CAMBRIDGE, ON,
May 22, 2014 /CNW/ - ATS Automation
Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company")
today reported financial results for the three and 12 months ended
March 31, 2014.
Fourth Quarter Summary
- Revenues from continuing operations were $200.7 million, 13% higher than the third quarter
of fiscal 2014 and 31% higher than the corresponding period a year
ago. Excluding IWK revenues of $29.6
million, revenues from continuing operations were
$171.1 million, a 12% increase over
the corresponding period a year ago;
- EBITDA1 was $23.5
million, compared to $22.6
million in the third quarter of fiscal 2014 and $17.3 million in the fourth quarter of fiscal
2013. Normalized for $1.0 million of
restructuring costs, fourth quarter fiscal 2014 EBITDA was
$24.5 million;
- Earnings from continuing operations were $17.2 million (9% operating margin), compared to
$16.7 million (9% operating margin)
in the third quarter of fiscal 2014 and $14.0 million (9% operating margin) in the fourth
quarter a year ago;
- Earnings per share from continuing operations were 13 cents basic and diluted compared to
10 cents basic and 9 cents diluted in the fourth quarter a year
ago;
- Order Bookings were $197 million,
a 16% increase over the corresponding period a year ago. Excluding
IWK Order Bookings of $26 million,
Order Bookings were $171 million,
compared to $170 million in the
fourth quarter a year ago;
- Period end Order Backlog was a record $474 million, up 19% from $398 million in the fourth quarter a year ago.
Higher Order Backlog reflected the addition of IWK's Order Backlog
and higher Order Bookings in the energy and consumer products &
electronics markets;
- The Company's balance sheet and financial capacity to support
growth remained strong, with cash net of debt in continuing
operations of $70.4 million at
March 31, 2014, unutilized credit
facilities of $179.3 million and
$11.1 million of credit available
under letter of credit facilities.
________________________________
1 Non-IFRS measure: see "Notice to Reader: Non-IFRS
Measures and Additional IFRS Measures"
Financial Results
In millions of Canadian
dollars,
except per share data |
|
3 months
ended
March 31,
2014 |
|
3 months
ended
March 31,
2013 |
|
12 months
ended
March 31,
2014 |
|
12 months
ended
March 31,
2013 |
Revenues |
Continuing Operations |
$ |
200.7 |
$ |
153.2 |
$ |
683.4 |
$ |
591.1 |
Discontinued
Operations |
$ |
-- |
$ |
1.6 |
$ |
1.1 |
$ |
3.7 |
Earnings from
Operations |
Continuing Operations |
$ |
17.2 |
$ |
14.0 |
$ |
61.0 |
$ |
56.6 |
EBITDA1 |
Continuing Operations |
$ |
23.5 |
$ |
17.3 |
$ |
79.4 |
$ |
68.8 |
Net income (loss) |
Continuing Operations |
$ |
11.7 |
$ |
8.9 |
$ |
49.4 |
$ |
41.1 |
Discontinued
Operations |
$ |
(0.4) |
$ |
(0.6) |
$ |
12.8 |
$ |
(26.0) |
Earnings
(loss) per share |
From
continuing operations (basic) |
$ |
0.13 |
$ |
0.10 |
$ |
0.56 |
$ |
0.47 |
From discontinued
operations (basic) |
$ |
(0.01) |
$ |
(0.01) |
$ |
0.14 |
$ |
(0.30) |
From continuing
operations (diluted) |
$ |
0.13 |
$ |
0.09 |
$ |
0.55 |
$ |
0.46 |
From discontinued
operations (diluted) |
$ |
(0.01) |
$ |
(0.00) |
$ |
0.14 |
$ |
(0.29) |
1 Non-IFRS measure: see "Notice to
Reader: Non-IFRS Measures and Additional IFRS Measures"
"Our fourth quarter operating performance was
strong," said Anthony Caputo, Chief
Executive Officer. "Our business is growing, both organically and
through acquisition, our operating margins remained strong and we
ended the fiscal year with record Order Backlog. Strategically, the
integration of IWK is progressing well and we remain focused on
executing our value creation plan to grow, expand and scale our
business."
Fourth Quarter Summary Continuing
Operations
Fourth quarter revenues of $200.7
million were 31% higher than a year ago primarily reflecting
$29.6 million of revenues earned by
IWK. Excluding IWK, fourth quarter revenues were $171.1 million, a 12% increase over the
corresponding period a year ago. Foreign exchange rate changes
positively impacted the translation of revenues earned by
foreign-based ATS subsidiaries compared to the corresponding period
a year ago, primarily reflecting the weakening of the Canadian
dollar relative to the Euro and U.S. dollar. By industrial market,
fourth quarter revenues from consumer products & electronics
increased by 216%, primarily on revenues from IWK and higher
revenues earned in the consumer products market. Revenues generated
in the energy market increased 94% compared to the corresponding
period a year ago, primarily on higher Order Backlog entering the
fourth quarter due largely to increased activity in nuclear energy.
Revenues generated in the life sciences market increased 32%
compared to the corresponding period a year ago, primarily on
revenues from IWK. Transportation revenues decreased 5% compared to
a year ago primarily due to lower Order Backlog in the fourth
quarter compared to a year ago.
Earnings from operations were $17.2 million (9% operating margin) compared to
$14.0 million (9% operating margin)
in the fourth quarter of fiscal 2013. Fourth quarter fiscal 2014
earnings from operations included restructuring charges of
$1.0 million to improve the Company's
cost structure including closing its Singapore manufacturing facility. Adjusted for
restructuring charges, fourth quarter fiscal 2014 earnings from
operations were $18.2 million. Higher
earnings from operations primarily reflected higher revenues,
better program execution, and the inclusion of IWK, partially
offset by an accrual for a legal settlement, higher stock-based
compensation costs and increased depreciation and amortization
expenses compared to the corresponding period a year ago.
Depreciation and amortization expense was $6.3 million in the fourth quarter of fiscal
2014, compared to $3.3 million a year
ago, primarily due to a $2.8 million
increase in amortization as a result of the addition of
identifiable intangible assets recorded on the acquisition of IWK
in the third quarter of fiscal 2014.
EBITDA was $23.5
million (12% EBITDA margin) compared to $17.3 million (11% EBITDA margin) in the fourth
quarter of fiscal 2013. Adjusted for restructuring charges, fourth
quarter fiscal 2014 EBITDA was $24.5
million (12% EBITDA margin).
Order Bookings
Fourth quarter fiscal 2014 Order Bookings were $197 million, a 16% increase from the fourth
quarter of fiscal 2013, which primarily reflected $26 million of Order Bookings generated by
IWK. Excluding the impact of IWK, Order Bookings were
$171 million, a 1% increase from the
corresponding period a year ago. Foreign exchange rate changes also
positively impacted the translation of Order Bookings from
foreign-based ATS subsidiaries compared to the corresponding period
a year ago.
Fourth Quarter Summary of Discontinued
Operations: Solar
Ontario Solar recorded a loss of $0.4
million in the fourth quarter of fiscal 2014. The fourth
quarter loss a year ago was $0.6
million. During the first quarter of fiscal 2014, Ontario
Solar manufacturing assets were sold and the manufacturing business
wound up. In addition, four of seven ground-mount solar projects
owned by Ontario Solar's 50% owned subsidiary Ontario Solar PV
Fields ("OSPV") were sold.
Subsequent to the end of fiscal 2014, OSPV
completed the previously announced sale of its remaining three
ground-mount solar projects. OSPV will retain 25% ownership of the
projects until the projects reach commercial operation, which is
expected to occur in early calendar 2015. Net proceeds to ATS are
expected to be approximately $14.6
million, of which the Company received $12.0 million in the first quarter of fiscal
2015. Remaining proceeds are to be paid based on the projects
achieving commercial operation.
Annual Results Materials
ATS' annual Consolidated Financial Statements, Management's
Discussion and Analysis, and Annual Information Form for the year
ended March 31, 2014, are available
on the Company's website at www.atsautomation.com and on SEDAR at
www.sedar.com.
Quarterly Conference Call
ATS' quarterly conference call begins at 10
am eastern on Thursday, May 22
and can be accessed live at www.atsautomation.com or on the phone
by dialing 416 644 3416 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 May 29,
2014) by dialing 416-640-1917 and entering passcode 4683190
followed by the number sign.
About ATS
ATS Automation Tooling Systems Inc. provides innovative, custom
designed, built and installed manufacturing solutions to many of
the world's most successful companies. Founded in 1978, ATS
uses its industry-leading knowledge and global capabilities to
serve the sophisticated automation systems' needs of multinational
customers in industries such as life sciences, transportation,
energy, consumer products and electronics. ATS also leverages its
many years of experience and skills to fulfill the specialized
automation product manufacturing requirements of customers. ATS
employs approximately 2,500 people at 23 manufacturing facilities
in Canada, the United States, Europe, Southeast
Asia and China. The
Company's Solar segment is classified as discontinued operations.
The Company's shares are traded on the Toronto Stock Exchange under
the symbol ATA. Visit the Company's website at
www.atsautomation.com.
Management's Discussion and Analysis
For the Year Ended March 31, 2014
This Management's Discussion and Analysis
("MD&A") for the year ended March 31,
2014 (fiscal 2014) is as of May 21,
2014 and provides information on the operating activities,
performance and financial position of ATS Automation Tooling
Systems Inc. ("ATS" or the "Company") and should be read in
conjunction with the audited consolidated financial statements of
the Company for fiscal 2014 which have been prepared in accordance
with International Financial Reporting Standards ("IFRS") and are
reported in Canadian dollars. Additional information is
contained in the Company's filings with Canadian securities
regulators, including its Annual Information Form, found on SEDAR
at www.sedar.com and on the Company's website at
www.atsautomation.com.
Notice to Reader: Non-IFRS Measures and
Additional IFRS Measures
Throughout this document management uses certain non-IFRS measures
to evaluate the performance of the Company. These terms do not have
any standardized meaning prescribed within IFRS and therefore may
not be comparable to similar measures presented by other
companies. The terms "operating margin," "EBITDA", "EBITDA
margin", "Order Bookings" and "Order Backlog" do not have any
standardized meaning prescribed within IFRS and therefore may not
be comparable to similar measures presented by other companies. 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 from continuing operations
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 (which includes
amortization of intangible assets). EBITDA margin is an
expression of the Company's EBITDA as a percentage of revenues.
Order Bookings represent new orders for the supply of automation
systems, services and products that management believes are firm.
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. Earnings from operations and EBITDA
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
EBITDA is an important indicator of the Company's ability to
generate operating cash flows to fund continued investment in its
operations. Order Bookings provides 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 the Company expects to generate based on contracts
that management believes to be firm. Management believes that ATS
shareholders and potential investors in ATS use these IFRS measures
and non-IFRS financial measures in making investment decisions and
measuring operational results. A reconciliation of earnings from
operations and EBITDA to net income from continuing operations for
the fiscal fourth quarters and years ending March 31, 2014 and March
31, 2013 is contained in this MD&A (see "Reconciliation
of EBITDA to IFRS Measures"). EBITDA should not be construed
as a substitute for net income determined in accordance with IFRS.
A reconciliation of Order Bookings and Order Backlog to total
Company revenues for the fiscal fourth quarters and years ending
March 31, 2014 and March 31, 2013 is contained in the MD&A (see
"Order Backlog Continuity").
