CAMBRIDGE, ON, May 18, 2017 /CNW/ - Cambridge, Ontario (May
18, 2017): ATS Automation Tooling Systems Inc. (TSX:
ATA) ("ATS" or the "Company") today reported financial results
for the three and twelve months ended March
31, 2017.
Fourth Quarter and Annual Summary
- Fourth quarter revenues were $265.7
million, 8% higher than a year ago, primarily reflecting
higher Order Backlog entering the fourth quarter of fiscal 2017
compared to a year ago. Annual revenues were $1,010.9 million, 3% lower than the prior
year.
- Fourth quarter earnings from operations were $16.8 million (6% operating margin), compared to
$8.1 million (3% operating margin) a
year ago. Fourth quarter adjusted earnings from
operations1 were $24.5
million (9% margin), compared to $23.2 million (9% margin) in the fourth quarter a
year ago, primarily reflecting higher revenues offset by increased
stock compensation expenses. Annual earnings from operations were
$71.9 million (7% margin) compared to
$76.8 million (7% margin) for the
prior year. Annual adjusted earnings from operations were
$97.1 million (10% margin) compared
to adjusted earnings from operations of $114.4 million (11% margin) for the prior year,
primarily reflecting lower revenues, higher selling, general and
administrative expenses and increased stock compensation costs.
- Fourth quarter EBITDA1 was $25.6 million (10% margin), compared to
$17.7 million (7% margin) in the
fourth quarter of fiscal 2016. Excluding a share purchase allowance
of $2.9 million, fourth quarter
fiscal 2017 EBITDA was $28.5 million
(11% EBITDA margin), compared to $27.1
million (11% EBITDA margin) a year ago, which excluded
$2.3 million of restructuring and
severance costs and $7.1 million of
executive transition expenses. Annual EBITDA was $106.5 million (11% margin), compared to
$116.1 million (11% margin) in fiscal
2016.
- Fourth quarter earnings per share were 8
cents basic and diluted compared to 2
cents basic and diluted a year ago. Fourth quarter adjusted
basic earnings per share1 were 15
cents compared to 14 cents in
the fourth quarter a year ago. Annual earnings per share were
38 cents basic and diluted compared
to 43 cents basic and diluted for the
year. Annual adjusted basic earnings per share1 were
57 cents compared to 72 cents in the prior year.
- Fourth quarter Order Bookings were $322
million, a 17% decrease from the fourth quarter of fiscal
2016. Annual Order Bookings were $1,134
million, a 6% increase from prior year Order Bookings of
$1,070 million.
- Period end Order Backlog was a record $681 million, 4% higher than at March 31, 2016.
- The Company's balance sheet and financial capacity to support
growth remained strong, with unutilized credit facilities of
$639.1 million.
Financial
Results
In millions of
Canadian dollars
Except per share
data
|
3 months
ended
March
31,
2017
|
3 months
ended
March 31,
2016
|
12 months
ended
March
31,
2017
|
12 months
ended
March 31,
2016
|
Revenues
|
$
|
265.7
|
$
|
246.8
|
$
|
1,010.9
|
$
|
1,039.6
|
Earnings from
operations
|
$
|
16.8
|
$
|
8.1
|
$
|
71.9
|
$
|
76.8
|
Adjusted earnings
from operations1
|
$
|
24.5
|
$
|
23.2
|
$
|
97.1
|
$
|
114.4
|
EBITDA1
|
$
|
25.6
|
$
|
17.7
|
$
|
106.5
|
$
|
116.1
|
Net
income
|
$
|
7.8
|
$
|
1.4
|
$
|
35.0
|
$
|
39.6
|
Adjusted basic
earnings per share1
|
$
|
0.15
|
$
|
0.14
|
$
|
0.57
|
$
|
0.72
|
Basic and diluted
earnings per share
|
$
|
0.08
|
$
|
0.02
|
$
|
0.38
|
$
|
0.43
|
1 Non-IFRS
measure: see "Notice to Reader: Non-IFRS Measures and Additional
IFRS Measures".
|
Effective March 6, 2017, the Board
of Directors appointed Andrew Hider
as Chief Executive Officer of ATS. Mr. Hider is an
experienced executive with a track record of success founded on his
ability to drive business growth and operational performance in
complex business environments and across multiple industries
including transportation, advanced technology, instrumentation and
industrial products.
"Since arriving in March, my focus has been on meeting our
employees and customers, and assessing our operations, competitive
position and strategies," said Mr. Hider. "ATS is a world class
company with talented employees, a global footprint, and a strong
history of innovation, and quality. Certainly, there are areas of
the business to improve and further develop. That said, our
operating foundation is solid and I look forward to building on
that foundation in the months and years ahead to drive the creation
of long term shareholder value."
Board of Directors Appointment
David McAusland, Chairman of the Board of
Directors of ATS, today announced the appointment of Andrew Hider to the Board of Directors effective
May 17, 2017.
Fourth Quarter Summary
Fiscal 2017 fourth quarter
revenues were 8% higher than in the corresponding period a year
ago. Higher revenues primarily reflected higher Order Backlog
entering the fourth quarter of fiscal 2017 compared to a year
ago. Foreign exchange rate changes negatively impacted the
translation of revenues earned by foreign-based subsidiaries
compared to the corresponding period a year ago, reflecting the
strengthening of the Canadian dollar relative to the U.S. dollar
and Euro.
By market, fiscal 2017 fourth quarter revenues from consumer
products & electronics increased 8% due to timing of Order
Bookings. Revenues generated in the energy market decreased
17% primarily due to the enterprise program won in the fourth
quarter of fiscal 2016 that was cancelled in the third quarter of
fiscal 2017. Revenues in the life sciences market increased
21% primarily reflecting higher Order Backlog entering the fourth
quarter of fiscal 2017. Transportation revenues decreased 3%
compared to a year ago primarily due to lower activity compared to
the previous year.
Fiscal 2017 fourth quarter earnings from operations were
$16.8 million (6% operating margin)
compared to $8.1 million (3%
operating margin) in the fourth quarter of fiscal 2016.
Included in fourth quarter fiscal 2017 earnings from operations was
a share purchase allowance of $2.9
million, which was paid to Mr. Hider as an inducement to
join the Company. The after-tax proceeds of the share
purchase allowance were used to purchase shares of ATS in the
public market. Fourth quarter fiscal 2017 earnings from
operations also included $4.8 million
related to amortization of identifiable intangible assets recorded
on the acquisitions of PA, IWK and sortimat. Included in
fourth quarter fiscal 2016 earnings from operations was
$5.7 million related to amortization
of identifiable intangible assets recorded on the acquisitions of
PA, IWK and sortimat, $2.3 million of
restructuring and severance costs and $7.1
million of executive transition expenses related to the
transition agreement entered into between the Company and the
former Chief Executive Officer of ATS. Excluding these items,
fourth quarter fiscal 2017 adjusted earnings from operations were
$24.5 million (9% margin), compared
to adjusted earnings from operations of $23.2 million (9% margin) a year ago.
Higher adjusted earnings from operations primarily reflected higher
revenues, offset by increased stock compensation expenses.
Depreciation and amortization expense was $8.8 million in the fourth quarter of fiscal
2017, compared to $9.6 million a year
ago. The decrease primarily reflected lower amortization of
identifiable intangible assets recorded on the acquisitions of PA,
IWK and sortimat compared to the fourth quarter of fiscal 2016.
EBITDA was $25.6 million (10%
EBITDA margin) in the fourth quarter of fiscal 2017 compared to
$17.7 million (7% EBITDA margin) in
the fourth quarter of fiscal 2016. Excluding the share
purchase allowance, fourth quarter fiscal 2017 EBITDA was
$28.5 million (11% EBITDA
margin). Comparably, excluding restructuring and severance
costs and executive transition expenses, fourth quarter fiscal 2016
EBITDA was $27.1 million (11% EBITDA
margin).
Order Bookings
Fourth quarter fiscal 2017 Order
Bookings were $322 million, a 17%
decrease from the fourth quarter of fiscal 2016. By customer
market, higher Order Bookings in the transportation and life
sciences markets were offset by lower Order Bookings in the energy
and consumer products & electronics markets. Included in
fourth quarter fiscal 2016 Order Bookings was an enterprise program
valued at approximately U.S. $100
million, part of which was subsequently cancelled
in the third quarter of fiscal 2017.
Order Backlog
At March 31,
2017, Order Backlog was a record $681
million, 4% higher than at March
31, 2016. Higher Order Backlog in the life sciences
and transportation markets was partially offset by lower Order
Backlog in the consumer products & electronics and energy
markets.
