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Brooks Automation Reports Fiscal Third Quarter of 2015 Ended June 30, 2015 Results

20:00 EDT 5 Aug 2015 | Globe Newswire

CHELMSFORD, Mass., Aug. 06, 2015 (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 third quarter ended June 30, 2015.

Fiscal Third Quarter of 2015 Financial and Operational Highlights:

  • Revenue was $144.9 million;
  • Total order bookings were $151.7 million;
  • GAAP Net Income was $7.7 million with diluted EPS of $0.11;
  • Non-GAAP Net Income was $10.3 million with diluted EPS of $0.15;
  • Operating cash flow was $16.5 million;
  • Total of Cash, Cash Equivalents, and Marketable Securities, as of June 30, was $214.6 million or $3.13 per Diluted Share with no bank debt.

Summary of GAAP and Non-GAAP Earnings

  
 Quarter Ended
 June 30, March 31, June 30,
Dollars in thousands, except per share data2015 2015 2014
GAAP net income attributable to Brooks Automation, Inc.$7,681  $2,711  $24,476 
GAAP diluted earnings per share$0.11  $0.04  $0.36 
      
Non-GAAP net income attributable to Brooks Automation, Inc.$10,277  $5,429  $3,602 
Non-GAAP diluted earnings per share$0.15  $0.08  $0.05 
            

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

Management Comments
"Our performance in the quarter demonstrates the strength of our Product Solutions business.  As the Semi front-end manufacturers implement each new project, we have seen increasing reliance on Brooks’ vacuum and contamination control technology,” stated Dr. Steve Schwartz, Chief Executive Officer of Brooks. “We have driven gross margins back to our expected levels as a result of operational improvements and continued cost reductions.  In our Life Science Systems segment we made significant strides in the planned restructuring of the sample stores manufacturing and the build-out of the FluidX consumables and instruments team.  Most notable for the future in sample management, the team is well positioned to ship the first automated stores in the -150°C Cryogenic space.”

GAAP Summary
Revenue increased 4% sequentially to $144.9 million in the third quarter of fiscal 2015, while the gross margin improved 230 basis points to 35.3% and operating expense decreased $2.0 million.  The GAAP net income result was $7.7 million and diluted EPS was $0.11.

Amortization of intangibles, special charges, and one-time items are appropriately included in the GAAP summary of earnings. The impact on earnings of these items is set out in the unaudited table included with this release.

Results of Q3 Fiscal 2015 (Non-GAAP Discussion)

Non-GAAP net income was $10.3 million in the third quarter, resulting in non-GAAP earnings per share of $0.15. This compares to non-GAAP net income of $5.4 million and non-GAAP EPS of $0.08 in the prior quarter.

As noted above, revenue for the third fiscal quarter of 2015 was $144.9 million, up 4% compared to the second fiscal quarter of 2015. Product Solutions revenue grew 6% to $104.5 million as sales increased in our automation, contamination control solutions, cryo pump, and Polycold offerings.  The primary market drivers of sales were demand for vacuum and atmospheric systems for advanced packaging, as well as the increased need for contamination control in the leading technology fab lines.  The Global Services revenue increased 3% to $23.6 million, while the Life Science Systems revenue declined 4% to $16.8 million.

Adjusted gross margin, which excludes amortization and purchase accounting impacts, was 36.2% in the quarter, up from 34.0% in the prior quarter. The Product Solutions adjusted gross margin was 37.3% in the third quarter compared to 35.1% in the prior period.  The gross margin improvement was primarily driven by improved cost controls, while also benefiting from product mix and higher volumes. The Life Science Systems adjusted gross margin was 30.2% compared to 30.7% in the prior quarter. The Global Services adjusted gross margin was 35.6% in the third quarter compared to 31.5% in the prior quarter. This increase was primarily due to reduced cost of revenue due to a more favorable mix of repair services performed in the quarter. In summary, the total adjusted gross profit increase of $5.2 million includes an increase of $5.5 million in the Product Solutions and Global Services segments on higher revenue with improved margins, and a decrease of $0.3 million from Life Science Systems segment on lower revenue.

