CHELMSFORD, Mass., April 29, 2019 /PRNewswire/ -- Brooks Automation, Inc. (Nasdaq: BRKS) today reported financial results for the second fiscal quarter of 2019, ended March 31, 2019.
Financial Results Summary | |||||||||||||||||
Quarter Ended | |||||||||||||||||
Dollars in millions, except per share data | March 31, | December 31, | March 31, | Change vs. | |||||||||||||
2019 | 2018 | 2018 | Prior Qtr | Prior Year | |||||||||||||
Revenue | $ | 198 | $ | 179 | $ | 157 | 11 | % | 26 | % | |||||||
Semiconductor Solutions Group | $ | 113 | $ | 113 | $ | 108 | 0 | % | 4 | % | |||||||
Life Sciences | $ | 86 | $ | 67 | $ | 49 | 28 | % | 76 | % | |||||||
Diluted EPS Continuing Operations | $ | (0.04) | $ | 0.09 | $ | 0.89 | (145) | % | (104) | % | |||||||
Diluted EPS Total | $ | 0.05 | $ | 0.20 | $ | 0.95 | (76) | % | (95) | % | |||||||
Non-GAAP Diluted EPS Cont. Operations | $ | 0.17 | $ | 0.17 | $ | 0.18 | 3 | % | (3) | % | |||||||
Adjusted EBITDA | $ | 33 | $ | 28 | $ | 25 | (18) | % | 29 | % | |||||||
The Company announced on August 27, 2018 it had entered into a definitive agreement to sell its Semiconductor Cryogenics business to Edwards Vacuum LLC (a member of the Atlas Copco Group). In accordance with GAAP, the Company is reporting the operating results of the Semiconductor Cryogenics business, for all periods presented, as discontinued operations.
Management Comments
"We are pleased to report solid Q2 operating results with 26% year-over-year revenue growth. Life Sciences grew 76% while Semiconductor Solutions remained solid with 4% growth, despite the semiconductor capital equipment slow down. Our Semiconductor Solutions resilience is a testament to our product portfolio that serves a broadening customer base across the range of chip technologies," commented Steve Schwartz, president and CEO. "During our first full quarter of owning GENEWIZ, that team captured 170 new customers and continued its revenue growth driven by its next-generation sequencing and Sanger sequencing capabilities. Sample Management continued to improve with 11% year-over-year organic growth. The second quarter results mark a transformative milestone with 43% of our revenue coming from Life Sciences."
GAAP Summary, Second Quarter, Fiscal 2019
- Revenue was $198 million in the second quarter, 11% higher compared to the first fiscal quarter of 2019, and 26% higher compared to the second fiscal quarter of 2018. Revenue included $33 million from a full quarter of GENEWIZ that was acquired on November 15, 2018, compared to $16 million in the first quarter.
- GAAP diluted EPS was $0.05 compared with $0.20 in the first quarter of 2019 and $0.95 in the second quarter of 2018. Discontinued operations provided $0.09 and continuing operations generated a loss of $0.04 per diluted share, including a $9 million charge for early extinguishment of debt. The Company syndicated its $350 million incremental term loan incurred in connection with the GENEWIZ acquisition.
- GAAP operating income was $14 million, an increase of 156% compared to the first quarter of 2019 and 32% higher compared with the second quarter of 2018.
- Below operating income, net interest expense increased by $3 million compared to the first quarter, due to the full quarter of interest expense associated with the debt incurred when we acquired GENEWIZ. The Company also reported a $1 million tax benefit in the quarter compared to a $6 million tax benefit last quarter, which had a favorable $0.08 per share impact on EPS in the prior quarter.
- Life Sciences revenue of $86 million grew 28% compared to the first quarter of 2019. It was up 76% on a year-over-year basis, inclusive of 11% organic growth, all attributable to Sample Management. GENEWIZ contributed $33 million of revenue in the second quarter, compared to $16 million in the first quarter.
- Semiconductor Solutions revenue of $113 million, grew 4% on a year over year basis and was flat compared to the first quarter of 2019.
Non-GAAP Profit Discussion for Continuing Operations
- Non-GAAP diluted EPS from continuing operations for the quarter was $0.17 compared to $0.17 in the first quarter and $0.18 in the second quarter of 2018. Operating margins were 12% in the second quarter, expanding 90 basis points sequentially and 60 basis points year over year on improved gross margins. The increase in interest expense largely offset the improved operating income, as the Company raised additional debt in the middle of the prior quarter to fund the GENEWIZ acquisition. The Company anticipates paying down a significant portion of outstanding debt upon closing the sale of the Semiconductor Cryogenics business.
