CAMBRIDGE, ON, June 1, 2011 /CNW/ -- CAMBRIDGE, ON, June 1, 2011
/CNW/ - ATS Automation Tooling Systems Inc. (TSX: ATA) ("ATS" or
the "Company") today reported its financial results for the three
and 12 months ended March 31, 2011. Fourth Quarter Summary --
Consolidated revenue was $198.9 million compared to $192.5 million
in the third quarter of the fiscal year and $138.8 million in the
fourth quarter a year ago; -- Consolidated loss from operations was
$14.4 million compared to a consolidated loss from operations of
$8.5 million in the third quarter of fiscal 2011 and a consolidated
loss from operations of $26.0 million in the fourth quarter a year
ago; -- Included in the fourth quarter loss from operations were
expenses for the write-down of inventories at Photowatt France
("PWF") of $7.1 million, $2.3 million in incremental restructuring
charges related to the finalization of the restructuring plan at
PWF and a related $9.1 million asset impairment charge following
the decision to outsource production of PWF modules; -- Per share
loss was $0.18 (basic and diluted) compared to earnings per share
of $0.03 (basic and diluted) a year ago; -- ASG recorded record
Order Bookings of $206 million in the fourth quarter of fiscal
2011, reflecting contributions from acquired businesses and organic
growth in ASG's other businesses; -- On January 5, 2011, the
Company completed its acquisition of the majority of Assembly &
Test Worldwide, Inc.'s U.S.-based and German automation and test
systems businesses (collectively "ATW"); and -- Subsequent to the
end of the fourth quarter of fiscal 2011, Photowatt Ontario ("PWO")
signed two customer agreements for the manufacture and supply of
customer branded modules. See "PWO Customer Agreements" below. "Our
Automation Systems Group ("ASG") performance remained strong
through the fourth quarter," said Anthony Caputo, Chief Executive
Officer. "We generated record Order Bookings, continued to grow ASG
revenues, and delivered solid operating results. We significantly
advanced the integration of Sortimat and drove much improved EBIT
margins. We also initiated the integration of ATW. However, losses
at Photowatt negatively impacted consolidated results. We are
moving ahead with our separation plans via a spinoff of our
Photowatt businesses, which we are targeting to complete before the
end of the calendar year, unless an acceptable sale arrangement of
Photowatt France is identified first." Acquisition of ATW Early in
the fourth quarter, the Company completed its acquisition of ATW.
ATW is a manufacturer of assembly and test systems, with capability
in the transportation, life sciences and energy segments. The
Company benefits from ATW's significant experience, particularly in
the transportation segment. ATW provides the scale required to
further organize ASG's marketing and divisions into a group within
the Company's ASG segment that is focused on transportation. The
integration of ATW is in its early stages. To date, management has
initiated the consolidation of ATW's Saginaw division into its
Livonia and Dayton divisions. Additional incremental margin
improvements are targeted through the application of best
practices, command and control, program management and approach to
market. Management expects the integration process to continue for
a number of quarters. For additional information on the acquisition
of ATW, refer to Note 3 of the Consolidated Financial Statements.
Proposed Spinoff of Photowatt In fiscal 2011, the Company's Board
of Directors approved a plan designed to implement the separation
of Photowatt from ATS. The Company initiated a dual track process
to effect the separation: a spinoff of the Company's combined solar
businesses or a sale of PWF. The Company is engaged with a number
of interested parties regarding the potential sale of PWF. If
a favourable offer is made for PWF, the Company would give it full
consideration. In the interim, the Company is advancing its
separation strategy via the spinoff of the Photowatt businesses as
a standalone public company to the existing shareholders of ATS.
Fiscal 2011 Annual Results Summary Consolidated revenues were
$704.6 million, a 22% year-over-year increase. Included in the
fiscal 2011 increase is $83.0 million of revenues from businesses
acquired during the fiscal year. Excluding revenues from the
acquired businesses, there was a year-over-year increase in
consolidated revenues of $43.8 million or 8%. Consolidated loss per
share was $0.21 compared to earnings per share of $0.14 a year ago.
