Fiscal Second Quarter of 2015 Financial and Operational Highlights:
Summary of GAAP and Non-GAAP Earnings (Loss)
Quarter Ended | |||
March 31, | December 31, | March 31, | |
Dollars in thousands, except per share data | 2015 | 2014 | 2014 |
GAAP net income (loss) attributable to Brooks Automation, Inc. | $ 2,711 | $ (2,734) | $ 3,189 |
GAAP diluted earnings (loss) per share | $ 0.04 | $ (0.04) | $ 0.05 |
Non-GAAP net income attributable to Brooks Automation, Inc. | $ 5,429 | $ 3,443 | $ 4,337 |
Non-GAAP diluted earnings per share | $ 0.08 | $ 0.05 | $ 0.06 |
A reconciliation of non-GAAP measures to the most nearly comparable GAAP measure follows the consolidated balance sheets, statements of operations and statements of cash flows included in this release.
Management Comments
"Our second fiscal quarter results were driven by solid revenue and volume trends across our Product Solutions business," stated Dr.
GAAP Summary
Revenue increased 14% sequentially to
There are a number of special charges and one-time items reflected in each period of results addressed in this report. The impact on earnings of these items and the amortization of intangibles is set out in the unaudited table included with this release.
Results of Q2 Fiscal 2015 (Non-GAAP Discussion)
Non-GAAP net income was
As noted above, revenue for the second fiscal quarter of 2015 was
Adjusted gross margin, which excludes amortization and purchase accounting impacts, was 34.0% in the quarter, essentially flat as compared to the prior quarter. The Brooks Product Solutions adjusted gross margin was 35.1% in the second quarter compared to 34.1% in the prior period. The improved margins reflect higher license income and improved volume absorption of fixed costs. The Brooks Life Science Systems adjusted gross margin was 30.7% compared to 30.4% in the prior quarter. Gross margins in the period were affected by higher inventory reserves, a portion of which were taken as the Company is rationalizing the offerings while consolidating manufacturing sites in this segment. The Brooks Global Services adjusted gross margin was 31.5% in the second quarter compared to 37.2% in the prior quarter. This decrease was primarily due to the mix of repair services performed in the quarter. In summary, the total adjusted gross profit increase of
Total order bookings in the second quarter were
Non-GAAP operating expense of
Other income was
Adjusted EBITDA in the quarter was
Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of
Guidance for Third Fiscal Quarter of Fiscal 2015
The Company announced revenue and earnings guidance for the third quarter of fiscal 2015. Revenue is expected to be in the range of
Conference Call
Brooks management will webcast its second quarter earnings conference call today at
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 800-728-2056 (US &
About
Brooks is a leading worldwide provider of automation and cryogenic solutions for multiple markets including semiconductor manufacturing and life sciences. Brooks' technologies, engineering competencies and global service capabilities provide customers speed to market and ensure high uptime and rapid response, which equate to superior value in their mission-critical controlled environments. Since 1978, Brooks has been a leading partner to the global semiconductor manufacturing market and, through product development initiatives and strategic business acquisitions, has expanded offerings to meet the needs of customers in the life sciences industry, analytical & research markets and clean energy solutions. Brooks is headquartered in
For more information, visit www.brooks.com.
