Brooks Automation Reports Results of Fourth Quarter of Fiscal 2021, Ended September 30, 2021, and Announces Quarterly Cash Dividend

CHELMSFORD, Mass., Nov. 10, 2021 /PRNewswire/ -- Brooks Automation, Inc. (Nasdaq: BRKS) today reported financial results for the fiscal quarter ended September 30, 2021.

Summary of GAAP Results
Results of continuing operations reflect the Life Sciences business. Due to the announced divestiture in the fourth fiscal quarter of 2021, results of the Semiconductor Automation business are treated as discontinued operations and reflected in total diluted EPS.

Summary of Non-GAAP Results
The aggregate view of revenue and EPS is shown on a non-GAAP basis for investors to compare results to the performance reports provided in previous periods and to the Company's most recent guidance.

On September 20, 2021 the Company announced that it had entered into a definitive agreement to sell its Semiconductor Automation business. In accordance with GAAP, sales and expenses directly related to that business must be removed from their applicable income statement caption for continuing operations and reported for all periods presented as net income from discontinued operations in the GAAP financial statements. For this transition quarter, we present the non-GAAP summary above to provide a view of the entire business including the Semiconductor Automation business for direct comparison to prior guidance and historical results.

Management Comments
"We ended the 2021 fiscal year with another strong quarter in what has been a truly transformational year for the company," stated Steve Schwartz, President and CEO. "Life Sciences delivered another quarter of growth in excess of 20%, and we continue to see a long runway ahead. In addition, late in the quarter we announced the new name and brand of our life sciences business, Azenta. We are excited for the opportunity to launch into the marketplace under a single, unified life sciences brand."

Summary of GAAP Results
Revenue excludes the Semiconductor Automation revenue as a result of the pending sale of this business. Profits related to this business are included in discontinued operations.

Fourth Quarter, Fiscal 2021

• Revenue from continuing operations for the fourth quarter was $137 million, up 27% year over year driven by strong growth in both Life Sciences Products and Services. Year-over-year organic growth was 24%.
• Revenue from Life Science Products grew 38% year over year, and Life Sciences Services grew 20%.
• Operating loss for the quarter was $21 million and gross margin was 48.3%.  Operating expenses in the quarter include approximately $8 million related to the pending divestiture of the Semiconductor Automation business and $13 million of non-cash charges due to the retirement of tradenames related to the rebranding of the Life Sciences business.  Non-operating expenses include $16 million of charges for the release of a tax indemnification asset, which is offset within tax expense with the reduction of tax liability.
• Total diluted EPS of $0.29 includes $0.59 of diluted EPS from discontinued operations.  Diluted loss per share from continuing operations was $0.30 per share, down $0.29 compared to the fourth quarter of 2020, primarily driven by operating expenses related to the pending divestiture of the Semiconductor Automation business and the impact of the retirement of tradenames related to the rebranding of the Life Sciences business.

Full Year, Fiscal 2021

• Revenue for fiscal 2021 was $514 million, an increase of 32% compared to fiscal 2020 driven by 54% growth in Life Science Products and 21% growth in Life Science Services. Excluding the effect of the exit of the RUCDR alliance in Q4 2020, Life Sciences Services grew 30%. Year-over-year organic growth was 33%.
• Operating loss for fiscal 2021 was $31 million, a $6 million reduction in operating loss compared to fiscal 2020. Gross margin was 47.5%, a 320 basis point increase year-over-year.
• Diluted EPS was $1.49 for the fiscal year, up 69% year-over-year driven by strong growth and operating leverage, partially offset by expenses in the period including $20 million due to the pending divestiture of the Semiconductor Automation business and $13 million due to the retirement of tradenames related to the rebranding of the Life Sciences business. Non-operating expenses include $16 million of charges for the release of a tax indemnification asset, which is offset within tax expense with the reduction of tax liability.

Summary of Non-GAAP Earnings for Continuing Operations
The Continuing Operations view shown on a non-GAAP basis provides investors additional performance information by excluding the impact of M&A costs, amortization, restructuring, purchase price accounting, and special charges or gains, such as impairment losses. This profile will be used in reporting future results and excludes the Semiconductor Automation business, which is now part of discontinued operations. 

