Tuesday, ATS Automation Tooling Systems Inc. (ATA.TO) reported a decline in profit for the third quarter reflecting difficult market conditions.
For the quarter, net income declined to C$3.7 million or C$0.04 per share from C$12.3 million or C$0.16 per share a year-ago. Net income from continuing operations declined to C$3.74 million or C$0.04 per share from C$15.8 million or C$0.20 per share in the year-ago period.
Consolidated revenue for the third quarter declined by 45% to C$138.13 million from C$221.73 million a year-ago. This primarily reflected a 20% decrease in Order Backlog entering the third quarter compared to a year ago.
Revenue for the Photowatt Technologies segment declined by 25% to C$59.7 million. Lower year-over-year revenue reflected a 22% decrease in total megawatts or MWs sold to 12.8 MWs from 16.4 MWs in the same period a year ago. Lower MWs sold resulted from lower demand for Photowatt Technologies' products outside of its current core market in France.
The company said that fiscal 2010 third quarter Order Bookings were $92 million, 41% lower than the third quarter of fiscal 2009, which included a solar industry Order Booking of approximately $50 million. Lower Order Bookings also reflected a reduction in sales opportunities as customers continued to spend at reduced levels as a result of global economic uncertainty.
For the third quarter, foreign exchange rate changes negatively impacted consolidated revenues compared to the third quarter of fiscal 2009. This decrease was primarily related to a stronger Canadian dollar in comparison with U.S. dollar.
The company's cost of revenue declined by 37% to C$112.76 million from C$180.32 million a year-ago. The selling, general and administrative expenses declined by 13% to C$19.53 million from C$22.47 million a year-ago. Lower SG&A expenses reflected cost reductions implemented during fiscal 2009 and 2010, in addition to lower profit sharing expenses. Stock-based compensation during the quarter was C$1.07 million, compared with C$0.471 million a year-ago.
At December 27, 2009, the company had cash and short-term investments of C$180.0 million, compared with C$142.4 million at March 31, 2009. In the three months ended December 27, 2009.
The company said that in the short-term, management believes business investment and capital spending by customers will remain low. As the global economy and some of ASG's markets have strengthened, proposal activity in ASG's markets has increased, however despite signs of improvement in some of ASG's customers markets, such as healthcare and automotive, many of ASG's customers are continuing to push-out spending and delay investment decisions. This will continue to cause volatility in Order Bookings and put pressure on revenues in the short-term.
For the nine month period, net income declined to C$10.1 million or C$0.11 per share from C$34.51 million or C$0.45 per share a year-ago.
Year-to-date, the company's net income from continuing operations declined to C$10.1 million or C$0.11 per share from C$43.5 million or C$0.56 per share in the comparable period a year-ago.
The year-to-date revenue declined to $439 million from $653 million in the year-ago period.
Year-to-date foreign exchange rate changes positively impacted consolidated revenue due to a weaker Canadian dollar relative to the U.S. dollar in the first and second quarters of fiscal 2010.
ATA.TO is currently trading at C$7.24, down C$0.01 or 0.14%, on a volume of 424 million shares on the Toronto Stock Exchange.
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