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1、2 0 2 4 A N N U A L R E P O R TFuturein FocusContents02Who We Are04Fiscal Snapshot08Evolution of the ABM12Mergers&Acquisitions06Message from our CEO10NYSE ListingA Future in FocusAt ATS Corporation we are constantly working to build a better tomorrow a future filled with solutions that positively im
2、pact lives around the world.As our business has grown and developed over the past year,that future has become even clearer.Everywhere we look,we see potential.For safer food,delivered more reliably.For better health care enabling stronger communities.For innovative solutions that support a cleaner e
3、nvironment.This is a future within our sights.We see the possibility,and were entirely focused on making it reality.ATS 2024 ANNUAL REPORT48Managements Annual Report on Internal Controls Over Financial Reporting18Managements Discussion&Analysis52Consolidated Financial Statements14Business Group Summ
4、aries49Report of Independent Registered Public Accounting Firm457Notes to Consolidated Financial Statements1Clear Purpose Drives Clear Results2 ATS 2024 ANNUAL REPORT4A companys future is only as strong as the principles that guide it.Our unwavering values of people,process,and performance form the
5、building blocks for everything we do.People We believe employees need to feel highly engaged to perform their best.We continuously develop,empower,and energize our people to stay on top of their game.Process Even more important than what we do,is how we do it.We focus on where the need is greatest a
6、nd use data to drive continuous improvement.Our ATS Business Model(ABM)is a systematic approach to creating the most impact possible.Performance We are never satisfied with the status quo.Every day,we strive to deliver better results for our customers,shareholders,and employees.The stronger our perf
7、ormance,the greater impact we have on the world at large.Our purpose is to create solutions that positively impact lives around the world.Every day,were proud to see these solutions in action.We see cancers being treated.We see families being fed.We see a planet moving closer to a sustainable future
8、.And because the impact is this clear,we never lose sight of the purpose behind it.At ATS,we are enablers of innovation.Through our industry-leading automation solutions and products,we streamline manufacturing operations in the highly regulated life sciences,food&beverage,consumer products,and ener
9、gy industries,as well as in transportation.We create solutions to drive real impact for our customers,and our customers make a real impact on the world we live in.O U R P U R P O S EO U R B U S I N E S SO U R V A L U E S3Strength in Numbers$1,268.6MLIFE SCIENCES$933.3MTRANSPORTATION$435.0MFOOD&BEVER
10、AGE$287.2MCONSUMER PRODUCTS$108.8MENERGYF2024 Revenueby Market$1,766.5MNORTH AMERICA$990.1MEUROPE$276.3MASIA/OTHERF2024 Revenue by CustomerGeographic Segmentation$3,032.9MF2024 Total RevenueThe reason we put so much emphasis on our values is because we know that working the right way builds the enga
11、gement and commitment amongst our people to deliver strong results.Weve established ourselves in attractive markets and are driving industry-leading solutions.4 ATS 2024 ANNUAL REPORTATS at a Glance$3,032.9M Revenue7,000+Employees WorldwideATS:TSX and NYSE Dual-Listed17.7%Revenue Growth in F202419.3
12、%Five-Year Revenue CAGR17.3%Adjusted EBITDA Growth in F202423.7%Five-Year Adjusted EBITDA CAGRF2024 was not without its challenges.But when you work with a shared purpose,good things tend to happen.This past year,we showcased resilience and saw that come to fruition.Revenue growth was up,employee tu
13、rnover rate was down,and we delivered a historically good year.As proud as we are of where we stand,were even more excited about where were going.With our mindset of continuous improvement,we know theres always room to grow.20+COUNTRIES85+OFFICES65+FACILITIES5Dear Shareholders,As F2023 came to a clo
14、se a year ago,I wrote to you about our desire to preparefor the future.We set out to continue to drive value for our stakeholders,find opportunities for growth,and keep building the foundation for a strong tomorrow.A year removed from those statements,I look back with satisfaction and pride on what
15、we achieved.Over the past year,we have worked tirelessly.Weve refined our ATS Business Model(ABM)to systematically meet challenges and develop solutions.We celebrated a major milestone with our listing on the NYSE.Our team was more driven and dedicated than ever,and we never wavered from our culture
16、 of continuous improvement.Our focus was clear,and we saw strong results because of it.Focused on Shareholders We knew it was going to be difficult to top F2023s record-setting growth.But in F2024,thats exactly what we did.While our full-year order bookings were down,due in large part to the timing
17、of select large projects,our total revenues were up 17.7%,which includes nearly 11%from organic growth.In addition,our net income increased by 52.1%on a year-over-year basis.Our adjusted basic earnings per share were$2.61,compared to$2.37 a year ago.Part of the reason we favor a diverse,decentralize
18、d business model is because there is a built-in balance.We are able to respond to market dynamics and pivot resources to growth opportunities.This was our case in F2024.The electric vehicle industry faced some challenges and our transportation business did an admirable job of weathering this dynamic
19、 market as OEMs recalibrated their paths forward.Meanwhile,our life sciences business experienced growth in many areas,lead by the rapid development of auto injectors for GLP-1 drug delivery,while our food&beverage business went above and beyond to meet their goals and deliver an excellent year all
20、around.In our energy business,order bookings increased and the company remains focused on clean energy solutions,including early participation in the small modular reactor market.Lastly,our consumer business remains well-positioned while our customers navigate inflationary pressures.Our experience i
21、n packaging will provide ATS with opportunities to respond to our customers sustainability standards and goals.Focused on the Organization We approach every day with an attitude of confidence and humility.Confident that we can solve any challenge that comes our way.Humble enough to know that we can
22、always improve.This year,we strengthened our organization through a focus on our ABM,which enabled organic growth and drove impact for our customers.Never satisfied,we also strategically deployed capital to acquire new companies.We invested approximately$277 million to complete four acquisitions(see
23、“Mergers&Acquisitions”on page 12).These new additions bolster our digitalization and artificial intelligence service offerings.We will continue to invest in our capabilities with a focus on being able to drive enhanced value for our customers.Focused on the Future The past year was one for the recor
24、d books.I want to pause for a moment and reflect on all the people who made it possible.To our leaders and employees,your passionate commitment to continuous improvement moved our business forward.Thank you.To our customers,your confidence in our services and trust in our partnership will never go u
25、nappreciated.We exist because of our valued relationship.Thank you.Finally,to our shareholders,your support enables a positive impact on lives around the world.We will continue to drive value for you,as you provide value to us.Thank you.As proud as we are of what we accomplished in F2024,our company
26、 culture doesnt allow us to dwell on it for long.Were always looking forward,and a brighter future is within our sights.As we enter F2025,we are refining the future,and getting further into the details that take us from a good company to a great one,and a great one to a remarkable one.Building a bet
27、ter ATS thats our focus.Sincerely,Andrew Hider Chief Executive Officer ATS Corporation A Messagefrom our CEO3 6 ATS 2024 ANNUAL REPORTWe approach every day with an attitude of confidence and humility.Confident that we can solve any challenge that comes our way.Humble enough to know that we can alway
28、s improve.”“73Evolving the Model.Shifting the Mindset.The ATS Business Model,or ABM,was first introduced in 2017 as a powerful business management system to enable continuous improvement.As a decentralized corporation,this common thread became an essential tool at ATS for powering innovation and dri
29、ving growth.But it hasnt always been easy.Building a shared culture of excellence across industries and geographies takes time.Now,seven years in,the ABM is really gaining momentum.The more employees we train on the models capabilities,the clearer our focus is on how to use it.In F2024,we saw the AB
30、M create an impact across the organization.We put the ABM to work to drive real results for our customers.We went deeper into the greatest areas of need with a systematic approach to deliver innovative solutions.We also had more employees complete the ABM Bootcamp than in the five previous years com
31、bined.Today,the ABM is sharper than ever,and so is our mindset.985772BOOTCAMP ATTENDEESTEAMS COMPETING IN THE PRESIDENTS KAIZENKAIZEN EVENTS8 ATS 2024 ANNUAL REPORT9CEO Andrew Hider rang the opening bell of the New York Stock Exchange to celebrate our U.S.stock listing.This was a pivotal moment for
32、our organization.One that resonates far beyond the ding of the bell.Our NYSE stock listing signifies a key point in our growth story.It gives us exposure to new investors,as well as improved liquidity.Well always remember this moment as a critical point in our journey.But theres much more work to do
33、.This is only the beginning.In F2024,we rang in a major milestone for the company.MoreThan a Moment10 ATS 2024 ANNUAL REPORT11SeizingMomentumAs our business has grown,so has our ability to provide value for our customers.When we see an opportunity to create a higher impact,we take it.In F2024,we sei
34、zed that opportunity through strategic M&A.We proudly welcomed four new companies to the ATS family via acquisition in F2024.These acquisitions bring us new capabilities that drive real results for our customers.Mergers&Acquisitions12 ATS 2024 ANNUAL REPORT13Odyssey is a provider of automation and d
35、igitalization solutions for the process and manufacturing industries.Supporting customers in the life sciences industry,they help clients in their compliant digital transformation and journey to the cloud.Providing artificial intelligence and machine learning-based tools for industrial production,Ya
36、zzoom strengthens our capabilities for the demands of the future.OdysseyYazzoomAs a designer and manufacturer of automated water purification solutions for biomedical applications,Avidity bolsters our life sciences business.With 30+years of experience,ITA.CA brings incredible wisdom to our business
37、as an automation systems integrator with a primary focus on the pharmaceutical and chemical industries.Avidity SciencesITA.CAEngineering A Business in FocusLIFE SCIENCESFocus onTransformationTRANSPORTATION Focus on ResilienceEnd MarketsOur life sciences teams play a critical role in the development
38、of drugs,devices,and therapies around the world.In F2024,the team experienced growth in large part due to our global customers further recognizing the opportunities available to them through advanced automation.And while this one market provided substantial success,it just scratches the surface of o
39、ur capabilities.The life sciences team is focused on creating end-to-end solutions to improve the lives of people around the world.REVENUE$1,268.6MCUSTOMER FOCUSLaunched SuperTrak Pharma,a linear-motor conveyor to be used in aseptic and cleanroom environments in the pharma industry.REVENUE$933.3MCUS
40、TOMER FOCUSGrew the VR Battery Assembly Environment to show how ATS can support in optimizing customer assembly and test lines for batteries and fuel cells.While there have been challenges in the EV market,we have aligned our business to navigate them.With strong capabilities and a track-record of l
41、eading solutions in the transportation market,we remain well positioned in this dynamic space.14 ATS 2024 ANNUAL REPORTCONSUMER PRODUCTSFocus on SustainabilityENERGYFocus on EfficiencyFOOD&BEVERAGEFocus on Growth15REVENUE$435.0MCUSTOMER FOCUSIntroduced Raytec OpportunitY,which integrates AI,4IR&sust
42、ainability in a 360-degree vision machine for fresh produce sorting.REVENUE$287.2MCUSTOMER FOCUSUnveiled the IWK CH 4 Cartoner,which can produce up to 120 cartons per minute while reducing energy consumption by 21%.REVENUE$108.8MCUSTOMER FOCUSATS Industrial Automation is supplying tooling for nuclea
43、r fuel channel installation,which will help shorten schedules while improving safety and performance of the project.Our food&beverage group was proud to report improvement on all value drivers.Through continued adaption of automation,we provided new value for our customers that led to real results,a
44、nd we look forward to growing even more in F2025.Our consumer goods customers look to us as a leader in integration.From specialized products to conveyance solutions,we provide ongoing service and digitalization support.We are here for our customers,no matter where they are on their automation journ
45、ey.When we look at sustainability regulations around the world,we see more than a challenge.We see an opportunity.Our specialized capabilities in the energy market allow us to support customers in significant ways while making a positive impact on the planet.Our Future StartsNow 16 ATS 2024 ANNUAL R
46、EPORTHow do we get better tomorrow?Our culture of continuous improvement means we are constantly striving for more,and never satisfied with the status quo.There is always room to grow,to improve,and to make a bigger impact.Our future is one of constant innovation.Now that F2024 has come to a close,o
47、ur focus is narrowing on one thing:tomorrow.ATS Corporation Annual Financial Statements&Managements Discussion and AnalysisFOR THE YEAR ENDED MARCH 31,2024 MANAGEMENTS DISCUSSION AND ANALYSIS18Managements Discussion and AnalysisFor the Year Ended March 31,2024This Managements Discussion and Analysis
48、(“MD&A”)for the year ended March 31,2024(“fiscal 2024”)is as of May 16,2024 and provides information on the operating activities,performance and financial position of ATS Corporation(“ATS”or the“Company”).It should be read in conjunction with the audited consolidated financial statements of the Comp
49、any for fiscal 2024,which have been prepared in accordance with International Financial Reporting Standards(“IFRS”)as issued by the International Accounting Standards Board(“IASB”)and are reported in Canadian dollars.All references to“$”or“dollars”in this MD&A are to Canadian dollars unless otherwis
50、e indicated.Additional information is contained in the Companys filings with Canadian and U.S.securities regulators,including its Annual Information Form for fiscal 2024,found on the Companys profile on System for Electronic Data Analysis and Retrieval+(“SEDAR+”)at ,on the Companys profile on the U.
