Filed Pursuant to Rule 424(b)(1)
Registration No. 333-88320
BROOKS-PRI AUTOMATION, INC.
COMMON STOCK
68,973 SHARES
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The selling stockholders are selling all of the shares of common stock
offered by this prospectus. We will not receive any of the proceeds from the
sale of these shares.
The selling stockholders may offer the common stock through public or
private transactions, at prevailing market prices, or at privately negotiated
prices.
Our common stock is quoted on the Nasdaq National Market under the
symbol "BRKS". On May 23, 2002, the last reported sale price of the common stock
on the Nasdaq National Market was $30.85 per share.
INVESTING IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated May 24, 2002.
TABLE OF CONTENTS
PROSPECTUS SUMMARY........................................ 3
RISK FACTORS.............................................. 4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS......... 16
USE OF PROCEEDS........................................... 17
SELLING STOCKHOLDERS...................................... 17
PLAN OF DISTRIBUTION...................................... 18
LEGAL MATTERS............................................. 19
EXPERTS................................................... 19
WHERE YOU CAN FIND MORE INFORMATION....................... 20
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY BE USED ONLY WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
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PROSPECTUS SUMMARY
This summary provides an overview of selected information and may not
contain all of the information that is important to you. You should read the
entire prospectus carefully, including the financial data, related notes and the
information we have incorporated by reference before making an investment
decision.
ABOUT BROOKS-PRI
Brooks-PRI Automation, Inc. ("Brooks") is a leading supplier of
integrated factory automation solutions for the global semiconductor
manufacturing and related industries. We have distinguished ourselves as a
technology and market leader, particularly in the demanding cluster-tool
vacuum-processing environment and in integrated factory automation software
applications. Our automation solutions are designed to optimize equipment and
factory productivity. These solutions include tool automation modules, complete
semiconductor wafer handling systems, factory interface solutions and automation
software and integration services.
We are a Delaware corporation and were incorporated in 1989. Our
principal offices are located at 15 Elizabeth Drive, Chelmsford, Massachusetts
01824 and our telephone number is (978) 262-2400. Our corporate website is
www.brooks.com. The information on our website is not incorporated by reference
in this prospectus.
THE OFFERING
The selling stockholders may offer and sell up to an aggregate of
68,973 shares of our common stock under this prospectus. The selling
stockholders obtained their shares they are offering under this prospectus in
connection with our acquisition of substantially all of the assets of
Intelligent Automation Systems, Inc. and IAS Products, Inc. on February 15,
2002.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information in this prospectus
before deciding to invest in shares of our common stock. While these are the
risks and uncertainties we believe are most important for you to consider, you
should know that they are not the only risks or uncertainties facing us or which
may adversely affect our business. If any of the following risks or
uncertainties actually occurs, our business, financial condition and operating
results would likely suffer. In that event, the market price of our common stock
could decline and you could lose all or part of the money you paid to buy our
common stock.
This prospectus also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described below and elsewhere in this
prospectus.
RISK FACTORS RELATING TO BROOKS' INDUSTRY
THE CYCLICAL DEMAND OF SEMICONDUCTOR MANUFACTURERS AFFECTS BROOKS' OPERATING
RESULTS AND THE ONGOING DOWNTURN IN THE INDUSTRY COULD SERIOUSLY HARM BROOKS'
OPERATING RESULTS.
Brooks' business is significantly dependent on capital expenditures by
semiconductor manufacturers. The level of semiconductor manufacturers' capital
expenditures is dependent on the current and anticipated market demand for
semiconductors. The semiconductor industry is highly cyclical and is currently
experiencing a downturn. Brooks anticipates the downturn will continue during
the next few quarters. Despite these industry conditions, Brooks plans to
continue to invest in those areas which Brooks believes are important to its
long-term growth, such as its infrastructure and information technology systems,
customer support, supply chain management and new products. As a result,
consistent with its experience in downturns in the past, Brooks believes the
current industry downturn will lead to reduced revenues for it and may cause it
to incur losses.
INDUSTRY CONSOLIDATION AND OUTSOURCING OF THE MANUFACTURE OF SEMICONDUCTORS TO
FOUNDRIES COULD REDUCE THE NUMBER OF AVAILABLE CUSTOMERS.
The substantial expense of building or expanding a semiconductor
fabrication facility is leading increasing numbers of semiconductor companies to
contract with foundries, which manufacture semiconductors designed by others. As
manufacturing is shifted to foundries, the number of Brooks' potential customers
could decrease, which would increase its dependence on its remaining customers.
Recently, consolidation within the semiconductor manufacturing industry has
increased. If semiconductor manufacturing is consolidated into a small number of
foundries and other large companies, Brooks' failure to win any significant bid
to supply equipment to those customers could seriously harm its reputation and
materially and adversely affect its revenue and operating results.
BROOKS' FUTURE OPERATIONS COULD BE HARMED IF THE COMMERCIAL ADOPTION OF 300MM
WAFER TECHNOLOGY CONTINUES TO PROGRESS SLOWLY OR IS HALTED.
Brooks' future operations depend in part on the adoption of new systems
and technologies to automate the processing of 300mm wafers. However, the
industry transition from the current, widely used 200mm manufacturing technology
to 300mm manufacturing technology is occurring more slowly than expected. A
significant delay in the adoption of 300mm manufacturing technology, or the
failure of the industry to adopt 300mm manufacturing technology, could
significantly impair Brooks' operations. Moreover, continued delay in transition
to 300mm technology could permit Brooks' competitors to introduce competing or
superior 300mm products at more competitive prices. As a result of these
factors, competition for 300mm orders could become vigorous and could harm
Brooks' results of operations. Brooks' merger with PRI on May 14, 2002 does not
mitigate this risk. Manufacturers implementing factory automation in 300mm pilot
projects typically seek to purchase systems from multiple vendors. To date,
nearly all manufacturers with pilot projects have selected PRI's competitors'
systems for these projects. Manufacturers' awards to PRI's competitors of early
300mm orders could make it more difficult for Brooks to win orders from those
manufacturers for their full-scale 300mm production facilities.
PRI'S DIFFICULTIES WITH PRODUCTION OF ITS TURBOSTOCKER PRODUCT COULD ADVERSELY
AFFECT BROOKS' ABILITY TO COMPETE IN THE 300MM WAFER TECHNOLOGY MARKETPLACE.
In late fiscal 2000 and early fiscal 2001, PRI, which Brooks acquired
on May 14, 2002, encountered manufacturing and supply chain problems related to
its recently introduced TurboStocker product, which PRI had planned to begin
manufacturing in high volume in
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the fourth quarter of fiscal 2000 in response to increased customer demand at
the time. These problems caused delays in shipments and in customer acceptance
of these systems, and in some cases required repair or retrofit of TurboStockers
already installed in the field. PRI's TurboStocker manufacturing problems, to
the extent they have undermined or may undermine potential 300mm customers'
confidence in PRI's ability to manufacture and deliver complex factory
automation systems in a timely manner and at acceptable quality levels, have
adversely affected, and may continue to adversely affect, PRI's reputation and,
as a result, the competitive position of Brooks in the market for 300mm
products.
