ATS Corporation (TSX and NYSE: ATS) (“ATS” or the “Company”)
today reported its financial results for the three and nine months
ended December 31, 2023. All references to "$" or "dollars" in this
news release are to Canadian dollars unless otherwise
indicated.
Third quarter highlights:
- Revenues increased 16.2% year over year to $752.0 million.
- Net Income was $47.2 million compared to $29.2 million a year
ago.
- Basic earnings per share were 48 cents, compared to 32 cents a
year ago.
- Adjusted EBITDA1 was $119.3 million, 18.5% higher compared to
$100.7 million a year ago.
- Adjusted basic earnings per share1 were 65 cents compared to 56
cents a year ago.
- Order Bookings1 were $668 million, 31.8% lower compared to $979
million a year ago, which included Order Bookings of U.S. $221.3
million (approximately $300.2 million CAD) from an electric vehicle
("EV") customer.
- Order Backlog1 decreased 11.0% to $1,907 million compared to
$2,143 million a year ago.
"Today we announced our third quarter results. Building on our
momentum from the first half of the year, we again demonstrated
strong organic revenue growth and adjusted earnings," said Andrew
Hider, Chief Executive Officer. "We also completed the acquisition
of Avidity, which complements our existing life sciences businesses
while furthering our product offerings to both new and existing
customers."
"In addition, subsequent to the quarter end, our PA Solutions
business completed the acquisition of IT.ACA. Engineering S.r.l.
("ITACA"), an Italian based automation integrator with a focus on
pharma processing. We are pleased to welcome both the Avidity and
ITACA teams to the ATS family as we drive our strategy and evolve
our portfolio."
Year-to-date highlights:
- Revenues increased 21.4% year over year to $2,241.4
million.
- Net Income increased 48.5% year over year to $145.7
million.
- Basic earnings per share increased 39.3% year over year to
$1.49.
- Adjusted EBITDA1 increased 25.3% year over year to $354.6
million.
- Adjusted basic earnings per share1 increased 19.5% year over
year to $1.96.
- Order Bookings1 were $2,100 million, compared to $2,518 million
a year ago.
Mr. Hider added: “Our diversified opportunity funnel and our
strategic acquisitions give us ongoing confidence in our ability to
create strong shareholder value and continue to deliver solutions
that positively impact lives around the world."
1 Non-IFRS measure: see “Notice to Reader: Non-IFRS and Other
Financial Measures”.
Financial results
(In millions of dollars, except per share and margin data)
Three Months Ended
December 31, 2023
Three Months Ended January 1,
2023
Variance
Nine Months Ended
December 31, 2023
Nine Months Ended January 1,
2023
Variance
Revenues
$
752.0
$
647.0
16.2%
$
2,241.4
$
1,846.6
21.4%
Net income
$
47.2
$
29.2
61.6%
$
145.7
$
98.1
48.5%
Adjusted earnings from
operations1, 2
$
101.2
$
86.2
17.4%
$
301.6
$
241.5
24.9%
Adjusted earnings from operations
margin1, 2
13.5
%
13.3
%
13bps
13.5
%
13.1
%
38bps
Adjusted EBITDA1, 2
$
119.3
$
100.7
18.5%
$
354.6
$
283.0
25.3%
Adjusted EBITDA margin1, 2
15.9
%
15.6
%
30bps
15.8
%
15.3
%
50bps
Basic earnings per share
$
0.48
$
0.32
50.0%
$
1.49
$
1.07
39.3%
Adjusted basic earnings per
share1, 2
$
0.65
$
0.56
16.1%
$
1.96
$
1.64
19.5%
Order Bookings1
$
668.0
$
979.0
(31.8)%
$
2,100.0
$
2,518.0
(16.6)%
As At
December 31
2023
January 1 2023
Variance
Order Backlog1
$
1,907
$
2,143
(11.0)%
1
Non-IFRS Financial Measure - See “Non-IFRS
and Other Financial Measures."
2
Certain Non-IFRS Financial Measures have
been revised from previously disclosed values to exclude the impact
on stock-based compensation expense of the revaluation of deferred
stock units and restricted share units resulting specifically from
the change in market price of the Company's common shares between
periods ("stock-based compensation revaluation expenses").
Management believes that this adjustment provides further insight
into the Company's performance, as share price volatility drives
variability in the Company's stock- based compensation expense.
Recent Acquisitions
On November 16, 2023, the Company acquired Avidity Science, LLC
("Avidity"), a growing designer and manufacturer of automated water
purification solutions for biomedical and life science
applications. The total purchase price paid in the third quarter of
fiscal 2024, pending post-closing adjustments was $271.9 million
(U.S. $198.6 million). Avidity serves a diverse global customer
base of pharmaceutical, biopharma, healthcare, government, and
academic research facilities. Avidity bolsters ATS' value
proposition for both new and existing customers by providing
researchers confidence in their data during key stages of drug
discovery, development and testing.
On January 1, 2024, subsequent to the third quarter, the Company
acquired IT.ACA. Engineering S.r.l., an Italian automation system
integrator.
Third quarter summary
Fiscal 2024 third quarter revenues were 16.2% or $105.0 million
higher than in the corresponding period a year ago. This
performance reflected year-over-year organic revenue growth (growth
excluding contributions from acquired companies and foreign
exchange translation) of $59.2 million or 9.1%, and revenues earned
by acquired companies of $29.7 million, most notably $13.8 million
from Avidity Science, LLC ("Avidity"), which was acquired in the
third quarter of fiscal 2024. Foreign exchange translation
positively impacted revenues by $16.1 million or 2.5%, primarily
reflecting the strengthening of the Euro relative to the Canadian
dollar. Revenues generated from construction contracts increased
14.9% or $63.0 million due to organic revenue growth combined with
positive foreign exchange translation impact. Revenues from
services increased 23.2% or $28.8 million due to revenues earned by
acquired companies of $18.0 million in addition to organic revenue
growth and the positive impact of foreign exchange translation.
Revenues from the sale of goods increased 13.1% or $13.2 million
primarily due to revenues earned by acquired companies of $11.2
million in addition to a positive foreign exchange translation
impact.
By market, revenues generated in life sciences increased $12.7
million or 4.2% year over year. This was primarily due to
contributions from acquisitions totalling $18.2 million and the
positive impact of foreign exchange translation, partially offset
by revenues earned a year ago on a large $120.0 million program.
Revenues in transportation increased $78.8 million or 48.8%, due to
timing of program execution and on higher Order Backlog entering
the third quarter of fiscal 2024, driven primarily by EV Order
Bookings, including previously announced EV Order Bookings of U.S.
$578.2 million. Revenues generated in food & beverage increased
$6.4 million or 7.2% due to revenues earned by acquired companies
and the positive impact of foreign exchange translation. Revenues
generated in consumer products decreased $0.9 million or 1.3%.
Revenues in energy increased $8.0 million or 34.9% due to higher
Order Backlog entering the period as compared to the prior year and
$3.5 million of contributions from acquisitions.
