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8-K - FORM 8-K - Brooks Automation, Inc.b88928e8vk.htm
EX-99.2 - EX-99.2 - Brooks Automation, Inc.b88928exv99w2.htm
Exhibit 99.1
Brooks Automation Reports Fiscal Fourth Quarter
and Full Year Ended September 30, 2011 Results
Achieves Record Cash from Operating Activities of $87.6 Million for Full
Year
Declares Quarterly Cash Dividend of $0.08 per Share
CHELMSFORD, Mass., November 10, 2011 Brooks Automation, Inc. (Nasdaq:BRKS), a leading worldwide provider of automation, vacuum and instrumentation solutions for multiple markets including semiconductor manufacturing, life sciences, and clean energy, today reported preliminary financial results for the fourth quarter and full year ended September 30, 2011.
Fiscal Full Year of 2011 Financial and Operational Highlights:
    Grew Revenue to $688.1 Million an Increase of 16% from Last Year
 
    Achieved Record Cash Flow from Operating Activities of $87.6 Million
 
    Cash, Cash Equivalents and Marketable Securities as of September 30th were $205.8 million, or $3.17 per diluted share with no Debt
 
    GAAP Diluted earnings per share were $1.97 for the full year
 
    Adjusted EBITDA Increased 48% to $111.2 Million
 
    Sold Lower Margin Contract Manufacturing Business
 
    Successfully Diversified Business with Creation of Higher Margin Life Science Systems Platform
 
    Generated 79 Design-in-Wins with OEM Customers Forging Continued Market Share Gains
Management Comments
“Even though our performance was negatively impacted by the challenging economy, we are pleased with our overall financial and operational performance during the fourth quarter and full year as we continued to make improvements in many controllable aspects of our business,” stated Steve Schwartz, President & Chief Executive Officer of Brooks. “Our fourth quarter Life Sciences revenue was slightly ahead of our expectations and our integration activities are well underway although cost reductions and margins on some orders were less than we had projected. Industry weakness for LED tools accelerated as the quarter progressed and our semiconductor business was at the bottom end of our expectations as orders and deliveries continue to be pushed out. However, we believe we are well positioned for growth in this area of our business in calendar 2012.

 


 

Dr. Schwartz continued, “In fiscal 2011 we achieved our goal of entering the higher margin life science businesses and exiting our contract manufacturing business while also generating record cash from operating activities of $87.6 million. We are pleased with the initial results and implementation of our strategic plan to expand our business in the life sciences area with the formation of Brooks Life Science Systems. With our recent acquisition of Nexus Biosystems, we have created a strong platform in automated sample management that we expect to be the core of a higher margin, more profitable, long-term growth business for us. In fiscal 2012, we will continue to prudently focus on strategic acquisitions, completing the integration and restructuring of the Brooks Life Science Systems business, retaining our high design-in win rate and executing on meaningful operational improvement plans.
Martin Headley, Executive Vice President and Chief Financial Officer, commented, “With our strong operating cash flow, over $200 million of cash and marketable securities and no debt, we believe we are well positioned to leverage our leading platform in automation, vacuum and instrumentation solutions by expanding our core competencies and entering into adjacent markets such as life sciences. We believe this strategic direction will result in improved gross and operating margins in the future and enhance long-term shareholder value.”
Fiscal Fourth Quarter 2011 Results
Revenues for the fourth quarter of fiscal 2011 were $131 million, compared to revenues of $181.6 million in the fourth quarter of fiscal 2010, which included $48.0 million from the contract manufacturing business that was sold at the end of the third quarter of 2011. Revenues for the Brooks Global Services segment increased sequentially 6.1% from the third quarter of fiscal 2011, while revenues for the Brooks Product Solutions segment declined 17.3% sequentially with industry weakness.
Order bookings for the fourth quarter of fiscal 2011 were $110.3 million, compared to order bookings in the fiscal third quarter of $190.8 million, which included $44.2 million related to contract manufacturing.
Gross profit margin increased to 35.9% or $47.1 million for the fourth quarter of 2011, compared to gross profit margin of 30.4% or $55.2 million for the fourth quarter of 2010. The fourth quarter fiscal 2011 margins were adversely impacted by a number of acquisition and integration related expenses related to Brooks Life Science Systems.
Net income for the fourth quarter of fiscal 2011 amounted to $12.1 million, or $0.19 per diluted share which includes $479 thousand of restructuring charges, $2.3 million of acquisition related adjustments and $2.7 million of one-time tax benefits. Adjusted net income, a non-GAAP measure, was also $12.1 million, or $0.19 per diluted share and compares to $24.4 million or $0.38 per diluted share in the fourth quarter of fiscal 2010. This and other special charges and benefits and their impact on comparative results are identified in the unaudited table included with this release.

