ATS Corporation (ATS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the ATS Annual and Special Meeting of Shareholders for 2021. My name is David McAusland. I'm a proud long-term shareholder of ATS and Chairman of the Board. I call this meeting to order. Stewart McCuaig, Corporate Vice President and General Counsel, will act as Secretary. Later in the meeting, you will hear from Andrew Hider, Chief Executive Officer and Director of ATS; and Ryan McLeod, our Chief Financial Officer. They will deal with and speak to the progress of our business. Shereen Zahawi, ATS Director, Investor Relations, will help us field your questions after management's presentations. Since this is a virtual meeting, reliant on technology, Joanne Ferstman, the Chair of our Audit and Finance Committee of the Board, will perform my role in the event I am disconnected due to a technical malfunction. Our physical distance is a reminder that we come together in unusual times. Indeed, before getting into the heart of my remarks, I want to acknowledge that in many parts of the world, COVID-19 continues to create uncertainty, lockdowns and personal loss. While ATS did an extraordinary job of adjusting to pandemic conditions in every one of the 20 countries where we do business, there are people on our team who lost loved ones and to them I offer our sincere condolences. I wanted to start with the recognition of that difficult reality as a counterpoint to what has taken place in our business. Despite the difficulties created by closed borders, working from home and customer facility restrictions, the pandemic has brought out the best in our team in every market and geography. I am particularly proud, the Board is particularly proud of how ATS leveraged its know-how to help customers in the fight against COVID-19 through the rapid production of critical items such as test kits and vaccine syringes. In the face of these extraordinary circumstances, I can't thank our employees and the leadership group enough for achieving outstanding results for our customers and value for our shareholders. If you are looking for an answer to the question, why invest? I would say that the people of ATS provide a great reason every day. Their dedication is inspiring and their talent is industry-leading. The term stress test is frequently used in medicine, engineering and business to reveal just how far someone or something can bend without breaking. The pandemic has been a rather severe stress test to say the least, and ATS demonstrated tremendous resiliency in a challenging environment. Our annual revenues of over $1.4 billion in fiscal 2021 were in line with the previous record set in 2020 while order bookings were up 11% to a record $1.6 billion. Despite pandemic-induced inefficiencies, every profit measure was also up. A sure sign that ATS is executing well amongst using the ATS business model or what we call ABM for short. Looking deeper at our results, we see that organic growth returned in the fourth quarter with revenue, excluding acquisitions and foreign exchange, higher by a healthy 5.4% sequentially. Q4 profit margins were also well ahead of last year as a result of our ongoing focus on driving operational improvements in our cost structure as well as better program execution and increased service revenues. This was indeed a great way to leave a challenging year behind. In my view, the world needs more of what ATS has to offer. And in that context, it is good to know that we have our sights set on doing more business in regulated markets, including the food and beverage industries. In late March, we acquired CFT, a global supplier of automated processing and packaging equipment for leading food and beverage customers. The addition of CFT has allowed us to introduce a food technology platform at ATS comprised of CFT at our other food business, MARCO. Over time, we will drive new value through this exciting business combination. In June, we bolstered our extensive capabilities in life sciences with the acquisition of BioDot, a leading manufacturer of automated fluid dispensing systems for point of care and clinical diagnostics lab automation end markets. Again, highly regulated markets with good growth prospects. We welcome the employees of CFT and BioDot to the ATS family. With their presence, our business is now over 5,000 talented people strong. Whether it's assessing a potential acquisition, reviewing corporate policies or weighing risks and opportunities, good governance is essential to the creation of value for all ATS shareholders. Our governance foundation is in no small part, thanks to the dedicated efforts of my fellow directors; Dave Cummings, Joanne Ferstman, Andrew Hider, Kirsten Lange, Mike Martino and Philip Whitehead. My sincere thanks to these individuals for discharging their duties and responsibilities this past year with professionalism and care. With senior leadership experience, our Board sets the tone for business excellence, integrity and accountability. And I can assure you that the directors work hard at striking a balance between challenging management to ensure that your interests are looked after, on the one hand, and on the other hand, providing encouragement to innovate and grow. Going forward, the collective focus of the Board and the senior leadership team remains on sharpening business execution through the application of the ABM playbook, all as a means of driving continuous improvement where it counts. In terms of the environmental and social pillars of ESG, we recently committed to a long-term sustainability strategy built on 4 key elements; our people, ethics, social responsibility and our devotion to responsible manufacturing and service worldwide. We first described these 4 elements in our inaugural sustainability report published in November. And since then, we have taken action to integrate ESG in our business planning and expand our ESG reporting. Like all worthwhile endeavors, this is a work in progress. But by bringing greater attention to important KPIs such as our carbon emissions and energy consumption and thinking critically about our impact on the environment when planning facility expansions, we can identify and implement new processes that