ATS reports fourth quarter gains in operating profit,
New automation systems bookings accelerate to $123 million
TSX: ATA
CAMBRIDGE, ON, May 22 /CNW/ - ATS Automation Tooling Systems Inc. today
reported increases in operating profitability, revenue and new automation
order bookings for the three months ended March 31, 2003 as it continued to
maximize the value of its industry leadership in challenging economic
conditions.
"ATS finished fiscal 2003 with improved operating profitability and a
decidedly more optimistic outlook than we've had in a number of months," said
Klaus Woerner, ATS President and Chief Executive Officer. "In particular, the
revenue increases for Automation Systems in the fourth quarter were strong and
growth in new automation order bookings was even stronger - 30% ahead of last
year. Combined with healthy backlog levels, ATS is in good shape to start the
new fiscal year. Precision Components Group also registered higher revenues,
and made solid headway on new projects. Most important, we ended the year
knowing that ATS has significantly advanced its industry leadership, made
substantial market share gains, and greatly expanded its new business
opportunities. All of this puts us in good shape for a market renewal."
12 Month Summary
ATS remained profitable for the 12 months ended March 31, 2003, despite
market weakness, and a non-cash charge of $6.0 million ($5.6 million after
tax, or 0.09 cents per share) in the fourth quarter reflecting impairment in
the value of certain assets. Including this charge, net earnings for the
fiscal year 2003 were $2.3 million (0.04 cents per share basic and diluted)
compared to $12.6 million (0.21 cents basic and diluted) in fiscal 2002.
Excluding this charge, fiscal 2003 net earnings would have been $7.9 million
(0.13 cents per share). Revenue for the 12 months was $584.3 million, 6% ahead
of $549.5 million in fiscal 2002.
Fourth Quarter Fiscal 2003 Highlights
- Consolidated revenue was $139.2 million, up 7% from $130.4 million in
the fourth quarter a year ago.
- Operating earnings were $1.3 million, 151% higher than $0.5 million in
the same period a year ago based on improvements in operating margin
for Automation Systems Group and higher revenue.
- Fourth quarter net loss - including the aforementioned non-cash
charge - was $4.6 million (a loss of 0.08 cents) compared to net
earnings of $0.2 million (0.0 cents per share) in the same period a
year ago. Excluding this charge, fourth quarter fiscal 2003 net
earnings would have been 0.02 cents per share.
- In the fourth quarter of fiscal 2003, cash flow from operating
activities totaled $31.8 million and period end cash and short-term
investments rose to $82.3 million.
- At $123 million, new automation systems bookings were 30% or
$29 million ahead of the fourth quarter last year. Sequentially,
bookings were 31% higher than in the third quarter of fiscal 2003.
- Quarter end automation systems backlog was $161 million, down from
$168 million at quarter end a year ago.
<<
Revenue by Industry
($ millions)
13 weeks ended 52 weeks ended
03/31/2003 03/31/2002 03/31/2003 03/31/2002
-------------------------------------------------------------------------
Automation Systems:
Automotive $ 45.0 $ 40.5 $ 177.6 $ 158.5
Computer-electronics 35.1 25.6 155.2 141.3
Healthcare 12.9 15.3 64.5 70.1
Other 8.4 5.4 28.4 23.8
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Subtotal 101.4 86.8 425.7 393.7
Precision Components:
Automotive 28.3 27.7 111.4 102.3
Computer-electronics 2.5 1.2 5.4 3.9
Other 2.5 2.3 8.2 7.6
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Subtotal 33.3 31.2 125.0 113.8
Solar 9.6 15.3 48.2 50.9
Intersegment Elimination (5.1) (2.9) (14.6) (8.9)
-------------------------------------------------------------------------
Total Consolidated Revenue $ 139.2 $ 130.4 $ 584.3 $ 549.5
-------------------------------------------------------------------------
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ATS continued to benefit from its strategic market diversification
efforts, broad customer base and expanding global market reach. Segmented
revenue for the fourth quarter shows:
- Automation Systems Group revenue was $101.4 million, 17% higher than in
the fourth quarter a year ago, reflecting backlog entering the period.
