ATS Reports Third Quarter Fiscal 2016 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 27, 2015.

Third Quarter Summary

• Revenues from continuing operations were $274.9 million, 10% higher than the third quarter a year ago, primarily reflecting foreign exchange rate changes and the timing of project activities;
• Earnings from continuing operations were $26.8 million (10% operating margin), compared to $15.9 million (6% operating margin) in the third quarter of fiscal 2015. Adjusted earnings from continuing operations1 were $32.1 million (12% margin), compared to $27.2 million (11% margin) in the third quarter a year ago;
• EBITDA1 was $36.0 million (13% margin), compared to $28.7 million (12% margin) in the third quarter of fiscal 2015. Excluding a gain of $3.7 million from the sale of a redundant U.S. facility and restructuring and severance costs of $3.4 million, third quarter 2016 EBITDA was $35.7 million (13% margin), up from $30.4 million (12% margin), which excluded $1.7 million of acquisition-related costs;
• Earnings per share from continuing operations were 16 cents basic compared to 9 cents basic a year ago. Adjusted basic earnings per share from continuing operations1 were 21 cents compared to 18 cents in the third quarter a year ago;
• Order Bookings were $228 million, a 21% decrease from the third quarter of fiscal 2015;
• Period end Order Backlog was $546 million, 9% lower than at December 28, 2014; and
• The Company's balance sheet and financial capacity to support growth remained strong, with unutilized credit facilities of $616 million and $8.9 million of credit available under letter of credit facilities.

¹ Non-IFRS measure: see "Notice to Reader: Non-IFRS Measures and Additional IFRS Measures".

"Third quarter performance was strong with increased revenues and earnings which reflected our solid operating foundation," said Anthony Caputo, Chief Executive Officer. "Market conditions have challenged the front end of our business, with some customers delaying significant investment decisions. Despite this, our funnel remains strong and proposal activity robust. We have a strong balance sheet and significant financial resources available to pursue our growth strategy."

Third Quarter Summary Continuing Operations
Fiscal 2016 third quarter revenues were 10% higher than in the corresponding period a year ago, primarily reflecting foreign exchange rate changes and the timing of project activities. Foreign exchange rate changes positively impacted the translation of revenues earned by foreign-based subsidiaries compared to the corresponding period a year ago, primarily reflecting the weakening of the Canadian dollar relative to the U.S. dollar and Euro.

By market, fiscal 2016 third quarter revenues from consumer products & electronics were consistent with the corresponding period a year ago. Revenues generated in the energy market decreased 18% due to the timing of project activities. Revenues generated in the life sciences market increased 19% primarily due to foreign exchange rate changes and the timing of project activities. Transportation revenues increased 13% primarily due to foreign exchange rate changes and the timing of project activities.

Fiscal 2016 third quarter earnings from operations were $26.8 million (10% operating margin) compared to $15.9 million (6% operating margin) in the third quarter of fiscal 2015. Third quarter fiscal 2016 earnings from operations included a gain of $3.7 million from the sale of a redundant U.S. facility, $3.4 million of restructuring and severance costs and $5.6 million related to amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK, and sortimat. Excluding these items, third quarter fiscal 2016 adjusted earnings from operations were $32.1 million (12% margin), compared to adjusted earnings from operations of $27.2 million (11% margin) a year ago. Higher adjusted earnings from operations primarily reflected increased revenues.

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Depreciation and amortization expense was $9.2 million in the third quarter of fiscal 2016, compared to $12.8 million a year ago. The decrease primarily reflects lower amortization of identifiable intangible assets recorded on the acquisitions of PA, IWK, and sortimat compared to the third quarter of fiscal 2015.

EBITDA was $36.0 million (13% EBITDA margin) in the third quarter of fiscal 2016 compared to $28.7 million (12% EBITDA margin) in the third quarter of fiscal 2015. Excluding restructuring and severance costs and the gain on the sale of a U.S. facility, third quarter fiscal 2016 EBITDA was $35.7 million (13% EBITDA margin). Comparably, excluding acquisition-related costs, third quarter fiscal 2015 EBITDA was $30.4 million (12% EBITDA margin).

In the third quarter of fiscal 2016, the Company's investment in non-cash working capital decreased by $18.4 million from September 27, 2015. The Company has made progress towards its goal of reducing its overall investment in non-cash working capital as a percentage of revenues. However, at the end of the third quarter of fiscal 2016 the Company's non-cash working capital as a percentage of revenues was 15.4%. This remains above the Company's target of 15% or lower, which management expects to work towards over time.

Order Bookings
Third quarter fiscal 2016 Order Bookings were $228.0 million, a 21% decrease from the third quarter of fiscal 2015, primarily reflecting normal volatility in the Company's Order Bookings including the timing of customer decisions on various larger opportunities. Lower Order Bookings were realized in all customer markets with the exception of energy. The most significant decreases were realized in the life sciences and consumer products and electronics markets.

Quarterly Conference Call
ATS's quarterly conference call begins at 10 am eastern on Wednesday February 3 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 (until midnight February 10, 2016) by dialing (416) 849-0833 and entering passcode 35564430 followed by the number sign.

About ATS
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 24 manufacturing facilities and over 50 offices in North America, Europe, Southeast Asia and China.

Company Contact
Maria Perrella, Chief Financial Officer
Tel: 519 653-6500