COMPANY PROFILE
ATS Automation Tooling Systems Inc. provides innovative, custom
designed, built and installed manufacturing solutions to many of
the world's most successful companies. Founded in 1978, ATS
uses its industry-leading knowledge and global capabilities to
serve the sophisticated automation systems' needs of multinational
customers in industries such as life sciences, transportation,
energy, consumer products and electronics. ATS also leverages its
many years of experience and skills to fulfill the specialized
automation product manufacturing requirements of customers. ATS
employs approximately 2,500 people at 23 manufacturing facilities
in Canada, the United States, Europe, Southeast
Asia and China. The
Company's Solar segment is classified as discontinued
operations.
Value Creation Strategy
To drive value creation, the Company implemented a three-phase
strategic plan: (1) fix the business (improve the existing
operations, gain operating control of the business and earn
credibility); (2) separate the businesses (create a standalone
automation business, monetize non-core assets and strengthen the
balance sheet); and (3) grow (both organically and through
acquisition). The Company has made significant progress in
each phase of its Value Creation Strategy, including the separation
of solar assets (see "Discontinued Operations: Solar" and "Solar
Separation and Outlook").
Accordingly, in June
2012, the ATS Board of Directors approved the next phase of
the Company's strategy: Grow, Expand and Scale. The strategy
is designed to leverage the strong foundation of ATS' core
automation business, continue the growth and development of ATS and
create value for all stakeholders.
Grow
To further the Company's organic growth, ATS will continue to
target providing comprehensive, value-based programs and enterprise
solutions for customers built on differentiating technological
solutions, value of customer outcomes achieved and global
capability.
Expand
The Company seeks to expand its offering of products and services
to the market. The Company intends to build on its automation
systems business to offer: engineering, including design, modelling
and simulation, and program management; products, including
contract manufacturing, automation and other manufacturing
products; and services, including pre automation, post automation,
training, life cycle material management, and other services.
Although engineering, products and services are part of ATS'
portfolio today, the Company has significant room to grow these
offerings in the future.
Scale
The Company is also committed to growth through acquisition and has
the organizational structure, the business processes and the
experience to successfully integrate acquired companies.
Acquisition targets are evaluated on their ability to bring ATS
market or technology leadership, scale and/or a market
opportunity. For each of ATS' markets, the Company has
analyzed the capability value chain and made a grow, team or
acquire decision. Financially, targets are reviewed on a
number of criteria including their potential to add accretive
earnings to current operations.
Business Acquisition - IWK
On September 30, 2013, the Company
completed its acquisition of IWK Verpackungstechnik GmbH and OYSTAR
IWK USA, Inc. (collectively
"IWK"). IWK is a leader in technology driven high performance
tube filling and cartoning machinery for the pharmaceutical and
personal care industries. The acquisition of IWK aligns with
ATS' strategy of scaling its leading position in the global
automation market and enhancing growth opportunities, particularly
in strategic customer segments and with technology
leadership. IWK brought new relationships with key
pharmaceutical and personal care customers and added core
capability in primary packaging (tube fillers) and secondary
packaging (cartoners), which management expects can be leveraged
into other markets ATS currently serves. IWK also allows ATS
to consider future acquisition possibilities that would be a
strategic fit with IWK and provide the Company with deep
capabilities across several core elements of the customer value
chain.
In calendar 2012, IWK had revenues of
approximately 82 million Euro and
EBITDA of approximately 11 million
Euro. Sales to customers in the pharmaceutical and personal
care sectors evenly accounted for over 90% of IWK worldwide
revenues. New equipment systems and standard automation each
accounted for approximately 30% of total revenues, and services
accounted for the remaining 40% of total revenues. European
and North American markets each represented approximately a third
of IWK revenues, Asia 25%, and the
balance was earned primarily in South
America.
The Company is integrating IWK into ATS where it
will serve as the filling centre of excellence (primary and
secondary packaging) for the Company. IWK brings a strong and
experienced management team that will continue to drive the
business.
Cash consideration paid for IWK in the third
quarter of fiscal 2014 was $137.4
million (99.0 million Euro),
which is net of $9.9 million of cash
acquired. In addition, the Company incurred $3.2 million of transaction costs related to the
acquisition. The cash consideration of the purchase price, along
with transaction costs, were primarily funded with existing cash on
hand and proceeds from long-term debt of $40.0 million, which has subsequently been
repaid. This acquisition has been accounted for as a business
combination with the Company as the acquirer of IWK. The
purchase method of accounting has been used and the earnings of IWK
are consolidated beginning from the acquisition date, September 30, 2013. For additional
information on the acquisition of IWK, refer to note 5 of the
consolidated financial statements.
AUTOMATION SYSTEMS GROUP
Business Overview
ATS's Automation Systems Group ("ASG") is an industry-leading
automation solutions provider to some of the world's largest
multinational companies. ASG has expertise in custom automation,
repeat automation, automation products and value-added
services.
ASG categorizes its market into four industry
groups: life sciences, consumer and electronics, transportation,
and energy. Contract values for individual automation systems are
often in excess of $1.0 million, with
some contracts for Enterprise-type programs well in excess of
$10 million. Given the custom
nature of customer projects, contract durations vary greatly, with
typical durations ranging from six to 12 months, with some larger
contracts extending up to 18 to 24 months.
With broad and in-depth knowledge across
multiple industries and technical fields, ASG is able to deliver
single source solutions to customers that can lower their
production costs, accelerate delivery of their products, and
improve quality control. ASG's relationships with customers can
begin with planning and feasibility studies. In situations where
the customer is seeking in-depth analysis before committing to a
program, ASG conducts an analysis to verify the economics and
feasibility of different types of automation, sets objectives for
factors such as line speed and yield, assesses production processes
for manufacturability and calculates the total cost of
ownership.
When a contract for an automation solution is
received, ASG often provides a number of services, including
engineering design, prototyping, process verification,
specification writing, software development, automation simulation,
equipment design and build, third-party equipment qualification,
procurement and integration, automation system installation,
product line start up, documentation, customer training and
after-installation support, maintenance and service. Following the
installation of custom automation, ASG may supply duplicate or
"repeat" automation systems to customers that leverage engineering
design completed in the original customer program. For customers
seeking complex equipment replication, ASG provides value
engineering, supply chain management, integration and manufacturing
capabilities and other automation products and solutions.
Competitive Strengths
Management believes ASG has the following competitive
strengths:
Global presence, size and critical
mass: ASG's global presence and scale provides an advantage
in serving multinational customers because the markets in which the
Company operates are primarily populated by competitors with narrow
geographic and/or industrial market reach. ASG has
manufacturing operations in Canada, the United
States, Germany,
Switzerland, China, Malaysia, Thailand and India. Management believes that ASG's scale
and locations provide it with competitive advantages in winning
large, multinational customer programs that have become
increasingly common in the industry.
Technical skills, capabilities and
experience: Automation manufacturing is a knowledge-based
business. ATS has designed, manufactured, assembled and serviced
over 15,000 automation systems worldwide since 1978 and has an
extensive knowledge base and accumulated design experience.
Management believes ASG's broad experience in many different
industry sectors, with many diverse technologies, along with its
talented workforce and ability to provide custom automation, repeat
automation, automation products and value-added services, positions
the Company well to serve complex multinational customer programs
in a variety of industry sectors.
Product and technology portfolio:
Through its history of bringing thousands of unique automation
projects to market, ATS and its subsidiaries, including Sortimat,
ATW and IWK, have developed an extensive product and technology
portfolio, including manufacturing vision technologies, numerous
material handling and feeder technologies, high-accuracy and high
precision laser processing technologies, and high performance tube
filling and cartoning. Management believes this extensive product
and technology portfolio gives the Company an advantage in
developing unique and leading solutions for customers and
maintaining cost competitiveness.
Trusted customer relationships:
ASG serves some of the world's largest multinational companies.
Most of ASG's customers are repeat customers and many have
long-standing relationships with ATS, often spanning more than a
decade. Management estimates that approximately 90% of ASG Order
Bookings in fiscal 2014 were earned from repeat customers.
Recognized brands: Management
believes ATS is well known within the global automation industry
due to its long history of innovation and broad scope of
operations. In addition, ATS' subsidiaries include strong brands
in: Sortimat, which specializes in the life sciences market; ATW,
which specializes in the transportation market; and IWK which
specializes in the packaging market. Management believes that ATS'
brand names and global reputation improve sales prospecting,
allowing the Company to be considered for a wide variety of
customer programs.
Total-solutions capabilities:
Management believes the Company gains competitive advantages
because ASG provides total turn-key solutions in automation. This
allows customers to single source their most complex projects to
ATS rather than rely on multiple equipment builders. In addition,
ASG can provide customers with other value-added services including
pre-automation consulting, total cost of ownership studies, life
cycle material management, post-automation service, training and
support.
OVERVIEW - OPERATING RESULTS FROM CONTINUING
OPERATIONS
Results from continuing operations comprise the results of ATS'
continuing operations and corporate costs not directly attributable
to Solar. The results of the Solar segment are reported in
discontinued operations.
Consolidated Revenues from Continuing
Operations
(In millions of dollars)
Revenues by
market |
|
|
Q4 2014 |
|
|
Q4 2013 |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
|
Consumer products &
electronics |
|
$ |
34.8 |
|
$ |
11.0 |
|
$ |
91.6 |
|
$ |
54.2 |
|
Energy |
|
|
15.9 |
|
|
8.2 |
|
|
46.6 |
|
|
35.7 |
|
Life sciences |
|
|
81.2 |
|
|
61.7 |
|
|
288.7 |
|
|
224.4 |
|
Transportation |
|
|
68.8 |
|
|
72.3 |
|
|
256.5 |
|
$ |
276.8 |
Total revenues from
continuing operations |
|
$ |
200.7 |
|
$ |
153.2 |
|
$ |
683.4 |
|
|
591.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
installation location |
|
|
Q4 2014 |
|
|
Q4 2013 |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
|
North America |
|
$ |
107.2 |
|
$ |
60.3 |
|
$ |
328.5 |
|
$ |
262.5 |
|
Europe |
|
|
55.3 |
|
|
51.9 |
|
|
192.4 |
|
|
180.3 |
|
Asia / Other |
|
|
38.2 |
|
|
41.0 |
|
|
162.5 |
|
|
148.3 |
Total revenues from
continuing operations |
|
$ |
200.7 |
|
$ |
153.2 |
|
$ |
683.4 |
|
$ |
591.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
Fourth quarter revenues were 31% higher than in the corresponding
period a year ago primarily reflecting $29.6
million of revenues earned by IWK. Excluding IWK, fourth
quarter revenues were $171.1 million,
a 12% increase over the corresponding period a year ago. Foreign
exchange rate changes positively impacted the translation of
revenues earned by foreign-based ASG subsidiaries compared to the
corresponding period a year ago, primarily reflecting the weakening
of the Canadian dollar relative to the Euro and U.S. dollar.
By industrial market, fourth quarter revenues
from consumer products & electronics increased by 216%,
primarily on revenues from IWK and higher revenues earned in the
consumer products market. Revenues generated in the energy market
increased 94% compared to the corresponding period a year ago,
primarily on higher Order Backlog entering the fourth quarter due
largely to increased activity in nuclear energy. Revenues generated
in the life sciences market increased 32% compared to the
corresponding period a year ago, primarily on revenues from IWK.
Transportation revenues decreased 5% compared to a year ago
primarily due to lower Order Backlog in the fourth quarter compared
to a year ago.