Computer-electronics revenue was 37% higher in the fourth quarter this
year versus last, revenue from 'other' customers was 55% higher and
automotive - the Group's largest customer segment in the quarter -
registered a healthy 11% increase. Automotive continues to be a stable
market for ATS.
- Precision Components operations, excluding solar, achieved revenue of
$33.3 million, 7% higher than a year ago. Increases primarily came from
growth in thermal device sales and contributions made by newly acquired
Micro Precision Plastics (MPP) which was purchased in early February,
2003. These positive contributions more than offset revenue declines on
other programs which have reached their end of life.
- Photowatt International solar revenue, at $9.6 million in the quarter,
was 37% lower than in the fourth quarter a year ago. Fourth quarter
revenue was 49% lower than the record high revenue recorded in the
third quarter of fiscal 2003 when a number of customers pulled forward
solar module orders to qualify under subsidies offered by the German
government. Under German law, these solar energy subsidies
automatically decline at the end of each calendar year (the end of
ATS's third quarter). Photowatt revenue was also lower because of
declines in world prices for solar modules over the past year.
Consolidated Revenue by Region
($ millions)
13 weeks ended 52 weeks ended
03/31/2003 03/31/2002 03/31/2003 03/31/2002
-------------------------------------------------------------------------
U.S. & Mexico $ 79.5 $ 70.4 $ 334.4 $ 333.4
Europe 32.4 25.5 123.8 110.1
Canada 13.5 16.5 70.0 52.7
Asia-Pacific and other 13.8 18.0 56.1 53.3
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Total $ 139.2 $ 130.4 $ 584.3 $ 549.5
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Fourth Quarter Operating Results
Consolidated operating earnings were $1.3 million compared to
$0.5 million in the fourth quarter of fiscal 2002, reflecting the factors
discussed below.
Automation Systems Group operating earnings were $3.5 million versus an
operating loss of $0.7 million in the fourth quarter a year ago. The
year-over-year improvement was due to higher revenues and the fact that the
Group incurred $3.2 million of charges in last year's fourth quarter to
write-down certain inventories.
Starting in the fourth quarter, ATS treated its solar operations as a
separate reportable segment. Previously, these results were part of ATS
Precision Components. The solar segment consists of Photowatt International
and the development activity for Spheral Solar Power (SSP), the Company's next
generation solar technology.
Photowatt remained profitable on an operating basis in the fourth quarter
despite the steep decline in revenue. Operating earnings were $0.2 million
compared to $0.7 million in the fourth quarter a year ago. The affect on
earnings from lower revenue was largely mitigated by the net impact of a
year-end inventory gain and an offsetting bad debt expense.
ATS Precision Components Group generated operating earnings of
$0.4 million reflecting costs to prepare for new automotive programs coming on
line in fiscal 2004 and the ramp up of the Group's thermal products business.
The impact of these costs was partially offset by positive contributions by
newly-acquired MPP. Operating earnings were $2.8 million in the fourth quarter
last year.
Balance Sheet
ATS finished the year with a very strong balance sheet. Cash and
short-term investments were $82.3 million at March 31, 2003 and period end
debt to equity ratio was 0.09 to 1 compared to 0.1 to 1 at March 31, 2002.
Cash flow from operating activities for all of fiscal 2003 was $32.6 million.
Outlook
At March 31, 2003, automation systems order backlog for external
customers was $161 million, compared to $152 million at the end of the third
quarter. Largely as a result of changes in the U.S.-Canadian dollar exchange
rate, backlog was lower than the $168 million registered at March 31, 2002.
The ending backlog of $161 million does not include approximately $20 million
in automation systems backlog related to SSP.