Quarterly Conference Call
ATS' quarterly conference
call begins at 10:00 a.m. eastern on
Thursday May 18, 2017, 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 by
dialing (416) 849-0833 and entering passcode 19951559 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 23
manufacturing facilities and over 50 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, 2017
This Management's Discussion and Analysis ("MD&A") for
the year ended March 31, 2017 (fiscal
2017) is as of May 17, 2017 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 2017,
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 net income", "adjusted
earnings from operations", "adjusted basic earnings per share",
"non-cash working capital", "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 is defined as adjusted net income on a basic per
share basis, where adjusted net income is defined as adjusted
earnings from operations less net finance costs and income tax
expense, plus tax effects of adjustment items. Non-cash
working capital is defined as the sum of accounts receivable, costs
and earnings in excess of billing on contracts in progress,
inventories, deposits, prepaids and other assets, less accounts
payable, accrued liabilities, provisions and billings in excess of
costs and earnings on contracts in progress. 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 (including adjusted net income) 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. Management uses the measure
non-cash working capital as a percentage of revenues to evaluate
the Company's management of its investment in non-cash working
capital. Management calculates non-cash working capital as a
percentage of revenues using period-end non-cash working capital
divided by trailing two fiscal quarter revenues annualized.
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 additional
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, and (ii) adjusted earnings
from operations to earnings from operations, adjusted net income to
net income and adjusted basic earnings per share to basic earnings
per share, in each case for the three- and twelve-month periods
ending March 31, 2017 and
March 31, 2016 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, 2017 and
March 31, 2016 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 23 manufacturing facilities and over 50 offices in North America, Europe, Southeast
Asia and China.
CEO APPOINTMENT
Effective March
6, 2017, the Board of Directors appointed Andrew Hider as Chief Executive Officer of ATS
following an extensive planning and search process. Mr. Hider
is uniquely qualified to lead ATS and its global team of 3,500
employees. He is an experienced executive with a track record
of success founded on his ability to drive business growth and
operational performance in complex business environments and across
multiple industries, including transportation, advanced technology,
instrumentation and industrial products.
Most recently, Mr. Hider served as President and CEO of the
Taylor Made Group, LLC. Prior to that, Mr. Hider served for
10 years at Danaher Corporation (NYSE: DHR) including as President
of Veeder Root. Mr. Hider
began his career with General Electric (NYSE: GE), serving in a
number of areas over a six-year period, culminating in his
appointment as General Manager of GE Tri-Remanufacturing. Mr.
Hider holds a Bachelor of Science in Interdisciplinary Engineering
and Management and a Masters of Business Administration, both from
Clarkson University.
During his career as a leader, Mr. Hider has brought focus to
five key areas:
- People: ensuring that the Company attracts and retains the best
people in the right roles and developing the pipeline of talent in
the organization
- Process: aligning businesses around a common set of
policy-driven processes to deliver continuous improvement
- Plan: driving profitable growth through a rigorous strategic
planning process that targets incremental and continuous
improvement
- Performance: constantly and consistently managing performance
and implementing countermeasures to meet expectations
- Customer: understanding, anticipating and meeting the needs of
the Company's key stakeholders, including customers and
shareholders
Effective May 17, 2017 Mr. Hider
was appointed to the Company's Board of Directors.
STRATEGY
Mr. Hider is working with management and the
Board to review and build upon ATS' growth strategy, with a view to
driving long-term shareholder value through the generation of
profitable growth, both organically and through acquisition.
BUSINESS OVERVIEW
ATS is an industry-leading
automation solutions provider to many of the world's most
successful 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,
transportation, energy, consumer products, electronics, chemicals,
food, beverage, and oil and gas. With broad and in-depth knowledge
across multiple industries and technical fields, ATS delivers
single-source solutions to customers that lower their production
costs, accelerate delivery of their products, and improve quality
control. 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.
ATS and its subsidiaries engage at varying points in the
customers' automation cycle. During the pre-automation phase, ATS
offers comprehensive services, including discovery and analysis,
concept development, simulation and total cost of ownership
modelling, all of which help to verify the feasibility of different
types of automation, set objectives for factors such as line speed
and yield, assess production processes for manufacturability and
calculate the total cost of ownership.
For customers that have decided to proceed with an automation
project, ATS offers a number of automation and integration
services, including engineering design, prototyping, process
verification, specification writing, software and manufacturing
process controls development, equipment design and build, standard
automation products/platforms, third-party equipment qualification,
procurement and integration, automation system installation,
product line commissioning, validation and documentation. 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 production or build-to-print
manufacturing, ATS provides value engineering, supply chain
management, integration and manufacturing capabilities, and other
automation products and solutions.
Post automation, ATS offers a number of services, including
customer training, preventative maintenance, process optimization,
emergency and on-call support, spare parts, retooling, retrofits
and equipment relocation.
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 and Thailand. ATS can deliver localized service
through a network of over 50 offices located around the world.
Management believes that ATS' scale and global footprint provide it
with competitive advantages in winning large, multinational
customer programs and in delivering a life-cycle-oriented service
platform to customers' global operations.
Technical skills, capabilities and experience:
Automation manufacturing is a knowledge-based business. ATS has
designed, manufactured, assembled and serviced over 23,000
automation systems worldwide and has an extensive knowledge base
and accumulated design expertise. Management believes ATS'
broad experience in many different industrial markets and with
diverse technologies, its talented workforce, which includes over
1,300 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.
Product and technology portfolio: Through its
history of bringing thousands of unique automation projects to
market, ATS and its subsidiaries have developed an extensive
product and technology portfolio. ATS has a number of standard
automation platforms, including SuperTrakTM, an in-line,
high-speed flexible pallet transport system; Discovery
DialTM, a rotary dial indexer; JetwingTM and
SpacelineTM, both synchronous indexing chassis; and
OmniTrakTM, which combines the synchronous drive of the
SpacelineTM chassis with asynchronous pallet movement
provided by the programmable SuperTrakTM pallet transfer
system, allowing for multiple process times and selective
synchronization of devices. Each of these automation platforms can
be tailored to a customer's unique requirements.
Other standard automation products and technologies include
advanced vision systems used to ensure product or process quality,
numerous material handling and feeder technologies, high-accuracy
and high-precision laser processing technologies, high-performance
tube filling and cartoning technologies and advanced HMI control
systems. Management believes the Company's extensive product and
technology portfolio gives it an advantage in developing unique and
leading solutions for customers and maintaining
competitiveness.
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; "IWK", which specializes
in the packaging market; and "Process Automation Solutions" or
"PA", which provides innovative automation solutions for process
and production sectors. 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.
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 2017 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 engineering firms and 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.
OVERVIEW –
OPERATING RESULTS Consolidated Revenues (In
millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
market
|
Q4
2017
|
Q4 2016
|
Fiscal
2017
|
Fiscal
2016
|
Consumer products
& electronics
|
$
|
41.9
|
$
|
38.9
|
$
|
137.8
|
$
|
160.4
|
Energy
|
|
15.3
|
|
18.4
|
|
173.5
|
|
74.5
|
Life
sciences
|
|
127.5
|
|
105.6
|
|
415.1
|
|
435.5
|
Transportation
|
|
81.0
|
|
83.9
|
|
284.5
|
|
369.2
|
Total
revenues
|
$
|
265.7
|
$
|
246.8
|
$
|
1,010.9
|
$
|
1,039.6
|
|
|
|
|
|
|
|
|
|
Revenues by
installation location
|
Q4
2017
|
Q4 2016
|
Fiscal
2017
|
Fiscal
2016
|
North
America
|
$
|
103.0
|
$
|
93.3
|
$
|
365.6
|
$
|
456.9
|
Europe
|
|
116.2
|
|
100.6
|
|
406.5
|
|
394.1
|
Asia/Other
|
|
46.5
|
|
52.9
|
|
238.8
|
|
188.6
|
Total
revenues
|
$
|
265.7
|
$
|
246.8
|
$
|
1,010.9
|
$
|
1,039.6
|
Fourth Quarter
Fiscal 2017 fourth quarter revenues
were 8% higher than in the corresponding period a year ago. Higher
revenues primarily reflected higher Order Backlog entering the
fourth quarter of fiscal 2017 compared to a year ago. Foreign
exchange rate changes negatively impacted the translation of
revenues earned by foreign-based subsidiaries compared to the
corresponding period a year ago, reflecting the strengthening of
the Canadian dollar relative to the U.S. dollar and Euro.
By market, fiscal 2017 fourth quarter revenues from consumer
products & electronics increased 8% due to timing of Order
Bookings. Revenues generated in the energy market decreased 17%
primarily due to the enterprise program won in the fourth quarter
of fiscal 2016 that was cancelled in the third quarter of fiscal
2017. Revenues in the life sciences market increased 21% primarily
reflecting higher Order Backlog entering the fourth quarter of
fiscal 2017. Transportation revenues decreased 3% compared to
a year ago primarily due to lower activity compared to the previous
year.
Full Year
Fiscal 2017 revenues were 3% lower than in
the corresponding period a year ago, primarily reflecting the
timing of project activities. Fiscal 2017 revenues were negatively
impacted by the suspension and subsequent cancellation of a part of
the large enterprise program won in the fourth quarter of fiscal
2016 and by revised estimates and adjustments related to certain
programs that are in process or have been completed. Foreign
exchange rate changes did not materially impact the translation of
revenues earned in foreign currencies into Canadian
dollars.