RISK FACTORS RELATING TO BROOKS' ACQUISITIONS
FAILURE OF THE MERGER OF PRI INTO BROOKS TO ACHIEVE POTENTIAL BENEFITS COULD
HARM THE BUSINESS AND OPERATING RESULTS OF THE COMBINED COMPANY.
Brooks acquired PRI in May 2002. Brooks expects that the combination of
Brooks and PRI will result in potential benefits for the combined company. The
merger will not achieve its anticipated benefits unless Brooks successfully
combines its operations with those of PRI and integrates the two companies'
products in a timely manner. Integrating Brooks and PRI will be a complex, time
consuming and expensive process and may result in revenue disruption if not
completed in a timely and efficient manner. The companies must operate as a
combined organization using common:
- sales, marketing, service and support organizations;
- information communication systems;
- operating procedures;
- financial controls; and
- human resource practices, including benefit, training and professional
development programs.
There may be substantial difficulties, costs and delays involved in
integrating Brooks and PRI. These could include:
- distracting management from the business of the combined company;
- supply chain coordination;
- problems with compatibility of business cultures;
- customer perception of an adverse change in service standards, business
focus, billing practices or product and service offerings;
- costs and inefficiencies in delivering products and services to the
customers of the combined company;
- problems in successfully coordinating the research and development
efforts of the combined company;
- integrated sales, support and product marketing;
- costs and delays in implementing common systems and procedures,
including financial accounting and enterprise resource planning
systems; and
- the inability to retain and integrate key management, research and
development, technical sales and customer support personnel.
Further, we cannot assure you that the combined company will realize
any of the anticipated benefits and synergies of the merger. Any one or all of
the factors identified above or identified in "Risk Factors Relating to Brooks'
Industry" and "Risk Factors Relating to Brooks' Operations," identified below,
could cause increased operating costs, lower than anticipated financial
performance, or the loss of customers, employees or business partners. The
failure to integrate Brooks and PRI successfully will have a material adverse
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effect on the business, financial condition and results of operations of the
combined company.
BROOKS' BUSINESS COULD BE HARMED IF BROOKS FAILS TO ADEQUATELY INTEGRATE THE
OPERATIONS OF THE BUSINESSES IT HAS ACQUIRED.
Brooks recently merged with PRI and has completed a number of
acquisitions in a short period of time. Brooks' management must devote
substantial time and resources to the integration of the operations of its
acquired businesses with its core business and its other acquired businesses. If
Brooks fails to accomplish this integration efficiently, Brooks may not realize
the anticipated benefits of its acquisitions. The process of integrating supply
and distribution channels, research and development initiatives, computer and
accounting systems and other aspects of the operation of its acquired
businesses, presents a significant challenge to Brooks' management. This is
compounded by the challenge of simultaneously managing a larger entity. These
businesses have operations and personnel located in Asia, Europe and the United
States and present a number of additional difficulties of integration,
including:
- assimilating products and designs into integrated solutions;
- informing customers, suppliers and distributors of the effects of the
acquisitions and integrating them into Brooks' overall operations;
- integrating personnel with disparate business backgrounds and cultures;
- defining and executing a comprehensive product strategy;
- managing geographically remote units;
- managing the risks of entering markets or types of businesses in which
Brooks has limited or no direct experience; and
- minimizing the loss of key employees of the acquired businesses.
If Brooks delays the integration or fails to integrate an acquired
business or experiences other unforeseen difficulties, the integration process
may require a disproportionate amount of Brooks' management's attention and
financial and other resources. Brooks' failure to adequately address these
difficulties could harm its business and financial results.
BROOKS' BUSINESS MAY BE HARMED BY ACQUISITIONS BROOKS COMPLETES IN THE FUTURE.
Brooks plans to continue to pursue additional acquisitions of related
businesses. Brooks' identification of suitable acquisition candidates involves
risks inherent in assessing the values, strengths, weaknesses, risks and
profitability of acquisition candidates, including the effects of the possible
acquisition on Brooks' business, diversion of Brooks' management's attention and
risks associated with unanticipated problems or latent liabilities. If Brooks is
successful in pursuing future acquisitions, Brooks may be required to expend
significant funds, incur additional debt or issue additional securities, which
may negatively affect Brooks' results of operations and be dilutive to its
stockholders. If Brooks spends significant funds or incurs additional debt,
Brooks' ability to obtain financing for working capital or other purposes could
decline, and Brooks may be more vulnerable to economic downturns and competitive
pressures. Brooks cannot guarantee that it will be able to finance additional
acquisitions or that it will realize any anticipated benefits from acquisitions
that Brooks completes. Should Brooks successfully acquire another business, the
process of integrating acquired operations into Brooks' existing operations may
result in unforeseen operating difficulties and may require significant
financial resources that would otherwise be available for the ongoing
development or expansion of Brooks' existing business.
RISK FACTORS RELATING TO BROOKS' OPERATIONS
BROOKS' SALES VOLUME SUBSTANTIALLY DEPENDS ON THE SALES VOLUME OF BROOKS'
ORIGINAL EQUIPMENT MANUFACTURER CUSTOMERS AND ON INVESTMENT IN MAJOR CAPITAL
EXPANSION PROGRAMS BY END-USER SEMICONDUCTOR MANUFACTURING COMPANIES.
Brooks sells a majority of its tool automation products to original
equipment manufacturers that incorporate Brooks' products into their equipment.
Therefore, Brooks' revenues depend on the ability of these customers to develop,
market and sell their equipment in a timely, cost-effective manner.
Approximately 40% of Brooks' total revenue for the quarter ended December 31,
2001 and approximately 56% of Brooks' total revenue in fiscal 2001 comes from
sales to original equipment manufacturers. Almost all of PRI's
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revenue from its OEM Systems division, which accounted for approximately 17% of
PRI's total net revenue for the quarter ended December 31, 2001 and
approximately 39% of PRI's total net revenue in fiscal 2001, comes from sales to
original equipment manufacturers. Approximately 29% and 51% of the combined
revenue of Brooks and PRI came from sales to these customers in the quarter
ended December 31, 2001 and fiscal 2001, respectively.
Brooks also generates significant revenues from large orders from
semiconductor manufacturing companies that build new plants or invest in major
automation retrofits. Brooks' revenues depend, in part, on continued capital
investment by semiconductor manufacturing companies. Approximately 60% of
Brooks' total revenue for the quarter ended December 31, 2001 and approximately
44% of Brooks' total revenue in fiscal 2001, comes from sales to semiconductor
manufacturing companies. Almost all of PRI's revenue from its Factory Systems
and Software Systems divisions, which accounted for approximately 83% of PRI's
total net revenue for the quarter ended December 31, 2001 and approximately 61%
of PRI's total net revenue in fiscal 2001, comes from sales to semiconductor
manufacturing companies. Approximately 71% and 49% of the combined revenue of
Brooks and PRI came from sales to these customers in the quarter ended December
31, 2001 and fiscal 2001, respectively.
DEMAND FOR BROOKS' PRODUCTS FLUCTUATES RAPIDLY AND UNPREDICTABLY, WHICH MAKES IT
DIFFICULT TO MANAGE ITS BUSINESS EFFICIENTLY AND CAN REDUCE ITS GROSS MARGINS
AND PROFITABILITY.
