Edgar Filing: BROOKS AUTOMATION INC

BRKS 2013.3.31 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: March 31, 2013



¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to _________

Commission File Number 0-25434

BROOKS AUTOMATION, INC.

(Exact name of registrant as specified in its charter)



Delaware	04-3040660
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

15 Elizabeth Drive

Chelmsford, Massachusetts

(Address of principal executive offices)

01824

(Zip Code)

Registrant’s telephone number, including area code: (978) 262-2400

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practical date, April 26, 2013: common stock, $0.01 par value and 66,490,810 shares outstanding.

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BROOKS AUTOMATION, INC.

INDEX




	PAGE NUMBER

PART I. FINANCIAL INFORMATION	3
Item 1. Consolidated Financial Statements	3
Consolidated Balance Sheets as of March 31, 2013 (unaudited) and September 30, 2012	3
Consolidated Statements of Operations for the three and six months ended March 31, 2013 and 2012 (unaudited)	4
Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended March 31, 2013 and 2012 (unaudited)	5
Consolidated Statements of Cash Flows for the six months ended March 31, 2013 and 2012 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures about Market Risk	30
Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION	30
Item 1. Legal Proceedings	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6. Exhibits	32
Signatures	33

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PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)



	March 31, 2013			September 30, 2012
Assets
Current assets
Cash and cash equivalents	$	60,121		$	54,639
Restricted cash	—			763
Marketable securities	46,242			85,646
Accounts receivable, net	73,545			78,855
Inventories	96,601			102,985
Deferred tax assets	18,460			15,531
Prepaid expenses and other current assets	11,773			9,070
Total current assets	306,742			347,489
Property, plant and equipment, net	58,874			64,478
Long-term marketable securities	39,211			59,946
Long-term deferred tax assets	99,551			104,626
Goodwill	114,893			88,440
Intangible assets, net	64,576			39,400
Equity investment in joint ventures	28,425			31,428
Other assets	9,490			6,153
Total assets	$	721,762		$	741,960
Liabilities and equity
Current liabilities
Accounts payable	$	28,658		$	28,988
Deferred revenue	13,613			9,986
Accrued warranty and retrofit costs	7,725			7,329
Accrued compensation and benefits	12,409			14,118
Accrued restructuring costs	2,580			2,098
Accrued income taxes payable	390			1,699
Accrued expenses and other current liabilities	16,138			16,973
Total current liabilities	81,513			81,191
Income taxes payable	7,945			6,356
Long-term pension liability	1,411			1,688
Other long-term liabilities	3,618			3,424
Total liabilities	94,487			92,659
Contingencies (Note 17)
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, 79,952,679 shares issued and 66,490,810 shares outstanding at March 31, 2013, 79,790,557 shares issued and 66,328,688 shares outstanding at September 30, 2012	799			798
Additional paid-in capital	1,822,102			1,817,706
Accumulated other comprehensive income	17,512			23,642
Treasury stock at cost, 13,461,869 shares	(200,956		)	(200,956		)
Accumulated deficit	(1,012,861		)	(992,524		)
Total Brooks Automation, Inc. stockholders’ equity	626,596			648,666
Noncontrolling interest in subsidiaries	679			635
Total equity	627,275			649,301
Total liabilities and equity	$	721,762		$	741,960

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)



	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
Revenues
Product	$	95,493		$	117,621		$	172,816		$	214,719
Services	21,126			21,716			41,828			44,846
Total revenues	116,619			139,337			214,644			259,565
Cost of revenues
Product	64,154			75,443			118,635			139,732
Services	15,853			15,612			30,239			31,194
Total cost of revenues	80,007			91,055			148,874			170,926
Gross profit	36,612			48,282			65,770			88,639
Operating expenses
Research and development	12,030			12,529			23,548			24,478
Selling, general and administrative	24,785			24,270			50,732			51,012
Restructuring and other charges	769			42			5,526			245
In-process research and development	—			3,026			—			3,026
Total operating expenses	37,584			39,867			79,806			78,761
Operating income (loss)	(972		)	8,415			(14,036		)	9,878
Interest income	265			273			540			552
Interest expense	—			—			(1		)	(7		)
Other income (expense), net	77			(51		)	(16		)	295
Income (loss) before income taxes and equity in earnings (losses) of joint ventures	(630		)	8,637			(13,513		)	10,718
Income tax benefit	(129		)	(659		)	(3,799		)	(359		)
Income (loss) before equity in earnings (losses) of joint ventures	(501		)	9,296			(9,714		)	11,077
Equity in earnings (losses) of joint ventures	(10		)	430			(16		)	1,480
Net income (loss)	$	(511	)	$	9,726		(9,730		)	12,557
Net income attributable to noncontrolling interests	(27		)	(5		)	(44		)	(13		)
Net income (loss) attributable to Brooks Automation, Inc.	$	(538	)	$	9,721		(9,774		)	12,544
Basic net income (loss) per share attributable to Brooks Automation, Inc. common stockholders	$	(0.01	)	$	0.15		$	(0.15	)	$	0.19
Diluted net income (loss) per share attributable to Brooks Automation, Inc. common stockholders	$	(0.01	)	$	0.15		$	(0.15	)	$	0.19
Shares used in computing earnings (loss) per share
Basic	65,889			65,038			65,726			64,925
Diluted	65,889			65,828			65,726			65,552

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

(In thousands)



	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
Net income (loss)	$	(511	)	$	9,726		$	(9,730	)	$	12,557
Change in cumulative translation adjustment	(6,908		)	188			(6,378		)	(2,771		)
Unrealized gain (loss) on marketable securities	(23		)	253			(152		)	346
Actuarial gain (loss)	23			(3		)	400			(87		)
Comprehensive income (loss)	(7,419		)	10,164			(15,860		)	10,045
Comprehensive income attributable to noncontrolling interests	(27		)	(5		)	(44		)	(13		)
Comprehensive income (loss) attributable to Brooks Automation, Inc.	$	(7,446	)	$	10,159		$	(15,904	)	$	10,032

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)



	Six months ended March 31,
	2013			2012
Cash flows from operating activities
Net income (loss)	$	(9,730	)	$	12,557
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	12,443			10,621
Stock-based compensation	5,010			4,924
Amortization of premium on marketable securities	661			1,244
Undistributed (earnings) losses of joint ventures	16			(1,480		)
Deferred income tax benefit	(3,387		)	—
Pension settlement	87			—
Gain on disposal of long-lived assets	(150		)	(47		)
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable	9,489			(2,951		)
Inventories	13,734			3,540
Prepaid expenses and other current assets	(4,305		)	(732		)
Accounts payable	(3,260		)	5,894
Deferred revenue	3,711			(3,949		)
Accrued warranty and retrofit costs	(1,154		)	(172		)
Accrued compensation and benefits	(2,702		)	(5,630		)
Accrued restructuring costs	195			(168		)
Accrued expenses and other current liabilities	(3,914		)	(1,954		)
Net cash provided by operating activities	16,744			21,697
Cash flows from investing activities
Purchases of property, plant and equipment	(1,578		)	(4,384		)
Purchases of marketable securities	(39,269		)	(39,097		)
Sale/maturity of marketable securities	98,178			61,970
Acquisition, net of cash acquired	(59,005		)	(8,716		)
Proceeds from the sale of property, plant and equipment	2,368			—
Payment of deferred leasing cost	(2,076		)	—
Decrease in restricted cash	763			476
Net cash provided by (used in) investing activities	(619		)	10,249
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance costs	969			842
Common stock dividend paid	(10,672		)	(10,442		)
Net cash used in financing activities	(9,703		)	(9,600		)
Effects of exchange rate changes on cash and cash equivalents	(940		)	(24		)
Net increase in cash and cash equivalents	5,482			22,322
Cash and cash equivalents, beginning of period	54,639			58,833
Cash and cash equivalents, end of period	$	60,121		$	81,155

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation

The unaudited consolidated financial statements of Brooks Automation, Inc. and its subsidiaries (“Brooks” or the “Company”) included herein have been prepared in accordance with generally accepted accounting principles, or GAAP. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year.

Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted and, accordingly, the accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission (the “SEC”) for the fiscal year ended September 30, 2012 (the "2012 Annual Report on Form 10-K").

In the third quarter of fiscal 2012, the Company identified prior period errors related to the accounting for its equity method investment in ULVAC Cryogenics, Inc. The Company concluded these errors were not material individually or in the aggregate to any of the prior reporting periods. Revisions for these corrections to the applicable prior periods were disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. Relevant revisions for prior periods presented in this report include the three months ended March 31, 2012, the Company previously reported $195,000 of equity in earnings of joint ventures but has revised the amount to $430,000 and for the six months ended March 31, 2012, the Company previously reported $1,420,000 of equity in earnings of joint ventures but has revised the amount to $1,480,000.

Recently Enacted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance for presentation of comprehensive income. Under the amended guidance, a company may present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This authoritative guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. On October 1, 2012 the Company adopted this guidance and elected to present two separate but consecutive statements.

In February 2013, the FASB issued guidance to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. On January 1, 2013 the Company adopted this standard, which had no impact on its financial position or results of operations.

2. Stock-Based Compensation

The Company may issue stock options and restricted stock, which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues shares pursuant to an employee stock purchase plan.