- Non-GAAP gross margins expanded to 42.0%, an improvement of 60 basis points compared to the first quarter of 2019 and 160 basis points higher than the second quarter of 2018. Life Sciences gross margins expanded to 42.6%, up 170 basis points sequentially driven by 60 basis points improvement in Sample Management and a favorable mix benefit from additional GENEWIZ revenue. The Semiconductor Solutions business gross margins were essentially flat sequentially at 41.6% and were 90 basis points improved compared to the second quarter of 2018.
- Net interest expense increased $3 million sequentially in the quarter to $8 million reflecting the debt utilized to fund the GENEWIZ acquisition. The Company expects interest expense to decrease following an anticipated reduction of debt upon closure of the sale of the Semiconductor Cryogenics business.
- Adjusted EBITDA in the quarter was $33 million, up from $28 million in the prior quarter and $25 million in the second quarter of 2018. The adjusted EBITDA margin expanded 100 basis points sequentially to 16.6% and reflects 40 basis points improvement from the second quarter of 2018.
- Cash flow from operations was $16 million in the quarter generating $10 million in free cash flow. At March 31, 2019, total debt was $543 million and the balance of cash, cash equivalents, and marketable securities was $140 million.
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.
Pending Sale of the Semiconductor Cryogenics Business
As previously disclosed, the completion of the sale of the Company's Semiconductor Cryogenics business is conditioned upon, among other things, certain regulatory approvals, including the approval of the Committee on Foreign Investment in the United States (CFIUS). The Company and the buyer continue to pursue the necessary clearances and expect that the CFIUS process will conclude in the second calendar quarter. Accordingly, the Company expects to complete the sale within the June quarter. The Company and the buyer remain fully committed to completing the sale as expeditiously as possible.
Guidance for Fiscal Third Quarter 2019
The Company announced revenue and earnings guidance for the third quarter of fiscal 2019. Revenue is expected to be in the range of $200 million to $210 million and non-GAAP diluted earnings per share from continuing operations is expected to be in the range of $0.13 to $0.18. GAAP diluted earnings per share for the third quarter is expected to be in the range of $0.04 to $0.09.
Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on June 28, 2019 to stockholders of record on June 7, 2019. 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 second 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 800-897-4662 (US & Canada only) or +1-212-231-2903 for international callers to listen to the live webcast.
Regulation G – Use of Non-GAAP financial Measures
The Company supplements its GAAP financial measures with certain non-GAAP financial measures to provide investors a better perspective on the results of business operations, which the Company believes is more comparable to the similar analysis provided by its peers. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. These measures should always be considered in conjunction with appropriate GAAP measures. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included at the end of this release following the consolidated balance sheets, statements of operations and statements of cash flows.
Free cash flow is a non-GAAP financial measure and is defined as operating cash flow minus capital expenditures.
"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 whether CFIUS will approve the sale of our Semiconductor Cryogenics business or the expected timing for completion of the sale, our revenue and earnings expectations, our ability to increase our profitability, our ability to improve or retain our market position, the expected financial results from our recently acquired GENEWIZ business 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, the risk that CFIUS does not approve the sale of the Cryogenics business 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.
About Brooks Automation, Inc.
Brooks is a leading provider of life science and semiconductor manufacturing automation solutions worldwide. The Company applies its automation and cryogenics expertise to provide a full suite of reliable cold-chain sample management solutions across life sciences in areas such as drug development, clinical research and advanced cell therapies. Brooks recently added global capability for gene sequencing and gene synthesis services through its strategic acquisition of GENEWIZ, expanding its sample-based services offerings. With over 40 years as a partner to the semiconductor manufacturing industry, Brooks is a provider of industry-leading precision robotics, integrated automation systems and services. Brooks is headquartered in Chelmsford, MA, with operations in North America, Europe and Asia. For more information, visit www.brooks.com.
