Brooks Automation, Inc. (BRKS)
F1Q13 Earnings Call
January 31, 2013 4:30 pm ET
Martin S. Headley – Executive Vice President and Chief Financial Officer
Dr. Stephen S. Schwartz – President and Chief Executive Officer
Satya Kumar – Credit Suisse
Patrick Ho – Stifel Nicolaus & Company, Inc.
Ben Pang – B. Riley Caris
Edwin Mok – Needham and Company
Olga Levinzon – Barclays Capital
Jairam Nathan – Sidoti & Company, LLC
Previous Statements by BRKS
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I would now like to turn the conference over to Mr. Martin Headley, Executive Vice President and Chief Financial Officer. Please go ahead sir.
Martin S. Headley
Thank you very much Christy and good afternoon everybody. I’d like to welcome each of you to the first quarter financial results conference call for Brooks’ financial year 2013. In addition to covering the results of the quarter that ended on December 31, we’ll be providing an outlook into the second quarter of fiscal 2013 that quarters will end on March 31.
Our press release was issued at the close of market today and is available at the Investor Relations page of our website at www.brooks.com, as are the illustrative PowerPoint slides to be used during our prepared comments during today’s call.
I’d like to remind everybody that during the course of the call, we’ll be making a number of forward-looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that can cause actual results or other events to differ from those identified in such forward-looking statements. I will refer you to the section of our earnings release titled Safe Harbor statement. The Safe Harbor slide in the aforementioned PowerPoint presentation on our website and the company’s various filings with the SEC. We make no obligation to update these statements, should future financial data or events occur that differ from forward-looking statements presented today.
I’d also like to note we also make reference to a number of non-GAAP financial measures which are used to, in addition to and in conjunction with results presented in accordance with GAAP. Management believes these non-GAAP measures provide an additional way of viewing aspects of our operations and performance and when considered with the GAAP financial results and the reconciliations of GAAP measures provide a more complete understanding of the Brooks’ business.
Non-GAAP measures should not be relied upon to the exclusion of GAAP measures.
With me today is Brooks’ President and Chief Executive Officer, Steve Schwartz who will follow my introductory remarks with some commentary on the business environment and our current initiatives. I’ll then provide an overview of the first quarter financial results and a summary of our financial outlook for the quarter ended March 31.
Following my comments regarding my upcoming retirement some comments from Steve, we will then take your questions. During our prepared remarks, I will from time to time make reference to the slides available to everybody on the Investor Relations page of our website.
To frame the events of the quarter, summary is provided in slide number 3. We experienced a further 20% sequential downturn in the December quarter for front-end semiconductor product. This performance was actually favorable to our expectations, as we saw a late quarter hold to the downwards trend. Countering this was slightly higher rate of decline in products sold to general vacuum purposes resulting in a 31% sequential decline for revenues into industrial market.
A $98.1 million, which were above the top end of our guidance range for revenues, and the results our adjusted earnings also exceed the guidance for the $0.5 net loss for diluted share. These results include two months of our Crossing Automation acquisition that closed on October 29, 2012. The quarter included $6.5 million of product revenues reported in the Brooks Product Solutions segment and $2 million of services revenues reported in the Brooks Global Services segment.
We were very active with restructuring and integration programs during the quarter. The actions taken during the past two quarters have removed permanent annualized costs of $40 million from operating expenses and $5 million from cost of goods sold.
These programs addressed the integration of the Crossing Automation acquisition, removal of cost and response to a somewhat U-shaped trough to the semiconductor capital equipment cycle, permanent improvements to our operating cost structure, downsizing the Life Sciences footprint and the initial steps taken to close our Petaluma, California, manufacturing facility as we outsource manufacture of our Polycold branded products to Malaysia. Additionally, we flexed down our cost of goods sold by $4 million in taking down our contractor workforce.
The order environment during the quarter was weak, with bookings of $92.6 million. This represented a sequential decline of 5%. Consistent with an expectation of the December quarter being a trough quarter, the book-to-bill of our business into semiconductor and adjacent markets was 0.99. However, the Life Sciences book-to-bill was lower 0.68 with the specter of sequestration at the end of the quarter weighing hard on capital expenditure decisions for many of the participants in these markets.
With that scene setting, let me introduce Stephen Schwartz.