ATS Corp /ATS

EXECUTIVE SUMMARY

•The before tax-impact of the EV customer settlement in the amount of $171.1 million is accounted for under IFRS as (i) a partial decrease to revenue in the fourth quarter of $146.9 million (referred to as “EV customer settlement – revenue portion”); and (ii) a partial increase of selling, general and administrative ("SG&A") costs of $24.2 million (referred to as “EV customer settlement – other"), as opposed to being fully reflected as an increase of SG&A as reflected in the Company’s previously disclosed preliminary fourth quarter 2025 results. Consequently, the Company presents an adjusted revenues amount for the fourth quarter, which adjusts for the EV customer settlement – revenue portion. All other amounts reflected in the Company’s preliminary fourth quarter 2025 results remain unchanged.

•Order Bookings in the fourth quarter were $863 million, up from $791 million in the same quarter last year, which reflected 2.6% organic Order Bookings growth, 4.0% from recent acquisitions and 2.5% from the positive impact of foreign exchange translation. "Acquisitions" or "acquired companies" in this MD&A refer to companies that were not part of the consolidated group in the comparable prior-year periods. Trailing twelve month book-to-bill ratio at March 31, 2025 was 1.23:1, and was above 1.00:1 in all markets. Order Bookings, organic Order Bookings growth and book-to-bill ratio are supplementary financial measures — see "Non-IFRS and Other Financial Measures".

•Fourth quarter revenues were $574.2 million, and included the Company's EV customer settlement – revenue portion (also see "Update on Large EV Customer"). On an adjusted basis, revenues were $721.1 million, lower as expected, due to lower transportation Order Backlog entering the quarter compared to fiscal 2024, reflecting lower investment in the EV market; this was partially offset by 3.6% growth from recent acquisitions, organic revenue growth in life sciences, consumer products, food & beverage, and energy and 2.7% from the positive impact of foreign exchange translation. Adjusted revenues and organic revenue are non-IFRS financial measures and organic revenue growth is a non-IFRS financial ratio — see "Non-IFRS and Other Financial Measures".

•Order Backlog of $2,139 million at period-end was 19.3% higher than the fourth quarter of the prior year, primarily on account of higher Order Backlog in life sciences, consumer products, energy and food & beverage markets. Order Backlog is distributed across strategic global markets and regulated industries, and provides good revenue visibility. Order Backlog is a supplementary financial measure — see "Non-IFRS and Other Financial Measures".

•Non-cash working capital as a percentage of adjusted revenues was 22.4%, and includes a receivable for the negotiated settlement amount that the Company announced with an EV customer. Excluding the settlement receivable, which is expected to be received in the Company's first fiscal quarter, non-cash working capital as a percentage of adjusted revenues was just above the Company's targeted range of 15%. The Company had a net debt to pro forma adjusted EBITDA ratio at March 31, 2025 of 3.9 times, after including pro forma impacts from its acquisitions of Paxiom Group ("Paxiom") and Heidolph Instruments GmbH & Co. KG and Hans Heidolph GmbH ("Heidolph"). This ratio is expected to improve by approximately 0.5 times, upon receipt of the Settlement amount. Non-cash working capital as a percentage of adjusted revenues and net debt to pro forma adjusted EBITDA are non-IFRS ratios — see "Non-IFRS and Other Financial Measures".

•Adjusted earnings from operations for the quarter was $74.3 million (10.3% adjusted earnings from operations margin), compared to $95.9 million (12.1% adjusted earnings from operations margin) a year ago, primarily due to lower transportation 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 and Other Financial Measures".