The following table reflects stock-based compensation expense recorded during the three and six months ended March 31, 2013 and 2012 (in thousands):



	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
Restricted stock	$	2,382	$	3,030	$	4,766	$	4,625
Employee stock purchase plan	117		151		244		299
	$	2,499	$	3,181	$	5,010	$	4,924

The fair value per share of restricted stock is equal to the quoted price of the Company’s common stock on the date of grant, net of estimated forfeitures. In addition, for stock-based awards where vesting is dependent upon achieving certain

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operating performance goals, the Company estimates the likelihood of achieving the performance goals. Actual results, and future changes in estimates, may differ substantially from the Company’s current estimates.

During the three months ended December 31, 2012 and March 31, 2013, the Company granted 1,183,500 shares and 40,500 shares, respectively, of restricted stock to members of senior management of which 524,250 shares and 22,375 shares, respectively, vest over the service period and the remaining 659,250 shares and 18,125 shares, respectively, vest upon the achievement of certain financial performance goals which will be measured at the end of fiscal year 2013. Total compensation expense on these awards is a maximum of $13.7 million, net of cancellations. During the three months ended December 31, 2011 and March 31, 2012, the Company granted 1,377,000 shares and 150,000 shares, respectively, of restricted stock to members of senior management of which 369,250 shares and 37,500 shares, respectively, vest over the service period and the remaining 1,007,750 shares and 112,500 shares, respectively, vest upon the achievement of certain financial performance goals which will be measured at the end of fiscal year 2014. Total compensation expense on these awards is a maximum of $15.6 million, net of cancellations. Awards subject to service criteria are being recorded to expense ratably over the vesting period. Awards subject to performance criteria are expensed over the related service period when attainment of the performance condition is considered probable. The total amount of compensation recorded will depend on the Company’s achievement against performance targets. Changes to the projected attainment against performance targets during the vesting period may result in an adjustment to the amount of cumulative compensation recorded as of the date the estimate is revised.

During the three months ended December 31, 2011, the Company’s Chief Executive Officer was granted an award of 100,000 cash settled phantom units, which are subject to the same vesting terms as the performance-based restricted stock units granted in the three months ended December 31, 2011. The Company’s unaudited consolidated balance sheet at March 31, 2013 and September 30, 2012 includes a liability of approximately $155,000 and $78,000, respectively, for this potential cash payment. The Company incurred an expense of $32,000 and $58,000 for the three months ended March 31, 2013 and 2012, respectively, in connection with the cash settled phantom unit award. The Company incurred an expense of $77,000 and $83,000 for the six months ended March 31, 2013 and 2012, respectively, in connection with the cash settled phantom unit award.

Stock Option Activity

The following table summarizes stock option activity for the six months ended March 31, 2013:



	Number of Options		Weighted- Average Remaining Contractual Term	Weighted Average Exercise Price		Aggregate Intrinsic Value (In Thousands)
Outstanding at September 30, 2012	193,182			$	13.11
Exercised	(8,600	)		7.75
Forfeited/expired	(155,990	)		13.33
Outstanding at March 31, 2013	28,592		0.8 years	$	13.50	$	7
Vested at March 31, 2013	28,592		0.8 years	$	13.50	$	7
Options exercisable at March 31, 2013	28,592		0.8 years	$	13.50	$	7

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $10.18 as of March 28, 2013, which would have been received by the option holders had all option holders exercised their options as of that date.

No stock options were granted during the three or six months ended March 31, 2013 or 2012. The total intrinsic value of options exercised during the three and six months ended March 31, 2013 was $19,000. The total intrinsic value of options exercised during the three and six months ended March 31, 2012 was $56,000. The total cash received from participants as a result of stock option exercises during the three and six months ended March 31, 2013 was $67,000. The total cash received from participants as a result of stock option exercises during the three and six months ended March 31, 2012 was $103,000.

As of March 31, 2013 there was no future compensation cost related to stock options as all outstanding stock options have vested.

Restricted Stock Activity

A summary of the status of the Company’s restricted stock as of March 31, 2013 and changes during the six months ended March 31, 2013 is as follows:

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	Six months ended March 31, 2013
	Shares		Weighted Average Grant-Date Fair Value
Outstanding at September 30, 2012	2,732,448		$	10.47
Awards granted	1,297,439		9.26
Awards vested	(611,138	)	9.79
Awards canceled	(281,992	)	11.43
Outstanding at March 31, 2013	3,136,757		$	10.77

The fair value of restricted stock awards vested during the three months ended March 31, 2013 and 2012 was $3.1 million and $3.2 million, respectively. The fair value of restricted stock awards vested during the six months ended March 31, 2013 and 2012 was $6.0 million and $3.6 million, respectively.

As of March 31, 2013, the unrecognized compensation cost related to restricted stock that is expected to vest is $10.4 million and will be recognized over an estimated weighted average amortization period of 1.8 years.

Employee Stock Purchase Plan

A total of 115,751 shares were purchased under the employee stock purchase plan during the three and six months ended March 31, 2013 for aggregate proceeds of $0.9 million. A total of 90,433 shares were purchased under the employee stock purchase plan during the three and six months ended March 31, 2012 for aggregate proceeds of $0.7 million.

3. Acquisition

On October 29, 2012, the Company acquired all the outstanding stock of Crossing Automation Inc. (“Crossing”), a U.S. based provider of automation solutions and services primarily to global semiconductor front-end markets. The Company paid, in cash, an aggregate merger consideration of $59.0 million net of cash acquired. Crossing is based in Fremont, California, and the Company’s nearby Santa Clara, California operation has been integrated into the Crossing facility. Crossing resides in the Brooks Product Solutions and the Brooks Global Services segments. The acquisition of Crossing provides the Company with the opportunity to enhance its existing capabilities with respect to manufacturing of atmospheric and vacuum automation solutions within the semiconductor front-end market.

The assets and liabilities associated with Crossing were recorded at their fair values as of the acquisition date and the amounts follow (in thousands):



Accounts receivable	$	5,356
Inventory	8,668
Prepaid expenses	610
Other current assets	1,358
Property, plant and equipment	2,270
Completed technology	10,530
Customer relationships	20,010
Goodwill	26,453
Other long term assets	885
Accounts payable	(3,024		)
Accrued liabilities	(5,172		)
Deferred revenue	(319		)
Other current liabilities	(388		)
Other long-term liabilities	(8,232		)
Total purchase price, net of cash acquired	$	59,005

In performing the purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analyses of historical financial performance, and estimates of future cash flows from Crossing’s

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products and services. The purchase price was allocated based upon the fair value of the identified assets acquired and liabilities assumed as of the acquisition date from a market participant’s perspective.

The Company used the relief-from-royalty method to value the completed technology and the excess earnings method to value the customer relationships. Cash flows were discounted at a rate of 15%. The weighted-average amortization periods are 7.7 years for completed technologies and 8.0 years for customer relationships. The intangible assets acquired will be amortized using methods that approximate the pattern in which the economic benefits are expected to be realized, including variable declining balance and straight-line methods.

Goodwill represents the excess of the purchase price over the fair values of the net tangible and intangible assets acquired and is primarily the result of expected synergies. Goodwill arising from the acquisition is not deductible for tax purposes.

The Company completed the final allocation of the purchase price related to Crossing in the second quarter of fiscal 2013. Adjustments made to the purchase price allocation in the second quarter of fiscal 2013 were not material.

Crossing’s operating results have been included in the results of operations for the Brooks Product Solutions and Brooks Global Services segments from the acquisition date. Revenue from Crossing for the three months ended March 31, 2013 was $12.2 million, and the net loss was $0.6 million. Revenue from Crossing for the six months ended March 31, 2013 was $20.7 million, and the net loss was $2.5 million. The net loss for the three and six months ended March 31, 2013 includes charges to expense the step-up in value of acquired inventories which increased the net loss by $0.6 million and $2.7 million, respectively, and amortization expense of $1.0 million and $1.7 million for the three and six months ended March 31, 2013, respectively.

The following pro forma summary presents consolidated information of the Company as if the acquisition of Crossing occurred on October 1, 2011 (in thousands):



	Three months ended March 31,					Six months ended March 31,
	2013			2012		2013			2012
Revenue	$	116,618		$	151,774	$	216,737		$	284,898
Net income (loss) attributable to Brooks Automation, Inc.	(465		)	9,150		(10,775		)	11,960

The pro forma net income (loss) has been adjusted to reflect additional amortization from adjustments to intangible assets as if those adjustments had been applied as of October 1, 2011.

Transaction costs of $3.6 million incurred by Crossing prior to the closing of the acquisition have been eliminated from pro forma net loss as presented above. These costs include banker fees of $1.5 million and one-time incentive compensation payments related to the transaction of $1.2 million. Transaction costs incurred by the Company related to this acquisition were $8,000 and $642,000 for the three and six months ended March 31, 2013, and are included in selling, general and administrative expense.

4. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. The Company performs an annual impairment test of its goodwill on September 30 of each fiscal year unless interim indicators of impairment exist. The Company did not identify any indicators of impairment during the six month period ended March 31, 2013 that would warrant an interim test.