51、S.Securities and Exchange Commissions Electronic Data Gathering,Analysis and Retrieval System(“EDGAR”)website at www.sec.gov,and on the Companys website at .Important NotesForward-Looking StatementsThis document contains forward-looking information within the meaning of applicable securities laws.Pl
52、ease see“Forward-Looking Statements”for further information on page 44.Non-IFRS and Other Financial MeasuresThroughout this document,management uses certain non-IFRS financial measures,non-IFRS ratios and supplementary financial measures within the meaning of applicable securities laws to evaluate t
53、he performance of the Company.See“Non-IFRS and Other Financial Measures”on page 46 for an explanation of such measures and“Reconciliation of Non-IFRS Measures to IFRS Measures”beginning on page 36 for a reconciliation of non-IFRS measures.Company ProfileATS is an industry leader in planning,designin
54、g,building,commissioning and servicing automated manufacturing and assembly systems including automation products and test solutions for a broadly diversified base of customers.ATS reputation,knowledge,global presence and standard automation technology platforms differentiate the Company and provide
55、 competitive advantages in the worldwide manufacturing automation market for life sciences,transportation,food and beverage,consumer products and energy.Founded in 1978,ATS employs over 7,000 people at more than 65 manufacturing facilities and over 85 offices in North America,Europe,Southeast Asia a
56、nd Oceania.The Companys website can be found at .The Companys common shares are traded on the Toronto Stock Exchange(“TSX”)and the New York Stock Exchange(“NYSE”)under the symbol ATS.ATS 2024 ANNUAL REPORT19StrategyTo drive the creation of long-term sustainable shareholder value,the Company employs
57、a three-part value creation strategy:Build,Grow and Expand.Build:To build on the Companys foundation and drive performance improvements,management is focused on the advancement of the ATS Business Model(“ABM”),the pursuit and measurement of value drivers and key performance indicators,a rigorous str
58、ategic planning process,succession planning,talent management,employee engagement,and instilling autonomy with accountability into its businesses.Grow:To drive organic growth,ATS has developed and implemented growth tools under the ABM,which provide innovation and value to customers and work to grow
59、 reoccurring revenues.Expand:To expand the Companys reach,management is focused on the development of new markets and business platforms,expanding service offerings,investment in innovation and product development,and strategic and disciplined acquisitions that strengthen ATS.The Company pursues all
60、 of its initiatives by using a strategic capital framework aimed at driving the creation of long-term sustainable shareholder value.ATS Business ModelThe ABM is a business management system that ATS developed with the goal of enabling the Company to pursue its strategies,outpace the growth of its ch
61、osen markets,and drive year-over-year continuous improvement.The ABM emphasizes:People:developing,engaging and empowering ATS people to build the best team;Process:aligning ATS people to implement and continuously improve robust and disciplined business processes throughout the organization;and Perf
62、ormance:consistently measuring results in order to yield world-class performance for ATS customers and shareholders.The ABM is ATS playbook,serving as the framework to achieve business goals and objectives through disciplined,continuous improvement.The ABM is employed by ATS divisions globally and i
63、s supported with extensive training in the use of key problem-solving tools,and applied through various projects to drive continuous improvement.When ATS makes an acquisition,the ABM is quickly introduced to new companies as a means of supporting cultural and business integration.Key ABM drivers inc
64、lude:Strengthening the core:adopting a customer-first mindset;implementing a robust performance management system;adhering to eight value drivers;managing using key performance indicators;and leveraging daily management to measure at the point of impact;Delivering growth:aligning with customer succe
65、ss;developing organizational talent;constantly confirming that progress is being made toward stated goals;and creating annual operating and capital deployment plans for each ATS division;Pursuing excellence:deploying specific goals that segment strategies into relevant areas of concentration;and imp
66、roving continuously using Kaizen events,problem solving and other continuous improvement initiatives,which target increased performance annually;and Pioneering innovation:driving automation market technology leadership;creating innovative platforms and analytics that benefit customers by reducing co
67、mplexity,shortening development cycles and improving production efficiencies;and expanding the reach and scope of ATS capabilities for competitive advantage.Management is pursuing several initiatives to grow revenues and improve profitability with the goal of expanding its adjusted earnings from ope
68、rations margin to 15%over time through a combination of operational initiatives and portfolio development.Operational initiatives include a focus on pursuing continuous improvement in all business activities through the ABM,including in acquired businesses,improving global supply chain management,in
69、creasing the use of standardized platforms and technologies,and growing revenues while leveraging the Companys cost structure.Portfolio development initiatives include efforts to grow the Companys products and after-sales service revenues as a percentage of overall revenues.Management also sees the
70、development of the Companys digitalization capabilities as another key area of growth for the portfolio,including the collection and interpretation of data to drive meaningful change that optimizes performance for customers.In addition,management is focused on investing in innovation and employing a
71、 consistent,strategic approach to acquisitions.MANAGEMENTS DISCUSSION AND ANALYSIS20Business OverviewATS and its subsidiaries serve customers in the following markets:(a)life sciences,including medical devices,pharmaceuticals,radiopharmaceuticals and chemicals;(b)transportation,including electric ve
72、hicles(“EV”),automotive and aerospace;(c)food&beverage,including processing,packaging and filling for fresh produce and liquid food&beverage;(d)consumer products,including packaging of cosmetics,electronics,durable and general goods;and(e)energy,including oil&gas,in addition to nuclear,solar and oth
73、er green energy applications.With broad and in-depth knowledge across multiple industries and technical fields,ATS delivers single-source solutions to customers designed to meet their volume and throughput requirements,lower their production costs,accelerate product delivery,and improve quality and
74、quality control.ATS 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.ATS is selective in its choice of
75、 markets and favours regulated industries where quality and reliability are mandatory.ATS engages at varying points in customers automation cycles.During the pre-automation phase,ATS offers comprehensive services,including discovery and analysis,concept development,simulation and total cost of owner
76、ship modelling,all of which help customers to verify the feasibility of different types of automation,set objectives for factors such as line speed and yield,assess production processes for manufacturability and calculate the total cost of ownership.For customers that have decided to proceed with an
77、 automation project,ATS offers specialized equipment for specific applications and markets,as well as automation and integration services,including engineering design,prototyping,process verification,specification writing,software and manufacturing process controls development,equipment design and b
78、uild,standard automation products/platforms,third-party equipment qualification,procurement and integration,automation system installation,product line commissioning,validation and documentation.Following the installation of custom automation,ATS may supply duplicate or similar automation systems th
79、at leverage engineering design completed in the original customer program.For customers seeking complex equipment production or build-to-print manufacturing,ATS provides value engineering,supply-chain management,integration and manufacturing capabilities,and other automation products and solutions.P
80、ost-automation,ATS offers services including training,process optimization,preventative maintenance,emergency and on-call support,spare parts,retooling,retrofits and equipment relocation.Service agreements are often entered into at the time of new equipment sale or are available on an after-market b
81、asis on installed equipment.ATS offers a number of software and digital solutions to its customers,including connected factory floor management systems to capture,analyze and use real-time machine performance data to quickly and accurately troubleshoot,deliver process and product solution improvemen
82、ts,prevent equipment downtime,drive greater operational efficiency and unlock performance for sustainable production improvements.Contract values for individual automation systems vary depending on the nature and complexity of the system and are often in excess of$1 million,with some contracts for e
83、nterprise-type programs well in excess of$10 million.Due to the custom nature of customer projects,contract durations vary,with typical durations ranging from six to 12 months,and some larger contracts extending to 18 to 24 months and beyond.Contracts for pre-and post-automation services range in va
84、lue and can exceed$1 million with varying durations,and can sometimes extend over several years.Contracts for other products range in value and duration,depending on their nature.ATS 2024 ANNUAL REPORT21Competitive StrengthsManagement believes ATS has the following competitive strengths:Global prese
85、nce,size and critical mass:ATS global presence and scale provide advantages in serving multinational customers,as many of the Companys competitors are smaller and operate with a narrower geographic and/or industrial market focus.ATS and its subsidiaries have a presence in Canada,the United States,It
86、aly,Germany,Belgium,United Kingdom,Thailand,Netherlands,Ireland,China,Czech Republic,Australia,Spain,France,Indonesia,Slovakia,Japan,Singapore,India,Ukraine,Malaysia,Brazil,Switzerland,Austria,and Mexico.ATS can deliver localized service through its network of over 85 locations globally.Management b
87、elieves that ATS scale and global footprint provide it with competitive advantages in winning large,multinational customer programs and in delivering a lifecycle-oriented service platform to customers global operations.In addition,customers seeking to de-risk or enhance the resiliency of their suppl
88、y chains also provide future opportunities for ATS to pursue by leveraging its global presence and the inherent advantages of automation on production reliability and cost.Technical skills,capabilities and experience:ATS has designed,manufactured,assembled and serviced automation systems worldwide a
89、nd has an extensive knowledge base and accumulated design expertise.Management believes ATS broad experience in many different industrial markets and with diverse technologies,its talented workforce,which includes approximately 2,100 engineers and approximately 400 program management personnel,and i
90、ts ability to provide custom automation,repeat automation,automation products and value-added services,position the Company well to serve complex customer programs in a variety of markets.Product and technology portfolio:By having realized thousands of unique automation projects,ATS owns an extensiv
91、e product and technology portfolio.ATS has a number of standard automation platforms and products,including:innovative linear motion transport systems;pallet handling and sanitary conveyance systems;robust cam-driven assembly platforms;advanced vision systems used to ensure product or process qualit
92、y;optical sorting and inspection technologies;test systems;factory management and intelligence and other software solutions;proprietary weighing hardware and process control software technologies;precision fluid-dispensing equipment;aseptic containment technologies;biopharma processing equipment and
