Atlas Engineered Products (TSX.V: AEP)

0:00Hey listeners, it's Paul Andriola here. When I join our community at SmallCap Discoveries, where we offer our members direct access to some of the best micro-cap investment opportunities available, our members are getting access to premium micro-cap financing, research reports, and direct access to management. Sign up today at www.smallcapdiscoverys.com. Hi everyone, welcome to the SmallCap Discoveries Conference call. Today is August 27th, 2026. And today our call, we have back the CEO, Hadi Abasi and the CFO, Melissa McCray, from Atlas Engineer Products. Atlas trades on the TSX Venture Exchange under the symbol AEP. And it also trades on the OTC under APEUF. The company is currently trading at 64 cents with about 71.5 million shares of standing, or about a $46 million market cap.

1:01I now get handed over to Paul Andriola. Thanks a lot Trevor. Hadi, Melissa, good to see you guys here. I guess before we start, I want to remind everybody that I am a director of Atlas Engineer Products. So I want to make sure that was disclosed. But we're happy to have the crew from Atlas here. So we can talk about the last set of numbers. Also talk about some of the things that happened over the course of the last year. And some of the stuff that's happening right now and some of the interesting initiatives that have been going on with the business, specifically the new robotics facility. So guys, great to have you here. Before we start to get into the Q&A and talk about some of the updates, Hadi, maybe you remind everybody what Atlas is all about. Okay, hello everybody. And nice to be here with all of you there. And basically Atlas started in 2018 when we were in public.

2:01It was a manufacturing company. We manufactured engineer wood products. And it was just basically crosses. And then we had organic growth to it, the site to it that it was the engineer flooring. And that's what we had at that time. And the objective was and has always been to build the footprint across the country. And then eventually introduced a full component manufacturing. That means the walls, the floors, everything together. So we supplied the total package to the client because I could see an opportunity that coming up in the future. That was 2018. And to be honest, anything it would come as fast as it's arriving right now with all the narratives of our shortage of housing and affordable housing plus the shortage of labor in Canada that has always been an issue in construction, a skilled labor especially. So with that at first we started

3:03getting the footprint in the country in most of the provinces. The only area really we don't cover, although we cover it from New Brunswick, we cover a lot in Quebec and we are not in the Quebec province. And the only other area we are not at the moment for now is Alberta. Otherwise we have centers and facilities across the country in Maritime all the way to British Columbia and Vancouver Island. And the biggest challenges with our industry and the biggest opportunity has been was we had a certain type of machinery is fully automated. And that was the ceiling for us. And then eventually with the introduction of robotics and everything in manufacturing, that is for trousers and walls. It creates a new challenge for us and it creates a new opportunity for us. And for us being footprint across the country makes it tougher to optimize everything overnight. It's always easier to do it with one problem so one factory, but that's the opportunity for us

4:03to scale the automation across the country because the technology is amazing right now and it's available, but it's a big players game now. You have to have the money, the capital, and the full site to take that chance and go into that, to take advantage of that opportunity and it's not just trousers anymore, it's trousers and walls. And that's what really the challenge for us is and the opportunity for us for growth in that area. To just keep going and build your footprint across the country and then introduce the automation and introduce the fully component manufacturing in salt to the job site. And we have introduced that in the last 24 months, we've been working on it and we don't speak much about it. But we have done it, we perfected the process and we are in the process of scaling that across the country. So the game's change ball from a trust manufacturing facility is buying them and roll ups and all that stuff too now. We're coming to fully component manufacturing and dealing with the automations

5:05and dealing with all that stuff and trying to work up five AM and forget about what Donald Trump and all the other players do in all the games. That's the game. You just controlling or understanding right? Exactly, perfect. One, we're gonna get a couple of things that you mentioned there. But what do we talk about Q2? So this is a seasonal business, right? I think anybody who understands construction in Canada recognizes that it has a big effect on us. But on a year-over-year basis, revenues were up 19%. And maybe that's the question from Melissa. What had the biggest impact to allow us to grow by 19% over the same period last year? Definitely a bit into the wall line organic growth, which we've, like I said, we've been focusing on now. The East, particularly in the maritime, so I saw some of the growth. Additionally, this year we have our acquisitions. So Penn Trust and Trustworthy that we closed in May and July of last year. Still on that acquisition train.

6:06Yeah, and of the 19%, I guess maybe you can quantify the way you want to, but how much of the growth was organic versus non-organic? About a couple of percent was for the organic versus the M&A growth. Perfect, perfect. Maybe back to how you on this one, the industry itself, I think anybody who's reading headlines right now recognizes that construction or housing has been pretty beat up over the last couple of years, particularly in the big market. Like Ontario and BC, you've been the hardest hit. What allowed us to be able to still grow when so many of our competitors were really struggling out there? And I think some of us, some of the listeners here probably see those while there's a number of companies that are in bankruptcy. Some of our competitors are obviously struggling.

7:08What makes this different? All the biggest part we do is that it's like, there are times you're going to the time of survival and be the construction and me being in it for God no so long since 1984. And you see the up and down, the cyclical, the seasonal, everything. And you learn to go into a survival mode and shrink and just survive and you learn another time to grow. And what I've learned about it is the biggest time is to be prepared and the time when everybody is shuriken to a start. Not recklessly, but to start investing, start growing and start becoming more aggressive. So to me, I've learned it all my life. Even when I used to play sport, the best form of a difference is just become more offensive and more aggressive out there. And if you look at the Q2, it's a class half full and class empty. If I look at the Q2 and all the sweat and tears

8:09we pull up to produce those numbers, it's phenomenal. And if I look at it as an investor size, I do agree with them. In terms of margins, mean down, cash, mean tight, and all of that stuff there, the class looks half empty. For me, being in the middle of the ring is just like you win a biggest heavyweight championship fight and you come out, you don't look pretty anymore. You got blood everywhere, you got your eyes blot and everything there, but you still lift the trophy. And to me, Q2 for my team, they showed me, because I've always seen it, the biggest part of a scale is like in an IMO, we had built a company that we were as tough as they are, as tough as they are, resilient. So many big players came to the island trying to put us out, they ended up selling to us and left town bankrupt or gave up. And my biggest thing was, the easy part was buying the companies, do the integration introduce the organic growth? Who I'm going to get them tough enough and resilient enough that they can weather the storm and weather the uncertainties?

9:10And to me, a Q2 says, wow, I've got a bunch of tough players who don't know how to quit. And we keep adding to that team. That's become part of criteria when we are Salesforce from competition, whatever. Who tough are they that when the snow's coming down and when everything's getting tough? And the narrative in the market is down, the stars are down. How is this player going to quit? And go on holidays or is it going to fight harder to get it? So to me, that's, I see one of the differences. We are building the company, we are down the optimization. We got a wonderful facility right now being built that it leaves me speechless when I look at it, 300 feet of automated robotic plant. It's just absolutely amazing. Meanwhile, I'm part of M&A and look at the competition's ballast sheets. And they're all good deals out there. And they even say, how do you guys do it? You grow in and everything there. And yes, part of it is we did a good race. And we spend every money on that.

10:10We have the public trade in arm and the power behind us. But whatever we want it, you can have the best weapon on the planet. If you don't have the soldiers to execute it, you don't have anything. And that takes time. That's not a software or a technology company. You can make a perfect model and copy it overnight. This is called building the human team. Building a bunch of Navy sales that they're going to go on and capture with a warrior what called the water is a whole late at night. That is the biggest challenge of building a company like this. That might have been, that's my philosophy. And that is really what I look at you too. I have a big smile in my face. I said, this look tough guys now. We have tough people working with them. That they don't quit that easily. Yeah, I love the analogies. You use Navy SEALs, fantastic. So how do you, let's talk about the increase in wallet chair. Because I think this is probably the most important thing to understand about the business is we've gone

11:12from just selling trusses as you said earlier in your introduction. To now where we sell, we're selling floor systems. We're selling wall panels. We're selling engineering wood products. And we're even now starting install. So it could cruise that install. And looking at other sort of building products as well to add to the mix. But maybe even the sense, like when we're talking a single family home or something like that, and then we've got some projects that we've highlighted before, but gives us a sense of what the change is in terms of the wallet chair, these builders. Okay, Paul, I'm gonna give you a sense of it. And I'm giving you the red flags on it and how we got to be careful with it. So once you start as becoming just a truss manufacturer, that's for most of the truss manufacturers in the country. They are, they manufacture roof trusses, they buy engineering wood or they buy floor trusses. And that's it. We don't deal with installation. We don't deal anything. And somebody else will do the walls.