Total order bookings in the third quarter were $151.7 million compared to $135.0 million in the second quarter. The Life Science Systems business had $13.8 million of new orders in the third quarter, bringing total backlog to $44 million and 12-month backlog to $34 million. Bookings for the semiconductor business in the Product Solutions and Global Services segments totaled $137.9 million, compared to $121.1 million in the second quarter.

Non-GAAP operating expense of $38.7 million decreased 4% sequentially due to reduced G&A and stock compensation expense.

Other income was $0.6 million in the third quarter, compared to $1.3 million in the second quarter.  The decrease was driven by fewer gains recognized related to foreign exchange.

Adjusted EBITDA in the quarter was $20.0 million compared to $14.8 million in the second quarter. Cash flow from operations for the third quarter was $16.5 million, compared to $1.9 million in the second quarter.  Cash flow in the quarter benefited from the improved adjusted EBITDA while working capital was reduced modestly.  The Company's cash, cash equivalents, and marketable securities increased $7.5 million in the third quarter to $214.6 million.

Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on September 25, 2015 to stockholders of record on September 4, 2015. 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 Fourth Fiscal Quarter of Fiscal 2015
The Company announced revenue and earnings guidance for the fourth quarter of fiscal 2015. Revenue is expected to be in the range of $140 million to $146 million. Non-GAAP diluted earnings per share is expected to be in the range of $0.10 to $0.14.

Conference Call
Brooks management will webcast its third quarter earnings conference call today at 4:30 p.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 800-747-0367 (US & Canada only) or 212-231-2926 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 and, through product development initiatives and strategic business acquisitions, has expanded offerings to meet the needs of customers in the life sciences industry, analytical & research markets and clean energy solutions. Brooks is headquartered in Chelmsford, MA, with direct 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 statements regarding our revenue and operating margin expectations, our ability to develop further our business in new and adjacent markets, and our ability to achieve financial success in the future. Factors that could cause results to differ from our expectations include the following: 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; continuing uncertainties in global political and economic conditions, and other factors and other risks 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 BALANCE SHEETS
(unaudited)
(In thousands, except share and per share data)
 
 June
30,
 2015
 September 30,
 2014
Assets   
Current assets   
Cash and cash equivalents$79,670  $94,114 
Marketable securities61,555  68,130 
Accounts receivable, net100,973  80,106 
Inventories95,167  93,567 
Deferred tax assets18,990  19,009 
Prepaid expenses and other current assets14,488  19,387 
Total current assets370,843  374,313 
Property, plant and equipment, net46,277  50,183 
Long-term marketable securities73,404  83,212 
Long-term deferred tax assets68,603  67,563 
Goodwill118,257  109,501 
Intangible assets, net56,771  59,550 
Equity method investments26,760  28,944 
Other assets9,458  4,772 
Total assets$770,373  $778,038 
Liabilities and equity   
Current liabilities   
Accounts payable$47,145  $33,740 
Capital lease obligation881  881 
Deferred revenue22,614  26,279 
Accrued warranty and retrofit costs6,184  6,499 
Accrued compensation and benefits19,709  21,663 
Accrued restructuring costs2,661  3,475 
Accrued income taxes payable4,012  1,808 
Deferred tax liabilities339  808 
Accrued expenses and other current liabilities15,617  18,688 
Total current liabilities119,162  113,841 
Long-term capital lease obligation7,049  7,417 
Long-term tax reserves3,947  5,708 
Long-term deferred tax liabilities3,268  2,567 
Long-term pension liability2,416  1,774 
Other long-term liabilities3,305  3,842 
Total liabilities139,147  135,149 
Commitments and contingencies   
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, 80,951,970 shares issued and 67,490,101 shares outstanding at June 30, 2015, 80,375,777 shares issued and 66,913,908 shares outstanding at September 30, 2014810  804 
Additional paid-in capital1,842,773  1,834,619 
Accumulated other comprehensive income8,452  15,687 
Treasury stock at cost, 13,461,869 shares(200,956) (200,956)
Accumulated deficit(1,019,853) (1,007,265)
Total equity631,226  642,889 
Total liabilities and equity$770,373  $778,038 