The components of the Company’s goodwill by business segment at March 31, 2013 are as follows (in thousands):

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	Brooks Product Solutions			Brooks Global Services			Brooks Life Science Systems		Other			Total
Gross goodwill at September 30, 2012	$	485,844		$	151,238		$	40,302	$	26,014		$	703,398
Less: aggregate impairment charges recorded	(437,706		)	(151,238		)	—		(26,014		)	(614,958		)
Goodwill, less accumulated impairments at September 30, 2012	$	48,138		$	—		$	40,302	$	—		$	88,440
Acquisitions and adjustments during the six months ended March 31, 2013	20,899			5,554			—		—			26,453
Goodwill, less accumulated impairments at March 31, 2013	$	69,037		$	5,554		$	40,302	$	—		$	114,893

Components of the Company’s identifiable intangible assets are as follows (in thousands):



	March 31, 2013						September 30, 2012
	Cost		Accumulated Amortization		Net Book Value		Cost		Accumulated Amortization		Net Book Value
Patents	$	7,808	$	7,145	$	663	$	7,808	$	7,093	$	715
Completed technology	65,018		44,905		20,113		54,583		42,751		11,832
Trademarks and trade names	4,010		3,918		92		4,014		3,880		134
Customer relationships	68,536		24,828		43,708		48,654		21,935		26,719
	$	145,372	$	80,796	$	64,576	$	115,059	$	75,659	$	39,400

5. Income Taxes

The Company recorded an income tax benefit of $0.1 million and $3.8 million for the three and six months ended March 31, 2013, respectively. The tax benefit substantially consists of $0.9 million of tax benefits resulting from the reinstatement of the U.S. federal research and development tax credit, retroactive to January 1, 2012. The benefit also consists of U.S. deferred tax benefits partially offset by foreign taxes, certain state income taxes and interest related to unrecognized tax benefits.

The Company recorded an income tax benefit of $0.7 million and $0.4 million for the three and six months ended March 31, 2012, respectively. The tax benefit is driven by $1.4 million of reductions in uncertain tax positions as a result of the lapse in statutes of limitations. This benefit is partially offset by provisions substantially consisting of foreign income taxes arising from the Company's international sales mix, certain state income taxes and interest related to unrecognized tax benefits.

The Company evaluates the realizability of its deferred tax assets by jurisdiction and assesses the need for a valuation allowance on a quarterly basis. As of March 31, 2013, the Company has continued to maintain a valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these attributes. The Company has also continued to maintain a valuation allowance in certain jurisdictions that have not generated historical cumulative profitability.

The Company is subject to U.S. federal income tax and various state, local and international income taxes in various jurisdictions. The amount of income taxes paid is subject to the Company's interpretation of applicable tax laws in the jurisdictions in which it files. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company has income tax audits in progress in various jurisdictions in which it operates. In the Company's U.S. and international jurisdictions, the years that may be examined vary, with the earliest tax year being 2006. Based on the outcome of these examinations, or the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the Company's statement of financial position. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefit will be reduced by approximately $1.5 million during the next twelve months primarily as the result of statutes of limitations expiring.

6. Earnings per Share

Below is a reconciliation of weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share (in thousands):

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	Three months ended March 31,		Six months ended March 31,
	2013	2012	2013	2012
Weighted average common shares outstanding used in computing basic earnings per share	65,889	65,038	65,726	64,925
Dilutive common stock options and restricted stock awards	—	790	—	627
Weighted average common shares outstanding for purposes of computing diluted earnings per share	65,889	65,828	65,726	65,552

Options to purchase approximately 34,000 and 224,000 shares of common stock and 3,179,000 and 0 shares of restricted stock were excluded from the computation of diluted earnings per share attributable to common stockholders for the three months ended March 31, 2013 and 2012, respectively, as their effect would be anti-dilutive. In addition, options to purchase approximately 65,000 and 278,000 shares of common stock and 3,008,000 and 63,000 shares of restricted stock were excluded from the computation of diluted earnings per share attributable to common stockholders for the six months ended March 31, 2013 and 2012, respectively, as their effect would be anti-dilutive. All outstanding stock options and unvested shares of restricted stock were excluded from the computation of diluted earnings per share for the three and six months ended March 31, 2013 as a result of the net loss for those periods.

7. Segment Information

The Company reports financial results in three segments: Brooks Product Solutions, Brooks Global Services and Brooks Life Science Systems. A description of segments is included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012.

The Company evaluates performance and allocates resources based on revenues, operating income (loss) and returns on invested assets. Operating income (loss) for each segment includes selling, general and administrative expenses directly attributable to the segment. Other unallocated corporate expenses, amortization of acquired intangible assets (excluding completed technology) and restructuring are excluded from the segments’ operating income (loss). The Company’s non-allocable overhead costs, which include various general and administrative expenses, are allocated among the segments based upon various cost drivers associated with the respective administrative function, including segment revenues, segment headcount, or an analysis of the segments that benefit from a specific administrative function. Segment assets exclude cash, cash equivalents, restricted cash, marketable securities, deferred tax assets and investments in joint ventures.

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Financial information for the Company’s business segments is as follows (in thousands):



	Brooks Product Solutions			Brooks Global Services		Brooks Life Science Systems			Total
Three months ended March 31, 2013
Revenues
Product	$	85,404		$	3,731	$	6,358		$	95,493
Services	—			18,369		2,757			21,126
	$	85,404		$	22,100	$	9,115		$	116,619
Gross profit	$	27,685		$	6,516	$	2,411		$	36,612
Segment operating income (loss)	$	3,523		$	1,956	$	(3,875	)	$	1,604

Three months ended March 31, 2012
Revenues
Product	$	103,456		$	3,015	$	11,150		$	117,621
Services	—			18,220		3,496			21,716
	$	103,456		$	21,235	$	14,646		$	139,337
Gross profit	$	35,885		$	6,591	$	5,806		$	48,282
Segment operating income (loss)	$	7,597		$	2,195	$	(105	)	$	9,687

Six months ended March 31, 2013
Revenues
Product	$	148,126		$	7,236	$	17,454		$	172,816
Services	—			36,029		5,799			41,828
	$	148,126		$	43,265	$	23,253		$	214,644
Gross profit	$	45,439		$	11,626	$	8,705		$	65,770
Segment operating income (loss)	$	(2,911	)	$	2,547	$	(3,897	)	$	(4,261	)

Six months ended March 31, 2012
Revenues
Product	$	188,750		$	5,392	$	20,577		$	214,719
Services	—			37,937		6,909			44,846
	$	188,750		$	43,329	$	27,486		$	259,565
Gross profit	$	64,286		$	13,727	$	10,626		$	88,639
Segment operating income (loss)	$	8,682		$	5,144	$	(738	)	$	13,088

Assets
March 31, 2013	$	251,174		$	63,799	$	100,102		$	415,075
September 30, 2012	$	218,799		$	56,120	$	107,530		$	382,449

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A reconciliation of the Company’s reportable segment operating income (loss) to the corresponding consolidated amounts for the three and six month periods ended March 31, 2013 and 2012 is as follows (in thousands):



	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
Segment operating income (loss)	$	1,604		$	9,687		$	(4,261	)	$	13,088
Other unallocated corporate expenses	394			(2,934		)	1,284			(2,416		)
Amortization of acquired intangible assets	1,413			1,138			2,965			2,355
Restructuring and other charges	769			42			5,526			245
In-process research and development	—			3,026			—			3,026
Total operating income (loss)	$	(972	)	$	8,415		$	(14,036	)	$	9,878

A reconciliation of the Company’s reportable segment assets to the corresponding consolidated amounts as of March 31, 2013 and September 30, 2012 is as follows (in thousands):



	March 31, 2013		September 30, 2012
Segment assets	$	415,075	$	382,449
Investments in cash, cash equivalents, restricted cash and marketable securities	145,574		200,994
Deferred tax assets	118,011		120,157
Investments in joint ventures	28,425		31,428
Other unallocated corporate net assets	14,677		6,932
Total assets	$	721,762	$	741,960

8. Significant Customers

The Company had one customer that accounted for more than 10% of revenues, at 13%, in the three months ended March 31, 2013. The Company had two customers that accounted for more than 10% of revenues, at 16% and 10%, respectively, in the three months ended March 31, 2012. The Company had one customer that accounted for more than 10% of revenues, at 11%, in the six months ended March 31, 2013. The Company had one customer that accounted for more than 10% of revenues, at 14%, in the six months ended March 31, 2012.

9. Restructuring and Other Charges

The Company recorded a restructuring charge of $0.8 million for the three months ended March 31, 2013 and $5.4 million for the six months ended March 31, 2013, respectively. Restructuring costs recorded in the first six months of fiscal 2013 relate primarily to workforce reductions implemented to consolidate the operations of Crossing and the Company, to transition internal manufacturing of the Polycold product line (certain of the Company's cryopump and cryochiller products) to a third party contract manufacturer and other programs designed to improve the Company's cost structure. Restructuring charges also included facility related costs incurred in connection with the consolidation of Crossing facilities with the Company's facilities. Accrued restructuring costs as of March 31, 2013 are expected to be paid during the next twelve months.

Restructuring costs for the three months ended March 31, 2013 consist of $0.7 million of severance costs and $0.1 million of facility related costs. The Brooks Product Solutions segment incurred a severance charge of $0.1 million to eliminate 13 positions and $0.3 million related to the outsourcing of the Polycold manufacturing operation. The Company also incurred $0.2 million of severance charges to eliminate 8 corporate positions and $0.1 million related to the Brooks Life Science Systems segment.