will make a positive difference. Similarly, further entrenching our ethics and social responsibilities initiatives in our long-term plans will enable us to make a more significant and informed contribution to meeting the needs and expectations of our people, our customers and our shareholders. I encourage you to read our latest sustainability report available at atsautomation.com for further insights. This is indeed an exciting time to work at ATS and to own our shares. I congratulate and commend Andrew Hider and the ATS management team for leading us through these challenging and uncertain times with energy, enthusiasm, tremendous skill, and of course, discipline. Although there are certainly some pandemic hurdles yet to be crossed, it does seem that ATS has passed through the period of maximum stress. We look forward to the return of a healthier world and a more stable business climate. With that said, we now can go on to the business of the meeting. So I now ask that the Annual and Special Meeting of the shareholders of the corporation officially come to order. Once the formal business items of the meeting are complete, I will invite management presentations from Andrew Hider and Ryan McLeod. And then following these presentations, we will address any and all questions received through the course of the meeting. As I stated earlier, I will preside as Chair of this meeting. In the event that I am disconnected as a result of a technical malfunction, Joanne Ferstman will step in and assume the role of the Chair of the meeting. Stewart McCuaig will act as Secretary of the meeting, and Shereen Zahawi will perform the role of moderator with respect to all questions submitted throughout the meeting. As matters of business to be conducted today, we have the election of directors, the reappointment of the corporation's auditors for the coming year and consideration of an extraordinary resolution to confirm and ratify an Advance Notice By-law. If there are no objections, I will ask Patty Sigiannis and [ Amy Kemp ], Computershare Investor Services, to act as scrutineers of the meeting. The Secretary has advised me that the notice that calling this meeting to order, together with a form of proxy and management information circular have been made available to each Director of the corporation, the auditors of the corporation and to each intermediary and registered holder of common shares of the corporation of record as of June 17, 2021, the record date for this meeting, all in accordance with applicable bylaws. These materials are available on the corporation's website at www.atsautomation.com, and on the corporation's profile on SEDAR. Our transfer agent, Computershare Investor Services Inc., as attested to the proper mailing of the notice calling this meeting. There has been found with me the proof of service of such mailing provided by the corporation's transfer agent. The scrutineers have provided me with their preliminary report regarding shareholder attendance at today's meeting. The scrutineers report that there are common shares representing over 86% of all outstanding common shares of the corporation present at this virtual meeting or represented by proxy. Accordingly, I declare that the requisite quorum of shareholders is present, and I declare that the meeting is indeed duly and properly constituted for the transaction of business. I direct that proof of mailing and the scrutineer's final report on attendance be annexed to the minutes of the meeting. As this meeting is being held virtually, via live webcast, we think it is necessary to set out a few rules for orderly conduct. First, questions can be submitted by any registered shareholder or duly appointed proxy holder using the instant messaging service of the Lumi Virtual Interface. Second, when asking a question, please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or duly appointed proxy holder. Third, questions will be addressed during the question period at the end of the meeting, provided that questions regarding procedural matters or directly related to the motions before the meeting may be addressed during that part of the meeting. Fourth, for the purposes of the meeting today, voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each business item all -- after the presentation of all business items. Fifth, once discussion on all items of business has concluded, I will give you a minute to enter your votes if you haven't already voted by proxy, and I will then declare voting closed on all resolutions. Sixth, when you were asked to vote, you will receive a message on the virtual interface requesting you to register your votes. You will only have a certain amount of time to do so when the polls are open. Seventh, and finally, if you have already voted in advance, do not -- please do not vote again online during the meeting unless you want to change your vote. If you vote again using the online ballot, your online voting during the meeting will revoke your previously submitted proxy. So I hope that's all clear. We will now proceed with the formal portion of today's meeting. I have been advised by Ryan McLeod that he would be prepared to second each of the motions in respect of the items outlined in the management information circular. Accordingly, unless there are any objections, I will take such motions as seconded with no further action needed. The first item of business is the presentation of the corporation's consolidated financial statements for the year ended March 31, 2021, and the auditor's report thereon. Copies of such documents have been mailed to the shareholders who requested them and are also available on the corporation's website and on SEDAR. It is not proposed to read the financial statements to the meeting. Receipt and presentation of the financial statements for the year ended March 31, 2021, are hereby acknowledged. I direct that the financial statements and the auditor's report thereon be annexed to the minutes of this meeting. Ryan McLeod will review the financial statements of ATS following the formal part of the meeting. We will now proceed with the election of directors. The number of directors to be elected at the meeting has been fixed at 7. I move to nominate