Brooks' expense levels are based in part on its expectations for future
demand. Many expenses, particularly those relating to capital equipment and
manufacturing overhead, are relatively fixed. The rapid and unpredictable shifts
in demand for Brooks' products make it difficult to plan manufacturing capacity
and business operations efficiently. If demand is significantly below
expectations, Brooks may be unable to rapidly reduce these fixed costs, which
can diminish gross margins and cause losses. A sudden downturn may also leave
Brooks with excess inventory, which may be rendered obsolete as products evolve
during the downturn and demand shifts to newer products. For example, as a
result of the current industry downturn, PRI recorded special charges in the
second and fourth quarters of fiscal year 2001 in the aggregate amount of $9.7
million relating to inventory write-downs and costs associated with order
cancellations. Brooks' ability to reduce expenses is further constrained because
it must continue to invest in research and development to maintain its
competitive position and to maintain service and support for its existing global
customer base. Conversely, in sudden upturns, Brooks sometimes incurs
significant expenses to rapidly expedite delivery of components, procure scarce
components and outsource additional manufacturing processes. These expenses
could reduce its gross margins and overall profitability. Any of these results
could seriously harm Brooks' business.
BROOKS RELIES ON A RELATIVELY LIMITED NUMBER OF CUSTOMERS FOR A LARGE PORTION OF
ITS REVENUES AND BUSINESS.
Brooks receives a significant portion of its revenues in each fiscal
period from a relatively limited number of customers. The loss of one or more of
these major customers, or a decrease in orders by one or more customers, could
adversely affect Brooks' revenue, business and reputation. Sales to Brooks' ten
largest customers accounted for approximately 39% of total revenues in the first
quarter of fiscal 2002, 37% of total revenues in fiscal 2001, and 40% of total
revenues in fiscal 2000. Sales to PRI's top ten customers accounted for 61% of
PRI's total net revenue in fiscal 2001 and 54% in fiscal 2000. In fiscal 2001,
sales to Intel accounted for 21% and sales to KLA-Tencor accounted for 11% of
PRI's total net revenue.
DELAYS IN OR CANCELLATION OF SHIPMENTS OR CUSTOMER ACCEPTANCE OF A FEW OF
BROOKS' LARGE ORDERS COULD SUBSTANTIALLY DECREASE ITS REVENUES OR REDUCE ITS
STOCK PRICE.
Historically, a substantial portion of Brooks' quarterly and annual
revenues has come from sales of a small number of large orders. Some of Brooks'
products have high selling prices compared to Brooks' other products. As a
result, the timing of when Brooks recognizes revenue from one of these large
orders can have a significant impact on its total revenues and operating results
for a particular period because its sales in that fiscal period could fall
significantly below the expectations of financial analysts and investors. This
could cause the value of its common stock to fall. Brooks' operating results
could be harmed if a small number of large orders are canceled or rescheduled by
customers or cannot be filled due to delays in manufacturing, testing, shipping
or product acceptance.
BROOKS DOES NOT HAVE LONG-TERM CONTRACTS WITH ITS CUSTOMERS AND BROOKS'
CUSTOMERS MAY CEASE PURCHASING BROOKS' PRODUCTS AT ANY TIME.
Brooks generally does not have long-term contracts with its customers.
As a result, Brooks' agreements with its customers do not provide any assurance
of future sales. Accordingly:
- Brooks' customers can cease purchasing its products at any time without
penalty;
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- Brooks' customers are free to purchase products from Brooks'
competitors;
- Brooks is exposed to competitive price pressure on each order; and
- Brooks' customers are not required to make minimum purchases.
BROOKS' SYSTEMS INTEGRATION SERVICES BUSINESS HAS GROWN SIGNIFICANTLY RECENTLY
AND POOR EXECUTION OF THOSE SERVICES COULD ADVERSELY IMPACT BROOKS' OPERATING
RESULTS.
The number of projects Brooks is pursuing for its systems integration
services business has grown significantly recently. This business consists of
integrating combinations of Brooks software and hardware products to provide
more comprehensive solutions for Brooks' end-user customers. The delivery of
these services typically is complex, requiring that Brooks coordinate personnel
with varying technical backgrounds in performing substantial amounts of services
in accordance with timetables. Brooks is in the early stages of developing this
business and it is subject to the risks attendant to entering a business in
which it has limited direct experience. In addition, Brooks' ability to supply
these services and increase its revenues is limited by its ability to retain,
hire and train systems integration personnel. Brooks believes that there is
significant competition for personnel with the advanced skills and technical
knowledge that it needs. Some of Brooks' competitors may have greater resources
to hire personnel with those skills and knowledge. Brooks' operating margins
could be adversely impacted if it does not effectively hire and train additional
personnel or deliver systems integration services to its customers on a
satisfactory and timely basis consistent with its budgets.
BROOKS' LENGTHY SALES CYCLE REQUIRES IT TO INCUR SIGNIFICANT EXPENSES WITH NO
ASSURANCE THAT BROOKS WILL GENERATE REVENUE.
Brooks' tool automation products are generally incorporated into
original equipment manufacturer equipment at the design stage. To obtain new
business from its original equipment manufacturer customers, Brooks must develop
products for selection by a potential customer at the design stage. This often
requires Brooks to make significant expenditures without any assurance of
success. The original equipment manufacturer's design decisions often precede
the generation of volume sales, if any, by a year or more. Brooks cannot
guarantee that the equipment manufactured by its original equipment
manufacturing customers will be commercially successful. If Brooks or its
original equipment manufacturing customers fails to develop and introduce new
products successfully and in a timely manner, Brooks' business and financial
results will suffer.
Brooks also must complete successfully a costly evaluation and proposal
process before Brooks can achieve volume sales of Brooks factory automation
software and systems to customers. These undertakings are major decisions for
most prospective customers and typically involve significant capital commitments
and lengthy evaluation and approval processes. Brooks cannot guarantee that it
will continue to satisfy evaluations by its end-user customers.
BROOKS' OPERATING RESULTS WOULD BE HARMED IF ONE OF ITS KEY SUPPLIERS FAILS TO
DELIVER COMPONENTS FOR BROOKS' PRODUCTS.
Brooks currently obtains many of its components on an as needed,
purchase order basis. Generally, Brooks does not have any long-term supply
contracts with its vendors and believes many of its vendors have been taking
cost containment measures in response to the industry downturn. When demand for
semiconductor manufacturing equipment increases, Brooks' suppliers face
significant challenges in delivering components on a timely basis. Brooks'
inability to obtain components in required quantities or of acceptable quality
could result in significant delays or reductions in product shipments. This
could create customer dissatisfaction, cause lost revenue and otherwise
materially and adversely affect Brooks' operating results. Delays on Brooks'
part could also cause it to incur contractual penalties for late delivery.
AS A RESULT OF THE ACQUISITION OF PRI, BROOKS IS BECOMING INCREASINGLY DEPENDENT
ON SUBCONTRACTORS AND ONE OR A FEW SUPPLIERS FOR SOME COMPONENTS AND
MANUFACTURING PROCESSES.
