MCLEAN, Va., Feb. 21, 2012 /PRNewswire/ --
Highlights - Fourth Quarter
- Revenue of $21.9 million
- EBITDA (1) of $3.3 million and
Adjusted EBITDA (2) of $3.6
million
- Operating income of $2.6 million
and net income of $1.6 million
- Fully diluted EPS of $0.07
- Backlog of $276.9 million
- Total debt of $2.0 million as of
December 31, 2011
- DSO of 63 days as of December 31,
2011
ATS Corporation ("ATSC" or the "Company") (NYSE AMEX: ATSC), a
leading information technology company that delivers innovative
technology solutions to government and commercial organizations,
today announced unaudited operating results for the fourth quarter
and fiscal year ended December 31,
2011.
Fourth Quarter Results
ATSC reported revenue of $21.9
million for the fourth quarter of 2011. Revenue for
the fourth quarter decreased by 21% from fourth quarter revenue of
$27.7 million in fiscal year 2010.
Operating income for the fourth quarter of 2011 was $2.6 million and net income for the quarter was
$1.6 million, or $0.07 per diluted share, compared to operating
income of $3.5 million and net income
of $2.2 million, or $0.10 per diluted share for the fourth quarter of
2010. EBITDA (1) was $3.3
million and adjusted EBITDA (2) was $3.6 million for the fourth quarter of 2011
resulting in an EBITDA margin of 14.9%, and 16.3%, respectively,
compared to EBITDA (1) of $4.1
million for the fourth quarter of 2010, resulting in an
EBITDA margin of 14.9 % for the fourth quarter of 2010.
Backlog as of December 31, 2011
was approximately $276.9 million, of
which $25.7 million was funded, up
17.3% from $236.1 million as of
December 31, 2010. Days sales
outstanding ("DSO") were 63 at the end of the fourth quarter of
fiscal year 2011.
As of December 31, 2011, ATSC's
balance sheet included debt of $2.0
million on its revolving credit facility and $63.8 million in stockholders' equity.
Unaudited Full Fiscal Year 2011 Results
ATSC reported revenue of $91.4
million for the fiscal year ended December 31, 2011. Revenue for the year
decreased $25.3 million, or by 21.7%
from revenue of $116.7 million for
fiscal year 2010. Revenue from Fannie Mae, a government
sponsored enterprise, decreased by $7.7
million to $7.7 million, or by
50%. Revenue from commercial contracts decreased by
$2.9 million to $9.4 million, or 23.6%. Revenue from
civilian and defense contracts decreased by $14.6 million to $74.3
million, or 16.5%.
Operating income for 2011 was $7.5
million and net income for the year was $4.5 million, or $0.19 per diluted share, compared to operating
income of $10.5 million and net
income of $7.1 million, or
$0.31 per diluted share in 2010.
EBITDA (1) was $10.0 million and
adjusted EBITDA (2) was $11.9 million
for 2011 resulting in an EBITDA margin of 10.9% and 13.0%,
respectively, compared to EBITDA (1) of $14.5 million and adjusted EBITDA (2) of
$13.1 million for 2010, resulting in
an adjusted EBITDA margin of 11.3% for 2010. 2010 EBITDA (1)
and net income for the year were favorably impacted by $1.3 million of other income associated with the
resolution of indemnification claims from prior ATS acquisitions.
New Booking Highlights and Management Comments
2011 net new bookings totaled approximately $132 million, representing a book to bill ratio
of 1.4x for the full year. The most significant new awards
received during the year included:
- a $45.7 million five-year award
with the Department of Housing and Urban Development ("HUD") for
the continuation of the Company's application systems support for
HUD's Single Family Computerized Homes Underwriting Management
System ("CHUMS") and FHA Connection;
- a $33.7 million, five-year
contract with HUD, representing the continuation of the Company's
application systems support for three distinct HUD Single Family
Premium Collections and Refund systems;
- a new single award Indefinite Delivery, Indefinite Quantity
("IDIQ") contract with a $30 million
ceiling over a multiple year term, initially exercised at
$20.4 million, with the Pension
Benefit Guaranty Corporation ("PBGC") for the continuation of the
Company's software development, maintenance, and operational
services in managing the Benefit Management Applications suite of
solutions; and
- a $4.8 million, three-year task
order in support of the U.S. Army Intelligence and Security Command
("INSCOM") in its efforts to recruit highly qualified cyber
security professionals.