those persons specified in the management information circular for election as directors of the corporation to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the corporation and take such motion as having been duly seconded by Ryan McLeod. The proposed nominees are: Dave Cummings, Joanne Ferstman, Andrew Hider, Kirsten Lange, Michael Martino, David McAusland and Philip Whitehead. If there are any further nominations or remarks with respect to the foregoing, please submit saying now through the instant messaging service on the virtual interface. I will allow for this with a short pause at this moment. So I don't see or hear anything. So as there are no further nominations or discussion with respect to the foregoing, I thank you. And there are no further nominations or remarks, I move the nominations be closed and take such motion as seconded by Ryan McLeod. Again, the vote comes a little bit later when we finished going through the business. We will now proceed with the reappointment of the auditors of the corporation. I move that Ernst & Young LLP be reappointed as auditors of the corporation until the next Annual Meeting of Shareholders or until a successor is appointed, and that the Board of Directors is authorized to fix the auditor's remuneration and take such motion as having been duly seconded by Ryan McLeod. Is there any discussion on this motion? I'm going to just pause for a minute just to check to see if there is any. So I don't see or hear anything. So there appears to be no further discussion at this time. As there's no further discussion, I will proceed with the next item of business. The next and last item of business is to consider and if deemed advisable to pass an ordinary resolution confirming the adoption of bylaw #2, relating to the advance nominations of directors of the corporation, the full text of which is reproduced on Page 15 of the management information circular with a minor amendment we announced on July 26 to clarify that any additional information requested of a director -- of director nominees to confirm their independence shall be made in accordance with securities law. To provide context for this resolution, the Advance By-law sets out a clear and transparent process for all shareholders who intend to nominate directors at a shareholders meeting by providing a reasonable timeframe for shareholders to notify the corporation of their intention and by requiring shareholders to disclose information concerning the proposed nominees as is mandated by applicable securities laws. The purpose of the advance bylaw is to: one, enable the Board to evaluate the proposed nominees' qualifications and suitability as directors and to respond as appropriate in the best interest of the corporation; two, to ensure that all shareholders receive adequate notice of any director nominations and sufficient time and information regarding such nominees; three, to ensure an orderly and efficient shareholder meeting process; and four, to allow shareholders to register an informed vote having been afforded reasonable time for appropriate deliberation. That said, I move to adopt the Advance Notice By-law resolution and take such motion as having been duly seconded by Ryan McLeod. So I will pause to see if there is any discussion on this motion. So I don't see or hear anything, so it appears that no further discussion is required on this matter. As there is no further discussion, we will proceed with voting on the 3 matters. As we mentioned today, voting will be conducted by electronic ballot. As a reminder, as I said earlier, if you have already voted in advance, do not vote again unless you want to change your vote. If you vote again using the online ballot, your online vote will revoke your previously submitted proxy. I will now take a moment to ask that the balloting be opened to registered shareholders and duly appointed proxy holders. The polls are now open. And at this point, all registered shareholders and duly appointed proxy holders who have properly logged in with their control numbers or user name and who wish to vote will be able to see on the screen all motions being brought forth at this meeting. Please register your votes by accessing the voting page and selecting the For or Withhold buttons next to the name of each proposed director and next to the resolution with respect to the appointment of Ernst & Young LLP as the corporation's auditors. Please register your votes by selecting the -- either the For or Against buttons next to the Advance Notice By-law resolution. Once the electronic balloting process closes, the voting page will disappear, and your votes will be automatically submitted. So for the purposes of this process. I will now pause for about 1 minute. [Voting]

So that should more than do it, and I now declare the polls closed. I have been advised by the scrutineers that a sufficient number of votes were received by proxy in advance of the meeting to pass all of the resolutions before us today. Accordingly, I am pleased to announce that each one -- each of the 7 nominees have been elected as directors of the corporation to serve until the next Annual Meeting of Shareholders or until their successors are elected or appointed. Second, the appointment of Ernst & Young as the auditors of the corporation has been approved, and the Board of Directors of the corporation has been authorized to fix their remuneration. Finally, the Advance Notice By-law resolution, as more particularly set forth on Page 15 of the Management Information Circular, was approved by the requisite majority, and is, therefore, in force. I direct that the results of the poll be included with the minutes of this meeting, and the final results of the voting will be announced in a press release in accordance with the policies of the TSX and filed on SEDAR. Ladies and gentlemen, thank you. That concludes the formal business to be -- to have been brought before this meeting. As there is no further business, I declare that the formal part of this meeting is concluded. It is now time for the management presentations. Before these presentations begin, I would like to ask Shereen to provide a caution with respect to forward-looking information. Shereen?

