e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended: December 31, 2009
OR
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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)
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| Delaware
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04-3040660 |
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
15 Elizabeth Drive
Chelmsford, Massachusetts
(Address of principal executive offices)
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 þ No o
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 o No o
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):
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Accelerated filer þ
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes o No o
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as
of the latest practical date, January 29, 2010: Common stock, $0.01 par value 64,551,247
shares
BROOKS AUTOMATION, INC.
INDEX
2
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share and per share data)
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December 31, |
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September 30, |
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2009 |
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2009 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
47,164 |
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$ |
59,985 |
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Marketable securities |
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38,038 |
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28,046 |
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Accounts receivable, net |
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53,193 |
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38,428 |
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Insurance receivable for litigation |
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204 |
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120 |
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Inventories, net |
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89,763 |
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84,738 |
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Prepaid expenses and other current assets |
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10,464 |
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9,872 |
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Total current assets |
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238,826 |
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221,189 |
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Property, plant and equipment, net |
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71,391 |
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74,793 |
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Long-term marketable securities |
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26,157 |
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22,490 |
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Goodwill |
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48,138 |
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48,138 |
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Intangible assets, net |
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13,133 |
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14,081 |
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Equity investment in joint ventures |
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29,362 |
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29,470 |
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Other assets |
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2,684 |
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3,161 |
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Total assets |
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$ |
429,691 |
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$ |
413,322 |
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Liabilities and equity |
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Current liabilities |
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Accounts payable |
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$ |
46,243 |
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$ |
26,360 |
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Deferred revenue |
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4,097 |
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2,916 |
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Accrued warranty and retrofit costs |
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5,734 |
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5,698 |
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Accrued compensation and benefits |
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10,370 |
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14,317 |
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Accrued restructuring costs |
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4,786 |
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5,642 |
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Accrued income taxes payable |
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2,925 |
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2,686 |
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Accrued expenses and other current liabilities |
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11,716 |
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12,870 |
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Total current liabilities |
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85,871 |
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70,489 |
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Accrued long-term restructuring |
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2,263 |
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2,019 |
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Income taxes payable |
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11,035 |
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10,755 |
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Long-term pension liability |
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8,070 |
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7,913 |
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Other long-term liabilities |
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2,625 |
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2,523 |
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Total liabilities |
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109,864 |
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93,699 |
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Contingencies (Note 14) |
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Equity |
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Preferred stock, $0.01 par value, 1,000,000 shares
authorized, no shares issued and outstanding |
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— |
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— |
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Common stock, $0.01 par value, 125,000,000 shares
authorized, 78,013,116 shares issued and 64,551,247
shares outstanding at December 31, 2009, 77,883,173
shares issued and 64,421,304 shares outstanding at
September 30, 2009 |
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780 |
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|
779 |
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Additional paid-in capital |
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1,798,235 |
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1,795,619 |
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Accumulated other comprehensive income |
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16,781 |
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16,318 |
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Treasury stock at cost, 13,461,869 shares at December
31, 2009 and September 30, 2009 |
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(200,956 |
) |
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(200,956 |
) |
Accumulated deficit |
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(1,295,426 |
) |
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(1,292,631 |
) |
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Total Brooks Automation, Inc. stockholders’ equity |
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319,414 |
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319,129 |
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Noncontrolling interest in subsidiaries |
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413 |
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494 |
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Total equity |
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319,827 |
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319,623 |
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Total liabilities and equity |
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$ |
429,691 |
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$ |
413,322 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
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Three months ended |
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December 31, |
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2009 |
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2008 |
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Revenues |
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Product |
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$ |
91,521 |
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$ |
59,086 |
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Services |
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14,676 |
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14,360 |
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Total revenues |
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106,197 |
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73,446 |
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Cost of revenues |
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Product |
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67,245 |
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53,869 |
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Services |
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12,706 |
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13,189 |
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Total cost of revenues |
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79,951 |
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67,058 |
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Gross profit |
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26,246 |
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6,388 |
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Operating expenses |
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Research and development |
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7,541 |
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9,277 |
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Selling, general and administrative |
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18,979 |
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27,634 |
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Restructuring charges |
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1,522 |
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4,105 |
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Total operating expenses |
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28,042 |
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41,016 |
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Operating loss |
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(1,796 |
) |
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(34,628 |
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Interest income |
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328 |
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|
897 |
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Interest expense |
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16 |
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126 |
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Loss on investment |
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191 |
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1,185 |
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Other expense, net |
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197 |
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38 |
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Loss before income taxes and equity in earnings (losses) of joint ventures |
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(1,872 |
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(35,080 |
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Income tax provision |
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635 |
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391 |
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Loss before equity in earnings (losses) of joint ventures |
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(2,507 |
) |
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(35,471 |
) |
Equity in earnings (losses) of joint ventures |
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(370 |
) |
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301 |
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Net loss |
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$ |
(2,877 |
) |
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$ |
(35,170 |
) |
Add: Net loss attributable to noncontrolling interests |
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82 |
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87 |
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Net loss attributable to Brooks Automation, Inc. |
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$ |
(2,795 |
) |
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$ |
(35,083 |
) |
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Basic net loss per share attributable to Brooks Automation, Inc. common
stockholders |
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$ |
(0.04 |
) |
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$ |
(0.56 |
) |
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Diluted net loss per share attributable to Brooks Automation, Inc. common
stockholders |
|
$ |
(0.04 |
) |
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$ |
(0.56 |
) |
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Shares used in computing loss per share |
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Basic |
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63,394 |
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62,651 |
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Diluted |
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63,394 |
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62,651 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
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Three months ended |
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December 31, |
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2009 |
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2008 |
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Cash flows from operating activities |
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Net loss |
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$ |
(2,877 |
) |
|
$ |
(35,170 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities: |
|
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Depreciation and amortization |
|
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4,794 |
|
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|
8,380 |
|
Stock-based compensation |
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1,517 |
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|
1,524 |
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Amortization of premium (discount) on marketable securities |
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136 |
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(34 |
) |
Undistributed (earnings) losses of joint ventures |
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370 |
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(301 |
) |
Gain on disposal of long-lived assets |
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— |
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(8 |
) |
Loss on investment |
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191 |
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|
1,185 |
|
Changes in operating assets and liabilities, net of acquisitions and disposals: |
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Accounts receivable |
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(14,759 |
) |
|
|
26,330 |
|
Inventories |
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(5,163 |
) |
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(3,252 |
) |
Prepaid expenses and other current assets |
|
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(834 |
) |
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|
71 |
|
Accounts payable |
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19,902 |
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(7,580 |
) |
Deferred revenue |
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|
1,199 |
|
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(330 |
) |
Accrued warranty and retrofit costs |
|
|
32 |
|
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(237 |
) |
Accrued compensation and benefits |
|
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(2,834 |
) |
|
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(1,201 |
) |
Accrued restructuring costs |
|
|
(605 |
) |
|
|
890 |
|
Accrued expenses and other |
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|
413 |
|
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(3,745 |
) |
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Net cash provided by (used in) operating activities |
|
|
1,482 |
|
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(13,478 |
) |
|
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Cash flows from investing activities |
|
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|
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Purchases of property, plant and equipment |
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(461 |
) |
|
|
(5,084 |
) |
Purchases of marketable securities |
|
|
(43,983 |
) |
|
|
(35,022 |
) |
Sale/maturity of marketable securities |
|
|
29,853 |
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|
22,533 |
|
Proceeds from the sale of investment |
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|
240 |
|
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— |
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Net cash used in investing activities |
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(14,351 |
) |
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(17,573 |
) |
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Effects of exchange rate changes on cash and cash equivalents |
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|
48 |
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(1,118 |
) |
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Net decrease in cash and cash equivalents |
|
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(12,821 |
) |
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(32,169 |
) |
Cash and cash equivalents, beginning of period |
|
|
59,985 |
|
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|
110,269 |
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Cash and cash equivalents, end of period |
|
$ |
47,164 |
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|
$ |
78,100 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Basis of Presentation
The unaudited condensed 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. 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.