For some products, or components or specialized processes that PRI uses
in its products, PRI depends on subcontractors or has available only one or a
few suppliers. For example, PRI's TurboStocker, AeroLoader, AeroTrak and
Guardian products each include components and assemblies for which PRI has
qualified, or for which there exists, only one supplier or a small number of
suppliers. In general, PRI does not have long-term agreements with these
suppliers, or agreements that obligate them to supply all of PRI's requirements
for such components or assemblies. Also, PRI relies on Shinsung Engineering Co.
Ltd. to manufacture its TurboStocker product for delivery in the Asian market
and to provide related customer support. PRI has a Master Engineering Services
Agreement with Shinsung, which provides the general terms and conditions under
which PRI may from time to time request that Shinsung perform
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engineering projects to PRI. The scope of each project and the related price and
other terms are defined in separate statements of work to be agreed upon by PRI
and Shinsung. The agreement provides that all intellectual property created by
Shinsung in the course of any such project will belong to PRI. PRI also has a
Master Manufacturing Services Agreement with Shinsung, which provides the
general terms and conditions under which PRI may from time to time request that
Shinsung manufacture products for PRI. The specifications for any products to be
manufactured, and related price and other terms, are to be defined in one or
more separate purchase orders to be issued by PRI to Shinsung. These agreements
with Shinsung are non-exclusive, contain customary provisions entitling either
party to terminate the agreement in the event of a material breach of the
agreement by, or the insolvency of, the other party, and also may be terminated
by PRI at any time for its convenience. The agreements both expire in October
2004. PRI's reliance on subcontractors gives PRI less control over the
manufacturing process and exposes PRI to significant risks, especially
inadequate capacity, late delivery, substandard quality and high costs. PRI
intends to outsource additional aspects of its manufacturing operations to
subcontractors and suppliers. PRI could experience disruption in obtaining
products or needed components and may be unable to develop alternatives in a
timely manner. If PRI is unable to obtain adequate deliveries of products or
components for an extended period of time, PRI may have to pay more for
inventory, parts and other supplies, seek alternative sources of supply or delay
shipping products to its customers. These outcomes could damage PRI's
relationships with customers. Any such increased costs, delays in shipping or
damage to customer relationships could seriously harm Brooks' business.
PRI's dependence on third-party suppliers could harm its ability to
negotiate the terms of its future business relationships with these parties, and
PRI may be unable to replace any of them on terms favorable to it. In addition,
outsourcing PRI's manufacturing to third parties may require PRI to share its
proprietary information with these suppliers. Although PRI enters into
confidentiality agreements with these third parties, these agreements may not
adequately protect PRI's proprietary information.
BROOKS MAY EXPERIENCE DELAYS AND TECHNICAL DIFFICULTIES IN NEW PRODUCT
INTRODUCTIONS AND MANUFACTURING, WHICH CAN ADVERSELY AFFECT ITS REVENUES, GROSS
MARGINS AND NET INCOME.
Because Brooks' systems are complex, there can be a significant lag
between the time Brooks introduces a system and the time it begins to produce
that system in volume. As technology in the semiconductor industry becomes more
sophisticated, Brooks is finding it increasingly difficult to design and
integrate complex technologies into its systems, to procure adequate supplies of
specialized components, to train its technical and manufacturing personnel and
to make timely transitions to high-volume manufacturing. Many customers also
require customized systems, which compound these difficulties. Brooks sometimes
incurs substantial unanticipated costs to ensure that its new products function
properly and reliably early in their life cycle. These costs could include
greater than expected installation and support costs or increased materials
costs as a result of expedited changes. Brooks may not be able to pass these
costs on to its customers. In addition, Brooks has experienced, and may continue
to experience, difficulties in both low and high volume manufacturing. Any of
these results could seriously harm Brooks' business.
For example, beginning late in the third quarter of fiscal 2000, PRI
encountered manufacturing and supply chain problems relating to its TurboStocker
product, which PRI had planned to begin manufacturing in high volume in the
fourth quarter of fiscal 2000 in response to increased customer demand at that
time. These problems have delayed shipments and customer acceptance, which
caused PRI's revenues for fiscal 2000 and 2001 to be lower than expected and
also contributed to its net losses for these periods. Since PRI discovered these
problems, it has incurred expenditures of $15.4 million to address them,
consisting of approximately $3.4 million for associated engineering costs, $5.7
million of additional warranty costs, and $6.3 million to repair or retrofit
TurboStockers already installed in the field where necessary. These costs also
contributed to PRI's losses for these periods. Of these costs, the $6.3 million
reserve for repairs and retrofits was recorded as a special charge in the fourth
quarter of PRI's fiscal year 2001. The balance of the costs were recorded in
PRI's results of operations during the period beginning with the fourth quarter
of its fiscal year 2000 and ending with the last quarter of its fiscal year
2001. PRI has also consolidated its TurboStocker manufacturing operations into a
single location, upgraded its enterprise resource planning system and outsourced
additional manufacturing of components and subassemblies. PRI's efforts to date
may be insufficient to resolve its manufacturing problems with its TurboStocker,
and PRI may encounter similar difficulties and delays in the future.
Moreover, on occasion Brooks has failed to meet its customers' delivery
or performance criteria, and as a result Brooks has deferred revenue recognition
and incurred late delivery penalties and had higher warranty and service costs.
These failures could continue and could also cause Brooks to lose business from
those customers and suffer long-term damage to its reputation.
BROOKS MAY BE UNABLE TO RECRUIT AND RETAIN NECESSARY PERSONNEL BECAUSE OF
INTENSE COMPETITION FOR HIGHLY SKILLED PERSONNEL.
Brooks needs to retain a substantial number of employees with technical
backgrounds for both its hardware and software engineering, manufacturing, sales
and support staffs. The market for these employees is intensively competitive,
and Brooks has
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occasionally experienced delays in hiring qualified personnel. Due to the
cyclical nature of the demand for its products and the current downturn in the
semiconductor market, Brooks recently reduced its workforce as a cost reduction
measure. If the semiconductor market experiences an upturn, Brooks may need to
rebuild its workforce. Due to the competitive nature of the labor markets in
which Brooks operates, this type of employment cycle increases Brooks' risk of
being unable to retain and recruit key personnel. Brooks' inability to recruit,
retain and train adequate numbers of qualified personnel on a timely basis could
adversely affect its ability to develop, manufacture, install and support its
products and may result in lost revenue and market share if customers seek
alternative solutions.
BROOKS' INTERNATIONAL BUSINESS OPERATIONS EXPOSE IT TO A NUMBER OF DIFFICULTIES
IN COORDINATING ITS ACTIVITIES ABROAD AND IN DEALING WITH MULTIPLE REGULATORY
ENVIRONMENTS.