Thank you, David. Today's oral and visual presentations will contain forward-looking information, forward-looking statements. Actual results could differ materially from a conclusion, forecast or projection in such forward-looking information. Certain material factors or assumptions were applied in drawing the conclusion or making a forecast or projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information and the material factors or assumptions that were applied in drawing their conclusion or making a forecast or projection as reflected in the forward-looking information are set out in the overhead and contain in ATS' filings with the Canadian provincial securities regulators.

Thank you, Shereen. We will now view a short video and then Andrew will deliver his report. [Presentation]

Good morning, ladies and gentlemen, and thank you for participating in this virtual meeting. Thank you also to David McAusland for his words of encouragement, the stewardship he and our dedicated Board members provide. For our employees, customers and suppliers, this has been a uniquely challenging period. Throughout the pandemic, our hard work, purposeful innovation and commitment to our ABM playbook have allowed the ATS team to succeed. I am incredibly proud of our accomplishments. This morning, I will update you on some of those accomplishments and speak to our go-forward strategy, including capital deployment. I do want to begin by acknowledging that COVID-19 has tested all of us, and it hasn't been easy. Travel restrictions, temporary closures at some customer sites have impacted installations and aftersales services, particularly last spring and summer. Our teams rose to the challenge and developed creative solutions to overcome the pandemic complexities. All ATS businesses operated throughout the year with strict health and safety measures in place, which call out, in many cases, employees to work from home, offices, basements, family rooms or even the kitchen table. Under these circumstances, the team did a great job of reducing the inefficiencies created by necessary remote work policies and the application of physical distancing and flexible schedules for those whose job required on-site presence. Many of these protocols remain with us today because our first priority is the health, safety and mental wellness of our employees, and the all-clear signal has not yet been given by world health authorities. Fortunately, we're a company that finds solutions. We addressed pandemic-related obstacles by switching to and adding digital capabilities, condensing design, tooling and engineering processes, embracing virtual training and Kaizens, including our first global virtual ABM Boot Camp that are critical drivers of continuous improvement and putting greater resilience in regional service networks. Did all of this knowing that our customers needed us to perform, often on a moment's notice. More than once, we worked with our customers in the fight against COVID-19 under urgent and critical circumstances, and ATS delivered. Of the record $805 million of Life Sciences business we did last year, one project that stands out required ATS to design, engineer and equip a system to manufacture 10 million rapid COVID-19 tests per month. ATS completed in 14 weeks what would normally take 46 weeks, and did so with all the pandemic restrictions I mentioned, and this was just one of many accomplishments. ATS today is a global company with over 5,000 employees spread across 22 countries. Despite the challenges brought on by COVID-19, our customer relationships remain strong, and our business rebounded nicely as last year progressed. In fiscal 2021, we generated $1.4 billion of total revenue, approximately 14% adjusted EBITDA margin and year-ending backlog of $1.2 billion. Ryan will tell you more about recent performance, including a healthy balance sheet that gives us confidence and strength today. Beyond these financial results, fiscal 2021 was notable for the fact that while combating the pandemic, ATS made good progress with our strategy and with a capital deployment that supports it. Over the past few years, our business has evolved using our build, grow and expand strategies. We have deliberately transformed our portfolio in favor of high growth and low cyclicality end markets. We also strengthened our aftermarket services capabilities to add a variable growth component for ATS and help diversify our revenue stream. This transformation continued last year with the acquisition of CFT, which scaled up our presence in the attractive food and beverage market. From a strategic perspective, we favor defendable areas such as life sciences, which is today our largest market. Because it is regulated, technology intense, requires complex processes and where quality is always a necessity. These barriers to entry create lasting ties between