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 year ended September 30, 2009. Certain
reclassifications have been made in the prior period consolidated financial statements to conform
to the current presentation.
We evaluated subsequent events through February 5, 2010, the date of financial statement
issuance.
Recently Enacted Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued authoritative
guidance for Fair Value Measurements and Disclosures which defines fair value, establishes a
framework for measuring fair value and expands disclosures about assets and liabilities measured at
fair value in the financial statements. In February 2008, the FASB issued authoritative guidance
which allows for the delay of the effective date for fair value measurements for one year for all
non-financial assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually). In
April 2009, the FASB issued additional authoritative guidance in determining whether a market is
active or inactive, and whether a transaction is distressed, is applicable to all assets and
liabilities (i.e. financial and non-financial) and will require enhanced disclosures. This standard
was effective beginning with the Company’s fourth quarter of fiscal 2009. The measurement and
disclosure requirements related to financial assets and financial liabilities were effective for
the Company beginning on October 1, 2008. See Note 13. On October 1, 2009 the Company adopted the
fair value measurement standard for all non-financial assets and non-financial liabilities, which
had no impact on its financial position or results of operations.
In December 2007, the FASB revised the authoritative guidance for Business Combinations, which
significantly changes the accounting for business combinations in a number of areas including the
treatment of contingent consideration, pre-acquisition contingencies, transaction costs,
restructuring costs and income taxes. On October 1, 2009 the Company adopted this standard
prospectively and will apply the standard to any business combination with an acquisition date
after October 1, 2009.
In December 2007, the FASB issued authoritative guidance regarding Consolidation, which
establishes accounting and reporting standards for noncontrolling interests in a subsidiary and for
the deconsolidation of a subsidiary. This standard clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be reported as equity in
the consolidated financial statements. The amount of net income attributable to the noncontrolling
interest will be included in consolidated net income on the face of the income statement. Further,
it clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions if the parent retains its controlling financial interest.
In addition, this standard requires that a parent recognize a gain or loss in net income when a
subsidiary is deconsolidated. On October 1, 2009 the Company adopted this standard retrospectively,
which did not have a material impact on its financial position or results of operations.
In April 2008, the FASB issued authoritative guidance regarding the determination of the
useful life of intangible assets. This guidance amends the factors that should be considered in
developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset. It
also improves the consistency between the useful
6
life of a recognized intangible asset and the
period of expected cash flows used to measure the fair value of the asset. On October 1, 2009 the
Company adopted this standard, which had no impact on its financial position or results of
operations.
In June 2008, the FASB issued authoritative guidance regarding whether instruments granted in
share-based payment transactions are participating securities, which classifies unvested
share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) as participating securities and requires them to be included in the
computation of earnings per share pursuant to the two-class method. On October 1, 2009 the Company
adopted this standard, which had no impact on its financial position or results of operations.
In December 2008, the FASB issued authoritative guidance regarding Compensation — Retirement
Benefits, which requires enhanced disclosures about the plan assets of a company’s defined benefit
pension and other postretirement plans. The enhanced disclosures are intended to provide users of
financial statements with a greater understanding of: (1) how investment allocation decisions are
made, including the factors that are pertinent to an understanding of investment policies and
strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used
to measure the fair value of plan assets; (4) the effect of fair value measurements using
significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5)
significant concentrations of risk within plan assets. This standard will be effective for the
Company for the fiscal year ending September 30, 2010. The Company is currently evaluating the
potential impact of this guidance on its future disclosures.
In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for
the consolidation of variable interest entities (VIEs), which requires a qualitative approach to
identifying a controlling financial interest in a VIE, and requires ongoing assessment of whether
an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the
VIE. This guidance is effective for fiscal years beginning after November 15, 2009. The Company is
currently evaluating the potential impact of this standard on its financial position and results of
operations.
In September 2009, the FASB issued authoritative guidance on revenue arrangements with
multiple deliverables. This guidance provides another alternative for establishing fair value for a
deliverable. When vendor specific objective evidence or third-party evidence for deliverables in an
arrangement cannot be determined, companies will be required to develop a best estimate of the
selling price for separate deliverables and allocate arrangement consideration using the relative
selling price method. This guidance is effective October 1, 2010, and early adoption is permitted.
The Company is currently evaluating the potential impact of this guidance on its financial position
and results of operations.
2. Stock Based Compensation
The following table reflects compensation expense recorded during the three months ended
December 31, 2009 and 2008 (in thousands):
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|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, |
|
| |
|
2009 |
|
|
2008 |
|
Stock options |
|
$ |
43 |
|
|
$ |
133 |
|
Restricted stock |
|
|
1,368 |
|
|
|
1,251 |
|
Employee stock purchase plan |
|
|
106 |
|
|
|
140 |
|
|
|
|
|
|
|
|
|
|
$ |
1,517 |
|
|
$ |
1,524 |
|
|
|
|
|
|
|
|
The Company uses the Black-Scholes valuation model for estimating the fair value of the stock
options granted. The fair value per share of restricted stock is equal to the number of shares
granted and the excess of the quoted price of the Company’s common stock over the exercise price of
the restricted stock on the date of grant. In addition, for stock-based awards where vesting is
dependent upon achieving certain 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. Restricted stock with market-based vesting criteria is valued using a lattice
model. For the three months ended December 31, 2009, the Company
7
recorded $0.4 million of expense
on stock-based awards that have performance goals which will vest in the Company’s second fiscal
quarter of 2010.
Stock Option Activity
The following table summarizes stock option activity for the three months ended December 31,
2009:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
| |
|
|
|
|
|
Average |
|
|
Weighted |
|
|
Aggregate |
|
| |
|
Number of |
|
|
Remaining |
|
|
Average |
|
|
Intrinsic Value |
|
| |
|
Options |
|
|
Contractual Term |
|
|
Exercise Price |
|
|
(In Thousands) |
|
Outstanding at September 30, 2009 |
|
|
1,189,897 |
|
|
|
|
|
|
$ |
17.54 |
|
|
|
|
|
Forfeited/expired |
|
|
(59,175 |
) |
|
|
|
|
|
|
14.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2009 |
|
|
1,130,722 |
|
|
1.3 years |
|
$ |
17.71 |
|
|
$ |
28 |
|
Vested and unvested expected to vest at
December 31, 2009 |
|
|
1,129,477 |
|
|
1.3 years |
|
$ |
17.72 |
|
|
$ |
28 |
|
Options exercisable at December 31, 2009 |
|
|
1,105,722 |
|
|
1.3 years |
|
$ |
17.82 |
|
|
$ |
28 |
|
The aggregate intrinsic value in the table above represents the total intrinsic value, based
on the Company’s closing stock price of $8.58 as of December 31, 2009, 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 months ended December 31, 2009 and 2008. There
were no stock option exercises in the three months ended December 31, 2009 and 2008. The total
intrinsic value of options exercised during the three month period ended December 31, 2009 and 2008
was $0. The total cash received from employees as a result of employee stock option exercises
during the three months ended December 31, 2009 and 2008 was $0.
As of December 31, 2009 future compensation cost related to nonvested stock options is
approximately $0.1 million and will be recognized over an estimated weighted average period of 0.8
years.
Restricted Stock Activity
A summary of the status of the Company’s restricted stock as of December 31, 2009 and changes
during the three months ended December 31, 2009 is as follows:
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, 2009 |
|
| |
|
|
|
|
|
Weighted |
|
| |
|
|
|
|
|
Average |
|
| |
|
|
|
|
|
Grant-Date |
|
| |
|
Shares |
|
|
Fair Value |
|
Outstanding at September 30, 2009 |
|
|
1,162,086 |
|
|
$ |
8.96 |
|
Awards granted |
|
|
178,346 |
|
|
|
7.85 |
|
Awards vested |
|
|
(206,458 |
) |
|
|
8.49 |
|
Awards canceled |
|
|
(9,388 |
) |
|
|
6.70 |
|
|
|
|
|
|
|
|
Outstanding at December 31, 2009 |
|
|
1,124,586 |
|
|
$ |
8.89 |
|
In November 2009, the Company’s Board of Directors (“Board”) approved the payment of
performance based variable compensation awards to certain executive management employees related to
fiscal year 2009 performance. The Board chose to pay these awards in fully vested shares of the
Company’s common stock rather than cash. The Company granted 178,346 shares based on the closing
share price as of November 13, 2009. The $1.4 million of compensation expense related to these
awards was recorded during fiscal year 2009 as selling, general and administrative expense.
