CAMBRIDGE, ON, May 20, 2021 /CNW/ - ATS Automation Tooling
Systems Inc. (TSX: ATA) ("ATS" or the "Company") today reported its
financial results for the three and 12 months ended March 31, 2021.
Fourth quarter highlights:
- Revenues increased 4.7% year over year to $399.9 million.
- Earnings from operations were $42.8
million (10.7% operating margin), compared to $24.9 million (6.5% operating margin) a year ago.
Adjusted earnings from operations1 were $49.5 million (12.4% margin), compared to
$39.3 million (10.3% margin) a year
ago.
- EBITDA1 was $60.2
million (15.1% EBITDA margin), compared to $43.2 million (11.3% EBITDA margin) a year
ago.
- Earnings per share were 26 cents
basic and diluted compared to 14
cents a year ago.
- Adjusted basic earnings per share1 were 34 cents compared to 26
cents a year ago.
- Order Bookings were $463 million,
30.1% higher than a year ago, primarily reflecting organic
growth.
- Order Backlog increased 23.1% to $1,160
million at March 31, 2021
compared to $942 million a year ago
and included $166 million of CFT
Order Backlog acquired in March
2021.
"Fourth quarter performance featured record Order Bookings and
Order Backlog as well as strong operating margins despite a
challenging environment," said Andrew
Hider, Chief Executive Officer. "ATS starts the new fiscal
year with a solid base of business and balance sheet strength to
execute our Build, Grow and Expand value creation
strategy."
Year-to-date highlights:
- Revenues were $1,430.0 million
compared to $1,429.7 million last
year.
- Earnings from operations were $119.6
million (8.4% operating margin), compared to $95.6 million (6.7% operating margin) in the
prior year. Adjusted earnings from operations1 were
$163.2 million (11.4% margin),
compared to $157.4 million (11.0%
margin) in the prior year.
- EBITDA1 was $190.6
million (13.3% EBITDA margin), compared to $167.0 million (11.7% EBITDA margin) in the prior
year.
- Earnings per share were 70 cents
basic and 69 cents diluted compared
to 57 cents in the prior year.
- Adjusted basic earnings per share1 were $1.07 compared to $1.06 a year ago.
- Order Bookings were $1,626
million, compared to $1,468
million a year ago.
Mr. Hider added, "The pandemic environment highlighted the
resiliency of our business and I am very proud of how our people
mobilized to creatively serve our customers. At the same time, we
set the stage for additional growth through our M&A strategy
with the acquisition of CFT in late March and a definitive
agreement to acquire BioDot in the new fiscal year. CFT joins our
MARCO operations to serve the regulated food and beverage equipment
market. BioDot will expand our Life Sciences capabilities in
precise, low volume fluid dispensing and enhances our position in
the point-of-care and clinical diagnostics lab automation
end-markets. We look forward to the contributions of these
businesses and driving improvement across all operations through
the ATS Business Model. Our focus remains on bringing value to our
customers and value to our shareholders."
Financial results
(In millions of dollars unless
otherwise stated)
|
Q42021
|
Q4 2020
|
Fiscal
2021
|
Fiscal
2020
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
399.9
|
$
|
382.1
|
$
|
1,430.0
|
$
|
1,429.7
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
$
|
42.8
|
$
|
24.9
|
$
|
119.6
|
$
|
95.6
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from operations1
|
$
|
49.5
|
$
|
39.3
|
$
|
163.2
|
$
|
157.4
|
EBITDA1
|
$
|
60.2
|
$
|
43.2
|
$
|
190.6
|
$
|
167.0
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
23.8
|
$
|
13.1
|
$
|
64.1
|
$
|
52.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic
earnings per share1
|
$
|
0.34
|
$
|
0.26
|
$
|
1.07
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.26
|
$
|
0.14
|
$
|
0.70
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.26
|
$
|
0.14
|
$
|
0.69
|
$
|
0.57
|
1 Non-IFRS
measure: see "Notice to Reader: Non-IFRS Measures and Additional
IFRS Measures".
|
Fourth quarter summary
Fiscal 2021 fourth quarter
revenues were 4.7% higher than in the corresponding period a year
ago and included $0.9 million of
revenues earned by acquired companies. Excluding acquired
companies, fourth quarter revenues increased $16.9 million, or 4.4%, compared to the
corresponding period a year ago. Revenues from services increased
12.5% with broad-based strength across ATS' businesses. Revenues
from the sale of goods increased 20.2% due primarily to increased
after-sales spare parts sales. Revenues generated from construction
contracts increased $0.2 million.
By market, revenues generated in life sciences increased 14.5%
on higher Order Backlog entering the fourth quarter of fiscal 2021.