Full Year
Fiscal 2014 revenues were 16% higher than the corresponding period
a year ago. Higher fiscal 2014 revenues reflected
$59.3 million of revenues earned by
IWK in the third and fourth quarters of fiscal 2014, foreign
exchange rate changes which positively impacted the translation of
revenues earned by foreign-based ASG subsidiaries compared to
fiscal 2013, primarily reflecting the weakening of the Canadian
dollar relative to the Euro and the U.S. dollar, and
increased Order Backlog entering the fiscal year compared to a year
ago.
By industrial market, revenues from consumer
products & electronics and life sciences markets increased 69%
and 29% respectively compared to fiscal 2013, primarily on revenues
earned by IWK and higher Order Backlog in life sciences entering
the fiscal year compared to a year ago. Revenues generated in the
energy market increased 31% on increased activity primarily in
nuclear energy. Revenues from the Transportation market decreased
7% compared to a year ago primarily due to lower Order
Bookings.
Consolidated Operating Results
(In millions of dollars)
|
|
|
Q4 2014 |
|
|
Q4 2013 |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
$ |
17.2 |
|
$ |
14.0 |
|
$ |
61.0 |
|
$ |
56.6 |
Depreciation and amortization |
|
|
6.3 |
|
|
3.3 |
|
|
18.4 |
|
|
12.2 |
EBITDA |
|
$ |
23.5 |
|
$ |
17.3 |
|
$ |
79.4 |
|
$ |
68.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
Fiscal 2014 fourth quarter earnings from operations were
$17.2 million (9% operating margin)
compared to $14.0 million (9%
operating margin) in the fourth quarter of fiscal 2013. Fourth
quarter fiscal 2014 earnings from operations included restructuring
charges of $1.0 million to improve
the Company's cost structure including closing its Singapore manufacturing facility. Adjusted for
restructuring charges, fourth quarter fiscal 2014 earnings from
operations were $18.2 million (9%
operating margin).
Higher earnings from operations primarily
reflected higher revenues, better program execution, and the
inclusion of IWK, partially offset by an accrual for a legal
settlement, higher stock-based compensation costs and increased
depreciation and amortization expenses compared to the
corresponding period a year ago. Depreciation and amortization
expense was $6.3 million in the
fourth quarter of fiscal 2014, compared to $3.3 million a year ago, primarily due to a
$2.8 million increase in amortization
as a result of the addition of identifiable intangible assets
recorded on the acquisition of IWK in the third quarter of fiscal
2014.
EBITDA was $23.5
million (12% EBITDA margin) compared to $17.3 million (11% EBITDA margin) in the fourth
quarter of fiscal 2013. Adjusted for restructuring charges, fourth
quarter fiscal 2014 EBITDA was $24.5
million (12% EBITDA margin).
Full Year
Earnings from operations were $61.0
million (9% operating margin) compared to $56.6 million (10% operating margin) a year ago.
Excluding $6.1 million of
restructuring charges incurred to re-balance global capacity and
improve the Company's cost structure, $3.2
million of transaction costs related to the acquisition of
IWK, and a one-time gain of $4.3
million from the successful recovery of costs related to
programs acquired in a previous acquisition, fiscal 2014 earnings
from operations were $66.0 million
(10% operating margin).
Higher earnings from operations, adjusted for
these items, primarily reflected revenue growth and the inclusion
of IWK, partially offset by higher stock-based compensation costs
and higher depreciation and amortization expenses compared to a
year ago. Depreciation and amortization expense of $18.4 million in fiscal 2014 increased from
$12.2 million a year ago, primarily
due to a $5.2 million increase in
amortization as a result of the addition of identifiable intangible
assets recorded on the acquisition of IWK in the third quarter of
fiscal 2014.
EBITDA was $79.4
million (12% EBITDA margin) compared to $68.8 million (12% EBITDA margin) in fiscal 2013.
Fiscal 2014 EBITDA, adjusted for restructuring charges, IWK
acquisition costs, and one-time gains was $84.4 million (12% EBITDA margin).
ASG Order Bookings by Quarter
(In millions of dollars)
|
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
Q1 |
|
$ |
165 |
|
$ |
168 |
Q2 |
|
|
110 |
|
|
112 |
Q3 |
|
|
237 |
|
|
173 |
Q4 |
|
|
197 |
|
|
170 |
Total Order Bookings |
|
$ |
709 |
|
$ |
623 |
|
|
|
|
|
|
|
Fourth Quarter
Fourth quarter fiscal 2014 Order Bookings were $197 million, a 16% increase from the fourth
quarter of fiscal 2013, which primarily reflected $26 million of Order Bookings generated by
IWK. Excluding the impact of IWK, Order Bookings were
$171 million, a 1% increase from the
corresponding period a year ago. Foreign exchange rate changes also
positively impacted the translation of Order Bookings from
foreign-based ASG subsidiaries compared to the corresponding period
a year ago.
Full Year
Fiscal 2014 Order Bookings were $709
million, a 14% increase from fiscal 2013 Order Bookings of
$623 million. Excluding the impact of
IWK, Order Bookings were $635
million, a 2% increase from the previous fiscal year.
Continued strength in consumer products and electronics, life
sciences and energy was offset by lower activity in transportation.
Foreign exchange rate changes also positively impacted the
translation of Order Bookings from foreign-based ASG subsidiaries
compared to fiscal 2013.
During the first quarter of fiscal 2014,
milestone payments of 15 million Euro
related to the Nigeria enterprise
program were received resulting in total payments for this program
to date of approximately 25 million
Euro. The Company will record the balance of the Order
Booking and Order Backlog if and when financial close is reached or
additional milestone payments are received.
Order Backlog Continuity
(In millions of dollars)
|
|
|
Q4 2014 |
|
|
Q4 2013 |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening Order Backlog |
|
$ |
467 |
|
$ |
388 |
|
$ |
398 |
|
$ |
382 |
Revenues |
|
|
(201) |
|
|
(153) |
|
|
(683) |
|
|
(591) |
Order Bookings |
|
|
197 |
|
|
170 |
|
|
709 |
|
|
623 |
Order Backlog adjustments1 |
|
|
11 |
|
|
(7) |
|
|
50 |
|
|
(16) |
Total |
|
$ |
474 |
|
$ |
398 |
|
$ |
474 |
|
$ |
398 |
1 Order Backlog adjustments include
foreign exchange adjustments, cancellations and for fiscal 2014,
incremental Order Backlog of $45
million acquired with IWK.
Order Backlog by Industry
(In millions of dollars)
|
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
Consumer products & electronics |
|
$ |
79 |
|
$ |
23 |
Energy |
|
|
55 |
|
|
13 |
Life sciences |
|
|
170 |
|
|
162 |
Transportation |
|
|
170 |
|
|
200 |
Total |
|
$ |
474 |
|
$ |
398 |
|
|
|
|
|
|
|
At March 31, 2014,
Order Backlog was $474 million, 19%
higher than at March 31, 2013.
Higher Order Backlog primarily reflected the addition of IWK's
Order Backlog and higher Order Bookings in the energy and consumer
products & electronics markets.
Outlook
The general global economic environment has improved; however,
uncertainty remains. In North
America, the U.S. and Canadian economies have shown signs of
improvement, but growth remains slow. Economic growth has slowed in
China and other parts of
Asia. In Europe, the economy has shown signs of
stabilizing, but markets continue to be weak. This has the
potential to negatively impact demand, particularly for the
Company's European operations, and may cause volatility in Order
Bookings. Overall, a prolonged or more significant downturn in an
economy where the Company operates could negatively impact Order
Bookings. Impacts on demand for the Company's products and
services may lag behind global macroeconomic trends due to the
strategic nature of the Company's programs to its customers and the
long lead times on projects.
Many customers remain cautious in their approach
to capital investment; however, activity in the life sciences and
transportation markets remains strong. The Company has seen
increased activity in energy markets such as nuclear and oil and
gas; however, the solar energy market remains weak due to
reductions in solar feed-in-tariffs. Activity in consumer products
& electronics has improved and the addition of IWK provides the
Company with an opportunity to increase its exposure to new
customers in these markets and in life sciences.
The Company's sales organization will continue
to work to engage with customers on enterprise-type
solutions. The Company expects that this will provide ATS
with more strategic relationships, increased predictability, better
program control and less sensitivity to macro-economic
forces. This approach to market may cause variability in
Order Bookings from quarter to quarter and, as is already the case,
lengthen the performance period and revenue recognition for certain
customer programs. The Company expects its Order Backlog of
$474 million at the end of fiscal
2014 to mitigate the impact of volatile Order Bookings on revenues
in the short term. Management expects that approximately 35% to 40%
of its Order Backlog would typically be completed each quarter.
The addition of IWK provides core capabilities
and customers that are new to ATS. This is expected to result
in cross-selling opportunities and further key account
development. ATS' approach to market will be rolled out
within IWK to support its growth. Management expects to
leverage IWK's established product development and after-market
service capabilities across the ATS organization.
Regarding IWK, opportunities to increase
profitability are being pursued through improved supply chain
management, better leveraging of the Company's global footprint and
deploying IWK's service model and capability to all of ATS.
The addition of IWK also provides the Company with an opportunity
to realign its operations and improve the global cost structure of
its base business. In this regard, the Company is in the process of
closing a manufacturing facility in Singapore. The Company will continue to
service customers in the region from a sales and service office in
Singapore and by way of
neighboring locations in Malaysia
and Thailand. These actions, along
with other changes implemented by the Company in the first quarter
of fiscal 2014, have re-balanced global capacity and improved the
Company's cost structure.
Management's disciplined focus on program
management, cost reductions, standardization and quality puts ATS
in a strong competitive position to capitalize on opportunities
going forward and sustain performance in challenging market
conditions. Management expects that the application of its ongoing
efforts to improve its cost structure, business processes,
leadership and supply chain management will continue to have a
positive impact on ATS operations.
The Company is seeking to expand its position in
the global automation market organically and through
acquisition. The Company's strong financial position provides
a solid foundation and the flexibility to pursue its growth
strategy.