Sales to customers outside North America accounted for approximately
61% of Brooks' total revenues in the quarter ended December 31, 2001, 50% in
fiscal 2001, 48% in fiscal 2000, and 43% in fiscal 1999. Sales to customers
outside the United States accounted for approximately 32% of PRI's total
revenues in the quarter ended December 31, 2001, 38% in fiscal 2001, 36% in
fiscal 2000 and 33% in fiscal 1999. Brooks anticipates that international sales
will continue to account for a significant portion of its revenues. Many of
Brooks' vendors are located in foreign countries. As a result of its
international business operations, Brooks is subject to various risks,
including:
- difficulties in staffing and managing operations in multiple
locations in many countries;
- difficulties in managing distributors, representatives and third
party systems integrators;
- challenges presented by collecting trade accounts receivable in
foreign jurisdictions;
- longer sales-cycles;
- possible adverse tax consequences;
- fewer legal protections for intellectual property;
- governmental currency controls and restrictions on repatriation of
earnings;
- changes in various regulatory requirements;
- political and economic changes and disruptions; and
- export/import controls and tariff regulations.
To support its international customers, Brooks maintains locations in
several countries, including Belgium, Canada, China, Germany, Japan, Malaysia,
Singapore, South Korea, Switzerland, Taiwan and the United Kingdom. Brooks
cannot guarantee that it will be able to manage these operations effectively.
Brooks cannot assure you that its investment in these international operations
will enable it to compete successfully in international markets or to meet the
service and support needs of its customers, some of whom are located in
countries where Brooks has no infrastructure.
Although Brooks' international sales are primarily denominated in U.S.
dollars, changes in currency exchange rates can make it more difficult for
Brooks to compete with foreign manufacturers on price. If Brooks' international
sales increase relative to its total revenues, these factors could have a more
pronounced effect on Brooks' operating results.
BROOKS MUST CONTINUALLY IMPROVE ITS TECHNOLOGY TO REMAIN COMPETITIVE.
Technology changes rapidly in the semiconductor, data storage and flat
panel display manufacturing industries. Brooks believes its success depends in
part upon its ability to enhance its existing products and to develop and market
new products to meet customer needs, even in industry downturns. For example, as
the semiconductor industry transitions from 200mm manufacturing technology to
300mm technology, Brooks believes it is important to its future success to
develop and sell new products that are compatible with 300mm technology. If
competitors introduce new technologies or new products, Brooks' sales could
decline and its existing products could lose market acceptance. Brooks cannot
guarantee that it will identify and adjust to changing market conditions or
succeed in introducing
10
commercially rewarding products or product enhancements. The success of Brooks'
product development and introduction depends on a number of factors, including:
- accurately identifying and defining new market opportunities and
products;
- completing and introducing new product designs in a timely manner;
- market acceptance of Brooks' products and its customers' products;
- timely and efficient software development, testing and process;
- timely and efficient implementation of manufacturing and assembly
processes;
- product performance in the field;
- development of a comprehensive, integrated product strategy; and
- efficient implementation and installation and technical support
services.
Because Brooks must commit resources to product development well in
advance of sales, its product development decisions must anticipate
technological advances by leading semiconductor manufacturers. Brooks may not
succeed in that effort. Its inability to select, develop, manufacture and market
new products or enhance its existing products could cause it to lose its
competitive position and could seriously harm its business.
BROOKS FACES SIGNIFICANT COMPETITION WHICH COULD RESULT IN DECREASED DEMAND FOR
BROOKS' PRODUCTS OR SERVICES.
The markets for Brooks' products are intensely competitive. Brooks may
be unable to compete successfully.
Brooks believes the primary competitive factors in the tool automation
systems segment are throughput, reliability, contamination control, accuracy and
price/performance. Brooks believes that its primary competition in the tool
automation market is from integrated original equipment manufacturers that
satisfy their semiconductor and flat panel display handling needs internally
rather than by purchasing systems or modules from an independent supplier like
Brooks. Many of these original equipment manufacturers have substantially
greater resources than Brooks does. Applied Materials, Inc., the leading process
equipment original equipment manufacturer, develops and manufactures its own
central wafer handling systems and modules. Brooks may not be successful in
selling its products to original equipment manufacturers that internally satisfy
their wafer or substrate handling needs, regardless of the performance or the
price of Brooks products. Moreover, integrated original equipment manufacturers
may begin to commercialize their handling capabilities and become Brooks
competitors.
Brooks believes that the primary competitive factors in the factory
interface market are technical and technological capabilities, reliability,
price/performance, ease of integration and global sales and support capability.
In this market, Brooks competes directly with Asyst, Rorze, Fortrend, Newport,
TDK, Yasakawa and Hirata. Some of these competitors have substantial financial
resources and extensive engineering, manufacturing and marketing capabilities.
Brooks believes that the primary competitive factors in the end-user
semiconductor manufacturer market for factory automation and process control
solutions are product functionality, price/performance, ease of use, ease of
integration and installation, hardware and software platform compatibility,
costs to support and maintain, vendor reputation and financial stability. The
relative importance of these competitive factors may change over time. Brooks
directly competes in this market with various competitors, including Applied
Materials-Consilium, IBM, Si-view, Compaq, TRW, Camstar and numerous small,
independent software companies. Brooks also competes with the in-house software
staffs of semiconductor manufacturers like NEC, Texas Instruments and Intel.
Most of those manufacturers have substantially greater resources than Brooks
does.
Brooks' factory automation systems division competes with Daifuku,
Murata Machinery, Shinko Electric and a number of other smaller foreign and
domestic manufacturers of automated machinery used in semiconductor fabrication
facilities. The primary competitive factors in the market are quality,
robustness and performance, price, ease of integration, vendor reputation,
financial stability, support and on-time delivery.
11
BROOKS' RECENT RAPID GROWTH IS STRAINING ITS OPERATIONS AND REQUIRING IT TO
INCUR COSTS TO UPGRADE ITS INFRASTRUCTURE.
During fiscal 2000 and 2001, Brooks experienced extremely rapid growth
in its operations, its product offerings and the geographic area of its
operations. The merger with PRI will continue this trend. Brooks' growth has
placed a significant strain on its management, operations and financial systems.
Brooks' future operating results will depend in part on its ability to continue
to implement and improve its operating and financial controls and management
information systems. If Brooks fails to manage its growth effectively, its
financial condition, results of operations and business could be harmed.
MUCH OF BROOKS' SUCCESS AND VALUE LIES IN ITS OWNERSHIP AND USE OF INTELLECTUAL
PROPERTY, AND BROOKS' FAILURE TO PROTECT THAT PROPERTY COULD ADVERSELY AFFECT
ITS FUTURE OPERATIONS.
Brooks' ability to compete is heavily affected by its ability to
protect its intellectual property. Brooks relies primarily on trade secret laws,
confidentiality procedures, patents, copyrights, trademarks and licensing
arrangements to protect its intellectual property. The steps Brooks has taken to
protect its technology may be inadequate. Existing trade secret, trademark and
copyright laws offer only limited protection. Brooks' patents could be
invalidated or circumvented. The laws of certain foreign countries in which
Brooks products are or may be developed, manufactured or sold may not fully
protect Brooks' products. This may make the possibility of piracy of Brooks'
technology and products more likely. Brooks cannot guarantee that the steps
Brooks has taken to protect its intellectual property will be adequate to
prevent misappropriation of its technology. Other companies could independently
develop similar or superior technology without violating Brooks' proprietary
rights. There has been substantial litigation regarding patent and other
intellectual property rights in semiconductor-related industries. Brooks may
engage in litigation to:
- enforce its patents;
- protect its trade secrets or know-how;
- defend itself against claims alleging it infringes the rights of
others; or
- determine the scope and validity of the patents or intellectual
property rights of others.