customers and suppliers who possess capabilities to enable customers to meet those requirements. Concentrating on these markets allows ATS to focus on enabling further growth in revenue and margin expansion. During the pandemic, our core markets also added important stability to our results. Innovation to develop differentiated technologies and products and digital growth, including industrial IoT, serialization, predictive maintenance, and real-time optimization of what we consider prime-enablers of our core market expansion, and all received attention last year. We then add strategic M&A that is designed to strengthen and expand our portfolio in today's core markets and new frontiers that we identify and margin improvement that makes ATS a more efficient and effective organization. ATS' position today is strong as the end markets we target at favorable tailwinds and attractive long-term secular trends including the need to derisk manufacturing and supply chains, embrace increasing complex automation ecosystems, meet ever-increasing demands for safety and reliability and cope with the impact of aging workers and the resulting loss of skilled talent. For customers, the pandemic exposed single country and underdiversified supply chain risks that may best be solved through additional manufacturing investments. As a global provider, ATS is ready to help. The loss of skilled workers through retirement is another area where automation can support. Looking briefly at our markets, life Sciences end markets are poised to continue growing due to favorable demographics, a robust product pipeline that is giving the world new medical treatments, the rise of new ailments, and sadly, including COVID-19, that need new treatments and growth in disposables. Our capabilities allow ATS to deliver solutions across medical devices, pharma, radiopharma and chemical focus areas. The dynamics in our consumer vertical, which includes food and beverage are attractive and include factors that are driving significant customer investment, such as increased demand for food safety, better quality products, stricter regulations and the need for producers and processors to manage higher labor costs and labor shortages. Energy end markets, which for us are comprised mainly of nuclear and solar, are being pushed ahead by increasing global demand for clean solutions, major tooling and equipment life cycle management and asset decommissioning. Last year marked an important entry point for ATS with a new customer called Holtec that's an accomplished player in decommissioning nuclear plants in the U.S. Our work for this customer includes a design and build of specialized tooling equipment that is being tested under water at ATS' full-scale MARCO markup facility. Transportation is benefiting from a shift to electric vehicles and a record number of new product launches. ATS has a long track record and proven expertise in EV battery assembly and test. We look forward to supporting our customers' EV fleet goals. As part of our strategy, market targeting is essential. We allocate capital with focus to achieve the best results. This requires discipline in how we manage our existing portfolio and how we direct our innovation and acquisition efforts. I'll provide a couple of recent examples. Last year, we adjusted our transportation business by divesting nonstrategic facilities and small branch offices as a preemptive move to mitigate an expected downturn in certain areas of automotive, but also to sharpen our focus on EV. That shift was rewarded with a $60 million EV order in last year's first quarter and another large award in the fourth quarter. About 75% of our transportation business is now focused on EV opportunities, a good accomplishment as EV holds a significant future for transportation. Also within our existing portfolio, we allocated capital to build differentiated solutions that fit our customers' needs. Today, teams across ATS are pursuing next-generation ideas in areas including linear motion technology, digital services, modular and flexible manufacturing, among others. From an M&A perspective, we have been equally active in deploying capital in a managed fashion. One of last year's accomplishments was to build a robust process to cultivate and evaluate acquisition targets worldwide when travel restrictions took hold. We did this without losing a step or changing any of the criteria we use to evaluate acquisitions, which include the market, the strategic value of the target, operational fit, including how fast and how effective we can launch the ABM and the financial return, which includes return on invested capital, EBITDA growth potential, reoccurring revenue and EPS accretion. David mentioned 2 recent acquisitions. Here's a profile of both starting with the largest. CFT is a global supplier of processing and packaging automation equipment for