Brooks Automation Reports Fourth Quarter Results of Fiscal Year Ended September 30, 2017

Chelmsford, Massachusetts, UNITED STATES


CHELMSFORD, Mass., Nov. 09, 2017 (GLOBE NEWSWIRE) -- Brooks Automation, Inc. (Nasdaq:BRKS), a leading worldwide provider of automation and cryogenic solutions for multiple markets, including semiconductor manufacturing and life sciences, today reported financial results for the fourth quarter of the fiscal year ended September 30, 2017.

Fiscal Fourth Quarter of 2017 Financial and Operational Highlights:

  • Total revenue was $182 million;  15% growth compared to 2016 Q4;
  • Life Sciences revenue was $44 million;  39% growth vs. 2016 Q4;
  • Semiconductor revenue was $138 million; 10% growth vs. 2016 Q4;
  • GAAP Net Income was $17 million with diluted EPS of $0.25;
  • Non-GAAP Net Income was $25 million with diluted EPS of $0.35; and
  • Cash flow from operations was $35 million.

Fiscal Year 2017 Financial and Operational Highlights:

  • Total revenue was $693 million;  24% growth compared to 2016, with 22% organic growth;
  • Life Sciences revenue was $149 million; 38% growth, with 27% organic growth;
  • Semiconductor revenue was $544 million;  20% growth, with all being organic growth;
  • GAAP Net Income was $63 million with diluted EPS of $0.89;
  • Non-GAAP Net Income was $87 million with diluted EPS of $1.23; and
  • Cash flow from operations was $96 million.


Summary of GAAP and Non-GAAP Earnings
 
 Quarter Ended
 September 30,  June 30,  September 30, 
Dollars in thousands, except per share data2017 2017 2016
GAAP net income$ 17,386 $ 17,350 $ 10,547
GAAP diluted earnings per share$ 0.25 $ 0.25 $ 0.15
         
Non-GAAP net income$ 24,522 $ 25,353 $ 15,324
Non-GAAP diluted earnings per share$ 0.35 $ 0.36 $ 0.22
         

A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures follows the consolidated statements of operations, balance sheets and statements of cash flows included in this release.

Management Comments
“Our fiscal 2017 has been a year filled with key milestones and the fourth quarter was no exception. We achieved another record for gross margins in our Semiconductor segment and for the Company, while we continued to expand our Life Sciences business,” commented Steve Schwartz, CEO of Brooks Automation.  “Life Sciences revenue grew 20% quarter over quarter to comprise 24% of our fourth quarter revenue. In early October we purchased 4titude, which will complement our existing Life Sciences business and continue to drive our Life Science’s revenue growth.  For the full fiscal year 2017, we delivered 24% top-line growth and 163% adjusted EPS growth with both segments contributing materially to this solid performance.  We finished the year in a strong position and we are poised for continued momentum in fiscal year 2018.”

GAAP Summary of Q4 Fiscal 2017
Revenue for the fourth quarter of fiscal 2017 was $182 million, flat compared to the third quarter of fiscal 2017 and 15% higher than the fourth fiscal quarter of 2016.  The flat sequential revenue reflected growth of 20% in the Brooks Life Sciences Systems segment offset by an expected 5% decline in the Brooks Semiconductor Solutions Group segment.  The year-over-year 15% growth was driven by 39% growth in Life Sciences and 10% growth in Semiconductor Solutions.  Total gross margin was 40.9% which improved 150 basis points from the third quarter of fiscal 2017.  Operating expenses of $57 million increased 8%, or $4 million, from the previous quarter, driven primarily by higher non-cash stock incentive accruals and increased R&D costs.  In the fourth quarter, the Company incurred $0.6 million of restructuring charges, compared to $0.8 million in the third quarter. GAAP net income in the quarter was $17 million and diluted earnings per share was $0.25.

The amortization of intangible assets, restructuring charges, impact of purchase price accounting adjustments, charges related to M&A and special charges are appropriately included in the GAAP summary of earnings discussed above. The impact on earnings of such non-GAAP adjustments is referenced in the unaudited table included within this press release.

