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ATS Industrial Automation is a global leader integrator for EV battery, fixed energy storage, E-commerce packaging, electronic product assembly, and testing automation. Our customers are weary of production problems and want high-volume, high-speed capabilities so that they can deliver a quality product, on-time, and on-budget. With expertise in battery assembly, welding, vision, and process automation, ATS Industrial Automations provides the best route to scale their business. Our custom system
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ATS Reports Annual and Fourth Quarter Fiscal 2013 Results
POSTED 05/23/2013
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ATS Reports Annual and Fourth Quarter Fiscal 2013 Results
CAMBRIDGE, ON, - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported financial results for the three and 12 months ended March 31, 2013 for its continuing operations (Automation Systems Group or "ASG") and discontinued operations ("Solar").
Fourth Quarter Summary - Continuing Operations- Revenues were $153.2 million, 6% higher than the third quarter of fiscal 2013 and 12% lower than the corresponding period a year ago;
- Earnings from operations were $14.0 million (9% operating margin) compared to $13.6 million (9% operating margin) in the third quarter of fiscal 2013 and $16.1 million (9% operating margin) in the corresponding period a year ago;
- EBITDA was $17.3 million (11% EBITDA margin) compared to $16.6 million (12% EBITDA margin) in the third quarter of fiscal 2013 and $19.0 million (11% EBITDA margin) in the corresponding period a year ago;
- Order Bookings were $170 million, a 2% decrease from $173 million in the third quarter of fiscal 2013 and a 9% decrease from the fourth quarter of fiscal 2012;
- Period end Order Backlog was a record $398 million, an increase of 3% from $388 million in the third quarter of fiscal 2013 and an increase of 4% from $382 million a year ago;
- The Company's balance sheet was strong with cash net of debt of $104.3 million with $199.4 million of unutilized credit available under the Credit Agreement and another $18.9 million available under letter of credit facilities.
Fourth Quarter Summary - Continuing Operations
By industrial market, consumer products & electronics revenues declined 52% year-over-year due to lower Order Backlog entering the fourth quarter compared to a year ago, primarily on lower activity in consumer products markets. Energy market revenues decreased 54% on lower Order Backlog entering the fourth quarter compared to a year ago, reflecting weakness in the solar market. Revenues from life sciences increased 6% year-over-year due to higher Order Backlog entering the fourth quarter compared to a year ago on continued market strength. Transportation revenues decreased by 4% on lower Order Backlog entering the fourth quarter compared to a year ago due to the timing of various larger opportunities in this market.
Fiscal 2013 fourth quarter earnings from operations were $14.0 million (9% operating margin) compared to earnings from operations of $16.1 million (9% operating margin) in the fourth quarter of fiscal 2012. The decrease in earnings from operations primarily reflected lower revenues during the fourth quarter of fiscal 2013, which were partially offset by lower selling, general and administrative expenses compared to the corresponding period a year ago.
Annual Summary - Continuing Operations
Fiscal 2013 revenues were 1% lower than a year ago. By industrial market, annual revenues from life sciences and transportation markets both increased 12% year-over-year, primarily on increased Order Backlog entering the fiscal year compared to a year ago. Revenues in energy decreased 54% compared to a year ago, primarily due to decreased Order Backlog entering the fiscal year compared to a year ago on weakness in the solar market. Revenues in consumer products & electronics decreased 23% compared to a year ago, primarily due to lower Order Bookings during the fiscal year compared to a year ago on lower activity in the consumer products market.
Foreign exchange rate changes negatively impacted the translation of revenues earned by foreign-based ASG subsidiaries by approximately $7.8 million compared to fiscal 2012, primarily reflecting the strengthening of the Canadian dollar relative to the Euro.
Earnings from operations were $56.6 million (10% operating margin) compared to earnings from operations of $60.3 million (10% operating margin) in the corresponding period a year ago. Excluding a $3.0 million gain relating to the sale of a redundant ASG facility in France, and the benefit of $3.7 million of previously unrecognized U.S. research and development tax credits, both of which were recognized in the third quarter of fiscal 2012, earnings from operations in fiscal 2012 were $53.6 million (9% operating margin). On a normalized basis, increased earnings from operations in fiscal 2013 primarily reflected reduced selling, general and administrative costs.
ASG Order Bookings
Fourth quarter fiscal 2013 Order Bookings were $170 million, a 9% decrease from the fourth quarter of fiscal 2012 Order Bookings of $187 million. Strong Order Bookings in the transportation market were more than offset by lower Order Bookings in the life sciences market, which primarily reflected the timing of various larger opportunities, and weakness in the consumer products market.
Fiscal 2013 Order Bookings were $623 million, a 9% decrease from fiscal 2012 Order Bookings of $688 million. Continued strength in life sciences and transportation was offset by lower activity in energy, consumer products and electronics.
Fourth Quarter Summary - Discontinued Operations: Solar
Fiscal 2013 fourth quarter revenues of $1.6 million were 84% lower than in the fourth quarter of fiscal 2012 reflecting regulatory delays affecting demand. Ontario Solar recorded a $0.6 million loss in the fourth quarter of fiscal 2013. The fourth quarter loss in fiscal 2012 was $7.9 million, $2.0 million of which related to Ontario Solar and $5.9 million of which related to Photowatt France, which was divested in the second half of fiscal 2012.
Regarding the plan to implement the separation of Solar from ATS, during the year ended March 31, 2013, the Company's 50% owned joint venture; Ontario Solar PV Fields ("OSPV") signed a definitive agreement to sell four ground-mount solar projects, representing approximately 34 megawatts (MWs). The transaction is subject to a number of approvals and conditions, including the purchaser securing financing for the projects. The Company expects the transaction to close in the first half of calendar 2013. OSPV will retain 25% ownership of the projects until the projects reach commercial operation, which is expected in calendar 2014. Net proceeds to the Company are expected to be approximately $20 million, scheduled to be paid based on the projects achieving certain development milestones. To date, the Company has received down payments of $0.8 million for its 50% share of the projects.
The Company has signed a definitive agreement to sell the Ontario Solar manufacturing assets and inventory. Delivery of the assets is expected to occur in the second quarter of fiscal 2014. Net proceeds to the Company are expected to be approximately $6 million with the final one-third of this amount expected to be paid in the third quarter of fiscal 2014. The Company expects to incur restructuring charges of approximately $2 million to complete its obligations related to the sale and wind-down of the business.
Regarding the remaining three ground-mount solar projects, the Company has signed a non-binding memorandum of understanding which sets the major commercial terms for the sale of the projects. The Company is working to conclude a definitive agreement for the sale of those projects.
Annual Results Materials
ATS's annual Consolidated Financial Statements, Management's Discussion and Analysis, and Annual Information Form for the year ended March 31, 2013, are available on the Company's website at www.atsautomation.com and on SEDAR at www.sedar.com.
Quarterly Conference Call
ATS's quarterly conference call begins at 10 am eastern on Thursday May 23 and can be accessed live at www.atsautomation.com or on the phone by dialing 416 644 3415 five minutes prior.
About ATS
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 consumer products & electronics, energy, life sciences and transportation. It also leverages its many years of experience and skills to fulfill the specialized automation product manufacturing requirements of customers. Through its Ontario solar business, ATS participates in the solar energy industry. ATS employs approximately 2,400 people at 20 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. Visit the Company's website at www.atsautomation.com.
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