Net income for the third quarter of fiscal 2024 was $47.2
million (48 cents per share basic), compared to $29.2 million (32
cents per share basic) for the third quarter of fiscal 2023. The
increase primarily reflected higher revenues, partially offset by
higher cost of revenues, selling, general and administrative
("SG&A") expenses, and restructuring charges. Adjusted basic
earnings per share were 65 cents compared to 56 cents in the third
quarter of fiscal 2023 (see “Reconciliation of Non-IFRS Measures to
IFRS Measures”).
Depreciation and amortization expense was $35.2 million in the
third quarter of fiscal 2024, compared to $27.9 million a year ago;
the increase was primarily related to incremental depreciation and
amortization expense from recently acquired companies.
EBITDA was $113.7 million (15.1% EBITDA margin) in the third
quarter of fiscal 2024 compared to $83.9 million (13.0% EBITDA
margin) in the third quarter of fiscal 2023. EBITDA for the third
quarter of fiscal 2024 included $16.2 million of restructuring
charges, $0.9 million of incremental costs related to acquisition
activity, $0.8 million of acquisition-related fair value
adjustments to acquired inventories, a $0.6 million recovery of
stock-based compensation expenses due to revaluation, and an $11.7
million gain on sale of facilities. EBITDA for the corresponding
period in the prior year included $0.7 million of incremental costs
related to acquisition activity, $10.5 million of restructuring
charges, and $5.6 million of stock-based compensation revaluation
expenses. Excluding these costs, adjusted EBITDA was $119.3 million
(15.9% adjusted EBITDA margin), compared to $100.7 million (15.6%
adjusted EBITDA margin) for the corresponding period in the prior
year. Higher adjusted EBITDA reflected higher revenues partially
offset by increased SG&A expenses. EBITDA is a non-IFRS measure
- see “Non-IFRS and Other Financial Measures.”
Order Backlog
Continuity
(In millions of dollars)
Three Months
Ended
Three Months
Nine Months
Ended
Nine Months
December 31,
2023
Ended January 1, 2023
December 31,
2023
Ended January 1, 2023
Opening Order Backlog
$
2,016
$
1,793
$
2,153
$
1,438
Revenues
(752
)
(647
)
(2,241
)
(1,847
)
Order Bookings
668
979
2,100
2,518
Order Backlog adjustments1
(25
)
18
(105
)
34
Total
$
1,907
$
2,143
$
1,907
$
2,143
1
Order Backlog adjustments include
incremental Order Backlog of acquired companies ($4 million
acquired with Avidity in the three and nine months ended December
31, 2023, and $11 million acquired with IPCOS Group N.V. in the
three and nine months ended January 1, 2023), foreign exchange
adjustments, scope changes and cancellations.
Order Bookings
Third quarter fiscal 2024 Order Bookings were $668 million, a
31.8% year over year decrease, reflecting an organic Order Bookings
decline of 36.2%, primarily related to the transportation market,
partially offset by 3.0% growth from acquired companies, in
addition to a 1.4% increase due to foreign exchange rate
translation of Order Bookings from foreign-based ATS subsidiaries,
primarily reflecting the strengthening of the Euro relative to the
Canadian dollar. Order Bookings from acquired companies totalled
$29.0 million. By market, Order Bookings in life sciences increased
compared to the prior-year period primarily due to $18.1 million of
contributions from acquired companies, organic growth and a
positive foreign exchange rate translation of Order Bookings from
foreign-based ATS subsidiaries. Order Bookings in transportation
decreased compared to the prior-year period, as a result of
variability on timing of large EV orders. Third quarter fiscal 2023
included Order Bookings of U.S. $221.3 million (approximately
$300.2 million CAD) from a global automotive customer to move
towards fully automated battery assembly systems for their North
American manufacturing operations. Order Bookings in food &
beverage increased compared to the prior-year period primarily due
to foreign exchange rate translation of Order Bookings from
foreign-based ATS subsidiaries. Order Bookings in consumer products
increased primarily due to the timing of customer projects and
contributions from acquired companies. Order Bookings in energy
decreased primarily due to timing of customer projects.
Trailing twelve month book-to-bill ratio at December 31, 2023
was 0.95:1. Book-to-bill ratio is a supplementary financial measure
- see “Non-IFRS and Other Financial Measures.”
Backlog
At December 31, 2023, Order Backlog was $1,907 million, 11.0%
lower than at January 1, 2023 primarily on account of lower Order
Backlog within the transportation market where several large,
strategic Order Bookings were included a year ago.
Outlook
The life sciences funnel remains strong, with a focus on
strategic submarkets of pharmaceuticals, radiopharmaceuticals, and
medical devices such as auto-fillers and auto-injectors. Management
continues to see opportunities with both new and existing
customers, including those customers using auto-injectors for
diabetes and obesity treatments, and producers of contact lens and
pre-filled syringes, as well as opportunities to provide life
science solutions that leverage various integrated capabilities to
serve broader customer needs. In transportation, the funnel largely
includes strategic opportunities related to electric vehicles, as
the global automotive industry continues to shift towards EV
production. The strategic nature of EV programs can result in
larger average order values, resulting in variability in Order
Bookings. Management believes the Company's automated EV battery
pack and assembly capabilities position ATS well within the
industry. Management is working with one of its EV customers to
support their revised timing on a portion of an existing program as
the customer works to realign their production schedules. The
near-term market for electric vehicles remains dynamic as
automotive Original Equipment Manufacturers look to align capacity
to end-market demand and lower platform costs, however the
longer-term fundamentals remain intact and the transportation
funnel is strong and reflects diversified, long-term opportunities.
Funnel activity in food & beverage remains strong, particularly
for energy-efficient solutions. The Company continues to benefit
from strong brand recognition within the global tomato processing
industry, and there is ongoing interest in automated solutions with
the food & beverage market. Funnel activity in consumer
products is stable; inflationary pressures continue to have an
effect on discretionary spending, which may impact timing of some
customer investments. Funnel activity in energy remains strong and
includes some longer-term opportunities in the nuclear industry.
The Company is focused on clean energy applications including
solutions for the refurbishment of nuclear power plants, early
participation in the small modular reactor market, and grid battery
storage. Across all markets, customers are exercising normal
caution in their approach to investment and spending. Funnel growth
in markets where environmental, social and governance ("ESG")
requirements are an increasing focus for customers — including grid
battery storage, EV and nuclear, as well as consumer goods
packaging — provide ATS with opportunities to use its capabilities
to respond to customer sustainability standards and goals,
including global and regional requirements to reduce carbon
emissions. Customers seeking to de-risk or enhance the resiliency
of their supply chains, address a shortage of skilled workers or
combat higher labour costs also provide future opportunities for
ATS to pursue. Management believes that the underlying trends
driving customer demand for ATS solutions including rising labour
costs, labour shortages, production onshoring or reshoring and the
need for scalable, high-quality, energy-efficient production remain
favourable.
