CAMBRIDGE, ON, May 21, 2015 /CNW/ - ATS Automation Tooling
Systems Inc. (TSX: ATA) ("ATS" or the "Company") today
reported financial results for the three and twelve months ended
March 31, 2015.
Fourth Quarter Summary
- Revenues from continuing operations were $289.4 million, 44% higher than a year ago, or
$218.9 million excluding PA, 9%
higher than last year (see "Business Acquisition – PA");
- Adjusted earnings from continuing operations1 were
$34.7 million (12% margin), compared
to $22.2 million (11% margin) in the
fourth quarter a year ago. Earnings from continuing operations were
$22.6 million (8% operating margin),
compared to $17.2 million (9%
operating margin) in the fourth quarter a year ago;
- EBITDA1 was $35.2
million (12% margin) compared to $23.5 million (12% margin) a year ago. Excluding
$1.6 million of acquisition-related
costs and $1.4 million of
restructuring and severance costs, EBITDA was $38.2 million (13% margin), up from $24.7 million (12% margin) a year ago which
excluded $0.2 million of
acquisition-related costs and $1.0
million of restructuring charges;
- Adjusted basic earnings per share from continuing
operations1 increased to 24
cents compared to 17 cents in
the fourth quarter a year ago;
- Order Bookings1 were $317
million, 61% higher than a year ago. Excluding PA, Order
Bookings were $247 million, 25%
higher than last year;
- Period end Order Backlog1 was $632 million, up 33% from $474 million at March 31,
2014. Higher Order Backlog primarily reflected the addition
of PA as well as higher Order Bookings in life sciences and
transportation;
- The Company's balance sheet and financial capacity to support
growth remained strong, with unutilized credit facilities of
$377 million and $5.8 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,
2015
|
3 months
ended
March 31,
2014
|
12
months
ended
March
31,
2015
|
12 months
ended
March 31,
2014
|
Revenues
|
Continuing
Operations
|
$
|
289.4
|
$
|
200.7
|
$
|
936.1
|
$
|
683.4
|
Discontinued
Operations
|
$
|
––
|
$
|
––
|
$
|
––
|
$
|
1.1
|
Earnings from
operations1
|
Continuing
Operations
|
$
|
22.6
|
$
|
17.2
|
$
|
67.0
|
$
|
61.0
|
Adjusted earnings
from operations1
|
Continuing
Operations
|
$
|
34.7
|
$
|
22.2
|
$
|
109.8
|
$
|
75.2
|
EBITDA1
|
Continuing
Operations
|
$
|
35.2
|
$
|
23.5
|
$
|
107.5
|
$
|
79.4
|
Net
income
|
Continuing
Operations
|
$
|
13.9
|
$
|
11.7
|
$
|
38.9
|
$
|
49.4
|
Discontinued
Operations
|
$
|
2.2
|
$
|
(0.4)
|
$
|
16.2
|
$
|
12.8
|
Adjusted earnings
per share1
|
From continuing
operations (basic)
|
$
|
0.24
|
$
|
0.17
|
$
|
0.77
|
$
|
0.58
|
Earnings per
share
|
From continuing
operations (basic)
|
$
|
0.15
|
$
|
0.13
|
$
|
0.43
|
$
|
0.56
|
From discontinued
operations (basic)
|
$
|
0.03
|
$
|
(0.01)
|
$
|
0.18
|
$
|
0.14
|
From continuing
operations (diluted)
|
$
|
0.15
|
$
|
0.13
|
$
|
0.42
|
$
|
0.55
|
From discontinued
operations (diluted)
|
$
|
0.03
|
$
|
(0.01)
|
$
|
0.18
|
$
|
0.14
|
1 Non-IFRS
measure: see "Notice to Reader: Non-IFRS Measures and Additional
IFRS Measures".
|
"Fourth quarter performance was strong, with record Order
Bookings, revenues and continued strong operating margins," said
Anthony Caputo, Chief Executive
Officer. "Organic growth was strong, PA's performance was positive
and the early synergies resulting from our combined businesses are
encouraging. We remain focused on our grow, expand and scale
strategies to create value organically and through
acquisition."
Fourth Quarter Summary Continuing Operations
Fiscal
2015 fourth quarter revenues were 44% higher than a year ago
primarily reflecting $70.5 million of
revenues earned by PA. Excluding PA, fourth quarter revenues grew
9% year over year primarily reflecting higher Order Bookings in the
last three quarters of the fiscal year and the timing of the build
cycle on certain larger programs. Foreign exchange rate changes
also positively impacted the translation of revenues earned by
foreign-based subsidiaries compared to a year ago, primarily
reflecting the weakening of the Canadian dollar relative to the
U.S. dollar.
Year over year, fiscal 2015 fourth quarter revenues from
consumer products and electronics increased by 12%, primarily on
higher Order Bookings. Revenues generated in energy markets
increased 6% compared to a year ago, primarily due to increased
activity in the nuclear energy market. Revenues generated in the
life sciences markets increased 71%, primarily on revenues from PA.
Transportation revenues increased 38% primarily due to revenues
earned by PA.
Fiscal 2015 fourth quarter earnings from operations were
$22.6 million (8% operating margin)
compared to $17.2 million (9%
operating margin) a year ago. Fourth quarter fiscal 2015 earnings
from operations included $1.6 million
of incremental costs related to the Company's acquisition activity,
$1.4 million of restructuring and
severance costs, and amortization expenses of $9.1 million related to amortization of
identifiable intangible assets recorded on acquired businesses.
Excluding these costs, fourth quarter fiscal 2015 adjusted earnings
from operations were $34.7 million
(12% margin), compared to adjusted earnings from operations of
$22.2 million (11% margin) a year
ago. Higher adjusted earnings from operations primarily
reflected the inclusion of PA and improved program execution.
EBITDA was $35.2 million (12%
margin) compared to $23.5 million
(12% margin) in the fourth quarter of fiscal 2014. Excluding
$1.6 million of acquisition-related
costs and restructuring and severance costs of $1.4 million, fourth quarter fiscal 2015 EBITDA
was $38.2 million (13% margin).
Comparably, excluding $0.2
million of acquisition-related costs and restructuring and
severance costs of $1.0 million,
fourth quarter fiscal 2014 EBITDA was $24.7
million (12% margin).
Order Bookings
Fourth quarter fiscal 2015 Order
Bookings were $317 million, a 61%
increase from the fourth quarter of fiscal 2014, primarily
reflecting $70 million of Order
Bookings generated by PA. Excluding PA, Order Bookings were
$247 million, a 25% increase from the
corresponding period a year ago. Strength in transportation, life
sciences and energy markets more than offset lower activity in
consumer products and electronics markets. Foreign exchange rate
changes positively impacted the translation of Order Bookings from
foreign-based ATS subsidiaries compared to the corresponding period
a year ago.
Order Backlog
At March 31,
2015, Order Backlog was $632
million, 33% higher than at March
31, 2014. Higher Order Backlog primarily reflected the
addition of PA as well as higher Order Bookings in life sciences
and transportation markets, partially offset by lower Order
Bookings in consumer products and electronics and energy markets.
The Company expects its Order Backlog of $632 million at the end of the fourth quarter of
fiscal 2015 to mitigate the impact of volatile Order Bookings on
revenues in the short term. Management expects that approximately
40% to 45% of its Order Backlog would typically be completed each
quarter. In the first quarter of fiscal 2016, management expects to
operate at the lower end of this range.
Discontinued Operations: Solar
During fiscal 2015, all
remaining Solar assets were sold. In the fourth quarter, Ontario
Solar ("discontinued operations") recorded income of $2.2 million on the completion of the sale of the
final remaining ground-mount solar projects.
Quarterly Conference Call
ATS's quarterly conference
call begins at 10 am eastern on
Thursday May 21, 2015 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 May 28, 2015) by
dialing 416-849-0833 and entering passcode 44111469 followed by the
number sign.
About ATS
ATS is an industry-leading automation
solutions provider to many of the world's most successful
companies. ATS uses its extensive knowledge base and global
capabilities in custom automation, repeat automation, automation
products and value-added services including pre-automation and
after-sales services to address the sophisticated manufacturing
automation systems and service needs of multinational customers in
markets such as life sciences, chemicals, consumer products,
electronics, food, beverage, transportation, energy, and oil and
gas. Founded in 1978, ATS employs approximately 3,500 people at 26
manufacturing facilities and 47 offices in North America, Europe, Southeast
Asia and China. The
Company's shares are traded on the Toronto Stock Exchange under the
symbol ATA. Visit the Company's website at www.atsautomation.com.
Management's Discussion and Analysis
For the Year
Ended March 31, 2015
This Management's Discussion and Analysis ("MD&A") for
the year ended March 31, 2015 (fiscal
2015) is as of May 20, 2015 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 2015
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", "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 and integration 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 and twelve month periods ending March 31, 2015 and March
31, 2014; and (ii) adjusted earnings from operations and
adjusted basic earnings per share from continuing operations to net
income from continuing operations and basic earnings per share from
continuing operations for the three and twelve month periods ending
March 31, 2015 and March 31, 2014 is contained in this MD&A (see
"Reconciliation of Non-IFRS Measures to IFRS Measures"). A
reconciliation of Order Bookings and Order Backlog to total Company
revenues for the three and twelve month periods ending March 31, 2015 and March
31, 2014 is also contained in the MD&A (see "Order
Backlog Continuity").