the food and beverage sector. It complements our MARCO business acquired in December of 2019. With a 75-year track record, proven technology and a dedicated workforce of 900-plus employees, CFT enables us to capture more of the value chain in a vertical we target for stability and growth. CFT serves a blue chip customer base, diversified across Europe, North America and Asia. And revenue is diversified across the sales of complete lines, single machines and the aftermarket. The company holds 140 patents as a global leader in tomato processing technologies and optical sorting for fresh cut fruits and vegetables. It is also recognized for its brewing technologies and linear blow-molding technology for primary packaging. The acquisition was done on attractive terms and with a view to unlocking value through multiple avenues, including leveraging technologies across our combined portfolio in material handling, optical sorting and inspection and liquid filling where CFT has strong aseptic filling capabilities that we can apply across ATS Life Sciences and our Comecer business. Turning to our other recent acquisition, BioDot, which closed in early June. The company designs and manufactures mission-critical, low volume, premium fluid dispensing and lab automation systems. Based in California, it serves a blue-chip customer base in point-of-care and clinical diagnostics, genomics and other segments of life sciences. And has a highly skilled workforce of over 90 employees, 2 U.S.-based manufacturing facilities and locations in China and the U.K. As with other recent acquisitions, BioDot opens doors to new and growing markets, adds diversification to our portfolio from a financial perspective, offers robust synergies, earnings accretion and a compelling return on invested capital. We also deployed capital to acquire 3 businesses that strengthen our Process Automation Solutions Group. Last week, we acquired BLSG, a German-based consulting firm with strong capabilities in process engineering and operational excellence, which expands our consulting offering and value add to customers. Early in the new fiscal year, we acquired CIM, an industrial automation system integrator based in Ireland that adds capabilities in life sciences and enhances our digital strategy. And in last year's third quarter, we acquired NIMCO, a Belgium-based company that offers digital knowledge, resources and solutions to help customers gain insights into their machine and productivity data. Turning to the ABM, the ATS business model, which links all of our decentralized businesses. It helps us drive continuous improvement to outpace the competition in the markets we serve and to support long-term sustainable value for you, our shareholders. The ABM is a playbook that emphasizes people, process and performance. It is a repeatable model for analyzing challenges and developing solutions that will ultimately drive performance and growth. We look to implement ABM disciplines quickly in all new acquisitions and continually advance and apply those disciplines in our existing operations. The ABM promotes full engagement with an ATS. It continues the development of a problem-solving mindset and the creation of a common culture and language across our global operations. Fundamentally, it helps us to pursue and measure to achieve greater impact on our businesses. The ABM is now in its fourth year. And while we have accomplished a great deal by applying it, as with any good continuous improvement model, there are further improvements to come as we expand the focus. Today, ATS is a global automation company with a 40-year track record that now include successfully navigating a pandemic environment. In all market conditions, we deploy our technology and automation capabilities to transform, streamline and optimize our customers' manufacturing operations. By doing so, we enable our customers to bring their products to market faster and more cost effectively. We operate in sizable markets with favorable long-term dynamics, which we review on a regular basis to ensure ATS is well positioned. In short, for a company that is on-the-move and ready to tackle new challenges and create more value, the results of fiscal 2021 demonstrated the resiliency of our workforce in delivering on our commitments and the value of a disciplined approach to continuous improvement and capital deployment. We are not out of the pandemic just yet, but I am confident we have the right framework and people to succeed and the capabilities that will enable our continued success. In closing, I offer my sincere appreciation to our employees for their many accomplishments this past year, our customers for their engagement and loyalty, and fellow shareholders for your confidence and trust. I'm excited to move forward together as we build, grow and expand. Now I will turn the call over to Ryan. Ryan?