In the following analysis of the non-GAAP results, Brooks adjusted the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A to provide investors better perspective on the results of operations, which the Company believes is more comparable to the similar analysis provided by its peers. Brooks also excludes special charges or gains, such as impairment losses, gains or losses from the sale of assets, as well as other gains and charges that are assessed to not be representative of the normal operations of the business. Brooks currently includes a valuation allowance reserve against U.S. deferred tax assets in its GAAP results. In assessing the appropriate tax rate for the non-GAAP results, the Company evaluated the adjustments discussed above and concluded it was appropriate to maintain the valuation allowance reserve in deriving the non-GAAP tax rate.

Discussion of Non-GAAP Results
Non-GAAP net income was $25 million in the fourth quarter, resulting in non-GAAP earnings per share of $0.35. This compares to non-GAAP net income of $25 million and non-GAAP earnings per share of $0.36 in the third quarter of fiscal 2017, and non-GAAP net income of $15 million and non-GAAP earnings per share of $0.22 in the fourth quarter of fiscal 2016.

As noted above, revenue for the fourth fiscal quarter of 2017 was $182 million, flat compared to the third fiscal quarter of 2017.  As projected, the Semiconductor Solutions revenue was 5% lower in the fourth quarter compared to the third quarter, largely driven by lower Contamination Control Solutions sales.  Growth in the Life Sciences segment offset this decline, with revenue growth of $7.2 million or 20% sequentially to $44 million.  Storage services, store systems, cryo systems, and consumables all expanded, contributing $3.7 million of the total growth.  Life Sciences also added $3.5 million of revenue from businesses acquired in the quarter, primarily from the PBMMI storage services business. 

Adjusted gross margin was 41.3% in the fourth quarter, up 130 basis points from the prior quarter.  The Semiconductor Solutions segment adjusted gross margin was 42.3% in the fourth quarter compared to 40.5% in the prior quarter reflecting improved production costs and revenue mix.  The Life Sciences segment adjusted gross margin was 38.2% in the fourth quarter compared to 38.0% in the prior quarter, supported by improved margins in the core systems business.  In summary, the total adjusted gross profit increased by $2.5 million compared to the prior quarter, supported by 20% growth of adjusted gross profit in Life Sciences and approximately flat adjusted gross profit in the Semiconductor segment on lower revenue with higher margins.

Bookings for the Semiconductor Solutions segment in the fourth quarter totaled $142 million, compared to $131 million in the third quarter.  Backlog for the segment finished at $115 million, $4 million above the third quarter ending backlog.  Bookings in the Life Sciences segment totaled $35 million of new contract value in the fourth quarter, compared to $42 million in the third quarter. 

Fourth quarter non-GAAP operating expenses were $49 million, an increase of 10%, or $4.3 million, compared to the third quarter.  The sequential change was driven by a 10% increase in SG&A and a 7% increase in R&D.  Within operating expenses, $2.0 million of the increase was a non-cash charge to the stock compensation accrual for long term incentive plans.

Adjusted EBITDA was $37 million in the fourth quarter, an improvement of $0.8 million, or 2%, compared to the third fiscal quarter.  Cash flow from operations increased from $18 million in the third quarter to $35 million in the fourth quarter, and culminated in $96 million total cash from operations for fiscal 2017.  The Company's balance of cash, cash equivalents, and marketable securities was $104 million as of September 30, 2017 compared to $120 million at the end of the third quarter.  Impacting cash on the balance sheet were dividends paid of $7 million and  cash used for acquisitions of $39 million.

Fiscal Year 2017 Results (non-GAAP discussion)
For fiscal 2017, total revenue increased 24% to $693 million compared to revenue of $560 million for fiscal 2016 with Life Science revenue growth of 38% and Semiconductor Solutions growth of 20%.  Adjusted net income was $87 million, which improved 167% compared to $33 million of adjusted net income in fiscal year 2016.

