Q2 2025 Earnings Call November 6, 2024 8:30am ET Today's Hosts /ATS" Andrew Hider Ryan McLeod Chief Executive Officer Chief Financial Officer Forward Looking Statements Note to Reader: This presentation and the oral statements made during this call contain certain statements that may constitute forward-looking information and forward-looking statements within the meaning of applicable Canadian and United States securities laws ("forward-looking statements"). All such statements are made pursuant to the "saf ...

ATS Corporation. (NYSE:ATS) Q2 2025 Earnings Conference Call November 6, 2024 8:30 AM ET Company Participants David Galison - Head of Investor Relations Andrew Hider - Chief Executive Officer Ryan McLeod - Chief Financial Officer Conference Call Participants Sabahat Khan - RBC Justin Keywood - Stifel David Ocampo - Cormark Securities Patrick Sullivan - TD Cowen Maxim Sytchev - National Bank Financial Michael Glen - Raymond James Patrick Baumann - JPMorgan Operator Welcome to the ATS Corporation Second Quart ...

Financial Performance - For the six months ended September 29, 2024, the company reported an income (loss) before income taxes of $(1,366) thousand, compared to $67,561 thousand for the same period last year[93]. - For the six months ended September 29, 2024, total company revenue was CAD 1,307,051, a decrease from CAD 1,489,365 for the same period in 2023, representing a decline of approximately 12.2%[119]. - The total company revenue for the three months ended September 29, 2024, was CAD 612,781, down from CAD 735,716 for the same period in 2023, reflecting a decline of approximately 16.7%[119]. - Revenue from construction contracts for the three months ended September 29, 2024, was CAD 317,462, compared to CAD 479,755 for the same period in 2023, indicating a decrease of about 33.9%[119]. - The company reported total revenue from external customers in the United States for the six months ended September 29, 2024, at CAD 583,063, compared to CAD 723,755 for the same period in 2023, a decrease of approximately 19.4%[118]. Debt and Financing - As of September 29, 2024, the Company had utilized $732,532 under its Credit Facility, with $732,520 classified as long-term debt[73]. - The Company has additional credit facilities available totaling $110,935, with $19,497 outstanding as of September 29, 2024[78]. - The Company's U.S. $350,000 aggregate principal amount of senior notes bears interest at a rate of 4.125% per annum and matures on December 15, 2028[79]. - On August 21, 2024, the Company completed a private placement of $400,000 aggregate principal amount of senior unsecured notes, bearing interest at a rate of 6.50% per annum, maturing on August 21, 2032[82]. - The Company’s long-term debt as of September 29, 2024, is $1,594,002, up from $1,171,796 on March 31, 2024[85]. - The Company met all financial covenants under its Credit Facility as of September 29, 2024[77]. Restructuring and Cost Management - The North American Electric Vehicle market is experiencing a slowdown in sales growth, leading to reduced investment and program cancellations, prompting the Company to initiate cost structure reductions in its transportation-related businesses, with restructuring expenses of $17,075 recorded in Q2 fiscal 2025[71]. - The total estimated cost of restructuring activities is expected to be at the higher end of the previously disclosed range of $15,000 to $20,000[71]. Stock and Shareholder Activity - During the six months ended September 29, 2024, the Company repurchased 1,020,887 common shares under its normal course issuer bid for $44,983[89]. - The balance of common shares outstanding decreased from 98,219,496 on March 31, 2024, to 96,869,371 on September 29, 2024[90]. - The total number of stock options outstanding increased to 1,048,581 with a weighted average exercise price of $36.16 as of September 29, 2024, compared to 906,218 options at $32.83 as of October 1, 2023[98]. - The company granted 241,327 time-vesting stock options during the six months ended September 29, 2024, with a weighted average exercise price of $45.37[100]. - The stock-based compensation expense for the six months ended September 29, 2024, totaled $6,423 thousand, down from $13,445 thousand for the same period last year[108]. Tax and Deferred Tax - The company recognized an income tax expense related to Pillar Two income taxes of $538 thousand for the three months ended September 29, 2024, and $1,051 thousand for the six months ended September 29, 2024[93]. - The company recognized a deferred tax recovery of $(10,882) thousand for the three months ended September 29, 2024, compared to a deferred tax expense of $9,683 thousand for the same period last year[93]. Contract and Asset Management - Total net contract assets and liabilities as of September 29, 2024, were CAD 344,802, compared to CAD 392,499 as of March 31, 2024, showing a decrease of approximately 12.2%[124]. - Estimated earnings for contracts in progress as of September 29, 2024, were CAD 1,484,945, compared to CAD 1,354,259 as of March 31, 2024, indicating an increase of about 9.6%[124]. - The weighted average number of common shares outstanding for the three months ended September 29, 2024, was 97,926,369, down from 98,883,583 for the same period in 2023[130]. Working Capital and Liabilities - Total change in non-cash working capital decreased by $74,280 in the three months ended September 29, 2024, compared to a decrease of $87,212 in the same period last year[134]. - Contract assets increased to $136,775 in the three months ended September 29, 2024, from $15,768 in the previous year[134]. - Accounts payable and accrued liabilities decreased to $72,030 in the latest quarter, compared to $5,031 in the same period last year[134]. - Contract liabilities increased to $120,509 in the three months ended September 29, 2024, from $35,770 in the previous year[134]. - Provisions increased to $8,700 in the latest quarter, compared to a decrease of $1,784 in the same period last year[134]. - Inventories decreased to $8,377 in the three months ended September 29, 2024, from $10,473 in the previous year[134]. - Foreign exchange and other liabilities increased to $7,999 in the latest quarter, compared to $1,397 in the same period last year[134]. - Income tax receivable slightly increased to $2,343 in the latest quarter, compared to $2,219 in the previous year[134]. - Deposits, prepaids, and other assets increased to $9,596 in the three months ended September 29, 2024, from a decrease of $4,297 in the previous year[134]. - Total accounts receivable decreased to $(17,972) in the latest quarter, compared to $(107,220) in the same period last year[134].

