ATS Corp T.ATS

Alternate Symbol(s): ATS

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ATS Corporation is an automation solutions provider. It uses its knowledge base and global capabilities in custom automation, repeat automation, automation products and value-added solutions, 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, transportation, food and beverage, consumer products, and energy. It engages with customers on both greenfield programs, such as equipping new factories, and brownfield programs, including capacity expansions, production relocations, equipment upgrades, software upgrades, efficiency improvements and factory optimizations. It offers post-automation services. It offers artificial intelligence and machine-learning-based tools for industrial production. It designs and manufactures automated water purification solutions. It also manufactures lab equipment for the life sciences and pharmaceutical industries.

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ATS Corp

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Post by retiredcfon Feb 09, 2023 10:26am

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Post# 35276995

TD

Some potential here for them to raise their current target of $59.00. GLTA

ATS Corporation

(ATS-T) C$53.93

Modest Q3/F23 EBITDA Beat; Record Bookings/Backlog Event

ATS reported Q3/F23 adjusted EBITDA of $95mm, a slight beat vs. the Street at $92mm, and in line with our $95mm estimate. Relative to our forecast, slightly higher-than-expected revenue, due to a somewhat faster-than-expected backlog drawdown, was offset by higher-than-expected SG&A.
Record bookings of $979mm were comfortably above our $915mm forecast, more than offsetting the slightly faster-than-expected backlog drawdown, such that the ending backlog of $2,143mm was 3% better-than-expected.
The conference call is at 8:30 a.m. ET. Dial-in: (416) 764-8688.

Impact: SLIGHTLY POSITIVE

Q3/F23 Results: Revenue increased 18% y/y to $647mm, reflecting 10% organic growth, plus acquired revenue of $41mm, and a 1% FX tailwind. Adjusted EBITDA increased 14% y/y to $95mm (14.7% margin) vs. $84mm (15.3% margin) in Q3/ F22, primarily reflecting: 1) a 140bps decrease in the gross profit margin, which ATS attributed to the execution of higher-margin programs in Q3/F22 and the impact of supply-chain headwinds in Q3/F23; 2) a 20bps improvement in adjusted SG&A as a percentage of revenue; and 3) lower stock-based compensation, which was very elevated in both years, but declined 80bps y/y as a percentage of revenue.
Record Bookings/Backlog: Record bookings of $979mm were up 46% y/y, reflecting organic growth of 38%, primarily due to large order bookings from an existing automotive customer in the EV space and in life sciences. The book-to- bill ratio was 1.51, and the ending backlog was a record $2,143mm, up 45% y/y and 20% q/q. The company's outlook commentary is largely unchanged vs. Q2/ F23. Funnel activity is strong in life sciences, EVs, and in food and beverage, and ATS has its highest-ever order backlog in food and beverage since entering the space. Activity is stable in consumer products and in nuclear, and the nuclear funnel includes some longer-term opportunities.
Cash Flow: Working capital as a percentage of revenue improved to 13% vs. 16% in Q2/F23, due to the receipt of some milestone payments for large EV programs, and ATS' leverage of 2.8x net debt to TTM adjusted EBITDA is back within the target range, even as the company continues to invest in working capital on some newer enterprise programs.