By market, fiscal 2017 revenues from consumer products &
electronics decreased 14%, primarily reflecting lower activity in
the consumer products market. Revenues generated in the energy
market increased 133%, compared to the corresponding period a year
ago, primarily due to higher Order Backlog entering fiscal 2017
compared to a year ago. Revenues generated in the life sciences
market decreased 5%, primarily reflecting the timing of project
activities and lower Order Backlog at the end of fiscal 2016,
compared to the previous year. Transportation revenues decreased
23% compared to a year ago primarily due to lower Order Backlog
entering fiscal 2017, compared to a year
ago.
Consolidated
Operating Results (In millions of dollars)
|
|
|
|
|
|
|
|
|
|
Q4
2017
|
Q4 2016
|
Fiscal
2017
|
Fiscal
2016
|
Earnings from
operations
|
$
|
16.8
|
$
|
8.1
|
$
|
71.9
|
$
|
76.8
|
Amortization of
acquisition-related
|
|
|
|
|
|
|
|
|
|
intangible
assets
|
|
4.8
|
|
5.7
|
|
20.0
|
|
24.5
|
Share purchase
allowance
|
|
2.9
|
|
─
|
|
2.9
|
|
─
|
Restructuring
charges
|
|
─
|
|
2.3
|
|
2.3
|
|
9.7
|
Executive transition
expenses
|
|
─
|
|
7.1
|
|
─
|
|
7.1
|
Gain on sale of
assets
|
|
─
|
|
─
|
|
─
|
|
(3.7)
|
Adjusted earnings
from
operations1
|
$
|
24.5
|
$
|
23.2
|
$
|
97.1
|
$
|
114.4
|
1 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
|
|
|
|
|
|
Q4
2017
|
Q4 2016
|
Fiscal
2017
|
Fiscal
2016
|
Earnings from
operations
|
$
|
16.8
|
$
|
8.1
|
$
|
71.9
|
$
|
76.8
|
Depreciation and
amortization
|
|
8.8
|
|
9.6
|
|
34.6
|
|
39.3
|
EBITDA2
|
$
|
25.6
|
$
|
17.7
|
$
|
106.5
|
$
|
116.1
|
2 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
|
|
Fourth Quarter
Fiscal 2017 fourth quarter earnings
from operations were $16.8 million
(6% operating margin) compared to $8.1
million (3% operating margin) in the fourth quarter of
fiscal 2016. Included in fourth quarter fiscal 2017 earnings
from operations was a share purchase allowance of $2.9 million, which was paid to Mr. Hider as an
inducement to join the Company. The after-tax proceeds of the share
purchase allowance were used to purchase shares of ATS in the
public market. Fourth quarter fiscal 2017 earnings from
operations also included $4.8 million
related to amortization of identifiable intangible assets recorded
on the acquisitions of PA, IWK and sortimat. Included in fourth
quarter fiscal 2016 earnings from operations was $5.7 million related to amortization of
identifiable intangible assets recorded on the acquisitions of PA,
IWK and sortimat, $2.3 million of
restructuring and severance costs and $7.1
million of executive transition expenses related to the
transition agreement entered into between the Company and the
former Chief Executive Officer of ATS. Excluding these items,
fourth quarter fiscal 2017 adjusted earnings from operations were
$24.5 million (9% margin), compared
to adjusted earnings from operations of $23.2 million (9% margin) a year ago. Higher
adjusted earnings from operations primarily reflected higher
revenues, offset by increased stock compensation expenses (see
"Consolidated Results: Stock-based Compensation").
Depreciation and amortization expense was $8.8 million in the fourth quarter of fiscal
2017, compared to $9.6 million a year
ago. The decrease primarily reflected lower amortization of
identifiable intangible assets recorded on the acquisitions of PA,
IWK and sortimat compared to the fourth quarter of fiscal 2016.
EBITDA was $25.6 million (10%
EBITDA margin) in the fourth quarter of fiscal 2017 compared to
$17.7 million (7% EBITDA margin) in
the fourth quarter of fiscal 2016. Excluding the share purchase
allowance, fourth quarter fiscal 2017 EBITDA was $28.5 million (11% EBITDA margin). Comparably,
excluding restructuring and severance costs and executive
transition expenses, fourth quarter fiscal 2016 EBITDA was
$27.1 million (11% EBITDA margin).
Full Year
Earnings from operations were $71.9 million (7% operating margin) in fiscal
2017, compared to $76.8 million (7%
operating margin) in the corresponding period a year ago. Earnings
from operations included $2.9 million
for the share purchase allowance, $2.3
million of restructuring and severance costs and
$20.0 million of amortization costs
related to the amortization of identifiable intangible assets
recorded on the acquisitions of PA, IWK and sortimat. Fiscal 2016
earnings from operations included $24.5
million of amortization costs related to the amortization of
identifiable intangible assets recorded on the acquisitions of PA,
IWK and sortimat, $9.7 million of
restructuring and severance costs, $7.1
million of executive transition expenses and a gain of
$3.7 million on the sale of a
redundant U.S. facility. Excluding these items, adjusted earnings
from operations were $97.1 million
(10% margin) compared to adjusted earnings from operations of
$114.4 million (11% margin) in the
corresponding period a year ago. Lower adjusted earnings from
operations primarily reflected lower revenues, higher selling,
general and administrative expenses and increased stock
compensation costs.
Depreciation and amortization expense was $34.6 million in fiscal 2017, compared to
$39.3 million a year ago. The
decrease primarily reflected lower amortization of identifiable
intangible assets recorded on the acquisitions of PA, IWK, and
sortimat, compared to fiscal 2016.
EBITDA was $106.5 million (11%
EBITDA margin) compared to $116.1
million (11% EBITDA margin) in fiscal 2016. Excluding
the share purchase allowance and restructuring costs, fiscal 2017
EBITDA was $111.7 million (11% EBITDA
margin). Comparably, excluding executive transition expenses,
restructuring costs and the gain on the sale of the U.S. facility,
fiscal 2016 EBITDA was $129.2 million
(12% EBITDA margin).
Order Bookings by
Quarter (In millions of dollars)
|
|
|
|
|
|
Fiscal
2017
|
Fiscal
2016
|
Q1
|
$
|
239
|
$
|
222
|
Q2
|
|
289
|
|
230
|
Q3
|
|
284
|
|
228
|
Q4
|
|
322
|
|
390
|
Total Order
Bookings
|
$
|
1,134
|
$
|
1,070
|
Fourth Quarter
Fourth quarter fiscal 2017 Order
Bookings were $322 million, a 17%
decrease from the fourth quarter of fiscal 2016. By customer
market, higher Order Bookings in the transportation and life
sciences markets were offset by lower Order Bookings in the energy
and consumer products & electronics markets. Included in fourth
quarter fiscal 2016 Order Bookings was an enterprise program valued
at approximately U.S. $100 million,
part of which was subsequently cancelled in the third quarter of
fiscal 2017. Foreign exchange rate changes negatively impacted the
translation of Order Bookings from foreign-based ATS subsidiaries
compared to the corresponding period a year ago.
Full Year
Fiscal 2017 Order Bookings were $1,134 million, a 6% increase from prior year
Order Bookings of $1,070 million. By
market, higher Order Bookings in the life sciences and
transportation markets more than offset lower Order Bookings in
energy and consumer products & electronics. Foreign exchange
rate changes did not materially impact the translation of Order
Bookings from foreign-based ATS subsidiaries compared to fiscal
2016.
Order Backlog
Continuity (In millions of dollars)
|
|
|
|
|
|
|
|
|
|
Q4
2017
|
Q4
2016
|
Fiscal
2017
|
Fiscal
2016
|
Opening Order
Backlog
|
$
|
632
|
$
|
546
|
$
|
652
|
$
|
632
|
Revenues
|
|
(266)
|
|
(247)
|
|
(1,011)
|
|
(1,040)
|
Order
Bookings
|
|
322
|
|
390
|
|
1,134
|
|
1,070
|
Order Backlog
adjustments1
|
|
(7)
|
|
(37)
|
|
(94)
|
|
(10)
|
Total
|
$
|
681
|
$
|
652
|
$
|
681
|
$
|
652
|
1 Order
Backlog adjustments include foreign exchange adjustments and
cancellations.
|
Order Backlog by
Market (In millions of dollars)
|
|
|
|
|
|
Fiscal
2017
|
Fiscal
2016
|
Consumer products
& electronics
|
$
|
54
|
$
|
85
|
Energy
|
|
94
|
|
186
|
Life
sciences
|
|
355
|
|
224
|
Transportation
|
|
178
|
|
157
|
Total
|
$
|
681
|
$
|
652
|
At March 31, 2017, Order Backlog
was a record $681 million, 4% higher
than at March 31, 2016. Higher
Order Backlog in the life sciences and transportation markets was
partially offset by lower Order Backlog in the consumer products
& electronics and energy markets. Foreign exchange rate changes
also negatively impacted the translation of Order Backlog from
foreign-based ATS subsidiaries compared to fiscal 2016.
Outlook
The global economic environment has shown some
recent signs of improvement; however, geopolitical risks
remain. Economic growth in the U.S., Canadian and European
economies has been slow. Economic growth in China and other parts of Asia has decelerated. A prolonged or more
significant downturn in an economy where the Company operates could
negatively impact Order Bookings and may add to volatility in Order
Bookings.
