Financial Data and Key Metrics Changes - Fiscal year 2025 was challenging, but financial results were supported by a diversified presence in dynamic end markets and disciplined application of the ATS business model [6][10] - ATS has outperformed the S&P 500 index on a total shareholder return basis over the past five years, despite global economic challenges [10] Business Line Data and Key Metrics Changes - In life sciences, ATS continues to support customers with automation solutions that enhance scalability and precision, with strategic investments driving innovation [7] - In food and beverage, ATS introduced advanced inspection and sorting solutions to improve quality control and operational efficiency [7] - The company strengthened its digital portfolio and service offerings, exploring AI-based tools integration across various markets [8] Market Data and Key Metrics Changes - ATS's specialized capabilities have shown steady progress across market verticals, including energy, where it assists nuclear customers in scaling operations to meet energy demands [7] - The transportation business has been better aligned with current end market demand following recent adjustments [9] Company Strategy and Development Direction - ATS is committed to continuous improvement and innovation, with a focus on leveraging the ATS business model as a competitive differentiator [8][39] - The company has made targeted acquisitions, such as Paxium and Heidolph, to expand capabilities in packaging and enhance its product suite [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its long-term strategy and drive sustained value creation through fiscal 2026 and beyond [10] - The leadership transition is expected to be smooth, with full confidence in the existing team to maintain progress [12][39] Other Important Information - The meeting included a leadership update, with Ryan McLeod appointed as interim CEO following Andrew Hyder's departure [12] - The board remains engaged with management to ensure risk management and value creation [8] Q&A Session Summary Question: Are there any questions from shareholders? - There were no questions submitted during the Q&A session, indicating a lack of immediate concerns from shareholders [41][42]

Financial Data and Key Metrics Changes - Q1 revenues were $737 million, up 6% from Q1 last year [6] - Order bookings were $693 million, down 15% compared to Q1 last year [16] - Adjusted earnings from operations in Q1 were CAD 78.6 million, representing 10.7% of revenues [18] - Gross margin for Q1 was 29.8%, consistent with Q1 last year [18] - Cash flows from operating activities were CAD 156 million [22] - Net debt to adjusted EBITDA ratio was 3.6 times on a pro forma basis at Q1 [22] Business Line Data and Key Metrics Changes - Life Sciences order backlog at quarter end was $1.2 billion, with strong contributions from auto injectors and radiopharma [7][8] - Food and Beverage backlog was $229 million, an increase of 6% compared to Q1 last year [10] - Energy business saw growth primarily in nuclear refurbishment activities, particularly around CANDU reactors [39] - Consumer Products and Transportation segments remained stable, with transportation experiencing lower EV end market demand [11][33] Market Data and Key Metrics Changes - The order backlog ended the quarter at approximately $2.1 billion, reflecting a healthy funnel across diversified offerings [6][19] - Orders in the energy sector, particularly nuclear, showed strong demand despite project delays reported by other companies [39] - Orders excluding transportation were up over 10% year-over-year in the first half of the calendar year [36] Company Strategy and Development Direction - The company is focused on driving growth through repeatable revenue from services, consumables, and digital offerings [7] - M&A activities are ongoing, with a focus on strategic opportunities that align with long-term growth ambitions [12][60] - The company aims to return leverage to its target range of 2 to 3 times while realizing synergies from recent acquisitions [23][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for the year, supported by a strong backlog and healthy order intake [35] - The company is closely monitoring the business environment, particularly regarding cross-border tariffs, but has not seen a material impact to date [20] - Management highlighted ongoing efficiency improvements and a commitment to creating long-term value for shareholders [25][60] Other Important Information - ATS was included in Time Magazine's inaugural list of Canada's Best Companies 2025, ranking number one in the engineering, manufacturing, and medical technology category [15] - The company continues to invest in innovation and capability development, including the launch of a new virtual reality training platform [13] Q&A Session Summary Question: Can you discuss the demand environment further? - Management noted that the trailing twelve-month book-to-bill ratio is 1.17, indicating alignment with growth targets and a healthy funnel across key markets [32] Question: What is driving the uptick in the energy business? - The growth in the energy sector is primarily driven by nuclear refurbishment activities, particularly around CANDU reactors [39] Question: Can you