12:13Originally was, they still do it. Once your framers, they hand frame the product on the side. And some do a walls, they do it in the factory that they were basically catered to the big multifamily projects that they were really upside framers. When you come to component manufacturing, the beauty of it is like, I've shown you some example. And I would like to give a cautious to the investors and stuff. They don't expect me to do that tomorrow morning, please. Because it takes time to scale it and prove it and do it. What we've proven on certain clients, we have that they are the biggest clients, whether they are in Ontario, British Columbia. And even two years ago, when we made that visit, the site visit in Anamut, that was a pilot project from one of my former partners that we did that project for. So take a house, a simple house, a two story home that the trusses were was around $9,000, $10,000. We have done the whole project for that same contractor.

13:13Now, with the trusses, the walls, the floor cassettes, everything for about $100,000 to $150,000, depending to the size of the home. That's exterior interior installed by your own crew. And we had a perfect example of it was, I sent you two weeks ago when I was in Ontario. Actually, we drove the truck there on a Thursday night. The crane started loading the walls, everything. Their contractor gave us the foundation. This being the future, I've dreamed of most of my life. Not most of my life since I was in the truss business because we used to do it for the garden sheds, for the home artworks and home people. And thinking about it, wow, one day, they don't just put it eight by eight shed together. They can put a house together like this component. So we delivered that seven, eight a.m. The installers or crane operators, everything on the side with their own crane. They loaded it. While one day evening, the house was ready for the windows and doors and the locker.

14:13And the project went from $10,000 or $9,800 for trusses and plus another $7,000 for floor. The total contract was $120,000 in stock. Now, that is a beauty for the organic growth. And that gets you set your site from competition nationwide. Now, you will have local competition certainly in order to do it, but nobody doing it the scale we are introducing in the country. The part I need to be careful with my Navy Sears or the Salesforce, don't forget the market share. Don't forget you still have to sell the trusses for eight grand because one day that client is going to want to 100 grand. Because not all the clients going to change overnight. But usually, you do want to prove it. You don't make mistakes and everything goes great. Then they start talking at Tim Horton, and obviously, and the home builder. Oh, by the way, I did this, I did this. But that's the secret, so now. Instead of waiting three months or four months to get to lock up, he got to lock up in less than two weeks.

15:16Or we doing two major franchises in Ontario that the only reason they wanted, we did one, not they gave us another one, but the truss order was about $17,000. We did the whole building. It's just a score in a mall franchise. Say something's like a star one, for example. I have signed it. I can't do the name, right? But they're just boxed. Walls go outside, they roof everything. But for that franchise, they make $2,500 a day cash by selling pennies. And for us to go tell them we can do these three or four weeks faster than your old conventional. Okay, show me what. The moment we show them one, do the next one, please. Do the next one, please. And that is where organic growth come. And my biggest challenge is to have the sales force that they're hungry going after every market share and their wallet keeps growing growing. And another sales force adding these organic growths to it. So all of a sudden, salesmen who's had to sell 10 truss orders for $150,000, he will do two contracts for that amount.

16:19He still makes the same money, right? But how you manage that growth? So it's not just keep getting me the order. It's getting the orders, making sure they go perfect. Because when you're dealing with franchises, nation-wide franchises like that, when you promise you better deliver because it costs the money. And then once they trust you, you need to deliver. So to keep that going, delivering, and doing everything, meanwhile, let's still keep in the hunger to grow. This is how you make it to $500 million and a billion dollar company. So then there is no limiting to how much you're going to grow. There is no ceiling to it. And then we need to deal with the challenge of it, all of a sudden once you learn, OK, we just built these walls old-fashioned way. If I had the robotic for another $5 million, I could do it that much faster. I could do more. So when is the capric coming there so you can do that? These are the beautiful things. When I'm listening to everybody, but oh, I'm surviving. I don't know whether I'm going to be business and all that. And I'm looking at the V-spinning about 50 plus plates of opportunities in this country.

17:20And we keep growing and growing. There are most growing out here. The Tendet TV off. Don't listen to news and don't want Trump. And just get to work every day. Well, let's talk about that. Because OK, so we've been able to gain call it market share or wallet share with the addition of new products. But what is going on in the industry? And I recognize that depending on where you are in the country, it's extremely different. Like in Saskatchewan right now, we're flat out. Whereas in Ontario, we're still coming out of housing depression here. Maybe tell us if you see any different signals out there that we don't see in the headlines. Paul, actually, you don't see it in the headline and you will see it in the headline. OK? If you listen to all the noise comes from Saskatchewan, it's a total of different noise comes out. It makes common sense.

18:21It's less rhetoric, less lies, and more about plain Jane. But then that's the prairie people. Like the farmers, they never look out there and say, oh, it's raining. I'm not going out and doing harvest in the plants or whatever. They find a way to do it. It's the whole different thing. And the other thing in Saskatchewan of notice is there are so many people that they move from Vancouver. All days, if you told somebody, some immigrant, you go work in Saskatchewan and whatever, or Winnipeg. They say, you crazy? They're six months a year. They're a minus 20 degree weather. Now, the overdriveers, the coffee shops, everything. They are all my cousins now. And they buy a home for $150,000 to $300,000. And they detaches everything's the same across country, a little bit better. The cost of living is cheaper. And their kids, prostitutes, jobs, they. Like we have in our Saskatchewan plant, we have over 120 foreign workers there that we bring them under the urban rule

19:23of foreign workers' program that they sign a contract. They come and work for us for three years. And all of these are engineers and accountants and educated MBA people coming from Philippine, Ghana, all over Mexico, that they want to come and live in this wonderful land of Canada. And they are hungry. When we put a list of over time, there is one man, there is 88 years old. He's older, and longer, some pleasure. One person older than me in this organization is him. He has his hands up and the rest are the foreign workers. And because they don't have the hockey game and the Friday and the camping and the beer and all of that crap goes on with it. No, nothing wrong with that. But they come here to work, send money back home and bring their wife and kids over and buy a home in three years. And they make it affordable. Now, if I go to BC, everything is over $700 million. Then I'm not a political, but if you look at older, there is no good news out there. There is no good news out there.

20:24If you go to Ontario's the same thing, everything is over a million bucks, everything is there. And there isn't. And not even we seen a turnaround, really the economy hasn't turned around. It got so bad, it can't go anywhere. We had bottom, bottom rock. There is no more going down. Now, it's just doing, it's just people are building homes and doing that stuff. And it's great. And then when you look at it, when I'm doing a M&A, right now we have one golden M&A coming up, right? So typical across the country, 75, 6, 80 years old, the plant is set up for trusses, like we have in Ontario. In order to go robotics, you need to have at least 300 feet of building, one line. The number goes in, trusses comes out. That's it. But you need 300 feet of building by God knows. You need at least 40,000 schools with brand new building or an old building, but 40,000 schools with clear, but for robot. And you need 15 million dollars. Now, my business is not even worth 10 million bucks.

21:26The biggest I get multiple of, if it's a YV pay or anybody else, even private equity from that they've proven, they don't have a proven track record on buying businesses in our domain. Most of them are done, toast. So, do I take my 10 million dollars at 80 years old or do I spend 15 million bucks? Then there is a guy on the corners who become a publicly trading company. If he don't sell to him, he will start off a green field and he will come after us. It's just, it's not saying that I'm going after anybody, but it's just the way business goes, right? The big boys part that go over one day. Yeah. So are you saying that you're seeing more opportunities now because of how the industry is right now? And the fact that I see two things, right? The market is down, so some facilities clearly are struggling. But secondly, exactly we just sit here, you got a company like Atlas now that's starting to spend 10, 15 million dollars, maybe more on automation, and that's new competitor.

22:29So if you can't come up with that kind of money, what does your future look like? So is that exactly what you're talking about? Exactly for it. It's just even when we were the same shoes in the window business, I was the same with Atlas, one of first started at 1999, all of a sudden, my ex, the bankers, everybody went crazy. I mortgage everything. My dad was one company and it was my own money. I did it, I took the chance. All I spent was a brand new building, automation, automation. And I had all these big boys coming after me. One day we woke up and said, okay, let's have a fight now. And they all disappeared because they didn't have the automation that delivery all of the investment they needed to do. Now, we are not stupid. In business, especially in manufacturing business, whether it's construction, forestry is anything, you do not cap it on automations, on efficiency,

23:29and your human being, eventually somebody bigs gonna come and knock on door, door. Historically, it was the big American company. It used to come to town and take over. Oh, bye. Now, we say, we're gonna become the big boys in town, who, so nobody from America comes and takes over. And we are not the takeover thing, but is we are a public trading company. We have to report to a two-headed monster that nothing's ever big enough. You do a billion dollar within 24 hours. How much more are you gonna do? If you don't do more than a billion, I'm gonna punish you and thank your trust. Share price, blah, blah. You know what we live in for. So then it becomes, you become a gross company. That's what they call us a gross company. So you grow. Now, how do you grow it? Do you grow it overnight and recklessly and pretend? Or do you grow it solidly that you will be around for another hundred years? Because you're building factories. You're building industrial. You change in the game. You're doing all of that. It takes time. It takes capital, but it takes education and patience to build that. But the moment you are there,

24:30then you look at it and you see, okay, I am here. I've got to spend each kind of money and I'm gonna fight these guys. They have a presence across the country. They have branches everywhere. They have a major sales force, major buying power and they have the automation. Oh, Amaz will just take my 10 million bucks and run away right now. Because really, and it's as nothing to do with us being there. Somebody else will come home. Somebody else will come there. Let me just say. Yeah, I think it's pretty obvious that this is the way the industry is going. The challenge is, especially with the cyclical industry, is who can take advantage of automation and when can they take advantage of it as well? Because it's a lot harder to do it when it's a down cycle than when things are real busy and right now aren't a down cycle. So it feels like we've got several years of advantage to be able to take advantage of this type of automation and cat facts. Now, let's talk about the new plant.

