Brooks Automation Reports Results of its Third Quarter of Fiscal 2020, Ended June 30, 2020, and Announces Quarterly Cash Dividend


Continued Revenue Growth and Earnings Expansion on Solid Execution Across Both Segments

CHELMSFORD, Mass. , July 30, 2020 /PRNewswire/ — Brooks Automation, Inc. (Nasdaq: BRKS) today reported financial results for the third fiscal quarter, ended June 30, 2020 .

Financial Results Summary

Quarter Ended

Dollars in millions, except per share data

June 30, 

March 31, 

June 30, 

Change vs.

2020

2020

2019

Prior Qtr

Prior Year

Revenue

$

220

$

220

$

204

0

%

8

%

Semiconductor Solutions

$

127

$

125

$

116

2

%

9

%

Life Sciences

$

93

$

95

$

88

(2)

%

6

%

Diluted EPS Continuing Operations

$

0.19

$

0.12

$

0.01

49

%

N/M

Diluted EPS Total

$

0.19

$

0.12

$

0.10

50

%

85

%

Non-GAAP Diluted EPS Continuing Operations

$

0.32

$

0.25

$

0.20

26

%

60

%

Management Comments
“Despite the current environment’s headwinds, we delivered a strong performance in the quarter,” commented Steve Schwartz , president and CEO. “Our Life Sciences business witnessed robust demand for its sample management offerings and gene synthesis services.  Due to many customer lab closures around the world, our gene sequencing business had a slow start to the quarter but has steadily increased and is now approaching pre-COVID levels.  We continue to see a ramp in Semiconductor with increased demand for both automation systems and robots.  The real story here is about the relentless team of Brooks employees working through the most difficult of environments without missing a beat!”

Summary of GAAP Results for Continuing Operations

  • Revenue for the third fiscal quarter was $220 million , up 8% year over year.  Diluted EPS from continuing operations was $0.19 per share compared to $0.01 per share in the third quarter of 2019. 
  • Life Sciences revenue of $93 million grew 6% year over year and was down 2% sequentially.  Year-over-year organic growth was 5%, led by consumables, instruments, and storage services.  GENEWIZ revenue declined 9% sequentially but remained 1% above the third quarter 2019 revenue. 
  • Semiconductor Solutions revenue was $127 million , an increase of 9% year over year and 2% sequentially. 
  • GAAP operating income was $19 million , compared to $16 million in the third quarter of 2019.  GAAP operating margin at 8.7% was 60 basis points higher year over year and 210 basis points higher sequentially.
  • Net interest expense was $0.8 million for the quarter, a $7.1 million reduction from the third quarter of 2019.

Summary of Non-GAAP Results for Continuing Operations

  • Diluted EPS from continuing operations for the third quarter was $0.32 , up 26% from the second quarter of 2020 and up 60% over the prior year.  
  • Operating income was $30 million , an increase of 15% sequentially and year over year.  Operating margin was 13.5%, up 180 basis points sequentially and 80 basis points year over year.  The margin expansion was driven primarily by stronger gross margin.
  • Gross margin was 43.5%, an increase of 130 basis points sequentially and 110 basis points year over year.  Gross margin expansion in both segments, Life Sciences and Semiconductor Solutions, drove the improvement year over year, while the sequential momentum was driven by the Semiconductor business.
  • Life Sciences operating margin was 7.1%, approximately flat year over year and lower by 150 basis points from the prior quarter.  Gross margin performance of 44.6%, up 140 basis points year over year and lower by 120 basis points sequentially, was the primary driver.  The Life Sciences Products business reported 40 basis points of improvement sequentially but was more than offset by the lower margins of the Life Sciences Services business.
  • Semiconductor Solutions operating margin was 18.4%, an increase of 100 basis points from the prior year and up 510 basis points from the second quarter of 2020.  Gross margin of 42.7%, up 100 basis points year over year and 320 basis points sequentially, was the primary driver of operating margin expansion.  
  • Adjusted EBITDA was $40 million , up 12% from the third quarter of 2019 and 16% sequentially.

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.

Cash and Liquidity

  • Cash flow from operations was $26 million for the quarter and on a year-to-date basis, and cash flow from operations, excluding the $92 million tax payment made in the second quarter on the gain on the sale of the Semiconductor cryogenics business, was $78 million , an increase of $19 million from the same period the prior year. 
  • The Company ended the third quarter with a total balance of cash, cash equivalents, restricted cash, and marketable securities of $263 million .  With total debt of $51 million , net cash was $212 million .

Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on September 25, 2020 to stockholders of record on September 4 , 2020.  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.

Guidance for Fourth Quarter Fiscal 2020
The Company announced revenue and earnings guidance for the fourth quarter of fiscal 2020.  Revenue is expected to be in the range of $229 million to $241 million and non-GAAP diluted earnings per share is expected to be in the range of $0.32 to $0.40 .  GAAP diluted earnings per share for the fourth fiscal quarter is expected to be in the range of $0.19 to $0.27 .