COMPANY PROFILE
ATS is an industry-leading automation
solutions provider to many of the world's most successful
companies. ATS uses its extensive knowledge base and global
capabilities in custom automation, repeat automation, automation
products and value-added services including pre-automation and
after-sales services to address the sophisticated manufacturing
automation systems and service needs of multinational customers in
markets such as life sciences, chemicals, consumer products,
electronics, food, beverage, transportation, energy, and oil and
gas. Founded in 1978, ATS employs approximately 3,500 people at 26
manufacturing facilities and 47 offices in North America, Europe, Southeast
Asia and China.
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).
Having completed the first two phases of the plan, including the
separation of Solar which led to the final divestiture of the
Company's remaining solar assets in fiscal 2015 (see "Discontinued
Operations: Solar"), the Company is focused on the growth phase of
its value creation 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.
Scale
The Company is committed to growth
through acquisition and management believes that the Company has
the organizational structure, business processes and 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. To date,
ATS has successfully acquired four complementary and accretive
businesses: sortimat Group ("sortimat") on June 1, 2010; Assembly & Test Worldwide
("ATW") on January 5, 2011; IWK
Verpackungstechnik and Oystar IWK USA, Inc. ("IWK") on September 30, 2013 and M+W Process Automation
GmbH and ProFocus LLC (collectively "Process Automation Solutions"
or "PA") on September 1, 2014.
Business Acquisition – PA
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. PA adds to the Company's growth opportunities both in new
markets, including biotechnology, food, beverage, water,
wastewater, oil and gas, paper, metal and semiconductor and with
existing customers in automotive, pharmaceuticals and consumer
products. PA's largest geographic markets are Europe and North
America.
Cash consideration paid for PA was $355
million (245 million Euro),
which was net of $11.8 million of
cash acquired and includes $3 million
(2 million Euro) paid in May 2015. The cash consideration of the purchase
price was funded from the Company's $750
million senior secured credit facility (see "Liquidity, Cash
Flow and Financial Resources"). The acquisition has been accounted
for as a business combination with the Company as the acquirer of
PA. The purchase method of accounting has been used and the
earnings of PA were consolidated beginning from the acquisition
date.
Included in the PA acquisition was the acquisition of a majority
interest in a PA subsidiary, M+W Advanced Applications GmbH. On
January 15, 2015, the Company
increased its ownership from 74% to 100% of the subsidiary. The
total cash consideration to be paid in respect of this increased
ownership is expected to be $4.4
million (3.2 million Euro),
which includes expected future payments of $1.3 million (1.0 million
Euro) which are payable and subject to upward and downward
adjustment of up to 50% of the expected future payments based on
the achievement of certain operating performance targets over the
next two years.
For additional information on the acquisition of PA, refer to
note 5 of the consolidated financial statements.
BUSINESS OVERVIEW
ATS is an industry-leading
automation solutions provider to some of the world's largest
multinational companies. ATS has expertise in custom automation,
repeat automation, automation products and value-added services
including pre automation and after-sales services.
ATS serves customers in the following markets: life sciences,
chemicals, consumer products, electronics, food, beverage,
transportation, energy, and oil and gas. With broad and in-depth
knowledge across multiple industries and technical fields, ATS is
able to deliver single source solutions to customers that can lower
their production costs, accelerate delivery of their products, and
improve quality control. ATS' relationships with customers may
begin with planning and feasibility studies. In situations where
the customer is seeking in-depth analysis before committing to a
program, ATS 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.
ATS engages with customers on both greenfield programs, such as
equipping new factories, and brownfield programs such as capacity
expansions, line moves, equipment upgrades, software upgrades,
efficiency improvements and factory optimization.
When a contract for an automation solution is received, ATS may
provide 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, ATS 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, ATS provides value engineering, supply chain
management, integration and manufacturing capabilities and other
automation products and solutions.
Contract values for individual automation systems vary and are
often in excess of $1 million, with
some contracts for enterprise-type programs well in excess of
$10 million. Due to the custom nature
of customer projects, contract durations vary, with typical
durations ranging from six to 12 months, and some larger contracts
extending up to 18 to 24 months. Contract values for pre-automation
services and post-automation services range in value and can exceed
$1 million with varying durations
which can sometimes extend over a number of years.
Competitive Strengths
Management believes ATS has the following competitive
strengths:
Global presence, size and critical mass: ATS'
global presence and scale provide an advantage in serving
multinational customers. The markets in which the Company operates
are served primarily by competitors with narrow geographic and/or
industrial market reach. ATS has manufacturing operations in
Canada, the United States, Germany, China, Malaysia, Thailand and India. Through PA, ATS can deliver localized
service through a network of 47 offices located around the world.
Management believes that ATS' scale and global footprint 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 22,000
automation systems worldwide and has an extensive knowledge base
and accumulated design experience. Management believes ATS' broad
experience in many different industrial markets and with diverse
technologies, its talented workforce which includes over 1,400
engineers and over 200 program management personnel, and its
ability to provide custom automation, repeat automation, automation
products and value-added services, position the Company well to
serve complex customer programs in a variety of markets.
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 several strong brands: "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.
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 technologies. 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: ATS serves
some of the world's largest multinational companies. Most of ATS'
customers are repeat customers and many have long-standing
relationships with ATS, often spanning more than a decade.
Management estimates that approximately 90% of ATS Order Bookings
in fiscal 2015 were placed by repeat customers.
Total-solutions capabilities: Management
believes the Company gains competitive advantages because ATS
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, ATS
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. The addition of PA has expanded and strengthened ATS'
capabilities in a number of areas including process control,
software integration, manufacturing execution systems ("MES"),
remote monitoring, life cycle management, modelling, simulation and
product 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
2015
|
|
Q4
2014
|
|
Fiscal 2015
|
|
Fiscal
2014
|
Consumer products and
electronics
|
$
|
38.9
|
$
|
34.8
|
$
|
165.1
|
$
|
91.6
|
Energy
|
|
16.9
|
|
15.9
|
|
63.3
|
|
46.6
|
Life
sciences
|
|
138.8
|
|
81.2
|
|
393.1
|
|
288.7
|
Transportation
|
|
94.8
|
|
68.8
|
|
314.6
|
|
256.5
|
Total revenues
from continuing
operations
|
$
|
289.4
|
$
|
200.7
|
$
|
936.1
|
$
|
683.4
|
Revenues by
installation location
|
|
Q4
2015
|
|
Q4 2014
|
|
Fiscal
2015
|
|
Fiscal
2014
|
North
America
|
$
|
151.9
|
$
|
107.2
|
$
|
450.4
|
$
|
328.5
|
Europe
|
|
96.7
|
|
55.3
|
|
330.1
|
|
192.4
|
Asia/Other
|
|
40.8
|
|
38.2
|
|
155.6
|
|
162.5
|
Total revenues
from continuing
operations
|
$
|
289.4
|
$
|
200.7
|
$
|
936.1
|
$
|
683.4
|
Fourth Quarter
Fourth quarter fiscal 2015 revenues
were 44% higher than in the corresponding period a year ago
primarily reflecting $70.5 million of
revenues earned by PA. Excluding PA, fourth quarter revenues were
$218.9 million, a 9% increase
compared to the corresponding period a year ago primarily
reflecting higher Order Bookings in the last three quarters of the
fiscal year and the timing of the build cycle on certain larger
programs. Foreign exchange rate changes also 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
U.S. dollar.
By market, fourth quarter revenues from consumer products and
electronics increased by 12%, primarily on higher Order Bookings.
Revenues generated in energy markets increased 6% compared to the
corresponding period a year ago, primarily due to increased
activity in the nuclear energy market. Revenues generated in life
sciences markets increased 71%, primarily on revenues from PA.
Transportation revenues increased 38% primarily due to revenues
earned by PA.
Full Year
Fiscal 2015 revenues were 37% higher than in
the prior fiscal year primarily reflecting revenues of $151.5 million generated by PA since acquisition
and $70.3 million of IWK revenues
earned in the first six months of fiscal 2015 (IWK was acquired
mid-way through fiscal 2014 on September 30,
2013 and contributed for the full fiscal 2015 period).
Excluding PA and IWK (for the first six months of fiscal 2015),
revenues were $714.3 million, a 5%
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 a year ago, primarily
reflecting the weakening of the Canadian dollar relative to the
Euro and U.S. dollar.
By market, revenues from consumer products and electronics
increased by 80%, primarily on revenues from acquisitions. Revenues
generated in energy markets increased 36% primarily on higher Order
Backlog entering fiscal 2015 due largely to increased activity in
the nuclear energy market and revenue contributions from PA.
Revenues generated in life sciences markets increased 36% primarily
on revenues from acquisitions. Transportation revenues increased
23% primarily due to revenues earned by PA.
