CAMBRIDGE, ON,
Aug. 13, 2014 /CNW/ - ATS Automation
Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company")
today reported financial results for the three months ended
June 29, 2014.
First Quarter Summary
- Revenues from continuing operations were $190.9 million, 27% higher than the first quarter
of fiscal 2014. Excluding IWK revenues of $34.6 million, revenues from continuing
operations were $156.3 million, a 4%
increase over the corresponding period a year ago;
- EBITDA1 was $20.9
million, compared to $23.5
million in the fourth quarter of fiscal 2014 and
$15.8 million in the first quarter of
fiscal 2014. Normalized for $3.0
million of acquisition-program related costs, first quarter
fiscal 2015 EBITDA was $23.9
million. Normalized for $2.2
million of restructuring charges, first quarter fiscal 2014
EBITDA was $18.0 million;
- Earnings from continuing operations were $14.4 million (8% operating margin), compared to
$17.2 million (9% operating margin)
in the fourth quarter of fiscal 2014 and $12.7 million (8% operating margin) in the first
quarter a year ago. Adjusted earnings from continuing
operations1 were $21.1
million (11% operating margin), compared to $15.9 (11% operating margin) in the first quarter
a year ago;
- Earnings per share from continuing operations were 10 cents basic and diluted compared to
10 cents basic and diluted in the
first quarter a year ago. Adjusted basic earnings per
share1 from continuing operations were 15 cents compared to 13
cents in the first quarter a year ago;
- Order Bookings were $160 million,
a 3% decrease over the corresponding period a year ago. Excluding
IWK Order Bookings of $33 million,
Order Bookings were $127 million
compared to $165 million in the first
quarter a year ago;
- Period end Order Backlog was $425
million, up 2% from $415
million in the first quarter a year ago. Higher Order
Backlog reflected the addition of IWK's Order Backlog and
bookings;
- The Company's balance sheet and financial capacity to support
growth remained strong, with cash net of debt in continuing
operations of $75.2 million at
June 29, 2014, unutilized credit
facilities of $180.9 million and
$14.3 million of credit available
under letter of credit facilities;
- The Company announced it had entered into a definitive
agreement to acquire all shares of M+W Process Automation GmbH and
ProFocus LLC (collectively "M+W PA") subsequent to the end of the
first quarter of fiscal 2015.
________________________________
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
June 29, 2014 |
|
|
3 months ended
June 30, 2013 |
| Revenues |
Continuing
Operations |
$ |
190.9 |
|
$ |
150.0 |
|
Discontinued Operations |
$ |
-- |
|
$ |
1.1 |
|
Earnings from operations |
Continuing
Operations |
$ |
14.4 |
|
$ |
12.7 |
| Adjusted earnings from
operations1 |
Continuing Operations |
$ |
21.1 |
|
$ |
15.9 |
| EBITDA1 |
Continuing Operations |
$ |
20.9 |
|
$ |
15.8 |
| Net income |
Continuing
Operations |
$ |
9.0 |
|
$ |
8.6 |
|
Discontinued Operations |
$ |
6.9 |
|
$ |
11.0 |
| Earnings per share |
From continuing
operations
(basic) |
$ |
0.10 |
|
$ |
0.10 |
From
discontinued operations
(basic) |
$ |
0.08 |
|
$ |
0.12 |
From
continuing operations
(diluted) |
$ |
0.10 |
|
$ |
0.10 |
From
discontinued operations
(diluted) |
$ |
0.07 |
|
$ |
0.12 |
| Adjusted earnings per
share1 |
From continuing operations
(basic) |
$ |
0.15 |
|
$ |
0.13 |
1 Non-IFRS measure: see "Notice to
Reader: Non-IFRS Measures and Additional IFRS Measures".
"Our first quarter operating performance was
solid and market activity is strong," said Anthony Caputo, Chief Executive Officer.
"Strategically, we took a significant step in our value creation
plan through the acquisition of M+W PA, which expands ATS' markets,
customer penetration, capability and geography, and provides a
significant platform to drive organic growth. We remain focused on
continuing to grow, expand and scale our business, both organically
and through acquisition".
First Quarter Summary Continuing
Operations
Fiscal 2015 first quarter revenues were 27% higher than in the
corresponding period a year ago primarily reflecting $34.6 million of revenues earned by IWK.
Excluding IWK, first quarter revenues were $156.3 million, a 4% increase over the
corresponding period a year ago. Foreign exchange rate changes
positively impacted the translation of revenues earned by
foreign-based subsidiaries compared to the corresponding period a
year ago, primarily reflecting the weakening of the Canadian dollar
relative to the Euro and U.S. dollar. By industrial market, fiscal
first quarter revenues from consumer products & electronics
increased by 189%, primarily on revenues from IWK and organic
growth in the consumer products market. Revenues generated in the
energy market increased 87% compared to the corresponding period a
year ago, primarily on higher Order Backlog entering the first
quarter due largely to increased activity in the nuclear energy
market. Revenues generated in the life sciences market increased
19% compared to the corresponding period a year ago, primarily on
revenues from IWK. Transportation revenues decreased 4% compared to
a year ago primarily due to lower Order Backlog in the first
quarter compared to a year ago.
First quarter fiscal 2015 earnings from
operations were $14.4 million (8%
operating margin) compared to $12.7
million (8% operating margin) in the first quarter of fiscal
2014. First quarter fiscal 2015 earnings from operations
included $3.0 million of incremental
costs related to the Company's acquisition strategy and
amortization expenses of $3.7 million
related to amortization of identifiable intangible assets recorded
on the acquisitions of IWK, Assembly & Test Worldwide and
Sortimat. Adjusted for those costs, first quarter fiscal 2015
adjusted earnings from operations were $21.1
million (11% operating margin). Adjusted for
$2.2 million of restructuring charges
and amortization expense of $1.0
million related to amortization of identifiable intangible
assets recorded on the acquisitions of Assembly & Test
Worldwide and Sortimat, first quarter fiscal 2014 adjusted earnings
from operations were $15.9 million
(11% operating margin). Higher adjusted earnings from
operations primarily reflected higher revenues, better program
execution, and the inclusion of IWK, partially offset by higher
stock-based compensation costs.
Depreciation and amortization expense was
$6.5 million in the first quarter of
fiscal 2015, compared to $3.1 million
a year ago, primarily due to a $2.6
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 $20.9
million (11% EBITDA margin) in the first quarter of fiscal
2015 compared to $15.8 million (11%
EBITDA margin) in the first quarter of fiscal 2014.
Normalized for the acquisition-program related costs, first quarter
fiscal 2015 EBITDA was $23.9 million
(13% EBITDA margin). First quarter fiscal 2014 EBITDA was
$18.0 million (12% EBITDA margin)
normalized for restructuring charges.
Order Bookings
First quarter fiscal 2015 Order Bookings were $160 million, a 3% decrease from the first
quarter of fiscal 2014. Excluding the impact of IWK, Order
Bookings were $127 million, a 23%
decrease from the previous year. Lower Order Bookings
primarily reflected the timing of customer decisions on various
larger opportunities. By market, lower Order Bookings in Energy
were partially offset by increased Order Bookings in Transportation
as well as increased Order Bookings in Consumer Products and
Electronics due to the acquisition of IWK. The funnel of
opportunities continues to be strong, with all markets maintaining
levels similar to levels of a year ago.
