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ATS Reports Annual and Fourth Quarter Fiscal 2012 Results
ATS Automation Posted 05/25/2012CAMBRIDGE, ON- ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and twelve months ended March 31, 2012 for its continuing operations (Automation Systems Group or "ASG") and discontinued operations ("Solar").
"Strong fourth quarter results in our core ASG business reflected our approach to market, solid operating foundation and the integration of acquired businesses," said Anthony Caputo, Chief Executive Officer. "Most importantly, we made a very significant strategic advancement. We turned the corner on Solar separation and are now solely focused on our core business, which is robust and growing. It has the demonstrated ability to engage customers on an enterprise basis, select and integrate acquisitions and remain resilient during macro-economic downturns. Our plan is to continue to grow organically, expand our offering, and scale our business through acquisitions."
Fourth Quarter Summary of Continuing Operations: ASG
- Revenues were $173.5 million, 17% higher than in the corresponding period a year ago, and 16% higher than the third quarter of fiscal 2012;
- Earnings from continuing operations for the fourth quarter of fiscal 2012 were $16.1 million (9% operating margin), an improvement over normalized fourth quarter earnings from operations a year ago of $11.4 million (8% operating margin - normalized to exclude $2.8 million in proceeds received from a previously written-off note receivable) and normalized third quarter fiscal 2012 earnings from operations of $11.4 million (8% operating margin - normalized for a $3.0 million gain on the sale of a facility and $3.7 million of U.S. research and development tax credits);
- Order Bookings increased 4% to $187 million from $179 million in the third quarter of fiscal 2012 and decreased 9% year over year from $206 million in the fourth quarter of fiscal 2011;
- Period end Order Backlog was a record $382 million, an increase of 2% from $376 million in the third quarter of this fiscal year and 29% from $296 million a year ago;
- The Company's balance sheet was strong, including cash net of debt of $93.3 million, and the Company has unutilized credit facilities of $51.7 million available under existing credit facilities and another $24.1 million of credit available under letter of credit facilities.
Order Bookings were $53 million during the first 7 weeks of the first quarter of fiscal 2013.
Fourth Quarter Summary of Discontinued Operations - Solar:
On February 27, 2012, a subsidiary of the EDF group, the French electricity utility, was selected by the French bankruptcy court to purchase the assets of Photowatt International S.A.S. ("Photowatt France" or "PWF"). The entire workforce of PWF was subsequently transferred to the purchaser or offered to be transferred within the purchaser's group. Effective March 1, 2012, the purchaser assumed control over the operations of PWF. The confirmation of a new operator for the PWF business concluded ATS's operating support of PWF. As is customary in France, the purchaser and the court appointed trustee were granted a period of time (ending in June 2012) to finalize the purchase agreements relating to the PWF assets. These agreements which will complete the transfer of the legal ownership of those assets are still being finalized.
Although a new operator is now assuming the whole operation of the PWF assets and all employees have been (or offered to be) transferred to this new operator or within its group, the judicial liquidation process could take several years to wind-up. In light of the current situation, management does not expect to incur any additional expenses as a result of the bankruptcy, however, until all matters are resolved under the bankruptcy process, additional provisions may be required.
The results of PWF up to the Bankruptcy Date are presented as discontinued operations in the consolidated statements of income.
Results of Discontinued Operations
Solar revenues in the fourth quarter of fiscal 2012 included those of Ontario Solar only as a result of the de-consolidation of PWF during the third quarter of fiscal 2012. Despite a 367% year-over-year increase in Ontario Solar's revenues, fiscal 2012 fourth quarter revenues of $9.8 million were 80% lower than in the fourth quarter of fiscal 2011 reflecting the de-consolidation of PWF.
Solar's fiscal 2012 fourth quarter loss from operations was $8.2 million compared to a loss from operations of $93.3 million a year ago. Ontario Solar recorded a $2.0 million loss in the fourth quarter of fiscal 2012 on lower than expected revenues and higher fixed costs resulting from ramping-up in anticipation of higher demand. The total loss attributable to PWF was $6.2 million and was mainly due to costs incurred and provisions made in respect of the Company's obligations related to the bankruptcy process. In the fourth quarter of fiscal 2011, Solar's loss from operations included $70.8 million of non-cash property, plant and equipment impairment charges, $7.1 million of non-cash charges to write-down inventory, $2.3 million of incremental restructuring charges, and incremental warranty costs, and bad debt write-offs.
ATS remains committed to the separation of its entire Solar business from its core automation business. To complete this goal, ATS is advancing opportunities related to its other Solar assets. These opportunities are expected to positively impact cash during the next six months. In this regard, in December 2011, ATS sold an ASG-owned building in France that formerly housed PWF module assembly. The accounting impact of this sale was recorded under continuing operations.
Regarding Ontario Solar, 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.
As of the first quarter of fiscal 2012, the results of ATS were prepared under International Financial Reporting Standards ("IFRS"), with a transition date of April 1, 2010. As a result, prior period comparative information reflects conversion from previous Canadian Generally Accepted Accounting Principles to IFRS.
Annual Results Materials
ATS's annual Consolidated Financial Statements, Management's Discussion and Analysis, and Annual Information Form for the year ended March 31, 2012, are available on SEDAR at www.sedar.com and the Company's website.
Quarterly Conference Call
ATS's quarterly conference call begins at 10 am eastern on Thursday, May 24 and can be accessed live or on the phone by dialing 416 644 3416 five minutes prior.
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 life sciences, computer/electronics, energy, transportation and consumer products. 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.