25:32Let's talk about what we've done. We spent, and Melissa may be correct me here. I think we spent 17 million. When it's all said down to about 17 million is what we're gonna spend on the new plant. It's being commissioned right now. So I think we're gonna start to see some traces come off the conveyor belt pretty soon here. But let's talk about the new plant. What's it look like? What do you think? How has it been getting to this point? And what else do we need to see to make it successful? Do you want Melissa to go over the numbers first? Or do you want to talk numbers? Let's talk numbers. Yeah. Melissa, go for it. Yeah, you're correct on the cost here. You know, we've had a few extra costs overruns like anything, some extra equipment, some extra safety features, some extra heating, but I think that's common in construction projects and it was something we anticipated at the beginning. So moving forward now, we're looking at the commissioning. We're really looking forward to running the traces through

26:34and gaining our efficiency on this equipment because getting quickly as we can to the second and third shift is where we want to head on that. Let's talk about what that means in terms of numbers. At capacity, give us some fault part because these are always numbers that move all over the place. But generally, what do we get with one shift? What do we get with three shifts in terms of throughput or revenue? Yeah. So I mean, you're, again, we're looking at multiple factors within that. I mean, we have what our supplier has told us it can do. We have what some of our friends in other countries that have this equipment say it can do. And then we have our cautious. Like, this is what we want to start with. This is how we're going to improve to those numbers over efficiency and time. We also have what we can sell, what we're selling our board footage right now into the market. So we are definitely in the depressed market. We're at the lower end of our sell per board footage.

27:35Taking all that into account, assuming the lower board footage, assuming the lower dollar per sell, trust is only on one shift. You can get at least five million out of it. So when you think you can add a second shift in a third shift with less people, and you can work seven days a week, they're not Monday to Friday, Monday to Thursday with Mondays off or when Friday's off, you're looking at 15 million entrances in a down market. So just, that's trust is only across Eastern Canada as an entire company in 2025. We did 20 or we did 26 million. So it's a huge chunk of what we already do that we can now move into a robotics facility and to do more. In a regular average market, that increases to probably about 21 million in sales across through shifts. And again, ballparking and let's say on a more normalized basis.

28:38So when we're doing 20 to 21 million sort of mid cycle, what do the metrics look like? What kind of margins do we think we're getting? And really, what I'm trying to gain is, what kind of payback do we get on this kind of spend? How long would it take in the normal market to really justify this kind of spend? It's not going to take too long to justify it. I mean, it depends, because we have an asset, we had the building in the land that's not depreciating significantly over that. So the actual ROI, if we can run the three shifts on the actual equipment, is one to two years. It's not exorbitant. I think the nice average is five to seven years on equipment. I think the where it comes from is when you add in the building and everything that gets a little bit less, but we have plans for that. The margin though, that's where, you know, we're looking at scaling up significantly.

29:40That's a huge volume increase we're looking at over the next few years. So we need to gain that work, and that may be going in at lower margins and we would have sold it for today to gain that extra volume. It also may mean that we need to travel a little bit further and expand our radius of delivery, which then increases our free costs to some extent. So when we ran all these numbers, we conservatively said a very almost like zero to two to three percent increase in margin at the like when we calculated the return on the investments and what we're getting out of it. The volume increases where we're going to see the massive change. And in, once you get to that volume peak and you start ratcheting up, the margin increases are more because we're budgeting 800 bore feet per man hour in our industry, those are the lingoes. Manual labor, you're at 90. So that's the increase that you can get to.

30:43So robots may be slower sometimes. Yeah. But they show up to work and they're, they need less. Rally hung over. Rarely hung over. Ideally not hung over. Those sometimes your computer doesn't work Monday morning. So I question that. Yeah. Yeah. Yeah. No, fantastic. Thank you for that. Okay, so back to how you, so you did mention MNA like it doesn't it's a we are clearly still looking at opportunities out there. Like with a different high now because all the different things we're trying to do including possibly automate these facilities. So so MNA looks a little bit different in the past, but maybe let's talk geography. You mentioned, you know, we don't really do much in or directly into Quebec, although we sell into there from LCF. But you know, when I look at the map, I keep seeing that sort of empty space between BC and Saskatchewan. You know, when you're looking for another acquisition,

31:43does it make sense to sort of fill a holes in or are you looking for something else? I pull hold on that question. I just wanted to add something to the robotic challenges we have and the opportunity. So say last week, I think we had about 10 people started at in Ontario branches for us. We have ads to hire 20 people in Ontario for labor force. Okay, that's ads we have everywhere and not just in the water, but we have it with agencies with a charge, different agencies that they bring you labor stuff. We scrambling to hire 20 people, okay, to satisfy the orders we have coming in right now. For the trousers, then the walls, that's the challenge. Now, trust me with a char and all the manpower and all the expense we spent to find 20 people. That means you got to bring in 40, 50 people, train them because some of them will leave by coffee shop because everyone. The comparison to Melissa said about the 84 feet per man hour per person.

32:50So you go to the robotic, we need two person to run a shift and you're not builders. They are machine operators with the iPad in their hand. That's a total different thing. Then when we have ads for it, we have ads, you got to be willing to do shift for morning after noon or graveyard shift seven days. But that's a different class of employees you're going after. The pool become bigger and this is more, oh, wow, I'm going to work with robots and automated machineries. First one in Canada, blah. So that is the challenges we have when things pick up. Then you add the challenge we have with the wall panels, with the floor pieces, everything. So even now, whatever we're doing in the boat food, going to add volume to the process for us is a safe, a safe way for us to go organic growth in that area with the walls and floors because don't forget. We don't like dealing with the lumber yards and the middle persons. That's a part of our business, certain provinces. That's the only way to do it.

33:51Why by us doing walls, floors, trousers, everything, we become in a lumber yard. We got the story, millions of dollars, a lumber, you know, you're. And we do an evaluative product to it. So in that, once you have that kind of capability of going after clients, bringing them, then what you offer them is the walls, the floor cassettes, everything else for your organic growth. So all of these opportunities, the state there, but for now, we're just going to measure both food per man hour per day and stick to trousers and return on investment because the side of it, the other side of it is, when you interview and say, somebody really good comes up in the industry. And eventually they get in time, I'm working for a smaller company and they see us being really aggressive on the side. They want to say, I want to check you guys out. So we have a lot of toolbox, you know, thing now. Number one is you come to Atlas as your bonus, you could get options every year, you become an owner of a company. You have the robots to deliver to your clients.

34:52So you don't go from two weeks to 12 weeks delivery. You have the wall panel, you have all that, the recruiting of brain power, become much easier for us. So there are a lot of not just, yeah, we're going to have the government, everybody come and put a podium and pump their chairs to come over. We need we help Atlas out and blah, blah, blah. That's wonderful. And the inversors going to like it is the robots and its automation, but I look at it practical. What is it going to do for our force out there? What is it going to do to the Navy sales? It's going to give them another weapon. They don't even know how to use it yet. And those are all the opportunities, but at the end of it all, it all feeds into organic growth, into becoming a food, into we are a fully component manufacturer of doing trusses, walls and floors and bringing a building to the locker. That's where we are. Okay, so that changes the M&A for us. Like we look at M&A's. On this is an absolute amazing company, amazing deal with opportunity to grow into the walls and floors and stuff.

36:00Why are we buying now? I mean, I hate to be like this. What are we buying? Is bunch of old machineries and once you drive a Porsche, it's pretty hard to go back to a car. And because money, money makes sense. The pain of labor. Like we pay $5,000 a head for every God bless and Philippine laborer we bring it to agency. And we go to the air 90, the red tape we come, we fill up forms after forms after forms form to bring that and we need to do that. That is fight whatever we take. People don't put their hand up and say I'm going to go in construction and become a laborer or become a laborer. They don't know. So it's the reality. Yeah, no, I'm going to go work. And then what do you do? You can't put your hand up. You've got to find ways to get around that challenge. And the biggest, the most important part about our size of forgot to tell, I want to mention again, as an organic growth. I'm talking to some major contractors in Birbricis Columbia, one for example.

