News

ATS Reports First Quarter Fiscal 2011 Results

08/04/2010

6 minutes

CAMBRIDGE, ON - ATS Automation Tooling Systems Inc. ("ATS" or the "Company") today reported its financial results for the three months ended June 27, 2010.

First Quarter Summary

Consolidated revenue was $151.1 million, 1% lower than $152.7 million a year ago;
Consolidated earnings from operations increased to $9.7 million from $0.5 million a year ago;
Earnings increased to $0.07 per share (basic and diluted) compared to $0.00 per share (basic and diluted) a year ago;
A strong balance sheet was maintained with cash net of debt of $83.5 million at June 27, 2010.
On June 1, 2010, the acquisition of Sortimat Group ("Sortimat") was completed.

"Our Automation Systems Group ("ASG") operating earnings remained strong and Photowatt was breakeven, despite the ongoing challenging market conditions that have continued to negatively impact our Order Bookings and revenues," said Anthony Caputo, Chief Executive Officer. "As we move forward with our plans for growth, we are taking actions including organizing our ASG divisions by capability and segment and organizing our global sales and marketing group to mirror the markets we serve."

Subsequent to the completion of the Sortimat acquisition, the Company launched its Life Sciences group. As ASG continues to build critical mass in other markets, other divisions will be organized into operational groups: Products, Services, Transportation, Energy, and Consumer Products & Electronics. This new functional-based structure, combined with ASG's strong business processes, will support the Company's organic and acquisition-based growth strategy.

The Company has initiated a formal process to separate Photowatt and has engaged advisors to assist the Company in identifying and evaluating strategic alternatives. Conditions in the solar and capital markets will be a consideration in the timing and form of separation.

ASG First Quarter Results

Revenue increased to $106.6 million in the first quarter of fiscal 2011 compared to fiscal 2010 fourth quarter revenue of $91.5 million, but decreased from $115.2 million a year ago;
Fiscal 2011 first quarter EBITDA was $17.7 million compared to EBITDA of $21.1 million in the fourth quarter and $16.7 million a year ago;
Earnings from operations were $15.9 million (operating margin of 15%), compared to $19.5 million (operating margin of 21%) in the fourth quarter of fiscal 2010 and $14.8 million (operating margin of 13%) in the first quarter a year ago;
Period end Order Backlog was up 3% to $215 million from $209 million in the fourth quarter of fiscal 2010, but 7% below the Order Backlog of $230 million a year ago;
Order Bookings declined to $85 million compared to $105 million and $96 million in the fourth and first quarter of last year, respectively;
Order Bookings were $48 million during the first five weeks of the second quarter.

Despite the year-over-year decline in revenues, operating margins were maintained at 15% consistent with both the first and fourth quarters of fiscal 2010 (excluding severance and restructuring charges of $2.1 million incurred in the first quarter and the investment tax credit benefit of $6.1 million realized in the fourth quarter). Revenue increased year over year by 9% in life sciences (formerly referred to as healthcare), primarily as a result of revenue earned by Sortimat subsequent to its June 1, 2010 acquisition. The increase in life sciences revenue was offset by declines of 2% in computer-electronics, 1% in energy, 35% in transportation (formerly referred to as automotive), and 66% in "other" markets (primarily consumer products).

Photowatt First Quarter Results

Revenue was $48.8 million, consistent with fiscal 2010 fourth quarter revenue of $48.6 million and 22% higher than revenue of $40.1 million a year ago;
EBITDA was $3.2 million compared to EBITDA of negative $38.3 million in the fourth quarter of fiscal 2010 and negative $3.4 million a year ago;
Loss from operations was $0.1 million compared to loss from operations of $42.4 million in the fourth quarter of fiscal 2010 and loss from operations of $7.5 million in the first quarter a year ago;
Total megawatts (MWs) sold decreased 10% to 11.4 MWs from 12.7 MWs in the fourth quarter of fiscal 2010, but were 37% higher than the 8.3 MWs sold in the first quarter of fiscal 2010.

Higher year-over-year revenues reflected $7.1 million of revenue generated primarily from the sale of previously written-down raw material inventory, which was sold for approximately its net book value. Revenue from system sales in the first quarter of fiscal 2011 increased to $26.2 million from $24.8 million a year ago. Photowatt's operating margin improved to breakeven from negative 19% a year ago. Included in Photowatt's first quarter operating loss a year ago was a $4.7 million warranty charge related to a specific customer contract which contained an incremental performance clause beyond Photowatt's standard warranty terms. Excluding this expense, the year-over-year improvement in operating results reflected the higher MWs sold, increased system sales, and lower direct manufacturing costs-per-watt. These improvements were partially offset by a decrease in average selling prices per watt and costs related to the start-up of Photowatt Ontario.

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 3422 five minutes prior.

Annual Meeting of Shareholders

ATS will hold its Annual Meeting of Shareholders on August 5, 2010 at 10:00 a.m. (eastern) at the Holiday Inn Hotel and Conference Centre, 30 Fairway Road South, Kitchener, Ontario, Canada.

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 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 2,700 people at 17 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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ATS Reports First Quarter Fiscal 2011 Results

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