ATS outlines restructuring efforts

Restructuring efforts at ATS Automation Tooling Systems are expected to affect about three per cent of the company’s global workforce.

That translates to about 100 people from a total workforce of about 3,500, but minimal impacts are expected locally for the Cambridge-based manufacturer of factory automation systems.

The company has 23 manufacturing facilities and more than 50 offices in North America, Europe, Southeast Asia and China.

Its markets include life sciences, consumer products, electronics, food and beverage, transportation, chemicals, energy, oil and gas.

The announcement came Wednesday as the company’s second-quarter results were released. Quarterly revenues rose 13 per cent year-over-year to $274.9 million.

The restructuring measures will include the closing of a small division in Southeast Asia, the rationalization of a business line at a division in Europe, and leadership and management changes, a news release stated. ATS is retaining a sales and service office in Southeast Asia.

ATS chief financial officer Maria Perrella said there weren’t specific causal factors that prompted the moves.

“With the arrival of our new CEO, we are undertaking a more detailed strategic review and as a result, we see some opportunities to improve our

global footprint and our cost structure,” she said.

Andrew Hider took over the post from Anthony Caputo in March.

The restructuring measures are expected to take place over the next three to four months. The company said associated costs of $9 million to $10 million will be incurred in the third fiscal quarter with an 18 to 24-month payback.

“I don’t foresee anything else happening in our fiscal 2018,” Perrella said. “In our fiscal 2019, we don’t know.” For example, the company’s growth strategy could lead to acquisition opportunities that could necessitate some consolidation, she said.

Second-quarter performance reflected both year-over-year and sequential growth in revenues and margins, Hider noted in a news release. Net quarterly income rose to $13.8 million from $8.5 million a year before.

The company said order bookings declined in the quarter to $257 million, down 11 per cent yearover-year. But Perrella said those quarterly statistics are quite variable.

“We don’t get fussed with a drop from one quarter to the next,” she said. “We see the opportunities that are ahead of us.”