Funnel activity in life sciences has remained strong and funnel
activity in the transportation market improved with an increase in
opportunities in new technologies. Activity in energy markets
is sporadic, but the funnel contains meaningful
opportunities. Funnel activity in the consumer products &
electronics market has improved; however, it remains low relative
to other customer markets. Overall, the Company's funnel
remains significant; however, conversion of opportunities into
Order Bookings is variable, as customers remain cautious in their
approach to capital investment.
The Company's sales organization continues to work to engage
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 and the timing
of customer decisions on larger opportunities 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
$681 million at the end of fiscal
2017 to partially mitigate the impact of volatile Order Bookings on
revenues in the short term. In the first quarter of fiscal 2018,
management expects Order Backlog conversion to be in the 35% to 40%
range. The expected conversion rate is based on current
programs in Order Backlog and management's estimate of revenues
from new Order Bookings in the quarter.
The Company's efforts to expand its after-sales service offering
is expected to provide some balance to its exposure to the capital
expenditure cycle of its customers. However, the intended ramp-up
of the Company's after-sales service revenues may not offset
capital spending volatility in the short term.
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.
In fiscal 2017, the Company initiated the closure of a U.S.-based
operation to re-balance global capacity and improve the Company's
cost structure. These actions resulted in charges of
$2.3 million in fiscal 2017.
Over the long term, management expects that the application of its
ongoing efforts to improve ATS' cost structure, business processes,
leadership and supply chain management will 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 SELECTED FOURTH QUARTER AND ANNUAL
INFORMATION (In millions of dollars, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
2017
|
Q4
2016
|
Fiscal
2017
|
Fiscal
2016
|
Fiscal
2015
|
Revenues
|
$
|
265.7
|
$
|
246.8
|
$
|
1,010.9
|
$
|
1,039.6
|
$
|
936.1
|
Cost of
revenues
|
|
201.7
|
|
185.7
|
|
760.3
|
|
780.9
|
|
691.1
|
Selling, general and
administrative
|
|
45.3
|
|
53.5
|
|
171.9
|
|
179.3
|
|
173.7
|
Stock-based
compensation
|
|
1.9
|
|
(0.5)
|
|
6.8
|
|
2.6
|
|
4.3
|
Earnings from
operations
|
$
|
16.8
|
$
|
8.1
|
$
|
71.9
|
$
|
76.8
|
$
|
67.0
|
Net finance
costs
|
$
|
6.3
|
$
|
7.9
|
$
|
25.6
|
$
|
26.7
|
$
|
11.9
|
Provision for
(recovery of) income
taxes
|
|
2.7
|
|
(1.2)
|
|
11.3
|
|
10.5
|
|
16.2
|
Net income
from
|
|
|
|
|
|
|
|
|
|
|
continuing
operations
|
$
|
7.8
|
$
|
1.4
|
$
|
35.0
|
$
|
39.6
|
$
|
38.9
|
Income from
discontinued
|
|
|
|
|
|
|
|
|
|
|
operations, net of
tax
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
16.2
|
Net
income
|
$
|
7.8
|
$
|
1.4
|
$
|
35.0
|
$
|
39.6
|
$
|
55.1
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
$
|
0.08
|
$
|
0.02
|
$
|
0.38
|
$
|
0.43
|
$
|
0.43
|
Basic from
discontinued
operations
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
0.18
|
|
$
|
0.08
|
$
|
0.02
|
$
|
0.38
|
$
|
0.43
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
|
Diluted from
continuing
operations
|
$
|
0.08
|
$
|
0.02
|
$
|
0.38
|
$
|
0.43
|
$
|
0.42
|
Diluted from
discontinued operations
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
0.18
|
|
$
|
0.08
|
$
|
0.02
|
$
|
0.38
|
$
|
0.43
|
$
|
0.60
|
From continuing
operations:
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
$
|
1,374.6
|
$
|
1,367.5
|
$
|
1,220.7
|
Total cash and
short-term investments
|
|
|
|
|
$
|
286.7
|
$
|
170.0
|
$
|
106.1
|
Total bank
debt
|
|
|
|
|
$
|
328.7
|
$
|
323.7
|
$
|
291.3
|
Revenues. At $265.7
million, consolidated revenues for the fourth quarter of
fiscal 2017 were $18.9 million, or 8%
higher than the corresponding period a year ago. At
$1,010.9 million, fiscal 2017
revenues were $28.7 million, or 3%
lower than in the corresponding previous year (see "Overview –
Operating Results").
Cost of revenues. At $201.7
million, fourth quarter fiscal 2017 cost of revenues
increased compared to the corresponding period a year ago by
$16.0 million, or 9%, primarily on
higher revenues. Annual cost of revenues of $760.3 million decreased by $20.6 million, or 3%, primarily on lower revenues
generated compared to the corresponding period last year.
At 24%, gross margin in the fourth quarter of fiscal 2017
decreased 1% from the corresponding period a year ago. Lower
fourth quarter gross margins primarily reflected some lower margin
programs, which were bid and are being executed by the Company, and
certain programs where costs exceeded budgets. Fiscal 2017
gross margin of 25% was consistent with the corresponding period a
year ago.
Selling, general and administrative ("SG&A")
expenses. SG&A expenses for the fourth quarter of
fiscal 2017 were $45.3 million, which
included $4.8 million of amortization
costs related to the amortization of identifiable intangible assets
recorded on the acquisitions of PA, IWK and sortimat and
$2.9 million for the share purchase
allowance. SG&A expenses for the fourth quarter of fiscal
2016 were $53.5 million, which
included $5.7 million of amortization
costs related to the amortization of identifiable intangible assets
recorded on the acquisitions of PA, IWK and sortimat; $2.3 million of restructuring and severance
costs; and $7.1 million of executive
transition expenses. Excluding these costs, SG&A expenses
were $37.6 million in the fourth
quarter of fiscal 2017, down from $38.4
million a year ago. Lower SG&A expenses in the fourth
quarter of fiscal 2017 primarily reflected foreign exchange rate
changes, which reduced the translation of reported SG&A
expenses of foreign-based subsidiaries due to the strengthening of
the Canadian dollar relative to the U.S. dollar and Euro.
Fiscal 2017 SG&A expenses were $171.9
million, which included $20.0
million of amortization costs related to the amortization of
identifiable intangible assets recorded on the acquisitions of PA,
IWK and sortimat; $2.3 million
of restructuring and severance costs; and $2.9 million for the share purchase
allowance. Excluding these items, SG&A expenses were
$146.7 million for fiscal 2017.
Comparably, SG&A expenses for fiscal 2016 were $141.7 million, which excludes $24.5 million of amortization costs related to
the amortization of identifiable intangible assets recorded on the
acquisitions of PA, IWK and sortimat; $9.7
million of restructuring and severance costs; a gain of
$3.7 million on the sale of a U.S.
facility; and $7.1 million of
executive transition expenses. Higher SG&A expenses in fiscal
2017 primarily reflected increased employee costs and foreign
exchange rate changes, which increased the translation of reported
SG&A expenses of foreign-based subsidiaries, primarily due to
the weakening of the Canadian dollar relative to the U.S. dollar
and Euro.
Stock-based compensation. Stock-based compensation
expense amounted to $1.9 million in
the fourth quarter of fiscal 2017 compared to a recovery of
$0.5 million in the corresponding
period a year ago. Fiscal 2017 stock-based compensation
expense increased to $6.8 million
from $2.6 million a year ago.
The increase in stock-based compensation costs is attributable to
higher expenses from stock options and the revaluation of deferred
stock units and restricted share units.
Earnings from operations. For the three- and
twelve-month periods ended March 31,
2017, consolidated earnings from operations were
$16.8 million (6% operating margin)
and $71.9 million (7% operating
margin), respectively, compared to earnings from operations of
$8.1 million (3% operating margin)
and $76.8 million (7% operating
margin), respectively, in the corresponding periods of fiscal 2016
(see "Overview – Operating Results").
Net finance costs. Net finance costs were
$6.3 million in the fourth quarter of
fiscal 2017, $1.6 million lower than
in the corresponding period a year ago. Fiscal 2017 finance
costs were $25.6 million, compared to
$26.7 million in the corresponding
period a year ago. The decrease was primarily due to the
benefit of cross-currency interest swaps, which were entered into
in the fourth quarter of fiscal 2016 (see "Foreign Exchange").
Income tax provision. For the three and twelve months
ended March 31, 2017, the Company's
effective income tax rates of 26% and 24%, respectively, differed
from the combined Canadian basic federal and provincial income tax
rate of 27%, primarily due to income earned in certain
jurisdictions with different statutory tax rates. The Company
expects its effective tax rate to remain in the range of 25%.
Net income. Fiscal 2017 fourth quarter net income was
$7.8 million (8 cents per share basic and diluted) compared to
$1.4 million (2 cents per share basic and diluted) for the
fourth quarter of fiscal 2016. Adjusted basic earnings per
share were 15 cents in the fourth
quarter of fiscal 2017 compared to 14
cents for the fourth quarter of fiscal 2016 (see
"Reconciliation of Non-IFRS Measures to IFRS Measures").