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS &
SELECTED FOURTH QUARTER AND ANNUAL INFORMATION
(In millions of dollars, except per share data)
|
|
|
Q4
2014 |
|
|
Q4
2013 |
|
|
Fiscal
2014 |
|
|
Fiscal
2013 |
|
|
Fiscal 2012 |
Revenues |
|
$ |
200.7 |
|
$ |
153.2 |
|
$ |
683.4 |
|
$ |
591.1 |
|
$ |
595.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
146.6 |
|
|
116.4 |
|
|
501.7 |
|
|
441.2 |
|
|
438.7 |
Selling, general and administrative |
|
|
35.0 |
|
|
21.5 |
|
|
113.3 |
|
|
89.5 |
|
|
94.5 |
Stock-based compensation |
|
|
1.9 |
|
|
1.3 |
|
|
7.3 |
|
|
3.8 |
|
|
4.9 |
Gain on sale of land and building |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(3.0) |
Earnings from
operations |
|
$ |
17.2 |
|
$ |
14.0 |
|
$ |
61.0(1) |
|
$ |
56.6 |
|
$ |
60.3 |
Net finance costs |
|
$ |
1.0 |
|
$ |
0.7 |
|
$ |
3.0 |
|
$ |
2.0 |
|
$ |
1.6 |
Provision for income taxes |
|
|
4.5 |
|
|
4.4 |
|
|
8.6 |
|
|
13.5 |
|
|
14.7 |
Net income from continuing operations |
|
$ |
11.7 |
|
$ |
8.9 |
|
$ |
49.4 |
|
$ |
41.1 |
|
$ |
44.0 |
Loss from discontinued operations, net of
tax |
|
$ |
(0.4) |
|
$ |
(0.6) |
|
$ |
12.8 |
|
$ |
(26.0) |
|
$ |
(103.5) |
Net income (loss) |
|
$ |
11.3 |
|
$ |
8.3 |
|
$ |
62.2 |
|
$ |
15.1 |
|
$ |
(59.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing operations |
|
$ |
0.13 |
|
$ |
0.10 |
|
$ |
0.56 |
|
$ |
0.47 |
|
$ |
0.51 |
Basic from discontinued operations |
|
$ |
(0.01) |
|
$ |
(0.01) |
|
$ |
0.14 |
|
$ |
(0.30) |
|
$ |
(1.19) |
|
|
$ |
0.12 |
|
$ |
0.09 |
|
$ |
0.70 |
|
$ |
0.17 |
|
$ |
(0.68) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted from continuing operations |
|
$ |
0.13 |
|
$ |
0.09 |
|
$ |
0.55 |
|
$ |
0.46 |
|
$ |
0.51 |
Diluted from discontinued operations |
|
$ |
(0.01) |
|
$ |
(0.00) |
|
$ |
0.14 |
|
$ |
(0.29) |
|
$ |
(1.19) |
|
|
$ |
0.12 |
|
$ |
0.09 |
|
$ |
0.69 |
|
$ |
0.17 |
|
$ |
(0.68) |
From continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
$ |
778.4 |
|
$ |
565.4 |
|
$ |
532.9 |
Total cash and short-term investments |
|
|
|
|
|
|
|
$ |
76.5 |
|
$ |
105.5 |
|
$ |
96.2 |
Total bank debt |
|
|
|
|
|
|
|
$ |
6.0 |
|
$ |
1.2 |
|
$ |
3.0 |
(1) Rounding.
Revenues. At $200.7 million, consolidated revenues from
continuing operations for the fourth quarter of fiscal 2014 were
$47.5 million or 31% higher than in
the corresponding period a year ago. At $683.4 million, fiscal 2014 revenues were
$92.3 million or 16% higher than for
the same period a year ago, primarily on incremental IWK
revenue. See "Overview - Operating Results from Continuing
Operations."
Cost of revenues. At $146.6 million, fourth quarter fiscal 2014 cost
of revenues increased over the corresponding period a year ago by
$30.2 million or 26% primarily on
higher revenues. Fiscal 2014 cost of revenues of $501.7 million increased by $60.5 million or 14%, primarily on higher
revenues generated compared to a year ago.
At 27%, gross margin in the fourth quarter of
fiscal 2014 increased 3% from the corresponding period a year ago.
Higher fourth quarter gross margins reflected improved program
execution, improvements in the cost structure of the Company's base
business, and the inclusion of IWK. Fiscal 2014 gross margin of 27%
increased 2% from fiscal 2013 due to the same factors,
specifically: improved program execution, improvements in the cost
structure of the Company's base business, and the inclusion of IWK
for the third and fourth fiscal quarters of 2014.
Selling, general and administrative
("SG&A") expenses. SG&A expenses for the fourth
quarter of fiscal 2014 were $35.0
million. This included $1.0
million of restructuring charges incurred to re-balance
global capacity and improve the Company's cost structure. Adjusted
for these costs, SG&A expenses were $12.5 million or 58% higher than the $21.5 million incurred in the corresponding
period last year. Higher SG&A costs primarily reflected the
addition of IWK SG&A expenses, including $2.8 million of incremental amortization expenses
related to the identifiable intangible assets recorded on the
acquisition of IWK, foreign exchange rate changes which negatively
impacted the translation of SG&A expenses, an accrual for a
legal settlement, and higher employee performance incentives.
Fiscal 2014 SG&A expenses were $113.3 million, which included $6.1 million of restructuring charges,
$3.2 million of professional fees
related to the acquisition of IWK and a one-time gain of
$4.3 million from the successful
recovery of costs related to programs acquired in a previous
acquisition. Adjusted for these costs, fiscal 2014 SG&A
spending was $108.3 million,
$18.8 million or 21% higher compared
to the previous year. Higher SG&A costs primarily reflected the
addition of IWK SG&A expenses, including $5.2 million of incremental amortization expenses
related to the identifiable intangible assets recorded on the
acquisition of IWK.
Stock-based compensation cost.
Stock-based compensation expense of $1.9
million in the fourth quarter of fiscal 2014 increased from
$1.3 million in the corresponding
period a year ago. Fiscal 2014 stock-based compensation
expense increased to $7.3 million
from $3.8 million a year earlier. The
increase in stock-based compensation costs over both periods is due
to the revaluation of deferred stock units, share appreciation
rights and restricted share units.
Earnings from operations. For the
three and twelve month periods ended March
31, 2014 consolidated earnings from operations were
$17.2 million and $61.0 million respectively (operating margin of
9% in both periods), compared to earnings from operations of
$14.0 million and $56.6 million a year ago (operating margins of 9%
and 10% respectively). See "Overview - Operating Results from
Continuing Operations."
Net finance costs. Net finance
costs were $1.0 million in the fourth
quarter of fiscal 2014, $0.3 million
higher than a year ago. Fiscal 2014 finance costs were $3.0 million compared to $2.0 million in the corresponding period a year
ago. The increase in net finance costs reflected increased usage of
the Company's primary credit facility in both periods.
Income tax provision. For the three and
twelve months ended March 31, 2014,
the Company's effective income tax rate was 28% and 15%
respectively. Based on changes made to the tax structure of the
Company's businesses in Germany
and the acquisition of IWK, the Company expects it will be able to
utilize previously unrecognized deferred tax assets. Consequently,
in fiscal 2014, the Company recorded net income tax recoveries and
other adjustments of $8.3 million primarily related to the
recognition of deferred income tax assets following the Company's
change in assessment of its ability to utilize tax losses in its
German-based operations, partially offset by certain provisions in
other jurisdictions. Adjusted for these items which were recorded
in the third fiscal quarter of 2014, the Company's effective income
tax rate was 29% for fiscal 2014. The Company expects that with the
recognition of these deferred tax assets, its effective tax rate
will exceed the combined Canadian basic federal and provincial
income tax rate of 27% going forward; however, cash taxes are
expected to be lower than the effective tax rate for accounting
purposes due to tax assets available primarily in Canada and Germany.
Net income from continuing operations.
Fiscal 2014 fourth quarter net income from continuing operations
was $11.7 million (13 cents per share basic and diluted) compared to
$8.9 million (10 cents per share basic and 9 cents per share diluted) for the fourth quarter
of fiscal 2013. Net income from continuing operations for
fiscal 2014 was $49.4 million
(56 cents per share basic and
55 cents per share diluted) compared
to $41.1 million (47 cents per share basic and 46 cents per share diluted) a year ago.
Reconciliation of EBITDA to IFRS
Measures
(In millions of dollars)
|
|
Fiscal 2014 |
|
Fiscal 2013 |
|
Fiscal 2012 |
EBITDA |
$ |
79.4 |
$ |
68.8 |
$ |
72.3 |
Less: depreciation and amortization
expense |
|
18.4 |
|
12.2 |
|
12.0 |
Earnings from operations |
$ |
61.0 |
$ |
56.6 |
$ |
60.3 |
Less: net finance costs |
|
3.0 |
|
2.0 |
|
1.6 |
Provision for income taxes |
|
8.6 |
|
13.5 |
|
14.7 |
Net income from continuing operations |
$ |
49.4 |
$ |
41.1 |
$ |
44.0 |
|
|
|
|
|
|
|
|
|
|
|
Q4 2014 |
|
Q4 2013 |
EBITDA |
|
|
$ |
23.5 |
$ |
17.3 |
Less: depreciation and amortization
expense |
|
|
|
6.3 |
|
3.3 |
Earnings from operations |
|
|
$ |
17.2 |
$ |
14.0 |
Less: net finance costs
|
|
|
|
1.0 |
|
0.7 |
Provision for income taxes
|
|
|
|
4.5 |
|
4.4 |
Net income from continuing
operations |
|
|
$ |
11.7 |
$ |
8.9 |
DISCONTINUED OPERATIONS: SOLAR
(In millions of dollars)
|
|
Q4 2014 |
|
Q4 2013 |
|
Fiscal 2014 |
|
Fiscal 2013 |
Total revenues |
$ |
― |
$ |
1.6 |
$ |
1.1 |
$ |
3.7 |
Gain on sale |
|
― |
|
― |
|
13.8 |
|
― |
Income (loss) from discontinued |
|
|
|
|
|
|
|
|
operations |
|
(0.4) |
|
(0.7) |
|
12.8 |
|
(26.1) |
Income (loss) from discontinued |
|
|
|
|
|
|
|
|
operations, net of tax |
|
(0.4) |
|
(0.6) |
|
12.8 |
|
(26.0) |
|
|
|
|
|
|
|
|
|
Fourth Quarter
Revenues
During the first quarter of fiscal 2014, the manufacturing assets
were sold and the business wound up. Accordingly, fiscal 2014
fourth quarter revenues of $nil were $1.6
million lower than in the fourth quarter of fiscal 2013.
Income (loss) from Discontinued
Operations
Ontario Solar recorded a loss of $0.4
million in the fourth quarter of fiscal 2014. The fourth
quarter loss a year ago was $0.6
million.
Full Year
Revenues
Revenues for fiscal 2014 of $1.1
million were 70% lower than in the same period of fiscal
2013 reflecting the sale of manufacturing assets and business
cessation.
Gain on sale
For fiscal 2014, the gain on sale of $13.8
million was comprised of gains of $10.8 million from the sale of 75% ownership
interest in four ground-mount solar projects by Ontario Solar's 50%
owned joint operation Ontario Solar PV Fields ("OSPV") and
$3.0 million from the sale of Ontario
Solar's manufacturing assets and inventory.
Income (loss) from Discontinued
Operations
Ontario Solar recorded $12.8 million
of income in fiscal 2014 compared to losses from operations of
$26.0 million in the corresponding
period a year ago.
Solar Separation and Outlook
Subsequent to the end of fiscal 2014, OSPV completed the sale of
its remaining three ground-mount solar projects. OSPV will retain
25% ownership of the projects until the projects reach commercial
operation, which is expected to occur in early calendar 2015.
Net proceeds to ATS are expected to be approximately $14.6 million, of which the Company received
$12.0 million in the first quarter of
fiscal 2015. Remaining proceeds are to be paid based on the
projects achieving certain development milestones.
During the year ended March 31, 2014, OSPV sold four ground-mount solar
projects, representing approximately 34 megawatts (MWs). OSPV will
retain 25% ownership of the projects until they reach commercial
operation, which is expected to occur in calendar 2014. Net
proceeds to the Company are expected to be $21.4 million, of which the Company received net
proceeds of $13.4 million during the
first quarter of fiscal 2014 and $0.5
million during the year ended March
31, 2013. The remaining proceeds are expected to be received
when the projects achieve commercial operation.
During the year ended March 31, 2014, the Company divested its
Ontario Solar manufacturing assets
and inventory. Net proceeds to the Company were $6.5 million.
Overall, management expects to record a gain on
these divestitures as the sales are completed and proceeds
realized. Subsequent to the settlement of outstanding liabilities,
net proceeds from the divestiture of Ontario Solar will be
re-allocated to ATS' core automation business to support
growth.