Revenues in transportation decreased 42.1% on lower Order Backlog
entering the fourth quarter of fiscal 2021. This was due to a
slowdown in the transportation market and the implementation of a
reorganization plan that reduced exposure to certain aspects of the
market and created alignment with market demand. Revenues generated
in consumer products increased 69.6%, primarily on higher Order
Backlog entering the fourth quarter of fiscal 2021 related to
warehouse and personal care automation projects. Revenues in energy
increased 36.5% due to higher Order Backlog entering the fourth
quarter of fiscal 2021.
Fiscal 2021 fourth quarter earnings from operations were
$42.8 million (10.7% operating
margin) compared to $24.9 million
(6.5% operating margin) in the fourth quarter a year ago. Earnings
from operations included: $8.1
million related to amortization of acquisition-related
intangible assets, down from $8.5
million a year ago; $4.2
million of incremental costs related to the Company's
acquisition activity, up from $0.1
million last year, and $5.6
million in adjustments to contingent consideration related
to the acquisition of MARCO. Fiscal 2020 fourth quarter earnings
included $5.8 million of
restructuring charges incurred as part of the Company's
reorganization activity.
Excluding these items in both quarters, adjusted earnings from
operations were $49.5 million (12.4%
margin), compared to $39.3 million
(10.3% margin) a year ago. Higher fourth quarter fiscal 2021
adjusted earnings from operations reflected a higher gross margin
due to efficiency gains made in the Company's cost structure,
improved program execution and increased revenues from after-sales
services. In the fourth quarter, the Company benefited from
recoveries under the Canadian Emergency Wage Subsidy ("CEWS")
program of $2.6 million.
Depreciation and amortization expense was $17.4 million in the fourth quarter of fiscal
2021, compared to $18.3 million a
year ago. The decrease primarily reflected the disposal of assets
executed as part of the Company's reorganization activity.
EBITDA was $60.2 million (15.1%
EBITDA margin) in the fourth quarter of fiscal 2021 compared to
$43.2 million (11.3% EBITDA margin)
in the fourth quarter of fiscal 2020. Higher EBITDA reflected an
improved cost structure as well as the absence of restructuring
expenses in the fourth quarter of fiscal 2021 compared to the prior
year.
Order Backlog Continuity
(In millions of dollars)
|
Q4
2021
|
Q4
2020
|
Fiscal
2021
|
Fiscal
2020
|
Opening Order
Backlog
|
$
|
985
|
$
|
939
|
$
|
942
|
$
|
904
|
Revenues
|
|
(400)
|
|
(382)
|
|
(1,430)
|
|
(1,430)
|
Order
Bookings
|
|
463
|
|
356
|
|
1,626
|
|
1,468
|
Order Backlog
adjustments1
|
|
112
|
|
29
|
|
22
|
|
––
|
Total
|
$
|
1,160
|
$
|
942
|
$
|
1,160
|
$
|
942
|
1 Order Backlog adjustments include
incremental Order Backlog of $166 million acquired with CFT,
foreign exchange adjustments, scope changes and
cancellations.
|
Order Bookings
Fourth quarter fiscal 2021 Order
Bookings were $463 million, a 30.1%
increase compared to the fourth quarter of fiscal 2020. Organic
growth in Order Bookings was 31.0% and bookings from acquired
companies amounted to 0.3% of the increase. Foreign exchange rates
negatively impacted the translation of Order Bookings from
foreign-based ATS subsidiaries by approximately 1.2% compared to
the corresponding period a year ago, primarily reflecting the
strengthening of the Canadian dollar relative to the U.S. dollar.
By market, higher Order Bookings in life sciences primarily related
to medical device programs and critical life sciences products to
aid in the fight against COVID-19. Fourth quarter fiscal 2021
Order Bookings included large Order Bookings related to COVID-19
point-of-care rapid testing. Order Bookings in transportation
increased due to a large EV program win and timing of customer
orders. Higher Order Bookings in consumer products primarily
reflected programs related to warehouse automation. Bookings in
energy decreased due to timing of customer projects, primarily in
the nuclear market. Order Backlog
At March 31, 2021, Order Backlog
was $1,160 million, 23.1% higher than
at March 31, 2020. Order Backlog
growth was primarily driven by higher Order Bookings in the life
sciences and consumer products markets, as well as Order Backlog
from acquired businesses. Foreign exchange rate changes negatively
impacted the translation of Order Backlog from foreign-based ATS
subsidiaries by approximately 6.9% compared to the corresponding
period a year ago, primarily reflecting the strengthening of the
Canadian dollar relative to the U.S. dollar and the Euro.
Outlook
The Company's funnel (which includes customer
requests for proposal and ATS identified customer opportunities)
remains significant; however, the timing to convert opportunities
into Order Bookings is more variable during the pandemic as some
customers delay their planned project timing.