Fiscal 2017 net income was $35.0
million (38 cents per share
basic and diluted) compared to $39.6
million (43 cents per share
basic and diluted) for the corresponding period a year ago.
Adjusted basic earnings per share were 57
cents in fiscal 2017, compared to 72
cents in the corresponding period a year ago (see
"Reconciliation of Non-IFRS Measures to IFRS Measures").
Reconciliation of Non-IFRS Measures to IFRS
Measures
(In millions of dollars, except per share data)
The following table reconciles EBITDA to the most directly
comparable IFRS measure (net income from continuing
operations):
|
Fiscal
2017
|
Fiscal
2016
|
Fiscal
2015
|
EBITDA
|
$
|
106.5
|
$
|
116.1
|
$
|
107.5
|
Less: depreciation
and amortization expense
|
|
34.6
|
|
39.3
|
|
40.5
|
Earnings from
operations
|
$
|
71.9
|
$
|
76.8
|
$
|
67.0
|
Less: net finance
costs
|
|
25.6
|
|
26.7
|
|
11.9
|
Provision for income
taxes
|
|
11.3
|
|
10.5
|
|
16.2
|
Net income from
continuing
operations
|
$
|
35.0
|
$
|
39.6
|
$
|
38.9
|
|
|
|
|
|
|
|
|
|
|
Q4
2017
|
Q4 2016
|
EBITDA
|
|
|
$
|
25.6
|
$
|
17.7
|
Less: depreciation
and amortization expense
|
|
|
|
8.8
|
|
9.6
|
Earnings from
operations
|
|
|
$
|
16.8
|
$
|
8.1
|
Less: net finance
costs
|
|
|
|
6.3
|
|
7.9
|
Provision for
(recovery of) income taxes
|
|
|
|
2.7
|
|
(1.2)
|
Net income from
continuing
operations
|
|
|
$
|
7.8
|
$
|
1.4
|
The following table reconciles adjusted earnings from operations
and adjusted basic earnings per share to the most directly
comparable IFRS measure (net income and basic earnings per share,
respectively):
|
Three Months
Ended
|
Three Months
Ended
|
|
March 31,
2017
|
March 31,
2016
|
|
IFRS
|
Adjustments
|
Adjusted
|
IFRS
|
Adjustments
|
Adjusted
|
|
|
|
|
|
(non-IFRS)
|
|
|
(non-IFRS)
|
Earnings from
operations
|
$
|
16.8
|
$
|
─
|
$
|
16.8
|
$
|
8.1
|
$
|
─
|
$
|
8.1
|
Amortization of
acquisition-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related intangible
assets
|
|
─
|
|
4.8
|
|
4.8
|
|
─
|
|
5.7
|
|
5.7
|
Restructuring
charges
|
|
─
|
|
─
|
|
─
|
|
─
|
|
2.3
|
|
2.3
|
Executive transition
expenses
|
|
─
|
|
─
|
|
─
|
|
─
|
|
7.1
|
|
7.1
|
Share purchase
allowance
|
|
─
|
|
2.9
|
|
2.9
|
|
─
|
|
─
|
|
─
|
|
$
|
16.8
|
$
|
7.7
|
$
|
24.5
|
$
|
8.1
|
$
|
15.1
|
$
|
23.2
|
Less: net finance
costs
|
$
|
6.3
|
$
|
─
|
$
|
6.3
|
$
|
7.9
|
$
|
─
|
$
|
7.9
|
Income before
income taxes
|
$
|
10.5
|
$
|
7.7
|
$
|
18.2
|
$
|
0.2
|
$
|
15.1
|
$
|
15.3
|
Provision for
(recovery of)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
taxes
|
$
|
2.7
|
$
|
─
|
$
|
2.7
|
$
|
(1.2)
|
$
|
─
|
$
|
(1.2)
|
Adjustment to
provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
taxes1
|
|
─
|
|
2.2
|
|
2.2
|
|
─
|
|
4.0
|
|
4.0
|
|
$
|
2.7
|
$
|
2.2
|
$
|
4.9
|
$
|
(1.2)
|
$
|
4.0
|
$
|
2.8
|
Net
income
|
$
|
7.8
|
$
|
5.5
|
$
|
13.3
|
$
|
1.4
|
$
|
11.1
|
$
|
12.5
|
Basic earnings per
share
|
$
|
0.08
|
$
|
0.07
|
$
|
0.15
|
$
|
0.02
|
$
|
0.12
|
$
|
0.14
|
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.
|
|
Twelve
Months Ended
|
Twelve Months
Ended
|
|
March 31,
2017
|
March 31,
2016
|
|
IFRS
|
Adjustments
|
Adjusted
|
IFRS
|
Adjustments
|
Adjusted
|
|
|
|
|
|
(non-IFRS)
|
|
|
|
|
(non-IFRS)
|
Earnings from
operations
|
$
|
71.9
|
$
|
─
|
$
|
71.9
|
$
|
76.8
|
$
|
─
|
$
|
76.8
|
Amortization of
acquisition-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related intangible
assets
|
|
─
|
|
20.0
|
|
20.0
|
|
─
|
|
24.5
|
|
24.5
|
Restructuring
charges
|
|
─
|
|
2.3
|
|
2.3
|
|
─
|
|
9.7
|
|
9.7
|
Gain on sale of
assets
|
|
─
|
|
─
|
|
─
|
|
─
|
|
(3.7)
|
|
(3.7)
|
Executive transition
expenses
|
|
─
|
|
─
|
|
─
|
|
─
|
|
7.1
|
|
7.1
|
Share purchase
allowance
|
|
─
|
|
2.9
|
|
2.9
|
|
─
|
|
─
|
|
─
|
|
$
|
71.9
|
$
|
25.2
|
$
|
97.1
|
$
|
76.8
|
$
|
37.6
|
$
|
114.4
|
Less: net finance
costs
|
$
|
25.6
|
$
|
─
|
$
|
25.6
|
$
|
26.7
|
$
|
─
|
$
|
26.7
|
Income before
income taxes
|
$
|
46.3
|
$
|
25.2
|
$
|
71.5
|
$
|
50.1
|
$
|
37.6
|
$
|
87.7
|
Provision for income
taxes
|
$
|
11.3
|
$
|
─
|
$
|
11.3
|
$
|
10.5
|
$
|
─
|
$
|
10.5
|
Adjustment to
provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
income
taxes1
|
|
─
|
|
7.8
|
|
7.8
|
|
─
|
|
10.7
|
|
10.7
|
|
$
|
11.3
|
$
|
7.8
|
$
|
19.1
|
$
|
10.5
|
$
|
10.7
|
$
|
21.2
|
Net
income
|
$
|
35.0
|
$
|
17.4
|
$
|
52.4
|
$
|
39.6
|
$
|
26.9
|
$
|
66.5
|
Basic earnings per
share
|
$
|
0.38
|
$
|
0.19
|
$
|
0.57
|
$
|
0.43
|
$
|
0.29
|
$
|
0.72
|
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.
|
SUMMARY OF
INVESTMENTS, LIQUIDITY, CASH FLOW AND FINANCIAL RESOURCES
Investments (In millions of dollars)
|
|
Fiscal
2017
|
Fiscal
2016
|
Investments –
increase
(decrease)
|
|
|
|
|
Non-cash operating
working capital
|
$
|
(56.5)
|
$
|
30.8
|
Property, plant and
equipment
|
|
9.9
|
|
10.1
|
Acquisition of
intangible
assets
|
|
8.0
|
|
5.6
|
Purchase of
non-controlling
interest
|
|
─
|
|
0.1
|
Proceeds from
disposal of
assets
|
|
(0.1)
|
|
(22.3)
|
Proceeds from sale of
subsidiary
|
|
─
|
|
(2.3)
|
Total net
investments
|
$
|
(38.7)
|
$
|
22.0
|
In fiscal 2017, the Company's investment in non-cash working
capital decreased $56.5 million,
compared to an increase of $30.8
million a year ago. Accounts receivable decreased 15%,
or $29.8 million, driven by the
timing of billings on certain customer contracts. Net
contracts in progress decreased 37%, or $28.3 million, compared to March 31, 2016. 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 4%,
or $1.8 million, primarily due to the
timing of inventory purchases. Deposits and prepaid assets
decreased 28%, or $6.2 million,
compared to March 31, 2016 due to the
timing of program execution. Accounts payable and accrued
liabilities increased 3%, or $5.0
million, compared to March 31,
2016. Provisions decreased 30%, or $6.1 million, compared to March 31, 2016 due to the payment in fiscal 2017
of the executive transition provision accrued in fiscal 2016.
Capital expenditures totalled $9.9
million for fiscal 2017, primarily related to computer
hardware. Capital expenditures totalled $10.1 million in fiscal 2016, primarily related
to computer hardware.
Intangible assets expenditures for fiscal 2017 and fiscal 2016
were $8.0 million and $5.6 million, respectively, and primarily related
to computer software and various internal development projects.
Purchase of non-controlling interest was $0.1 million in fiscal 2016. There were no
such transactions in fiscal 2017.