 


 

Adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortization) for the fourth quarter of fiscal 2011 was $17.7 million, which compared to $29.5 million in the third quarter of fiscal 2011 and $29.7 million in the fourth quarter of fiscal 2010. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measure follows the consolidated statements of operations, balance sheets and statements of cash flows included in this release. Adjusted EBITDA (Earnings before Interest, Tax, Deprecation and Amortization) for the fiscal full year ended September 30, 2011 was $111.2 million which compared to $75.1 million for the fiscal full year ended September 30, 2010.
Net cash provided by operating activities for the fourth quarter of fiscal 2011 was $20.4 million. For the fiscal full year ended September 30, 2011 cash from operating activities was $87.6 million, and the increase in total cash and marketable securities was $63.4 million which resulted in an increase of total cash and marketable securities to $205.8 million at September 30, 2011.
Fiscal Full Year 2011 Results
Revenues for the fiscal full year ended September 30, 2011 were $688.1 million, a 16.0% increase over revenues of $593.0 million for the fiscal full year ended September 30, 2010. Net income attributable to Brooks for the full year ended September 30, 2011 was $128.4 million or $1.97 per diluted share, which compared to $59.0 million or $0.92 per diluted share for the fiscal full year ended September 30, 2010. Excluding the impact of special charges and non-recurring income, net income increased to $86.0 million or $1.32 per diluted share for the fiscal full year ended September 30, 2011, which compared to $50.1 million or $0.78 per diluted share, for the fiscal full year ended September 30, 2010.
Quarterly Cash Dividend
The Company additionally announced that the Board of Directors had declared a dividend of $0.08 per share payable on December 30, 2011 to stock holders of record on December 9, 2011. 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.
Conference Call
Brooks management will webcast its fourth quarter earnings conference today at 4:30 p.m. Eastern Time to discuss the fiscal fourth quarter and year-end results and business highlights. During the call, Company management will respond to questions concerning, but not limited to, the Company’s financial performance, business conditions and industry outlook. Their responses could contain information that has not been previously disclosed.
The call will be broadcast live over the Internet hosted at the Investor Relations section of Brook’s website at www.brooks.com, and will be archived online on this website for convenient on-demand replay. In addition, you may call (888) 419-5570 (US only) or (617) 896-9871 to listen to the live broadcast. The passcode for this telephone access is 90929467.

 


 

Contact Info:
John Mills
Senior Managing Director
ICR, LLC
310-954-1105
john.mills@icrinc.com
Barbara Culhane
Brooks Automation, Inc.
Corporate Marketing Manager
978-262-2400
barbara.culhane@brooks.com
About Brooks Automation, Inc.
Brooks is a leading worldwide provider of automation, vacuum and instrumentation solutions for multiple markets including semiconductor manufacturing, life sciences, and clean energy. Our 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, we have been a leading partner to the global semiconductor manufacturing market and through product development initiatives and strategic business acquisitions; we have expanded our reach 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, please 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 — particularly those manufacturing in Thailand — 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
(In thousands, except share and per share data)
(unaudited)
                 
