|Brooks had excellent earnings growth and margin expansion with earnings beat and revenue beat with above consensus guidance for their fiscal first quarter.|
Semis and life sciences both in growth mode. On track to be a billion dollar revenue company before expected!
BROOKS AUTOMATION REPORTS ITS FOURTH QUARTER AND YEAR-END RESULTS OF FISCAL 2020, ENDED SEPTEMBER 30, 2020, AND ANNOUNCES QUARTERLY CASH DIVIDEND
Significant Earnings Growth Driven by Operating Margin Expansion and Double-Digit Revenue Growth in Both Life Sciences and Semiconductor Solutions
CHELMSFORD, Mass., Nov. 10, 2020 / PRNewswire/ -- Brooks Automation, Inc. (Nasdaq: BRKS) today reported financial results for the fourth fiscal quarter and fiscal year, ended September 30, 2020.
|Financial Results Summary|
|Quarter Ended||Year Ended|
|Dollars in millions, except per share data||September 30, ||September 30, ||September 30, ||September 30, |
|Diluted EPS Continuing Operations||$||0.39||$||0.07||447||%||$||0.88||$||0.13||567||%|
|Diluted EPS Total||$||0.39||$||5.68||NM||$||0.88||$||6.04||NM|
|Non-GAAP Diluted EPS Continuing Operations||$||0.47||$||0.23||100||%||$||1.26||$||0.76||65||%|
"We delivered a robust quarter and completed a milestone year for the company," commented Steve Schwartz, President and CEO. "The Semiconductor Solutions and Life Sciences businesses each continued their momentum during the quarter, once again achieving operating margin expansion and delivering double-digit growth for the year. The growth is proof of our ability to lead and service two markets that have remained robust in spite of the pandemic. Our global team's dedication and our business model's strength keeps us positioned to address the ever-changing challenges of these unprecedented times as we move into fiscal 2021."
Summary of GAAP Results
Fourth Quarter, Fiscal 2020
Revenue for the fourth fiscal quarter was $246 million, up 24% year over year. Diluted EPS from continuing operations was $0.39 per share compared to $0.07 per share in the fourth quarter of 2019.Life Sciences revenue of $108 million grew 15% year over year and 16% sequentially. Year-over-year organic growth was 17%. Life Science Products grew 20% year over year, and Life Science Services grew 12%. Organic revenue growth in Q4, from what was previously defined as Sample Management, was 14% year-over-year.Semiconductor Solutions revenue was $138 million, an increase of 31% year over year and 9% sequentially. The growth was primarily driven by 50% year-over-year growth in Automation, while Contamination Control Solutions and Services each contributed single-digit growth. Full Year, Fiscal 2020
Revenue for fiscal 2020 was $897 million, an increase of 15% compared to fiscal 2019, supported by double-digit growth in both Life Sciences and Semiconductor.Life Sciences revenue of $389 million was 16% higher than fiscal 2019. Life Sciences Products grew 9% and Life Sciences Services grew 20%, year over year. In total, the Life Sciences business organic growth was 10%, including 7% organic growth from Sample Management.Semiconductor Solutions revenue was $509 million, up 14% over the prior year. Growth was led by Contamination Control Solutions at 33%, while Automation products and Services increased 8% and 1%, respectively.Pre-tax income from continuing operations of $75 million was up $66 million from the prior year. The improvement was significantly driven by operating income of $78 million, which was up $32 million, or 70%, year over year. Net interest expense was $2 million for the year, a reduction of $19 million from 2019. In addition, the prior fiscal year included a $14 million loss on the extinguishment of debt.The GAAP effective tax rate was 13.3% for the year.Diluted EPS from continuing operations was $0.88 compared to $0.13 in 2019. Total diluted EPS for this fiscal year was $0.88 compared to $6.04 in 2019. Discontinued operations in fiscal 2019 provided $5.91 per diluted share primarily from the $409 million gain on the sale of the Semiconductor Cryogenics business.Summary of Non-GAAP Results for Continuing Operations
Fourth Quarter, Fiscal 2020