Consolidated Operating Results
(In millions of
dollars)
|
Q4
2015
|
Q4 2014
|
Fiscal
2015
|
Fiscal
2014
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
$
|
22.6
|
$
|
17.2
|
$
|
67.0
|
$
|
61.0
|
Amortization of
acquisition-related
|
|
|
|
|
|
|
|
|
|
intangible
assets
|
|
9.1
|
|
3.8
|
|
28.1
|
|
9.2
|
Acquisition-related
transaction
|
|
|
|
|
|
|
|
|
|
and integration
costs
|
|
1.6
|
|
0.2
|
|
13.3
|
|
3.2
|
Restructuring
charges
|
|
1.4
|
|
1.0
|
|
1.4
|
|
6.1
|
Other non-recurring
items1
|
|
─
|
|
─
|
|
─
|
|
(4.3)
|
Adjusted earnings
from operations2
|
$
|
34.7
|
$
|
22.2
|
$
|
109.8
|
$
|
75.2
|
1Gain from
the recovery of costs related to programs acquired in a previous
acquisition, which is non-recurring in nature.
|
2See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
Consolidated Operating Results
(In millions of
dollars)
|
Q4 2015
|
Q4 2014
|
Fiscal
2015
|
Fiscal
2014
|
Earnings from
operations
|
$
|
22.6
|
$
|
17.2
|
$
|
67.0
|
$
|
61.0
|
Depreciation and
amortization
|
|
12.6
|
|
6.3
|
|
40.5
|
|
18.4
|
EBITDA1
|
$
|
35.2
|
$
|
23.5
|
$
|
107.5
|
$
|
79.4
|
1See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
Fourth Quarter
Fiscal 2015 fourth quarter earnings
from operations were $22.6 million
(8% operating margin) compared to $17.2
million (9% operating margin) in the fourth quarter a year
ago. Fourth quarter fiscal 2015 earnings from operations included
$1.6 million of incremental costs
related to the Company's acquisition activity, $1.4 million of restructuring and severance
costs, and amortization expenses of $9.1
million related to amortization of identifiable intangible
assets recorded on the acquisitions of PA, IWK, ATW and sortimat.
Excluding these costs, fourth quarter fiscal 2015 adjusted earnings
from operations were $34.7 million
(12% margin), compared to adjusted earnings from operations of
$22.2 million (11% margin) a year
ago. Higher adjusted earnings from operations primarily reflected
the inclusion of PA and improved program execution.
Depreciation and amortization expense was $12.6 million in the fourth quarter of fiscal
2015, compared to $6.3 million a year
ago, primarily due to a $6.2 million
increase in amortization as a result of the addition of
identifiable intangible assets recorded on the acquisition of
PA.
EBITDA was $35.2 million (12%
margin) compared to $23.5 million
(12% margin) in the fourth quarter of fiscal 2014. Excluding
$1.6 million of acquisition-related
costs and restructuring and severance costs of $1.4 million, fourth quarter fiscal 2015 EBITDA
was $38.2 million (13% margin).
Comparably, excluding $0.2
million of acquisition-related costs and restructuring and
severance costs of $1.0 million,
fourth quarter fiscal 2014 EBITDA was $24.7
million (12% margin).
Full Year
Earnings from operations were $67.0 million (7% operating margin) compared to
$61.0 million (9% operating margin) a
year ago. Earnings from operations included $13.3 million of incremental costs related to the
Company's acquisition activity, $1.4
million of restructuring and severance costs, and
amortization expenses of $28.1
million related to amortization of identifiable intangible
assets recorded on the acquisitions of PA, IWK, ATW and sortimat.
Excluding these costs, adjusted earnings from operations were
$109.8 million (12% operating
margin), compared to adjusted earnings from operations of
$75.2 million (11% operating margin)
in the corresponding period a year ago. Higher adjusted earnings
from operations primarily reflected better program execution,
higher revenues, lower stock-based compensation expenses and the
inclusion of IWK and PA.
Depreciation and amortization expense was $40.5 million in fiscal 2015 compared to
$18.4 million a year ago, primarily
due to the addition of identifiable intangible assets recorded on
the acquisitions of IWK and PA.
EBITDA was $107.5 million (11%
EBITDA margin) compared to $79.4
million (12% EBITDA margin) in fiscal 2014. Excluding
acquisition-related costs and restructuring and severance costs,
fiscal 2015 EBITDA was $122.2 million
(13% margin). Excluding acquisition-related costs,
restructuring charges and the one-time gain from the recovery of
costs related to programs acquired in a previous acquisition,
fiscal 2014 EBITDA was $84.4 million
(12% margin).
Order Bookings by Quarter
(In millions of dollars)
|
Fiscal
2015
|
Fiscal
2014
|
Q1
|
$
|
161
|
$
|
165
|
Q2
|
|
216
|
|
110
|
Q3
|
|
287
|
|
237
|
Q4
|
|
317
|
|
197
|
Total Order
Bookings
|
$
|
981
|
$
|
709
|
Fourth Quarter
Fourth quarter fiscal 2015 Order
Bookings were $317 million, a 61%
increase from the fourth quarter of fiscal 2014, primarily
reflecting $70 million of Order
Bookings generated by PA. Excluding PA, Order Bookings were
$247 million, a 25% increase from the
corresponding period a year ago. Strength in transportation, life
sciences and energy markets more than offset lower activity in
consumer products and electronics markets. Foreign exchange rate
changes positively impacted the translation of Order Bookings from
foreign-based ATS subsidiaries compared to the corresponding period
a year ago.
Full Year
Fiscal 2015 Order Bookings were $981 million, a 38% increase from prior year
Order Bookings of $709 million.
Excluding PA and IWK (for the first six months of fiscal 2015),
Order Bookings were $774 million, a
9% increase over the corresponding period a year ago.
Strength in life sciences and transportation markets was partially
offset by lower activity in consumer products and electronics and
energy markets. Foreign exchange rate changes also positively
impacted the translation of Order Bookings from foreign-based ATS
subsidiaries compared to fiscal 2014.
Order Backlog Continuity
(In millions of dollars)
|
Q4
2015
|
Q4 2014
|
Fiscal
2015
|
Fiscal
2014
|
Opening Order
Backlog
|
$
|
602
|
$
|
467
|
$
|
474
|
$
|
398
|
Revenues
|
|
(289)
|
|
(201)
|
|
(936)
|
|
(683)
|
Order
Bookings
|
|
317
|
|
197
|
|
981
|
|
709
|
Order Backlog
adjustments1
|
|
2
|
|
11
|
|
113
|
|
50
|
Total
|
$
|
632
|
$
|
474
|
$
|
632
|
$
|
474
|
1 Fiscal
2015 Order Backlog adjustments include foreign exchange
adjustments, order cancellations and incremental Order Backlog of
$131 million acquired with PA. Fiscal 2014 Order Backlog
adjustments included foreign exchange adjustments, order
cancellations and incremental Order Backlog of $45 million acquired
with IWK.
|
Order Backlog by Market
(In millions of dollars)
|
Fiscal
2015
|
Fiscal
2014
|
Consumer products and
electronics
|
$
|
64
|
$
|
79
|
Energy
|
|
53
|
|
55
|
Life
sciences
|
|
255
|
|
170
|
Transportation
|
|
260
|
|
170
|
Total
|
$
|
632
|
$
|
474
|
At March 31, 2015, Order Backlog
was $632 million, 33% higher than at
March 31, 2014. Higher Order
Backlog primarily reflected the addition of PA as well as higher
Order Bookings in life sciences and transportation markets,
partially offset by lower Order Bookings in consumer products and
electronics and energy markets.
Outlook
The global economic environment has continued
to show signs of volatility, and uncertainty remains. In
North America, U.S. economic
growth has slowed, and Canada's
growth remains weak. Economic growth continues to decelerate in
China and other parts of
Asia. In Europe, 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 long lead
times on projects.
Many customers remain cautious in their approach to capital
investment; however, activity in the life sciences and
transportation markets has remained strong. The Company has seen
strength in energy markets such as nuclear; however, the solar
energy market remains weak due to reductions in solar
feed-in-tariffs. Activity in the consumer products and electronics
market has improved.
The Company's sales organization continues 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 $632 million at the
end of the fourth quarter of fiscal 2015 to mitigate the impact of
volatile Order Bookings on revenues in the short term. Management
expects that approximately 40% to 45% of its Order Backlog would
typically be completed each quarter. In the first quarter of fiscal
2016, management expects to operate at the lower end of this
range.
The addition of PA provides growth opportunities both in new
markets and with existing customers. PA's significant capability
and market position benefit ATS and its growth strategy. The
Company expects meaningful revenue synergies through an expanded
ATS offering, which will include PA's process controls, software
integration, manufacturing execution systems ("MES"), remote
monitoring, life cycle management, modelling and simulation
capabilities. PA provides an imbedded engineering, service and
sales force, with early insight into customer preferences,
developments, problems and programs. This allows PA to act as first
responders for post-automation services and equipment maintenance.
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 PA have the ability to
engage customers on a more comprehensive basis. Opportunities to
improve profitability are being 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 is expected to put ATS in a
strong competitive position to capitalize on opportunities going
forward and sustain performance in challenging market conditions.
With the addition of PA, the Company has undertaken a comprehensive
review of its facilities and global capacity. As a result of
this review, the Company has agreed to divest its Swiss-based
automation operations through a sale to a third party. The
transaction is expected to close in the first quarter of fiscal
2016. Additional actions to re-balance global capacity and improve
the Company's cost structure are expected to be implemented in the
first and second quarters of fiscal 2016. As a result, management
expects to incur charges of approximately $3
million in the first two quarters of fiscal 2016.
