ATS Reports Second Quarter Fiscal 2016 Results and Announces Normal Course Issuer Bid
CAMBRIDGE, ON, /CNW/ - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and six months ended September 27, 2015.
Second Quarter Summary
- Revenues from continuing operations were $263.7 million, 27% higher than a year ago. Excluding PA (acquired September 1, 2014), revenues increased $9.8 million or 5% compared to the corresponding period a year ago;
- Earnings from continuing operations were $24.4 million (9% operating margin), compared to $14.1 million (7% operating margin) in the second quarter of fiscal 2015. Adjusted earnings from continuing operations1 were $31.7 million (12% margin), compared to $27.0 million (13% margin) in the second quarter a year ago;
- EBITDA1 was $33.7 million (13% margin), compared to $22.7 million (11% margin) in the second quarter of fiscal 2015. Excluding $1.7 million of restructuring and severance costs, second quarter 2016 EBITDA was $35.4 million (13% margin), up from $29.8 million (14% margin), which excluded $7.1 million of acquisition-related costs;
- Earnings per share from continuing operations were 14 cents basic compared to 8 cents basic a year ago. Adjusted basic earnings per share from continuing operations1 were 19 cents for the second quarters of fiscal 2016 and fiscal 2015;
- Order Bookings were $230 million, a 6% increase from the second quarter of fiscal 2015;
- Period end Order Backlog was $589 million, 5% higher than at September 28, 2014;
- The Company's balance sheet and financial capacity to support growth remained strong, with unutilized credit facilities of $648 million and $2.3 million of credit available under letter of credit facilities;
- ATS also announced it has filed and that the Toronto Stock Exchange ("TSX") has accepted a notice by the Company of its intention to make a normal course issuer bid ("NCIB"). See "Normal Course Issuer Bid".
1 Non-IFRS measure: see "Notice to Reader: Non-IFRS Measures and Additional IFRS Measures".
"Second quarter performance reflected our solid operating foundation," said Anthony Caputo, Chief Executive Officer. "We have a strong balance sheet and significant financial resources available to pursue our growth strategy."
Second Quarter Summary Continuing Operations
Fiscal 2016 second quarter revenues were 27% higher than in the corresponding period a year ago, primarily reflecting revenues earned by PA (acquired September 1, 2014). PA revenues for the second quarter of fiscal 2016 were $67.4 million compared to $20.5 million in the corresponding period a year ago. Excluding PA, second quarter revenues increased $9.8 million, or 5% compared to the corresponding period a year ago. The increase in revenues reflected foreign exchange rate changes which positively impacted the translation of revenues earned by foreign-based subsidiaries compared to the corresponding period a year ago, primarily reflecting the weakening of the Canadian dollar relative to the Euro and U.S. dollar.
Fiscal 2016 second quarter earnings from operations were $24.4 million (9% operating margin) compared to $14.1 million (7% operating margin) in the second quarter of fiscal 2015. Second quarter fiscal 2016 earnings from operations included $1.7 million of restructuring and severance costs and amortization expenses of $5.6 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat. Excluding these costs, second quarter fiscal 2016 adjusted earnings from operations were $31.7 million (12% margin), compared to adjusted earnings from operations of $27.0 million (13% margin) a year ago. Higher adjusted earnings from operations primarily reflected increased revenues.
Depreciation and amortization expense was $9.3 million in the second quarter of fiscal 2016, compared to $8.6 million a year ago, primarily due to increased amortization expenses as a result of the addition of identifiable intangible assets recorded on the acquisition of PA in the second quarter of fiscal 2015.
EBITDA was $33.7 million (13% EBITDA margin) compared to $22.7 million (11% EBITDA margin) in the second quarter of fiscal 2015. Excluding restructuring and severance costs, second quarter fiscal 2016 EBITDA was $35.4 million (13% EBITDA margin). Comparably, excluding acquisition-related costs, second quarter fiscal 2015 EBITDA was $29.8 million (14% EBITDA margin).
Second quarter fiscal 2016 Order Bookings were $230 million, a 6% increase from the second quarter of fiscal 2015. Excluding the impact of PA, Order Bookings decreased $34 million or 17% from the corresponding period a year ago primarily reflecting the timing of customer decisions on various larger opportunities. By customer market, lower Order Bookings in life sciences and transportation markets were partially offset by strength in consumer products and electronics.
Normal Course Issuer Bid
ATS today also announced that the Toronto Stock Exchange ("TSX") has accepted a notice filed by it of its intention to make a NCIB. Under the NCIB, ATS will have the ability to purchase for cancellation up to a maximum of 4,600,000 common shares, representing approximately 5% of the 92,541,582 common shares that were issued and outstanding as of October 31, 2015.
Purchases under the NCIB will be made through the facilities of the TSX and/or alternative trading systems in accordance with applicable regulatory requirements, during the twelve month period commencing on November 6, 2015 and ending on or before November 5, 2016. The average daily trading volume of the common shares on the TSX for the six calendar months ending October 31, 2015 is 160,087 common shares. On any trading day ATS will not purchase more than 25% of such average daily trading volume representing 40,021 common shares, except where such purchases are made in accordance with available block purchase exemptions. The common shares purchased under this NCIB will be cancelled.
Some purchases under the NCIB may be made pursuant to an automatic purchase plan between ATS and its broker. This plan would enable the purchase of ATS common shares when ATS would not ordinarily be active in the market due to internal trading blackout periods, insider trading rules, or otherwise.
ATS believes that there are times when the market price of ATS common shares may not reflect their underlying value and that the purchase of shares by ATS will both provide liquidity to existing shareholders and benefit remaining shareholders. The NCIB is viewed by ATS management as one component of an overall capital structure strategy and complimentary to its acquisition growth plans.
Quarterly Conference Call
ATS's quarterly conference call begins at 10 am eastern on Wednesday November 4 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 (until midnight November 11, 2015) by dialing 416-849-0833 and entering passcode 67263624 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, chemicals, consumer products, electronics, food, beverage, transportation, energy, and oil and gas. Founded in 1978, ATS employs approximately 3,500 people at 25 manufacturing facilities and 51 offices in North America, Europe, Southeast Asia and China.