Order Backlog of $1,907 million is expected to help mitigate
some of the impact of quarterly variability in Order Bookings on
revenues in the short term. The Company’s Order Backlog includes
several large enterprise programs that have longer periods of
performance and therefore longer revenue recognition cycles. These
programs have extended the average period over which the Company
expects to convert its Order Backlog to revenues, providing ATS
with longer visibility. In the fourth quarter of fiscal 2024,
management expects the conversion of Order Backlog to revenues to
be in the 36% to 39% range. This estimate is calculated each
quarter based on management’s assessment of project schedules
across all customer contracts, expectations for faster-turn product
and services revenues, expected delivery timing of third-party
equipment and operational capacity. The fourth-quarter conversion
range accounts for the impact of approximately $200 million of
Order Backlog with one of the Company's EV customers that has been
delayed, as noted above. Management expects that the program will
restart in the first quarter of fiscal 2025.
The timing of customer decisions on larger opportunities is
expected to cause variability in Order Bookings from quarter to
quarter. Revenues in a given period are dependent on a combination
of the volume of outstanding projects the Company is contracted to,
the size and duration of those projects, and the timing of project
activities including design, assembly, testing, and installation.
Given the specialized nature of the Company’s offerings, the size
and scope of projects vary based on customer needs. The Company
seeks to achieve revenue growth organically and by identifying
strategic acquisition opportunities that provide access to
attractive end-markets and new products and technologies and
deliver hurdle-rate returns.
In the short term, ATS will continue to mitigate supply chain
volatility, which has been contributing to longer lead times and
cost increases in the supply base over the past several quarters.
However, prolonged cost increases and price volatility have and may
continue to disrupt the timing and progress of the Company’s margin
expansion efforts and affect revenue recognition. In addition, with
a portion of Order Backlog related to one of the Company's EV
programs currently delayed, Management expects to see near-term
margin pressure in its Transportation business. Over time,
sustaining management's margin target assumes that the Company will
successfully implement the initiatives noted below, and that such
initiatives will result in improvements to its adjusted earnings
from operations margin that offset these shorter-term pressures
(see “Forward-Looking Statements” for a description of the risks
underlying the achievement of the margin target in future
periods).
The Company regularly monitors customers for changes in credit
risk and does not believe that any single industry or geographic
region represents significant credit risk.
In the short term, the Company expects non-cash working capital
to remain elevated as large enterprise programs progress through
milestones. Over the long-term, the Company expects to continue
investing in non-cash working capital to support growth, with
fluctuations expected on a quarter-over-quarter basis. The
Company’s long-term goal is to maintain its investment in non-cash
working capital as a percentage of annualized revenues below 15%.
However, given the size and timing of milestone payments for
certain large EV programs in Order Backlog, the Company could see
its working capital exceed 15% of annualized revenues in certain
periods as it did in the first three quarters of fiscal 2024. The
Company expects that continued cash flows from operations, together
with cash and cash equivalents on hand and credit available under
operating and long-term credit facilities will be sufficient to
fund its requirements for investments in non-cash working capital
and capital assets, and to fund strategic investment plans
including some potential acquisitions. Acquisitions could result in
additional debt or equity financing requirements for the Company.
Non-cash working capital as a percentage of revenues is a Non-IFRS
ratio - see “Non-IFRS and Other Financial Measures.”
Management is pursuing several initiatives to grow revenues and
improve profitability with the goal of expanding its adjusted
earnings from operations margin to 15% over time through a
combination of operational initiatives and portfolio development.
Operational initiatives include a focus on pursuing continuous
improvement in all business activities through the ATS Business
Model, including in acquired businesses, improving global supply
chain management, increasing the use of standardized platforms and
technologies, and growing revenues while leveraging the Company’s
cost structure. Portfolio development initiatives include efforts
to grow the Company's products and after-sales service revenues as
a percentage of overall revenues. After-sales revenues and
reoccurring revenues, which ATS defines as revenues from ancillary
products and services associated with equipment sales, and revenues
from customers who purchase non-customized ATS product at regular
intervals, are expected to provide some balance to customers'
capital expenditure cycles. Management estimates that reoccurring
revenues are currently in the range of 25% to 35% of total revenues
on a trailing twelve- month basis. Moreover, the Company's
financial profile, which has included strong growth, margin
expansion and disciplined working capital investment, has allowed
it to generate free cash flows that are reinvested back into the
business. Management also sees the development of the Company's
digitalization capabilities as another key area of growth for the
portfolio, including the collection and interpretation of data to
drive meaningful change that optimizes performance for customers.
In addition, management is focused on investing in innovation and
employing a consistent, strategic approach to acquisitions. The
Company continues to make progress in line with its plans to
integrate acquired companies, and expects to realize cost and
revenue synergies consistent with announced integration plans.
Reorganization Activity
The Company periodically undertakes reviews of its operations to
ensure alignment with strategic market opportunities. As a part of
this review, the Company has identified and previously announced an
opportunity to improve the cost structure of the organization and
reallocate investment to growth areas. In the third quarter of
fiscal 2024, restructuring expenses of $16.2 million were recorded
in relation to the reorganization. The majority of the remaining
actions are expected to be completed during the fourth quarter of
fiscal 2024. The total estimated cost of these activities is
expected to be at the higher end of the previously disclosed range
of $15 million to $20 million.
Quarterly Conference Call
ATS will host a conference call and webcast at 8:30 a.m. eastern
on Wednesday, February 7, 2024 to discuss its quarterly results.
The listen-only webcast can be accessed live at
www.atsautomation.com. The conference call can be accessed live by
dialing (888) 660-6652 or (646) 960-0554 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 14,
2024) by dialing (800) 770-2030 and using the access code
8782510.
About ATS
ATS Corporation 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
solutions 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, transportation, food & beverage, consumer products,
and energy. Founded in 1978, ATS employs over 7,000 people at more
than 65 manufacturing facilities and over 85 offices in North
America, Europe, Southeast Asia and Oceania. The Company's common
shares are traded on the Toronto Stock Exchange and the NYSE under
the symbol ATS. Visit the Company's website at
www.atsautomation.com.
