ATS Automation Tooling Systems Inc.
ATS makes automation equipment. Increasingly ATS has been taking an approach of being more engaged with their customers to design and build automation systems and solutions. These deals are bigger but can also be lumpier because of the time it takes to negotiate the deals. They also have a solid balance sheet they can leverage for strategic acquisitions. While stock-based compensation is a real expense, I’m starting to exclude it because significant moves in the stock price can result in marking-to-market which can have outsized impacts on earnings and can send incorrect signals to the health of profitability especially when there’s a negative expense.
Ests 3Q21 4Q21 FY21 FY22
Revs 353.2 374 1.39b 1.84b
EPS .24 .29 0.97 1.38
y/y -14% +16% -88% +42% (estimates skewed by stock comp)
P=22.78, D/C=9%, NWC > debt, TTM EPS ex stock comp=1.04, P/E=22X, FY22 P/E=17X
3Q21 .34 vs .28 +21%, est .24
Feb 3, 2021, P=22.78, TTM EPS=1.04, P/E=22X, FY22 P/E=17X
Revs +1% to 369.7m, GM 27.8% vs 25.1%, OM 13.2% vs 11.1%, OpInc +20%
Revs construction contracts -5% to 217.2m, Services +8% to 117m, parts +19% to 35.5m, CP&E +88% y/y to 61.1m, Energy +24.8% to 28.7m, Life Sciences +2.7% to 213.2m, Transport -36% to 66.7m
Bookings +18% to 435m (Record level), B/B=1.18, Backlog 985m, also record level, bookings -68% in Transport but +64% in Energy, +19% in Life Sciences, and +159% in Consumer
EBITDA 49.7m vs 26.8m, CFO before NWC 35.3m vs 20.4m, after NWC 78.9m vs (7m)
Results incl 2.3m from CEWS
Consumer driven by warehouse and personal care automation projects plus acquisitions
Mgmt expects 35-40% backlog conversion, implies 4Q Revs -10% to +3%
Solid results, continues to deliver better results than ROK which is valued at 28X estimates 1 year out vs 17X for ATA, analysts continue to be lazy or chicken.
ROK Revs -7.1%, -9.7% organic, EPS -10% to 1.93 ex legal benefit, FY21 Guidance adj EPS ex legal benefit 8.25-8.65, slightly reduced, stock reacting negatively, @248 29X FY21 midpoint
Mid Quarter Update
Intending to acquire CFT SpA, supplier to F&B equipment market for €88m plus €78m in debt (total ~C$260m)
“Highly strategic” to broaden offerings in regulated F&B market, CFT has 75-year history, >900 employees, “significant value creation potential” as they apply the ATS operating model
2Q21 .27 vs .28, est .13
Nov 4, 2020, P=17.09, TTM EPS=0.98, P/E=17X
Revs -2% to 335.5m, Services -9% due to travel restrictions but up double digits q/q, GM 27.2% vs 26.3%, OM 12.3% vs 12.2%, Energy weak, Transport +6% q/q but -8% y/y, Life Sciences flat q/q and -4.8% y/y, Consumer +22% q/q and +30% y/y
Bookings +23.9% q/q, +25% y/y to 402.5m, B/B=1.2X (Life sciences ~60% of bookings, B/B>1 in all segments but transport), Backlog 956m, Orders solid q/q energy, transport, and consumer, solid y/y life sciences and consumer (consumer +137% y/y)
Expanded digital marketing efforts and funnel, also streamlined quoting process, reducing time and improving quality.
Divested transportation business was related to internal combustion, not EV.
Mgmt expects 3Q Backlog conversion 35-40% (Implies 3Q Revs -9% to +4%, est -8%)
Company doing a great job in this environment, value proposition vs its opportunity remains, estimates are too low at least near term.
ROK Revs -9%, -12% organic, adj -7% to EPS 1.87 , FY20 adj EPS -11% to 7.68, FY21 Guidance 8.45-8.85 would be similar to FY19 EPS (no growth over 2 years at 29X eps)
Mid Quarter Updates
Sept 25, 2020 As part of Transportation reorg “Conditional Agreement” to sell “certain assets and transfer employees of its German-based subsidiaries to a third party”, several conditions must be met so it’s not a done deal, would “partially mitigate costs” of announced restructuring. No financial terms disclosed.
