Atlas Engineered Products (TSXV: AEP, OTC: APEUF), a leading manufacturer of engineered wood products across Canada, witnesses its stock price evolving slowly and steadily. For the last 6 months, AEP grew from $0.55 to $1.12 on February 8, 2023. If you check the company’s fundamentals, you will notice Atlas has positive earnings, something uncommon on the TSXV exchange. 

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Sector Overview

Engineered wood is formed by binding wood fibers, strands, and chips together using adhesives to create composite wood structures. One of the main factors influencing the market is the rising demand for engineered wood as a substitute for materials with high emissions, including concrete, steel, and aluminum, to minimize greenhouse gases. In addition, house innovation and renovation are on the rise, particularly in wealthy nations. The market is expanding as a results of the rising investments made in housing projects by governments of various countries. Moreover, cross-laminated timber (CLT) is becoming increasingly popular as a building material worldwide.

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Company Overview

Atlas Engineered Products (TSXV: AEP, OTC: APEUF) designs, manufactures, and sells engineered roof trusses, floor trusses, wall panels, and windows in Canada. The company provides floor joists, floor panels, design, engineering, permits, project management, and site assembly services. For the construction of single-family homes, townhouses, multi-story wood-framed residential buildings, commercial buildings, and agricultural structures, it also offers a variety of engineered wood products and patio doors. When you think about Atlas Engineered, you have to imagine a family of 7 companies spread out throughout Canada to provide design, engineering & permitting services, roof systems & roof trusses products, floor systems & floor trusses products, and finally, wall panels.

Design, Engineering & Permitting services: The company's expert design team uses cutting-edge design and engineering technologies to guarantee that you receive a consistent, accurate, and high-quality product from our facilities. Obtaining building permits is another service we provide. The designers at AEP create your orders in a carefully regulated indoor factory setting using cutting-edge BIM (Building-Information-Modeling) software, laser precision cutting equipment, and automated assembly equipment.

Roof systems & roof trusses products: Use Atlas's innovative, cost-effective design and engineering expertise to speed up installation, expand your span possibilities, and decrease installation times. AEP roof trusses may be a cost-effective and efficient component of any building project, regardless of how complicated the commercial design or how basic the residential structure is.

Floor systems & floor trusses products: Atlas' custom-built floor panels are a useful substitute for onsite framing since they provide clients quality control and guarantee flawless integration with customers’ wall and roof components. Quality floor trusses and systems from a facility that also enables clients to cut back on labor requirements on the job site or concurrently work on the following project.

Wall panels: AEP wall panels are a more affordable option than framing on site because they allow you better quality control, the flexibility to lower labor costs on site, and the assurance of a smooth integration with your floor and roof components. Clients' walls will be square, have the correct nailing patterns, and have studs and headers designed to sustain applied loads thanks to our specialist design software and production capability.

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Share Structure / Financials

The company’s revenues are more than positive. For the quarter ending September 30, 2022, Atlas Engineered Products generated $17.6M and had a $6.1M gross profit. The company still has positive revenue, and the net income represented $3.1M. Translated in income per share, this data is worth $0.05 basic and diluted. For the last quarter of 2022, the company expects to recognize revenues of approximately $14.9M, a 7% increase from the three months that ended December 31, 2021 ($13.9M). Furthermore, Atlas expects to report approximately $61.8M for 2022 compared to revenues of just under $55M in 2021. 

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On March 9, 2023, the company announced it obtained a $1.6M purchase order for wall panels and engineered wood products. $850k of the order represents wall panel sales. For your information, wall panel sales in 2022 represented only $108k and the company aims to develop this business. 

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"We are thrilled to receive this major purchase order as it furthers our expansion in to the wall panel industry. This represents the next step of our strategic expansion to become a quality multi-product supplier to our customers by offering floor trusses, beams, roof trusses, and now, wall panels, all while maintaining high levels of customer service."

Hadi Abassi, CEO & President, Founder

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Regarding the share structure, the company has 57.2M shares issued and outstanding (as of November 29, 2022), 3M options (as of  September 30, avg. price: $0.48), and doesn’t have warrants. About the balance sheet, Atlas has $12.9M in cash, $51.8M in total assets, and $24.5M in total liabilities. 

The stock price is on a solid uptrend. Currently traded at $0.94 (April 5, 2023) and over the last 52 weeks, AEP traded between $0.42 to $1.12.

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Conclusion

Atlas Engineered Products (TSXV: AEP, OTC: APEUF) have several qualities. The company has a low share structure, buys back shares on the market, and reveals positive Earnings Per Share. Atlas also has a solid contract, including wall panels, while it wasn’t much developed. It will be interesting to see if investors believe the market cap should have a higher valuation. 

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