Subsequent Events
On October 5, 2017, the Company announced the acquisition of 4titude, Ltd., a manufacturer of scientific consumables for biological sample materials used in a variety of genomic analytical applications, for approximately $66 million in cash, subject to customary working capital and other adjustments.  The Company also announced it had secured a seven year $200 million senior secured term loan.  

Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on December 22, 2017 to stockholders of record on December 1, 2017. Future dividend declarations, as well as the record and payment dates for such dividends, are subject to the final determination of the Company's Board of Directors.

Guidance for First Quarter of Fiscal 2018
The Company announced revenue and earnings guidance for the first quarter of fiscal 2018. Revenue is expected to be in the range of $182 million to $188 million. The Company’s newly established debt is estimated to drive $2.2 million of interest expense. Non-GAAP diluted earnings per share is expected to be in the range of $0.27 to $0.32. GAAP diluted earnings per share for the first quarter is expected to be in the range of $0.19 to $0.24, reflecting the impact of amortization, purchase price accounting, charges related to M&A and anticipated restructuring charges.

Conference Call
Brooks management will webcast its fourth quarter earnings conference call today at 8:30 a.m. Eastern Time. During the call, Company management will respond to questions concerning, but not limited to, the Company's financial performance, business conditions and industry outlook. Management's responses could contain information that has not been previously disclosed.

The call will be broadcast live over the Internet and, together with presentation materials referenced on the call, will be hosted at the Investor Relations section of Brooks' website at www.brooks.com, and will be archived online on this website for convenient on-demand replay. In addition, you may call 800-954-0648 (US & Canada only) or 415-226-5357 to listen to the live webcast.
           
About Brooks Automation, Inc.
Brooks is a leading worldwide provider of automation and cryogenic solutions for multiple markets including semiconductor manufacturing and life sciences. Brooks' technologies, engineering competencies and global service capabilities provide customers speed to market and ensure high uptime and rapid response, which equate to superior value in their mission-critical controlled environments.  Since 1978, Brooks has been a leading partner to the global semiconductor manufacturing market as a provider of precision automation and cryogenic vacuum solutions.  Since 2011, Brooks has applied its automation and cryogenics expertise to meet the sample storage needs of customers in the life sciences industry.  Brooks' life sciences offerings include a broad range of products and services for on-site infrastructure for sample management in temperatures of ‑20°C to -150°C, as well as comprehensive outsource service solutions across the complete life cycle of biological samples including collection, transportation, processing, storage, protection, retrieval and disposal.  Brooks is headquartered in Chelmsford, MA, with operations in North America, Europe and Asia. For more information, visit www.brooks.com.

“Safe Harbor Statement” under Section 21E of the Securities Exchange Act of 1934
Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Brooks' financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. These forward-looking statements include, but are not limited to statements about our revenue and earnings expectations, our ability to increase our profitability, our ability to improve or retain our market position, and our ability to deliver financial success in the future. Factors that could cause results to differ from our expectations include the following:  the volatility of the industries the Company serves, particularly the semiconductor industry; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; the timing and effectiveness of cost reduction and cost control measures; price competition; disputes concerning intellectual property; uncertainties in global political and economic conditions, and other factors and other risks, including those that we have described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K, current reports on Form 8-K and our quarterly reports on Form 10-Q. As a result we can provide no assurance that our future results will not be materially different from those projected. Brooks expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based. Brooks undertakes no obligation to update the information contained in this press release.



BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
            
 Three Months Ended Year Ended
 September 30,  September 30, 
 2017  2016  2017  2016 
Revenue           
Products$ 136,940  $ 119,545  $ 533,624  $ 421,783 
Services  44,940    38,008    159,261    138,540 
   Total revenue  181,880    157,553    692,885    560,323 
Cost of revenue           
Products  80,452    75,158    323,812    267,974 
Services  27,063    25,830    101,669    94,268 
   Total cost of revenue  107,515    100,988    425,481    362,242 
Gross profit  74,365    56,565    267,404    198,081 
Operating expenses           
Research and development  12,856    12,335    47,004    51,543 
Selling, general and administrative  43,565    31,594    153,061    130,261 
Restructuring charges  563    2,232    3,226    12,039 
   Total operating expenses  56,984    46,161    203,291    193,843 
Operating income  17,381    10,404    64,113    4,238 
Interest income  32    142    464    452 
Interest expense  (122)   (101)   (408)   (157)
Gain on settlement of equity method investment  —    —    1,847    — 
Other income (expense), net  203    (290)   (645)   (579)
Income before income taxes and equity in earnings of equity method investments  17,494    10,155    65,371    3,954 
Income tax provision  2,240    740    12,140    75,810 
Income (loss) before equity in earnings of equity method investments  15,254    9,415    53,231    (71,856)
Equity in earnings of equity method investments  2,132    1,132    9,381    2,380 
Net income (loss)$ 17,386  $ 10,547  $ 62,612  $ (69,476)
Basic net income (loss) per share$ 0.25  $ 0.15  $ 0.90  $ (1.01)
Diluted net income (loss) per share  0.25    0.15    0.89    (1.01)
Dividend declared per share  0.10    0.10    0.40    0.40 
            
Weighted average shares outstanding used in computing net income (loss) per share:           
Basic  69,808    68,718    69,575    68,507 
Diluted  70,681    69,540    70,485    68,507 
            


BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share and per share data)
      
 September 30,  September 30,
  2017   2016 
Assets     
Current assets     
   Cash and cash equivalents$ 101,622  $ 85,086 
   Marketable securities  28    39 
   Accounts receivable, net  120,828    106,372 
   Inventories  106,395    92,572 
   Prepaid expenses and other current assets  23,138    15,265 
      Total current assets  352,011    299,334 
Property, plant and equipment, net  58,462    54,885 
Long-term marketable securities  2,642    6,096 
Long-term deferred tax assets  1,692    1,982 
Goodwill  233,638    202,138 
Intangible assets, net  83,520    81,843 
Equity method investments  28,593    27,273 
Other assets  6,070    12,354 
      Total assets$ 766,628  $ 685,905 
Liabilities and Stockholders' Equity     
Current liabilities     
Accounts payable$ 49,100  $ 41,128 
Deferred revenue  24,292    14,966 
Accrued warranty and retrofit costs  8,054    6,324 
Accrued compensation and benefits  27,065    21,254 
Accrued restructuring costs  1,708    5,939 
Accrued income taxes payable  11,417    7,554 
Accrued expenses and other current liabilities  25,142    22,628 
      Total current liabilities  146,778    119,793 
Long-term tax reserves  1,687    2,681 
Long-term deferred tax liabilities  3,748    2,913 
Long-term pension liabilities  1,979    2,557 
Other long-term liabilities  4,792    4,271 
      Total liabilities  158,984    132,215 
Stockholders' Equity     
Preferred stock, $0.01 par value- 1,000,000 shares authorized, no shares issued or outstanding  —    
Common stock, $0.01 par value- 125,000,000 shares authorized, 83,294,848 shares issued and 69,832,979 shares outstanding at September 30, 2017, 82,220,270 shares issued and 68,758,401 shares outstanding at  September 30, 2016  833    821 
Additional paid-in capital  1,874,918    1,855,703 
Accumulated other comprehensive income  15,213    15,166 
Treasury stock at cost - 13,461,869 shares  (200,956)   (200,956)
Accumulated deficit  (1,082,364)   (1,117,044)
      Total stockholders' equity  607,644    553,690 
      Total liabilities and stockholders' equity$ 766,628  $ 685,905 


BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
      
 Year Ended
 September 30, 
 2017  2016 
Cash flows from operating activities     
Net income (loss)$ 62,612  $ (69,476)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:     
  Depreciation and amortization  28,149    28,046 
  Gain on settlement of equity method investment  (1,847)   — 
  Impairment of other assets  —    807 
  Stock-based compensation  17,278    11,737 
  Amortization of premium on marketable securities and deferred financing costs  252    339 
  Earnings of equity method investments  (9,381)   (2,380)
  Deferred income tax provision  517    70,273 
  Pension settlement  (259)   — 
  Other gains on disposal of assets  (406)   (41)
  Changes in operating assets and liabilities, net of acquisitions:     
      Accounts receivable  (11,178)   (1,796)
      Inventories  (12,792)   8,565 
      Prepaid expenses and other current assets  (5,829)   (428)
      Accounts payable  7,846    (5,143)
      Deferred revenue  8,049    (3,290)
      Accrued warranty and retrofit costs  1,602    290 
      Accrued compensation and tax withholdings  5,565    (3,234)
      Accrued restructuring costs  (4,241)   3,860 
      Accrued pension costs  (32)   (811)
      Accrued expenses and other current liabilities  10,319    2,229 
            Net cash provided by operating activities  96,224    39,547 
Cash flows from investing activities     
Purchases of property, plant and equipment  (12,677)   (12,848)
Purchases of technology intangibles  (240)   — 
Purchases of marketable securities  —    (12,901)
Sales and maturities of marketable securities  3,590    139,388 
Acquisitions, net of cash acquired  (44,791)   (125,248)
Disbursement for a loan receivable  —    (1,821)
Purchases of other investments  (170)   (250)
Proceeds from sales of property, plant and equipment  100    2,806 
            Net cash used in investing activities  (54,188)   (10,874)
Cash flows from financing activities     
Proceeds from issuance of common stock  2,040    1,888 
Payment of deferred financing costs  (28)   (708)
Proceeds from line of credit  —    366 
Common stock dividends paid  (27,932)   (27,503)
            Net cash used in financing activities  (25,920)   (25,957)
Effects of exchange rate changes on cash and cash equivalents  420    1,648 
Net increase in cash and cash equivalents  16,536    4,364 
Cash and cash equivalents, beginning of period  85,086    80,722 
Cash and cash equivalents, end of period$ 101,622  $ 85,086 


Notes on Non-GAAP Financial Measures:

These financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusted the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as impairment losses, gains and losses from the sale of assets, as well as other gains and charges that are not representative of the normal operations of the business. Brooks currently includes a valuation allowance reserve against U.S. deferred tax assets in its GAAP results. In assessing the appropriate tax rate for non-GAAP results, the Company evaluated the adjustments discussed above and concluded it was appropriate to maintain the valuation allowance reserve in establishing the non-GAAP tax rate. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and not rely on any single measure.

                   
  Quarter Ended
  September 30, 2017 June 30, 2017 September 30, 2016
    per diluted   per diluted   per diluted
Dollars in thousands, except per share data  $ share $ share $ share
GAAP net income $ 17,386  $ 0.25  $ 17,350  $ 0.25  $ 10,547  $ 0.15 
Adjustments:                  
Purchase accounting impact on inventory and contracts acquired   —    —    71    0.00    125    — 
Amortization of intangible assets   4,403    0.06    4,330    0.06    3,826    0.06 
Impairment of other assets   —    —    —    —    807    0.01 
Restructuring charges   563    0.01    828    0.01    2,232    0.03 
Merger costs   3,470    0.05    3,654    0.05    81    — 
Tax effect of adjustments   (1,300)   (0.02)   (880)   (0.01)   (2,293)   (0.03)
Non-GAAP adjusted net income   24,522    0.35    25,353    0.36    15,324    0.22 
  Stock based compensation, pre-tax   6,197       4,197       3,532    
  Tax rate   13 %     15 %     16 %  
Stock-based compensation, net of tax   5,416    0.08    3,559    0.05    2,967    0.04 
Non-GAAP adjusted net income - excluding stock-based compensation $ 29,938  $ 0.42  $ 28,912  $ 0.41  $ 18,291  $ 0.26 
                   
Shares used in computing non-GAAP diluted net income per share      70,681       70,405       69,540 