Sep 14, 2020 Received $20m order from a medical device manufacturer to deliver several safety syringe manufacturing systems, featuring the company’s new high-performance Symphoni technology, for COVID-19 vaccines. To be completed over next 10 months.
Sep 8, 2020
Announced reorganization plan on Transportation business to be completed be end of year, cost $24m
To realign capacity and cost structure
Not surprising that this market is being disrupted, mgmt. has talked about delayed orders etc.. stock has given up its gains following 1Q results which weren’t nearly as bad as expected, these actions deal with challenging market conditions and likely position them better for the recovery especially in newer EV trends.
1Q21 .19 vs .28 -33%, est .11 down from .19
Aug 12, 2020, P=18.27, TTM EPS=1.00, P/E=18X
Revs -4% to 324.9m (-6% organic), adj OM 9.6% vs 12.3%, adj OpInc -25% to 31.3m
Services Revs -19% due to travel restrictions/closures/entry restrictions, Revs from construction +7%
Bookings -23% to 325m, B/B=1, Backlog -7% to 909m (58% Life Sciences), -3.5% q/q due to fx, negligible bookings in transportation, strong bookings in life sciences incl COVID-19 related order
CFO before NWC 27.2m vs 44.7m, after NWC 47m vs (40m)
Outlook: 2Q expects backlog conversion at lower end of 35-40% range (implies revs similar to 1Q) Funnel activity negatively impacted as some customers delaying projects, pharmaceutical robust, automotive projects re new technologies have advanced but others delayed, energy variable, consumer remains low vs other markets and customers are cautious
ATA reacting very positively, +12%, I think there’s still considerable value but must be mindful the near-term operational environment can be very challenging (not only for ATA).
ATA continues to deliver better results than ROK which is at all-time highs and +16% YTD, ROK reported Revs -16%, adj EPS -47%, ATA valued at considerable discount, ROK at 26X FY19 EPS, 30X FY21 EPS which is still estimated to be -11%
4Q20 .25 vs .31 -19% ex restr and stock benefit, est .18 down from .25
May 27, 2020, P=22.24, TTM EPS 1.09, P/E=20X, FY21 P/E=21X
Revs +10% to 382.1m (+2% organic), GM 23.2% vs 26.6%, adj OM 10% vs 12.7%, OpInc -13%
Service revs -13% due to travel restrictions, Energy -27% but Transportation +41%, Transportation orders strong, Life sci lower but still at solid level, Energy and Consumer both saw uptick in orders.
Bookings +19% to 356m (+11% organic), B/B=0.93, Backlog +4% to 942m
Margins impacted as expected by restructuring plan, further impacted $4m by unexpected costs and undisclosed costs due to COVID-19
Solid results much better than expected but sock has recovered from selloff to 52-week high.
Restructuring completed so cost specific cost impacts won’t recur but mgmt. emphasized this will not offset margin pressure in FY21
Management expects 1Q21 backlog conversion between 30-35%, implies revs 277-330m, est 315m, transportation activity will be lower, impacting margins
No program cancellations, 1 program on hold (EV related), quoting funnel being temporarily impacted with delayed timing, 1Q would have been more impacted if not for the order in April related to COVID-19 test kits.
For comparison, ROK Revs +1.5%, adj EPS +19%, FY20 EPS guidance down 11-20%
Mid Quarter Update - April 21, 2020
$65m order from Tessy Plastics to design, build, and deliver 2 automated mfng systems within 4 months to enable prodn of 10m units per month of critical components for point-of-care testing kits that can be used for COVID-19
Mid Quarter Update – Apr 8, 2020
Announced $60m EV order from a global auto manufacturer for fully automated battery assembly system for NA operations. Booked in 4Q, to be delivered over 18 months.
Covid-19 impacting operations and utilization, highlighted strong order backlog, balance sheet with $117.7m gross cash and $647.5m of available credit facility.
