Brooks Automation, Inc. (BRKS) F2Q12 Earnings Call May 10, 2012 4:30 pm ET Executives Martin S. Headley – Executive Vice President and Chief Financial Officer Stephen S. Schwartz – President and Chief Executive Officer Mark Morelli – Executive Vice President and Chief Operating Officer Analysts Y Edwin Mok – Needham & Company Ben Pang – Caris & Co. Farhan Ahmad – Credit Suisse Securities LLC Presentation Operator
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There are many factors that could cause actual results or other events to differ from those identified in such forward-looking statements. I’d refer you to the section of our earnings release titled Safe Harbor Statement, the Safe Harbor slide in the aforementioned PowerPoint presentation on our website, and the company’s various filings with the SEC including the Form 10-Q just filed for the second quarter ending March 31, 2012. We make no obligation to update these statements, should future financial data or events occur that differ from forward-looking statements presented today.I would like to note we also make reference to a number of non-GAAP financial measures, which are used to in addition to and in conjunction with results presented in accordance with GAAP. Management believes these non-GAAP measures provide an additional way of viewing aspects of our operations and performance and when considered with the GAAP financial results and the reconciliations of GAAP measures, provide a more complete understanding of the Brooks’ business. Non-GAAP measures should not be relied upon to the exclusion of GAAP measures. With me today is Brooks’ President and Chief Executive Officer, Steve Schwartz. After I’ve outlined some of the significant events of the quarter, Steve will elaborate with remarks around the business environment and our current initiatives. I will then provide an overview of the second quarter financial results and a summary of our financial outlook for the quarter ended June 30, which is our third quarter of fiscal 2012. We’ll then take your questions. During our prepared remarks, I will from time-to-time make reference to the slides available to everybody on the Investor Relations page of our website. On slide number three, I’ve summarized significant events of the March quarter, the second quarter. The quarter was highlighted by substantial growth in semiconductor products and Life Science Systems resulting in revenues of $139.3 million, sequential growth of 15.9%. This growth provided a sequential growth margin recovery.
Meanwhile, we made investments for the future with a $3 million linear intellectual property acquisition from Intevac. Given that this is in-process research & development, the appropriate accounting treatment was to write-off the bulk of the acquisition price on acquisition. We’ve removed this charge from our non-GAAP adjusted earnings of $0.20 for the quarter.There’s quite a lot going on in our SG&A spend. With a higher costs for a full launch of the full Brooks Life Science Systems product portfolio and running the trade shows. The annual direct to stock grant, model of forfeiting these temporary increases with a $3.2 million recovery of previously expensed legal costs associated with our past stock litigation matters. We’ve not attempted to adjust for any of those items in the adjusted earnings. Finally, our tax provisions continue to bounce around. This quarter we had a net benefit of $700,000. With that let me introduce Steve Schwartz. Stephen S. Schwartz Thank you, Martin, and hello everyone. I’m pleased to be able to speak with you today about our results for Q2 and to report on the progress of our strategic growth initiatives. We had another strong quarter moving along our aggressive growth path, and I’ll take a moment to give you some highlights from Q2, and an update on some of the longer-term initiatives that we’ve been working on. In general, we made improvements across all areas of our business. We achieved revenue of $139 million, which was at the high-end of our expectations, improved gross margin and boosted adjusted earnings per diluted share to $0.20. We generated over $20 million in adjusted EBITDA, and ended the quarter with more than $200 million cash and not debt. As we reported in our press release, we had a strong growth quarter. Semiconductor business improved significantly from the December quarter, and we’re investing in and strengthening our position in both front-end and back-end segments of this market. We also drove continued growth in our Life Science Systems business and we remain positive about the significant growth potential that exists for us as we apply our expertise in this new and exciting area. Read the rest of this transcript for free on seekingalpha.com