By market, the life sciences funnel remains robust, as activity
in medical devices, pharmaceuticals and radiopharmaceuticals has
improved and is being supplemented by opportunities related to the
fight against COVID-19. In transportation, some strategic
opportunities related to new technologies such as electric vehicles
have proceeded. Funnel activity in energy is variable and this
market provides niche opportunities for ATS. Funnel activity in
consumer products has improved; however, management expects some
customers to remain cautious in deploying capital in the current
economic environment. The addition of CFT has increased the
Company's exposure to opportunities in regulated food and beverage
equipment markets. Organic growth in the Company's fourth quarter
Order Bookings and the addition of CFT resulted in an Order Backlog
of $1,160 million that will help
mitigate the impact of quarterly variability in Order Bookings on
revenues in the short term.
The Company's Order Backlog includes several large enterprise
programs that have longer periods of performance and therefore
longer revenue recognition cycles. In the first quarter of fiscal
2022, management expects the conversion of Order Backlog to
revenues to be in the higher end of the 35% to 40% range based on
project mix and the addition of CFT.
The Company's sales organization continues to work to engage
customers on enterprise-type solutions. Enterprise orders are
expected to provide ATS with more strategic customer relationships,
better program control, workload predictability and less short-term
sensitivity to macroeconomic forces. This approach to market and
the timing of customer decisions on larger opportunities is
expected to cause variability in Order Bookings from quarter to
quarter and lengthen the performance period and revenue recognition
for certain customer programs. The Company is working to grow
after-sales service revenues as a percentage of overall revenues
over time, which is expected to provide some balance to the capital
expenditure cycle of the Company's customers. Improvements were
made in generating revenues from the Company's after-sales service
business in the third and fourth fiscal quarters compared to the
first half of the fiscal year; however, the Company continues to be
impacted by ongoing travel restrictions and some limitations on
customer facility access.
Management is pursuing several initiatives with the goal of
expanding its adjusted earnings from operations margin over the
long term, including: growing the Company's higher margin
after-sales service business; improving global supply chain
management; increasing the use of standardized platforms and
technologies; growing revenues while leveraging the Company's
current cost structure; and developing the ATS Business Model
("ABM.") The Company benefitted from the CEWS program in fiscal
2021 due to lower revenues in its Canadian operations. The Canadian
government has extended the CEWS program until June 2021, albeit at a lower recovery rate and
the recent federal budget proposed extending it until September 2021.
Over the long term, the Company generally expects to continue
investing 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 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: provide additional liquidity should the economic
impacts of the COVID-19 pandemic persist for an extended period;
fund its requirements for investments in non-cash working capital
and capital assets; and fund strategic investment plans including
some potential acquisitions. Acquisitions could result in
additional debt or equity financing requirements.
On April 14, 2021, the Company
announced it entered into a definitive agreement to acquire BioDot,
Inc. ("BioDot"), a leading manufacturer of automated fluid
dispensing systems. The transaction is expected to close in the
second quarter of calendar 2021, pending the completion of
customary regulatory filings. The acquisition of BioDot will give
ATS increased exposure to attractive and growing end markets in
point-of-care and clinical diagnostics automation end markets and
expand its Life Sciences capabilities. The purchase price of U.S.
$84.0 million will be funded by
drawing on the Company's revolving credit facility.
The outbreak of COVID-19 resulted in governments worldwide
enacting emergency measures to combat the spread of the virus.
These measures, which included the implementation of travel
restrictions, quarantine periods and physical distancing
requirements have affected economies and disrupted business
operations for ATS and its customers. It is difficult to predict
the ultimate duration or severity of the pandemic or its affect on
the business, financial results and conditions of the Company.
At the outset of the pandemic, management implemented several
countermeasures designed to: protect employees (including work from
home protocols, in-plant physical distancing requirements and shift
work); ensure work on customer projects progresses; and, enable
continued customer service through digital tools and regional
support networks. These responses allowed the Company to maintain
operations, although with less efficiency.
Quarterly Conference Call
ATS' quarterly conference
call begins at 8:30 a.m. eastern on
Thursday, May 20, 2021 and can be
accessed live at www.atsautomation.com or on the phone by dialing
(647) 427-7450 five minutes prior. A replay of the conference will
be available on the ATS website following the call. Alternatively,
a telephone recording of the call will be available for one week
(until midnight May 27, 2021) by
dialing (416) 849-0833 and entering passcode 8276801 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, food
& beverage, transportation, consumer products, and energy.
Founded in 1978, ATS employs over 5,000 people at 28 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.