Business Acquisition - M+W PA
On July 8, 2014, the Company
announced it had entered into a definitive agreement to acquire all
shares of M+W Process Automation GmbH and ProFocus LLC
(collectively "M+W PA"). M+W PA is a leading global provider
of engineering-based automation services and solutions focused on
the control, performance monitoring and measurement of critical
production processes. The acquisition is aligned with ATS'
stated strategy of scaling its position in the global automation
market by adding to its services and life-cycle management
capabilities across several core elements of the customer value
chain. The addition of M+W PA is expected to enhance growth
opportunities in both new markets and with existing customers.
In calendar 2013, M+W PA had revenues of
approximately 166 million Euro and
EBITDA of approximately 20 million
Euro. Over the past three years, M+W PA's revenues
have grown organically at an average annual rate of approximately
19%. Sales by industry segment in 2013 were 41% automotive,
26% chemicals, 13% pharmaceuticals and biotechnology, 3% oil &
gas and 17% other industries including food and beverage, water,
wastewater, consumer care, paper, metal and semiconductor.
Revenues earned in Europe
accounted for approximately 70% of global sales, North America 27% and Asia 3%. In calendar 2013, M+W PA's
Order Bookings were 188 million Euro,
and at the end of May 2014 it had
approximately 120 million Euro of
Order Backlog.
Cash consideration to be paid for M+W PA pending
net debt and working capital adjustments is approximately
248 million Euro ($362 million based on exchange rates at the time
of the announcement). The cash consideration of the purchase
price, along with transaction costs, will be funded from a new
fully committed $600 million credit
facility to be available at closing. The acquisition will be
accounted for as a business combination with the Company as the
acquirer of M+W PA. The purchase method of accounting will be
used and the earnings of M+W PA will be consolidated beginning from
the acquisition date. ATS expects to complete the acquisition by
the end of September 2014, subject to
customary closing conditions, including applicable antitrust
approvals. For additional information on the acquisition of M+W PA,
refer to note 20 of the interim condensed consolidated financial
statements.
First Quarter Summary of Discontinued Operations:
Solar
Ontario Solar recorded $6.9 million
of income in the first quarter of fiscal 2015 compared to income of
$11.0 million in the first quarter a
year ago. During the first quarter of fiscal 2015, OSPV completed
the sale of its remaining three ground-mount solar projects.
OSPV will retain 25% ownership of the projects until they 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 net proceeds of $12.0
million in the first quarter of fiscal 2015. The
remaining proceeds are expected to be received when the projects
achieve commercial operation.
During fiscal 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
previously received net proceeds of $13.9
million. The remaining proceeds are expected to be
received when the projects achieve commercial operation.
Quarterly Conference Call
ATS' quarterly conference call begins at 10
am eastern on Wednesday, August
13 and can be accessed live at www.atsautomation.com or on
the phone by dialing 647 427 7450 five minutes prior. A replay of
the conference will be available on the ATS website following the
call. Alternatively, a telephone recording of the call will be
available for one week (until midnight August 20, 2014) by dialing 416-849-0833 and
entering passcode 72802550 followed by the number sign.
Annual Shareholders' Meeting
The Company will host its annual meeting of shareholders on
Thursday August 14, 2014 at
10 a.m. eastern at the Holiday Inn,
30 Fairway Road South, Kitchener,
Ontario.
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 Quarter Ended June 29,
2014
This Management's Discussion and Analysis
("MD&A") for the three months ended June
29, 2014 (first quarter of fiscal 2015) is as of
August 12, 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 unaudited
interim condensed consolidated financial statements of the Company
for the first quarter of fiscal 2015 which have been prepared in
accordance with International Financial Reporting Standards
("IFRS") and are reported in Canadian dollars. The Company assumes
that the reader of this MD&A has access to, and has read the
audited consolidated financial statements prepared in accordance
with IFRS and MD&A of the Company for the year ended
March 31, 2014 (fiscal 2014) and,
accordingly, the purpose of this document is to provide a first
quarter update to the information contained in the fiscal 2014
MD&A. 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", "adjusted earnings from operations", "adjusted basic
earnings per share from continuing operations", "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. Such measures should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. In addition,
management uses "earnings from operations" which is an additional
IFRS measure to evaluate the performance of the Company. Earnings
from operations is presented on the Company's consolidated
statements of income as net income 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.
Adjusted earnings from operations is defined as earnings from
operations before items excluded from management's internal
analysis of operating results, such as amortization expense of
acquisition-related intangible assets, acquisition-related
transaction costs, restructuring charges, and certain other
adjustments which would be non-recurring in nature ("adjustment
items"). Adjusted basic earnings per share from continuing
operations is defined as adjusted net income from continuing
operations on a basic per share basis, where adjusted net income
from continuing operations is defined as adjusted earnings from
operations less net finance costs and income tax expense, plus tax
effects of adjustment items. 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
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. Management believes
that adjusted earnings from operations and adjusted basic earnings
per share from continuing operations are important measures to
increase comparability of performance between periods. The
adjustment items used by management to arrive at these metrics are
not considered to be indicative of the business's ongoing operating
performance. 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. EBITDA should not be construed as a
substitute for net income determined in accordance with IFRS.
Adjusted earnings from operations is not necessarily indicative of
earnings from operations or cash flows from operations as
determined under IFRS and may not be comparable to similar measures
presented by other companies. A reconciliation of (i)
earnings from operations and EBITDA to net income from continuing
operations for the three month periods ending June 29, 2014 and June 30,
2013; and (ii) adjusted earnings from operations and
adjusted basic earnings per share from continuing operations to net
income from operations for the three month periods ending
June 29, 2014 and June 30, 2013 is contained in this MD&A (see
"Reconciliation of Non-IFRS to IFRS Measures"). A reconciliation of
Order Bookings and Order Backlog to total Company revenues for the
three month periods ending June 29,
2014 and June 30, 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 - M+W PA
On July 8, 2014, the Company
announced it had entered into a definitive agreement to acquire all
shares of M+W Process Automation GmbH and ProFocus LLC
(collectively "M+W PA"). M+W PA is a leading global provider
of engineering-based automation services and solutions focused on
the control, performance monitoring and measurement of critical
production processes. The acquisition is aligned with ATS'
stated strategy of scaling its position in the global automation
market by adding to its services and life-cycle management
capabilities across several core elements of the customer value
chain. The addition of M+W PA is expected to enhance growth
opportunities in both new markets and with existing customers.
In calendar 2013, M+W PA had revenues of
approximately 166 million Euro and
EBITDA of approximately 20 million
Euro. Over the past three years, M+W PA's revenues
have grown organically at an average annual rate of approximately
19%. Sales by industry segment in 2013 were 41% automotive,
26% chemicals, 13% pharmaceuticals and biotechnology, 3% oil &
gas and 17% other industries including food and beverage, water,
wastewater, consumer care, paper, metal and semiconductor.
Revenues earned in Europe
accounted for approximately 70% of global sales, North America 27% and Asia 3%. In calendar 2013, M+W PA's
Order Bookings were 188 million Euro,
and at the end of May 2014 it had
approximately 120 million Euro of
Order Backlog.