3Q20 .28 vs .28, est .22 down from .29
Feb 5, 2020, P=20.72, TTM EPS ex stock comp 1.15, P/E=18X, FY21 P/E=16X
Reported adj EPS.26 vs.33 skewed by .02 vs (.05) stock comp
Revs +14% to 367.2m, +5% organic, GM 25.1% vs 26.3%, OM 11.1% vs 12.6%
Bookings -7% to 368m incl 32m Enterprise pharma order, B/B=1.0, Backlog +1% to 939m
B/B above 1 in all segments except Life Sciences was 0.93 due to strong rev recognition
Earnings drag of 5m from restructuring plan, as discussed in 3Q
Implementing a $60m restructuring to close/consolidate underperforming facilities to high-performing facilities to drive growth (increase capacity) and margin improvement. Expect cost savings 15-18m and annualized improvement in OM by 110-130bps (commencing FY21)
Outlook: Expect 4Q backlog conversion lower end of 35-40% range (implies revs 329-376, est 358) due to program schedules and reorg, Funnel activity in Life Sciences remains strong, Transportation some EV opportunities delayed as mentioned in 2Q but funnel remains significant, Energy is variable, Consumer remains low.
Mgmt discussed a new aerospace customer using PA to analyse data from existing machines to improve manufacturing process, also penetrating regulated food market with MARCO
Solid results continue, near-term earnings pressured by underutilization charges on facilities to be closed. Contrast to ROK which reported organic revs -1%, adj EPS -4.5% despite much lower tax rate, FY20 Guidance 8.7-9.1 vs 8.67, trailing P/E=24X, FY20 P/E=23X for minimal growth.
Stock sold off ~5% possibly on EPS skewed by stock comp or near-term impact on revs and EPS form reorg.
Mid Quarter Update – Dec 16, 2019
Acquired MARCO, a specialized provider of productivity solutions for global food packaging industry. Provides yield control and recipe formulation for food, nutraceuticals, and cosmetics customers to increase productivity and meet regulatory standards.
Expected FY Revs ~ 15m pounds Sterling with EBITDA margins in low-mid 20% range
Purchase price 25m pounds with 7.3m pound earn-out over 2 years.
2Q20 .28 vs .21 +33% ex stock comp, est .24
Nov 6, 2019, P=18.61, TTM EPS ex stock comp=.1.16, P/E=16X, FY20 P/E=16X
Revs +20% to 341.2m (est 318) +12% organic, GM 26.3% vs 26%, adj OM 12.2% vs 11.3%, OpInc +30%
Bookings -10% to 321m, B/B=0.94, Organic B/B=0.93, Backlog +14% to 945m
B/B was 1.5X in Energy, soft in Life Sciences and Transportation following strong B/B last quarter, weak in CP&E
Initiating a reorg to reduce costs, expect 25m cost and 15-18m annualized savings starting in FY21, expects 3-5m incremental costs per quarter for next 2 quarters.
Some might look at soft bookings in the quarter but not surprising given very strong bookings last quarter and 32m enterprise order announced in October.
Outlook: geopolitical issues could affect future results (no comment on seeing current impacts), funnel activity in Life Sciences remains strong, some EV opportunities being delayed due to refinements to customer’ technologies or assessments of end market conditions however funnel remains significant, Energy is variable with niche opportunities, CP&E remains low relative to other markets.
Expects backlog to partially mitigate impact of volatile order bookings in the short term, expects 3Q backlog conversion 35-40% (implies Revs 330-378m, est 357)
To date has purchased 2.5m shares for $39.3m (average price 15.66, mostly late 2018)
Results very strong, while economic uncertainty is weighing on the stock, valuation looks very attractive given its strong results and opportunity, the company is performing much better than ROK and is trading at a much lower valuation.
Order announced in October was due to combination with Comecer, ATS would not have won it alone, it’s a new customer to both of them and mgmt. feels there’s follow-on opportunities.
Mid Quarter Update – Oct 23, 2019
Announced $32m order from a new pharma customer, to be recorded in 3Q20 results, deliverable over 2 years
Mid Quarter Update Sept 19, 2019
Acquired iXLOG to expand data analytics and business intelligence offerings, broaden digitization capabilities to optimize customer manufacturing ops
Had FY18 Revs of 4m euro, more of a capability acquisition rather than scale. Purchase price was 5.2m euro up front with possible 2m earnout.