Proceeds from disposal of assets were $0.1 million in fiscal 2017, compared to
$22.3 million in fiscal 2016.
The decrease primarily reflects the sale of a U.S. facility and the
sale of certain other redundant assets in fiscal 2016.
Proceeds from sale of subsidiary were $2.3 million in fiscal 2016, related to the sale
of a Swiss subsidiary, which closed in fiscal 2016. There
were no such transactions in fiscal 2017.
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 2017 and
determined there is no impairment of goodwill or intangible assets
as of March 31, 2017 (fiscal 2016 –
$nil).
All 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
2017
|
Fiscal
2016
|
Cash and cash
equivalents
|
$
|
286.7
|
$
|
170.0
|
Debt-to-equity
ratio
|
|
0.52:1
|
|
0.56:1
|
Cash flows provided
by operating
activities
|
$
|
127.9
|
$
|
35.8
|
At March 31, 2017, the Company had
cash and cash equivalents of $286.7
million compared to $170.0
million at March 31,
2016. At March 31, 2017, the
Company's debt-to-total equity ratio was 0.52:1.
At March 31, 2017, the Company had
$639.1 million of unutilized
multipurpose credit, including letters of credit, available under
existing credit facilities and an additional $2.9 million available under letter of credit
facilities.
In fiscal 2017, cash flows provided by operating activities were
$127.9 million ($35.8 million provided by operating activities in
the corresponding period a year ago). The increase in
operating cash flows related primarily to the timing of investments
in non-cash working capital in certain customer programs.
The Company's U.S. $250.0 million
aggregate principal amount of senior notes (the "Senior Notes") are
unsecured, were issued at par, bear interest at a rate of 6.50% per
annum and mature on June 15,
2023. The Company may redeem the Senior Notes, in whole, at
any time or in part, from time to time, at specified redemption
prices and subject to certain conditions required by the Senior
Notes. If the Company experiences a change of control, the
Company may be required to repurchase the Senior Notes, in whole or
in part, at a purchase price equal to 101% of the aggregate
principal amount of the Senior Notes, plus accrued and unpaid
interest, if any, to, but not including, the redemption date.
The Senior Notes contain customary covenants that restrict, subject
to certain exceptions and thresholds, some of the activities of the
Company and its subsidiaries, including the Company's ability to
dispose of assets, incur additional debt, pay dividends, create
liens, make investments and engage in specified transactions with
affiliates. Subject to certain exceptions, the Senior Notes
are guaranteed by each of the subsidiaries of the Company that is a
borrower or has guaranteed obligations under the Credit
Facility. Transaction fees of $7.2
million were deferred and are being amortized over the term
of the Senior Notes.
The Company's senior secured credit facility (the "Credit
Facility") provides a committed revolving credit facility of
$750.0 million. The Credit
Facility is secured by: (i) the Company's assets, including real
estate; (ii) assets, including certain 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, 2017, the Company had utilized
$115.0 million under the Credit
Facility by way of letters of credit (March
31, 2016 - $115.1
million). The Credit Facility matures on August 29, 2018.
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 as
defined in the Credit Facility. 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 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 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. At
March 31, 2017, all of the covenants
were met.
The Company has additional credit facilities available of
$8.1 million (3.3 million Euros, 75.0
million Indian Rupees, 50.0 million
Thai Baht and 1.1 million Czech Koruna). The total
amount outstanding on these facilities at March 31, 2017 was $4.0
million, of which $1.4 million
was classified as bank indebtedness (March
31, 2016 - $2.3 million) and
$2.6 million was classified as
long-term debt (March 31, 2016 -
$7.1 million). The interest
rates applicable to the credit facilities range from 1.66% to 9.18%
per annum. A portion of the long-term debt is secured by
certain assets of the Company. The 75.0 million Indian Rupees and the 50.0 million Thai Baht credit facilities are
secured by letters of credit under the Credit Facility.
Over the long term, the Company generally expects to continue
increasing its overall investment in non-cash working capital to
support the growth of its business, with fluctuations on a
quarter-over-quarter basis. The Company's goal is to maintain
its investment in non-cash working capital as a percentage of
annualized revenues at a level below 15%. 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 non-cash working capital and
capital assets and to fund strategic investment plans including
some potential acquisitions. Significant acquisitions could
result in additional debt or equity financing requirements.
The Company expects to continue to use leverage to support its
growth strategy.
Contractual Obligations
(In millions of dollars)
The Company's minimum operating lease payments (related
primarily to facilities and equipment) and purchase obligations are
as follows:
|
Operating
|
Purchase
|
|
leases
|
obligations
|
Less than one
year
|
$
|
10.5
|
$
|
83.5
|
One – two
years
|
|
7.7
|
|
7.4
|
Two – three
years
|
|
6.9
|
|
0.1
|
Three – four
years
|
|
6.1
|
|
─
|
Four – five
years
|
|
4.9
|
|
─
|
Due in over five
years
|
|
1.3
|
|
─
|
|
$
|
37.4
|
$
|
91.0
|
The Company's off-balance sheet arrangements consist of purchase
obligations and various operating lease financing arrangements
related primarily to facilities and equipment that were entered
into in the normal course of business. The Company's purchase
obligations consist primarily of commitments for material
purchases.
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 letters of credit as security for advances
received from customers pending delivery and contract
performance. In addition, the Company provides letters of
credit for post-retirement obligations and may provide letters of
credit as security on equipment under lease and on order. At
March 31, 2017, the total value of
outstanding letters of credit was approximately $136.0 million (March 31,
2016 - $137.0 million).
In the normal course of operations, the Company is party to a
number of lawsuits, claims and contingencies. Although it is
possible that liabilities may be incurred in instances for which no
accruals have been made, the Company does not believe that the
ultimate outcome of these matters will have a material impact on
its consolidated financial position.
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 11 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 market 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
obtains insurance in certain instances.
During fiscal 2017, 1,308,667 stock options were
exercised. At May 17, 2017 the
total number of shares outstanding was 93,602,026 and there
were 2,274,724 stock options outstanding to acquire common
shares of the Company.
Normal Course Issuer Bid
On November 4, 2015, the Company announced that the
Toronto Stock Exchange ("TSX") had accepted a notice filed by the
Company of its intention to make a normal course issuer bid
("NCIB"). Under the NCIB, ATS had the ability to purchase,
for cancellation, up to a maximum of 4,600,000 common shares,
representing approximately 5% of the 92,541,582 common shares that
were issued and outstanding as of October
31, 2015.
During fiscal 2016, the Company purchased 481,473 common shares
for $6.0 million under the
NCIB. The weighted average price per share repurchased was
$12.45. No subsequent purchases
were made in fiscal 2017. The NCIB expired on November 5, 2016.
RELATED PARTY TRANSACTIONS
The Company has 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, a member of the
Company's Board of Directors who is associated with Mason Capital
has waived any fees to which he may have otherwise been entitled
for serving as a member of the Board of Directors or as a member of
any committee of the Board of Directors.
There were no other significant related party transactions in
fiscal 2017.
FOREIGN EXCHANGE
The Company is exposed to foreign
exchange risk as a result of transactions in currencies other than
its functional currency of the Canadian dollar, through borrowings
made by the Company in currencies other than its functional
currency and through its investments in its foreign-based
subsidiaries.
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
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.
The Company uses cross-currency swaps as derivative financial
instruments to hedge a portion of its foreign exchange risk related
to its U.S.-dollar-denominated Senior Notes. On March 29, 2016, the Company entered into a
cross-currency interest rate swap instrument to swap U.S.
$150.0 million into Canadian
dollars. The Company will receive interest of 6.50% U.S. per
annum and pay interest of 6.501% Canadian. The terms of the
hedging relationship will end on June 15,
2023.
The Company manages foreign exchange risk on its Euro
denominated net investments. The Company uses cross-currency
swaps as derivative financial instruments to hedge a portion of the
foreign exchange risk related to its Euro-denominated net
investment. On March 29, 2016,
the Company entered into a cross-currency interest rate swap
instrument to swap 134.1 million
Euros into Canadian dollars. The Company will receive
interest of 6.501% Canadian per annum and pay interest of 5.094%
Euros. The terms of the hedging relationship will end on
June 15, 2023. As a result of
the cross-currency interest rate swap instruments, the Company
expects its interest expenses to be reduced by approximately U.S.
$2 million per annum from the coupon
rate of the Senior Notes.
In addition, from time to time, the Company may hedge the
foreign exchange risk arising from foreign currency debt,
intercompany loans, net investments in foreign-based subsidiaries
and committed acquisitions through the use of forward foreign
exchange contracts or other non-derivative financial
instruments. The Company uses hedging as a risk management
tool, not to speculate. See note 11 to the consolidated
financial statements for details on the derivative financial
instruments outstanding at March 31,
2017.
|
Year-end actual exchange
rates
|
Period
average exchange rates
|
|
March
31,
|
March 31,
|
|
March
31,
|
March 31,
|
|
|
2017
|
2016
|
%
change
|
2017
|
2016
|
% change
|
U.S.