Cash consideration to be paid for M+W PA pending
net debt and working capital adjustments is approximately
248 million Euro ($362 million based on exchange rates at the time
of the announcement). The cash consideration of the purchase
price, along with transaction costs, will be funded from a new
fully committed $600 million credit
facility to be available at closing. The acquisition will be
accounted for as a business combination with the Company as the
acquirer of M+W PA. The purchase method of accounting will be
used and the earnings of M+W PA will be consolidated beginning from
the acquisition date. ATS expects to complete the acquisition by
the end of September 2014, subject to
customary closing conditions, including applicable antitrust
approvals. For additional information on the acquisition of M+W PA,
refer to note 20 of the interim condensed consolidated financial
statements.
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 |
|
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Consumer products & electronics |
|
|
$ |
38.5 |
$ |
13.3 |
| Energy |
|
|
11.8 |
6.3 |
| Life sciences |
|
|
78.8 |
66.1 |
| Transportation |
|
|
61.8 |
64.3 |
| Total revenues from continuing
operations |
|
|
$ |
190.9 |
$ |
150.0
|
Fiscal 2015 first quarter revenues were 27%
higher than in the corresponding period a year ago primarily
reflecting $34.6 million of revenues
earned by IWK. Excluding IWK, first quarter revenues were
$156.3 million, a 4% increase over
the corresponding period a year ago. Foreign exchange rate changes
positively impacted the translation of revenues earned by
foreign-based subsidiaries compared to the corresponding period a
year ago, primarily reflecting the weakening of the Canadian dollar
relative to the Euro and U.S. dollar.
By industrial market, fiscal first quarter
revenues from consumer products & electronics increased by
189%, primarily on revenues from IWK and organic growth in the
consumer products market. Revenues generated in the energy market
increased 87% compared to the corresponding period a year ago,
primarily on higher Order Backlog entering the first quarter due
largely to increased activity in the nuclear energy market.
Revenues generated in the life sciences market increased 19%
compared to the corresponding period a year ago, primarily on
revenues from IWK. Transportation revenues decreased 4% compared to
a year ago primarily due to lower Order Backlog in the first
quarter compared to a year ago.
Consolidated Operating Results
(In millions of dollars)
| |
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Earnings from operations |
$ |
14.4 |
$ |
12.7 |
| Amortization of acquisition-related intangible
assets |
3.7 |
1.0 |
| Acquisition-related transaction costs |
3.0 |
-- |
| Restructuring charges |
-- |
2.2 |
| Adjusted earnings from
operations1 |
$ |
21.1 |
$ |
15.9 |
1 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures".
| |
|
|
|
| |
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Earnings from operations |
|
$ |
14.4 |
$ |
12.7 |
| Depreciation and amortization |
|
6.5 |
3.1 |
| EBITDA1 |
|
$ |
20.9 |
$ |
15.8 |
1 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures".
Fiscal 2015 first quarter earnings from
operations were $14.4 million (8%
operating margin) compared to $12.7
million (8% operating margin) in the first quarter of fiscal
2014.
First quarter fiscal 2015 earnings from
operations included $3.0 million of
incremental costs related to the Company's acquisition strategy and
amortization expenses of $3.7 million
related to amortization of identifiable intangible assets recorded
on the acquisitions of IWK, Assembly & Test Worldwide and
Sortimat. Adjusted for those costs, first quarter fiscal 2015
adjusted earnings from operations were $21.1
million (11% operating margin). Adjusted for
$2.2 million of restructuring charges
and amortization expense of $1.0
million related to amortization of identifiable intangible
assets recorded on the acquisitions of Assembly & Test
Worldwide and Sortimat, first quarter fiscal 2014 adjusted earnings
from operations were $15.9 million
(11% operating margin).
Higher adjusted earnings from operations
primarily reflected higher revenues, better program execution, and
the inclusion of IWK, partially offset by higher stock-based
compensation costs.
Depreciation and amortization expense was
$6.5 million in the first quarter of
fiscal 2015, compared to $3.1 million
a year ago, primarily due to a $2.6
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 $20.9
million (11% EBITDA margin) in the first quarter of fiscal
2015 compared to $15.8 million (11%
EBITDA margin) in the first quarter of fiscal 2014.
Normalized for the acquisition-program related costs, first quarter
fiscal 2015 EBITDA was $23.9 million
(13% EBITDA margin). First quarter fiscal 2014 EBITDA was
$18.0 million (12% EBITDA margin)
normalized for restructuring charges.
Order Bookings
First quarter fiscal 2015 Order Bookings were $160 million, a 3% decrease from the first
quarter of fiscal 2014. Excluding the impact of IWK, Order
Bookings were $127 million, a 23%
decrease from the previous year. Lower Order Bookings
primarily reflected the timing of customer decisions on various
larger opportunities. By market, lower Order Bookings in energy
were partially offset by increased Order Bookings in transportation
as well as increased Order Bookings in consumer products and
electronics due to the acquisition of IWK. The funnel of
opportunities continues to be strong, with all markets maintaining
levels similar to levels of a year ago.
Order Backlog Continuity
(In millions of dollars)
| |
|
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Opening Order Backlog |
|
|
$ |
474 |
$ |
398 |
| Revenues |
|
|
(191) |
(150) |
| Order Bookings |
|
|
160 |
165 |
| Order Backlog adjustments1 |
|
|
(18) |
2 |
| Total |
|
|
$ |
425 |
$ |
415 |
1 Order Backlog adjustments include
foreign exchange adjustments and cancellations.
Order Backlog by Industry
(In millions of dollars)
| As at |
|
|
June 29,
2014 |
June 30, 2013 |
| Consumer products & electronics |
|
|
$ |
75 |
$ |
18 |
| Energy |
|
|
48 |
57 |
| Life sciences |
|
|
160 |
175 |
| Transportation |
|
|
142 |
165 |
| Total |
|
|
$ |
425 |
$ |
415 |
At June 29, 2014,
Order Backlog was $425 million, 2%
higher than at June 30, 2013.
Higher Order Backlog primarily reflected the addition of IWK and
higher Order Bookings in the consumer products & electronics
market, offset by lower Order Bookings in the energy market.
Outlook
The global economic environment appears to be slowly improving;
however, uncertainty remains. In North
America, the U.S. and Canadian economies have shown signs of
improvement, but growth remains slow. Economic growth continues to
decelerate in China and other
parts of Asia. In Europe, the economy has shown signs of
stabilizing, but markets remain weak, which has the potential to
negatively impact demand, particularly for the Company's European
operations, and may add to 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 transportation
market remains strong. The Company has seen strength 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 macroeconomic 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
$425 million at the end of the first
quarter of fiscal 2015 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 M+W PA is expected to enhance
growth opportunities in both new markets and with existing
customers. M+W PA's significant capability and market
position are expected to benefit ATS and its strategy to grow the
business. The Company expects meaningful revenue synergies
through an expanded ATS offering, which will include M+W PA's
process controls, software integration, manufacturing execution
systems ("MES"), remote monitoring, lifecycle management, modelling
and simulation capabilities. M+W PA provides an imbedded
engineering, service and sales force, with early insight into
customer preferences, developments, problems and programs, allowing
M+W PA to act as first responders for post-automation services and
equipment maintenance. M+W PA expects to expand its main
automation contractor ("MAC") offering by utilizing ATS on a
subcontractor basis to address capability gaps across a number of
industries, thereby increasing opportunity. Further, both ATS
and M+W PA are expected to have opportunities to engage customers
on a more comprehensive basis.