37:05The building we're going to do for them is probably $2.5 million package for this. The same as it was when we were in high-rise business. Once you go in over a million dollar package, a small company can carry the single parts like that and inventory like that. That's why a lot of component offside framers when they started doing walls and everything for the big projects, they asked the contractor to buy the lumber. We don't want that. We want to buy the lumber and market up. We want to invoice one. Even if you go on YouTube, the video will send you about the first source blah, blah, all the things they're talking about, this component manufacturer at one point of contact. One person, one invoice. Imagine how many people in between a contractor has to go through from concrete or project management or framers, lumber yard, different invoices. I wasn't available. I don't know how many invoices I had to check every day. Now it's just one invoice, one contract, one invoice. We give you the keys. That is the opportunity.

38:07It's not an overnight thing. It takes time. I think that's something hopefully investors start to recognize that the industry is really changing. The idea of trust companies standing by themselves, I think over time that's going to disappear and you're going to see component manufacturers as opposed to just trust manufacturers. If you don't deliver the whole kit, a company that's just selling one of the pieces is going to have a really hard time. We're clearly doing what they've already proven in Europe needs to be done. To answer your last question, the one area that I'm absolutely, I'm amazed I've been patient. That's not my DNA. But we've been diligent, patients to find the right place, right company. We want to be in Alberta. Like, this is amazing grocery area.

39:08Amazing people, amazing opportunities, amazing grocery. And one way or the other, we're going to make a move there. Whether it's a green film. But sometimes in M&A, there is tech two to dance. When somebody wants nine times, every day or eight times, every day or when they have no every day and they just got the, oh my business is worth 50 million bucks. Go away if you're not paying me that cash tomorrow. Well, he showed me something. But you know, it's hard to deal with some cabos like that too. But and eventually it becomes, then we might as well play the music also, and just start up a green film and just go after it also. But right now, so far so good. If you're feeling this crossed and we see what happens. That's all one thing. Pretty hard. That's all one thing. I say a question that I was going to ask anyway, but how do you, I mean, you talk in M&A right now, but how do you finance M&A right now with sort of where we are? Like we are, and maybe let's talk about that first. Because that's been brought up by much of investors.

40:09Our cash has been drawn down pretty significantly in this last quarter. You know, we do work in a seasonal business. I think, you know, let's talk about that. Maybe Melissa, maybe you can explain what happens. Like we go from Q1, maybe in Q4, we have a high cash position. And then it almost seems the busier we get, the less cash we have, maybe explain how that works. Absolutely. Q2 was always going to be among the worst. I am noticing still Q3, like we're still in growth mode in our operations for volumes. So what happens in our industry, we use a lot of cash just in our basic company as it is through Q1 and Q2. We have to scale up. We have to invest in inventory. We have to, you know, we carry some AR. It's just it, the cash goes into the operations and they're, they're just using it up.

41:10Even as of right now, they're still using a bit as, as even Q3 gets busy. And as you can see, like even with our volumes, we go from doing revenues increasing through quarter one quarter two quarter three is typically our biggest. And it still trails into quarter, the beginning of quarter four. Really the decline isn't until December when you have half the month off as holidays. So we have to put the money into it, which you can see inventory is increased significantly as well on our sheets. Cash typically on a normal year starts coming back in at the end of July in the beginning of August. So what I'm noticing though this year is that we're still, the operations are still expanding. They're still investing into inventory and sales at the moment. Then we'll typically start coming in September and it continues into February, even though our sales have dropped off. Because that's just the turnaround in our industry.

42:11We don't, there's a lot of companies, yes, stick to the 30 day net 30 day on AR. Really in construction, you're looking at 60 to 75. So that delay and cash, it does come in. The other point is we're using cash in at this facility. We always knew that was coming. It's why we negotiated better terms with our bank and it's why we negotiated a higher line of credit to temporarily have that flexibility when it came to our operations needing money and finishing out these payments for the facility. One thing I want to point out, like even last year we were at, we range from 17 to 20 million in debt depending on the time of year last year. We're still not planning to be over that, over that 20 million, even this year going into the line of credit. We're still investing and paying down our long term debt and we're using our line of credit, which is the short term option because we know the cash is going to come in.

43:11It's going to repay that line of credit quickly. And then we're going to come out of this having a lot of debt room for future projects. Instead of holding us into a term of 25 or 30 years in debt and then maybe our cash then position could be a little bit better right now. But then our long term next project would be more at risk of when it gets done. So yeah, so Greg, I think that's kind of, you sort of get to the answer to the question around how do you pay for M&A? Depending on the size of the M&A, obviously, when cash comes back in and the sort of increase in debt capability, that's likely how we're going to pay for part of it. But then the other piece is, you know, we're a public company, we have a currency and if the deal makes sense and it's the right deal, then you also mix in some shares. What we're finding is as we talk to more and more of these opportunities, more and more

44:15of these vendors are looking for shares. They're not just looking for cash, but they want a piece that they sort of want to ride on the app, the story as well. So that would be the way to look at one of these deals is, you know, you still have to get creative, you've got to figure out what the deal, the best terms we can, but we do have capability within the balance sheet, especially as we go into the latter part of the year. Perfect. Okay, so let me say, okay, so we covered that off. Now the other thing that you guys have been mentioning quite a bit as the press releases is things like quotes and bookings. Give us some color. Like what's it feel like out there right now in terms of any signals that you're getting, clearly we're getting more quotes. We must be doing something right or the industry must be doing something different. How do we, how do we look at that? I don't know, one of the biggest volume on the code in Ontario was with the addition of

45:23a team we have in there that we added from, they were working somewhere else, they decided to join us. And they are very specializing to the full component manufacturing, supply and stuff. So I know in the last three or four months that we work for them that we have a lot of code, we put out there and the closing ratio is pretty good on those people and the clients are being made. So that's one area has increased the organic growth site has increased a lot and it's just the seasonal and the movement in the market on the island and Ontario has helped us a lot in the quotation plus in the prairies where Pentross had a coverage, we have expanded that coverage and we're covering more areas of that and that is where the quote activities come up. I like it. I'm very, very positive about it and cautiously optimistic about it because there are lots of stuff happen out of your control out there and then you just, you just gotta be careful

46:26with it. So it's not one of those things you're gonna go and do all kinds of shop it because your coats and odors are high. And in terms of delivery, we got a little bit of delay happens and bumping odors happens and it's one of those things. You have an industry that a lot of moving wheels into it and once you go from a state of doing nothing to a state of getting busy and doing something, it takes a wall for that wheel to warm up and get into a routine. Because some of the builders and the crews and everything they were not doing much. Now is a kind of a little glitch will happen until everything goes back to normal way of okay delivery tomorrow and the red tapes, you know, so that's the kind of stuff we deal with every day and it could be really a downpour of rain. Like in such a talk we were going crazy, everybody was falling behind just now even months ago. Next thing you know we had three days of that monsoon crazy rain came down and everything got delayed for three weeks because so but that's all of that stuff said all those numbers I see the I know or closing ratio.

47:28It goes up and down but we are pretty good. We have a great closing ratio. Changes, promise to promise but we have a good closing ratio. I know the client and I feel really positive optimistic about all the coats and all the odors we have coming. It's pretty good. But one major impact is that crew and the organic roles, the walls and the installation. Like it's all of a sudden added another 20, it's $15 million, $20 million to a coat but that we never did that before. Now we need to scale that across the country. Let's take some of the questions that have come in here. Let's cover those off. Greg's got another question. This is can you give any color on how the New Clinton facility utilization looks like for the coming autumn and winter so far. Okay. So utilization, what do you mean by that?

48:29Like how basically do you think it's going to be? Is it going to justify one shift, two shifts, three shifts, what do you think? Okay. We going to right now as we speak this morning report, we are in the commission here and we are in the debugging process. You know, lying like that, there are millions of switches and arms moving and stuff and then we come into the handful of them right now that they're so too now. Okay. The number one priority is to run 24 hour shift there. First one shift, train the people, the leaders and then one shift and they don't get used to it but have all the set up of that machinery in order to get the big bang for $1 and biggest efficiencies. You got to run that two shift at least six days a week. Then go to three shifts six days a week and that is the number one priority. Put as much as we can through that. The way it looks like it, we're going to have to do that because of the demand.

