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ATS Reports Fourth Quarter and Fiscal 2019 Results
ATS Automation Posted 05/21/2019
CAMBRIDGE, ON /CNW/ - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and twelve months ended March 31, 2019.
Fourth quarter highlights:
- Revenues increased 17% to $348.6 million. Organic growth in revenues was 13% with 4% coming from acquisitions.
- Earnings from operations were $30.3 million (9% operating margin), compared to $25.5 million (9% operating margin) a year ago.
- Adjusted earnings from operations1 were $38.2 million (11% margin), compared to $32.8 million (11% margin) a year ago.
- EBITDA1 was $42.6 million (12% EBITDA margin), compared to $34.8 million (12% EBITDA margin) a year ago.
- Earnings per share were 20 cents basic and diluted compared to 16 cents a year ago. Adjusted basic earnings per share1 were 26 cents compared to 22 cents a year ago.
- Order Bookings were $298 million, 14% lower than a year ago. Excluding acquired businesses, fourth quarter Order Bookings were $269 million.
- Order Backlog increased 21% to $904 million at March 31, 2019 compared to $746 million a year ago.
"Our fourth quarter featured growth in revenues and earnings as we continued to execute our value creation strategy and drive continuous improvement through our ABM," said Andrew Hider, Chief Executive Officer. "On February 28, we added significant capability by completing the acquisition of Comecer S.p.A., a leader in advanced aseptic containment and processing systems for the nuclear medicine and pharmaceutical industries. Coupled with our existing business serving life science customers, we have created a sizeable new platform that we intend to grow organically and inorganically in the coming years."
Annual fiscal 2019 highlights:
- Revenues increased 12% to a record $1,253.6 million. Organic growth in revenues was 11% with 1% coming from acquisitions.
- Earnings from operations were $114.8 million (9% operating margin), compared to $85.5 million (8% operating margin) in the prior year.
- Adjusted earnings from operations1 were $142.8 million (11% margin), compared to $117.3 million (11% margin) in the prior year.
- EBITDA1 was $157.2 million (13% EBITDA margin), compared to $122.1 million (11% EBITDA margin) in the prior year.
- Earnings per share increased 52% to 76 cents basic from 50 cents. Adjusted basic earnings per share1 grew 32% to 98 cents from 74 cents.
- Order Bookings increased 19% to a record $1.408 billion. Organic growth in Order Bookings was 16% with 3% coming from acquisitions.
Mr. Hider added, "Fiscal 2019 was a successful year with positive momentum leading to solid organic growth through the addition of new customers and the expansion of long-term customer relationships in our diversified markets. This performance reflected the hard work and dedication of our team and their ongoing commitment to the ATS Business Model. Going forward, we have significant Order Backlog and a strong balance sheet which we continue to put to work through internal investment, innovation, strategic acquisitions and share repurchases when appropriate."
Fiscal 2019 fourth quarter revenues were 17% higher than in the corresponding period a year ago and included $10.5 million of revenues earned by KMW and Comecer since acquisition. Excluding KMW and Comecer, fourth quarter revenues were $338.1 million, a 13% increase compared to the corresponding period a year ago, primarily reflecting Order Backlog, which was 34% higher entering the fourth quarter of fiscal 2019 compared to a year ago. Revenues generated from construction contracts and from services both increased 17% compared to a year ago.
By market, revenues generated in the life sciences market increased by 46% due to higher Order Backlog entering the fourth quarter of fiscal 2019 on improved Order Bookings in the year from both new and existing customers and, to a lesser extent, revenues earned by Comecer since acquisition on February 28, 2019. Revenues in the transportation market increased 18% primarily related to an EV enterprise program awarded in the first quarter of fiscal 2019 and revenues from KMW. Fiscal 2019 fourth quarter revenues from consumer products & electronics decreased 29% compared to a year ago, due to lower Order Backlog entering the fourth quarter of fiscal 2019. Revenues generated in the energy market decreased 17% primarily due to the timing of program execution.
Fiscal 2019 fourth quarter earnings from operations were $30.3 million (9% operating margin) compared to $25.5 million (9% operating margin) in the fourth quarter of fiscal 2018. Fourth quarter fiscal 2019 earnings from operations included $1.1 million of incremental costs related to the Company's acquisition activity and $6.8 million related to amortization of identifiable intangible assets recorded on business acquisitions. Included in fourth quarter fiscal 2018 earnings from operations were $2.2 million of restructuring costs and $5.1 million related to amortization of identifiable intangible assets recorded on business acquisitions. Excluding these items in both comparable quarters, fourth quarter fiscal 2019 adjusted earnings from operations were $38.2 million (11% margin), compared to adjusted earnings from operations of $32.8 million (11% margin) a year ago. Fourth quarter fiscal 2019 adjusted earnings from operations reflected higher revenues and improved gross margin, offset by higher selling, general and administrative expenses, and increased stock compensation expenses (see "Stock-based compensation").
Depreciation and amortization expense was $12.3 million in the fourth quarter of fiscal 2019, compared to $9.3 million a year ago. The increase primarily reflected depreciation of internal development projects and incremental amortization of acquisition-related intangible assets due to the acquisitions of KMW and Comecer.
EBITDA was $42.6 million (12% EBITDA margin) in the fourth quarter of fiscal 2019 compared to $34.8 million (12% EBITDA margin) in the fourth quarter of fiscal 2018. EBITDA growth primarily reflected higher revenues and improved gross margin, partially offset by higher selling, general and administrative expenses and stock compensation expenses compared to a year ago. Excluding acquisition related costs, fourth quarter fiscal 2019 EBITDA was $43.7 million (13% EBITDA margin). Comparably, excluding restructuring costs, fourth quarter fiscal 2018 EBITDA was $37.0 million (12% EBITDA margin).
Fourth quarter fiscal 2019 Order Bookings were $298 million, 14% lower than fourth quarter fiscal 2018 Order Bookings. Excluding KMW and Comecer, fourth quarter Order Bookings were $269 million, which primarily reflected lower consumer products & electronics and transportation Order Bookings compared to the prior year period when certain enterprise Order Bookings were recorded in those markets.
At March 31, 2019, Order Backlog was $904 million, 21% higher than at March 31, 2018. Order Backlog growth was primarily driven by higher Order Bookings in the life sciences and transportation markets in fiscal 2019 and Order Backlog from acquired businesses. Foreign exchange rate changes negatively impacted the translation of Order Backlog from foreign-based ATS subsidiaries by approximately 2% compared to fiscal 2018.
Business Acquisition: Comecer
On February 28, 2019, the Company completed its acquisition of Comecer S.p.A. ("Comecer"), a leader in the design, engineering, manufacture, and servicing of advanced aseptic containment and processing systems for the nuclear medicine and pharmaceutical industries. The total cash purchase price for the acquisition was 113 million Euro, subject to working capital and net debt adjustments. Cash consideration paid in the fourth quarter of fiscal 2019 was 95 million Euro. Integration of Comecer will target revenue synergies through cross selling, geographic expansion and commercial process best practices. Integration will also include the deployment of the ATS Business Model ("ABM"), which is intended to enable improvements in operations including project management, supply chain and product life cycle management.
Quarterly Conference Call
ATS' quarterly conference call begins at 10:00 a.m. eastern on Thursday May 16, 2019, and can be accessed live at www.atsautomation.com or on the phone by dialing (647) 427-7450 five minutes prior to the scheduled start time. 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 1034078 followed by the number sign.
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, pharmaceuticals, chemicals, electric vehicles, transportation, consumer products, electronics, food, beverage, energy, and oil and gas. Founded in 1978, ATS employs approximately 4,400 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.