93、 high-performance tube filling and cartoning systems.Management believes the Companys extensive product and technology portfolio provides advantages in developing unique and leading solutions for customers and in maintaining competitiveness.Recognized brands:Management believes ATS is well-known wit
94、hin the global automation industry due to its long history of innovation and broad scope of operations.In addition,ATS subsidiaries include several strong brands,such as:“Avidity,”a designer and manufacturer of automated water purification solutions for biomedical and life sciences applications;“Sci
95、entific Products,”a specialized designer and manufacturer of pharmaceutical and packaging equipment and systems in the life sciences market;“BioDot,”a leading manufacturer of automated fluid-dispensing systems in the life sciences market;“Comecer,”a provider of high-tech automation systems for the n
96、uclear medicine and pharmaceutical industries;“NCC,”a provider of engineered-to-order sanitary automation solutions and standalone precision conveyance equipment in the food&beverage industries;“MARCO,”a provider of yield control and recipe formulation systems in the food,nutraceuticals and cosmetic
97、s sectors;“CFT,”a specialist in the development and production of turn-key machines and systems for the food&beverage industries;“IWK,”a specialist in the packaging market;and“Process Automation Solutions,”a provider of innovative automation and digital solutions for process and production sectors.M
98、anagement believes that ATS brands and global reputation improve sales prospecting,allowing the Company to be considered for a wide variety of customer programs.Trusted customer relationships:ATS serves some of the worlds largest multinational companies.Many customer relationships are long-standing,
99、often spanning a decade or more,and many customers are repeat buyers who return to ATS and its subsidiaries time after time to meet their automation manufacturing,assembly,processing and service needs.Total-solutions capabilities:Customers often rely on ATS because it can provide comprehensive,turnk
100、ey solutions in automation.This allows customers to single source their most complex projects to ATS rather than rely on multiple engineering firms,equipment builders and/or service/component suppliers.In addition,ATS provides customers with other value-added services including pre-automation consul
101、ting,total cost-of-ownership studies,lifecycle material management,and post-automation service,optimization,training and support.MANAGEMENTS DISCUSSION AND ANALYSIS22Financial Highlights(In millions of dollars,except per share and margin data)Q4 2024Q4 2023VarianceFiscal 2024Fiscal 2023VarianceReven
102、ues$791.5$730.88.3%$3,032.9$2,577.417.7%Net income$48.5$29.663.9%$194.2$127.752.1%Adjusted earnings from operations1$95.9$101.9(5.9)%$397.5$343.415.8%Adjusted earnings from operations margin112.1%13.9%(183)bps13.1%13.3%(22)bpsAdjusted EBITDA1$115.8$118.2(2.0)%$470.6$401.217.3%Adjusted EBITDA margin1
103、14.6%16.2%(154)bps15.5%15.6%(5)bpsBasic earnings per share$0.49$0.3253.1%$1.98$1.3942.4%Adjusted basic earnings per share1$0.65$0.73(11.0)%$2.61$2.3710.1%Order Bookings1$791.0$737.07.3%$2,891.0$3,256.0(11.2)%As AtMarch 312024March 312023VarianceOrder Backlog1$1,793$2,153(16.7)%1 Non-IFRS financial m
104、easure See“Non-IFRS and Other Financial Measures.”Executive Summary:Growth in Strategic End Markets Growth in fourth quarter revenues of 8.3%year over year was primarily driven by organic revenue growth of 3.5%,and 4.7%from recently acquired companies.“Acquisitions”or“acquired companies”in this MD&A
105、 refer to companies that were not part of the consolidated group in the comparable prior-year periods.Organic revenue is a non-IFRS financial measure and organic revenue growth is a non-IFRS financial ratio see“Non-IFRS and Other Financial Measures.”Order Bookings in the fourth quarter were$791 mill
106、ion compared to$737 million a year earlier when ATS received Order Bookings of U.S.$119.9 million(approximately$162.2 million CAD)from an EV customer.Growth in Order Bookings was comprised of 5.2%from recent acquisitions,in addition to 2.1%from organic Order Bookings.Trailing twelve-month book-to-bi
107、ll ratio at March 31,2024 was 0.95:1,and was above 1.00:1 in all markets except transportation.Order Bookings,organic Order Bookings growth and book-to-bill ratio are supplementary financial measures see“Non-IFRS and Other Financial Measures.”Order Backlog of$1,793 million at year-end was 16.7%lower
108、 than the prior year,primarily on lower Order Backlog within the transportation market which included several large Order Bookings a year ago.Order Backlog is distributed across strategic global markets and regulated industries,and provides good revenue visibility.Order Backlog is a Supplementary Fi
109、nancial Measure see“Non-IFRS and Other Financial Measures.”Non-cash working capital as a percentage of revenues was 19.0%and is primarily driven by customer project schedules,including timing of milestone billings and payments for large EV programs.Net debt to adjusted EBITDA ratio at March 31,2024
110、of 2.4 times was within the Companys target range.Non-cash working capital as a percentage of revenues and net debt to adjusted EBITDA are non-IFRS ratios see“Non-IFRS and Other Financial Measures.”Adjusted earnings from operations for the quarter decreased 5.9%to$95.9 million(12.1%margin),compared
111、to$101.9 million(13.9%margin)a year ago on higher selling,general and administrative(“SG&A”)expenses and lower margin,partially offset by higher revenues.Adjusted earnings from operations is a non-IFRS financial measure and adjusted earnings from operations margin is a non-IFRS ratio see“Non-IFRS an
112、d Other Financial Measures.”ATS 2024 ANNUAL REPORT23Strategic Business AcquisitionsOn June 30,2023,the Company acquired Yazzoom B.V.(“Yazzoom”),a Belgium-based provider of artificial intelligence and machine learning based tools for industrial production.Yazzoom joined ATS Process Automation Solutio
113、ns(“PA”)business to broaden its process optimization and digitalization capabilities in key focus sectors.Yazzoom leverages integrated data to enable predictive analytics and insights that drive tangible improvements in production processes.The purchase price was$5.3 million(3.7 million Euros).On Ju
114、ly 3,2023,the Company acquired Odyssey Validation Consultants Limited(“Odyssey”),an Ireland-based provider of digitalization solutions for the life sciences industry.Odyssey also joined ATS PA business,and their expertise in delivering production process improvements through computer system validati
115、on as well as cloud-based software solutions are also expected to advance PAs digitalization capabilities.The purchase price was$5.6 million(3.9 million Euros).On November 16,2023,the Company acquired Avidity Science,LLC(“Avidity”),a designer and manufacturer of automated water purification solution
116、s for biomedical and life science applications.The total purchase price was$267.6 million(U.S.$195.5 million).Avidity serves a diverse global customer base of pharmaceutical,biopharma,healthcare,government,and academic research facilities.Avidity bolsters ATS value proposition for both new and exist
117、ing customers by providing researchers confidence in their data during key stages of drug discovery,development and testing.On January 1,2024,the Company acquired IT.ACA.Engineering S.r.l(“IT.ACA”),an Italian automation system integrator.IT.ACA strengthens PAs market position in southern Europe,whil
118、e also adding strong capabilities aligned with PAs in automation integration,digitalization,and production process optimization.The purchase price paid in the fourth quarter of fiscal 2024 was$12.4 million(8.5 million Euros).On May 15,2024,the Company announced it had entered into a definitive agree
119、ment to acquire Paxiom Group(“Paxiom”).With headquarters in Montreal,Quebec,Paxiom is a provider of primary,secondary,and end-of-line packaging machines in the food and beverage,cannabis,and pharmaceutical industries.Paxiom provides a vast product line that includes precision weigh filling,bagging,w
120、rapping,labeling,conveyors,case forming,robotic case packing and end-of-line palletizing equipment that will complement ATS businesses CFT S.p.A,Raytec Vision S.p.A,Marco Limited,IWK Verpackungstechnik GmbH,and NCC Automated Systems,Inc.and allow ATS to offer complete packaging and end-of-line solut
121、ions.The transaction is expected to close in the third calendar quarter of 2024,subject to customary closing conditions.Order Bookings by Quarter(in millions of dollars)Fiscal 2024Fiscal 2023Q1$690$736Q2742804Q3668979Q4791737Total Order Bookings$2,891$3,256 Fourth-quarter fiscal 2024 Order Bookings
122、were$791 million,a 7.3%year-over-year increase,reflecting 5.2%growth from acquired companies,in addition to organic Order Bookings of 2.1%.Order Bookings from acquired companies totalled$38.7 million.By market,Order Bookings in life sciences increased compared to the prior-year period primarily due
123、to organic growth,along with$28.7 million of contributions from acquired companies,including$22.7 million from Avidity.Order Bookings in transportation decreased compared to the prior-year period,which included Order Bookings of U.S.$119.9 million(approximately$162.2 million CAD)from a global automo
124、tive customer to move towards fully automated battery assembly systems for their North American manufacturing operations.Order Bookings in food&beverage increased primarily due to timing of customer projects.Order Bookings in consumer products decreased slightly as a result of the timing of customer
125、 projects,offset by contributions from acquired companies.Order Bookings in energy increased primarily due to timing of customer projects.Fiscal 2024 Order Bookings were$2,891 million,a 11.2%decrease compared to last year,reflecting a decline in organic Order Bookings of 16.6%,primarily related to t
126、he transportation market,partially offset by 3.0%growth from acquired companies,and a 2.4%increase due to foreign exchange rate translation,primarily reflecting the strengthening of the Euro and U.S.dollar relative to the Canadian dollar.Growth in Order Bookings from acquired companies totalled$98.5
127、 million,of which Avidity contributed$36.5 million and Zi-Argus Australia Pty Ltd.and Zi-Argus Ltd.(“ZIA”)contributed$28.0 million.By market,Order Bookings in life sciences increased due to a combination of organic growth,contributions from acquired companies of$53.9 million,of which Avidity contrib
128、uted$36.5 million,and positive foreign exchange translation impact,primarily reflecting the strengthening of the Euro and U.S.dollar relative to the Canadian dollar.Order Bookings in transportation decreased due to U.S.$578.2 million in Order Bookings from an existing global automotive customer rece
129、ived in the prior fiscal year.Order Bookings in food&MANAGEMENTS DISCUSSION AND ANALYSIS24beverage increased primarily due to timing of customer projects and foreign exchange rate translation of Order Bookings from foreign-based ATS subsidiaries.Order Bookings in consumer products increased due to c
130、ontributions from acquired companies,in addition to organic growth and foreign exchange rate translation of Order Bookings from foreign-based ATS subsidiaries.Order Bookings in energy increased due to timing of customer projects.Trailing twelve-month book-to-bill ratio at March 31,2024 was 0.95:1.Bo
131、ok-to-bill ratio is a supplementary financial measure see“Non-IFRS and Other Financial Measures.”Order Backlog Continuity(In millions of dollars)Q4 2024Q4 2023Fiscal 2024Fiscal 2023Opening Order Backlog$1,907$2,143$2,153$1,438Revenues(792)(731)(3,033)(2,577)Order Bookings7917372,8913,256Order Backlo
132、g adjustments1(113)4(218)36Total$1,793$2,153$1,793$2,1531 Order Backlog adjustments include incremental Order Backlog of acquired companies($4 million acquired with Avidity in the twelve months ended March 31,2024,and in fiscal 2023,$9 million acquired with ZIA and$5 million acquired with Triad Unli
133、mited LLC in the three and twelve months ended March 31,2023,$14 million acquired with IPCOS Group N.V.in the twelve months ended March 31,2023),as well as foreign exchange adjustments,scope changes and cancellations.OutlookOrder Backlog by Market(In millions of dollars)As atMarch 31,2024March 31,20