These charges are expected to have an approximate payback period of
less than one year. 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 seeks to continue to expand its position in the
global automation market organically and through acquisition. The
Company's solid foundation and strong cash flow generation
capability provide 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
2015
|
Q4 2014
|
Fiscal
2015
|
Fiscal
2014
|
Fiscal
2013
|
Revenues
|
$
|
289.4
|
$
|
200.7
|
$
|
936.1
|
$
|
683.4
|
$
|
591.1
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
217.3
|
|
146.6
|
|
691.1
|
|
501.7
|
|
441.2
|
Selling, general and
administrative
|
|
49.0
|
|
35.0
|
|
173.7
|
|
113.3
|
|
89.5
|
Stock-based
compensation
|
|
0.5
|
|
1.9
|
|
4.3
|
|
7.3
|
|
3.8
|
Earnings from
operations
|
$
|
22.6
|
$
|
17.2
|
$
|
67.0
|
$
|
61.0
|
$
|
56.6
|
Net finance
costs
|
$
|
4.3
|
$
|
1.0
|
$
|
11.9
|
$
|
3.0
|
$
|
2.0
|
Provision for income
taxes
|
|
4.4
|
|
4.5
|
$
|
16.2
|
|
8.6
|
|
13.5
|
Net income
from
|
|
|
|
|
|
|
|
|
|
|
continuing
operations
|
$
|
13.9
|
$
|
11.7
|
$
|
38.9
|
$
|
49.4
|
$
|
41.1
|
Income (loss) from
discontinued
|
|
|
|
|
|
|
|
|
|
|
operations, net of
tax
|
$
|
2.2
|
$
|
(0.4)
|
$
|
16.2
|
$
|
12.8
|
$
|
(26.0)
|
Net
income
|
$
|
16.1
|
$
|
11.3
|
$
|
55.1
|
$
|
62.2
|
$
|
15.1
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
$
|
0.15
|
$
|
0.13
|
$
|
0.43
|
$
|
0.56
|
$
|
0.47
|
Basic from
discontinued operations
|
$
|
0.03
|
$
|
(0.01)
|
$
|
0.18
|
$
|
0.14
|
$
|
(0.30)
|
|
$
|
0.18
|
$
|
0.12
|
$
|
0.61
|
$
|
0.70
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
Diluted from
continuing operations
|
$
|
0.15
|
$
|
0.13
|
$
|
0.42
|
$
|
0.55
|
$
|
0.46
|
Diluted from
discontinued operations
|
$
|
0.03
|
$
|
(0.01)
|
$
|
0.18
|
$
|
0.14
|
$
|
(0.29)
|
|
$
|
0.18
|
$
|
0.12
|
$
|
0.60
|
$
|
0.69
|
$
|
0.17
|
From continuing
operations:
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
$
|
1,220.7
|
$
|
778.4
|
$
|
565.4
|
Total cash and
short-term investments
|
|
|
|
|
$
|
106.1
|
$
|
76.5
|
$
|
105.5
|
Total bank
debt
|
|
|
|
|
$
|
291.3
|
$
|
6.0
|
$
|
1.2
|
Revenues. At $289.4
million, consolidated revenues from continuing operations
for the fourth quarter of fiscal 2015 were $88.7 million or 44% higher than in the
corresponding period a year ago, primarily on incremental PA
revenues. At $936.1 million, fiscal
2015 revenues were $252.7 million or
37% higher than a year ago, primarily on incremental IWK and PA
revenues. See "Overview – Operating Results from Continuing
Operations."
Cost of revenues. At $217.3
million, fourth quarter fiscal 2015 cost of revenues
increased over the corresponding period a year ago by $70.7 million or 48%, primarily on higher
revenues. Fiscal 2015 cost of revenues of $691.1 million increased by $189.4 million or 38%, primarily on higher
revenues compared to a year ago.
At 25%, gross margin in the fourth quarter of fiscal 2015
decreased 2% from the corresponding period a year ago due to the
addition of PA. PA's cost structure has typically operated with a
lower gross margin than ATS. For PA, higher cost of sales is
partially offset by lower selling, general and administrative costs
relative to revenues as compared to ATS. Fiscal 2015 gross margin
of 26% decreased 1% from the corresponding period a year ago due to
the addition of PA.
Selling, general and administrative ("SG&A")
expenses. SG&A expenses for the fourth quarter of fiscal
2015 were $49.0 million. This
included $1.6 million of incremental
costs related to the Company's acquisition activity and
restructuring and severance expenses of $1.4
million. Excluding these costs, SG&A expenses were
$12.2 million or 36% higher than the
$33.8 million incurred in the
corresponding period in the prior year, which is exclusive of
$0.2 million of acquisition-related
costs and $1.0 million of
restructuring charges incurred to re-balance global capacity and
improve the Company's cost structure. Higher SG&A costs
primarily reflected the addition of PA, including $6.2 million of incremental amortization expense
related to the identifiable intangible assets recorded on the
acquisition, foreign exchange rate changes which impacted the
translation of SG&A expenses, and higher employee-related
costs.
Fiscal 2015 SG&A expenses were $173.7
million, which included $13.3
million of costs related to the Company's acquisition
strategy and $1.4 million of
restructuring and severance costs. Excluding these costs, SG&A
spending was $159.0 million,
$50.7 million or 47% higher than a
year ago. Higher SG&A costs primarily reflected the addition of
PA and IWK, including $19.3 million
of incremental amortization expense related to the identifiable
intangible assets recorded on the PA and IWK acquisitions.
Stock-based compensation. Stock-based compensation
expense of $0.5 million in the fourth
quarter of fiscal 2015 decreased from $1.9
million in the corresponding period a year ago. Fiscal 2015
stock-based compensation expense decreased to $4.3 million from $7.3
million a year ago. The decrease in stock-based compensation
costs primarily reflects the revaluation of deferred stock units,
share appreciation rights and restricted share units based on
changes in the market price of the Company's stock.
Earnings from operations. For the three and twelve
month periods ended March 31, 2015,
consolidated earnings from operations were $22.6 million and $67.0
million respectively (operating margins of 8% and 7%
respectively), compared to earnings from operations of $17.2 million and $61.0
million in the corresponding periods a year ago (operating
margins of 9% in both periods). See "Overview – Operating
Results from Continuing Operations."
Net finance costs. Net finance costs were
$4.3 million in the fourth quarter of
fiscal 2015, $3.3 million higher than
the corresponding period a year ago. Fiscal 2015 finance costs were
$11.9 million compared to
$3.0 million a year ago. The increase
in net finance costs in both periods reflected increased usage of
the Company's credit facility to finance the acquisition of PA and
to support letters of credit.
Income tax provision. For the three and twelve months
ended March 31, 2015, the Company's
effective income tax rates of 24% and 29%, respectively, 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 rates. The Company expects
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 fourth
quarter net income from continuing operations was $13.9 million (15
cents per share basic and diluted) compared to $11.7 million (13
cents per share basic and diluted) for the fourth quarter of
fiscal 2014. Net income from continuing operations for fiscal 2015
was $38.9 million (0.43 cents per share basic and 0.42 cents per share diluted) compared to
$49.4 million (56 cents per share basic and 55 cents per share diluted) a year ago.