Consolidated Revenues
(In millions of dollars)
Three Months
Ended
Three Months
Nine Months
Ended
Nine Months
Revenues by type
December 31,
2023
Ended January 1, 2023
December 31,
2023
Ended January 1, 2023
Revenues from construction
contracts
$
485.2
$
422.2
$
1,473.8
$
1,159.7
Services rendered
153.0
124.2
444.4
354.9
Sale of goods
113.8
100.6
323.2
332.0
Total revenues
$
752.0
$
647.0
$
2,241.4
$
1,846.6
Three Months
Ended
Three Months
Nine Months
Ended
Nine Months
Revenues by market
December 31,
2023
Ended January 1, 2023
December 31,
2023
Ended January 1, 2023
Life Sciences
$
316.8
$
304.1
$
893.3
$
885.4
Transportation
240.4
161.6
711.2
379.1
Food & Beverage
94.9
88.5
335.3
272.3
Consumer Products
69.0
69.9
217.2
222.9
Energy
30.9
22.9
84.4
86.9
Total revenues
$
752.0
$
647.0
$
2,241.4
$
1,846.6
Consolidated Operating
Results (In millions of dollars)
Three Months
Ended
Three Months
Nine Months
Ended
Nine Months
December 31,
2023
Ended January 1, 2023
December 31,
2023
Ended January 1, 2023
Earnings from
operations
$
78.5
$
56.0
$
240.6
$
170.6
Amortization of
acquisition-related intangible assets
17.1
13.4
51.8
50.1
Acquisition-related transaction
costs
0.9
0.7
2.1
1.6
Acquisition-related inventory
fair value charges
0.8
—
0.8
9.2
Gain on sale of facilities
(11.7
)
—
(11.7
)
—
Restructuring charges
16.2
10.5
16.2
11.7
Mark to market portion of
stock-based compensation
(0.6
)
5.6
1.8
(1.7
)
Adjusted earnings from
operations1, 2
$
101.2
$
86.2
$
301.6
$
241.5
1
Non-IFRS Financial Measure, See “Non-IFRS
and Other Financial Measures”
2
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
Three Months Ended
December 31,
Three Months Ended
Nine Months Ended
December 31,
Nine Months Ended
2023
January 1, 2023
2023
January 1, 2023
Earnings from
operations
$
78.5
$
56.0
$
240.6
$
170.6
Depreciation and amortization
35.2
27.9
104.8
91.6
EBITDA1
$
113.7
$
83.9
$
345.4
$
262.2
Restructuring charges
16.2
10.5
16.2
11.7
Acquisition-related transaction
costs
0.9
0.7
2.1
1.6
Acquisition-related inventory
fair value charges
0.8
—
0.8
9.2
Mark to market portion of
stock-based compensation2
(0.6
)
5.6
1.8
(1.7
)
Gain on sale of facilities
(11.7
)
—
(11.7
)
—
Adjusted EBITDA1, 2
$
119.3
$
100.7
$
354.6
$
283.0
1
Non-IFRS Financial Measure, See “Non-IFRS
and Other Financial Measures”
2
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
Order Backlog by Market
(In millions of dollars)
December 31,
As at
2023
January 1, 2023
Life Sciences
$
875
$
793
Transportation
564
887
Food & Beverage
207
208
Consumer Products
161
162
Energy
100
93
Total
$
1,907
$
2,143
Reconciliation of Non-IFRS Measures to IFRS Measures (In
millions of dollars, except per share data)
The following table reconciles adjusted EBITDA and EBITDA to the
most directly comparable IFRS measure (net income):
Three Months Ended
December 31,
Three Months Ended
Nine Months Ended
December 31,
Nine Months Ended
2023
January 1, 2023
2023
January 1, 2023
Adjusted EBITDA1
$
119.3
$
100.7
$
354.6
$
283.0
Less: restructuring charges
16.2
10.5
16.2
11.7
Less: acquisition-related
transaction costs
0.9
0.7
2.1
1.6
Less: acquisition-related
inventory fair value charges
0.8
—
0.8
9.2
Less: mark to market portion of
stock-based compensation
(0.6
)
5.6
1.8
(1.7
)
Less: gain on sale of
facilities
(11.7
)
—
(11.7
)
—
EBITDA
$
113.7
$
83.9
$
345.4
$
262.2
Less: depreciation and
amortization expense
35.2
27.9
104.8
91.6
Earnings from
operations
$
78.5
$
56.0
$
240.6
$
170.6
Less: net finance costs
17.5
19.7
49.9
43.9
Less: provision for income
taxes
13.8
7.1
45.0
28.6
Net income
$
47.2
$
29.2
$
145.7
$
98.1
1
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
The following table reconciles adjusted earnings from
operations, adjusted net income, and adjusted basic earnings per
share to the most directly comparable IFRS measure (net income and
basic earnings per share):
Three Months Ended December
31, 2023
Three Months Ended January 1,
2023
Earnings from
operations
Finance costs
Provision for income
taxes
Net income
Basic EPS
Earnings from operations
Finance costs
Provision for income taxes
Net income
Basic EPS
Reported (IFRS)
$
78.5
$
(17.5
)
$
(13.8
)
$
47.2
$
0.48
$
56.0
$
(19.7
)
$
(7.1
)
$
29.2
$
0.32
Amortization of acquisition-
related intangibles
17.1
—
—
17.1
0.17
13.4
—
—
13.4
0.15
Restructuring charges
16.2
—
—
16.2
0.16
10.5
—
—
10.5
0.11
Acquisition-related inventory
fair value charges
0.8
—
—
0.8
0.01
—
—
—
—
—
Acquisition-related transaction
costs
0.9
—
—
0.9
0.01
0.7
—
—
0.7
0.01
Mark to market portion of
stock-based compensation
(0.6
)
—
—
(0.6
)
(0.01
)
5.6
—
—
5.6
0.06
Gain on sale of facilities
(11.7
)
—
—
(11.7
)
(0.11
)
—
—
—
—
—
Tax effect adjustments1
—
—
(6.0
)
(6.0
)
(0.06
)
—
—
(7.8
)
(7.8
)
(0.09
)
Adjusted (non-IFRS)2
$
101.2
$
63.9
$
0.65
$
86.2
$
51.6
$
0.56
1
Adjustments to provision for income taxes
relate to the income tax effects of adjustment items that are
excluded for the purposes of calculating non-IFRS based adjusted
net income.
2
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
Nine Months Ended December 31,
2023
Nine Months Ended January 1,
2023
Earnings from
operations
Finance costs
Provision for income
taxes
Net income
Basic EPS
Earnings from Operations
Finance costs
Provision for income taxes
Net Income
Basic EPS
Reported (IFRS)
$
240.6
$
(49.9
)
$
(45.0
)
$
145.7
$
1.49
$
170.6
$
(43.9
)
$
(28.6
)
$
98.1
$
1.07
Amortization of acquisition-
related intangibles
51.8
—
—
51.8
0.53
50.1
—
—
50.1
0.54
Restructuring charges
16.2
—
—
16.2
0.17
11.7
—
—
11.7
0.13
Acquisition-related fair value
inventory charges
0.8
—
—
0.8
0.01
9.2
—
—
9.2
0.10
Acquisition-related transaction
costs
2.1
—
—
2.1
0.02
1.6
—
—
1.6
0.02
Mark to market portion of
stock-based compensation
1.8
—
—
1.8
0.02
(1.7
)
—
—
(1.7
)
(0.02
)
Gain on sale of facilities
(11.7
)
—
—
(11.7
)
(0.12
)
—
—
—
—
—
Tax effect of the above
adjustments1
—
—
(15.6
)
(15.6
)
(0.16
)
—
—
(17.9
)
(17.9
)
(0.20
)
Adjusted (non-IFRS)2
$
301.6
$
191.1
$
1.96
$
241.5
$
151.1
$
1.64
1
Adjustments to provision for income taxes
relate to the income tax effects of adjustment items that are
excluded for the purposes of calculating non-IFRS based adjusted
net income.