INVESTOR CONTACTS:
Mark Namaroff
Director, Investor Relations
Brooks Automation
978.262.2635
Mark.namaroff@brooks.com
Sherry Dinsmore
Brooks Automation
978.262.2400
sherry.dinsmore@brooks.com
John Mills
Partner
ICR, LLC
646.277.1254
john.mills@icrinc.com
BROOKS AUTOMATION, INC. | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | ||||||||||||||||
Products | $ | 128,056 | $ | 121,031 | $ | 253,430 | $ | 226,803 | ||||||||
Services | 70,334 | 35,921 | 124,327 | 72,748 | ||||||||||||
Total revenue | 198,390 | 156,952 | 377,757 | 299,551 | ||||||||||||
Cost of revenue | ||||||||||||||||
Products | 77,803 | 70,635 | 152,376 | 134,164 | ||||||||||||
Services | 40,071 | 23,931 | 72,785 | 48,742 | ||||||||||||
Total cost of revenue | 117,874 | 94,566 | 225,161 | 182,906 | ||||||||||||
Gross profit | 80,516 | 62,386 | 152,596 | 116,645 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 14,101 | 11,347 | 27,249 | 22,752 | ||||||||||||
Selling, general and administrative | 52,373 | 40,671 | 105,914 | 78,599 | ||||||||||||
Restructuring charges | 370 | 47 | 429 | 48 | ||||||||||||
Total operating expenses | 66,844 | 52,065 | 133,592 | 101,399 | ||||||||||||
Operating income | 13,672 | 10,321 | 19,004 | 15,246 | ||||||||||||
Interest income | 316 | 356 | 739 | 504 | ||||||||||||
Interest expense | (8,018) | (2,196) | (13,308) | (4,377) | ||||||||||||
Loss on extinguishment of debt | (9,051) | — | (9,051) | — | ||||||||||||
Other expenses, net | (778) | (515) | (807) | (2,438) | ||||||||||||
Income (loss) before income taxes | (3,859) | 7,966 | (3,423) | 8,935 | ||||||||||||
Income tax benefit | (1,030) | (54,531) | (6,860) | (55,181) | ||||||||||||
Income (loss) from continuing operations | (2,829) | 62,497 | 3,437 | 64,116 | ||||||||||||
Income from discontinued operations, net of tax | 6,250 | 4,523 | 14,399 | 19,390 | ||||||||||||
Net income | $ | 3,421 | $ | 67,020 | $ | 17,836 | $ | 83,506 | ||||||||
Basic net income per share: | ||||||||||||||||
Basic net income (loss) per share from continuing operations | $ | (0.04) | $ | 0.89 | $ | 0.05 | $ | 0.91 | ||||||||
Basic net income per share from discontinued operations | 0.09 | 0.06 | 0.20 | 0.28 | ||||||||||||
Basic net income per share | $ | 0.05 | $ | 0.95 | $ | 0.25 | $ | 1.19 | ||||||||
Diluted net income per share: | ||||||||||||||||
Diluted net income (loss) per share from continuing operations | $ | (0.04) | $ | 0.89 | $ | 0.05 | $ | 0.90 | ||||||||
Diluted net income per share from discontinued operations | 0.09 | 0.06 | 0.20 | 0.27 | ||||||||||||
Diluted net income per share | $ | 0.05 | $ | 0.95 | $ | 0.25 | $ | 1.18 | ||||||||
Weighted average shares outstanding used in computing net income per | ||||||||||||||||
Basic | 72,077 | 70,220 | 71,760 | 70,340 | ||||||||||||
Diluted | 72,292 | 70,613 | 72,215 | 70,908 | ||||||||||||
BROOKS AUTOMATION, INC. | |||||
March 31, | September 30, | ||||
2019 | 2018 | ||||
(unaudited) | |||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 137,217 | $ | 197,708 | |
Marketable securities | 47 | 46,281 | |||
Accounts receivable, net | 163,653 | 125,192 | |||
Inventories | 108,512 | 96,986 | |||
Prepaid expenses and other current assets | 35,056 | 31,741 | |||
Current assets held for sale | 65,005 | 66,148 | |||
Total current assets | 509,490 | 564,056 | |||
Property, plant and equipment, net | 97,939 | 59,988 | |||
Long-term marketable securities | 2,795 | 7,237 | |||
Long-term deferred tax assets | 28,012 | 43,798 | |||
Goodwill | 492,526 | 255,876 | |||
Intangible assets, net | 270,793 | 99,956 | |||
Other assets | 23,250 | 5,294 | |||
Non-current assets held for sale | 63,072 | 59,052 | |||
Total assets | $ | 1,487,877 | $ | 1,095,257 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities | |||||
Current portion of long-term debt | $ | 8,114 | $ | 2,000 | |
Accounts payable | 56,934 | 55,873 | |||
Deferred revenue | 31,200 | 25,884 | |||
Accrued warranty and retrofit costs | 7,202 | 6,340 | |||
Accrued compensation and benefits | 24,129 | 29,322 | |||
Accrued restructuring costs | 586 | 659 | |||
Accrued income taxes payable | 7,276 | 6,746 | |||
Accrued expenses and other current liabilities | 36,294 | 30,405 | |||
Current liabilities held for sale | 6,595 | 7,388 | |||
Total current liabilities | 178,330 | 164,617 | |||
Long-term debt | 535,384 | 194,071 | |||
Long-term tax reserves | 15,037 | 1,102 | |||
Long-term deferred tax liabilities | 15,978 | 7,135 | |||
Long-term pension liabilities | 4,717 | 4,255 | |||
Other long-term liabilities | 7,997 | 5,547 | |||