The fair value of restricted stock awards vested during the three months ended December 31,
2009 was $1.8 million, which includes the $1.4 million of compensation expense related to the
fiscal year 2009 variable compensation award. The fair value of restricted stock awards vested
during the three months ended December 31, 2008 was $0.4 million.
8
As of December 31, 2009, the unrecognized compensation cost related to nonvested restricted
stock is $4.3 million and will be recognized over an estimated weighted average amortization period
of 1.1 years.
Employee Stock Purchase Plan
There were no shares purchased under the employee stock purchase plan during the three months
ended December 31, 2009 and 2008.
3. Goodwill
The components of the Company’s goodwill by business segment at December 31, 2009 are as
follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Critical |
|
|
Systems |
|
|
Global |
|
|
|
|
|
|
|
| |
|
Solutions |
|
|
Solutions |
|
|
Customer |
|
|
|
|
|
|
|
| |
|
Group |
|
|
Group |
|
|
Operations |
|
|
Other |
|
|
Total |
|
Gross goodwill |
|
$ |
353,253 |
|
|
$ |
151,184 |
|
|
$ |
151,238 |
|
|
$ |
7,421 |
|
|
$ |
663,096 |
|
Less: aggregate impairment charges recorded |
|
|
(305,115 |
) |
|
|
(151,184 |
) |
|
|
(151,238 |
) |
|
|
(7,421 |
) |
|
|
(614,958 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
48,138 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
48,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company did not have any adjustments to goodwill during the three months ended December
31, 2009.
Components of the Company’s identifiable intangible assets are as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
December 31, 2009 |
|
|
September 30, 2009 |
|
| |
|
|
|
|
|
Accumulated |
|
|
Net Book |
|
|
|
|
|
|
Accumulated |
|
|
Net Book |
|
| |
|
Cost |
|
|
Amortization |
|
|
Value |
|
|
Cost |
|
|
Amortization |
|
|
Value |
|
Patents |
|
$ |
6,915 |
|
|
$ |
6,815 |
|
|
$ |
100 |
|
|
$ |
6,915 |
|
|
$ |
6,812 |
|
|
$ |
103 |
|
Completed technology |
|
|
43,502 |
|
|
|
35,737 |
|
|
|
7,765 |
|
|
|
43,502 |
|
|
|
35,280 |
|
|
|
8,222 |
|
Trademarks and trade names |
|
|
3,779 |
|
|
|
3,140 |
|
|
|
639 |
|
|
|
3,779 |
|
|
|
3,060 |
|
|
|
719 |
|
Customer relationships |
|
|
18,860 |
|
|
|
14,231 |
|
|
|
4,629 |
|
|
|
18,860 |
|
|
|
13,823 |
|
|
|
5,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
73,056 |
|
|
$ |
59,923 |
|
|
$ |
13,133 |
|
|
$ |
73,056 |
|
|
$ |
58,975 |
|
|
$ |
14,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Income Taxes
The Company recorded an income tax provision of $0.6 million for the first quarter of fiscal
year 2010. This provision is substantially impacted by foreign taxes arising from the Company’s
international sales mix. This provision is also attributable to U.S. Federal alternative minimum
taxes and certain state income taxes.
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 states 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 2003. 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 anticipates that several of these audits may be finalized within the next 12 months. The
Company currently anticipates that approximately $0.4 million will be realized in the fourth
quarter of fiscal year 2010 as a result of the expiration of certain non-U.S. statute of
limitations, all of which will impact the Company’s fiscal year 2010 effective tax rate.
9
5. Earnings (Loss) per Share
Below is a reconciliation of weighted average common shares outstanding for purposes of
calculating basic and diluted earnings (loss) per share (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, |
|
| |
|
2009 |
|
|
2008 |
|
Weighted average common shares outstanding used in
computing basic earnings (loss) per share |
|
|
63,394 |
|
|
|
62,651 |
|
Dilutive common stock options and restricted stock awards |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for purposes
of computing diluted earnings (loss) per share |
|
|
63,394 |
|
|
|
62,651 |
|
|
|
|
|
|
|
|
Approximately 1,161,000 and 1,670,000 options to purchase common stock and 926,000 and 875,000
shares of restricted stock were excluded from the computation of diluted earnings (loss) per share
attributable to common stockholders for the three months ended December 31, 2009 and 2008,
respectively, as their effect would be anti-dilutive.
6. Comprehensive Income (Loss)
The calculation of the Company’s comprehensive income (loss) for the three months ended
December 31, 2009 and 2008 is as follows (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, |
|
| |
|
2009 |
|
|
2008 |
|
Net loss |
|
$ |
(2,877 |
) |
|
$ |
(35,170 |
) |
Change in cumulative translation adjustment |
|
|
701 |
|
|
|
3,037 |
|
Unrealized gain (loss) on marketable securities |
|
|
(238 |
) |
|
|
304 |
|
|
|
|
|
|
|
|
Comprehensive loss |
|
|
(2,414 |
) |
|
|
(31,829 |
) |
Add: Comprehensive loss attributable to noncontrolling interests |
|
|
82 |
|
|
|
87 |
|
|
|
|
|
|
|
|
Comprehensive loss attributable to Brooks Automation, Inc |
|
$ |
(2,332 |
) |
|
$ |
(31,742 |
) |
|
|
|
|
|
|
|
7. Segment Information
The Company reports financial results in three segments: Critical Solutions Group; Systems
Solutions Group; and Global Customer Operations. In the second quarter of fiscal 2009 the Company
realigned its management structure and its underlying internal financial reporting structure.
Segment disclosures for prior periods have been revised to reflect the new reporting structure. A
description of segments is included in the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2009.
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 (primarily certain legal costs associated with the Company’s past equity
incentive-related practices and costs to indemnify a former executive in connection with these
matters), amortization of acquired intangible assets (excluding completed technology) and
restructuring, goodwill, and long-lived asset impairment charges 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 investments in joint ventures, marketable securities and cash equivalents.