2
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
The following table reconciles organic revenue to the most
directly comparable IFRS measure (revenue):
Three Months Ended
December 31,
Three Months Ended
Nine Months Ended
December 31,
Nine Months Ended
2023
January 1, 2023
2023
January 1, 2023
Organic revenue
$
706.2
$
599.2
$
2,096.5
$
1,679.4
Revenues of acquired
companies
29.7
41.0
59.5
196.9
Impact of foreign exchange rate
changes
16.1
6.8
85.4
(29.7
)
Total revenue
$
752.0
$
647.0
$
2,241.4
$
1,846.6
Organic revenue growth
9.1
%
13.6
%
The following table reconciles non-cash working capital as a
percentage of revenues to the most directly comparable IFRS
measures:
December 31
March 31
As at
2023
2023
Accounts receivable
$
557.4
$
399.7
Income tax receivable
15.4
15.2
Contract assets
589.7
527.0
Inventories
312.8
256.9
Deposits, prepaids and other
assets
113.2
93.4
Accounts payable and accrued
liabilities
(617.9)
(647.6)
Income tax payable
(47.3)
(38.9)
Contract liabilities
(356.3)
(296.6)
Provisions
(36.6)
(30.6)
Non-cash working
capital
$
530.4
$
278.5
Trailing six-month revenues
annualized
$
2,975.4
$
2,755.6
Working capital %
17.8%
10.1%
The following table reconciles net debt to adjusted EBITDA to
the most directly comparable IFRS measures:
December 31
March 31
As at
2023
2023
Cash and cash equivalents
$
260.9
$
159.9
Bank indebtedness
(5.2)
(5.8)
Current portion of lease
liabilities
(26.7)
(24.0)
Current portion of long-term
debt
(0.2)
(0.1)
Long-term lease liabilities
(85.2)
(73.3)
Long-term debt
(1,219.6)
(1,155.7)
Net Debt
$
(1,076.0)
$
(1,099.0)
Adjusted EBITDA (TTM)1
$
472.9
$
401.2
Net Debt to Adjusted
EBITDA1
2.3x
2.7x
1
The composition of these Non-IFRS Measures
has been revised from what was previously disclosed. See "Non-IFRS
and Other Financial Measures."
The following table reconciles free cash flow to the most
directly comparable IFRS measures:
(in millions of dollars)
Three Months Ended
December 31, 2023
Three Months Ended January 1,
2023
Nine Months Ended
December 31, 2023
Nine Months Ended January 1,
2023
Cash flows provided by operating
activities
$
110.5
$
116.1
$
11.2
$
46.4
Acquisition of property, plant
and equipment
(12.0
)
(18.6
)
(46.5
)
(32.7
)
Acquisition of intangible
assets
(5.7
)
(6.9
)
(16.0
)
(14.1
)
Free cash flow
$
92.8
$
90.6
$
(51.3
)
$
(0.4
)
Certain Non-IFRS Financial Measures have been revised from
previously disclosed values to exclude the impact on stock-based
compensation expense of the revaluation of deferred stock units and
restricted share units resulting specifically from the change in
market price of the Company's common shares between periods.
Management believes the adjustment provides further insight into
the Company's performance.
The following table reconciles total stock-based compensation
expense to its components:
(in millions of dollars)
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Total stock-based compensation expense
$
4.7
$
3.5
$
10.0
$
19.3
$
9.9
$
5.3
$
(4.0
)
$
0.8
Less: Mark to market portion of stock-based compensation
(0.6
)
(2.0
)
4.4
15.1
5.6
1.0
(8.3
)
(4.2
)
Base stock-based compensation expense
$
5.3
$
5.5
$
5.6
$
4.2
$
4.3
$
4.3
$
4.3
$
5.0
The following table reconciles the previously reported non-IFRS
financial measures to reflect the exclusion of the stock-based
compensation revaluation expenses:
(in millions of dollars)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Previously reported: adjusted
earnings from operations
$
80.6
$
75.1
$
87.5
$
85.8
Mark to market portion of
stock-based compensation
5.6
1.0
(8.3
)
(4.2
)
Revised: adjusted earnings
from operations
$
86.2
$
76.1
$
79.2
$
81.6
Previously reported: adjusted
EBITDA
$
95.1
$
88.8
$
100.8
$
99.1
Mark to market portion of
stock-based compensation
5.6
1.0
(8.3
)
(4.2
)
Revised: adjusted
EBITDA
$
100.7
$
89.8
$
92.5
$
94.9
Previously reported: adjusted
basic earnings per share
$
0.52
$
0.50
$
0.64
$
0.64
Mark to market portion of
stock-based compensation
0.06
0.01
(0.09
)
(0.05
)
Tax impact of mark to market
portion of stock-based compensation
(0.02
)
—
0.02
0.01
Revised: adjusted basic earnings per
share
$
0.56
$
0.51
$
0.57
$
0.60
INVESTMENTS, LIQUIDITY, CASH FLOW AND FINANCIAL RESOURCES
(In millions of dollars, except ratios)
December 31,
As at
2023
March 31, 2023
Cash and cash equivalents
$
260.9
$
159.9
Debt-to-equity ratio1
0.85:1
1.18:1
1
Debt is calculated as bank indebtedness,
long-term debt and lease liabilities. Equity is calculated as total
equity less accumulated other comprehensive income.
Three Months Ended
December 31,
Three Months Ended
Nine Months Ended
December 31,
Nine Months Ended
2023
January 1, 2023
2023
January 1, 2023
Cash, beginning of period
$
187.4
$
95.2
$
159.9
$
135.3
Total cash provided by (used
in):
Operating activities
110.5
116.1
11.2
46.4
Investing activities
(269.3
)
(43.1
)
(315.5
)
(42.1
)
Financing activities
232.8
130.9
406.1
160.8
Net foreign exchange
difference
(0.5
)
3.0
(0.8
)
1.7
Cash, end of period
$
260.9
$
302.1
$
260.9
$
302.1
ATS CORPORATION Interim
Condensed Consolidated Statements of Financial Position (in
thousands of Canadian dollars - unaudited)
December 31
March 31
As at
2023
2023
ASSETS
Current assets
Cash and cash equivalents
$
260,888
$
159,867
Accounts receivable
557,402
399,741
Income tax receivable
15,363
15,160
Contract assets
589,693
526,990
Inventories
312,762
256,866
Deposits, prepaids and other
assets
113,187
93,350
1,849,295
1,451,974
Non-current assets
Property, plant and equipment
284,456
263,119
Right-of-use assets
106,378
94,212
Other assets
11,339
16,679
Goodwill
1,237,884
1,118,262
Intangible assets
682,316
593,210
Deferred income tax assets
6,356
6,337
2,328,729
2,091,819
Total assets
$
4,178,024
$
3,543,793
LIABILITIES AND EQUITY
Current liabilities
Bank indebtedness
$
5,179
$
5,824
Accounts payable and accrued
liabilities
617,897
647,629
Income tax payable
47,268
38,904
Contract liabilities
356,311
296,555
Provisions
36,623
30,600
Current portion of lease
liabilities
26,661
23,994
Current portion of long-term
debt
207
65
1,090,146
1,043,571
Non-current
liabilities
Employee benefits
24,014
25,486
Long-term lease liabilities
85,263
73,255
Long-term debt
1,219,605
1,155,721
Deferred income tax
liabilities
124,031
104,459
Other long-term liabilities
16,699
10,718
1,469,612
1,369,639
Total liabilities
$
2,559,758
$
2,413,210
EQUITY
Share capital
$
865,649
$
520,633
Contributed surplus
23,064
15,468
Accumulated other comprehensive
income
49,889
60,040
Retained earnings
676,454
530,707
Equity attributable to
shareholders
1,615,056
1,126,848
Non-controlling interests
3,210
3,735
Total equity
1,618,266
1,130,583
Total liabilities and
equity
$
4,178,024
$
3,543,793
Please refer to complete Interim Condensed Consolidated
Financial Statements for supplemental notes which can be found on
the Company’s profile on SEDAR+ at www.sedarplus.com, the Company's
profile on the U.S. Securities and Exchange Commission's website at
www.sec.gov, and on the Company’s website at
www.atsautomation.com.
