CHELMSFORD, Mass., Feb. 5, 2015 (GLOBE NEWSWIRE) -- Brooks Automation, Inc. (Nasdaq:BRKS), a leading worldwide provider of automation and cryogenic solutions for multiple markets including semiconductor manufacturing and life sciences, today reported financial results for the first quarter ended December 31, 2014.
Fiscal First Quarter of 2015 Financial and Operational Highlights:
- Revenue was $122.7 million;
- Total order bookings were $128.4 million;
- Life Science Systems revenue was $16.7 million;
- GAAP Net Loss was $(2.7) million with diluted EPS of $(0.04);
- Non-GAAP Net Income was $3.4 million with diluted EPS of $0.05;
- Operating cash flow was $3.0 million;
- Total Cash and Cash Equivalents, and Marketable Securities, as of December 31, was $218.7 million or $3.26 per Diluted Share with no bank debt.
Summary of GAAP and Non-GAAP Earnings (Loss)
| Quarter Ended | |||
| December 31, | September 30, | December 31, | |
| Dollars in thousands, except per share data | 2014 | 2014 | 2013 |
| GAAP net income (loss) attributable to Brooks Automation, Inc. | $ (2,734) | $ 248 | $ 3,448 |
| GAAP diluted earnings (loss) per share | $ (0.04) | $ 0.00 | $ 0.05 |
| Non-GAAP net income attributable to Brooks Automation, Inc. | $ 3,443 | $ 4,726 | $ 4,501 |
| Non-GAAP diluted earnings per share | $ 0.05 | $ 0.07 | $ 0.07 |
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 results of this first fiscal quarter are softer than expected. The semiconductor top-line was roughly on track with our expectations while we faced some challenges in the life sciences segment," stated Dr. Steve Schwartz, Chief Executive Officer of Brooks. "Revenue from life sciences came in below expectations, but remains consistent with our general expectations that revenue in this segment will not always be linear as we build out our capabilities. We have made significant progress in transforming our portfolio, and we are confident that we have the portfolio in place, combined with cost reduction initiatives, to position us for continued profitable growth in 2015 and beyond."
GAAP Summary
Revenue was flat sequentially at $122.7 million in the first quarter of fiscal 2015 as a 5% increase in Brooks Product Solutions revenue was offset by a 17% decline in Life Sciences revenue. Gross margins at 31.8% were lower by 1.9 points and total operating expense increased $3.5 million. The increased spending was driven by the addition of the FluidX business, acquired on October 1, 2014 and additional investment in the Contamination Control Solutions business. Restructuring expense was $2.7 million in the quarter, an increase of $1.0 million. These additional costs were partially offset by improvements in other income from foreign exchange gains of $1.0 million and tax benefits in the quarter. The GAAP net income result was a net loss of $2.7 million and diluted EPS was $(0.04).
There are a number of special charges and one-time items reflected in both fiscal 2015 and fiscal 2014. 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 Q1 Fiscal 2015 (Non-GAAP Discussion)
Non-GAAP net income was $3.4 million in the first quarter, resulting in non-GAAP earnings per share of $0.05. This compares to non-GAAP net income of $4.7 million and non-GAAP EPS of $0.07 in the prior quarter.
As noted above, revenue for the first fiscal quarter 2015 was $122.7 million, flat compared to the fourth fiscal quarter, 2014. Brooks Product Solutions revenue grew 5% to $82.9 million. This included revenue from the Contamination Control Solutions business of $7.2 million, compared to $4.5 million in the previous quarter. Additional sequential growth occurred in sales to the semiconductor front-end manufacturing market, while sales to the industrial and the semiconductor adjacent markets, including semiconductor back-end manufacturing, saw decline. The Life Science Systems revenue was $16.7 million, a sequential decline of 17%. This decline was primarily in revenue from systems projects and in the base consumables and instruments business. The FluidX bio-sample consumables business, acquired October 1, 2014, provided $3.6 million of incremental revenue in the quarter.
Adjusted gross margin, which excludes amortization and purchase accounting impacts, was 34.1% in the quarter, reflecting a sequential decrease of 2.1 points and a drop in adjusted gross profit of $2.5 million. The margin decline was seen in both the Product Solutions and Life Science Systems segments while the Global Services segment improved quarter to quarter. The Brooks Product Solutions adjusted gross margin was 34.1% in the first quarter compared to 35.5% in the prior period. This decline was primarily driven by a decrease in license income and temporary operational transition costs in moving portions of the manufacturing of the Company's Polycold product to a third-party manufacturer. The Brooks Life Science Systems adjusted gross margin was 30.4% compared to 40.2% in the prior quarter. The margin decline was due to additional resources and logistics cost to meet customer commitments. Gross margins were also negatively impacted by the recent weakness in foreign currency exchange rates and the resulting effect on revenue earned in the current period. The Brooks Global Services adjusted gross margin was 37.2% in the first quarter compared to 35.5% in the prior quarter. In summary, the total gross profit decrease of $2.5 million includes an increase of $0.5 million in the semiconductor segments of Product Solutions and Global Services on higher revenue, and a decrease of $3.0 million from Life Science Systems on lower revenue.