Dollar
|
1.330
|
1.299
|
2.4%
|
1.313
|
1.311
|
0.2%
|
Euro
|
1.419
|
1.478
|
(4.0%)
|
1.440
|
1.447
|
(0.5%)
|
CONSOLIDATED
QUARTERLY RESULTS (In millions of dollars, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
2017
|
2017
|
2017
|
2017
|
2016
|
2016
|
2016
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
265.7
|
$
|
237.4
|
$
|
242.5
|
$
|
265.4
|
$
|
246.8
|
$
|
274.9
|
$
|
263.7
|
$
|
254.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
$
|
16.8
|
$
|
15.3
|
$
|
17.3
|
$
|
22.6
|
$
|
8.1
|
$
|
26.8
|
$
|
24.4
|
$
|
17.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
$
|
24.5
|
$
|
22.5
|
$
|
22.3
|
$
|
27.9
|
$
|
23.2
|
$
|
32.1
|
$
|
31.7
|
$
|
27.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
7.8
|
$
|
6.6
|
$
|
8.5
|
$
|
12.1
|
$
|
1.4
|
$
|
15.5
|
$
|
12.8
|
$
|
9.8
|
Basic and diluted
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per
share
|
$
|
0.08
|
$
|
0.07
|
$
|
0.09
|
$
|
0.13
|
$
|
0.02
|
$
|
0.16
|
$
|
0.14
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic
earnings per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share
|
$
|
0.15
|
$
|
0.12
|
$
|
0.13
|
$
|
0.17
|
$
|
0.14
|
$
|
0.21
|
$
|
0.19
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order
Bookings
|
$
|
322.0
|
$
|
284.0
|
$
|
289.0
|
$
|
239.0
|
$
|
390.0
|
$
|
228.0
|
$
|
230.0
|
$
|
222.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order
Backlog
|
$
|
681.0
|
$
|
632.0
|
$
|
654.0
|
$
|
610.0
|
$
|
652.0
|
$
|
546.0
|
$
|
589.0
|
$
|
590.0
|
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.
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. General economic trends, product life cycles
and product changes may impact revenues and operating
performance. ATS typically experiences some seasonality with
its Order Bookings, revenues and earnings from operations due to
summer plant shutdowns by its customers.
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)
"Revenue Recognition – 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.
A 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 16 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 17 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
cost 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 9 to the consolidated financial
statements. The Company performed its annual impairment test
of goodwill as at March 31, 2017 and
determined there was no impairment (March
31, 2016 – $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
consolidated statement of financial position 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 13 of the consolidated financial
statements.
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
("IFRS 15"), which establishes a single comprehensive model for
entities to use in accounting for revenues arising from contracts
with customers. Under IFRS 15, revenues are 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,
2018, with early adoption permitted. The Company does
not anticipate early adoption and plans to adopt the standard for
the annual period beginning on April
1, 2018. The Company has not yet determined the impact
on its consolidated financial statements.
IFRS 16 – Leases
In January
2016, the IASB issued IFRS 16 – Leases, which
requires lessees to recognize assets and liabilities for most
leases. There are minimal changes to the existing accounting
in IAS 17 – Leases from the perspective of lessors.
The new standard is effective for annual periods beginning on or
after January 1, 2019, with early
adoption permitted provided IFRS 15 has been adopted or is adopted
at the same date. The Company does not anticipate early
adoption and plans to adopt the standard for the annual period
beginning on April 1, 2019. The
Company has not yet determined the impact on its consolidated
financial statements.
CONTROLS AND PROCEDURES
The Chief Executive Officer
("CEO") and the Chief Financial Officer ("CFO") are responsible for
establishing and maintaining disclosure controls and procedures and
internal controls over financial reporting for the Company.
The control framework used in the design of disclosure controls and
procedures and internal control over financial reporting is the
"Internal Control - Integrated Framework (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, 2017 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, 2017,
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 years ended March 31,
2017 and March 31, 2016, 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.
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 from financial
institutions;
- 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, United States
Foreign Corrupt Practices Act and anti-bribery laws risk;
- Intellectual property protection risks;
- Infringement of third parties' intellectual property rights
risk;
- 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: potential impact of
general economic environment, including impact on Order Bookings
and volatility of Order Bookings; the expected benefits where the
Company engages with customers on enterprise-type solutions and the
potential impact on Order Bookings, performance period, and timing
of revenue recognition; the Company's Order Backlog partially
mitigating the impact of volatile Order Bookings; the rate of
completion of Order Backlog available to be completed; the
Company's efforts to expand after-sales services and the expected
impact; expected impact of the Company's focus and efforts in
regards to certain management initiatives; the Company's strategy
to expand organically and through acquisition; the Company's
expectation with respect to effective tax rate; the Company's goal
with respect to non-cash working capital as a percentage of
revenues; expectation in relation to meeting funding requirements
for investments; expectation to use leverage to support growth
strategy; the Company's belief with respect to the outcome of
certain lawsuits, claims and contingencies; and the Company's
expectation with respect to a reduction of interest expense
resulting from an interest rate swap. 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 markets 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; timing of customer decisions related to large
enterprise programs and potential for greater negative impact
associated with any cancellations or non-performance in relation
thereto; variations in the amount of Order Backlog completed in any
given quarter; that revenues from after-sales services are
insufficient to offset capital spending volatility; inability to
successfully expand organically or through acquisition, due to an
inability to grow expertise, personnel, and/or facilities at
required rates or to identify, negotiate and conclude one or more
acquisitions; or to raise, through debt or equity, or otherwise
have available, required capital; that acquisitions made are not
integrated as quickly or effectively as planned or expected and, as
a result, anticipated benefits and synergies are not realized; that
the effective tax rate is other than expected, due to reasons
including income spread among jurisdictions being other than
anticipated; non-cash working capital as a percentage of revenues
operating at a level other than as expected due to reasons,
including, the timing and nature of Order Bookings, the timing of
payment milestones and payment terms in customer contracts, and
delays in customer programs; risk that the ultimate outcome of
lawsuits, claims, and contingencies give rise to material
liabilities for which no provisions have been recorded; 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
|
|
2017
|
2016
|
|
|
|
|
|
|
|
ASSETS
|
14
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
286,697
|
$
|
170,034
|
Accounts
receivable
|
|
|
|
166,069
|
|
195,911
|
Costs and earnings in
excess of billings
|
|
|
|
|
|
|
|
on contracts in
progress
|
5
|
|
|
144,708
|
|
202,694
|
Inventories
|
5
|
|
|
47,981
|
|
46,200
|
Deposits, prepaids
and other
assets
|
6
|
|
|
16,119
|
|
22,324
|
|
|
|
|
661,574
|
|
637,163
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
7
|
|
|
69,233
|
|
71,060
|
Other
assets
|
8
|
|
|
13,291
|
|
4,211
|
Goodwill
|
9
|
|
|
423,250
|
|
431,747
|
Intangible
assets
|
10
|
|
|
156,069
|
|
177,065
|
Deferred income tax
assets
|
16
|
|
|
2,138
|
|
2,534
|
Investment tax credit
receivable
|
16
|
|
|
49,015
|
|
43,683
|
|
|
|
|
712,996
|
|
730,300
|
Total
assets
|
|
|
$
|
1,374,570
|
$
|
1,367,463
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
14
|
|
$
|
1,411
|
$
|
2,319
|
Accounts payable and
accrued liabilities
|
|
|
|
183,839
|
|
