Attached files

file filename
EX-99.1 - EX-99.1 - Brooks Automation, Inc.b88351exv99w1.htm
EX-23.1 - EX-23.1 - Brooks Automation, Inc.b88351exv23w1.htm
EX-99.2 - EX-99.2 - Brooks Automation, Inc.b88351exv99w2.htm
8-K/A - FORM 8-K/A - Brooks Automation, Inc.b88351e8vkza.htm
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma condensed combined financial information is based on the assumptions set forth in the notes to such information. The unaudited pro forma adjustments made in the compilation of the unaudited pro forma financial information are based upon available information and assumptions that the Company considers to be reasonable, and have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the Securities and Exchange Commission (“SEC”).
These unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of the financial position or operating results that would have been achieved had the Agreement been consummated as of the date indicated or of the results that may be obtained in the future. These unaudited pro forma condensed combined financial information and the accompanying notes should be read together with (1) the Company’s audited consolidated financial statements and accompanying notes, as of and for the fiscal year ended September 30, 2010, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2010, which was filed with the SEC on November 23, 2010 and (2) the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the nine months ended June 30, 2011 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, which was filed with the SEC on August 4, 2011, and the Nexus audited and unaudited financial statements included in this report.
The actual operating results for Nexus will be consolidated with the Company’s operating results for all periods subsequent to the acquisition date of July 25, 2011.
The unaudited pro forma condensed combined statements of operations included herein do not reflect any potential cost savings or other operating efficiencies that should result from the integration of the companies.
The unaudited pro forma condensed combined statements of operations of Brooks for the nine months ended June 30, 2011 and twelve months ended September 30, 2010 and Nexus for the nine months ended June 30, 2011 and the twelve months ended December 31, 2010 gives effect to the acquisition of Nexus by Brooks as if it had occurred effective October 1, 2009. The operating results for the twelve month periods included different fiscal year ends, which may be combined in accordance with Securities and Exchange Commission guidance contained within Regulation S-X, since the fiscal year ends are within 93 days of each other.
The unaudited pro forma condensed combined balance sheet of Brooks and Nexus at June 30, 2011 gives effect to the acquisition of Nexus by Brooks as if it had occurred effective June 30, 2011.

2


 

Brooks Automation, Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
                               
    Brooks     Nexus            
    year ended     year ended            
    September 30,     December 31,   Pro Forma     Pro Forma  
In thousands, except per share data   2010     2010   Adjustments     Combined  
Revenues
  $ 592,972     $ 32,156   $     $ 625,128  
Cost of revenues
    426,677       16,310     1,057 )(a,b)     444,044  
 
                     
Gross profit
    166,295       15,846     (1,057       181,084  
 
                     
Operating expenses
                             
Research and development
    31,162       5,153           36,315  
Selling, general and administrative
    85,597       6,871     2,585 (a)     95,053  
Restructuring charges
    2,529                 2,529  
 
                     
Total operating expenses
    119,288       12,024     2,585       133,897  
 
                     
Operating income
    47,007       3,822     (3,642 )     47,187  
Interest income (expense), net
    1,041       (517 )   531 (d)     1,055  
Other income, net
    8,016       11,549           19,565  
 
                     
Income before income taxes and equity in earnings of joint ventures
    56,064       14,854     (3,111 )     67,807  
Income tax provision (benefit)
    (2,746 )     667     (147 )(e)     (2,226 )
 
                     
Income before equity in earnings of joint ventures
    58,810       14,187     (2,964 )     70,033  
Equity in earnings of joint ventures
    215                 215  
 
                     
Net income
  $ 59,025     $ 14,187   $ (2,964 )   $ 70,248  
Add: Net income attributable to noncontrolling interests
    (43 )               (43 )
 
                     
Net income attributable to Brooks Automation, Inc.
  $ 58,982     $ 14,187   $ (2,964 )   $ 70,205  
 
                     
Basic net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 0.92                   $ 1.10  
 
                         
Diluted net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 0.92                   $ 1.09  
 
                         
Shares used in computing earnings per share
                             
Basic
    63,777                     63,777  
Diluted
    64,174                     64,174  
See Notes to Pro Forma Condensed Consolidated Financial Information.

