ATS Automation Secures $60 Million EV Order Booking and Provides Global Operations Update
CAMBRIDGE, ON /CNW/ - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today announced it has received an Order Booking from a global automotive manufacturer for a fully automated battery assembly system for their North American manufacturing operations.
This enterprise program is valued at approximately $60 million and includes the design, build, and installation of two turnkey battery assembly systems. These systems are critical components of the customer's electric vehicle (EV) strategy. The Order Booking will be recorded in the Company's fourth quarter of fiscal 2020 and is expected to be delivered over the next 18 months.
"Our ability to develop a low-risk solution based on our demonstrated EV expertise and technology were critical in the customer's decision to award ATS this strategic program," said Andrew Hider, Chief Executive Officer. "The program will be built on our best-in class SuperTrakTM linear motion technology. We look forward to delivering on this important project, and the opportunity to expand this program in the future."
Update on Global Operations
ATS today provided an update on its global operations and the impact of the ongoing healthcare crisis caused by the recent novel coronavirus ("COVID-19") outbreak. COVID-19 has impacted and could further impact the Company's operations and the operations of customers and suppliers as a result of quarantines, facility closures, and travel and logistical restrictions in connection with the outbreak.
"The global pandemic has caused uncertainty in our end-markets, which we expect will impact customer ordering activity," said Mr. Hider. "While some customers are proceeding with strategic projects, as evidenced by the enterprise program we announced today, others have shut down their operations and some are placing ongoing programs on hold or deferring new projects to focus on preserving liquidity."
Mr. Hider continued, "Our first priority is to ensure the safety, health and mental wellness of our employees and ensuring they are informed on all matters related to COVID-19 and are equipped with the necessary resources. We are similarly concerned for the well-being of our customers, suppliers, and our communities, and we are committed to taking precautionary measures recommended by global health authorities. We have a pandemic response team that is working around the clock to coordinate our global approach and ensure local regulations are followed."
Measures implemented to enable social distancing across ATS' operations, including remote work and flexible schedules, have caused the Company to operate below full capacity. Travel restrictions and closures of customer facilities have disrupted customer projects and service activity. These factors are expected to negatively impact fourth quarter operating margins and are expected to impact the Company's operating results in the first quarter of fiscal 2021.
With travel restrictions in place, the Company is leveraging innovative technologies such as IlluminateTM Manufacturing Intelligence and Enhanced Remote Support to assist customers in maximizing overall equipment efficiency and operational efficiency and productivity of their operations. These initiatives are intended to help mitigate disruption.
Management is focused on cost-containment measures and the preservation of liquidity. The duration and impact of the global pandemic is uncertain at this time. However, the Company entered its fourth fiscal quarter in a favourable position with Order Backlog of $939 million and a strong balance sheet featuring cash of $117.7 million together with $647.5 million of unutilized multi-purpose credit available as at December 29, 2019.
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 4,500 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. Visit the Company's website at www.atsautomation.com.
Note to Readers:
Order Bookings, Order Backlog, and operating margin are non-IFRS measures and do not have any standardized meaning prescribed within IFRS and therefore may not be comparable to similar measures presented by other companies. Such measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Additional information on non-IFRS measures can be found in the Company's MD&A on SEDAR or on the Investor's section of the Company's website.
Forward Looking Statements:
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of ATS, or developments in ATS' business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Forward-looking statements relate to, among other things, the announcement of a new Order Booking; the anticipated timeline for program delivery; the expected direct and indirect impact of certain COVID-19 pandemic related factors on fourth quarter operating margins and on the Company's operating results in the first quarter of fiscal 2021; the impact of leveraging innovative technologies; and a focus on cost-containment measures and the preservation of liquidity. The risks and uncertainties that may affect forward-looking statements include, among others: the progression of COVID-19 and its impacts on the Company's ability to operate its assets, including the possible shut-down of facilities due to COVID-19 outbreaks; the severity and duration of the COVID-19 pandemic in all jurisdictions where the Company conducts its business; the nature and extent of government imposed restrictions on travel and business activities and the nature, extent, and applicability of government assistance programs, in both cases related to the COVID-19 pandemic, as applicable in all jurisdictions where the Company conducts its business; the impact of the COVID-19 pandemic on the Company's employees, customers, and suppliers; the impact of the global economy and general market performance; that the timing of completion of the enterprise program is other than as expected due to various reasons, including schedule changes or COVID-19 pandemic related factors; the customer exercising any right to terminate the program in whole or in part prior to its completion, thereby preventing ATS from realizing on the full benefit of the program; the degree to which the Company is successful with its initiatives related to cost containment and preservation of liquidity; the degree to which the Company is successful in selling and deploying its remote service offerings; that one or more customers, or other entities with which the Company has contracted, experience insolvency or bankruptcy with resulting delays, costs or losses to the Company; management effectiveness and disaster response preparedness, including business continuity plans in response to COVID-19, political, labour or supplier disruptions; risks relating to legal proceedings to which ATS is or may become a party; exposure to product and/or professional liability claims; and other risks detailed from time to time in ATS' filings with Canadian provincial securities regulators. There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and other than as required by applicable securities laws, ATS does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.