10
Financial information for the Company’s business segments is as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Critical |
|
|
Systems |
|
|
Global |
|
|
|
|
| |
|
Solutions |
|
|
Solutions |
|
|
Customer |
|
|
|
|
| |
|
Group |
|
|
Group |
|
|
Operations |
|
|
Total |
|
Three months ended December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
43,186 |
|
|
$ |
47,099 |
|
|
$ |
1,236 |
|
|
$ |
91,521 |
|
Services |
|
|
— |
|
|
|
— |
|
|
|
14,676 |
|
|
|
14,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
43,186 |
|
|
$ |
47,099 |
|
|
$ |
15,912 |
|
|
$ |
106,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
15,777 |
|
|
$ |
7,556 |
|
|
$ |
2,913 |
|
|
$ |
26,246 |
|
Segment operating income (loss) |
|
$ |
1,868 |
|
|
$ |
318 |
|
|
$ |
(1,884 |
) |
|
$ |
302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
35,883 |
|
|
$ |
22,636 |
|
|
$ |
567 |
|
|
$ |
59,086 |
|
Services |
|
|
— |
|
|
|
— |
|
|
|
14,360 |
|
|
|
14,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
35,883 |
|
|
$ |
22,636 |
|
|
$ |
14,927 |
|
|
$ |
73,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) |
|
$ |
6,738 |
|
|
$ |
(1,738 |
) |
|
$ |
1,388 |
|
|
$ |
6,388 |
|
Segment operating loss |
|
$ |
(9,005 |
) |
|
$ |
(13,352 |
) |
|
$ |
(4,483 |
) |
|
$ |
(26,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
$ |
143,043 |
|
|
$ |
83,365 |
|
|
$ |
55,270 |
|
|
$ |
281,678 |
|
September 30, 2009 |
|
$ |
138,930 |
|
|
$ |
70,537 |
|
|
$ |
56,007 |
|
|
$ |
265,474 |
|
A reconciliation of the Company’s reportable segment operating income (loss) to the
corresponding consolidated amounts for the three month periods ended December 31, 2009 and 2008 is
as follows (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, |
|
| |
|
2009 |
|
|
2008 |
|
Segment operating income (loss) |
|
$ |
302 |
|
|
$ |
(26,840 |
) |
Other unallocated corporate expenses |
|
|
85 |
|
|
|
1,790 |
|
Amortization of acquired intangible assets |
|
|
491 |
|
|
|
1,893 |
|
Restructuring charges |
|
|
1,522 |
|
|
|
4,105 |
|
|
|
|
|
|
|
|
Total operating loss |
|
$ |
(1,796 |
) |
|
$ |
(34,628 |
) |
|
|
|
|
|
|
|
A reconciliation of the Company’s reportable segment assets to the corresponding consolidated
amounts as of December 31, 2009 and September 30, 2009 is as follows (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
|
September 30, |
|
| |
|
2009 |
|
|
2009 |
|
Segment assets |
|
$ |
281,678 |
|
|
$ |
265,474 |
|
Investments in cash equivalents,
marketable securities, joint ventures,
and other unallocated corporate net
assets |
|
|
147,809 |
|
|
|
147,728 |
|
Insurance receivable |
|
|
204 |
|
|
|
120 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
429,691 |
|
|
$ |
413,322 |
|
|
|
|
|
|
|
|
8. Restructuring-Related Charges and Accruals
The Company recorded charges to operations of $1,522,000 in the three months ended December
31, 2009 which consisted of facility related restructuring costs of $1,338,000 and $184,000 of
severance costs. The severance charges include $77,000 for the elimination of three positions in
the Company’s Global Customer Operations segment and $107,000 to adjust severance provisions
related to general corporate positions eliminated in prior periods.
During the preparation of the Company’s financial statements for the three months ended
December 31, 2009, the Company identified certain accounting errors in its prior period financial
statements that, individually and in aggregate, are not material to its financial statements taken
as a whole for any related prior periods. The errors were
11
related to the present value discounting
of multi-year facility related restructuring liabilities. The total amount of the
adjustment of $1,221,000 was recorded as a restructuring cost for the three months ended
December 31, 2009. In addition, the Company recorded $117,000 of facility related restructuring
costs during the three months ended December 31, 2009 to amortize the deferred discount on
multi-year facility restructuring liabilities.
The Company recorded a charge to operations of $4,105,000 in the three months ended December
31, 2008. These charges primarily relate to severance costs of $4,071,000 for workforce reductions
of 120 employees in operations, service and administrative functions across all the main
geographies in which the Company operates. The restructuring charges by segment for the first
quarter of fiscal year 2009 were: Global Customer Operations — $2.7 million, Critical Solutions
Group — $0.6 million and Systems Solutions Group — $0.4 million. In addition, the Company incurred
$0.4 million of restructuring charges that were related to general corporate functions that support
all of its segments.
The activity for the three months ended December 31, 2009 and 2008 related to the Company’s
restructuring-related accruals is summarized below (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Activity — Three Months Ended December 31, 2009 |
|
| |
|
Balance |
|
|
|
|
|
|
|
|
|
|
Balance |
|
| |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
| |
|
2009 |
|
|
Expense |
|
|
Utilization |
|
|
2009 |
|
Facilities and other |
|
$ |
6,289 |
|
|
$ |
1,338 |
|
|
$ |
(1,125 |
) |
|
$ |
6,502 |
|
Workforce-related |
|
|
1,372 |
|
|
|
184 |
|
|
|
(1,009 |
) |
|
|
547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,661 |
|
|
$ |
1,522 |
|
|
$ |
(2,134 |
) |
|
$ |
7,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Activity — Three Months Ended December 31, 2008 |
|
| |
|
Balance |
|
|
|
|
|
|
|
|
|
|
Balance |
|
| |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
| |
|
2008 |
|
|
Expense |
|
|
Utilization |
|
|
2008 |
|
Facilities and other |
|
$ |
9,658 |
|
|
$ |
34 |
|
|
$ |
(1,041 |
) |
|
$ |
8,651 |
|
Workforce-related |
|
|
3,005 |
|
|
|
4,071 |
|
|
|
(2,227 |
) |
|
|
4,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
12,663 |
|
|
$ |
4,105 |
|
|
$ |
(3,268 |
) |
|
$ |
13,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company expects the majority of the remaining severance costs totaling $547,000 will be
paid over the next twelve months. The expected facilities costs, totaling $6,502,000, net of
estimated sub-rental income, will be paid on leases that expire through September 2011.
9. Loss on Investment
During the three months ended December 31, 2009, the Company recorded a charge of $0.2 million
for the sale of its minority equity investment in a closely-held Swiss public company. During the
three months ended December 31, 2008, the Company recorded a charge of $1.2 million to write-down
this investment to market value as of December 31, 2008. As of December 31, 2009, the Company no
longer has an equity investment in this entity.
10. Employee Benefit Plans
In connection with the acquisition of Helix Technology Corporation (“Helix”) in October 2005,
the Company assumed the responsibility for the Helix Employees’ Pension Plan (the “Plan”). The
Company froze the benefit accruals and future participation in this plan as of October 31, 2006.
The components of the Company’s net pension cost related to the Plan for the three months
ended December 31, 2009 and 2008 is as follows (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
| |
|
December 31, |
|
| |
|
2009 |
|
|
2008 |
|
Service cost |
|
$ |
25 |
|
|
$ |
25 |
|
Interest cost |
|
|
193 |
|
|
|
171 |
|
Amortization of losses |
|
|
82 |
|
|
|
— |
|
Expected return on assets |
|
|
(151 |
) |
|
|
(199 |
) |
|
|
|
|
|
|
|
Net periodic pension (benefit) cost |
|
$ |
149 |
|
|
$ |
(3 |
) |
|
|
|
|
|
|
|
12
11. Other Balance Sheet Information
Components of other selected captions in the Consolidated Balance Sheets are as follows (in
thousands):
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
|
September 30, |
|
| |
|
2009 |
|
|
2009 |
|
Accounts receivable |
|
$ |
53,846 |
|
|
$ |
39,147 |
|
Less allowances |
|
|
653 |
|
|
|
719 |
|
|
|
|
|
|
|
|
|
|
$ |
53,193 |
|
|
$ |
38,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories, net |
|
|
|
|
|
|
|
|
Raw materials and purchased parts |
|
$ |
66,491 |
|
|
$ |
65,815 |
|
Work-in-process |
|
|
16,771 |
|
|
|
13,588 |
|
Finished goods |
|
|
6,501 |
|
|
|
5,335 |
|
|
|
|
|
|
|
|
|
|
$ |
89,763 |
|
|
$ |
84,738 |
|
|
|
|
|
|
|
|
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. While the Company engages in extensive product quality programs and
processes, including actively monitoring and evaluating the quality of its component suppliers, 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 months ended December 31, 2009 and 2008 is as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Activity — Three Months Ended December 31, 2009 |
| Balance |
|
|
|
|
|
|
|
|
|
Balance |
| September 30, |
|
|
|
|
|
|
|
|
|
December 31, |
| 2009 |
|
Accruals |
|
Settlements |
|
2009 |
$5,698
|
|
$ |
2,496 |
|
|
$ |
(2,460 |
) |
|
$ |
5,734 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Activity — Three Months Ended December 31, 2008 |
| Balance |
|
|
|
|
|
|
|
|
|
Balance |
| September 30, |
|
|
|
|
|
|
|
|
|
December 31, |
| 2008 |
|
Accruals |
|
Settlements |
|
2008 |
$8,174
|
|
$ |
3,085 |
|
|
$ |
(3,321 |
) |
|
$ |
7,938 |
|
12. Joint Ventures
The Company participates in a 50% joint venture, ULVAC Cryogenics, Inc., or UCI, with ULVAC
Corporation of Chigasaki, Japan. UCI manufactures and sells cryogenic vacuum pumps, principally to
ULVAC Corporation. For the three months ended December 31, 2009 and 2008, the Company recorded
income (loss) associated with UCI of ($0.1) million and $0.3 million, respectively. At December 31,
2009, the carrying value of UCI in the Company’s consolidated balance sheet was $26.6 million. For
the three months ended December 31, 2009 and 2008, management fee payments received by the Company
from UCI were $0.1 million and $0.2 million, respectively. For the three months ended December 31,
2009 and 2008, the Company incurred charges from UCI for products or services of $0.2 million and
$0.3 million, respectively. At December 31, 2009 and September 30, 2009 the Company owed UCI $0.2
million in connection with accounts payable for unpaid products and services.