Total order bookings in the first quarter were $128.4 million compared to $130.8 million in the fourth quarter. The Life Science Systems business had $18.6 million of new orders in the first quarter. In addition to the positive book-to-bill ratio in the quarter, the newly acquired FluidX business added $8 million of backlog to Life Sciences, bringing total backlog to $53 million and $38 million in 12-month backlog to $44 million. Bookings for the semiconductor business in the Product Solutions and Global Services segments totaled $109.8 million, compared to $118.2 million in the fourth quarter.
Non-GAAP operating expense of $40.7 million increased $2.0 million or 5.2% compared to the prior quarter. The increase reflects the addition of the new acquisition of FluidX, additional spending for the Life Sciences and the Contamination Control Systems businesses, and increased accruals for stock-based compensation.
Other income was $1.0 million in the quarter, an improvement of $1.2 million driven by foreign exchange gains in our European operations which make most of their sales in US dollar contracts.
Adjusted EBITDA in the quarter was $9.1 million compared to $10.9 million in the fourth quarter. Cash flow from operations for the first quarter was $3.0 million. The Company's cash, cash equivalents, and marketable securities decreased $26.8 million in the first quarter to close at $218.7 million. This decrease was primarily attributable to the acquisition of FluidX and dividends paid in the quarter.
Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on March 27, 2015 to stockholders of record on March 6, 2015. 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 Second Fiscal Quarter of Fiscal 2015
The Company announced revenue and earnings guidance for the second quarter of fiscal 2015. Revenue is expected to be in the range of $130 million to $135 million. Non-GAAP diluted earnings per share is expected to be in the range of $0.04 to $0.06.
Conference Call
Brooks management will webcast its first 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 800-926-9197 (US & Canada only) or 212-231-2930 to listen to the live webcast.
About Brooks Automation, Inc.
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 Chelmsford, MA, with direct operations in North America, Europe and Asia.
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 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 | ||
| (unaudited) | ||
| (In thousands, except share and per share data) | ||
|
December 31, 2014 |
September 30, 2014 |
|
| Assets | (In thousands, except share and per share data) | |
| Current assets | ||
| Cash and cash equivalents | $ 77,759 | $ 94,114 |
| Marketable securities | 58,648 | 68,130 |
| Accounts receivable, net | 75,675 | 80,106 |
| Inventories | 94,936 | 93,567 |
| Deferred tax assets | 17,367 | 19,009 |
| Prepaid expenses and other current assets | 15,166 | 19,387 |
| Total current assets | 339,551 | 374,313 |
| Property, plant and equipment, net | 47,918 | 50,183 |
| Long-term marketable securities | 82,288 | 83,212 |
| Long-term deferred tax assets | 73,120 | 67,563 |
| Goodwill | 117,652 | 109,501 |
| Intangible assets, net | 62,722 | 59,550 |
| Equity method investments | 27,197 | 28,944 |
| Other assets | 6,699 | 4,772 |
| Total assets | $ 757,147 | $ 778,038 |
| Liabilities and equity | ||
| Current liabilities | ||
| Accounts payable | $ 37,674 | $ 33,740 |
| Capital lease obligation | 881 | 881 |
| Deferred revenue | 25,657 | 26,279 |
| Accrued warranty and retrofit costs | 6,255 | 6,499 |
| Accrued compensation and benefits | 12,353 | 21,663 |
| Accrued restructuring costs | 3,928 | 3,475 |
| Accrued income taxes payable | 2,966 | 1,808 |
| Deferred tax liabilities | 847 | 808 |
| Accrued expenses and other current liabilities | 14,094 | 18,688 |
| Total current liabilities | 104,655 | 113,841 |
| Long-term capital lease obligation | 7,296 | 7,417 |
| Long-term tax reserves | 5,293 | 5,708 |
| Long-term deferred tax liabilities | 3,941 | 2,567 |
| Long-term pension liability | 1,715 | 1,774 |
| Other long-term liabilities | 3,633 | 3,842 |