In fiscal 2011, ASG revenues increased 32% on incremental revenues
from Sortimat and ATW and higher Order Bookings during the fiscal
year compared to the prior year. At Photowatt, revenues
increased 8% compared to fiscal 2010. This growth reflected $45.6
million of revenues generated primarily from the sale of raw
materials inventory, which was sold for its approximate net book
value. Excluding the revenues from raw material sales, Photowatt
fiscal 2011 revenues were 15% lower than a year ago, primarily
reflecting lower average selling prices. Low profitability also
reflected actions taken by PWF employees, including work stoppages
and slowdowns, in response to the restructuring project which
negatively impacted production volumes and operating costs.
Financial Results In millions of dollars, 3 12 except per share
data months months ended 3 months ended 12 months Mar. ended Mar.
ended 31, Mar. 31, 31, Mar. 31, 2011 2010 2011 2010 Revenues from
continuing Automation operations Systems Group $ 153.8 $ 91.6 $
502.9 $ 382.4 Photowatt 49.3 48.6 216.2 199.9 Inter-segment (4.2)
(1.4) (14.5) (4.5) Consolidated $ 198.9 $ 138.8 $ 704.6 $ 577.8
EBITDA Automation Systems Group $ 21.9 $ 21.1 $ 73.3 $ 63.0
Photowatt (27.2) (38.3) (35.9) (31.3) Corporate and Inter-segment
elimination (2.6) (2.9) (21.0) (18.8) Consolidated $ (7.9) $ (20.1)
$ 16.4 $ 12.9 Net income (loss) from Consolidated $ (15.7) $ 2.1 $
(18.0) $ 12.2 continuing operations Earnings From (loss) per
continuing share operations (basic) $ (0.18) $ 0.03 $ (0.21) $ 0.14
From continuing operations (diluted) $ (0.18) $ 0.03 $ (0.21) $
0.14 ASG Fourth Quarter Results -- Revenues were $153.8 million
compared to $124.7 million in the third quarter of the fiscal year
and $91.6 million in the fourth quarter a year ago; -- Fiscal 2011
fourth quarter EBITDA was $21.9 million compared to EBITDA of $16.8
million in the third quarter and $21.1 million a year ago; --
Earnings from operations were $19.4 million (operating margin of
13%), compared to $14.4 million (operating margin of 12%) in the
third quarter of this fiscal year and $19.5 million (operating
margin of 21%) in the fourth quarter a year ago when ASG benefited
from the recognition of $6.1 million of previously unrecognized
investment tax credits receivable; -- Period end Order Backlog was
$296 million, an increase of 38% from $215 million in the third
quarter of the fiscal year and up from $209 million a year ago; --
Order Bookings for the fourth quarter were $206 million compared to
$133 million in the third quarter of fiscal 2011 and $105 million
in the fourth quarter a year ago; -- Order Bookings were $100
million during the first 8 weeks of the first quarter of fiscal
2012. The increase in fourth quarter earnings from operations was
driven by higher revenues in fiscal 2011, partially offset by lower
profitability in Sortimat and ATW. A 68% year-over-year increase in
revenues in the fourth quarter reflected incremental revenues of
$21.9 million and $16.7 million earned by Sortimat and ATW
respectively and an increase in Order Backlog entering the fourth
quarter compared to a year ago. By industrial market, life sciences
revenues increased 30% year over year as a result of the
incremental revenues earned by Sortimat. Revenues from
computer-electronics remained consistent while revenues from energy
markets increased 96% reflecting higher Order Bookings in the first
three quarters of the fiscal year. Transportation revenues
increased 217% year over year primarily as a result of incremental
revenues earned by ATW. "Other" revenues increased by 107% due
primarily to higher consumer products revenues. Photowatt Fourth
Quarter Results -- Revenues were $49.3 million, a 32% decrease from
fiscal 2011 third quarter revenues of $73.0 million, but slightly
higher compared to $48.6 million in the fourth quarter a year ago;
-- EBITDA was negative $27.2 million compared to EBITDA of negative
$12.8 million in the third quarter of fiscal 2011 and EBITDA of
negative $38.3 million a year ago; -- Loss from operations was
$31.3 million compared to loss from operations of $16.3 million in
the third quarter of fiscal 2011 and loss from operations of $42.4
million in the fourth quarter a year ago; -- Total megawatts (MWs)
sold decreased 39% to 10.0 MWs from 16.4 MWs in the third quarter
of fiscal 2011, and were 21% lower than the 12.7 MWs sold in the
fourth quarter of fiscal 2010. Photowatt's fiscal 2011 fourth
quarter loss from operations reflected low volumes due to difficult
market conditions in the global solar industry, particularly in
France where a government imposed moratorium on new solar
installations over three kilowatts caused a reduction in demand and
average selling prices during the fourth quarter. Low profitability
also reflected increased operating costs due to actions taken by
PWF employees, including work stoppages and slowdowns in response