ATS CORPORATION Interim
Condensed Consolidated Statements of Income (in thousands of
Canadian dollars, except per share amounts - unaudited)
Three months ended
Nine months ended
December 31
2023
January 1
2023
December 31
2023
January 1 2023
Revenues
$
752,052
$
647,048
$
2,241,417
$
1,846,593
Operating costs and expenses
Cost of revenues
538,435
463,362
1,606,658
1,331,691
Selling, general and
administrative
114,187
107,283
359,811
321,304
Restructuring costs
16,228
10,465
16,228
11,736
Stock-based compensation
4,671
9,933
18,116
11,253
Earnings from
operations
78,531
56,005
240,604
170,609
Net finance costs
17,537
19,733
49,945
43,900
Income before income
taxes
60,994
36,272
190,659
126,709
Income tax expense
13,812
7,060
45,010
28,574
Net income
$
47,182
$
29,212
$
145,649
$
98,135
Attributable to
Shareholders
$
47,048
$
29,266
$
145,276
$
97,976
Non-controlling interests
134
(54
)
373
159
$
47,182
$
29,212
$
145,649
$
98,135
Earnings per share
attributable to shareholders
Basic
$
0.48
$
0.32
$
1.49
$
1.07
Diluted
$
0.47
$
0.32
$
1.48
$
1.06
Please refer to complete Interim Condensed Consolidated
Financial Statements for supplemental notes which can be found on
the Company’s profile on SEDAR+ at www.sedarplus.com, the Company's
profile on the U.S. Securities and Exchange Commission's website at
www.sec.gov, and on the Company’s website at
www.atsautomation.com.
ATS CORPORATION Interim
Condensed Consolidated Statements of Cash Flows (in thousands
of Canadian dollars - unaudited)
Three months ended
Nine months ended
December 31
2023
January 1 2023
December 31
2023
January 1 2023
Operating activities
Net income
$
47,182
$
29,212
$
145,649
$
98,135
Items not involving cash
Depreciation of property, plant
and equipment
7,111
6,469
20,791
18,568
Amortization of right-of-use
assets
7,304
6,006
21,656
17,407
Amortization of intangible
assets
20,743
15,428
62,393
55,620
Deferred income taxes
(8,693
)
1,033
(9,020
)
(13,192
)
Other items not involving
cash
(1,871
)
(518
)
(2,433
)
8,029
Stock-based compensation
3,043
1,508
8,146
3,637
Change in non-cash operating
working capital
35,689
57,011
(235,977
)
(141,809
)
Cash flows provided by
operating activities
$
110,508
$
116,149
$
11,205
$
46,395
Investing activities
Acquisition of property, plant
and equipment
$
(12,045
)
$
(18,588
)
$
(46,516
)
$
(32,723
)
Acquisition of intangible
assets
(5,666
)
(6,902
)
(15,971
)
(14,143
)
Business acquisitions, net of
cash acquired
(266,117
)
(18,163
)
(275,776
)
(18,163
)
Settlement of cross-currency
interest rate swap instrument
—
—
—
21,493
Proceeds from disposal of
property, plant and equipment
14,554
525
22,809
1,431
Cash flows used in investing
activities
$
(269,274
)
$
(43,128
)
$
(315,454
)
$
(42,105
)
Financing activities
Bank indebtedness
$
2,495
$
(6,345
)
$
(378
)
$
9,549
Repayment of long-term debt
(76,151
)
(181,897
)
(542,095
)
(196,199
)
Proceeds from long-term debt
310,844
325,270
626,828
395,559
Proceeds from exercise of stock
options
775
338
1,954
1,942
Proceeds from U.S. initial public
offering, net of issuance fees
—
—
362,072
—
Purchase of non-controlling
interest
13
—
(195
)
(452
)
Repurchase of common shares
—
—
—
(21,071
)
Acquisition of shares held in
trust
—
(1,184
)
(23,820
)
(12,365
)
Principal lease payments
(5,135
)
(5,306
)
(18,250
)
(16,113
)
Cash flows provided by
financing activities
$
232,841
$
130,876
$
406,116
$
160,850
Effect of exchange rate changes
on cash and cash equivalents
(569
)
3,085
(846
)
1,723
Increase in cash and cash
equivalents
73,506
206,982
101,021
166,863
Cash and cash equivalents,
beginning of period
187,382
95,163
159,867
135,282
Cash and cash equivalents, end
of period
$
260,888
$
302,145
$
260,888
$
302,145
Supplemental
information
Cash income taxes paid
$
7,946
$
8,931
$
33,662
$
36,680
Cash interest paid
$
20,814
$
23,066
$
54,952
$
46,019
Please refer to complete Interim Condensed Consolidated
Financial Statements for supplemental notes which can be found on
the Company’s profile on SEDAR+ at www.sedarplus.com, the Company's
profile on the U.S. Securities and Exchange Commission's website at
www.sec.gov, and on the Company’s website at
www.atsautomation.com.
Notice to Reader: Non-IFRS and Other Financial
Measures
Throughout this document, management uses certain non-IFRS
financial measures, non-IFRS ratios and supplementary financial
measures to evaluate the performance of the Company.
The terms “EBITDA”, "organic revenue", “adjusted net income”,
“adjusted earnings from operations”, “adjusted EBITDA”, “adjusted
basic earnings per share”, and “free cash flow”, are non-IFRS
financial measures, “EBITDA margin”, “adjusted earnings from
operations margin”, “adjusted EBITDA margin”, "organic revenue
growth", “non-cash working capital as a percentage of revenues”,
and “net debt to adjusted EBITDA” are non-IFRS ratios, and
"operating margin", “Order Bookings”, "organic Order Bookings",
"organic Order Bookings growth", “Order Backlog”, and “book-to-bill
ratio” are supplementary financial measures, all of which do not
have any standardized meaning prescribed within IFRS and therefore
may not be comparable to similar measures presented by other
companies. Such measures should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. In addition, management uses “earnings from operations”,
which is an additional IFRS measure, to evaluate the performance of
the Company. Earnings from operations is presented on the Company’s
consolidated statements of income as net income excluding income
tax expense and net finance costs. Operating margin is an
expression of the Company’s earnings from operations as a
percentage of revenues. EBITDA is defined as earnings from
operations excluding depreciation and amortization. EBITDA margin
is an expression of the Company’s EBITDA as a percentage of
revenues. Organic revenue is defined as revenues in the stated
period excluding revenues from acquired companies for which the
acquired company was not a part of the consolidated group in the
comparable period. Organic revenue growth compares the stated
period organic revenue with the reported revenue of the comparable
prior period. Adjusted earnings from operations is defined as
earnings from operations before items excluded from management’s
internal analysis of operating results, such as amortization
expense of acquisition-related intangible assets,
acquisition-related transaction and integration costs,
restructuring charges, the mark-to-market adjustment on stock-based
compensation and certain other adjustments which would be
non-recurring in nature (“adjustment items”). Adjusted earnings
from operations margin is an expression of the Company’s adjusted
earnings from operations as a percentage of revenues. Adjusted
EBITDA is defined as adjusted earnings from operations excluding
depreciation and amortization. Adjusted EBITDA margin is an
expression of the entity’s adjusted EBITDA as a percentage of
revenues. Adjusted basic earnings per share is defined as adjusted
net income on a basic per share basis, where adjusted net income is
defined as adjusted earnings from operations less net finance costs
and income tax expense, plus tax effects of adjustment items and
adjusted for other significant items of a non-recurring nature.