49:29Now keep your fingers caught things go the way we hope to go in another three or four weeks. We're going to have to have that three shifts. Yeah. How do you think there's enough business in the winter season to justify 24 or seven sort of operations? Is that or do you have to build the circle big enough to go and get it? I mean, it sounds like it's doable. It's just a function of how big we want that circle to be. So first we try to have enough business to the winter for it that the machine is the robotics line first because that's almost official equipment. And everything is as filling. Like the Clinton facility, existing facility, that's a different ballgame. Like that one day do lots of custom homes and lots of agricultural. We are not even talking that. They are very busy. They're running one and a half shifts and they're producing. What we want to do with the pace and the spelling and stuff is to push as much through as you can through the automation, then everything is filled up.

50:32Now the winter one pulled away looks like we could be busy depending on a huge downpour or israel or everything. It looks pretty good right now for us. And if it slows down, we want to have just enough business to run the robots for now. Okay. Okay. Okay. Good. Okay. Next question comes in from Jennifer. She says that I found that you I found what you said about needing to pursue market share of interesting. If you need your salespeople to pursue lots of little projects and not just a few large projects, how do you get your salespeople aligned with your long term goals? Products often die because of a misalignment of the sales force. That's a great point. Great question. And it just really is them believing in the story and we just keep on top of it. We keep on top of the permits. We keep on top of who is building what, everything that. And you just say it's with the sales force is you just got to manage them every day, every

51:32day. And you just get to share their margins. There's a whole process we go through to making sure that you they are hungry after every job there. And usually we the type of sales force, if you get the right type, they are not satisfied with 50% market share, 30% and 100% or $300,000 sale, million dollars sale. They just wake up every morning. They want more. And that's how we manage it. You know? Yeah. You said you're not a micro managing board. Yeah. And I know if there's something about you, you love good sales people and you manage to do a fantastic job of finding them and really motivating them. But you said something earlier about hiring. We are hiring in this environment. Are we not? Yes. Yeah. And across the country we have opening for 40 people right now. Yeah. And you know, again, I've seen the headlines. There's a lot of other companies, a lot of our competitors are in pretty rough shape

52:35right now. And I'd say a lot of people, a lot of talented sales people in some of these other organizations that are looking for new homes. How do you track those type of people? What do you have to do to get somebody like that to move from one facility to another? It's not like you're good humor in your gentle nature. How else do you track these guys? Oh, well, if you live with that, that's what you want me to do. You're going to put this back on thing on YouTube. You're going to be on the time more hated that I am tomorrow. Well, maybe I'll be a little more correct. I mean, do salesmen show up and knock on your door and say, hey, I want to come work for you? Okay. So number one, they don't show up and knock on your door. You're going to knock on their doors. But a good salesman, they don't look around. They're too busy taking care of their clients and doing their day to day job. Honestly, a good salesman, they don't even take launch break. They have a sandwiching like usually with me, Georgia, say, I'm not going to struck and

53:37say, how many sandwich rappers you aren't subbed rappers you are in a backup. But my old boss used to give me shit for that. Is it what you want me to do? Salah or a good seed and have lunch for two hours. So anyway, so you got to find them. You got to source them out. And then it's just the same old thing. They're no different to any other clients. You build a relationship, you build a trust. And eventually you're going to offer them something nobody else can. You see, as a public trading company, when you not just salespeople, engineers, designers, and you've got to educate them first, that you come and work at AP, you become an entrepreneur. And with the two bonus systems we have coming up, that is all around ownership of the company of two, whether it's restricted shares, whether option. So it's no more cash out than government takes part of it. You're going to become owner of this company like Microsoft and Google's and all stuff. That's an opportunity for employees. So there is a big opportunity for investors.

54:39Now we're starting to educate the industry. There's an opportunity for employees in that area. That's why we attract some of the people. We attract the so-for-in-all business. Like even that 20,000 options per year that we give them and the list keeps narrowing down to qualifies for it. That means huge to them. Because you use the boy's examples and all those people and you tell them what is possible in 10 years, 15 years of your retirement, what you can do, then it's up to them. So once you have that, then you add the automation, the geography, when a salesman from NANIMO can sell a multi-million dollar contract in Ottawa or Winnipeg and get a ship without issue and he collects his interest, his commission, that is huge. And those are, it's a former tool package. So it's not the case of hiring a headhounder, offering a signing bonus and hiring. Like I am the headhounder. And everything then has to be done within the honor system and the etiquette of the industry.

55:39We are out there talking to owners by their business. Yeah. So, is that? Yeah, I keep thinking as well. Like as we morph into a component manufacturer with more products to sell, I just keep thinking of the salesman having more things they can sell rather than just trusses. Why would they want to stick with just a trust company and not move to somewhere that they can literally make more commission of more products? And I agree with you. And the other thing to answer the previous question, like I know old days in 80s when I was a salesman and as one person you can only do so many million dollars in certain product that to be able to sleep at night and to get burned out of die. You know, then what happens? It was on her to have in the industry all of us are having one assistant, two assistant, three assistants. And that part of their wages in combination with the owner that was a very progressive thinker. He wanted me instead of selling million dollars, selling ten million dollars.

56:43You know, it's possible but I had a system that they did the pricing, they did the project managers, everything. Many, many small companies will not think that. How was was that? Then the agreement was I have this assistance for three years, five years or two years. The moment they're ready, they're going to go on their own. But they still will mark up my team and I made a point five percent of water and I mentored and all of some people from five people to 42 sales force. And it's outside the box thinking. So when you take a salesman, say listen, you sir five million dollars on your own, you burnt out, you can't even see your family at the weekend. What about if we go half and half, you go raise it to five, seven million, ten million and I give you two assistants, a higher two. You train them, you bring them and they work for you. They go pick up plans, they go watch the mistakes, they arrange the ship and everything. So all you do is create in relationship sign. Like this happened, they do it in real estate agencies, they do it in other businesses. But with a construction, we're such a 17th century business, we never think about it that

57:46way. Outside the box thinking of lock a big business. So and that's the one area you can become creative because at the end of it all is your sales force does it. But there's a time and a place. You get to a point when you become a fully component manufacturer and the burden needs your product and they know, or given the plan, I can have a lock up in less as soon as I give them the plan and concrete, they promise me in a week I could have a lock up, they will phone you. They will phone you because they need that product. And that will become that because so the salesmen are great as a pioneer and they will go pioneer in different areas. There are certain areas, the phone will ring. And some of them, they don't sell you one plan, they send you 50 plans. And that's what you have your team behind the scene doing all of that stuff for you. Gotcha. Gotcha. Okay, next question comes from Jill. She says, with the new Clinton plan, will you be able to offer lower pricing than your

58:46competitors? Do you anticipate achieving a higher quote to win ratio compared with your other plans? Yes, and I don't know whether we need to or not yet because the moment we start having the open houses for the builders, the machinery speaks for herself. And they become the point Jill. When is time, when is right now he has been like this for the last three years, the builders have the upper hand because they get delivery fast. There is a time when all the trust plan and I can see it. We go from two weeks to four weeks already. We'll go to eight weeks. They need product right away. Then the price doesn't matter. And the robots are the ones going to deliver fast. Exactly. Right. So, Jay, I just sooner or your mic's line. So what you're saying, it's not just pricing here that motivates and it doesn't downmark it's like this. I think that's clear. But as things start to get busier, time is actually more valuable than the price.

59:48So having capacity, this is what I kept thinking about when we were looking at the building of this facility is that elasticity of volume. LPM access to so many small plants, once it gets busy, they tap out very quickly. The hit capacity and then they just stop. Whereas we have that elasticity where we can go from one shift up to three shifts and allows us to continue to spend or continue to sell, sell, sell and really capture that. One thing to be busy, you want that business because that's when the real gravy, high margin, orders go through. So you want to have that elasticity, one thing to do. Exactly. Yeah. Gotcha. Gotcha. Okay. Let's go to the next one. Jennifer says, as Atlas becomes more automated, do you still anticipate needing to bring in workers from overseas? Or do you think the local workforce will be adequate? I hate to say it, but we have to work hard and hard to bring overseas workers.

1:00:54And the one part I love about it, Paul, when you bring in these workers, they're not just laborers. These are bunch of ambitious, hungry people with a lot of education behind it. Like I had one of them from Ghana that I just saw him working and I just loved the way he was working. His feet, just like football. You see someone running back like I used to watch him, how his feet move, I knew, I got to find owner. I'm looking at this guy the way he jumps up table, the way he carries. I need to talk to that. So I find out he's a chartered accountant from his country, blah, blah, all that stuff. And he's got one more, one and a half more year left. So I'm worried. I'm going to lose this guy. He's going to have his own business somewhere or go work for somebody else because he's great. And now we work in hard to fit him in the organization as a management, as a leader. And I've been in Canada since 82, Paul. All business, all my life.