Automation Systems Backlog by Industry
($ millions)
03/31/2003 03/31/2002
-------------------------------------------------------------------------
Computer/Electronics $ 43.0 $ 35.2
Automotive 73.4 79.3
Healthcare 26.8 38.2
Other 17.3 15.6
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Total $ 160.5 $ 168.3
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New automation systems order bookings in the fourth quarter were very
strong at $123 million, 30% higher than bookings in the fourth quarter a year
ago and 31% ahead of third quarter fiscal 2003 bookings.
During the first seven weeks of the first quarter of fiscal 2004, ATS
recorded $48 million in new automation order bookings.
"We aren't making a definitive call on an upturn at this point and in
fact, activity in one segment - computer-electronics - remains weak compared
to historical norms," said Mr. Woerner. "However, since the end of our fiscal
year, we've been given more reasons for optimism. Purchase orders continue to
flow and perhaps more importantly, customers are requesting quotations at a
very robust pace. In fact, we're having more serious discussions with
customers about future orders than at any time in the past 12 months."
"We have the makings of much healthier capacity utilization levels," said
Mr. Woerner. "We currently estimate that the majority of our automation
facilities now have about five months of order backlog on hand - which is much
improved. As for Precision Components, they have a number of new programs
underway. These new assignments include the five year, multi-million dollar
automotive seat assembly project we've been tooling up for over the past 18
months. This month, we began making early shipments under this contract, which
is expected to add $12 million to $15 million in new revenue this fiscal year.
In addition, our thermal products business is growing and we anticipate, based
on current weekly volume and shipment release schedules, that thermal revenues
may almost double in the first quarter of this new fiscal year versus the
fourth quarter last year."
Mr. Woerner said in addition, the Company's Photowatt operations also
recently announced a $31.1 million order for the supply of photovoltaic solar
modules to a new customer, which is expected to be completed over the next 12
months.
"Photowatt has firmed up a major portion of its revenue targets for
fiscal 2004 and should benefit from improved market conditions, particularly
in Germany, since year end," said Mr. Woerner. "Most promising of all are the
recent advancements in our next generation solar initiative, Spheral Solar
Power. SSP is on schedule to begin commercial shipments in early calendar 2004
and has now successfully produced, on our pilot line, the world's largest
format solar cell measuring 6 by 24 inches. With product samples now in hand,
potential customers and distribution partners are getting more serious about
the potential of this breakthrough solar technology. Construction of our first
20 megawatt SSP factory in Cambridge is also progressing on plan, as is
development of the automated workstations for SSP being designed and built at
ATS. We expect to begin moving this equipment into the facility late this
summer."
In light of recent changes in the U.S.-Canadian dollar exchange rate, ATS
has estimated the potential impact on net earnings, after the benefits of
forward exchange contracts the Company has in place, and using assumptions
with respect to: revenue volumes, margins, transaction and translation
exposures, and net currency exposures. Using these assumptions, management
estimates that the impact on fiscal 2004 net earnings for every 1 cent change
in the U.S.-Canadian dollar exchange rate is approximately $600 for every
$1 million of revenue.
Fiscal 2004 Agenda
Beyond building its solar energy opportunities, the Company's main
business development thrust in fiscal 2004 is to enhance, expand and market
its standard automation products, modules and software platforms to help
reduce costs, accelerate delivery and maximize value from ATS's turn-key
automation systems. "Our standard automation product technologies and tools
clearly differentiate ATS automation systems in the marketplace and are
becoming an increasingly important fixture in a rapidly growing number of
assignments," said Mr. Woerner. "Many of the competitive bids we've won in the
past year were won specifically on the strength of these offerings. For that
reason, we intend to continue to develop more new tools, including a number of
lean manufacturing solutions, and showcase these aggressively in all the new
and existing markets we're targeting through our ongoing strategic marketing
efforts. These proprietary technologies add value for customers and ATS, and
are cost-effective to develop because they utilize our internal design,
engineering, and software development capabilities."
Based on an aggressive product development program in fiscal 2003, ATS
has entered fiscal 2004 with a variety of innovative new standard
technologies, including a flexible motion control platform, a low cost machine
vision product, a micro-machining laser system and new software modules to
monitor and track manufacturing productivity and quality in real-time.