Any litigation could result in substantial cost to Brooks and divert
the attention of Brooks' management, which could harm its operating results and
its future operations.
BROOKS' OPERATIONS COULD INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Particular aspects of Brooks' technology could be found to infringe on
the intellectual property rights or patents of others. Other companies may hold
or obtain patents on inventions or may otherwise claim proprietary rights to
technology necessary to Brooks' business. Brooks cannot predict the extent to
which it may be required to seek licenses or alter its products so that they no
longer infringe the rights of others. Brooks cannot guarantee that the terms of
any licenses it may be required to seek will be reasonable. Similarly, changing
Brooks' products or processes to avoid infringing the rights of others may be
costly or impractical or could detract from the value of its products. A party
making a claim of infringement could secure a judgment against Brooks that
requires it to pay substantial damages. A judgment could also include an
injunction or other court order that could prevent Brooks from selling its
products. Any claim of infringement by a third party also could cause Brooks to
incur substantial costs defending against the claim, even if the claim is
invalid, and could distract the attention of Brooks' management. Any of these
events could seriously harm Brooks' business.
BROOKS' BUSINESS MAY BE HARMED BY INFRINGEMENT CLAIMS OF GENERAL SIGNAL OR
APPLIED MATERIALS.
Brooks received notice from General Signal Corporation alleging certain
of Brooks' tool automation products that Brooks sells to semiconductor process
tool manufacturers infringed General Signal's patent rights. The notification
advised Brooks that General Signal was attempting to enforce its rights to those
patents in litigation against Applied Materials, and that, at the conclusion of
that litigation, General Signal intended to enforce its rights against Brooks
and others. According to a press release issued by Applied Materials in November
1997, Applied Materials settled its litigation with General Signal by acquiring
ownership of five General Signal patents. Although not verified by Brooks, these
five patents would appear to be the patents referred to by General Signal in its
prior notice to Brooks. Applied Materials has not contacted Brooks regarding
these patents. Brooks cannot guarantee that it would prevail in any litigation
by Applied Materials seeking damages or expenses from Brooks or to enjoin Brooks
from selling its products on the basis of the alleged patent infringement, or
that a license for any of the alleged infringed patents will be available to
Brooks on reasonable
12
terms, if at all. A substantial portion of Brooks' revenues for the quarter
ended December 31, 2001 and for fiscal 2001 derive from the products that are
alleged to infringe.
BROOKS' BUSINESS MAY BE HARMED BY INFRINGEMENT CLAIMS OF ASYST TECHNOLOGIES,
INC.
Brooks acquired certain assets, including a transport system known as
IridNet, from the Infab division of Jenoptik AG on September 30, 1999. Asyst
Technologies, Inc. had previously filed suit against Jenoptik AG and other
defendants, claiming that products of the defendants, including IridNet,
infringe Asyst's patents. This ongoing litigation may ultimately affect certain
products sold by Brooks. Brooks has received notice that Asyst may amend its
complaint to name Brooks as an additional defendant. Based on Brooks'
investigation of Asyst's allegations, Brooks does not believe it is infringing
any claims of Asyst's patents. Brooks intends to continue to support Jenoptik to
argue vigorously, among other things, the position that the IridNet system does
not infringe the Asyst patents. If Asyst prevails in prosecuting its case, Asyst
may seek to prohibit Brooks from developing, marketing and using the IridNet
product without a license. Because patent litigation can be extremely expensive,
time-consuming, and its outcome uncertain, Brooks may seek to obtain licenses to
the disputed patents. Brooks cannot guarantee that licenses will be available to
it on reasonable terms, if at all. If a license from Asyst is not available,
Brooks could be forced to incur substantial costs to reengineer the IridNet
system, which could diminish its value. In any case, Brooks may face litigation
with Asyst. Such litigation could be costly and would divert Brooks management's
attention and resources. In addition, even though sales of IridNet comprise a
small percentage of Brooks' revenues, if Brooks does not prevail in such
litigation, Brooks could be forced to pay significant damages or amounts in
settlement. Jenoptik has indemnified Brooks for losses Brooks may incur in this
action.
BROOKS' SOFTWARE PRODUCTS MAY CONTAIN ERRORS OR DEFECTS THAT COULD RESULT IN
LOST REVENUE, DELAYED OR LIMITED MARKET ACCEPTANCE OR PRODUCT LIABILITY CLAIMS
WITH SUBSTANTIAL LITIGATION COSTS.
Complex software products like Brooks' can contain errors or defects,
particularly when Brooks first introduces new products or when it releases new
versions or enhancements. Any defects or errors could result in lost revenue or
a delay in market acceptance, which would seriously harm Brooks' business and
operating results. Brooks has occasionally discovered software errors in its new
software products and new releases after their introduction, and Brooks expects
that this will continue. Despite internal testing and testing by current and
potential customers, Brooks' current and future products may contain serious
defects.
Because many of Brooks' customers use their products for
business-critical applications, any errors, defects or other performance
problems could result in financial or other damage to Brooks' customers and
could significantly impair their operations. Brooks' customers could seek to
recover damages from Brooks for losses related to any of these issues. A product
liability claim brought against Brooks, even if not successful, would likely be
time-consuming and costly to defend and could adversely affect Brooks' marketing
efforts.
THE IMPACT OF TERRORIST THREATS ON THE GENERAL ECONOMY COULD DECREASE BROOKS'
REVENUES.
On September 11, 2001, the United States was subject to terrorist
attacks at the World Trade Center buildings in New York City and the Pentagon in
Washington, D.C. The potential near- and long-term impact these attacks may have
in regards to Brooks' suppliers and customers, markets for their products and
the U.S. economy are uncertain. There may be other potential adverse effects on
Brooks' operating results due to this significant event that Brooks cannot
foresee.
13
RISK FACTORS RELATING TO THE BROOKS COMMON STOCK
BROOKS' OPERATING RESULTS FLUCTUATE SIGNIFICANTLY, WHICH COULD NEGATIVELY IMPACT
ITS BUSINESS AND ITS STOCK PRICE.
Brooks' revenues, margins and other operating results can fluctuate
significantly from quarter to quarter depending upon a variety of factors,
including:
- the level of demand for semiconductors in general;
- cycles in the market for semiconductor manufacturing equipment and
automation software;
- the timing, rescheduling, cancellation and size of orders from
Brooks' customer base;
- Brooks' ability to manufacture, test and deliver products in a
timely and cost-effective manner;
- Brooks' success in winning competitions for orders;
- the timing of Brooks' new product announcements and releases and
those of its competitors;
- the mix of products it sells;
- the timing of any acquisitions and related costs;
- competitive pricing pressures; and
- the level of automation required in fab extensions, upgrades and
new facilities.
Brooks entered the factory automation software business in fiscal 1999.
A portion of Brooks' revenues from this business will depend on achieving
project milestones. As a result, Brooks' revenue from this business will be
subject to fluctuations depending upon a number of factors, including whether
Brooks can achieve project milestones on a timely basis, if at all, as well as
the timing and size of projects.