Consolidated Revenues
(In millions of dollars)
Revenues by
type
|
Q4
2021
|
Q4 2020
|
Fiscal
2021
|
Fiscal 2020
|
Revenues from
construction contracts
|
$
|
258.1
|
$
|
257.9
|
$
|
895.1
|
$
|
884.9
|
Services
rendered
|
|
109.7
|
|
97.5
|
|
413.3
|
|
423.2
|
Sale of
goods
|
|
32.1
|
|
26.7
|
|
121.6
|
|
121.6
|
Total
revenues
|
$
|
399.9
|
$
|
382.1
|
$
|
1,430.0
|
$
|
1,429.7
|
|
|
|
|
|
|
|
|
|
Revenues by
market
|
Q4
2021
|
Q4
2020
|
Fiscal
2021
|
Fiscal 2020
|
Life
sciences
|
$
|
228.7
|
$
|
199.8
|
$
|
805.4
|
$
|
770.2
|
Transportation
|
|
67.3
|
|
116.2
|
|
272.3
|
|
385.0
|
Consumer
products
|
|
69.9
|
|
41.2
|
|
238.2
|
|
172.7
|
Energy
|
|
34.0
|
|
24.9
|
|
114.1
|
|
101.8
|
Total
revenues
|
$
|
399.9
|
$
|
382.1
|
$
|
1,430.0
|
$
|
1,429.7
|
|
|
|
|
|
|
|
|
|
Revenues by
customer location
|
Q4
2021
|
Q4 2020
|
Fiscal
2021
|
Fiscal
2020
|
North America
|
$
|
198.5
|
$
|
172.3
|
$
|
687.6
|
$
|
588.3
|
Europe
|
|
140.3
|
|
175.0
|
|
567.8
|
|
709.4
|
Asia/Other
|
|
61.1
|
|
34.8
|
|
174.6
|
|
132.0
|
Total
revenues
|
$
|
399.9
|
$
|
382.1
|
$
|
1,430.0
|
$
|
1,429.7
|
Consolidated Operating Results
(In millions of
dollars)
|
Q4
2021
|
Q4 2020
|
Fiscal
2021
|
Fiscal
2020
|
Earnings from
operations
|
$
|
42.8
|
$
|
24.9
|
$
|
119.6
|
$
|
95.6
|
Amortization of
acquisition-related intangible assets
|
|
8.1
|
|
8.5
|
|
33.5
|
|
33.7
|
Restructuring
charges
|
|
––
|
|
5.8
|
|
14.3
|
|
26.6
|
Acquisition-related
transaction costs
|
|
4.2
|
|
0.1
|
|
6.7
|
|
1.5
|
Gain on sale of
facility
|
|
––
|
|
––
|
|
(5.3)
|
|
––
|
Contingent
consideration adjustment
|
|
(5.6)
|
|
––
|
|
(5.6)
|
|
––
|
Adjusted earnings
from operations1
|
$
|
49.5
|
$
|
39.3
|
$
|
163.2
|
$
|
157.4
|
1 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
|
Q4
2021
|
Q4 2020
|
Fiscal
2021
|
Fiscal
2020
|
Earnings from
operations
|
$
|
42.8
|
$
|
24.9
|
$
|
119.6
|
$
|
95.6
|
Depreciation and
amortization
|
|
17.4
|
|
18.3
|
|
71.0
|
|
71.4
|
EBITDA1
|
$
|
60.2
|
$
|
43.2
|
$
|
190.6
|
$
|
167.0
|
1 See
"Notice to Reader: Non-IFRS Measures and Additional IFRS
Measures."
|
Order Bookings by Quarter
(In millions of dollars)
|
Fiscal 2021
|
Fiscal
2020
|
Q1
|
$
|
325
|
$
|
423
|
Q2
|
|
403
|
|
321
|
Q3
|
|
435
|
|
368
|
Q4
|
|
463
|
|
356
|
Total Order
Bookings
|
$
|
1,626
|
$
|
1,468
|
Order Backlog by Market
(In millions of dollars)
As
at
|
March 31,
2021
|
March 31,
2020
|
Life sciences
|
$
|
585
|
$
|
467
|
Transportation
|
|
197
|
|
273
|
Consumer
products
|
|
282
|
|
90
|
Energy
|
|
96
|
|
112
|
Total
|
$
|
1,160
|
$
|
942
|
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):
|
Fiscal
2021
|
Fiscal
2020
|
Fiscal
2019
|
EBITDA
|
$
|
190.6
|
$
|
167.0
|
$
|
157.2