ATSC Co-Chief Executive Officer and Chief Financial Officer
Pamela Little commented, "2011 was a
challenging year for the Company's top line and, as result, our
financial performance did not meet our expectations. Our
federal business decline was driven by the increasingly difficult
Federal budget environment that delayed awards on a number of new
contracts we are pursuing and postponed development funding or
reduced the initial scope on several sizeable recompetes we won
this year. Our business with Fannie Mae also declined by
nearly 50% over 2010 revenue due to delayed project starts and a
resulting decrease in staffing levels. We were, however,
pleased to see revenue in our fourth quarter increase over the
third quarter as we began receiving increased funding for
development work on the recompetes earlier mentioned. We also
continued to manage our business to deliver above industry average
EBITDA margins and maintain strong DSO performance over the year,
and as a result paid down our debt by over 86%, leaving a balance
of $2 million at December 31, 2011."
ATSC Co-Chief Executive Officer John
Hassoun further commented on the Company's operations, "We
continued to maintain our strong federal business recompete
track-record in 2011, securing a number of our key programs for
another five years and bringing an end to a series of major
recompetes successfully defended over the last 18 months. To
build on this solid, multi-year foundation of business, we are now
fully focusing our business development efforts on new pursuits and
remain optimistic in new awards from a number of outstanding bids
in our pipeline. Regarding our other business areas, we
believe our commercial and Fannie Mae businesses have stabilized as
we enter 2012."
About ATS Corporation
ATSC is a leading provider of software and systems development,
systems integration, infrastructure management and outsourcing,
information sharing, and consulting to the Department of Defense,
federal civilian agencies, public safety and national security
customers, as well as commercial enterprises. Headquartered
in McLean, Virginia, the Company
has more than 400 employees.
Additional information about ATSC may be found at
www.atsc.com.
Forward-looking Statements
Any statements in this press release about future expectations,
plans, and prospects for ATSC, including statements about the
estimated value of the contract and work to be performed, and other
statements containing the words "estimates," "believes,"
"anticipates," "plans," "expects," "will," and similar expressions,
constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Actual results
may differ materially from those indicated by such forward-looking
statements as a result of various important factors, including: our
dependence on our contracts with federal government agencies for
the majority of our revenue, our dependence on our GSA schedule
contracts and our position as a prime contractor on government-wide
acquisition contracts to grow our business, and other factors
discussed in our latest annual report on Form 10-K filed with the
Securities and Exchange Commission on February 17, 2011. In addition, the
forward-looking statements included in this press release represent
our views as of February 21, 2012. We
anticipate that subsequent events and developments will cause our
views to change. However, while we may elect to update these
forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing our views as of any date subsequent to February 21, 2012.
- EBITDA is a non-GAAP measure that is defined as GAAP net income
plus other expense, interest expense, income taxes, and
depreciation and amortization. We have provided EBITDA
because we believe it is a commonly used measure of financial
performance in comparable companies and is provided to help
investors evaluate companies on a consistent basis, as well as to
enhance an understanding of our operating results. EBITDA is
not a recognized term under U.S. GAAP and does not purport to be an
alternative to net income as a measure of operating performance or
the cash flows from operating activities as a measure of liquidity.
Please refer to the table at the bottom of the statement of
operations in this release that reconciles GAAP net income to
EBITDA.
- Adjusted EBITDA is defined as EBITDA adjusted (i) in 2010 for
one-time other income associated with the adjustment of seller
notes and the release of escrow from a previous acquisition not
expected to be reflected in the ongoing performance of ATSC and
(ii) in 2011 for expenses related to severance, the Company's
strategic evaluation, and a contract settlement reserve, none of
which is expected to be reflected in the ongoing performance of
ATSC. Adjusted EBITDA is not a recognized term under U.S.