SUMMARY OF INVESTMENTS, LIQUIDITY, CASH FLOW AND FINANCIAL
RESOURCES
Investments
(In millions of dollars)
|
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
Investments — increase (decrease) |
|
|
|
|
|
|
|
Non-cash operating working capital |
|
$ |
4.9 |
|
$ |
26.0 |
|
Property, plant and equipment |
|
|
4.3 |
|
|
7.7 |
|
Acquisition of intangible assets |
|
|
6.8 |
|
|
4.8 |
|
Business acquisition, net of cash required |
|
|
137.4 |
|
|
― |
|
Proceeds from disposal of assets |
|
|
(0.2) |
|
|
― |
|
Acquisition / (Proceeds from disposal) of
portfolio investments |
|
|
(5.2) |
|
|
4.6 |
|
Investing activities of discontinued
operations |
|
|
(21.9) |
|
|
0.1 |
Total net investments |
|
$ |
126.1 |
|
$ |
43.2 |
|
|
|
|
|
|
|
|
In fiscal 2014, the Company's investment in
non-cash working capital increased by $4.9
million compared to an increase of $26.0 million a year ago. Accounts receivable
increased 18% or $18.1 million,
driven by the increase in fiscal 2014 revenues and the acquisition
of IWK. Net contracts in progress increased 16% or $12.2 million compared to March 31, 2013 due to the acquisition of IWK and
timing of closing programs compared to fiscal 2013. The Company
actively manages its accounts receivable and net contracts in
progress balances through billing terms on long-term contracts,
collection efforts and supplier payment terms. Inventories
increased 127% or $13.5 million
primarily due to the acquisition of IWK. Deposits and prepaid
assets decreased 18% or $2.1 million
compared to March 31, 2013 due to the
timing of program execution compared to fiscal 2013. Accounts
payable and accrued liabilities increased 34% or $35.5 million primarily due to the acquisition of
IWK and timing of purchases.
Capital expenditures totalled $4.3 million for fiscal 2014, primarily related
to computer hardware. Capital expenditures totalled $7.7 million in fiscal 2013, primarily related to
facility improvements, computer hardware and equipment.
Intangible assets expenditures totalled
$6.8 million in fiscal 2014 and
primarily related to computer software. Intangible assets
expenditures totalled $4.8 million in
fiscal 2013, primarily related to software acquisitions.
During fiscal 2013, the Company acquired a
portfolio investment for $4.6
million. The Company divested this investment in fiscal 2014
for proceeds of $5.2 million.
The Company performs impairment tests on its
goodwill and intangible asset balances on an annual basis or as
warranted by events or circumstances. The Company conducted its
annual impairment assessment in the fourth quarter of fiscal
2014 and has determined there is no impairment of goodwill or
intangible assets as of March 31,
2014 (fiscal 2013 - $nil).
All of the Company's investments involve risks
and require that the Company make judgments and estimates regarding
the likelihood of recovery of the respective costs. In the event
management determines that any of the Company's investments have
become permanently impaired or recovery is no longer reasonably
assured, the value of the investment would be written down to its
estimated net realizable value as a charge against earnings. Due to
the magnitude of certain investments, such write-downs could be
material.
Liquidity, Cash Flow and Financial
Resources
(In millions of dollars, except ratios)
As at |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
Cash and cash equivalents |
|
$ |
76.5 |
|
$ |
105.5 |
Debt-to-equity ratio |
|
|
0.01:1 |
|
|
0.01:1 |
Cash flows provided by operating activities
from
continuing operations |
|
$ |
70.0 |
|
$ |
33.7 |
|
|
|
|
|
|
|
At March 31, 2014,
the Company had cash and cash equivalents of $76.5 million in continuing operations compared
to $105.5 million at March 31, 2013. The Company's
total-debt-to-total-equity ratio, excluding accumulated other
comprehensive income at March 31,
2014 was 0.01:1. At March 31,
2014, the Company had $179.3
million of unutilized credit available under existing credit
facilities and another $11.1 million
available under letter of credit facilities.
In fiscal 2014, cash flows provided by operating
activities from continuing operations were $70.0 million ($33.7
million provided by operating activities from continuing
operations in fiscal 2013). The increase in operating cash flows
from continuing operations related primarily to higher income from
continuing operations, the timing of investments in non-cash
working capital in large customer programs and cash flows provided
by the operating activities of IWK.
During fiscal 2013, the Company established a
new Senior Secured Credit Facility (the "Credit Agreement"). The
Credit Agreement provides a revolving credit facility of
$250.0 million and expires on
November 6, 2015. The Credit
Agreement is secured by the assets, excluding real estate, of
certain of the Company's North American legal entities and a pledge
of shares and guarantees from certain of the Company's legal
entities. At March 31, 2014,
the Company had utilized $72.6
million under the Credit Agreement, which was obtained by
way of letters of credit (March 31,
2013 - $53.1 million).
In the third quarter of fiscal 2014, the Company used proceeds from
the facility to partially fund the purchase of IWK, which was
subsequently repaid in the fourth quarter of fiscal 2014.
The Credit Agreement is available in Canadian
dollars by way of prime rate advances, letters of credit for
certain purposes and/or bankers' acceptances and in U.S. dollars by
way of base rate advances and/or LIBOR advances. The interest
rates applicable to the Credit Agreement are determined based on a
debt-to-EBITDA ratio. For prime-rate advances and base-rate
advances, the interest rate is equal to the bank's prime rate or
the bank's U.S. dollar base rate in Canada, respectively, plus 0.50% to
1.50%. For bankers' acceptances and LIBOR advances, the
interest rate is equal to the bankers' acceptance fee or the LIBOR,
respectively, plus 1.50% to 2.50%. The Company pays a fee for
usage of financial letters of credit which ranges from 1.70% to
2.70% and a fee for usage of non-financial letters of credit which
ranges from 1.15% to 1.80%. The Company pays a standby fee on
the unadvanced portions of the amounts available for advance or
draw-down under the Credit Agreement at rates ranging from 0.30% to
0.50%.
The Credit Agreement is subject to a
debt-to-EBITDA test and an interest coverage test. Under the
terms of the Credit Agreement, the Company is restricted from
encumbering any assets with certain permitted exceptions. The
Credit Agreement also limits advances to subsidiaries and partially
restricts the Company from repurchasing its common shares and
paying dividends.
The Company has additional credit facilities of
$9.0 million (2.4 million Euro, 200
million Indian Rupees, 0.5 million
Swiss Francs and 30 million Thai
Baht). The total amount outstanding on these
facilities is $6.7 million of which
$0.9 million is classified as bank
indebtedness (March 31, 2013 - $nil)
and $5.8 million is classified as
long-term debt (March 31, 2013 -
$2.2 million). The interest
rates applicable to the credit facilities range from 1.9% to 11.0%
per annum. A portion of the long-term debt is secured by
certain assets of the Company. The 0.5
million Swiss Francs and 200.0
million Indian Rupees credit facilities are secured by
letters of credit under the Credit Agreement.
The Company expects to continue increasing its
investment in working capital to support the growth of its
business. 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
working capital and capital assets and to fund strategic investment
plans including some potential acquisitions. Significant
acquisitions could result in additional debt or equity financing
requirements. The Company expects to use moderate leverage to
support its growth strategy.
In the third quarter of fiscal 2014, the Company
completed its acquisition of IWK. Total cash consideration paid for
IWK was $137.4 million (99.0 million Euro), which is net of $9.9 million of cash acquired in the
business. See "Value Creation Strategy: Business Acquisition
- IWK."
Contractual Obligations
(In millions of dollars)
The minimum operating lease payments (related
primarily to facilities and equipment) and purchase obligations are
as follows:
From continuing operations:
|
|
|
Operating |
|
|
Purchase |
|
|
|
leases |
|
|
obligations |
Less than one year |
|
$ |
6.3 |
|
$ |
59.3 |
One - two years |
|
|
5.1 |
|
|
0.8 |
Two - three years |
|
|
4.4 |
|
|
― |
Three - four years |
|
|
2.3 |
|
|
― |
Four - five years |
|
|
1.8 |
|
|
― |
Due in over five years |
|
|
3.8 |
|
|
― |
|
|
$ |
23.7 |
|
$ |
60.1 |
|
|
|
|
|
|
|
The Company's off-balance sheet arrangements
consist of purchase obligations and various operating lease
financing arrangements related primarily to facilities and
equipment, which have been entered into in the normal course of
business. The Company's purchase obligations consist
primarily of materials purchase commitments.
In accordance with industry practice, the
Company is liable to customers for obligations relating to contract
completion and timely delivery. In the normal conduct of its
operations, the Company may provide bank guarantees as security for
advances received from customers pending delivery and contract
performance. In addition, the Company provides bank guarantees for
post-retirement obligations and may provide bank guarantees as
security on equipment under lease and on order. At
March 31, 2014, the total value of
outstanding bank guarantees under credit facilities was
approximately $95.3 million
(March 31, 2013 - $68.3 million) from continuing operations and was
$2.1 million (March 31, 2013 - $3.7
million) from discontinued operations.
The Company is exposed to credit risk on
derivative financial instruments arising from the potential for
counterparties to default on their contractual obligations to the
Company. The Company minimizes this risk by limiting counterparties
to major financial institutions and monitoring their
creditworthiness. The Company's credit exposure to forward foreign
exchange contracts is the current replacement value of contracts
that are in a gain position. For further information related
to the Company's use of derivative financial instruments refer to
note 13 of the consolidated financial statements. The Company
is also exposed to credit risk from its customers. Substantially
all of the Company's trade accounts receivable are due from
customers in a variety of industries and, as such, are subject to
normal credit risks from their respective industries. The Company
regularly monitors customers for changes in credit risk. The
Company does not believe that any single industry or geographic
region represents significant credit risk. Credit risk
concentration with respect to trade receivables is mitigated by the
Company's client base being primarily large, multinational
customers and through insurance purchased by the Company.
During fiscal 2014, 2,942,254 stock options were
exercised. As of May 21, 2014
the total number of shares outstanding was 90,847,082 and there
were 4,985,041 stock options outstanding to acquire common shares
of the Company.
RELATED-PARTY TRANSACTIONS
There were no significant related-party transactions in fiscal
2014. See note 26 to the consolidated financial statements for
further details on related-party disclosure.
FOREIGN EXCHANGE
The Company is exposed to foreign exchange risk as a result of
transactions in currencies other than its functional currency of
the Canadian dollar. Weakening in the value of the Canadian
dollar relative to the U.S. dollar and the Euro had a positive
impact on translation of the Company's revenues in fiscal 2014
compared to the corresponding period of fiscal 2013.
The Company's Canadian operations generate
significant revenues in major foreign currencies, primarily U.S.
dollars, which exceed the natural hedge provided by purchases of
goods and services in those currencies. In order to manage a
portion of this net foreign currency exposure, the Company has
entered into forward foreign exchange contracts. The timing
and amount of these forward foreign exchange contract requirements
are estimated based on existing customer contracts on hand or
anticipated, current conditions in the Company's markets and the
Company's past experience. Certain of the Company's foreign
subsidiaries will also enter into forward foreign exchange
contracts to hedge identified balance sheet, revenue and purchase
exposures. The Company's forward foreign exchange contract
hedging program is intended to mitigate movements in currency rates
primarily over a four to six month period. See note 13 to the
consolidated financial statements for details on the derivative
financial instruments outstanding at March
31, 2014.
In addition, from time to time, the Company
enters forward foreign exchange contracts to manage the foreign
exchange risk arising from certain inter-company loans and net
investments in certain self-sustaining subsidiaries.
The Company uses hedging as a risk management
tool, not to speculate.
