Exhibit
99.1
ATS
Corporation Announces Financial Results for the Fourth Quarter and Fiscal Year
2009. Names Sidney E. Fuchs as Chief Operating Officer.
Highlights
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2009
revenue of $118.7 million
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2009
diluted EPS of $0.14 compared to a loss per share of $2.35 in
2008
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2009
adjusted EBITDA (2) of $13.1 million, representing an 11.0%
margin
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Strong
cash flow from operations of $12.9 million for the full year and total
debt of $21.2 million as of December 31, 2009, down over $16 million, or
43%, from $37.2 million in total debt as of December 31,
2008
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MCLEAN,
VA — (PRNEWSWIRE) – March 24, 2010 — 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 operating results for the fourth quarter and fiscal year ended
December 31, 2009.
Fourth
Quarter Results
ATSC
reported revenue of $29.2 million for the fourth quarter of 2009. Revenue
for the fourth quarter decreased by 5.5% over fourth quarter revenue of $30.9
million in fiscal year 2008. Operating income for the fourth quarter of
2009 was $1.3 million and net loss for the quarter was $461,000, or ($0.02) per
diluted share, compared to an operating income of $2.6 million and net income of
$785,000, or $0.03 per diluted share for the fourth quarter of
2008.
In the
fourth quarter of 2009, the Company recognized a $1.5 million loss contingency
based on recent settlement discussions related to the Company’s ongoing
litigation with Maximus, Inc. The Company intends to pursue its
indemnification claim against the former principal owners of Advanced Technology
Systems, Inc. (“ATSI”), once the Maximus lawsuit has been fully resolved.
The Company has discussed this matter in greater detail in its latest annual
report on Form 10-K filed with the Securities and Exchange Commission on March
24, 2010.
EBITDA
(1) was $547,000 for the fourth quarter of 2009. Adjusted EBITDA (2) for
the fourth quarter of 2009 was $2.4 million, resulting in an EBITDA margin of
8.3%, compared to an EBITDA (1) and adjusted EBITDA of $3.4 million or an EBITDA
margin of 11.1% for the fourth quarter of 2008.
The
quarter over quarter decrease in adjusted EBITDA was primarily driven by a
decline in gross margins from 33% to 30% from the fourth quarter of 2008 to the
fourth quarter 2009. This drop resulted in lower year over year fourth
quarter gross profit of $1.4 million, and was caused by a shift in the Company’s
contract mix, the largest component of which was associated with the previously
disclosed Coast Guard contract where ATSC shifted from a prime to subcontractor
role, which also contributed to the drop in quarter over quarter
revenue.
Backlog
as of December 31, 2009 was $166.8 million, of which $61.0 million was
funded. Days sales outstanding were 66 at the end of the fourth quarter of
fiscal year 2009. As of December 31, 2009, ATSC’s balance sheet included
debt of (i) $18.7 million on its revolving credit facility, down from $32.6
million at December 31, 2008 and (ii) approximately $2.5 million in promissory
notes related to the acquisitions of Potomac Management Group, Inc. and Number
Six Software, Inc., down from $4.5 million at December 31, 2008.
Additionally, the balance sheet included $49.8 million in stockholders’ equity
as of December 31, 2009.
Full
Fiscal Year 2009 Results
ATSC
reported revenue of $118.7 million for the fiscal year ended December 31,
2009. Revenue for the year decreased by 9.8% over revenue of $131.5
million for fiscal year 2008. Of the $12.8 million decline in revenue,
$5.5 million of the decrease was driven by reduction within several of the
Company’s commercial business areas which the Company has reported on
previously. The remaining $7.3 million decline was the result of a drop in
revenue from government contracts. The most significant contract reduction
was with the U.S. Coast Guard as discussed earlier, where the Company continues
to perform in a subcontractor role but at a lower revenue level for its share of
the work.
Operating
income for 2009 was $9.6 million and net income for the year was $3.1 million,
or $0.14 per diluted share, compared to an operating loss of $51.1 million and
net loss of $49.8 million, or ($2.35) per diluted share for fiscal year 2008. As
previously reported, the Company incurred a $56.8 million, non-cash goodwill and
intangible asset impairment charge in the third quarter of 2008.
EBITDA
(1) was $11.2 million and adjusted EBITDA (2) was $13.1 million for 2009,
resulting in an EBITDA margin of 11.0% compared to EBITDA (1) of $12.2 million
and adjusted EBITDA (2) of $13.1 million in 2008, or an EBITDA margin of
9.9%.
Fourth
Quarter New Bookings
Fourth
quarter net new bookings totaled approximately $43 million, representing an
increase in bookings from previous quarters and a book to bill ratio of
1.5x. Competitive new awards received during the quarter
include:
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a
$12.2 million, five-year award to provide software development services to
the Pension Benefit Guaranty Corporation
(“PBGC”);
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a
$1.4 million, 18-month award with the Federal Housing Finance Agency to
support the agency’s efforts to consolidate and modernize its IT
infrastructure;
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a
$4.5 million, one-year award from a large health insurance provider,
representing the extension of a current assignment to provide application
development support for the organization’s claims modernization project;
and
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$1.3
million in new awards from several different property and casualty
insurance customers, including Arbella Insurance Group, Minnesota Fair
Plan and Michigan Basic Property Insurance
Association.
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The
balance of the bookings came from add-ons or additional funding from existing
clients, including the Department of Housing and Urban Development, the Defense
Logistics Agency, and the Defense Technology Security Administration, among
others. Subsequent to the end of the quarter the Company has booked $50
million in new awards including a (i) $27.5 million, four-year contract with an
agency within the Department of Defense to provide project management support,
IT infrastructure operations and maintenance, information assurance and
application software development and maintenance and a (ii) a $21.4 million,
five-year contract with the Nuclear Regulatory Commission (“NRC”) to support
the NRC’s Program
Management Methodology (“PMM”), the major NRC Program Offices, and
to maintain
the NRC’s Rational Tools Suite.
Major
ATSC highlights for 2009 included:
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Maintaining
well above industry average EBITDA
margins;
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Paying
down outstanding debt by over $16
million;
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Repurchasing
over 400,000 shares of common
stock;
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Receiving
approval for listing on the NYSE Amex, with trading beginning on January
5, 2010; and
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Continuing
to win all recompeted contracts in addition to adding new customers such
as the Defense Security Service and capturing new work with existing
customers, such as a new award at
PBGC.
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ATSC
Chairman and Chief Executive Officer Dr. Edward H. Bersoff commented, “We are
pleased to have delivered adjusted EBITDA of $13.1 million for the year, which
is near the top of our guidance range of $12 to $13.5 million, despite the
weaknesses we experienced in our revenues. Our fourth quarter new bookings
represent a balanced mix of new business with the award from PBGC, a customer
with whom we have consistently increased our market share over the last few
years; incremental funding from many of our largest and longest standing
government customers; and strong growth in our commercial business. As a
result of the strong bookings in the fourth quarter, we are reporting an
increase in backlog from the previous quarter and a book to bill ratio greater
than one. Furthermore, as we have reported in the last month, we have won
over $50 million of new awards in the first quarter of 2010, so we are pleased
this upward trend in our backlog is continuing and providing us more revenue
visibility and a strong growth platform this year.”
“We are
also very pleased with our efforts this year to increase stockholder value
related to our capital structure. With our significant reduction of debt,
we have been able to execute our share repurchase plan. Plus, we believe
our listing on NYSE Amex will help us increase liquidity for our stockholders,”
Dr. Bersoff added.
“Finally,
we are pleased to be nearing the end of our ongoing litigation matters with
Maximus which have consumed a substantial amount of management time and legal
expenses. As we stated earlier, we intend to pursue an
indemnification claim against the former principal owners of Advanced Technology
Systems, Inc. (“ATSI”), once the Maximus lawsuit has been fully
resolved. We could recover up to as much as $2.3 million, which also
includes related legal expenses incurred to date. Any recovery will
be recorded as other income, when received,” Dr. Bersoff concluded.
ATSC
Executive Vice President and Chief Financial Officer Pamela Little further
commented on the financial performance, “In 2009, we benefited from the first
full year result of cost saving plans and process improvements initiated in
2008. These initiatives led to an increase in 110 basis points over
last year’s adjusted EBITDA margin and a decrease in days sales outstanding from
86 days at the end of 2008 to 66 days at the end of 2009. As a result
of these expanded margins and improvement in cash management, we were able to
pay down 43% of our borrowings over the course of the year and initiate
execution of our share repurchase plan.”
Management’s
Outlook
Based on
current market trends and current ATSC backlog and bid activity, the Company is
issuing guidance of a 2010 revenue range of $124 to $128 million and an EBITDA
(1) range of $11.8 to $13 million.
Dr.
Bersoff commented, “We are encouraged by strong bookings in the fourth quarter
of 2009 and so far this year, as well as potential new awards in the near term
which will help us achieve organic growth approaching 7.5% in 2010.
Furthermore, we will continue to make additional investments in business
development in 2010 to support our long-term growth plans.”
Chief
Operating Officer Appointment
Today,
ATSC also announced the appointment of Sidney E. Fuchs as the Chief Operating
Officer of the Company, effective April 5, 2010. Mr. Fuchs was most
recently the President and Chief Executive Officer of OAO Technology Solutions
(“OAOT”), a global provider of information technology services to commercial and
government customers that was sold in January of this year to Platinum Equity, a
private equity firm with over $27 billion in aggregate portfolio company
revenue. Prior to OAOT, he was the President of Northrop Grumman’s
Information Technology’s Civilian Agencies Group, a $1.4 billion unit delivering
IT services to the healthcare, homeland security, public safety and federal
civilian markets. Prior to this position, he was the President and
Chief Executive Officer of TASC Inc., at the time a Northrop subsidiary
providing systems engineering expertise to the intelligence, aerospace and
defense markets, which grew organically from $450 million to over $1.2 billion
during his tenure. In addition, he has held other management positions at
Rational Software, Oracle Corporation and Digital Equipment Corporation. Earlier
in his career, he was a Central Intelligence Agency officer and he served in
various operations, engineering, and management roles worldwide. In 2008, the
Undersecretary of Defense for Intelligence appointed Mr. Fuchs to the Defense
Science Board as a member of the Permanent Task Force on Intelligence.
Upon nomination by the White House in 2002, he was appointed by the Secretary of
Defense to the National Defense University (“NDU”) Board of Visitors and in 2003
was named an NDU Distinguished Visiting Fellow. He is a graduate of
Louisiana State University with B.S. and M.S. degrees in Mechanical
Engineering.
Dr.
Bersoff commented, “Sid brings an exceptionally strong operational and
experience base that crosses each of our market areas. His successful
track record in building organizations, combined with his roots in the
government, will bring tremendous value to ATSC in executing our growth
plans.”
Conference
Call
ATSC will
conduct a fourth quarter conference call on Wednesday, March 24, 2010 at 5:00
p.m. ET. The dial-in number for the live teleconference for
participants based in the U.S. and Canada is 866-244-6522, conference ID #
1444239. For international participants, please call into 011-800-4040-2020 and
use the same conference ID #. A recorded replay of the teleconference will
also be available on the Company website (www.atsc.com) for one year from the
conference call date.
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 600 employees at 10 locations across
the country.
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 March 24, 2010. In addition, the forward-looking statements
included in this press release represent our views as of March 24, 2010. 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 March 24, 2010.
Additional
information about ATSC may be found at www.atsc.com.
Company
Contact:
Joann
O’Connell
Vice
President, Investor Relations
ATS
Corporation
(571)
766-2400
Media
Contact:
Penny
Parker
Corporate
Communications Manager
ATS
Corporation
(571)
766-2400
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(1)
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EBITDA
is a non-GAAP measure that is defined as GAAP net income plus other
expense, interest expense, income taxes, depreciation and amortization,
and impairment charges. 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.
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(2)
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Adjusted
EBITDA is defined as EBITDA adjusted for one time severance expenses and
the litigation-related loss contingency, neither expected to be reflected
in the ongoing performance of ATSC. Please refer to the table at the
bottom of the statement of operations in this release that reconciles GAAP
net income to adjusted
EBITDA.
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ATS
Corporation
Consolidated
Statement of Operations (audited)
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ATS Corporation
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Three Months Ended
December 31,
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Year Ended,
December 31,
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2009
(unaudited)
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2008
(unaudited)
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2009
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2008
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Revenue
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$ | 29,161,182 | $ | 30,853,655 | $ | 118,658,939 | $ | 131,548,557 | ||||||||
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Operating
costs and expenses:
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Direct costs
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20,359,172 | 20,691,608 | 80,349,485 | 88,476,707 | ||||||||||||
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Selling, general and administrative expenses
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6,756,512 | 6,705,421 | 25,664,838 | 30,927,440 | ||||||||||||
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Depreciation and amortization
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714,003 | 861,903 | 3,038,021 | 6,444,516 | ||||||||||||
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Impairment charge
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— | — | — | 56,772,541 | ||||||||||||
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Total
operating costs and expenses
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27,829,687 | 28,258,932 | 109,052,344 | 182,621,204 | ||||||||||||
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Operating
income (loss)
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1,331,495 | 2,594,723 | 9,606,595 | (51,072,647 | ) | |||||||||||
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Other
(expense) income:
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Interest expense, net
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695,036 | 781,809 | (2,859,462 | ) | (3,427,859 | ) | ||||||||||
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Other (expense) income
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(1,498,600 | ) | (23,088 | ) | (1,438,563 | ) | 29,627 | |||||||||
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Income
(loss) before income taxes
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(862,141 | ) | 1,789,826 | 5,308,570 | (54,470,879 | ) | ||||||||||
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Income
tax expense (benefit)
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(400,808 | ) | 1,004,757 | 2,180,727 | (4,642,464 | ) | ||||||||||
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Income
(loss) from continuing operations
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$ | (461,333 | ) | $ | 785,069 | $ | 3,127,843 | $ | (49,828,415 | ) | ||||||
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Weighted
average number of shares outstanding
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-
basic
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22,728,722 | 22,442,163 | 22,669,066 | 21,231,654 | ||||||||||||
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dilutive
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22,890,749 | 22,442,163 | 22,766,840 | 21,231,654 | ||||||||||||
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Basic
net income (loss) per share
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$ | (0.02 | ) | $ | 0.03 | $ | 0.14 | $ | (2.35 | ) | ||||||
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Diluted
net income (loss) per share
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$ | (0.02 | ) | $ | 0.03 | $ | 0.14 | $ | (2.35 | ) | ||||||
Reconciliation
of GAAP Net Income to EBITDA (1) and Adjusted EBITDA (2)
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ATS Corporation
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Three Months Ended
December 31,
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Year Ended,
December 31,
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2009
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2008
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2009
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2008
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Net
Income
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$ | (461,333 | ) | $ | 785,069 | $ | 3,127,843 | $ | (49,828,415 | ) | ||||||
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Adjustments:
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Impairment charge
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— | — | — | 56,772,541 | ||||||||||||
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Depreciation and amortization
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714,003 | 861,903 | 3,038,021 | 6,444,516 | ||||||||||||
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Interest
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695,036 | 781,809 | 2,859,462 | 3,427,859 | ||||||||||||
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Taxes
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(400,808 | ) | 1,004,757 | 2,180,727 | (4,642,464 | ) | ||||||||||
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EBITDA
(1)
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546,898 | 3,433,538 | 11,206,053 | 12,174,037 | ||||||||||||
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Severance
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383,211 | — | 383,211 | 890,519 | ||||||||||||
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Loss Contingency
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1,500,000 | — | 1,500,000 | — | ||||||||||||
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Adjusted EBITDA
(2)
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2,430,109 | 3,433,538 | 13,089,264 | 13,064,556 | ||||||||||||