1:01:54Right now we're talking about the last week of August, holiday. It's my biggest anxiety for the next 10 days to the Labor Day weekend because of all the stuff I'm dealing with human beings, emotions. Now I love them all. I love my kids. Boy and boy in months of August they drive me off the wall. I'm a good job. I'm not a drinker. I was going to be drunk every day. You know, it just kids are here. They call camping. They call heat, whatever. And to me, I don't have that hunger and ambition in the young people the way we used to have that. Yeah. That they want to do better. They want to do more. They want to raise family. They want to buy a home. They want to do it. I mean, my one is legal for God's sake. Take a talk and you don't. And it's just to me there as an organization, as my duty and duty to invest as more and more I'm pounding the table, new bronzer everywhere. Please just because the economy is bad right now, we have a good labor boom to hire from.

1:02:59But the moment economy picks up, it's not just our business. Everybody picks up. That labor boom shrinks. And we don't need to rely on the foreign workers as long as the government allows us to do it to bring the right person into it. And at the end of it, we are a growing country. We are a growing populace. If we have an opportunity to bring civil engineers, mechanic, colleges, accountants that they want to come and live is God forsaken, beautiful country and make it grow and make it better for everybody, somebody gave me a chance. Why don't we give it to everybody else's chance? Right? Because we need that educated workforce that they are hungry, that they want to come and succeed and have family and buy a house. Otherwise, who is going to buy a house? Yeah. And I would also state that like the automation doesn't do away with the need for labor, but it certainly sort of lowers the need for labor. So when things were busy, I remember that you're pretty stressed.

1:04:02That when things were really busy, we just couldn't find people. And one of the greatest challenges in this industry is exactly that. It's finding any qualified people that will continue to come in and work in this sort of type of business, bringing an automation when it does just, it shrinks our requirements. Right? So we still have to go and find people which is still going to be hard, but instead of having to find 100 people, you're having to find 10 or 15. Right? So it just makes it easier. But one of the, and history we show, one of the best M&A we've done is Pentross based on the volume and the number of state and the profits. Right? Yeah. And believe me, it took me a while to do it. Like even you know it, you went on the board. Every time I go there, I feel great. My God feeling is telling me, you're crazy not to do this deal. Everything lined up, but when I come out and every way looked at the map, it's all called, it's a little hole in the middle of farm, over your towns, the closest with so many thousand people, blah, blah.

1:05:05And you get scared. But right now within a few years, that will become the best example of M&A for us. And honestly, aside from making a good deal for the owner, for us, for the investors, everything and the volume increase in everything, the biggest contribution for us was Saskatoon government and the labor law they have for bringing foreign workers. And not easy, but if you hire the right people, the right lawyers and stuff, fill up the paperwork stock, they make life easier for you. And that's why when you drive in Saskatoon, you go from one town to another town. You see no human being. All of a sudden you get some trees then behind it, there is a factory going on. You drive through the drive-through and all of a sudden, my God, this industry, our company going on here with 100 cars in front of them and where did they all come from? Because, pray even you look at this all form, nothing going on. But when you really dig into it, major industrial factories, companies out there, the biggest French fry suppliers in Portage and everything.

1:06:06We becoming one of the biggest trust plans in the country in middle and over. And I'm looking at and say, so how could we have done this volume increase? We give them buying power, we give them some accounting and sales and blah, blah. And all of a sudden they double their revenue. We couldn't have and the market picks up. So it's one of those things, it's not all ours. We got lucky too. I mean, Locke has a lot to do with it and you go with you, God feeling. But I tell you, if it wasn't for the foreign workers, I would have probably end up having to build trust as long as to do no one before. Because there is nobody to and you told somebody come, you tell a white kid come on, but trust us when we look at he has something wrong, mentally wrong with you, I'm not going to break my fingers or break my back. But trust us for minimum wages. I can go to McDonald's and make more money and top fancy. You know what I'm saying? But so to me there, I don't I don't care what anybody says, yeah, we've got to be controlled our race, our kids, the future for work, everything.

1:07:07But you got to face realities to them. Look at all the construction. So in Vancouver, higher rises, I walk around them. They are only mad and concrete and grease and everything there. I say, how would we do it if it wasn't for these foreign workers here? You know, it's the real. And not one of the influence they just want to work and pull every one of them, doesn't want to go out drinking. They save money to buy a house tomorrow. Yeah. It's been an issue within the construction trades for as long as I can remember. Certainly was when I was when I was in it as well. Okay, what do we got? We've got another question here from this one's from TM. He says the approach to piloting the package build out sounds thoughtful. Can you provide more color and how this might work at scale and margin versus the trust business? Specifically, how do you see staffing for installation and managing the projects and choosing geographies? And how does management of the fabrication facility spin it?

1:08:09So I'll shrink that question. When you start, the trust is automated to some degree, right? So especially at Clinton. But yes, as we get into wall panels right now, it's more labor intensive. Yes. You know, the floor systems are pretty automated as well. But how do you deal with, you know, as we get more into wall panels right now, we have to increase our labor force. But is there a plan to automate that piece as well? Yes. There is a, the one thing about the walls compared to the process walls are all either a score or a rectangular walls. They are not a structural or per se like process. So they don't have the angles, the plates and everything. Trusses are a very sophisticated product. They are not just a triangle. It's a completely designed, a structurally material, load bearing, wind bearing everything. Walls is simpler. But the design process once you design the whole house, when we design it, when you get

1:09:12a plan, when you divide it, lock a jacks up puzzle and you suffer and your designers, they will give you peace by peace. Those pieces are simpler to manufacture. However, we have machineries, automated, semi-automated and we have old fashioned wooden table. We burn them, right? And right now, the way I've looked at it and that is the challenge and the opportunity now, we are not just looking at robotics for the trusses. We look at robotics for the walls. What is the best return on investment on that? So that's where we got to invest money into that, to the robotic for the wall. Then, with the walls, the way it is, you look at certain robotics that they don't need mega plants, 350,000 square feet. You have 150,000 square feet building, saying Ontario, say Colburn, we have, you have one, Ontario's big, Ontario's a country on its own. And I'm talking about Ontario because we go a lot to US, to Michigan, New York, those haters. Right now, the press is scared to say anything. US economy in construction is way worse than Canadian economy.

1:10:16The burgers we have there, they are not doing anything right now. They are not buying from us, not because we're Canadian. We love each other. But they don't have the capital and they don't have the buyers right now for the type of building that they're doing, right? Once that comes up, say, for example, if you start your eyes, look at future, you need Clinton and you need one similar plant in Colburn, in the 42 acres we have. Then, you can have a smaller satellite buildings, two or three often for walls because the footprint is smaller. And then the trusses come from two mega plants and then a smaller satellite building doing the wall, 10,000, 15,000 square feet building the walls. Then the installing crew will bring it together. And to answer your question about the installing crew, once you educate the framers, the installers that they come and work for you as a team, they're just contract workers. We have solid contracts, we have for them that instead of them, a one man crew with three of assistants, instead of doing one house in three weeks, they can do so many houses in

1:11:21three weeks because it becomes a scale like that. And there are some of them understand numbers. Plus they know sooner or later we're going to take over, we were a join this company. And instead of them framing one house every five months, if they're going to frame five, six houses in five months, the revenue goes up and it's easier for them. They just put in jigs up as of together. Because and don't forget the framing crew don't grow in the country either. They have the same labor issues, everything. So instead of 10 houses a year, they get to two, 30 houses a year. And that's how we presented and that's how they work with them. But with that project is a mega project and we're going to slow. We have one crew, no we have two. Soon we will have three. Maybe on the island, all we need is two crews. And then scale it as we go around. It's step by step by step. Yeah. The second part of the question here is around the CAPEX. And as we continue to grow here, do we have other CAPEX requirements like for vehicles,

1:12:25for example, or is there other automation equipment that we need as well? Back? Yeah. Yeah. I mean, not going to say there isn't as we can handle quite a bit of the increase. But there is a CAPEX budget we'll have to look at for next year and year after depending on the scale. Especially when as we get into these additional, if we're gaining market share and gaining trust customers, like had you mentioned before. Now are they wanting walls? Can we convert them to walls? Because then that's more of market share. We're gaining more revenue. But wall capacity is limited, like you said, by labor as well. So we will have to look at how we can reduce the labor requirement for walls if there isn't any out there with equipment. So it's right now wall equipment specifically is developing fast. It's gone from again, the wooden table to robots.

1:13:30So where do we look at that and start with? Are we looking at investing in the mid-line equipment just to have to upgrade in a couple of years? And what kind of board footage can we get out of it? So thankfully switching some of the robotics here over to the, sorry, there's trust sales over the robotics. We can free up some labor to at least get walls out the door. So now it's going to be when do we hit that point to switch to robotics more there? But yes, there's, as we grow significantly, we're going to need the equipment to do so further. Makes sense. Thank you for that. Okay, next question comes from Jill. She says, so you think Atlas can win more contracts because the autonomous facility can produce orders faster than competitors. If Atlas is successful, would you agree that margins and profitability will improve significant? Maybe I'll try to answer that question a little bit. So it's not necessarily that they're faster. It's that capacity is there and the labor concerns are mitigated.