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):
|
|
Fiscal
2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
EBITDA
|
$
|
107.5
|
$
|
79.4
|
$
|
68.8
|
Less: depreciation
and amortization expense
|
|
40.5
|
|
18.4
|
|
12.2
|
Earnings from
operations
|
$
|
67.0
|
$
|
61.0
|
$
|
56.6
|
Less: net finance
costs
|
|
11.9
|
|
3.0
|
|
2.0
|
Provision for income
taxes
|
|
16.2
|
|
8.6
|
|
13.5
|
Net income from
continuing operations
|
$
|
38.9
|
$
|
49.4
|
$
|
41.1
|
|
|
|
|
|
|
|
|
|
|
|
Q4
2015
|
|
Q4 2014
|
EBITDA
|
|
|
$
|
35.2
|
$
|
23.5
|
Less: depreciation
and amortization expense
|
|
|
|
12.6
|
|
6.3
|
Earnings from
operations
|
|
|
$
|
22.6
|
$
|
17.2
|
Less: net finance
costs
|
|
|
|
4.3
|
|
1.0
|
Provision for income
taxes
|
|
|
|
4.4
|
|
4.5
|
Net income from
continuing operations
|
|
|
$
|
13.9
|
$
|
11.7
|
The following table reconciles adjusted earnings from operations
and adjusted basic earnings per share from continuing operations to
the most directly comparable IFRS measures (net income from
continuing operations and basic earnings from continuing operations
respectively):
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2015
|
|
March 31,
2014
|
|
IFRS
|
|
Adjustments
|
|
|
Adjusted
|
|
IFRS
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
(non-IFRS)
|
|
|
|
|
|
|
|
(non-IFRS)
|
Earnings from
operations
|
$
|
22.6
|
|
$
|
─
|
|
$
|
22.6
|
|
$
|
17.2
|
|
$
|
─
|
|
$
|
17.2
|
Amortization of
acquisition-related intangible assets
|
|
─
|
|
|
9.1
|
|
|
9.1
|
|
|
─
|
|
|
3.8
|
|
|
3.8
|
Acquisition-related
transaction costs
|
|
─
|
|
|
1.6
|
|
|
1.6
|
|
|
─
|
|
|
0.2
|
|
|
0.2
|
Restructuring
charges
|
|
─
|
|
|
1.4
|
|
|
1.4
|
|
|
─
|
|
|
1.0
|
|
|
1.0
|
|
$
|
22.6
|
|
$
|
12.1
|
|
$
|
34.7
|
|
$
|
17.2
|
|
$
|
5.0
|
|
$
|
22.2
|
Less: net finance
costs
|
$
|
4.3
|
|
$
|
─
|
|
$
|
4.3
|
|
$
|
1.0
|
|
$
|
─
|
|
$
|
1.0
|
Income from
continuing operations before income taxes
|
$
|
18.3
|
|
$
|
12.1
|
|
$
|
30.4
|
|
$
|
16.2
|
|
$
|
5.0
|
|
$
|
21.2
|
Provision for income
taxes
|
$
|
4.4
|
|
$
|
─
|
|
$
|
4.4
|
|
$
|
4.5
|
|
$
|
─
|
|
$
|
4.5
|
Adjustment to
provision for income taxes1
|
|
─
|
|
|
3.5
|
|
|
3.5
|
|
|
─
|
|
|
1.3
|
|
|
1.3
|
|
$
|
4.4
|
|
$
|
3.5
|
|
$
|
7.9
|
|
$
|
4.5
|
|
$
|
1.3
|
|
$
|
5.8
|
Net income from
continuing operations
|
$
|
13.9
|
|
$
|
8.6
|
|
$
|
22.5
|
|
$
|
11.7
|
|
$
|
3.7
|
|
$
|
15.4
|
Basic earnings per
share from continuing operations
|
$
|
0.15
|
|
$
|
0.09
|
|
$
|
0.24
|
|
$
|
0.13
|
|
$
|
0.04
|
|
$
|
0.17
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2015
|
|
March 31,
2014
|
|
IFRS
|
|
Adjustments
|
|
|
Adjusted
|
|
IFRS
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
(non-IFRS)
|
|
|
|
|
|
|
|
(non-IFRS)
|
Earnings from
operations
|
$
|
67.0
|
|
$
|
─
|
|
$
|
67.0
|
|
$
|
61.0
|
|
$
|
─
|
|
$
|
61.0
|
Amortization of
acquisition-related intangible assets
|
|
─
|
|
|
28.1
|
|
|
28.1
|
|
|
─
|
|
|
9.2
|
|
|
9.2
|
Acquisition-related
transaction costs
|
|
─
|
|
|
13.3
|
|
|
13.3
|
|
|
─
|
|
|
3.2
|
|
|
3.2
|
Unusual
items
|
|
─
|
|
|
─
|
|
|
─
|
|
|
─
|
|
|
(4.3)
|
|
|
(4.3)
|
Restructuring
charges
|
|
─
|
|
|
1.4
|
|
|
1.4
|
|
|
─
|
|
|
6.1
|
|
|
6.1
|
|
$
|
67.0
|
|
$
|
42.8
|
|
$
|
109.8
|
|
$
|
61.0
|
|
$
|
14.2
|
|
$
|
75.2
|
Less: net finance
costs
|
$
|
11.9
|
|
$
|
─
|
|
$
|
11.9
|
|
$
|
3.0
|
|
$
|
─
|
|
$
|
3.0
|
Income from
continuing operations before income taxes
|
$
|
55.1
|
|
$
|
42.8
|
|
$
|
97.9
|
|
$
|
58.0
|
|
$
|
14.2
|
|
$
|
72.2
|
Provision for income
taxes
|
$
|
16.2
|
|
$
|
─
|
|
$
|
16.2
|
|
$
|
8.6
|
|
$
|
─
|
|
$
|
8.6
|
Recognition of
previously unrecognized liabilities
|
|
─
|
|
|
─
|
|
|
─
|
|
|
─
|
|
|
8.8
|
|
|
8.8
|
Adjustment to
provision for income taxes1
|
|
─
|
|
|
11.4
|
|
|
11.4
|
|
|
─
|
|
|
3.3
|
|
|
3.3
|
|
$
|
16.2
|
|
$
|
11.4
|
|
$
|
27.6
|
|
$
|
8.6
|
|
$
|
12.1
|
|
$
|
20.7
|
Net income from
continuing operations
|
$
|
38.9
|
|
$
|
31.4
|
|
$
|
70.3
|
|
$
|
49.4
|
|
$
|
2.1
|
|
$
|
51.5
|
Basic earnings per
share from continuing operations
|
$
|
0.43
|
|
$
|
0.34
|
|
$
|
0.77
|
|
$
|
0.56
|
|
$
|
0.02
|
|
$
|
0.58
|
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)
|
|
Q4
2015
|
|
|
Q4 2014
|
|
|
Fiscal
2015
|
|
|
Fiscal
2014
|
Total
revenues
|
$
|
―
|
|
$
|
―
|
|
$
|
―
|
|
$
|
1.1
|
Gain on
sale
|
|
2.5
|
|
|
―
|
|
|
16.7
|
|
|
13.8
|
Income (loss) from
discontinued operations, net of tax
|
|
2.2
|
|
|
(0.4)
|
|
|
16.2
|
|
|
12.8
|
Revenues
During
the first quarter of fiscal 2014, the manufacturing assets were
sold and the business wound up. Accordingly, no revenues have been
generated since the first quarter of fiscal 2014.
Income from Discontinued Operations
Ontario Solar
recorded income of $2.2 million in
the fourth quarter of fiscal 2015 on the completion of the sale of
the final three remaining ground-mount solar projects.
For the year, the Company realized gains of $16.7 million related to the sales of its
ground-mount solar projects.
Solar Outlook
During fiscal 2015, all remaining solar
assets were divested.
SUMMARY OF INVESTMENTS, LIQUIDITY, CASH FLOW AND FINANCIAL
RESOURCES
Investments
(In millions of
dollars)
|
|
Fiscal
2015
|
|
|
Fiscal 2014
|
Investments –
increase (decrease)
|
|
|
|
|
|
Non-cash operating
working capital
|
$
|
(3.6)
|
|
$
|
4.9
|
Property, plant and
equipment
|
|
11.2
|
|
|
4.3
|
Acquisition of
intangible assets
|
|
6.8
|
|
|
6.8
|
Business acquisition,
net of cash acquired
|
|
355.4
|
|
|
137.4
|
Purchase of
non-controlling interest
|
|
4.4
|
|
|
―
|
Proceeds from
disposal of assets
|
|
(8.9)
|
|
|
(0.2)
|
Disposal of portfolio
investment
|
|
―
|
|
|
(5.2)
|
Investing activities
of discontinued operations
|
|
(22.1)
|
|
|
(21.9)
|
Total net
investments
|
$
|
343.2
|
|
$
|
126.1
|
In fiscal 2015, the Company's investment in non-cash working
capital decreased by $3.6 million
compared to an increase of $4.9
million a year ago. Accounts receivable increased 23% or
$27.5 million, driven by the increase
in fiscal 2015 revenues and the acquisition of PA. Net contracts in
progress increased 34% or $29.9
million compared to March 31,
2014 due to the acquisition of PA and timing of closing
customer programs compared to fiscal 2014. 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 74.0% or
$17.9 million primarily due to the
acquisition of PA. Deposits and prepaid assets increased 53% or
$5.1 million compared to March 31, 2014 due to the timing of program
execution. Accounts payable and accrued liabilities increased 45%
or $62.6 million primarily due to the
acquisition of PA and timing of purchases.
Capital expenditures totalled $11.2
million for fiscal 2015, primarily related to incremental
capital expenditures from the addition of PA. Capital expenditures
totalled $4.3 million in fiscal 2014,
primarily related to computer hardware. Intangible assets
expenditures for both fiscal 2015 and fiscal 2014 were $6.8 million and primarily related to computer
software.
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 2015 and has
determined there is no impairment of goodwill or intangible assets
as of March 31, 2015 (fiscal 2014 –
$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)
|
|
Fiscal
2015
|
|
|
Fiscal
2014
|
Cash and cash
equivalents
|
$
|
106.1
|
|
$
|
76.5
|
Debt-to-equity
ratio
|
|
0.54:1
|
|
|
0.01:1
|
Cash flows provided
by operating activities from continuing operations
|
$
|
82.1
|
|
$
|
70.0
|
At March 31, 2015, the Company had
cash and cash equivalents of $106.1
million compared to $76.5
million at March 31, 2014. The
Company's total-debt-to-total- equity ratio, excluding accumulated
other comprehensive income, was 0.54:1 at March 31, 2015.
At March 31, 2015, the Company had
$377 million of unutilized
multipurpose credit, including letters of credit, available under
existing credit facilities and an additional $5.8 million available under letter of credit
facilities.
In fiscal 2015, cash flows provided by operating activities from
continuing operations were $82.1
million ($70.0 million
provided by in the corresponding period a year ago). The increase
in operating cash flows from continuing operations related
primarily to higher earnings net of depreciation and amortization
expenses and the timing of investments in non-cash working capital
in large customer programs.
During fiscal 2015, the Company amended its senior secured
credit facility (the "Credit Facility"). The Credit Facility
provides a four-year committed revolving credit facility of
$750.0 million and matures on
August 29, 2018. The Credit
Facility is secured by: (i) the Company's assets, excluding real
estate; (ii) assets, excluding real estate, of certain of the
Company's North American subsidiaries; and (iii) a pledge of shares
of certain of the Company's non-North American subsidiaries.
Certain of the Company's subsidiaries also provide guarantees under
the Credit Facility. At March 31,
2015, the Company had utilized $375.0
million under the Credit Facility, of which $290.0 million was classified as long-term debt
(March 31, 2014 - $nil) and
$85.0 million by way of letters of
credit (March 31, 2014 - $72.6 million).