 
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
 
 Three Months Ended
June 30,
 Nine Months Ended
June 30,
 2015 2014 2015 2014
Revenue       
Product$120,816  $93,223  $336,941  $288,887 
Services24,078  24,136  70,002  71,444 
Total revenue144,894  117,359  $406,943  $360,331 
Cost of revenue       
Product79,721  59,985  228,989  185,507 
Services13,986  16,628  41,654  48,889 
Total cost of revenue93,707  76,613  270,643  234,396 
Gross profit51,187  40,746  136,300  125,935 
Operating expenses       
Research and development12,834  13,494  39,001  38,538 
Selling, general and administrative27,825  30,040  86,845  84,812 
Restructuring and other charges358  3,122  3,711  4,641 
Total operating expenses41,017  46,656  129,557  127,991 
Operating income (loss)10,170  (5,910) 6,743  (2,056)
Interest income199  181  678  685 
Interest expense(100) (101) (300) (101)
Other income, net460  157  2,640  472 
Income (loss) before income taxes and equity in earnings (losses) of equity method investments10,729  (5,673) 9,761  (1,000)
Income tax provision (benefit)3,340  (2,838) 1,790  (928)
Income (loss) before equity in earnings (losses) of equity method investments7,389  (2,835) 7,971  (72)
Equity in earnings (losses) of equity method investments292  71  (313) 1,330 
Income (loss) from continuing operations7,681  (2,764) 7,658  1,258 
Income from discontinued operations, net of tax  27,263    30,002 
Net income7,681  24,499  7,658  31,260 
Net income attributable to noncontrolling interests  (23)   (147)
Net income attributable to Brooks Automation, Inc.$7,681  $24,476  $7,658  $31,113 
Basic net income (loss) per share attributable to Brooks Automation, Inc. common stockholders:       
Net income (loss) from continuing operations$0.11  $(0.04) $0.11  $0.02 
Net income from discontinued operations, net of tax  0.41    0.45 
Basic net income per share attributable to Brooks Automation, Inc.$0.11  $0.37  $0.11  $0.47 
Diluted net income (loss) per share attributable to Brooks Automation, Inc. common stockholders:       
Net income (loss) from continuing operations$0.11  $(0.04) $0.11  $0.02 
Net income from discontinued operations, net of tax  0.40    0.44 
Diluted net income per share attributable to Brooks Automation, Inc.$0.11  $0.36  $0.11  $0.46 
Dividend declared per share$0.10  $0.08  $0.30  $0.24 
        
Shares used in computing earnings (loss) per share:       
Basic67,454  66,751  67,321  66,583 
Diluted68,571  67,653  68,520  67,528 