|
Less: depreciation
and amortization expense
|
|
71.0
|
|
71.4
|
|
42.4
|
Earnings from
operations
|
$
|
119.6
|
$
|
95.6
|
$
|
114.8
|
Less: net finance
costs
|
|
40.1
|
|
28.1
|
|
20.9
|
Provision for income
taxes
|
|
15.4
|
|
14.6
|
|
23.1
|
Net
income
|
$
|
64.1
|
$
|
52.9
|
$
|
70.8
|
|
|
|
|
|
|
|
|
Q4
2021
|
Q4 2020
|
EBITDA
|
|
|
$
|
60.2
|
$
|
43.2
|
Less: depreciation
and amortization expense
|
|
|
|
17.4
|
|
18.3
|
Earnings from
operations
|
|
|
$
|
42.8
|
$
|
24.9
|
Less: net finance
costs
|
|
|
|
16.7
|
|
7.8
|
Provision for income
taxes
|
|
|
|
2.3
|
|
4.0
|
Net
income
|
|
|
$
|
23.8
|
$
|
13.1
|
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):
|
|
Three Months Ended
March 31, 2021
|
Three Months Ended
March 31, 2020
|
|
|
IFRS
|
|
Adjustments
|
|
Adjusted (non-IFRS)
|
|
IFRS
|
|
Adjustments
|
|
Adjusted
(non-IFRS)
|
Earnings from
operations
|
$
|
42.8
|
$
|
––
|
$
|
42.8
|
$
|
24.9
|
$
|
––
|
$
|
24.9
|
Acquisition-related
transaction
costs
|
|
––
|
|
4.2
|
|
4.2
|
|
––
|
|
0.1
|
|
0.1
|
Amortization of
acquisition-
|
|
|
|
|
|
|
|
|
|
|
|
|
related intangible
assets
|
|
––
|
|
8.1
|
|
8.1
|
|
––
|
|
8.5
|
|
8.5
|
Restructuring
costs
|
|
––
|
|
––
|
|
––
|
|
––
|
|
5.8
|
|
5.8
|
Contingent
consideration adjustment
|
|
––
|
|
(5.6)
|
|
(5.6)
|
|
––
|
|
––
|
|
––
|
|
$
|
42.8
|
$
|
6.7
|
$
|
49.5
|
$
|
24.9
|
$
|
14.4
|
$
|
39.3
|
Less: net finance
costs
|
$
|
16.7
|
$
|
––
|
$
|
16.7
|
$
|
7.8
|
$
|
––
|
$
|
7.8
|
Less: adjustment to
net finance
costs1
|
|
––
|
|
(9.1)
|
|
(9.1)
|
|
––
|
|
––
|
|
––
|
Income before
income
taxes
|
$
|
26.1
|
$
|
15.8
|
$
|
41.9
|
$
|
17.1
|
$
|
14.4
|
$
|
31.5
|
Provision for income
taxes
|
$
|
2.3
|
$
|
––
|
$
|
2.3
|
$
|
4.0
|
$
|
––
|
$
|
4.0
|
Adjustment to
provision
for
|
|
|
|
|
|
|
|
|
|
|
|
|
income
taxes2
|
|
––
|
|
8.7
|
|
8.7
|
|
––
|
|
3.9
|
|
3.9
|
|
$
|
2.3
|
$
|
8.7
|
$
|
11.0
|
$
|
4.0
|
$
|
3.9
|
$
|
7.9
|
Net
income
|
$
|
23.8
|
$
|
7.1
|
$
|
30.9
|
$
|
13.1
|
$
|
10.5
|
$
|
23.6
|
Basic earnings per
share
|
$
|
0.26
|
$
|
0.08
|
$
|
0.34
|
$
|
0.14
|
$
|
0.12
|
$
|
0.26
|
1 Adjustments to net finance costs
relate to non-recurring finance costs associated with the
redemption of the U.S. $250.0 million 6.5% senior notes that were
due in 2023 (see "Liquidity, Cash Flow and Financial
Resources").
|
2 Adjustments to provision for income
taxes include $4.4 million of income tax effects on adjustment
items that are excluded for the purposes of calculating non-IFRS
based adjusted net income, and a non-recurring provision for income
taxes amount of $4.3 million primarily related to the impact of tax
planning opportunities which were implanted in the fourth quarter
of fiscal 2021.