1:14:33So in some cases, human beings can actually produce that trust is faster than the machines can. But you have to be able to have the volume and you have to be able to make sure everybody shows up on time and works the way they're supposed to. One thing that I've learned about this business as well is that it's not easy to have a second shift. It's not easy to have somebody work more than eight hours a day. This can be extremely hard work. And you know, you're not as productive later at night as a human being, but robots don't have those issues. So on a consistency basis, you're going to get more out of robots, you're already humans. And then the idea of margins and profitability, improving significantly, it really depends on where we're going and getting market share. If we have to go get volume and lower price to do that or push it out because we've got a geographically, let's call it spend money to go and truck a longer distance, then we'll

1:15:40do that. At the end of the day, what we're trying to do is make sure we get maximum utilization and maximum pricing out of that. But the other big piece of that is it really depends on where we are in the cycle. When things get really busy, you're going to get very good margins and you're going to have an easier time doing it because you've got larger volumes you can sell through because of the automation. So it's kind of a moving answer to your question because it really depends on a bunch of other factors. But absolutely, the idea here is we've built this facility because we know there's market share to be had and we know that there's money to be made by being able to scale and go after this market. I don't know if I missed anything guys if you want to have anything to it, that was my idea.

1:16:41No, Paul, the other thing is for example, those are the measures that we don't put up. For example, on a normal setup, you need a three-man crew for one-jerk setup. Three, the most efficient 90-ball feet per man hour is for three people working synergy, one on top of a table, two below and one as a backup for the place. Work a four-man crew to do a jig as most efficient, high peak efficiency. No, what happens when one of them doesn't show up that day and there's a high percentage they don't, then instead of driving a car with four wheels, you've got one wheel missing and that KPI cost the load, KPI cost. Those are because something you return on investment by how many more feet you manufacture and how you ship it and blah, blah, all that stuff, that return on investment. The KPI we can never measure is what happens when absentees happen on a Monday morning and a long weekend night. Never mind the challenges of afternoon ship, evening ship.

1:17:43All that stuff, so a four-man crew becomes a two-man crew. Then their productivity goes 50% down because then one person has to do two different, there are no synergy into it. So those are all the things as an ops manager they deal with every day, every day. The beauty of it, the way it goes, the rumor was and all the street was, oh, we bring in robots, we're going to lay everybody off. Now we're saying we got the robots working and we advertise them for 20 more people. We don't have enough people. So all of a sudden that rumors go out in the wall, out of the window, that is there. And honestly, at the end of the whole, we can do all of those predictions, all of those things in my life, in manufacturing, construction, I've seen what automation can do. And beyond my belief, I knew so much, we knew so much, we invested the money and we were automated in the window business. And it was like after 12 months, 14 months, actually two years ago, it was whole, it smokes.

1:18:44That was an area I didn't think we could power to do that stuff. It just gives you a whole, it's that you don't know that, you don't know. It's not a wishful thinking, we go based on facts. Right now we need 20 people. The robots start running two shifts, that eliminates ten of them. The need, not laying people off, the need to do that stuff there. And those are all the stuff we look at. And we are talking about a dead economy, I've been in Ontario, one thing is crazy. We're talking about a slow economy. All this craziness, all this uncertainty every five minute, the world changes. One minute we got a deal and five more minutes, we don't have a deal, we are in war. Lake Ontario changed to Lake America yesterday and blah blah all that stuff. That thing's not going to last forever, Paul. Sure, and we talked about this so often that in a cyclical industry like this, you have to play offense when everybody else is playing deep apps.

1:19:47And the best time to be putting money into this industry is when things are weak, not when things are busy. Otherwise it's just too costly, the best time to acquire is when things are cheap. And that's what we're doing here. And Paul, at the end of it all, I want to tell you, being a publicly trading company, everything, I promise you I guarantee you, comparing to everybody else in our industry and with the lady on the call, Melissa here. We are. That's the head office of this corporation, we and her. We are very, very diligent. We are very cash, a smart and how to manage money, how to manage margins. But you cannot tie your hands and mouths just and let margin control you. There is a once in a while, when you want to market share, you need to drop the hammer on people because what's the point of being the aggressor and the big boy? Once in a while you drop the glove and you go at it, that's how competition learns. That's how they know it, don't poke the bear anymore.

1:20:49And so you need, so you don't want to have your hands all tied down because we want to put a result on and make everybody happen so you're safe, precious. I know the investors love that 20 cents, 30 cents blah, blah, blah, blah. And they will dump you overnight, not this group, but you know what I'm saying. You need long term prediction, you need to make long term strategy. Yeah, especially within the cyclical industry, you can't manage a business. Quarter to quarter, right? You have to manage it in cycles, right? So I'm hoping that a lot of our investors understand that. I'm sure many do here. Okay, so here's a question. I'm going to throw this one to Melissa. It's around the expectations for 2027. Now we can't give any kind of predictions, but Melissa, at sort of the, let's say, normalized revenues, if there is such a thing, kind of what's the capacity, the current capacity of the Atlas in terms of what kind of revenues could we do if the industry is a little bit marked or pricing was a little bit more normalized right now.

1:21:52And including, you know, Clinton's new facility. Yeah, I mean across all of our, across all our facilities in a normal, if the market improved, in across all our product lines, I mean, ideally we would be probably a hundred million dollar company right now versus where we're at. It lumber prices are definitely depressed as a past through cost. And then we also have this facility. Like I said, like how you mentioned, our plan is to build as much new facility before we fill our other plants as possible, gaining the speed and the efficiency. But I mean, so ideally that plant is full and now we're building elsewhere, especially into the other product lines, but yeah, in a normal market, we should, we should be a lot more than we are now. So, so then if I do my math, let's say we can do a hundred million sort of in a normal

1:22:52market right now, and Clinton at three, three lines or three shifts, that's about 50 million years. Is that right? Yeah, well, I think it's about 20. Yeah, so theoretically Clinton could be 20% of that hundred million in revenue. Okay, perfect. That's that's the way I wanted to answer that question. Okay, next question from from Greg, he says, do you plan to ever buy other facilities? If so, what's the plan timelines? And how does ROI on that look like compared to M and A? Maybe in the list of all that you take that one again? Constantly investigating that. So like, how do you imagine before the system that we had we put in here with Clinton, you needed the new building, you needed that that fresh build, the size, the capacity, the, you know, the heating and everything and the clear span. When you look at adding more of those facilities, that is like said, this is a 17, 18 million

1:23:54dollar project, that's a lot of money, then we need to get to do the next one. So it's about finding other options and robotics that we can add to our existing facilities to improve without needing a brand new building and a brand new location. Land across the country is not, we got part of the reason we did Clinton was the land cost. We were looking at 500 K to a million for the entire piece of land. When you go closer, let's just say Vancouver Island here. Four to eight million dollars for the same land. It's not the same ROI and that's where we, that's the piece where we have to look at. It's also where we having the most struggle with labor and where we can grow the other product lines the most. So ideally, yes, we were looking at green fields with more robotics. Ideally we could automate further our existing facilities, but right now the robotic technology

1:24:58there isn't a lot that can retrofit into the existing, existing facilities, which is kind of where our competition will come into problems as well too with meeting that extra cash to do that. Instead of putting in 15 million in their pocket, they're going to have to put 15 million into a business, which is hard to do. So it's kind of also why, you know, back when we first selected House of Design to work with on the robotics, they had baby robotics. So to say, we could retrofit into our existing facilities. We put that out there to the market years ago. And that technology needs to rebound now to get there. And hopefully we can be there when it's ready again. It's ready. Yeah. Perfect. And the whole other thing is, as they have been innovative, government of Canada, they gave us a good grant. Now aside from that, they're waiting to see what we do with this thing.

1:26:02So they will play a role. They might, I don't know, but they might play a role into that. So it's the biggest part. It will become like Melissa explained it great. And the other thing is, we need to wait for a bit to see what this thing does. So the proof thing is holding. And right now, they are not there yet, but they are about, they say, 12 months, but say 18 months away, there are one or two more options coming up in the market that we are the front runners they're talking to us about a different system they have. Our interest even from boring, boring, same machinery forever to crazy change the last three years. I know somebody's got some new innovative ideas. They're coming to us first. They're coming to me first and they're talking to us. They even some of them use us as a research and development. So there is a lot of stuff coming, but there is sometimes a sensible thing says, let's see and see what you're doing this one first.

