ATS Reports Third Quarter Fiscal 2018 Results
CAMBRIDGE, ON, /CNW/ - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and nine months ended December 31, 2017.
Third Quarter Summary
- Revenues were $277.6 million, 17% higher than a year ago.
- Earnings from operations were $14.8 million (5% operating margin), compared to $15.3 million (6% operating margin) in the third quarter of fiscal 2017, primarily reflecting planned restructuring costs.
- Adjusted earnings from operations1 were $29.3 million (11% margin), compared to $22.5 million (9% margin) in the third quarter a year ago, primarily reflecting higher revenues.
- EBITDA1 of $24.3 million (9% margin) was unchanged from the third quarter of fiscal 2017 (10% margin).
- Earnings per share were 7 cents basic and diluted in the third quarter of fiscal 2018 and 2017. Adjusted basic earnings per share1 were 18 cents for the third quarter of fiscal 2018 compared to 12 cents a year ago.
- Order Bookings were $311 million, a 10% increase from the third quarter of fiscal 2017.
- Period end Order Backlog was $689 million, 9% higher than at January 1, 2017.
- The Company's balance sheet and financial capacity to support growth remained strong, with unutilized credit facilities of $643.5 million.
"Third quarter performance reflected improvement in our financial value drivers including revenues, Order Bookings and adjusted earnings from operations margin1," said Andrew Hider, Chief Executive Officer. "Order Bookings included significant programs from both new and existing customers. As a result, we have record Order Backlog that will primarily benefit our performance in fiscal 2019. Operationally, we are advancing the deployment of our ATS Business Model."
1 Non-IFRS measure: see "Notice to Reader: Non-IFRS Measures and Additional IFRS Measures".
Third Quarter Summary
Fiscal 2018 third quarter revenues were 17% higher than in the corresponding period a year ago. Higher revenues primarily reflected the timing of project activities. By market, fiscal 2018 third quarter revenues from consumer products & electronics increased 14% compared to a year ago due to timing of Order Bookings. Revenues generated in the energy market decreased 13% primarily due to timing of Order Bookings. Revenues in the life sciences market increased 39%, primarily reflecting higher Order Backlog entering the third quarter of fiscal 2018 compared to a year ago. Transportation revenues increased 8% compared to a year ago primarily due to timing of Order Bookings.
Fiscal 2018 third quarter earnings from operations were $14.8 million (5% operating margin) compared to $15.3 million (6% operating margin) in the third quarter of fiscal 2017. Third quarter fiscal 2018 earnings from operations included $9.0 million of restructuring costs related to the closure of a division in southeast Asia, the rationalization of a business line at a division in Europe, as well as leadership and management changes and $5.5 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat. Third quarter fiscal 2017 earnings from operations included $2.3 million of restructuring costs and $4.9 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK and sortimat. Excluding restructuring and amortization of acquisition-related intangible assets, third quarter fiscal 2018 adjusted earnings from operations were $29.3 million (11% margin), compared to $22.5 million (9% margin) a year ago. Higher adjusted earnings from operations primarily reflected higher revenues in the third quarter of fiscal 2018, partially offset by higher selling, general and administrative expenses compared to a year ago.
Depreciation and amortization expense was $9.5 million in the third quarter of fiscal 2018, which included $0.5 million of incremental amortization related to the rationalization of a European business line. Third quarter fiscal 2017 depreciation was $9.0 million which included $1.0 million of incremental depreciation related to the closure of a U.S. operation. Excluding these items, depreciation and amortization expenses were $9.0 million in the third quarter of fiscal 2018 compared to $8.0 million in the third quarter of fiscal 2017. The increase primarily reflected depreciation of internal development projects.
EBITDA of $24.3 million (9% EBITDA margin) was unchanged in the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 (10% EBITDA margin). Higher revenues in fiscal 2018 were offset by increased restructuring costs and other selling, general and administrative expenses compared to a year ago.
Third quarter fiscal 2018 Order Bookings were $311 million, a 10% increase from the third quarter of fiscal 2017. By customer market, higher Order Bookings in the consumer products & electronics and transportation markets were partially offset by lower Order Bookings in the energy and life sciences markets.
At December 31, 2017, Order Backlog was $689 million, 9% higher than at January 1, 2017. Higher Order Backlog in the consumer products & electronics and energy markets was partially offset by lower Order Backlog in the life sciences market. Order Backlog in the transportation market was slightly higher.
Quarterly Conference Call
ATS' quarterly conference call will begin at 10:00 a.m. eastern on Wednesday February 7, 2018, 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 8787068 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 23 manufacturing facilities and over 50 offices in North America, Europe, Southeast Asia and China.
Management's Discussion and Analysis
For the Quarter Ended December 31, 2017
This Management's Discussion and Analysis ("MD&A") for the three and nine months ended December 31, 2017 (third quarter of fiscal 2018) is as of February 6, 2018 and provides information on the operating activities, performance and financial position of ATS Automation Tooling Systems Inc. ("ATS" or the "Company") and should be read in conjunction with the unaudited interim condensed consolidated financial statements of the Company for the third quarter of fiscal 2018, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are reported in Canadian dollars. The Company assumes that the reader of this MD&A has access to, and has read, the audited consolidated financial statements prepared in accordance with IFRS and the MD&A of the Company for the year ended March 31, 2017 (fiscal 2017), and, accordingly, the purpose of this document is to provide a fiscal 2018 third quarter update to the information contained in the fiscal 2017 MD&A. Additional information is contained in the Company's filings with Canadian securities regulators, including its Annual Information Form, found on SEDAR at www.sedar.com and on the Company's website at www.atsautomation.com.
Maria Perrella, Chief Financial Officer