Diluted EPS from continuing operations for the fourth quarter was $0.47, up 100% over the prior year and up 48% sequentially.Operating income was $45 million, an increase of 112% year over year and 51% sequentially. Operating margin was 18.2%, up 760 basis points year over year and 470 basis points sequentially. The margin expansion was driven by gross margin improvements coupled with operating expense control.Gross margin was 46.6%, an increase of 490 basis points year over year and 310 basis points sequentially. Gross margin expansion was driven by improvements in both Life Sciences and Semiconductor Solutions, both sequentially and year over year.The total Life Sciences operating margin was 16.2%, an increase of 900 basis points year over year and 910 basis points from the prior quarter. Gross margin performance of 50.5%, which was up 790 basis points year over year and up 580 basis points sequentially, was the primary driver of improved operating margin. The Life Sciences Products business gross margin remained stable with a 50 basis point decline sequentially, and an increase of 390 basis points year over year, driven by sustained improvements achieved earlier in the fiscal year. The Life Sciences Services sequential improvement consisted of 590 basis points that was driven by improved performance, and another 350 basis points from the favorable mix effect of unwinding the Alliance support agreement with RUCDR. In the Alliance arrangement, RUCDR performed the substantive services while Brooks Life Sciences provided contract management and other support services which came at low gross margins. In this fourth fiscal quarter, we dissolved the business arrangement and going forward we will have only a nominal amount of revenue in final support of some ongoing contracts. The reported margins for Life Science Services are up 1,020 basis points year over year.Semiconductor Solutions operating margin was 20.2%, an increase of 720 basis points from the prior year and up 170 basis points from the third quarter of 2020. Gross margin of 43.6%, up 260 basis points year over year and 90 basis points sequentially, was the primary driver of the operating margin expansion.Adjusted EBITDA was $54 million, up 75% from the fourth quarter of 2019 and 34% sequentially.Full Year, Fiscal 2020
Non-GAAP diluted EPS from continuing operations was $1.26, a 65% increase compared to $0.76 in 2019. The increase reflects the 15% revenue growth described in the GAAP summary, 200 basis points improvement in non-GAAP operating margin, and a reduction in net interest expense of $19 million.The non-GAAP effective tax rate for the year was 21.9%.Operating income was $122 million, a 36% increase from 2019, supported by non-GAAP gross margins of 43.6%, which improved 170 basis points. The increase in gross margin was driven by 410 basis points improvement in the Life Sciences gross margin.A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures follows the consolidated balance sheets, statements of operations and statements of cash flows included in this release.
Cash and Liquidity
Cash flow from operations for the fourth quarter was $52 million. On a full year basis, excluding the $92 million tax payment made in the second quarter for the gain on the sale of the Semiconductor cryogenics business, cash flow from operations increased 24% to $129 million. This compares to cash from operations in 2019 of $104 million excluding the transaction fees associated with the sale of the Semiconductor cryogenics business.The Company ended the fourth quarter with a total balance of cash, cash equivalents, restricted cash, and marketable securities of $306 million. With total debt of $51 million, net cash at September 30, 2020 was $255 million.Quarterly Cash Dividend
The Company additionally announced that the Board of Directors has reiterated a dividend of $0.10 per share payable on December 17, 2020 to stockholders of record on December 4, 2020. Future dividend declarations, as well as the record and payment dates for such dividends, are subject to the final determination of the Company's Board of Directors.
Guidance for First Quarter Fiscal 2021
The Company announced revenue and earnings guidance for the first quarter of fiscal 2021. Revenue is expected to be in the range of $237 million to $251 million and non-GAAP diluted earnings per share is expected to be in the range of $0.37 to $0.47. GAAP diluted earnings per share for the first fiscal quarter is expected to be in the range of $0.27 to $0.37.
Full disclosure, I have sold off 7.2% of my stock position on monday, and today I have sold January and April 2021 calls on an additional 9.0% of my shares . If these are assigned, I 'll have recovered my original investment plus a bit more.
If this plan turns out like I hope it does,(all the calls get assigned), I will take the remaining 84% of those shares, collect dividends on them and let their wonderful growth rate fund a vibrant and fast growing business that has margins in the mid to high 40%.
Gonna throw them in a drawer and forgetaboutem, except on dividend day. (smile)