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News

ATS Reports Second Quarter Fiscal 2017 Results

ATS Automation

CAMBRIDGE, ON - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and six months ended October 2, 2016.

Second Quarter Summary

  • Revenues were $242.5 million, 8% lower than a year ago, primarily reflecting the timing of project activities;
  • Earnings from operations were $17.3 million (7% operating margin), compared to $24.4 million (9% operating margin) in the second quarter of fiscal 2016. Adjusted earnings from operations1 were $22.3 million (9% margin), compared to $31.7 million (12% margin) in the second quarter a year ago, primarily reflecting lower revenues and increased stock compensation expenses;
  • EBITDA1 was $25.3 million (10% margin), compared to $33.7 million (13% margin) in the second quarter of fiscal 2016;
  • Earnings per share were 9 cents basic compared to 14 cents basic a year ago. Adjusted basic earnings per share1 were 13 cents for the second quarter of fiscal 2017 compared to 19 cents a year ago;
  • Order Bookings were $289 million, a 26% increase from the second quarter of fiscal 2016;
  • Period end Order Backlog was $654 million, 11% higher than at September 27, 2015. Approximately $70 million of Order Backlog relates to a program that was put on hold by a customer subsequent to quarter end; and
  • The Company's balance sheet and financial capacity to support growth remained strong, with unutilized credit facilities of $642.4 million and $2.5 million of credit available under letter of credit facilities.

1 Non-IFRS measure: see "Notice to Reader: Non-IFRS Measures and Additional IFRS Measures".

"Second quarter operating performance was strong, notwithstanding lower revenues," said Anthony Caputo, Chief Executive Officer "We continued to advance our value creation plan with another significant enterprise program which drove growth in Order Bookings. Order Backlog remains significant, even with the on-hold customer program. We have a strong balance sheet with significant cash and funding available to pursue our growth strategy."

Second Quarter Summary
Fiscal 2017 second quarter revenues were 8% lower than in the corresponding period a year ago, primarily reflecting the timing of project activities. Foreign exchange rate changes did not materially impact the translation of revenues earned by foreign-based subsidiaries compared to the corresponding period a year ago.

By market, fiscal 2017 second quarter revenues from consumer products & electronics decreased 27%, primarily due to lower activity in the consumer products market. Revenues generated in the energy market increased 123% compared to the corresponding period a year ago, primarily due to higher Order Backlog entering the second quarter of 2017 compared to a year ago. Revenues generated in the life sciences market decreased 10% compared to the corresponding period a year ago, primarily reflecting lower Order Backlog entering the second quarter of fiscal 2017 compared to a year ago. Transportation revenues decreased 27% compared to a year ago primarily due to lower activity compared to a year ago.

Fiscal 2017 second quarter earnings from operations were $17.3 million (7% operating margin) compared to $24.4 million (9% operating margin) in the second quarter of fiscal 2016. Excluding $5.0 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK, and sortimat, second quarter fiscal 2017 adjusted earnings from operations were $22.3 million (9% margin). Second quarter fiscal 2016 earnings from operations included $1.7 million of restructuring and severance costs and $5.6 million related to the amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat. Excluding these items, last year's second quarter adjusted earnings from operations were $31.7 million (12% margin). Lower adjusted earnings from operations in the most recent period primarily reflected lower revenues and increased stock compensation expenses.

Depreciation and amortization expense was $8.0 million in the second quarter of fiscal 2017, compared to $9.3 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 second quarter of fiscal 2016. EBITDA was $25.3 million (10% EBITDA margin) in the second quarter of fiscal 2017 compared to $33.7 million (13% EBITDA margin) in the second quarter of fiscal 2016.

Order Bookings
Second quarter fiscal 2017 Order Bookings were $289 million, a 26% increase over the second quarter of fiscal 2016. By customer market, increased Order Bookings in the life sciences and transportation markets more than offset lower Order Bookings in the consumer products & electronics and energy markets.

Included in second quarter fiscal 2017 Order Bookings is an enterprise program valued at approximately $40 million from an industry leading North American-based medical device company for the highly automated manufacturing of their innovative drug delivery device. The Order Booking includes the design, delivery and installation of a new manufacturing system which is based on ATS's proprietary technology. This unique technology facilitates high volume and reliable manufacturing requirements in a compact footprint. The Order Booking was made under a master agreement that provides the framework for an additional potential follow-on order depending on the success of the customer's product.

Order Backlog
At October 2, 2016, Order Backlog was $654 million, $65 million or 11% higher than at September 27, 2015. Higher Order Backlog in the energy and life sciences markets more than offset lower Order Backlog in the consumer products & electronics and transportation markets. Approximately $70 million of period end Order Backlog relates to a program which was put on hold by a customer subsequent to the end of the second quarter.

Quarterly Conference Call
ATS' quarterly conference call begins at 10:00 a.m. eastern on Wednesday November 9, 2016, 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 10063535 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 24 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.

Company Contact
Maria Perrella, Chief Financial Officer
Tel: 519 653-6500

 

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