ATS Reports First Quarter Fiscal 2013 Results
ATS Automation Posted 08/16/2012
(Editor's note: This release has been truncated)
ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three months ended July 1, 2012 for its continuing operations (Automation Systems Group or "ASG") and discontinued operations ("Solar").
"First quarter performance reflected our strong operating foundation, leading market position and solid year-over-year improvements from our fix, separate and grow strategy," said Anthony Caputo, Chief Executive Officer. "We have moved to the next phase of ATS' development. Our go forward strategy - Grow, Expand and Scale - will leverage the strength of our core business, which has the demonstrated ability to grow organically, expand its offering and markets served, and scale through accretive acquisitions."
First Quarter Summary of Continuing Operations: ASG
- Revenues grew 20% to $152.2 million, from $126.9 million in the first quarter a year ago;
- Earnings from continuing operations increased 45% to $15.2 million (10% operating margin), from $10.5 million (8% operating margin) a year ago;
- EBITDA increased 33% to $18.1 million (12% EBITDA margin) from $13.6 million (11% EBITDA margin) in the first quarter a year ago;
- Order Bookings increased 7% to $168 million from $157 million in the first quarter of fiscal 2012;
- Period end Order Backlog was a record $397 million, an increase of 21% from $328 million a year ago and an increase of 4% from $382 million in the fourth quarter of fiscal 2012; and
- The Company's balance sheet was strong, including cash net of debt of $81.5 million, and the Company has unutilized credit facilities of $28.6 million available under existing credit facilities and another $8.6 million of credit available under letter of credit facilities.
Value Creation Strategy
In June 2012 the ATS Board of Directors approved the next phase of the Company's strategy: Grow, Expand and Scale. See "Value Creation Strategy" in the Company's fiscal 2013 first quarter Management's Discussion and Analysis.
First Quarter Summary of Discontinued Operations: Solar
Solar revenues in the first quarter of fiscal 2013 included those of Ontario Solar only as a result of the de-consolidation of Photowatt International S.A.S. ("PWF") during fiscal 2012.
Ontario Solar generated revenues of $0.6 million in the first quarter of fiscal 2013 due to decreased market activity resulting primarily from regulatory delays in project approvals. Ontario Solar recorded a $2.0 million loss on lower than planned revenues.
ATS is conducting a formal sale process to divest the business. The Company has received a number of non-binding indicative offers for the Ontario Solar business and is working with the interested parties to conclude a transaction.
Regarding PWF, the agreement between the French bankruptcy court and a subsidiary of the EDF group to purchase the assets of PWF, and assume its operations and workforce was finalized in July 2012.
ATS Automation provides innovative, custom designed, built and installed manufacturing solutions to many of the world's most successful companies. Founded in 1978, ATS uses its industry-leading knowledge and global capabilities to serve the sophisticated automation systems' needs of multinational customers in industries such as consumer products & electronics, energy, life sciences and transportation. It also leverages its many years of experience and skills to fulfill the specialized automation product manufacturing requirements of customers. Through its Ontario solar business, ATS participates in the solar energy industry. ATS employs approximately 2,400 people at 20 manufacturing facilities in Canada, the United States, Europe, Southeast Asia and China. The Company's shares are traded on the Toronto Stock Exchange under the symbol ATA.
Management's Discussion and Analysis
For the Quarter Ended July 1, 2012
This Management's Discussion and Analysis ("MD&A") for the three months ended July 1, 2012 (first quarter of fiscal 2013) is as of August 13, 2012 and provides information on the operating activities, performance and financial position of ATS Automation Tooling Systems Inc. ("ATS" or the "Company") and should be read in conjunction with the unaudited interim consolidated financial statements of the Company for the first quarter of fiscal 2013 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are reported in Canadian dollars. The Company assumes that the reader of this MD&A has access to, and has read the audited consolidated financial statements prepared in accordance with IFRS and MD&A of the Company for the year ended March 31, 2012 (fiscal 2012) and, accordingly, the purpose of this document is to provide a first quarter update to the information contained in the fiscal 2012 MD&A. Additional information is contained in the Company's filings with Canadian securities regulators, including its Annual Information Form.
Notice to Reader: Non-IFRS Measures
Throughout this document the term "operating earnings" is used to denote earnings (loss) from operations. EBITDA is also used and is defined as earnings (loss) from operations excluding depreciation and amortization (which includes amortization of intangible assets). The term "margin" refers to an amount as a percentage of revenue. The terms "earnings (loss) from operations", "operating earnings", "margin", "operating loss", "operating results", "operating margin", "EBITDA", "Order Bookings" and "Order Backlog" do not have any standardized meaning prescribed within IFRS and therefore may not be comparable to similar measures presented by other companies. Operating earnings and EBITDA are some of the measures the Company uses to evaluate the performance of its segments. Management believes that ATS shareholders and potential investors in ATS use non-IFRS financial measures such as operating earnings and EBITDA in making investment decisions and measuring operational results. A reconciliation of operating earnings and EBITDA to net income from continuing operations for the three month periods ending July 1, 2012 and July 3, 2011 is contained in this MD&A (see "Reconciliation of EBITDA to IFRS Measures"). EBITDA should not be construed as a substitute for net income determined in accordance with IFRS.
Order Bookings represent new orders for the supply of automation systems that management believes are firm. Order Backlog is the estimated unearned portion of ASG revenue on customer contracts that are in process and have not been completed at the specified date. A reconciliation of Order Bookings and Order Backlog to total Company revenues for the three month periods ending July 1, 2012 and July 3, 2011 is contained in the MD&A (see "ASG Order Backlog Continuity").