3


 

Brooks Automation, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
                                         
    Brooks     Nexus     Nexus                
    nine months     three months     six months             Nine months  
    ended     ended     ended             ended  
    June 30,     December 31,     June 30,     Pro Forma     June 30, 2011  
In thousands, except per share data   2011     2010     2011     Adjustments     Combined  
Revenues
  $ 557,154     $ 15,004     $ 14,073     $       $ 586,231  
Cost of revenues
    381,191       6,569       9,918       793 (a,b)     398,471  
 
                             
Gross profit
    175,963       8,435       4,155       (793 )     187,760  
 
                             
Operating expenses
                                       
Research and development
    28,365       1,880       3,447             33,692  
Selling, general and administrative
    74,399       2,558       5,902       1,094 (a,c)     83,953  
Restructuring charges
    557                         557  
 
                             
Total operating expenses
    103,321       4,438       9,349       1,094       118,202  
 
                             
Operating income
    72,642       3,997       (5,194 )     (1,887 )     69,558  
Interest income (expense), net
    847       (279 )     (537)       823 (d)     854  
Other income, net
    46,494       224       533             47,251  
 
                             
Income before income taxes and equity in earnings of joint ventures
    119,983       3,942       (5,198 )     (1,064 )     117,663  
Income tax provision (benefit)
    5,323       589       (972 )     (111 )(e)     4,829  
 
                             
Income before equity in earnings of joint ventures
    114,660       3,353       (4,226 )     (953 )     112,834  
Equity in earnings of joint ventures
    1,618                         1,618  
 
                             
Net income
  $ 116,278     $ 3,353     $ (4,226 )   $ (953 )   $ 114,452  
Add: Net income attributable to noncontrolling interests
    (24 )                       (24 )
 
                             
Net income attributable to Brooks Automation, Inc.
  $ 116,254     $ 3,353     $ (4,226 )   $ (953 )   $ 114,428  
 
                             
Basic net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 1.80                             $ 1.77  
 
                                   
Diluted net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 1.79                             $ 1.76  
 
                                   
Shares used in computing earnings per share
                                       
Basic
    64,481                               64,481  
Diluted
    64,941                               64,941  
See Notes to Pro Forma Condensed Consolidated Financial Statements.

4


 

Brooks Automation, Inc.
Pro Forma Condensed Combined Balance Sheet
(Unaudited)
As of June 30, 2011
                                 
                    Transaction        
                    and Pro        
    Brooks     Nexus     Forma     Pro Forma  
In thousands   June 30, 2011     June 30, 2011     Adjustments     Combined  
Assets
                               
Current assets
                               
Cash and cash equivalents
  $ 133,115     $ 6,926     $ (91,758 )(f)   $ 48,283  
Restricted cash
    760       871             1,631  
Marketable securities
    64,804                   64,804  
Accounts receivable, net
    82,547       4,869             87,416  
Inventories, net
    93,525       7,657       869 (g)     102,051  
Prepaid expenses and other current assets
    10,179       3,520             13,699  
 
                       
Total current assets
    384,930       23,843       (90,889 )     317,884  
Property, plant and equipment, net
    58,270       11,607       788 (h)     70,665  
Long-term marketable securities
    83,686                   83,686  
Goodwill
    51,694             32,349 (i)     84,043  
Intangible assets, net
    10,395       8,477       28,623 (i)     47,495  
Equity investment in joint ventures
    34,747                   34,747  
Deferred financing costs, net
          265       (265 )(j)      
Other assets
    2,637                   2,637  
 
