Atlas Engineered Products announces debt prepayment and new wall panel order
by CM Staff
The Company has secured its first large wall panel order out of its Atlas Building Systems location in Nanaimo, BC and has already begun manufacturing and shipping for this project.
NANAIMO — Atlas Engineered Products announces that it has made a principal debt prepayment of $1.08 million on its Business Development Bank of Canada loans.
The BDC loans were entered into February of 2019 to fund the South Central Building Systems 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.
The Company has secured its first large wall panel order out of its Atlas Building Systems 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 says they’ve 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.