|
|
|
Twelve Months
Ended March 31, 2021
|
|
Twelve Months
Ended March 31, 2020
|
|
|
IFRS
|
|
Adjustments
|
|
Adjusted (non-IFRS)
|
|
IFRS
|
|
Adjustments
|
|
Adjusted
(non-IFRS)
|
Earnings from
operations
|
$
|
119.6
|
$
|
––
|
$
|
119.6
|
$
|
95.6
|
$
|
––
|
$
|
95.6
|
Acquisition-related
transaction costs
|
|
––
|
|
6.7
|
|
6.7
|
|
––
|
|
1.5
|
|
1.5
|
Amortization of
acquisition-
|
|
|
|
|
|
|
|
|
|
|
|
|
related intangible
assets
|
|
––
|
|
33.5
|
|
33.5
|
|
––
|
|
33.7
|
|
33.7
|
Restructuring
costs
|
|
––
|
|
14.3
|
|
14.3
|
|
––
|
|
26.6
|
|
26.6
|
Gain on sale of
facility
|
|
––
|
|
(5.3)
|
|
(5.3)
|
|
––
|
|
––
|
|
––
|
Contingent
consideration
adjustment
|
|
––
|
|
(5.6)
|
|
(5.6)
|
|
––
|
|
––
|
|
––
|
|
$
|
119.6
|
$
|
43.6
|
$
|
163.2
|
$
|
95.6
|
$
|
61.8
|
$
|
157.4
|
Less: net finance
costs
|
$
|
40.1
|
$
|
––
|
$
|
40.1
|
$
|
28.1
|
$
|
––
|
$
|
28.1
|
Less: adjustment to
net finance costs1
|
|
––
|
|
(9.1)
|
|
(9.1)
|
|
––
|
|
––
|
|
––
|
Income before
income
taxes
|
$
|
79.5
|
$
|
52.7
|
$
|
132.2
|
$
|
67.5
|
$
|
61.8
|
$
|
129.3
|
Provision for income
taxes
|
$
|
15.4
|
$
|
––
|
$
|
15.4
|
$
|
14.6
|
$
|
––
|
$
|
14.6
|
Adjustment to
provision
for
|
|
|
|
|
|
|
|
|
|
|
|
|
income
taxes2
|
|
––
|
|
18.7
|
|
18.7
|
|
––
|
|
16.9
|
|
16.9
|
|
$
|
15.4
|
$
|
18.7
|
$
|
34.1
|
$
|
14.6
|
$
|
16.9
|
$
|
31.5
|
Net
income
|
$
|
64.1
|
$
|
34.0
|
$
|
98.1
|
$
|
52.9
|
$
|
44.9
|
$
|
97.8
|
Basic earnings per
share
|
$
|
0.70
|
$
|
0.37
|
$
|
1.07
|
$
|
0.57
|
$
|
0.49
|
$
|
1.06
|
1 Adjustments to net finance costs
relate to non-recurring finance costs associated with the
redemption of the U.S. $250.0 million 6.5% senior notes that were
due in 2023 (see "Liquidity, Cash Flow and Financial
Resources").
|
2 Adjustments to provision for income
taxes include $14.4 million of income tax effects on adjustment
items that are excluded for the purposes of calculating non-IFRS
based adjusted net income, and a non-recurring provision for income
taxes amount of $4.3 million primarily related to the impact of tax
planning opportunities which were implanted in the fourth quarter
of fiscal 2021.
|
Liquidity, Cash Flow and Financial Resources
(In
millions of dollars, except
ratios)
As at
|
March
31,
|
March 31,
|
|
2021
|
2020
|
Cash and cash
equivalents
|
$
|
187.5
|
$
|
358.6
|
Debt-to-equity
ratio1
|
|
0.59:1
|
|
0.86:1
|
Cash flows provided
by operating activities
|
$
|
185.2
|
$
|
20.3
|
1 Debt is
calculated as bank indebtedness, long-term debt and lease
liabilities. Equity is calculated as total equity less accumulated
other comprehensive income.
|
ATS AUTOMATION TOOLING SYSTEMS
INC.
Consolidated Statements of Financial
Position
(in thousands of Canadian dollars)
As at
|
Note
|
|
March
31 2021
|
|
March 31
2020
|
|
|
|
|
|
|
ASSETS
|
16
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
187,467
|
$
|
358,645
|
Accounts
receivable
|
|
|
285,947
|
|
291,126
|
Income tax
receivable
|
|
|
8,158
|
|
3,720
|
Contract
assets
|
22
|
|
272,847
|
|
231,531
|
Inventories
|
6
|
|
134,978
|
|
68,436
|
Deposits, prepaids
and other assets
|
7
|
|
37,807
|
|
31,149
|
|
|
|
927,204
|
|
984,607
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment
|
10
|
|
191,169
|
|
136,284
|
Right-of-use
assets
|
8
|
|
72,570
|
|
61,156
|
Other
assets
|
9
|
|
5,882
|
|
20,220
|
Goodwill
|
11
|
|
671,057
|
|
608,243
|
Intangible
assets
|
12
|
|
264,691
|
|
220,169
|
Deferred income tax
assets
|
18
|
|
11,087
|
|
2,725
|
Investment tax credit
receivable
|
18
|
|
52,440
|
|
64,569
|
|
|
|
1,268,896
|
|
1,113,366
|
Total
assets
|
|
$
|
2,196,100
|
$
|
2,097,973
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Bank
indebtedness
|
16
|
$
|
1,106
|
$
|
4,572
|
Accounts payable and
accrued liabilities
|
|
|
367,303
|
|
293,022
|
Income tax
payable
|
|
|
32,938
|
|
3,084
|
Contract
liabilities
|
22
|
|
218,290
|
|
117,757
|
Provisions
|
14
|
|
29,034
|
|
28,417
|
Current portion of
lease liabilities
|
8
|
|
15,197
|
|
15,696
|
Current portion of
long-term debt
|
16
|
|
79
|
|
133
|
|
|
|
663,947
|
|
462,681
|
Non-current
liabilities
|
|
|
|
|
|
Employee
benefits
|
15
|
|
34,110
|
|
26,247
|
Long-term lease
liabilities
|
8
|
|
57,764
|
|
47,209
|
Long-term
debt
|
16
|
|
430,634
|
|
597,965
|
Deferred income tax
liabilities
|
18
|
|
74,437
|
|
86,821
|
Other long-term
liabilities
|
9
|
|
22,548
|
|
8,037
|
|
|
|
619,493
|
|
766,279
|
Total
liabilities
|
|
$
|
1,283,440
|
$
|
1,228,960
|
|
|
|
|
|
|
Commitments and
contingencies
|
16, 20
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share
capital
|
17
|
$
|
526,446
|
$
|
521,884
|
Contributed
surplus
|
|
|
11,170
|
|
11,680
|
Accumulated other
comprehensive income
|
|
|
59,830
|
|
92,585
|
Retained
earnings
|
|
|
297,818
|
|
242,076
|
Equity attributable
to shareholders
|
|
|
895,264
|
|
868,225
|
Non-controlling
interests
|
|
|
17,396
|
|
788
|
Total
equity
|
|
|
912,660
|
|
869,013
|
Total liabilities
and equity
|
|
$
|
2,196,100
|
$
|
2,097,973
|
ATS AUTOMATION TOOLING SYSTEMS
INC.
