Brooks Automation, Inc. (BRKS) F4Q 2011 Earnings Call November 10, 2011 4:30 p.m. ET Executives Martin Headley – EVP and CFO Stephen Schwartz – President and CEO Analysts Edwin Mok – Needham & Co. LLC (CJ Nuss) David Duley – Steelhead Securities Wenge Yang – Citigroup Satya Kumar – Credit Suisse Patrick Ho – Stifel Nicolaus Ben Pang – Caris & Co. Presentation Operator
I would also note that we’re going to make reference to a number of non-GAAP financial measures, which 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 measures. Management believes those financial measures we provide and additional way of viewing aspects of our operations but, when viewed with our GAAP results and the reconciliations to GAAP measures, provide a more complete understanding of our business.With me today is Brooks’ President and Chief Executive Officer, Steve Schwartz, who will open with remarks around the business environment and our current initiatives. I will then provide an overview of fourth quarter and full-year fiscal 2011 financials and a summary of our financial outlook for the December quarter, our first quarter of fiscal 2012. We’ll then take your questions. During our prepared remarks, we, will from time to time, make reference to the slides available to everybody online, at www.brooks.com, which are identified to assist in clarifying our comments. And with that, let me introduce Steve Schwartz. Stephen Schwartz Thank you, Martin. Today I’d like to give a brief update on results from our strategic initiatives and give some commentary as to how we see our December coming together. Fiscal year 2011 in many respects, was a very strong year for Brooks. We drove revenue to $688 million, an increase of 16% from last year, achieved record cash flow from operating activities of $88 million, ended the year with cash and marketable securities of $206 million or $3.17 per diluted share and no debt. We successfully sold our lower margin Contract manufacturing business, and acquired the businesses that formed our higher margin Life Science Systems platform. Unfortunately, these positive results have recently been over shadowed by the slowdown in semi-conductor capital equipment spending, which has been significant. And consistent with the reports from many of the companies who serve our same customers, we believe that semi-conductor related revenue in the December quarter will be lower than the September quarter.
In spite of this challenging economic environment, we are pleased to report our September quarter Life Sciences revenue was slightly ahead of our expectations, and our integration activities are well under way, although cost reductions and margins on some orders were less than had been projected.Also, we’ve continued to make progress against our strategic initiatives that we outlined for you at the beginning of fiscal 2011, to gain market share in our existing businesses, to expand in the high growth markets, and to drive gross margin improvements in all of our businesses. I’d like to spend a moment to highlight some of our design win activity, that’s a result of our RD&E initiatives. Even in the down business environment, we had another strong quarter for wins in our core business and I highlighted a few of those penetrations here. We had six new automation systems design wins, two for Advanced Packaging, two for LED, one for an advance nanotechnically application, and one for a semi-conductor frontend application. And we received orders for three more 450 millimeter systems, two of which were vacuum systems, and one for a front end application.
We are actively engaged in 450 millimeter design activity with another five customers at this time. Although we continue to believe that the market for significant volume of 450 millimeter products is still some years away, we are ready now with products for customer who need automated platforms. We feel that it’s important for us to have developed products in advance of the market needs. For the entire fiscal year, we recorded a total of 79 new design wins, and we added 18 new customers. We are particularly pleased with the success of our expansion into markets beyond the frontend semi-conductor market segment into what we refer to as adjacent spaces, like active display, LED, MEMS, and advanced packaging. Read the rest of this transcript for free on seekingalpha.com