ATS Corporation Q4 FY2025 earnings call

• Financial value drivers: Q4 order bookings $863M (+9% y/y), full year $3.3B (record). Q4 adjusted revenues $721M, full year down 12% y/y due to EV.
• Business segments: Life sciences demonstrated strength and market leadership with acquisitions like Paxiom and Heidolph. Food and beverage funnel strong. Energy受益于核行业增长. Consumer products and transportation funnels stable.
• Strategic initiatives: Hosted President's Kaizen Events, making progress on M&A, innovating in Symphoni platform, Digital Tomato, and SuperTrak system.
• Macro influences: Geopolitical and trade tensions, but no material customer behavior change yet. Focus on global supply chain optimization, regional capabilities, and price action to support margins.

Order bookings for Q4 were $863 million, up 9% from Q4 last year. Full year bookings were $3.3 billion, a record. Q4 adjusted revenues were $721 million, down 9% from Q4 last year. Full year adjusted revenues were 12% lower y/y due to lower EV revenues. Adjusted earnings from operations in Q4 were $74 million, and full year were $283 million. Order backlog ended Q4 at approximately $2.1 billion, the highest in 8 quarters. Life sciences backlog was $1.2 billion, food and beverage ended the year with a backlog of $258 million, energy funnel remained strong, consumer products funnel was stable, and transportation funnel was stable with some EV orders.

• Q1 revenues expected $680M-$730M.
• Expect organic growth in fiscal '26 supported by backlog.
• CapEx and intangible investment for fiscal '26 expected $80M-$100M.
• Aim to reduce net debt to adjusted EBITDA leverage to 2-3x.

• Geopolitical and trade tensions could impact demand.
• Internal control deficiency related to business processes and documentation.
• Tariffs and supply chain challenges.

Q: How confident are you about returning to positive organic growth in fiscal '26?

A: Andrew and Ryan discuss that the trailing 12-month book-to-bill ratio of 1.23 and strong backlog support growth, with cautiously optimistic view.

Q: Can you talk about the internal control deficiency identified and what's underway to address it?

A: Identified through normal course process, relates to business processes and documentation improvements, focus on fixing in fiscal '26.

Q: What's the composition of the health care backlog?

A: Includes GLP-1, radiopharmaceuticals, wearable devices for diabetes care, automated pharmacies, and contact lenses.

Q: How are you protecting from tariffs and related inflation?

A: Contracts protect well, supply chain is being localized, and benefits from USMCA in Canadian operations.