 
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
 
 Nine Months Ended
June 30,
 2015 2014
Cash flows from operating activities   
Net income$7,658  $31,260 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization18,929  17,252 
Impairment of intangible assets  398 
Impairment of other assets  2,621 
Stock-based compensation9,510  8,774 
Amortization of premium on marketable securities917  896 
Undistributed losses (earnings) of equity method investments313  (1,330)
Deferred income tax provision (benefit)(2,262) 1,115 
Gain on disposal of businesses  (27,444)
(Gain) loss on disposal of long-lived assets(4) 52 
Changes in operating assets and liabilities, net of acquisitions and disposals:   
Accounts receivable(19,070) 10,416 
Inventories(1,519) 1,150 
Prepaid expenses and other current assets(4,881) (3,612)
Accounts payable11,600  (15,712)
Deferred revenue(2,339) 13,243 
Accrued warranty and retrofit costs(320) (820)
Accrued compensation and benefits(1,907) 5,484 
Accrued restructuring costs(660) 2,542 
Accrued expenses and other current liabilities5,506  (5,947)
Net cash provided by operating activities21,471  40,338 
Cash flows from investing activities   
Purchases of property, plant and equipment(5,945) (3,384)
Purchases of marketable securities(58,991) (128,135)
Sales and maturities of marketable securities74,515  89,579 
Proceeds from divestitures  85,369 
Acquisitions, net of cash acquired(17,257) (37,832)
Proceeds from sales of property, plant and equipment6   
Purchases of other investments(5,000)  
Decreases in restricted cash  177 
Net cash (used in) provided by investing activities(12,672) 5,774 
Cash flows from financing activities   
Proceeds from issuance of common stock, net of issuance costs867  967 
Principal repayments of capital lease obligations(368)  
Common stock dividends paid(20,229) (16,144)
Net cash used in financing activities(19,730) (15,177)
Effects of exchange rate changes on cash and cash equivalents(3,513) 1,641 
Net (decrease) increase in cash and cash equivalents(14,444) 32,576 
Cash and cash equivalents, beginning of period94,114  82,971 
Cash and cash equivalents, end of period$79,670  $115,547 
    
Supplemental disclosure of non-cash investing and financing activities:   
Acquisition of buildings and land through capital lease$  $8,537 
        

Notes on Non-GAAP Financial Measures:
The information in this press release is for: internal managerial purposes; when publicly providing guidance on future results; and as a means to evaluate period-to-period comparisons. 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 believes these financial measures provide an additional way of viewing aspects of our operations, that, when viewed with our GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of our business. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and not rely on any single measure.

The press release includes financial measures which exclude the effects of special charges such as restructuring charges and acquisition related charges. Management believes these measures are useful to investors because it eliminates accounting charges that do not reflect Brooks' day-to-day operations. Tables reconciling GAAP to the non-GAAP measures are presented below.

          
     Quarter Ended    
 June 30, 2015 March 31, 2015 June 30, 2014
Dollars in thousands, except per share data$ Per Diluted Share $ Per Diluted Share $ Per Diluted Share
Net income attributable to Brooks Automation, Inc.$7,681  0.11  $2,711  $0.04  $24,476  $0.36 
Income from discontinued operations, net of tax        27,263  0.40 
Net income (loss) attributable to continuing operations7,681  0.11  2,711  0.04  (2,787) (0.04)
Adjustments, net of tax:           
Purchase accounting impact on inventory and contracts acquired        99  0.00 
Amortization of intangible assets2,222  0.03  2,219  0.03  1,850  0.03 
Impairment of note receivable        1,704  0.03 
Restructuring charges261  0.00  457  0.01  2,126  0.03 
Inventory write-downs related to restructuring programs        210  0.00 
Liquidation costs due to dissolution of joint venture69  0.00         
Merger costs44  0.00  42  0.00  400  0.01 
Non-GAAP net income attributable to Brooks Automation, Inc.10,277  0.15  5,429  0.08  3,602  0.05 
Stock-based compensation2,402  0.04  3,625  0.05  2,258  0.03 
Non-GAAP net income attributable to Brooks Automation, Inc. - excluding stock-based compensation$12,679  0.18  $9,054  $0.13  $5,860  $0.09 
                       


