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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Post by retiredcfon May 18, 2023 10:30am

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Post# 35454447

TD

A more cautious analyst, she currently has a $63.00 target. GLTA

ATS Corporation

(ATS-T) C$57.88

First Look: Q4/F23 EBITDA Beat; Backlog Up Marginally Q/Q Event

ATS reported Q4/F23 adjusted EBITDA of $103mm, an ~5% beat vs. the Street/ TDSI at $99mm/$98mm. Adjusted EBITDA was $118mm after adding back the mark-to-market component of stock-based compensation, as ATS started to do this quarter, but that is not comparable to the consensus. Relative to our forecast, the EBITDA beat was driven by higher-than-expected revenue, due to a faster-than-expected backlog draw-down.
Bookings of $737mm were up 16% y/y, but below our $803mm forecast, and the ending backlog of $2,153mm, while up 50% y/y and stable q/q, was ~6% short of our forecast of $2,281mm.
The conference call is at 8:30 a.m. ET. Dial-in: (416) 764-8688.

Impact: NEUTRAL

We have characterized the results as NEUTRAL because ATS has reported another solid quarter and is entering F2024 with a record backlog, but with the stock up ~40% YTD, we find it hard to see the share-price moving much higher on the back of the Q4/F23 results.
Q4/F23 Results: Revenue increased 21% y/y to $731mm, reflecting healthy organic growth of 17%, plus acquired revenue/an FX tailwind. Adjusted EBITDA increased 4% y/y to $103mm (14.1% margin) vs. $99mm (16.4% margin) in Q4/ F22, as higher revenue was offset by a substantial y/y increase in stock-based compensation.
Solid Bookings/Record Backlog: Bookings of $737mm, while down vs. a record $979mm in Q3/F23, were still up a healthy 16% y/y, and included a US$120mm EV order from an existing customer. The book-to-bill ratio was 1.01 and the ending backlog of $2,153mm was up 50% y/y. The company's outlook commentary is virtually unchanged vs. last quarter. 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 10% vs. 13% last quarter, largely due to the receipt of some milestone payments for large EV programs. ATS' leverage of 2.7x net debt to TTM adjusted EBITDA is down slightly q/q and within the target range.