Non-cash working capital as a percentage of revenues is defined as
the sum of accounts receivable, contract assets, inventories,
deposits, prepaids and other assets, less accounts payable, accrued
liabilities, provisions and contract liabilities divided by the
trailing two fiscal quarter revenues annualized. Free cash flow is
defined as cash provided by operating activities less property,
plant and equipment and intangible asset expenditures. Net debt to
adjusted EBITDA is the ratio of the net debt of the Company (cash
and cash equivalents less bank indebtedness, long-term debt, and
lease liabilities) to adjusted EBITDA. Order Bookings represent new
orders for the supply of automation systems, services and products
that management believes are firm. Organic Order Bookings are
defined as Order Bookings in the stated period excluding Order
Bookings from acquired companies for which the acquired company was
not a part of the consolidated group in the comparable period.
Organic Order Bookings growth compares the stated period organic
Order Bookings with the reported Order Bookings of the comparable
prior period. Order Backlog is the estimated unearned portion of
revenues on customer contracts that are in process and have not
been completed at the specified date. Book to bill ratio is a
measure of Order Bookings compared to revenue.
Following amendments to ATS’ Restricted Stock Unit ("RSU") Plan
in 2022 to provide for settlement in shares purchased in the open
market and the creation of the employee benefit trust to facilitate
such settlement, ATS began to account for equity-settled RSUs using
the equity method of accounting. However, prior RSU grants which
will be cash-settled and deferred stock unit ("DSU") grants which
will be cash-settled are accounted for as described in the
Company's annual consolidated financial statements and have
significant volatility period over period based on the fluctuating
price of ATS’ common shares. As a result, certain Non-IFRS
Financial Measures (EBITDA, adjusted EBITDA, net debt to adjusted
EBITDA, adjusted earnings from operations and adjusted basic
earnings per share) were revised from previously disclosed values
to exclude the impact on stock-based compensation expense of the
revaluation of DSUs and RSUs resulting specifically from the change
in market price of the Company's common shares between periods.
Management believes that this adjustment provides further insight
into the Company's performance, as share price volatility drives
variability in the Company's stock-based compensation expense.
Operating margin, adjusted earnings from operations, EBITDA,
EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin are used
by the Company to evaluate the performance of its operations.
Management believes that earnings from operations is an important
indicator in measuring the performance of the Company’s operations
on a pre-tax basis and without consideration as to how the Company
finances its operations. Management believes that organic revenue
and organic revenue growth, when considered with IFRS measures,
allow the Company to better measure the Company's performance and
evaluate long-term performance trends. Organic revenue growth also
facilitates easier comparisons of the Company's performance with
prior and future periods and relative comparisons to its peers.
Management believes that EBITDA and adjusted EBITDA are important
indicators of the Company’s ability to generate operating cash
flows to fund continued investment in its operations. Management
believes that adjusted earnings from operations, adjusted earnings
from operations margin, adjusted EBITDA, adjusted net income and
adjusted basic earnings per share are important measures to
increase comparability of performance between periods. The
adjustment items used by management to arrive at these metrics are
not considered to be indicative of the business’ ongoing operating
performance. Management uses the measure “non-cash working capital
as a percentage of revenues” to assess overall liquidity. Free cash
flow is used by the Company to measure cash flow from operations
after investment in property, plant and equipment and intangible
assets. Management uses net debt to adjusted EBITDA as a
measurement of leverage of the Company. Order Bookings provide an
indication of the Company’s ability to secure new orders for work
during a specified period, while Order Backlog provides a measure
of the value of Order Bookings that have not been completed at a
specified point in time. Both Order Bookings and Order Backlog are
indicators of future revenues that the Company expects to generate
based on contracts that management believes to be firm. Organic
Order Bookings and organic Order Bookings growth allow the Company
to better measure the Company's performance and evaluation
long-term performance trends. Organic Order Bookings growth also
facilities easier comparisons of the Company's performance with
prior and future periods and relative comparisons to its peers.
Book to bill ratio is used to measure the Company’s ability and
timeliness to convert Order Bookings into revenues. Management
believes that ATS shareholders and potential investors in ATS use
these additional IFRS measures and non-IFRS financial measures in
making investment decisions and measuring operational results.
A reconciliation of (i) adjusted EBITDA and EBITDA to net
income, (ii) adjusted earnings from operations to earnings from
operations, (iii) adjusted net income to net income, (iv) adjusted
basic earnings per share to basic earnings per share (v) free cash
flow to its IFRS measure components and (vi) organic revenue to
revenue, in each case for the three- and nine-months ended December
31, 2023 and January 1, 2023 is contained in this document (see
“Reconciliation of Non-IFRS Measures to IFRS Measures”). This
document also contains a reconciliation of (i) non-cash working
capital as a percentage of revenues and (ii) net debt to their IFRS
measure components, in each case at both December 31, 2023 and
March 31, 2023 (see “Reconciliation of Non-IFRS Measures to IFRS
Measures”). A reconciliation of Order Bookings and Order Backlog to
total Company revenues for the three- and nine-months ended
December 31, 2023 and January 1, 2023 is also contained in this
news release (see “Order Backlog Continuity”).
Note to Readers: Forward-Looking Statements
This news release contains certain statements that may
constitute forward-looking information and forward-looking
statements within the meaning of applicable Canadian and United
States securities laws ("forward-looking statements"). All such
statements are made pursuant to the “safe harbour” provisions of
Canadian provincial and territorial securities laws and the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that are not historical facts
regarding possible events, conditions or results of operations that
ATS believes, expects or anticipates will or may occur in the
future, including, but not limited to: the value creation strategy;
the Company’s strategy to expand organically and through
acquisition, and the expected benefits to be derived; the ABM;
disciplined acquisitions; various market opportunities for ATS;
expanding in emerging markets; the Company’s Order Backlog
partially mitigating the impact of variable Order Bookings; rate of
Order Backlog conversion to revenue; the potential impact of timing
of customer decisions on Order Bookings, performance period, and
timing of revenue recognition; the announcement of new Order
Bookings and the anticipated timeline for delivery; potential
impacts on the time to convert opportunities into Order Bookings;
expected benefits with respect to the Company’s efforts to grow its
product portfolio and after-sale service revenues; Company’s goal
of expanding its adjusted earnings from operations margin over the
long term and potential impact of supply chain disruptions; the
ability of after-sales revenues and reoccurring revenues to provide
some balance to customers’ capital expenditure cycles; the range of
reoccurring revenues as a percentage of total revenues; the impact
of developing the Company’s digitalization capabilities, including
the collection and interpretation of data, as a key area of growth,
and to drive meaningful change to optimize performance for
customers; expectation of synergies from integration of acquired
companies; non-cash working capital levels as a percentage of
revenues in the short-term and the long-term; reorganization
activity, and its ability to improve the cost structure of the
Company, and to be reallocated to growth areas, and the expected
timing and cost of this reorganization activity; expectations in
relation to meeting liquidity and funding requirements for
investments; potential to use debt or equity financing to support
strategic opportunities and growth strategy; underlying trends
driving customer demand; potential impacts of variability in
bookings caused by the strategic nature and size of electric
vehicle programs; expected capital expenditures for fiscal 2024;
the Company’s belief with respect to the outcome of certain
lawsuits, claims and contingencies; and the uncertainty and
potential impact on the Company’s business and operations due to
the current macroeconomic environment including the impacts of
infectious diseases or any epidemic or pandemic outbreak or
resurgence, inflation, supply chain disruptions, interest rate
changes, and regional conflicts.