                   
        Year Ended
        September 30, 2017 September 30, 2016
          per diluted   per diluted
Dollars in thousands, except per share data        $ share $ share
GAAP net income (loss)       $ 62,612  $ 0.89  $ (69,476) $ (1.01)
Adjustments:                  
Purchase accounting impact on inventory and contracts acquired         523    0.01    624    0.01 
Amortization of intangible assets         17,146    0.24    14,979    0.22 
Impairment of other assets               807    0.01 
Restructuring charges         3,226    0.05    12,039    0.17 
Gain on sale of a building         —       (56)   — 
Merger costs         8,309    0.12    3,384    0.05 
Less: Fair value adjustment of equity investment         (1,847)   (0.03)   —    — 
Add: True-up of BioCision stub period adjustment         203       —    — 
Establishment of valuation allowance against deferred tax assets               79,340    1.14 
Tax effect of adjustments         (3,157)   (0.04)   (9,016)   (0.13)
Non-GAAP adjusted net income         87,015    1.23    32,625    0.47 
Stock-based compensation, pre-tax         17,278       11,737    
Tax rate         15 %     47 %  
Stock-based compensation, net of tax         14,686  $ 0.21    6,232    0.09 
Non-GAAP adjusted net income - excluding stock-based compensation       $ 101,701  $ 1.44  $ 38,857  $ 0.56 
                   
Shares used in computing non-GAAP diluted net income per share            70,485       69,367 


                   
  Quarter Ended 
  September 30, 2017 June 30, 2017 September 30, 2016
Dollars in thousands $  $  $ 
GAAP gross profit/gross margin percentage $ 74,365 40.9% $ 71,572 39.4% $ 56,565 35.9
Adjustments:                  
Amortization of completed technology   810 0.4   1,051 0.6   1,083 0.7
Purchase accounting impact on inventory and contracts acquired   — 0.0   71 0.0   125 0.1
Non-GAAP adjusted gross profit/gross margin percentage $ 75,175 41.3 $ 72,694 40.0 $ 57,773 36.7


                   
        Year Ended
        September 30, 2017 September 30, 2016
Dollars in thousands       $   $ 
GAAP gross profit/gross margin percentage       $ 267,404 38.6 $ 198,081 35.4
Adjustments:                  
Amortization of completed technology         3,915 0.6   4,180 0.7
Purchase accounting impact on inventory and contracts acquired         523 0.1   624 0.1
Non-GAAP adjusted gross profit/gross margin percentage       $ 271,842 39.2 $ 202,885 36.2


                
  Quarter Ended Year Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
Dollars in thousands 2017  2017  2016  2017  2016 
GAAP net income (loss) $ 17,386  $ 17,350  $ 10,547  $ 62,612  $ (69,476)
Adjustments:               
Less: Interest income   (32)   (137)   (142)   (464)   (452)
Add: Interest expense   122    93    101    408    157 
Add: Income tax provision   2,240    3,680    740    12,140    75,810 
Add: Depreciation   3,096    2,589    2,900    11,003    13,067 
Add: Amortization of completed technology   810    1,051    1,083    3,915    4,180 
Add: Amortization of customer relationships and acquired intangible assets   3,593    3,279    2,743    13,231    10,799 
Earnings before interest, taxes, depreciation and amortization $ 27,215  $ 27,905  $ 17,972  $ 102,845  $ 34,085 


                
  Quarter Ended Year Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
Dollars in thousands 2017 2017 2016 2017  2016 
Earnings before interest, taxes, depreciation and amortization $ 27,215 $ 27,905 $ 17,972 $ 102,845  $ 34,085 
Adjustments:               
Add: Impairment of other assets   —   —  807   —   807 
Less: Fair value adjustment of equity method investment   —   —     (1,847)   
Add: Stock-based compensation   6,197   4,197   3,532   17,278    11,737 
Add: Restructuring charges   563   828   2,232   3,226    12,039 
Add: BioCision stub period adjustment   —   —     203    
Add: Purchase accounting impact on inventory and contracts acquired   —   71   125   523    624 
Less: Gain on sale of a building       —      (56)
Add: Merger costs   3,470   3,654   81   8,309    3,384 
Adjusted earnings before interest, taxes, depreciation and amortization $ 37,445 $ 36,655 $ 24,749 $ 130,537  $ 62,620 