The Company participates in a 50% joint venture with Yaskawa Electric Corporation (“Yaskawa”)
to form a joint venture 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 December 31, 2009 and 2008, the
Company recorded income (loss) associated with YBA of ($0.2) and $0.0 million, respectively. At
December 31, 2009, the carrying value of YBA in the Company’s consolidated balance sheet was $2.8
million. For the three months ended December 31, 2009 and 2008, revenues earned by the Company from
YBA were $1.8 million and $1.7 million, respectively. The amount due from YBA included in accounts
receivable at December 31, 2009 and September 30, 2009 was $2.2 million and $2.4 million,
respectively. For the three months ended December 31, 2009 and 2008, the Company did not incur any
charges from YBA for products or services. At December 31, 2009 and September 30, 2009 the Company
did not owe YBA any amount in connection with accounts payable for unpaid products and services.
13
These investments are accounted for using the equity method. Under this method of accounting,
the Company records in income its proportionate share of the earnings of the joint ventures with a
corresponding increase in the carrying value of the investment.
13. Fair Value Measurements
In September 2006, the FASB issued authoritative guidance for fair value measurements and
disclosures, which defines fair value, establishes a framework for measuring fair value and expands
the related disclosure requirements. This statement applies under other accounting pronouncements
that require or permit fair value measurements. The statement indicates, among other things, that a
fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs
in the principal market for the asset or liability or, in the absence of a principal market, the
most advantageous market for the asset or liability. This guidance defines fair value based upon an
exit price model.
The FASB amended the fair value measurement guidance to exclude accounting for leases and its
related interpretive accounting pronouncements that address leasing transactions; the delay of the
effective date of the measurement application to fiscal years beginning after November 15, 2008 for
all non-financial assets and non-financial liabilities that are recognized or disclosed at fair
value in the financial statements on a nonrecurring basis; and the determination of whether a
market is active or inactive, and whether a transaction is distressed, is applicable to all assets
and liabilities (i.e. financial and nonfinancial) and will require enhanced disclosures.
The Company adopted the fair value measurement guidance as of October 1, 2008, with the
exception of the application of the statement to non-recurring non-financial assets and
non-financial liabilities. The Company adopted the fair value measurement guidance for
non-recurring non-financial assets and non-financial liabilities on October 1, 2009.
The fair value measurement guidance also 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
December 31, 2009, are summarized as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
| |
|
|
|
|
|
Quoted Prices in |
|
|
|
|
|
|
|
| |
|
|
|
|
|
Active Markets for |
|
|
Significant Other |
|
|
Significant |
|
| |
|
December 31, |
|
|
Identical Assets |
|
|
Observable Inputs |
|
|
Unobservable Inputs |
|
| Description |
|
2009 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents |
|
$ |
24,656 |
|
|
$ |
24,656 |
|
|
$ |
— |
|
|
$ |
— |
|
Available-for-sale securities |
|
|
64,195 |
|
|
|
25,143 |
|
|
|
39,052 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
88,851 |
|
|
$ |
49,799 |
|
|
$ |
39,052 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
Cash Equivalents
Cash equivalents of $24.7 million, consisting 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 $25.1 million, 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 $39.1 million, consisting of Asset Backed Securities, Municipal Bonds, and 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.
14. Contingencies
On August 22, 2006, an action captioned as Mark Levy v. Robert J. Therrien and Brooks
Automation, Inc., was filed in the United States District Court for the District of Delaware,
seeking recovery, on behalf of Brooks, from Mr. Therrien (the Company’s former Chairman and CEO)
under Section 16(b) of the Securities Exchange Act of 1934 for alleged “short-swing” profits earned
by Mr. Therrien due to the loan and stock option exercise in November 1999, and a sale by Mr.
Therrien of Brooks stock in March 2000. The complaint seeks disgorgement of all profits earned by
Mr. Therrien on the transactions, attorneys’ fees and other expenses. On February 20, 2007, a
second Section 16(b) action, concerning the same loan and stock option exercise in November 1999
discussed above and seeking the same remedy, was filed in the United States District Court of the
District of Delaware, captioned Aron Rosenberg v. Robert J. Therrien and Brooks Automation, Inc. On
April 4, 2007, the court issued an order consolidating the Levy and Rosenberg actions. On July 14,
2008, the court denied Mr. Therrien’s motion to dismiss this action. Discovery has commenced in
this matter and is currently ongoing. It has been reported to the Company that the parties have
reached an agreement in principle to settle this case, subject to the approval of the court and to
the conclusion by the parties of necessary settlement processes and documents. Brooks is a nominal
defendant in the consolidated action and any recovery in this action, less attorneys’ fees, would
go to the Company.
15. Subsequent Event
On February 3, 2010, the Company entered into an agreement to sell certain intellectual
property assets associated with factory automated material handling systems for $7.9 million. Under the terms of the
agreement Brooks will retain the rights to use this intellectual property to support its existing
installed base of factory automated material handling systems.
The Company will record a gain of approximately $7.8 million on this sale during its second quarter of fiscal year 2010.
The Company will receive $7.7 million of the proceeds from the sale during the second quarter of fiscal year 2010,
and expects to receive the balance of $0.2 million during the second half of fiscal year 2010.
15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking
statements” which involve known 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 Annual Report on Form 10-K and which are
incorporated herein by reference. Precautionary statements made in our 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 and are a highly
valued business partner to original equipment manufacturers (OEM) and equipment users throughout
the world. We serve markets where equipment productivity and availability is a critical factor for
our customers’ success. Our largest served market is the semiconductor manufacturing industry,
which represented 71% and 84% of our consolidated revenues for fiscal year 2009 and the first
quarter of fiscal year 2010, respectively. We also provide unique solutions to customers in data
storage, advanced display, analytical instruments and industrial markets. We develop and deliver
differentiated solutions that range from proprietary products to highly respected manufacturing
services.
The demand for semiconductors and semiconductor manufacturing equipment is cyclical, resulting
in periodic expansions and contractions. Demand for our products has been impacted by these
cyclical industry conditions. During fiscal year 2006 and throughout most of fiscal year 2007, we
benefited from an industry expansion. That cyclical expansion turned to a downturn in the fourth
quarter of fiscal year 2007 that continued through the second quarter of fiscal year 2009. Our
revenues for the second quarter of fiscal year 2009 were $37.3 million. Since that time, our
revenues have significantly increased in each fiscal quarter. Revenue for the first quarter of
fiscal year 2010 was $106.2 million.
Throughout fiscal years 2008 and 2009, we implemented a number of cost reduction programs to
align our cost structure with a reduced demand environment. From the end of fiscal year 2007
through the end of fiscal year 2009, we reduced our headcount by approximately 40% and closed
redundant facilities. Our cost reduction efforts focused on actions that would decrease our
overhead cost structure for the foreseeable future. Although we have added personnel in recent
months, these additions were made primarily to address increased production requirements. We will
continue to add personnel to address our increasing production levels. We do not intend to
significantly increase our overhead structure as our revenues recover.