to the restructuring project which negatively impacted production
volumes and operating costs. In the quarter, a number of charges
were incurred related to the restructuring project implemented by
management and poor market conditions. Specific items impacting the
fourth quarter of fiscal 2011 included: -- $9.1 million of non-cash
fixed asset impairment charges related to the decision to outsource
production of PWF modules; -- $7.1 million of non-cash charges
related to the write-down of inventory to its net realizable value,
following decreases to average selling prices in the fourth quarter
of fiscal 2011 due to low demand in the French and wider European
solar markets; -- $2.3 million of incremental restructuring charges
related to the finalization of the restructuring plan at PWF,
accrual for contract related costs and related professional fees;
and -- Incremental warranty costs, and bad debt write-offs related
to customer claims, disputes and customer bankruptcies, caused in
part by the moratorium imposed by the French government on the
solar industry during the fiscal fourth quarter. Photowatt's fiscal
2011 fourth quarter loss from operations also reflected higher
operating losses of approximately $2.3 million at PWO, as it ramped
up production on its 100MW module line in the last month of the
fiscal period. The Company also began to incur costs related to
preparations for the spinoff of Photowatt. In response to the
difficult market conditions and to assist in recovering
competitiveness, PWF management has initiated a restructuring plan
intended to: (i) focus on growing system sales in France and other
emerging European solar markets with attractive FIT regimes for
systems sales; (ii) reduce manufacturing costs; and (iii) improve
its global supply chain, including subcontracting the assembly of
solar modules to third parties. The restructuring project will
result in the reduction of approximately 35% of PWF's workforce,
including 166 full-time positions, partially offset by the creation
of approximately 44 new positions. In addition, approximately 50
PWF positions will be re-deployed to the 25 MW PV Alliance cell
manufacturing line. PWF will also discontinue 136 temporary
positions. The total MW capacity available for sale by PWF is
expected to remain generally the same. Management expects that the
restructuring project will be fully implemented in the second
quarter of fiscal 2012. While local management believes that
the contemplated actions are appropriate and would allow PWF to
recover competitiveness, there is ultimately no guarantee that the
restructuring project and potential future actions will offset all
competitive challenges. PWF continues to monitor market
conditions and intends to take appropriate actions in relation to
such conditions. PWO Customer Agreements Subsequent to the end of
the fourth quarter of fiscal 2011, PWO signed two customer
agreements for the manufacture and supply of customer branded
modules. The first agreement (announced on May 5, 2011) is for the
supply of a minimum of 24 MWs over fiscal 2012 and 2013 and allows
for the potential to increase volumes by an additional 24 MWs over
the term of the agreement. The second agreement (announced today on
June 1, 2011) is for the supply of a minimum of 160 MWs over 4
years, with shipments expected to begin in October 2011. The second
agreement allows for the potential to increase volumes by an
additional 160 MWs over the term of the agreement. Under the first
agreement, PWO will recognize revenue on the full value of the
modules being manufactured. Under the second agreement, PWO will
recognize revenue for module manufacturing services and module
materials other than solar cells, which will be provided by the
customer. Annual Results Materials ATS's annual Consolidated
Financial Statements, Management's Discussion and Analysis, and
Annual Information Form for the year ended March 31, 2011, are
available on SEDAR at www.sedar.com and the Company's website at
www.atsautomation.com. Quarterly Conference Call ATS's quarterly
conference call begins at 10 am eastern tomorrow, June 2 and can be
accessed live at www.atsautomation.com or on the phone by dialing
416 644 3416 five minutes prior. 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, transportation 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 3,000
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. Note to Readers:
Forward-Looking Statements This news release contains certain
statements that constitute forward-looking information within the
meaning of applicable securities laws ("forward-looking
statements"). Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of ATS, or
developments in ATS's business or in its industry, to differ
materially from the anticipated results, performance, achievements
or developments expressed or implied by such forward-looking
statements. Forward-looking statements include all disclosure