                
  Quarter Ended Year Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
Dollars in thousands 2017  2017  2016  2017  2016 
GAAP selling, general and administrative expenses $ 43,565  $ 40,016  $ 31,594  $ 153,061  $ 130,261 
Adjustments:               
Less: Amortization of customer relationships and acquired intangible assets   (3,593)   (3,279)   (2,743)   (13,231)   (10,799)
Less: Impairment of other assets   —    —    (807)   —    (807)
Less: Merger costs   (3,470)   (3,654)   (81)   (8,309)   (3,384)
Non-GAAP adjusted selling, general and administrative expenses $ 36,502  $ 33,083  $ 27,963  $ 131,521  $ 115,271 
Research and development expenses $ 12,856  $ 11,958  $ 12,335  $ 47,004  $ 51,543 
Non-GAAP adjusted operating expenses $ 49,358  $ 45,041  $ 40,298  $ 178,525  $ 166,814 


                
  Quarter Ended Year Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
Dollars in thousands 2017 2017 2016 2017 2016
GAAP equity in earnings of equity method investments $ 2,132 $ 2,530 $ 1,132 $ 9,381 $ 2,380
Adjustments:               
Add: BioCision stub period adjustment   —       203  
Non-GAAP adjusted equity in earnings of equity method investments $ 2,132 $ 2,530 $ 1,132 $ 9,584 $ 2,380


                   
  Brooks Semiconductor Solutions Group Brooks Life Science Systems
  Quarter Ended Quarter Ended
  September 30,  June 30,  September 30,  September 30,  June 30,  September 30, 
Dollars in thousands 2017 2017 2016 2017 2017 2016
GAAP gross profit $ 57,775 $ 58,083 $ 44,513 $ 16,590 $ 13,489 $ 12,052
Adjustments:                  
Amortization of completed technology   627   626   711   183   425   372
Purchase accounting impact on inventory and contracts acquired   —   —   125   —   71   —
Non-GAAP adjusted gross profit $ 58,402 $ 58,709 $ 45,349 $ 16,773 $ 13,985 $ 12,424


             
  Brooks Semiconductor Solutions Group Brooks Life Science Systems
  Year Ended  Year Ended
  September 30,  September 30,  September 30,  September 30, 
Dollars in thousands 2017 2016 2017 2016
GAAP gross profit $ 212,652 $ 159,018 $ 54,752 $ 39,063
Adjustments:            
Amortization of completed technology   2,506   2,715   1,409   1,465
Purchase accounting impact on inventory and contracts acquired   125   624   398  
Non-GAAP adjusted gross profit $ 215,283 $ 162,357 $ 56,559 $ 40,528


                    
  Brooks Semiconductor Solutions Group Brooks Life Science Systems 
  Quarter Ended Quarter Ended 
  September 30,  June 30,  September 30,  September 30,  June 30,  September 30,  
Dollars in thousands 2017 2017 2016 2017 2017 2016 
GAAP gross margin   41.9%  40.1%  35.4%  37.8%  36.7%  38.1%
Adjustments:                   
Amortization of completed technology   0.5%  0.4%  0.6%  0.4%  1.2%  1.2%
Purchase accounting impact on inventory and contracts acquired   —   —   0.1%  -%  0.2%  - 
Non-GAAP adjusted gross margin   42.3%  40.5%  36.0%  38.2%  38.0%  39.2%


             
  Brooks Semiconductor Solutions Group
  Brooks Life Science Systems 
  Year Ended
  Year Ended  
  September 30,   September 30,   September 30,   September 30,   
Dollars in thousands 2017
  2016 
  2017 
  2016 
 