provide an update on the integration process and cross-selling opportunities? - Integration across recent acquisitions is progressing well, with strong uptake of ABM deployments and cost synergies being realized [52] Question: How is the company addressing the impact of U.S. government funding changes on lab research? - The impact is minimal, representing a low single-digit percentage of the overall business, and does not materially affect the life sciences segment [53] Question: What is the outlook for margin progression? - Management expects margin expansion throughout the year, although variability is anticipated due to project portfolio dynamics [85] Question: Can you elaborate on the Multiflex system? - The Multiflex system is designed for decommissioning nuclear reactors, enhancing efficiency and space management in the process [97]

Financial Data and Key Metrics Changes - Q1 revenues were $737 million, up 6% from Q1 last year [5] - Order bookings were $693 million, down 15% compared to Q1 last year [16] - Adjusted earnings from operations in Q1 were CAD 78.6 million, representing 10.7% of revenues [18] - Gross margin for Q1 was 29.8%, consistent with Q1 last year [18] - Cash flows from operating activities were CAD 156 million [22] - Net debt to adjusted EBITDA ratio was 3.6 times on a pro forma basis at Q1 [22] Business Line Data and Key Metrics Changes - In Life Sciences, order backlog at quarter end was $1.2 billion, with strong contributions from auto injectors and blood glucose monitoring wearables [6] - Food and Beverage backlog was $229 million, an increase of 6% compared to Q1 last year [8] - Energy sector saw growth primarily in nuclear refurbishment activities, particularly around CANDU reactors [42] - Consumer Products and Transportation sectors remained stable, with transportation experiencing lower EV end market demand [10] Market Data and Key Metrics Changes - The order backlog ended the quarter at approximately $2.1 billion, reflecting a healthy funnel across diversified offerings [5] - Orders in the first half of the calendar year were up over 10% year over year, excluding transportation [39] Company Strategy and Development Direction - The company is focused on returning leverage to its target range of 2 to 3 times and realizing further synergies from recent acquisitions [12][23] - The strategy includes growing repeatable revenue through services, consumables, and digital offerings [6] - The company remains committed to creating long-term value for shareholders and customers through strong execution and continued growth in targeted markets [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for the year, supported by a strong backlog and a trailing twelve-month book-to-bill ratio of 1.17 [33] - The company is closely monitoring the business environment due to cross-border tariffs but has not seen a material impact to date [20] - Management noted that while some customers in the lab research space are taking a more measured approach to capital spending, the overall outlook for Life Sciences remains positive [7] Other Important Information - ATS was included in Time Magazine's inaugural list of Canada's Best Companies 2025, ranking number one in the engineering, manufacturing, and medical technology category [14] - The company is actively engaged in M&A opportunities that align with long-term growth ambitions [11] Q&A Session Summary Question: Can you discuss the demand environment further? - Management noted that the trailing twelve-month book-to-bill ratio is 1.17, indicating alignment with growth targets and a healthy funnel of customer conversations [33][34] Question: What is driving the uptick in the energy business? - The growth in the energy sector is primarily driven by nuclear refurbishment activities, particularly around CANDU reactors, with a strong demand environment [42] Question: Can you provide an update on the integration process and cross-selling opportunities? - Integration across recent acquisitions is progressing well, with strong uptake in ABM deployments and cost synergies being realized [54] Question: How is the company addressing the impact of U.S. government funding changes on Life Sciences? - The impact is low, representing less than a single-digit percentage of the business, and has not materially affected overall Life Sciences performance [55] Question: What is the outlook for margin progression? - Management expects margin expansion for the year, driven by gross margin improvements and operational efficiencies, though variability is anticipated [88] Question: What is the status of the M&A pipeline during the leadership transition? - The company continues to pursue both organic and acquisition-related growth, with M&A activity ongoing despite the leadership transition [62]

Q1 2026 Earnings Call August 7, 2025 8:30am ET Today's Hosts Throughout this presentation management uses certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures to evaluate the performance of the Company. The terms "EBITDA", "adjusted revenues", "organic revenue", "adjusted net income", "adjusted earnings from operations", "adjusted EBITDA", "pro forma adjusted EBITDA", "adjusted basic earnings per share", and "free cash flow", are non-IFRS financial measures, "adjusted ea ...

