American Technology (ATCO) Misses Q1 EPS by 10c, Revenues Beat; Raises FY20 Revenue Guidance

American Technology (NYSE: ATCO) reported Q1 EPS of $0.15, $0.10 worse than the analyst estimate of $0.25. Revenue for the quarter came in at $308.4 million versus the consensus estimate of $297.86 million.

Financial Highlights

• Atlas increases Seaspan revenue guidance from $1,170 - $1,195 million to $1,185 - $1,225 million for Full Year 2020
• Records revenue of $308.4 million for the first quarter, a record high
• Records operating earnings of $127.5 million for the first quarter
• Achieves earnings per diluted share of $0.15 for the first quarter; loss on derivative instruments contributed a loss of $0.10 per diluted share for the first quarter
• Generates cash flow from operations of $130.7 million for the first quarter
• Liquidity of $393.7 million as of March 31, 2020
• Declares Atlas' first dividend, of $0.125 per common share, following 58 consecutive dividends by Seaspan

Operational Highlights

• Seaspan acquires four young 12000 TEU vessels, increasing the total fleet to 123 vessels and surpassing 1 million TEU
• Seaspan achieved vessel utilization of 97.9%, 98.4% TEU-weighted utilization for the first quarter
• Seaspan secured charters for all 123 vessels
• Completes holding company reorganization (the "Reorganization") of Seaspan Corporation ("Seaspan") to form Atlas Corp., a leading global asset owner and operator
• Atlas closes $750 million acquisition of APR Energy Ltd. ("APR")
• APR announced the signing of 265MW of Peaking Power contracts in Baja California, Mexico

Comments from Management

Bing Chen, Chief Executive Officer of Atlas, commented, "Despite the unprecedented conditions, we delivered record quarterly revenue of $308.4 million while consistently executing on our resilient business model, deepening our customer partnerships and growing our containership fleet to 123 vessels and over 1 million TEU. While continuing to expand our sustained access to global capital markets, we have concluded mutually beneficial agreements extending the term of six charters from four to ten years and signed contracts for 265MW of peaking power in Mexico. The completion of our Reorganization to form Atlas and the closing of the APR acquisition further position Atlas as a leading owner and operator in two core infrastructure verticals: maritime and power. Atlas' business model is built upon long-term contracted cash flows of close to $4.8 billion and a focus on operational excellence that differentiates us as the solutions provider of choice in both the maritime and power sectors."

Ryan Courson, Chief Financial Officer of Atlas, said, "We have continued to execute on our strategic priorities during the first quarter, maintaining our strong balance sheet and credit profile while growing our fleet and acquiring APR. Atlas' robust liquidity position of $393.7 million is supported by our access to global capital markets in all market conditions as demonstrated through the $340 million financing of our recently acquired vessels and the closing of a $285 million senior secured financing program for APR. Atlas' scale, diversified portfolio and financial strength enable us to continue optimizing our companies' capital structures. We remain focused on disciplined capital allocation towards new growth opportunities while creating sustainable long-term value for shareholders regardless of the current economic cycle."

GUIDANCE:

American Technology sees FY2020 revenue of $1.185-1.225 billion, versus the consensus of $1.22 billion.

• The following table is based on Atlas' current expectations. Seaspan's revenue and operating expense guidance for 2020 has been revised upwards compared to 2020 guidance provided on February 19, 2020. Atlas also today provided 2020 guidance for APR for the contribution period February 29, 2020 to December 31, 2020.

For earnings history and earnings-related data on American Technology (ATCO) click here.

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