GAAP and does not purport to be an alternative to net income as a
measure of operating performance or the cash flows from operating
activities as a measure of liquidity. Please refer to the
table in the financial statements that reconciles GAAP net income
to adjusted EBITDA.
ATS Corporation
Consolidated Statement of
Operations
|
|
|
|
|
ATS
Corporation
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended,
December
31,
|
|
|
|
2011
(unaudited)
|
|
|
2010
(unaudited)
|
|
|
2011
(unaudited)
|
|
|
2010
(audited)
|
|
|
|
Revenue
|
$
|
21,896,014
|
|
$
|
27,661,304
|
|
$
|
91,407,160
|
|
$
|
116,666,234
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs
|
|
15,143,050
|
|
|
18,733,270
|
|
|
63,856,697
|
|
|
81,059,072
|
|
|
Selling, general and
administrative expenses
|
|
3,497,046
|
|
|
4,806,071
|
|
|
17,543,556
|
|
|
22,604,892
|
|
|
Depreciation and
amortization
|
|
620,322
|
|
|
636,528
|
|
|
2,518,543
|
|
|
2,540,210
|
|
|
Total operating costs and
expenses
|
|
19,260,418
|
|
|
24,175,873
|
|
|
83,918,796
|
|
|
106,204,174
|
|
|
Operating income
|
|
2,635,597
|
|
|
3,485,431
|
|
|
7,488,364
|
|
|
10,462,060
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(40,626)
|
|
|
(87,926)
|
|
|
(233,146)
|
|
|
(1,157,477)
|
|
|
Other income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,463,332)
|
|
|
Income before income
taxes
|
|
2,594,971
|
|
|
3,397,505
|
|
|
7,255,218
|
|
|
10,767,915
|
|
|
Income tax expense
|
|
982,451
|
|
|
1,202,939
|
|
|
2,790,482
|
|
|
3,666,741
|
|
|
Net Income
|
$
|
1,612,520
|
|
$
|
2,194,566
|
|
$
|
4,464,736
|
|
$
|
7,101,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- basic
|
|
22,973,944
|
|
|
22,590,930
|
|
|
22,896,923
|
|
|
22,535,493
|
|
|
- dilutive
|
|
23,176,435
|
|
|
22,571,169
|
|
|
23,131,409
|
|
|
22,690,774
|
|
|
Basic net income per
share
|
$
|
0.07
|
|
$
|
0.10
|
|
$
|
0.19
|
|
$
|
0.32
|
|
|
Diluted net income per
share
|
$
|
0.07
|
|
$
|
0.10
|
|
$
|
0.19
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net
Income to EBITDA (1) and Adjusted EBITDA (2)
|
|
|
|
|
ATS
Corporation
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended,
December
31,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Net Income
|
$
|
1,612,520
|
|
$
|
2,194,566
|
|
$
|
4,464,736
|
|
$
|
7,101,174
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
620,322
|
|
|
636,528
|
|
|
2,518,543
|
|
|
2,540,210
|
|
|
Interest
|
|
40,626
|
|
|
87,926
|
|
|
233,146
|
|
|
1,157,477
|
|
|
Taxes
|
|
982,451
|
|
|
1,202,939
|
|
|
2,790,482
|
|
|
3,666,741
|
|
|
EBITDA (1)
|
|
3,255,919
|
|
|
4,121,959
|
|
|
10,006,907
|
|
|
14,465,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
—
|
|
|
—
|
|
|
1,072,414
|
|
|
—
|
|
|
Contract Settlement
Reserve
|
|
22,842
|
|
|
|
|
|
361,961
|
|
|
|
|
|
Strategic
Expenses
|
|
282,941
|
|
|
|
|
|
456,976
|
|
|
|
|
|
Net
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,322,776)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
|
3,561,702
|
|
|
4,121,959
|
|
|
11,898,258
|
|
|
13,142,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATS Corporation
Consolidated Balance
Sheets
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2011
(unaudited)
|
|
|
2010
(audited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
189,517
|
|
|
$
|
65,993
|
|
|
Accounts
receivable, net
|
|
|
14,390,317
|
|
|
|
21,219,602
|
|
|
Prepaid expenses
and other current assets
|
|
|
548,475
|
|
|
|
696,174
|
|
|
Income tax
receivable, net
|
|
|
—
|
|
|
|
61,477
|
|
|
Restricted
cash
|
|
|
1,328,533
|
|
|
|
1,327,245
|
|
|
Other current
assets
|
|
|
7,596
|
|
|
|
25,491
|
|
|
Deferred income
taxes, current
|
|
|
841,228
|
|
|
|
698,521
|
|
|
Total current
assets
|
|
|
17,305,666
|
|
|
|
24,094,503
|
|
|
Property and equipment,
net
|
|
|
2,219,731
|
|
|
|
2,714,164
|
|
|
Goodwill
|
|
|
55,370,011
|
|
|
|
55,370,011
|
|
|
Intangible assets,
net
|
|
|
2,118,143
|
|
|
|
4,110,470
|
|
|
Other assets
|
|
|
133,314
|
|
|
|
133,314
|
|
|
Deferred income
taxes
|
|
|
1,596,078
|
|
|
|
1,407,545
|
|
|
Total assets
|
|
$
|
78,742,943
|
|
|
$
|
87,830,007
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Current portion of
debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Capital
leases – current portion
|
|
|
81,389
|
|
|
|
79,572
|
|
|
Accounts
payable
|
|
|
4,511,774
|
|
|
|
4,457,781
|
|
|
Other accrued
expenses and current liabilities
|
|
|
1,305,143
|
|
|
|
2,381,941
|
|
|
Accrued salaries
and related taxes
|
|
|
2,340,120
|
|
|
|
2,917,294
|
|
|
Accrued
vacation
|
|
|
1,642,470
|
|
|
|
1,968,226
|
|
|
Income taxes
payable, net
|
|
|
121,397
|
|
|
|
—
|
|
|
Deferred
revenue
|
|
|
314,584
|
|
|
|
513,653
|
|
|
Deferred
rent – current portion
|
|
|
320,498
|
|
|
|
320,498
|
|
|
Total current
liabilities
|
|
|
10,637,375
|
|
|
|
12,638,965
|
|
|
Long-term debt – net
of current portion
|
|
|
2,000,000
|
|
|
|
14,400,000
|
|
|
Capital leases – net
of current portion
|
|
|
62,259
|
|
|
|
143,648
|
|
|
Deferred rent – net of
current portion
|
|
|
2,232,344
|
|
|
|
2,465,962
|
|
|
Other long-term
liabilities
|
|
|
—
|
|
|
|
—
|
|
|
Total liabilities
|
|
|
14,931,978
|
|
|
|
29,648,575
|
|
|
Commitments and
contingencies
|
|
|
—
|
|
|
|
—
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock $.0001 par
value, 1,000,000 shares authorized, and no shares issued and
outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock $0.0001 par value,
100,000,000 shares authorized, 31,561,486 and 31,235,696 shares
issued, respectively
|
|
|
3,190
|
|
|
|
3,156
|
|
|
Additional paid-in
capital
|
|
|
133,968,602
|
|
|
|
132,803,839
|
|
|
Treasury stock, at cost,
8,897,893 and 8,745,893 shares, respectively
|
|
|
(31,663,758)
|
|
|
|
(31,663,758)
|
|
|
Accumulated
deficit
|
|
|
(38,497,069)
|
|
|
|
(42,961,805)
|
|
|
Other comprehensive
loss
|
|
|
—
|
|
|
|
—
|
|
|
Total shareholders'
equity
|
|
|
63,810,965
|
|
|
|
58,181,432
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
78,742,943
|
|
|
$
|
87,830,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATS Corporation
Consolidated Statement of Cash
Flows
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2011
(unaudited)
|
|
|
2010
(audited)
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
4,464,735
|
|
|
$
|
7,101,174
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,518,543
|
|
|
|
2,540,210
|
|
|
Employee
stock-based compensation
|
|
|
774,956
|
|
|
|
748,409
|
|
|
Directors' fees
paid in equity
|
|
|
—
|
|
|
|
103,098
|
|
|
Deferred income
taxes
|
|
|
(304,003)
|
|
|
|
1,237,633
|
|
|
Deferred
rent
|
|
|
(233,618)
|
|
|
|
(192,093)
|
|
|
Gain on disposal of
equipment
|
|
|
—
|
|
|
|
(8,722)
|
|
|
Reduction in notes
payable from acquisition
|
|
|
—
|
|
|
|
(495,000)
|
|
|
Provision for bad
debt
|
|
|
(109,700)
|
|
|
|
974,203
|
|
|
Changes in assets and
liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
6,938,985
|
|
|
|
303,639
|
|
|
Prepaid
expenses and other current assets
|
|
|
147,699
|
|
|
|
(70,943)
|
|
|
Restricted
cash
|
|
|
(1,288)
|
|
|
|
(2,735)
|
|
|
Other
assets
|
|
|
17,895
|
|
|
|
34,026
|
|
|
Accounts
payable
|
|
|
85,776
|
|
|
|
(296,021)
|
|
|
Other
accrued expenses and accrued liabilities
|
|
|
(1,076,798)
|
|
|
|
(2,576,840)
|
|
|
Accrued
salaries and related taxes
|
|
|
(577,174)
|
|
|
|
(1,624,215)
|
|
|
Accrued
vacation
|
|
|
(325,756)
|
|
|
|
(291,312)
|
|
|
Income
taxes payable and receivable, net
|
|
|
212,853
|
|
|
|
161,463
|
|
|
Other
current liabilities
|
|
|
(199,069)
|
|
|
|
(878,804)
|
|
|
Other
long-term liabilities
|
|
|
—
|
|
|
|
(5,795)
|
|
|
Net cash provided by operating
activities
|
|
$
|
12,334,036
|
|
|
$
|
6,407,355
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Purchase of
property and equipment
|
|
|
(31,783)
|
|
|
|
(9,074)
|
|
|
Proceeds from
release of escrows
|
|
|
—
|
|
|
|
—
|
|
|
Proceeds from
disposals of equipment
|
|
|
—
|
|
|
|
10,000
|
|
|
Net cash (used in) provided by
investing activities
|
|
$
|
(31,783)
|
|
|
$
|
926
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Borrowings on line
of credit
|
|
|
46,996,675
|
|
|
|
69,814,288
|
|
|
Payments on line of
credit
|
|
|
(59,396,675)
|
|
|
|
(74,102,523)
|
|
|
Payments on notes
payable
|
|
|
—
|
|
|
|
(2,007,900)
|
|
|
Payments on capital
leases
|
|
|
(111,355)
|
|
|
|
(19,614)
|
|
|
Proceeds from
exercise of stock options
|
|
|
139,163
|
|
|
|
19,588
|
|
|
Proceeds from stock
issued pursuant to Employee Stock Purchase Plan
|
|
|
193,463
|
|
|
|
230,288
|
|
|
Payments to
repurchase treasury stock
|
|
|
—
|
|
|
|
(454,640)
|
|
|
Net cash used in financing
activities
|
|
$
|
(12,178,729)
|
|
|
$
|
(6,520,513)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) of
cash
|
|
$
|
123,524
|
|
|
$
|
(112,232)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period
|
|
|
65,993
|
|
|
|
178,225
|
|
|
Cash and cash equivalents, end
of period
|
|
$
|
189,517
|
|
|
$
|
65,993
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
|
|
Cash paid or received during the
period for:
|
|
|
|
|
|
|
|
|
|
Income taxes
paid
|
|
$
|
2,888,024
|
|
|
$
|
2,289,228
|
|
|
Income tax
refunds
|
|
$
|
45,585
|
|
|
$
|
23,977
|
|
|
Interest
paid
|
|
$
|
271,764
|
|
|
$
|
1,972,402
|
|
|
Interest
received
|
|
$
|
11,759
|
|
|
$
|
305,461
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities:
|
|
|
|
|
|
|
|
|
|
Equipment financed
under capital leases
|
|
$
|
—
|
|
|
$
|
242,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE ATS Corporation