The Credit Facility is available in Canadian dollars by way of
prime rate advances and/or bankers' acceptances, in U.S. dollars by
way of base rate advances and/or LIBOR advances, in Swiss francs,
Euros and British pounds sterling by way of LIBOR advances and by
way of letters of credit for certain purposes in Canadian dollars,
U.S. dollars and Euros. The interest rates applicable to the Credit
Facility 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 a
margin ranging from 0.45% to 2.00%. For bankers' acceptances and
LIBOR advances, the interest rate is equal to the bankers'
acceptance fee or the LIBOR, respectively, plus a margin that
varies from 1.45% to 3.00%. The Company pays a fee for usage of
financial letters of credit which ranges from 1.45% to 3.00% and a
fee for usage of non-financial letters of credit which ranges from
0.97% to 2.00%. The Company pays a standby fee on the unadvanced
portions of the amounts available for advance or draw-down under
the Credit Facility at rates ranging from 0.29% to 0.68%.
The Credit Facility is subject to a debt-to-EBITDA ratio test
and an interest coverage test. Under the terms of the Credit
Facility, the Company is restricted from encumbering any assets
with certain permitted exceptions. The Credit Facility 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 (1.7 million
Euro, 200.0 million Indian
Rupees, 0.5 million Swiss
Francs, 50.0 million Thai Baht
and 0.4 million Czech Koruna). The total amount outstanding on
these facilities was $6.6 million, of
which $1.7 million was classified as
bank indebtedness (March 31, 2014 -
$0.9 million) and $4.9 million was classified as long-term debt
(March 31, 2014 - $5.8 million). The interest rates applicable to
the credit facilities range from 1.85% to 10.25% 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
Facility.
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
certain potential acquisitions. Significant acquisitions could
result in additional debt or equity financing requirements. The
Company expects to continue to use leverage to support its growth
strategy.
In the second quarter of fiscal 2015, the Company completed its
acquisition of PA. The total cash consideration paid was
$367 million (253 million Euro). At the close of the
transaction, $365 million
(251 million Euro) was paid, with the
balance paid in May 2015. See "Value Creation Strategy:
Business Acquisition – 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
|
$
|
9.7
|
|
$
|
54.5
|
One – two
years
|
|
8.3
|
|
|
0.4
|
Two – three
years
|
|
5.3
|
|
|
―
|
Three – four
years
|
|
3.9
|
|
|
―
|
Four – five
years
|
|
3.3
|
|
|
―
|
Due in over five
years
|
|
4.0
|
|
|
―
|
|
$
|
34.5
|
|
$
|
54.9
|
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, 2015, the total value of
outstanding bank guarantees was approximately $118.0 million under credit facilities from
continuing operations (March 31, 2014
- $95.3 million from continuing
operations and $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 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 as the Company primarily
serves large, multinational customers and through insurance.
During fiscal 2015, 836,118 stock options were exercised.
At May 20, 2015 the total number of
shares outstanding was 91,629,665 and there were
4,221,283 stock options outstanding to acquire common shares
of the Company.
RELATED-PARTY TRANSACTIONS
During fiscal 2015, the
Company entered into an agreement with a shareholder, Mason Capital
Management, LLC ("Mason Capital"), pursuant to which Mason Capital
has agreed to provide ATS with ongoing strategic and capital
markets advisory services for an annual fee of U.S. $0.5 million. As part of the agreement, members
of the Company's board of directors who are associated with Mason
Capital have waived any fees to which they may have otherwise been
entitled for serving as members of the board of directors or as
members of any committee of the board of directors.
There were no other significant related-party transactions in
fiscal 2015.
FOREIGN EXCHANGE
The Company is exposed to foreign
exchange risk through transactions in currencies other than its
functional currency of the Canadian dollar and through its
investments in its foreign based subsidiaries. Weakening in the
value of the Canadian dollar relative to the U.S. dollar had a
positive impact on translation of the Company's revenues in fiscal
2015 compared to 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 13 to the consolidated
financial statements for details on the derivative financial
instruments outstanding at March 31,
2015.
In addition, from time to time, the Company enters into forward
foreign exchange contracts to manage the foreign exchange risk
arising from certain intercompany 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$
|
Year-end actual
exchange rates
|
|
Period average
exchange rates
|
|
March
31,
|
|
March 31,
|
|
|
|
March
31,
|
|
March 31,
|
|
|
|
2015
|
|
2014
|
|
% change
|
|
2015
|
|
2014
|
|
% change
|
U.S.
Dollar
|
1.2666
|
|
1.1055
|
|
14.6%
|
|
1.1384
|
|
1.0538
|
|
8.0%
|
Euro
|
1.3615
|
|
1.5230
|
|
(10.6%)
|
|
1.4383
|
|
1.4137
|
|
1.7%
|
CONSOLIDATED
QUARTERLY RESULTS
|
(In millions of
dollars, except
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
per share
amounts)
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
289.4
|
|
$
|
248.8
|
|
$
|
207.0
|
|
$
|
190.9
|
|
$
|
200.7
|
|
$
|
178.0
|
|
$
|
154.6
|
|
$
|
150.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
$
|
22.6
|
|
$
|
15.9
|
|
$
|
14.1
|
|
$
|
14.4
|
|
$
|
17.2
|
|
$
|
16.7
|
|
$
|
14.4
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34.7
|
|
$
|
27.2
|
|
$
|
27.0
|
|
$
|
21.1
|
|
$
|
22.2
|
|
$
|
20.5
|
|
$
|
16.6
|
|
$
|
15.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13.9
|
|
$
|
8.6
|
|
$
|
7.4
|
|
$
|
9.0
|
|
$
|
11.7
|
|
$
|
18.8
|
|
$
|
10.4
|
|
$
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from
discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.2
|
|
$
|
(0.0)
|
|
$
|
7.1
|
|
$
|
6.9
|
|
$
|
(0.4)
|
|
$
|
(0.3)
|
|
$
|
2.5
|
|
$
|
11.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
16.1
|
|
$
|
8.6
|
|
$
|
14.5
|
|
$
|
15.9
|
|
$
|
11.3
|
|
$
|
18.5
|
|
$
|
12.9
|
|
$
|
19.6
|
Basic earnings per
share from
continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.15
|
|
$
|
0.09
|
|
$
|
0.08
|
|
$
|
0.10
|
|
$
|
0.13
|
|
$
|
0.21
|
|
$
|
0.12
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic
earnings per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share from
continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.24
|
|
$
|
0.18
|
|
$
|
0.19
|
|
$
|
0.15
|
|
$
|
0.17
|
|
$
|
0.14
|
|
$
|
0.14
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
$
|
(0.00)
|
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
(0.01)
|
|
$
|
(0.00)
|
|
$
|
0.03
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.18
|
|
$
|
0.09
|
|
$
|
0.16
|
|
$
|
0.18
|
|
$
|
0.12
|
|
$
|
0.21
|
|
$
|
0.15
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.15
|
|
$
|
0.09
|
|
$
|
0.08
|
|
$
|
0.10
|
|
$
|
0.13
|
|
$
|
0.21
|
|
$
|
0.11
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per
share from discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
$
|
(0.00)
|
|
$
|
0.08
|
|
$
|
0.07
|
|
$
|
(0.01)
|
|
$
|
(0.00)
|
|
$
|
0.03
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.18
|
|
$
|
0.09
|
|
$
|
0.16
|
|
$
|
0.17
|
|
$
|
0.12
|
|
$
|
0.21
|
|
$
|
0.14
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order
Bookings
|
$
|
317.0
|
|
$
|
287.0
|
|
$
|
216.0
|
|
$
|
160.0
|
|
$
|
197.0
|
|
$
|
237.0
|
|
$
|
110.0
|
|
$
|
165.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order
Backlog
|
$
|
632.0
|
|
$
|
602.0
|
|
$
|
561.0
|
|
$
|
425.0
|
|
$
|
474.0
|
|
$
|
467.0
|
|
$
|
355.0
|
|
$
|
415.0
|
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 some of
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;
and by the timing of acquisitions.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The
preparation of the Company's consolidated financial statements
requires management to make estimates, judgments 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, judgments 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.
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 ATS 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" to 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 involves
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.
ATS' 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 the 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 ATS' 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 to 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 determination of 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 formation of
assumptions. 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. Goodwill is assessed for impairment on an
annual basis as described in note 11 to the consolidated financial
statements. The Company performed its annual impairment test of
goodwill as at March 31, 2015 and has
determined there is no impairment (March 31,
2014 – $nil).
Provisions
As described in note 3(q) to 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 2015
IFRIC
21 – Levies
Effective April 1,
2014, the Company applied IFRIC 21, which 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
financial statements of the Company.
ACCOUNTING STANDARDS AMENDED TO REFLECT ANNUAL IMPROVEMENTS
2010-2012 CYCLE ISSUED BY THE IASB IN MAY
2012
IFRS 2 – Share-based Payments
The IASB
amended this standard to clarify the definition of a vesting
condition and separately defines "performance condition" and
"service condition." The amendment is effective for
share-based payment transactions for which the grant date is on or
after July 1, 2014.
IFRS 3 – Business Combinations
The IASB amended this
standard to clarify contingent consideration in a business
combination. The amendment is effective for business
combinations where the acquisition date is on or after July 1, 2014.
IFRS 8 – Operating Segments
Effective for interim and
annual financial statements relating to fiscal years beginning on
or after July 1, 2014, the IASB
amended this standard to require disclosure of the judgments made
by management in aggregating operating segments along with the
requirement to include a reconciliation of segment assets to the
entity's assets when segment assets are reported.