BROOKS' STOCK PRICE IS VOLATILE.
The market price of the Brooks common stock has fluctuated widely. For
example, between April 4, 2001 and April 30, 2001, the closing price of Brooks'
common stock rose from approximately $35.45 to $62.61 per share and between
August 28, 2001 and September 28, 2001, the price of the Brooks common stock
dropped from approximately $48.15 to $26.59 per share. Consequently, the current
market price of the Brooks common stock may not be indicative of future market
prices, and Brooks may be unable to sustain or increase the value of an
investment in its common stock. Factors affecting Brooks' stock price may
include:
- variations in operating results from quarter to quarter;
- changes in earnings estimates by analysts or Brooks' failure to
meet analysts' expectations;
- changes in the market price per share of Brooks' public company
customers;
- market conditions in the industry;
- general economic conditions;
- low trading volume of Brooks common stock; and
- the number of firms making a market in Brooks common stock.
14
In addition, the stock market has recently experienced extreme price
and volume fluctuations. These fluctuations have particularly affected the
market prices of the securities of high technology companies like Brooks. These
market fluctuations could adversely affect the market price of the Brooks common
stock.
BECAUSE A LIMITED NUMBER OF STOCKHOLDERS, INCLUDING A MEMBER OF BROOKS'
MANAGEMENT TEAM, OWNS A SUBSTANTIAL NUMBER OF SHARES OF BROOKS COMMON STOCK AND
ARE PARTIES TO A VOTING AGREEMENT, THEIR DECISIONS MAY BE DETRIMENTAL TO YOUR
INTERESTS.
By virtue of their stock ownership and voting agreement, Robert J.
Therrien, Brooks' president and chief executive officer, and Jenoptik AG have
the power to significantly influence Brooks' affairs and are able to influence
the outcome of matters required to be submitted to stockholders for approval,
including the election of Brooks' directors, amendments to Brooks' certificate
of incorporation, mergers, sales of assets and other acquisitions or sales.
These stockholders may exercise their influence over Brooks in a manner
detrimental to your interests. As of March 31, 2002, Mr. Therrien and M+W Zander
Holding GmbH, a subsidiary of Jenoptik AG, beneficially owned approximately 8.9%
of the Brooks common stock.
Brooks has a stockholders agreement with Mr. Therrien, M+W Zander
Holding GmbH and Jenoptik AG under which M+W Zander Holding GmbH agreed to vote
all of its shares on all matters in accordance with the recommendation of a
majority of Brooks' board of directors.
PROVISIONS OF BROOKS' CERTIFICATE OF INCORPORATION, BYLAWS, CONTRACTS AND 4.75%
CONVERTIBLE SUBORDINATED NOTES DUE 2008 MAY DISCOURAGE TAKEOVER OFFERS AND MAY
LIMIT THE PRICE INVESTORS WOULD BE WILLING TO PAY FOR BROOKS' COMMON STOCK.
Brooks' certificate of incorporation and bylaws contain provisions that
may make an acquisition of Brooks more difficult and discourage changes in
Brooks' management. These provisions could limit the price that investors might
be willing to pay for shares of Brooks' common stock. In addition, Brooks has
adopted a shareholder rights plan. In many potential takeover situations, rights
issued under the plan become exercisable to purchase Brooks common stock at a
price substantially discounted from the then applicable market price of Brooks
common stock. Because of its possible dilutive effect to a potential acquirer,
the rights plan would generally discourage third parties from proposing a merger
with or initiating a tender offer for Brooks that is not approved by Brooks'
board of directors. Accordingly, the rights plan could have an adverse impact on
Brooks' stockholders who might want to vote in favor of a merger or participate
in a tender offer. In addition, Brooks may issue shares of preferred stock upon
terms the board of directors deems appropriate without stockholder approval.
Brooks' ability to issue preferred stock in such a manner could enable its board
of directors to prevent changes in its management or control. Finally, upon a
change of control of Brooks, Brooks may be required to repurchase convertible
subordinated notes at a price equal to 100% of the principal outstanding amount
thereof, plus accrued and unpaid interest, if any, to the date of the
repurchase. Such a repurchase of the notes would represent a substantial cash
outflow; accordingly, the repayment of the notes upon a change of control of
Brooks could discourage third parties from proposing a merger with, initiating a
tender offer for or otherwise attempting to gain control of Brooks.
15
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference "forward-looking
statements"' within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 with respect to the financial
condition, results of operations, plans, objectives, future performance and
business of Brooks, which are usually identified by the use of words such as
"will," "may,"' "anticipates," "believes," "estimates," "expects," "projects,"
"plans," "predicts," "continues," "intends," "should," "would," or similar
expressions. We intend for these forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and are including this statement for
purposes of complying with these safe harbor provisions.
These forward-looking statements reflect our current views and
expectations about Brooks' plans, strategies and prospects, which are based on
the information currently available and on current assumptions.
We cannot give any guarantee that these plans, intentions or
expectations will be achieved. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, and actual results may differ
materially from those discussed in the forward-looking statements as a result of
various factors, including those factors described in the "Risk Factors" section
beginning on page 4 of this prospectus. Listed below and discussed elsewhere in
this prospectus are some important risks, uncertainties and contingencies that
could cause actual results, performances or achievements of Brooks to be
materially different from the forward-looking statements included or
incorporated by reference in this prospectus. These risks, uncertainties and
contingencies include, but are not limited to, the following:
- market acceptance of new products;
- competition in the industry;
- the ability to satisfy demand for our products;
- exchange rate fluctuations;
- the availability of debt and equity financing;
- the development of new competitive technologies;
- the availability of key components for our products;
- future acquisitions;
- the availability of qualified personnel;
- international, national, regional and local economic and political
changes;
- general economic conditions; and
- trends affecting the semiconductor industry, our financial
conditions or results of operations.
You should read this prospectus and the documents that we incorporate
by reference in this prospectus completely and with the understanding that our
actual future results may be materially different from what we expect. We may
not update these forward-looking statements, even though our situation may
change in the future. We qualify all of our forward-looking statements by these
cautionary statements.
16
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by
the selling stockholders.
SELLING STOCKHOLDERS
The selling stockholders are listed on the table below. The selling
stockholders acquired shares of our common stock from us in connection with our
acquisition of substantially all of the assets of Intelligent Automation
Systems, Inc. and IAS Products, Inc. We issued the shares registered hereunder
pursuant to exemptions from the registration requirements of the Securities Act
of 1933. Under the terms of the asset purchase agreement regarding the assets of
Intelligent Automation Systems, Inc. and IAS Products, Inc., we have agreed to
register the shares of our common stock acquired by the selling stockholders
hereunder.
Registration by the selling stockholders does not necessarily mean that
the selling stockholders will sell any or all of their shares.
The information with regard to each selling stockholder in the table
below is based upon information provided to us by each selling stockholder as of
May 15, 2002. The shares listed below represent the shares that each selling
stockholder currently beneficially owns and the number of shares each selling
stockholder indicated it plans to offer.