Non-current liabilities held for sale | 523 | 698 | |||
Total liabilities | 757,966 | 377,425 | |||
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, 85,593,182 shares issued and | 856 | 841 | |||
Additional paid-in capital | 1,909,684 | 1,898,434 | |||
Accumulated other comprehensive income | 11,852 | 13,587 | |||
Treasury stock at cost - 13,461,869 shares | (200,956) | (200,956) | |||
Accumulated deficit | (991,525) | (994,074) | |||
Total stockholders' equity | 729,911 | 717,832 | |||
Total liabilities and stockholders' equity | $ | 1,487,877 | $ | 1,095,257 | |
BROOKS AUTOMATION, INC. | |||||
Six Months Ended | |||||
March 31, | |||||
2019 | 2018 | ||||
Cash flows from operating activities | |||||
Net income | $ | 17,836 | $ | 83,506 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 26,339 | 17,634 | |||
Stock-based compensation | 9,717 | 10,129 | |||
Amortization of premium on marketable securities and deferred financing costs | 556 | 217 | |||
Earnings of equity method investments | (3,041) | (3,602) | |||
Loss recovery on insurance claim | — | (1,103) | |||
Deferred income tax benefit | (12,472) | (49,156) | |||
Loss on extinguishment of debt | 9,051 | — | |||
Other gains on disposals of assets | 34 | — | |||
Accounts receivable | (9,654) | (16,949) | |||
Inventories | (9,992) | (16,233) | |||
Prepaid expenses and current assets | 1,938 | (17,248) | |||
Accounts payable | (6,088) | 14,899 | |||
Deferred revenue | 5,410 | (2,783) | |||
Accrued warranty and retrofit costs | 740 | (16) | |||
Accrued compensation and tax withholdings | (11,123) | (4,151) | |||
Accrued restructuring costs | (57) | (1,336) | |||
Proceeds from recovery on insurance claim | 886 | — | |||
Accrued expenses and current liabilities | 2,149 | 9,619 | |||
Net cash provided by operating activities | 22,229 | 23,427 | |||
Cash flows from investing activities | |||||
Purchases of property, plant and equipment | (9,676) | (5,675) | |||
Purchases of marketable securities | (1,290) | (49,560) | |||
Sales of marketable securities | 48,904 | — | |||
Maturities of marketable securities | 2,557 | 100 | |||
Acquisitions, net of cash acquired | (442,704) | (64,988) | |||
Proceeds from sales of property, plant and equipment | — | 200 | |||
Net cash used in investing activities | (402,209) | (119,923) | |||
Cash flows from financing activities | |||||
Proceeds from term loan, net of discount | 686,386 | 197,554 | |||
Proceeds from issuance of common stock | 1,548 | 1,395 | |||
Payment of financing costs | (687) | (318) | |||
Repayment of term loan | (352,289) | (500) | |||
Repayment of capital lease | (487) | — | |||
Common stock dividends paid | (14,429) | (14,125) | |||
Net cash provided by financing activities | 320,042 | 184,006 | |||
Effects of exchange rate changes on cash and cash equivalents | (553) | 4,884 | |||
Net increase (decrease) in cash and cash equivalents | (60,491) | 92,394 | |||
Cash and cash equivalents, beginning of period | 197,708 | 101,622 | |||
Cash and cash equivalents, end of period | $ | 137,217 | $ | 194,016 | |
Revision of Prior Period Financial Statements
During the three months ended March 31, 2019, the Company identified a misclassification related to the presentation of the product and service revenue and the cost of product and service revenue related to GENEWIZ in the Company's Consolidated Statements of Operations for the three months ended December 31, 2018. The total revenue and cost of revenue related to GENEWIZ for the three months ended December 31, 2018 were included in the product revenue and cost of revenue line items instead of the service revenue and cost of revenue line items in the Consolidated Statements of Operations in the Form 10-Q for the quarter ended December 31, 2018. GENEWIZ was acquired during the three months ended December 31, 2018 and therefore the misclassification did not impact any other historical periods. The misclassification had no impact on total revenue or the total cost of revenue, gross profit, operating income (loss), net income (loss), as well as basic and diluted net income (loss) per share during any of the periods presented. Additionally, the misclassification had no impact on the Company's consolidated balance sheets and consolidated statements of cash flows during any of the prior periods. Please refer to Note 1 "Basis of Presentation" to the Company's unaudited consolidated financial statements included in the Form 10-Q for the quarter ended March 31, 2019 for further information on this reclassification.