"Safe Harbor Statement" under Section 21E of the Securities Exchange Act of 1934
Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Brooks' financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. These forward-looking statements include statements regarding our revenue and operating margin expectations, our ability to develop further our business in new and adjacent markets, and our ability to achieve financial success in the future. Factors that could cause results to differ from our expectations include the following: volatility of the industries the Company serves, particularly the semiconductor industry; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; the timing and effectiveness of cost reduction and cost control measures; price competition; disputes concerning intellectual property; continuing uncertainties in global political and economic conditions, and other factors and other risks that we have described in our filings with the
BROOKS AUTOMATION, INC. | ||
CONSOLIDATED BALANCE SHEETS | ||
(unaudited) | ||
(In thousands, except share and per share data) | ||
March 31, | September 30, | |
2015 | 2014 | |
Assets | ||
Current assets | ||
Cash and cash equivalents | $ 73,176 | $ 94,114 |
Marketable securities | 69,327 | 68,130 |
Accounts receivable, net | 94,679 | 80,106 |
Inventories | 90,558 | 93,567 |
Deferred tax assets | 18,871 | 19,009 |
Prepaid expenses and other current assets | 14,841 | 19,387 |
Total current assets | 361,452 | 374,313 |
Property, plant and equipment, net | 46,833 | 50,183 |
Long-term marketable securities | 64,601 | 83,212 |
Long-term deferred tax assets | 69,595 | 67,563 |
Goodwill | 118,264 | 109,501 |
Intangible assets, net | 59,693 | 59,550 |
Equity method investments | 27,027 | 28,944 |
Other assets | 9,490 | 4,772 |
Total assets | $ 756,955 | $ 778,038 |
Liabilities and equity | ||
Current liabilities | ||
Accounts payable | $ 43,610 | $ 33,740 |
Capital lease obligation | 881 | 881 |
Deferred revenue | 19,943 | 26,279 |
Accrued warranty and retrofit costs | 6,203 | 6,499 |
Accrued compensation and benefits | 15,345 | 21,663 |
Accrued restructuring costs | 3,297 | 3,475 |
Accrued income taxes payable | 2,789 | 1,808 |
Deferred tax liabilities | 458 | 808 |
Accrued expenses and other current liabilities | 15,027 | 18,688 |
Total current liabilities | 107,553 | 113,841 |
Long-term capital lease obligation | 7,173 | 7,417 |
Long-term tax reserves | 4,175 | 5,708 |
Long-term deferred tax liabilities | 3,418 | 2,567 |
Long-term pension liability | 2,342 | 1,774 |
Other long-term liabilities | 3,467 | 3,842 |
Total liabilities | 128,128 | 135,149 |
Equity | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding | — | — |
Common stock, $0.01 par value, 125,000,000 shares authorized, 80,943,277 shares issued and 67,481,408 shares outstanding at March 31, 2015, 80,375,777 shares issued and 66,913,908 shares outstanding at September 30, 2014 |
809 | 804 |
Additional paid-in capital | 1,840,426 | 1,834,619 |
Accumulated other comprehensive income | 9,333 | 15,687 |
Treasury stock at cost, 13,461,869 shares | (200,956) | (200,956) |
Accumulated deficit | (1,020,785) | (1,007,265) |
Total equity | 628,827 | 642,889 |
Total liabilities and equity | $ 756,955 | $ 778,038 |
BROOKS AUTOMATION, INC. | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(unaudited) | ||||
(In thousands, except per share data) | ||||
Three months ended | Six months ended | |||
March 31, | March 31, | |||
2015 | 2014 | 2015 | 2014 | |
Revenue | ||||
Product | $ 116,395 | $ 102,534 | $ 216,125 | $ 195,664 |
Services | 22,918 | 23,366 | 45,924 | 47,308 |
Total revenue | 139,313 | 125,900 | 262,049 | 242,972 |
Cost of revenue | ||||
Product | 79,048 | 64,786 | 149,268 | 125,522 |
Services | 14,240 | 16,816 | 27,668 | 32,261 |
Total cost of revenue | 93,288 | 81,602 | 176,936 | 157,783 |
Gross profit | 46,025 | 44,298 | 85,113 | 85,189 |
Operating expenses | ||||
Research and development | 12,678 | 12,493 | 26,167 | 25,044 |
Selling, general and administrative | 29,609 | 28,637 | 59,020 | 54,772 |
Restructuring and other charges | 685 | 772 | 3,353 | 1,519 |
Total operating expenses | 42,972 | 41,902 | 88,540 | 81,335 |
Operating income (loss) | 3,053 | 2,396 | (3,427) | 3,854 |
Interest income | 228 | 258 | 479 | 504 |
Interest expense | (98) | — | (200) | — |
Other income, net | 1,161 | 56 | 2,180 | 315 |
Income (loss) before income taxes and equity in earnings (losses) of equity method investments | 4,344 | 2,710 | (968) | 4,673 |