134、23Life Sciences$871$761Transportation425939Food&Beverage230215Consumer Products156156Energy11182Total$1,793$2,153At March 31,2024,Order Backlog was$1,793 million,16.7%lower than at March 31,2023 primarily on account of lower Order Backlog within the transportation market which included several large
135、 Order Bookings a year ago.The life sciences funnel remains strong,with a focus on strategic submarkets of pharmaceuticals,radiopharmaceuticals,and medical devices.Management continues to see opportunities with both new and existing customers,including those who produce auto-injectors and wearable d
136、evices for diabetes and obesity treatments,contact lenses and pre-filled syringes,as well as opportunities to provide life science solutions that leverage integrated capabilities from across ATS.Management expects revenues from programs related to GLP-1 drugs and associated drug delivery solutions,s
137、uch as auto-injectors,to move towards a high single digit percentage of total revenues over the next several years.In transportation,the funnel is comprised of smaller shorter-term opportunities,relative to the larger Order Bookings received throughout fiscal years 2023 and 2024,and some of those la
138、rger opportunities have also moved further into the future,reflecting Original Equipment Manufacturers taking a more measured approach,aligning capacity and platform costs with market demand.Management believes the Companys automated EV battery pack and assembly capabilities position ATS well within
139、 the industry as the market continues to evolve.Funnel activity in food&beverage remains strong,particularly for energy-efficient solutions.The Company continues to benefit from strong brand recognition within the global tomato processing industry,and there is continued interest in automated solutio
140、ns within the food&beverage market more broadly.Funnel activity in consumer products is stable;inflationary pressures continue to have an effect on discretionary spending by consumers,which ATS 2024 ANNUAL REPORT25may impact timing of some customer investments.Funnel activity in energy remains stron
141、g and includes longer-term opportunities in the nuclear industry.The Company is focused on clean energy applications including solutions for the refurbishment of nuclear power plants,early participation in the small modular reactor market,and grid battery storage.Across all markets,customers are exe
142、rcising normal caution in their approach to investment and spending.Funnel growth in markets where environmental,social and governance requirements are an increasing focus for customers including grid battery storage,EV and nuclear,as well as consumer goods packaging provide ATS with opportunities t
143、o use its capabilities to respond to customer sustainability standards and goals,including global and regional requirements to reduce carbon emissions.Customers seeking to de-risk or enhance the resiliency of their supply chains,address a shortage of skilled workers or combat higher labour costs als
144、o provide future opportunities for ATS to pursue.Management believes that the underlying trends driving customer demand for ATS solutions including rising labour costs,labour shortages,production onshoring or reshoring and the need for scalable,high-quality,energy-efficient production remain favoura
145、ble.Order Backlog of$1,793 million is expected to help mitigate some of the impact of quarterly variability in Order Bookings on revenues in the short term.The Companys Order Backlog includes several large enterprise programs that have longer periods of performance and therefore longer revenue recog
146、nition cycles.In the first quarter of fiscal 2025,management expects the conversion of Order Backlog to revenues to be in the 36%to 40%range.This estimate is calculated each quarter based on managements assessment of project schedules across all customer contracts,expectations for faster-turn produc
147、t and services revenues,expected delivery timing of third-party equipment and operational capacity.In the third quarter,management disclosed that approximately$200 million of Order Backlog with one of the Companys EV customers was delayed.During the fourth quarter,approximately$50 million of Order B
148、acklog on this portion of the program was reduced to reflect scope changes,partially offset by increased scope changes in other areas of the overall program with this same customer.Management continues to work with this customer to support their revised timing as they realign their production schedu
149、les on this portion of the program.This delay is accounted for in the first-quarter revenue conversion range.Management expects some pressure on EV revenues in the short term as ATS continues to execute on existing EV Order Backlog.For fiscal 2025,despite expected lower revenues from EV,Management b
150、elieves that ATS is well-positioned to drive revenue growth in other markets,including life sciences and expects this growth,combined with the addition of Paxiom will largely offset reduced volumes from EV.The timing of customer decisions on larger opportunities is expected to cause variability in O
151、rder Bookings from quarter to quarter.Revenues in a given period are dependent on a combination of the volume of outstanding projects the Company is contracted to perform,the size and duration of those projects,and the timing of project activities including design,assembly,testing,and installation.G
152、iven the specialized nature of the Companys offerings,the size and scope of projects vary based on customer needs.The Company seeks to achieve revenue growth organically and by identifying strategic acquisition opportunities that provide access to attractive end-markets and new products and technolo
153、gies and deliver hurdle-rate returns.After-sales revenues and reoccurring revenues,which ATS defines as revenues from ancillary products and services associated with equipment sales,and revenues from customers who purchase non-customized ATS product at regular intervals,are expected to provide some
154、balance to customers capital expenditure cycles.Management estimates that reoccurring revenues are currently in the range of 25%to 35%of total revenues on a trailing twelve-month basis.In the short term,ATS expects it will continue to mitigate supply chain volatility.Lead times have improved in most
155、 key categories;however,prolonged cost increases,price and lead-time volatility have and may continue to disrupt the timing and progress of the Companys margin expansion efforts and affect revenue recognition.In addition,short-term revenue pressure related to EV programs could impact margins.However
156、,Management expects to be able to manage the Companys cost structure over time through flexible resourcing,including but not limited to subcontract labour and redeploying resources to other parts of the business.Over time,sustaining managements margin target assumes that the Company will successfull
157、y implement its margin expansion initiatives,and that such initiatives will result in improvements to its adjusted earnings from operations margin that offset these shorter-term pressures(see“Forward-Looking Statements”for a description of the risks underlying the achievement of the margin target in
158、 future periods).In the short term,the Company expects non-cash working capital to remain elevated as large enterprise programs progress through milestones.Over the long term,the Company expects to continue investing in non-cash working capital to support growth,with fluctuations expected on a quart
159、er-over-quarter basis.The Companys long-term goal is to maintain its investment in non-cash working capital as a percentage of annualized revenues below 15%.However,given the size and timing of milestone payments for certain large EV programs in Order Backlog,the Company could see its working capita
160、l exceed 15%of annualized revenues in certain periods as it did throughout fiscal 2024.The Company expects that continued cash flows from operations,together with cash and cash equivalents on hand and credit available under operating and long-term credit facilities will be sufficient to fund its req
161、uirements for investments in non-cash working capital and capital assets,and to fund strategic investment plans including some potential acquisitions.Acquisitions could result in additional debt or equity financing requirements for the Company.Non-cash working capital as a percentage of revenues is
162、a non-IFRS ratio see“Non-IFRS and Other Financial Measures.”The Company continues to make progress in line with its plans to integrate acquired companies,and expects to realize cost and revenue synergies consistent with announced integration plans.MANAGEMENTS DISCUSSION AND ANALYSIS26Reorganization
163、ActivityThe Company periodically undertakes reviews of its operations to ensure alignment with strategic market opportunities.As a part of this review,the Company has identified and previously announced an opportunity to improve the cost structure of the organization and reallocate investment to gro
164、wth areas.Resulting actions started in the third quarter of fiscal 2024 and continued through fiscal year end.Restructuring expenses of$6.6 million were recorded in the fourth quarter,and for the full year,total costs of$22.8 million were recorded,including actions to address expected lower EV volum
165、es in fiscal 2025.Detailed Analysis Consolidated Results(In millions of dollars,except per share data)Q4 2024Q4 2023Fiscal 2024Fiscal 2023Fiscal 2022Revenues$791.5$730.8$3,032.9$2,577.4$2,182.7Cost of revenues570.7519.92,177.41,851.61,570.3Selling,general and administrative143.7123.9503.5445.2387.1R
166、estructuring costs6.615.822.827.55.9Stock-based compensation(4.3)19.313.830.632.8Earnings from operations$74.8$51.9$315.4$222.5$186.6Net finance costs$18.8$18.8$68.7$62.7$32.2Provision for income taxes7.53.552.532.133.0Net income$48.5$29.6$194.2$127.7$121.4Basic earnings per share$0.49$0.32$1.98$1.3
167、9$1.32Total assets$4,088.8$3,543.8$3,069.4Total cash and short-term investments$170.2$159.9$135.3Total debt$1,287.4$1,258.9$1,101.3Other non-current liabilities$120.0$140.7$159.2Non-IFRS Financial Measures1Q4 2024Q4 2023Fiscal 2024Fiscal 2023Adjusted earnings from operations$95.9$101.9$397.5$343.4EB
168、ITDA$111.1$85.8$456.6$348.0Adjusted EBITDA$115.8$118.2$470.6$401.2Adjusted basic earnings per share$0.65$0.73$2.61$2.371 Non-IFRS financial measures see“Non-IFRS and Other Financial Measures.”ATS 2024 ANNUAL REPORT27Consolidated Revenues(In millions of dollars)Revenues by typeQ4 2024Q4 2023Fiscal 20
169、24Fiscal 2023Revenues from construction contracts$499.0$470.7$1,972.8$1,630.4Services rendered170.3137.4614.7492.3Sale of goods122.2122.7445.4454.7Total revenues$791.5$730.8$3,032.9$2,577.4Revenues by marketQ4 2024Q4 2023Fiscal 2024Fiscal 2023Life Sciences$375.2$324.5$1,268.6$1,209.9Transportation22
170、2.2199.1933.3578.2Food&Beverage99.799.1435.0371.3Consumer Products70.182.2287.2305.1Energy24.325.9108.8112.9Total revenues$791.5$730.8$3,032.9$2,577.4Revenues by customer locationQ4 2024Q4 2023Fiscal 2024Fiscal 2023North America$468.0$438.1$1,766.5$1,525.5Europe247.1237.8990.1811.7Asia/Other76.454.9
171、276.3240.2Total revenues$791.5$730.8$3,032.9$2,577.4Additional revenue disaggregation1Q4 2024Q4 2023Fiscal 2024Fiscal 2023Custom integration and automation systems$367.7$329.0$1,422.3$1,143.3Products and equipment197.7209.8783.6747.2Services including spare parts226.1192.0827.0686.9Total revenues$79
172、1.5$730.8$3,032.9$2,577.41 Supplementary financial measure see“Non-IFRS and Other Financial Measures.”FOURTH QUARTERFiscal 2024 fourth quarter revenues were 8.3%or$60.7 million higher than in the corresponding period a year ago.This performance primarily reflected year-over-year organic revenue grow
173、th(growth excluding contributions from acquired companies and foreign exchange translation)of$25.3 million or 3.5%,and revenues earned by acquired companies of$34.0 million,which included$24.8 million from Avidity.Revenues generated from construction contracts increased 6.0%or$28.3 million due to or
174、ganic revenue growth.Revenues from services increased 23.9%or$32.9 million due to organic revenue growth in addition to revenues earned by acquired companies of$12.9 million.Revenues from the sale of goods decreased 0.4%or$0.5 million primarily due to lower Order Backlog entering the quarter,partial
175、ly offset by revenues earned by acquired companies of$20.6 million,primarily from Avidity.By market,revenues generated in life sciences increased$50.7 million or 15.6%year over year.This was primarily due to contributions from acquisitions totalling$28.3 million and organic revenue growth on higher
