UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
(Mark One)
| [X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the quarterly period ended: June 30, 2003 | ||
| OR | ||
| [ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the transition period from to |
Commission File Number 0-25434
BROOKS AUTOMATION, INC.
| Delaware | 04-3040660 | |
|
|
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| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
15 Elizabeth Drive
Chelmsford, Massachusetts
(Address of principal executive offices)
01824
(Zip Code)
Registrant’s telephone number, including area code: (978) 262-2400
Brooks-PRI Automation, Inc.
(Former Name, Former Address and Former Fiscal Year if Changed Since Last
Report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No __
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes X No __
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practical date, August 1, 2003:
Common stock, $0.01 par value 37,078,798 shares
BROOKS AUTOMATION, INC.
INDEX
| PAGE NUMBER | |||||||||
| PART I. | FINANCIAL INFORMATION |
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| Item 1. | Consolidated Financial Statements |
||||||||
Consolidated Balance Sheets as of June 30, 2003 (unaudited)
and September 30, 2002 |
3 | ||||||||
Consolidated Statements of Operations for the three and nine months
ended June 30, 2003 and 2002 (unaudited) |
4 | ||||||||
Consolidated Statements of Cash Flows for the nine months
ended June 30, 2003 and 2002 (unaudited) |
5 | ||||||||
Notes to Consolidated Financial Statements (unaudited) |
6 | ||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and
Results of Operations |
20 | |||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
35 | |||||||
| Item 4. | Controls and Procedures |
36 | |||||||
| PART II. | OTHER INFORMATION |
||||||||
| Item 6. | Exhibits and Reports on Form 8-K |
37 | |||||||
| Signatures | 38 | ||||||||
| Certifications | |||||||||
2
BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
| June 30, | September 30, | |||||||||||
| 2003 | 2002 | |||||||||||
| (unaudited) | ||||||||||||
| (In thousands, except share and per share data) | ||||||||||||
Assets |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
$ | 137,713 | $ | 125,297 | ||||||||
Marketable securities |
2,077 | 25,353 | ||||||||||
Accounts receivable, net |
67,477 | 89,150 | ||||||||||
Inventories |
58,179 | 78,193 | ||||||||||
Prepaid expenses and other current assets |
14,657 | 15,560 | ||||||||||
Total current assets |
280,103 | 333,553 | ||||||||||
Property, plant and equipment |
||||||||||||
Buildings and land |
38,830 | 37,259 | ||||||||||
Computer equipment and software |
43,366 | 45,558 | ||||||||||
Machinery and equipment |
20,293 | 23,658 | ||||||||||
Furniture and fixtures |
12,450 | 14,706 | ||||||||||
Leasehold improvements |
24,742 | 25,238 | ||||||||||
Construction in progress |
601 | 13,768 | ||||||||||
| 140,282 | 160,187 | |||||||||||
Less: Accumulated depreciation and amortization |
(72,586 | ) | (75,395 | ) | ||||||||
| 67,696 | 84,792 | |||||||||||
Long-term marketable securities |
69,856 | 95,087 | ||||||||||
Goodwill |
108,720 | 104,156 | ||||||||||
Intangible assets, net |
11,548 | 14,648 | ||||||||||
Other assets |
9,793 | 25,261 | ||||||||||
Total assets |
$ | 547,716 | $ | 657,497 | ||||||||
Liabilities, minority interests and stockholders’ equity |
||||||||||||
Current liabilities |
||||||||||||
Current portion of long-term debt |
$ | 98 | $ | 8 | ||||||||
Accounts payable |
22,566 | 30,436 | ||||||||||
Deferred revenue |
38,394 | 29,032 | ||||||||||
Accrued warranty and retrofit costs |
13,405 | 19,011 | ||||||||||
Accrued compensation and benefits |
16,903 | 18,171 | ||||||||||
Accrued retirement benefit |
9,899 | 9,599 | ||||||||||
Accrued restructuring costs |
14,829 | 18,897 | ||||||||||
Accrued income taxes payable |
10,447 | 8,488 | ||||||||||
Accrued expenses and other current liabilities |
16,083 | 23,573 | ||||||||||
Total current liabilities |
142,624 | 157,215 | ||||||||||
Long-term debt |
175,064 | 175,177 | ||||||||||
Accrued long-term restructuring |
21,753 | 14,889 | ||||||||||
Other long-term liabilities |
1,412 | 1,488 | ||||||||||
Total liabilities |
340,853 | 348,769 | ||||||||||
Contingencies (Note 11) |
||||||||||||
Minority interests |
704 | 493 | ||||||||||
Stockholders’ equity |
||||||||||||
Preferred stock, $0.01 par value, 1,000,000 shares authorized,
one share issued and outstanding |
— | — | ||||||||||
Common stock, $0.01 par value, 100,000,000 shares authorized,
37,046,317 and 36,199,333 shares issued and outstanding at
June 30, 2003 and September 30, 2002, respectively |
370 | 362 | ||||||||||
Additional paid-in capital |
1,098,322 | 1,094,726 | ||||||||||
Deferred compensation |
(2,161 | ) | (13,421 | ) | ||||||||
Accumulated other comprehensive income (loss) |
11,223 | (8,058 | ) | |||||||||
Accumulated deficit |
(901,595 | ) | (765,374 | ) | ||||||||
Total stockholders’ equity |
206,159 | 308,235 | ||||||||||
Total liabilities, minority interests and stockholders’ equity |
$ | 547,716 | $ | 657,497 | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
| Three months ended | Nine months ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
Revenues |
||||||||||||||||||
Product |
$ | 53,840 | $ | 59,943 | $ | 174,600 | $ | 138,228 | ||||||||||
Services |
30,205 | 25,819 | 87,264 | 62,840 | ||||||||||||||
Total revenues |
84,045 | 85,762 | 261,864 | 201,068 | ||||||||||||||
Cost of revenues
|
||||||||||||||||||
Product |
42,337 | 41,272 | 130,885 | 90,777 | ||||||||||||||
Services |
14,114 | 17,818 | 54,359 | 43,927 | ||||||||||||||
Total cost of revenues |
56,451 | 59,090 | 185,244 | 134,704 | ||||||||||||||
Gross profit |
27,594 | 26,672 | 76,620 | 66,364 | ||||||||||||||
Operating expenses |
||||||||||||||||||
Research and development |
18,103 | 20,679 | 57,531 | 50,254 | ||||||||||||||
Selling, general and administrative |
21,697 | 28,244 | 78,825 | 66,228 | ||||||||||||||
Amortization of acquired intangible assets |
940 | 5,522 | 3,928 | 11,711 | ||||||||||||||
Restructuring and acquisition-related charges |
20,742 | 10,817 | 46,566 | 10,926 | ||||||||||||||
Total operating expenses |
61,482 | 65,262 | 186,850 | 139,119 | ||||||||||||||
Loss from operations |
(33,888 | ) | (38,590 | ) | (110,230 | ) | (72,755 | ) | ||||||||||
Interest income |
837 | 2,440 | 3,683 | 7,894 | ||||||||||||||
Interest expense |
2,595 | 2,624 | 7,790 | 7,896 | ||||||||||||||
Other (income) expense, net |
754 | (400 | ) | 16,789 | (1,045 | ) | ||||||||||||
Loss before income taxes and minority interests |
(36,400 | ) | (38,374 | ) | (131,126 | ) | (71,712 | ) | ||||||||||
Income tax provision (benefit) |
16 | (14,207 | ) | 4,884 | (24,964 | ) | ||||||||||||
Loss before minority interests |
(36,416 | ) | (24,167 | ) | (136,010 | ) | (46,748 | ) | ||||||||||
Minority interests in income (loss) of consolidated subsidiaries |