    September 30,     September 30,  
    2011     2010  
ASSETS
               
Current assets
               
Cash and cash equivalents
  $ 58,833     $ 59,823  
Restricted cash
    1,293        
Marketable securities
    65,695       49,011  
Accounts receivable, net
    76,701       92,273  
Inventories, net
    107,654       115,787  
Prepaid expenses and other current assets
    10,348       10,437  
 
           
Total current assets
    320,524       327,331  
Property, plant and equipment, net
    68,596       63,669  
Long-term marketable securities
    81,290       33,593  
Goodwill
    84,727       48,138  
Intangible assets, net
    44,314       11,123  
Equity investment in joint ventures
    34,612       31,746  
Other assets
    2,557       2,624  
 
           
Total assets
  $ 636,620     $ 518,224  
 
           
 
               
LIABILITIES AND EQUITY
               
Current liabilities
               
Accounts payable
  $ 40,199     $ 65,734  
Deferred revenue
    14,073       4,365  
Accrued warranty and retrofit costs
    7,438       8,195  
Accrued compensation and benefits
    17,288       13,677  
Accrued restructuring costs
    293       3,509  
Accrued income taxes payable
    4,015       1,040  
Accrued expenses and other current liabilities
    12,433       11,635  
 
           
Total current liabilities
    95,739       108,155  
Income taxes payable
    11,728       12,446  
Long-term pension liability
    7,161       5,466  
Other long-term liabilities
    3,394       2,805  
 
           
Total liabilities
    118,022       128,872  
 
           
Commitments and contingencies
               
 
               
Equity
               
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding at September 30, 2011 and 2010
           
Common stock, $0.01 par value, 125,000,000 shares authorized, 79,737,189 shares issued and 66,275,320 shares outstanding at September 30, 2011, 78,869,331 shares issued and 65,407,462 shares outstanding at September 30, 2010
    797       789  
Additional paid-in capital
    1,809,287       1,803,121  
Accumulated other comprehensive income
    19,480       19,510  
Treasury stock at cost, 13,461,869 shares at September 30, 2011 and 2010
    (200,956 )     (200,956 )
Accumulated deficit
    (1,110,599 )     (1,233,649 )
 
           
Total Brooks Automation, Inc. stockholders’ equity
    518,009       388,815  
Noncontrolling interest in subsidiaries
    589       537  
 
           
Total equity
    518,598       389,352  
 
           
Total liabilities and equity
  $ 636,620     $ 518,224  
 
           

 


 

BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(In thousands, except per share data)
(unaudited)
                                 
    Three months ended     Twelve months ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
Revenues
                               
Product
  $ 108,334     $ 165,340     $ 611,117     $ 531,807  
Services
    22,617       16,292       76,988       61,165  
 
                       
Total revenues
    130,951       181,632       688,105       592,972  
 
                       
Cost of revenues
                               
Product
    68,677       113,909       411,610       377,466  
Services
    15,216       12,529       53,474       49,211  
 
                       
Total cost of revenues
    83,893       126,438       465,084       426,677  
 
                       
Gross profit
    47,058       55,194       223,021       166,295  
 
                       
Operating expenses
                               
Research and development
    11,481       8,043       39,846       31,162  
Selling, general and administrative
    28,143       24,576       102,542       85,597  
Restructuring charges
    479       235       1,036       2,529  
 
                       
Total operating expenses
    40,103       32,854       143,424       119,288  
 
                       
Operating income
    6,955       22,340       79,597       47,007  
Interest income
    267       307       1,153       1,121  
Interest expense
    (26 )     (46 )     (65 )     (80 )
Sale of intellectual property rights
                      7,840  
Sale of contract manufacturing business
                45,009        
Loss on investment
                      (191 )
Other income, net
    397       662       1,882       367  
 