Consolidated Statements of Income
(in
thousands of Canadian dollars, except per share amounts)
Years ended March
31
|
Note
|
2021
|
2020
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Revenues
from construction contracts
|
|
$
|
895,086
|
$
|
884,913
|
Services
rendered
|
|
|
413,323
|
|
423,252
|
Sale of
goods
|
|
|
121,643
|
|
121,569
|
|
|
|
|
|
|
Total
revenues
|
21, 22
|
|
1,430,052
|
|
1,429,734
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
Cost of
revenues
|
|
|
1,045,795
|
|
1,067,599
|
Selling, general and
administrative
|
|
|
236,013
|
|
233,653
|
Restructuring
costs
|
14
|
|
14,355
|
|
26,624
|
Stock-based
compensation
|
19
|
|
14,280
|
|
6,245
|
|
|
|
|
|
|
Earnings from
operations
|
|
|
119,609
|
|
95,613
|
|
|
|
|
|
|
Net finance
costs
|
23
|
|
40,152
|
|
28,074
|
|
|
|
|
|
|
Income before
income taxes
|
|
|
79,457
|
|
67,539
|
|
|
|
|
|
|
Income tax
expense
|
18
|
|
15,354
|
|
14,588
|
|
|
|
|
|
|
Net
income
|
|
$
|
64,103
|
$
|
52,951
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
Shareholders
|
|
$
|
64,092
|
$
|
52,898
|
Non-controlling
interests
|
|
|
11
|
|
53
|
|
|
$
|
64,103
|
$
|
52,951
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
Basic
|
24
|
$
|
0.70
|
$
|
0.57
|
Diluted
|
24
|
$
|
0.69
|
$
|
0.57
|
ATS AUTOMATION TOOLING SYSTEMS
INC.
Consolidated Statements of Cash Flows
(in
thousands of Canadian dollars)
Years ended March
31
|
Note
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Net income
|
|
$
|
64,103
|
$
|
52,951
|
Items not involving
cash
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
10
|
|
14,820
|
|
14,675
|
Amortization of
right-of-use assets
|
8
|
|
16,111
|
|
15,913
|
Amortization of
intangible assets
|
12
|
|
39,987
|
|
40,814
|
Deferred income
taxes
|
18
|
|
(29,054)
|
|
(951)
|
Other items not
involving cash
|
|
|
7,282
|
|
3,270
|
Stock-based
compensation
|
19
|
|
14,280
|
|
6,245
|
Gain on disposal of
property, plant and equipment
|
10
|
|
(6,505)
|
|
––
|
|
|
|
121,024
|
|
132,917
|
Change in non-cash
operating working capital
|
|
|
64,135
|
|
(112,570)
|
Cash flows
provided by operating activities
|
|
$
|
185,159
|
$
|
20,347
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
10
|
$
|
(21,541)
|
$
|
(45,448)
|
Acquisition of
intangible assets
|
12
|
|
(10,031)
|
|
(11,119)
|
Business
acquisitions, net of cash acquired
|
5
|
|
(68,523)
|
|
(53,367)
|
Proceeds from
disposal of property, plant and equipment
|
10
|
|
11,963
|
|
139
|
Cash flows used in
investing activities
|
|
$
|
(88,132)
|
$
|
(109,795)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Bank
indebtedness
|
|
$
|
(3,585)
|
$
|
2,546
|
Repayment of
long-term debt
|
|
|
(742,091)
|
|
(17,087)
|
Proceeds from
long-term debt
|
|
|
504,315
|
|
250,183
|
Proceeds from
exercise of stock options
|
|
|
6,111
|
|
5,985
|
Repurchase of common
shares
|
17
|
|
(8,662)
|
|
(4,785)
|
Principal lease
payments
|
|
|
(15,204)
|
|
(14,533)
|
Cash flows
provided by (used in) financing activities
|
|
$
|
(259,116)
|
$
|
222,309
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(9,089)
|
|
1,244
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(171,178)
|
|
134,105
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of year
|
|
|
358,645
|
|
224,540
|
|
|
|
|
|
|
Cash and cash
equivalents, end of year
|
|
$
|
187,467
|
$
|
358,645
|
|
|
|
|
|
|
Supplemental
information
|
|
|
|
|
|
Cash income taxes
paid
|
|
$
|
6,528
|
$
|
10,807
|
Cash interest
paid
|
|
$
|
38,428
|
$
|
30,365
|
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. 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 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 and right-of-use 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 and adjusted for other significant items of a
non-recurring nature. Non-cash working capital is defined as the
sum of accounts receivable, contract assets, inventories, deposits,
prepaids and other assets, less accounts payable, accrued
liabilities, provisions and contract liabilities. Order Bookings
represent new orders for the supply of automation systems, services
and products that management believes are firm. Order Backlog is
the estimated unearned portion of revenues on customer contracts
that are in process and have not been completed at the specified
date.