The shares of common stock offered by this prospectus may be offered
from time to time by the selling stockholder named below:
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
AND OWNERSHIP PERCENTAGE NUMBER OF SHARES AND OWNERSHIP PERCENTAGE
SELLING STOCKHOLDER PRIOR TO OFFERING BEING OFFERED AFTER OFFERING
------------------- ------------------------ ---------------- --------------------------
Steven J. Gordon, Ph.D. 61,049(*) 61,0493 0 (0%)
Laurence Chin 4,948(*) 4,948 0 (0%)
Jeffrey Davis 645(*) 645 0 (0%)
James Barbookles 538(*) 538 0 (0%)
Neil Aronson 538(*) 538 0 (0%)
Peter Mottla 538(*) 538 0 (0%)
Richard Couto 717(*) 717 0 (0%)
Any future transferee, pledgee,
donee or successor of the
selling stockholders(1)
* Less than 1%
--------------
(1) Information about other selling stockholders will be set forth in
prospectus supplements, if required.
17
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling stockholders.
The selling stockholders include their respective pledgees, donees,
distributees, transferees or other successors-in-interest selling shares
received from a selling stockholder as a gift, partnership distribution or other
non-sale related transfer after the date of this prospectus. A supplement to
this prospectus may be filed naming that successor-in-interest prior to
consummating a sale hereunder. The selling stockholders may offer their shares
of Brooks common stock at various times in one or more of the following
transactions:
- on one or more exchange;
- in the over the counter market;
- in private transactions other than an exchange or in the over the
counter market;
- in connection with short sales of the shares of Brooks common
stock;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded
call options,
- in hedge transactions and in settlement of other transactions or
over the counter options; or
- in a combination of any of the above transactions.
These transactions may include block transactions or crosses. Crosses
are transactions in which the same broker acts as an agent on both sides of the
trade.
The selling stockholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated or fixed prices.
The selling stockholders may use broker-dealers to sell their shares.
The selling stockholders may pay broker-dealers compensation in the form of
commissions, discounts or concessions in amounts to be negotiated in connection
with the sales. These broker-dealers and any other participating broker-dealers
may be deemed to be "underwriters" within the meaning of the Securities Act, in
connection with such sales and any such commissions, discount or concession may
be deemed to be underwriting discounts or commissions under the Act. If any of
the selling stockholders was deemed an underwriter, that selling stockholder
might be subject to certain statutory liabilities, including, but not limited
to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the
Exchange Act.
We have agreed to bear certain expenses of registration of the common
stock under the federal and state securities laws. These expenses include
registration and qualification fees, legal fees and expenses, and auditing and
accounting expenses. The selling stockholders have agreed to bear their own
counsel fees or any brokers' commissions or underwriting discounts incurred in
connection with the registration of their shares. The selling stockholders may
agree to indemnify any broker-dealer, agent or other person that participates in
transactions involving sales of the shares against liabilities, including
liabilities arising under the Securities Act.
The selling stockholders also may resell all or a portion of their
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, rather than pursuant to this prospectus provided they meet the
criteria and conform to the requirements of that Rule.
There can be no assurance that the selling stockholders will sell any
or all of their shares of Brooks common stock offered hereunder.
The selling stockholder and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any common stock by selling stockholder and any other
such person. In addition, Regulation M of the Exchange Act may restrict the
ability of any person engaged in the distribution of the common stock to engage
in market-making activities with respect to the common stock being
18
distributed for a period of up to five business days prior to the commencement
of such distribution. This may affect the marketability of the common stock and
the ability of any person or entity to engage in market-making activities with
respect to the common stock.
Pursuant to the agreements relating to our acquisition of Intelligent
Automation Systems, Inc. and IAS Products, Inc., we and each selling stockholder
who acquired shares of our common stock pursuant to such agreement will be
indemnified by each other against certain liabilities, including certain
liabilities under the Securities Act or will be entitled to contribution in
connection with these liabilities.
LEGAL MATTERS
The validity of the shares of common stock to be sold in this offering
will be passed upon for us by Brown Rudnick Berlack Israels LLP, Boston,
Massachusetts.
EXPERTS
The audited financial statements incorporated in this prospectus by
reference to the annual report on Form 10-K/A of Brooks Automation, Inc. for the
year ended September 30, 2001, except as they relate to Irvine Optical Company,
LLC for the year ended December 31, 1999, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
The audited financial statements of PRI Automation, Inc., incorporated
in this prospectus by reference to Brooks-PRI Automation, Inc.'s Current Report
on Form 8-K/A filed May 15, 2002, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The audited financial statements of General Precision, Inc.,
incorporated in this prospectus by reference to Brooks Automation, Inc.'s
current report on Form 8-K/A dated October 5, 2001, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
Ernst & Young LLP, independent auditors, have audited the financial
statements of Irvine Optical Company, LLC as of December 31, 1999 and 1998, and
for the years then ended, as set forth in their report (which contains an
explanatory paragraph describing conditions that raise substantial doubt about
Irvine Optical Company, LLC's ability to continue as a going concern as
described in Note 1 to those financial statements). Brooks has incorporated by
reference Ernst & Young LLP's report with respect to Irvine Optical Company,
LLC's financial statements in this prospectus and elsewhere in the registration
statement in reliance on Ernst & Young LLP's report, given on their authority as
experts in accounting and auditing.
19
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission (SEC). You may read and copy these reports, proxy statements and
other information at the SEC's public reference rooms at 450 Fifth Street, NW,
Washington, D.C., and in New York, NY and Chicago, IL. You can request copies of
these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference rooms. Our SEC filings are also available at the SEC's
web site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act with respect to common stock offered in connection with this
prospectus. This prospectus does not contain all of the information set forth in
the registration statement. We have omitted certain parts of the registration
statement in accordance with the rules and regulations of the SEC. For further
information with respect to us and the common stock, you should refer to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or other document are not necessarily complete and, in
each instance, you should refer to the copy of such contract or document filed
as an exhibit to or incorporated by reference in the registration statement.
Each statement as to the contents of such contract or document is qualified in
all respects by such reference. You may obtain copies of the registration
statement from the SEC's principal office in Washington, D.C. upon payment of
the fees prescribed by the SEC, or you may examine the registration statement
without charge at the offices of the SEC described above.
The SEC allows us to "incorporate by reference" information that we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act until each
selling stockholder sells all of its Brooks common stock:
- Annual Report on Form 10-K/A for the year ended September 30,
2001;
- Current Report on Form 8-K filed on October 19, 2001;
- Current Report on Form 8-K filed on October 22, 2001;
- Current Report on Form 8-K filed on October 26, 2001;
- Current Report on Form 8-K filed on February 7, 2002;
- Current Report on Form 8-K filed on March 1, 2002;
- Current Report on Form 8-K/A filed on April 4, 2002;
- Current Report on Form 8-K/A filed on May 15, 2002;
- Quarterly Report on Form 10-Q/A for the quarter ended December 31,
2001;
- The description of our common stock that is contained in our
Registration Statement on Form 8-A filed on January 27, 1995; and
- The description of our preferred share rights that is contained in
our Registration Statement on Form 8-A filed on August 7, 1997.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Brooks-PRI Automation, Inc.
15 Elizabeth Drive
Chelmsford, Massachusetts 01824
Attention: Investor Relations
(978) 262-5799
You should rely only on the information or representations provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
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