"With industry-leading capabilities like these to sell, we have an
aggressive plan to target the most promising areas of our markets, add new
customers and translate all of this into profitable and accelerated revenue
growth," said Mr. Woerner. "Our plan is realistic, can be fully implemented
based on our significant balance sheet strength and existing capabilities, and
will lead to even more market share gains."
Quarterly Conference Call
ATS will hold its quarterly conference call at 11 a.m. eastern time
today. To listen to a live audio webcast of the call please visit
www.atsautomation.com.
About ATS
ATS Automation Tooling Systems Inc. (www.atsautomation.com) is the
industry's leading designer and producer of turn-key automated manufacturing
and test systems, which are used primarily by multinational corporations
operating in a variety of industries including: automotive,
computer/electronics, healthcare, and consumer products. The Company also
makes precision components and sub-assemblies using its own custom-built
manufacturing systems, process knowledge and automation technology. This
includes a line of advanced thermal management devices used by computer
manufacturers to cool high-speed processors. Through Photowatt International
S.A., and Spheral Solar Power Inc., ATS is an emerging leader in the rapidly
growing market for solar energy modules. ATS employs approximately 3,400
people at 29 facilities in Canada, the United States, Europe and Asia-Pacific.
The Company's shares are traded on The Toronto Stock Exchange under the symbol
ATA.
Certain forward looking statements are made in this news release,
including statements regarding possible future business. Investors are
cautioned that such forward-looking statements involve risks and
uncertainties, including, without limitation, continued acceptance of ATS's
products, technologies, customer requirements and other risks detailed from
time to time in ATS's periodic reports filed with Canadian regulatory
authorities.
ATS AUTOMATION TOOLING SYSTEMS INC.
Consolidated Statements of Earnings
(in thousands, except per share amounts - unaudited)
Fifty-two weeks ended Thirteen weeks ended
-------------------------------------------------------------------------
March 31 March 31 March 31 March 31
2003 2002 2003 2002
-------------------------------------------------------------------------
Revenue $ 584,321 $ 549,547 $ 139,233 $ 130,426
Operating costs and
expenses:
Cost of revenue 475,283 436,821 111,790 106,256
Depreciation and
amortization 31,067 27,457 8,540 7,623
Selling and administrative 66,527 65,662 17,556 16,010
-------------------------------------------------------------------------
572,877 529,940 137,886 129,889
-------------------------------------------------------------------------
Earnings from operations 11,444 19,607 1,347 537
Other expenses (income):
Interest on long-term debt 1,170 2,172 246 336
Interest income (2,025) (2,019) (391) (330)
Write-down for impairment in
value of assets (note 5) 5,960 - 5,960 -
-------------------------------------------------------------------------
5,105 153 5,815 6
-------------------------------------------------------------------------
Earnings (loss) before
income taxes and
non-controlling interest 6,339 19,454 (4,468) 531
Provision for income taxes 3,602 6,499 99 170
Non-controlling interest
in earnings of subsidiaries 394 362 57 169
-------------------------------------------------------------------------
Net earnings (loss) $ 2,343 $ 12,593 $ (4,624) $ 192
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings (loss)
per share:
Basic $ 0.04 $ 0.21 $ (0.08) $ 0.00
Diluted $ 0.04 $ 0.21 $ (0.08) $ 0.00
Weighted average
number of shares:
Basic 60,492 60,261 60,569 60,311
Diluted 60,938 61,023 60,808 60,995
-------------------------------------------------------------------------
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See accompanying notes to interim consolidated financial statements
Consolidated Statements of Retained Earnings
(in thousands of dollars - unaudited)
Fifty-two weeks ended Thirteen weeks ended
-------------------------------------------------------------------------
March 31 March 31 March 31 March 31
2003 2002 2003 2002
-------------------------------------------------------------------------
Retained earnings,
beginning of period
as restated (note 2) $ 198,732 $ 186,139 $ 205,699 $ 198,540
Net earnings (loss) 2,343 12,593 (4,624) 192
-------------------------------------------------------------------------
Retained earnings, end
of period $ 201,075 $ 198,732 $ 201,075 $ 198,732
-------------------------------------------------------------------------
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See accompanying notes to interim consolidated financial statements
ATS AUTOMATION TOOLING SYSTEMS INC.
