ATS Corporation announces settlement with EV customer

ATS Corporation (ATS) announced that it has reached a settlement agreement with its Electric Vehicle customer with respect to the previously disclosed outstanding payments owed. Under the terms of the agreement, the company will receive payment from the customer of $134.75M in the first quarter of fiscal 2026, with no further work required by the company on these projects. This settlement results from discussions which were originally disclosed in the company’s management’s discussion and analysis for the three and six months ended September 29, 2024. The company determined that it is willing to settle its disagreement with the customer based on a number of factors, including but not limited to, the benefit of receiving a cash payment in the near term, particularly in light of the volatility and uncertainty of the overall global macro-economic environment and the impact of such environment on the automotive sector, in addition to previously announced reductions to automakers’ EV end-market demand. “It was important to get this matter behind us,” said Andrew Hider, Chief Executive Officer. “All factors considered, we believe this outcome is the best result for ATS. With transportation having become a smaller piece of our business, this Agreement allows us to focus on our growth strategy consistent with our emphasis on regulated markets, while continuing to deliver value to all stakeholders.” The company added: “In light of the Agreement, in the Company’s annual audited consolidated financial statements for the year ended March 31, 2025 (i) all previous amounts related to the program with the customer, including accounts receivable, contract assets, and inventories will be written-off accordingly, (ii) the settlement amount will be reflected in accounts receivable, and (iii) a reduction to net income of $129 million (approximately $171 million before income taxes) related to the Agreement will be reflected. The financial impacts from this Agreement will be reflected as EV customer settlement in the Company’s adjusted earnings from operations, adjusted EBITDA, adjusted net income, and adjusted basic earnings per share.”