In connection with our restructuring programs, we have realigned our management structure and
our underlying internal financial reporting structure. Effective as of the beginning of our second
quarter of 2009, we implemented a new internal reporting structure which includes three segments:
Critical Solutions Group, Systems Solutions Group and Global Customer Operations. Financial results
prior to this new management structure have been revised to reflect our current segment structure.
The Critical Solutions Group segment provides a variety of products critical to technology
equipment productivity and availability. Those products include robots and robotic modules for
atmospheric and vacuum applications and cryogenic vacuum pumping, thermal management and vacuum
measurement solutions used to create, measure and control critical process vacuum applications.
The Systems Solutions Group segment provides a range of products and engineering and
manufacturing services, which include our Extended Factory services. Our Extended Factory product
line provides services to build equipment front-end modules and other subassemblies which enable
our customers to effectively develop and source high quality, high reliability, process tools for
semiconductor and adjacent market applications.
The Global Customer Operations 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 services and spare parts for our Automated Material Handling Systems (“AMHS”) product line. Revenues from the sales of spare
parts that are not
16
related to a repair or replacement transaction, or are not AMHS products, are
included within the product revenues of the other operating segments.
On February 3, 2010, we entered into an agreement to sell certain intellectual property assets
associated with factory automated material handling systems for $7.9
million. Under the terms of the agreement we
will retain the rights to use this intellectual property to support our existing installed base of
factory automated material handling systems.
We will record a gain of approximately $7.8 million on this sale during our second quarter of fiscal
year 2010. We will receive $7.7 million of the proceeds from the sale during the second quarter of fiscal
year 2010, and expect
to receive the balance of $0.2 million during the second half of fiscal year 2010.
Three Months Ended December 31 2009, Compared to Three Months Ended December 31, 2008
Revenues
We reported revenues of $106.2 million for the first quarter of fiscal year 2010, compared to
$73.4 million in the same prior year period, a 44.6% increase. The total increase in revenues of
$32.8 million impacted all of our operating segments. Our Critical Solutions Group segment revenues
increased by $7.3 million, our System Solutions Group segment revenues increased by $24.5 million
and our Global Customer Operations segment revenues increased by $1.0 million. These increases were
primarily the result of increased volume shipments in response to increasing demand for
semiconductor capital equipment.
Our Critical Solutions Group segment reported revenues of $43.2 million for the first quarter
of fiscal year 2010, an increase of 20.3% from $35.9 million in the same prior year period. This
increase is primarily attributable to a higher volume of shipments to semiconductor capital
equipment customers. This increase was partially offset by lower volume of shipments of $2.3
million to non-semiconductor markets served by this segment.
Our System Solutions Group segment reported revenues of $47.1 million for the first quarter of
fiscal year 2010, a 108.1% increase from $22.6 million in the same prior year period. This increase
is attributable to increased demand for semiconductor capital equipment. Included within this
segment is our Extended Factory product line. Revenue for our Extended Factory product line was
substantially the largest contributor to increased revenues in this segment, increasing by $19.2
million for the first quarter of fiscal year 2010 as compared to the same prior year period.
Our Global Customer Operations segment reported revenues of $15.9 million for first quarter of
fiscal year 2010, a 6.6% increase from $14.9 million in the same prior year period. This increase
is attributable to higher AMHS spare parts revenue of $0.7 million and higher service contract and
repair revenues of $0.3 million. All service revenues included in our unaudited consolidated
statements of operations, which include service contract and repair services, are related to our
Global Customer Operations segment.
Gross Profit
Gross margin dollars increased to $26.2 million for the first quarter of fiscal year 2010, an
increase of 310.9% from $6.4 million for the same prior year period. This increase was attributable
to higher revenues of $32.8 million, a $5.2 million reduction in charges for excess and obsolete
inventory and $1.9 million of reduced amortization expense for completed technology intangible
assets, due primarily to the impairment recorded for those assets during the second quarter of
fiscal 2009. These decreases were partially offset by a less favorable product mix which reduced
gross margin dollars by $4.6 million. Gross margin was reduced by $0.5 million and $2.3 million for
the first quarter of fiscal years 2010 and 2009, respectively, for amortization of completed
technology, which relates primarily to the acquisition of Helix Technology Corporation (“Helix”) in
October 2005.
Gross margin percentage increased to 24.7% for the first quarter of fiscal year 2010, compared
to 8.7% for the same prior year period. This increase was primarily attributable to higher
absorption of indirect factory overhead on higher revenues. Other factors increasing gross margin
percentage include decreased charges for excess and obsolete inventory which increased gross margin
percentage by 6.6%, and reduced amortization expense for completed
technology intangible assets which increased gross margin percentage by 2.8%. These increases
in gross margin percentage were partially offset by a less favorable product mix which reduced
gross margin percentage by 4.3%.
17
Gross margin of our Critical Solutions Group segment increased to $15.8 million for the first
quarter of fiscal year 2010, an increase of 134.1% from $6.7 million in the same prior year period.
This increase was attributable to higher revenues of $7.3 million, reduced charges for excess and
obsolete inventory of $1.7 million and reduced amortization expense of $0.6 million for completed
technology intangible assets, due primarily to the impairment recorded for those assets during the
second quarter of fiscal 2009. Gross margin for the first quarter of fiscal years 2010 and 2009 was
reduced by $0.4 million and $1.0 million, respectively, for completed technology amortization
related to the Helix acquisition. Gross margin percentage was 36.5% for the first quarter of fiscal
year 2010 as compared to 18.8% in the same prior year period. This increase is primarily the result
of higher absorption of indirect factory overhead on higher revenues. Other factors increasing
gross margin percentage include decreased charges for excess and obsolete inventory which increased
gross margin percentage by 4.7%, and reduced amortization expense for completed technology
intangible assets which increased gross margin percentage by 1.9%.
Gross margin of our Systems Solutions Group segment increased to $7.6 million for the first
quarter of fiscal year 2010, an increase of 534.7% from a $1.7 million loss for the same prior year
period. This increase was attributable to higher revenues of $24.5 million, decreased charges for
excess and obsolete inventory of $3.1 million and $0.2 million of reduced amortization expense for
completed technology intangible assets, due primarily to the impairment recorded for those assets
during the second quarter of fiscal year 2009. Gross margin for the first quarter of fiscal 2009
was reduced by $0.2 million for completed technology amortization. Gross margin percentage
increased to 16.0% for the first quarter of fiscal year 2010 as compared to (7.7)% in the same
prior year period. This increase was primarily attributable to higher absorption of indirect
factory overhead on higher revenues. Other factors increasing gross margin percentage include
decreased charges for excess and obsolete inventory which increased gross margin percentage by
12.4% and reduced amortization expense for completed technology intangible assets, which increased
gross margin percentage by 0.7%. These increases in gross margin percentage were partially offset
by a less favorable product mix which reduced gross margin percentage by 9.7%. The less favorable
product mix is attributable to a $19.2 million increase in Extended Factory product sales, which
are less profitable than other products within this segment. Extended Factory product revenues were
65% of all sales within this segment for the first quarter of fiscal year 2010, and we expect this
product will continue to generate a majority of the revenue for this segment in the near term.
Gross margin of our Global Customer Operations segment increased to $2.9 million for the first
quarter of fiscal year 2010, an increase of 109.8% from the $1.4 million in the same prior year
period. The increase was attributable to reduced amortization expense of $1.1 million for completed
technology intangible assets, due primarily to the impairment recorded for those assets during the
second quarter of 2009, decreased charges for excess and obsolete inventory of $0.4 million and
higher revenues of $1.0 million. Gross margin for the first quarter of fiscal years 2010 and 2009
was reduced by $0.1 million and $1.2 million, respectively, for completed technology amortization
related to the Helix acquisition. Gross margin percentage was 18.3% for the first quarter of fiscal
year 2010 as compared to 9.3% in the same prior year period. The increase in gross margin
percentage was primarily attributable to reduced amortization expense for completed technology
intangible assets which increased gross margin percentage by 7.4%, and decreased charges for excess
and obsolete inventory which decreased gross margin percentage by 2.6%.