Consolidated Balance Sheets
(in thousands of dollars - unaudited)
-------------------------------------------------------------------------
March 31 March 31
2003 2002
-------------------------------------------------------------------------
(as restated,
see note 2)
ASSETS
Current assets:
Cash and short-term investments $ 82,333 $ 113,281
Accounts receivable 117,756 113,704
Income taxes recoverable 1,868 11,140
Costs and earnings in excess of
billings on contracts in progress 96,546 104,320
Inventories 83,099 60,712
Other 3,734 3,114
-------------------------------------------------------------------------
385,336 406,271
Fixed assets 226,555 212,009
Goodwill 63,721 57,974
Intangible assets 8,949 9,491
Other assets 29,307 27,447
-------------------------------------------------------------------------
$ 713,868 $ 713,192
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank indebtedness $ - $ 3,108
Accounts payable and accrued liabilities 73,373 65,434
Billings in excess of costs and earnings
on contracts in progress 14,585 12,481
Future income taxes 22,128 27,455
-------------------------------------------------------------------------
110,086 108,478
Long-term debt 49,754 53,860
Future income taxes 5,817 2,196
Non-controlling interest 1,053 2,957
Shareholders' equity:
Share capital 331,499 329,660
Retained earnings 201,075 198,732
Cumulative translation adjustment 14,584 17,309
-------------------------------------------------------------------------
547,158 545,701
-------------------------------------------------------------------------
$ 713,868 $ 713,192
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See accompanying notes to interim consolidated financial statements
ATS AUTOMATION TOOLING SYSTEMS INC.
Consolidated Statements of Cash Flows
(in thousands of dollars - unaudited)
Fifty-two weeks ended Thirteen weeks ended
-------------------------------------------------------------------------
March 31 March 31 March 31 March 31
2003 2002 2003 2002
-------------------------------------------------------------------------
Cash flows from operating
activities:
Net earnings (loss) $ 2,343 $ 12,593 $ (4,624) $ 192
Items not involving cash:
Depreciation and
amortization 31,067 27,457 8,540 7,623
Write-down for
impairment in value of
assets 5,960 - 5,960 -
Other (128) 4,018 (5,637) (781)
-------------------------------------------------------------------------
Cash flow from operations 39,242 44,068 4,239 7,034
Change in non-cash
operating working capital (6,657) 49,885 27,597 36,287
-------------------------------------------------------------------------
32,585 93,953 31,836 43,321
Cash flows from investing
activities:
Acquisition of interest
in subsidiaries (note 3) (14,704) (5,317) (8,581) -
Acquisition of fixed
assets (37,627) (29,695) (15,530) (8,731)
Investments and other (9,329) (15,965) (2,183) (6,455)
-------------------------------------------------------------------------
(61,660) (50,977) (26,294) (15,186)
Cash flows from financing
activities:
Bank indebtedness (3,108) (3,500) - 2,072
Issuance of common shares 839 786 16 97
Other 396 70 18 44
-------------------------------------------------------------------------
(1,873) (2,644) 34 2,213
-------------------------------------------------------------------------
Increase (decrease) in cash
and short-term investments (30,948) 40,332 5,576 30,348
Cash and short-term
investments, beginning
of period 113,281 72,949 76,757 82,933
-------------------------------------------------------------------------
Cash and short-term
investments, end of
period $ 82,333 $ 113,281 $ 82,333 $ 113,281
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplementary information:
Cash income taxes paid $ 8,445 $ 7,913 $ 949 $ 2,268
Cash interest paid $ 1,250 $ 2,472 $ 318 $ 341
See accompanying notes to interim consolidated financial statements
ATS AUTOMATION TOOLING SYSTEMS INC.
