Brooks Automation, Inc. (BRKS)
F2Q13 Earnings Call
May 9, 2013 4:30 PM ET
Martin Headley – EVP and CFO
Steve Schwartz – President and CEO
David Duley – Steelhead Securities
Patrick Ho – Stifel Nicolaus
Jairam Nathan – Sidoti
Rohan – Credit Suisse
Ben Pang – B Riley & Company
Edwin Mok – Needham & Company
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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 proceed.
Thank you very much, James and good afternoon, everybody. I’d like to welcome each of you to the second quarter financial results conference call for Brooks’ financial year 2013. In addition to covering the results of the quarter that ended on March 31, we’ll be providing an outlook into the third quarter of our fiscal 2013 which will end on June 30.
Our press release was issued after the close of markets today and is available at the Investor Relations page of our website, www.brooks.com as are the illustrative PowerPoint slides we use 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 may cause actual financial results or other events to differ from those identified in such forward-looking statements.
I’d 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, on 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’ll also make reference to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results provided in accordance with GAAP. Management believes these non-GAAP measures provide an additional way viewing aspects of our operation and performance when considered with the GAAP financial results and the reconciliation of debt 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 second quarter financial results and the summary of our financial outlook for the quarter ended June 30, which is the third quarter of our fiscal year.
From time to time, I will make a prepared remarks that make reference the slides available to everybody on the investor relations page of our website. To frame the events of the quarter, a summary is provided in slide three. We benefited from improved market conditions in semiconductor and generated a 50% increase in semiconductor frontend product revenues. We also saw improvements in demands for cryo products into general vacuum applications and our industrial product revenues increased 10%. As a result, we exceeded the top end of our guidance range.
Also in the technology side of our business, the integration of crossing automation, an acquisition that closed on October 29, 2012, continued to pace and on track with our plans. As a result, we generated profits from the transaction in the March quarter. The Life Science Systems market conditions were challenging in the quarter with a very cautious approach exhibited by our customers that resulted in delays in both facilitating project completions and making spending commitments.
These delays impacted the timing of completion of larger projects, deliveries of smaller instruments and consumables and some pull back in service activities. As a result, Life Science Systems posted $9.1 million in revenues for the quarter. The order environment during the quarter improved and our bookings in the quarter increased sequentially 30% of the December quarter to a $121.3 million. This represents a book-to-bill of a 104 on the technology side of our business, and a book-to-bill of 100 under Life Sciences business.
Favorable order trends continue into the current quarter. Finally we continue to execute on our balance management goals, and achieved improved receivables and the inventory management performance, that were significant contributors to our $10.7 million free cash flow generation in the quarter.
With that scene setting, let me introduce Steve.
Thank you, Martin. Good afternoon, everyone and thank you for joining our call. We’re pleased to have the opportunity to be able to report the results of the second quarter of our fiscal year. As many of our customers and peers have recently reported, December was definitely the low point in the semiconductor equipment cycle.
In March, the level of order activity picked up significantly and although we still have higher expectations for the second half of the year, the 30% increase in bookings over the prior quarter was welcome news. Our March quarter revenue was slightly above the upper end of our expectations, as business was robust, and we were able to satisfy some incremental turns business.