Mr. Anthony Caputo reports
ATS REPORTS ANNUAL AND FOURTH QUARTER FISCAL 2012 RESULTS
ATS Automation Tooling Systems Inc.
has released its financial results for the
three and 12 months ended March 31, 2012, for its continuing
operations (Automation Systems Group or ASG) and discontinued
"Strong fourth quarter results in our core ASG business reflected our
approach to market, solid operating foundation and the integration of
acquired businesses," said Anthony Caputo, chief executive officer.
"Most importantly, we made a very significant strategic advancement.
We turned the corner on Solar separation and are now solely focused on
our core business, which is robust and growing. It has the demonstrated
ability to engage customers on an enterprise basis, select and
integrate acquisitions, and remain resilient during macro-economic
downturns. Our plan is to continue to grow organically, expand our
offering and scale our business through acquisitions."
Fourth quarter summary of continuing operations -- ASG
- Revenues were $173.5-million, 17 per cent higher than in the corresponding
period a year ago, and 16 per cent higher than the third quarter of fiscal
Earnings from continuing operations for the fourth quarter of fiscal
2012 were $16.1-million (9-per-cent operating margin), an improvement over normalized fourth quarter earnings from operations a year ago of $11.4-million (8-per-cent operating margin -- normalized to exclude $2.8-million in
proceeds received from a previously written-off note receivable) and
normalized third quarter fiscal 2012 earnings from operations of $11.4-million (8-per-cent operating margin -- normalized for a $3.0-million gain on
the sale of a facility and $3.7-million of United States research and
development tax credits).
Order bookings increased 4 per cent to $187-million from $179-million in the
third quarter of fiscal 2012 and decreased 9 per cent year over year from $206-million in the fourth quarter of fiscal 2011.
Period-end order backlog was a record $382-million, an increase of 2 per cent
from $376-million in the third quarter of this fiscal year and 29 per cent from
$296-million a year ago.
The company's balance sheet was strong, including cash net of debt of
$93.3-million, and the company has unutilized credit facilities of
$51.7-million available under existing credit facilities and another
$24.1-million of credit available under letter of credit facilities.
By industrial market, revenues from life sciences increased 3 per cent year over
year due to higher order backlog entering the fourth quarter compared with a year ago, offset by a longer performance period on certain
programs. The 44-per-cent decrease in computer electronics revenues reflected
lower market activity compared with a year ago. Revenues generated in the
energy market decreased 39 per cent on lower order backlog entering the fourth
quarter compared with a year ago, primarily reflecting solar market
activity. The 102-per-cent increase in transportation revenues primarily
reflected higher order backlog entering the fourth quarter compared with
a year ago on improved demand in the global automotive market. Other
revenues increased 22 per cent year over year primarily due to consumer
products market activity.
Order bookings were $53-million during the first seven weeks of the first
quarter of fiscal 2013.
Fourth quarter summary of discontinued operations -- Solar
On Feb. 27, 2012, a subsidiary of the EDF group, the French
electricity utility, was selected by the French Bankruptcy Court to
purchase the assets of Photowatt International SAS. The entire work force of PWF was subsequently
transferred to the purchaser or offered to be transferred within the
purchaser's group. Effective March 1, 2012, the purchaser assumed
control over the operations of PWF. The confirmation of a new operator
for the PWF business concluded ATS's operating support of PWF. As is
customary in France, the purchaser and the court-appointed trustee were
granted a period of time (ending in June, 2012) to finalize the purchase
agreements relating to the PWF assets. These agreements which will
complete the transfer of the legal ownership of those assets are still
Although a new operator is now assuming the whole operation of the PWF
assets and all employees have been (or offered to be) transferred to
this new operator or within its group, the judicial liquidation process
could take several years to wind up. In light of the current situation,
management does not expect to incur any additional expenses as a result
of the bankruptcy; however, until all matters are resolved under the
bankruptcy process, additional provisions may be required.