The Company does not anticipate a significant impact to the
financial statements related to these amendments.
ACCOUNTING STANDARDS ISSUED BUT NOT YET
EFFECTIVE
IFRS 15 – Revenue from Contracts with
Customers
In May 2014, the
IASB issued IFRS 15 – Revenue from Contracts with Customers
which establishes a single comprehensive model for entities to use
in accounting for revenue arising from contracts with customers.
Under IFRS 15, revenue is recognized to depict the transfer of
promised goods or services to customers at an amount that reflects
the consideration to which an entity expects to be entitled in
exchange for those goods or services. The principles in IFRS 15
provide a more structured approach to measuring and recognizing
revenue. The new revenue standard will supersede all current
revenue recognition requirements under IFRS.
The standard currently requires a full or modified retrospective
application for annual periods beginning on or after January 1, 2017. In April 2015, the IASB proposed deferring the
effective date of the standard to January
1, 2018. The IASB is expected to issue an exposure
draft in May 2015 in relation to the
proposed effective date deferral. The Company is in the process of
reviewing the standard to determine the impact on its consolidated
financial statements.
IFRS 9 – Financial Instruments
In July 2014, the IASB issued the final version of
IFRS 9 – Financial Instruments which replaces all phases of
the financial instruments project, IAS 39 – Financial
Instruments: Recognition and Measurement, and all previous
versions of IFRS 9. The standard introduces new requirements for
classification and measurement, impairment and hedge
accounting.
The new standard is effective for annual periods beginning on or
after January 1, 2018, with early
adoption permitted. The Company is in the process of reviewing the
standard to determine the impact on its consolidated financial
statements.
IAS 19 – Employee Benefits
The amendments to IAS 19 –
Employee Benefits require an entity to consider
contributions from employees or third parties when accounting for
defined benefit plans. When the contributions are linked to
service, they should be attributed to periods of service as a
negative benefit. These amendments clarify that, if the amount of
the contributions is independent of the number of years of service,
an entity is permitted to recognize such contributions as a
reduction in the service cost in the period in which the service is
rendered, instead of allocating the contributions to the periods of
service.
These amendments are effective for annual periods beginning on
or after July 1, 2014. The Company is
currently assessing the impact of adopting these amendments on its
consolidated financial statements and does not expect any
significant impact.
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 (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission
("COSO").
Disclosure controls and procedures
An evaluation of
the design and operating effectiveness of the Company's disclosure
controls and procedures was conducted as of March 31, 2015 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, and 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 IFRS.
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 (2013)"
issued by COSO, evaluated the design and operating effectiveness of
the Company's internal controls over financial reporting and
concluded that, as of March 31, 2015,
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,
2015, other than as noted below, there have been no changes
in the design of 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.
In May 2013, COSO released an
updated version of the 1992 internal control integrated
framework. The original framework was available through
December 15, 2014, at which time the
1992 framework was superseded. During fiscal 2015, the
Company adopted the new framework.
The Company acquired PA on September
1, 2014. During the three months ended
March 31, 2015, management completed
its evaluation on the design and operating effectiveness of PA's
internal controls over financial reporting and concluded that, as
of March 31, 2015, 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;
- Liquidity, access to capital markets and leverage;
- Restrictive covenants;
- Availability of performance and other guarantees;
- Share price volatility;
- Competition;
- Industry consolidation;
- First-time program and production risks;
- Automation systems pricing;
- Revenue mix risk;
- Pricing, quality, delivery and volume risks;
- Product failure;
- Insurance coverage;
- Acquisition risks;
- Expansion risks;
- Availability of raw materials and other manufacturing
inputs;
- Customer risks;
- Cumulative loss of several significant contracts;
- Lengthy sales cycle;
- Lack of long term customer commitment;
- New product market acceptance, obsolescence, and
commercialization risk;
- Foreign exchange risk;
- Doing business in foreign countries;
- Availability of human resources and dependence on key
personnel;
- Legislative compliance;
- Environmental compliance;
- Corruption of Foreign Public Officials Act and anti-bribery
laws risk;
- Intellectual property protection risks;
- Risk of infringement of third parties' intellectual property
rights;
- Security breaches or disruptions of information technology
systems;
- Internal controls;
- Impairment of intangible assets risk;
- Income and other taxes and uncertain tax liabilities;
- Variations in quarterly results;
- Litigation;
- Natural disasters, pandemics, acts of war terrorism,
international conflicts or other disruptions;
- Manufacturing facilities disruption; 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 may 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; the enhancement of
growth opportunities in both new markets and with existing
customers resulting from the PA acquisition; expected cash
consideration for purchase of remaining interest in M+W Advanced
Applications GmbH; potential impact of general economic
environment, including impact on demand and Order Bookings; impacts
on demand for Company's products potentially lagging global
macroeconomic trends; activity in the market segments that the
Company serves; the engagement with customers on enterprise
solutions providing ATS with more strategic relationships,
increased predictability, better program control and less
sensitivity to macroeconomic forces; the sales organization's
approach to market and expected impact on Order Bookings,
performance period, and timing of revenue recognition; the
Company's Order Backlog mitigating the impact of volatility in
Order Bookings; the rate of completion of Order Backlog and
expectations in that regard for the first quarter of fiscal 2016;
PA acquisition – growth opportunities presented by PA, ATS
benefiting from PA's capability and market position, revenue
synergies through an expanded ATS offering, PA's opportunity to
expand its MAC offering, ATS and PA engaging customers on a
more comprehensive basis, PA benefiting from the adoption of ATS'
best practices, and expectations in relation to cost synergies;
management's expectations in relation to the impact of management
focus and strategic initiatives on ATS operations; expected timing
of closing of divestiture of Swiss-based operations; expected
restructuring, related costs, and expected payback period; the
Company's strategy to expand organically and through acquisition;
Company's expectation with respect to deferred tax assets,
effective tax rate and cash taxes; Company's expectation to
continue to increase its investment in working capital; expectation
in relation to meeting funding requirements for investments;
expectation to use increased 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 based on rate of achievement of performance targets,
the cash consideration for the remaining interest in M+W Advanced
Applications GmbH is other than expected; variations in the amount
of Order Backlog completed in any given quarter; in the first
quarter of 2016, completion of an amount of Order Backlog other
than as expected; variation in the amount of time and materials
contracts performed by PA in any given quarter; that ATS is unable
to realize upon growth opportunities presented by PA, or expand
product or service offerings; that ATS is unable to leverage PA's
capability and market position; that revenue synergies are not
realized; that customers are more difficult to engage than
expected; that strategic initiatives are delayed, not completed, or
do not have intended positive impact; that the sale of the
Swiss-based operation is delayed or does not close; that
restructuring charges are greater than expected and/or that the
payback is not realized as quickly as anticipated; 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
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.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
March 31
|
As at
|
Note
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
106,052
|
|
$
|
76,466
|
Accounts
receivable
|
|
|
|
145,342
|
|
|
117,821
|
Costs and earnings in
excess of billings
on contracts in progress
|
|
|
|
|
|
|
|
7
|
|
|
192,813
|
|
|
146,231
|
Inventories
|
7
|
|
|
42,079
|
|
|
24,186
|
Deposits, prepaids
and other assets
|
8
|
|
|
14,731
|
|
|
9,630
|
|
|
|
|
501,017
|
|
|
374,334
|
Assets held for
sale
|
6
|
|
|
4,221
|
|
|
13,265
|
|
|
|
|
505,238
|
|
|
387,599
|
Non-current
assets
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
|
|
83,901
|
|
|
85,412
|
Investment
property
|
10
|
|
|
3,880
|
|
|
4,341
|
Goodwill
|
11
|
|
|
405,881
|
|
|
151,731
|
Intangible
assets
|
12
|
|
|
183,610
|
|
|
111,298
|
Deferred income tax
assets
|
18
|
|
|
5,057
|
|
|
7,838
|
Investment tax credit
receivable
|
18
|
|
|
33,107
|
|
|
30,165
|
|
|
|
|
715,436
|
|
|
390,785
|
Total
assets
|
|
|
$
|
1,220,674
|
|
$
|
778,384
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Bank
indebtedness
|
16
|
|
$
|
1,731
|
|
$
|
913
|
Accounts payable and
accrued liabilities
|
|
|
|
200,871
|
|
|
138,285
|
Provisions
|
14
|
|
|
10,419
|
|
|
10,412
|
Billings in excess of
costs and earnings
on contracts in progress
|
|
|
|
|
|
|
|
7
|
|
|
76,031
|
|
|
59,363
|
Current portion of
long-term debt
|
16
|
|
|
3,372
|
|
|
3,815
|
|
|
|
|
292,424
|
|
|
212,788
|
Liabilities directly
associated with assets held for sale
|
6
|
|
|
5,717
|
|
|
6,774
|
|
|
|
|
298,141
|
|
|
219,562
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Employee
benefits
|
15
|
|
|
24,777
|
|
|
23,213
|
Long-term
debt
|
16
|
|
|
286,154
|
|
|
1,324
|
Deferred income tax
liabilities
|
18
|
|
|
40,870
|
|
|
16,747
|
|
|
|
|
351,801
|
|
|
41,284
|
Total
liabilities
|
|
|
$
|
649,942
|
|
$
|
260,846
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
Share
capital
|
17
|
|
$
|
519,118
|
|
$
|
510,725
|
Contributed
surplus
|
|
|
|
14,420
|
|
|
15,025
|
Accumulated other
comprehensive income
|
|
|
|
33,434
|
|
|
35,970
|
Retained earnings
(deficit)
|
|
|
|
3,590
|
|
|
(44,311)
|
Equity attributable
to shareholders
|
|
|
|
570,562
|
|
|
517,409
|
Non-controlling
interests
|
|
|
|
170
|
|
|
129
|
Total
equity
|
|
|
|
570,732
|
|
|
517,538
|
Total liabilities
and equity
|
|
|
$
|
1,220,674
|
|
$
|
778,384
|
ATS AUTOMATION
TOOLING SYSTEMS INC.