| Total liabilities | 126,533 | 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, 80,775,926 shares issued and 67,314,057 shares outstanding at December 31, 2014, 80,375,777 shares issued and 66,913,908 shares outstanding at September 30, 2014 | 808 | 804 |
| Additional paid-in capital | 1,835,998 | 1,834,619 |
| Accumulated other comprehensive income | 11,502 | 15,687 |
| Treasury stock at cost, 13,461,869 shares | (200,956) | (200,956) |
| Accumulated deficit | (1,016,738) | (1,007,265) |
| Total equity | 630,614 | 642,889 |
| Total liabilities and equity | $ 757,147 | $ 778,038 |
| BROOKS AUTOMATION, INC. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (unaudited) | ||
| (In thousands, except per share data) | ||
|
Three months ended December 31, |
||
| 2014 | 2013 | |
| Revenue | ||
| Product | $ 99,730 | $ 93,130 |
| Services | 23,006 | 23,942 |
| Total revenue | 122,736 | 117,072 |
| Cost of revenue | ||
| Product | 70,220 | 60,736 |
| Services | 13,428 | 15,445 |
| Total cost of revenue | 83,648 | 76,181 |
| Gross profit | 39,088 | 40,891 |
| Operating expenses | ||
| Research and development | 13,489 | 12,551 |
| Selling, general and administrative | 29,411 | 26,135 |
| Restructuring and other charges | 2,668 | 747 |
| Total operating expenses | 45,568 | 39,433 |
| Operating income (loss) | (6,480) | 1,458 |
| Interest income | 251 | 246 |
| Interest expense | (102) | — |
| Other income, net | 1,019 | 259 |
| Income (loss) before income taxes and equity in earnings (losses) of equity method investments | (5,312) | 1,963 |
| Income tax provision (benefit) | (3,110) | 793 |
| Income (loss) before equity in earnings (losses) of equity method investments | (2,202) | 1,170 |
| Equity in earnings (losses) of equity method investments | (532) | 749 |
| Income (loss) from continuing operations | (2,734) | $ 1,919 |
| Income from discontinued operations, net of tax | — | $ 1,577 |
| Net income (loss) | $ (2,734) | $ 3,496 |
| Net income attributable to noncontrolling interests | — | (48) |
| Net income (loss) attributable to Brooks Automation, Inc. | $ (2,734) | $ 3,448 |
| Basic net income (loss) per share attributable to Brooks Automation, Inc. common stockholders: | ||
| Net income (loss) from continuing operations | $ (0.04) | $ 0.03 |
| Net income from discontinued operations, net of tax | — | 0.02 |
| Basic net income (loss) per share attributable to Brooks Automation, Inc. | $ (0.04) | $ 0.05 |
| Diluted net income (loss) per share attributable to Brooks Automation, Inc. common stockholders: | ||
| Net income (loss) from continuing operations | $ (0.04) | $ 0.03 |
| Net income from discontinued operations, net of tax | — | 0.02 |
| Diluted net income (loss) per share attributable to Brooks Automation, Inc. | $ (0.04) | $ 0.05 |
| Dividend declared per share | $ 0.10 | $ 0.08 |
| Shares used in computing earnings (loss) per share: | ||
| Basic | 67,126 | 66,355 |
| Diluted | 67,126 | 67,126 |
| BROOKS AUTOMATION, INC. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited) | ||
| (In thousands) | ||
|
Three Months Ended December 31, |
||
| 2014 | 2013 | |
| Cash flows from operating activities | ||
| Net income (loss) | $ (2,734) | $ 3,496 |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
| Depreciation and amortization | 6,403 | 5,729 |
| Impairment of intangible assets | — | 398 |
| Stock-based compensation | 3,483 | 2,754 |
| Amortization of premium on marketable securities | 336 | 285 |
| Undistributed losses (earnings) of equity method investments | 532 | (749) |
| Deferred income tax provision (benefit) | (4,107) | 1,164 |
| Loss on disposal of long-lived assets | 2 | 4 |
| Changes in operating assets and liabilities, net of acquisitions and disposals: | ||
| Accounts receivable | 4,973 | 1,901 |
| Inventories | (236) | 942 |
| Prepaid expenses and other current assets | 1,754 | 665 |
| Accounts payable | 2,117 | (4,521) |
| Deferred revenue | 705 | (3,250) |
| Accrued warranty and retrofit costs | (290) | (528) |
| Accrued compensation and benefits | (9,333) | 1,154 |
| Accrued restructuring costs | 519 | 51 |
| Accrued expenses and other current liabilities | (1,089) | (1,022) |
| Net cash provided by operating activities | 3,035 | 8,473 |
