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News

ATS Reports Fourth Quarter and Annual Fiscal 2017 Results

ATS Automation

Editor's note: This releas has been truncated.

ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and twelve months ended March 31, 2017. 

Fourth Quarter and Annual Summary 

  • Fourth quarter revenues were $265.7 million, 8% higher than a year ago, primarily reflecting higher Order Backlog entering the fourth quarter of fiscal 2017 compared to a year ago. Annual revenues were $1,010.9 million, 3% lower than the prior year. 
  • Fourth quarter earnings from operations were $16.8 million (6% operating margin), compared to $8.1 million (3% operating margin) a year ago. Fourth quarter adjusted earnings from operations1 were $24.5 million (9% margin), compared to $23.2 million (9% margin) in the fourth quarter a year ago, primarily reflecting higher revenues offset by increased stock compensation expenses. Annual earnings from operations were $71.9 million (7% margin) compared to $76.8 million (7% margin) for the prior year. Annual adjusted earnings from operations were $97.1 million (10% margin) compared to adjusted earnings from operations of $114.4 million (11% margin) for the prior year, primarily reflecting lower revenues, higher selling, general and administrative expenses and increased stock compensation costs. 
  • Fourth quarter EBITDA1 was $25.6 million (10% margin), compared to $17.7 million (7% margin) in the fourth quarter of fiscal 2016. Excluding a share purchase allowance of $2.9 million, fourth quarter fiscal 2017 EBITDA was $28.5 million (11% EBITDA margin), compared to $27.1 million (11% EBITDA margin) a year ago, which excluded $2.3 million of restructuring and severance costs and $7.1 million of executive transition expenses. Annual EBITDA was $106.5 million (11% margin), compared to $116.1 million (11% margin) in fiscal 2016. 
  • Fourth quarter earnings per share were 8 cents basic and diluted compared to 2 cents basic and diluted a year ago. Fourth quarter adjusted basic earnings per share1 were 15 cents compared to 14 cents in the fourth quarter a year ago. Annual earnings per share were 38 cents basic and diluted compared to 43 cents basic and diluted for the year. Annual adjusted basic earnings per share1 were 57 cents compared to 72 cents in the prior year. 
  • Fourth quarter Order Bookings were $322 million, a 17% decrease from the fourth quarter of fiscal 2016. Annual Order Bookings were $1,134 million, a 6% increase from prior year Order Bookings of $1,070 million. 
  • Period end Order Backlog was a record $681 million, 4% higher than at March 31, 2016. 
  • The Company's balance sheet and financial capacity to support growth remained strong, with unutilized credit facilities of $639.1 million.

Effective March 6, 2017, the Board of Directors appointed Andrew Hider as Chief Executive Officer of ATS.  Mr. Hider is an experienced executive with a track record of success founded on his ability to drive business growth and operational performance in complex business environments and across multiple industries including transportation, advanced technology, instrumentation and industrial products. 

"Since arriving in March, my focus has been on meeting our employees and customers, and assessing our operations, competitive position and strategies," said Mr. Hider. "ATS is a world class company with talented employees, a global footprint, and a strong history of innovation, and quality. Certainly, there are areas of the business to improve and further develop. That said, our operating foundation is solid and I look forward to building on that foundation in the months and years ahead to drive the creation of long term shareholder value." 

Board of Directors Appointment
David McAusland, Chairman of the Board of Directors of ATS, today announced the appointment of Andrew Hider to the Board of Directors effective May 17, 2017. 

Fourth Quarter Summary
Fiscal 2017 fourth quarter revenues were 8% higher than in the corresponding period a year ago. Higher revenues primarily reflected higher Order Backlog entering the fourth quarter of fiscal 2017 compared to a year ago.  Foreign exchange rate changes negatively impacted the translation of revenues earned by foreign-based subsidiaries compared to the corresponding period a year ago, reflecting the strengthening of the Canadian dollar relative to the U.S. dollar and Euro. 