Period average exchange rates in CDN$
|
Year-end actual
exchange rates |
Period average
exchange rates |
|
March 31,
2014 |
March 31,
2013 |
% change |
March 31,
2014 |
March 31,
2013 |
% change |
U.S. Dollar |
1.1055 |
1.0160 |
8.8 % |
1.0538 |
1.0016 |
5.2 % |
Euro |
1.5230 |
1.3024 |
16.9 % |
1.4137 |
1.2892 |
9.7 % |
|
|
|
|
|
|
|
|
|
CONSOLIDATED QUARTERLY RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions of dollars, except
per share amounts) |
|
Q4
2014 |
|
Q3
2014 |
|
Q2
2014 |
|
Q1
2014 |
|
Q4
2013 |
|
Q3
2013 |
|
Q2
2013 |
|
Q1
2013 |
Revenues from continuing
operations |
$ |
200.7 |
$ |
178.0 |
$ |
154.6 |
$ |
150.0 |
$ |
153.2 |
$ |
144.2 |
$ |
141.1 |
$ |
152.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
$ |
17.2 |
$ |
16.7 |
$ |
14.4 |
$ |
12.7 |
$ |
14.0 |
$ |
13.6 |
$ |
13.8 |
$ |
15.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations |
$ |
11.7 |
$ |
18.8 |
$ |
10.4 |
$ |
8.6 |
$ |
8.9 |
$ |
10.7 |
$ |
9.7 |
$ |
11.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations |
$ |
(0.4) |
$ |
(0.3) |
$ |
2.5 |
$ |
11.0 |
$ |
(0.6) |
$ |
(21.7) |
$ |
(1.8) |
$ |
(2.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
11.3 |
$ |
18.5 |
$ |
12.9 |
$ |
19.6 |
$ |
8.3 |
$ |
(11.0) |
$ |
7.9 |
$ |
9.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share from
continuing operations |
$ |
0.13 |
$ |
0.21 |
$ |
0.12 |
$ |
0.10 |
$ |
0.10 |
$ |
0.12 |
$ |
0.11 |
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share
from discontinued operations |
$ |
(0.01) |
$ |
(0.00) |
$ |
0.03 |
$ |
0.12 |
$ |
(0.01) |
$ |
(0.24) |
$ |
(0.02) |
$ |
(0.02) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
0.12 |
$ |
0.21 |
$ |
0.15 |
$ |
0.22 |
$ |
0.09 |
$ |
(0.12) |
$ |
0.09 |
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
from continuing operations |
$ |
0.13 |
$ |
0.21 |
$ |
0.11 |
$ |
0.10 |
$ |
0.09 |
$ |
0.12 |
$ |
0.11 |
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share from discontinued
operations |
$ |
(0.01) |
$ |
(0.00) |
$ |
0.03 |
$ |
0.12 |
$ |
(0.00) |
$ |
(0.24) |
$ |
(0.02) |
$ |
(0.02) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share |
$ |
0.12 |
$ |
0.21 |
$ |
0.14 |
$ |
0.22 |
$ |
0.09 |
$ |
(0.12) |
$ |
0.09 |
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order Bookings |
$ |
197.0 |
$ |
237.0 |
$ |
110.0 |
$ |
165.0 |
$ |
170.0 |
$ |
173.0 |
$ |
112.0 |
$ |
168.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order Backlog |
$ |
474.0 |
$ |
467.0 |
$ |
355.0 |
$ |
415.0 |
$ |
398.0 |
$ |
388.0 |
$ |
361.0 |
$ |
397.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim financial results are not necessarily
indicative of annual or longer-term results because many of the
individual markets served by the Company tend to be cyclical in
nature. General economic trends, product life cycles and
product changes may impact revenues and operating
performance. ATS typically experiences some seasonality with
its Order Bookings, revenues and earnings from operations due to
summer plant shutdowns by its customers. Operating
performance quarter to quarter may also be affected by the timing
of revenue recognition on large programs in Order Backlog, which is
impacted by such factors as customer delivery schedules, and the
timing of third-party content.
CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS
& ASSUMPTIONS
Notes 2 and 3 to the consolidated financial statements describe the
basis of accounting and the Company's significant accounting
policies.
Revenue recognition and contracts in
progress
The nature of ASG contracts requires the use of estimates to quote
new business and most automation systems are typically sold on a
fixed-price basis. Revenues on construction contracts and
other long-term contracts are recognized on a percentage of
completion basis as outlined in note 3(d) "Construction contracts"
of the consolidated financial statements. In applying the
accounting policy on construction contracts, judgment is required
in determining the estimated costs to complete a contract.
These cost estimates are reviewed at each reporting period and by
their nature may give rise to income volatility. If the actual
costs incurred by the Company to complete a contract are
significantly higher than estimated, the Company's earnings may be
negatively affected. The use of estimates involve risks, since the
work to be performed requires varying degrees of technical
uncertainty, including possible development work to meet the
customer's specification, the extent of which is sometimes not
determinable until after the project has been awarded. In the
event the Company is unable to meet the defined performance
specification for a contracted automation system, it may need to
redesign and rebuild all or a portion of the system at its expense
without an increase in the selling price. Certain contracts
may have provisions that reduce the selling price if the Company
fails to deliver or complete the contract by specified dates. These
provisions may expose the Company to liabilities or adversely
affect the Company's results of operations or financial
position.
ASG's contracts may be terminated by customers
in the event of a default by the Company or, in some cases, for the
convenience of the customer. In the event of a termination
for convenience, the Company typically negotiates a payment
provision reflective of the progress achieved on the contract
and/or the costs incurred to the termination date. If a
contract is cancelled, Order Backlog is reduced and production
utilization may be negatively impacted.
Complete provision, which can be significant, is
made for losses on such contracts when such losses first become
known. Revisions in estimates of costs and profits on
contracts, which can also be significant, are recorded in the
accounting period in which the relevant facts impacting the
estimates become known.
A portion of ASG revenue is recognized when
earned, which is generally at the time of shipment and transfer of
title to the customer, provided collection is reasonably
assured.
Income taxes
Deferred income tax assets, disclosed in note 18 of the
consolidated financial statements, are recognized to the extent
that it is probable that taxable income will be available against
which the losses can be utilized. Significant management judgment
is required to determine the amount of deferred income tax assets
that can be recognized based upon the likely timing and level of
future taxable income together with future tax planning
strategies.
If the assessment of the Company's ability to
utilize the deferred income tax asset changes, the Company would be
required to recognize more or fewer of the deferred income tax
assets which would increase or decrease income tax expense in the
period in which this is determined. The Company establishes
provisions based on reasonable estimates for possible consequences
of audits by the tax authorities of the respective countries in
which it operates. The amount of such provisions is based on
various factors, such as experience of previous taxation audits and
differing interpretations of tax regulations by the taxable entity
and the respective tax authority. These provisions for
uncertain tax positions are made using the best estimate of the
amount expected to be paid based on a qualitative assessment of all
the relevant factors. The Company reviews the adequacy of
these provisions at each quarter. However, it is possible that at
some future date an additional liability could result from audits
by the taxation authorities. Where the final tax outcome of
these matters is different from the amount initially recorded, such
differences will affect the tax provisions in the period in which
such determination is made.
Stock-based payment transactions
The Company measures the cost of transactions with employees by
reference to the fair value of the equity instruments at the date
at which they are granted. Estimating fair value for stock-based
payment transactions requires the determination of the most
appropriate valuation model, which is dependent on the terms and
conditions of the grant. This estimate also requires determining
the most appropriate inputs to the valuation model including the
future forfeiture rate, the expected life of the share option,
weighted average risk-free interest rate, volatility and dividend
yield and making assumptions about them. The assumptions and models
used for estimating fair value for stock-based payment transactions
are disclosed in note 19 of the consolidated financial
statements.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash
generating unit exceeds its recoverable amount, which is the higher
of its fair value less costs to sell and its value in use. The
calculations involve significant estimates and assumptions.
Items estimated include cash flows, discount rates and assumptions
on revenue growth rates. These estimates could effect the
Company's future results if the current estimates of future
performance and fair values change. As described in note 11 of the
consolidated financial statements, goodwill is assessed for
impairment on an annual basis. The Company performed its annual
impairment test of goodwill as at March 31,
2014 and has determined there is no impairment (March 31, 2013 - $nil).
Provisions
As described in note 3(q) of the consolidated financial statements,
the Company records a provision when an obligation exists, an
outflow of economic resources required to settle the obligation is
probable and a reliable estimate can be made of the amount of the
obligation. The Company records a provision based on the best
estimate of the required economic outflow to settle the present
obligation at the balance sheet date. While management believes
these estimates are reasonable, differences in actual results or
changes in estimates could have a material impact on the
obligations and expenses reported by the Company.
Employee Benefits
The cost of defined benefit pension plans and the present value of
the pension obligations are determined using actuarial valuations.
An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. These include the
determination of the discount rate, future salary increases,
mortality rates and future pension increases. Due to the complexity
of the valuation, the underlying assumptions and its long-term
nature, a defined benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at each
reporting date.
In determining the appropriate discount rate,
management considers the interest rates of corporate bonds in their
respective currency, with extrapolated maturities corresponding to
the expected duration of the defined benefit obligation. The
mortality rate is based on publicly available mortality tables for
the specific country. Future salary increases and pension increases
are based on expected future inflation rates for the respective
country. Further details about the assumptions used are provided in
note 15 of the consolidated financial statements.
ACCOUNTING STANDARDS ADOPTED IN FISCAL
2014
Effective April 1, 2013, the Company
applied the following new IFRS standards for the first time: IFRS
10 Consolidated Financial Statements and IFRS 12 Disclosures of
Interests in Other Entities. The adoption of these standards
and amendments affected presentation and disclosures only, and had
no impact on the financial statements of the Company.
IFRS 13 - Fair Value Measurement
IFRS 13 defines fair value and provides guidance for measuring fair
value and identifies the required disclosures pertaining to fair
value measurement. The application of IFRS 13 has not
materially impacted the fair value measurements of the Company.
Additional disclosures, where required, are provided in the
individual notes to the consolidated financial statements relating
to the assets and liabilities whose fair values were determined.
Fair value hierarchy is provided in note 13 to the consolidated
financial statements.
IAS 1 - Presentation of Financial
Statements
The IASB amended IAS 1 by revising how certain items are presented
in other comprehensive income ("OCI"). Items within OCI that
may be reclassified to the statements of income have been separated
from items that will not. While this amendment has impacted
presentation in the consolidated statements of comprehensive
income, it did not impact the Company's consolidated income,
comprehensive income or consolidated financial position.
IAS 19 - Employee Benefits
Effective April 1, 2013, the Company
adopted revisions to IAS 19 - Employee Benefits ("IAS 19R").
The amendments to IAS 19 introduce a net interest approach for
defined benefit obligations by replacing the expected return on
plan assets and interest costs on the defined benefit obligation
with a single net interest component determined by multiplying the
net defined benefit liability or asset by the discount rate used to
determine the defined benefit obligation. Also, unvested past
service costs can no longer be deferred and recognized over future
vesting periods. Instead, all past service costs are
recognized at the earlier of when the amendment occurs and when the
Company recognizes related restructuring or termination costs.
The change in accounting policy has been applied
retrospectively. The adoption of IAS 19R had an immaterial
impact on the financial statements of the Company.
IFRS 11 - Joint Arrangements
IFRS 11 replaces the previous guidance in IAS 31, Interests in
Joint Ventures. IFRS 11 reduces the types of joint
arrangements to two: joint ventures and joint operations.
IFRS 11 requires equity accounting for interest in joint ventures,
eliminating the existing policy choice of proportionate
consolidation for jointly controlled entities in IAS 31.
Accounting for joint operations will follow accounting similar to
that for jointly controlled assets and jointly controlled
operations under IAS 31. This standard became effective for
annual periods beginning on or after January
1, 2013.
The Company's existing joint arrangement is
classified as a joint operation under the new standard with no
significant change in the accounting. The adoption of this
standard did not have a material impact on the Company's
consolidated financial statements.
IAS 36 -Impairment of Assets
Effective April 1, 2013, the Company
adopted revisions to IAS 36 - Impairment of Assets ("IAS
36"). The amendments to IAS 36 reverse the unintended
requirement in IFRS 13 - Fair Value Measurement, to disclose
the recoverable amount of every CGU to which significant goodwill
or indefinite-lived intangible assets have been allocated.
Under the amendments, recoverable amount is required to be
disclosed only when an impairment loss has been recognized or
reversed. These amendments are effective for annual periods
beginning on or after January 1,
2014; however, the Company has adopted them early, starting
April 1, 2013.
The adoption of IAS 36 did not have a material
impact on the Company's consolidated financial statements.
CONTROLS AND PROCEDURES
The Chief Executive Officer ("CEO") and the Chief Financial Officer
("CFO") are responsible for establishing and maintaining disclosure
controls and procedures and internal controls over financial
reporting for the Company. The control framework used in the
design of disclosure controls and procedures and internal control
over financial reporting is the internal control integrated
framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Disclosure controls and procedures
An evaluation of the design of and operating effectiveness of the
Company's disclosure controls and procedures was conducted as of
March 31, 2014 under the supervision
of the CEO and CFO as required by CSA National Instrument 52-109 -
Certification of Disclosure in Issuers' Annual and Interim
Filings. The evaluation included documentation, review,
enquiries and other procedures considered appropriate in the
circumstances. Based on that evaluation, the CEO and the CFO have
concluded that the Company's disclosure controls and procedures are
effective to provide reasonable assurance that information relating
to the Company and its consolidated subsidiaries that is required
to be disclosed in reports filed under provincial and territorial
securities legislation is recorded, processed, summarized and
reported to senior management, including the CEO and the CFO, so
that appropriate decisions can be made by them regarding required
disclosure within the time periods specified in the provincial and
territorial securities legislation.
Internal control over financial
reporting
CSA National Instrument 52-109 requires the CEO and CFO to certify
that they are responsible for establishing and maintaining internal
control over financial reporting for the Company, that those
internal controls have been designed and are effective in providing
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance
with the Company's GAAP.
Management, including the CEO and CFO, does not
expect that the Company's disclosure controls or internal controls
over financial reporting will prevent or detect all errors and all
fraud or will be effective under all potential future
conditions. A control system is subject to inherent
limitations and, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance that the control
system's objectives will be met.
The CEO and CFO have, using the framework and
criteria established in "Internal Control - Integrated Framework"
issued by the Committee of Sponsoring Organizations of the Treadway
Commission, evaluated the design and operating effectiveness of the
Company's internal controls over financial reporting and concluded
that, as of March 31, 2014, internal
controls over financial reporting were effective to provide
reasonable assurance that information related to consolidated
results and decisions to be made based on those results were
appropriate.
During the year ended March 31, 2014, other than as noted below, there
have been no changes in the Company's internal controls over
financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company's internal
controls over financial reporting.
The Company acquired IWK on September 30, 2013. During the three
months ended March 31, 2014,
management completed its evaluation on the design and operating
effectiveness of the IWK's internal controls over financial
reporting and concluded that, as of March
31, 2014, internal controls over financial reporting were
effective to provide reasonable assurance that information related
to consolidated results and decisions to be made based on those
results were appropriate.
OTHER MAJOR CONSIDERATIONS AND RISK
FACTORS
Any investment in ATS will be subject to risks inherent to ATS'
business. The following risk factors are discussed in the Company's
Annual Information Form, which may be found on SEDAR at
www.sedar.com.
- Market volatility;
- Strategy execution risks;
- Competition risk;
- Automation systems pricing and revenue mix risk;
- First-time program and production risks;
- Pricing, quality, delivery and volume risk;
- Product failure risks;
- Availability of raw materials and other manufacturing
inputs;
- Customer risks;
- New product market acceptance, obsolescence, and
commercialization risk;
- Liquidity and access to capital markets;
- Expansion risks;
- Availability of human resources and dependence on key
personnel;
- Intellectual property protection risks;
- Risk of infringement of third parties' intellectual property
rights;
- Internal controls;
- Income and other taxes and uncertain tax liabilities;
- Variations in quarterly results;
- Share price volatility;
- Litigation;
- Legislative compliance; and
- Dependence on performance of subsidiaries.
Note to Readers: Forward-Looking
Statements:
This news release and management's discussion and analysis of
financial conditions, and results of operations of ATS 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' 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: the next phase of the
Company's strategy: grow, expand, and scale; IWK acquisition -
leveraging of IWK into other markets, potential for future
acquisitions that would be a strategic fit with IWK; competitive
strengths; a Nigerian contract and timing of Order Booking and
Order Backlog in relation thereto; potential impact of general
economic environment, including impact on credit markets, customer
markets, and Order Bookings, and the timing of those impacts;
demand for Company's products potentially lagging global
macroeconomic trends; activity in the market segments that the
Company serves; opportunities resulting from the IWK acquisition;
the sales organization's approach to market and expected impact on
Order Bookings; impact of Order Backlog on volatility and time to
complete Order Backlog; the implementation of changes to cost
structure and the expected impact; management's expectations in
relation to the impact of strategic initiatives on ATS operations;
the Company's strategy to expand organically and through
acquisition; Company's expectation with respect to deferred tax
assets and effective tax rate and cash taxes; separation of solar
business; expected timing of receipt of proceeds in relation to the
sale of seven joint venture ground mount solar projects; expected
gain on solar divestitures; Company's expectation to continue to
increase its investment in working capital; expectation in relation
to meeting funding requirements for investments; expectation to use
moderate leverage to support growth strategy; foreign exchange
hedging; and accounting standards changes.
The risks and uncertainties that may affect
forward-looking statements include, among others: impact of the
global economy; general market performance including capital market
conditions and availability and cost of credit; performance of the
market sectors that ATS serves; foreign currency and exchange risk;
the relative strength of the Canadian dollar; impact of factors
such as increased pricing pressure and possible margin compression;
the regulatory and tax environment; failure or delays associated
with the new customer programs; that leveraging and strategic
initiatives in relation to the IWK acquisition are delayed, not
completed, or do not have intended positive impact; that
acquisitions that are a strategic fit with IWK are not identified
or concluded; failure of the Nigerian project to achieve financial
close, generate further milestone payments, or satisfy other
conditions or meet expected timelines; potential for greater
negative impact associated with any non-performance related to
large enterprise programs; variations in the amount of Order
Backlog completed in any given quarter; that strategic initiatives
are delayed, not completed, or do not have intended positive
impact; that restructuring charges exceed those currently
contemplated; 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 acquisitions made are not integrated as quickly or
effectively as planned or expected; that the Company or its
subsidiaries may have exposure to greater than anticipated income
tax liabilities; that the solar joint venture ground mount projects
are delayed in achieving commercial operation or cannot ultimately
be developed, due to market, regulatory, transmission, local
opposition, or other factors; labour disruptions; that one or more
customers, or other entities with which the Company has contracted,
experience insolvency or bankruptcy with resulting delays, costs or
losses to the Company; political, labour or supplier disruptions;
the development of superior or alternative technologies to those
developed by ATS; 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 become a party; exposure to product liability
claims; risks associated with greater than anticipated tax
liabilities or expenses; 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.
ATS AUTOMATION
TOOLING SYSTEMS INC. |
Consolidated
Statements of Financial Position |
(in thousands of
Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
|
March 31 |
As at |
|
Note |
|
|
2014 |
|
|
2013 |
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
$ |
76,466 |
|
$ |
105,453 |
Accounts receivable |
|
|
|
|
117,821 |
|
|
99,696 |
Costs and earnings in excess of billings on contracts in
progress |
|
7 |
|
|
146,231 |
|
|
122,842 |
Inventories |
|
7 |
|
|
24,186 |
|
|
10,669 |
Deposits, prepaids and other assets |
|
8 |
|
|
9,630 |
|
|
11,738 |
|
|
|
|
|
374,334 |
|
|
350,398 |
Assets associated with discontinued operations |
|
6 |
|
|
13,265 |
|
|
14,950 |
|
|
|
|
|
387,599 |
|
|
365,348 |
Non-current assets |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
9 |
|
|
85,412 |
|
|
79,269 |
Investment property |
|
10 |
|
|
4,341 |
|
|
3,712 |
Goodwill |
|
11 |
|
|
151,731 |
|
|
58,542 |
Intangible assets |
|
12 |
|
|
111,298 |
|
|
27,615 |
Deferred income tax assets |
|
18 |
|
|
7,838 |
|
|
13,154 |
Investment tax credit receivable |
|
18 |
|
|
30,165 |
|
|
27,699 |
Portfolio investments |
|
13 |
|
|
-- |
|
|
4,969 |
|
|
|
|
|
390,785 |
|
|
214,960 |
Total assets |
|
|
|
$ |
778,384 |
|
$ |
580,308 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Bank indebtedness |
|
16 |
|
$ |
913 |
|
$ |
-- |
Accounts payable and accrued liabilities |
|
|
|
|
138,285 |
|
|
102,828 |
Provisions |
|
14 |
|
|
10,412 |
|
|
9,096 |
Billings in excess of costs and earnings on contracts in
progress |
|
7 |
|
|
59,363 |
|
|
48,135 |
Current portion of long-term debt |
|
16 |
|
|
3,815 |
|
|
257 |
|
|
|
|
|
212,788 |
|
|
160,316 |
Liabilities associated with discontinued operations |
|
6 |
|
|
6,774 |
|
|
8,112 |
|
|
|
|
|
219,562 |
|
|
168,428 |
Non-current liabilities |
|
|
|
|
|
|
|
|
Employee benefits |
|
15 |
|
|
23,213 |
|
|
10,581 |
Long-term debt |
|
16 |
|
|
1,324 |
|
|
918 |
Deferred income tax liability |
|
18 |
|
|
16,747 |
|
|
1,777 |
|
|
|
|
|
41,284 |
|
|
13,276 |
Total liabilities |
|
|
|
$ |
260,846 |
|
$ |
181,704 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Share capital |
|
17 |
|
$ |
510,725 |
|
$ |
486,734 |
Contributed surplus |
|
|
|
|
15,025 |
|
|
19,317 |
Accumulated other comprehensive income (loss) |
|
|
|
|
35,970 |
|
|
(123) |
Retained deficit |
|
|
|
|
(44,311) |
|
|
(107,407) |
Equity attributable to shareholders |
|
|
|
|
517,409 |
|
|
398,521 |
Non-controlling interests |
|
|
|
|
129 |
|
|
83 |
Total equity |
|
|
|
|
517,538 |
|
|
398,604 |
Total liabilities and equity |
|
|
|
$ |
778,384 |
|
$ |
580,308 |
|
|
|
|
|
|
|
|
|
ATS AUTOMATION
TOOLING SYSTEMS INC. |
Consolidated
Statements of Income |
(in thousands of
Canadian dollars, except per share amounts) |
|
Years ended March
31 |
|
Note |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Revenues from construction
contracts |
|
|
|
$ |
597,143 |
|
$ |
538,150 |
|
Sale of goods |
|
|
|
|
42,973 |
|
|
24,407 |
|
Services
rendered |
|
|
|
|
43,245 |
|
|
28,541 |
|
|
|
|
|
|
|
|
|
Total
revenues |
|
|
|
|
683,361 |
|
|
591,098 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
501,684 |
|
|
441,182 |
|
Selling, general and
administrative |
|
|
|
|
113,321 |
|
|
89,485 |
|
Stock-based compensation |
|
19 |
|
|
7,323 |
|
|
3,786 |
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
|
|
|
61,033 |
|
|
56,645 |
|
|
|
|
|
|
|
|
|
Net finance costs |
|
23 |
|
|
3,016 |
|
|
2,013 |
|
|
|
|
|
|
|
|
|
Income from continuing operations before income
taxes |
|
|
|
|
58,017 |
|
|
54,632 |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
18 |
|
|
8,600 |
|
|
13,558 |
|
|
|
|
|
|
|
|
|
Income from continuing
operations |
|
|
|
|
49,417 |
|
|
41,074 |
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of
tax |
|
6 |
|
|
12,802 |
|
|
(25,991) |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
$ |
62,219 |
|
$ |
15,083 |
|
|
|
|
|
|
|
|
|
Attributable to |
|
|
|
|
|
|
|
|
Shareholders |
|
|
|
$ |
62,173 |
|
$ |
15,031 |
Non-controlling
interests |
|
|
|
|
46 |
|
|
52 |
|
|
|
|
$ |
62,219 |
|
$ |
15,083 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to
shareholders |
|
24 |
|
|
|
|
|
|
Basic - from continuing
operations
|
|
|
|
$ |
0.56 |
|
$ |
0.47 |
Basic - from discontinued operations |
|
6 |
|
|
0.14 |
|
|
(0.30) |
|
|
|
|
$ |
0.70 |
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to
shareholders |
|
24 |
|
|
|
|
|
|
Diluted - from continuing
operations
|
|
|
|
$ |
0.55 |
|
$ |
0.46 |
Diluted - from discontinued
operations |
|
6 |
|
|
0.14 |
|
|
(0.29) |
|
|
|
|
$ |
0.69 |
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
ATS AUTOMATION
TOOLING SYSTEMS INC. |
Consolidated
Statements of Comprehensive Income |
(in thousands of
Canadian dollars) |
|
Years ended March 31 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
Net
income |
|
$ |
62,219 |
|
$ |
15,083 |
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items to be reclassified subsequently to net
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation adjustment (net of income taxes of
$nil) |
|
|
36,639 |
|
|
536 |
|
|
|
|
|
|
|
|
Net unrealized gain on available-for-sale financial
assets |
|
|
285 |
|
|
321 |
|
Tax impact |
|
|
82 |
|
|
(82) |
|
|
|
|
|
|
|
|
Gain on available-for-sale financial assets transferred to net
income |
|
|
(606) |
|
|
-- |
|
Tax impact |
|
|
-- |
|
|
-- |
|
|
|
|
|
|
|
|
Net unrealized loss on derivative financial instruments
designated as cash flow
hedges |
|
|
(2,478) |
|
|
(576) |
|
Tax impact |
|
|
633 |
|
|
179 |
|
|
|
|
|
|
|
|
Loss (gain) transferred to net income for derivatives
designated as cash flow
hedges |
|
|
2,081 |
|
|
(79) |
|
Tax impact |
|
|
(543) |
|
|
(39) |
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to
net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains (losses) on defined benefit pension plans
|
|
|
894 |
|
|
(3,397) |
|
Tax impact |
|
|
29 |
|
|
187 |
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
37,016 |
|
|
(2,950) |
|
|
|
|
|
|
|
Comprehensive income
|
|
$ |
99,235 |
|
$ |
12,133 |
|
|
|
|
|
|
|
Attributable to |
|
|
|
|
|
|
Shareholders |
|
$ |
99,189 |
|
$ |
12,081 |
Non-controlling
interests
|
|
|
46 |
|
|
52 |
|
|
$ |
99,235 |
|
$ |
12,133 |
|
|
|
|
|
|
|
ATS
AUTOMATION TOOLING SYSTEMS INC. |
Consolidated
Statements of Changes in Equity |
(in thousands
of Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended March 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available- |
|
|
|
accumulated |
|
|
|
|
|
|
|
|
|
|
Retained |
|
Currency |
|
for-sale |
|
|
|
other |
|
Non- |
|
|
|
|
Share |
|
Contributed |
|
earnings |
|
translation |
|
financial |
|
Cash flow |
|
comprehensive |
|
controlling |
|
Total |
|
|
capital |
|
surplus |
|
(deficit) |
|
adjustments |
|
assets |
|
hedges |
|
income |
|
interests |
|
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March 31, 2013 |
$ |
486,734 |
$ |
19,317 |
$ |
(107,407) |
$ |
(23) |
$ |
239 |
$ |
(339) |
$ |
(123) |
$ |
83 |
$ |
398,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
-- |
|
-- |
|
62,173 |
|
-- |
|
-- |
|
-- |
|
-- |
|
46 |
|
62,219 |
Other comprehensive income (loss) |
|
-- |
|
-- |
|
923 |
|
36,639 |
|
(239) |
|
(307) |
|
36,093 |
|
-- |
|
37,016 |
Total comprehensive income (loss) |
|
-- |
|
-- |
|
63,096 |
|
36,639 |
|
(239) |
|
(307) |
|
36,093 |
|
46 |
|
99,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
-- |
|
2,082 |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
2,082 |
Exercise of stock options |
|
23,991 |
|
(6,374) |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
17,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March 31, 2014 |
$ |
510,725 |
$ |
15,025 |
$ |
(44,311) |
$ |
36,616 |
$ |
-- |
$ |
(646) |
$ |
35,970 |
$ |
129 |
$ |
517,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended March 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available- |
|
|
|
accumulated |
|
|
|
|
|
|
|
|
|
|
Retained |
|
Currency |
|
for-sale |
|
|
|
other |
|
Non- |
|
|
|
|
Share |
|
Contributed |
|
earnings |
|
translation |
|
financial |
|
Cash flow |
|
comprehensive |
|
controlling |
|
Total |
|
|
capital |
|
surplus |
|
(deficit) |
|
adjustments |
|
assets |
|
hedges |
|
income |
|
interests |
|
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March 31, 2012 |
$ |
483,099 |
$ |
17,868 |
$ |
(119,210) |
$ |
(559) |
$ |
-- |
$ |
176 |
$ |
(383) |
$ |
78 |
$ |
381,452 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
-- |
|
-- |
|
15,031 |
|
-- |
|
-- |
|
-- |
|
-- |
|
52 |
|
15,083 |
Other comprehensive income (loss) |
|
-- |
|
-- |
|
(3,210) |
|
536 |
|
239 |
|
(515) |
|
260 |
|
-- |
|
(2,950) |
Total comprehensive income (loss) |
|
-- |
|
-- |
|
11,821 |
|
536 |
|
239 |
|
(515) |
|
260 |
|
52 |
|
12,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling Interest |
|
-- |
|
-- |
|
(18) |
|
-- |
|
-- |
|
-- |
|
-- |
|
(47) |
|
(65) |
Stock-based compensation |
|
-- |
|
2,560 |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
2,560 |
Exercise of stock options |
|
3,635 |
|
(1,111) |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
2,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March 31, 2013 |
$ |
486,734 |
$ |
19,317 |
$ |
(107,407) |
$ |
(23) |
$ |
239 |
$ |
(339) |
$ |
(123) |
$ |
83 |
$ |
398,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATS AUTOMATION
TOOLING SYSTEMS INC. |
Consolidated
Statements of Cash Flow |
(in thousands of
Canadian dollars) |
|
Years ended March 31 |
|
|
Note |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
$ |
49,417 |
|
$ |
41,074 |
Items not involving cash |
|
|
|
|
|
|
|
|
|
|
Depreciation of property, plant and
equipment |
|
|
|
|
|
7,245 |
|
|
6,861 |
|
Amortization of intangible
assets |
|
|
|
|
|
11,210 |
|
|
5,376 |
|
Deferred income taxes |
|
|
18 |
|
|
(2,067) |
|
|
2,663 |
|
Other items not involving
cash |
|
|
|
|
|
2,210 |
|
|
(142) |
|
Stock-based compensation |
|
|
19 |
|
|
7,323 |
|
|
3,786 |
|
Loss on disposal of property, plant and
equipment |
|
|
|
|
|
23 |
|
|
77 |
|
Gain on sale of portfolio
investment |
|
|
|
|
|
(606) |
|
|
-- |
|
|
|
|
|
$ |
74,755 |
|
$ |
59,695 |
Change in non-cash operating working
capital |
|
|
|
|
|
(4,862) |
|
|
(26,034) |
Cash flows used in operating activities of
discontinued operations |
|
|
6 |
|
|
(6,966) |
|
|
(6,987) |
Cash flows provided by operating
activities |
|
|
|
|
$ |
62,927 |
|
$ |
26,674 |
Investing activities: |
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and
equipment |
|
|
|
|
$ |
(4,260) |
|
$ |
(7,747) |
Acquisition of intangible
assets |
|
|
|
|
|
(6,843) |
|
|
(4,750) |
Business acquisition, net of cash
acquired |
|
|
|
|
|
(137,408) |
|
|
-- |
Acquisition of portfolio
investments |
|
|
|
|
|
-- |
|
|
(4,648) |
Proceeds from disposal of property, plant and
equipment |
|
|
|
|
|
155 |
|
|
23 |
Proceeds on sale of portfolio
investments |
|
|
|
|
|
5,247 |
|
|
-- |
Cash flows provided by (used in) investing
activities of discontinued operations |
|
|
6 |
|
|
21,846 |
|
|
(111) |
Cash flows used in investing
activities |
|
|
|
|
$ |
(121,263) |
|
$ |
(17,233) |
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
8 |
|
$ |
1,009 |
|
$ |
(993) |
Bank indebtedness |
|
|
|
|
|
(29) |
|
|
(403) |
Repayment of long-term debt
|
|
|
|
|
|
(40,310) |
|
|
(1,282) |
Proceeds from long-term
debt |
|
|
|
|
|
43,236 |
|
|
-- |
Issuance of common shares
|
|
|
|
|
|
17,617 |
|
|
2,524 |
Cash flows provided by (used in) financing
activities |
|
|
|
|
$ |
21,523 |
|
$ |
(154) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash
equivalents |
|
|
|
|
|
9,557 |
|
|
(109) |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents |
|
|
|
|
|
(27,256) |
|
|
9,178 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of
period |
|
|
|
|
|
105,870 |
|
|
96,692 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period |
|
|
|
|
$ |
78,614 |
|
$ |
105,870 |
|
|
|
|
|
|
|
|
|
|
Attributable to |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - continuing
operations |
|
|
|
|
$ |
76,466 |
|
$ |
105,453 |
Cash and cash equivalents - associated with
discontinued operations |
|
|
|
|
|
2,148 |
|
|
417 |
|
|
|
|
|
$ |
78,614 |
|
$ |
105,870 |
Supplemental information |
|
|
|
|
|
|
|
|
|
Cash income taxes paid by continuing
operations |
|
|
|
|
$ |
2,874 |
|
$ |
3,927 |
Cash interest paid by continuing
operations |
|
|
|
|
$ |
2,141 |
|
$ |
1,002 |
SOURCE ATS Automation Tooling Systems Inc.