The following table summarizes the effects of the misclassification to the three months ended December 31, 2018:
Three Months Ended December 31, 2018 | |||||||||
Dollars in thousands | As Previously Reported | Adjustment | As Revised | ||||||
Total Company | |||||||||
Revenue | |||||||||
Products | $ | 141,732 | $ | (16,357) | $ | 125,375 | |||
Service | 37,636 | 16,357 | 53,993 | ||||||
Total Revenue | 179,368 | — | 179,368 | ||||||
Cost of revenue | |||||||||
Products | 83,481 | (8,907) | 74,574 | ||||||
Service | 23,806 | 8,907 | 32,713 | ||||||
Total cost of revenue | $ | 107,287 | $ | — | $ | 107,287 | |||
Brooks Life Science Segment | |||||||||
Revenue | |||||||||
Products | $ | 39,931 | $ | (16,357) | $ | 23,574 | |||
Service | 26,730 | 16,357 | 43,087 | ||||||
Total Revenue | $ | 66,661 | $ | — | $ | 66,661 | |||
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. In this context, the Company has also removed the effect of reversing the valuation allowance reserve on the U.S. deferred income tax assets. 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 | ||||||||||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | ||||||||||||||||
per diluted | per diluted | per diluted | ||||||||||||||||
Dollars in thousands, except per share data | share | share | share | |||||||||||||||
Net income (loss) from continuing operations | $ | (2,829) | $ | (0.04) | $ | 6,266 | $ | 0.09 | $ | 62,497 | $ | 0.89 | ||||||
Adjustments: | ||||||||||||||||||
Purchase accounting impact on inventory and | — | — | 184 | 0.00 | — | — | ||||||||||||
Amortization of intangible assets | 9,405 | 0.13 | 7,776 | 0.11 | 5,611 | 0.08 | ||||||||||||
Restructuring charges | 370 | 0.01 | 59 | 0.00 | 47 | 0.00 | ||||||||||||
Loss on extinguishment of debt | 9,051 | — | — | — | — | — | ||||||||||||
Merger costs | 36 | 0.00 | 6,354 | 0.09 | 1,646 | 0.02 | ||||||||||||
Adjustment of valuation allowance against | — | — | — | — | (58,018) | (0.82) | ||||||||||||
Tax Reform - rate change applied to deferred tax | — | — | (1,125) | (0.02) | — | — | ||||||||||||
Tax adjustments (2) | 803 | 0.01 | (4,411) | (0.06) | — | — | ||||||||||||
Tax effect of adjustments | (4,593) | (0.06) | (3,184) | (0.04) | 599 | 0.01 | ||||||||||||
Non-GAAP adjusted net income from continuing | $ | 12,243 | $ | 0.17 | $ | 11,919 | $ | 0.17 | $ | 12,382 | $ | 0.18 | ||||||
Stock based compensation, pre-tax | 5,121 | 0.07 | 4,176 | 0.06 | 5,074 | 0.07 | ||||||||||||
Tax rate | 15 | % | — | 15 | % | — | 15 | % | — | |||||||||
Stock-based compensation, net of tax | 4,353 | 0.06 | 3,550 | 0.05 | 4,313 | 0.06 | ||||||||||||
Non-GAAP adjusted net income excluding | $ | 16,596 | $ | 0.23 | $ | 15,469 | $ | 0.21 | $ | 16,695 | $ | 0.24 | ||||||
Shares used in computing non-GAAP diluted net | — | 72,292 | — | 72,165 | — | 70,613 | ||||||||||||
Six Months Ended | ||||||||||||
March 31, 2019 | March 31, 2018 | |||||||||||
per diluted | per diluted | |||||||||||
Dollars in thousands, except per share data | $ | share | $ | share | ||||||||
Net income from continuing operations | $ | 3,437 | $ | 0.05 | $ | 64,116 | $ | 0.90 | ||||
Adjustments: | ||||||||||||
Purchase accounting impact on inventory and contracts acquired | 184 | 0.00 | 1,160 | 0.02 | ||||||||
Amortization of intangible assets | 17,180 | 0.24 | 11,103 | 0.16 | ||||||||
Restructuring charges | 429 | 0.01 | 48 | 0.00 | ||||||||
Loss on extinguishment of debt | 9,051 | — | — | — | ||||||||