Company Overview - ATS is expected to report a year-over-year decline in earnings of 27%, with an estimated earnings per share (EPS) of $0.27 for the quarter ended June 2025 [3][12] - Revenue is projected to be $517.13 million, reflecting a slight increase of 1.9% compared to the same quarter last year [3] Earnings Expectations - The earnings report is anticipated to be released on August 7, and the stock may experience upward movement if actual results exceed expectations [2] - Conversely, if the results fall short, the stock may decline [2] Estimate Revisions - The consensus EPS estimate has been revised down by 0.67% over the last 30 days, indicating a bearish sentiment among analysts regarding ATS's earnings prospects [4][12] - The current Earnings ESP for ATS stands at -34.31%, suggesting a negative outlook compared to the consensus estimate [12] Historical Performance - In the last reported quarter, ATS had an EPS of $0.28, surpassing the expected $0.26, resulting in a surprise of +7.69% [13] - Over the past four quarters, ATS has only beaten consensus EPS estimates once [14] Industry Comparison - Another company in the same industry, Middleby (MIDD), is expected to report an EPS of $2.26 for the same quarter, indicating a year-over-year decline of 5.4% [18] - Middleby's revenue is projected to be $982.71 million, down 0.9% from the previous year [18] - Middleby has an Earnings ESP of -2.66% and a Zacks Rank of 3, making it similarly challenging to predict an earnings beat [19]

[Fiscal 2025 Fourth Quarter and Full Year Financial Results](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20and%20Full%20Year%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) ATS Corporation's fiscal 2025 was marked by strong Order Bookings and Backlog growth, but a significant net loss due to a one-time EV customer settlement Q4 Fiscal 2025 Key Metrics | Metric | Q4 2025 | Q4 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues ($ million) | $574.2 | $791.5 | -27.5% | | Adjusted Revenues¹ ($ million) | $721.1 | $791.5 | -8.9% | | Net Income (Loss) ($ million) | $(68.9) | $48.5 | -242.1% | | Adjusted Basic EPS¹ ($) | $0.41 | $0.65 | -36.9% | | Order Bookings ($ million) | $863 | $791 | +9.1% | Full Year Fiscal 2025 Key Metrics | Metric | Fiscal 2025 | Fiscal 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues ($ million) | $2,533.3 | $3,032.9 | -16.5% | | Adjusted Revenues¹ ($ million) | $2,680.2 | $3,032.9 | -11.6% | | Net Income (Loss) ($ million) | $(28.0) | $194.2 | -114.4% | | Adjusted Basic EPS¹ ($) | $1.47 | $2.61 | -43.7% | | Order Bookings ($ million) | $3,305 | $2,891 | +14.3% | - A one-time settlement with an EV customer significantly impacted results, accounted for as a **$146.9 million** decrease in revenue and a **$24.2 million** increase in SG&A for Q4[5](index=5&type=chunk) - Order Backlog grew **19.3%** year-over-year to **$2,139 million** as of March 31, 2025, enhancing revenue visibility for the upcoming fiscal year[5](index=5&type=chunk)[6](index=6&type=chunk) [Consolidated Financial Performance](index=3&type=section&id=Consolidated%20Financial%20Performance) Q4 FY2025 IFRS revenues declined significantly to **$574.2 million** due to an EV customer settlement, leading to a net loss of **$68.9 million** [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Q4 adjusted revenues decreased **8.9%** to **$721.1 million**, driven by declines in construction and services, while transportation revenues plummeted **69.2%** - Q4 IFRS revenues were **$574.2 million**, down **27.5%** YoY. The decline was driven by a **$146.9 million** EV customer settlement, a **$120.2 million (15.2%)** decrease in organic revenue, partially offset by **$28.5 million** from acquisitions[9](index=9&type=chunk) Q4 Adjusted Revenue Growth by Market (YoY) | Market | Growth (%) | Key Drivers | | :--- | :--- | :--- | | Life Sciences | +11.1% | Acquisitions ($19.4 million), organic growth from higher backlog | | Food & Beverage | +13.2% | Acquisitions ($9.1 million), positive FX impact | | Consumer Products | +27.2% | Higher Order Backlog entering the quarter | | Transportation | -69.2% | Lower Order Backlog as prior year had large EV projects | | Energy | +38.7% | Higher Order Backlog entering the quarter | [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) The company reported a Q4 net loss of **$68.9 million**, with Adjusted EBITDA falling to **$97.1 million** and margin contracting to **13.5%** due to lower revenues - Q4 FY2025 net loss was **$68.9 million**, or **($0.70)** per share, a significant decrease from the **$48.5 million** net income, or **$0.49** per share, in Q4 FY2024[11](index=11&type=chunk) Q4 Profitability Metrics (YoY) | Metric | Q4 2025 | Q4 2024 | | :--- | :--- | :--- | | Adjusted EBITDA ($ million) | $97.1 | $115.8 | | Adjusted EBITDA Margin (%) | 13.5% | 14.6% | | Adjusted Basic EPS ($) | $0.41 | $0.65 | [Business Operations and Orders](index=2&type=section&id=Business%20Operations%20and%20Orders) ATS saw strong commercial momentum with Q4 Order Bookings up **9.1%** to **$863 million**, contributing to a **19.3%** rise in Order Backlog to **$2,139 million** [Order Bookings and Backlog](index=4&type=section&id=Order%20Bookings%20and%20Backlog) Q4 Order Bookings increased **9.1%** to **$863 million**, driven by organic growth and acquisitions, resulting in a **19.3%** rise in Order Backlog to **$2,139 million** - Q4 Order Bookings increased **9.1%** YoY to **$863 million**, reflecting organic growth (**2.6%**), contributions from acquisitions (**$31.5 million** or **4.0%**), and positive currency effects (**2.5%**)[16](index=16&type=chunk) - Order Backlog stood at **$2,139 million** at March 31, 2025, a **19.3%** increase from the previous year, driven by strength in life sciences, consumer products, food & beverage, and energy markets[17](index=17&type=chunk) - The trailing twelve-month book-to-bill ratio was **1.23:1** as of March 31, 2025, indicating that new orders outpaced revenues[17](index=17&type=chunk) [Recent Acquisitions](index=2&type=section&id=Recent%20Acquisitions) ATS expanded its portfolio by acquiring Paxiom Group for **$146.4 million** to enhance packaging capabilities and Heidolph for **$45.1 million** to strengthen its life sciences presence - Acquired Paxiom Group, a provider of packaging machines for food & beverage, cannabis, and pharmaceutical industries, for a total purchase price of **$146.4 million** on July 24, 2024[7](index=7&type=chunk) - Acquired Heidolph, a manufacturer of premium lab equipment for life sciences and pharmaceutical industries, for **$45.1 million** on August 30, 2024[8](index=8&type=chunk) [Market Outlook and Forward-Looking Guidance](index=5&type=section&id=Market%20Outlook%20and%20Forward-Looking%20Guidance) ATS maintains a positive outlook with a strong sales funnel in life sciences and energy, anticipating Q1 FY2026 revenues between **$680 million** and **$730 million** supported by a substantial Order Backlog - For the first quarter of fiscal 2026, the company expects to generate revenues in the range of **$680 million** to **$730 million**[20](index=20&type=chunk) - The sales funnel remains strong in life sciences (pharmaceuticals, medical devices), food & beverage, and energy (nuclear, grid battery storage)[18](index=18&type=chunk) - The transportation funnel consists of smaller opportunities as North American customers moderate investment in new EV capacity[18](index=18&type=chunk) - The company's long-term goal is to maintain its investment in non-cash working capital as a percentage of annualized revenues below **15%**[23](index=23&type=chunk) [Key Corporate Developments](index=6&type=section&id=Key%20Corporate%20Developments) ATS finalized a **$134.75 million** EV customer settlement, incurred **$24.0 million** in reorganization costs, and identified ineffective internal controls over financial reporting as of March 31, 2025 [EV Customer Settlement](index=6&type=section&id=EV%20Customer%20Settlement) ATS settled with an EV customer for a **U.S. $134.75 million** payment in Q1 FY2026, resulting in a **$171 million** pre-tax charge and a **$129 million** net income reduction in Q4 FY2025 - The company reached a settlement with an EV customer and expects to receive a payment of **U.S. $134.75 million** in Q1 fiscal 2026[25](index=25&type=chunk) - The settlement resulted in a reduction to net income of **$129 million** (**$171 million** before taxes) for the year ended March 31, 2025[27](index=27&type=chunk) [Other Corporate Matters](index=6&type=section&id=Other%20Corporate%20Matters) The company incurred **$24.0 million** in fiscal 2025 restructuring costs and identified ineffective internal controls over financial reporting as of March 31, 2025, without restating financials - In fiscal 2025, the company recorded total restructuring costs of **$24.0 million**[24](index=24&type=chunk) - Management concluded that internal controls over financial reporting were not effective as of March 31, 2025, but this did not result in any restatement of financial statements[29](index=29&type=chunk) [Detailed Financial Statements and Reconciliations](index=9&type=section&id=Detailed%20Financial%20Statements%20and%20Reconciliations) [Consolidated Financial Statements](index=17&type=section&id=Consolidated%20Financial%20Statements) The audited Consolidated Financial Statements show total assets of **$4.62 billion** and a net loss of **$28.0 million** on **$2.53 billion** revenues for fiscal 2025 Consolidated Statement of Financial Position (Year-End) | Metric | March 31, 2025 ($ million) | March 31, 2024 ($ million) | | :--- | :--- | :--- | | Total Assets | $4,621.9 | $4,088.8 | | Total Liabilities | $2,912.5 | $2,404.9 | | Total Equity | $1,709.4 | $1,683.9 | Consolidated Statement of Income (Full Year) | Metric | Fiscal 2025 ($ million) | Fiscal 2024 ($ million) | | :--- | :--- | :--- | | Revenues | $2,533.3 | $3,032.9 | | Earnings from Operations | $9.3 | $315.4 | | Net Income (Loss) | $(28.0) | $194.2 | | Basic EPS (Loss) ($) | $(0.29) | $1.98 | - Cash flows from operating activities for fiscal 2025 were **$25.8 million**, while cash used in investing activities was **$268.4 million**, and cash provided by financing activities was **$290.3 million**[49](index=49&type=chunk) [Reconciliation of Non-IFRS to IFRS Measures](index=11&type=section&id=Reconciliation%20of%20Non-IFRS%20to%20IFRS%20Measures) This section reconciles non-IFRS measures like Adjusted EBITDA, Adjusted Net Income, and Adjusted Revenues to IFRS, removing impacts from the EV settlement, acquisitions, and restructuring for clearer operational insights - Adjusted EBITDA is reconciled to Net Income by adding back net finance costs, taxes, depreciation & amortization, and removing items like restructuring charges and the EV customer settlement[38](index=38&type=chunk) - Adjusted Net Income and Adjusted Basic EPS are reconciled from IFRS figures by excluding items such as amortization of acquisition-related intangibles, restructuring charges, the EV customer settlement, and related tax effects[39](index=39&type=chunk)[40](index=40&type=chunk) - Free cash flow for fiscal 2025 was a negative **$52.3 million**, calculated from **$25.8 million** in cash from operations less **$78.1 million** in capital expenditures for property, plant, equipment, and intangible assets[41](index=41&type=chunk) [Investments, Liquidity, and Cash Flow](index=16&type=section&id=Investments%2C%20Liquidity%2C%20and%20Cash%20Flow) As of March 31, 2025, ATS held **$225.9 million** in cash, with its debt-to-equity ratio increasing to **1.10:1**, while operating activities provided **$25.8 million** in cash for the fiscal year Liquidity Position (Year-End) | Metric | March 31, 2025 ($ million) | March 31, 2024 ($ million) | | :--- | :--- | :--- | | Cash and cash equivalents | $225.9 | $170.2 | | Debt-to-equity ratio | 1.10:1 | 0.79:1 | Fiscal 2025 Cash Flow Summary | Activity | Cash Flow ($ million) | | :--- | :--- | | Operating activities | $25.8 | | Investing activities | $(268.5) | | Financing activities | $290.3 | [Disclosures](index=20&type=section&id=Disclosures) [Non-IFRS and Other Financial Measures](index=20&type=section&id=Non-IFRS%20and%20Other%20Financial%20Measures) This section defines non-IFRS and supplementary financial measures used to evaluate performance and liquidity, clarifying they are not standardized under IFRS and may not be comparable - The company uses non-IFRS measures like Adjusted EBITDA, adjusted earnings from operations, and adjusted basic EPS to evaluate performance[51](index=51&type=chunk) - Management believes these adjusted measures increase comparability between periods by removing items such as acquisition-related costs, restructuring charges, and the EV customer settlement[54](index=54&type=chunk) - Supplementary measures like Order Bookings and Order Backlog are used as indicators of future revenues[55](index=55&type=chunk) [Forward-Looking Statements](index=22&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future performance and strategy, cautioning readers about numerous risks and uncertainties that could cause actual results to differ materially - The document contains forward-looking statements concerning the company's strategy, market opportunities, Order Backlog conversion, and financial outlook (e.g., quarterly revenue guidance)[57](index=57&type=chunk)[58](index=58&type=chunk) - Key risks identified include general market performance, international trade disputes, supply chain challenges, inflation, interest rate changes, and customer concentration[59](index=59&type=chunk) - The statements are based on current estimates and assumptions, and the company undertakes no obligation to update them other than as required by law[61](index=61&type=chunk)[63](index=63&type=chunk)

Core Insights - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative outlook for these companies [1][2] Company Summaries - ATS Corporation (ATS) is a global provider of automation solutions, with a current year earnings estimate revised downward by 4.5% over the last 60 days [1] - CONMED Corporation (CNMD) is a medical technology company specializing in surgical devices, experiencing a 7.3% downward revision in its current year earnings estimate over the last 60 days [1] - CSX Corporation (CSX) operates in rail-based freight transportation services, with its current year earnings estimate revised downward by 9.9% over the last 60 days [2]

Financial Data and Key Metrics Changes - Order bookings for Q3 were $883 million, up 32% compared to Q3 last year, marking the second highest bookings quarter in company history [6][25] - Q3 revenues were $652 million, down 13% from Q3 last year, primarily due to lower EV revenues as expected [6][27] - Adjusted earnings from operations in Q3 were $66 million, reflecting a decrease of 35% from the prior year [28] - The order backlog at the end of the quarter was approximately $2.1 billion, with a trailing 12-month book-to-bill ratio of 1.18 to 1 [7][30] Business Line Data and Key Metrics Changes - In life sciences, order backlog reached a record $1.2 billion, an increase of 39% compared to Q3 last year [11] - The food and beverage segment ended the quarter with a record backlog of $252 million, an increase of 22% compared to last year [12] - The energy segment showed strong funnel growth, supported by refurbishment opportunities for nuclear power generation facilities [13] - Transportation business continued restructuring to align with lower market demand, particularly in EV [15] Market Data and Key Metrics Changes - The life sciences market saw strong bookings in key sub-markets such as radiopharma and medical devices [11] - The energy market is experiencing growth, particularly in nuclear refurbishment and new builds [13][49] - The consumer products market remains stable with niche opportunities in automated warehouse solutions [14] Company Strategy and Development Direction - The company is focused on expanding market reach through high-value applications and growing recurring revenues to offset variability in bookings [8] - Integration activities for recent acquisitions are underway, with a strong M&A funnel being cultivated [19][21] - The company is committed to innovation, particularly in AI-driven initiatives, to enhance capabilities and deliver long-term value [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential tariff impacts and emphasized the strength of their teams and processes [9][33] - The company anticipates continued margin improvement, albeit modestly in Q4, as restructuring efforts take effect [45][46] - Management remains optimistic about the strong order backlog and diversified bookings across markets, providing good revenue visibility [38][39] Other Important Information - The company generated cash flows from operating activities of $66.7 million in Q3 [34] - The net debt to adjusted EBITDA ratio was 3.7 times, with a commitment to reduce leverage to a target range of two to three times [37][114] - The company released its fifth annual Sustainability Report, reaffirming commitments to sustainability goals [23] Q&A Session Summary Question: Will margin improvements impact overall operating margins for fiscal Q4? - Management expects continued margin improvement, but it will be modest due to the timing of new business ramp-up in transportation [44][46] Question: Can you provide context on the energy or nuclear segment's growth? - The segment saw strong bookings from multiple customers, with ongoing opportunities in refurbishment and new builds [49][53] Question: What is the status of the dispute with the large EV customer? - The equipment has been delivered and remains in production at the customer site, with no revenues related to the dispute in the quarter [56][142] Question: How is the company addressing potential tariff impacts? - Management is closely monitoring the situation and working with customers and suppliers to mitigate challenges [33][62] Question: What is the outlook for capital allocation and leverage reduction? - The priority is to reduce leverage to the target range of two to three times, with ongoing cultivation of M&A opportunities [114][116] Question: How does the company view the nuclear market's potential? - Management sees a strong niche position in nuclear and anticipates it will be a valuable part of the revenue mix moving forward [118][120]

Financial Performance - Q3 2025 revenues decreased by approximately 133% year-over-year to $652 million [10], compared to $752 million in Q3 2024 [12] - Adjusted earnings from operations for Q3 2025 were $657 million [10], a decrease of approximately 351% compared to $1012 million in Q3 2024 [12] - Net income for Q3 2025 was $65 million [12], a significant decrease of approximately 862% compared to $472 million in Q3 2024 [12] - Organic revenue decreased by approximately 202% for Q3 and 188% year-to-date [12] Order Bookings and Backlog - Q3 2025 order bookings increased by approximately 32% year-over-year to $883 million [10] - The company's order backlog stands at $2060 million [10], providing good revenue visibility [11] - The trailing twelve-month book-to-bill ratio is 118, or 124 excluding transportation [10] Outlook - The company estimates Q4 F25 revenue to be in the range of $650 million to $710 million [13, 15] - The company has a strong and diversified order backlog across various sectors, including Life Sciences ($1220 million), Food and Beverage ($252 million), Energy ($158 million), Consumer Products ($180 million), and Transportation ($250 million) [11]

Financial Performance - Total revenues for the three months ended December 29, 2024, were $651,993, a decrease of 13.3% compared to $752,052 for the same period in 2023[3] - Net income for the three months ended December 29, 2024, was $6,505, down 86.2% from $47,182 in the same period last year[3] - Earnings per share attributable to shareholders for the three months ended December 29, 2024, were $0.07, compared to $0.48 for the same period in 2023[3] - Comprehensive income for the three months ended December 29, 2024, was $65,008, compared to $45,049 for the same period in 2023, an increase of 44.4%[5] - The company reported an income before income taxes of $10,642 for the three months ended December 29, 2024, compared to $60,994 for the same period in 2023[70] Assets and Liabilities - Total assets increased to $4,666,313 as of December 29, 2024, up from $4,088,799 as of March 31, 2024, representing a growth of 14.1%[2] - Total liabilities increased to $2,910,273 as of December 29, 2024, from $2,404,852 as of March 31, 2024, reflecting a rise of 21%[2] - Cash and cash equivalents rose to $263,152 as of December 29, 2024, compared to $170,177 as of March 31, 2024, an increase of 54.6%[2] - Trade receivables as of December 29, 2024, were $663,146,000, an increase of 51.7% from $437,329,000 as of March 31, 2024[91] - Contract assets decreased to $619,510,000 