                       
Income from operations before income taxes and equity in earnings of joint ventures
    7,593       23,263       127,576       56,064  
Income tax provision (benefit)
    (3,369 )     (527 )     1,954       (2,746 )
 
                       
Income from operations before equity in earnings of joint ventures
    10,962       23,790       125,622       58,810  
Equity in earnings of joint ventures
    1,164       518       2,782       215  
 
                       
Net income
    12,126       24,308       128,404       59,025  
Add: Net income attributable to noncontrolling interests
    (28 )     (132 )     (52 )     (43 )
 
                       
Net income attributable to Brooks Automation, Inc.
  $ 12,098     $ 24,176     $ 128,352     $ 58,982  
 
                       
Basic net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 0.19     $ 0.38     $ 1.99     $ 0.92  
 
                       
Diluted net income per share attributable to Brooks Automation, Inc. common stockholders
  $ 0.19     $ 0.38     $ 1.97     $ 0.92  
 
                       
Shares used in computing income per share
                               
Basic
    64,750       64,068       64,549       63,777  
Diluted
    65,118       64,330       65,003       64,174  

 


 

BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
                 
    Year Ended September 30,  
    2011     2010  
Cash flows from operating activities
               
Net income
  $ 128,404     $ 59,025  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    17,249       18,420  
Sale of intellectual property rights
          (7,840 )
Stock-based compensation
    6,752       6,567  
Amortization of premium on marketable securities
    2,283       942  
Undistributed earnings of joint ventures
    (383 )     (215 )
Sale of contract manufacturing business
    (45,009 )      
Loss on disposal of long-lived assets
    10       4  
Loss on investment
          191  
Changes in operating assets and liabilities, net of acquisitions and disposals:
               
Accounts receivable
    9,916       (53,163 )
Inventories
    (19,131 )     (31,341 )
Prepaid expenses and other current assets
    1,806       (499 )
Accounts payable
    (15,099 )     39,352  
Deferred revenue
    1,841       1,487  
Accrued warranty and retrofit costs
    (1,420 )     2,483  
Accrued compensation and benefits
    2,036       (913 )
Accrued restructuring costs
    (3,212 )     (4,123 )
Accrued expenses and other current liabilities
    1,607       (2,505 )
 
           
Net cash provided by operating activities
    87,650       27,872  
 
           
Cash flows from investing activities
               
Purchases of property, plant and equipment
    (6,455 )     (3,472 )
Purchases of marketable securities
    (186,718 )     (117,473 )
Sale/maturity of marketable securities
    120,095       84,546  
Increase in restricted cash
    (1,293 )      
Proceeds from the sale of the contract manufacturing business
    78,249        
Acquisitions, net of cash acquired
    (88,309 )      
Proceeds from the sale of intellectual property rights
          7,840  
Purchase of intangible assets
          (892 )
Other
    181       243  
 
           
Net cash used in investing activities
    (84,250 )     (29,208 )
 
           
Cash flows from financing activities
               
Issuance of common stock under stock option and stock purchase plans
    1,358       1,245  
Common stock dividend paid
    (5,180 )      
 
           
Net cash provided by (used in) financing activities
    (3,822 )     1,245  
 
           
Effects of exchange rate changes on cash and cash equivalents
    (568 )     (71 )
 
           
Net decrease in cash and cash equivalents
    (990 )     (162 )
Cash and cash equivalents, beginning of year
    59,823       59,985  
 
           
Cash and cash equivalents, end of year
  $ 58,833     $ 59,823  
 
           

 


 

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 non-recurring income and special charges such as restructuring charges and gains or losses on investments. Management believes these measures are useful to investors because it eliminates accounting charges that do not reflect Brooks’ day-to-day operations. A table reconciling income and diluted earnings per share from operations is presented below:

 


 