                       
Total assets
  $ 626,359     $ 44,192     $ (29,394 )   $ 641,157  
 
                       
Liabilities and equity
                               
Current liabilities
                               
Accounts payable
  $ 45,177     $ 1,618     $ (781 )(f)   $ 46,014  
Customer deposits
          1,486             1,486  
Deferred revenue
    7,640       3,639             11,279  
Accrued expenses and other
    37,339       5,188       (22 )(j)     42,505  
Current portion of long-term debt
          2,000       (2,000 )(j)      
 
                       
Total current liabilities
    90,156       13,931       (2,803 )     101,284  
Long-term debt
          2,500       (2,500 )(j)      
Convertible stockholder notes
          2,643       (2,643 )(j)      
Income tax liabilities
    13,223       650       1,969 (k)     15,842  
Long-term pension liability
    5,728       1,051             6,779  
Other
    3,280       5,480       (5,480 )(l)     3,280  
 
                       
Total liabilities
    112,387       26,255       (11,457 )     127,185  
 
                       
 
                               
Equity
    513,972       17,937       (17,937 )     513,972  
 
                       
Total liabilities and equity
  $ 626,359     $ 44,192     $ (29,394 )   $ 641,157  
 
                       
See Notes to Pro Forma Condensed Consolidated Financial Statements.

5


 

Brooks Automation, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
1. Summary of Transaction
On July 25, 2011, Brooks Automation, Inc. (“Brooks” or the “Company”) acquired Nexus Biosystems, Inc. (“Nexus”), a U.S. based provider of automated sample management systems and consumables to the life sciences markets, specifically biobanking and compound sample management.
Nexus’ major operations are based in California, with significant engineering, sales and service activities based in Switzerland, and sales and service locations in Germany and Japan. The functional currency of Nexus’ Switzerland operation is the Swiss franc, the functional currency of the Germany operation is the euro and the functional currency of the Japanese operation is the Japanese yen.
The following table summarizes the components of the purchase price, assuming the transaction had closed on June 30, 2011 (in thousands):
         
Cash acquired
  $ (6,926 )
Transactions costs incurred by Nexus, reimbursed by Brooks
    (781 )
Cash consideration paid
    91,758  
 
     
 
  $ 84,051  
 
     
The following table summarizes the preliminary allocation of the purchase price, assuming the transaction closed on June 30, 2011 (in thousands):
         
Restricted cash
  $ 871  
Accounts receivable
    4,869  
Inventories
    8,526  
Other current assets
    3,520  
Property, plant & equipment
    12,395  
Goodwill
    32,349  
Identifiable intangible assets
    37,100  
Accounts payable and accrued expenses
    (6,784 )
Customer deposits and deferred revenue
    (5,125 )
Long-term liabilities
    (3,670 )
 
     
 
  $ 84,051  
 
     
2. Intangible Assets
Based on the preliminary allocation of the purchase price, the following amounts have been allocated to identifiable intangible assets (in thousands):
         
Completed technology
  $ 6,000  
Customer relationships — systems
    7,300  
Customer relationships — consumables and service
    23,700  
Trade name
    100  
 
     
 
  $ 37,100  
 
     
The estimated fair value attributed to the completed technologies was determined based upon a discounted cash flow forecast utilizing the relief from royalty method. The royalty rate was determined to be 6% based on a review of comparable royalty arrangements. Cash flows were discounted at a rate of 17%. The estimated fair value of the completed technologies is expected to be amortized over a period of 6 years on a straight-line basis, which we preliminarily assume approximates the pattern in which the economic benefits of the completed technologies are expected to be realized.
The estimated fair value attributed to the customer relationships was determined based upon a discounted forecast of estimated net future cash flows to be generated from the relationships discounted at a rate of 17% — 18%. The estimated fair value of customer relationships for systems is expected to be amortized over a period of 6 years, while the estimated fair value of customer relationships for consumables and service are expected to be amortized over a period of 13 years. The amortization is expected to be amortized on a straight-line basis, which we preliminarily assume approximates the pattern in which the economic benefits of the customer relationships are expected to be realized.