as of December 29, 2024, from $704,703,000 as of March 31, 2024[91] - Net contract balances increased to $853,614,000 as of December 29, 2024, compared to $778,772,000 as of March 31, 2024[91] Operating Costs and Expenses - The company reported operating costs of $454,061 for the three months ended December 29, 2024, down 15.7% from $538,435 in the same period last year[3] - The company incurred restructuring costs of $3,360 for the three months ended December 29, 2024, compared to $16,228 in the same period last year[3] - Interest expense for the three months ended December 29, 2024, was $25,255,000, an increase of 49.5% from $16,898,000 in 2023[94] - The company recorded risk management losses of $13,310 for the three months ended December 29, 2024, compared to gains of $1,487 in the same period of the previous year[49] Equity and Shareholder Information - Total equity as of December 31, 2023, reached CAD 1,618,266 thousand, up from CAD 1,130,583 thousand as of March 31, 2023, indicating a growth of approximately 43%[7] - The Company has a normal course issuer bid allowing for the repurchase of up to 8,259,180 common shares until December 15, 2025[65] - As of December 29, 2024, the Company has repurchased 1,020,887 common shares for $44,983 under the previous NCIB program[66] - The weighted average number of common shares outstanding for the three months ended December 29, 2024, was 97,926,990, a decrease from 98,906,456 in 2023[97] Acquisitions - The acquisition of Paxiom Group was completed for a total purchase price of CAD 146,438 thousand, enhancing the company's capabilities in packaging solutions[22] - The total purchase price for the acquisition of Paxiom was $146,438, with a net identifiable asset value of $66,901 and residual goodwill of $79,537[24] - Paxiom contributed approximately $22,323 in revenue and incurred a net loss of $1,235 from the acquisition date to December 29, 2024[26][27] - The total purchase price for the acquisition of Heidolph was $45,064, with net identifiable assets valued at $42,722 and residual goodwill of $2,342[28][29] - Heidolph contributed approximately $23,335 in revenue and incurred a net loss of $1,066 from the acquisition date to December 29, 2024[31] Cash Flow and Financing - Cash flows provided by operating activities for the nine months ended December 31, 2023, were CAD 11,205 thousand, a significant decrease from CAD 110,508 thousand in the previous year[9] - The company recorded a significant cash outflow of CAD 269,274 thousand in investing activities for the nine months ended December 31, 2023, compared to CAD 315,454 thousand in the previous year[9] - The Company issued $600,000 in CAD Senior Notes at an interest rate of 6.50% per annum, with the latest issuance completed on December 19, 2024[61] - The Company has a total of $1,611,232 in long-term debt as of December 29, 2024, which includes $519,335 from the Credit Facility and $1,103,380 from Senior Notes[64] Taxation - The effective income tax rate increased to 29% for the nine months ended December 29, 2024, compared to 24% for the same period in 2023[70] - The company recognized income tax expense related to Pillar Two income taxes of CAD 1,579 for the nine months ended December 29, 2024, compared to CAD 0 in the same period of 2023[71] Stock Options and Compensation - The number of stock options outstanding increased to 1,035,380 with a weighted average exercise price of CAD 36.05 as of December 29, 2024, compared to 865,386 options at CAD 33.43 in the prior year[74] - The company granted 241,327 time-vesting stock options during the nine months ended December 29, 2024, compared to 176,112 in the same period of 2023[73] - The company incurred stock-based compensation expenses of CAD 9,907 thousand for the nine months ended December 31, 2023, compared to CAD 8,146 thousand in the previous year[9] Market Conditions and Risks - The company expects to continue monitoring the potential impact of tariffs on its financial condition and operations, which remains uncertain[21] - The company recorded unrealized losses of $5,016 on foreign currency risk management forward contracts during the three months ended December 29, 2024[49]