Fourth Quarter, Fiscal 2021

• Diluted EPS for the fourth quarter was $0.12, up 32% year over year.
• Adjusted EBITDA was $21 million, up 38% from the fourth quarter of 2020 and 13% sequentially.
• Operating income was $11 million, an increase of 48% year over year, and operating margin was 8.2%, up 120 basis points year over year driven by margin leverage in Life Science Products partially offset by increased costs in Life Sciences Services.
• Gross margin of 49.7% was down 80 basis points year over year driven lower margins in the Life Sciences Services business related to higher materials and labor costs.

Full Year, Fiscal 2021

• Diluted EPS for fiscal 2021 was $0.48, compared to $0.02 in fiscal 2020.
• Adjusted EBITDA was $86 million, up 205% from fiscal 2020.
• Operating income was $47 million, compared to $0.3 million in fiscal 2020, and operating margin was 9.1%, up 910 basis points year over year driven by gross margin improvement in both segments as well as operating leverage.
• Gross margin of 50.1% was up 360 basis points year over year driven by performance improvement of 290 basis points driven by improvement in both Products and Services as well as 70 basis points of favorable mix as a result of exiting the RUCDR alliance agreement.
• The non-GAAP tax rate was 20.3%.

Commentary on Non-GAAP Earnings in an Aggregate View with Semiconductor Automation Included
The aggregate view is shown on a non-GAAP basis for investors wishing to compare results to the performance reports provided in previous periods and to the Company's most recent guidance.

Fourth Quarter, Fiscal 2021

• Revenue in aggregate for the fourth quarter was $342 million, up 39% year over year. The Semiconductor Automation business generated revenue of $205 million, up 49% year over year and up 45% on an organic basis. Life Sciences generated revenue of $137 million, up 27% year over year and up 24% on an organic basis.
• Non-GAAP EPS was $0.78 in the quarter, an increase of 67% year over year.

Full Year, Fiscal 2021

• Revenue in aggregate for fiscal 2021 was $1,194 million, up 33% year over year. The Semiconductor Automation business generated revenue of $680 million, up 34% year over year and up 31% on an organic basis. Life Sciences generated revenue of $514 million, up 32% year over year and up 33% on an organic basis.
• Non-GAAP EPS was $2.58 for the full year, an increase of 105% year over year.

Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on December 23, 2021 to stockholders of record on December 3, 2021.  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 Continuing Operations for First Quarter Fiscal 2022
The Company announced revenue and earnings guidance for continuing operations for the first quarter of fiscal 2022.  Revenue is expected to be in the range of $130 million to $140 million and GAAP diluted loss per share for the first fiscal quarter is expected to be in the range of $0.14 to $0.06.   Non-GAAP diluted earnings per share from continuing operations is expected to be in the range of $0.04 to $0.12. 

Brooks 2021 Investor Day Featuring Azenta Life Sciences
The Company will host a virtual investor day on November 16^th from 9:00am to 12:00pm Eastern Time. The investor day will feature our Life Sciences business, the recently rebranded Azenta Life Sciences. Please visit our website at brooks.investorroom.com or click here to register.

Conference Call and Webcast
Brooks management will webcast its fourth 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 800-786-1918 (US & Canada only) or +1-212-231-2907 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 analyses 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, our ability to deliver financial success in the future, and certainty and/or timing of completion of the pending sale of our Semiconductor Automation business to Thomas H. Lee Partners, L.P., and our ability to invest the expected cash proceeds from the sale. 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) operates two global, market-leading businesses, Life Sciences and Semiconductor Solutions, each with its own distinct area of focus and expertise. The Life Sciences business, to be operated under the new Azenta brand, 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. On September 20, 2021, the Company announced the pending sale to Thomas H. Lee Partners of its Semiconductor Automation business, which provides industry-leading precision vacuum robotics, integrated automation systems and contamination control solutions to the world's leading semiconductor chip makers and equipment manufacturers as well as collaborative robotics and automation capabilities for multi-market applications. Brooks is headquartered in Chelmsford, MA, with operations in North America, Europe, and Asia. For more information, please visit www.brooks.com.

BROOKS INVESTOR CONTACTS:

Sara Silverman
Director of Investor Relations
Brooks Automation
978.262.2635
sara.silverman@brooks.com

Sherry Dinsmore
Brooks Automation
978.262.4301
sherry.dinsmore@brooks.com

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 adjusts 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. For fiscal year 2021, management has excluded a charge related to liabilities for import tariffs related to imports in prior fiscal years. The cost of import tariffs which pertain to the current fiscal year imports were not removed from non-GAAP results. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure.