TORONTO (Reuters) - ATS Automation Tooling Systems Inc ATA.TO posted a wider third-quarter loss on Wednesday and outlined its strategy to restore profitability through fiscal 2009.
ATS, which makes manufacturing and other industrial equipment, reported a net loss of $3.7 million, or 5 cents a share, in the three months ended December 31, compared with a loss of $2.4 million, or 4 cents a share, in the same period the year before.
Cambridge, Ontario-based ATS said it “substantially” wrote down its Precision Components Group by taking $24 million in non-cash charges for the quarter, including $19.1 million in property, plant and equipment impairment charges, and $4.9 million in provisions against working capital assets.
ATS said it is continuing the sale process of the unit and has initiated discussions with possible purchasers with the hope of obtaining bids during the fourth quarter.
The company had revenue of $191.3 million, up 11.4 percent from the year before.
ATS said its aim is to reduce costs and improve operational effectiveness through a number of initiatives, but said it expects that to cost about $30 million over the next several quarters.
“Our objective is to improve profitability through fiscal 2009 and then focus on growth,” said Chief Executive Officer Anthony Caputo in a statement.
“Specific actions to improve operational effectiveness will likely impact results negatively in the next several quarters. We expect significant recurring benefits as a result of these initiatives.”
ATS said its plans include strengthening leadership, fixing underperforming divisions and programs, and revising business processes.
The company said it intends to finance a portion of the costs through a number of cash generating actions, including the sale of non-core assets and that the payback period on the costs will likely be less than one year.
Shares of ATS were up 24 cents, or 4 percent, at $6.25 Wednesday morning on the Toronto Stock Exchange.
Reporting by Leah Schnurr; Editing by Rob Wilson