Restructuring costs for the six months ended March 31, 2013 consist of $4.7 million of severance costs and $0.7 million of facility related costs. The Brooks Product Solutions segment incurred a severance charge of $2.6 million to eliminate 141 positions, including approximately 30 related to the acquisition of Crossing; Brooks Global Services segment incurred a severance charge of $1.1 million to eliminate 18 positions, and the Company incurred $0.7 million to eliminate 19 corporate positions. The

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Brooks Life Science Systems segment incurred severance charges of $0.3 million to eliminate 6 positions, mainly due to the consolidation of administrative functions.

Total severance charges related to the outsourcing of the Polycold manufacturing operation are expected to be $1.3 million, including severance and retention bonuses. This charge will be amortized over the period from notification of the closing to the actual service end date. The Company has expensed $0.6 million of this charge as of March 31, 2013, and will expense the balance over the remainder of fiscal year 2013.

Restructuring and other charges for the six months ended March 31, 2013 also include $0.1 million related to a partial settlement of a defined benefit pension plan that covers substantially all of the Company's Swiss employees.

The Company recorded charges to operations of $42,000 and $245,000 in the three and six months ended March 31, 2012, respectively, for severance costs related primarily to a limited workforce reduction for the Brooks Product Solutions segment and Brooks Global Services segment in response to a decline in demand from semiconductor equipment customers.

The activity for the three and six months ended March 31, 2013 and 2012 related to the Company's restructuring-related accruals is summarized below (in thousands):



	Activity — Three Months Ended March 31, 2013
	Balance December 31, 2012		Expense		Utilization			Balance March 31, 2013
Facilities and other	$	265	$	112	$	(144	)	$	233
Workforce-related	4,528		657		(2,838		)	2,347
	$	4,793	$	769	$	(2,982	)	$	2,580


	Activity - Three Months Ended March 31, 2012
	Balance December 31, 2011		Expense		Utilization			Balance March 31, 2012
Workforce-related	$	321	$	42	$	(243	)	$	120


	Activity — Six Months Ended March 31, 2013
	Balance September 30, 2012		Expense		Utilization			Balance March 31, 2013
Facilities and other	$	—	$	690	$	(457	)	$	233
Workforce-related	2,098		4,749		(4,500		)	2,347
	$	2,098	$	5,439	$	(4,957	)	$	2,580


	Activity — Six Months Ended March 31, 2012
	Balance September 30, 2011		Expense		Utilization			Balance March 31, 2012
Workforce-related	$	293	$	245	$	(418	)	$	120

10. Employee Benefit Plans

On October 26, 2005, the Company purchased Helix Technology Corporation and assumed responsibility for the liabilities and assets of the Helix Employees’ Pension Plan (the “Helix Plan”). During fiscal year 2012, the Company advised participants of the Helix Plan that it intended to settle this pension obligation. The settlement, which occurred in the fourth quarter of fiscal 2012, resulted in accelerated cash payments of approximately $6.4 million to fully satisfy the pension liability and accelerated amortization of approximately $8.9 million of prior pension losses.

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The Company acquired Nexus Biosystems, Inc. on July 25, 2011, and in connection with this acquisition, assumed responsibility for the liabilities of the Nexus Biosystems AG Pension Plan (the “Nexus Plan”). The Nexus Plan covers substantially all employees of the Company’s Swiss subsidiary. Admittance for risk benefits (disability and death) is as of January 1 for employees who are 17 or older. Admittance into the pension plan with retirement pension occurs as of January 1 for employees who are age 24 or older. Pension benefits are based on the accumulated savings credits plus interest. The amount of the savings credit is based on the employee’s age. The Company expects to contribute $0.5 million to the Nexus Plan in fiscal 2013. In connection with actions taken under the Company’s restructuring programs, the number of employees accumulating benefits under the Nexus Plan has declined significantly. As a result, a partial settlement event occurred and resulted in accelerated amortization of approximately $0.1 million of prior pension losses. The settlement loss, recorded in the quarter ended December 31, 2012, is included in restructuring and other charges in the Consolidated Statements of Operations.

The Company also has a pension plan covering certain employees of its Taiwan subsidiary that were employed by this entity on or before July 1, 2005 (the “Taiwan Plan”). After July 1, 2005, most participants of this plan decided to join a defined contribution plan and as a result, their service earned under the Taiwan Plan was frozen.

The components of the Company’s net pension cost related to the Helix Plan (for the three and six months ended March 31, 2012), the Nexus Plan and the Taiwan Plan for the three and six months ended March 31, 2013 and 2012 is as follows (in thousands):



	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
Service cost	$	144		$	149		$	322		$	300
Interest cost	35			248			80			497
Amortization of losses	1			116			3			231
Expected return on assets	(58		)	(235		)	(135		)	(470		)
Net periodic pension cost	122			278			270			558
Settlement loss	—			—			87			—
Total pension cost	$	122		$	278		$	357		$	558

11. Other Balance Sheet Information

The following is a summary of accounts receivable at March 31, 2013 and September 30, 2012 (in thousands):



	March 31, 2013		September 30, 2012
Accounts receivable	$	74,621	$	79,706
Less allowances	1,076		851
	$	73,545	$	78,855

The following is a summary of inventories at March 31, 2013 and September 30, 2012 (in thousands):



	March 31, 2013		September 30, 2012
Inventories
Raw materials and purchased parts	$	60,762	$	64,732
Work-in-process	20,659		20,800
Finished goods	15,180		17,453
	$	96,601	$	102,985

Reserves for excess and obsolete inventory were $25.5 million and $23.2 million at March 31, 2013 and September 30, 2012, respectively.

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The Company provides for the estimated cost of product warranties, primarily from historical information, at the time product revenue is recognized and retrofit accruals at the time retrofit programs are established. The Company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Product warranty and retrofit activity on a gross basis for the three and six months ended March 31, 2013 and 2012 is as follows (in thousands):

Activity — Three Months Ended March 31, 2013



Balance December 31, 2012		Adjustments for acquisitions and divestitures		Accruals		Costs incurred			Balance March 31, 2013
$	7,724	$	—	$	3,006	$	(3,005	)	$	7,725

Activity — Three Months Ended March 31, 2012



Balance December 31, 2011		Adjustments for acquisitions and divestitures		Accruals		Costs incurred			Balance March 31, 2012
$	7,293	$	—	$	3,405	$	(3,417	)	$	7,281

Activity — Six Months Ended March 31, 2013



Balance September 30, 2012		Adjustments for acquisitions and divestitures		Accruals		Costs incurred			Balance March 31, 2013
$	7,329	$	962	$	5,369	$	(5,935	)	$	7,725

Activity — Six Months Ended March 31, 2012



Balance September 30, 2011		Adjustments for acquisitions and divestitures		Accruals		Costs incurred			Balance March 31, 2012
$	7,438	$	7	$	6,923	$	(7,087	)	$	7,281

12. Joint Ventures

The Company participates in a 50% joint venture, ULVAC Cryogenics, Inc. (“UCI”), with ULVAC Corporation of Chigasaki, Japan. UCI manufactures and sells cryogenic vacuum pumps, principally to ULVAC Corporation. For the three months ended March 31, 2013 and 2012, the Company recorded income (expense) associated with UCI of $(16,000) and $0.6 million, respectively. For the six months ended March 31, 2013 and 2012, the Company recorded income associated with UCI of $62,000 and $1.5 million, respectively. At March 31, 2013, the carrying value of UCI in the Company’s consolidated balance sheet was $25.1 million. For the three months ended March 31, 2013 and 2012, management fee payments received by the Company from UCI were $0.1 million and $0.2 million, respectively. For the six months ended March 31, 2013 and 2012, management fee payments received by the Company from UCI were $0.2 million and $0.6 million, respectively. For the three months ended March 31, 2013 and 2012, the Company incurred charges from UCI for products or services of $0.1 million and $0.2 million, respectively. For the six months ended March 31, 2013 and 2012, the Company incurred charges from UCI for products or services of $0.4 million and $0.5 million, respectively. At March 31, 2013 and September 30, 2012 the Company owed UCI $34,000 and $0.1 million, respectively, in connection with accounts payable for unpaid products and services. Summarized condensed financial information for UCI is as follows (in thousands):

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	Three Months Ended December 31,					Six Months Ended December 31,
	2012			2011		2012		2011
Statements of Operations:
Revenue	$	8,619		$	18,196	$	18,879	$	43,928
Gross profit	2,409			5,135		5,660		12,807
Net income (loss)	(33		)	1,219		123		2,951

The Company participates in a 50% joint venture with Yaskawa Electric Corporation (“Yaskawa”) called Yaskawa Brooks Automation, Inc. (“YBA”) to exclusively market and sell Yaskawa’s semiconductor robotics products and Brooks’ automation hardware products to semiconductor customers in Japan. For the three months ended March 31, 2013 and 2012, the Company recorded income (expense) associated with YBA of $6,000 and $(0.2) million respectively. For the six months ended March 31, 2013 and 2012, the Company recorded income (expense) associated with YBA of $(78,000) and $5,000, respectively. At March 31, 2013, the carrying value of YBA in the Company’s consolidated balance sheet was $3.3 million. For the three months ended March 31, 2013 and 2012, revenues earned by the Company from YBA were $1.3 million and $1.9 million, respectively. For the six months ended March 31, 2013 and 2012, revenues earned by the Company from YBA were $2.9 million and $4.0 million, respectively. For the three months ended March 31, 2013 and 2012, the Company incurred charges from YBA for products or services of $0.2 million and $0.1 million, respectively. For the six months ended March 31, 2013 and 2012, the Company incurred charges from YBA for products or services of $0.3 million and $0.2 million, respectively.