176、Order Backlog entering the quarter.Revenues in transportation increased$23.1 million or 11.6%,due to timing of program execution.Revenues generated in food&beverage increased$0.6 million or 0.6%due to revenues earned by acquired companies.Revenues generated in consumer products decreased$12.1 millio
177、n or 14.7%due to timing of program execution.Revenues in energy decreased$1.6 million or 6.2%due to timing of program execution.MANAGEMENTS DISCUSSION AND ANALYSIS28FULL YEARRevenues for the year ended March 31,2024 were 17.7%or$455.5 million higher than in the prior year and included$93.5 million o
178、f revenues earned by acquired companies,including$38.6 million from Avidity,and$22.7 million from ZIA.Organic revenue growth,excluding contributions from acquired companies and the impact of foreign exchange fluctuations,was$275.2 million or 10.7%higher than the corresponding period in the prior yea
179、r.Organic revenue growth was primarily related to activity in transportation,driven by EV work,as well as increases in food&beverage.Foreign exchange translation positively impacted revenues by$86.8 million or 3.4%,primarily reflecting the strengthening of the U.S.dollar and Euro relative to the Can
180、adian dollar.Revenues generated from construction contracts increased 21.0%or$342.4 million due to higher Order Backlog entering the fiscal year,combined with positive foreign exchange translation impact.Revenues from services increased 24.9%or$122.4 million due to revenues earned by acquired compan
181、ies of$60.2 million,most notably$21.7 million from ZIA,in addition to organic revenue growth and the positive impact of foreign exchange translation.Revenues from the sale of goods decreased 2.0%or$9.3 million primarily due to lower Order Backlog entering the period compared to the prior year,partia
182、lly offset by revenues earned by acquired companies of$31.8 million,primarily from Avidity and ZIA,and the positive impact of foreign exchange translation.By market,fiscal 2024 revenues from life sciences increased$58.7 million or 4.9%primarily on revenues earned by acquired companies of$54.8 millio
183、n and a positive impact of foreign exchange translation,partially offset by revenues earned a year ago on a large$120.0 million program.Revenues in transportation increased$355.1 million or 61.4%due primarily to revenues earned on previously announced large EV Order Bookings.Revenues generated in fo
184、od&beverage increased$63.7 million or 17.2%due to organic revenue growth and the positive impact of foreign exchange translation.Revenues generated in consumer products decreased$17.9 million or 5.9%,due to lower Order Backlog entering the fiscal year,partially offset by contributions from acquired
185、companies of$14.4 million.Revenues in energy decreased$4.1 million or 3.6%due to lower Order Backlog entering the fiscal year.Cost of revenues.At$570.7 million,fourth quarter fiscal 2024 cost of revenues increased$50.8 million,or 9.8%compared to the corresponding period a year ago,primarily due to h
186、igher revenues.Fourth quarter fiscal 2024 gross margin was 27.9%,compared to 28.9%in the corresponding period a year ago.Excluding acquisition-related inventory fair value charges of$2.0 million,gross margin in the fourth quarter of fiscal 2024 was 28.1%,71 basis points lower than the prior year,pri
187、marily due to some lower margin programs,partially offset by accretive margin on acquisitions.Year-to-date gross margin was 28.2%(28.3%excluding acquisition-related inventory fair value charges of$2.8 million)compared to 28.2%(or 28.5%excluding acquisition-related inventory fair value charges of$9.2
188、 million)in the corresponding period a year ago.The year-to-date gross margin,excluding acquisition-related inventory fair value charges,decreased primarily due to some lower margin programs in the current period,partially offset by accretive margin on acquisitions.Selling,general and administrative
189、 expenses.SG&A expenses for the fourth quarter of fiscal 2024 were$143.7 million and included$16.4 million of costs related to the amortization of identifiable intangible assets on business acquisitions,and$4.6 million of incremental costs related to the Companys acquisition activity.Excluding these
190、 items,SG&A expenses were$122.7 million in the fourth quarter of fiscal 2024.Comparably,SG&A expenses for the fourth quarter of fiscal 2023 were$104.8 million,which excluded$17.6 million of costs related to the amortization of identifiable intangible assets on business acquisitions,and$1.5 million o
191、f incremental costs related to the Companys acquisition activity.Higher SG&A expenses in the fourth quarter of fiscal 2024 primarily reflected incremental SG&A expenses from acquired companies of$11.0 million,primarily from Avidity,in addition to various other SG&A expense increases.Fiscal 2024 SG&A
192、 expenses were$503.5 million,which included$68.1 million of costs related to the amortization of identifiable intangible assets on business acquisitions,$6.8 million of incremental costs related to the Companys acquisition activity,and an$11.7 million gain on sale of facilities.Excluding these costs
193、,SG&A expenses were$440.3 million.Comparably,SG&A expenses for the year ended March 31,2023 were$374.4 million,which excluded$67.7 million of expenses related to the amortization of identifiable intangible assets on business acquisitions,and$3.1 million of incremental costs related to the Companys a
194、cquisition activity.Excluding these costs,higher SG&A expenses for the year ended March 31,2024 primarily reflected increased employee costs,$14.0 million of foreign exchange translation impact,and the addition of SG&A expenses from acquired companies of$28.4 million,primarily Avidity and ZIA.Restru
195、cturing costs.Restructuring costs for the three and twelve months ended March 31,2024 were$6.6 million and$22.8 million,respectively,compared to restructuring costs of$15.8 million and$27.5 million in the corresponding periods a year ago.For further information on the restructuring costs,refer to Re
196、organization Activity on page 26.Stock-based compensation.Stock-based compensation expense was a recovery of$4.3 million in the fourth quarter of fiscal 2024,which included an$8.5 million recovery of revaluation expenses from deferred stock units and restricted share units resulting from the change
197、in the market price of the Companys common shares between periods(“stock-based compensation revaluation expenses”).Comparably,stock-based compensation expense was$19.3 million in the corresponding period a year ago,which included$15.1 million of stock-based compensation revaluation expenses.Fiscal 2
198、024 stock-based compensation expense was$13.8 million,which included$6.7 million recovery of stock-based compensation revaluation expenses,compared to$30.6 million a year earlier,which included$13.4 million of stock-based compensation revaluation expenses.ATS 2024 ANNUAL REPORT29Earnings and adjuste
199、d earnings from operations(in millions of dollars)Q4 2024Q4 2023Fiscal 2024Fiscal 2023Earnings from operations$74.8$51.9$315.4$222.5Amortization of acquisition-related intangible assets16.417.668.167.7Acquisition-related transaction costs4.61.56.83.1Acquisition-related inventory fair value charges2.
200、02.89.2Gain on sale of facilities(11.7)Restructuring charges6.615.822.827.5Mark to market portion of stock-based compensation(8.5)15.1(6.7)13.4Adjusted earnings from operations1$95.9$101.9$397.5$343.41 Non-IFRS financial measure See“Non-IFRS and Other Financial Measures.”FOURTH QUARTERFiscal 2024 fo
201、urth quarter earnings from operations were$74.8 million(9.5%operating margin)compared to$51.9 million(7.1%operating margin)in the fourth quarter a year ago.Fiscal 2024 fourth quarter earnings from operations included$2.0 million of acquisition-related fair value adjustments to acquired inventories r
202、ecorded in cost of revenues,$16.4 million related to amortization of acquisition-related intangible assets,and$4.6 million of incremental costs for the Companys acquisition activity recorded to SG&A expenses,$6.6 million of restructuring charges and a$8.5 million recovery of stock-based compensation
203、 expenses due to revaluation.Fourth quarter of fiscal 2023 earnings from operations included$17.6 million of amortization of acquisition-related intangible assets and$1.5 million of incremental costs for acquisition activity recorded in SG&A expenses,$15.8 million of restructuring charges,and$15.1 m
204、illion of stock-based compensation revaluation expenses.Excluding these items in both quarters,adjusted earnings from operations were$95.9 million(12.1%margin),compared to$101.9 million(13.9%margin)a year ago.Fourth quarter fiscal 2024 adjusted earnings from operations reflected higher cost of reven
205、ues and SG&A expenses,partially offset by increased revenues.FULL YEARFor the year ended March 31,2024,earnings from operations were$315.4 million(10.4%operating margin),compared to$222.5 million(8.6%operating margin)a year ago.Earnings from operations included$2.8 million of acquisition-related fai
206、r value adjustments to acquired inventories recorded in cost of revenues,$68.1 million related to amortization of acquisition-related intangible assets,$6.8 million of incremental costs related to the Companys acquisition activity and an$11.7 million gain on sale of facilities recorded in SG&A expen
207、ses,$22.8 million of restructuring charges and a$6.7 million recovery of stock-based compensation revaluation expenses.For the year ended March 31,2023,earnings from operations included$9.2 million of acquisition-related fair value adjustments to acquired inventories recorded in cost of revenues,$67
208、.7 million related to amortization of acquisition-related intangible assets and$3.1 million of incremental costs related to the Companys acquisition activity recorded to SG&A,$27.5 million of restructuring charges and$13.4 million of stock-based compensation expenses due to revaluation.Excluding tho
209、se items in both years,adjusted earnings from operations were$397.5 million(13.1%margin),compared to$343.4 million(13.3%margin)in the corresponding period a year ago.Increased adjusted earnings from operations reflected higher revenues,partially offset by increased SG&A expenses.Net finance costs.Ne
210、t finance costs were$18.8 million in the fourth quarter of fiscal 2024,compared to$18.8 million a year ago.Fiscal 2024 finance costs were$68.7 million compared to$62.7 million a year ago.The increase was primarily due to higher interest rates compared to a year ago.Income tax provision.For the three
211、 and twelve months ended March 31,2024,the Companys effective income tax rates of 13.4%and 21.3%,respectively,differed from the combined Canadian basic federal and provincial income tax rate of 26.5%due to income earned in certain jurisdictions with different statutory tax rates.Net Income.Net incom
212、e for the fourth quarter of fiscal 2024 was$48.5 million(49 cents per share basic),compared to$29.6 million(32 cents per share basic)for the fourth quarter of fiscal 2023.The increase primarily reflected higher revenues,lower stock-based compensation expenses and lower restructuring charges,partiall
213、y offset by higher cost of revenues and SG&A.Adjusted basic earnings per share were 65 cents compared to 73 cents in the fourth quarter of fiscal 2023(see“Reconciliation of Non-IFRS Measures to IFRS Measures”).MANAGEMENTS DISCUSSION AND ANALYSIS30Fiscal 2024 net income was$194.2 million($1.98 per sh
214、are basic),an increase of$66.5 million(and$0.59 per share basic)compared to a year ago.This was primarily the result of higher revenues and lower restructuring charges and stock-based compensation,partially offset by higher cost of revenues,SG&A expenses,income tax expense,and finance costs.Adjusted
215、 basic earnings per share were$2.61 for the year ended March 31,2024 compared to$2.37 in the corresponding period a year ago(see“Reconciliation of Non-IFRS Measures to IFRS Measures”).Other Non-IFRS Measures of Performance(in millions of dollars)Q4 2024Q4 2023Fiscal 2024Fiscal 2023Earnings from oper
216、ations$74.8$51.9$315.4$222.5Depreciation and amortization36.333.9141.2125.5EBITDA1$111.1$85.8$456.6$348.0Restructuring charges6.615.822.827.5Acquisition-related transaction costs4.61.56.83.1Acquisition-related inventory fair value charges2.02.89.2Mark to market portion of stock-based compensation(8.