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:ATS Corporation (ATS) is an automation company. The Zacks Consensus Estimate for its current year earnings has been revised 14.7% downward over the last 60 days.Azul S.A. (AZUL) is an air transport company. The Zacks Consensus Estimate for its current year earnings has been revised 42.2% downward over the last 60 days.Boise Cascade Company (BCC) is construction materials industry.The Zacks Consensus Estimate for its current year earni ...

Group 1 - ATS Corporation (ATS) is an automation company with a Zacks Consensus Estimate for its current year earnings revised 14.7% downward over the last 60 days [1] - Azul S.A. (AZUL) is an air transport company with a Zacks Consensus Estimate for its current year earnings revised 42.2% downward over the last 60 days [1] - Babcock & Wilcox Enterprises, Inc. (BW) is an energy and emissions control solutions provider with a Zacks Consensus Estimate for its current year earnings revised 10% downward over the last 60 days [1]

ATS Corporation (NYSE: ATS ) is positioned to grow both organically and through acquisitions from the long-term trends of the current macro environment. This company is a mid-cap in Canada that has recently purchased related companiesI am currently a CFA Candidate, working in the food and beverage industry as a finance guy. I have a passion for equity research and am an individual investor primarily focused on North American equities. My investing philosophy focuses on long-term sustainable macro trends and ...

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:ATS Corporation (ATS) is an automation company. The Zacks Consensus Estimate for its current year earnings has been revised 16.7% downward over the last 60 days.BM Technologies, Inc. (BMTX) is a financial technology company. The Zacks Consensus Estimate for its current year earnings has been revised 132.1% downward over the last 60 days.Barnes Group Inc. (B) is an industrial solutions company.The Zacks Consensus Estimate for its curre ...

Tom Werner Please note all $ figures in $CAD, not $USD, unless otherwise stated Introduction I've been following shares of ATS Corporation (TSX:ATS:CA)(NYSE:ATS) for a while now. Since my initial coverage of the name back in February, I cautioned investors that while I was bullish on the company's long-term outlook regarding EVs, the valuation at 18.5x earnings wasn't providing enough margin of safety. Sure enough, with weaker auto sale volumes to start the first half of the year, shares of ATS have been un ...