Forward-looking statements are inherently subject to significant
known and unknown risks, uncertainties, and other factors that may
cause the actual results, performance, or achievements of ATS, or
developments in ATS’ business or in its industry, to differ
materially from the anticipated results, performance, achievements,
or developments expressed or implied by such forward-looking
statements. Important risks, uncertainties, and factors that could
cause actual results to differ materially from expectations
expressed in the forward-looking statements include, but are not
limited to: the impact of regional or global conflicts; general
market performance including capital market conditions and
availability and cost of credit; performance of the markets that
ATS serves; industry challenges in securing the supply of labour,
materials, and, in certain jurisdictions, energy sources such as
natural gas; impact of inflation; interest rate changes; foreign
currency and exchange risk; the relative strength of the Canadian
dollar; risks related to customer concentration; risks related to a
recession, slowdown, and/or sustained downturn in the economy;
impact of factors such as increased pricing pressure, increased
cost of energy and supplies, and delays in relation thereto, and
possible margin compression; the regulatory and tax environment;
the emergence of new infectious diseases or any epidemic or
pandemic outbreak or resurgence, and collateral consequences
thereof, including the disruption of economic activity, volatility
in capital and credit markets, and legislative and regulatory
responses; the effect of events involving limited liquidity,
defaults, non-performance or other adverse developments that affect
financial institutions, transaction counterparties, or other
companies in the financial services industry generally, or concerns
or rumours about any events of these kinds or other similar risks,
that have in the past and may in the future lead to market-wide
liquidity problems; energy shortages and global prices increases;
inability to successfully expand organically or through
acquisition, due to an inability to grow expertise, personnel,
and/or facilities at required rates or to identify, negotiate and
conclude one or more acquisitions; or to raise, through debt or
equity, or otherwise have available, required capital; that the ABM
is not effective in accomplishing its goals; ATS is unable to
expand in emerging markets, or is delayed in relation thereto, due
to any number of reasons, including inability to effectively
execute organic or inorganic expansion plans, focus on other
business priorities, or local government regulations or delays;
that the timing of completion of new Order Bookings is other than
as expected due to various reasons, including schedule changes; the
customer exercising any right to withdraw the Order Booking or to
terminate the program in whole or in part prior to its completion,
thereby preventing ATS from realizing on the full benefit of the
program; that some or all of the sales funnel is not converted to
Order Bookings due to competitive factors or failure to meet
customer needs; that the market opportunities ATS anticipates do
not materialize or that ATS is unable to exploit such
opportunities; failure to convert Order Backlog to revenue and/or
variations in the amount of Order Backlog completed in any given
quarter; timing of customer decisions related to large enterprise
programs and potential for negative impact associated with any
cancellations or non-performance in relation thereto; that the
Company is not successful in growing its product portfolio and/or
service offering or that expected benefits are not realized; that
efforts to expand adjusted earnings from operations margin over
long-term are unsuccessful, due to any number of reasons, including
less than anticipated increase in after-sales service revenues or
reduced margins attached to those revenues, inability to achieve
lower costs through supply chain management, failure to develop,
adopt internally, or have customers adopt, standardized platforms
and technologies, inability to maintain current cost structure if
revenues were to grow, and failure of ABM to impact margins; that
after-sales or reoccurring revenues do not provide the expected
balance to customers’ expenditure cycles; that reoccurring revenues
are not in the expected range; the development of the Company’s
digitalization capabilities fails to achieve the growth or change
expected; that acquisitions made are not integrated as quickly or
effectively as planned or expected and, as a result, anticipated
benefits and synergies are not realized; non-cash working capital
as a percentage of revenues operating at a level other than as
expected due to reasons, including, the timing and nature of Order
Bookings, the timing of payment milestones and payment terms in
customer contracts, and delays in customer programs; that planned
reorganization activity does not succeed in improving the cost
structure of the Company or that the investment is not reallocated
to growth areas, or is not completed at the cost or within the
timelines expected, or at all; underlying trends driving customer
demand will not materialize or have the impact expected; that
capital expenditure targets are increased in the future or the
Company experiences cost increases in relation thereto; risk that
the ultimate outcome of lawsuits, claims, and contingencies give
rise to material liabilities for which no provisions have been
recorded; and other risks and uncertainties detailed from time to
time in ATS' filings with securities regulators, including, without
limitation, the risk factors described in ATS’ annual information
form for the fiscal year ended March 31, 2023, which are available
on the System for Electronic Document Analysis and Retrieval
("SEDAR+") at www.sedarplus.com and on the U.S. Securities Exchange
Commission’s Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR”) at www.sec.gov. ATS has attempted to identify
important factors that could cause actual results to materially
differ from current expectations, however, there may be other
factors that cause actual results to differ materially from such
expectations.
Forward-looking statements are necessarily based on a number of
estimates, factors, and assumptions regarding, among others,
management's current plans, estimates, projections, beliefs and
opinions, the future performance and results of the Company’s
business and operations; the ability of ATS to execute on its
business objectives; and general economic and political conditions,
and global events, including any epidemic or pandemic outbreak or
resurgence.
Forward-looking statements included in this news release are
only provided to understand management’s current expectations
relating to future periods and, as such, are not appropriate for
any other purpose. Although ATS believes that the expectations
reflected in such forward-looking statements are reasonable, such
statements involve risks and uncertainties, and ATS cautions you
not to place undue reliance upon any such forward-looking
statements, which speak only as of the date they are made. ATS does
not undertake any obligation to update forward-looking statements
contained herein other than as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207732687/en/
For more information, contact: David Galison Head of
Investor Relations ATS Corporation 730 Fountain Street North
Cambridge, ON, N3H 4R7 (519) 653-6500
dgalison@atsautomation.com
For general media inquiries, contact: Matthew Robinson
Director, Corporate Communications ATS Corporation 730 Fountain
Street North Cambridge, ON, N3H 4R7 (519) 653-6500
mrobinson@atsautomation.com
ATS (NYSE:ATS)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
ATS (NYSE:ATS)
Historical Stock Chart
Von Mai 2023 bis Mai 2024