Notes to Interim Consolidated Financial Statements
(tabular amounts in thousands, except per share amounts - unaudited)
-------------------------------------------------------------------------
1. Significant accounting policies:
(a) The accompanying unaudited interim consolidated financial
statements are prepared in accordance with accounting principles
generally accepted in Canada and the accounting policies are
consistent with those described in the annual consolidated
financial statements for the year ended March 31, 2002, except as
described in note 2. The unaudited interim consolidated financial
statements presented in this interim report do not conform in all
respects to the requirements of generally accepted accounting
principles for annual financial statements and should be read in
conjunction with the audited consolidated financial statements in
the Company's fiscal 2002 Annual Report and the audited
consolidated financial statements which will be in the Company's
fiscal 2003 Annual Report.
(b) Contract revenue in the Automation Systems segment is recognized
using the percentage of completion method. The degree of
completion is determined based on costs incurred, excluding costs
that are not representative of progress to completion, as a
percentage of total costs anticipated for each contract.
Incentive awards, claims or penalty provisions are recognized
when such amounts can reasonably be determined. Complete
provision is made for losses on contracts in progress when such
losses first become known. Revisions in cost and profit
estimates, which can be significant, are reflected in the
accounting period in which the relevant facts become known.
2. Accounting policy changes:
(a) Effective April 1, 2002, the Company retroactively adopted the
new Recommendations of the Canadian Institute of Chartered
Accountants ("CICA") related to foreign currency translation.
The new Recommendations require gains and losses on the
translation of long-term monetary assets and liabilities to be
included in income. Previously, such gains and losses were
deferred and amortized over the life of the respective asset or
liability. Retroactive adoption of this policy had no material
impact on net earnings for the thirteen weeks or the fifty-two
weeks ended March 31, 2002 and as such have remained as
previously reported. The retroactive changes to the consolidated
balance sheet as at March 31, 2002 are as follows:
Decrease in other assets $ 4,177
Decrease in retained earnings $ 4,177
(b) Effective April 1, 2002, the Company prospectively adopted the
new Recommendations of the CICA for Stock-based Compensation and
Other Stock-based Payments. The new Recommendations establish
standards for the recognition, measurement and disclosure of
stock-based compensation and other stock-based payments. The
Company has elected to continue accounting for stock options as
capital transactions, and to disclose pro forma net earnings and
earnings per share information using the fair value based method
which is disclosed in note 4. As a result, the adoption of the
Recommendations had no effect on the Company's reported earnings
for the thirteen weeks or the fifty-two weeks ended March 31, 2003.
3. Acquisitions:
During the year ended March 31, 2003, the following companies were
acquired: the remaining 49% of outstanding equity of ATS Test Systems
Inc., an advanced test systems business; 100% of the common shares of
Magnet GmbH, a German company that specializes in electrical
controls; and 100% of the assets of Micro Precision Plastics Inc., a
micro-precision plastic injection moulding company located in
Ontario. ATS Test Systems Inc. and Magnet GmbH are included in the
Automation Systems segment and Micro Precision Plastics Inc. is
included in the Precision Components segment.