By market, fiscal 2017 fourth quarter revenues from consumer products & electronics increased 8% due to timing of Order Bookings.  Revenues generated in the energy market decreased 17% primarily due to the enterprise program won in the fourth quarter of fiscal 2016 that was cancelled in the third quarter of fiscal 2017.  Revenues in the life sciences market increased 21% primarily reflecting higher Order Backlog entering the fourth quarter of fiscal 2017.  Transportation revenues decreased 3% compared to a year ago primarily due to lower activity compared to the previous year. 

Fiscal 2017 fourth quarter earnings from operations were $16.8 million (6% operating margin) compared to $8.1 million (3% operating margin) in the fourth quarter of fiscal 2016.  Included in fourth quarter fiscal 2017 earnings from operations was a share purchase allowance of $2.9 million, which was paid to Mr. Hider as an inducement to join the Company.  The after-tax proceeds of the share purchase allowance were used to purchase shares of ATS in the public market.  Fourth quarter fiscal 2017 earnings from operations also included $4.8 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat.  Included in fourth quarter fiscal 2016 earnings from operations was $5.7 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat, $2.3 million of restructuring and severance costs and $7.1 million of executive transition expenses related to the transition agreement entered into between the Company and the former Chief Executive Officer of ATS.  Excluding these items, fourth quarter fiscal 2017 adjusted earnings from operations were $24.5 million (9% margin), compared to adjusted earnings from operations of $23.2 million (9% margin) a year ago.  Higher adjusted earnings from operations primarily reflected higher revenues, offset by increased stock compensation expenses. 

Depreciation and amortization expense was $8.8 million in the fourth quarter of fiscal 2017, compared to $9.6 million a year ago.  The decrease primarily reflected lower amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat compared to the fourth quarter of fiscal 2016. 

EBITDA was $25.6 million (10% EBITDA margin) in the fourth quarter of fiscal 2017 compared to $17.7 million (7% EBITDA margin) in the fourth quarter of fiscal 2016.  Excluding the share purchase allowance, fourth quarter fiscal 2017 EBITDA was $28.5 million (11% EBITDA margin).  Comparably, excluding restructuring and severance costs and executive transition expenses, fourth quarter fiscal 2016 EBITDA was $27.1 million (11% EBITDA margin).  

Order Bookings
Fourth quarter fiscal 2017 Order Bookings were $322 million, a 17% decrease from the fourth quarter of fiscal 2016.  By customer market, higher Order Bookings in the transportation and life sciences markets were offset by lower Order Bookings in the energy and consumer products & electronics markets.  Included in fourth quarter fiscal 2016 Order Bookings was an enterprise program valued at approximately U.S. $100 million, part of which was subsequently cancelled   in the third quarter of fiscal 2017.  

Order Backlog 
At March 31, 2017, Order Backlog was a record $681 million, 4% higher than at March 31, 2016.  Higher Order Backlog in the life sciences and transportation markets was partially offset by lower Order Backlog in the consumer products & electronics and energy markets. 

Quarterly Conference Call
ATS' quarterly conference call begins at 10:00 a.m. eastern on Thursday May 18, 2017, and can be accessed live at www.atsautomation.com or on the phone by dialing (647) 427-7450 five minutes prior. A replay of the conference will be available on the ATS website following the call. Alternatively, a telephone recording of the call will be available for one week by dialing (416) 849-0833 and entering passcode 19951559 followed by the number sign. 

About ATS
ATS is an industry-leading automation solutions provider to many of the world's most successful companies. ATS uses its extensive knowledge base and global capabilities in custom automation, repeat automation, automation products and value-added services including pre-automation and after-sales services to address the sophisticated manufacturing automation systems and service needs of multinational customers in markets such as life sciences, chemicals, consumer products, electronics, food, beverage, transportation, energy, and oil and gas. Founded in 1978, ATS employs approximately 3,500 people at 23 manufacturing facilities and over 50 offices in North America, Europe, Southeast Asia and China. The Company's shares are traded on the Toronto Stock Exchange under the symbol ATA.  
 

 

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