Merger costs | 6,390 | 0.09 | 2,259 | 0.03 | ||||||||
Adjustment of valuation allowance against deferred tax assets | — | — | (58,018) | (0.82) | ||||||||
Tax Reform - rate change applied to deferred tax liabilities (1) | (1,125) | (0.02) | (671) | (0.01) | ||||||||
Tax adjustments (2) | (3,608) | (0.05) | — | — | ||||||||
Tax effect of adjustments | (7,777) | (0.11) | (1,321) | (0.02) | ||||||||
Non-GAAP adjusted net income from continuing | 24,161 | 0.33 | 18,676 | 0.26 | ||||||||
Stock-based compensation, pre-tax | 9,297 | 0.13 | 9,637 | 0.14 | ||||||||
Tax rate | 15 | % | — | 15 | % | — | ||||||
Stock-based compensation, net of tax | 7,902 | $ | 0.11 | 8,191 | 0.12 | |||||||
Non-GAAP adjusted net income attributable to Brooks | $ | 32,063 | $ | 0.44 | $ | 26,867 | $ | 0.38 | ||||
Shares used in computing non-GAAP diluted net income | — | 72,215 | — | 70,908 | ||||||||
(1) | Adjustments are related to U.S. Federal Tax Reform. |
(2) | The Company has elected to apply the tax benefit related to the stock compensation windfall realized in the quarter ended December 31, 2018 to the non-GAAP full year tax rate and to exclude the benefit of a change in the deferred tax benefit realized in the three months ended December 31, 2018 related to a change in the Company's state effective tax rate related to the acquisition of GENEWIZ. |
Quarter Ended | Six Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | March 31, | March 31, | |||||||||||
Dollars in thousands | 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||
GAAP net income | $ | 3,421 | $ | 14,415 | $ | 67,020 | $ | 17,836 | $ | 83,506 | |||||
Adjustments: | |||||||||||||||
Less: Discontinued operations | (6,250) | (8,149) | (4,523) | (14,399) | (19,390) | ||||||||||
Less: Interest income | (316) | (423) | (356) | (739) | (504) | ||||||||||
Add: Interest expense | 8,018 | 5,290 | 2,196 | 13,308 | 4,377 | ||||||||||
Add: Income tax provision (benefit) | (1,030) | (5,830) | (54,531) | (6,860) | (55,181) | ||||||||||
Add: Depreciation | 5,099 | 4,060 | 3,304 | 9,159 | 6,140 | ||||||||||
Add: Amortization of completed technology | 2,791 | 2,007 | 982 | 4,798 | 1,886 | ||||||||||
Add: Amortization of customer relationships | 6,614 | 5,769 | 4,629 | 12,382 | 9,217 | ||||||||||
Add: Loss on extinguishment of debt | 9,051 | — | — | 9,051 | — | ||||||||||
Earnings before interest, taxes, depreciation and | $ | 27,398 | $ | 17,139 | $ | 18,721 | $ | 44,536 | $ | 30,051 | |||||
Quarter Ended | Six Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | March 31, | March 31, | |||||||||||
Dollars in thousands | 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||
Earnings before interest, taxes, depreciation and | $ | 27,398 | $ | 17,139 | $ | 18,721 | $ | 44,536 | $ | 30,051 | |||||
Adjustments: | |||||||||||||||
Less: Fair value adjustment of equity method | — | — | — | — | |||||||||||
Add: Stock-based compensation | 5,121 | 4,176 | 5,074 | 9,297 | 9,637 | ||||||||||
Add: Restructuring charges | 370 | 59 | 47 | 429 | 48 | ||||||||||
Add: Purchase accounting impact on inventory | — | 184 | — | 184 | 1,160 | ||||||||||
Add: Merger costs | 36 | 6,354 | 1,646 | 6,390 | 2,259 | ||||||||||
Adjusted earnings before interest, taxes, | $ | 32,925 | $ | 27,912 | $ | 25,488 | $ | 60,836 | $ | 43,155 | |||||
Quarter Ended | ||||||||||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | ||||||||||||||||