The amount due from YBA included in accounts receivable at March 31, 2013 and September 30, 2012 was $1.4 million and $2.0 million, respectively. At March 31, 2013 and September 30, 2012 the Company owed YBA $0.1 million in connection with accounts payable for unpaid products and services. Summarized condensed financial information for YBA is as follows (in thousands):



	Three Months Ended March 20,						Six Months Ended March 20,
	2013			2012			2013			2012
Statements of Operations:
Revenue	$	13,908		$	22,538		$	26,947		$	46,261
Gross profit	1,671			1,896			3,495			4,246
Net loss	(21		)	(236		)	(116		)	(148		)

These investments are accounted for using the equity method. Under this method of accounting, the Company records in income a proportionate share of the earnings of the joint ventures with a corresponding increase in the carrying value of the investment.

13. Derivative Instruments

The Company has transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. These transactions and balances, including short-term advances between the Company and its subsidiaries, subject the Company’s operations to exposure from exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company mitigates the impact of potential currency translation gains and losses on short-term intercompany advances through timely settlement of each transaction, generally within 30 days. The Company also enters into foreign exchange contracts to reduce its exposure to currency translation. Under forward contract arrangements, the Company typically agrees to purchase a fixed amount of U.S. Dollars in exchange for a fixed amount of a foreign currency on specified dates with maturities of three months or less. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the Consolidated Statements of Operations.

There were no forward contracts outstanding at March 31, 2013.

The Company had the following notional amounts outstanding under foreign currency contracts at September 30, 2012 (in thousands):

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Buy Currency	Notional Amount of Buy Currency		Sell Currency	Maturity	Notional Amount of Sell Currency in U.S. Dollars		Fair Value of Assets		Fair Value of Liabilities
U.S. Dollar	$	2,791	Taiwan Dollar	October 2012	$	2,786	$	5	$	—
U.S. Dollar	1,842		Israeli Shekel	October 2012	1,854		—		12
U.S. Dollar	1,058		Singapore Dollar	October 2012	1,056		2		—
U.S. Dollar	806		Korean Won	October 2012	803		3		—
U.S. Dollar	611		Japanese Yen	October 2012	611		—		—
U.S. Dollar	524		British Pound	October 2012	525		—		1
	$	7,632			$	7,635	$	10	$	13

The fair values of the forward contracts described above are recorded in the Company’s Consolidated Balance Sheets as prepaid expenses and other current assets and accrued expenses and other current liabilities. The amount recorded in the results of operations related to these forward contracts are recorded in other income, net in the Consolidated Statements of Operations.

14. Marketable Securities

The Company invests its cash in marketable securities and classifies them as available-for-sale. The Company records these securities at fair value. Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date. Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date. At the time that the maturity dates of these investments become one year or less, the securities are reclassified to current assets. Unrealized gains and losses are excluded from earnings and reported in a separate component of stockholders’ equity until they are sold or mature. At the time of sale, any gains or losses, calculated by the specific identification method, will be recognized as a component of operating results.

The following is a summary of marketable securities (included in short and long-term marketable securities in the Consolidated Balance Sheets), including accrued interest receivable, as of March 31, 2013 and September 30, 2012 (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
March 31, 2013:
U.S. Treasury securities and obligations of U.S. government agencies	$	22,786	$	9	$	(1	)	$	22,794
Corporate securities	37,581		26		(32		)	37,575
Mortgage-backed securities	1,171		39		—			1,210
Other debt securities	62		—		—			62
Municipal securities	19,755		10		(2		)	19,763
Bank certificate of deposits	4,049		—		—			4,049
	$	85,404	$	84	$	(35	)	$	85,453
September 30, 2012:
U.S. Treasury securities and obligations of U.S. government agencies	$	41,202	$	15	$	(2	)	$	41,215
Corporate securities	64,102		138		(16		)	64,224
Mortgage-backed securities	1,310		42		(1		)	1,351
Other debt securities	13		—		—			13
Municipal securities	34,777		25		(1		)	34,801
Bank certificate of deposits	3,987		1		—			3,988
	$	145,391	$	221	$	(20	)	$	145,592

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The fair value of the marketable securities at March 31, 2013 by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.



	Fair Value
Due in one year or less	$	46,242
Due after one year through five years	35,906
Due after ten years	3,305
	$	85,453

15. Fair Value Measurements

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities of the Company measured at fair value on a recurring basis as of March 31, 2013 and September 30, 2012 are summarized as follows (in thousands):



			Fair Value Measurements at Reporting Date Using
Description	March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	12,451	$	12,451	$	—	$	—
Available-for-sale securities	85,453		37,594		47,859		—
Total Assets	$	97,904	$	50,045	$	47,859	$	—



			Fair Value Measurements at Reporting Date Using
Description	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	17,508	$	17,508	$	—	$	—
Available-for-sale securities	145,592		60,231		85,361		—
Foreign exchange contracts	10		—		10		—
Total Assets	$	163,110	$	77,739	$	85,371	$	—
Liabilities
Foreign exchange contracts	$	13	$	—	$	13	$	—

Cash Equivalents

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Cash equivalents of $12.5 million and $17.5 million at March 31, 2013 and September 30, 2012, respectively, consisting primarily of Money Market Funds, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

Available-For-Sale Securities

Available-for-sale securities of $37.6 million and $60.2 million at March 31, 2013 and September 30, 2012, respectively, consisting of highly rated Corporate Bonds, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets of identical assets or liabilities. Available-for-sale securities of $47.9 million and $85.4 million at March 31, 2013 and September 30, 2012, respectively, consisting of Mortgage-Backed Securities, Municipal Securities, Bank Certificate of Deposits, Commercial Paper and U.S. Treasury Securities and Obligations of U.S. Government Agencies are classified within Level 2 of the fair value hierarchy because they are valued using matrix pricing and benchmarking. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

Foreign Exchange Contracts

Foreign exchange contract assets and foreign exchange contract liabilities of $10,000 and $13,000, respectively, at September 30, 2012 are classified within Level 2 of the fair value hierarchy because there may not be an active market for each contract, however, the inputs used to calculate the value of the contract were obtained from an active market.

16. Deferred Lease Costs

In December 2012, the Company leased certain of its owned property in Chelmsford, Massachusetts, to an unrelated third party. In connection with the origination of this lease the Company capitalized $3.6 million of initial direct costs, which consist primarily of commissions and tenant allowances. The deferred lease costs will be amortized over the initial lease term, or approximately 10.5 years. Amortization expense for the three and six month periods ended March 31, 2013, was $11,000. Rental income related to this lease for the three and six month periods ended March 31, 2013 was $36,000. Rental income and amortization of the deferred lease costs are included in other income (expense), net in the Consolidated Statements of Operations. At March 31, 2013, $0.4 million of unamortized deferred lease costs were included in prepaid expenses and other current assets and $3.2 million of unamortized deferred lease costs were included in other assets in the Consolidated Balance Sheets.

17. Contingencies

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its consolidated financial condition or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company's assessment of any claim will reflect the ultimate outcome and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's consolidated financial condition or results of operations in particular quarterly or annual periods.

18. Subsequent Event

On May 8, 2013, the Company’s Board of Directors declared a cash dividend of $0.08 per share payable on June 28, 2013 to common stockholders of record on June 7, 2013. Dividends are declared at the discretion of the Company’s Board of Directors and depend on actual cash from operations, the Company’s financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q contains statements that are, or may be considered to be, forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the

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Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project” or similar statements or variations of such terms and involve risks, uncertainties and other factors which may cause the actual results, our performance or our achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Risk Factors which are set forth in our 2012 Annual Report on Form 10-K and which are incorporated herein by reference. Precautionary statements made in our 2012 Annual Report on Form 10-K should be read as being applicable to all related forward-looking statements whenever they appear in this report.

Overview

We are a leading provider of automation, vacuum and instrumentation solutions for multiple markets and are a valued business partner to original equipment manufacturers (“OEMs”) and equipment users throughout the world. We serve markets where equipment productivity and availability is a critical factor for our customers’ success, typically in demanding temperature and/or pressure environments. Our largest served market is the semiconductor capital equipment industry, which represented approximately 65% and 54% of our consolidated revenues for fiscal years 2011 and 2012, respectively, and 47% of our consolidated revenues for the first half of fiscal year 2013. These decreases are the result of a recent cyclical downturn in the semiconductor capital equipment market, combined with our efforts to target certain non-semiconductor revenue opportunities, including acquisitions and a divestiture which has led to an increase in the non-semiconductor portion of our revenue. The non-semiconductor markets served by us include life sciences, industrial capital equipment and other adjacent technology markets.

Although we have entered into transactions to expand the non-semiconductor portions of our business, we continue to make investments to maintain and grow our semiconductor product and service offerings. In October 2012, we acquired Crossing Automation Inc. (“Crossing”), a U.S. based provider of automation solutions for the global semiconductor front-end markets. The purchase price was approximately $59.0 million, net of cash acquired.

In December 2012, we committed to a restructuring plan that would achieve cost synergies associated with our acquisition of Crossing and further reduce costs and improve profitability in light of the continued near-term macro-economic environment. We eliminated and continue to eliminate redundant positions across the Company and we expect to substantially complete our restructuring plan prior to June 30, 2013. For a discussion on our restructuring plan, please refer to “Restructuring and Other Charges” below.