Consolidated Statements of Income
(in thousands of Canadian dollars, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
Years ended March
31
|
Note
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Revenues from
construction contracts
|
|
|
$
|
651,710
|
|
$
|
597,143
|
|
Sale of
goods
|
|
|
|
62,997
|
|
|
42,973
|
|
Services
rendered
|
|
|
|
221,370
|
|
|
43,245
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
|
936,077
|
|
|
683,361
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
691,067
|
|
|
501,684
|
|
Selling, general and
administrative
|
|
|
|
173,703
|
|
|
113,321
|
|
Stock-based
compensation
|
19
|
|
|
4,316
|
|
|
7,323
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
|
|
66,991
|
|
|
61,033
|
|
|
|
|
|
|
|
|
Net finance
costs
|
23
|
|
|
11,931
|
|
|
3,016
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
|
|
|
55,060
|
|
|
58,017
|
|
|
|
|
|
|
|
|
Income tax
expense
|
18
|
|
|
16,162
|
|
|
8,600
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
|
|
38,898
|
|
|
49,417
|
|
|
|
|
|
|
|
|
Income from
discontinued operations, net of tax
|
6
|
|
|
16,198
|
|
|
12,802
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
55,096
|
|
$
|
62,219
|
|
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
|
|
Shareholders
|
|
|
$
|
54,963
|
|
$
|
62,173
|
Non-controlling
interests
|
|
|
|
133
|
|
|
46
|
|
|
|
$
|
55,096
|
|
$
|
62,219
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
24
|
|
|
|
|
|
|
Basic – from
continuing operations
|
|
|
$
|
0.43
|
|
$
|
0.56
|
Basic – from
discontinued operations
|
6
|
|
|
0.18
|
|
|
0.14
|
|
|
|
$
|
0.61
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
24
|
|
|
|
|
|
|
Diluted – from
continuing operations
|
|
|
$
|
0.42
|
|
$
|
0.55
|
Diluted – from
discontinued operations
|
6
|
|
|
0.18
|
|
|
0.14
|
|
|
|
$
|
0.60
|
|
$
|
0.69
|
ATS AUTOMATION
TOOLING SYSTEMS INC.
Consolidated Statements of Comprehensive Income
(in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
Years ended March
31
|
Note
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Net income
|
|
$
|
55,096
|
|
$
|
62,219
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items to be
reclassified subsequently to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation
adjustment (net of income taxes of $nil)
|
|
|
(914)
|
|
|
36,639
|
|
|
|
|
|
|
|
|
|
Net unrealized gain
on available-for-sale financial assets
|
|
|
––
|
|
|
285
|
|
Tax
impact
|
|
|
––
|
|
|
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
|
|
|
|
|
|
|
|
|
|
(4,584)
|
|
|
(2,478)
|
|
Tax
impact
|
|
|
1,145
|
|
|
633
|
|
|
|
|
|
|
|
|
|
Loss transferred to
net income for
derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
2,417
|
|
|
2,081
|
|
Tax
impact
|
|
|
(600)
|
|
|
(543)
|
|
|
|
|
|
|
|
|
Items that will not
be reclassified subsequently to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains
(losses) on defined benefit pension plans
|
|
|
(4,245)
|
|
|
894
|
|
Tax impact
|
|
|
1,198
|
|
|
29
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
(5,583)
|
|
|
37,016
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
49,513
|
|
$
|
99,235
|
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
|
Shareholders
|
|
$
|
49,380
|
|
$
|
99,189
|
Non-controlling
interests
|
|
|
133
|
|
|
46
|
|
|
|
$
|
49,513
|
|
$
|
99,235
|
ATS AUTOMATION
TOOLING SYSTEMS INC.
Consolidated Statements of Changes in Equity
(in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended March
31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2014
|
$
|
510,725
|
|
$
|
15,025
|
|
$
|
(44,311)
|
|
$
|
36,616
|
|
$
|
––
|
|
$
|
(646)
|
|
$
|
35,970
|
|
$
|
129
|
|
$
|
517,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
––
|
|
|
––
|
|
|
54,963
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
133
|
|
|
55,096
|
Other comprehensive
income (loss)
|
|
––
|
|
|
––
|
|
|
(3,047)
|
|
|
(914)
|
|
|
––
|
|
|
(1,622)
|
|
|
(2,536)
|
|
|
––
|
|
|
(5,583)
|
Total comprehensive
income (loss)
|
|
––
|
|
|
––
|
|
|
51,916
|
|
|
(914)
|
|
|
––
|
|
|
(1,622)
|
|
|
(2,536)
|
|
|
133
|
|
|
49,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests (note 5)
|
|
––
|
|
|
––
|
|
|
(4,015)
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
(92)
|
|
|
(4,107)
|
Stock-based
compensation
|
|
––
|
|
|
1,867
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
1,867
|
Exercise of stock
options
|
|
8,393
|
|
|
(2,472)
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
––
|
|
|
5,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March
31, 2015
|
$
|
519,118
|
|
$
|
14,420
|
|
$
|
3,590
|
|
$
|
35,702
|
|
$
|
––
|
|
$
|
(2,268)
|
|
$
|
33,434
|
|
$
|
170
|
|
$
|
570,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
ATS AUTOMATION
TOOLING SYSTEMS INC.
Consolidated Statements of Cash Flow
(in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Years ended March
31
|
Note
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
|
$
|
38,898
|
|
$
|
49,417
|
Items not involving
cash
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
|
|
8,208
|
|
|
7,245
|
|
Amortization of
intangible assets
|
|
|
|
32,316
|
|
|
11,210
|
|
Deferred income
taxes
|
18
|
|
|
1,002
|
|
|
(2,067)
|
|
Other items not
involving cash
|
|
|
|
(5,952)
|
|
|
2,210
|
|
Stock-based
compensation
|
19
|
|
|
4,316
|
|
|
7,323
|
|
Loss on disposal of
property, plant and equipment
|
|
|
|
(295)
|
|
|
23
|
|
Gain on sale of
portfolio investment
|
|
|
|
––
|
|
|
(606)
|
|
|
|
|
$
|
78,493
|
|
$
|
74,755
|
Change in non-cash
operating working capital
|
|
|
|
3,580
|
|
|
(4,862)
|
Cash flows used in
operating activities of
discontinued operations
|
|
|
|
|
|
|
|
6
|
|
|
(1,556)
|
|
|
(6,966)
|
Cash flows
provided by operating activities
|
|
|
$
|
80,517
|
|
$
|
62,927
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
9
|
|
$
|
(11,154)
|
|
$
|
(4,260)
|
Acquisition of
intangible assets
|
12
|
|
|
(6,752)
|
|
|
(6,843)
|
Business acquisition,
net of cash acquired
|
5
|
|
|
(355,381)
|
|
|
(137,408)
|
Purchase of
non-controlling interest
|
5
|
|
|
(4,426)
|
|
|
––
|
Proceeds from
disposal of property, plant and equipment
|
|
|
|
8,942
|
|
|
155
|
Proceeds on sale of
portfolio investments
|
|
|
|
––
|
|
|
5,247
|
Cash flows provided
by investing activities
|
|
|
|
|
|
|
|
of discontinued
operations
|
6
|
|
|
22,097
|
|
|
21,846
|
Cash flows used in
investing activities
|
|
|
$
|
(346,674)
|
|
$
|
(121,263)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Restricted
cash
|
8
|
|
$
|
327
|
|
$
|
1,009
|
Bank
indebtedness
|
|
|
|
645
|
|
|
(29)
|
Repayment of
long-term debt
|
|
|
|
(82,692)
|
|
|
(40,310)
|
Proceeds from
long-term debt
|
|
|
|
363,653
|
|
|
43,236
|
Issuance of common
shares
|
|
|
|
5,921
|
|
|
17,617
|
Cash flows
provided by financing activities
|
|
|
$
|
287,854
|
|
$
|
21,523
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
6,215
|
|
|
9,557
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
|
27,912
|
|
|
(27,256)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of year
|
|
|
|
78,614
|
|
|
105,870
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of year
|
|
|
$
|
106,526
|
|
$
|
78,614
|
|
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
|
|
Cash and cash
equivalents – continuing operations
|
|
|
$
|
106,052
|
|
$
|
76,466
|
Cash and cash
equivalents – held for sale
|
|
|
|
474
|
|
|
2,148
|
|
|
|
$
|
106,526
|
|
$
|
78,614
|
Supplemental
information
|
|
|
|
|
|
|
|
Cash income taxes
paid by continuing operations
|
|
|
$
|
11,980
|
|
$
|
2,874
|
Cash interest paid by
continuing operations
|
|
|
$
|
10,874
|
|
$
|
2,141
|
SOURCE ATS Automation Tooling Systems Inc.