18 | 30 | 211 | (90 | ) | |||||||||||||
Net loss |
$ | (36,434 | ) | $ | (24,197 | ) | $ | (136,221 | ) | $ | (46,658 | ) | ||||||
Loss per share |
||||||||||||||||||
Basic and diluted |
$ | (0.99 | ) | $ | (0.89 | ) | $ | (3.72 | ) | $ | (2.08 | ) | ||||||
Shares used in computing loss per share |
||||||||||||||||||
Basic and diluted |
36,873 | 27,341 | 36,638 | 22,448 | ||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine months ended | ||||||||||||
| June 30, | ||||||||||||
| 2003 | 2002 | |||||||||||
| (unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
$ | (136,221 | ) | $ | (46,658 | ) | ||||||
Adjustments to reconcile net loss to net cash used in
operating activities: |
||||||||||||
Depreciation and amortization |
26,558 | 24,515 | ||||||||||
Compensation expense related to common stock options |
7,364 | 1,815 | ||||||||||
Provision for losses on accounts receivable |
449 | 1,773 | ||||||||||
Reserves for excess and obsolete inventories and other
inventory adjustments |
6,291 | 2,266 | ||||||||||
Deferred income taxes |
38 | (9,996 | ) | |||||||||
Amortization of debt discount and issuance costs |
629 | 628 | ||||||||||
Minority interests |
211 | (90 | ) | |||||||||
Loss on disposal of long-lived assets |
6,992 | 75 | ||||||||||
Impairment of assets |
17,604 | — | ||||||||||
Changes in operating assets and liabilities, net of acquired
assets and liabilities: |
||||||||||||
Accounts receivable |
20,979 | 17,069 | ||||||||||
Inventories |
14,493 | 220 | ||||||||||
Prepaid expenses and other current assets |
964 | (1,382 | ) | |||||||||
Accounts payable |
(8,211 | ) | 12,033 | |||||||||
Deferred revenue |
12,386 | 922 | ||||||||||
Accrued warranty and retrofit costs |
(5,217 | ) | (402 | ) | ||||||||
Accrued compensation and benefits |
(1,800 | ) | 955 | |||||||||
Accrued acquisition-related and restructuring costs |
2,878 | (7,150 | ) | |||||||||
Accrued expenses and other current liabilities |
(2,230 | ) | (19,332 | ) | ||||||||
Net cash used in operating activities |
(35,843 | ) | (22,739 | ) | ||||||||
Cash flows from investing activities
|
||||||||||||
Purchases of fixed assets |
(12,242 | ) | (16,906 | ) | ||||||||
Acquisition of businesses, net of cash acquired |
147 | (10,077 | ) | |||||||||
Proceeds from sale of business line |
550 | — | ||||||||||
Purchases of marketable securities |
(44,032 | ) | (56,866 | ) | ||||||||
Sale/maturity of marketable securities |
92,539 | 78,293 | ||||||||||
Proceeds from sale of long-lived assets |
8,329 | 57 | ||||||||||
Decrease in other assets |
805 | 486 | ||||||||||
Net cash provided by (used in) investing activities |
46,096 | (5,013 | ) | |||||||||
Cash flows from financing activities
|
||||||||||||
Payments of long-term debt and capital lease obligations |
(80 | ) | (432 | ) | ||||||||
Issuance of long-term debt |
153 | — | ||||||||||
Proceeds from issuance of common stock, net of issuance costs |
3,518 | 5,204 | ||||||||||
Net cash provided by financing activities |
3,591 | 4,772 | ||||||||||
Effects of exchange rate changes on cash and cash equivalents |
(1,428 | ) | 1,409 | |||||||||
Net increase (decrease) in cash and cash equivalents |
12,416 | (21,571 | ) | |||||||||
Cash and cash equivalents, beginning of period |
125,297 | 160,239 | ||||||||||
Cash and cash equivalents, end of period |
$ | 137,713 | $ | 138,668 | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
| 1. | BASIS OF PRESENTATION | |
| The unaudited co |