We report financial results in the following three segments:

•

The Brooks Product Solutions segment provides a variety of products critical to technology equipment productivity and availability. Those products include atmospheric and vacuum tool automation systems, atmospheric and vacuum robots and robotic modules and cryogenic vacuum pumping, thermal management and vacuum measurement solutions which are used to create, measure and control critical process vacuum applications.


•	The Brooks Global Services segment provides an extensive range of support services including on and off-site repair services, on and off-site diagnostic support services, and installation services to enable our customers to maximize process tool uptime and productivity. This segment also provides end-user customers with spare parts support services to maximize customer tool productivity.

•

The Brooks Life Science Systems segment provides automated sample management systems for automated cold sample storage, automated blood fractionation equipment, sample preparation and handling equipment, cellular imaging, consumables, and parts and support services to a wide range of life science customers including pharmaceutical companies, biotechnology companies, biobanks, national laboratories, research institutes and research universities.

The demand for semiconductors and semiconductor manufacturing equipment is cyclical, resulting in periodic expansions and contractions of this market. Most recently, demand for semiconductor capital equipment began to decline during late fiscal 2012 and through the first half of our fiscal 2013 resulting in lower revenues in both the Brooks Product Solutions segment and the Brooks Global Services segment. However, based on recent communications with our semiconductor capital equipment customers, we expect moderately higher revenues from this end market in the near term. We have also experienced a recent decline in demand for the products in our life science business. We believe that this decline is temporary and expect our life science business to recover by the end of our fiscal year. However, to the extent that this business does not recover as quickly as expected and projected cash flows are revised downward, we may be required to write down all or a portion of the goodwill and other long-lived assets associated with this business, which would adversely impact our earnings.

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Three and Six Months Ended March 31, 2013, Compared to Three and Six Months Ended March 31, 2012

Revenues

We reported revenues of $116.6 million for the three months ended March 31, 2013, compared to $139.3 million in the same prior year period, a decrease of 16%. This decrease was primarily due to reduced demand for our products, primarily due to weakness in demand for semiconductor capital equipment which led to a reduction of $28.1 million in revenues from our Brooks Product Solutions segment and a $1.3 million reduction in revenues from our Brooks Global Services segment. Our Brooks Life Science Systems segment had lower sales of $5.5 million for the three months ended March 31, 2013 as compared to the same prior year period due to lower demand. This decrease was partially offset by the acquisition of Crossing which added $12.2 million to our revenues for the three months ended March 31, 2013 as compared to the same prior year period.

We reported revenues of $214.6 million for the six months ended March 31, 2013, compared to $259.6 million in the same prior year period, a decrease of 17%. This decrease was primarily due to reduced demand for our products, primarily due to weakness in demand for semiconductor capital equipment which led to a reduction of $57.1 million in revenues from our Brooks Product Solutions segment and a $4.3 million reduction in revenues from our Brooks Global Services segment. Our Brooks Life Science Systems segment had lower sales of $4.2 million for the six months ended March 31, 2013 as compared to the same prior year period due to lower demand. These decreases were partially offset by the acquisition of Crossing which added $20.7 million to our revenues for the six months ended March 31, 2013, as compared to the same prior year period.

Our Brooks Product Solutions segment reported revenues of $85.4 million for the three months ended March 31, 2013, a decrease of 17% from $103.5 million in the same prior year period. This segment reported revenues of $148.1 million for the six months ended March 31, 2013, a decrease of 22% from $188.8 million in the same prior year period. These decreases were mostly attributable to lower volumes of shipments to semiconductor capital equipment customers, which decreased by $28.1 million and $57.1 million for the three and six months ended March 31, 2013, respectively, as compared to the same prior year periods. This decrease was partially offset by $10.0 million and $16.5 million of product revenues for the three and six months ended March 31, 2013, respectively, contributed by our recent acquisition of Crossing as compared to the same prior year periods.

Our Brooks Global Services segment reported revenues of $22.1 million for the three months ended March 31, 2013, a 4% increase from $21.2 million in the same prior year period. This segment earns revenues from services, including the service contract and repair services, and revenues from the sale of spare parts. Total service revenues for this segment were $18.4 million for the three months ended March 31, 2013, and include $1.7 million of service revenues contributed by the acquisition of Crossing. For the prior year period, service contract and repair revenues were $18.2 million. Excluding the acquisition of Crossing, service revenues for this segment declined $1.5 million for the three months ended March 31, 2013 as compared to the same prior year period. Total spare parts revenues were $3.7 million for the three months ended March 31, 2013, and include $0.5 million of spare parts revenues contributed by the acquisition of Crossing. For the prior year period, spare parts revenues were $3.0 million. Excluding the acquisition of Crossing, spare parts revenues increased $0.2 million for the three months ended March 31, 2013 as compared to the same prior year period.

Our Brooks Global Services segment reported revenues of $43.3 million for the six months ended March 31, 2013, which was flat as compared to the same prior year period. The Crossing acquisition contributed $4.2 million of revenue to this segment of which $2.8 million was service related and $1.4 million was product related. Excluding the acquisition of Crossing, revenues for this segment declined $4.2 million for the six months ended March 31, 2013 as compared to the same prior year period primarily due to weakness in demand.

Our Brooks Life Science Systems segment reported revenues of $9.1 million for the three months ended March 31, 2013, a 38% decrease from $14.6 million in the same prior year period. This segment reported revenues of $23.3 million for the six months ended March 31, 2013, a decrease of 15% from $27.5 million in the same prior year period. These decreases were the result of a delay in customer decisions to proceed with the purchase of automated sample management systems during the second quarter of fiscal 2013.

Gross Margin

Our gross margin percentage decreased to 31.4% for the three months ended March 31, 2013, compared to 34.7% for the same prior year period. This decrease was attributable to a reduction in demand for our products from semiconductor equipment and life science customers, which led to reduced production and lower absorption of our fixed costs. In addition, acquisition related charges and higher charges for amortization of intangible assets due to our acquisition of Crossing reduced gross margin percentage by 0.8% for the three months ended March 31, 2013. Our gross margin percentage decreased to 30.6%

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for the six months ended March 31, 2013 compared to 34.1% for the same prior year period. This decrease was attributable to acquisition related charges of $2.7 million related to the acquisition of Crossing, which reduced gross margin by 1.3%, higher charges for amortization of intangible assets due to our acquisition of Crossing which reduced gross margin by 0.3%, with the balance of the reduction primarily related to a reduction in demand for our products from semiconductor equipment and life science customers, which led to reduced production and lower absorption of our fixed costs.

Our gross margin percentage for our Brooks Product Solutions segment decreased to 32.4% for the three months ended March 31, 2013 as compared to 34.7% in the same prior year period. The decrease in gross margin percentage was caused by increased charges for amortization of intangible assets due to the Crossing acquisition, which reduced gross margin by 0.2%, with the balance of the lower gross margin attributable to the reduction in demand for our products, which led to reduced production and lower absorption of our fixed costs. Gross margin percentage for our Brooks Product Solutions segment decreased to 30.7% for the six months ended March 31, 2013 as compared to 34.1% in the same prior year period. The decrease in gross margin percentage was caused by $1.4 million of charges related to the acquisition of Crossing, mainly related to the sale of acquired inventory to which a step up in value had been applied in purchase accounting, which reduced gross margin by 0.9%, increased charges for amortization of intangible assets due to the Crossing acquisition, which reduced gross margin by 0.2%, with the balance of the lower gross margin attributable to the reduction in demand for our products, which led to reduced production and lower absorption of our fixed costs.

Our gross margin percentage for our Brooks Global Services segment decreased to 29.5% for the three months ended March 31, 2013 as compared to 31.0% in the same prior year period. The decrease in gross margin percentage was caused by the sale of acquired inventory to which a step up in value had been applied in purchase accounting, which reduced gross margin by 1.2%, with the balance of the decrease mainly attributable to reduction in demand for our services by semiconductor customers, which led to reduced repair activity and lower absorption of our fixed costs. Gross margin percentage for our Brooks Global Services segment decreased to 26.9% for the six months ended March 31, 2013 as compared to 31.7% in the same prior year period. The decrease in gross margin percentage was caused by $1.3 million of charges related to the acquisition of Crossing, mainly related to the sale of acquired inventory to which a step up in value had been applied in purchase accounting, which reduced gross margin by 3.0%, with the balance of the decrease attributable to the reduction in demand for our services by semiconductor customers, which led to reduced repair activity and lower absorption of our fixed costs.

Our gross margin percentage for our Brooks Life Science Systems segment decreased to 26.5% for the three months ended March 31, 2013 as compared to 39.6% in the same prior year period. Gross margin percentage for our Brooks Life Science Systems segment decreased to 37.4% for the six months ended March 31, 2013 as compared to 38.7% in the same prior year period. This decrease was primarily attributable to the decrease in revenue described above, which led to reduced production and lower absorption of our fixed costs. This decrease was partially offset by a more favorable product mix for the six months ended March 31, 2013, including a firmware upgrade project that increased gross margin percentage by 2.5%.