Regarding M+W PA, opportunities to improve
profitability will be pursued through adoption of ATS best
practices in approach to market, key account management,
front-end-of-the-business processes, performance management and
corporate strategy. Cost synergies are expected to be
nominal.
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 continue 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
| (In millions of dollars, except per share
data) |
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Revenues |
|
$ |
190.9 |
$ |
150.0 |
| Cost of revenues |
|
137.1 |
110.6 |
| Selling, general and administrative |
|
36.9 |
25.4 |
| Stock-based compensation |
|
2.5 |
1.3 |
| Earnings from operations |
|
$ |
14.4 |
$ |
12.7 |
| Net finance costs |
|
$ |
0.9 |
$ |
0.6 |
| Provision for income taxes |
|
4.5 |
3.5 |
| Net income from continuing operations |
|
$ |
9.0 |
$ |
8.6 |
| Income from discontinued operations |
|
$ |
6.9 |
$ |
11.0 |
| Net income |
|
$ |
15.9 |
$ |
19.6 |
| Earnings per share |
|
|
|
| Basic from continuing operations |
|
$ |
0.10 |
$ |
0.10 |
| Basic from discontinued operations |
|
$ |
0.08 |
$ |
0.12 |
| |
|
$ |
0.18 |
$ |
0.22 |
| Diluted from continuing operations |
|
$ |
0.10 |
$ |
0.10 |
| Diluted from discontinued operations |
|
$ |
0.07 |
$ |
0.12 |
| |
|
$ |
0.17 |
$ |
0.22 |
Revenues. At $190.9 million, consolidated revenues from
continuing operations for the first quarter of fiscal 2015 were
$40.9 million or 27% higher than in
the corresponding period a year ago, primarily on incremental IWK
revenue. See "Overview - Operating Results from Continuing
Operations."
Cost of revenues. At $137.1 million, first quarter fiscal 2015 cost of
revenues increased over the corresponding period a year ago by
$26.5 million or 24% primarily on
higher revenues. At 28%, gross margin in the first quarter of
fiscal 2015 increased 2% from the corresponding period a year ago.
Higher gross margins reflected improved program execution,
improvements in the cost structure of the Company's base business,
and the inclusion of IWK.
Selling, general and administrative
("SG&A") expenses. SG&A expenses for the first
quarter of fiscal 2015 were $36.9
million. This included $3.0
million of incremental costs related to the Company's
acquisition strategy. Normalized for these costs, SG&A
expenses were $10.7 million or 46%
higher than the normalized $23.2
million incurred in the corresponding period last year,
which excludes $2.2 million of
restructuring charges. On a normalized basis, higher SG&A costs
primarily reflected the addition of IWK SG&A expenses,
including $2.6 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 and
higher employee-related costs.
Stock-based compensation cost.
Stock-based compensation expense of $2.5
million in the first quarter of fiscal 2015 increased from
$1.3 million in the corresponding
period a year ago. The increase in stock-based compensation costs
is due to the revaluation of deferred stock units, share
appreciation rights and restricted share units.
Earnings from operations. For the
first quarter of fiscal 2015, consolidated earnings from operations
were $14.4 million (operating margin
of 8%) compared to earnings from operations of $12.7 million a year ago (operating margin of
8%). See "Overview - Operating Results from Continuing
Operations".
Net finance costs. Net finance
costs were $0.9 million in the first
quarter of fiscal 2015, $0.3 million
higher than a year ago, reflecting increased usage of the Company's
primary credit facility. The increased usage relates primarily to
letters of credit.
Income tax provision. The Company's
fiscal 2015 first quarter effective income tax rate of 33% differed
from the combined Canadian basic federal and provincial income tax
rate of 27% primarily as a result of income earned in certain
jurisdictions with different statutory tax rates. The Company
expects that with the recognition of deferred income tax assets in
fiscal 2014 following the Company's change in assessment of its
ability to utilize tax losses in its German-based operations, its
effective tax rate will exceed the combined Canadian basic federal
and provincial income tax rate of 27% going forward. 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 2015 first quarter net income from continuing operations was
$9.0 million (10 cents per share basic and diluted,
15 cents adjusted basic earnings per
share) compared to $8.6 million
(10 cents per share basic and
diluted, 13 cents adjusted basic
earnings per share) for the first quarter of fiscal 2014.
Reconciliation of Non-IFRS Measures to IFRS Measures
(In millions of dollars)
The following table reconciles EBITDA to the
most directly comparable IFRS measure (net income from continuing
operations):
| |
|
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| EBITDA |
|
|
$ |
20.9 |
$ |
15.8 |
| Less: depreciation and amortization expense |
|
|
6.5 |
3.1 |
| Earnings from operations |
|
|
$ |
14.4 |
$ |
12.7 |
| Less: net finance costs |
|
|
0.9 |
0.6 |
| Provision for income taxes |
|
|
4.5 |
3.5 |
| Net income from continuing operations |
|
|
$ |
9.0 |
$ |
8.6 |
The following table reconciles adjusted earnings
from operations and adjusted basic earnings per share from
continuing operations to the most directly comparable IFRS measure
(net income from continuing operations):
| |
Three
Months Ended June 29, 2014 |
|
Three
Months Ended June 30, 2013 |
| |
IFRS |
Adjustments |
Adjusted
(non-IFRS) |
|
IFRS |
Adjustments |
Adjusted
(non-IFRS) |
| Earnings from operations |
$ |
14.4 |
$ |
- |
$ |
14.4 |
|
$ |
12.7 |
$ |
- |
$ |
12.7 |
| Amortization of acquisition-related intangible
assets |
- |
3.7 |
3.7 |
|
- |
1.0 |
1.0 |
| Acquisition-related transaction costs |
- |
3.0 |
3.0 |
|
- |
- |
- |
| Restructuring
charges |
- |
- |
- |
|
- |
2.2 |
2.2 |
| |
$ |
14.4 |
$ |
6.7 |
$ |
21.1 |
|
$ |
12.7 |
$ |
3.2 |
$ |
15.9 |
| Less: net finance
costs |
$ |
0.9 |
$ |
- |
$ |
0.9 |
|
$ |
0.6 |
$ |
- |
$ |
0.6 |
| Income from
continuing operations before income taxes |
$ |
13.5 |
$ |
6.7 |
$ |
20.2 |
|
$ |
12.1 |
$ |
3.2 |
$ |
15.3 |
| Provision for income taxes |
$ |
4.5 |
$ |
- |
$ |
4.5 |
|
$ |
3.5 |
$ |
- |
$ |
3.5 |
| Adjustments to provision
for income taxes1 |
- |
1.6 |
1.6 |
|
- |
0.6 |
0.6 |
| |
$ |
4.5 |
$ |
1.6 |
$ |
6.1 |
|
$ |
3.5 |
$ |
0.6 |
$ |
4.1 |
| Net income from
continuing operations |
$ |
9.0 |
$ |
5.1 |
$ |
14.1 |
|
$ |
8.6 |
$ |
2.6 |
$ |
11.2 |
| Basic earnings
per share from continuing operations |
$ |
0.10 |
$ |
0.05 |
$ |
0.15 |
|
$ |
0.10 |
$ |
0.03 |
$ |
0.13 |
1 Adjustments to provision for income
taxes relate to the income tax effects of adjustment items that are
excluded for the purposes of calculating non-IFRS based adjusted
net income from continuing operations.