1Q20 .25 vs .22 +14.6% incl (.03) drag from stock comp vs (.03) last year, est .26
Aug 14, 2019, P=19.60, TTM EPS ex stock comp 1.10, P/E=18X, FY20 P/E=18X
Revs +13% to 339.2m (est 343) +4% organic, GM 27% vs 26%, OM 12.3% vs 12%, OpInc +15%
Bookings +18% to 423m, B/B=1.25, Backlog at record levels, +8.6% q/q to 982m, +24% y/y or +13% organically
Energy -27%, transport +20%, life sciences +38%, CP&E -19%
Solid CFO before NWC, 44.7m vs 29.6m, but significant investment into WC driving negative FCF
Bookings very strong especially absent a specific press release on a big enterprise win, solid order bookings in life sciences primarily related to medical device programs, several large orders in NA and EU in transportation, decent organic growth in revenues, strong organic growth in backlog
Mgmt expects backlog conversion for 2Q20 30-35% which factors some longer lasting projects, implies 2Q Revs +4-21% y/y (est +15%), generally sees operating leverage from higher revenues with better margins baked into backlog.
Unchanged view about caution from customers in environment.
Stock was recovering well but sold off hard since late June, further reacting negatively on a weak day due to trade/recession fears and slight EPS “miss”, company’s fundamentals are very sound, valuation looking even more interesting, performing better than Rockwell, has similar valuation.
4Q19 .31 vs .23 ex stock comp, est .20 down from .26, FY19 ex stock comp EPS 1.07 vs .81 +32%
May 16, 2019, P=19.95, TTM EPS ex stock comp=.1.07, P/E=19X, FY20 P/E=18X
Reported adj EPS .26 vs .22 incl (.05) stock comp expense vs (.01) expense
Revs +17% to 348.6m (est 309.7), +13% organic, GM 26.6% vs 26.3%, OM 12.7% vs 11.6%, OpInc +28.3%, FY OpInc +21.6%, Bookings -14% to 298m, B/B=0.85 but FY B/B=1.12 (quarters can be lumpy), Backlog +21% to 904m
Transport Revs +18%, Life Sciences +46%, Energy -16.7% and CPE -30%, strong orders in Life Sciences while the others had B/B below 1
Completed Comecer acquisition on Feb 28th
Solid FY19 CFO before NWC 125.1m vs 86.6m, used 192m in investing activities, repurchased $39.3m in stock (24.5m in 4Q, remainder in 3Q)
Mgmt cognizant of apparent slowing of global economy and potential impacts from trade disputes. Funnel activity in life sciences remains strong, opportunities in EV are significant but customers are cautious with their investments, not seeing a change in tone from customers, Energy is variable, consumer products remains low relative to other markets. Overall funnel activity remains significant however conversion to bookings is variable (increased variability?), expected backlog conversion 35-40% which is higher than previous quarter.
Mgmts effors to expand OMs include growing after-sales services, improving supply chain management, increasing use of standardized platforms and technologies, growing revenues and leveraging fixed costs, and continued roll-out of ATS Business Model
Very solid results, EPS beat even including a high stock comp which is related to strong gains in the stock rather than grant activity. Stock still attractively priced given its strength and positioning as long as the economy holds together, stock weakness could expose them to a takeover.
3Q19 .28 vs .21 ex stock comp, est .25
Feb 6, 2019, P=16.21, TTM EPS ex stock comp .97, P/E=17X, FY20 P/E=15X
Reported adj EPS .33 vs .18 incl (.05) stock comp recovery vs .02 expense
Revs +16% to 321.4m (est 310.5), Organic +14%, GM 26.3% vs 26%, adj EBITDA +27.3% to 45.1m, adj OpInc ex stock comp +28%, OM 12.6% vs 11.3%, Bookings +28% to 397m, B/B=1.24, Backlog +34% to 926m
q/q Energy +23%, Transport +21%, Life Sciences +17%, CP&E -11%, y/y Energy -5%, Transport +16%, Life Sciences +18.5%, CP&E +28%
Bookings include the 60m Life Sciences order announced in December and 2 EV orders both ~25m
EV bookings remain strong, majority of transport funnel, Life sciences funnel remains strong. With Comercer, expect life sciences to represent >50% of revs.
Closed acquisitions of Transformix and KMW, Comercer should be soon.
Revs benefited from some programs that were delayed in 2Q
Funnel activity remains significant although customers remain cautious in approach to capital investment, expected Backlog conversion for 4Q (30-35%) is lower than historical but backlog profile has changed materially which mgmt. views as positive (longer revenue recognition cycles with higher composition of enterprise programs), implies 4Q Revs 278-324m, est 313.