These acquisitions have been accounted for using the purchase method
with the results of the operations being included from the date of
acquisition. The net assets acquired at their assigned values and the
consideration given for the acquisition is as follows:
Assets acquired $ 11,312
Liabilities assumed (4,303)
Goodwill 8,695
------------------------------------------------------------
$ 15,704
------------------------------------------------------------
------------------------------------------------------------
Consideration:
Cash $ 14,704
Common shares 1,000
------------------------------------------------------------
$ 15,704
------------------------------------------------------------
------------------------------------------------------------
4. Stock-based compensation:
The following pro forma disclosures present the compensation cost for
the Company's stock option plan had compensation cost been determined
and recorded in the statement of earnings based on the fair value at
the grant date of the options awarded on or after April 1, 2002:
------------------------------------------------------------
Fifty-two Thirteen
weeks ended weeks ended
March 31, 2003 March 31, 2003
------------------------------------------------------------
Net earnings:
as reported $ 2,343 $ (4,624)
pro forma $ 1,498 $ (4,833)
------------------------------------------------------------
Earnings (loss) per share:
Basic - as reported $ 0.04 $ (0.08)
- pro forma $ 0.02 $ (0.08)
Diluted - as reported $ 0.04 $ (0.08)
- pro forma $ 0.02 $ (0.08)
------------------------------------------------------------
------------------------------------------------------------
In the pro forma results above, the fair values of the Company's
stock option grants were estimated using the Black Scholes option
pricing model with the following assumptions: risk free interest rate
of 5.4%; dividend yield of 0%; expected lives of 6.0 years; and
volatility of 42%. The estimated compensation cost of the options
granted is amortized over the five year vesting period of the
options. During the thirteen weeks ended March 31, 2003 no stock
options were granted and 1,350 of the options which were granted in
fiscal 2003 were cancelled. During the fifty-two weeks ended
March 31, 2003, 471,495 stock options were granted at an average
exercise price of $18.61, and 7,500 of the options granted in fiscal
2003 were cancelled.
5. Write-down for impairment:
The Company regularly reviews its portfolio investments to determine
if there has been a permanent impairment in value. As a result of
this review, certain of the Company's portfolio investments were
written-down in the thirteen weeks ended March 31, 2003 by $4,760,000
and no income tax benefit was recorded on this write-down.
The Company also regularly reviews the net recoverable value of its
fixed assets. As a result of this review, certain of the Company's
fixed assets were written-down in the thirteen weeks ended March 31,
2003 to their estimated net recoverable value. The amount of the
write-down was $1,200,000 before income taxes and $804,000 after
income taxes.
6. Segmented disclosure:
The Company evaluates performance based on three reportable segments:
Automation Systems, Precision Components and Solar. The Automation
Systems segment produces custom-engineered turn-key automated
manufacturing and test systems. The Precision Components group is a
high volume manufacturer of plastic and metal components and
sub-assemblies. The Solar segment is a high volume manufacturer of
photovoltaic products and includes the Company's investment in
Spheral Solar(TM) Technology.
The Company accounts for inter-segment revenue at current market
rates, negotiated between the segments.
Fifty-two weeks ended Thirteen weeks ended
---------------------------------------------------------------------
March 31 March 31 March 31 March 31
2003 2002 2003 2002
---------------------------------------------------------------------
Revenue
Automation Systems $ 425,727 $ 393,739 $ 101,394 $ 86,785
Precision Components 125,031 113,833 33,304 31,164
Solar 48,183 50,925 9,612 15,346
Elimination of
inter-segment
revenue (14,620) (8,950) (5,077) (2,869)
---------------------------------------------------------------------
Consolidated $ 584,321 $ 549,547 $ 139,233 $ 130,426
---------------------------------------------------------------------
Earnings from operations
Automation Systems $ 17,276 $ 24,468 $ 3,506 $ (689)
Precision Components 2,966 2,119 389 2,771
Solar (129) 1,140 150 718
Inter-segment
elimination and
other corporate
expenses (8,669) (8,120) (2,698) (2,263)
---------------------------------------------------------------------
Consolidated $ 11,444 $ 19,607 $ 1,347 $ 537
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March 31 March 31
2003 2002
---------------------------------------------------------------------
Total Assets
Automation Systems $ 425,651 $ 456,233
Precision Components 132,175 127,237
Solar 99,038 70,451
Corporate Assets 57,004 59,271
---------------------------------------------------------------------
$ 713,868 $ 713,192
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7. Cyclical nature of the business:
Interim financial results are not necessarily indicative of annual or
longer term results, because many of the individual markets served by
the Company tend to be cyclical in nature. General economic trends,
product life cycles and product changes may impact Automation Systems
bookings, Precision Components volumes, and the Company's earnings in
any of its markets.
%SEDAR: 00002017E
-30-
For further information: Ron Jutras, Exec. Vice President and C.F.O., (519) 653-6500