DISCONTINUED OPERATIONS: SOLAR
(In millions of dollars)
| |
|
|
Three
Months
Ended
June 29, 2014 |
Three
Months
Ended
June 30, 2013 |
| Total revenues |
|
|
$ |
- |
$ |
1.1 |
| Gain on sale |
|
|
7.2 |
13.8 |
| Income from discontinued operations |
|
|
6.9 |
11.0 |
| |
|
|
|
|
Revenues
During the first quarter of fiscal 2014, the manufacturing assets
were sold and the business wound up. Accordingly, fiscal 2015 first
quarter revenues of $nil were $1.1
million lower than in the first quarter of fiscal 2014.
Gain on Sale
Fiscal 2015 first quarter gain on sale of $7.2 million related to the sale of Ontario
Solar's 75% ownership in three ground-mount solar projects by
Ontario Solar's 50% owned joint operation Ontario Solar PV Fields
("OSPV"). Fiscal 2014 first quarter gain on sale of
$13.8 million reflected gains of
$10.8 million from the sale of
Ontario Solar's 75% ownership in
four ground-mount solar projects and $3.0
million from the sale of Ontario Solar's manufacturing
assets and inventory.
Income from Discontinued Operations
Ontario Solar recorded $6.9 million
of income in the first quarter of fiscal 2015 compared to income of
$11.0 million in the first quarter a
year ago.
Solar Separation and Outlook
During the first quarter of fiscal 2015, OSPV completed the sale of
its remaining three ground-mount solar projects. OSPV will retain
25% ownership of the projects until they 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 net
proceeds of $12.0 million in the
first quarter of fiscal 2015. The remaining proceeds are
expected to be received when the projects achieve commercial
operation.
During fiscal 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
previously received net proceeds of $13.9
million. The remaining proceeds are expected to be received
when the projects achieve commercial operation.
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.
LIQUIDITY, CASH FLOW AND FINANCIAL RESOURCES
(In millions of dollars, except ratios)
| As at |
|
June 29,
2014 |
March 31,
2014 |
| Cash and cash equivalents |
|
$ |
81.6 |
$ |
76.5 |
| Debt-to-equity ratio |
|
0.01:1 |
0.01:1 |
| For the three months ended |
|
June 29,
2014 |
June 30,
2013 |
| Cash flows provided by (used in) operating
activities from continuing operations |
|
$ |
(10.7) |
$ |
16.2 |
At June 29, 2014,
the Company had cash and cash equivalents of $81.6 million in continuing operations compared
to $76.5 million at March 31, 2014. The Company's total
debt-to-total-equity ratio, excluding accumulated other
comprehensive income, at June 29,
2014 was 0.01:1.
At June 29, 2014,
the Company had $180.9 million of
unutilized multipurpose credit, including letters of credit,
available under existing credit facilities and another $14.3 million available under letter of credit
facilities.
In the first quarter of fiscal 2015, cash flows
used in operating activities from continuing operations were
$10.7 million ($16.2 million provided by operating activities
from continuing operations in the first quarter of fiscal 2014).
The decrease in operating cash flows from continuing operations
related primarily to the timing of investments in non-cash working
capital in large customer programs.
In the first quarter of fiscal 2015, the
Company's investment in non-cash working capital increased by
$26.7 million from March 31, 2014. Accounts receivable decreased 7%
or $8.2 million, due to timing of
billings on certain customer contracts. Net contracts in progress
increased 34% or $29.2 million
compared to March 31, 2014 due to
timing of closing programs. 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 decreased 9% or $2.2 million primarily due to the timing of
inventory purchases. Deposits and prepaid assets increased 27% or
$2.6 million compared to March 31, 2014 due to the timing of program
execution. Accounts payable and accrued liabilities decreased 2% or
$2.9 million.
Capital expenditures totalled $2.7 million in the first quarter of fiscal 2015,
primarily related to computer hardware.
Intangible assets expenditures totalled
$1.8 million in the first quarter of
fiscal 2015, primarily related to computer software and development
projects.
As a result of the separation of solar (see
"Discontinued Operations: Solar Separation and Outlook") the
Company reverted capacity in its Cambridge, Ontario campus to its core ASG
business in fiscal 2013 which resulted in the sale of a vacant ASG
facility in the first quarter of fiscal 2015. The net
proceeds from disposal of the facility were $8.5 million and the income statement impact was
minimal.
During fiscal 2013, the Company established a
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
June 29, 2014, the Company had
utilized $70.8 million under the
Credit Agreement, which was obtained by way of letters of credit
(March 31, 2014 - $72.6 million).
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
$9.1 million (2.3 million Euro, 230.0
million Indian Rupees, 0.5 million
Swiss Francs and 30.0 million Thai
Baht). The total amount outstanding on these
facilities is $7.0 million of which
$0.8 million is classified as bank
indebtedness (March 31, 2014 -
$0.9) and $6.2
million is classified as long-term debt (March 31, 2014 - $5.8
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 230.0 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.
Subsequent to the end of the first quarter of
fiscal 2015, the Company announced its acquisition of M+W PA. The
total cash consideration to be paid for M+W PA pending net debt and
working capital adjustments is approximately 248 million Euro ($362
million). The acquisition of M+W PA is expected to be funded
from a new fully committed credit facility to be available to the
Company at closing. See "Value Creation Strategy: Business
Acquisition - M+W PA."
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 |
$ |
5.8 |
$ |
49.6 |
| One - two years |
4.5 |
0.8 |
| Two - three years |
3.9 |
― |
| Three - four years |
1.8 |
― |
| Four - five years |
1.5 |
― |
| Due in over five years |
3.6 |
― |
| |
$ |
21.1 |
$ |
50.4 |
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
June 29, 2014, the total value of
outstanding bank guarantees under credit facilities was
approximately $95.9 million
(March 31, 2014 - $95.3 million) from continuing operations and was
$nil (March 31, 2014 - $2.1 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 9 of the interim condensed 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 the first quarter of fiscal 2015, 186,701
stock options were exercised. At August 12, 2014 the total number of shares
outstanding was 90,980,248 and there were 4,230,750 stock options
outstanding to acquire common shares of the Company.
RELATED-PARTY TRANSACTIONS
There were no significant related-party transactions in the first
quarter of fiscal 2015.
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 the first
quarter of fiscal 2015 compared to the corresponding period of
fiscal 2014.
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 9 to the
interim condensed consolidated financial statements for details on
the derivative financial instruments outstanding at June 29, 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
investments in certain subsidiaries and committed acquisitions.
The Company uses hedging as a risk management
tool, not to speculate.