217、5)15.1(6.7)13.4Gain on sale of facilities(11.7)Adjusted EBITDA1$115.8$118.2$470.6$401.21 Non-IFRS financial measure See“Non-IFRS and Other Financial Measures”FOURTH QUARTERDepreciation and amortization expense was$36.3 million in the fourth quarter of fiscal 2024,compared to$33.9 million a year ago;
218、the increase was primarily related to incremental depreciation and amortization expense from recently acquired companies.EBITDA was$111.1 million(14.0%EBITDA margin)in the fourth quarter of fiscal 2024 compared to$85.8 million(11.7%EBITDA margin)in the fourth quarter of fiscal 2023.EBITDA for the fo
219、urth quarter of fiscal 2024 included$6.6 million of restructuring charges,$4.6 million of incremental costs related to acquisition activity,$2.0 million of acquisition-related fair value adjustments to acquired inventories,and a$8.5 million recovery of stock-based compensation expenses due to revalu
220、ation.EBITDA for the corresponding period in the prior year included$1.5 million of incremental costs related to acquisition activity,$15.8 million of restructuring charges,and$15.1 million of stock-based compensation revaluation expenses.Excluding these costs,adjusted EBITDA was$115.8 million(14.6%
221、adjusted EBITDA margin),compared to$118.2 million(16.2%adjusted EBITDA margin)for the corresponding period in the prior year.Lower adjusted EBITDA reflected increased SG&A expenses and cost of revenues,partially offset by higher revenues.EBITDA is a non-IFRS financial measure see“Non-IFRS and Other
222、Financial Measures.”FULL YEARDepreciation and amortization expense was$141.2 million for fiscal 2024,compared to$125.5 million a year ago;the increase was primarily related to incremental depreciation and amortization expense from recently acquired companies.EBITDA was$456.6 million(15.1%EBITDA marg
223、in)in fiscal 2024 compared to$348.0 million(13.5%EBITDA margin)a year ago.EBITDA for fiscal 2024 included$22.8 million of restructuring charges,$6.8 million of incremental costs related to the Companys acquisition activity,$2.8 million acquisition-related fair value adjustments to acquired inventori
224、es,a$6.7 million recovery of stock-based compensation revaluation expenses,and an$11.7 million gain on sale of facilities.EBITDA a year ago included$27.5 million of restructuring charges,$3.1 million of incremental costs related to the Companys acquisition activity,$9.2 million of acquisition-relate
225、d inventory fair value charges,and$13.4 million of stock-based compensation expenses due to revaluation.Excluding these costs in both years,adjusted EBITDA was$470.6 million(15.5%adjusted EBITDA margin),compared to$401.2 million(15.6%adjusted EBITDA margin)a year ago.Higher adjusted EBITDA reflected
226、 higher revenues,partially offset by increased SG&A expenses.ATS 2024 ANNUAL REPORT31Share DataDuring fiscal 2024,105,398 stock options were exercised.At May 16,2024,the total number of common shares outstanding was 97,923,899.There were also 821,596 stock options outstanding to acquire common share
227、s of the Company and 578,566 restricted share units outstanding that may be settled in ATS common shares where deemed advisable by the Company,as an alternative to cash payments.A portion of the restricted share units are subject to the performance vesting conditions of the plan.In fiscal 2023,a tru
228、st was created for the purpose of purchasing common shares of the Company on the stock market.The common shares are being held in trust and may be used to settle some or all of the fiscal 2023 and 2024 restricted share unit grants when such restricted share unit grants are fully vested.During the th
229、ree months ended March 31,2024,nil common shares were purchased,during the twelve months ended March 31,2024 the Company acquired 387,794 common shares for$23.8 million.The trust is included in the Companys consolidated financial statements with the value of the acquired common shares presented as a
230、 reduction of share capital.Normal Course Issuer BidOn December 13,2023,the Company announced that the TSX had accepted a notice filed by the Company of its intention to make a normal course issuer bid(“NCIB”).Under the NCIB,ATS may purchase for cancellation up to a maximum of 8,044,818 common share
231、s during the 12-month period ending December 14,2024.For the year ended March 31,2024,the Company purchased 300 common shares for$14 thousand under the recently announced and previous NCIB programs.Subsequent to March 31,2024,the Company purchased 1,020,887 common shares for cancellation under the N
232、CIB program for$45.0 million.Some purchases under the NCIB may be made pursuant to an automatic share purchase plan between ATS and its broker.This plan enables the purchase of common shares when ATS would not ordinarily be active in the market due to internal trading blackout periods,insider tradin
233、g rules,or otherwise.ATS security holders may obtain a copy of the notice,without charge,upon request from the Secretary of the Company.The NCIB program is viewed by the Company as one component of an overall capital structure strategy and complementary to its acquisition growth plans.Investments,Li
234、quidity,Cash Flow and Financial ResourcesInvestments(in millions of dollars)Fiscal 2024Fiscal 2023Investments increase(decrease)Non-cash operating working capital$275.6$109.4Acquisition of property,plant and equipment58.856.1Acquisition of intangible assets29.624.2Proceeds from disposal of assets(23
235、.2)(1.5)Total cash investments$340.8$188.2In fiscal 2024,the Companys investment in non-cash working capital increased$275.6 million,compared to an increase of$109.4 million a year ago.Accounts receivable increased 17.9%,or$71.6 million,and net contracts in progress increased 70.4%,or$162.1 million
236、compared to March 31,2023,due to the timing of billings on certain customer contracts and$22.9 million of accounts receivable from recent acquisitions.The Company actively manages its accounts receivable,contract asset and contract liability balances through billing terms on long-term contracts and
237、collection efforts.Inventories increased 15.2%,or$39.0 million,primarily due to$23.8 million of inventory from recent acquisitions.Deposits and prepaid assets increased 5.1%,or$4.8 million compared to March 31,2023,due$4.6 million of deposits and prepaids from recent acquisitions,partially offset by
238、 a decrease in supplier deposits due to timing.Accounts payable and accrued liabilities decreased 6.7%,or$43.1 million,compared to March 31,2023 due to timing of supplier billings and payments combined with fair value impacts related to the Companys deferred stock units and restricted share units to
239、 be settled in cash.Provisions increased 17.6%,or$5.4 million compared to March 31,2023,primarily due to higher provisions related to the Companys reorganization plan and$2.5 million of provisions from recent acquisitions.Non-cash working capital as a percentage of revenue was 19.0%at March 31,2024
240、compared to 10.1%at March 31,2023.MANAGEMENTS DISCUSSION AND ANALYSIS32Cash investments in property,plant and equipment totalled$58.8 million in fiscal 2024,compared to$56.1 million for fiscal 2023.Expenditures primarily related to the expansion and improvement of certain manufacturing facilities an
241、d investments in computer hardware,production equipment and office equipment.Intangible assets expenditures were$29.6 million for fiscal 2024,compared to$24.2 million for fiscal 2023,and primarily related to computer software and various internal development projects.Capital expenditures for fiscal
242、2025 for tangible assets and intangible assets are expected to be in the$70 million to$90 million range and reflect the Companys plan to add capacity to support growth while investing in innovation,along with ongoing business requirements.The Company will continue to build flexibility in its capacit
243、y plans through the strategic use of leased facilities and third-party services.Proceeds from disposal of assets were$23.2 million in fiscal 2024,compared to$1.5 million in fiscal 2023.The increase largely related to the disposal of two redundant facilities in the third quarter of fiscal 2024.The Co
244、mpany performs impairment tests on its goodwill and intangible asset balances on an annual basis or as warranted by events or circumstances.The Company conducted its annual impairment assessment in the fourth quarter of fiscal 2024 and determined there was no impairment of goodwill or intangible ass
245、ets as of March 31,2024(fiscal 2023$nil).All the Companys investments involve risks and require judgments and estimates regarding the likelihood of recovery of the respective costs.In the event management determines that any of the Companys investments have become permanently impaired or recovery is
246、 no longer reasonably assured,the value of the investment would be written down to its estimated net realizable value as a charge against earnings.Liquidity,Cash Flow and Financial Resources(In millions of dollars,except ratios)As at March 31,2024March 31,2023Cash and cash equivalents$170.2$159.9Deb
247、t-to-equity ratio1 0.79:11.18:11 Debt is calculated as bank indebtedness,long-term debt and lease liabilities.Equity is calculated as total equity less accumulated other comprehensive income.Q4 2024Q4 2023Fiscal 2024Fiscal 2023Cash,beginning of period$260.9$302.1$159.9$135.3Total cash provided by(us
248、ed in):Operating activities9.681.420.8127.8Investing activities(26.3)(66.9)(341.8)(109.0)Financing activities(75.4)(155.9)330.74.9Net foreign exchange difference1.4(0.8)0.60.9Cash,end of period$170.2$159.9$170.2$159.9In the fourth quarter of fiscal 2024,cash flows provided by operating activities we
249、re$9.6 million compared to$81.4 million provided by operating activities in the corresponding period a year ago.In the year ended March 31,2024,cash flows provided by operating activities were$20.8 million compared to$127.8 million provided by operating activities a year ago.The decrease primarily r
250、elated to the timing of investments in non-cash working capital in certain customer programs.The free cash flow of the Company for fiscal 2024 was an outflow of$67.6 million,compared to an inflow of$47.5 million a year ago primarily due to increased investments in non-cash working capital.The Compan
251、y has a multi-year free cash flow target of 100%of net income.Free cash flow is a non-IFRS financial measure see“Non-IFRS and Other Financial Measures.”At March 31,2024,the Company had$447.3 million of unutilized multipurpose credit,including letters of credit,available under existing credit facilit
252、ies and an additional$293.1 million available under letter of credit facilities.On October 5,2023,the Company amended its senior secured credit facility(the“Credit Facility”)to extend the term loan maturity to match the maturity of the revolving line of credit.The Credit Facility consists of(i)a$750
253、.0 million secured committed revolving line of credit and(ii)a fully drawn$300.0 million non-amortized secured term credit facility;both maturing on November 4,2026.The Credit Facility is secured by the ATS 2024 ANNUAL REPORT33Companys assets,including a pledge of shares of certain of the Companys s
254、ubsidiaries.Certain of the Companys subsidiaries also provide guarantees under the Credit Facility.At March 31,2024,the Company had utilized$704.0 million under the Credit Facility,of which$704.0 million was classified as long-term debt(March 31,2023$691.9 million)and$0.0 million by way of letters o
255、f credit(March 31,2023$0.0 million).The Credit Facility is available in Canadian dollars by way of prime rate advances and/or bankers acceptances,in U.S.dollars by way of base rate advances and/or Term SOFR,in Euros by way of EURIBOR advances,in British pounds sterling by way of Daily Simple SONIA a