| Cash flows from investing activities | ||
| Purchases of property, plant and equipment | (1,576) | (1,015) |
| Purchases of marketable securities | (22,269) | (26,082) |
| Sale/maturity of marketable securities | 32,201 | 18,595 |
| Acquisition, net of cash acquired | (15,428) | — |
| Other investment | (2,500) | — |
| Decrease in restricted cash | — | 177 |
| Net cash used in investing activities | (9,572) | (8,325) |
| Cash flows from financing activities | ||
| Principal repayment of capital lease obligation | (121) | — |
| Common stock dividend paid | (6,731) | (5,391) |
| Net cash used in financing activities | (6,852) | (5,391) |
| Effects of exchange rate changes on cash and cash equivalents | (2,966) | 287 |
| Net decrease in cash and cash equivalents | (16,355) | (4,956) |
| Cash and cash equivalents, beginning of period | 94,114 | 82,971 |
| Cash and cash equivalents, end of period | $ 77,759 | $ 78,015 |
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 | ||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||
| Dollars in thousands, except per share data |
$ |
per diluted share |
$ |
per diluted share |
$ |
per diluted share |
| Net income attributable to Brooks Automation, Inc. | $ (2,734) | $ (0.04) | $ 248 | $ 0.00 | $ 3,448 | $ 0.05 |
| Income from discontinued operations, net of tax | — | — | — | — | 1,577 | 0.02 |
| Net income (loss) attributable to continuing operations | (2,734) | (0.04) | 248 | 0.00 | 1,871 | 0.03 |
| Adjustments, net of tax: | ||||||
| Purchase accounting impact on inventory and contracts acquired | 1,164 | 0.02 | 1,300 | 0.02 | 150 | 0.00 |
| Amortization of intangible assets | 2,221 | 0.03 | 1,964 | 0.03 | 1,713 | 0.03 |
| Impairment of intangible assets | — | — | — | — | 259 | — |
| Impairment of Equity Method Investments | 681 | 0.01 | — | — | — | — |
| Restructuring charges | 1,786 | 0.03 | 1,151 | 0.02 | 508 | 0.01 |
| Merger costs | 325 | 0.00 | 63 | 0.00 | — | 0.00 |
| Adjusted net income attributable to Brooks Automation, Inc. | 3,443 | 0.05 | 4,726 | 0.07 | 4,501 | 0.07 |
| Stock-based compensation | 3,483 | 0.05 | 2,138 | 0.03 | 2,723 | 0.04 |
| Adjusted net income attributable to Brooks Automation, Inc. - excluding stock-based compensation | $ 6,926 | $ 0.10 | $ 6,864 | $ 0.10 | $ 7,224 | $ 0.11 |
| Quarter Ended | ||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||
| Dollars in thousands | $ | % | $ | % | $ | % |
| Gross profit/gross margin percentage | $ 39,088 | 31.8% | $ 41,402 | 33.8% | $ 40,891 | 34.9% |
| Adjustments: | ||||||
| Amortization of intangible assets | 1,305 | 1.1% | 1,249 | 1.0% | 1,117 | 1.0% |
| Impairment of intangible assets | — | — | 398 | 0.3% | ||
| Purchase accounting impact on inventory and contracts acquired | 1,511 | 1.2% | 1,805 | 1.5% | 230 | 0.2% |
| Adjusted gross profit/gross margin percentage | $ 41,904 | 34.1% | $ 44,456 | 36.3% | $ 42,636 | 36.4% |
| Quarter Ended | |||
| December 31, | September 30, | December 31, | |
| Dollars in thousands | 2014 | 2014 | 2013 |
| Net income (loss) attributable to Brooks Automation, Inc. | $ (2,734) | $ 248 | $ 3,448 |
| Adjustments: | |||
| Less: Interest income | (251) | (265) | (246) |
| Add: Interest expense | 102 | 101 | — |
| Add: Income tax provision (benefit) | (3,110) | (1,052) | 793 |
| Add: Depreciation | 3,186 | 3,310 | 3,089 |
| Add: Amortization of completed technology | 1,304 | 1,249 | 1,117 |
| Add: Amortization of customer relationships and acquired intangible assets | 1,913 | 1,648 | 1,456 |
| EBITDA | $ 410 | $ 5,239 | $ 9,657 |
| Quarter Ended | |||
| December 31, | September 30, | December 31, | |
| Dollars in thousands | 2014 | 2014 | 2013 |
| EBITDA | $ 410 | $ 5,239 | $ 9,657 |
| Adjustments: | |||
| Less: Income from discontinued operations, net of tax | — | — | (1,577) |
| Add: Impairment of completed technology | — | — | 398 |
| Add: Stock-based compensation | 3,483 | 2,138 | 2,723 |
| Add: Restructuring charges | 2,668 | 1,648 | 747 |
| Add: Purchase accounting impact on inventory and contracts acquired | 1,511 | 1,805 | 230 |
| Add: Merger costs | 325 | 79 | — |
| Add: Impairment of Equity Method Investments | 681 | — | — |
| Adjusted EBITDA | $ 9,078 | $ 10,909 | $ 12,178 |