Dollars in thousands | $ | % | $ | % | $ | % | ||||||||||||
GAAP gross profit/gross margin | $ | 80,516 | 40.6 | % | $ | 72,081 | 40.2 | % | $ | 62,386 | 39.7 | % | ||||||
Adjustments: | ||||||||||||||||||
Amortization of completed | 2,791 | 1.4 | 2,007 | 1.1 | 982 | 0.6 | ||||||||||||
Purchase accounting impact on | — | 0.0 | 184 | 0.1 | — | 0.0 | ||||||||||||
Non-GAAP adjusted gross | $ | 83,307 | 42.0 | % | $ | 74,272 | 41.4 | % | $ | 63,368 | 40.4 | % | ||||||
Six Months Ended | ||||||||||||||||||||||||||||||
March 31, 2019 | March 31, 2018 | |||||||||||||||||||||||||||||
Dollars in thousands | $ | % | $ | % | ||||||||||||||||||||||||||
GAAP gross profit/gross margin percentage | $ | 152,596 | 40.4 | % | $ | 116,645 | 38.9 | % | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||
Amortization of completed technology | 4,798 | 1.3 | % | 1,886 | 0.6 | % | ||||||||||||||||||||||||
Purchase accounting impact on inventory and | 184 | 0.0 | % | 1,160 | 0.4 | % | ||||||||||||||||||||||||
Non-GAAP adjusted gross profit/gross margin | $ | 157,578 | 41.7 | % | $ | 119,691 | 40.0 | % | ||||||||||||||||||||||
Brooks Semiconductor Solutions Group | ||||||||||||||||||
Quarter Ended | ||||||||||||||||||
Dollars in thousands | March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||||||||
GAAP gross profit/margin percentage | $ | 45,987 | 40.7 | % | $ | 45,915 | 40.7 | % | $ | 43,457 | 40.1 | % | ||||||
Adjustments: | ||||||||||||||||||
Amortization of completed | 916 | 0.8 | 937 | 0.8 | 570 | 0.5 | ||||||||||||
Purchase accounting impact on | — | — | 184 | 0.2 | — | — | ||||||||||||
Non-GAAP adjusted gross | $ | 46,903 | 41.6 | % | $ | 47,036 | 41.7 | % | $ | 44,027 | 40.6 | % | ||||||
Brooks Life Sciences | ||||||||||||||||||
Quarter Ended | ||||||||||||||||||
Dollars in thousands | March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||||||||
GAAP gross profit/margin percentage | $ | 34,529 | 40.4 | % | $ | 26,166 | 39.3 | % | $ | 18,929 | 39.0 | % | ||||||
Adjustments: | ||||||||||||||||||
Amortization of completed | 1,875 | 2.2 | 1,070 | 1.6 | 412 | 0.8 | ||||||||||||
Purchase accounting impact on | — | — | — | — | — | — | ||||||||||||
Non-GAAP adjusted gross | $ | 36,404 | 42.6 | % | $ | 27,236 | 40.9 | % | $ | 19,341 | 39.8 | % | ||||||
Brooks Semiconductor Solutions Group | ||||||||||||||
Six Months Ended | ||||||||||||||
Dollars in thousands | March 31, 2019 | March 31, 2018 | ||||||||||||
GAAP gross profit/margin percentage | $ | 91,901 | 40.7 | % | $ | 81,952 | 40.3 | % | ||||||
Adjustments: | ||||||||||||||
Amortization of completed technology | 1,853 | 0.8 | 1,103 | 0.5 | ||||||||||
Purchase accounting impact on inventory and | 184 | 0.1 | — | — | ||||||||||
Non-GAAP adjusted gross profit/margin percentage | $ | 93,938 | 41.6 | % | $ | 83,055 | 40.8 | % | ||||||
Brooks Life Sciences | ||||||||||||||
Six Months Ended | ||||||||||||||
Dollars in thousands | March 31, 2019 | March 31, 2018 | ||||||||||||
GAAP gross profit/margin percentage | $ | 60,695 | 39.9 | % | $ | 34,693 | 36.1 | % | ||||||
Adjustments: | ||||||||||||||
Amortization of completed technology | 2,945 | 1.9 | 783 | 0.8 | ||||||||||
Purchase accounting impact on inventory and | — | — | 1,160 | 1.2 | ||||||||||
Non-GAAP adjusted gross profit/margin percentage | $ | 63,640 | 41.8 | % | $ | 36,636 | 38.2 | % | ||||||