This quarter is a great example why paying attention to the impact of stock comp is important, the previous 2 quarters were fine but looked weaker due to stock comp, mgmt. doing a great job positioning the company and capitalizing on enterprise orders in key strategic areas.
Mid Quarter Update
Dec 18/19 2018
Announced $60m Enterprise Life Sciences Order for a current customer, to be built and delivered over next 30 months
Acquiring Comecer, a developer of advanced aseptic containment and processing systems for nuclear medicine and pharmaceutical industries.
Purchase price 113m Euro, Expected close in 1Q CY19, FY18 revs ~67m Euro with low double-digit EBITDA margin, in FY2020 expects mid-single digit EPS accretion, dilutive in near-term.
2Q19 .17 vs .18, est .23, stock comp (.04) vs (.01)
Nov 7, 2018, P=19.47, TTM EPS ex stock comp .87, P/E=22X, FY19 P/E=18X
Stock comp again impacted results by .04 due to stock price appreciation (which has now been reversed), not fundamental to results, ex stock comp adj EBT +10.6%
Revs +3% to 283.6m (est 310m), GM 26% vs 25.8%, Reported EBITDA 29 vs 32.8 but adj EBITDA +6% to 36.5m, margin 12.9% vs 12.6%
Bookings +38% to 355m, B/B=1.25, Backlog +28% to 830m
q/q, Energy -16.5%, Transport -7.5%, CP&E -22%, Life Sciences +7.9%. Y/y, Energy -11%, Transport -9%, Life Sciences flat, CP&E +60%
Revs lower than mgmt. expected because battery order was later than expected and some factors that pushed into 3Q/4Q
Bookings include 72m of 80m enterprise order from a global auto manufacturer for a fully automated battery assembly system for EVs following almost 1 year of working with the customer
Closed acquisition of KMW on Oct 31st, has EBITDA margin >20%
Mgmt does not expect a material impact from tariffs due to global footprint but further trade disruptions could affect business, so far they have not seen a change in customer activity.
Funnel activity in life sciences remains strong, energy Is fluid, CP&E has improved but remains low relative to other markets. Overall funnel remains significant but bookings can be variable as customers remain cautious.
Expects backlog conversion for 3Q19 to be in 35-40% range
Stock is weak following the recent selloff, results aren’t horrible as they reflect the variability in the business (and higher stock comp) but reflects that the stock got ahead of itself, I did a trim in August, clearly I should have done a larger trim with the stock down >30% from its highs but fundamentally nothing has changed and the acquisition is incrementally more positive.
1Q19 .22 vs .18, +22%, est=.21, stock comp shaved .04 vs .01
August 15, 2018, P=19.83, TTM EPS=.78, P/E=25X, FY19 P/E=22X
Revs +14% to 300m, GM 26% vs 25%, adj EBITDA +21.9% to 36.8m, 12% vs 11%, orders +35% to 358m, B/B=1.19, Backlog +15% to 789m
Energy +70% as 1Q18 was still low similar to last quarter, -9.6% q/q, Life Sciences +4.5%, transport -16.4% but +3.6% q/q due to timing of programs, backlog solid, CP&E +80.7% and +19% q/q from solid backlog
Energy orders at 76.9m very strong with B/B=2 incl 60m order from Bruce Power, Life Sciences also strong with B/B=1.25, transport is fine at 0.96, CP&E soft at 0.6 but backlog is still solid
Mgmt does not see significant change in customer demand or prodn plans but remain cautious on capital investment, funnel activities in life sciences remains strong, further strengthened in transportation, Energy activity is fluid, improved in CP&E
Mgmt expects backlog conversion for 2Q19 in higher end of 35-40% range
Solid results, while EPS was a slight beat, that was in the face of abnormally high stock comp due to repricing options from share price appreciation.
4Q18 .22 vs .15, est .16, FY .74 vs .57
Revs +12% to 298.4m, GM 26% vs 24%, adj EBITDA +30% to 37m, 12% vs 11%, orders +8% to 348m, B/B=1.17, Backlog +10% to 746m, another new record level
Energy +167% as 4Q17 was very low due to First Solar generation transition, +2.5% q/q, life sciences +3.7%, transport -13.8% but flat q/q, CP&E +32.7% and +54% q/q
Energy orders weak following a few solid months with B/B=.58, other segments were strong and all above 1
Funnel activity in life sciences remains strong, EV opportunities have strengthened funnel in transportation, energy is fluid with select opportunities, CP&E has improved although remains low compared to other segments, overall funnel remains significant, customers are cautious with their CapEx
Mgmt expects backlog conversion for 1Q19 to be in the higher end of 35-40% range
Results are solid, 23X EPS looks high but supported by solid growth, estimates look low
3Q18 .18 vs .12, est .18
Revs +17% to 277.6m, adj EBITDA 33.3m vs 26.6m, orders +10% to 311m, B/B=1.12, Backlog +9% to 689m, new record levels.