GAAP gross margin  39.1 %  35.2  36.8 36.1
Adjustments:            
Amortization of completed technology  0.5  0.6  0.9  1.4
Purchase accounting impact on inventory and contracts acquired  — %  0.1  0.3  —
Non-GAAP adjusted gross margin  39.6 %  35.9  38.0  37.5


                            
  Brooks Semiconductor Solutions Group Brooks Life Science Systems Total Segments
  Quarter Ended Quarter Ended Quarter Ended
  September 30,  June 30,  September 30,  September 30,  June 30,  September 30,  September 30,  June 30,  September 30, 
Dollars in thousands 2017 2017 2016 2017 2017 2016 2017 2017 2016
GAAP operating profit $ 23,154 $ 26,188 $ 15,208 $ 2,160 $ 1,134 $ 1,104 $ 25,314 $ 27,322 $ 16,312
Adjustments:                           
Amortization of completed technology   627   626   711   183   425   372   810   1,051   1,083
Purchase accounting impact on inventory and contracts acquired   —   —   125   —   71   —   —   71   125
Non-GAAP adjusted operating profit $ 23,781 $ 26,814 $ 16,044 $ 2,343 $ 1,630 $ 1,476 $ 26,124 $ 28,444 $ 17,520


                            
  Total Segments Corporate Total
  Quarter Ended Quarter Ended Quarter Ended
  September 30,  June 30,  September 30,  September 30,  June 30,  September 30,  September 30,  June 30,  September 30, 
Dollars in thousands 2017 2017 2016 2017  2017  2016  2017 2017 2016
GAAP operating profit (loss) $ 25,314 $ 27,322 $ 16,312 $ (7,933) $ (8,552) $ (5,908) $ 17,381 $ 18,770 $ 10,404
Adjustments:                           
Amortization of completed technology   810   1,051   1,083   —    —    —    810   1,051   1,083
Amortization of customer relationships and acquired intangible assets   —   —   —   3,593    3,279    2,743    3,593   3,279   2,743
Restructuring charges   —   —   —   563    828    2,232    563   828   2,232
Purchase accounting impact on inventory and contracts acquired   —   71   125   —    —    —    —   71   125
Merger costs   —   —   —   3,470    3,654    81    3,470   3,654   81
Non-GAAP adjusted operating profit (loss) $ 26,124 $ 28,444 $ 17,520 $ (307) $ (791) $ (852) $ 25,817 $ 27,653 $ 16,668


                   
  Brooks Semiconductor Solutions Group Brooks Life Science Systems Total Segments
  Year Ended  Year Ended  Year Ended
Dollars in thousands September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
GAAP operating profit (loss) $ 86,716 $ 37,926 $ 4,695 $ (6,451) $ 91,411 $ 31,476
Adjustments:                  
Amortization of completed technology   2,506   2,715   1,409   1,465    3,915   4,180
Purchase accounting impact on inventory and contracts acquired   125   624   398   —    523   624
Non-GAAP adjusted operating profit (loss) $ 89,347 $ 41,265 $ 6,502 $ (4,986) $ 95,849 $ 36,280


                   
  Total Segments Corporate Total
  Year Ended  Year Ended  Year Ended
Dollars in thousands September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
GAAP operating profit (loss) $ 91,411 $ 31,476 $ (27,298) $ (27,238) $ 64,113 $ 4,238
Adjustments:                  
Amortization of completed technology   3,915   4,180   —    —    3,915   4,180
Amortization of customer relationships and acquired intangible assets   —   —   13,231    10,799    13,231   10,799
Restructuring charges   —   —   3,226    12,039    3,226   12,039
Purchase accounting impact on inventory and contracts acquired   523   624   —    —    523   624
Merger costs   —   —   8,309    3,384    8,309   3,384
Non-GAAP adjusted operating profit (loss) $ 95,849 $ 36,280 $ (2,532) $ (1,016) $ 93,317 $ 35,264


John Mills
Partner
ICR, LLC
646.277.1254
john.mills@icrinc.com

 


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