Income tax provision (benefit) | 1,560 | 1,117 | (1,550) | 1,910 |
Income before equity in earnings (losses) of equity method investments | 2,784 | 1,593 | 582 | 2,763 |
Equity in earnings (losses) of equity method investments | (73) | 510 | (605) | 1,259 |
Income (loss) from continuing operations | 2,711 | 2,103 | (23) | 4,022 |
Income from discontinued operations, net of tax | — | 1,162 | — | 2,739 |
Net income (loss) | 2,711 | 3,265 | (23) | 6,761 |
Net income attributable to noncontrolling interests | — | (76) | — | (124) |
Net income (loss) attributable to Brooks Automation, Inc. | $ 2,711 | $ 3,189 | $ (23) | $ 6,637 |
Basic net income (loss) per share attributable to Brooks Automation, Inc. common stockholders: | ||||
Net income (loss) from continuing operations | $ 0.04 | $ 0.03 | — | $ 0.06 |
Net income from discontinued operations, net of tax | — | 0.02 | — | 0.04 |
Basic net income (loss) per share attributable to Brooks Automation, Inc. | $ 0.04 | $ 0.05 | — | $ 0.10 |
Diluted net income (loss) per share attributable to Brooks Automation, Inc. common stockholders: | ||||
Net income (loss) from continuing operations | $ 0.04 | $ 0.03 | $ — | $ 0.06 |
Net income from discontinued operations, net of tax | — | 0.02 | — | 0.04 |
Diluted net income (loss) per share attributable to Brooks Automation, Inc. | $ 0.04 | $ 0.05 | $ — | $ 0.10 |
Dividend declared per share | $ 0.10 | $ 0.08 | $ 0.20 | $ 0.16 |
Shares used in computing earnings (loss) per share: | ||||
Basic | 67,387 | 66,646 | 67,255 | 66,499 |
Diluted | 68,414 | 67,505 | 67,255 | 67,383 |
BROOKS AUTOMATION, INC. | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(unaudited) | ||
(In thousands) | ||
Six Months Ended March 31, | ||
2015 | 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ (23) | $ 6,761 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 12,733 | 11,170 |
Impairment of intangible assets | — | 398 |
Stock-based compensation | 7,108 | 6,516 |
Amortization of premium on marketable securities | 634 | 610 |
Undistributed losses (earnings) of equity method investments | 605 | (1,259) |
Deferred income tax provision (benefit) | (2,728) | 2,269 |
(Gain) loss on disposal of long-lived assets | (4) | 39 |
Changes in operating assets and liabilities, net of acquisitions and disposals: | ||
Accounts receivable | (13,269) | (6,057) |
Inventories | 2,474 | 276 |
Prepaid expenses and other current assets | (5,365) | 1,546 |
Accounts payable | 8,345 | 248 |
Deferred revenue | (3,868) | 13,408 |
Accrued warranty and retrofit costs | (274) | (951) |
Accrued compensation and benefits | (6,200) | 2,730 |
Accrued restructuring costs | (6) | 141 |
Accrued expenses and other current liabilities | 4,791 | (2,194) |
Net cash provided by operating activities | 4,953 | 35,651 |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (3,647) | (2,696) |
Purchases of marketable securities | (30,739) | (63,561) |
Sale/maturity of marketable securities | 47,625 | 46,551 |
Acquisitions, net of cash acquired | (17,257) | — |
Proceeds from the sale of property, plant and equipment | 6 | — |
Other investment | (5,000) | (4,000) |
Decrease in restricted cash | — | 177 |
Net cash used in investing activities | (9,012) | (23,529) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock, net of issuance costs | 867 | 967 |
Principal repayment of capital lease obligation | (244) | — |
Common stock dividend paid | (13,480) | (10,800) |
Net cash used in financing activities | (12,857) | (9,833) |
Effects of exchange rate changes on cash and cash equivalents | (4,022) | 21 |
Net increase (decrease) in cash and cash equivalents | (20,938) | 2,310 |
Cash and cash equivalents, beginning of period | 94,114 | 82,971 |
Cash and cash equivalents, end of period | $ 73,176 | $ 85,281 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Acquisition of buildings and land through capital lease | $ — | $ 8,537 |
Notes on Non-GAAP Financial Measures:
The information in this press release is for: internal managerial purposes; when publicly providing guidance on future results; and as a means to evaluate period-to-period comparisons. These financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management believes these financial measures provide an additional way of viewing aspects of our operations, that, when viewed with our GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of our business. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and not rely on any single measure.