Research and Development

Research and development, or R&D, expenses for the three months ended March 31, 2013 were $12.0 million, a decrease of $0.5 million, compared to $12.5 million in the same prior year period. R&D expenses for the six months ended March 31, 2013 were $23.5 million, a decrease of $1.0 million, compared to $24.5 million in the same prior year period. This decrease for the six months ended March 31, 2013 is primarily due to lower labor costs due to restructuring actions implemented during the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013, which was partially offset by $3.1 million of R&D expenses for Crossing, which were not included in the same prior year period.

Selling, General and Administrative

Selling, general and administrative, or SG&A expenses were $24.8 million for the three months ended March 31, 2013, an increase of $0.5 million compared to $24.3 million in the same prior year period. SG&A expenses were $50.7 million for the six months ended March 31, 2013, a decrease of $0.3 million compared to $51.0 million in the same prior year period. The decrease for the six months ended March 31, 2013 is the result of $3.1 million of lower labor costs due to restructuring actions implemented during the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013, $3.0 million of lower consulting costs in connection with our initiatives to improve certain operating efficiencies, $1.7 million of reduction in other SG&A costs, primarily facility and marketing costs and $0.4 million of lower intangible asset amortization, excluding the Crossing acquisition, as certain intangibles became fully amortized. These reductions were partially offset by $4.7 million of SG&A expenses for Crossing, including $1.0 million of increased amortization of intangible assets, and a one-time $3.3 million benefit recorded during the prior year period related to the reimbursement of litigation costs.

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Restructuring and Other Charges

We recorded a restructuring charge of $0.8 million for the three months ended March 31, 2013 and $5.5 million for the six months ended March 31, 2013, respectively. Restructuring costs recorded in the first six months of fiscal 2013 relate primarily to workforce reductions implemented to consolidate the operations of Crossing and the Company, to transition internal manufacturing of the Polycold product line (certain of our cryopump and cryochiller products) to a third party contract manufacturer and other programs designed to improve our cost structure. Restructuring charges also included facility related costs incurred in connection with the consolidation of Crossing facilities with our facilities. Accrued restructuring costs as of March 31, 2013 are expected to be paid during the next twelve months.

Restructuring costs for the three months ended March 31, 2013 consist of $0.7 million of severance costs and $0.1 million of facility related costs. The Brooks Product Solutions segment incurred a severance charge of $0.1 million to eliminate 13 positions and $0.3 million related to the outsourcing of the Polycold manufacturing operation. We also incurred $0.2 million of severance charges to eliminate 8 corporate positions and $0.1 million related to the Brooks Life Science Systems segment.

Restructuring costs for the six months ended March 31, 2013 consist of $4.7 million of severance costs and $0.7 million of facility related costs. The Brooks Product Solutions segment incurred a severance charge of $2.6 million to eliminate 141 positions, including approximately 30 related to the acquisition of Crossing; Brooks Global Services segment incurred a severance charge of $1.1 million to eliminate 18 positions, and we incurred $0.7 million to eliminate 19 corporate positions. The Brooks Life Science Systems segment incurred severance charges of $0.3 million to eliminate 6 positions, mainly due to the consolidation of administrative functions.

Total severance charges related to the outsourcing of the Polycold manufacturing operation are expected to be $1.3 million, including severance and retention bonuses. This charge will be amortized over the period from notification of the closing to the actual service end date. We expensed $0.6 million of this charge as of March 31, 2013, and will expense the balance over the remainder of fiscal year 2013.

Restructuring and other charges for the six months ended March 31, 2013 also includes $0.1 million related to a partial settlement of a defined benefit pension plan that covers substantially all of our Swiss employees.

The restructuring plans implemented by us during the three months ended September 30, 2012 and December 31, 2012 will reduce the combined cost structure of Brooks and Crossing by approximately $23.0 million. Approximately $4.0 million of that savings is the result of a reduction in temporary staffing, primarily in production positions, for which we did not incur severance charges. The temporary workforce may return as we see semiconductor capital equipment spending recover. The balance of our cost savings are expected to be more permanent, with approximately 33% of the savings reducing our cost of sales and the balance reducing operating expenses. In addition, our decision to outsource production of our Polycold product line will locate the manufacturing of this product closer to a majority of the end users. The impact on gross margin from this production move will be dependent on the mix of our revenues, the timeline for our transition and completion of supply chain activities that are still underway.

We recorded charges to operations of $42,000 and $245,000 in the three and six months ended March 31, 2012, respectively, for severance costs related primarily to a limited workforce reduction for the Brooks Product Solutions segment and Brooks Global Services segment in response to a decline in demand from semiconductor equipment customers.

In-Process Research and Development

During the three months ended March 31, 2012, we acquired primarily intellectual property from Intevac, Inc. for $3.0 million. This intellectual property will be utilized in the development of a next generation of semiconductor automation tools that resides within the Brooks Product Solutions segment. We expensed essentially all of this asset purchase as an in-process research and development cost in the three months ended March 31, 2012.

Interest Income

Interest income was $0.3 million and $0.5 million for the three and six month periods ended March 31, 2013, as compared to $0.3 million and $0.6 million for the same prior year periods. Our cash balances available for investing decreased during the three and six months ended March 31, 2013 as compared to the same prior year periods because we used $59.0 million in cash to acquire Crossing.

Other Income (Expense), Net

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Other income, net, was $77,000 for the three months ended March 31, 2013 and consists primarily of joint venture management fee income which was partially offset by foreign exchange losses of $234,000. Other expense, net, was $16,000 for the six months ended March 31, 2013 and consists primarily of foreign exchange losses which were partially offset by joint venture management fee income.

Other income (expense), net, was ($51,000) and $295,000 for the three and six months ended March 31, 2012, and consists primarily of foreign exchange losses which were partially offset by joint venture management fee income.

Income Tax Benefit

We recorded an income tax benefit of $0.1 million and $3.8 million for the three and six months ended March 31, 2013, respectively. The tax benefit substantially consists of $0.9 million of tax benefits resulting from the reinstatement of the U.S. federal research and development tax credit, retroactive to January 1, 2012. The benefit also consists of U.S. deferred tax benefits partially offset by foreign taxes, certain state income taxes and interest related to unrecognized tax benefits.

We recorded an income tax benefit of $0.7 million and $0.4 million for the three and six months ended March 31, 2012, respectively. The tax benefit is driven by $1.4 million of reductions in uncertain tax positions as a result of the lapse in statutes of limitations. This benefit was partially offset by provisions substantially consisting of foreign income taxes arising from our international sales mix, certain state income taxes and interest related to unrecognized tax benefits.

As of March 31, 2013, we continued to maintain a valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on our long-term forecasts and the expiration dates on these attributes. We also continued to maintain a valuation allowance in certain jurisdictions that have not generated historical cumulative profitability.

Equity in Earnings (Losses) of Joint Ventures

Income (expense) associated with our 50% interest in ULVAC Cryogenics, Inc., or “UCI”, a joint venture with ULVAC Corporation of Japan, was ($16,000) and $0.6 million for the three months ended March 31, 2013 and 2012, respectively. This decrease was the result of lower revenues due to a cyclical slowing of demand for UCI products. The income (expense) associated with our 50% interest in Yaskawa Brooks Automation, Inc., a joint venture with Yaskawa Electric Corporation of Japan was $6,000 and ($0.2) million for the three months ended March 31, 2013 and 2012, respectively.

Income associated with our 50% interest in UCI was $62,000 and $1.5 million for the six months ended March 31, 2013 and 2012, respectively. This decrease was the result of lower revenues due to a cyclical slowing of demand for UCI products. The income (loss) associated with our 50% interest in Yaskawa Brooks Automation, Inc. was ($78,000) and $5,000 for the six months ended March 31, 2013 and 2012, respectively.

Liquidity and Capital Resources

A considerable portion of our revenues are dependent on the demand for semiconductor capital equipment. Demand for this equipment has historically experienced periodic downturns. This cyclicality makes estimates of a considerable portion of our future revenues and cash flows inherently uncertain.

At March 31, 2013, we had cash, cash equivalents and marketable securities aggregating $145.6 million. This amount was composed of $60.1 million of cash and cash equivalents, $46.3 million of investments in short-term marketable securities and $39.2 million of investments in long-term marketable securities.

Cash and cash equivalents were $60.1 million at March 31, 2013, an increase of $5.5 million from September 30, 2012. The increase in cash was primarily due to $58.9 million of net sales of marketable securities and $16.7 million of cash flow from operations. These sources of cash were partially offset by the $59.0 million we used to acquire Crossing and $10.7 million we used to pay the cash dividend on December 28, 2012 and March 29, 2013.

Cash provided by operating activities was $16.7 million for the six months ended March 31, 2013, and was composed of $14.7 million for non-cash related charges partially offset by a net loss of $9.7 million. Non-cash related charges consisted of items such as $12.4 million of depreciation and amortization and $5.0 million of stock-based compensation offset by a deferred tax benefit of $3.4 million. The net loss adjusted for non-cash items for the six months ended March 31, 2013 was offset by an $11.8 million decrease in working capital, primarily due to a $13.7 million decrease in inventory and $9.5 million decrease in accounts receivable partially offset by a $4.3 million decrease in prepaid expenses and other current assets, a $3.3 million decrease in accounts payable and a $2.7 million decrease in accrued compensation.

