../Morning Post
Posted November 9, 2009
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ATS reports second quarter fiscal 2010 results

CAMBRIDGE - ATS Automation Tooling Systems Inc. today reported its financial results for the three and six months ended September 27, 2009.

Second Quarter Summary

- Consolidated revenue was $148.2 million compared to $152.7 million in the first quarter of the fiscal year and $219.5 million in the same period a year ago;

- Consolidated earnings from operations were $9.3 million compared to $0.5 million in the first quarter of the fiscal year and $13.6 million in the same period a year ago;

- Per share earnings were $0.07 (basic and diluted) compared to $0.00 (basic and diluted) in the first quarter of the fiscal year and $0.12 (basic and diluted) in the same period a year ago;

- The balance sheet remained strong with cash net of debt of $103.6 million compared to $106.5 million at March 31, 2009 and $40.0 million at September 30, 2008;

- In October, the Company announced plans to serve the Ontario solar energy market;

- Subsequent to quarter end, the Company reached agreement to extend its primary credit facility until April 2011.

In the Automation Systems Group segment ("ASG"), customers are continuing to reduce and/or delay their capital spending programs. This resulted in a 47% reduction in Order Bookings compared to the same period a year ago. At Photowatt France ("PWF"), reduced demand for solar modules, and lower year-over-year average selling prices per watt negatively impacted revenues and operations.

"The actions we have taken to fix our operations and re-position Photowatt over the last 18 months have enabled us to operate profitably in the second quarter, despite a significant decline in our revenues," said Anthony Caputo, Chief Executive Officer. "We remain focused on the front-end of our business, in both ASG and Photowatt, and we will continue to adapt our strategies to respond to this difficult environment."

ASG Second Quarter Results

- Revenue was $97.0 million compared to $115.2 million in the first quarter and $147.4 million a year ago on lower Order Bookings and lower Order Backlog entering the quarter compared to the prior periods;

- EBITDA was $15.3 million compared to $16.7 million in the first quarter of this fiscal year and $16.0 million in the same period a year ago;

- Earnings from operations were $13.6 million compared to $14.8 million in the first quarter of this fiscal year and $13.9 million in the same period a year ago;

- Period end Order Backlog was $197 million, a decrease of 14% from $230 million in the first quarter of this fiscal year and down from $247 million a year ago;

- Order Bookings were 26% lower at $71 million compared to $96 million in the first quarter of fiscal 2010 and 47% lower compared to $133 million in the second quarter of fiscal 2009;

- Order Bookings were $45 million during the first six weeks of the third quarter.

Despite a 34% year-over-year decrease in revenues in the second quarter, ASG's operating margin was 14% reflecting cost reductions implemented during fiscal 2009 and 2010, supply chain savings and improved program management. Revenue increased 38% in the healthcare industry, offset by decreases of 94% in computer-electronics, 33% in energy, 51% in automotive, and 24% in other markets (primarily consumer products).

Photowatt Second Quarter Results

- PWF revenue was $51.5 million, a 28% increase over fiscal 2010 first quarter revenues of $40.1 million, but down from $72.5 million a year ago;

- PWF EBITDA was $4.7 million compared to negative EBITDA of $3.4 million in the first quarter of fiscal 2010 and EBITDA of $9.8 million a year ago;

- PWF operating earnings were $0.6 million compared to an operating loss of $7.5 million in the first quarter of fiscal 2010 and operating earnings of $6.0 million a year ago;

- Total megawatts (MWs) sold at PWF increased 28% to 10.6 MWs from 8.3 MWs in the first quarter of fiscal 2010, and were 29% lower than the 14.9 MWs sold a year ago;

- Average cell efficiency improved for polysilicon products to 15.6% compared to 15.0% in the first quarter of fiscal 2010 and 15.4% a year ago.

The 29% year-over-year decline in revenues reflected lower MWs sold and lower average selling prices. PWF partially mitigated the impact of lower average selling prices through increased systems sales, which were up by 42% to $30.7 million from $21.6 million a year ago. Total polysilicon products represented $49.3 million or 96% of fiscal 2010 second quarter revenue compared to $21.0 million or 29% a year ago, as PWF rebalanced production towards polysilicon products to take advantage of better raw material pricing.

On October 21, 2009, ATS and Photowatt announced they were entering the Ontario solar energy market with a plan to: develop solar projects; offer complete solutions to installers and developers including modules, balance of system, technical support, project management, financing and site maintenance; and, encourage others wishing to participate in the market and/or produce solar products in Ontario to consider cooperation and co-location at a new "green wing" that has been designated at ATS's existing Cambridge campus.

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