NANAIMO,
BC, April 3, 2024 /CNW/ - Atlas
Engineered Products ("AEP" or the "Company") (TSXV: AEP) (OTC
Markets: APEUF) announced today it has made a principal debt
prepayment of $1.08 million on its
Business Development Bank of Canada ("BDC") loans.
The BDC loans were entered into February of 2019 to fund the
South Central Building Systems ("South Central") acquisition in
March of 2019. The first loan was secured by the land and building
of South Central and was initially to be amortized over 256 months.
The second loan was secured by the equipment of South Central and
was initially to be amortized over 100 months.
These loans were recently generating interest at 7.8% and 9.3%,
respectively. As a result of the debt prepayment, the Company has
paid off its debt with BDC. These loans would have had an interest
expense of $86,000 for the fiscal
year 2024 if they had not been paid off. Excess cash on hand was
used to prepay the BDC loans. It was determined by the Company that
this was the best use of cash at this time as these loans would
have reset at higher rates than the initial 5-year fixed interest
rate, and the Company will still have access to debt and further
cash on hand for potential future organic and acquisitive
growth.
Business Update
The Company has secured its first large wall panel order out of
its Atlas Building Systems ("ABS") location in Nanaimo, BC and has already begun
manufacturing and shipping for this project. This is a positive
sign that pre-manufactured wall panels are becoming accepted in an
area and industry where contractors traditionally stick-frame walls
on site with framing crews. Pre-manufactured wall panels save a
contractor from finding labour or framing crews in this difficult
construction labour market and can save significant time and money
on a build. The time and labour savings could help contractors
build more homes more efficiently which would help alleviate
Canada's housing shortage and
complete their projects quicker and realize their profits sooner.
ABS is looking forward to more projects in the future as the appeal
and knowledge of pre-manufactured wall panels increases.
The Company has also experienced a 30% increase in quoting from
January to February of this year indicating that construction
activity and production is poised to grow for the last three
quarters of the fiscal year after experiencing a more typical
seasonal and cyclical slowdown recently compared to the previous
few years. There continues to be a significant need for housing in
Canada and management expects
demand to increase with any lowering of interest rates.
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 and
apply new technologies, giving us a unique opportunity to
consolidate a fragmented industry of independent operators.
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 and nine months ended September 30,
2023. 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.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Atlas Engineered Products Ltd.