6


 

The estimated fair value of the trade name will be amortized over 2 years on a straight-line basis, which approximates the pattern in which the economic benefits of the trade names will be realized.
Based on the purchase price allocation, which was prepared as if the acquisition was completed on June 30, 2011, the amount of the purchase price allocated to goodwill is estimated to be $32.3 million. Goodwill represents the excess of the purchase price over the fair values of the net tangible and intangible assets acquired. Goodwill will not be amortized, but will be tested at least annually for impairment, and is not deductible for income tax purposes.
3. Pro Forma Adjustments
The pro forma adjustments in the unaudited pro forma condensed combined financial information are as follows:
Unaudited Pro Forma Condensed Combined Statement of Operations:
(a)   To reflect amortization expense related to the acquired intangible assets, calculated over the estimated useful lives on a straight-line basis (See Note 2 — Intangible Assets), less related amortization expense previously recorded on the financial statements of Nexus. The increase to amortization expense included in cost of revenues for the 2010 fiscal year and for the nine months ended June 30, 2011 was $1.0 million and $0.8 million, respectively. The increase to amortization expense included in selling, general and administrative costs for the 2010 fiscal year and for the nine months ended June 30, 2011 was $2.6 million and $1.7 million, respectively.
 
(b)   Includes increased depreciation expense of $57,000 and $43,000 for the year ended September 30, 2010 and the nine months ended June 30, 2011, respectively, due to the increase in value of acquired real estate.
 
(c)   Costs related to the transaction of $0.6 million have been eliminated, and include primarily outside legal fees incurred by both Nexus and Brooks.
 
(d)   Reflects the elimination of interest expense on Nexus indebtedness that was repaid in full upon the closing of the acquisition.
 
(e)   Reflects the adjustment to the Company’s income tax expense resulting from the pro forma impact of the transaction. The U.S. deferred tax assets of Nexus as of September 30, 2010 and June 30, 2011 had a full valuation allowance, as such the tax rate differs from the statutory rate due to utilization of net operating losses in the U.S.
Unaudited Pro Forma Condensed Combined Balance Sheet:
(f)   Reflects the gross consideration paid by Brooks to Nexus of $91.8 million, which includes the direct payment by Brooks of $0.8 million of transactions costs incurred by Nexus.
 
(g)   Nexus’ finished goods and work-in-process has been valued at estimated selling price less the costs of disposal and a reasonable profit allowance for the related selling effort; these values are estimated to exceed Nexus’ historical cost by approximately $0.9 million. This value will be recorded as an increase to the carrying value of inventory, and then will be recorded as a component of cost of goods sold as the underlying inventory is sold. Cost of goods sold was not adjusted in the unaudited pro forma condensed combined statements of operations due to the non-recurring nature of this adjustment as inventory turns in less than one year.
 
(h)   Reflects the adjustment to record certain real estate at fair value.
 
(i)   Reflects the estimated fair values of intangibles based on the preliminary allocation of the purchase price. See Note 2 — Intangible Assets.
 
(j)   At closing, a portion of the aggregate consideration was used to settle certain liabilities including $4.5 million of outstanding borrowings under a term loan, all convertible stockholder notes and accrued interest of $22,000. In connection with the repayment of indebtedness, all deferred financing costs were expensed.
 
(k)   Includes a $2.0 million increase in estimated deferred income liabilities associated with the intangible assets allocated to the Switzerland subsidiary of Nexus. This liability will decrease as the underlying intangible assets are amortized.
 
(l)   Nexus consolidated balance sheet includes a long-term liability for contingent consideration related to the acquisition of Nexus AG (formerly Remp AG). This liability was $4.7 million on the Nexus balance sheet as of June 30, 2011. The contingent consideration was based on future revenues of Nexus AG. In connection with the acquisition of Nexus by Brooks, this liability was settled in full for $6.0 million. The pro forma adjustment of $5.5 million includes the contingent consideration liability balance as of June 30, 2011, and $0.8 million of other liabilities, including stock warrants, that were also settled as part of the closing.

7