Brooks Semiconductor Solutions Group | Brooks Life Sciences | Total Segments | |||||||||||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | |||||||||||||||||||
Dollars in thousands | 2019 | 2018 | 2018 | 2019 | 2018 | 2018 | 2019 | 2018 | 2018 | ||||||||||||||||||
GAAP operating profit | $ | 17,987 | $ | 16,141 | $ | 15,424 | $ | 3,143 | $ | 1,590 | $ | 1,496 | $ | 21,130 | $ | 17,731 | $ | 16,920 | |||||||||
Adjustments: | |||||||||||||||||||||||||||
Amortization of completed | 916 | 937 | 570 | 1,875 | 1,070 | 412 | 2,791 | 2,007 | 982 | ||||||||||||||||||
Purchase accounting impact | — | 184 | — | — | — | — | — | 184 | — | ||||||||||||||||||
Non-GAAP adjusted operating | $ | 18,903 | $ | 17,262 | $ | 15,994 | $ | 5,018 | $ | 2,660 | $ | 1,908 | $ | 23,921 | $ | 19,922 | $ | 17,902 | |||||||||
Total Segments | Corporate | Total | |||||||||||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | |||||||||||||||||||
Dollars in thousands | 2019 | 2018 | 2018 | 2019 | 2018 | 2018 | 2019 | 2018 | 2018 | ||||||||||||||||||
GAAP operating profit (loss) | $ | 21,130 | $ | 17,731 | $ | 16,920 | $ | (7,458) | $ | (12,398) | $ | (6,599) | $ | 13,672 | $ | 5,333 | $ | 10,321 | |||||||||
Adjustments: | |||||||||||||||||||||||||||
Amortization of completed | 2,791 | 2,007 | 982 | — | — | — | 2,791 | 2,007 | 982 | ||||||||||||||||||
Amortization of customer | — | — | — | 6,614 | 5,769 | 4,629 | 6,614 | 5,769 | 4,629 | ||||||||||||||||||
Restructuring charges | — | — | — | 370 | 59 | 47 | 370 | 59 | 47 | ||||||||||||||||||
Purchase accounting impact | — | 184 | — | — | — | — | — | 184 | — | ||||||||||||||||||
Merger costs | — | — | — | 36 | 6,354 | 1,646 | 36 | 6,354 | 1,646 | ||||||||||||||||||
Non-GAAP adjusted operating | $ | 23,921 | $ | 19,922 | $ | 17,902 | $ | (438) | $ | (216) | $ | (277) | $ | 23,483 | $ | 19,706 | $ | 17,625 | |||||||||
Brooks Semiconductor Solutions Group | Brooks Life Sciences | Total Segments | ||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
Dollars in thousands | March 31, 2019 | March 31, 2018 | March 31, 2019 | March 31, 2018 | March 31, 2019 | March 31, 2018 | ||||||||||||
GAAP operating profit | $ | 34,128 | $ | 27,143 | $ | 4,733 | $ | 101 | $ | 38,861 | $ | 27,244 | ||||||
Adjustments: | ||||||||||||||||||
Amortization of completed technology | 1,853 | 1,103 | 2,945 | 783 | 4,798 | 1,886 | ||||||||||||
Purchase accounting impact on | 184 | — | — | 1,160 | 184 | 1,160 | ||||||||||||
Non-GAAP adjusted operating profit | $ | 36,165 | $ | 28,246 | $ | 7,678 | $ | 2,044 | $ | 43,843 | $ | 30,290 | ||||||
Total Segments | Corporate | Total | ||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
Dollars in thousands | March 31, 2019 | March 31, 2018 | March 31, 2019 | March 31, 2018 | March 31, 2019 | March 31, 2018 | ||||||||||||
GAAP operating profit (loss) | $ | 38,861 | $ | 27,244 | $ | 113,735 | $ | (11,998) | $ | 19,004 | $ | 15,246 | ||||||
Adjustments: | ||||||||||||||||||
Amortization of completed technology | 4,798 | 1,886 | — | — | 4,798 | 1,886 | ||||||||||||
Amortization of customer | — | — | 12,382 | 9,217 | 12,382 | 9,217 | ||||||||||||
Restructuring charges | — | — | 429 | 48 | 429 | 48 | ||||||||||||
Purchase accounting impact on | 184 | 1,160 | — | — | 184 | 1,160 | ||||||||||||
Merger costs | — | — | 6,390 | 2,259 | 6,390 | 2,259 | ||||||||||||
Non-GAAP adjusted operating profit | $ | 43,843 | $ | 30,290 | $ | 132,936 | $ | (474) | $ | 43,187 | $ | 29,816 | ||||||
SOURCE Brooks Automation, Inc.