The results of PWF up to the bankruptcy date are presented as
discontinued operations in the consolidated statements of income.
Results of discontinued operations
Solar revenues in the fourth quarter of fiscal 2012 included those of
Ontario Solar only as a result of the deconsolidation of PWF during
the third quarter of fiscal 2012. Despite a 367-per-cent year-over-year
increase in Ontario Solar's revenues, fiscal 2012 fourth quarter
revenues of $9.8-million were 80 per cent lower than in the fourth quarter of
fiscal 2011 reflecting the deconsolidation of PWF.
Solar's fiscal 2012 fourth quarter loss from operations was $8.2-million
compared with a loss from operations of $93.3-million a year ago. Ontario
Solar recorded a $2.0-million loss in the fourth quarter of fiscal 2012
on lower-than-expected revenues and higher fixed costs resulting from
ramping up in anticipation of higher demand. The total loss
attributable to PWF was $6.2-million and was mainly due to costs
incurred and provisions made in respect of the company's obligations
related to the bankruptcy process. In the fourth quarter of fiscal
2011, Solar's loss from operations included $70.8-million of non-cash
property, plant and equipment impairment charges, $7.1-million of
non-cash charges to writedown inventory, $2.3-million of incremental
restructuring charges, and incremental warranty costs, and bad debt
ATS remains committed to the separation of its entire Solar business
from its core automation business. To complete this goal, ATS is
advancing opportunities related to its other Solar assets. These
opportunities are expected to positively impact cash during the next
six months. In this regard, in December, 2011, ATS sold an ASG-owned
building in France that formerly housed PWF module assembly. The
accounting impact of this sale was recorded under continuing
Regarding Ontario Solar, ATS is conducting a formal sale process to
divest the business. The company has received a number of non-binding
indicative offers for the Ontario Solar business and is working with
the interested parties to conclude a transaction.
IFRS (international financial reporting standards)
As of the first quarter of fiscal 2012, the results of ATS were prepared
under international financial reporting standards (IFRS), with a
transition date of April 1, 2010. As a result, prior period comparative
information reflects conversion from previous Canadian generally
accepted accounting principles (GAAP) to IFRS.
Annual results materials
ATS's annual consolidated financial statements, management's discussion
and analysis, and annual information form for the year ended March 31,
2012, are available on SEDAR and the company's website.
Quarterly conference call
ATS's quarterly conference call begins at 10 a.m. Eastern Time on Thursday, May
24, 2012, and can be accessed live at the company's website or on the phone by
dialling 416-644-3416 five minutes prior.
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(In millions of dollars)
Q4 2012 Q4 2011 Fiscal 2012 Fiscal 2011 Fiscal 2010
Revenues $173.5 $148.4 $595.4 $485.3 $374.9
Cost of revenues 129.7 113.6 438.7 371.9 279.9
Selling, general and administrative 25.7 19.8 94.5 74.9 61.0
Stock-based compensation 2.0 0.8 4.9 3.0 3.3
Gain on sale of land and building (loss) - - (3.0) - -
Earnings from operations 16.1 14.2 60.3 35.5 30.7
Net finance costs 0.4 0.3 1.6 1.1 0.4
Provision for (recovery of) income taxes 4.8 (0.5) 14.7 6.6 (20.1)
Net income from continuing operations 10.9 14.4 44.0 27.8 50.4
(Loss) from discontinued operations, net of tax (7.9) (93.9) (103.5) (113.3) (38.2)
Net income (loss) 3.0 (79.5) (59.5) (85.5) 12.2
Earnings (loss) per share
Basic and diluted -- from
continuing operations (loss) 0.13 0.17 0.51 0.32 0.58
Basic and diluted -- from
discontinued operations (loss) (0.09) (1.08) (1.19) (1.30) (0.44)
0.04 (0.91) (0.68) (0.98) 0.14
We seek Safe Harbor.