ATS Reports Second Quarter Fiscal 2009 Results

CAMBRIDGE, ON, Nov. 12 /CNW/ - ATS Automation Tooling Systems Inc. today reported its financial results for the three and six months ended September 30, 2008 as well as the Company's next steps in restructuring the Automation Systems Group ("ASG").

Highlights

• Consolidated second quarter revenue increased 49% to $219.5 million from $146.9 million a year ago;
• Consolidated second quarter earnings from operations increased to $13.6 million compared to a loss from operations of $16.9 million a year ago;
• Second quarter earnings were $0.12 per share (basic and diluted) compared to a loss of $0.28 per share a year ago;
• Initiated the consolidation and restructuring of a number of smaller ASG manufacturing operations in the United States, Europe and Asia;
• Finalized a definitive agreement to sell the key operating assets and liabilities of the Precision Components Group ("PCG");
• Improved consolidated cash net of debt by $22.8 million from the beginning of the year to $50.8 million at September 30, 2008.

"Photowatt and ASG have made good progress on the execution of their respective strategies," said Anthony Caputo, Chief Executive Officer. "The sale of PCG and the consolidation and restructuring of the remaining underperforming ASG operations will substantially complete the "fix" phase of our strategic plan. Going forward, our focus on approach to market and supply chain management will increase. We are cognizant of changing global economic conditions and have been adjusting our plans accordingly".

Automation Systems Group Second Quarter Results

• Revenue increased 35% to $147.4 million from $109.1 million a year ago on higher Order Backlog entering the second quarter of fiscal 2009 compared to the prior year;
• EBITDA was $16.0 million compared to $4.4 million a year ago;
• Earnings from operations were $13.9 million, up from $2.4 million a year ago;
• Period end Order Backlog increased 12% to $247 million from $220 million a year ago;
• Order Bookings were consistent with last year at $133 million, and included two bookings with repeat solar and healthcare customers of $25 million and $13 million respectively;
• Order Bookings were $35 million during the first six weeks of the third quarter;

The improvement in operating results reflected higher revenue, cost reductions implemented during the fourth quarter of fiscal 2008 and improved program management. Revenue increased 4% in healthcare, 12% in computer- electronics, 222% in energy and 24% in other markets to more than offset a 14% decline in automotive revenue compared to the second quarter of 2008. The consolidation and restructuring of smaller, underperforming manufacturing operations is expected to result in an approximately 5% reduction in ASG's workforce and cost between $4 and $6 million during the third and fourth quarters of fiscal 2009.

Photowatt Technologies Second Quarter Results

• Photowatt France revenue increased 93% to $72.5 million from $37.5 million a year ago;
• Potowatt France EBITDA was $9.8 million compared to negative EBITDA of $2.9 million a year ago;
• Photowatt France operating earnings were $6.0 million compared to an operating loss of $6.1 million a year ago;
• Total megawatts (MWs) sold at Photowatt France increased 82% to 14.9 MWs from 8.2 MWs in the second quarter of fiscal 2008 - with UMG-Si products accounting for 71% of revenue;
• Average cell efficiency for UMG-Si cells improved to approximately 13.9% from 12.7% a year ago, while average cell efficiency for polysilicon products was 15.4% compared to 15.2% a year ago.

To balance production, offset the negative impact of the traditional summer plant shutdown and productively utilize its supply sources, Photowatt France continued to supplement its internal ingot and wafer production with increased externally-purchased polysilicon wafers in the second quarter and outsourced production of some cells and modules. This added incremental earnings to operations, but at lower operating margins than for modules manufactured in-house using internally produced wafers and cells. Average selling prices per watt were consistent year over year.

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 3423.

About ATS

ATS Automation Tooling Systems Inc. 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 healthcare, 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 Technologies, ATS participates in the growing solar energy industry as an integrated manufacturer of ingots, wafers, cells and modules. Photowatt- branded products and systems serve businesses, institutions and homeowners in established and emerging markets. ATS employs approximately 3,400 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. Visit the Company's website at www.atsautomation.com.

Management's Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") for the three and six months ended September 30, 2008 (second quarter of fiscal 2009) provides detailed 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 consolidated financial statements of the Company for the second quarter of fiscal 2009. The Company assumes that the reader of this MD&A has access to and has read the audited consolidated financial statements and MD&A of the Company for fiscal 2008 and the unaudited interim consolidated financial statements and MD&A for the three months ended June 30, 2008 and, accordingly, the purpose of this document is to provide a second quarter update to the information contained in the fiscal 2008 MD&A. These documents and other information relating to the Company, including the Company's fiscal 2008 audited consolidated financial statements, MD&A and annual information form may be found on SEDAR at www.sedar.com.

Notice to Reader

The Company has two reportable segments: Automation Systems Group ("ASG") and Photowatt Technologies ("Photowatt") which includes Photowatt France (the ongoing Photowatt Technologies operations), Photowatt USA, a small module assembly facility and sales operation closed during fiscal 2008 and Spheral Solar, a halted development project that has been wound down. Any reference to solar production capacity assumes the use of polysilicon at 15% cell efficiency. Actual solar capacity may vary materially for a number of reasons including the use of Upgraded Metallurgical Silicon ("UMG-Si"), changes in cell efficiency and/or changes in production processes. References to Photowatt's cell 'efficiency' means the percentage of incident energy that is converted into electrical energy in a solar cell. Solar cells and modules are sold based on wattage output. "Silicon" refers to a variety of silicon feedstock, including polysilicon, UMG-Si and polysilicon powders and fines. As described in Note 5 to the interim consolidated financial statements, the Precision Components Group ("PCG") was classified as held for sale as of March 31, 2008, and its results are reported in discontinued operations.

Non-GAAP Measures

Throughout this document the term "operating earnings" is used to denote earnings (loss) from operations. The term EBITDA is used and is defined as earnings (loss) from operations excluding depreciation and amortization (which includes amortization of intangible assets and impairment of goodwill). The term "margin" refers to an amount as a percentage of revenue. The terms "earnings (loss) from operations", "operating earnings", "margin", "operating loss", "operating results", "operating margin", "EBITDA", "Order Bookings" and "Order Backlog" do not have any standardized meaning prescribed within Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable to similar measures presented by other companies. Operating earnings and EBITDA are some of the measures the Company uses to evaluate the performance of its segments. Management believes that ATS shareholders and potential investors in ATS use non-GAAP financial measures such as operating earnings and EBITDA in making investment decisions about the Company and measuring its operational results. A reconciliation of EBITDA to total Company revenue and earnings from operations for the three and six months ended September 30, 2008 and the three and six months ended September 30, 2007 is contained in the MD&A. EBITDA should not be construed as a substitute for net income determined in accordance with GAAP. Order Bookings represent new orders for the supply of automation systems and products that management believes are firm. Order Backlog is the estimated unearned portion of ASG revenue on customer contracts that are in process and have not been completed at the specified date.

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