 Nine Months Ended
 June 30, 2015 June 30, 2014
Dollars in thousands, except per share data$ Per Diluted 
Share
 $ Per Diluted
Share
Net income attributable to Brooks Automation, Inc.$7,658  $0.11  $31,113  $0.46 
Income from discontinued operations, net of tax    30,002  0.44 
Net income attributable to continuing operations7,658  0.11  1,111  0.02 
Adjustments, net of tax:       
Purchase accounting impact on inventory and contracts acquired1,164  0.02  328  0.00 
Amortization of intangible assets6,662  0.10  5,147  0.08 
Impairment of note receivable681  0.01  1,704  0.03 
Impairment of intangible assets    259  0.00 
Restructuring charges2,504  0.04  3,160  0.05 
Inventory write-downs related to restructuring programs    210  0.00 
Liquidation costs due to dissolution of joint venture69  0.00     
Merger costs411  0.01  521  0.01 
Non-GAAP net income attributable to Brooks Automation, Inc.19,149  0.28  12,440  $0.18 
Stock-based compensation9,510  0.14  8,776  $0.13 
Non-GAAP net income attributable to Brooks Automation, Inc. - excluding stock-based compensation$28,659  $0.42  $21,216  $0.31 
                


 Quarter Ended
 June 30, 2015 March 31, 2015 June 30, 2014
Dollars in thousands$ % $ % $ %
Gross profit/gross margin percentage$51,187  35.3% $46,025  33.0% $40,746  34.7%
Adjustments:           
Amortization of intangible assets1,299  0.9% 1,299  0.9% 1,142  1.0%
Purchase accounting impact on inventory and contracts acquired        138  0.1%
Inventory write-downs related to restructuring programs        310  0.3%
Adjusted gross profit/gross margin percentage$52,486  36.2% $47,324  34.0% $42,336  36.1%
                     


 Nine Months Ended
 June 30, 2015 June 30, 2014
Dollars in thousands$ % $ %
Gross profit/gross margin percentage$136,300  33.5% $125,935  34.9%
Adjustments:       
Amortization of intangible assets3,903  1.0% 3,173  0.9%
Impairment of intangible assets    398  0.1%
Purchase accounting impact on inventory and contracts acquired1,511  0.4% 490  0.1%
Inventory write-downs related to restructuring programs    310  0.1%
Adjusted gross profit/gross margin percentage$141,714  34.8% $130,306  36.2%
              


 Quarter Ended Nine Months Ended
 June 30, March 31, June 30, June 30, June 30,
Dollars in thousands2015 2015 2014 2015 2014
Net income attributable to Brooks Automation, Inc.$7,681  $2,711  $24,476  $7,658  $31,113 
Adjustments:         
Less: Interest income(199) (228) (181) (678) (685)
Add: Interest expense100  98  101  300  101 
Add: Income tax provision (benefit)3,340  1,560  (2,838) 1,790  (928)
Add: Depreciation2,979  3,117  3,294  9,281  9,389 
Add: Amortization of completed technology1,299  1,299  1,142  3,903  3,173 
Add: Amortization of customer relationships and acquired intangible assets1,917  1,914  1,606  5,743  4,522 
EBITDA$17,117  $10,471  $27,600  $27,997  $46,685 
                    


 Quarter Ended Nine Months Ended
 June 30, March 31, June 30, June 30, June 30,
Dollars in thousands2015 2015 2014 2015 2014
EBITDA$17,117  $10,471  $27,600  $27,997  $46,685 
Adjustments:         
Less: Income from discontinued operations, net of tax    (27,263)   (30,002)
Add: Impairment of completed technology        398 
Add: Impairment of note receivable    2,621    2,621 
Add: Stock-based compensation2,402  3,625  2,258  9,510  8,776 
Add: Restructuring charges358  685  3,122  3,711  4,641 
Add: Inventory write-downs related to restructuring programs    310    310 
Add: Purchase accounting impact on inventory and contracts acquired    138  1,511  490 
Add: Liquidation costs due to dissolution of joint venture69      69   
Add: Merger costs44  64  426  432  607 
Add: Impairment of equity method investments      681   
Adjusted EBITDA$19,990  $14,845  $9,212  $43,911  $34,526 
                    

CONTACT:
Lynne Yassemedis
Brooks Automation, Inc.
978-262-4443
lynne.yassemedis@brooks.com

John Mills
Senior Managing Director
ICR, LLC
310-954-1105
john.mills@icrinc.com

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