1:27:02Learn it. Learn you, let your people learn. But a lot of the cash reserves are again, like Melissa said, we are a hundred million dollar company. I'm pounding the table and my sales was everything. We're building up for a hundred million dollar company next year, but what we have on in front of us, combination of robotics, organic growth, everything. That's what we are working. That's our mission statement for next year. That's what we're working on. At that time, we the certain margin will be in a very, very healthy money wise and the way we've been doing it right now is coming in. So we predicted all that plus in conjunction with that, there are some new ideas, new technologies everything and even with conjunction with what government has talked to us. And I mean, like, yeah, the great they gave us the four million dollars and we show them a pile of project, but now we're going to say, hey, we can do these some more areas. What can we do together? Because at the end of it, they all want to have affordable and all of that stuff there, right? So there are lots of plates into motions right now that I'm working on.

1:28:05And there is one part I'm really excited. The company is I'm working with behind the scene. And I'm going to be visiting from Europe next week on the island on the set that they coming up with certain way and then they want to see what we think about it stuff that is a new way. So we are doing a lot of research. So the choices becoming a little bit wider, but the beauty of it is five years ago, when I had to phone them and they would give me an interview now, they don't phone anybody else. They finally learned this is one company is going to do it. Nobody else got money or keep it, but let's go talk to these people. So we always become that pretty bride in the middle of the thing that everyone said, yeah, I know they want money and we think we have it, we're going to spend it. But my opinion is honestly, it's time to just make one work, get to the $100 million, make it work, run it, let the people learn it, then it's the same as M&A. You could go close three companies tomorrow if the cash was done and the right thing because

1:29:07we have a M&A team. Always it was me and Melissa. We did everything. Now we have three M&A teams, they can process the M&A and that's what we have those teams working on right now on different M&As. With the robotics, I say, I learned my lesson from the hosted design, I jumped too fast, don't should have done more homework on them and find in who the private equity is, who grab all the deposit and run away and we learned from all mistakes. We don't want to repeat it again, but there are some new stuff from new credible long importance we have coming up. And I've signed the NDA, I'm working with them and they've got some amazing stuff coming up and they want to deal with us in Canada. So I need to wait a bit and it's beautiful to wait is, let's see what this one can do. Let's try this one. Imagine you got a bunch of drivers, they can run existing plans like 100 miles an hour. Begin with machine can run 500 miles an hour, they've never driven that thing yet.

1:30:08It's like that kid goes on boys and the Lamborghini and crashes around the corner right away. You know, let them drive it, let them see what it's like, then we can scale it fast. And every half is the $100 million next year. They need to do that and have a healthy margin and build up the cash is of. I got two quick questions for you now and then we'll wrap it up here. But how do you, what keeps you awake at night right now? What's your biggest challenge you're facing in field? This got them debugging after robots. Like I'm jumping at the bits, like they cutting wood, putting it together but then there's another bug that you see. Every morning I'm making call and I'm getting an update and they're smart. They keep me wavered because I would drive everybody crazy. But with electronics and robots, you've got to be patient a little bit. Once they start dancing, but at the beginning, that keeps me awake all the time. Honestly, Paul, if you asked me two years ago when I was on a holiday, next year I know

1:31:12I'll share price tank and I said, what happened? They said, well, this guy became president and he just called a telephone Canada. Those kind of things become a fart in a hurricane right now. Right come and go and we grow in. But that is the one I want to, because there's so many eyes including government, me, all of our brains, investors, everybody. We want to see these palarinos run every day, 24 hours a day. That's the one I want to see right now going out there. And really, that's the big part, that's the, that's the, that's the worries. Because I know what I will do once we know how he's driving, how fast it is, the next one will pop up. Yeah. Yeah. So the second question is the opposite. What gets you the most excited right now about the business? Me? You? Sure. Yeah. What gets you the most excited? Oh, wait, you asked me, me or Melissa? Well, I either one if you, but you go first. Melissa, you go first. You go first. Well, it's excited. I mean, for me is seeing the robots, I guess, so the opposite of waiting for them to debug.

1:32:14It's, it's seeing those robots. I mean, I'm not, I'm finance, I'm numbers. I deal with the bank and everything. So, you know, looking at the robotics and seeing them in person is exciting. I've spent the last year managing the cash flow for it. It'd be nice to see it in action. Exactly. I mean, the company spent $17 million on these ballerinas. Be nice to see them dancing. Absolutely. It's not just a ballerino, by the way. It's funny. Half of the building is ballerino. The other half is going to be a hybrid factory. Sure. Same whole thing. So, we got to, we're going to put two factories in one under one roof there. That is the beauty of it. And the cost saving return on investment there that we don't mention to anybody. Like, that is the efficiency of it. For me is, I don't if you remember or not, when you were talking to us about going public, right? And even before that, all days, when things slow down in an IMO, we deal with the lumberyard.

1:33:14That's the only time I would deal with the lumberyard. I used to own a lumberyard. Not in Rome, but I just don't like the middleman. I want to go straight to the clients and collect the margins, right? And we used to build garden shirts, the roof, the walls, everything. Shipping on a pallet and then Mr. Mrs. Joe Smith, buy a one a weekend, some of them in my friend, they put the garden shirt together. They have a barbecue and they're happy. They build a garden shirt, 8x8, 8x10. And I used to say honest to guys, I said, one day we're going to do houses like this. But even public, everybody asks me about consolidating and trusting everything. Back in my mind, even at that time, deck up, when I trademarked the logo that is a design, assembly construction, install, lock up on the job site. And I always wonder, we'll see that in my lifetime. That technology, that full component manufacturing, that you build the bases in the country then you introduce the fully component manufacturing. Even when we bought LCF, I even remember when I phoned you mid of the summer, I said,

1:34:18Paul, I just saw the future here. They do walls and trousers and floors and ship it together. Then two weeks ago, when I saw those jobs in Ottawa and I sent you the picture, I was over the moon. The plane was flying back from Toronto so many thousand miles off. I was 10,000 miles over the plane. I was so excited. Finally, the full lock up package. We are doing that, not just one house. We got the whole contract. We doing it for this franchise that they don't give you a contract. That franchise is nasty to work with. They want delivery on time. And these, those are the exciting part that all of a sudden you taste the future here. No, the future creates is you want to have the automation, robotics, everything all over the country. So I just speak car factories. We're building those. The lumber goes in, finish product comes out. That the safety guy comes. He said, this is not safe. I said, what do you mean? He's got eight foot fence. We never seen anything in Ontario. What happens if somebody jumps over the fence?

1:35:20That is the biggest challenge here because it's the future. Nobody knows it, right? That's the point. And then I see now, I build this first source, everybody is talking about one contact or whatever, as if it was something new. Europe started forever. It just always wanted, when are we going to catch up to the European system in Canada? To me, that is the future poll. That's the game changer future. We do it. And it's amazing. And honestly, the biggest part is like we do group here on this call, right? Couple of times they got on the my skin and I'm angry about a lot more because your group and our meet them like your SCD and my cool is the only one we go to. Las Vegas, everything else I ignore is because I love seeing the people. And I love giving them a hug and stuff because you grew up not an investor. Your group here are owners with us. They've been with us most of them or almost all of them and you since day one. You guys are partners and one day I need to return their loyalty and their trust in us.

1:36:24And we keep saying we're going to do this, we're going to do this and honestly we're doing it. We are burning that foundation and we keep growing. And we have every time we get this mountain type, there's another mountain, another mountain to come. It looks like you never enough. It's a strong famous. It's a highly nothings ever enough for you. Of course not. There is always a different goal. But I am really excited about that. That I mean, even for you and your group being part of it from day one, the crazy days to now, that talking about full lock up package, everything. That's why the thing excites me. You know, it's beautiful. I keep remembering when we first met the business was doing about eight million in revenue and now we're talking about a hundred million dollars numbers here. You know, it's obviously come a long way. Listen guys, this has been great. It's given everybody a chance to sort of catch up. We've answered a lot of the questions I think that investors had here. So I appreciate the time. As always, we look forward to seeing both of you guys at the conference in September.

1:37:27So thanks for joining us today. We've been speaking with him. Go for it. Yeah, we both be at conference. Even I'm sponsoring the canoicode. We're on the banding most of you and your group want to go to their evening there. Yeah, that's on me. We want to say hi and watch all you guys get drunk on canoicode and my money there. But so I'm looking forward to seeing you guys. That's a fun time there. Yeah, that's I enjoy that. You know, I like that. Fantastic. Fantastic. We're looking forward to it for sure. Okay, we've been speaking with Hania Bassi CEO, Bad Listen Engineer products as well as Melissa McCray, a CFO of the company, symbol AEP on the Venture Exchange, AEP, sorry, APE UF on the OTC. Both of you, I want to thank for joining us today and we look forward to the next time we can chat. Thank you, Paul. Thank you, everybody. I will wonderful after you. Bye. Thank you. Bye for now.