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Cash used in investing activities was $0.6 million for the six months ended March 31, 2013, and is composed of $59.0 million used in connection with the acquisition of Crossing, $2.1 million of deferred leasing costs incurred by us in connection with the leasing of a recently vacated building owned by us that we have agreed to lease to a third party and $1.6 million of capital expenditures. These costs are mostly offset by net sales of marketable securities of $58.9 million and $2.4 million of proceeds from the sale of certain property, plant and equipment in Switzerland.

Cash used in financing activities for the six months ended March 31, 2013 is composed primarily of $10.7 million for our quarterly cash dividends paid on December 28, 2012 and March 29, 2013.

At March 31, 2013, we had approximately $2.5 million of letters of credit outstanding.

On June 21, 2010, we filed a registration statement on Form S-3 with the SEC to sell up to $200 million of securities, before any fees or expenses of the offering. Securities that may be sold include common stock, preferred stock, warrants or debt securities. Any such offering, if it does occur, may happen in one or more transactions. Specific terms of any securities to be sold will be described in supplemental filings with the SEC. This registration statement will expire on July 1, 2013.

On May 8, 2013, our Board of Directors approved a cash dividend of $0.08 per share of the Company’s common stock. The total dividend of approximately $5.3 million will be paid on June 28, 2013 to shareholders of record at the close of business on June 7, 2013. Dividends are declared at the discretion of our Board of Directors and depend on actual cash from operations, our financial condition and capital requirements and any other factors our Board of Directors may consider relevant. We intend to pay quarterly cash dividends in the future; however, the amount and timing of these dividends may be impacted by the cyclical nature of certain markets that we serve. We may reduce, delay or cancel a quarterly cash dividend based on the severity of a cyclical downturn.

We believe that we have adequate resources to fund our currently planned working capital and capital expenditure requirements for the next twelve months. The cyclical nature of our served markets and uncertainty with the current global economic environment makes it difficult for us to predict longer-term liquidity requirements with certainty. We may be unable to obtain any required additional financing on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to successfully develop or enhance products, respond to competitive pressure or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business.

Other Key Indicators of Financial Condition and Operating Performance

EBITDA and Adjusted EBITDA presented below are supplemental measures of our performance that are not required by, or presented in accordance with GAAP. They should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

EBITDA represents net income (loss) before interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to certain non-recurring and non-cash items and other adjustments. We believe that the inclusion of EBITDA and Adjusted EBITDA in this Form 10-Q is appropriate because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties. We use Adjusted EBITDA internally as a critical measurement of operating effectiveness. We believe EBITDA and Adjusted EBITDA facilitates operating performance comparison from period to period and company to company by backing out potential differences caused by variations in capital structures, tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense).

In determining Adjusted EBITDA, we eliminate the impact of a number of items. For the reasons indicated herein, you are encouraged to evaluate each adjustment and whether you consider it appropriate. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:


•	they do not reflect our cash expenditures for capital expenditure or contractual commitments;


•	they do not reflect changes in, or cash requirements for, our working capital requirements;


•	other companies, including other companies in our industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.

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Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. For these purposes, we rely on our GAAP results. For more information, see our consolidated financial statements and notes thereto appearing elsewhere in this report.

The following table sets forth a reconciliation of net (loss) income to EBITDA for the periods indicated (in thousands):



	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
Net income (loss) attributable to Brooks Automation, Inc.	$	(538	)	$	9,721		$	(9,774	)	$	12,544
Interest income, net	(265		)	(273		)	(539		)	(545		)
Benefit for income taxes	(129		)	(659		)	(3,799		)	(359		)
Depreciation and amortization	6,002			5,353			12,443			10,621
EBITDA	$	5,070		$	14,142		$	(1,669	)	$	22,261

The following table sets forth a reconciliation of EBITDA to Adjusted EBITDA for the periods indicated (in thousands):



	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013			2012
EBITDA	$	5,070	$	14,142	$	(1,669	)	$	22,261
Stock-based compensation	2,499		3,181		5,010			4,924
Restructuring and other charges	769		42		5,526			245
Purchase accounting impact on inventory and contracts acquired	805		471		2,907			831
Merger costs	8		—		642			221
In-process research and development	—		3,026		—			3,026
Adjusted EBITDA	$	9,151	$	20,862	$	12,416		$	31,508

The decrease in EBITDA for the six months ended March 31, 2013 as compared to the same prior year period was primarily related to the $44.9 million decrease in revenues and the $5.3 million increase in restructuring costs. For a further discussion of the factors impacting our revenues and costs, see the discussion of our results of operations above.

In connection with our acquisitions, we have valued acquired inventories at fair value, which results in a higher inventory cost charged to cost of sales in the periods shortly after the acquisition closes. We also value acquired sales contracts at fair value, which results in lower revenue and cost of sales in the periods shortly after the acquisition closes. These charges were $0.8 million and $2.9 million in the three and six month periods ended March 31, 2013, respectively, and related primarily to the acquisition of Crossing. The charges in prior year period related to our life science acquisitions.

Merger costs consist of professional fees to complete the acquisition of Crossing and the life science companies for the three and six month period ended March 31, 2013 and 2012, respectively.

Recently Enacted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance for presentation of comprehensive income. Under the amended guidance, a company may present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This authoritative guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. On October 1, 2012 we adopted this guidance and elected to present two separate but consecutive statements.

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financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. On January 1, 2013 we adopted this standard, which had no impact on our financial position or results of operations.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, including changes in interest rates affecting the return on our cash and cash equivalents, short-term and long-term investments and fluctuations in foreign currency exchange rates.

Interest Rate Exposure

As our cash and cash equivalents consist principally of money market securities, which are short-term in nature, our exposure to market risk related to interest rate fluctuations for these investments is not significant. Our short-term and long-term investments consist mostly of highly rated corporate debt securities, and as such, market risk to these investments is not significant. During the six months ended March 31, 2013, the unrealized loss on marketable securities was $152,000. A hypothetical 100 basis point change in interest rates would result in an annual change of approximately $1.7 million in interest income earned.

Currency Rate Exposure

We have transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. Sales in currencies other than the U.S. dollar were 26% of our total sales for the first half of fiscal year 2013. These foreign sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale.

In the normal course of our business, we have short-term advances between our legal entities that are subject to foreign currency exposure. These short-term advances were approximately $20.3 million at March 31, 2013, and relate to the Euro, British Pound and a variety of Asian currencies. We mitigate the impact of potential currency translation losses on these short-term intercompany advances by the timely settlement of each transaction, generally within 30 days. We also utilize forward contracts to hedge our exposures. In April 2013, we entered into forward contracts with a notional value of $11.0 million to hedge our exposure from these advances. We incurred a foreign currency loss of $0.5 million for the six months ended March 31, 2013, which relates to the currency fluctuation on these advances between the time the transaction occurs and the ultimate settlement of the transaction. A hypothetical 10% change in foreign exchange rates at March 31, 2013 would result in a $0.9 million change in our net income.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, and pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, the Company’s management, including our chief executive officer and chief financial officer has concluded that our disclosure controls and procedures are effective.

Change in Internal Controls. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. We cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, we believe that none of these claims will have a material adverse effect on our consolidated financial condition or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that our assessment of any claim will reflect the ultimate outcome and an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated financial condition or results of operations in particular quarterly or annual periods.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

As part of our equity compensation program, we offer recipients of restricted stock awards the opportunity to elect to sell their shares at the time of vesting to satisfy tax obligations in connection with such vesting. The following table provides information concerning shares of our Common Stock $0.01 par value purchased in connection with the forfeiture of shares to satisfy the employees’ obligations with respect to withholding taxes in connection with the vesting of shares of restricted stock during the three months ended March 31, 2013. Upon purchase, these shares are immediately retired.

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Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
January 1 — 31, 2013	—	$	—	—
February 1 — 28, 2013	73,090	9.35		73,090
March 1 — 31, 2013	714	10.01		714
Total	73,804	$	9.36	73,804

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Item 6. Exhibits

The following exhibits are included herein:




Exhibit No.		Description

10		Retention Agreement between Brooks Automation, Inc. and Martin Headley, dated March 5, 2013 (previously filed as Exhibit 10.1 to the Company's Form 8-K filed with the Commission on March 11, 2013 (File No. 0-25434) and incorporated herein by reference).

31.01		Rule 13a-14(a), 15d-14(a) Certification.

31.02		Rule 13a-14(a), 15d-14(a) Certification.

32		Section 1350 Certifications.

101*		The following material from the Company’s Quarterly Report on Form 10-Q, for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.

* Users of the XBRL data are advised pursuant to Rule 406T of Regulation S-T that these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	BROOKS AUTOMATION, INC.

DATE: May 9, 2013	/S/ MARTIN S. HEADLEY
	Martin S. Headley
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

DATE: May 9, 2013	/S/ TIMOTHY S. MATHEWS
	Timothy S. Mathews
	Vice President and Corporate Controller
	(Principal Accounting Officer)

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EXHIBIT INDEX




Exhibit No.		Description

10		Retention Agreement between Brooks Automation, Inc. and Martin Headley, dated March 5, 2013 (previously filed as Exhibit 10.1 to the Company's Form 8-K filed with the Commission on March 11, 2013 (File No. 0-25434) and incorporated herein by reference).

31.01		Rule 13a-14(a), 15d-14(a) Certification.

31.02		Rule 13a-14(a), 15d-14(a) Certification.

32		Section 1350 Certifications.

101*		The following material from the Company’s Quarterly Report on Form 10-Q, for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.