Period average exchange rates in CDN$
| |
Three months ended |
|
| |
|
June 29, 2014 |
|
June 30, 2013 |
|
% change |
| U.S. Dollar |
1.0901 |
1.0237 |
6.5% |
| Euro |
1.4948 |
1.3374 |
11.8% |
CONSOLIDATED QUARTERLY RESULTS
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions of dollars, except
per share amounts) |
Q1
2015 |
Q4
2014 |
Q3
2014 |
Q2
2014 |
Q1
2014 |
Q4
2013 |
Q3
2013 |
Q2
2013 |
Revenues from continuing
operations |
$ |
190.9 |
$ |
200.7 |
$ |
178.0 |
$ |
154.6 |
$ |
150.0 |
$ |
153.2 |
$ |
144.2 |
$ |
141.1 |
| Earnings from operations |
$ |
14.4 |
$ |
17.2 |
$ |
16.7 |
$ |
14.4 |
$ |
12.7 |
$ |
14.0 |
$ |
13.6 |
$ |
13.8 |
| Adjusted earnings from operations1 |
$ |
21.1 |
$ |
22.2 |
$ |
20.6 |
$ |
16.3 |
$ |
15.9 |
$ |
15.0 |
$ |
14.6 |
$ |
14.7 |
Income from continuing
operations |
$ |
9.0 |
$ |
11.7 |
$ |
18.8 |
$ |
10.4 |
$ |
8.6 |
$ |
8.9 |
$ |
10.7 |
$ |
9.7 |
Income (loss) from
discontinued operations |
$ |
6.9 |
$ |
(0.4) |
$ |
(0.3) |
$ |
2.5 |
$ |
11.0 |
$ |
(0.6) |
$ |
(21.7) |
$ |
(1.8) |
| Net income (loss) |
$ |
15.9 |
$ |
11.3 |
$ |
18.5 |
$ |
12.9 |
$ |
19.6 |
$ |
8.3 |
$ |
(11.0) |
$ |
7.9 |
Basic earnings per share from
continuing operations |
$ |
0.10 |
$ |
0.13 |
$ |
0.21 |
$ |
0.12 |
$ |
0.10 |
$ |
0.10 |
$ |
0.12 |
$ |
0.11 |
Adjusted basic earnings per
share from continuing operations1 |
$ |
0.15 |
$ |
0.17 |
$ |
0.14 |
$ |
0.14 |
$ |
0.13 |
$ |
0.11 |
$ |
0.13 |
$ |
0.12 |
Basic earnings (loss) per
share
from discontinued operations |
$ |
0.08 |
$ |
(0.01) |
$ |
(0.00) |
$ |
0.03 |
$ |
0.12 |
$ |
(0.01) |
$ |
(0.24) |
$ |
(0.02) |
| Basic earnings (loss) per share |
$ |
0.18 |
$ |
0.12 |
$ |
0.21 |
$ |
0.15 |
$ |
0.22 |
$ |
0.09 |
$ |
(0.12) |
$ |
0.09 |
Diluted earnings per share
from continuing operations |
$ |
0.10 |
$ |
0.13 |
$ |
0.21 |
$ |
0.11 |
$ |
0.10 |
$ |
0.09 |
$ |
0.12 |
$ |
0.11 |
Diluted earnings (loss) per
share from discontinued
operations |
$ |
0.07 |
$ |
(0.01) |
$ |
(0.00) |
$ |
0.03 |
$ |
0.12 |
$ |
(0.00) |
$ |
(0.24) |
$ |
(0.02) |
Diluted earnings (loss) per
share |
$ |
0.17 |
$ |
0.12 |
$ |
0.21 |
$ |
0.14 |
$ |
0.22 |
$ |
0.09 |
$ |
(0.12) |
$ |
0.09 |
| Order Bookings |
$ |
160.0 |
$ |
197.0 |
$ |
237.0 |
$ |
110.0 |
$ |
165.0 |
$ |
170.0 |
$ |
173.0 |
$ |
112.0 |
| Order Backlog |
$ |
425.0 |
$ |
474.0 |
$ |
467.0 |
$ |
355.0 |
$ |
415.0 |
$ |
398.0 |
$ |
388.0 |
$ |
361.0 |
1 Adjusted earnings from operations
and adjusted basic earnings per share from continuing operations
are non-IFRS measures and do not have any standardized meaning
prescribed within IFRS and therefore may not be comparable to
similar measures presented by other companies. Such measures are
intended to provide additional information only and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. See "Notice to Reader: Non-IFRS Measures and
Additional IFRS Measures".
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
The preparation of the Company's consolidated financial statements
requires management to make estimates, judgements and assumptions
that affect the reported amounts of assets, liabilities, revenues
and expenses, and the disclosure of contingent assets and
liabilities at the end of the reporting period. Uncertainty about
these estimates, judgements and assumptions could result in
outcomes that require a material adjustment to the carrying amount
of the asset or liability affected in future periods.
The Company based its assumptions on information
available when the consolidated financial statements were prepared.
Existing circumstances and assumptions about future developments
may change due to market changes or circumstances arising beyond
the control of the Company. Such changes are reflected in the
estimates as they occur. There have been no material changes to the
critical accounting estimates as described in the Company's fiscal
2014 MD&A.
ACCOUNTING STANDARDS CHANGE
IFRIC 21 - Levies
Effective April 1, 2014, the Company
applied IFRIC 21 for the first time. IFRIC 21 provides
guidance on when to recognize a liability to pay a levy imposed by
government that is accounted for in accordance with IAS 37 -
Provisions, Contingent Liabilities and Contingent
Assets. The adoption of IFRIC 21 had no impact on the
interim condensed financial statements of the Company.
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).
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.
During the three months ended June 29, 2014, 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.
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; M+W PA acquisition -
the enhancement of growth opportunities in both new markets and
with existing customers, the funding of the purchase price through
the new C$600 million credit facility
and such facility being available on closing, and expected timing
of closing the transaction and conditions in relation thereto;
potential impact of general economic environment, including impact
on demand 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; leveraging of IWK into other markets; 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 rate of completion of Order Backlog;
M+W PA acquisition - ATS benefiting from M+W PA's capability and
market position, revenue synergies through an expanded ATS
offering, M+W PA's increased opportunity to expand its MAC
offering, ATS and M+W PA engaging customers on a more
comprehensive basis, M+W PA benefiting from the adoption of ATS'
best practices, and cost synergies; the implementation of changes
to ATS 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
new customer programs; potential for greater negative impact
associated with any non-performance related to large enterprise
programs; that strategic initiatives are delayed, not completed, or
do not have intended positive impact; that M+W PA's business does
not perform as expected during fiscal 2015; that the new credit
facility does not become available by closing; inability to close
the acquisition, or delays in closing it, resulting from failure or
delays in relation to satisfying conditions of closing; variations
in the amount of Order Backlog completed in any given quarter; that
ATS is unable to enhance growth opportunities or M+W PA's
portfolio, or expand product or service offerings, or that
customers are more difficult to engage than expected; 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 and, as
a result, anticipated benefits and synergies are not realized; 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'
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.
Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars - unaudited) |
| As at |
Note |
|
|
June 29
2014 |
|
|
March 31
2014 |
| |
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
$ |
81,619 |
|
$ |
76,466 |
| Accounts receivable |
|
|
|
109,652 |
|
|
117,821 |
| Costs and earnings in excess of billings on
contracts in progress |
5 |
|
|
173,342 |
|
|
146,231 |
| Inventories |
5 |
|
|
21,951 |
|
|
24,186 |
| Deposits, prepaids and other
assets |
6 |
|
|
12,256 |
|
|
9,630 |
| |
|
|
|
398,820 |
|
|
374,334 |
| Assets associated with discontinued
operations |
4 |
|
|
781 |
|
|
13,265 |
| |
|
|
|
399,601 |
|
|
387,599 |
| Non-current assets |
|
|
|
|
|
|
|
| Property, plant and equipment |
7 |
|
|
75,896 |
|
|
85,412 |
| Investment property |
|
|
|
4,147 |
|
|
4,341 |
| Goodwill |
|
|
|
145,602 |
|
|
151,731 |
| Intangible assets |
8 |
|
|
104,200 |
|
|
111,298 |
| Deferred income tax assets |
|
|
|
6,648 |
|
|
7,838 |
| Investment tax credit
receivable |
|
|
|
30,820 |
|
|
30,165 |
| |
|
|
|
367,313 |
|
|
390,785 |
| Total assets |
|
|
$ |
766,914 |
|
$ |
778,384 |
| |
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
| Bank indebtedness |
11 |
|
$ |
774 |
|
$ |
913 |
| Accounts payable and accrued
liabilities |
|
|
|
135,374 |
|
|
138,285 |
| Provisions |
10 |
|
|
8,961 |
|
|
10,412 |
| Billings in excess of costs and earnings on
contracts in progress |
5 |
|
|
57,279 |
|
|
59,363 |
| Current portion of long-term debt |
11 |
|
|
4,401 |
|
|
3,815 |
| |
|
|
|
206,789 |
|
|
212,788 |
| Liabilities associated with discontinued
operations |
4 |
|
|
209 |
|
|
6,774 |
| |
|
|
|
206,998 |
|
|
219,562 |
| Non-current liabilities |
|
|
|
|
|
|
|
| Employee benefits |
|
|
|
22,920 |
|
|
23,213 |
| Long-term debt |
11 |
|
|
1,268 |
|
|
1,324 |
| Deferred income tax
liabilities |
|
|
|
15,016 |
|
|
16,747 |
| |
|
|
|
39,204 |
|
|
41,284 |
| Total liabilities |
|
|
$ |
246,202 |
|
$ |
260,846 |
| |
|
|
|
|
|
|
|
| EQUITY |
|
|
|
|
|
|
|
| Share capital |
12 |
|
$ |
512,463 |
|
$ |
510,725 |
| Contributed surplus |
|
|
|
15,037 |
|
|
15,025 |
| Accumulated other comprehensive
income |
|
|
|
21,499 |
|
|
35,970 |
| Retained deficit |
|
|
|
(28,453) |
|
|
(44,311) |
| Equity attributable to
shareholders |
|
|
|
520,546 |
|
|
517,409 |
| Non-controlling interests |
|
|
|
166 |
|
|
129 |
| Total equity |
|
|
|
520,712 |
|
|
517,538 |
| Total liabilities and
equity |
|
|
$ |
766,914 |
|
$ |
778,384 |
ATS AUTOMATION TOOLING SYSTEMS
INC.
Interim Consolidated Statements of Income
(in thousands of Canadian dollars, except per share amounts -
unaudited) |
| |
|
|
|
|
|
|
|
| For the three months
ended |
Note |
|
|
June 29
2014 |
|
|
June 30
2013 |
| |
|
|
|
|
|
|
|
| Revenues |
|
|
|
|
|
|
|
| |
Revenues from construction
contracts |
|
|
$ |
161,190 |
|
$ |
134,097 |
| |
Sale of goods |
|
|
|
14,413 |
|
|
7,223 |
| |
Services
rendered |
|
|
|
15,276 |
|
|
8,707 |
| |
|
|
|
|
|
|
|
| Total
revenues |
|
|
|
190,879 |
|
|
150,027 |
| |
|
|
|
|
|
|
|
| Operating costs and expenses |
|
|
|
|
|
|
|
| |
Cost of
revenues |
|
|
|
137,072 |
|
|
110,645 |
| |
Selling, general and
administrative |
|
|
|
36,937 |
|
|
25,363 |
| |
Stock-based compensation |
14 |
|
|
2,514 |
|
|
1,345 |
| |
|
|
|
|
|
|
|
|
| Earnings from
operations |
|
|
|
14,356 |
|
|
12,674 |
| |
|
|
|
|
|
|
|
| Net finance costs |
18 |
|
|
878 |
|
|
602 |
| |
|
|
|
|
|
|
|
| Income from continuing operations
before income taxes |
|
|
|
13,478 |
|
|
12,072 |
| |
|
|
|
|
|
|
|
| Income tax expense |
13 |
|
|
4,496 |
|
|
3,496 |
| |
|
|
|
|
|
|
|
| Income from continuing
operations |
|
|
|
8,982 |
|
|
8,576 |
| |
|
|
|
|
|
|
|
| Income from discontinued operations,
net of tax |
4 |
|
|
6,913 |
|
|
10,956 |
| |
|
|
|
|
|
|
|
| Net
income |
|
|
$ |
15,895 |
|
$ |
19,532 |
| |
|
|
|
|
|
|
|
| Attributable to |
|
|
|
|
|
|
|
|
Shareholders |
|
|
$ |
15,858 |
|
$ |
19,514 |
| Non-controlling
interests |
|
|
|
37 |
|
|
18 |
| |
|
|
$ |
15,895 |
|
$ |
19,532 |
| |
|
|
|
|
|
|
|
| Earnings per share
attributable to shareholders |
19 |
|
|
|
|
|
|
| Basic - from continuing
operations |
|
|
$ |
0.10 |
|
$ |
0.10 |
| Basic - from discontinued
operations |
4 |
|
|
0.08 |
|
|
0.12 |
| |
|
|
$ |
0.18 |
|
$ |
0.22 |
| |
|
|
|
|
|
|
|
| Earnings per share
attributable to shareholders |
19 |
|
|
|
|
|
|
| Diluted - from continuing
operations |
|
|
$ |
0.10 |
|
$ |
0.10 |
| Diluted - from discontinued
operations |
4 |
|
|
0.07 |
|
|
0.12 |
| |
|
|
$ |
0.17 |
|
$ |
0.22 |
ATS AUTOMATION TOOLING SYSTEMS
INC.
Interim Consolidated Statements of Comprehensive Income
(in thousands of Canadian dollars - unaudited) |
| For the three months
ended |
|
|
June 29
2014 |
|
|
June 30
2013 |
| |
|
|
|
|
|
|
| Net income |
|
$ |
15,895 |
|
$ |
19,532 |
| |
|
|
|
|
|
|
| Other comprehensive income
(loss): |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Items to be reclassified subsequently
to net income: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Currency translation adjustment (net of income
taxes of $nil) |
|
|
(15,232) |
|
|
11,114 |
| |
|
|
|
|
|
|
| |
Net unrealized loss on available-for-sale
financial assets |
|
|
-- |
|
|
(525) |
| |
Tax impact |
|
|
-- |
|
|
134 |
| |
|
|
|
|
|
|
| |
Net unrealized gain (loss) on derivative financial
instruments designated as cash flow
hedges |
|
|
652 |
|
|
(1,751) |
| |
Tax impact |
|
|
(161) |
|
|
451 |
| |
|
|
|
|
|
|
| |
Loss transferred to net income for derivatives
designated as cash flow hedges |
|
|
362 |
|
|
163 |
| |
Tax impact |
|
|
(92) |
|
|
(51) |
| |
|
|
|
|
|
|
| Other comprehensive income
(loss) |
|
|
(14,471) |
|
|
9,535 |
| |
|
|
|
|
|
|
| Comprehensive
income |
|
$ |
1,424 |
|
$ |
29,067 |
| |
|
|
|
|
|
|
| Attributable to |
|
|
|
|
|
|
| Shareholders |
|
$ |
1,387 |
|
$ |
29,049 |
| Non-controlling
interests |
|
|
37 |
|
|
18 |
| |
|
$ |
1,424 |
|
$ |
29,067 |
ATS AUTOMATION TOOLING SYSTEMS
INC.