Research and Development
Research and development, or R&D, expenses for the first quarter of fiscal year 2010 were $7.5
million, a decrease of $1.8 million, compared to $9.3 million in the same prior year period. This
decrease is primarily related to lower labor related costs of $1.7 million associated with
headcount reductions. Our headcount reductions were implemented to remove redundancies in our R&D
infrastructure. We will continue to invest in R&D projects that enhance our product and service
offerings.
Selling, General and Administrative
Selling, general and administrative, or SG&A expenses were $19.0 million for the first quarter
of fiscal year 2010, a decrease of $8.6 million compared to $27.6 million in the same prior year
period. The decrease is primarily attributable to lower labor costs of $3.7 million as we reduced
our headcount to align our SG&A resources with our new management structure, a $1.4 million
reduction in amortization of intangible assets primarily due to the impairment of intangible assets
recorded in our second quarter of fiscal year 2009 and a $1.9 million reduction in
litigation costs. We settled our litigation matters with the SEC during fiscal year 2008. The
total indemnification
18
costs, net of insurance reimbursements, were $(0.1) million and $1.8 million
for the first quarter of fiscal years 2010 and 2009, respectively.
Restructuring Charges
We recorded a charge of $1.5 million for the first quarter of fiscal year 2010 which consisted
of facility related restructuring costs of $1.3 million and $0.2 million of severance costs. These
severance costs include $0.1 million for the elimination of 3 positions in our Global Customer
Operations segment, and $0.1 million to adjust severance provisions related to general corporate
positions eliminated in prior periods.
During the preparation of our financial statements for the first quarter of fiscal year 2010,
we identified certain accounting errors in our prior period financial statements that, individually
and in aggregate, are not material to our financial statements taken as a whole for any related
prior periods. The errors were related to the present value discounting of multi-year facility
related restructuring liabilities. The total amount of the adjustment of $1.2 million was recorded
as a restructuring cost for the first quarter of fiscal year 2010. In addition, we recorded $0.1
million of facility related restructuring costs the first quarter of fiscal year 2010 to amortize
the deferred discount on multi-year facility restructuring liabilities.
We recorded a charge of $4.1 million for the first quarter of fiscal year 2009 as an initial
charge for our fiscal 2009 restructuring plan. This charge consisted of severance costs associated
with workforce reductions of 120 employees in operations, service and administrative functions
across all the main geographies in which we operate. The restructuring charges by segment for the
first quarter of fiscal year 2009 were: Global Customer Operations — $2.7 million, Critical
Solutions Group — $0.6 million and Systems Solutions Group — $0.4 million. In addition, we
incurred $0.4 million of restructuring charges that were related to general corporate functions
that support all of our segments.
Interest Income
Interest income was $0.3 million for the first quarter of fiscal year 2010 as compared to $0.9
million for the same prior year period. Approximately $0.3 million of this decrease is due to lower
investment balances, with the balance of the decrease attributable to lower interest rates on our
investments.
Loss on Investment
During the first quarter of fiscal year 2010, we recorded a charge of $0.2 million for the
sale of our minority equity investment in a closely-held Swiss public company. During the first
quarter of fiscal year 2009, we recorded a charge of $1.2 million to write down this investment to
market value as of December 31, 2008. As of December 31, 2009, we no longer have an equity
investment in this entity.
Other Expense, net
Other expense, net of $0.2 million for the first quarter of fiscal year 2010 consists
primarily of foreign exchange losses, offset partially by management fee income of $0.1 million.
Other expense, net of $0.0 million for the first quarter of fiscal year 2009 consists of management
fee income of $0.2 million which has been fully offset by foreign exchange losses.
Income Tax Provision
We recorded an income tax provision of $0.6 million for the first quarter of fiscal year 2010
and an income tax provision of $0.4 million for the same prior year period. The provision for the
first quarter of fiscal year 2010 is substantially impacted by foreign taxes arising from our
international sales mix. This provision is also attributable to U.S. Federal alternative minimum
taxes and certain state income taxes. The tax provision for the first quarter of fiscal year 2009
is principally attributable to taxes on foreign income and interest related to unrecognized tax
benefits. We continued to provide a full valuation allowance for our net deferred tax
assets at December 31, 2009, as we believe it is more likely than not that the future tax benefits from accumulated net
operating losses and deferred taxes will not be realized.
19
Equity in Earnings (Losses) of Joint Ventures
Income (loss) associated with our 50% interest in ULVAC Cryogenics, Inc., a joint venture with
ULVAC Corporation of Japan, was $(0.1) million for the first quarter of fiscal year 2010, compared
to $0.3 million in the same prior year period. The income (loss) associated with our 50% interest
in Yaskawa Brooks Automation, Inc., a joint venture with Yaskawa Electric Corporation of Japan was
$(0.2) million for the first quarter of fiscal year 2010 as compared to $0.0 million in the same
prior year period.
Liquidity and Capital Resources
Our business is significantly dependent on capital expenditures by semiconductor manufacturers
and OEMs that are, in turn, dependent on the current and anticipated market demand for
semiconductors. Demand for semiconductors is cyclical and has historically experienced periodic
downturns. This cyclicality makes estimates of future revenues, results of operations and net cash
flows inherently uncertain.
At December 31, 2009, we had cash, cash equivalents and marketable securities aggregating
$111.4 million. This amount was comprised of $47.2 million of cash and cash equivalents, $38.0
million of investments in short-term marketable securities and $26.2 million of investments in
long-term marketable securities.
Cash and cash equivalents were $47.2 million at December 31, 2009, a decrease of $12.8 million
from September 30, 2009. This decrease was primarily due to $14.1 million of purchases in
marketable securities, net of maturities. This decrease was partially offset by $1.5 million of
cash provided by operating activities.
Cash provided by operating activities was $1.5 million for the first quarter of fiscal year
2010, and was comprised of a net loss of $2.9 million, which includes $7.0 million of net non-cash
related charges such as $4.8 million of depreciation and amortization and $1.5 million of
stock-based compensation. Further, cash provided by operations was reduced by net increases in
working capital of $2.6 million, consisting primarily of $14.8 million of increases in accounts
receivable and $5.2 million of increases in inventory. The increases in accounts receivable and
inventory were caused by a 65.7% increase in revenues for the first quarter of fiscal year 2010 as
compared to the fourth quarter of fiscal year 2009. Additionally, we paid approximately $3.0
million in annual incentive compensation payments during the first quarter of fiscal year 2010
related to the prior fiscal year. These increases in working capital were partially offset by $19.9
million of increases in accounts payable and $1.2 million of higher deferred revenues.
Cash used in investing activities was $14.4 million for the first quarter of fiscal year 2010,
and is principally comprised of net purchases of marketable securities of $14.1 million and $0.5
million of capital expenditures. These uses of cash were partially offset by $0.2 million of
proceeds from our sale of a minority equity investment in a closely-held Swiss public company. Our
capital expenditures for the first quarter of fiscal year 2009 were $5.1 million, including $3.0
million in expenditures related to our Oracle ERP implementation. We implemented the Oracle ERP
system in most of our U.S. operations in July 2009. We are currently evaluating the timing and cost
to implement this system in our international locations.
At December 31, 2009, we had approximately $0.5 million of letters of credit outstanding.
We believe that we have adequate resources to fund our currently planned working capital and
capital expenditure requirements for the next twelve months. However, the cyclical nature of
our served markets and uncertainty with the current global economic environment makes it difficult
for us to predict future 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.
20
Recently Enacted Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued authoritative
guidance for Fair Value Measurements and Disclosures which defines fair value, establishes a
framework for measuring fair value and expands disclosures about assets and liabilities measured at
fair value in the financial statements. In February 2008, the FASB issued authoritative guidance
which allows for the delay of the effective date for fair value measurements for one year for all
non-financial assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually). In
April 2009, the FASB issued additional authoritative guidance in determining whether a market is
active or inactive, and whether a transaction is distressed, is applicable to all assets and
liabilities (i.e. financial and non-financial) and will require enhanced disclosures. This standard
was effective beginning with our fourth quarter of fiscal 2009. The measurement and disclosure
requirements related to financial assets and financial liabilities were effective for us beginning
on October 1, 2008. See Note 13. On October 1, 2009 we adopted the fair value measurement standard
for all non-financial assets and non-financial liabilities, which had no impact on our financial
position or results of operations.