The press release includes financial measures which exclude the effects of special charges such as restructuring charges and acquisition related charges. Management believes these measures are useful to investors because it eliminates accounting charges that do not reflect Brooks' day-to-day operations. Tables reconciling GAAP to the non-GAAP measures are presented below.
Quarter Ended | ||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||
Dollars in thousands, except per share data | $ | per diluted share | $ | per diluted share | $ | per diluted share |
Net income (loss) attributable to Brooks Automation, Inc. | $ 2,711 | $ 0.04 | $ (2,734) | $ (0.04) | $ 3,189 | $ 0.05 |
Income from discontinued operations, net of tax | — | — | — | — | 1,162 | 0.02 |
Net income (loss) attributable to continuing operations | 2,711 | 0.04 | (2,734) | (0.04) | 2,027 | 0.03 |
Adjustments, net of tax: | ||||||
Purchase accounting impact on inventory and contracts acquired | — | — | 1,164 | 0.02 | 79 | 0.00 |
Amortization of intangible assets | 2,219 | 0.03 | 2,221 | 0.03 | 1,584 | 0.02 |
Impairment of equity method investments | — | — | 681 | 0.01 | — | — |
Restructuring charges | 457 | 0.01 | 1,786 | 0.03 | 526 | 0.01 |
Merger costs | 42 | 0.00 | 325 | 0.00 | 121 | 0.00 |
Non-GAAP net income attributable to Brooks Automation, Inc. | 5,429 | 0.08 | 3,443 | 0.05 | 4,337 | 0.06 |
Stock-based compensation | 3,625 | 0.05 | 3,483 | 0.05 | 3,795 | 0.06 |
Non-GAAP net income attributable to Brooks Automation, Inc. - excluding stock-based compensation | $ 9,054 | $ 0.13 | $ 6,926 | $ 0.10 | $ 8,132 | $ 0.12 |
Six Months Ended | ||||
March 31, 2015 | March 31, 2014 | |||
Dollars in thousands, except per share data | $ | per diluted share | $ | per diluted share |
Net income (loss) attributable to Brooks Automation, Inc. | $ (23) | $ 0.00 | $ 6,637 | $ 0.10 |
Income from discontinued operations, net of tax | — | — | 2,739 | 0.04 |
Net income (loss) attributable to continuing operations | (23) | 0.00 | 3,898 | 0.06 |
Adjustments, net of tax: | ||||
Purchase accounting impact on inventory and contracts acquired | 1,164 | 0.02 | 229 | 0.00 |
Amortization of intangible assets | 4,440 | 0.07 | 3,297 | 0.05 |
Impairment of intangible assets | — | — | 259 | 0.00 |
Impairment of equity method investments | 681 | 0.01 | — | — |
Restructuring charges | 2,243 | 0.03 | 1,034 | 0.02 |
Merger costs | 367 | 0.01 | 121 | 0.00 |
Non-GAAP net income attributable to Brooks Automation, Inc. | 8,872 | 0.13 | 8,838 | 0.13 |
Stock-based compensation | 7,108 | 0.11 | 6,518 | 0.10 |
Non-GAAP net income attributable to Brooks Automation, Inc. - excluding stock-based compensation | $ 15,980 | $ 0.24 | $ 15,356 | $ 0.23 |
