable Notes by the issuance of Common Shares at a conversion price equal to the closing price of the Common Shares on the last trading day prior to maturity. As disclosed in Atlas’ filing statement filed on October 27, 2017, a total of 1,487,500 Common Shares were issuable on account of principal due on the Exchangeable Notes upon exercise of the exchange rights by the noteholders. These shares were also issued on August 9, 2018.

About Atlas Engineered Products Ltd.

Atlas Engineered Products is a leading supplier of trusses and engineered wood products. Atlas Engineered Products was formed over 18 years ago and operates manufacturing and distribution facilities in British Columbia and Ontario to meet the needs of residential and commercial builders. Atlas Engineered Products has expert design and engineering teams, multiple-shift state-of-the-art truss manufacturing operations, and large inventories of engineered beam and flooring components. Atlas Engineered Products aims to grow its base of business across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas Engineered Products will bring its construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying them with the full array of components and assemblies they might require for their projects – from design to lockup.

For further information please contact:

Atlas Engineered Products Ltd.
Guy Champagne, President
Phone: 1-250-754-1400
Email: [email protected]
Unit 102, 6551 Aulds Road
Nanaimo, BC V9S 5X9

For investor relations please contact:

Rob Gamley
Phone: 1-604-689-7422
Email: [email protected]
Contact Financial Corp.
810 – 609 Granville St.
Vancouver, BC V7Y 1G5

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. The Company 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 the Company’s control. Such factors include, among other things: risks and uncertainties relating to the Company including those to be described in the Annual Information Form filed by the Company on June 1, 2018 and the Management’s Discussion and Analysis (“MD&A”) for the Company’s fiscal quarter ended August 31, 2018 filed by the Company on October 17, 2018, both on 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, the Company undertakes no obligation to publicly update or revise forward-looking information. Closing of the acquisition of South Central Building Systems Ltd. remains subject to a number of conditions, including, but not limited to, financing, satisfactory completion of the Company’s due diligence investigations and TSX Venture Exchange approval.



Certain 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 the Company and to assess whether the Company’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”, and “adjusted 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.