ATS Corp. has launched a cost-cutting program it expects will drive about half of the margin expansion it is chasing.

The Canadian provider of factory automation systems said it initiated a roughly 18-month program to transform fixed costs, the first phase of which will focus on Europe where it will consolidate come of its facilities and transfer select capabilities to other locations.

The effort aims to align ATS's footprint and capacity with customer needs, it said.

The Cambridge, Ontario, company said the program is expected to represent about 50% of the margin expansion needed to hit a long-term adjusted earnings margin from its operations of 15%.

The first phase of its cost cutting efforts are projects to cut annual costs by about C$20 million (US$14.3 million). It said the program isn't intended to alter the company's strategic focus or the end markets it serves.

ATS was squeezed in the latest quarter by the timing on some customer deal that it anticipated and which it now projects will shift into future quarters. It said it has seen encouraging signs across parts of its business, but the delays influence the mix and volume of revenue growth in fiscal 2027 and temporarily reduced its order backlog available for near-term work.

Achieving modest organic revenue growth in 2027 will depend on stronger order bookings activity over the balance of the year, it said.

ATS swung to a loss of C$300,000 in fiscal first quarter from income of C$24.3 million a year earlier.

Adjusted earnings before interest, taxes, depreciation and amortization fell 8.5% to C$92.9 million. And its adjusted Ebitda margin narrowed slightly to 13.3% from last year's 13.8%.

Revenue fell 5.8% in the three months to June 28 to C$693.7 million.

ATS said order bookings for the quarter stood at C$656 million, down from C$693 million in the same period last year. The order backlog at the end of the quarter stood at C$1.89 billion, 8.7% lower than at the end of June.