                                                 
    Quarter ended  
    September 30, 2011     June 30, 2011     September 30, 2010  
        per share         per share         per share  
Net income attributable to Brooks Automation, Inc.
  $ 12,098     $ 0.19     $ 66,183     $ 1.02     $ 24,176     $ 0.38  
 
                                               
Purchase accounting impact on contracts acquired
    957       0.01       313       0.00              
Restructuring charges
    479       0.01       97       0.00       235       0.00  
Gain on sale of contract manufacturing, net of tax
                (42,588 )     (0.65 )            
Merger costs
    719       0.01                          
Inventory charges recorded for acquistions
    625       0.01                          
Litigation settlement
                (664 )     (0.01 )            
One-time tax benefit
    (2,758 )     (0.04 )                        
 
                                   
Adjusted net income attributable to Brooks Automation, Inc.
    12,120       0.19       23,341       0.36       24,411       0.38  
 
                                               
Stock-based compensation
    1,541       0.02       1,595       0.02       1,678       0.03  
 
                                   
Adjusted net income attributable to Brooks Automation, Inc. — excluding stock-based compensation
  $ 13,661     $ 0.21     $ 24,936     $ 0.38     $ 26,089     $ 0.41  
 
                                   
                                 
    Year ended  
    September 30, 2011     September 30, 2010  
        per share         per share  
Net income attributable to Brooks Automation, Inc.
  $ 128,352     $ 1.97     $ 58,982     $ 0.92  
 
                               
Purchase accounting impact on contracts acquired
    1,270       0.02              
Restructuring charges
    1,036       0.02       2,529       0.04  
Gain on sale of contract manufacturing, net of tax
    (42,588 )     (0.66 )            
Merger costs
    719       0.01              
Inventory charges recorded for acquisitions
    625       0.01              
Litigation settlement
    (664 )     (0.01 )            
Sale of intellectual property rights, net of tax
                (7,730 )     (0.12 )
Loss on investment
                191       0.00  
One-time income tax benefit
    (2,758 )     (0.04 )     (3,899 )     (0.06 )
 
                       
Adjusted net income attributable to Brooks Automation, Inc.
    85,992       1.32       50,073       0.78  
 
                               
Stock-based compensation
    6,752       0.10       6,567       0.10  
 
                       
Adjusted net income attributable to Brooks Automation, Inc. — excluding stock-based compensation
  $ 92,744     $ 1.43     $ 56,640     $ 0.88  
 
                       
                                         
    Quarter ended     Year ended  
    Sep 30,     June 30,     Sep 30,     Sep 30,     Sep 30,  
    2011     2011     2010     2011     2010  
Net income attributable to Brooks Automation, Inc.
  $ 12,098     $ 66,183     $ 24,176       128,352       58,982  
 
                                       
Less: Interest income
    (267 )     (350 )     (307 )     (1,153 )     (1,121 )
Add: Interest expense
    26       10       46       65       80  
Add: Income tax provision (benefit)
    (3,369 )     3,300       (527 )     1,954       (2,746 )
Add: Depreciation
    3,177       2,990       3,419       12,621       14,563  
Add: Amortization of completed technology
    718       539       479       2,216       1,887  
Add: Amortization of acquired intangible assets
    1,018       495       493       2,412       1,970  
Add: Stock-based compensation
    1,541       1,595       1,678       6,752       6,567  
Add: Restructuring charges
    479       97       235       1,036       2,529  
Add: Loss on investment
                            191  
Add: Purchase accounting impact on contracts acquired
    957       313             1,270        
Add: Merger costs
    719                   719        
Add: Inventory charges recorded for acquisitions
    625                   625        
Less: Gain on sale of contract manufacturing, pre-tax
          (45,009 )           (45,009 )      
Less: Litigation settlement
          (664 )           (664 )      
Less: Sale of intellectual property rights, pre-tax
                            (7,840 )
 
                                       
 
                             
Adjusted EBITDA
  $ 17,722     $ 29,499     $ 29,692     $ 111,196     $ 75,062