ATS Reports Third Quarter Fiscal 2011 Results
Editor's Note: This release has been truncated.
ATS Automation Tooling Systems Inc. ("ATS" or the "Company") today reported its financial results for the three and nine months ended December 26, 2010.
Third Quarter Summary
- Consolidated revenues were $192.5 million compared to $162.0 million in the second quarter of the fiscal year and $138.1 million in the same period a year ago;
- Consolidated loss from operations was $8.5 million compared to earnings from operations of $5.5 million in the second quarter of the fiscal year and earnings from operations of $4.7 million in the same period a year ago;
- The Company recorded a $9.0 million provision related to a restructuring project at Photowatt France ("PWF") (subject to the ongoing notification and consultation process with employee works council in accordance with French law) and related legal and advisory services. The restructuring project is intended to: grow systems sales in France; reduce factory costs; and improve the supply chain;
- Third quarter loss per share was $0.14 compared to per share earnings of $0.04 (basic and diluted) in the second quarter of the fiscal year and per share earnings of $0.04 (basic and diluted) in the same period a year ago;
- The Company's balance sheet was strong with cash net of debt of $95.3 million at December 26, 2010;
- On January 5, 2011, the Company completed the acquisition of the majority of Assembly & Test Worldwide Inc.'s U.S. and German-based automation and test systems businesses (collectively "ATW"); and
- The Company made progress on the contemplated separation of Photowatt through advancing a dual track process; a potential spinoff of the Company's solar business to shareholders or a potential sale of PWF.
"Our Automation Systems Group ("ASG") performance was strong and we saw improvements in our markets, however losses at PWF negatively impacted consolidated results," said Anthony Caputo, Chief Executive Officer. "We are beginning to see the return of larger opportunities in ASG, and with recent acquisitions, continue to expand our core business. Photowatt has initiated a restructuring project designed to recover competitiveness. The Company is pursuing a clear path to prepare for the contemplated separation of Photowatt."
ASG Third Quarter Results
- Revenues increased to $124.7 million in the third quarter of fiscal 2011 compared to second quarter revenues of $117.8 million and $78.6 million a year ago reflecting the addition of Sortimat and improved Order Bookings compared to the prior periods;
- EBITDA was $16.8 million compared to $17.0 million in the second quarter of this fiscal year and $10.0 million in the same period a year ago;
- Earnings from operations were $14.4 million (operating margin of 12%) compared to $14.5 million (operating margin of 12%) in the second quarter of this fiscal year and $8.4 million (operating margin of 11%) in the same period a year ago;
- Period end Order Backlog was $215 million, an increase of 3% from $208 million in the second quarter of this fiscal year and up 6% from $203 million a year ago;
- Order Bookings were 27% higher at $133 million compared to $105 million in the second quarter of fiscal 2011 and 45% higher compared to $92 million in the third quarter of fiscal 2010;
- Order Bookings were $73 million during the first five weeks of the fourth quarter.
On the 59% year-over-year increase in revenues in the third quarter, ASG's operating margin increased to 12% from 11%, despite the inclusion of Sortimat, which had lower operating margins than other ASG operations, and incremental amortization related to identifiable intangible assets recorded on the acquisition of Sortimat. Revenues increased year over year by 19% in life sciences, 1% in computer-electronics, 146% in energy, 45% in transportation, and 263% in "other" markets (primarily consumer products). Increased volumes were partially offset by year-over-year foreign exchange rate changes which negatively impacted the translation of revenues due to the strong Canadian dollar relative to the U.S. dollar and Euro.
The addition of ATW's capability in specialized automation and test systems, customer relationships, and critical mass has enabled the launch of a transportation group within ASG. Integration of ATW is underway with a focus on applying best practices. Until the integrations of ATW and Sortimat are complete, ASG operating margins will be negatively impacted. Sortimat's integration is progressing well with cost reductions made in the third quarter.
Photowatt Third Quarter Results
- Revenues were $73.0 million, a 62% increase over fiscal 2011 second quarter revenues of $45.1 million and a 22% increase from $59.7 million a year ago;
- EBITDA was negative $12.8 million compared to EBITDA of $0.9 million in the second quarter of fiscal 2011 and EBITDA of $5.7 million a year ago;
- Loss from operations was $16.3 million compared to a loss from operations of $2.6 million in the second quarter of fiscal 2011 and operating earnings of $1.6 million a year ago;
- Total megawatts (MWs) sold increased 64% to 16.4 MWs from 10.0 MWs in the second quarter of fiscal 2011, and were 28% higher than the 12.8 MWs sold a year ago.
Third quarter fiscal 2011 revenues included $17.4 million of revenues generated primarily from the sale of excess raw material inventory, which was sold for approximately its net book value. Excluding the revenues from raw material sales, the year-over-year decrease in revenues reflected lower average selling prices and the strong Canadian dollar relative to the Euro, which negatively impacted the translation of revenues earned at PWF. These decreases were partially offset by higher MWs sold and initial revenues generated at PWO in the third quarter of fiscal 2011. Revenues from the sale of systems decreased 17% to $31.8 million from $38.5 million a year ago. Photowatt's third quarter operating loss included a $9.0 million restructuring provision related to the restructuring project (subject to the ongoing notification and consultation process with employee works council in accordance with French law) and related legal and advisory services at PWF. The decline in Photowatt's operating margin also reflected incremental costs incurred at PWO as well as higher operating costs incurred at Photowatt's joint venture, PV Alliance, as activity ramped-up in advance of the fourth quarter launch of its 25 MW cell line.
Quarterly Conference Call
ATS's quarterly conference call begins at 10 am eastern today and can be accessed over the Internet at www.atsautomation.com or on the phone at 416 644 3418.
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, automotive 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 growing solar energy industry. ATS employs approximately 3,000 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.