256、dvances,and by way of letters of credit for certain purposes.The interest rates applicable to the Credit Facility are determined based on a net debt-to-EBITDA ratio as defined in the Credit Facility.For prime rate advances and base rate advances,the interest rate is equal to the banks prime rate or
257、the banks U.S.dollar base rate in Canada,respectively,plus a margin ranging from 0.45%to 2.00%.For bankers acceptances,Term SOFR,EURIBOR advances and Daily Simple SONIA advances,the interest rate is equal to the bankers acceptance fee,Term SOFR rate,EURIBOR rate or Daily Simple SONIA rate,respective
258、ly,plus a margin that varies from 1.45%to 3.00%.The Company pays a fee for usage of financial letters of credit that ranges from 1.45%to 3.00%,and a fee for usage of non-financial letters of credit that ranges from 0.97%to 2.00%.The Company pays a standby fee on the unadvanced portions of the amount
259、s available for advance or drawdown under the Credit Facility at rates ranging from 0.29%to 0.60%.The Companys Credit Facility is subject to changes in market interest rates.Changes in economic conditions outside of the Companys control could result in higher interest rates,thereby increasing its in
260、terest expense.The Company uses a variable for fixed interest rate swap to hedge a portion of its Credit Facility(see“Risk Management”).The Credit Facility is subject to financial covenants including a net debt-to-EBITDA test and an interest coverage test.Under the terms of the Credit Facility,the C
261、ompany is restricted from encumbering any assets with certain permitted exceptions.At March 31,2024,all of the covenants were met.The Company has additional credit facilities available of$108.1 million(40.6 million Euros,U.S.$24.0 million,120.0 million Thai Baht,5.0 million CNY,5.0 million GBP,$0.2
262、million AUD and$2.2 million CAD).The total amount outstanding on these facilities as at March 31,2024 was$6.7 million,of which$4.1 million was classified as bank indebtedness(March 31,2023$5.8 million),$2.3 million was classified as long-term debt(March 31,2023$0.2 million)and$0.4 million by way of
263、letters of credit(March 31,2023$0.2 million).The interest rates applicable to the credit facilities range from 0.03%to 8.45%per annum.A portion of the long-term debt is secured by certain assets of the Company.The Companys U.S.$350.0 million aggregate principal amount of senior notes(the“Senior Note
264、s”)were issued at par,bear interest at a rate of 4.125%per annum and mature on December 15,2028.After December 15,2023,the Company may redeem the Senior Notes,in whole at any time or in part from time to time,at specified redemption prices and subject to certain conditions required by the Senior Not
265、es.If the Company experiences a change of control,the Company may be required to repurchase the Senior Notes,in whole or in part,at a purchase price equal to 101%of the aggregate principal amount of the Senior Notes,plus accrued and unpaid interest,if any,to,but not including,the redemption date.The
266、 Senior Notes contain customary covenants that restrict,subject to certain exceptions and thresholds,some of the activities of the Company and its subsidiaries,including the Companys ability to dispose of assets,incur additional debt,pay dividends,create liens,make investments,and engage in specifie
267、d transactions with affiliates.At March 31,2024,all of the covenants were met.Subject to certain exceptions,the Senior Notes are guaranteed by each of the subsidiaries of the Company that is a borrower or has guaranteed obligations under the Credit Facility.Transaction fees of$8.1 million were defer
268、red and are being amortized over the term of the Senior Notes.The Company uses a cross-currency interest rate swap instrument to hedge a portion of its U.S.-dollar-denominated Senior Notes(see“Risk Management”).Contractual Obligations(In millions of dollars)The Companys contractual obligations are a
269、s follows as at March 31,2024:Payments Due by PeriodTotal5 YearsBank indebtedness$4.1$4.1$Long-term debt obligations11,286.221.121.1636.9108.8494.73.6Lease liability obligations1127.931.125.119.312.59.730.2Purchase obligations369.6353.713.51.70.60.1Accounts payable and accrued liabilities604.5604.5T
270、otal$2,392.3$1,014.5$59.7$657.9$121.9$504.5$33.81 Long-term debt obligations and lease liability obligations include principal and interest.MANAGEMENTS DISCUSSION AND ANALYSIS34The Companys off-balance sheet arrangements consist of purchase obligations,primarily commitments for material purchases,wh
271、ich have been entered into in the normal course of business.In accordance with industry practice,the Company is liable to customers for obligations relating to contract completion and timely delivery.In the normal conduct of its operations,the Company may provide letters of credit as security for ad
272、vances received from customers pending delivery and contract performance.In addition,the Company provides letters of credit for post-retirement obligations and may provide letters of credit as security on equipment under lease and on order.As at March 31,2024,the total value of outstanding letters o
273、f credit was approximately$171.1 million(March 31,2023$192.5 million).In the normal course of operations,the Company is party to a number of lawsuits,claims and contingencies.Although it is possible that liabilities may be incurred in instances for which no accruals have been made,the Company does n
274、ot believe that the ultimate outcome of these matters will have a material impact on its consolidated statement of financial position.The Company is exposed to credit risk on derivative financial instruments arising from the potential for counterparties to default on their contractual obligations to
275、 the Company.The Company minimizes this risk by limiting counterparties to major financial institutions and monitoring their credit worthiness.The Companys credit exposure to forward foreign exchange contracts is the current replacement value of contracts that are in a gain position.The Company is a
276、lso exposed to credit risk from its customers.Substantially all of the Companys trade accounts receivable are due from customers in a variety of industries and,as such,are subject to normal credit risks from their respective industries.The Company regularly monitors customers for changes in credit r
277、isk.The Company does not believe that any single market or geographic region represents significant credit risk.Credit risk concentration,with respect to trade receivables,is mitigated as the Company primarily serves large,multinational customers and obtains receivables insurance in certain instance
278、s.Financial InstrumentsThe Company has various financial instruments including cash and cash equivalents,trade accounts receivable,bank indebtedness,trade accounts payable and accrued liabilities and long-term debt which are used in the normal course of business to maintain operations.The Company us
279、es derivative financial instruments to help manage and mitigate various risks that the business faces.Risk ManagementAn interest rate risk exists with financial instruments held by the Company,which is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a re
280、sult of changes in market interest rates.The Company manages interest rate risk on a portfolio basis and seeks financing terms in individual arrangements that are most advantageous taking into account all relevant factors.The Company uses a variable for fixed interest rate swap as a derivative finan
281、cial instrument to hedge a portion of its interest rate risk.Effective November 4,2022,the Company entered into a variable for fixed interest rate swap instrument to swap the variable interest rate on its$300.0 million non-amortized secured credit facility to a fixed 4.241%interest rate.The terms of
282、 the hedging instrument will end on November 4,2024.Effective November 21,2023,the Company entered into a variable for fixed interest rate swap instrument to swap the variable interest rate on its$300.0 million non-amortized secured credit facility to a fixed 4.044%interest rate for the period Novem
283、ber 4,2024 to November 4,2026.A credit risk exists with financial instruments held by the Company,which is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations.The Company attempts to mitigate this risk by following policies and procedures
284、surrounding accepting work with new customers,and performing work for a large variety of multinational customers in diversified industries.There is a liquidity risk,which is the risk that the Company may encounter difficulties in meeting obligations associated with some financial instruments.This is
285、 managed by ensuring,to the extent possible,that the Company will have sufficient liquidity to meet its liabilities when they become due.Foreign Exchange RiskThe Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency of the Canadian d
286、ollar,through borrowings in currencies other than its functional currency and through its investments in its foreign-based subsidiaries.The Companys Canadian operations generate significant revenues in major foreign currencies,primarily U.S.dollars,which exceed the natural hedge provided by purchase
287、s of goods and services in those currencies.In order to manage a portion of this foreign currency exposure,the Company has entered into forward foreign exchange contracts.The timing and amount of these forward foreign exchange contract requirements are estimated based on existing customer contracts
288、on hand or anticipated,current conditions in the Companys markets and the Companys past experience.Certain of the Companys foreign subsidiaries will also enter forward foreign exchange contracts to hedge identified balance sheet,revenue and purchase exposures.The Companys forward foreign exchange co
289、ntract hedging program is intended to mitigate movements in currency rates primarily over a four-to six-month period.ATS 2024 ANNUAL REPORT35The Company uses cross-currency swaps as derivative financial instruments to hedge a portion of its foreign exchange risk related to its U.S.dollar-denominated
290、 Senior Notes.On April 20,2022,the Company entered into a cross-currency interest rate swap instrument to swap U.S.$175.0 million into Canadian dollars to hedge a portion of its foreign exchange risk related to its U.S.dollar-denominated Senior Notes.The Company will receive interest of 4.125%U.S.pe
291、r annum and pay interest of 4.169%Canadian.The terms of the hedging instrument will end on December 15,2025.The Company manages foreign exchange risk on its Euro-denominated net investments.The Company uses a cross-currency interest rate swap as derivative financial instruments to hedge a portion of
292、 the foreign exchange risk related to its Euro-denominated net investment.On April 20,2022,the Company entered into a cross-currency interest rate swap instrument to swap 161.1 million Euros into Canadian dollars.The Company will receive interest of 4.169%Canadian per annum and pay interest of 2.351
293、%Euros.The terms of the hedging relationship will end on December 15,2025.In addition,from time to time,the Company may hedge the foreign exchange risk arising from foreign currency debt,intercompany loans,net investments in foreign-based subsidiaries and committed acquisitions through the use of fo
294、rward foreign exchange contracts or other non-derivative financial instruments.The Company uses hedging as a risk management tool,not to speculate.Period Average Exchange Rates in Canadian DollarsYear-end actual exchange ratesPeriod average exchange ratesMarch 312024March 312023%changeMarch 312024Ma