Quarter Ended | ||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||
Dollars in thousands | $ | % | $ | % | $ | % |
Gross profit/gross margin percentage | $ 46,025 | 33.0% | $ 39,088 | 31.8% | $ 44,298 | 35.2% |
Adjustments: | ||||||
Amortization of intangible assets | 1,299 | 0.9% | 1,305 | 1.1% | 914 | 0.7% |
Purchase accounting impact on inventory and contracts acquired | — | — | 1,511 | 1.2% | 122 | 0.1% |
Adjusted gross profit/gross margin percentage | $ 47,324 | 34.0% | $ 41,904 | 34.1% | $ 45,334 | 36.0% |
Six Months Ended | ||||
March 31, 2015 | March 31, 2014 | |||
Dollars in thousands | $ | % | $ | % |
Gross profit/gross margin percentage | $ 85,113 | 32.5% | $ 85,189 | 35.1% |
Adjustments: | ||||
Amortization of intangible assets | 2,604 | 1.0% | 2,031 | 0.8% |
Impairment of intangible assets | — | — | 398 | 0.2% |
Purchase accounting impact on inventory and contracts acquired | 1,511 | 0.6% | 352 | 0.1% |
Adjusted gross profit/gross margin percentage | $ 89,228 | 34.1% | $ 87,970 | 36.2% |
Quarter Ended | Six Months Ended | ||||
March 31, | December 31, | March 31, | March 31, | March 31, | |
Dollars in thousands | 2015 | 2014 | 2014 | 2015 | 2014 |
Net income (loss) attributable to Brooks Automation, Inc. | $ 2,711 | $ (2,734) | $ 3,189 | $ (23) | $ 6,637 |
Adjustments: | |||||
Less: Interest income | (228) | (251) | (258) | (479) | (504) |
Add: Interest expense | 98 | 102 | — | 200 | — |
Add: Income tax provision (benefit) | 1,560 | (3,110) | 1,117 | (1,550) | 1,910 |
Add: Depreciation | 3,117 | 3,186 | 3,006 | 6,302 | 6,095 |
Add: Amortization of completed technology | 1,299 | 1,304 | 914 | 2,604 | 2,031 |
Add: Amortization of customer relationships and acquired intangible assets | 1,914 | 1,913 | 1,460 | 3,826 | 2,916 |
EBITDA | $ 10,471 | $ 410 | $ 9,428 | $ 10,880 | $ 19,085 |
Quarter Ended | Six Months Ended | ||||
March 31, | December 31, | March 31, | March 31, | March 31, | |
Dollars in thousands | 2015 | 2014 | 2014 | 2015 | 2014 |
EBITDA | $ 10,471 | $ 410 | $ 9,428 | $ 10,880 | $ 19,085 |
Adjustments: | |||||
Less: Income from discontinued operations, net of tax | — | — | (1,162) | — | (2,739) |
Add: Impairment of completed technology | — | — | — | — | 398 |
Add: Stock-based compensation | 3,625 | 3,483 | 3,795 | 7,108 | 6,518 |
Add: Restructuring charges | 685 | 2,668 | 772 | 3,353 | 1,519 |
Add: Purchase accounting impact on inventory and contracts acquired | — | 1,511 | 122 | 1,511 | 352 |
Add: Merger costs | 64 | 325 | 181 | 389 | 181 |
Add: Impairment of Equity Method Investments | — | 681 | — | 681 | — |
Adjusted EBITDA | $ 14,845 | $ 9,078 | $ 13,136 | $ 23,922 | $ 25,314 |
CONTACT:
978-262-4443
lynne.yassemedis@brooks.com
Senior Managing Director
310-954-1105
john.mills@icrinc.com
Brooks Automation, Inc.