Earnings from operations and EBITDA are used by the Company to
evaluate the performance of its operations. Management believes
that earnings from operations is an important indicator in
measuring the performance of the Company's operations on a pre-tax
basis and without consideration as to how the Company finances its
operations. Management believes that EBITDA is an important
indicator of the Company's ability to generate operating cash flows
to fund continued investment in its operations. 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' 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 provide 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 that 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.
A reconciliation of (i) earnings from operations and EBITDA to
net income, 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 12-month periods ended March 31, 2021 and March
31, 2020, is contained in this news release (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 12-month periods ended March 31, 2021 and March
31, 2020 is also contained in this news release (see "Order
Backlog Continuity").
Note to Readers: Forward-Looking Statements
This news
release and results of operations of ATS contain certain statements
that may constitute forward-looking information within the meaning
of applicable securities laws ("forward-looking statements").
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of ATS, or developments in ATS'
business or in its industry, to differ materially from the
anticipated results, performance, achievements or developments
expressed or implied by such forward-looking statements.
Forward-looking statements include all disclosure regarding
possible events, conditions or results of operations that is based
on assumptions about future economic conditions and courses of
action. Forward-looking statements may also include, without
limitation, any statement relating to future events, conditions or
circumstances. ATS cautions you not to place undue reliance
upon any such forward-looking statements, which speak only as of
the date they are made. Forward-looking statements relate to, among
other things: the strategic framework; the Company's strategy to
expand organically and through acquisition; the ATS Business Model
("ABM"); conversion of opportunities into Order Bookings; the
Company's Order Backlog partially mitigating the impact of volatile
Order Bookings; rate of Order Backlog conversion; 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;
expected benefits with respect to the Company's efforts to expand
its services revenues; initiatives having the goal of expanding
adjusted earnings from operations margin over long-term; the CEWS
program; non-cash working capital levels as a percentage of
revenues; expectation in relation to meeting liquidity and funding
requirements for investments; potential to use leverage to support
growth strategy; expected closing of the BioDot transaction; the
potential impact of COVID-19 and government emergency measures; and
the Company's belief with respect to the outcome of certain
lawsuits, claims and contingencies. The risks and
uncertainties that may affect forward-looking statements include,
among others: the progression of COVID-19 and its impacts on the
Company's ability to operate its assets, including the possible
shut-down of facilities due to COVID-19 outbreaks; the severity and
duration of the COVID-19 pandemic in all jurisdictions where the
Company conducts its business; the nature and extent of government
imposed restrictions on travel and business activities and the
nature, extent, and applicability of government assistance
programs, in both cases related to the COVID-19 pandemic, as
applicable in all jurisdictions where the Company conducts its
business; the impact of the COVID-19 pandemic on the Company's
employees, customers, and suppliers; impact of COVID-19 on 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; 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 some or
all of the sales funnel is not converted to Order Bookings due to
competitive factors or failure to meet customer needs; timing of
customer decisions related to large enterprise programs and
potential for 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 the Company is
not successful in growing its service offering or that expected
benefits are not realized; that efforts to expand adjusted earnings
from operations margin over long-term is unsuccessful, due to any
number of reasons, including less than anticipated increase in
after-sales service revenues or reduced margins attached to those
revenues, inability to achieve lower costs through supply chain
management, failure to develop, adopt internally, or have customers
adopt, standardized platforms and technologies, inability to
maintain current cost structure if revenues were to grow, and
failure of ABM to impact margins; that the CEWS program ceases to
be available, that the Company ceases to qualify, or that the
benefits under the program are other than expected; 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; that the BioDot transaction does not close, is delayed,
or is prohibited as a result of the completion of the regulatory
filing process; 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 and/or
professional 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.
SOURCE ATS Automation Tooling Systems Inc.