178,826
|
Provisions
|
12
|
|
|
14,124
|
|
20,267
|
Billings in excess of
costs and earnings
|
|
|
|
|
|
|
|
on contracts in
progress
|
5
|
|
|
96,490
|
|
126,127
|
Current portion of
long-term
debt
|
14
|
|
|
1,321
|
|
5,259
|
|
|
|
|
297,185
|
|
332,798
|
Non-current
liabilities
|
|
|
|
|
|
|
Employee
benefits
|
13
|
|
|
26,668
|
|
28,252
|
Long-term
debt
|
14
|
|
|
325,947
|
|
316,120
|
Deferred income tax
liabilities
|
16
|
|
|
38,761
|
|
39,740
|
|
|
|
|
391,376
|
|
384,112
|
Total
liabilities
|
|
|
$
|
688,561
|
$
|
716,910
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
14, 18
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Share
capital
|
15
|
|
$
|
543,317
|
$
|
528,184
|
Contributed
surplus
|
|
|
|
12,871
|
|
13,201
|
Accumulated other
comprehensive income
|
|
|
|
54,974
|
|
68,319
|
Retained
earnings
|
|
|
|
74,599
|
|
40,634
|
Equity attributable
to shareholders
|
|
|
|
685,761
|
|
650,338
|
Non-controlling
interests
|
|
|
|
248
|
|
215
|
Total
equity
|
|
|
|
686,009
|
|
650,553
|
Total liabilities
and
equity
|
|
|
$
|
1,374,570
|
$
|
1,367,463
|
ATS AUTOMATION
TOOLING SYSTEMS INC. Consolidated Statements of
Income (in thousands of Canadian dollars, except per share
amounts)
|
|
|
|
|
|
|
|
Years ended March
31
|
Note
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Revenues from
construction contracts
|
|
|
$
|
589,033
|
$
|
617,487
|
|
Sale of
goods
|
|
|
|
78,776
|
|
80,153
|
|
Services
rendered
|
|
|
|
343,095
|
|
342,000
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
|
1,010,904
|
|
1,039,640
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
760,248
|
|
780,948
|
|
Selling, general and
administrative
|
|
|
|
171,907
|
|
179,297
|
|
Stock-based
compensation
|
17
|
|
|
6,814
|
|
2,638
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
|
|
71,935
|
|
76,757
|
|
|
|
|
|
|
|
Net finance
costs
|
20
|
|
|
25,552
|
|
26,652
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
|
|
46,383
|
|
50,105
|
|
|
|
|
|
|
|
Income tax
expense
|
16
|
|
|
11,356
|
|
10,507
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
35,027
|
$
|
39,598
|
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
|
Shareholders
|
|
|
$
|
34,994
|
$
|
39,553
|
Non-controlling
interests
|
|
|
|
33
|
|
45
|
|
|
|
$
|
35,027
|
$
|
39,598
|
|
|
|
|
|
|
|
Earnings per share
attributable to
shareholders
|
|
|
|
|
|
|
Basic and
diluted
|
21
|
|
$
|
0.38
|
$
|
0.43
|
ATS AUTOMATION
TOOLING SYSTEMS INC. Consolidated Statements of
Comprehensive Income (in thousands of Canadian
dollars)
|
|
|
|
|
|
Years ended March
31
|
2017
|
2016
|
|
|
|
|
|
Net
income
|
$
|
35,027
|
$
|
39,598
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
Items to be
reclassified subsequently to net income:
|
|
|
|
|
|
|
|
|
|
|
Currency translation
adjustment (net of income taxes of $nil)
|
|
(10,978)
|
|
30,780
|
|
|
|
|
|
|
Net unrealized gain
(loss) on derivative financial instruments designated as cash flow
hedges
|
|
(2,869)
|
|
1,309
|
|
Tax impact
|
|
751
|
|
(349)
|
|
|
|
|
|
|
Loss transferred to
net income for derivatives designated as cash flow
hedges
|
|
(287)
|
|
4,136
|
|
Tax impact
|
|
46
|
|
(1,029)
|
|
|
|
|
|
|
Cash flow hedge
reserve adjustment
|
|
(11)
|
|
51
|
|
Tax impact
|
|
3
|
|
(13)
|
|
|
|
|
|
Items that will not
be reclassified subsequently to net income:
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains
(losses) on defined benefit pension plans
|
|
(569)
|
|
1,099
|
|
Tax impact
|
|
157
|
|
(317)
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
(13,757)
|
|
35,667
|
|
|
|
|
|
Comprehensive
income
|
$
|
21,270
|
$
|
75,265
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
Shareholders
|
$
|
21,237
|
$
|
75,220
|
Non-controlling
interests
|
|
33
|
|
45
|
|
$
|
21,270
|
$
|
75,265
|
ATS AUTOMATION
TOOLING SYSTEMS INC. Consolidated Statements of Changes
in Equity (in thousands of Canadian dollars)
|
|
Year ended March
31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital
|
Contributed
surplus
|
Retained
earnings
(deficit)
|
Currency
translation
adjustments
|
Cash flow
hedge reserve
|
Total
accumulated
other
comprehensive
income
|
Non-
controlling
interests
|
Total
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, as at
March 31, 2016
|
$
|
528,184
|
$
|
13,201
|
$
|
40,634
|
$
|
66,482
|
$
|
1,837
|
$
|
68,319
|
$
|
215
|
$
|
650,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
––
|
|
––
|
|
34,994
|
|
––
|
|
––
|
|
––
|
|
33
|
|
35,027
|
Other comprehensive
loss
|
|
––
|
|
––
|
|
(412)
|
|
(10,978)
|
|
(2,367)
|
|
(13,345)
|
|
––
|
|
(13,757)
|
Total comprehensive
income (loss)
|
|
––
|
|
––
|
|
34,582
|
|
(10,978)
|
|
(2,367)
|
|
(13,345)
|
|
33
|
|
21,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
––
|
|
––
|
|
(617)
|
|
––
|
|
––
|
|
––
|
|
––
|
|
(617)
|
Stock-based
compensation
|
|
––
|
|
2,361
|
|
––
|
|
––
|
|
––
|
|
––
|
|
––
|
|
2,361
|
Exercise of stock
options
|
|
15,133
|
|
(2,691)
|
|
––
|
|
––
|
|
––
|
|
––
|
|
––
|
|
12,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, as at
March 31, 2017
|
$
|
543,317
|
$
|
12,871
|
$
|
74,599
|
$
|
55,504
|
$
|
(530)
|
$
|
54,974
|
$
|
248
|
$
|
686,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital
|
Contributed
surplus
|
Retained
earnings
(deficit)
|
Currency
translation
adjustments
|
Cash flow
hedge reserve
|
Total
accumulated
other
comprehensive
income
|
Non-
controlling
interests
|
Total
equity
|
Balance, as at March
31, 2015
|
$
|
519,118
|
$
|
14,420
|
$
|
3,590
|
$
|
35,702
|
$
|
(2,268)
|
$
|
33,434
|
$
|
170
|
$
|
570,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
––
|
|
––
|
|
39,553
|
|
––
|
|
––
|
|
––
|
|
45
|
|
39,598
|
Other comprehensive
income
|
|
––
|
|
––
|
|
782
|
|
30,780
|
|
4,105
|
|
34,885
|
|
––
|
|
35,667
|
Total comprehensive
income
|
|
––
|
|
––
|
|
40,335
|
|
30,780
|
|
4,105
|
|
34,885
|
|
45
|
|
75,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
––
|
|
1,899
|
|
––
|
|
––
|
|
––
|
|
––
|
|
––
|
|
1,899
|
Exercise of stock
options
|
|
11,807
|
|
(3,118)
|
|
––
|
|
––
|
|
––
|
|
––
|
|
––
|
|
8,689
|
Repurchase of common
shares
|
|
(2,741)
|
|
––
|
|
(3,291)
|
|
––
|
|
––
|
|
––
|
|
––
|
|
(6,032)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, as at March
31, 2016
|
$
|
528,184
|
$
|
13,201
|
$
|
40,634
|
$
|
66,482
|
$
|
1,837
|
$
|
68,319
|
$
|
215
|
$
|
650,553
|
ATS AUTOMATION
TOOLING SYSTEMS INC. Consolidated Statements of Cash
Flows (in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended March
31
|
Note
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
Income from
operations
|
|
|
$
|
35,027
|
$
|
39,598
|
Items not involving
cash
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
|
|
10,492
|
|
9,681
|
|
Amortization of
intangible assets
|
|
|
|
24,070
|
|
29,681
|
|
Deferred income
taxes
|
16
|
|
|
1,900
|
|
(232)
|
|
Other items not
involving cash
|
|
|
|
(7,427)
|
|
(9,560)
|
|
Stock-based
compensation
|
17
|
|
|
6,814
|
|
2,638
|
|
Loss (gain) on
disposal of property, plant and equipment
|
|
|
|
483
|
|
(5,232)
|
|
|
|
|
71,359
|
|
66,574
|
Change in non-cash
operating working capital
|
|
|
|
56,541
|
|
(30,814)
|
Cash flows
provided by operating activities
|
|
|
$
|
127,900
|
$
|
35,760
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Acquisition of
property, plant and
equipment
|
7
|
|
$
|
(9,892)
|
$
|
(10,050)
|
Acquisition of
intangible
assets
|
10
|
|
|
(8,006)
|
|
(5,611)
|
Purchase of
non-controlling
interest
|
|
|
|
––
|
|
(71)
|
Proceeds from
disposal of property, plant and equipment
|
|
|
|
84
|
|
22,323
|
Proceeds from sale of
subsidiary
|
|
|
|
–
|
|
2,274
|
Cash flows
provided by (used in) investing activities
|
|
|
$
|
(17,814)
|
$
|
8,865
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Bank
indebtedness
|
|
|
$
|
(964)
|
$
|
661
|
Repayment of
long-term debt
|
|
|
|
(5,081)
|
|
(290,984)
|
Proceeds from
long-term debt
|
|
|
|
701
|
|
303,670
|
Proceeds from
exercise of stock options
|
|
|
|
12,442
|
|
8,689
|
Repurchase of common
shares
|
15
|
|
|
––
|
|
(6,032)
|
Cash flows
provided by financing activities
|
|
|
$
|
7,098
|
$
|
16,004
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
(521)
|
|
2,879
|
|
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
|
|
|
116,663
|
|
63,508
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of year
|
|
|
|
170,034
|
|
106,526
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of year
|
|
|
$
|
286,697
|
$
|
170,034
|
|
|
|
|
|
|
|
Supplemental
information
|
|
|
|
|
|
|
Cash income taxes
paid
|
|
|
$
|
10,785
|
$
|
10,078
|
Cash interest
paid
|
|
|
$
|
23,222
|
$
|
16,619
|
SOURCE ATS Automation Tooling Systems Inc.