Energy -13% due to timing of bookings, life sciences +39%, transport +7.9%, CP&E +13.5%
Funnel activity in life sciences remains strong, strengthened in electric vehicles, energy is fluid with select opportunities, CP&E has improved but remains at low levels (new orders were strongest in a few years due to a big order). EV is majority of transportation funnel, numerous opportunities and deals are larger.
Mgmt expects backlog conversion for 4Q to be at the higher end of 35-40%, see continued improvement and growth in FY19.
2Q18 .18 vs .13, est .19 up from .16
Revs +13% to 274.9m (est 283), EBITDA 32.8m vs 25.5m, Orders -11% to 257m, B/B=0.93,
mainly due to the variability of life sciences orders which was -44% to lowest level in 3 years, last year life sciences was 55% of total orders, Backlog -1% to 648m
Energy -26% but still improving q/q, transp +5.7%, life sci +37.4%, CP&E +15%
Implementing a restructuring, closing 1 division in SE Asia, rationalizing a business line in Europe, making some leadership/management changes, ~3% of workforce to be impacted. To improve leadership and cost structure and improve capacity utilization, should be complete in 3-4 months, cost ~9-10m with a payback of 18-24 months
Funnel activity in life sciences remains strong, transportation is solid particularly with electrification of vehicles (>50% of the funnel), energy is fluid and provides select opportunities, CP&E has improved but still remains low relative to other markets. Overall funnel remains significant, conversion to bookings is still variable. Mgmt expects backlog conversion to be in the 40-50% range.
Excellent operating cash flow quarter, 37.7m vs 3.8m (23.9 vs 18.1 before changes in NWC).
1Q18 .16 vs .17, est .15
Revs -1% to 264m, GM 25.3% vs 24.4%, EBITDA 30.2 vs 31.5, Orders +11% to 266m, B/B=1
Energy -67% but +41% q/q (recovering), transp +25%, life sci +26%, C&E +2%
Backlog +12% to 683m, expect 40-45% to convert to 2Q revs
Developed a Build, Grow, and Expand strategic framework to create value
Expect revenue growth for the year but quarterly performance could be lumpy due to project-based business.
4Q 17.15 vs .14, ex items and signing bonus to CEO, .14 est, FY EPS=.57 vs .72
Stock comp shaved almost .02 from EPS vs .005 last year (revaluations)
Revs +8% to 265.7m, GM 24% vs 25%, EBITDA 28.5m vs 27.1m (11% vs 11%), Orders -17% to 322m, B/B=1.36 but last year included the $100m order from First Solar which was cancelled in 3Q17
C&E +8%, Energy -17%, Life Sciences +21%, Transport -3%
Backlog +4% to 681m (a new record). Mgmt expects 1Q18 Backlog conversion 35-40%
Funnel activity in life sciences remained strong, improved in transport, energy is sporadic (with solid bookings this Q) and meaningful opportunities in funnel, CP&E has improved but lower than other markets
Solid quarter demonstrating the 3Q First Solar cancellation is mostly timing but lumpiness remains, good to see strong orders in Energy, and solid orders in Transport and Life Sciences (had $30-35m follow on from $40m Life Sci order announced in 2Q), very solid cash flow quarter, 81m vs 34m including deposits so WC will increase from here.
3Q 17.12 vs .21, 9M .42 vs .58, TTM .63 vs .82
Revs -14% to 237.4m, GM 26% vs 26%, adj OM 9% vs 12%, Bookings +25% to 284m, B/B=1.2, 1.03X last year's revs. Incl $40m booking with Bruce Power, 1.03 ex Bruce.
All segments down y/y except for energy, +178%
Expects backlog conversion for 4Q17 to be at higher end of 35-40% range
Stock comp 8% vs 2.5%, hit EPS ~.01
Backlog +16% to 632m