Interim Consolidated Statements of Changes in Equity
(in thousands of Canadian dollars - unaudited) |
| Three months ended June 29, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Share
capital |
|
|
Contributed
surplus |
|
|
Retained
earnings
(deficit) |
|
|
Currency
translation
adjustments |
|
|
Available-
for-sale
financial
assets |
|
|
Cash flow
hedges |
|
|
Total
accumulated
other
comprehensive
income |
|
|
Non-
controlling
interests |
|
|
Total
equity |
| Balance, at March 31, 2014 |
|
$ |
510,725 |
|
$ |
15,025 |
|
$ |
(44,311) |
|
$ |
36,616 |
|
$ |
-- |
|
$ |
(646) |
|
$ |
35,970 |
|
$ |
129 |
|
$ |
517,538 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
-- |
|
|
-- |
|
|
15,858 |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
37 |
|
|
15,895 |
| Other comprehensive income (loss) |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
(15,232) |
|
|
-- |
|
|
761 |
|
|
(14,471) |
|
|
-- |
|
|
(14,471) |
| Total comprehensive income (loss) |
|
|
-- |
|
|
-- |
|
|
15,858 |
|
|
(15,232) |
|
|
-- |
|
|
761 |
|
|
(14,471) |
|
|
37 |
|
|
1,424 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock-based compensation |
|
|
-- |
|
|
535 |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
535 |
| Exercise of stock options |
|
|
1,738 |
|
|
(523) |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
1,215 |
| Balance, at June 29, 2014 |
|
$ |
512,463 |
|
$ |
15,037 |
|
$ |
(28,453) |
|
$ |
21,384 |
|
$ |
-- |
|
$ |
115 |
|
$ |
21,499 |
|
$ |
166 |
|
$ |
520,712 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Share
capital |
|
|
Contributed
surplus |
|
|
Retained
earnings
(deficit) |
|
|
Currency
translation
adjustments |
|
|
Available-
for-sale
financial
assets |
|
|
Cash flow
hedges |
|
|
Total
accumulated
other
comprehensive
income |
|
|
Non-
controlling
interests |
|
|
Total
equity |
| Balance, at March 31, 2013 |
|
$ |
486,734 |
|
$ |
19,317 |
|
$ |
(107,407) |
|
$ |
(23) |
|
$ |
239 |
|
$ |
(339) |
|
$ |
(123) |
|
$ |
83 |
|
$ |
398,604 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
-- |
|
|
-- |
|
|
19,514 |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
18 |
|
|
19,532 |
| Other comprehensive income
(loss) |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
11,114 |
|
|
(391) |
|
|
(1,188) |
|
|
9,535 |
|
|
-- |
|
|
9,535 |
| Total comprehensive income
(loss) |
|
|
-- |
|
|
-- |
|
|
19,514 |
|
|
11,114 |
|
|
(391) |
|
|
(1,188) |
|
|
9,535 |
|
|
18 |
|
|
29,067 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock-based compensation |
|
|
-- |
|
|
547 |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
547 |
| Exercise of stock options |
|
|
1,583 |
|
|
(486) |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
1,097 |
| Balance, at June 30, 2013 |
|
$ |
488,317 |
|
$ |
19,378 |
|
$ |
(87,893) |
|
$ |
11,091 |
|
$ |
(152) |
|
$ |
(1,527) |
|
$ |
9,412 |
|
$ |
101 |
|
$ |
429,315 |
ATS AUTOMATION TOOLING SYSTEMS
INC.
Interim Consolidated Statements of Cash Flow
(in thousands of Canadian dollars - unaudited) |
| Three months
ended |
Note |
|
|
June 29
2014 |
|
|
June 30
2013 |
| |
|
|
|
|
|
|
|
| Operating activities: |
|
|
|
|
|
|
|
| Income from continuing
operations |
|
|
$ |
8,982 |
|
$ |
8,576 |
| Items not involving cash |
|
|
|
|
|
|
|
| |
Depreciation of property, plant and
equipment |
|
|
|
1,934 |
|
|
1,678 |
| |
Amortization of intangible
assets |
|
|
|
4,546 |
|
|
1,380 |
| |
Deferred income
taxes |
|
|
|
153 |
|
|
2,565 |
| |
Other items not involving
cash |
|
|
|
(1,642) |
|
|
(943) |
| |
Stock-based
compensation |
14 |
|
|
2,514 |
|
|
1,345 |
| |
Gain on disposal of property, plant and
equipment |
|
|
|
(423) |
|
|
(13) |
| |
|
|
$ |
16,064 |
|
$ |
14,588 |
| Change in non-cash operating working
capital |
|
|
|
(26,749) |
|
|
1,573 |
| Cash flows provided by (used in)
operating activities of discontinued
operations |
4 |
|
|
(2,824) |
|
|
1,188 |
| Cash flows provided by (used in)
operating activities |
|
|
$ |
(13,509) |
|
$ |
17,349 |
| |
|
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
|
| Acquisition of property, plant and
equipment |
|
|
$ |
(2,674) |
|
$ |
(1,085) |
| Acquisition of intangible
assets |
|
|
|
(1,839) |
|
|
(875) |
| Proceeds from disposal of property,
plant and
equipment |
|
|
|
8,529 |
|
|
16 |
| Cash flows provided by investing
activities of discontinued
operations |
4 |
|
|
13,643 |
|
|
19,679 |
| Cash flows provided by investing
activities |
|
|
$ |
17,659 |
|
$ |
17,735 |
| |
|
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
|
|
|
| Restricted
cash |
6 |
|
$ |
(67) |
|
$ |
(1,162) |
| Bank
indebtedness |
|
|
|
(113) |
|
|
176 |
| Repayment of long-term
debt |
|
|
|
(72) |
|
|
(44) |
| Proceeds from long-term
debt |
|
|
|
732 |
|
|
-- |
| Issuance of common
shares |
|
|
|
1,215 |
|
|
1,097 |
| Cash flows provided by financing
activities |
|
|
$ |
1,695 |
|
$ |
67 |
| |
|
|
|
|
|
|
|
| Effect of exchange rate changes on
cash and cash
equivalents |
|
|
|
(2,705) |
|
|
3,708 |
| |
|
|
|
|
|
|
|
| Increase in cash and cash
equivalents |
|
|
|
3,140 |
|
|
38,859 |
| |
|
|
|
|
|
|
|
| Cash and cash equivalents, beginning
of
period |
|
|
|
78,614 |
|
|
105,870 |
| |
|
|
|
|
|
|
|
| Cash and cash equivalents, end of
period |
|
|
$ |
81,754 |
|
$ |
144,729 |
| |
|
|
|
|
|
|
|
| Attributable to |
|
|
|
|
|
|
|
| Cash and cash equivalents - continuing
operations |
|
|
$ |
81,619 |
|
$ |
130,960 |
| Cash and cash equivalents - associated
with discontinued
operations |
|
|
|
135 |
|
|
13,769 |
| |
|
|
$ |
81,754 |
|
$ |
144,729 |
| |
|
|
|
|
|
|
|
| Supplemental information |
|
|
|
|
|
|
|
| Cash income taxes paid by continuing
operations |
|
|
$ |
1,908 |
|
$ |
531 |
| Cash interest paid by continuing
operations |
|
|
$ |
650 |
|
$ |
199 |
SOURCE ATS Automation Tooling Systems Inc.