regarding possible events, conditions or results of operations that
is based on assumptions about future economic conditions and
courses of action. Forward-looking statements may also
include, without limitation, any statement relating to future
events, conditions or circumstances. ATS cautions you not to place
undue reliance upon any such forward-looking statements, which
speak only as of the date they are made. Forward-looking
statements relate to, among other things: a potential spinoff of
Photowatt or sale of PWF; structure of potential spinoff; timing of
potential spinoff; capitalization of Photowatt in spinoff scenario;
ATW integration, including targeted margin improvements and
duration of the integration process; impact of ATW acquisition on
revenues and operating margins; PWF implementation of the announced
restructuring and expected reduction in workforce; PWF outsourcing
of module production and other targeted areas of cost reductions;
markets that PWF will target; intended outcomes of PWF
restructuring plan, the expected MW capacity of PWF, timing of
implementation, and PWF's intention to take appropriate actions in
response to market conditions; ramp-up of capacity of PWO 100 MW
Module line; two customer agreements signed subsequent to the end
of the quarter, minimum amounts to be supplied thereunder, and
recognition of revenue in connection therewith. The risks and
uncertainties that may affect forward-looking statements include,
among others: general market performance including capital market
conditions and availability and cost of credit; economic market
conditions; impact of factors such as increased pricing pressure
and possible margin compression; foreign currency and exchange
risk; the relative strength of the Canadian dollar; performance of
the market sectors that ATS serves; impact of conditions in
the solar and capital markets, Photowatt performance, impact of
Works Council notification and consultation process, regulatory and
tax environment, and unexpected delays and issues on the timing,
form and structure of contemplated separation and the dual track
process; that the anticipated benefits of separation are not
realized; that other capitalization alternatives are not available
in a spinoff scenario; that targeted initiatives at ATW do not have
intended positive impact and/or take longer than expected; that
PWF's restructuring plan is not fully achieved and/or does not
generate the desired results; that additional cost saving measures
will cost more, or take longer to implement, than planned; the risk
that the PWF restructuring project or other potential future
actions would not offset all competitive challenges; that potential
PWF reduction in work positions is other than as contemplated; that
unexpected problems arise with the new module assembly outsourcing
arrangements; the availability and possible reduction or
elimination of government subsidies and incentives for solar
products in various jurisdictions, including France and Ontario;
the potential for module supplies to customers or the ramp up to
full production of the PWO 100 MW module line to be hindered or
delayed to due to an inability to procure necessary permits,
approvals, materials or equipment on a timely basis; that one or
both of the customer agreements signed subsequent to the end of the
quarter is terminated or impaired as a result of a cancellation or
material change in the feed in tariff program in Ontario and as a
result contemplated minimum amounts to be supplied are not supplied
with resulting impacts on revenue and profitability; that one or
more customers, or other persons with which ATS or its affiliates
has contracted, experience insolvency or bankruptcy with resulting
costs or losses; political, labour or supplier disruptions in
manufacturing and supply of silicon, modules or other supplies; the
development of superior or alternative technologies to those
developed by ATS or Photowatt; the success of competitors with
greater capital and resources in exploiting their technology;
market risk for developing technologies; risks relating to legal
proceedings to which ATS is or may becomes a party; exposure to
product liability claims of Photowatt; and other risks detailed
from time to time in ATS's filings with Canadian provincial
securities regulators. Forward-looking statements are based on
management's current plans, estimates, projections, beliefs and
opinions, and other than as required by applicable securities laws,
ATS does not undertake any obligation to update forward-looking
statements should assumptions related to these plans, estimates,
projections, beliefs and opinions change. To view this news release
in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/June2011/01/c9958.html p
Maria Perrella, Chief Financial Officerbr/ Carl Galloway,
Vice-President, Treasurerbr/ 519 653-6500 /p
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