295、rch 312023%changeU.S.dollar1.3551.3510.3%1.3491.3241.9%Euro1.4611.465(0.3)%1.4631.3796.1%Consolidated Quarterly Results(In millions of dollars,except per share amounts)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023Revenues$791.5$752.0$735.7$753.6$730.8$647.0$588.9$610.6Earnings from operat
296、ions$74.8$78.5$83.0$79.0$51.9$56.0$53.0$61.6Adjusted earnings from operations1,4$95.9$101.2$98.3$102.1$101.9$86.2$76.1$79.2Net income$48.5$47.2$50.7$47.7$29.6$29.2$29.5$39.4Basic earnings per share$0.49$0.48$0.51$0.50$0.32$0.32$0.32$0.43Diluted earnings per share$0.49$0.47$0.51$0.50$0.32$0.32$0.32$0
297、.42Adjusted basic earnings per share1,4$0.65$0.65$0.63$0.69$0.73$0.56$0.51$0.57Order Bookings2$791.0$668.0$742.0$690.0$737.0$979.0$804.0$736.0Order Backlog3$1,793.0$1,907.0$2,016.0$2,023.0$2,153.0$2,143.0$1,793.0$1,555.01 Non-IFRS financial measure See“Non-IFRS and Other Financial Measures”and“Recon
298、ciliation of Non-IFRS Measures to IFRS Measures”2 Non-IFRS financial measure See“Non-IFRS and Other Financial Measures”and“Order Bookings by Quarter”3 Non-IFRS financial measure See“Non-IFRS and Other Financial Measures”and“Order Backlog Continuity”4 The composition of these Non-IFRS Measures has be
299、en revised from what was previously disclosed.See“Non-IFRS and Other Financial Measures”Interim financial results are not necessarily indicative of annual or longer-term results because capital equipment markets served by the Company tend to be cyclical in nature.Operating performance quarter to qua
300、rter is also affected by the timing of revenue recognition on large programs in Order Backlog,which is impacted by such factors as customer delivery schedules,the timing of receipt of third-party components,and by the timing of acquisitions.General economic trends,product life cycles and product cha
301、nges may impact revenues and operating performance.ATS typically experiences some seasonality with its Order Bookings,revenues and earnings from operations,due to employee vacations,seasonality of growing seasons within the food industry and summer plant shutdowns by its customers.MANAGEMENTS DISCUS
302、SION AND ANALYSIS36Related Party TransactionsThe Company has an agreement with a shareholder,Mason Capital Management,LLC(“Mason Capital”),pursuant to which Mason Capital has agreed to provide ATS with ongoing strategic and capital markets advisory services for an annual fee of U.S.$0.5 million.As p
303、art of the agreement,Michael Martino,a member of the Companys Board of Directors who is associated with Mason Capital,has waived any fees to which he may have otherwise been entitled for serving as a member of the Board of Directors or as a member of any committee of the Board of Directors.There wer
304、e no other significant related party transactions in fiscal 2024.Reconciliation of Non-IFRS Measures to IFRS Measures(In millions of dollars,except per share data)The following table reconciles adjusted EBITDA and EBITDA to the most directly comparable IFRS measure(net income):Q4 2024Q4 2023Fiscal 2
305、024Fiscal 2023Adjusted EBITDA$115.8$118.2$470.6$401.2Less:restructuring charges6.615.822.827.5Less:acquisition-related transaction costs4.61.56.83.1Less:acquisition-related inventory fair value charges2.02.89.2Less:mark to market portion of stock-based compensation(8.5)15.1(6.7)13.4Less:gain on sale
306、 of facilities(11.7)EBITDA$111.1$85.8$456.6$348.0Less:depreciation and amortization expense36.333.9141.2125.5Earnings from operations$74.8$51.9$315.4$222.5Less:net finance costs18.818.868.762.7Less:provision for income taxes7.53.552.532.1Net income$48.5$29.6$194.2$127.7 ATS 2024 ANNUAL REPORT37The f
307、ollowing table reconciles adjusted earnings from operations,adjusted net income,and adjusted basic earnings per share to the most directly comparable IFRS measures(net income and basic earnings per share):Three Months Ended March 31,2024Three Months Ended March 31,2023Earningsfrom operationsFinance
308、costsProvision for incometaxesNet incomeBasic EPSEarningsfrom operationsFinance costsProvision for incometaxesNet incomeBasic EPSReported(IFRS)$74.8$(18.8)$(7.5)$48.5$0.49$51.9$(18.8)$(3.5)$29.6$0.32Amortization of acquisition-related intangibles16.416.40.1617.617.60.19Restructuring charges6.66.60.0
309、715.815.80.17Acquisition-related inventory fair value charges2.02.00.02Acquisition-related transaction costs4.64.60.051.51.50.02Mark to market portion of stock-based compensation(8.5)(8.5)(0.09)15.115.10.17Tax effect adjustments1(5.3)(5.3)(0.05)(12.9)(12.9)(0.14)Adjusted(non-IFRS)$95.9$64.3$0.65$101
310、.9$66.7$0.731 Adjustments to provision for income taxes relate to the income tax effects of adjustment items that are excluded for the purposes of calculating non-IFRS based adjusted net income.Year Ended March 31,2024Year Ended March 31,2023Earningsfrom operationsFinance costsProvision for incometa
311、xesNet incomeBasic EPSEarningsfrom operationsFinance costsProvision for incometaxesNet incomeBasic EPSReported(IFRS)$315.4$(68.7)$(52.5)$194.2$1.98$222.5$(62.7)$(32.1)$127.7$1.39Amortization of acquisition-related intangibles68.168.10.7067.767.70.74Restructuring charges22.822.80.2327.527.50.30Acquis
312、ition-related fair value inventory charges2.82.80.039.29.20.10Acquisition-related transaction costs6.86.80.073.13.10.03Mark to market portion of stock-based compensation(6.7)(6.7)(0.07)13.413.40.14Gain on sale of facilities(11.7)(11.7)(0.12)Tax effect of the above adjustments1(21.0)(21.0)(0.21)(30.7
313、)(30.7)(0.33)Adjusted(non-IFRS)$397.5$255.3$2.61$343.4$217.9$2.371 Adjustments to provision for income taxes relate to the income tax effects of adjustment items that are excluded for the purposes of calculating non-IFRS based adjusted net income.MANAGEMENTS DISCUSSION AND ANALYSIS38The following ta
314、ble reconciles organic revenue to the most directly comparable IFRS measure(revenue):Q4 2024Q4 2023Fiscal 2024Fiscal 2023Organic revenue$756.1$702.7$2,852.6$2,382.1Revenues of acquired companies34.04.893.5201.7Impact of foreign exchange rate changes1.423.386.8(6.4)Total revenue$791.5$730.8$3,032.9$2
315、,577.4Organic revenue growth3.5%10.7%The following table reconciles non-cash working capital as a percentage of revenues to the most directly comparable IFRS measures:As atMarch 312024March 312023Accounts receivable$471.3$399.7Income tax receivable13.415.2Contract assets704.7527.0Inventories295.9256
316、.9Deposits,prepaids and other assets98.293.4Accounts payable and accrued liabilities(604.5)(647.6)Income tax payable(44.7)(38.9)Contract liabilities(312.2)(296.6)Provisions(36.0)(30.6)Non-cash working capital$586.1$278.5Trailing six-month revenues annualized$3,087.0$2,755.6Working capital%19.0%10.1%
317、The following table reconciles net debt to the most directly comparable IFRS measures:As atMarch 312024March 312023Cash and cash equivalents$170.2$159.9Bank indebtedness(4.1)(5.8)Current portion of lease liabilities(27.6)(24.0)Current portion of long-term debt(0.2)(0.1)Long-term lease liabilities(83
318、.8)(73.3)Long-term debt(1,171.8)(1,155.7)Net Debt$(1,117.3)$(1,099.0)Adjusted EBITDA(TTM)$470.6$401.2Net Debt to Adjusted EBITDA2.4x2.7x ATS 2024 ANNUAL REPORT39The following table reconciles free cash flow to the most directly comparable IFRS measures:(in millions of dollars)Q4 2024Q4 2023Fiscal 20
319、24Fiscal 2023Cash flows provided by operating activities$9.6$81.4$20.8$127.8Acquisition of property,plant and equipment(12.3)(23.4)(58.8)(56.1)Acquisition of intangible assets(13.6)(10.1)(29.6)(24.2)Free cash flow$(16.3)$47.9$(67.6)$47.5 Certain non-IFRS financial measures exclude the impact on stoc
320、k-based compensation expense of the revaluation of deferred stock units and restricted share units resulting specifically from the change in market price of the Companys common shares between periods.Management believes the adjustment provides further insight into the Companys performance.The follow
321、ing table reconciles total stock-based compensation expense to its components:(in millions of dollars)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023Total stock-based compensation expense$(4.3)$4.7$3.5$10.0$19.3$9.9$5.3$(4.0)Less:mark to market portion of stock-based compensation(8.5)(0.6)(
322、2.0)4.415.15.61.0(8.3)Base stock-based compensation expense$4.2$5.3$5.5$5.6$4.2$4.3$4.3$4.3Critical Accounting Estimates and AssumptionsThe preparation of the Companys consolidated financial statements requires management to make estimates,judgments and assumptions that affect the reported amounts o
323、f assets,liabilities,revenues and expenses,and the disclosure of contingent assets and liabilities at the end of the reporting period.Uncertainty about these estimates,judgments and assumptions could result in outcomes that require a material adjustment to the carrying amount of the asset or liabili
324、ty affected in future periods.The Company based its assumptions on information available when the consolidated financial statements were prepared.Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Compa
325、ny.Such changes are reflected in the estimates as they occur.Notes 2 and 3 to the consolidated financial statements describe the basis of accounting and the Companys significant accounting policies.Macroeconomic environmentThe Company continues to operate amidst an uncertain macroeconomic environmen
326、t,including inflation,supply chain disruptions,interest rate changes,regional conflicts,and the impacts of any pandemic or epidemic outbreak or resurgence.Further increases in inflation and interest rates could affect the global and Canadian economies,which could adversely affect the Companys busine
327、ss,operations and customers.ATS will continue to monitor these dynamic macroeconomic conditions to assess any potential impacts on the business,financial results,and conditions of the Company.Management will continue to monitor and assess the impact of these factors on its judgments,estimates,accoun
328、ting policies,and amounts recognized in the Companys consolidated financial statements.The Company tests for impairment on an annual basis and if there are indicators that impairment may have arisen.In calculating the recoverable amount for impairment testing,management is required to make several a
329、ssumptions,including,but not limited to,expected future revenues,expected future cash flows and forward multiples.Revenue recognition and contracts in progressThe nature of ATS contracts requires the use of estimates to quote new business,and most automation systems are typically sold on a fixed-pri
330、ce basis.Revenues on construction contracts and other long-term contracts are recognized on a percentage of completion basis as outlined in note 3(c)“Revenue recognition Construction contracts”to the consolidated financial statements.In applying the accounting policy on construction contracts,judgme
331、nt is required in determining the estimated costs to complete a contract.These cost estimates are reviewed at each reporting period and by their nature may give rise to income volatility.If the actual costs incurred by the Company to complete a contract MANAGEMENTS DISCUSSION AND ANALYSIS40are signi
332、ficantly higher than estimated,the Companys earnings may be negatively affected.The use of estimates involves risks,including volatility within the supply chain that can lead to inflation to the price of inputs as well as the work to be performed involves varying degrees of technical uncertainty,inc
333、luding possible development work to meet the customers specification,the extent of which is sometimes not determinable until after the project has been awarded.In the event the Company is unable to meet the defined performance specification for a contracted automation system,it may need to redesign and rebuild all or a portion of the system at its expense without an increase in the selling price.C
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