Financial Data and Key Metrics - Q1 2025 order bookings were $817 million, up 18% YoY, driven by organic growth in life sciences and consumer products [7] - Q1 revenues were $694 million, down 8% YoY, primarily due to lower transportation revenues [7] - Adjusted earnings from operations in Q1 were $86 million, down 16% YoY [7] - Gross margin, excluding acquisition-related inventory fair value charges, was 29.9%, up 168 basis points YoY [20] - Backlog at the end of Q1 was $1.9 billion, with a trailing 12-month book-to-bill ratio of 1.02:1 [18] Business Line Data and Key Metrics - Life sciences backlog reached $990 million, up 26% YoY, the highest in company history [7] - Food and beverage backlog was $216 million, up 15% YoY [8] - Transportation backlog was $417 million, with smaller opportunities in the sales funnel [10] - After-sales services saw the launch of a service experience center in Cambridge, enabling real-time asset monitoring [12] Market Data and Key Metrics - Life sciences opportunity funnel remains strong, with large orders in wearable devices, GLP-1 auto-injectors, and radioisotope production lines [7][8] - Energy market opportunities include CANDU reactor refurbishment, SMRs, and energy storage [9][31] - Transportation market faces challenges, with EV projects nearing completion and reduced investments by industry participants [10] Company Strategy and Industry Competition - The company is realigning its EV business and adjusting its cost structure due to market conditions [10] - The acquisition of Paxiom is expected to enhance market position and diversify offerings in food technologies and packaging [8] - The company is focused on expanding its international customer base and leveraging its expertise in energy storage [9][31] Management Commentary on Operating Environment and Future Outlook - Management remains confident in the strategic direction, particularly in regulated end markets like life sciences [17] - The company expects Q2 revenue conversion to be in the 33% to 36% range of order backlog, with challenges in transportation [21] - Long-term growth opportunities are seen in life sciences, energy, and digital offerings [9][13] Other Important Information - The company announced the acquisition of Heidolph Instruments, a leading manufacturer of lab equipment [15] - The company launched several new products, including AI-based heat exchanger and compressor monitoring systems [13] - The company is actively engaged in M&A activities, with a diversified portfolio of target sizes and markets [15] Q&A Session Summary Question: Working Capital Situation - The increase in working capital was primarily due to timing issues in life sciences and EV projects [27] - No risk of obsolescence in the equipment being built, as contracts are being fulfilled as expected [29] Question: Energy Market Opportunities - Opportunities include CANDU reactor refurbishment, SMRs, and energy storage [31][32][33] Question: GLP-1 Market Outlook - The GLP-1 market is in line with internal expectations, with strong support for auto-injector production [35] Question: Q2 Revenue and Margin Guidance - Q2 revenue is expected to be between $620 million and $680 million, with margin pressure due to lower revenues [37][38] Question: Restructuring Actions - The company is reallocating resources and reducing workforce to align with market activity, with expected savings exceeding costs [40] Question: Life Sciences Backlog - GLP-1 orders comprise roughly 20% of the life sciences backlog [45] Question: M&A and NCIB Strategy - The company views NCIB as opportunistic and prioritizes internal investment and M&A based on return on invested capital [51] Question: Tax Rate - The effective tax rate is expected to be in the 25% to 27% range for fiscal 2025 [64] Question: Revenue Outlook - The overall revenue outlook for 2025 remains unchanged, with strong bookings in life sciences and recent acquisitions offsetting transportation declines [67] Question: Gross Margin Improvement - Gross margin improvement was driven by acquisitions, mix benefits, and easing supply chain headwinds [69]

ATS (ATS) came out with quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -2.63%. A quarter ago, it was expected that this automation services provider would post earnings of $0.41 per share when it actually produced earnings of $0.48, delivering a surprise of 17.07%.Over the last four quarters, the ...