Conference Call and Webcast
Brooks management will webcast its third 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.investorroom.com , and will be archived online on this website for convenient on-demand replay.  In addition, you may call 800-754-1366 (US & Canada only) or +1-212-231-2930 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.

“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 our revenue and earnings expectations, our ability to increase our profitability, our ability to improve or retain our market position, and our ability to deliver financial success in the future. Factors that could cause results to differ from our expectations include the following:  the impact of the COVID-19 global pandemic on the markets we serve, including our supply chain, and on the global economy generally, 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, 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
Brooks (Nasdaq: BRKS) is a leading provider of life science sample-based solutions and semiconductor manufacturing solutions worldwide.  The Company’s Life Sciences business provides a full suite of reliable cold-chain sample management solutions and genomic services across areas such as drug development, clinical research and advanced cell therapies for the industry’s top pharmaceutical, biotech, academic and healthcare institutions globally.  Brooks Life Sciences’ GENEWIZ division is a leading provider of DNA gene sequencing and gene synthesis services.  With over 40 years as a partner to the semiconductor manufacturing industry, Brooks is a provider of industry-leading precision vacuum robotics, integrated automation systems and contamination control solutions to the world’s leading semiconductor chip makers and equipment manufacturers.  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

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

June 30, 

June 30, 

2020

2019

2020

2019

Revenue

Products

$

142,323

$

128,397

$

413,329

$

381,827

Services

78,027

75,483

237,748

199,810

Total revenue

220,350

203,880

651,077

581,637

Cost of revenue

Products

81,989

77,203

245,930

229,580

Services

45,573

43,167

137,092

115,951

Total cost of revenue

127,562

120,370

383,022

345,531

Gross profit

92,788

83,510

268,055

236,106

Operating expenses

Research and development

14,004

14,235

43,727

41,485

Selling, general and administrative

59,714

52,596

178,866

158,509

Restructuring charges

(29)

256

1,125

685

Total operating expenses

73,689

67,087

223,718

200,679

Operating income

19,099

16,423

44,337

35,427

Interest income

29

108

865

847

Interest expense

(810)

(8,041)

(2,265)

(21,348)

Loss on extinguishment of debt

(9,051)

Other income (expenses), net

498

(309)

(1,318)

(1,116)

Income before income taxes

18,816

8,181

41,619

4,759

Income tax benefit

5,120

7,260

5,557

400

Income  from continuing operations

13,696

921

36,062

4,359

Income (loss) from discontinued operations, net of tax

6,333

(182)

20,731

Net income

$

13,696

$

7,254

$

35,880

$

25,090

Basic net income per share:

Income from continuing operations

$

0.19

$

0.01

$

0.48

$

0.06

Income (loss) from discontinued operations, net of tax

0.09

(0.00)

0.29

Basic net income per share

$

0.19

$

0.10

$

0.49

$

0.35

Diluted net income per share:

Income from continuing operations

$

0.19

$

0.01

$

0.49

$

0.06

Income (loss) from discontinued operations, net of tax

0.09

(0.00)

0.29

Diluted net income per share

$

0.19

$

0.10

$

0.49

$

0.35

Weighted average shares outstanding used in computing net income per share:

Basic

73,759

72,188

73,473

71,903

Diluted

73,860

72,470

73,766

72,313

 

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

June 30, 

September 30,

2020

2019

Assets

Current assets

Cash and cash equivalents

$

256,633

$

301,642

Marketable securities

136

34,124

Accounts receivable, net

183,167

165,602

Inventories

117,686

99,445

Prepaid expenses and other current assets

44,389

46,332

Total current assets

602,011

647,145

Property, plant and equipment, net

111,416

100,669

Long-term marketable securities

2,939

2,845

Long-term deferred tax assets

3,489

5,064

Goodwill

500,062

488,602

Intangible assets, net

226,623

251,168

Other assets

57,377

20,506

Total assets

$

1,503,917

$

1,515,999

Liabilities and Stockholders’ Equity

Current liabilities

Current portion of long-term debt

$

828

$

829

Accounts payable

70,344

58,919

Deferred revenue

31,162

29,435

Accrued warranty and retrofit costs

7,881

7,175

Accrued compensation and benefits

33,847

31,375

Accrued restructuring costs

437

1,040

Accrued income taxes payable

16,253

99,263

Accrued expenses and other current liabilities

45,053

44,234

Total current liabilities

205,805

272,270

Long-term debt

49,563

50,315

Long-term tax reserves

19,609

18,274

Long-term deferred tax liabilities

10,613

20,636

Long-term pension liabilities

5,724

5,338



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