ATS Provides Update on Solar Separation Process
ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today provided the following updates on its previously announced dual-track process involving a spinoff of the Company's combined solar businesses or a sale of Photowatt France ("PWF") and/or Photowatt Ontario ("PWO"):
- Detailed discussions with parties in regards to a sale of PWF have recently concluded without producing an acceptable transaction.
- The state of economic conditions in Europe and further deterioration in the demand for solar products in France, and the rest of Europe, are negatively impacting PWF and have prompted the Company to re-examine the viability of the spinoff alternative.
- Given these developments and the significant reduction in off-balance sheet obligations at PWF (as previously announced), ATS is reconsidering a broader set of strategic options for both PWF and PWO.
ATS remains committed to the separation of its solar business and expects a modest delay to the previously announced timeline. The Company still expects to complete the separation without materially impacting growth plans for its core automation business.
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 Photowatt, ATS participates in the solar energy industry. ATS employs approximately 2,900 people at 21 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.
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's 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 is 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. ATS cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things: re-examination of the viability of the spinoff alternative; reconsideration of a broader set of strategic options; commitment to, and timing of, the separation process; and expectation to complete the separation without materially impacting growth plans for its core automation business. The risks and uncertainties that may affect forward-looking statements include, among others: general market performance including capital market conditions and availability and cost of credit; economic market conditions; foreign currency and exchange risk; the relative strength of the Canadian dollar; performance of the market sectors that ATS serves; impact of factors such as increased pricing pressure and possible margin compression; impact of the global economy, conditions in the solar and capital markets, Photowatt performance, the regulatory and tax environment, availability of credit facilities, and unexpected delays and issues, on the timing, form and structure of separation, and the capitalization requirements of Photowatt; that other capitalization alternatives are not available in a spinoff scenario; inability to successfully expand organically or through acquisition, due to an inability to grow expertise, personnel, and/or facilities at required rates or to identify, negotiate and conclude one or more acquisitions; the availability and possible reduction or elimination of government subsidies and incentives for solar products in various jurisdictions, including France and Ontario; ability of ATS and its solar joint venture to acquire the needed expertise and financing necessary to effectively develop Ontario solar projects; the financial attractiveness of, and demand for, those solar projects; the success of developers with whom ATS has signed agreements in obtaining FIT contracts and ultimately developing the projects; the potential for the ramp up to full production of the PWO 100 MW module line will be hindered or delayed due to an inability to procure necessary permits, approvals, materials, equipment, and staff on a timely basis; ability to obtain necessary government and other certifications and approvals for solar projects in a timely fashion; that one or more of the customer agreements signed by PWO is terminated or impaired as a result of a cancellation or material change in the FIT program in Ontario and as a result contemplated minimum amounts to be supplied are not supplied with resulting impacts on revenue and profitability; that PWF's market strategy is unsuccessful in differentiating it and penetrating the markets it is targeting; that PWF's restructuring plan is not fully achieved and/or does not generate the desired results; that unexpected problems arise with the new module assembly outsourcing arrangements; that one or more customers, or other persons with which the Company has contracted, experience insolvency or bankruptcy with resulting costs or losses to the Company; political, labour or other disruptions, impacting the supply of goods or services to PWF and/or PWO; the success of competitors with greater capital and resources in exploiting their technology; risks relating to legal proceedings to which ATS is or may becomes a party; exposure to product liability claims of Photowatt; and other risks detailed from time to time in ATS's filings with Canadian provincial securities regulators. 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.