Thank you, Andrew, and good morning, ladies and gentlemen. I'm pleased to have this opportunity to speak to you about the company's performance. First, let me frame our discussion. For the purposes of managing our global business, we measure results against 8 value drivers. Every ATS business is aligned to achieve continuous improvement in these drivers. The top 4 are financial, and we report on these quarterly to our shareholders; bookings, revenue, EBIT margin and working capital. The bottom 4 are focused on the customer, on-time delivery and quality and people, internal fill rate and turnover. Looking at results against our 4 financial drivers. I'll begin with revenue. On a 5-year compound annual basis, revenue has grown just over 9% or 6% if we exclude the impact of acquisitions. The start of this 5-year period coincides with the introduction of the ATS Business Model or ABM. Last year, revenue was steady at $1.43 billion despite challenges brought on by the pandemic. We benefited from $25 million earned by acquired companies and the resumption of organic growth in the fourth quarter. In the first quarter of the new fiscal year, revenues totaled $511 million, a $186 million or 57% increase from the corresponding period a year ago, of which 28% was organic growth. Acquisitions contributed $114 million. Moving to order bookings. Growth over the past 5 years averaged 9.4% on a compound annual basis. Last year, order bookings were $1.6 billion, up $158 million over the prior year. Organic growth in bookings was 7.4% in fiscal '21, driven by strong activity in life sciences and consumer markets. In the first quarter of this year, growth continued with bookings of $637 million, up 96% from pandemic-impacted levels a year ago. In the quarter, year-over-year order bookings growth was registered in life sciences, food and beverage and consumer. Excluding the impact of acquisitions, order bookings were up 74% in Q1 from a year ago. In terms of profitability measures, adjusted EBITDA margins expanded to 14% in fiscal '21 from 13.6% in fiscal '20. In Q1 this year, adjusted EBITDA margin increased to 15.3%. We are pleased with our performance, particularly when viewed through the lens of operating in a pandemic environment with inefficiencies arising from additional health and safety measures, travel restrictions and temporary closures and entry restrictions at some customer sites. Beyond our own countermeasures, recoveries under the government's CEWS program last year helped us to maintain our highly skilled workforce. In Q1 this fiscal year, excluding acquisitions, our core business operated at a 14.1% adjusted earnings from operations margin. Operating margins from our acquired businesses were 8.2%. Going forward, we continue to work to drive margins towards our 500 basis point target through purposeful activities, including growing our higher-margin aftersales service business, maximizing global supply chain management, increasing the use of standardized platforms and technologies, growing revenues while leveraging our current cost structure and continuous improvement driven by the ABM. As I noted, we've made good progress in our core business. Acquisitions will take time, but we are confident that we can achieve our acquisition plans. Note that adjusted EBITDA has grown 15.8% on a compound annual basis since fiscal 2017, in line with our long-term plan to enhance profitability. We continue to reinvest in the business, typically at a rate of 2% to 3% of annual revenues. Fiscal '20 was an expansionary year, while fiscal '21 spending reflected pandemic conditions. For fiscal '22, we plan to add capacity to support growth and continue to invest in innovation, with a CapEx budget of $50 million to $60 million. In fiscal '21, we generated cash from operations of $185 million, up from $20 million in fiscal '20, reflecting improved profitability and lower investment in noncash working capital. Working capital is our fourth value driver. Looking at noncash working capital, our goal is to keep it below 15% of revenue, which we have done every year since the ABM was introduced. More favorable commercial terms, improved program management and timing of deposits and program milestones caused the improved results in fiscal '21. While we're pleased with this result, we do expect our noncash working capital investment to increase to a more normal range of approximately 10% during fiscal '22. Turning to our capital structure. We ended fiscal '21 with ample liquidity, even though we did deploy the balance sheet for acquisitions, the largest of which is CFT, which we acquired for approximately $250 million. From a leverage standpoint, our net debt to adjusted EBITDA ratio was 1.6:1 at year-end. At the end of Q1, this ratio was 1.7:1, reflecting the acquisitions of BioDot and CIM. Our normal course target leverage range is 2 to 2.5x, so we have further room to deploy capital to pursue our strategies. And for the right assets, we will temporarily increase our leverage to the 2 to 3.5x range as necessary. In terms of optimizing our balance sheet, in Q4, we completed a private placement of USD 350 million 2028 senior notes bearing interest at 4.125% annually. We deployed the proceeds to redeem our value outstanding 2023 6.5% senior notes. That is a brief report on our financial results. I certainly encourage you to review our annual report and our Q1 update available on our website for more details. In our Q1 report, you will note that our backlog at the end of June was $1.25 billion, which provides us with a very solid base of business for this fiscal year. In summary, fiscal '21 was a challenging year that tested our business. In the face of these challenges, our people were resilient and demonstrated the strength of ATS, our business model, and remained dedicated to value creation. We look forward to continuing our efforts to grow and improve our value drivers. Now I will turn the meeting back to our Chairman. David?