In December 2007, the FASB revised the authoritative guidance for Business Combinations, which
significantly changes the accounting for business combinations in a number of areas including the
treatment of contingent consideration, pre-acquisition contingencies, transaction costs,
restructuring costs and income taxes. On October 1, 2009 we adopted this standard prospectively and
will apply the standard to any business combination with an acquisition date after October 1, 2009.
In December 2007, the FASB issued authoritative guidance regarding Consolidation, which
establishes accounting and reporting standards for noncontrolling interests in a subsidiary and for
the deconsolidation of a subsidiary. This standard clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be reported as equity in
the consolidated financial statements. The amount of net income attributable to the noncontrolling
interest will be included in consolidated net income on the face of the income statement. Further,
it clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions if the parent retains its controlling financial interest.
In addition, this standard requires that a parent recognize a gain or loss in net income when a
subsidiary is deconsolidated. On October 1, 2009 we adopted this standard retrospectively, which
did not have a material impact on our financial position or results of operations.
In April 2008, the FASB issued authoritative guidance regarding the determination of the
useful life of intangible assets. This guidance amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of a recognized
intangible asset. It also improves the consistency between the useful life of a recognized
intangible asset and the period of expected cash flows used to measure the fair value of the asset.
On October 1, 2009 we adopted this standard, which had no impact on our financial position or
results of operations.
In June 2008, the FASB issued authoritative guidance regarding whether instruments granted in
share-based payment transactions are participating securities, which classifies unvested
share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) as participating securities and requires them to be included in the
computation of earnings per share pursuant to the two-class method. All prior-period earnings per
share data presented are to be adjusted retrospectively (including interim financial statements,
summaries of earnings, and selected financial data) to conform with the provisions of this
guidance. On October 1, 2009 we adopted this standard, which had no impact on our financial
position or results of operations.
In December 2008, the FASB issued authoritative guidance regarding Compensation — Retirement
Benefits, which requires enhanced disclosures about the plan assets of a company’s defined benefit
pension and other postretirement plans. The enhanced disclosures are intended to provide users of
financial statements with a greater understanding of: (1) how investment allocation decisions are
made, including the factors that are pertinent to an understanding of investment policies and
strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used
to measure the fair value of plan assets; (4) the effect of fair value measurements using
significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5)
significant concentrations of risk within plan assets. This standard will be effective for us for
the fiscal year ending September 30, 2010. We are currently evaluating the potential impact of this
guidance on our future disclosures.
In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for
the consolidation of variable interest entities (VIEs), which requires a qualitative approach to
identifying a controlling financial
21
interest in a VIE, and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the
VIE. This guidance is effective for fiscal years beginning after November 15, 2009. We are
currently evaluating the potential impact of this standard on our financial position and results of
operations.
In September 2009, the FASB issued authoritative guidance on revenue arrangements with
multiple deliverables. This guidance provides another alternative for establishing fair value for a
deliverable. When vendor specific objective evidence or third-party evidence for deliverables in an
arrangement cannot be determined, companies will be required to develop a best estimate of the
selling price for separate deliverables and allocate arrangement consideration using the relative
selling price method. This guidance is effective October 1, 2010, and early adoption is permitted.
We are currently evaluating the potential impact of this guidance on our financial position and
results of operations.
Item 3. Quantitative and Qualitative Disclosure 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 three months ended December 31, 2009, the unrealized loss on marketable securities was
$51,000. A hypothetical 100 basis point change in interest rates would result in an annual change
of approximately $1.2 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 and a variety of Asian currencies. Sales
in currencies other than the U.S. dollar were 18.0% of our total sales for the three months ended
December 31, 2009. 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 $13.4
million at December 31, 2009, and relate to the Euro and a variety of Asian currencies. A majority
of our foreign currency loss of $0.2 million for the three months ended December 31, 2009 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
December 31, 2009 would result in a $1.3 million change in our net income (loss). We mitigate the
impact of potential currency translation losses on these short-term inter company advances by the
timely settlement of each transaction, generally within 30 days.
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.
22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On August 22, 2006, an action captioned as Mark Levy v. Robert J. Therrien and Brooks
Automation, Inc., was filed in the United States District Court for the District of Delaware,
seeking recovery, on behalf of Brooks, from Mr. Therrien (the Company’s former Chairman and CEO)
under Section 16(b) of the Securities Exchange Act of 1934 for alleged “short-swing” profits earned
by Mr. Therrien due to the loan and stock option exercise in November 1999, and a sale by Mr.
Therrien of Brooks stock in March 2000. The complaint seeks disgorgement of all profits earned by
Mr. Therrien on the transactions, attorneys’ fees and other expenses. On February 20, 2007, a
second Section 16(b) action, concerning the same loan and stock option exercise in November 1999
discussed above and seeking the same remedy, was filed in the United States District Court of the
District of Delaware, captioned Aron Rosenberg v. Robert J. Therrien and Brooks Automation, Inc. On
April 4, 2007, the court issued an order consolidating the Levy and Rosenberg actions. On July 14,
2008, the court denied Mr. Therrien’s motion to dismiss this action. Discovery has commenced in
this matter and is currently ongoing. It has been reported to us that the parties have reached an
agreement in principle to settle this case, subject to the approval of the court and to the
conclusion by the parties of necessary settlement processes and documents. Brooks is a nominal
defendant in the consolidated action and any recovery in this action, less attorneys’ fees, would
go to the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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 December 31, 2009. These purchases were made pursuant to the Amended and
Restated 2000 Equity Incentive Plan.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number (or |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximate |
|
| |
|
|
|
|
|
|
|
|
|
Total Number of |
|
|
Dollar Value) of |
|
| |
|
Total |
|
|
|
|
|
|
Shares Purchased as |
|
|
Shares that May Yet |
|
| |
|
Number |
|
|
|
|
|
|
Part of Publicly |
|
|
be Purchased Under |
|
| |
|
of Shares |
|
|
Average Price Paid |
|
|
Announced Plans |
|
|
the Plans or |
|
| Period |
|
Purchased |
|
|
per Share |
|
|
or Programs |
|
|
Programs |
|
October 1 — 31, 2009 |
|
|
1,146 |
|
|
$ |
6.88 |
|
|
|
1,146 |
|
|
$ |
— |
|
November 1 — 30, 2009 |
|
|
37,869 |
|
|
|
7.76 |
|
|
|
37,869 |
|
|
|
— |
|
December 1 — 31, 2009 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
39,015 |
|
|
$ |
7.73 |
|
|
|
39,015 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 6. Exhibits
The following exhibits are included herein:
| |
|
|
| Exhibit No. |
|
Description |
31.01
|
|
Rule 13a-14(a), 15d-14(a) Certification. |
| |
|
|
31.02
|
|
Rule 13a-14(a), 15d-14(a) Certification. |
| |
|
|
32
|
|
Section 1350 Certifications. |
23
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: February 5, 2010 |
/s/ Martin S. Headley
|
|
| |
Martin S. Headley |
|
| |
Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
|
| |
|
|
|
|
| DATE: February 5, 2010 |
/s/ Timothy S. Mathews
|
|
| |
Timothy S. Mathews |
|
| |
Vice President and Corporate Controller
(Principal Accounting Officer) |
|
24
EXHIBIT INDEX
| |
|
|
| Exhibit No. |
|
Description |
31.01
|
|
Rule 13a-14(a), 15d-14(a) Certification. |
| |
|
|
31.02
|
|
Rule 13a-14(a), 15d-14(a) Certification. |
| |
|
|
32
|
|
Section 1350 Certifications. |
25