Brooks Automation, Inc. (BRKS)
Q4 2009 Earnings Call
November 12, 2009 10:00 am ET
Robert Lepofsky – President & CEO
Martin Headley - CFO
CJ Muse - Barclays
Tim Arcuri - Citigroup
Ben Pang - Caris & Co.
Patrick Ho – Stifel Nicolaus
Satya Kumar - Credit Suisse
Hari Chandra - Deutsche Bank
Timothy Summers - Newbridge Securities
David Dooley – Steelhead Securities
Previous Statements by BRKS
» Brooks Automation Inc. F3Q09 (August 6, 2009) Earnings Call Transcript
» Brooks Automation Inc. F2Q09 (Qtr End 03/31/09) Earnings Call Transcript
» Brooks Automation, Inc. F1Q09 (Qtr End 12/31/08) Earnings Call Transcript
Good morning everybody. I’d like to welcome each of you to the Brooks Automation fiscal 2009 fourth quarter results call. Our press release was issued earlier this morning, and is available on our website at www.brooks.com. You’ll also find posted there copies of the PowerPoint slides used during our call today.
I’d like to remind everybody that during the course of the call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of factors that could cause actual financial results, or other events to differ significantly from those identified in such forward-looking statements.
I refer you to the section of our earnings release titled Safe Harbor Statement. The Safe Harbor slide on our website and to the company’s various filings with the SEC. I would also note that we will also make reference to a number of non-GAAP financial measures which are used in addition to, and in conjunction with results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP measures.
Management believes these financial measures provide an additional way of viewing aspects of our operations, that when viewed with our GAAP results and the reconciliations to GAAP measures provide a more complete understanding of our business.
Robert Lepofsky, President, and CEO of Brooks will open the call. After which I will provide a more detailed overview of the fourth quarter results and then we’ll turn it over to your questions.
Thank you Martin, and good day ladies and gentlemen. We appreciate you taking the time to join our call today. I opened our last call by commenting on the upbeat tone of our report at that time. Over the course of the last three months things have progressed in an accelerated pace and we are even more upbeat today encouraged by both our recent performance and our future prospects.
During the September ended quarter our results again demonstrated the creditability of our financial model, and the operating leverage that we can derive from every additional dollar of sales. With a favorable product and customer mix, across our broad portfolio of solutions, and a couple of favorable end of year adjustments which Martin will touch on, we actually well exceeded our targeted 40% drop through in the quarter.
Our ability to respond to the surge in demand from our customers that began accelerating in late summer, coincidentally at that same time of our new Oracle business system implementation cutover, is a result of the intense collaborative efforts of our people, our supply chain partners, and our customers.
The 46% sequential increase in revenues we have just reported was back end of the quarter loaded and to some extent supply chain constrained. Six weeks into this quarter customer requirements are continuing to increase, material flows into our factories are becoming into better balance with demand, and our confidence is increasing daily that we will deliver at least another 45% sequential growth in the current quarter.
In addition based on current booking rates, and new commitments from customers, the March ending quarter will continue to see top line growth and strong drop through. I’m pleased to report that we are quickly converging on profitability and cash generation, again consistent with our own expectations but well ahead of many external projections.
It is now fairly clear to us that we will be profitable and cash positive for the full year FY2010. So today as in August, we are confident that we’re on the right track. Confident that the decisions we made over the past 12 months were appropriate, confident that our financial model is delivering the expected results, and confident that continuing upticks in orders will translate into profits for our shareholders.
We are also gaining added confidence month by month that our business development initiatives that are aimed in the right direction and that they will begin to impact our performance progressively through 2010 and they will have an important influence on Brooks in 2011 and beyond.
Allow me a moment to broadly touch on a couple of these initiatives before turning the call back over to Martin. As you know, customers around the world view Brooks as a leading provider of automation, vacuum, and instrumentation solution. Today our largest concentration of customers is in the semiconductor manufacturing sector, where we are considered a strategic business partner and an extension of our customers’ own engineering, manufacturing, and product support capabilities.
At Brooks our product and business development initiatives are aimed at building on our strong position with both existing and newer customers in the semiconductor space, while at the same time extending our market reach and the impact of our core capabilities into new market segments.
Allow me to give you some examples, during the quarter we both resumed production of existing products, and ramped several new platforms to each of our top semiconductor OEM customers in support of traditional applications.